PREPAYMENT FOR PATENTS	12 Months Ended
PREPAYMENT FOR PATENTS	Dec. 31, 2011
Notes to Financial Statements
PREPAYMENT FOR PATENTS	Note 3 – PREPAYMENTS FOR PATENTS The Company signed two contracts with Xi’an Keli Pharmaceutical Co., Ltd (“Keli”), a local pharmaceutical company, to purchase two medicine formulation that were in the process of completion of their research and development and obtaining of patent from the relevant PRC Governmental Authority from them; the total contracted amount was approximately $4.7 million (RMB 30 million). As of December 31, 2010, the Company had prepayment for patents of $3,870,688 (RMB 25 million), and was committed to pay the remaining $0.8 million (RMB 5 million) upon the Company obtaining the registration certificate of the medicine. These two contracts will expire on May 3, 2013. On June 30, 2011, the Company entered into a supplemental agreement with Keli for changing the final completion date to March 31, 2014 as a result of implementing the new medicine manufacturing GMP standards issued in February 2011 by PRC Food and Drug Administration (“PRC FDA”) into the medicine formulation research and development process. Since 2011, PRC government has been strengthening the supervision of food and drug safety and upgrading large amount of medicine quality standards; accordingly, on April 23, 2012, the Company and Keli entered into a supplemental agreement for further extension of the final completion date to March 31, 2016 due to increased R&D work and testing cycle as a result of enhanced quality control standards and government regulation. Based on the agreement, if Keli cannot obtain the patents of new medicine formulation, the patents from the relevant PRC governmental Authority as set out in the agreement before the agreement expiration date, Keli will refund the full amount of the prepayment to the Company within 30 days of the agreement expiration date.

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China Pharmaceuticals Inc 10-K