8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): January 11, 2010 (January 5, 2010)

Link Resources, Inc.

(Exact name of registrant as specified in its charter)

Nevada	000-53401	98-0588402
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

c/o Yantai Bohai Pharmaceuticals Group Co. Ltd.

No. 9 Daxin Road, Zhifu District

Yantai, Shandong Province, China 264000

(Address of principal executive offices)

Registrant’s telephone number, including area code:  +86(535)-685-7928

392 Acadia Drive S.E.

Calgary, Alberta, Canada T2J 0A8

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation to the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain information contained in Current Report on Form 8-K include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  The statements herein which are not historical reflect our current expectations and projections about our future results, performance, liquidity, financial condition, prospects and opportunities and are based upon information currently available to us and our management and our management’s interpretation of what is believed to be significant factors affecting the businesses, including many assumptions regarding future events.  Such forward-looking statements include statements regarding, among other things:

· our ability to generate commercial viability and acceptance of our products;

· our anticipated future sales and profitability;

· our future financing plans;

· our anticipated needs for working capital;

· our growth strategies, including future product offerings;

· the anticipated trends in our industry;

· our ability to expand our marketing capability;

· acquisitions of other companies or assets that we might undertake in the future;

· our operations in China and the regulatory, economic and political conditions in China; and

· competition existing today or that will likely arise in the future.

Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology.  Actual results, performance, liquidity, financial condition, prospects and opportunities could differ materially from those expressed in, or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors, including the ability to raise sufficient capital to continue our operations.  Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under “Risk Factors” and matters described in this Current Report on Form 8-K generally.  In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained herein will in fact occur.

Potential purchasers of our common stock or other securities should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

EXPLANATORY NOTE

This Current Report on Form 8-K being filed in connection with a series of transactions consummated by the Registrant, and certain related events and actions taken by the Registrant.

This Current Report on Form 8-K includes the following items on Form 8-K:

Item1.01 Entry into a Material Definitive Agreement

Item2.01 Completion of Acquisition or Disposition of Assets

Item3.02 Unregistered Sales of Equity Securities

Item5.01 Changes in Control of Registrant

Item5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

Item5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

Item5.06 Change in Shell Company Status

Item9.01 Financial Statements and Exhibits

Certain Definitional Conventions Used in this Current Report

In this Current Report on Form 8-K, unless the context requires or is otherwise specified, references to the “Registrant,” “Company,” “we,” “us,” “our” and similar expressions include the following entities, after given effective to the Share Exchange (as defined herein):

(i)           Link Resources, Inc., a Nevada corporation (most commonly referred to herein as the “Registrant” as the context requires), which is our publicly traded parent company;

(ii)          Chance High International Limited, a British Virgin Islands company and a wholly-owned subsidiary of the Registrant (“Chance High”);

(iii)         Yantai Shencaojishi Pharmaceuticals Co., Ltd., a Chinese wholly-owned foreign enterprise subsidiary of Chance High (“WFOE”); and

(iv)         Yantai Bohai Pharmaceuticals Group Co. Ltd., our principal operating subsidiary, which is a Chinese variable interest entity that the WOFE controls through certain contractual arrangements.

Item 1.01  Entry into a Material Definitive Agreement

1.           Share Exchange Agreement.  Reference is made to Item 2.01 of this Current Report for a description of a Share Exchange Agreement, entered into on January 5, 2010 (the “Share Exchange Agreement”), and related share exchange (the “Share Exchange”) by and between the Registrant, Chance High, and the shareholders of Chance High (the “Chance High Shareholders”).

As a result of the Share Exchange, Chance High has become a wholly-owned subsidiary of the Registrant and business of the Registrant is now the business of Chance High’s indirect, controlled subsidiary Bohai, a company organized in the People’s Republic of China (“China” or “PRC”).

2.           Securities Purchase Agreement.  Reference is made to Item 3.02 of this Current Report for a description of a Securities Purchase Agreement, dated January 5, 2010 (the “Securities Purchase Agreement”), by and among the Registrant, the investors signatory thereto (the “Investors”) and Euro Pacific Capital, Inc. (“Euro Pacific”), as representative of the Investors, relating to a private placement by the Registrant (the “Private Placement”) of 6,000,000 units consisting of convertible notes (the “Notes”) and common stock purchase warrants (the “Warrants”).

In addition to the other terms described in Item 3.02 of this Current Report, pursuant to the Securities Purchase Agreement, the Registrant has agreed that it shall:

(a)           within six (6) months of the closing of the Private Placement, appoint individuals constituting a majority of “independent” directors (as defined under the Nasdaq Marketplace rules) to the Registrant’s Board of Directors, with one such director being designated by Euro Pacific, and with at least two of such directors being fluent in English;

(b)           within six (6) months of the closing of the Private Placement, enter into a 24 month agreement with a new Chief Financial Officer of the Registrant who is reasonably satisfactory to Euro Pacific and who is proficient in: (i) U.S. generally accepted accounting principals; (ii) transactions similar to the ones contemplated by Securities Purchase Agreement; and (iii) U.S. public company listings and the related filing and compliance requirements; and

(c)           within three (3) months of the closing of the Private Placement, the Registrant shall enter into a 12 month agreement with an investor and public relations firm that is reasonably satisfactory to Euro Pacific.

3.           Registration Rights Agreement.  On January 5, 2010, the Registrant entered into a Registration Rights Agreement (the “Registration Rights Agreement”), by and among the Registrant and the Investors which sets forth the rights of the Investors to have the shares of common stock, par value $0.001 per share, of the Registrant (the “Common Stock”) underlying the Notes and Warrants issued in the Private Placement (and certain other securities, as described below) registered with the Securities and Exchange Commission (“SEC”) for public resale.

Pursuant to the Registration Rights Agreement, the Registrant agreed to file a registration statement on Form S-1 (“Registration Statement”) within 60 days after closing of the Private Placement and use its commercially reasonable best efforts to have the Registration Statement declared effective by the SEC within 160 days after Closing to register 100% of the Common Stock underlying: (i) the Notes (such shares, the “Conversion Shares”), (ii) the Warrants and the warrants issued to Euro Pacific and Chardan Capital Markets, LLC in connection with the Private Placement (such shares, the “Warrant Shares”), and (iii) any capital stock of the Registrant issued or issuable, with respect to the Conversion Shares, the Warrant Shares or the Warrants as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitations on exercises of the Warrants (collectively, the “Registrable Securities”).

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The Registration Rights Agreement provides that if the Registrant fails to file, obtain and maintain effectiveness of Registration Statement due to Filing Failure or Maintenance Failure (each as defined in the Registration Rights Agreement), the Registrant shall pay to Investors, distributed pro rata, equal to one percent (1%) of the aggregated Purchase Price (the “Registration Delay Payments”), provided that in no event shall the aggregate amount of Registration Delay Payments exceed, in the aggregate, six percent (6%) of the aggregate Purchase Price paid by all Investors pursuant to the Securities Purchase Agreement.

4.           Securities Escrow Agreement.  On January 5, 2010, the Registrant entered into a Securities Escrow Agreement (the “Securities Escrow Agreement”) by and among the Registrant, Euro Pacific, as representative of the Investors, Glory Period Limited, a British Virgin Islands company (the “Principal Stockholder”), and Escrow, LLC, as escrow agent (the “Escrow Agent”).  Pursuant to the Securities Escrow Agreement, the Principal Stockholder has pledged and deposited a stock certificate representing 1 million shares of Common Stock (the “Escrow Shares”) into escrow in order to provide security to the Investors in the event of an occurrence of an Event of Default (as defined in the Notes) under the Notes.  Upon the earlier to occur of the full repayment of all amounts due to the Investors under the Notes or the conversion of fifty percent (50%) of the principal face value of Notes into shares of Common Stock, the Investors’ rights in and to the Escrow Shares shall terminate.

Following the consummation of the Share Exchange, the Principal Stockholder holds 55% of the issued and outstanding shares of Common Stock (not taking into consideration the shares of Common Stock underlying the Notes and Warrants issued in the Private Placement).  The Principal Stockholder is, through contractual arrangements described elsewhere in this Current Report, controlled by Hongwei Qu (“Qu”), the Executive Director and former principal shareholder of Bohai.  Effective January 5, 2010, Qu was appointed as the President, Chief Executive Officer, Interim Chief Financial Officer, Treasurer and Secretary of the Registrant.

5.           Closing Escrow Agreement.  Pursuant to a Closing Escrow Agreement (the “Closing Escrow Agreement”), dated December 10, 2009, by and among the Registrant, Euro Pacific, as representative of the Investors, and the Escrow Agent, the Registrant has placed a total of $240,000 of proceeds from the Private Placement (the “Holdback Amount”) with the Escrow Agent, constituting an amount sufficient to satisfy the payment to the Investors of one quarterly interest payment due on the aggregate principal amount of all Notes issued in the Private Placement.  If, subject to certain conditions and after applicable notice and cure periods, an Event of Default (as defined in the Notes) is declared by Euro Pacific with respect to a failure by the Registrant to make a quarterly interest payment to Investors, the Escrow Agent shall disburse such portion of the Holdback Amount to the Investors, and the Registrant shall deposit additional amount equal to the Holdback Amount with Escrow Agent to be retained.  At such time as seventy-five percent (75%) of the aggregate shares of Common Stock underlying the Notes have been issued upon conversion of the Notes, all remaining funds of the Holdback Amount shall promptly be disbursed to the Registrant.

Item 2.01  Completion of Acquisition or Disposition of Assets

Pursuant to the Share Exchange Agreement, the Registrant acquired Chance High and its indirect, controlled subsidiary Bohai, a Chinese company engaged the production, manufacturing and distribution in China of herbal medicines, including capsules and other products, based on traditional Chinese medicine.  The closing of the Share Exchange (the “Closing”) took place on January 5, 2010 (the “Closing Date”).  On the Closing Date, pursuant to the terms of the Share Exchange Agreement, the Registrant acquired all of the outstanding equity securities (the “Chance High Shares”) of Chance High from the Chance High Shareholders; and the Chance High Shareholders transferred and contributed all of their Chance High Shares to the Registrant.  In exchange, the Registrant issued to Chance High Shareholders an aggregate of 13,162,500 newly issued shares of Common Stock.  In addition, pursuant to the terms of the Share Exchange Agreement, Anthony Zaradic, the former President and Chief Executive Officer of the Registrant, cancelled a total of 1,500,000 shares of Common Stock.

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Chance High owns 100% of the issued and outstanding capital stock of the WFOE.  On December 7, 2009, the WFOE entered into a series of variable interest entity contractual agreements (the “VIE Agreements”) with Bohai and its three shareholders, including Qu, in which WOFE effectively assumed management of the business activities of Bohai and has the right to appoint all executives and senior management and the members of the board of directors (Chance High, WOFE and Bohai is referred to herein collectively as the “Group”).  The VIE Agreements are comprised of a series of agreements, including a Consulting Services Agreement, Operating Agreement and Proxy Agreement, through which WFOE has the right to advise, consult, manage and operate Bohai for an annual fee in the amount of Bohai’s yearly net profits after tax.  Additionally, Bohai’s shareholders have pledged their rights, titles and equity interest in Bohai as security for WFOE to collect consulting and services fees provided to Bohai through an Equity Pledge Agreement.  In order to further reinforce WFOE’s rights to control and operate Bohai, Bohai’s shareholders have granted WFOE an exclusive right and option to acquire all of their equity interests in Bohai through an Option Agreement.  As all of the companies in the Group are under common control, this has been accounted for as a reorganization of entities and the financial statements have been prepared as if the reorganization had occurred retroactively.  The Registrant has consolidated Bohai’s operating results, assets and liabilities within its financial statements.

In addition, on December 7, 2009, Qu entered into a call option agreement (the “Call Option Agreement”) with Joshua Tan (“Tan”), the sole shareholder of the Principal Stockholder.  The Call Option Agreement became effective upon the closing of the Share Exchange.  Under the Call Option Agreement, Tan shall transfer up to 100% shares of the Principal Stockholder within the next 3 years to Qu for nominal consideration, which would give Qu indirect ownership of a significant percentage of the Common Stock.  The Call Option Agreement provides that Tan shall not dispose any of the shares of Principal Stockholder without the Qu’s prior written consent.

The foregoing descriptions of the series of the VIE Agreements and the transactions contemplated thereby are subject to the more detailed provisions set forth in the VIE Agreements, which are attached as exhibits to this Current Report and which are incorporated herein by reference.

Pursuant to the Exchange Agreement, Chance High became a wholly-owned subsidiary of the Registrant.  The sole director of Link approved the Share Exchange Agreement and the Share Exchange. The directors and shareholders of Chance High have also approved the Share Exchange Agreement and the Share Exchange.

As a further condition of the Share Exchange, the current officers and directors of the Registrant resigned and Qu was appointed as the new sole officer of the Registrant and also its sole director upon effectiveness of an information statement required by Rule 14f-1 promulgated under the Exchange Act of 1934 (the “Exchange Act”).

The foregoing descriptions of the Share Exchange Agreement and the transactions contemplated thereby are subject to the more detailed provisions set forth in the agreement, which is attached hereto as Exhibit 2.1 and which are incorporated herein by reference.  All references to the Share Exchange Agreement and other exhibits to this Current Report are qualified, in their entirety, by the text of such exhibits.

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FORM 10 INFORMATION

Information in response to this item 2.01 below is keyed to the item number of Form 10.

Part I

Item 1. Description of Business.

Overview

The Registrant was incorporated under the laws of the State of Nevada on January 9, 2008.  Its principal offices is in Calgary, Alberta, Canada.  The Registrant was a public “shell” company in the exploration stage since its formation and has not yet realized any revenues from its planned operations.  The Registrant entered into a Mineral Lease Agreement on April 1, 2008 for two mining claims in Pershing County, Nevada, in an area known as the Goldbanks East Prospect.  The Registrant terminated the lease on July 7, 2009.

Through the Share Exchange, the Registrant acquired Chance High and its principal operating subsidiary, Bohai.  A summary of the business of Bohai is described below.

General

Based in the city of Yantai, Shandong Province, China, Bohai is a profitable and growing company principally engaged in the production, manufacturing and distribution of herbal pharmaceuticals based on traditional Chinese medicine (“Traditional Chinese Medicine” or “TCM”) in the PRC.

Bohai’s medicines address rheumatoid arthritis, viral infections, gynecological diseases, cardio vascular issues and respiratory diseases.  Bohai obtained Drug Approval Numbers for 29 varieties of traditional Chinese herbal medicines in 2004 and it currently produces 10 varieties of approved traditional Chinese herbal medicines in seven delivery systems: tablets, granules, capsules, syrup, concentrated powder, tincture and medicinal wine.  Of these 10 products, 4 are prescription drugs and 6 are OTC products.  Committed to accelerated growth in revenues and earnings in the expanding TCM marketplace, Bohai is engaging in the Share Exchange in order to access new sources of financing to further leverage the execution of its strategy to drive revenue and profit.

Having generated in excess of $50.2 million in revenues and $8.0 million in net earnings for the fiscal year ended June 30, 2009, Bohai anticipates revenues to exceed $60 million, $80 million and $100 million in 2010, 2011 and 2012, respectively, with net income expected to rise to $8.4 million, $11.4 million and $14.8 million, respectively.  Bohai’s rapid growth is supported by the continuing expansion of the market for TCM in the PRC.  This market is forecasted to reach $24 billion by 2010 according to the Information Office of the State Council of the People’s Republic of China, “Status Quo of Drug Supervision.”

In a significant development, on December 1, 2009, two of Bohai’s lead products, Tongbi Capsules and Tablets and Lung Nourishing Cream, became eligible for reimbursement under China’s National Medical Insurance Program.  In fiscal year ended June 30, 2009, these two products accounted for more than 50% of Bohai’s revenues.

The Chinese government has awarded Bohai exclusive rights to manufacture Tongbi Capsules and Bohai shares manufacturing rights with one or more manufacturers for Shangtongning Tablets and Anti-flu Granules.  The protection periods for both Tongbi Capsules and Shangtongning Tablets expired in September 2009 and Bohai is seeking to extend the protection periods.

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As of December 1, 2009, Bohai had approximately 546 employees, including 260 sales representatives, operating from 20 offices throughout China.  More than 50% of Bohai’s workforce is engaged in sales and distribution activities.  Bohai’s strategy is to leverage the “protected” status of a number of its pharmaceutical products that grant it exclusive or near-exclusive manufacturing and distribution rights in China to aggressively increase market penetration throughout the world’s most populous nation.  By utilizing its powerful distribution platform in addition to utilizing mass media and other marketing methods to build awareness of its brand, Bohai expects to significantly grow revenues and earnings.

Bohai is placing particular marketing focus on its Lung Nourishing Cream over the next several years.  The Lung Nourishing Cream is one of Bohai’s most popular products and contains what Bohai believes is a unique formulation for the treatment of asthma and other common respiratory ailments with an emphasis on the improvement of overall lung function and health.  While other manufacturers of TCM in China produce medicines that address lung and respiratory health, Bohai’s Lung Nourishing Cream has been recognized for its efficacy but is an unfamiliar brand to an estimated two-thirds of the population.  Bohai believes this represents an exceptional market opportunity.

Bohai’s business strategy will seek to capitalize on new government programs established in early 2009 to extend health insurance coverage to previously uncovered Chinese citizens.  The PRC government’s new health care policies are also designed to encourage the use of TCM and its approach to wellness and treatment of disease.  As a result, the government continues to expand the number of TCMs eligible for reimbursement under national medical insurance programs.  This has resulted in medical professionals working in the state-run medical facilities to increasingly prescribe and recommend TCM products of the type Bohai manufactures and markets.  The state-run facilities provide the majority of medical care in China.  Two of Bohai’s lead products, Lung Nourishing Cream and Tongbi Capsules and Tablets are authorized to be eligible for insurance coverage, with others expected to follow.  Currently public health officials in China are developing general consumer awareness of increasing problems and concerns with respiratory and lung health caused by pervasive national air pollution.  This nationwide epidemic is an unfortunate by-product of the robust development of China’s expansive manufacturing and industrial activities.  Increased air pollution is a cause and contributory factor to a range of acute respiratory illnesses including chronic conditions such as asthma.  As a result, Bohai intends to significantly increase its advertising of its Lung Nourishing Cream forecasting increased sales in fiscal year 2010 by $5.9 million to a total of $17.6 million resulting in Bohai’s first medicine exceeding RMB 100 million in sales.

Organization and Consolidated Subsidiaries

Bohai’s organizational structure was carefully developed to abide by the laws of the PRC and maintain tax benefits as well as internal organizational efficiencies.  Bohai’s post Share Exchange organization structure is summarized below:

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Overview of Traditional Chinese Medicine

In China, Traditional Chinese Medicine is not an alternative form of therapy but is used in the state-run hospitals alongside modern medicine.  For its practitioners and advocates, TCM is a complete medical system that is used to treat disease in all its forms.  TCM is also believed to promote long term wellness and vigor. Many modern-day drugs have been developed from herbal sources.  These include drugs designed to treat asthma and hay fever such as ephedrine; hepatitis remedies from fruits and licorice roots and a number of anticancer agents from trees and shrubs.

For the Chinese, however, health is more than just the absence of disease.  Chinese herbal medicine is not only intended to cure but to enhance the capacity for enjoyment, fulfillment and happiness.  Accordingly, there are herbal drugs that are used to invigorate, nourish blood, calm tension and regulate menstruation.

The roots of TCM date back thousands of years and include a number of therapeutic approaches.  These include herbal medications, acupuncture, dietary manipulation, massage and others.  Very early works of Chinese medical literature date back as much as 2,500 years while other classics appeared approximately 2,000 years ago during the Han Dynasty. Medicine in China continued to develop throughout the Middle Ages when emperors commissioned the creation of various scholarly works that compiled and documented hundreds of medicines derived from herbs, animal sources and minerals.  In addition, these works described their therapeutic uses.  In the 1950s, TCM was further modernized and reformed by the PRC government.

The emphasis on wellness and the avoidance of disease is considered by some to be a key distinction between TCM and western medical practice which has been seen as more heavily oriented toward the treatment of disease and less toward prevention.  While TCM has remained a substantial part of medical treatment in China and throughout East Asia, recent decades have seen increasing acceptance throughout the United States, Europe and elsewhere.  This growth is, in part, driven by increasingly educated and empowered consumers of medical care who seek organic, natural and alternative approaches to western medical treatments and prescription drugs.  Doctors are also accelerating the process of acceptance.  In the face of mounting clinical research data demonstrating the effectiveness and safety of TCM and herbal treatments, medical doctors trained in the western tradition in Europe, the United States and elsewhere are integrating TCM and alternative treatments in their everyday practice.  Additionally, a growing number of physicians specifically trained in TCM, acupuncture and other modalities are opening offices in communities in the U.S. and around the world.

Growth of TCM Sales in China.  The sales of TCM in China reflect the central and still growing role these therapies play in medical care in that nation.  According to Helmut Kaiser Consultancy, in 2005, total sales revenue for Chinese herbal medicine manufactured in China was $13.6 billion which accounted for 25.8% of all medicine manufactured in China.  This segment had total profit of $1.76 billion which accounted for 29% of the total profit of the Chinese drug industry.  In 2006, there were approximately 1,400 Chinese herbal medicine manufacturers with an annual growth rate of 15%, much higher than the comparable period GDP growth.  According to Helmut Kaiser Consultancy, as a result of the increasing wealth of China and an aging population, it is estimated that by 2010 China will be the fifth largest market for herbal medicines in the world exceeding more than $24 billion in sales.

China currently has more than 10,000 distributors supplying drugs and medical devices to hospitals and pharmacies.  At present, most Chinese seeking medical care go directly to the hospitals where more than 80% of the medicines used throughout China are prescribed.  Only recently have chain drug stores begun to appear allowing drugs to be obtained in many areas without a visit to a hospital.

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Products

Overview

Bohai obtained Drug Approval Numbers for 29 varieties of traditional Chinese herbal medicines in 2004 and it currently produces 10 TCM pharmaceutical products, all derived from herbal and organic sources.  These include both prescription and non-prescription over-the-counter (OTC) medicines.   The first five-year valid terms of such Drug Approval Numbers have expired.  Bohai submitted the applications for re-registration on June 29, 2007 which were accepted by SFDA.  Bohai has been advised that the approval processes for these drugs, as well as drugs submitted by other drug manufacturers in Shandong Province, have not been started by the Shandong Branch of SFDA yet due to the new requirements provided by the Circular regarding the Better Conduction for the Examination and Approval of Drug Re-Registration which is issued by SFDA on July 31st, 2009. During the renewal period, Bohai is permitted to continue manufacturing these drugs as if the renewals had been approved.

The following is a list of approved pharmaceutical products that Bohai is producing with their intended uses:

Lung Nourishing Cream.  Lung Nourishing Cream is designed to moisten the lung and relieve coughs and can be used to treat weak lung and chest tightness, poor chronic cough, shortness of spontaneous breath and chronic bronchitis.  The sales for this medicine were approximately $12,792,000 during the ten-month period ending October 31, 2009.

Tongbi Capsules.  This product is designed to promote blood circulation and relieve swelling and pain, and can be used to treat cold resistance, liver and kidney deficiency, arthralgia syndrome and rheumatoid arthritis.  The sales for this medicine were approximately $10,753,000 during the ten-month period up to the ten-month period ending October 31, 2009.

