Link Resources announces completion of share exchange transaction and private placement

Link Resources, Inc. (OTCBB: LNKR) announced today the completion of a share exchange transaction and concurrent US$12 million private placement pursuant to which it acquired the parent company of Yantai Bohai Pharmaceuticals Group Co., Ltd. (“Bohai”).

“While we have achieved significant operational milestones during our corporate history in China, we view becoming a U.S. listed public company as a major opportunity to expand the Bohai brand and make further inroads into the growing traditional Chinese medicine market in the PRC.”

Based in Yantai, Shandong Province, China, Bohai is engaged in the production, manufacturing and distribution of traditional Chinese herbal medicines, including capsules and other products, in China. Bohai generated approximately $50.2 million in audited revenues and approximately $8.0 million in audited net earnings for the fiscal year ended June 30, 2009 and has approximately 500 employees, including 260 sales representatives operating from 20 offices in China.

In the share exchange transaction, the shareholders of Chance High International Limited, Bohai’s indirect parent company organized in the British Virgin Islands, exchanged all of their Chance High equity for 13,162,500 newly issued shares of Link, representing approximately 81% of the outstanding shares of Link prior to the private placement. Chance High is now a directly held, wholly-owned subsidiary of Link.

As part of the share exchange transaction, Link’s sole director and officer resigned and Hongwei Qu, Bohai’s Executive Director, was appointed President, Chief Executive Officer and interim Chief Financial Officer of Link as well as, subject to compliance with applicable SEC rules, Link’s sole director.

In the private placement, sold to approximately 143 “accredited” investors, Link issued 6,000,000 units at $2.00 per unit, resulting in gross proceeds of $12,000,000. Net proceeds to Link were approximately $9,700,000. Each unit consists of a $2.00 principal amount, two year convertible note and a three year warrant to purchase one share of Link common stock at $2.40 per share, subject to certain conditions. Euro Pacific Capital, Inc. acted as the lead placement agent and Chardan Capital Markets, LLC acted as co-placement agent.

Assuming full conversion of the notes and exercise of the warrants, the offering investors would own approximately 26.9% of the outstanding shares of Link and the former Chance High shareholders would own approximately 59.2% of the outstanding shares of Link. One Chance High shareholder, Glory Period Limited, a British Virgin Islands company controlled by Mr. Qu through contractual arrangements, would own approximately 40% the outstanding shares of Link assuming full conversion of the notes and exercise of the warrants.

Among other obligations to the private placement investors, Link will be required to register the shares of common stock underlying the notes and warrants with the SEC for public resale, appoint a board of directors comprised of a majority of independent directors, and appoint a new chief financial officer. It is also expected that Link will change its corporate name and stock symbol to more accurately reflect the business of Bohai. These actions are all expected to be undertaken over the next few months.

“This is an exciting milestone event for Bohai,” said Mr. Qu. “While we have achieved significant operational milestones during our corporate history in China, we view becoming a U.S. listed public company as a major opportunity to expand the Bohai brand and make further inroads into the growing traditional Chinese medicine market in the PRC.”

“We are very happy with the results of the private placement, especially with the number of investors we attracted,” continued Mr. Qu. “With the proceeds of this offering, we will be able to begin to execute on our near and long term strategic plans, which call for, among other key aspects, increasing our advertising and corporate and product branding and expanding our sales and marketing personnel. Our goal is simple – we will look to translate the benefits that we believe our products provide to our customers in China into growth in our revenues and earnings and, ultimately, increased shareholder value for our U.S. shareholders.”

Additional information regarding the share exchange, the private placement, the terms of the notes and warrants, and the Bohai’s business, including Bohai’s audited financial statements, will be disclosed a Current Report on Form 8-K to be filed by Link with the Securities and Exchange Commission.

Source: Link Resources, Inc.