Yesterday, the share price of China America Holdings, Inc. (OTC:CAAH) closed the market with a 350% increase from the previous day. A couple of weeks after the company announced the sale of its former business with chemical products, now CAAH said it has acquired a porcelain manufacturing company with a 44% growth in the profitability for the last year. 
Immediately after the news came out, CAAH started rising up, climbing up to $0.0299 during the session and trading over 32 million shares. The year’s chart shows that CAAH has formed a very bullish pattern and could mark another yearly high today. On the other hand, according to the intraday chart the demand for the shares ceased by the end of the day.
In any case, it looks like CAAH could hold investor attention at least by July 7, 2011. This is the date on which the company intends to file an 8-k with the SEC containing details about the transaction. A particularly interesting part of the 8-k should be the audited current financial statements of Ziyang Ceramics, the wholly-owned subsidiary of China Ziyang Technology Company, Limited, the company which CAAH has signed to acquire.
According to yesterday’s press release, CAAH will pay for the acquisition with a combination of convertible promissory note and common stock valued at approximately $16 million. CAAH has signed the share exchange agreement with Best Alliance Worldwide Investments Limited, who will own approximately 79.6% of the then issued and outstanding shares of China America Holdings upon completion of the transaction and assuming full conversion of the note.
Further, the PR states that Ziyang Ceramics is engaged in the manufacturing and distribution of porcelain tiles, has $26.5 million in total assets and has a net income of $7.3 million for 2010. As mentioned, next Thursday will show if the numbers are all that positive.
In the middle of June, CAAH shareholders approved the sale of the company’s 56.08% interest in Shanghai AoHong Chemical Co., Ltd. for a price of $3.5 million. That amount will be paid through forgiveness of certain CAAH debt owed to the buyer and a promissory note. According to the latest 10-Q, CAAH has no other operating business and a cash balance as of end-March 2011 of around $9,000.