Tongbi Tablets.  Tongbi Tablets are designed to regulate and fortify the blood promote blood circulation and relieve swelling pain and can be used to treat alpine resistance, liver and kidney deficiency, including rheumatoid arthritis, and rheumatoid arthritis.  The sales for this medicine were approximately $7,990,000 during the ten-month period ending October 31, 2009.

Shangtongning Tablets.  This product is designed to alleviate pain and can be used to treat bruises.  The sales for this medicine were approximately $7,458,000 during the ten-month period ending October 31, 2009.

Zhuangyuan shenhailong Medicinal Wine.  This liquid product is designed to promote kidney function and can be used to treat the weakness waist and knee fatigue, insomnia and forgetfulness.  The sales for this medicine were approximately $2,706,000 during the ten-month period ending October 31, 2009.

Danqi Tablet.  This product is designed to improve blood circulation and can be used to treat blood stasis, cardio-thoracic pain, dizziness and headache, and menstrual pain. The sales for this medicine were approximately $2,239,000 during the ten-month period ending October 31, 2009.

Fukangning Tablet.  This product is designed to improve blood circulation and can be used to treat blood stasis, cardio-thoracic pain, dizziness, headache and menstrual pain.  The sales for this medicine were approximately $2,089,000 during the ten-month period ending October 31, 2009.

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Bazhen Yimu Cream.  This product is designed for menstruation conditioning and can be used to treat dizziness, palpitation, fatigue, weakness and other menstrual symptoms and can also be used to crease menstrual flow. The sales for this medicine were approximately $1,889,000 during the ten-month period ending October 31, 2009.

Huoxue Shujin Ting.  This product is designed to promote blood circulation and relieve blood congestion, and can be used to treat pain in the waist and leg, numbness in the feet and hands and arthritis.  The sales for this medicine were approximately $1,144,000 during the ten-month period ending October 31, 2009.

Anti-flu Granules.  This product is designed to detoxify the body, and can be used to treat cold caused by exogenous wind-heat with symptoms such as fever, headache, stuffy nose, sneezing, pharyngodynia, generalized weakness and soreness. The sales for this medicine were approximately $867,000 during the ten-month period ending October 31, 2009.

In addition to the 10 medicines currently in production, Bohai holds the rights to produce 19 other herb-based pharmaceutical formulations.  Bohai anticipates it will commence the manufacturing and distribution for these additional products as business conditions develop.

Product Types

Bohai has five production lines for the manufacturing of medicines in five forms, including tablets, granules, capsules, syrup, and medicinal wine.  In year 2009, Bohai produced:

· 1.35 billion tablets and capsules;

· 30 million bags granules (370 million granules);

· 15 million bottles/units of concentrated decoctions;

· 10 million bottles/units of syrup;

· 1 million bottles/units of tinctures; and

· 1 million bottles/units medical wine

Three of Bohai’s pharmaceutical products have been granted “protected” status by the PRC government, a marketplace classification used by the government to regulate both production and distribution of traditional and herbal medicines.  These “protected” medicines are not patented in the traditional commercial sense but are essentially proprietary.  The protection refers, in part, to standardizations of formulae which require that medicines of the same name have the same type and proportion of ingredients.  The “protected” designation grants Bohai exclusive manufacturing and distribution rights within China over certain protected products or with up to six manufacturers in other cases.

Bohai has the exclusive rights to manufacture Tongbi Capsules and shares manufacturing rights with one or more manufacturers for Shangtongning Tablets and Anti-flu Granules. The exclusive rights usually have a term of seven years and can be extended for another seven year period after the initial seven year period elapses.  The protection periods for both Tongbi Capsules and Shangtongning Tablets expired in September 2009 and we have filed an application for extending the protection period on March 12, 2009 for Tongbi Capsules and are in the process of applying for extending the protection period for Shangtongning Tablets.

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For 2010, Bohai expects to increase marketing and advertising of its Tongbi Capsules and Tablets which are formulated to treat various forms of arthritis.  Sales of Bohai’s Tongbi medicines are expected to grow to $11.7 million in 2010, compared with $9 million in 2009.  In addition to the Tongbi medicines and the Lung Nourishing Cream, other substantial contributors to Bohai’s revenues include its Shangtongning Tablets which are expected to reach $7.3 million in sales in 2010, up from $6.8 million in 2009.  Sales of Bohai’s OTC product Bazhen Yimu Cream, used to strengthen the immune system, the enhancement of physical strength and conditioning, are also projected to reach $7.3 million in 2010, an increase of approximately $700,000 from the previous year.

Bohai prices its medicines well under government-mandated caps and at a premium to most competitors because the purity, potency and effectiveness of its ingredients are superior to similar products from other companies.  In other words, patients can use less of a Bohai pharmaceutical product to achieve the same effectiveness.

Overview of the Chinese Market

The People’s Republic of China is undergoing the world’s most important and powerful economic transformation.  This transformation includes the confluence of its ancient culture with modern trends in business, technology and finance.  As a result, Chinese operating companies are capitalizing on unmatched growth opportunities in this evolving and growing marketplace.  Although average income is approximately one-tenth that of developed western nations, business growth and market reform-driven policies have given the country’s 1.3 billion citizens more purchasing power than ever.

Total consumer spending in China reached $1.7 trillion in 2007, according to the most recent figures available, compared with $12 trillion in the U.S.  In new research on Chinese consumers, management consulting firm McKinsey classifies two million households out of a population of 1.3 billion as “wealthy,” based on fairly modest annual earnings of more than $30,000.  An enormous middle class is rising, however, numbering some 70 million urban households, but these still earn $5,000-$10,000 a year.

China’s GDP grew 8.9% in the third quarter of 2009, after rising 7.1% in the second quarter and 6.1% in the first quarter.  Following these GDP results, HSBC China economist Qu Hongbin raised his estimates and predicted that the Chinese economy will grow 8.1% this year and 9.5% in 2010.  Previously Qu Hongbin estimated 7.8% growth in 2009 and 8.1% in 2010.  His bullish upgrade for next year suggests the Chinese recovery will be far broader and deeper than most observers had expected evidence that growth will be sustained not just by the government’s $586 billion fiscal stimulus package but by strong growth in consumer demand. Officially, the Chinese government is still forecasting 8% growth for 2009, down from last year’s 10.6%,

China’s National Bureau of Statistics, based on a random survey of 65,000 urban households in China, found that the average (annual) disposable income of urban residents in the first half of 2009 was U.S.$1,300, an increase of 9.8% compared to the same period last year. When price factors are deducted, this is equivalent to a real increase of 11.2%.  The average consumption expenditure amount of urban residents in the first half of 2009 was U.S.$876, an increase of 8.9% compared to the same period last year. When price factors are deducted, this is equal to a real increase of 10.3%.

TCM Industry Drivers

Bohai believes that demographic, governmental and related factors in the China will be favorable to growth and expansion of its business.

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Growing Prosperity of the Chinese People.  The increased spending power of China’s population continues to be reflected in the increased consumption of health products and medical services between 2007 and 2010.  According to Euromonitor data, spending by Chinese people on these goods and services will increase from $100 billion in 2007 to $145 billion in 2010.

Population and Aging

· The total population of China was 1.32 billion at the end of 2007, according to official government estimates.

· Due to improved healthcare, the elderly population of China is growing.

· The health/medical costs associated with care for elderly in China are approximately five (5x) times that of younger people.

· China had 170 million elderly people in 2007 but will have an expected 230 million elderly by 2015 according to “Consumer Lifestyles in China: Consumer Trends, China’s Grey Population,” by Euromonitor, 2009.

· The proportion of the China’s population aged 65 and over will rise from just 10% of the overall population in 1995 to 22% by 2030, according to the World Bank.  The process of aging in China is occurring much more rapidly than in western countries such as Germany.

· From 1995 to 2030 it is estimated that the ratio of working-age people to pensioners will decrease from 9.7:1 to 4.2:1.  China’s national estimates vary slightly from World Bank figures, but still show in increase in the proportion of the population over 65 years from 7% in 2000 to 9.4% in 2007, according to China Country Profile 2009, The Economist Intelligence Unit Ltd.

Government Policies in Health Care and TCM.  In April of 2009 the PRC government implemented a new national medical and health plan.  Among other features, this new plan extended national medical insurance coverage to China’s rural areas, where the bulk of the population resides.  This expanded coverage will eventually encompass virtually all of China’s 1.3 billion citizens, greatly expanding the market for TCM pharmaceuticals, as well as other health care products and services.   This has led to massive potential for increased sales growth for Bohai and other providers of TCM pharmaceutical products.

According to Espicom Business Intelligence, in the next three years, the PRC government’s health care investment will rise to $125 billion, compared with $96 billion for 2008.  Direct health care subsidies of urban and rural residents will amount to $57 billion.  China’s health care investment is expected to witness a growth of 19.7% and the overall growth rate will reach more than 25%.

Government Support of Traditional Chinese Medicine.  Among its public health initiatives, the Chinese government officially supports use of TCM to enhance wellness and to treat chronic and acute diseases. The government has also commenced a program to evaluate TCM and herbal-based pharmaceuticals for coverage and reimbursement under national medical insurance.  In 2002, TCM was declared a “national strategic industry” in the government’s “Development Outline of Traditional Chinese Medicine Modernization (2002 – 2010).”

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Decreased Competition.  Prior to 2009, there were approximately 6,000 Chinese pharmaceutical manufacturers.  That number is being significantly reduced through both marketplace attrition and direct government involvement, decreasing competition and increasing potential sales opportunities for the surviving companies.  Other companies are expected to fail through lack of innovative and aggressive management.  As an example, approximately one third of Chinese pharmaceutical companies do not have their own sales organization and distribution network.

Growth Strategy

Bohai’s strategic initiatives for the next three years are designed to aggressively capitalize on the health and wellness needs of increasingly wealthy and empowered consumer class in China.  In particular, Bohai is seeking to capitalize on the government policies that extended medical insurance in 2009 to hundreds of millions of Chinese citizens living in rural areas, representing a vast untapped market of potential consumers who previously lacked access to national medical insurance.  As part of its reforms to expand and improve public health and medical care, the PRC government is promoting the use of herbal-based TCM and expanding insurance coverage to 100% of an increasing number of medicines.

Bohai’s strategic initiatives include the following:

Grow Hospital Presence.  Bohai has targeted 600 hospitals in 100 locations throughout China for direct marketing of Bohai products.  As part of this initiative, Bohai’s sales team will expand its marketing activities to educate hospital personnel about the Bohai product lines and train hospital employees in the preventative and curative qualities of these products.  The initial focus will capitalize on the best known and most popular Bohai products such as Tongbi capsules and Shangtongning tablets, using these as door-openers for our other medicines.

The average cost to “open” each hospital to the Bohai products is $1,500 with the following provinces targeted:

Cities	Number of Hospitals
Zhejiang	100
Jiangsu	80
Anhui	150
Shandong	200
Sichuan	20
Hubei	100

Build Awareness of the Lung Nourishing Cream.  Bohai plans to allocate a significant portion of the proceeds from the Private Placement for brand-building.  It will primarily target consumers through television and print advertising to expand awareness of the uses and effectiveness of its Lung Nourishing Cream.  The advertising will incorporate messaging targeting smokers and workers with occupational diseases as well as city dwellers exposed to smog.  It is expected that the consumer television advertising program will initially be focused in the following areas:

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TV Station Location	Amount
Shandong	$700,000
Anhui	$575,000
Hubei	$425,000
Sichuan	$425,000
Chongqing	$425,000
Shanxi	$300,000
Jiangsu	$300,000
Liaoning	$300,000

Expand to Rural Areas.  Bohai expects to execute a comprehensive marketing campaign targeting 100 rural counties as a result of the national government’s emphasis on expansion of healthcare and health insurance into the country’s rural areas.  Bohai plans on starting its rural marketing in Shandong, Anhui, Liaoning and Hubei.  The Bohai sales team will market its products to pharmacies, hospitals, physicians, herbal medicine experts, media outlets and other opinion leaders in these rural areas.  The main purpose is to be listed in the New Rural Cooperative Medical Directory which is farmer-friendly and assists these rural dwellers with reimbursement of medical expenses.

Generally, the cost of this professional relationship-building with each rural county is $3,000 with a listing fee in the New Rural Cooperative Medical Directory costing in excess of $1,000,000.  Bohai expects to hire 80 sales people for this effort and to equip each with a minivan to enable in-person contacts.  Each employee will be responsible for 5 counties.  All of these sales and marketing initiatives will involve both OTC and prescribed products.

Build Product Line and Product Awareness.  Brand awareness marketing will include the promotion and introduction to new markets of the current popular Bohai products such as Tongbi Tablets, Lung Nourishing Cream and Champion Sea Dragon Wine Medicine.  As part of its increase in sales and marketing staff, Bohai plans to have special trainers and presenters who can conduct promotional events and seminars to increase awareness of Bohai products.

Competitive Advantages

Bohai believes there are several key factors that will continue to differentiate Bohai from its competition in the PRC:

· “Protected” Status of Bohai Products.  Three of Bohai’s 10 products enjoy protected status by the PRC government. This status regulates competition, granting Bohai exclusive or near-exclusive rights to manufacture and sell the protected products.

· Insurance Coverage for Lead Bohai Products.  Two of Bohai’s lead products, Lung Nourishing Cream and Tongbi Capsules and Tablets, are listed in the Catalogue Eligible for Medicine Reimbursement as of December 1, 2009.  This means that these medicines are eligible for reimbursement under the national health insurance.

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· Relatively low research and development (including acquisition) costs of TCM, compared with western pharmaceutical companies.

· Highly trained sales force of about 260 people as of November 2009.

Raw Materials and Suppliers

The principal raw materials used for the production of our distributed products are honey, laiyang pear paste, Sichuan fritillaria, pangolin, and Chinese angelica.  Raw materials, as well as packaging materials, are sourced from various independent suppliers in the PRC.  We have no long term agreements with our suppliers, and purchase raw materials on a purchase order basis.  We try to maintain relationships with at least two vendors for each major raw material in order to ensure a reliable supply of raw materials at reasonable prices.  We believe there is ample supply in the market for the foreseeable future of the ingredients for our products.  Our principal suppliers include Anhui Dechang Pharmaceutical Tablet Co., Ltd, Shandong Yantai Medical Materials Purchasing and Supply Station, Zibo Taibao Forgery-proof Product Co., Ltd., and Zhejiang Yuhuan Kangning Medicine Packaging CO., Ltd.  In fiscal 2009, one supplier accounted for over 10% of our purchases of raw materials.  Approximately 30% of the raw material is purchased from Anhui Dechang Pharmaceutical Tablet Co., Ltd, Shandong Yantai Medical Materials Purchasing and Supply Station and Shandong Cangli Medicine Co., Ltd.

Research and Development

We currently have limited resources to devote to and limited capabilities to conduct the development of new products.  We have only one full-time employee who is engaged in research and development, so we mainly dependent on a third-party, Yantai Tianzheng Medicine Research and Development Co., Ltd., to perform research and development for us.  We currently have two products, namely Forsythia Capsule and Fern Injection, under research and development in association with Yantai Tianzheng Medicine Research and Development Co., Ltd.

However, Bohai, like other TCM manufacturers, enjoys relatively low research and development expenses as most TCM medicines are based on standardized formula.  Research and development expenses are generally estimated at 5% of revenue for TCM manufacturers.  The research and development process includes toxicological tests, pharmalogical and qualitative research, preparation for production and other miscellaneous costs.  We intend to introduce one new product by 2014 which is currently identified as a Shujin Pain Relief soft capsule.  The total cost to develop this product is not expected to exceed $150,000.  We may also seek to acquire new products through acquisitions of other TCM companies in the future.

Manufacturing

Although TCM is thousands of years old, Bohai believes that its product manufacturing and procedures are the most modern and up-to-date available.  Bohai employs rigorous standards for product quality control and safety.  Bohai’s manufacturing is conducted in the city of Yantai in the Shandong province in a state-of-the-art 18,000 square-meter facility that meets or exceeds the latest Good Manufacturing and Quality Management Practice standards (referred to in China as “GMP”).

GMP standards are the government’s benchmark for pharmaceutical manufacturers in China and must be met for the manufacturer to be eligible to market domestically or enter world markets.  On March 31, 2009, Bohai completed a GMP review which included examination of 225 items including development technology, production, quality assurance, quality control, material handling and engineering.  As a result of the success of that review, Bohai has been re-certified for a new five-year period.

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Through stringent application of GMP standards, the PRC government has reduced the number of marginal medicine manufacturers by one-third, from 6,000 to 4,000.  It is expected that TCM and pharmaceutical companies such as Bohai that have received full GMP approval by the government will enjoy the competitive benefits of their strict adherence to quality control, safety, health and manufacturing standards.

Bohai’s advanced and mechanized facilities utilize controlled, clean-room procedures with sophisticated water filtration and materials processing systems.  In its annual operations, Bohai processes 800 tons of herbal plants to extract, isolate and purify the compounds used in its medicines and health supplements.  The manufacturing staff consists of 159 production employees and 30 quality control inspectors as of October 2009.

Marketing, Sales and Distribution

Bohai’s products are sold either by prescription through hospitals or Over The Counter (OTC) through local pharmacies and retail drug store chains. Sales and distribution are managed and executed by about 260 sales representatives located in 20 offices throughout China as of November 2009.  These employees are trained in all details of each product and are encouraged to develop strong ties with physicians, hospitals and pharmacies in their local areas. Smaller competitors cannot match the size and expertise of Bohai’s distribution network.

Bohai’s distribution and marketing initiatives for the next several years will be focused on achieving the following goals:

Expand hospital presence.  Bohai intends to further develop business in 600 hospitals in provinces it already serves including Shandong, Zhejiang, Jiangsu, Anhui, Sichuan and Hubei.  Bohai projects hospital sales to increase more than $8 million in 2010 over 2009 levels to $30 million.  The additional revenue will come from the newly developed hospitals in those provinces.

Expand distribution to the rural market.  The Chinese government’s expansion this year of national medical insurance coverage to the rural population provides Bohai with new and largely untapped markets.  Bohai is working to get some of its products, namely Lung Nourishing Cream, Tongbi Capsules, Tongbi Tablets and Bazhen Yimu Cream listed in government’s New National Medical Insurance Catalogue in Shandong and Anhui Province, and expects it will gain a competitive advantage in these newly accessible rural markets.

Throughout 2010 Bohai plans to develop relationships with 100 new county-level hospitals in rural areas of Shandong, Anhui, Liaoning and Hubei to establish its primary marketing and distribution network in these rural areas. Through these activities Bohai projects sales in these regions to increase $2.9 million in 2009 over the previous year to reach a total of $7.3 million.

Expand prescription medicine sales organization.  A key element of Bohai’s growth strategy is increased outreach to physicians.  These outreach programs will focus on the five current Bohai pharmaceutical products that are available by prescription only and will typically take place at state-run hospitals where virtually all Chinese citizens obtain their medical care.  Bohai’s educational training programs will be designed to inform doctors of the range of Bohai’s pharmaceutical products including diseases or health/wellness concerns targeted and proper usage of the medicines.  Management will allocate a portion of the proceeds derived from the Private Placement to expand its existing physician-education programs.

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Expand OTC team to drive market share.  Bohai management intends to accelerate and expand sales of its OTC medicines through promotion and advertising targeting consumers.  The marketing programs will principally utilize television, print advertising and news releases.

Competition

China’s domestic pharmaceutical industry is highly competitive, with hundreds of companies vying to reach consumers through more than 100,000 pharmacies.  In some categories in which we compete there are many other companies offering the same competitive products.  The market continues to attract new entrants because the per capita medicine consumption in China is still low, compared to developed countries, and that shows promise for substantial growth.

Competitive factors primarily include price and quality. We believe that we are able to effectively compete in our market segment in China based upon the quality of our product, given our new GMP certified manufacturing facility and our reputation in the market place.

Many of our current and potential competitors have significantly longer operating histories and significantly greater managerial, financial, marketing, technical and other competitive resources, as well as greater name recognition, than we do. These competitors may be able to respond more quickly to new or changing opportunities and customer requirements and may be able to undertake more extensive promotional activities, offer more attractive terms to customers or adopt more aggressive pricing policies. We cannot assure you that we will be able to compete effectively with current or future competitors or that the competitive pressures we face will not harm our business.

Intellectual Property

We market our products under the trademark “Xian Ge” which is registered with the PRC Trademark Bureau under the State Administration for Industry and Commerce.  Currently, another company is licensed to utilize our registered trademark “Xian Ge”. We have applied for a patent for a medicine with its production method for the treatment of Lung-qi Deficiency Cough and Chronic Bronchitis.  The application was accepted by the State Intellectual Property Office of the PRC on September 20, 2007.

Government Regulation

We are subject to many general regulations governing business entities and their behavior in China and in any other jurisdiction in which we have operations. In particular, we are subject to laws and regulations covering food, dietary supplements and pharmaceutical products. Such regulations typically deal with licensing, approvals and permits. Any change in product licensing may make our products more or less available on the market. Such changes may have a positive or negative impact on the sale of our products and may directly impact the associated costs in compliance and our operational and financial viability.

Our only sales market is presently in China.  We are subject to the Pharmaceutical Administrative Law, which governs the licensing, manufacturing, marketing and distribution of pharmaceutical products in China and sets penalties for violations of the law.  We are also subject to the Food Sanitation Law, which provides for the food sanitation standards to be followed.

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Under SFDA guidelines for licensing of pharmaceutical products, all pharmaceutical manufacturers must obtain and maintain GMP Certificate. We hold a GMP Certificate (No. Lu K0587) issued by Shandong Branch of SFDA on June 18, 2009. Because our manufacturing facility has obtained the National GMP Certificate, we are authorized to produce products in seven modes which are tablets, capsules, granules, syrup, concentrated decoctions, tincture and medical wine.  Such certificate expires on June, 14, 2014

We hold a Permit for the Production of Medicine (Lu Zb20050330) issued by Shandong Branch of SFDA on January 1, 2006 which allows us to engage in the production of tablets, capsules, granules, syrup, concentrated decoctions, tincture (for oral use) and medical wine.  Such permit expires on December 31, 2010.

The Permit for the Production of Medicine and GMP certificates are each valid for a term of five years and must be renewed before their expiration.

We obtained a Drug Approval Number for each of our products in 2004. The first five year valid terms of such Drug Approval Numbers have expired.  We submitted the applications for re-registration on June 29, 2007 which were accepted by SFDA.  We have been advised that the approval processes for these drugs and as well as drugs from other manufacturers in Shandong Province have not been started by the Shandong Branch of SFDA yet due to the new requirements provided by the Circular regarding the Better Conduction for the Examination and Approval of Drug Re-Registration which is issued by SFDA on July 31, 2009. During the renewal period, Bohai is permitted to continue manufacturing these drugs as if the renewals had been approved.

The governmental approval process in China’s newly developed health product is as follows: a product sample is sent to a clinical testing agent designated by the Ministry of Health, which conducts extensive clinical testing and examinations to verify if the product has the specified functions as stated by the company producing the product.  A report will be issued by the clinical testing agent confirming or negating such functions. It generally takes approximately six months to one year for the report to be issued.  This report then has to be submitted to a provincial Health Management Commission for approval. A letter of approval issued by such commission will then be submitted to the Ministry of Health for the issuance of a certificate that authorizes the sales and marketing of the product in China. The whole process generally takes one and a half to two years.

