Ciig Merger Corp. (NASDAQ:CIIC)

SHENZHEN, China, March 12, 2014 /PRNewswire/ -- On March 11, 2014, China Internet Cafe Holdings Group Inc. ("CICC" or the "Company") (OTCQB: CICC), a leading chain of Internet cafes in the People's Republic of China, announced that it begins the trial sale of nutriceutical products in three of its cafe locations for three months. The three stores are Shijikuanxian store, Shengpingfeiyang store and Fuyan store, all of which are located in Longgang District, Shenzhen, Guangdong Province. The average daily visits per store are approximately 500.

The nutriceutical products for trial sale, including Melatonin tablets, Vitamin B tablets, Calcium and Zinc chewable tablets and multi-vitamin tablets, are provided by Beijing Eastern Union Biopharmaceuticals, Ltd. ("BEUB"), a leading biopharmaceutical company engaged in the research, development, production and sale of pharmaceutical products and nutriceutical products in China. In 2012 London Olympic Games, BEUB's Melatonin tablets were designated by the General Administration of Sport of China as the exclusive nutriceutical product for Chinese Olympic athletes to improve sleep.

"We're trying to provide more value-added services to our cafe members by leveraging our 62 store locations and 2 million active members," said Dishan Guo, Chairman and CEO of CICC. "We'll carry more nutriceutical products in our cafe stores if the trial is successful and we'll continue to deliver a healthy and comfortable environment to our cafe members."

On September 21, 2011, the Company received a letter of resignation from Mr. Lei Li, who was the Chief Financial Officer of the Company at the time. Although the Company did not accept Mr. Li’s resignation, Mr. Li did not continue to perform his duties as Chief Financial Officer for the Company.

On December 15, 2011, the Board of Directors was informed that Mr. Li submitted a resignation letter on September 21, 2011 and had ceased working for the Company immediately after such submission. It was also brought to the attention of the Board of Directors on December 15, 2011, that the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2011 filed on October 13, 2011, its Quarterly Report on 10-Q for the quarter ended September 30, 2011, filed on November 14, 2011 and its Annual Report on Form 10-K/A for the fiscal year ended June 30, 2011, filed on November 14, 2011, all of which included Mr. Li’s signatures had in fact not been prepared or reviewed by Mr. Li, and Mr. Li had not personally signed such reports or consented to the use of his signature on such reports.

The Company plans to invest in the construction and purchase of additional expressways, water supply, sewage treatment facilities and other infrastructure assets in the next few years. In doing so, it intends to seize the opportunities in infrastructure development in China, especially in Henan province. We believe that through consolidation, the Company will strengthen its business in infrastructure development and create economics of scale resulting in reduction in operation costs.

The Company intends to actively seek various sources in the capital markets to raise funds for its future expansion and consolidation.

The increase was mainly due to the following:
 
1) The converted average daily traffic volume, a guideline specifically used in the toll road industry to evaluate operational performance, increased 3,228 units, or 21.2%, from 15,240 units for the three months ended September 30, 2010 to 18,468 units for the three months ended September 30, 2011.
 
2) Pinglin Expressway is part of Ningnuo Expressway, which intersects and is a part of the Lianhuo Expressway (the main freight channel from east to west) at Luoyang. Due to the rebuilding of the Lianhuo Expressway, which finished in October 2010, trucks chose alternative routes for part of fiscal year 2010 and the first quarter of fiscal year 2011. Upon completion of the construction, trucks chose our Expressway because of the improved road conditions and additional traffic lanes. With the completion of the rebuilding of the Lianhuo Expressway, the traffic volume of the Expressway returned back to normal volume. As a result, the long-haul truck flow through Pinglin Expressway for the three months ended September 30, 2011 increased approximately 21% compared to the same period in 2010.  Thus, the revenues increased accordingly.
 
3) With the continuous development of the domestic economy, the coal demand for industry increased. Therefore, the weight and flow rate of trucks carrying coal through Pinglin Expressway increased accordingly.

BEIJING, CHINA--(Marketwire - Nov 18, 2011) - China Infrastructure Investment Corporation (NASDAQ: CIIC) ("CIIC" or the "Company"), an emerging infrastructure development company operating in the People's Republic of China, reported today that the Nasdaq Stock Market ("Nasdaq") has sent a letter to the Company, which states that the Nasdaq Hearings Panel has denied the Company's request for continued listing on Nasdaq, and will suspend trading of the Company's shares of common stock effective at the open of business on Friday, November 18, 2011.

