OTHER RECEIVABLES

9 Months Ended

Sep. 30, 2011

OTHER RECEIVABLES

NOTE 7 - OTHER RECEIVABLES

At September 30, 2011 and December 31, 2010, the Company had other receivables of $5,560,849 and $152,337, respectively. Other receivables at September 30, 2011 primarily included short-term advances to Wuhai Likang of approximately $5,160,000. This short-term advance accrues interest at an annual rate of 4%, and is payable upon demand.

Wuhai Likang was a related party of the Company in 2010 due to the Company being in the process of acquiring a controlling position in Wuhai Likang. On December 30, 2009, the Company issued 4,000,000 shares of common stock in exchange for acquiring a 51% equity interest in Wuhai Likang in China for $544,000 which was accounted for as a deposit as of March 31, 2011. However, the acquisition target has increased its registered capital to RMB 50 million by the contribution of new investors in April 2010, which resulted in a decrease of the equity interest owned by Linkwell to 7.65%. With this reduction in ownership, and reduction in influence over Wuhai Likang, the Company’s management has determined that Wuhai Likang is not deemed a related party.

Wuhai Likang is a major supplier and strategic partner to the Company. The Company has a large demand for a raw material which is produced from Wuhai Likang’s waste recycling project. Due to the need for this raw material, the Company made advances to Wuhai LiKang’s to support their waste recycling project which ultimately benefits the Company. As of December 31, 2010, the Company has made advances totaling $1,567,337 to provide operating funds to Wuhai Likang. The portion of such advances toprovide operating funds to Wuhai Likang was classified as due from related party as of December 31, 2010 pending approval of the acquisition. As of September 30, 2011, government approval for this acquisition had not occurred and is unable to be completed. During the nine months ended September 30, 2011, the existing shareholders of Wuhai Likang contributed additional capital into Wuhai Likang, which resulted in a reduction of the Company’s ownership position in Wuhai Likang to approximately 7.65% as of September 30, 2011. With this reduction in ownership, and reduction in influence over Wuhai Likang, the Company’s management has determined that Wuhai Likang is not deemed a related party. Accordingly, the due from related party of $1,567,337 as of December 31, 2010 and the approximate additional $3,600,000 advances made during the nine months ended September 30, 2011, have been classified as other receivables as of September 30, 2011.