Because our subsidiary Yantai Shencaojishi Pharmaceuticals Co., Ltd. is a wholly foreign owned enterprise, we are subject to the law on foreign investment enterprises in China, and the foreign company provisions of the Company Law of China, which governs the conduct of our subsidiary and its officers and directors. Additionally, we are also subject to varying degrees of regulations and permit system by the Chinese government.

Currently we have not developed a market in U.S. so we believe we are not subject to any of regulations by the U.S. Food and Drug Administration.

Environment Regulation

We believe we are in compliance with the Environmental Protection Law of the PRC, as well as applicable local regulations, except that as of the date of this Memorandum we are in the process of applying for the Pollution Discharge Permit.  Zhifu District Branch of Yantai Environment Protection Bureau issued a written document on September 10, 2009, and stated that we have never been subject to sanction due to violation of relevant environmental protection laws since the incorporation.  In addition to compliance with PRC laws and local regulations, we consistently undertake active efforts to ensure the environmental sustainability of our operations.  Because the manufacturing of herb and plant-based products does not generally cause significant damage or pollution to the environment, the cost of complying with applicable environmental laws is not material.  In the event we fail to comply with applicable laws, we may be subject to penalties.

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Properties

Bohai’s corporate office is located at No. 9 Daxin Road, Zhifu District, Yantai, Shandong Province, China.  Under the current PRC laws, land is owned by the state, and parcels of land in rural areas which is known as collective land is owned by the rural collective economic organization. “Land use rights” are granted to an individual or entity after payment of a land use right fee is made to the applicable state or rural collective economic organization. Land use rights allow the holder of the right to use the land for a specified long-term period. We have a land use right, expiring in 2047, for a total of approximately 30,637 square meters of land.  We currently have not obtained a land use right certificate for a piece of land located in Xingfu Twelve Village of Zhifu District with the area of 11,222 square meters. In the process of the planning of Yantai City, the usage of the aforesaid land use right has been changed from “industrial use” to “commercial use” and therefore, the approval process for the land use right certificates on five relevant parcels of land including the land occupied by us is suspended until the completion of the planning. We can not assure you that we will eventually obtain the land use right certificate for the foresaid land.

Employees

Substantially all of our employees are located in China.  As of December 1, 2009, we have 546 employees, including 260 sales representatives.  There are no collective bargaining contracts covering any of our employees. We believe our relationship with our employees is satisfactory.

We are required to contribute a portion of our employees’ total salaries to the Chinese government’s social insurance funds, including medical insurance, unemployment insurance and job injuries insurance, and a housing assistance fund, in accordance with relevant regulations. In the last three years, we contributed approximately $62,930, $80,839 and $85,024 for the years ended December 31, 2006, 2007 and 2008, respectively. We expect the amount of contribution to the government’s social insurance funds to increase in the future as we expand its workforce and operations.

Item 1A.              Risk Factors.

Our business, operations and financial condition are subject to various risks.  Some of these risks are described below and you should take these risks into account in making a decision to invest in our Common Stock.  If any of the following risks actually accurs, we may not be able to conduct our business as currently planned and our financial condition and operating results could be seriously harmed.  In that case, the market price of our Common Stock could decline and you could lose all or part of your investment in our Common Stock.

Risks Related to Bohai’s Business

Our limited operating history may not serve as an adequate basis to judge our future prospects and results of operations.

Our limited operating history in the traditional Chinese herbal medicines industry may not provide a meaningful basis for evaluating our business.  Bohai entered into its current line of business in September 2004.  Although Bohai’s revenues have grown rapidly since its inception, we cannot guaranty that we will maintain profitability or that we will not incur net losses in the future.  We will continue to encounter risks and difficulties that companies at a similar stage of development frequently experience, including the potential failure to:

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· obtain sufficient working capital to support our expansion;

· maintain or protect our intellectual property;

· maintain our proprietary technology;

· expand our product offerings and maintain the quality of our products;

· manage our expanding operations and continue to fill customers’ orders on time;

· maintain adequate control of our expenses allowing us to realize anticipated revenue growth;

· implement our product development, marketing, sales and acquisition strategies and adapt and modify them as needed;

· integrate any future acquisitions; and

· anticipate and adapt to changing conditions in the Chinese herbal medicines industry resulting from changes in government regulations, mergers and acquisitions involving our competitors, technological developments and other significant competitive and market dynamics.

If we are unable to address any or all of the foregoing risks, our business may be materially and adversely affected.

In addition, potential investors are cautioned that prior to the Private Placement, Link maintained no operating business, and so investors in the Private Placement are investing solely in Bohai’s business.

We will likely need to raise additional funds in the future to grow our business, which funds may not be available on acceptable terms or at all, and, without additional funds, we may not be able to maintain or expand our business.

We expect that the net proceeds from the Private Placement, together with cash generated from operations, will be sufficient to fund our projected operations for at least the next 12 months.  It is likely that in the future we will require substantial funds in order to fund operating expenses, to develop manufacturing, marketing and sales capabilities and to cover public company costs.  Without enough funds, we may not be able to meet these goals.  We may seek additional funding through public or private financing or through collaborative arrangements with strategic partners.

You should also be aware that in the future:

· We cannot be certain that additional capital will be available on favorable terms, if at all;

· Any available additional financing may not be adequate to meet our goals; and

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· Any equity financing would result in dilution to stockholders.

If we cannot raise additional funds when needed, or on acceptable terms, we may not be able to effectively execute our growth strategy, take advantage of future opportunities, or respond to competitive pressures or unanticipated requirements. In addition, we may be required to scale back or discontinue our production and development program, or obtain funds through strategic alliances that may require us to relinquish certain rights.

We have significant short-term debt obligations, which mature in less than one year.  Our inability to extend the maturities of, or to refinance, this debt could result in defaults, and in certain instances, foreclosures on our assets.  Moreover, we may be unable to obtain financing to fund ongoing operations and future growth.

We currently depend on short-term bank loans and net revenues to meet our short-term cash requirements.  As of November 1, 2009, our total bank debt outstanding was $4.4 million or RMB 29.95 million which carries maturity periods ranging from six months to one year, while the short-term and revolving nature of these credit facilities is common in China. Part of these short-term credit facilities are guaranteed by our inventories and fixed assets and the rest of them are guaranteed by third-parties and our CEO, Mr. Qu.  In China, short-term bank loans generally mature in one year or less and contain no specific renewal terms.  However, it is customary practice for banks and borrowers to negotiate roll-overs or renewals of short-term borrowings on an on-going basis shortly before they mature.  Although we have renewed our short-term borrowings in the past, we cannot assure you that we will be able to renew these loans in the future as they mature.  If we are unable to obtain renewals of these loans or sufficient alternative funding on reasonable terms from banks or other parties, we will have to repay these borrowings with the cash on our balance sheet or cash generated by our future operations, if any.  

Moreover, we cannot assure you that our business will generate sufficient cash flow from operations to repay these borrowings.  Failure to obtain extensions of the maturity dates of, or to refinance, these obligations or to obtain additional equity financing to meet these debt obligations would result in an event of default with respect to such obligations and could result in the foreclosure on the collateral. The sale of such collateral at foreclosure would significantly disrupt our ability to produce products for our customers in the quantities required by customer orders or deliver products in a timely fashion, which could significantly lower our revenues and profitability.

In addition, we may be exposed to changes in interest rates.  If interest rates increase substantially, our results of operations could be adversely affected.

We have been heavily dependent on sales of four key products.

Four of our products, namely Tongbi Capsules, Tongbi Tablets, Lung Nourishing Cream and Tongshangning Tablets represented approximately 22%, 16%, 26%, and 15%, respectively, of total sales for the fiscal year ended June 30, 2009.  We expect that a significant portion of our future revenue will continue to be derived from sales of these four products. If this product were to become subject to a problem such as loss of Certificates of Protected Variety of Traditional Chinese Medicine, unexpected side effects, regulatory proceedings, publicity adversely affecting user confidence or pressure from competing products, or if a new, more effective treatment should be introduced, the impact on our revenues could be significant. We hold the Certificates of Protected Variety of Traditional Chinese Medicine (Grade Two) issued by State Food and Drug Administration of China (“SFDA”) for Tongbi Capsules and Shangtongning Tablets which give us exclusive or near-exclusive rights to manufacture and distribute these two medicines. The terms of certificates for both Tongbi Capsules and Shangtongning Tablets expired in September 2009 and we have filed an application for extending the protection period on March 12, 2009 for Tongbi Capsules and are in the process of applying for extending the protection period for Shangtongning Tablets. We can not assure you that we will get the approvals and the loss of Certificates of Protected Variety of Traditional Chinese Medicine will a material adverse effect on our revenues. If we can’t get approvals, these products can be manufactured and sold by other pharmaceutical manufacturers in China once the relevant protection periods elapse.

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We may not be able to adequately protect our intellectual property, which could cause us to be less competitive and negatively impact our business.

We regard our trademarks, trade secrets, patents and similar intellectual property as critical to our success.  We hold the trademark “Xian Ge” registered with the PRC Trademark Bureau under the State Administration for Industry and Commerce with a valid term effective through February 23, 2013.  We have applied for a patent for a medicine with its production method for the treatment of Lung-qi Deficiency Cough and Chronic Bronchitis.  The application was accepted by the State Intellectual Property Office of the PRC on September 20, 2007.  No assurances can be given that such application will be approved.  If we are unable to obtain or maintain registered intellectual property protections for our proprietary products or methods, these products or methods could be infringed upon, which could materially adversely affect our business.

We rely on trademark, patent and trade secret law, as well as confidentiality agreement with certain of our employees to protect our proprietary rights.  For senior managers, we include a standard confidentiality clause into the employment agreement to prevent them from disclosing the formula or processing procedure to outside parties. No assurance can be given that our intellectual property will not be challenged, invalidated, infringed or circumvented, or that our intellectual property rights will provide competitive advantages to us.  Any material impairment of our intellectual property rights could have a material adverse effect on our business.

We face competition in the pharmaceutical market in the PRC and such competition could cause our sales revenue and profits to decline.

According to SFDA in China, there were approximately 5,071 pharmaceutical manufacturing companies in the PRC as of the end of June 2004, of which approximately 3,237 manufacturers obtained certificates of Good Manufacturing Practices Certification (“GMP”).  After GMP certification became a mandatory requirement on July 1, 2004, approximately 1,834 pharmaceutical manufacturers were forced to cease production.  Only the 3,237 pharmaceutical manufacturers with GMP certifications may continue their manufacturing operations.  As of the end of 2006, there were 4,682 enterprises manufacturing medicines and formulation in China.  The certificates, permits, and licenses required for pharmaceutical operation in the PRC create a potentially significant barrier for new competitors seeking entrance into the market.  Despite these obstacles, we face competitors that will attempt to create, or are already marketing, products in the PRC that are similar to ours.  Many of our current and potential competitors have significantly longer operating histories and significantly greater managerial, financial, marketing, technical and other competitive resources, as well as greater name recognition, than we do.  These competitors may be able to respond more quickly to new or changing opportunities and customer requirements and may be able to undertake more extensive promotional activities, offer more attractive terms to customers or adopt more aggressive pricing policies.  We cannot assure you that we will be able to compete effectively with current or future competitors or that the competitive pressures we face will not harm our business.

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Our business depends and will depend substantially on the continuing efforts of our present and future executive officers, and our business may be severely disrupted if we lose, are unable to obtain or unable to replace their services.

Our future prospects depend substantially on the continued services of our executive officers, especially Mr. Qu, the General Manager and Executive Director of Bohai. We do not maintain key man life insurance on any of our executive officers.  If one or more of our executive officers are unable or unwilling to continue in their present positions, we may not be able to replace them readily, if at all.  Therefore, our business may be severely disrupted, and we may incur additional expenses to recruit and retain new officers.  In addition, if any of our executives joins a competitor or forms a competing company, we may lose some of our customers.

In addition, we do not presently have a Chief Financial Officer that is familiar with the accounting and reporting requirements of a U.S. publicly-listed company.  Although we have agreed to retain the services of such an executive within 6 months of the closing of the Private Placement, no assurances can be given that we will be able to identify or afford the financial requirements of qualified candidates.  The position of Chief Financial Officer of a U.S. publicly-listed company is critical to the operations of such a company, and our failure to fill this position in a timely and effective manner will negatively impact our business.

Our business and growth will suffer if we are unable to hire and retain key personnel that are in high demand.

Our future performance depends on our ability to attract and retain highly skilled chemists, pharmaceutical engineers, technical, marketing and sales personnel, especially qualified personnel for our operations in China.  Qualified individuals are in high demand in China, and there are insufficient experienced personnel to fill the demand.  Therefore, we may not be able to attract or retain the personnel we need to succeed.  Our business development would be hindered if we lost the services of some key personnel.

Our business is highly dependent on continually developing or acquiring new and advanced products, technologies, and processes and failure to do so may cause us to lose our competitiveness in the pharmaceutical industry and may cause our profits to decline.

To remain competitive in the pharmaceutical industry, it is important to continually develop new and advanced products, technologies and processes.  There is no assurance that our competitors’ new products, technologies and processes will not render our company’s existing products obsolete or non-competitive.  Our company’s competitiveness in the pharmaceutical market therefore relies upon our ability to enhance our current products, introduce new products, and develop and implement new technologies and processes.  Our company’s failure to technologically evolve and/or develop new or enhanced products may cause us to lose our competitiveness in the pharmaceutical industry and may cause our profits to decline.  It is likely that our efforts to grow our products lines will be focused on acquisitions of such products from third parties.  There are many risks attendant to the acquisition of assets or companies, including availability, pricing, competition and, if acquisitions are consummate, integration.  If we are unable to so acquire and integrate new products, our revenue and profitability may suffer.

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Our research and development may be costly and/or untimely, and there are no assurances that our research and development will either be successful or completed within the anticipated timeframe, if ever at all.

The research and development of our new and existing products and their subsequent commercialization plays an important role in our success.  Development of new products requires significant research, development and clinical testing efforts, and we currently have limited resources to devote to and limited capabilities to conduct the development of new products. We have only one full-time employee who is engaged in research and development, so we mainly dependent on a third-party, Yantai Tianzheng Medicine Research and Development Co., Ltd., to perform research and development for us.  Accordingly, the failure of the third-party research to perform under agreements entered into with us, or our failure to renew important research agreements with the third party, may delay or curtail our research and development efforts.

As of September 2009, we have two products, namely Forsythia Capsule and Fern Injection, under research and development.  The research and development of new products is costly and time consuming, and there are no assurances that our research and development of new products will either be successful or completed within the anticipated time frame, if ever at all.  There are also no assurances that if the product is developed, that it will lead to actual commercialization and sales.

The commercial performance of our products depends upon the degree of market acceptance among the medical community and failure to attain market acceptance among the medical community may have an adverse impact on our operations and profitability.

The commercial performance of our products depends upon the degree of market acceptance among the medical community, such as hospitals and physicians.  Even if our products are approved by SFDA, and two of our products (Lung Nourishing Cream and Tongbi Capsules and Tablets) have been authorized to be eligible for reimbursement under national medical insurance programs, with others expected to follow, there is no assurance that physicians will prescribe or recommend our products to patients.  Furthermore, a product’s prevalence and use at hospitals may be contingent upon our relationship with the medical community.  The acceptance of our products among the medical community may depend upon several factors, including but not limited to, the product’s acceptance by physicians and patients as a safe and effective treatment, cost effectiveness, potential advantages over alternative treatments, and the prevalence and severity of side effects.  Failure to attain market acceptance among the medical community may have an adverse impact on our operations and profitability.

We may not be able to obtain the regulatory approvals or clearances that are necessary to commercialize our products.

The PRC and other countries impose significant statutory and regulatory obligations upon the manufacture and sale of pharmaceutical products.  Each regulatory authority typically has a lengthy approval process in which it examines pre-clinical and clinical data and the facilities in which the product is manufactured. Regulatory submissions must meet complex criteria to demonstrate the safety and efficacy of the ultimate products. Addressing these criteria requires considerable data collection, verification and analysis. We may spend time and money preparing regulatory submissions or applications without assurances as to whether they will be approved on a timely basis or at all.

Our product candidates, some of which are currently in the early stages of development, will require significant additional development and pre-clinical and clinical testing prior to their commercialization. These steps and the process of obtaining required approvals and clearances can be costly and time-consuming. If our potential products are not successfully developed, cannot be proven to be safe and effective through clinical trials, or do not receive applicable regulatory approvals and clearances, or if there are delays in the process:

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· the commercialization of our products could be adversely affected;

· any competitive advantages of the products could be diminished; and

· revenues or collaborative milestones from the products could be reduced or delayed.

Governmental and regulatory authorities may approve a product candidate for fewer indications or narrower circumstances than requested or may condition approval on the performance of post-marketing studies for a product candidate. Even if a product receives regulatory approval and clearance, it may later exhibit adverse side effects that limit or prevent its widespread use or that would force us to withdraw the product from the market.

Any marketed product and its manufacturer will continue to be subject to strict regulation after approval. Results of post-marketing programs may limit or expand the further marketing of products. Unforeseen problems with an approved product or any violation of regulations could result in restrictions on the product, including its withdrawal from the market and possible civil actions.

In manufacturing our products we will be required to comply with applicable good manufacturing practices regulations, which include requirements relating to quality control and quality assurance, as well as the maintenance of records and documentation. If we cannot comply with regulatory requirements, including applicable good manufacturing practice requirements, we may not be allowed to develop or market the product candidates. If we or our manufacturers fail to comply with applicable regulatory requirements at any stage during the regulatory process, we may be subject to sanctions, including fines, product recalls or seizures, injunctions, refusal of regulatory agencies to review pending market approval applications or supplements to approve applications, total or partial suspension of production, civil penalties, withdrawals of previously approved marketing applications and criminal prosecution.

Our products may have inadvertent and/or harmful side effects.  If side effects associated with our current or future products are not indentified prior to their marketing and sale, we may suffer as a result of product liability.  We may be required to withdraw such products from the market, change the labeling of our product, or suffer product liability claim against us.

All medicines have certain side effect.  Although all of our medicines sold on market have passed proper testing and are approved by SFDA, the products may still inadvertently adverse effects on the health of the consumers. If such side effect is identified after marketing and sale of the products, the products may be required to be withdrawn from the market, or have a change in labeling. If a product liability claim is brought against us, it may, regardless of merit or eventual outcome, result in damage to our reputation, breach of contracts with consumers, decreased demand for our products, costly litigation and loss of revenue.

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Natural disasters, weather conditions and other environmental factors affect our raw material supply, and a reduction in the quality or quantity of our herb supplies may have material adverse consequences on our financial results.

Our business may be adversely affected by weather and environmental factors beyond our control, such as natural disasters and adverse weather conditions.  The production of our products depends on the availability of raw materials, a significant portion of which are herbs.  These herbs tend to be very sensitive crops, which can be readily damaged by harsh weather, by disease, and by pests.  If our suppliers’ crops are destroyed by drought, flood, storm, blight, or the other woes of farming, we will not be able to meet the demands of our customers, which will have a material adverse effect on our business and financial condition and results.  

Our certificates, permits, and license are subject to governmental control and renewal, and the failure to obtain renewal would cause all or part of our operation to be suspended and have a material adverse effect on our financial condition.

We are subject to various PRC laws and regulations pertaining to the pharmaceutical industry.  We have obtained certain certificates, permits, and licenses required for the operation of a pharmaceutical enterprise and the manufacturing and distribution of pharmaceutical products in the PRC.  Some of the permits and license have expired or are about to expire.  We hold a Permit for the Production of Medicine (Lu Zb20050330) issued by Shandong Branch of SFDA on January 1, 2006 which allows us to engage in the production of tablets, capsules, granules, syrup, concentrated decoctions, tincture (for oral use) and medical wine.  Such permit expires on December 31, 2010.  We also hold a GMP Certificate (No. Lu K0587) issued by Shandong Branch of SFDA on June 18, 2009, the scope of inspection of which is tablets, capsules, granules, syrup, concentrated decoctions, tincture and medical wine.  Such certificate expires on June, 14, 2014.  The Permit for the Production of Medicine and GMP certificates are each valid for a term of five years and must be renewed before their expiration.

We hold a Drug Approval Number (“DAN”) for each of our products, and the valid terms of such DANs have expired.  We submitted the applications for re-registration on 29th June, 2007 which were accepted by SFDA, although the approvals have not yet been granted.  We have been advised that the approval processes for these drugs, as well as drugs submitted by other drug manufacturers in Shandong Province, have not been started by the Shandong Branch of SFDA yet due to the new requirements provided by the Circular regarding the Better Conduction for the Examination and Approval of Drug Re-Registration which is issued by SFDA on July 31, 2009.  During the renewal period, however, we will be permitted to continue manufacturing these drugs as if the renewals had been approved.  Our license to produce medical wine has a term valid through December 31, 2010.

During the application or renewal process for our licenses and permits, we will be evaluated and re-evaluated by the appropriate governmental authorities and must comply with the prevailing standards and regulations, which may change from time to time.  In the event that we are not able to obtain or renew the certificates, permits and licenses, all or part of our operations may be suspended by the government, which would have a material adverse effect on our business and financial condition.  Furthermore, if escalating compliance costs associated with governmental standards and regulations restrict or prohibit any part of our operations, it may adversely affect our results of operations and profitability.

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Our failure to fully comply with PRC labor laws, including laws relating to social insurance, may expose us to potential liability and increased costs.

Companies operating in China must comply with a variety of labor laws, including certain pension, health insurance, unemployment insurance and other welfare-oriented payment obligations.  Our failure to comply with these laws could have a material adverse effect on our business.  For example, we are currently paying social insurance for our 105 full-time employees.  We also have 260 sales representatives that we believe we are not required to pay social insurance for as these sales representatives are not legally employees of ours, but are rather independent contractors.  We have not paid social insurance for 195 of our full-time employees, and as an alternative we have reached an agreement with the employees that we will pay the employees compensations with an amount equals to the amount of social insurance that we are required to pay and the employees will pay the social insurance by themselves.  We believe these employees have been covered by social insurances and we are not required to make any contributions to the government in addition to the amount we have paid to these employees.  However, our interpretation of these requirements may be wrong, and the PRC regulatory authorities may not take the same view as we do on this subject.  If the PRC regulatory authorities take the view that we are required to pay social insurance for our independent contractors or other employees, our failure to make previous payments may be in violation of applicable PRC labor laws and we cannot assure you that PRC governmental authorities will not impose penalties on us for failure to comply.  In addition, in the event that any current or former employee files a complaint with the PRC government, we may be subject to making up the social insurance payment obligations as well as paying administrative fines.  The total cost of these payments and any related fines or penalties could be very significant and could have a material adverse effect on our working capital.

In addition, the new PRC Labor Contract Law took effect January 1, 2008 and governs standard terms and conditions for employment, including termination and lay-off rights, contract requirements, compensation levels and consultation with labor unions, among other topics.  In addition, the law limits non-competition agreements with senior management and other employees who have access to confidential information to two years and imposes restrictions or geographical limits.  This new labor contract law will increase our labor costs, which could adversely impact our results of operations.

We are subject to PRC government price control of drugs which may limit our profitability and even cause us to stop manufacturing certain products.