On October 17, 2011, China Infrastructure Investment Corporation (the “Company”), received a letter from The Nasdaq Stock Market LLC (“Nasdaq”), which stated that the Nasdaq Staff has made an additional determination that the actions taken by the Company with respect to substantial loans and advances made to related parties, which actions were disclosed in a Current Report on Form 8-K and in the Company’s Annual Report on Form 10-K filed on October 13, 2011, raise public interest concerns under Listing Rule 5101.  The Staff has indicated that this matter serves as an additional basis for delisting the Company’s securities from Nasdaq.
 
The Company previously disclosed in a Current Report on Form 8-K filed on September 7, 2011, the receipt of a letter (the “Letter”) from Nasdaq informing the Company that Nasdaq would delist the Company’s securities as a result of the Company’s failure to regain compliance with Listing Rule 5550(a)(2) prior to the expiration of the relevant compliance period.  On September 13, 2011, the Company formally appealed the determination to delist for failure to regain compliance with the Nasdaq bid price requirements and a hearing is scheduled for October 27, 2011 (the “Hearing”).
 
The Company does not agree that the actions taken with respect to writing off the  related party loans and accepting a controlling interest in a new asset to offset the related party loans, harmed the minority shareholders of the Company.  Further the Company does not believe that such actions should have lead to a public interest concern under Listing Rule 5101.  At the Hearing, the Company intends to rebut the allegations made by the Staff that the actions cause a public interest concern.
 

BEIJING--(Marketwire - Oct 14, 2011) - China Infrastructure Investment Corporation (NASDAQ: CIIC) (the "Company"), an emerging infrastructure development company operating in the People's Republic of China, today announces its audited financial results for the fiscal year ended June 30, 2011.

• The Company's revenues increased approximately US$13.2 million, or 30.9%, from US$42.6 million, to US$55.8 million for the fiscal year ended June 30, 2011.
• The gross profit increased approximately US$12.3 million, or 47.3%, from US$26.0 million to US$38.3 million for the fiscal year ended June 30, 2011.
• The Company took a one-time US$145.9 million bad debt write-off of related party loans, resulting in a net loss of US$136.5 million for the year.

In connection with, and as a result of the related party loans write-off as of June 30, 2011, on October 10, 2011, the Company entered into contractual agreements (known as "variable interest entity" (VIE) arrangements) with the shareholder of Zhengzhou Simian Real Estate Co., Ltd. ("Simian"), which is wholly owned by Henan Shengrun Real Estate Co., Ltd. Li Xipeng, the Chief Executive Officer, Chairman and significant shareholder of the Company is a 51% owner of Henan Shengrun Real Estate Co., Ltd. According to the arrangements, the Company will acquire a 51% equity interest in Simian through a series of variable interest entity ("VIE") contractual arrangements. The Company has agreed that the acquisition of the 51% interest in Simian from Mr. Li's company, will be deemed settlement and satisfaction in full of the outstanding obligations under the note receivable from Tai Ao of $57,169,593 as of June 30, 2011.

BEIJING--(Marketwire - Aug 28, 2011) - The board of directors of China Infrastructure Investment Corporation (NASDAQ: CIIC) announced today that it will hold a meeting to review the evaluation of the pending new asset proposed by the Company's majority shareholder as the partial repayment for the related party loans and to review the write-off of related party loans process.

Beginning in 2006, the Company provided working capital loans to Tai Ao Expressway Co., Ltd. and Xinyang Expressway Co., Ltd., companies which constructed and operate vehicle expressways in the PRC and are controlled by our Director, Chief Executive Officer and majority shareholder (the “Controlling Party”). On June 29, 2010, the Company entered into renewal agreements with Tai Ao and Xinyang that extended the maturity of these loans to June 29, 2011. These working capital loans were made based on the assumption that, once connecting toll roads in neighboring provinces were completed and functional, the traffic volume of the Tai Ao and Xinyang Expressways would increase significantly thereby generating sufficient revenues to enable Tai Ao and Xinyang to repay these loans in full. At March 31, 2011, outstanding principal and interest on these related party loans were approximately $83 million and $84 million, respectively.

On July 11, 2011, the Company’s Board of Directors determined that adverse developments occurred with respect to these loans. This followed a review of the most recent operating performance of Tai Ao and Xinyang and the most recent traffic volume data which shows that the traffic volume on both the Tai Ao and Xinyang Expressways has not significantly increased even though connecting toll roads in the neighboring provinces are now complete and operating. As a result, neither Tai Ao nor Xinyang have been able to generate enough cash flow to pay any principal and interest of these related party loans. 

 In addition, on September 27, 2009, the Company entered into a letter of intent pursuant to which the Company agreed to acquire at least 51% of Tai Ao, for which the note receivable from Xinyang will be part of the consideration. The acquisition, however, is subject to the approval of the Reform and Development Commission of the PRC Central Government, which as of the date of this report has not been received and which the Board has determined may not be received. Furthermore, even if the Company were to receive regulatory approval, it is uncertain that sufficient revenues would be generated to repay the related party loans.

