Lotus Pharmaceuticals Announces Business Reorganization and Provides Updates on the Beijing Headquarters Building

Press Release

A once promising stock is getting a new start. The land rights of their Inner Mongolian property was the big hangover investors didn't like at all.

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The following hypothetical actions could be the case.

LTUS was convinced by a company called Genesis Technologies (GTEC) to become a publicly traded company via reverse merger. GTEC was paid for their consulting with shares in the newly formed LTUS.

Someone (GTEC) then consulted LTUS to inflate earnings in order boost the share price. The retained earnings needed a place on the asset side of the balance sheet to hide so the accounts receivables ballooned.

Well you can only inflate accounts receivable so long before it become fishy, so one year LTUS "collected" millions and millions in back receivables and immediately paid a similar amount for a piece of land in Inner Mongolia, which was worth far less then the reported price, effectively transferring the inflated retained earnings from accounts receivable to a physical asset.

Meanwhile, LTUS builds a huge building in Beijing from cash flow. However, cash flow is still inflated so in reality the money comes not from profits, but from a shadow lender. The money "borrowed" has to show up as a liability (unpaid taxes).

Meanwhile, the auditors are applying pressure to clean up the income statement and balance sheet. No longer will the old ways be tolerated.

Today with one bold stroke, LTUS has paid off their bookie, removed the inflated assets and liabilities from the balance sheet and, with the sale of Liang Fang, allow for the future justification for realistic results on upcoming income statements.

LTUS is left with actual assets and liabilities on the balance sheet and actual revenues and profits on the income statement. Only of course much lower than it used to be.