The State Development and Reform Commission of the PRC (“SDRC”) and the price administration bureaus of the relevant provinces of the PRC in which the pharmaceutical products are manufactured are responsible for the retail price control over our pharmaceutical products.  The SDRC sets the price ceilings for certain pharmaceutical products in the PRC. All of our products except those under the protection periods are subject to such price controls as of the date of this Memorandum and we prices our medicines well under government-mandated caps. There is no assurance that whether our other products will remain unaffected by the price control.  Where our products are subject to a price ceiling, we will need to adjust the product price to meet the requirement and to accommodate for the pricing of competitors in the competition for market shares.  The price ceilings set by the SDRC may limit our profitability, and in some instances, such as where the price ceiling is below production costs, may cause us to stop manufacturing certain products which may adversely affect our results of operations.

Because we may not be able to obtain business insurance in the PRC, we may not be protected from risks that are customarily covered by insurance in the United States.

Business insurance is not readily available in the PRC.  To the extent that we suffer a loss of a type which would normally be covered by insurance in the United States, such as product liability and general liability insurance, we would incur significant expenses in both defending any action and in paying any claims that result from a settlement or judgment.  We have not obtained fire, casualty and theft insurance, and there is no insurance coverage for our raw materials, goods and merchandise, furniture and buildings in China.  Any losses incurred by us will have to be borne by us without any assistance, and we may not have sufficient capital to cover material damage to, or the loss of, our production facility due to fire, severe weather, flood or other cause, and such damage or loss would have a material adverse effect on our financial condition, business and prospects.

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We may be subject to product liability claims, for which we have no insurance.

We may produce products which inadvertently have an adverse pharmaceutical effect on the health of individuals.  Existing laws and regulations in China do not require us to maintain third party liability insurance to cover product liability claims.  However, if a product liability claim is brought against us, it may, regardless of merit or eventual outcome, result in damage to our reputation, breach of contracts with our customers, decreased demand for our products, costly litigations, product recalls, loss of revenue, and our inability to commercialize some products.

We do not carry directors and officers’ liability insurance to cover any expenses and losses due to lawsuits related to financial reporting errors.  Our indemnification obligations could adversely affect our business, financial condition and results of operations.

We have not obtained director and officer liability insurance to cover lawsuit expenses and losses related to financial reporting errors.  Our bylaws require us to indemnify our current and former directors, officers, employees and agents against most actions of a civil, criminal, administrative or investigative nature.  Generally, we are required to advance indemnification expenses prior to any final adjudication of an individual’s culpability.  The expense of indemnifying our current and former directors, officers and employees and agents in their defense or related expenses as a result of any actions related to the internal investigation and financial restatement may be significant.  Therefore, our indemnification obligations could result in the diversion of our financial resources and may adversely affect our business, financial condition and results of operations.

Potential environmental liability could have a material adverse effect on our operations and financial condition.

As a manufacturer, we are subject to various Chinese environmental laws and regulations on air emission, waste water discharge, solid wastes and noise.  We are in the process of applying for Pollution Discharge Permit, other than that we believe that our operations are in substantial compliance with current environmental laws and regulations. We can not assure you that we may not be able to comply with these regulations at all times as the Chinese environmental legal regime is evolving and becoming more stringent.  Therefore, if the Chinese government imposes more stringent regulations in future, we may have to incur additional and potentially substantial costs and expenses in order to comply with new regulations, which may negatively affect our results of operations.  Furthermore, no assurance can be given that all potential environmental liabilities have been identified or properly quantified or that any prior owner, operator, or tenant has not created an environmental condition unknown to us.  If we fail to comply with any of the present or future environmental regulations in any material aspects, we may suffer from negative publicity and be subject to claims for damages that may require us to pay substantial fines or have our operations suspended or even be forced to cease operations.

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Risks Relating to the Our Corporate Structure

Our corporate structure, in particular the VIE Agreements, are subject to significant risks, as set forth in the following risk factors.

We have not developed independent corporate governance.

We are currently seeking independent directors for our Board of Directors; however we do not presently have independent directors. Additionally, we have no audit, compensation, or nominating committees. This lack of independence and independent controls over our corporate affairs may result in potential or actual conflicts of interest between our officers, directors and our shareholders. We presently have no policy to resolve such conflicts. As a result, our Directors have the ability to, among other things, determine their own level of compensation. Until we comply with such corporate governance measures to appoint a majority of independent directors and form audit and other board committees in a manner consistent with Nasdaq Marketplace rules as part of our obligations under the Securities Purchase Agreement in connection with the Private Placement, the absence of such standards of corporate governance may leave our stockholders without protections against interested director transactions, conflicts of interest, if any, and similar matters and any potential investors may be reluctant to provide us with funds necessary to expand our operations.

The PRC government may determine that the VIE Agreements are not in compliance with applicable PRC laws, rules and regulations.

In the PRC it is widely understood that foreign invested enterprises are forbidden or restricted to engage in certain businesses or industries which are sensitive to the economy.  While we intend to centralize our management and operation in the PRC without being restricted to conduct certain business activities which are important for our current or future business but are restricted or might be restricted in the future, we believe our VIE Agreements will be essential for our business operation.

In order for WFOE to manage and operate our business through Bohai in the PRC, the VIE Agreements were entered into under which almost all the business activities of Bohai are managed and operated by WFOE and almost all economic benefits and risks arising from the business of Bohai are transferred to WFOE.

There are risks involved with the operation of Bohai under the VIE Agreements.  As advised by our PRC legal counsel, if the VIE Agreements are considered to be in breach of any existing or future PRC laws or regulations, the relevant regulatory authorities would have broad discretion in dealing with such breach, including:

· imposing economic penalties;

· discontinuing or restricting the operations of WFOE or Bohai;

· imposing conditions or requirements in respect of the VIE Agreements with which WFOE may not be able to comply;

· requiring us to restructure the relevant ownership structure or operations;

· taking other regulatory or enforcement actions that could adversely affect our business; and

· revoking the business license and/or the licenses or certificates of WFOE, and/or voiding the VIE Agreements.

Any of these actions could have a material adverse impact on our business, financial condition and results of operations.

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We depend upon the VIE Agreements in conducting our production, manufacturing and distribution of traditional Chinese herbal medicines in the PRC, which may not be as effective as direct ownership.

Following the Share Exchange, we will conducts our production, manufacturing and distribution of traditional Chinese herbal medicines in the PRC and generates the relevant revenues through the VIE Agreements.  The VIE Agreements may not be as effective in providing us with control over Bohai as direct ownership.  The VIE Agreements are governed by PRC laws and provide for the resolution of disputes through arbitration proceedings pursuant to PRC laws.  Accordingly, the VIE Agreements would be interpreted in accordance with PRC laws.  If Bohai or its shareholders fail to perform the obligations under the VIE Agreements, we may have to rely on legal remedies under PRC laws, including seeking specific performance or injunctive relief, and claiming damages, and there is a risk that we may be unable to obtain these remedies.  The legal environment in China is not as developed as in other jurisdictions.  As a result, uncertainties in the PRC legal system could limit our ability to enforce the VIE Agreements.

The pricing arrangement under the VIE Agreements may be challenged by the PRC tax authorities.

We could face adverse tax consequences if the PRC tax authorities determine that the VIE Agreements were not entered into based on arm’s length negotiations.  If the PRC tax authorities determine that the VIE Agreements were not entered into on an arm’s length basis, they may adjust the income and expenses of our company for PRC tax purposes which could result in higher tax liability.

We rely on the approval certificates and business license held by Bohai and any deterioration of the relationship between WFOE and Bohai could materially and adversely affect the overall business operation of our company.

Following the Share Exchange, and pursuant to the VIE Agreements, our production, manufacturing and distribution of traditional Chinese herbal medicines in China will be undertaken on the basis of the approvals, certificates and business license as well as other requisite licenses held by Bohai.  There is no assurance that Bohai will be able to renew its licenses or certificates when their terms expire with substantially similar terms as the ones they currently hold.

Further, our relationship with Bohai is governed by the VIE Agreements, which are intended to provide us, through our indirect ownership of WFOE, with effective control over the business operations of Bohai.  However, the VIE Agreements may not be effective in providing control over the applications for and maintenance of the licenses required for our business operations.  Bohai could violate the VIE Agreements, go bankrupt, suffer from difficulties in its business or otherwise become unable to perform its obligations under the VIE Agreements and, as a result, our operations, reputation, business and stock price could be severely harmed.

If WFOE exercises the purchase options over Bohai’s equity pursuant to the VIE Agreements, the payment of purchase prices could materially and adversely affect the financial position of our company.

Under the VIE Agreements, WFOE holds an option to purchase all or a portion of the equity of Bohai at a price, pro rata in case of not all, based on the capital paid in by the Bohai shareholders (namely, $2.94 million or RMB 20 million ).  In the case that applicable PRC laws and regulations require an appraisal of the equity interest or provide other restriction on the purchase price, the purchase price shall be the lowest price permitted under the applicable PRC laws and regulations. As Bohai is already a contractually controlled affiliate to our company, WFOE’s purchase of Bohai’s equity would not bring immediate benefits to our company and the exercise of the option and payment of the purchase prices could adversely affect the financial position of our company.

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Risks Associated With Doing Business in China

There are substantial risks associated with doing business in China, as set forth in the following risk factors.

The Chinese government exerts substantial influence over the manner in which we must conduct our business activities.

We are dependent on our relationship with the local government in the province in which we operate our business.  Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership.  Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, environmental regulations, land use rights, property and other matters.  The central or local governments of in the PRC jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations.  Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties.

Future inflation in China may inhibit our ability to conduct business in China. In recent years, the Chinese economy has experienced periods of rapid expansion and high rates of inflation.  Rapid economic growth can lead to growth in the money supply and rising inflation.  If prices for our products rise at a rate that is insufficient to compensate for the rise in the costs of supplies, it may have an adverse effect on profitability.  These factors have led to the adoption by Chinese government, from time to time, of various corrective measures designed to restrict the availability of credit or regulate growth and contain inflation.  High inflation may in the future cause Chinese government to impose controls on credit and/or prices, or to take other action, which could inhibit economic activity in China, and thereby harm the market for our products.

Our operations and assets in China are subject to significant political and economic uncertainties. 

Changes in PRC laws and regulations, or their interpretation, or the imposition of confiscatory taxation, restrictions on currency conversion, imports and sources of supply, devaluations of currency or the nationalization or other expropriation of private enterprises could have a material adverse effect on our business, results of operations and financial condition.  Under its current leadership, the Chinese government has been pursuing economic reform policies that encourage private economic activities and greater economic decentralization.  There is no assurance, however, that the Chinese government will continue to pursue these policies, or that it will not significantly alter these policies from time to time without notice.

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We derive all of our sales in China and a slowdown or other adverse developments in the PRC economy may materially and adversely affect our customers, demand for our products and our business. 

All of our sales are generated in China.  We anticipate that sales of our products in China will continue to represent all of our total sales in the near future.  Although the PRC economy has grown significantly in recent years, we cannot assure you that such growth will continue.  The industry which we are involved in the PRC is relatively new and growing, but we do not know how sensitive we are to a slowdown in economic growth or other adverse changes in the PRC economy which may affect demand for our products.  In addition, the Chinese government also exercises significant control over Chinese economic growth through the allocation of resources, controlling payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies.  Efforts by the Chinese government to slow the pace of growth of the Chinese economy could result in reduced demand for our products.  A slowdown in overall economic growth, an economic downturn or recession or other adverse economic developments in the PRC may materially reduce the demand for our products and materially and adversely affect our business.

Currency fluctuations and restrictions on currency exchange may adversely affect our business, including limiting our ability to convert Chinese Renminbi into foreign currencies and, if Chinese Renminbi were to decline in value, reducing our revenue in U.S. dollar terms. 

Our reporting currency is the U.S. dollar and our operations in China use their local currency as their functional currencies. Substantially all of our revenue and expenses are in Chinese Renminbi.  We are subject to the effects of exchange rate fluctuations with respect to any of these currencies.  For example, the value of the Renminbi depends to a large extent on Chinese government policies and China’s domestic and international economic and political developments, as well as supply and demand in the local market. Since 1994, the official exchange rate for the conversion of Renminbi to the U.S. dollar had generally been stable and the Renminbi had appreciated slightly against the U.S. dollar.  However, on July 21, 2005, the Chinese government changed its policy of pegging the value of Chinese Renminbi to the U.S. dollar.  Under the new policy, Chinese Renminbi may fluctuate within a narrow and managed band against a basket of certain foreign currencies. It is possible that the Chinese government could adopt a more flexible currency policy, which could result in more significant fluctuation of Chinese Renminbi against the U.S. dollar.  We can offer no assurance that Chinese Renminbi will be stable against the U.S. dollar or any other foreign currency. 

Our financial statements are translated into U.S. dollars at the average exchange rates in each applicable period.  To the extent the U.S. dollar strengthens against foreign currencies, the translation of these foreign currencies denominated transactions results in reduced revenue, operating expenses and net income for our international operations.  Similarly, to the extent the U.S. dollar weakens against foreign currencies, the translation of these foreign currency denominated transactions results in increased revenue, operating expenses and net income for our international operations.  We are also exposed to foreign exchange rate fluctuations as we convert the financial statements of our foreign consolidated subsidiaries into U.S. dollars in consolidation.  If there is a change in foreign currency exchange rates, the conversion of the foreign consolidated subsidiaries’ financial statements into U.S. dollars will lead to a translation gain or loss which is recorded as a component of other comprehensive income.  In addition, we have certain assets and liabilities that are denominated in currencies other than the relevant entity’s functional currency.  Changes in the functional currency value of these assets and liabilities create fluctuations that will lead to a transaction gain or loss.  We have not entered into agreements or purchased instruments to hedge our exchange rate risks, although we may do so in the future.  The availability and effectiveness of any hedging transaction may be limited and we may not be able to hedge our exchange rate risks.

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The State Administration of Foreign Exchange (“SAFE”) restrictions on currency exchange may limit our ability to receive and use our sales revenue effectively and to pay dividends, and the restrictions may cause a delay in payment of interest on the Notes.

All of our sales revenue and expenses are denominated in the Chinese currency, Renminbi.  Under PRC law, the Renminbi is currently convertible under the “current account,” which includes dividends and trade and service-related foreign exchange transactions, but not under the “capital account,” which includes foreign direct investment and loans.  Currently, our PRC operating subsidiary, Bohai, may purchase foreign currencies for settlement of current account transactions, including payments of dividends to us, without the approval of SAFE, by complying with certain procedural requirements.  However, the relevant PRC government authorities may limit or eliminate our ability to purchase foreign currencies in the future.  Since a significant amount of our future revenue will be denominated in Renminbi, any existing and future restrictions on currency exchange may limit our ability to utilize revenue generated in Renminbi to fund our business activities outside China that are denominated in foreign currencies.

Following the Share Exchange, all of our income will be derived from the consulting fees we receive from Bohai through the VIE Agreements.  SAFE restrictions may delay the payment of dividends, since we have to comply with certain procedural requirement and we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from the profits of WFOE, and it thus may delay our payment of interests to the Notes holders.

Foreign exchange transactions by PRC operating subsidiaries under the capital account continue to be subject to significant foreign exchange controls and require the approval of or need to register with PRC government authorities, including SAFE.  In particular, if Bohai, our PRC operating subsidiary, borrows foreign currency through loans from us or other foreign lenders, these loans must be registered with SAFE, and if we finance Bohai by means of additional capital contributions, these capital contributions must be approved by certain government authorities, including the Ministry of Commerce, or their respective local counterparts.  These limitations could affect Bohai’s ability to obtain foreign exchange through debt or equity financing.

The PRC government also may at its discretion restrict access in the future to foreign currencies for current account transactions.  If the foreign exchange control system prevents us from obtaining foreign currency, we may be unable to pay the interest and principal on the Notes, pay dividends or meet obligations that may be incurred in the future that require payment in foreign currency.

Recent PRC regulations relating to acquisitions of PRC companies by foreign entities may create regulatory uncertainties that could restrict or limit our ability to operate.  Our failure to obtain the prior approval of the China Securities Regulatory Commission (“CSRC”) for the Private Placement and the listing and trading of our Common Stock could have a material adverse effect on our business, operating results, reputation and trading price of our Common Stock, and may also create uncertainties for the Private Placement.

The SAFE issued a public notice in November 2005, known as Circular 75, concerning the use of offshore holding companies in mergers and acquisitions in China.  The public notice provides that if an offshore company controlled by PRC residents intends to acquire a PRC company, such acquisition will be subject to registration with the relevant foreign exchange authorities.  The public notice also suggests that registration with the relevant foreign exchange authorities is required for any sale or transfer by the PRC residents of shares in an offshore holding company that owns an onshore company.  PRC residents must each submit a registration form to the local SAFE branch with respect to their ownership interests in the offshore company, and must also file an amendment to such registration if the offshore company experiences material events, such as changes in the share capital, share transfer, mergers and acquisitions, spin-off transactions or use of assets in China to guarantee offshore obligations.

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On August 8, 2006, the PRC Ministry of Commerce (“MOC”), joined by the State-owned Assets Supervision and Administration Commission of the State Council, the State Administration of Taxation, the State Administration for Industry and Commerce, the CSRC and SAFE, released a substantially amended version of the Provisions for Foreign Investors to Merge with or Acquire Domestic Enterprises (the “Revised M&A Regulations”), which took effect September 8, 2006.  These new rules significantly revised China’s regulatory framework governing onshore-to-offshore restructurings and foreign acquisitions of domestic enterprises.  These new rules signify greater PRC government attention to cross-border merger, acquisition and other investment activities, by confirming MOC as a key regulator for issues related to mergers and acquisitions in China and requiring MOC approval of a broad range of merger, acquisition and investment transactions.  Further, the new rules establish reporting requirements for acquisition of control by foreigners of companies in key industries, and reinforce the ability of the Chinese government to monitor and prohibit foreign control transactions in key industries.

Among other things, the revised M&A Regulations include new provisions that purport to require that an offshore special purpose vehicle, or SPV, formed for listing purposes and controlled directly or indirectly by PRC companies or individuals must obtain the approval of the CSRC prior to the listing and trading of such SPV’s securities on an overseas stock exchange.  On September 21, 2006, the CSRC published on its official website procedures specifying documents and materials required to be submitted to it by SPVs seeking CSRC approval of their overseas listings.  However, the application of this PRC regulation remains unclear with no consensus currently existing among the leading PRC law firms regarding the scope and applicability of the CSRC approval requirement.

Glory Period is 100% owned by Tan, a Singapore citizen.  Mr. Tan and Mr. Qu (the principal founder of Bohai and our Chairman and Chief Executive Officer) entered into the Call Option Agreement on December 7, 2009 by which Mr. Qu has an option to acquire all the issued and outstanding shares of Glory Period within three years for nominal consideration.  Chance High set up WFOE on November 23, 2009 and WFOE obtained effective and substantial control over Bohai further to execution of the VIE Agreements on December 7, 2009 by and among WFOE, Bohai and the three shareholders of Bohai.  The PRC regulatory authorities may take the view that entry into the VIE Agreements by WFOE and Bohai may constitute a related party acquisition, because at the end of these transactions, Mr. Qu, a PRC resident become majority owners and effective controlling parties of a foreign entity that acquired ownership of Bohai.  The PRC regulatory authorities may also take the view that the relevant parties should fully disclose to SAFE or MOC of the overall restructuring arrangements, the existence of the Share Exchange and its link with the VIE Agreements.  Bohai’s PRC legal counsel has opined that: (a) the establishment of WFOE was duly approved by the local counterpart of Ministry of Commerce in Yantai on November 20, 2009; (b) the offshore restructuring, establishment of WFOE and execution of the VIE Agreements and the transactions thereunder do not (i) contravene or circumvent any provision of applicable PRC laws and regulations, including without limitation, the M&A Regulations, the Circular on Certain Administrative Measures on Financing and Inbound Investments by PRC Residents Through Offshore Special Purpose Vehicle effectives as of November 1, 2005 and its implementing rules; or (ii) contravene the articles of association, business license or other constituent documents of WFOE or Bohai; (c) to their best knowledge, they are not aware of any issue, fact or circumstance which would lead them to believe that the PRC regulatory authorities would revoke the VIE Agreements or Share Exchange and the transactions thereunder; and (d) the VIE Agreements is in compliance with and enforceable under the applicable PRC laws and regulations.

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We cannot, however, assure you that the PRC regulatory authorities, MOC in particular, may take the same view as our PRC legal counsel.  If the PRC regulatory authorities take the view that the Share Exchange and VIE arrangement constitutes a related party acquisition under the M&A Regulations, we cannot assure you we may be able to obtain the approval required from the national offices of MOC.

If the PRC regulatory authorities take the view that the Share Exchange and the VIE Agreements constitutes a related party acquisition without the approval of the national offices of MOC, they could invalidate the Share Exchange and VIE Agreements.  Additionally, the PRC regulatory authorities may take the view that any public offering plan of by us will require the prior approval of CSRC.  If we cannot obtain MOC or CSRC approval in case we are required to do so, our business and financial performance will be materially adversely affected.  We may also face regulatory actions or other sanctions from the MOC or other PRC regulatory agencies.  These regulatory agencies may impose fines and penalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from the Private Placement into the PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our Common Stock.

The CSRC or other PRC regulatory agencies also may take actions requiring us, or making it advisable for us, to halt the Private Placement before settlement and delivery of the Common Stock offered hereby. Consequently, if you engage in market trading or other activities in anticipation of and prior to settlement and delivery, you do so at the risk that settlement and delivery may not occur.

Also, if later the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect on the trading price of our Common Stock. Furthermore, published news reports in China recently indicated that the CSRC may have curtailed or suspended overseas listings for Chinese private companies. These news reports have created further uncertainty regarding the approach that the CSRC and other PRC regulators may take with respect to transactions such as the Private Placement.

Because our principal assets are located outside of the United States and a majority of our directors and our officers will reside outside of the United States, it may be difficult for you to enforce your rights based on the United States federal securities laws against us and our officers and directors in the United States or to enforce judgments of United States courts against us or them in the PRC. 

Following the Share Exchange, our sole director and officer, Mr. Qu, will reside outside of the United States.  In addition, our operating subsidiary is located in the PRC and all of its assets are located outside of the United States.  China does not have a treaty with United States providing for the reciprocal recognition and enforcement of judgments of courts.  It may therefore be difficult for investors in the United States to enforce their legal rights based on the civil liability provisions of the United States federal securities laws against us in the courts of either the United States or the PRC and, even if civil judgments are obtained in courts of the United States, to enforce such judgments in the PRC courts.  Further, it is unclear if extradition treaties now in effect between the United States and the PRC would permit effective enforcement against us or our officers and directors of criminal penalties, under the United States federal securities laws or otherwise.

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We may have limited legal recourse under PRC laws if disputes arise under our contracts with third parties. 

