Tianli Agritech (NASDAQ:OINK)

Company Snapshot:

Research and development, raising, breeding and selling hogs in the People's Republic of China.

Industry Snapshot

• China is also the world’s largest hog producing and pork consuming country. China has accounted for nearly half of both the world’s pork production and consumption for more than five years. According to the U.S. Department of Agriculture, China is again expected to be the driving force behind global pork production in 2010. Not only does China consume a significant amount of pork in the aggregate; Chinese per-capita pork consumption is among the highest in the world, as pork is China’s most popular meat. China consumes over 600 million pigs a year.
  
• China’s hog industry is in the midst of a transition from a large number of small household farms to larger, more commercial farms. Meat hog production in the PRC is currently dominated by backyard farms (those that sell 5-10 hogs annually) and small farms (those that sell less than 100 hogs annually). Farms that sell less than 100 hogs per year comprise approximately 75% of the hog farms in China and account for approximately one-third of the hogs sold annually in China. These farms sell their products to local rural markets. Farms that sell between 100 and 500 hogs a year account for 21% of China’s hog farms and approximately one-third of the hogs sold annually in China. Farms that sell between 500 and 3,000 hogs represent less than 3% of China’s hog farms but account for approximately 19% of the hogs sold in China. Those that sell more than 3,000 hogs annually account for less than one-half of a percent of all hog farms but sell more than 15% of China’s hogs annually.

Post Merger Share Calculation:

• 8,125,000: Pre IPO outstanding shares
• 1,667,000 to 2,000,000: Newly issued shares of Common Stock
• 200,000: Shares from placement agent warrants with an assumed exercise price of $7.20

GeoTeam® best effort calculation of total post reverse merger shares assuming full conversions: 9,992,000 to 10,325,000

Financial Snapshot: see note

Note that Tianli has undertaken some shareholder friendly moves:

• No significant amount of warrants issued in the IPO
  
  "In connection with this offering, we will, for a nominal amount, sell our placement agent warrants exercisable at a rate of one warrant per share to purchase up to ten percent of the shares sold in the offering. These warrants are exercisable for a period of five years from the date of issuance at a price equal to 120% of the price of the shares in this offering."
  
  
• Make-Good arrangement is attractive (see note)

The company has yet to provide details on its 6 months 2010 financials.