Weikang Bio-Tech (PINK:WKBT)

On January 28, 2011, Weikang Bio-Technology Group Company, Inc., a Nevada corporation, sold in a private placement a total of 234,582 Units, each unit comprised of (i) four shares of common stock, (ii) a three-year warrant to purchase one share of common stock at an exercise price of $3.60 per share (the “Series C Warrant”), and (iii) a three-year warrant to purchase one share of common stock at an exercise price of $4.80 per share (The “Series D Warrant”), for an aggregate purchase price of $2,252,000.00.

GeoTeam® Note:  This deal works out to an additional 1,452,492 shares:

• 983,328 from common shares
• 469,164 from warrants

On December 22, 2010, Weikang Bio-Technology Group Company, Inc., a Nevada corporation , sold in a private placement a total of 25,833 Units, each unit comprised of (i) four shares of common stock, (ii) a three-year warrant to purchase one share of common stock at an exercise price of $3.60 per share (the “Series C Warrant”), and (iii) a three-year warrant to purchase one share of common stock at an exercise price of $4.80 per share (The “Series D Warrant”), for an aggregate purchase price of $247,980.00.

In connection with the private placement transactions, the Company engaged Hunter Wise Securities, LLC (“Hunter Wise”) as exclusive placement agent, with Pacific Summit Capital serving as an authorized participating agent. As consideration for Hunter Wise’s placement agent services, the Company paid Hunter Wise $11,778.00, and issued Hunter Wise and/or its designees three-year warrants to purchase an aggregate of 2,433 shares of common stock at an exercise price of $2.40 per share. As consideration for Pacific Summit Capital’s services, the Company paid Pacific Summit Capital $13,000.00 and issued Pacific Summit Capital three-year warrants to purchase an aggregate of 5,833 shares of common stock at an exercise price of $2.40 per share.

The Series C and Series D Warrants (collectively, the “Warrants”) issued to the investors and the placement agents are immediately exercisable and have a term of three years. Such warrants may be exercised cashlessly in the event that there is no effective registration statement providing for the resale of the common stock underlying the warrants pursuant to the time frame described in more detail below. The exercise prices of the Warrants are subject to customary adjustments provisions for stock splits, stock dividends, recapitalizations and the like. Additionally, for a period of three years following the final closing of the private placement, anti-dilution protection shall be afforded the investors, as described in more detail below.

In connection with the private placement and pursuant to the financing transaction to which this private placement as a part the Company agreed to list and trade its shares of common stock on the Nasdaq Capital Market, Nasdaq Global Market, or the NYSE Amex and shall take all commercially reasonable actions to file an application to trade its shares on a National Stock Exchange within 90 days after the final closing date of the Offering. In the event the shares of common stock are not approved for trading on a National Stock Exchange within 120 days from the final closing date of the private placement and commercially reasonable actions have not been taken to meet such requirement, the Company shall pay cash liquidated damages to the Subscriber in the amount equal to 0.5% of the purchase price paid by each investor, to be paid each month until the listing of the Company’s shares on a National Stock Exchange is completed.

GeoTeam® Note:  This deal works out to an additional 163,264 shares:

• 103,332 from common shares
• 59,932 from warrants

On December 2 and December 6, 2010, Weikang Bio-Technology Group Company, Inc., a Nevada corporation (the “Company”), sold in a private placement a total of 226,042 Units, each unit comprised of (i) four shares of common stock,  (ii) a three-year warrant to purchase one share of common stock at an exercise price of $3.60 per share (the “Series C Warrant”), and (iii) a three-year warrant to purchase one share of common stock at an exercise price of $4.80 per share (The “Series D Warrant”),  for an aggregate purchase price of $2,170,003.20.  

In connection with the private placement transactions, the Company engaged Hunter Wise Securities, LLC (“Hunter Wise”) as exclusive placement agent for the private placement, with National Securities Corporation (“NSC”) serving as an authorized participating agent.  As consideration for Hunter Wise’s services, the Company paid Hunter Wise $168,380.11 and issued Hunter Wise three-year warrants to purchase an aggregate of 51,450 shares of common stock at an exercise price of $2.40 per share.  As consideration for NSC’s services, the Company paid NSC $48,620.21 and issued NSC three-year warrants to purchase an aggregate of 22,517 shares of common stock at an exercise price of $2.40 per share.

The Series C and Series D Warrants (collectively, the “Warrants”) issued to the investors and the placement agents are immediately exercisable and have a term of three years.  Such warrants may be exercised cashlessly in the event that there is no effective registration statement providing for the resale of the common stock underlying the warrants pursuant to the time frame described in more detail below. The exercise prices of the Warrants are subject to customary adjustments provisions for stock splits, stock dividends, recapitalizations and the like.  Additionally, for a period of three years following the final closing of the private placement, anti-dilution protection shall be afforded the investors, as described in more detail below.
 
In connection with the private placement and pursuant to the transaction agreements:

• The Company agreed to list and trade its shares of common stock on the Nasdaq Capital Market, Nasdaq Global Market, or the NYSE Amex (each, a “National Stock Exchange”) and shall take all commercially reasonable actions to file an application to trade its shares on a National Stock Exchange within 90 days after the final closing date of the Offering. In the event the shares of common stock are not approved for trading on a National Stock Exchange within 120 days from the final closing date of the private placement and commercially reasonable actions have not been taken to meet such requirement, the Company shall pay cash liquidated damages to the investors in the amount equal to 0.5% of the purchase price paid by each investor, to be paid each month until the listing of the Company’s shares on a National Stock Exchange is completed.

• The Company agreed to file a registration statement covering the shares of common stock issued as part of the Units and issuable upon exercise of the warrants issued to the investors and the placement agent.  The Company is to file the registration statement within 45 days following the final closing of the private placement and have the registration statement declared effective within 120 days after such closing, except that the effective date shall be extended by 30 days in the event that the SEC undertakes a full review of the registration statement.  If the registration statement is not filed or declared effective within the above-mentioned periods, the Company shall pay cash liquidated damages to each investor in the amount equal to 0.5% of the amount subscribed for by such investor, to be paid each month from the required effectiveness date until the registration statement is filed or declared effective, as applicable.

• Pursuant to a make good escrow agreement dated December 2, 2010, Lucky Wheel Limited, the principal shareholder of the Company, whose shares in the Company Yin Wang, the Company’s chief executive officer, has dispositive and voting power, agreed to deposit into escrow 2,083,333 shares of common stock, which are to be held in escrow to be returned to Lucky Wheel Limited or delivered to the investors on a pro-rata basis, depending on whether the Company meets certain financial performance targets for the years ending December 31, 2010 and December 31, 2011.  The performance target for 2010 is after-tax net income, as defined, of at least $21,000,000. The performance target for 2011 is after-tax net income of at least $25,000,000.  If the performance target for either 2010 or 2011 is not met, the Company shall allocate to the investors that number of escrowed shares as equals the shortfall for such year, based on each investor’s actual investment, on a pro-rata basis.

GeoTeam® Note:  This deal works out to an additional 1,430,219 shares:

• 904,168 from common shares
• 526,051 from warrants