The Chinese government has enacted some laws and regulations dealing with matters such as corporate organization and governance, foreign investment, commerce, taxation and trade.  However, their experience in implementing, interpreting and enforcing these laws and regulations is limited, and our ability to enforce commercial claims or to resolve commercial disputes is unpredictable.  If our new business ventures are unsuccessful, or other adverse circumstances arise from these transactions, we face the risk that the parties to these ventures may seek ways to terminate the transactions, or, may hinder or prevent us from accessing important information regarding the financial and business operations of these acquired companies.  The resolution of these matters may be subject to the exercise of considerable discretion by agencies of the Chinese government, and forces unrelated to the legal merits of a particular matter or dispute may influence their determination. Any rights we may have to specific performance, or to seek an injunction under PRC laws, in either of these cases, are severely limited, and without a means of recourse by virtue of the Chinese legal system, we may be unable to prevent these situations from occurring.  The occurrence of any such events could have a material adverse effect on our business, financial condition and results of operations.  Although legislation in China over the past 30 years has significantly improved the protection afforded to various forms of foreign investment and contractual arrangements in China, these laws, regulations and legal requirements are relatively new and their interpretation and enforcement involve uncertainties, which could limit the legal protection available to us, and foreign investors, including you.  The inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital and could have a material adverse impact on our operations.

We must comply with the Foreign Corrupt Practices Act. 

We are required to comply with the United States Foreign Corrupt Practices Act, which prohibits U.S. companies from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business. Foreign companies, including some of our competitors, are not subject to these prohibitions.  Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices occur from time-to-time in mainland China.  If our competitors engage in these practices, they may receive preferential treatment from personnel of some companies, giving our competitors an advantage in securing business or from government officials who might give them priority in obtaining new licenses, which would put us at a disadvantage.  Although we inform our personnel that such practices are illegal, we can not assure you that our employees or other agents will not engage in such conduct for which we might be held responsible.  If our employees or other agents are found to have engaged in such practices, we could suffer severe penalties.

If we make equity compensation grants to persons who are PRC citizens, they may be required to register with SAFE.  We may also face regulatory uncertainties that could restrict our ability to adopt equity compensation plans for our directors and employees and other parties under PRC laws.

On April 6, 2007, SAFE issued the “Operating Procedures for Administration of Domestic Individuals Participating in the Employee Stock Ownership Plan or Stock Option Plan of An Overseas Listed Company, also know as “Circular 78.”  It is not clear whether Circular 78 covers all forms of equity compensation plans or only those which provide for the granting of stock options. For any plans which are so covered and are adopted by a non-PRC listed company, such as our company, after April 6, 2007, Circular 78 requires all participants who are PRC citizens to register with and obtain approvals from SAFE prior to their participation in the plan.  In addition, Circular 78 also requires PRC citizens to register with SAFE and make the necessary applications and filings if they participated in an overseas listed company’s covered equity compensation plan prior to April 6, 2007.  We believe that the registration and approval requirements contemplated in Circular 78 will be burdensome and time consuming.

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In the future, we may adopt an equity incentive plan and make numerous stock option grants under the plan to our officers, directors and employees, some of whom are PRC citizens and may be required to register with SAFE.  If it is determined that any of our equity compensation plans are subject to Circular 78, failure to comply with such provisions may subject us and participants of our equity incentive plan who are PRC citizens to fines and legal sanctions and prevent us from being able to grant equity compensation to our PRC employees. In that case, our ability to compensate our employees and directors through equity compensation would be hindered and our business operations may be adversely affected.

Due to various restrictions under PRC laws on the distribution of dividends by our PRC operating companies, we may not be able to pay dividends to our stockholders or interest and principal on the Notes.

The Wholly-Foreign Owned Enterprise Law (1986), as amended and the Wholly-Foreign Owned Enterprise Law Implementing Rules (1990), as amended and the Company Law of the PRC (2006) contain the principal regulations governing dividend distributions by wholly foreign owned enterprises. Under these regulations, wholly foreign owned enterprises, such as WFOE, may pay dividends only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. Additionally, WFOE is required to set aside a certain amount of their accumulated profits each year, if any, to fund certain reserve funds.  These reserves are not distributable as cash dividends except in the event of liquidation and cannot be used for working capital purposes.   

Furthermore, if our consolidated subsidiaries in China incur debt on their own in the future, the instruments governing the debt may restrict its ability to pay dividends or make other payments. If we or our consolidated subsidiaries are unable to receive all of the revenues from our operations due to these contractual or dividend arrangements, we may be unable to pay dividends on our Common Stock or interest and principal on the Notes.

We may have difficulty establishing adequate management, legal and financial controls in the PRC.

The PRC historically has been deficient in western style management and financial reporting concepts and practices, as well as in modern banking, and other control systems.  We may have difficulty in hiring and retaining a sufficient number of qualified employees to work in the PRC.  As a result of these factors, and especially given that we expect to be a publicly listed company in U.S. and subject to regulation as such, we may experience difficulty in establishing management, legal and financial controls, collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices that meet western standards.  We may have difficulty establishing adequate management, legal and financial controls in the PRC.  Therefore, we may, in turn, experience difficulties in implementing and maintaining adequate internal controls as required under Section 404 of the Sarbanes-Oxley Act of 2002 and other applicable laws, rules and regulations.  This may result in significant deficiencies or material weaknesses in our internal controls which could impact the reliability of our financial statements and prevent us from complying with SEC rules and regulations and the requirements of the Sarbanes-Oxley Act of 2002.  Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our business and the public announcement of such deficiencies could adversely impact our stock price.

It may be difficult to protect and enforce our intellectual property rights under PRC laws.

Intellectual property rights in China are still developing, and there are uncertainties involved in the protection and the enforcement of such rights.  We will need to pay special attention to protecting our intellectual property and trade secrets.  Failure to do so could lead to the loss of a competitive advantage that could not be compensated by our damages award.

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If our land use rights are revoked, we would have no operational capabilities.

Under Chinese law land is owned by the state or rural collective economic organizations. The state issues to tenants the rights to use property.  Use rights can be revoked and the tenants forced to vacate at any time when redevelopment of the land is in the public interest.  The public interest rationale is interpreted quite broadly and the process of land appropriation may be less than transparent.  Bohai, our operating subsidiary, relies on these land use rights as the cornerstone of its operations, and the loss of such rights would have a material adverse effect on our company.  We currently do not maintain a land use right certificate for a piece of land located in Xingfu Twelve Village of Zhifu District with the area of 11,222 m2.  In the process of the planning of Yantai City, the usage of the aforesaid land use right has been changed from “industrial use” to “commercial use” and therefore, the process for the land use right certificate on five relevant parcels of land including the land occupied by Bohai is suspended until the completion of the planning.  We can not assure you that we will eventually obtain the land use right certificate for the foresaid land with reasonable cost.

Risks Related to Our Common Stock

The registration statement may not be declared effective or remain effective.

Under the terms of Registration Rights Agreement, we are obligated to include the shares of Common Stock underlying the Notes and Warrants in a registration statement to be filed by us with the SEC and to have such registration statement declared effective within certain time frames.  We are subject to penalties in the event we fail to comply with such obligations.  Nevertheless, no assurances can be given that the registration statement will ever be declared effective or that the shares of Common Stock underlying the Notes and Warrants will ever be registered and thereby be available for public resale.  Additionally, once the registration statement is filed and declared effective by the SEC, it will be necessary for us to file post-effective amendments to the registration statement when subsequent events so require.  We intend to use our best efforts to keep the registration statement current, but may not be able to do so.  If the registration statement is not declared effective or is not current in the future, your ability to sell the shares of Common Stock underlying the Notes and Warrants will be limited.

Trading in Link’s Common Stock over the last 12 months has been non-existent, so investors may not be able to sell as many of their shares as they want at prevailing prices.

Shares of Link’s Common Stock are traded on the OTCBB under the symbol “LNKR.OB”.  There has been no trading in Link’s shares since October 31, 2008.  If limited trading in the Common Stock continues, it may be difficult for investors once and if the Common Stock underlying the Notes and Warrants are registered, to sell such shares in the public market at any given time at prevailing prices.  Also, the sale of a large block of Common Stock could depress the market price of the Common Stock to a greater degree than a company that typically has a higher volume of trading of its securities.

The limited public trading market may cause volatility in our stock price.

The quotation of Link’s Common Stock on the OTCBB does not assure that a meaningful, consistent and liquid trading market currently exists, and in recent years such market has experienced extreme price and volume fluctuations that have particularly affected the market prices of many smaller companies like us.  Our Common Stock is thus and will be subject to significant volatility.  Sales of substantial amounts of our Common Stock, or the perception that such sales might occur, could adversely affect prevailing market prices of our Common Stock.

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An active and visible trading market for our Common Stock may not develop.

We cannot predict whether an active market for our Common Stock will develop in the future.  In the absence of an active trading market:

· Investors may have difficulty buying and selling or obtaining market quotations;

· Market visibility for our Common Stock may be limited; and

· A lack of visibility for our Common Stock may have a depressive effect on the market price for our Common Stock.

The OTCBB is an unorganized, inter-dealer, over-the-counter market that provides significantly less liquidity than NASDAQ or the NYSE AMEX.  The trading price of the Common Stock is expected to be subject to significant fluctuations in response to variations in quarterly operating results, changes in analysts’ earnings estimates, announcements of innovations by us or our competitors, general conditions in the industry in which we operate and other factors.  These fluctuations, as well as general economic and market conditions, may have a material or adverse effect on the market price of our Common Stock.

The market price for our stock may be volatile.

The market price for our stock may be volatile and subject to wide fluctuations in response to factors including the following:

· actual or anticipated fluctuations in our quarterly operating results;

· changes in financial estimates by securities research analysts;

· conditions in pharmaceutical markets;

· changes in the economic performance or market valuations of other pharmaceutical companies;

· announcements by us or our competitors of new products, acquisitions, strategic partnerships, joint ventures or capital commitments;

· addition or departure of key personnel;

· fluctuations of exchange rates between RMB and the U.S. dollar;

· intellectual property or other litigation; and

· general economic or political conditions in China.

In addition, the securities market has from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies.  These market fluctuations may also materially and adversely affect the market price of our stock.

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Shares eligible for future sale may adversely affect the market price of our Common Stock, as the future sale of a substantial amount of outstanding stock in the public marketplace could reduce the price of our Common Stock.

Pursuant to the terms of the Registration Rights Agreement and Securities Purchase Agreement, we agreed to file a registration statement with the SEC to register the securities issued in the Private Placement with 60 days of the closing of the Private Placement.  All of the shares included in an effective registration statement as described above may be freely sold and transferred following conversion or exercise of the Notes and Warrants.  Additionally, concurrently with the closing of the Private Placement, we engaged in a Share Exchange, and following the Share Exchange, the former shareholders of Chance High may be eligible to sell all or some of their shares of Common Stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144, subject to certain limitations.  In general, pursuant to Rule 144, a stockholder (or stockholders whose shares are aggregated) who has satisfied an one-year holding period may, under certain circumstances, sell within any three-month period a number of securities which does not exceed the greater of 1% of the then outstanding shares of Common Stock or the average weekly trading volume of the class during the four calendar weeks prior to such sale.  As of the closing of the Share Exchange, and not accounting for the Private Placement, 1% of our issued and outstanding shares of Common Stock equals approximately162,500 shares.  Rule 144 also permits, under certain circumstances, the sale of securities, without any limitations, by a non-affiliate that has satisfied a one-year holding period.  Any substantial sale of Common Stock pursuant to any resale prospectus or Rule 144 may have an adverse effect on the market price of our Common Stock by creating an excessive supply.

Our controlling stockholder may exercise significant influence over us.

Our controlling stockholder, Glory Period Limited, owns approximately 55% of our outstanding Common Stock as of the closing of the Share Exchange.  Tan is the sole shareholder of Glory Period and Qu is the sole director of Glory Period.  Either Tan or Qu has a controlling influence in determining the outcome of any corporate transaction or other matters submitted to our stockholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets, election of directors, and other significant corporate actions.  Tan and Qu may also have the power to prevent or cause a change in control.  In addition, without the consent of Tan and Qu, we could be prevented from entering into transactions that could be beneficial to us.  The interests of Tan and Qu may differ from the interests of our other stockholders.  This is particularly the case as Tan’s company, Cawston, is a consultant to Bohai.

Compliance with changing regulation of corporate governance and public disclosure, and our management’s inexperience with such regulations, will result in additional expenses and creates a risk of non-compliance.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and related SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the public markets and public reporting.  Our management team will need to invest significant management time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities.  In addition, our management is located in the PRC has little experience with compliance with U.S. laws (including securities laws).  This inexperience may cause us to fall out of compliance with applicable regulatory requirements, which could lead to enforcement action against us and a negative impact on our stock price.

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If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud.

We are subject to reporting obligations under the U.S. securities laws.  The SEC, as required by Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules requiring every public company to include a management report on such company’s internal controls over financial reporting in its annual report, which contains management’s assessment of the effectiveness of our internal controls over financial reporting.  In addition, an independent registered public accounting firm must attest to and report on management’s assessment of the effectiveness of our internal controls over financial reporting.   Our management may conclude that our internal controls over our financial reporting are not effective. Moreover, even if our management concludes that our internal controls over financial reporting are effective, our independent registered public accounting firm may still decline to attest to our management’s assessment or may issue a report that is qualified if it is not satisfied with our controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us.  Our reporting obligations as a public company will place a significant strain on our management, operational and financial resources and systems for the foreseeable future.  Effective internal controls, particularly those related to revenue recognition, are necessary for us to produce reliable financial reports and are important to prevent fraud.  As a result, our failure to achieve and maintain effective internal controls over financial reporting could result in the loss of investor confidence in the reliability of our financial statements, which in turn could harm our business and negatively impact the trading price of our stock.  Furthermore, we anticipate that we will incur considerable costs and use significant management time and other resources in an effort to comply with Section 404 and other requirements of the Sarbanes-Oxley Act.

Our Common Stock may be considered a “penny stock,” and thereby be subject to additional sale and trading regulations that may make it more difficult to sell.

Our Common Stock, which is currently and will be quoted for trading on OTCBB, may be considered to be a “penny stock” if it does not qualify for one of the exemptions from the definition of “penny stock” under Section 3a51-1 of the Exchange Act, as amended.  Our Common Stock may be a “penny stock” if it meets one or more of the following conditions: (i) the stock trades at a price less than $5.00 per share; (ii) it is NOT traded on a “recognized” national exchange; (iii) it is not quoted on the Nasdaq Capital Market, or even if so, has a price less than $5.00 per share; or (iv) is issued by a company that has been in business less than three years with net tangible assets less than $5 million.  The principal result or effect of being designated a “penny stock” is that securities broker-dealers participating in sales of our Common Stock will be subject to the “penny stock” regulations set forth in Rules 15-2 through 15g-9 promulgated under the Exchange Act.  For example, Rule 15g-2 requires broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document at least two business days before effecting any transaction in a penny stock for the investor’s account.  Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor.  This procedure requires the broker-dealer to: (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor’s financial situation, investment experience and investment objectives.  Compliance with these requirements may make it more difficult and time consuming for holders of our Common Stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise.

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We do not foresee paying cash dividends in the foreseeable future and, as a result, our investors’ sole source of gain, if any, will depend on capital appreciation, if any.

We do not plan to declare or pay any cash dividends on our shares of Common Stock in the foreseeable future and currently intend to retain any future earnings for funding growth. As a result, investors should not rely on an investment in our securities if they require the investment to produce dividend income. Capital appreciation, if any, of our shares may be investors’ sole source of gain for the foreseeable future. Moreover, investors may not be able to resell their Common Stock at or above the price they paid for them.

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Item 2.  Financial Information.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of Bohai.

Operating Results

The following selected comparative financial information for the three months ended September 30, 2009 and 2008 have been derived from and should be read in conjunction with the financial statements of Bohai for the year ended June 30, 2009 and 2008 included as exhibits to this Current Report.

As used in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, the terms “we,” “us,” “our” and similar identifying terminology refer to Bohai (and not the Registrant).

Three Months Ended September 30, 2009 Compared to Three Months Ended September 30, 2008

	Three Months Ended September 30,
	2009			2008
Sales	$	14,181,772		$	11,412,018
Less: Sales Tax		(227,168	)		(183,821	)
Net sales		13,954,604			11,228,197
Cost of sales		(2,217,604	)		(1,854,478	)
Gross profit		11,737,000			9,373,719
Selling, general and administrative expenses		(9,174,693	)		(6,651,539	)
Interest expenses		(148,395	)		(65,038	)
Operating income		2,413,912			2,657,142
Non-operating income		69,072			-
Non-operating costs		(5,269	)		(31	)
Income before taxes		2,477,715			2,657,111
Income taxes		(555,474	)		(600,199	)
Net income	$	1,922,241		$	2,056,912

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Sales

Net Sales for the three months ended September 30, 2009 increased by approximately $2,726,407 or 24.28% to $13,954,604 as compared to $11,228,197 for the three months ended September 30, 2008. Our sales growth was driven by effective marketing strategies being implemented which attribute to client base extension.

Cost of Sales

Our cost of sales for the three months ended September 30, 2009 was $2,217,604 as compared to $1,854,478 for the three months ended September 30, 2008, representing an increase of 19.58%. The increase was mainly attributable to the increase in cost of raw material by $373,483 as a result of the increase of sales.

Gross Profit

We achieved gross profits of $11,737,000 for the three months ended September 30, 2009, compared to $9,373,719 for the same quarter of the previous year, representing a 25.21% quarter to quarter increase. Our overall gross profit margin as a percentage of revenue are  82.76% and 82.14% for the three months ended September 30, 2009 and 2008, respectively.

Selling, General and Administrative Expenses

Our operating expenses, consisting of selling, general and administrative expenses, increased by approximately $2,523,154, to $9,174,693, for the three months ended September 30, 2009 from $6,651,539 for the same quarter of the previous year. This increase is mainly attributable to a significant increment of expenses on advertising and promotion due to an increase in the frequency of the comprehensive television broadcast which amounted and increased commissions due to increase of sales.

Interest Expense

Interest expense was $148,395 for the three months ended September 30, 2009, compared to $65,038 for the three months ended September 30, 2008. The increase is largely due to accrued interest from additional bank loans utilized during the period. The loans were used for working capital and capital expenditures for the expansion of production through acquisition of plants and machinery to improve the efficiency of the production lines.

Income tax

Our provisions for income taxes for the three months ended September 30, 2009 and 2008 were $555,474 and $600,199, respectively, an decrease of $44,725 or 7.45 % from period to period.  The decrease in tax provision was due to slightly decrease of income before tax during the period.

Net Income

We had a net income of $1,922,241 for the three months ended September 30, 2009, as compared to net income of $2,056,912 for the three months ended September 30, 2008.  The decrease in net income is primarily attributable to increase of selling and administrative expense.

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Foreign Currency Translation Gains

During the three months ended September 30, 2009, the RMB steadily rose against the U.S. dollar, and we recognized a foreign currency translation gain of $47,583.

Fiscal Year Ended June 30, 2009 Compared to the Fiscal Year Ended June 30, 2008

The following table sets forth our statement of operations for the period indicated:

	Fiscal Year Ended June 30,
	2009			2008
Sales	$	50,170,014		$	38,172,513
Less: Sales Tax		(821,400	)		(629,489	)
Net sales		49,348,614			37,543,024
Cost of sales		(7,975,267	)		(5,950,680	)
Gross profit		41,373,347			31,592,344
Selling, general and administrative expenses		(31,301,811	)		(22,601,932	)
Interest expenses		(184,404	)		(234,101	)
Operating income		9,887,132			8,756,311
Non-operating income		49,447			8
Non-operating costs		(36,366	)		(835	)
Income before taxes		9,900,213			8,755,484
Income taxes		(1,906,985	)		(2,303,712	)
Net income	$	7,993,228		$	6,451,772

Sales

Net sales increased by approximately $11,805,590, or 31.45%, from $37,543,024 in the fiscal year ended June 30, 2008 to $49,348,614 for the fiscal year ended June 30, 2009.  This increase was primarily due to the significant increase of our revenue on all the products as a result of the effective implementation of marketing strategy in the fiscal year of 2009.

Cost of Sales

Our cost of sales for the fiscal year ended June 30, 2009 was $7,975,267 as compared to $5,950,680 for the fiscal year ended June 30, 2008, representing an increase of $2,024,587, or 34.02%. The increase was mainly attributable to the increase of raw materials cost by $1,521,322 as a result of the increase of sales.

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Gross Profit

For the fiscal year ended June 30, 2009 as compared to the fiscal year ended June 30, 2008, we generated gross profit of $41,373,347 and $31,592,344 respectively, reflecting an increase of approximately $9,781,003, or 30.96%. The increase in our gross profit was mainly due to significantly increase of sales income.

Selling, General and Administrative Expenses

We incurred general and administrative expenses of $31,301,811 for the fiscal year ended June 30, 2009, representing an increase of $8,699,879, or 38.49%, compared to 22,601,932 for the fiscal year ended June 30, 2008. This increase was mainly due to the increase of cost of advertising and percentages of commissions to sales representative allocated in branch office through out China.

Interest Expense

Interest expense was $184,404 for the fiscal year ended June 30, 2009, compared to $234,101 for the fiscal year ended June 30, 2008. The decrease is largely due to repayment of bank loans utilized in the year 2007 during the period. The loans were used for working capital and capital expenditures for the expansion of production through acquisition of production plants and equipment to improve the efficiency of production.

Income tax

For the fiscal year ended June 30, 2009, income tax expense was $1,906,985, and a decrease of $396,727, or 17.22%, from $2,303,712 for the fiscal year ended June 30, 2008. The decrease was mainly due to the decrease of enterprise income tax in PRC from 33% to 25% since January 1, 2008.

Net Income

We had net income of $7,993,228, or 16.20% of net revenue for the fiscal year ended June 30, 2009 as compared to net income $6,451,772 or 17.18% of net revenue for the fiscal year ended June 30, 2008, representing an increase of $1,541,456, or 23.89%. The increase in our net income was the result of the significant increase of our revenue generated in the fiscal year of 2009.

Foreign Currency Translation Gains

During the fiscal year ended June 30, 2009, the RMB steadily rose against the U.S. dollar, and we recognized a foreign currency translation gain of $106,233.

Liquidity and Capital Resources

We have historically funded our operation primarily through paid-in capital, sales of goods and short term loans from financial institutions.  Net cash provided by operating activities for the three months ended September 30, 2009 was $2,640,537 compared to $1,333,312 for the three months ended September 20, 2008. During the three months ended September 30, 2009, cash borrowed from banks amounted to $872,865 and repayment of borrowing from previous years amounted to $880,200, which resulted in a net cash outflow in financing activities of $7,335.  Management is planning to raise additional capital through sales of common stock, as well as seeking financing from third parties.

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Operating activities

For the fiscal year ended June 30, 2009, cash used in operating activities totaled $1,467,734 compared to cash provided by $2,365,304 for the fiscal year ended June 30, 2008. This was primarily attributable to significant increase of cash used in prepayment for advertising expense and repayment of accounts payable.

Investing activities

For the fiscal year ended June 30, 2009, net cash outflow for investing activities was approximately $788,993 compared to $80,647 in the fiscal year ended June 30, 2008. This increase was primarily attributable to significant increase of capital investment in acquisition of property, plant and equipment during the year. During the fiscal year ended June 30, 2009, we spent $227,690, $59,459, $295,610 and $220,884 on acquisitions of plant and equipment, purchase of office equipment, purchase of motor vehicle and construction in progress, respectively.

Financing activities

Financing activities provided net cash inflow of $3,963,300 during the fiscal year ended June 30, 2009 primarily as a result of process of significant borrowing during the year. As of June 30, 2009, the proceeds from short-term borrowings amounted to $5,860,000 and the repayment of borrowings amounted to $1,896,000, which resulted in a net cash inflow by financing activities of $3,963,300.

