Weikang Bio-Technology Group (fka WKBT)

[joenatural]

Info I received on WKBT ........

From: [e-mail]
To: [e-mail]
Date: Thu, 6 Jan 2011 16:52:51 -0800
Subject: for xxxx: WKBT $5m PIPE Offering for China TCM/OTC Pharma Leader

Hi xxxx—

Enjoyed our conversation on ENHD and WKBT yesterday. As requested I’m sending you info on our TCM client. Hunter Wise Securities, LLC is exclusive Placement Agent in a $5m PIPE fundraise for Weikang Bio-Technology (WKBT.OB), a Harbin, PRC-based leader in OTC Pharma Products/Traditional Chinese Medicine that earned $17m in 2009 and has agreed to Net Income Make-Goods of $21m for 2010 and $25m for 2011. I am forwarding info on the PIPE and we would look to squeeze out some allocation for you, if interested, in the final closing on or before January 31, 2011.

The Common Shares being sold in the Offering are priced at $2.40 each, packaged as a $9.60 Unit consisting of 4 shares along with one C Warrant exercisable at $3.60 and one D Warrant exercisable at $4.80.

In addition to Registration Rights that call for and S-1 filing covering all shares and warrants within 45 days of Closing (which will actually now be filed on/before 2.14.11), the Offering Terms include Uplisting to Nasdaq or NYSE Amex within 120 days, Anti-Dilution protection unless future financings are done at 130% or higher than our PIPE price or $3.12/share, and a nine-month Lock-Up for share sales by Management.

Post-Money Issued and Outstanding Shares of 30.2m result in a PIPE valuation of $72.5m or a 3.45x P/E for 2010, and just 2.90x P/E for 2011 earnings. Should WKBT not hit either number, investors will be issued up to $5m in personal shares from Chairman Wang to make up for a reduced valuation basis.

WKBT will use the Proceeds to fund TV and print advertising campaigns for its products, and to open additional stores within its home base of Heilongjiang Province. Following the Offering, the Company’s organic growth plan is fully funded, and acquisition-led expansion will be financed predominately with internally-generated cash flow, along with the issuance of equity and use of local bank debt if necessary.

Attached is Weikang’s ppt presentation updated from last fall’s Rodman & Renshaw Conference in NY, where the Company reconfirmed guidance of $21m in 2010 after-tax net income. In November 2010 they subsequently increased 2011 guidance from $25m to $27m-$31m.

Please let me know your level of interest in participating and indication of investment size. We have opened escrow at Signature Bank in NY and I have sent the Confidential Private Placement Memorandum. A Subscription Booklet and all related documents can also be forwarded at your request. Sichenzia Ross Friedman Ference LLP is counsel to WKBT, and Guzov Ofsink, LLC is counsel to the investors and Placement Agent.

We completed initial Closings in December 2010 on the first $2.8m. Feel free to call with any questions and we look forward to your participation in the WKBT Offering.

Dan McClory, Managing Director
Hunter Wise Financial Group, LLC
[e-mail]
[phone] t
http://www.hunterwise.com/Bio_McClory.html