The Controlling Party has offered to transfer another asset of the Controlling Party to the Company in partial repayment for the related party loans. This asset consists of the Controlling Party’s ownership interest in a commercial, residential real estate and retail shopping mall development project in Zhengzhou, China, where the Company’s headquarters is located. The Board is currently evaluating this proposal and is seeking to engage a valuation expert to evaluate and value the proposed asset. Regardless, based on the above analysis, the Board believes that the Company is required to write off some or all of the related party loans. Until the necessary evaluation is completed, however, the Company’s management will be unable to estimate the amount or a range of amounts of the impairment charge. Management does not believe that the impairment charge will result in future cash expenditures.

On June 27, 2011, China Infrastructure Investment Corporation’s (the “Company”) Board of Directors (the “Board”) accepted Mr. Chunxian Zhang’s resignation from his current position as Chief Financial Officer of the Company. Mr. Zhang will continue to serve the Company as an Executive Director.

On June 27, 2011 the Board appointed Lei Li as the Company’s Chief Financial Officer.

On September 27, 2009, the board of directors of the Company approved a share purchase resolution. Pursuant to a letter of intent, the Company shall purchase at least 51% of Tai Ao. The consideration for such purchase will be settled first with the note receivable from Xinyang, and the remainder in cash. The advance to Tai Ao will be also involved in the Company’s acquisition of Tai Ao. The collectability of the notes receivables from related parties to the large extent depends on completion of the share purchase resolution as above mentioned. The transaction is the acquisition by a foreign company and is required to be approved by the Bureau of Commerce in the PRC. The Company has applied the share purchase application to the Pingdingshan Bureau of Commerce. However, whether the application will be approved is still unclear as of June 30, 2010. Thus, there is uncertainty as to the collectability of the notes receivables from related parties. At this time, the Company estimates that there is no need for a reserve against the amounts due from related parties. If the Company is unsuccessful in getting approval for the acquisition of Tai Ao, this reserve estimate could change significantly.

The Company had a working capital deficit of $38,068,927 at December 31, 2010. This was principally due to the Company providing notes receivables to its related parties, Xinyang and Tai Ao for their highway construction and working capital. The Company currently generates its cash flow through operating profit and borrowings from banks. During the reporting period, to increase its cash resources, the Company obtained a long-term loan of $19,208,083. As of the date of this report, the Company has not experienced any difficulty in raising funds through bank loans, and has not experienced any liquidity problems in settling payables in the normal course of business and repaying bank loans when they fall due. To improve liquidity, the Company may explore new expansion opportunities and external funding sources.

On September 9, 2010, China Infrastructure Investment Corporation received a letter from The NASDAQ Stock Market LLC (“NASDAQ”) advising that for the previous 30 consecutive business days, the closing bid price of the Company’s common stock was below the minimum $1.00 per share requirement for continued listing on NASDAQ Capital Market pursuant to NASDAQ Marketplace Rule 5550(a)(2). This notification has no effect on the listing of the Company’s common stock at this time.

Outstanding shares: 80,000,000

Source: SEC Form 10Q (For the quarterly period ended March 31, 2009)

Outstanding shares: 69,560,440

Source: SEC Form 10Q (For the Quarterly Period Ended March 31, 2008)

Pending litigation:

(a) The Company entered into an agreement to purchase land from Pingdingshan No.3 Cement Factory for $1,843,646. However, the Company was not informed that such land was pledged as collateral for loans to the cement factory. Pingdingshan No. 3 Cement Company went bankrupt and the Company that loaned them money then sued the Company for the loss of the collateral. On July 13, 2006, judgment was made by the Henan Pingdingshan Intermediary Court in which the Company was required to pay the lending company $485,851. The amount was paid in August 2006 and recorded as other expense in the statement of income (loss) for the year ended June 30, 2007. The Company is appealing the ruling to a higher court and the final judgment is pending.

(b) On June 27, 2007, China railway No. 5 bureau, the constructor who won the bid in the Pinglin expressway no.2 road connection project, was sued by the subcontractors Hujianting and Hefeiyue for postponing the commencing date of construction for more than 10 months. The total damage claimed in this case was $647,364, and the Company, as the 5th defendant, was brought into this case by the plaintiff.

The case is currently ongoing and the Company believes the claims against them are without substance and they plan to vigorously defend themselves. As such, there is no contingency accrual for this case at March 31, 2008.

Source: SEC Form 10Q (For the Quarterly Period Ended March 31, 2008)