Off-Balance Sheet Arrangements

We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our condensed consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk, or credit support to us or engages in leasing, hedging, or research and development services with us.

Inflation

In recent years, the Chinese economy has experienced periods of rapid expansion and high rates of inflation.  During the past ten years, the rate of inflation in China has been as high as 20.7% and as low as -2.2%.  These factors have led to the adoption by Chinese government, from time to time, of various corrective measures designed to restrict the availability of credit or regulate growth and contain inflation.  While inflation has been more moderate since 1995, high inflation may in the future cause Chinese government to impose controls on credit and/or prices, or to take other action, which could inhibit economic activity in China, and thereby harm the market for our products.

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Critical Accounting Policies and Estimates

Basis of presentation

Bohai’s financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

This basis of accounting differs in certain material respects from that used for the preparation of the books of account of Bohai, which are prepared in accordance with the accounting principles and the relevant financial regulations applicable to enterprises with limited liabilities established in the PRC, the accounting standards used in the places of their domicile.  The accompanying financial statements reflect necessary adjustments not recorded in the books of account of Bohai to present them in conformity with US GAAP.

Use of estimates

In preparing of the financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods.  These accounts and estimates include, but are not limited to, the valuation of accounts receivable, inventories, deferred income taxes and the estimation on useful lives of plant and machinery.  Actual results could differ from those estimates.

Accounts Receivable

Accounts receivable consists of amounts due from customers.  Bohai extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and determined based on management’s assessment of known requirements, aging of receivables, payment history, the customer’s current credit worthiness and the economic environment.

Inventories

Inventories are valued at the lower of cost or market with cost is determined on the weighted average method. Finished goods inventories consist of raw materials, direct labor and overhead associated with the manufacturing process. In assessing the ultimate realization of inventories, the management makes judgments as to future demand requirements compared to current or committed inventory levels.  Bohai’s reserve requirements generally increase/decrease due to management projected demand requirements, market conditions and product life cycle changes. As of June 30, 2009 and 2008, Bohai did not make any allowance for slow-moving or defective inventories.

Intangible Assets

Intangible assets as “Pharmaceutical Formulas”, which acquired and with indefinite useful live are measured initially at cost and not subject to amortization shall be tested for impairment annually or more frequently if there is indication of impairment. If the carrying amount exceeds fair value, an impairment loss should be recognized. Subsequently reversal of a recognized impairment loss is prohibited.

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Property, plant and equipment

Property, plant and equipment, other than construction in progress, are stated at cost less depreciation and amortization and accumulated impairment loss.  Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use.  Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized.

Depreciation of property, plant and equipment is calculated to written off the cost, less their estimated residual value, if any, using the straight-line method over their estimated useful lives. The principal annual rates are as follows:-

Leasehold land and buildings	30 to 40 years
Motor vehicles	10 years
Plant and machinery	10 years
Office equipment	5 years

Upon sale or disposition, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income.

Construction in progress mainly represents expenditures in respect of Bohai’s new corporate campus and machinery under construction. All direct costs relating to the acquisition or construction of Bohai’s new corporate campus and machinery. Assets under construction are not depreciated until the construction is completed and the assets are ready for their intended use.

Accounting for the Impairment of Long-Lived Assets

Bohai adopted Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Live Assets” (“SFAS 144”), which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. Bohai periodically evaluates the carrying value of long-lived assets to be held and used in accordance with SFAS 144. SFAS 144 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal. Based on its review, Bohai believes that, as of June 30, 2009 and 2008, there were no significant impairments of its long-lived assets.

Foreign Currency Translation

Bohai maintains its financial statements in the functional currency. The functional currency of Bohai is the Renminbi (RMB).  Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates.  Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchanges rates prevailing at the dates of the transaction.  Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods.

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For financial reporting purposes, the financial statements of Bohai which are prepared using the functional currency have been translated into United States dollars. Assets and liabilities are translated at the exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and stockholders’ equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of stockholders’ equity.

	9.30.2009		9.30.2008		6.30.2009		6.30.2008
Year end US$: RMB exchange rate		6.81663		6.83527		6.82594		6.85401
Average periodic US$: RMB exchange rate		6.82082		6.83107		6.82594		7.26269

RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions.  No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation.

Revenue Recognition

Revenue represents the invoiced value of goods sold recognized upon the delivery of goods to customers. Revenue is recognized when all of the following criteria are met:

· Persuasive evidence of an arrangement exists;

· Delivery has occurred or services have been rendered;

· The seller’s price to the buyer is fixed or determinable; and

· Collectability is reasonably assured. Payments have been established.

Research and Development Costs

Research and development costs are charged as expense when incurred and included in operating expenses.

Item 3.  Properties.

The Registrant’s corporate office is located at No. 9 Daxin Road, Zhifu District, Yantai, Shandong Province, China.  Under the current PRC laws, land is owned by the state, and parcels of land in rural areas which is known as collective land is owned by the rural collective economic organization. “Land use rights” are granted to an individual or entity after payment of a land use right fee is made to the applicable state or rural collective economic organization. Land use rights allow the holder of the right to use the land for a specified long-term period. We have a land use right, expiring in 2047, for a total of approximately 30,637 square meters of land.  We currently have not obtained a land use right certificate for a piece of land located in Xingfu Twelve Village of Zhifu District with the area of 11,222 square meters. In the process of the planning of Yantai City, the usage of the aforesaid land use right has been changed from “industrial use” to “commercial use” and therefore, the approval process for the land use right certificates on five relevant parcels of land including the land occupied by us is suspended until the completion of the planning.

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Item 4. Security Ownership of Certain Beneficial Owners and Management.

Pre-Share Exchange

As of September 30, 2009, there were 3,450,000 shares of Common Stock outstanding.  The following table sets forth certain information known to us with respect to the beneficial ownership of Common Stock as of that date by (i) each of our directors, (ii) each of our executive officers, and (iii) all of our directors and executive officers as a group.  Except as set forth in the table below, there is no person known to us who beneficially owns more than 5% of our common stock.

Name and Address of Beneficial Owner	Number of Shares Beneficially Owned (1)		Percentage of Class (2)
Anthony Zaradic 392 Acadia Drive S.E. Calgary, Alberta T2J 0A8		1,500,000		43.47	%
All directors and Officers as a group		1,500,000		43.47	%

(1)           Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights.

(2)           The percentage of class is based on 3,450,000 shares of Common Stock issued and outstanding as of June 29, 2009.  An additional 200,000 shares of Common Stock will be issued in connection with the Share Exchange to the Bridge Investors, bringing the total pre-Share Exchange, pre-Private Placement total to 3,650,000 shares.  An additional 1,500,000 shares will be cancelled as part of the Share Exchange.

Post-Share Exchange

The following table sets forth certain information regarding our Common Stock beneficially owned on the Closing Date, for (i) each stockholder known to be the beneficial owner of 5% or more of Link’s outstanding Common Stock, (ii) each executive officer and director, and (iii) all executive officers and directors as a group, on a pro forma basis, assuming all the Notes have been converted into Common Stock and none of the Warrants and Agent Warrants, were exercised as of such date.  The information contained in the following table is provided for disclosure purposes only as there can be no assurance that the actual ownership will be as set forth therein based on the assumptions used.

 

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Name of Beneficial Owner	Shares of Common Stock Owned		Percent of Class Post-Share Exchange but Pre- Private Placement (1)			Percent of Class Post-Share Exchange and Post-Private Placement (3)
Glory Period Limited (4)(7)		8,942,602		55.0	%		40.19	%
Hongwei Qu (5)		8,942,602		55.0	%		40.19	%
All Executive Officers and Directors as a group (3)		8,942,602		55.0	%		40.19	%

(1) Based on 16,250,000 shares of Common Stock issued and outstanding prior to the Private Placement but after the close of the Share Exchange.

(2) Based on 20,900,000 shares of Common Stock issued and outstanding after the Private Placement (and assuming the maximum offering amount is raised and all the Notes have been converted into Common Stock, but not assuming the exercise of the Warrants and Agent Warrants.)

(3) Based on 22,250,000 shares of Common Stock issued and outstanding after the Private Placement (and assuming all the Notes have been converted into Common Stock, but not assuming the exercise of the Warrants and Agent Warrants.)

(4) Joshua Tan is the sole shareholder of Glory Period, but pursuant to a Call Option Agreement, he has no right to sell any shares without prior written consent by Hongwei Qu.

(5) Hongwei Qu is the executive director of Glory Period.

(6) On December 7, 2009, Mr. Qu, who is a PRC citizen, entered into the Call Option Agreement with Mr. Tan, a Singapore passport holder and the sole shareholder of Glory Period.  Under the Call Option Agreement, Mr. Qu shall have right and option to acquire up to 100% shares of Glory Period for nominal consideration within the next 3 years.  The Call Option Agreement also provides that Mr. Tan shall not dispose any of the shares of Glory Period without Mr. Qu’s consent.

Change in Control

Reference is made to Item 5.01 for a description of the change in control of the Registrant as a result of the transactions disclosed herein.

Item 5.  Directors and Executive Officers.

Pre-Share Exchange

The officers and directors of the Registrant pre Share Exchange and additional information concerning them are as follows:

Name	Age	Position
Anthony Zaradic	32	CEO, CFO, President, Secretary, Treasurer and a Director

Anthony Zaradic.  Mr. Zaradic was our CEO, CFO, President, Secretary, Treasurer and sole director prior to the Share Exchange.  Mr. Zaradic has extensive experience in the geophysical data management field. Following receipt of a Network Technician Diploma from CDI College of Business and Technology in June of 2001 Mr. Zaradic worked for Paradigm Geophysical (formerly Core Lab RTD) as an operator. In 2004, Mr. Zaradic became an Archiving Technician for Copyseis Ltd., a Seismic data storage and archive/data warehouse. Since 2005 Mr. Zaradic has worked as a Geophysical Technician for Divestco Inc. (Formerly Geo-X Processing) a seismic signal processing, seismic software development and seismic data brokerage company.

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Post-Share Exchange

In connection with the Share Exchange, Anthony Zaradic, our former CEO, CFO, President, Secretary, Treasurer and sole director resigned from these positions and the Registrant appointed Hongwei Qu as its President, Chief Executive Officer, Interim Chief Financial Officer, Treasurer and Secretary and sole Director.

The following table sets forth the name, age, and position of our sole officer and director after the Closing Date.  Executive officers are elected annually by our Board of Directors.  Each executive officer holds his office until he resigns, is removed by the Board, or his successor is elected and qualified. Directors are elected annually by our stockholders at the annual meeting.  Each director holds his office until his successor is elected and qualified or his earlier resignation or removal.

Name	Age	Position
Hongwei Qu	35	President, Chief Executive Officer, Interim Chief Financial Officer, Treasurer and Secretary and Chairman of the Board of Directors

Hongwei Qu.  Qu became the Registrant’s President, Chief Executive Officer, Interim Chief Financial Officer, Treasurer and Secretary as of the Closing, and will be the Chairman of the Company’s Board of Directors effective as of the expiration of the ten (10) day period following the filing and mailing of this Information Statement, in compliance with Section 14(f) of the Exchange Act.  Qu is the founder and General Manger and Executive Director of Bohai.  He has significant experience in the medical and pharmaceutical sectors in China, most recently as the founder in 2001 of Yantai Hangwei Medical Trading Co., a company engaged in the wholesale of drugs and medical products and retail of medical devices.  Qu was principally responsible for the acquisition of Bohai in May 2007.  Qu graduated from Shandong Economic University with a bachelor degree.

Item 6.   Executive Compensation.

Bohai Executive Compensation Summary

The following table sets forth all cash compensation paid by Bohai, for the year of 2008 and for the six months period ended June 30, 2009.  The table below sets forth the positions and compensations for each officer and director of Bohai.  All the officers were paid in RMB and the amounts reported in this table have been converted from Renminbi to U.S. dollars based on the June 30, 2009 conversion rate of RMB 6.8319 to $1.00.

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SUMMARY COMPENSATION TABLE
Name and Principal Position	Fiscal Year	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)		All Other Compens- ation ($)		Total ($)
Hongwei Qu,	2008(1)	$	14,480.5	$	5,321.79		—		—		—		—		—	$	19,802.25
General Manger and Executive Director	2009(2)	$	14,644.5	$	4,910.78											$	19,555.28

(1)           For the fiscal year ended June 30, 2008.

(2)           For the fiscal year ended June 30, 2009.

Link Executive Compensation Summary

Since inception we have never paid to our existing officers any salary or consulting fees.

Option/SAR Grants in Last Fiscal Year

We did not grant any stock options to our executive officers or directors from inception through the date of this Memorandum.

Director Compensation

We do not pay our directors any fees or other compensation for acting as directors. We have not paid any fees or other compensation to any of our directors for acting as directors to date.

Employment Contracts

We presently do not have any employment agreements or other compensation arrangements with Mr. Qu.

Item 7.  Certain Relationships and Related Transactions, and Director Independence.

Link

During 2008 and 2009, and as of the dated hereof, there is no related party transaction known to the Registrant to identify in this section.

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Bohai

Reorganization Related Transactions

 

Chance High owns 100% of the issued and outstanding capital stock of WFOE, a wholly foreign owned enterprise incorporated under the laws of the PRC.  On December 7, 2009, WFOE entered into the VIE Agreements with Bohai, a company incorporated under the laws of the PRC, and its three shareholders (the principal shareholder being Mr. Qu, Bohai’s executive director), in which WFOE effectively assumed management of the business activities of Bohai and has the right to appoint all executives and senior management and the members of the board of directors of Bohai.  The VIE Agreements are comprised of a series of agreements, including a Consulting Services Agreement, Operating Agreement, Proxy Agreement, Equity Pledge Agreement, and Option Agreement, through which WFOE has the right to advise, consult, manage and operate Bohai for an annual fee in the amount of Bohai’s yearly net profits after tax.  Additionally, Bohai’s shareholders have pledged their rights, titles and equity interest in Bohai as security for WFOE to collect consulting and services fees provided to Bohai through an Equity Pledge Agreement. In order to further reinforce WFOE’s rights to control and operate Bohai, Bohai’s shareholders have granted WFOE the exclusive right and option to acquire all of their equity interests in Bohai through an Option Agreement.

Through WFOE, Chance High operates and controls Bohai through the VIE Agreements. WFOE used the contractual arrangements to acquire control of Bohai, instead of using a complete acquisition of Bohai’s assets or equity to make Bohai a wholly-owned subsidiary of WFOE because: (i) PRC laws governing share exchanges with foreign entities, which became effective on September 8, 2006, make the consequences of such acquisitions uncertain and (ii) other than by share exchange transactions, PRC laws require Bohai to be acquired for cash and WFOE was not able to raise sufficient funds to pay the full appraised value for Bohai’s assets or shares as required under PRC laws.

Slow Walk Arrangements

On December 7, 2009, Mr. Qu, who is a PRC citizen, entered into the Call Option Agreement with Mr. Tan, a Singapore passport holder and the sole shareholder of Glory Period.  Under the Call Option Agreement, Mr. Qu shall have right and option to acquire up to 100% shares of Glory Period for nominal consideration within the next 3 years.  The Call Option Agreement also provides that Mr. Tan shall not dispose any of the shares of Glory Period without Mr. Qu’s consent.

Guarantee for the loans with banks by Mr. Qu

Mr. Qu, our Chief Executive Officer and Chairman, is providing a guaranty for Bohai’s loans with Pudong Development Bank Qingdao Branch in a total amount of $2.2 million, or RMB 15 million.

Loans to Mr. Qu

During the quarter ended September 30, 2009, Bohai extended a loan of $1,465,000 to Mr. Qu. The loan is unsecured, interest bearing at 3.93% per annum and has no fixed term of repayment. The loan has been paid back on December 10, 2009.

Other

Other than employment and the foregoing arrangements, none of the following persons has any direct or indirect material interest in any transaction to which we are a party since our incorporation or in any proposed transaction to which we are proposed to be a party: (i) any of Bohai’s directors or officers; (ii) any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our Common Stock; or any relative or spouse of any of the foregoing persons, or any relative of such spouse, who has the same house as such person or who is a director or officer of any parent or subsidiary of our company.

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Board Meetings and Committees

As part of obligations under the Securities Purchase Agreement in connection with the Private Placement, the Registrant will be required to appoint a Board of Directors consisting of a majority of “independent” directors (as defined under the Nasdaq Marketplace rules) and one director designated by Euro Pacific, with at least two of such directors being fluent in English within six months of the closing of the Private Placement.  Upon such appointment, the Registrant will seek to form audit and other board committees in a manner consistent with Nasdaq listed companies.

Item 8.  Legal Proceedings.

We have no material proceedings pending nor are we aware of any pending investigation or threatened litigation by any third party.

Item 9.  Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters.

Quotations fort the Common Stock of the Registrant are included in the FINRA’s Over the Counter Bulletin Board system under the symbol “LNKR.OB”. There have been no trades in the common stock of the Registrant since listing on the OTC Bulletin Board since October 31, 2008. The absence of any transactions in the common stock indicates there is no established trading market for the Common Stock.

Since inception, no dividends have been paid on the common stock. The Registrant intends to retain any earnings for use in its business activities, so it is not expected that any dividends on the common stock will be declared and paid in the foreseeable future. Although the Registrant intends to retain its earnings, if any, to finance the exploration and growth of its business, its Board of Directors shall have the discretion to declare and pay dividends in the future.  Payment of dividends in the future will depend upon the earnings, capital requirements, and other factors of the Registrant, which the Board of Directors may deem relevant.

Item 10.  Recent Sales of Unregistered Securities.

Reference is made to Item 3.02 for a description of the Share Exchange Agreement and the Securities Purchase Agreement.

Item 11.  Description of Registrant’s Securities to be Registered.

The Registrant’s Common Stock was registered under the Exchange Act pursuant to a Form 8-A (File Number 000-53401) that was filed on September 4, 2008.

As of the date of this Current Report, the Registrant is authorized to issue 150,000,000 shares of Common Stock and 10,000,000 shares of preferred stock, par value $0.001 per share.  There are no outstanding shares of preferred stock.  Prior to the Share Exchange, 3,450,000 shares of Common Stock were issued and outstanding.  In connection with the Share Exchange, 1,500,000 shares of Common Stock held by Anthony Zaradic will be cancelled and 200,000 shares of Common Stock will be issued to the holders of the Company’s outstanding notes (in the aggregate amount of $400,000).

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Description of Common Stock.  The Registrant’s Common Stock is entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors.  Except as otherwise required by law, the holders of Common Stock will possess all voting power.  Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all shares of Common Stock that are present in person or represented by proxy.  Holders of Common Stock representing thirty three and one-third percent (33 1/3%) of our capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders. A vote by the holders of a majority of the outstanding shares of Common Stock is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our Articles of Incorporation.  The Company’s Articles of Incorporation do not provide for cumulative voting in the election of directors.  Holders of Common Stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to the Common Stock.

Item 12.  Indemnification of Officers and Directors.

The current bylaws of the Registrant provides that the Board of the Registrant shall cause the Registrant to indemnify a current or former director, officer and Secretary of the Registrant, or a current or former director, officer and Registrant of a corporation of which the Registrant is or was a shareholder and the heirs and personal representative of any such person against all costs, charges and expenses to settle an action, judgment or proceeding to which they are made a party by reason of their position of director or officer of the Registrant.

The Registrant is permitted by the Bylaws to purchase and maintain insurance for any director, officer, employee or agent of the Registrant or as a director, officer, employee or agent of the Registrant of which the Registrant is or was a shareholder and his or her heirs or personal representatives against a liability incurred by him as a Director, officer, employee or agent.

Our company is incorporated under the laws of the State of Nevada. Section 78.7502 of the Nevada Revised Statutes provides that a Nevada corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and that, with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful.

Section 78.7502 further provides a Nevada corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys' fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation. Indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.

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Section 78.751 of the Nevada Revised Statutes provides that discretionary indemnification under Section 78.7502 unless ordered by a court or advanced pursuant to subsection 2 of section 78.751, may be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances. The determination must be made by:

· By the stockholders;

· By the board of directors by majority vote of a quorum consisting of directors - who were not parties to the action, suit or proceeding;

· If a majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding so orders, by independent legal counsel in a written opinion; or

· If a quorum consisting of directors who were not parties to the action, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion.

The Articles of Incorporation, the Bylaws or an agreement made by the corporation may provide that the expenses of officeers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by the corporation. The provisions of this subsection do not affect any rights to advancement of expenses to which corporate personnel other than directors or officers may be entitled under any contract or otherwise by law.

The indemnification and advancement of expenses authorized in or ordered by a court pursuant to NRS Section 78.751:

· does not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled under the articles of incorporation or any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, for either an action in his official capacity or an action in another capacity while holding his office, except that indemnification, unless ordered by a court pursuant to section 78.7502 or for the advancement of expenses made pursuant to subsection 2 of section 78.751, may not be made to or on behalf of any director or officer if a final adjudication establishes that his acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and was material to the cause of action; and

· continues for a person who has ceased to be a director, officer, employee or agent and inures to the benefit of the heirs, executors and administrators of such a person.

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Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the “Securities Act”), may be permitted to directors, officers and controlling persons of our company under Nevada law or otherwise, we have been advised the opinion of the Securities and Exchange Commission is that such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.  In the event a claim for indemnification against such liabilities (other than payment by us for expenses incurred or paid by a director, officer or controlling person of our company in successful defense of any action, suit, or proceeding) is asserted by a director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction, the question of whether such indemnification by it is against public policy in the Securities Act and will be governed by the final adjudication of such issue.

Item 13.  Financial Statements and Supplementary Data.

See Item 9.01 of this Form 8-K for the financial statements required hereunder.

Item 14.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 15.  Financial Statements and Exhibits.

The exhibits are listed and described in Item 9.01 of this Form 8-K.

Item 3.02 Unregistered Sale of Equity Securities

Pursuant to the Share Exchange Agreement, the Registrant issued 13,162,500 ordinary shares to Chance High Shareholders in exchange for 100% of the outstanding shares of Chance High.  Such securities were not registered under the Securities Act.  These securities qualified for exemption under Section 4(2) of the Securities Act since the issuance securities by us did not involve a public offering.  The offering was not a “public offering” as defined in Section 4(2) of the Securities Act and met the requirements to qualify for exemption under Section 4(2) of the Securities Act.

Pursuant to the Securities Purchase Agreement, the Registrant issued to the Investors a total of 6,000,000 Units for $12 million with each Unit consisting of a unsecured $2 principal amount Notes payable 24 months from January 5, 2010 with an interest rate of 8% per annum payable quarterly in arrears, and a three year Warrant to purchase one share of Common Stock.  The Notes and Warrants were not registered under the Securities Act.  The issuance of these securities was exempt from registration under Regulation D and Section 4(2) of the Securities Act.  The Registrant made this determination based on the representations of Investors, which included, in pertinent part, that such Investors were “accredited investors” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act and that such Investors were acquiring the Notes and Warrants for investment purposes for their own respective accounts and not as nominees or agents, and not with a view to the resale or distribution thereof, and that the Investors understood that the Notes and Warrants may not be sold or otherwise disposed of without registration under the Securities Act or an applicable exemption therefrom.

Outstanding Convertible Notes.  On June 15, 2009, the Registrant issued four convertible notes for an aggregate of $400,000, which notes were amended on August 7, 2009.  The principal of such notes shall, automatically and without any action on the part of the holders, convert into one share of Common Stock for each two dollars converted, upon the occurrence of Change in Control as defined in the notes. All of such outstanding convertible notes were converted into Common Stock upon the Share Exchange, resulting in the issuance of 200,000 shares of Common Stock.

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Notes Issued in Connection with the Private Placement.  In connection with the Private Placement, the Registrant offered and sold $12,000,000 worth of Notes convertible into 6,000,000 shares of Common Stock.  The issuance of the Notes was not registered under the Securities Act as such issuance was exempt from registration under Section 4(2) of the Securities Act and Regulation D promulgated thereunder.

The Notes are unsecured, payable 24 months from the date of Closing with an interest rate of 8% per annum payable quarterly in arrears.  The Registrant has placed in escrow with the Escrow Agent an amount of the proceeds of the Private Placement equal to one quarter worth of interest payments on the Notes to secure prompt interest payments, or $240,000.  Until such time as 75% of the Notes are converted into shares of Common Stock, if such escrow is depleted in order to make interest payments, Bohai will replenish such escrow amount.  At the option of the holder, the Notes may be converted into Common Stock at a price of $2.00 per share, which conversion price is subject to customary weighted average and stock based anti-dilution protection.

The Notes contains standard events of default, including: (i) failure to file the Registration Statement (as defined in Item 1.01 of this Current Report) with the SEC within the prescribed period; (ii) failure to have the Registration Statement deemed effective by the SEC within the prescribed period; (iii) failure to maintain the effectiveness of the Registration Statement thereafter; (iv) nonpayment of principal or interest; (v) termination of registration or suspension of reporting obligations under the Exchange Act, suspension from trading on the OTCBB (or an exchange), or failure to file reports with the SEC on a timely basis as required by the Exchange Act; (vi) material breach of representations, warranties and other obligations under the transaction documents associated with the Securities Purchase Agreement; (vii) enforcement proceedings; (viii) cross default and cross acceleration; (ix) insolvency, winding up and other market standard analogous events; (x) moratorium and nationalization; (xi) proceedings against the Company or its consolidated subsidiaries with potential loss/damage of U.S.$5 million or more; and (xii) illegality of Notes under any applicable law.

The Notes also contain customary affirmative and negative covenants of the Registrant, including negative covenants which restrict the Registrant’s ability to do the following without the consent of Euro Pacific, as representative of the Investors: (i) incur, or permit to exist, any indebtedness  for borrowed money in excess of (A) US$10,000,000 during the twelve (12) month period beginning on January 5, 2010, or (B) US$15,000,000 during period beginning on January 5, 2010 and ending on January 5, 2012 (the maturity date of the Notes), except in the ordinary course of the Registrant’s business; (ii) lend or advance money, credit or property to or invest in (by capital contribution, loan, purchase or otherwise) any person or entity in excess of US$2,000,000except: (A) investments in United States Government obligations, certificates of deposit of any banking institution with combined capital and surplus of at least $200,000,000; (B) accounts receivable arising out of sales in the ordinary course of business; and (C) inter-company loans between and among the Registrant and its subsidiaries; (iii) pay dividends or make any other distribution on shares of the capital stock of the Registrant; (iv) create, assume or permit to exist, any lien on any of the Registrant’s property or assets now owned or hereafter acquired, subject to existing liens and certain exceptions; (v) assume guarantees, subject to certain exceptions; (vi) engage in “sale-leaseback” transactions, subject to certain exceptions; (vii) make capital expenditures in excess of US$5,000,000 in any fiscal year, subject to certain exceptions; and (viii) materially alter the Registrant’s business.

Warrants.  The Warrants to purchase Common Stock were issued in conjunction with the Private Placement.  The Registrant offered and sold Warrants to purchase 6,000,000 shares of Common Stock.  The issuance of the Warrants was not registered under the Securities Act as such issuance was exempt from registration under Section 4(2) of the Securities Act and Regulation D promulgated thereunder.  Each Warrant entitles the holder to purchase one share of Common Stock.  The Warrants shall be exercisable in whole or in part, at an initial exercise price per share of $2.40, which exercise price is subject to customary weighted average and stock based anti-dilution protection.  The Warrants may be exercised at any time upon the election of the holder, beginning on the date of issuance and ending of the third anniversary of the closing of the Private Placement.  The Warrants shall not be redeemable.

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In the event of the Registrant’s liquidation, dissolution or winding up, the holders of Warrants will not be entitled to participate in the distribution of assets of the Registrant.  In addition, holders of Warrants do not have voting, pre-emptive, subscription or other rights of stockholders in respect of the Warrants, nor shall the Holders be entitled to receive dividends.

The above description of Notes and Warrants is qualified in its entirety by reference to the actual agreement, a copy of which is filed as Exhibit 4.1 and 4.2 hereto and incorporated herein by reference.

In connection with the Private Placement, on January 5, 2010, the Registrant issued to affiliates of Euro Pacific and to Chardan Capital Markets, LLC (“Chardan”) three-year warrants (the “Agent Warrants”) to purchase 600,000 shares of Common Stock at an exercise price of $2.40 per share.  31,500 placement agent warrants were issued to Chardan and 568,500 placement agent warrants were issued to affiliates of Euro Pacific.  The Agent Warrants are substantially identical to the Warrants issued to the Investors in the Private Placement, except that such warrants may not be exercised until June 5, 2010.  Such issuance of the Agent Warrants was not registered under the Securities Act.  The issuance of the Agent Warrants was exempt from registration under Section 4(2) of the Securities Act.  In addition, for their services as placement agents, the Registrant paid cash fees of $1.2 million in the aggregate to Euro Pacific and Chardan.  The Registrant also agreed to indemnify the Euro Pacific and Chardan against certain liabilities, including liabilities under the Securities Act.   The Agent Warrants will have registration rights identical to the registration rights afforded to the Investors of the Notes and Warrants.

From and after the closing of the Private Placement, if the Registrant decides to engage any placement agent, underwriter or investment bank on a fee basis in connection with any private placement of securities of the Registrant or its affiliates and executive officers (a “Subsequent Offering”) for a period of twelve (12) months from the date of the closing of the Private Placement, the Registrant shall give prompt written notice of such an event to Euro Pacific, and Euro Pacific shall be entitled to a 5 day right of first refusal, beginning on the day Euro Pacific receives such written notice from the Registrant of such Subsequent Offering, to act as agent or manager for such private placement.  In addition, Euro Pacific shall be entitled 10.0% of the gross proceeds received by the Registrant, with respect to any equity or equity-linked financing transactions with any Investor introduced to the Registrant by Euro Pacific within twelve (12) months from the closing of the Private Placement.

Item 5.01  Changes in Control of Registrant

As explained more fully in Item 2.01, in connection with the Exchange Agreement on January 5, 2010, the Registrant issued 8,942,602 new shares of its Common Stock, or 55.0% of the issued and outstanding shares of Common Stock following the Share Exchange to Glory Period Limited. Immediately following the closing of the Private Placement, the shares of the Registrant’s Common Stock issued to Glory Period were 40.22% of the Registrant’s issued and outstanding shares on an as if converted basis, but not taking into account any exercise of the Warrants or the Agent Warrants.

In connection with the closing of the Share Exchange and as explained more fully in the above Item 2.01 and Item 5.02 below, Anthony Zaradic resigned from his position as sole director and officer of the Registrant upon Closing.  Further, in connection with the resignation of Anthony Zaradic, Hongwei Qu was appointed as the sole officer of the Registrant effective as of the Closing and will be formally appointed as sole director of the Registrant upon effectiveness of an information statement required by Rule 14f-1 promulgated under the Exchange Act, which was filed on January 6, 2010.

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Item 5.02  Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

(a)           Resignation of Directors and Officers

Upon effectiveness of an information statement required by Rule 14f-1 promulgated under the Exchange Act, Anthony Zaradic resigned as sole director, CEO, CFO, President, Secretary, and Treasurer of the Registrant.  There was no disagreement between Anthony Zaradic and the Registrant.

(b)           Appointment of Directors and Officers

Upon effectiveness of an information statement required by Rule 14f-1 promulgated under the Exchange Act, the following person was appointed as our director and officer:

Name	Age	Position
Hongwei Qu	35	President, Chief Executive Officer, Interim Chief Financial Officer, Treasurer and Secretary and Chairman of the Board of Directors

Hongwei Qu.  Qu became the Registrant’s President, Chief Executive Officer, Interim Chief Financial Officer, Treasurer and Secretary as of the Closing, and will be the Chairman of the Company’s Board of Directors effective as of the expiration of the ten (10) day period following the filing and mailing of this Information Statement, in compliance with Section 14(f) of the Exchange Act.  Qu is the founder and General Manger and Executive Director of Bohai.  He has significant experience in the medical and pharmaceutical sectors in China, most recently as the founder in 2001 of Yantai Hangwei Medical Trading Co., a company engaged in the wholesale of drugs and medical products and retail of medical devices.  Qu was principally responsible for the acquisition of Bohai in May 2007.  Qu graduated from Shandong Economic University with a bachelor degree.

(c)           Employment Agreements

We currently do not have an employment agreement with Mr. Qu.

Item 5.03  Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

The Registrant has determined that it will change its fiscal year from May 31 to June 30 and that such change will be reflected in the Registrant’s Quarterly Report on Form 10-Q for the Registrant’s second fiscal quarter ended December 31, 2009.

Item 5.06  Change in Shell Company Status.

As explained more fully in Item 2.01 above, the Registrant was a “shell company” (as such term defined in Rule 12b-2 under the Exchange Act) immediately before the Closing of the Share Exchange. As a result of the Share Exchange, Chance High became wholly owned subsidiary and Bohai became the main operational business of the Registrant, which is no longer a shell company. Reference is made to Item 2.01 for a more complete description of the transaction and the business of the Registrant subsequent to the Closing date.

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Item 9.01  Financial Statements and Exhibits

(a) Financial statements of the business acquired.

The audited financial statements of Bohai ended June 30, 2009 and 2008 and for the years then ended and the unaudited financial statement for the three months ended September 30, 2009 and 2008 and for the quarter then ended and related footnotes are attached hereto as Exhibit 99.2 and Exhibit 99.3 respectively and are incorporated herein by reference.  The Registrant will file the pro forma financial information required by Item 9.01 to Form 8-K via amendment to this Current Report on Form 8K. The following is an index to such financial statements:

Exhibit 99.2 - Audited financial statements of Bohai ended June 30, 2009 and 2008 and for the years then ended December 31, 2009 and 2008

Report of Independent Registered Public Accounting Firm	F-1
Balance Sheets as of June 30, 2009 and 2008 (Audited)	F-2
Statements of Income for the Fiscal Years Ended June 30, 2009 and 2008 (Audited)	F-3
Changes in Stockholders’ Equity for the Fiscal Years Ended June 30, 2009 and 2008 (Audited)	F-4
Cash Flows for the Fiscal Years Ended June 30, 2009 and 2008 (Audited)	F-5
Notes to the Financial Statements for the Fiscal Years Ended June 30, 2009 and 2008	F-6

Exhibit 99.3 –Unaudited financial statements of Bohai for three months ended September 30, 2009 and 2008 for the quarter then ended

Balance Sheets as of September 30, 2009 (Unaudited) and June 30, 2009 (Audited)	FA-1
Statements of Income for the Three Months Ended September 30, 2009 and 2008 (Unaudited)	FA-2
Statements of Cash Flow for the Three Months Ended September 30, 2009 and 2008 (Unaudited)	FA-3
Notes to the Financial Statements for the Three Months Ended September 30, 2009 and 2008	FA-4

(b) Exhibits.

Exhibit No.	Description
2.1	Share Exchange Agreement, dated January 5, 2010, by and among the Registrant, Chance High and Shareholders of Chance High *
3.1	Articles of Incorporation of the Registrant (1)
3.2	Bylaws of the Registrant (2)
3.3	Certificate of Amendment to Articles of Incorporation (3)
4.1	Form of Note issued to the Investors in the Private Placement, dated January 5, 2010 *
4.2	Form of Warrant issued to the Investors in the Private Placement, dated January 5, 2010 *
4.3	Form of Placement Agent Warrant issued to affiliates of Euro Pacific Capital, Inc. and to Chardan Capital Markets, LLC, dated January 5, 2010 *
10.1	Securities Purchase Agreement, dated January 5, 2010, by and among the Registrant, the Investors in the Private Placement and Euro Pacific Capital, Inc. as representative of the Investors *

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10.2	Registration Rights Agreement, dated January 5, 2010, by and among the Registrant and the Investors in the Private Placement *
10.3	Securities Escrow Agreement, dated January 5, 2010, by and among the Registrant, Euro Pacific Capital, Inc., as representative of the Investors, Glory Period Limited and Escrow, LLC, as escrow agent *
10.4	Closing Escrow Agreement, dated December 10, 2009, by and among the Registrant, Euro Pacific Capital, Inc., as representative of the Investors, and Escrow, LLC, as escrow agent *
10.5	Consulting Services Agreement, dated December 7, 2009, between Bohai and the WFOE *
10.6	Operating Agreement, dated December 7, 2009, by and among Bohai, its shareholders and the WFOE *
10.7	Voting Rights Proxy Agreement, dated December 7, 2009, by and among Bohai, its shareholders and the WFOE *
10.8	Equity Pledge Agreement, dated December 7, 2009, by and among Bohai, its shareholders and the WFOE *
10.9	Option Agreement, dated December 7, 2009, by and among Bohai, its shareholders and the WFOE *
10.10	Call Option Agreement dated December 7, 2009 *
17.1	Resignation Letter of Anthony Zaradic dated January 5, 2010 *
99.1	Press Release, dated January 5, 2010, announcing the closing of the Share Exchange and the Private Placement *
99.2	Audited financial statements of Bohai ended June 30, 2009 and 2008 and for the years then ended December 31, 2009 and 2008 *
99.3	Unaudited Financial Statements of Bohai for three months ended September 30, 2009 and 2008 and for the quarter then ended *

*  Filed herewith

(1) Incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement of Form S-1 (File Number 333-153102), filed on August 20, 2008.

(2) Incorporated by reference to Exhibit 3.2 to the Registrant’s Registration Statement of Form S-1 (File Number 333-153102), filed on August 20, 2008.

(3) Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on December 17, 2009.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

January 11, 2010	LINK RESOURCES, INC.
	By:	/s/ Hongwei Qu
		Name:	Hongwei Qu
		Title:	President, Chief Executive Officer, Interim Chief Financial Officer, Treasurer and Secretary

EX-2.1

Exhibit 2.1

SHARE EXCHANGE AGREEMENT

This SHARE EXCHANGE AGREEMENT (this “Agreement”) is entered into as of this 5th day of January, 2010, by and between Link Resources, Inc., a Nevada corporation (hereinafter referred to as “Link”), Chance High International Limited, a British Virgin Islands business company (“Chance High”) and the shareholders of Chance High listed on Schedule A hereto (collectively, the “Chance High Shareholders”).

WHEREAS, Link is a publicly reporting company organized under the laws of Nevada with no significant operations;

WHEREAS, the Chance High Shareholders collectively own 100% of the issued and outstanding capital stock of Chance High;

WHEREAS, Chance High owns 100% of the issued and outstanding capital stock of Yantai Shencaojishi Pharmaceuticals Co., Ltd. (“WOFE”), a wholly foreign owned enterprise incorporated under the laws of the People’s Republic of China (“PRC”);

WHEREAS, on December 7, 2009, WOFE entered into a series of contractual agreements with Yantai Bohai Pharmaceuticals Group Co., Ltd. (“Bohai Pharma”), a company incorporated under the laws of the PRC, and its three shareholders, in which WOFE effectively assumed management of the business activities of Bohai Pharma and has the right to appoint all executives and senior management and the members of the board of directors (Chance High, WOFE and Bohai Pharma shall be referred to herein collectively as the “Group”);

WHEREAS, Link desires to acquire 100% of the issued and outstanding equity securities of Chance High (the “Chance High Shares”) from the Chance High Shareholders in exchange (the “Exchange”) for the issuance by Link to the Chance High Shareholders of an aggregate of 13,162,500 newly issued shares of Link common stock, par value $0.001 per share (together with any securities into which such shares may be reclassified, the “Common Stock”) and the Chance High Shareholders desire to exchange its Chance High Shares for such shares of Common Stock on the terms described herein;

WHEREAS, on the Closing Date, and as a result of the transactions contemplated hereby, Chance High will become a wholly-owned subsidiary of Link (which shall be renamed Bohai Pharmaceuticals Group Inc. following the Closing Date);

WHEREAS, such Exchange is in connection with the offering (the “Offering”) pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) between Link and certain investors  named in the Purchase Agreement in connection with a private placement by Link of units (the “Units”), with each Unit consisting of: (i) an eight (8%) percent convertible promissory note (each a “Note,” and, collectively, the “Notes”) of Link in the aggregate principal amount of $2.00, which Note shall be convertible into shares of Common Stock at $2.00 per share (subject to adjustment as set forth in the Note) and (ii) a common stock purchase warrant (collectively, the “Warrants”) to purchase one (1) share of Common Stock at an exercise price of $2.40 per share, in each case as further described in the Confidential Private Placement Memorandum of Link, dated December 10, 2009 (the “Memorandum”); and

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WHEREAS, the closing of the Exchange is conditioned upon all of the conditions of the Offering being met, and the Offering is conditioned upon the closing of the Exchange.

NOW THEREFORE, on the basis of the foregoing stated premises and for and in consideration of the mutual covenants and agreements hereinafter set forth and the mutual benefits to the parties to be derived here from, and intending to be legally bound hereby, it is hereby agreed as follows:

ARTICLE I

REPRESENTATIONS, COVENANTS, AND WARRANTIES OF CHANCE HIGH

As an inducement to, and to obtain the reliance of Link, except as set forth in the Schedules of Chance High attached hereto (the “CH Disclosure Schedules”) or in the Memorandum, Chance High hereby represents and warrants to Link as of the Closing Date (as defined below) as follows.  As used herein, the term “knowledge of the Group” or similar language refers to the actual knowledge of the executive officers of Bohai Pharma.

Section 1.01      Incorporation.  Each member of the Group is organized under the laws of the jurisdiction set forth in Schedule 1.01(b) to the CH Disclosure Schedules, is duly formed or organized, validly existing and in good standing under the laws of its jurisdiction of organization and has the requisite power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being or currently planned by each member of the Group to be conducted.  Each member of the Group is in possession of all governmental or third party approvals necessary to own, lease and operate the properties it purports to own, operate or lease, to carry on its business as it is now being conducted, to consummate the transactions contemplated by this Agreement.  No member of the Group is in violation of any of the provisions of their respective charter or organization documents.  The ownership records (which have been delivered to Link) of each Group member’s registered capital are true, complete and accurate records of such ownership as of the date of such records and contain all transfers of such registered capital since the time of their respective organization.  No member of the Group is required to qualify to do business as a foreign corporation in any other jurisdiction, except where the failure to so qualify would not have a material adverse effect on: (i) the assets, liabilities, results of operations, condition (financial or otherwise) or business of the Group taken as a whole; or (ii) the ability of Chance High to perform its obligations hereunder, but, to the extent applicable, shall exclude any circumstance, change or effect to the extent resulting or arising from: (A) any change in general economic conditions in the industries or markets in which the Group operates so long as the Group is not disproportionately (in a material manner) affected by such changes; (x) national or international political conditions, including any engagement in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack so long as the Group is not disproportionately (in a material manner) affected by such changes; (y) changes in United States generally accepted accounting principles, or the interpretation thereof; or (z) the entry into or announcement of this Agreement, actions contemplated by this Agreement, or the consummation of the transactions contemplated hereby (a “Material Adverse Effect”).

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Section 1.02      Authorized Shares.  Authorized Shares.  The number of shares which Chance High is authorized to issue consists of 50,000 shares of a single class, par value US$ 1.00 per share.  There are 50,000 shares currently of Chance High issued and outstanding.  The issued and outstanding shares of Chance High are validly issued, fully paid, and non-assessable and not issued in violation of the preemptive or other rights of any person.

Section 1.03      Subsidiaries.  Except as set forth on Schedule 1.03 to the CH Disclosure Schedules (which sets forth the corporate structure of the Group), Chance High does not have any subsidiaries, and does not own, beneficially or of record, any shares of any other entity.

Section 1.04      Financial Statements.

(a)           Included in the Memorandum are: (i) the audited balance sheets of Bohai Pharma as of June 30, 2009 and June 30, 2008 and the related audited statements of operations, stockholders’ equity and cash flows for the fiscal years ended June 30, 2009 and June 30, 2008 together with the notes to such statements and the opinion ofParker Randall CF H.K. CPA Ltd., independent certified public accountants, and (ii) the unaudited financial statements of Bohai Pharma for the quarter ended September 30, 2009 (the “Financial Statements”).

(b)           The Financial Statements have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved.  The Bohai Pharma balance sheets included as part of the Financial Statements are true and accurate and present fairly as of their respective dates the financial condition of Bohai Pharma.  As of the date of such balance sheets, except as and to the extent reflected or reserved against therein, Bohai Pharma had no liabilities or obligations (absolute or contingent) which should be reflected in the balance sheets or the notes thereto prepared in accordance with generally accepted accounting principles, and all assets reflected therein are properly reported and present fairly the value of the assets of Bohai Pharma, in accordance with generally accepted accounting principles.  The statements of operations, stockholders’ equity and cash flows included as part of the Financial Statements reflect fairly the information required to be set forth therein by generally accepted accounting principles.

Section 1.05      Information.  The information concerning the Group set forth in this Agreement and the CH Disclosure Schedules is complete and accurate in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact required to make the statements made, in light of the circumstances under which they were made, not misleading.

Section 1.06      Options or Warrants.  Except as set forth in Schedule 1.06 to the CH Disclosure Schedules, there are no existing options, warrants, calls, or commitments of any character relating to the authorized and unissued stock of any member of the Group.

Section 1.07      Absence of Certain Changes or Events.  Except as disclosed in the Memorandum, the CH Disclosure Schedules or the Financial Statements (with respect to subsequent events), since September 30, 2009:

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(a)           There has not been any material adverse change in the business, operations, properties, assets, or condition (financial or otherwise) of the Group;

(b)           No member of the Group has: (i) amended its memorandum of association or articles of association or other organizational documents; (ii) declared or made, or agreed to declare or make, any payment of dividends or distributions of any assets of any kind whatsoever to stockholders or purchased or redeemed, or agreed to purchase or redeem, any of its shares; (iii) made any material change in its method of management, operation or accounting, (iv) entered into any other material transaction other than sales in the ordinary course of its business; or (v) made any increase in or adoption of any profit sharing, bonus, deferred compensation, insurance, pension, retirement, or other employee benefit plan, payment, or arrangement made to, for, or with its officers, directors, or employees; and

(c)           No member of the Group has: (i) granted or agreed to grant any options, warrants or other rights for its stocks, bonds or other corporate securities calling for the issuance thereof, (ii) borrowed or agreed to borrow any funds or incurred, or become subject to, any material obligation or liability (absolute or contingent) except as disclosed herein and except liabilities incurred in the ordinary course of business; (iii) sold or transferred, or agreed to sell or transfer, any of its assets, properties, or rights or canceled, or agreed to cancel, any debts or claims; or (iv) issued, delivered, or agreed to issue or deliver any stock, bonds or other corporate securities including debentures (whether authorized and unissued or held as treasury stock) except in connection with this Agreement and the transaction contemplated hereby.

Section 1.08      Litigation and Proceedings.  Except as disclosed on Schedule 1.08 to the CH Disclosure Schedules, there are no actions, suits, proceedings, or investigations pending or, to the knowledge of the Group after reasonable investigation, threatened by or against the Group or affecting the Group or their respective properties, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign, or before any arbitrator of any kind.  No member of the Group has any knowledge of any material default on its part with respect to any judgment, order, injunction, decree, award, rule, or regulation of any court, arbitrator, or governmental agency or instrumentality or of any circumstances which, after reasonable investigation, would result in the discovery of such a default.

Section 1.09       Contracts.

(a)           All “material” contracts, agreements, franchises, license agreements, debt instruments or other commitments to which any member of the Group is a party or by which it or any of its assets, products, technology, or properties are bound, other than those incurred in the ordinary course of business, are set forth on Schedule 1.09 to the CH Disclosure Schedules (the “Material Contracts”).  Such schedule contains any oral or written: (i) contract for the employment of any officer or employee; (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension benefit or retirement plan, (iii) agreement, contract, or indenture relating to the borrowing of money, (iv) guaranty of any obligation; (vi) collective bargaining agreement; or (vii) agreement with any present or former officer or director of members of the Group.

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(b)           The Material Contracts are valid and enforceable by the applicable members of the Group party thereto in all respects, , except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.

Section 1.10      No Conflict With Other Instruments.  The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, constitute a default under, or terminate, accelerate or modify the terms of any Material Contract a member of the Group is a party or to which any of their respective assets, properties or operations are subject.

Section 1.11      Compliance With Laws and Regulations.  To the best of its knowledge, each member of the Group has complied with all applicable statutes and regulations of any federal, state, or other governmental entity or agency thereof, except to the extent that noncompliance would not have a Material Adverse Effect.

Section 1.12      Approval of Agreement.  The Board of Directors of Chance High has authorized the execution and delivery of this Agreement by Chance High and has approved this Agreement and the transactions contemplated hereby.

Section 1.13      Valid Obligation.  This Agreement and all agreements and other documents executed by Chance High in connection herewith constitute the valid and binding obligation of Chance High, enforceable in accordance with its or their terms, except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.

ARTICLE II

REPRESENTATIONS, COVENANTS, AND WARRANTIES OF LINK

As an inducement to, and to obtain the reliance of Chance High and the Chance High Shareholders, except as set forth in the Schedules of Link attached hereto (the “Link Schedules”), Link hereby represents and warrants to Chance High and the Chance High Shareholders, as of the date hereof and as of the Closing Date, as follows.  As used herein, the term “knowledge of Link” or similar language refers to the knowledge of Anthony Zaradic any any individual who has served as a named executive officer or director of Link during the 36 month period prior to the execution of this Agreement.

Section 2.01      Organization.  Link is a corporation duly organized, validly existing, and in good standing under the laws of Nevada and has the corporate power and is duly authorized under all applicable laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted.  Attached as Schedule 2.01 to the Link Schedules are complete and correct copies of the certificate of incorporation and bylaws of Link as in effect on the date hereof.  The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of Link’s certificate of incorporation or bylaws.  Link has taken all action required by law, its certificate of incorporation, its bylaws, or otherwise to authorize the execution and delivery of this Agreement, and Link has full power, authority, and legal right and has taken all action required by law, its certificate of incorporation, bylaws, or otherwise to consummate the transactions herein contemplated.

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Section 2.02       Capitalization.

(a)           Link’s authorized capitalization consists of (a) 150,000,000 shares of Common Stock, of which 3,450,000 shares are issued and outstanding prior to the transactions described in the Memorandum, and (b) 10,000,000 shares of preferred stock, par value $0.001 per share, none of which are issued and outstanding.  All issued and outstanding shares of Common Stock are legally issued, fully paid, and non-assessable and not issued in violation of the preemptive or other rights of any person or entity.  As of the Closing Date, no shares of Common Stock were reserved for issuance upon the exercise of outstanding options or warrants to purchase the Common Stock or other equity-linked securities of Link (except with respect to the Notes and the Warrants) and no shares of preferred stock were reserved for issuance to any party.  All outstanding Common Stock have been issued and granted in compliance with: (i) all applicable securities laws and (in all material respects) other applicable laws and regulations, and (ii) all requirements set forth in any material contracts, agreements, franchises, license agreements, debt instruments or other commitments to which Link is a party or by which it or any of its assets or properties are bound, all of which are set forth on Schedule 2.02 to the Link Disclosure Schedules (the “Link Material Contracts”).

(b)           There are no equity securities, partnership interests or similar ownership interests of any class of any equity security of Link, or any securities exchangeable or convertible into or exercisable for such equity securities, partnership interests or similar ownership interests, issued, reserved for issuance or outstanding.   Except as contemplated by this Agreement or as set forth in Schedule 2.02 to the Link Disclosure Schedules, there are no subscriptions, options, warrants, equity securities, partnership interests or similar ownership interests, calls, rights (including preemptive rights), commitments or agreements of any character to which Link is a party or by which it is bound obligating Link to issue, deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem or otherwise acquire, or cause the repurchase, redemption or acquisition of, any shares of capital stock, partnership interests or similar ownership interests of Link or obligating Link to grant, extend, accelerate the vesting of or enter into any such subscription, option, warrant, equity security, call, right, commitment or agreement.  There is no plan or arrangement to issue Common Stock or preferred stock of Link except as set forth in this Agreement and in the Memorandum.

(c)           Except as contemplated by this Agreement or the Memorandum and except as set forth in Schedule 2.02 to the Link Disclosure Schedules, there are no registration rights, and there is no voting trust, proxy, rights plan, anti-takeover plan or other agreement or understanding to which Link is a party or by which it is bound with respect to any equity security of any class of Link, and there are no agreements to which Link is a party, or which Link has knowledge of, which conflict with this Agreement or the transactions contemplated herein or otherwise prohibit the consummation of the transactions contemplated hereunder.

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Section 2.03       Subsidiaries and Predecessor Corporations.  Link does not have any predecessor corporation(s) or subsidiaries, and does not own, beneficially or of record, any shares of any other entity.

Section 2.04       SEC Filings; Financial Statements. 

(a)           Link has made available to the Chance High Shareholders a correct and complete copy, or there has been available on the EDGAR system maintained by the U.S. Securities and Exchange Commission (the “SEC”), copies of each report, registration statement and definitive proxy statement filed by Link with the SEC for the 36 months prior to the date of this Agreement (the “Link SEC Reports”), which, to Link’s knowledge, are all the forms, reports and documents filed by Link with the SEC for the 36 months prior to the date of this Agreement.  As of their respective dates, to Link’s knowledge, the Link SEC Reports: (i) were prepared in accordance and complied in all material respects with the requirements of the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as the case may be, and the rules and regulations of the SEC thereunder applicable to such Link SEC Reports, and (ii) did not at the time they were filed (and if amended or superseded by a filing prior to the date of this Agreement then on the date of such filing and as so amended or superceded) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(b)           Each set of financial statements (including, in each case, any related notes thereto) contained in the Link SEC Reports comply as to form in all material respects with the published rules and regulations of the SEC with respect thereto, were prepared in accordance with U.S. generally accepted accounting principles, applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, do not contain footnotes as permitted by Form 10-Q promulgated under the Exchange Act) and each fairly presents in all material respects the financial position of Link at the respective dates thereof and the results of its operations and cash flows for the periods indicated, except that the unaudited interim financial statements were or are subject to normal adjustments which were not or are not expected to have a material adverse effect on: (i) the assets, liabilities, results of operations, condition (financial or otherwise) or business of Link; or (ii) the ability of Link to perform its obligations hereunder, but, to the extent applicable, shall exclude any circumstance, change or effect to the extent resulting or arising from: (A) any change in general economic conditions in the industries or markets in which Link operates so long as Link is not disproportionately (in a material manner) affected by such changes; (x) national or international political conditions, including any engagement in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack so long as Link is not disproportionately (in a material manner) affected by such changes; (y) changes in United States generally accepted accounting principles, or the interpretation thereof; or (z) the entry into or announcement of this Agreement, actions contemplated by this Agreement, or the consummation of the transactions contemplated hereby (a “Link Material Adverse Effect”).

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(c)           As of the date of all balance sheets included in the Link SEC Reports, except as and to the extent reflected or reserved against therein, Link had no liabilities or obligations (absolute or contingent) which should be reflected in the balance sheets or the notes thereto prepared in accordance with U.S. generally accepted accounting principles, and all assets reflected therein are properly reported and present fairly the value of the assets of Link, in accordance with U.S. generally accepted accounting principles.  All statements of operations, stockholders’ equity and cash flows included in the Link SEC Reports reflect fairly the information required to be set forth therein by U.S. generally accepted accounting principles.

(d)           For the 36 month period prior to the date of this Agreement, Link has maintained a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with U.S. generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(e)           Link has no liabilities with respect to the payment of any federal, state, county, local or other taxes (including any deficiencies, interest or penalties), except for taxes accrued but not yet due and payable.

(f)           Link has timely filed all state, federal or local income and/or franchise tax returns required to be filed by it from inception to the date hereof.  Each of such income tax returns reflects the taxes due for the period covered thereby, except for amounts which, in the aggregate, are immaterial.

(g)           The books and records, financial and otherwise, of Link are in all material aspects complete and correct and have been maintained in accordance with good business and accounting practices.

Section 2.05       Exchange Act Compliance.   Link is in compliance with, and current in, all of the reporting, filing and other requirements under the Exchange Act, the Common Stock is registered under Section 12(g) of the Exchange Act, and Link is in compliance with all of the requirements under, and imposed by, Section 12(g) of the Exchange Act.

Section 2.06       Information.  The information concerning Link set forth in this Agreement, the Link Schedules and the Link SEC Reports is complete and accurate in all material respects and does not contain any untrue statements of a material fact or omit to state a material fact required to make the statements made, in light of the circumstances under which they were made, not misleading.  In addition, Link has fully disclosed in writing to the Chance High Shareholders (through this Agreement or the Link Schedules) all information relating to matters involving Link or its assets or its present or past operations or activities which: (i) indicated or may indicate, in the aggregate, the existence of a greater than $1,000 liability, (ii) have led or may lead to a competitive disadvantage on the part of Link or (iii) either alone or in aggregation with other information covered by this Section, otherwise have led or may lead to Link Material Adverse Effect, including, but not limited to, information relating to governmental, employee, environmental, litigation and securities matters or proceedings and transactions with affiliates.

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Section 2.07       Absence of Certain Changes or Events.  Since the date of the most recent Link balance sheet included in the Link SEC Reports:

(a)           there has not been: (i) any material adverse change in the business, operations, properties, assets or condition of Link or (ii) any damage, destruction or loss to Link (whether or not covered by insurance) materially and adversely affecting the business, operations, properties, assets or condition of Link;

(b)           Link has not: (i) amended its certificate of incorporation or bylaws except as required by this Agreement; (ii) declared or made, or agreed to declare or make any payment of dividends or distributions of any assets of any kind whatsoever to stockholders or purchased or redeemed, or agreed to purchase or redeem, any of its capital stock; (iii) waived any rights of value which in the aggregate are outside of the ordinary course of business or material considering the business of Link; (iv) made any material change in its method of management, operation, or accounting; (v) entered into any transactions or agreements of any kind or nature; (vi) made any accrual or arrangement for or payment of bonuses or special compensation of any kind or any severance or  termination pay to any present or former officer or employee; (vii) increased the rate of compensation payable or to become payable by it to any of its officers or directors or any of its salaried employees whose monthly compensation exceed $1,000; or (viii) made any increase in any profit sharing, bonus, deferred compensation, insurance, pension, retirement, or other employee benefit plan, payment, or arrangement, made to, for or with its officers, directors, or employees;

(c)           Link has not: (i) granted or agreed to grant any options, warrants, or other rights for its stock, bonds, or other corporate securities calling for the issuance thereof; (ii) borrowed or agreed to borrow any funds or incurred, or become subject to, any material obligation or liability (absolute or contingent); (iii) paid or agreed to pay any material obligations or liabilities (absolute or contingent) other than current liabilities reflected in or shown on the most recent Link balance sheet and current liabilities incurred since that date in the ordinary course of business and professional and other fees and expenses in connection with the preparation of this Agreement and the consummation of the transaction contemplated hereby; (iv) sold or transferred, or agreed to sell or transfer, any of its assets, properties, or rights, or canceled, or agreed to cancel, any debts or claims; (v) made or permitted any amendment or termination of any contract, agreement, or license to which it is a party if such amendment or termination is material, considering the business of Link; or (vi) issued, delivered or agreed to issue or deliver, any stock, bonds or other corporate securities including debentures (whether authorized and unissued or held as treasury stock), except in connection with this Agreement; and

(d)           to its knowledge, Link has not become subject to any law or regulation which materially and adversely affects, or in the future, may adversely affect, the business, operations, properties, assets or condition of the Group as described in the Memorandum.

Section 2.08       Litigation and Proceedings.  There are no actions, suits, proceedings or investigations pending or, to the knowledge of Link after reasonable investigation, threatened by or against Link or affecting Link or its properties, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign, or before any arbitrator of any kind except as disclosed in the Schedule 2.08 to the Link Schedules.  Link has no knowledge of any default on its part with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any court, arbitrator, or governmental agency or instrumentality or any circumstance which after reasonable investigation would result in the discovery of such default.

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Section 2.09       Contracts.  Except for the Link Material Contracts:

(a)           Link is not a party to, and its assets or properties are not bound by, any contract, franchise, agreement, debt instrument or other commitments whether such agreement is in writing or oral;

(b)           Link is not a party to or bound by, and the properties of Link are not subject to any contract, agreement, other commitment or instrument; any charter or other corporate restriction; or any judgment, order, writ, injunction, decree, or award; and

(c)           Link is not a party to any oral or written: (i) contract for the employment of any officer or employee; (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension benefit or retirement plan, (iii) agreement, contract, or indenture relating to the borrowing of money, (iv) guaranty of any obligation, (vi) collective bargaining agreement; or (vii) agreement with any present or former officer or director of Link.

Section 2.10       No Conflict With Other Instruments.  The execution of this Agreement and the Purchase Agreement and the consummation of the transactions contemplated hereby and thereby will not result in the breach of any term or provision of, constitute a default under, or terminate, accelerate or modify the terms of, any Link Material Contracts or otherwise have a Link Material Adverse Effect.

Section 2.11       Filings, Consents and Approvals.  Link is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other foreign, federal, state, local or other governmental authority or other person or entity in connection with the execution, delivery and performance by Link of this Agreement, the Purchase Agreement or any document or instrument contemplated hereby or thereby, except as expressly contemplated herein or in the Purchase Agreement.

Section 2.12       Compliance With Laws and Regulations.  To the best of its knowledge, Link has complied with all applicable statutes and regulations of any federal, state, or other applicable governmental entity or agency thereof.  This compliance includes, but is not limited to, the filing of all reports to date with federal and state securities authorities.

Section 2.13       Approval of Agreements.  The Board of Directors and the holders of at least a majority of the issued and outstanding voting stock of Link have duly authorized: (i) the execution and delivery of this Agreement by Link and the transactions contemplated hereby and (ii) the execution and delivery of Purchase Agreement, the Notes, the Warrants and all documents and instruments called for under the Purchase Agreement by Link and the transactions contemplated each of the aforesaid agreements and instruments.

Section 2.14       Material Transactions or Affiliations.  Except as disclosed in the Link SEC Reports or on Schedule 2.14 to the Link Schedules, there exists no contract, agreement or arrangement between Link and any predecessor and any person or entity who was at the time of such contract, agreement or arrangement an officer, director, or person owning of record or known by Link to own beneficially, 5% or more of the issued and outstanding Common Stock of Link and which is to be performed in whole or in part after the date hereof or was entered into not more than three years prior to the date hereof.  Neither any officer, director, nor 5% stockholders of Link has, or has had since inception of Link, any known interest, direct or indirect, in any such transaction with Link which was material to the business of Link.  Link has no commitment, whether written or oral, to lend any funds to, borrow any money from, or enter into any other transaction with, any such affiliated person.

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Section 2.15       Bank Accounts; Power of Attorney.  Set forth on Schedule 2.15 to the Link Schedules is a true and complete list of: (a) all accounts with banks, money market mutual funds or securities or other financial institutions maintained by Link within the past twelve (12) months, the account numbers thereof, and all persons authorized to sign or act on behalf of Link, (b) all safe deposit boxes and other similar custodial arrangements maintained by Link within the past twelve (12) months, (c) the check ledger for the last 12 months, and (d) the names of all persons holding powers of attorney from Link or who are otherwise authorized to act on behalf of Link with respect to any matter, other than its officers and directors, and a summary of the terms of such powers or authorizations.

Section 2.16       Valid Obligation.  This Agreement and the Purchase Agreement and all agreements and other documents executed by Link in connection herewith and therewith constitute the valid and binding obligation of Link, enforceable in accordance with its or their terms, except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.

Section 2.17      Title to Property.  Link does not own or lease any real property or personal property.  There are no options or other contracts under which Link has a right or obligation to acquire or lease any interest in real property or personal property.

Section 2.18       Questionable Payments.Neither Link nor, to Link’s knowledge, any of its current or former stockholders, directors, officers, employees, agents or other persons or entities acting on behalf of Link, has on behalf of Link or in connection with Link’s business: (a) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (b) made any direct or indirect unlawful payments to any governmental officials or employees from corporate funds; (c) established or maintained any unlawful or unrecorded fund of corporate monies or other assets; (d) made any false or fictitious entries on the books and records of Link; or (e) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment of any nature.

Section 2.19       Solvency.  Link has not: (a) made a general assignment for the benefit of creditors; (b) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition by its creditors; (c) suffered the appointment of a receiver to take possession of all, or substantially all, of its assets; (d) suffered the attachment or other judicial seizure of all, or substantially all, of its assets; (e) admitted in writing its inability to pay its debts as they come due; or (f) made an offer of settlement, extension or composition to its creditors generally.

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Section 2.20       OFAC.  None of Link nor, to the knowledge of Link, any director, officer, agent, employee, affiliate or person acting on behalf of Link, is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and Link has not heretofore engaged in any transaction to lend, contribute or otherwise make available it funds or the funds of any joint venture partner or other person or entity towards any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC or for the purpose of financing the activities of any person or entity currently subject to any U.S. sanctions administered by OFAC.

Section 2.21       Intellectual Property.  Link does not own, license or otherwise have any right, title or interest in any intellectual property.

Section 2.22       Employees; Consultants, etc..  Except as disclosed in the Link SEC Reports, Link has no employees, officers, directors, agents or consultants.  Link maintains no employee benefit plans or programs of any kind or nature.

Section 2.23       Insurance.  Link does not hold or maintain, nor is Link obligated to hold or maintain, any insurance on behalf for itself or its assets or for any officer, director, employee or stockholder of Link.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF

THE CHANCE HIGH SHAREHOLDERS

As an inducement to Link, each Chance High Shareholder, severally but not jointly, hereby represent and warrant to Link as follows.

Section 3.01      Chance High Shares.  The Chance High Shares represent 100% of the issued and outstanding capital stock of Chance High.  Such Chance High Shareholder is the record and beneficial owner, and has good title to, the Chance High Shares appearing next to such Chance High Shareholder’s name on Schedule A hereto.  Such Chance High Shareholder has the right and authority to sell and deliver its Chance High Shares, free and clear of all liens, claims, charges, encumbrances, pledges, mortgages, security interests, options, rights to acquire, proxies, voting trusts or similar agreements, restrictions on transfer or adverse claims of any nature whatsoever, except as disclosed in the Memorandum.  Upon delivery of any certificate or certificates duly assigned, representing the Chance High Shares as herein contemplated and/or upon registering of Link as the new owner of the Chance High Shares in the share register of Chance High, Link will receive good title to the Chance High Shares owned by such Chance High Shareholder.

Section 3.02      Power and Authority. Such Chance High Shareholder has the legal power, capacity and authority to execute and deliver this Agreement to consummate the transactions contemplated by this Agreement, and to perform his, her or its obligations under this Agreement.  This Agreement constitutes a legal, valid and binding obligation of such Chance High Shareholder, enforceable against such Chance High Shareholder in accordance with the terms hereof, except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought..

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Section 3.03       No Conflicts.  The execution and delivery of this Agreement by such Chance High Shareholder and the performance by such Chance High Shareholder of its obligations hereunder in accordance with the terms hereof: (a) will not require the consent of any third party or governmental entity under any laws; (b) will not violate any laws applicable to such Chance High Shareholder and (c) will not violate or breach any contractual obligation to which such Chance High Shareholder is a party.

Section 3.04       Purchase Entirely for Own Account.  The Exchange Shares (as defined in Section 4.01 herein) proposed to be acquired by such Chance High Shareholder pursuant to the terms hereof will be acquired for investment for such Chance High Shareholder’s own account, and not with a view to the resale or distribution of any part thereof.

Section 3.05       Acquisition of Exchange Shares for Investment.

(a)           Such Chance High Shareholder is acquiring the Exchange Shares for investment purposes and for such Chance High Shareholder’s own account and not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and such Chance High Shareholder has no present intention of selling, granting any participation in, or otherwise distributing the same.  Such Chance High Shareholder further represents that it does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to such person or to any third person, with respect to any of the Exchange Shares.

(b)           Such Chance High Shareholder represents and warrants that it: (i) can bear the economic risk of his respective investments, and (ii) possesses such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the investment in Link and its securities.

(c)           Such Chance High Shareholder is not a “U.S. Person” as defined in Rule 902(k) of Regulation S of the Securities Act (“Regulation S”) and understands that the Exchange Shares are not registered under the Securities Act and that the issuance thereof to such Chance High Shareholder is intended to be exempt from registration under the Securities Act pursuant to Regulation S.  Such Chance High Shareholder has no intention of becoming a U.S. Person.  At the time of the origination of contact concerning this Agreement and the date of the execution and delivery of this Agreement, such Chance High Shareholder was outside of the United States.

(d)           Such Chance High Shareholder acknowledges that neither the SEC, nor the securities regulatory body of any state or other jurisdiction, has received, considered or passed upon the accuracy or adequacy of the information and representations made in this Agreement.

(e)           Such Chance High Shareholder understands that the Exchange Shares may not be sold, transferred, or otherwise disposed of without registration under the Securities Act or an exemption therefrom, and that in the absence of an effective registration statement covering the Exchange Shares or any available exemption from registration under the Securities Act, the Exchange Shares may have to be held indefinitely.

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ARTICLE IV

PLAN OF EXCHANGE

Section 4.01       The Exchange.

(a)           On the terms and subject to the conditions set forth in this Agreement, on the Closing Date (as defined in Section 4.03), each such Chance High Shareholder shall assign, transfer and deliver, free and clear of all liens, pledges, encumbrances, charges, restrictions or known claims of any kind, nature, or description, all of the Chance High Shares owned by such Chance High Shareholder to Link, with the objective of such Exchange being the acquisition by Link of 100% of the issued and outstanding shares of capital stock of Chance High.

(b)           In consideration of the transfer of the Chance High Shares to Link by the Chance High Shareholders, Link shall issue to the Chance High Shareholder an aggregate of 13,162,500 newly issued shares of Common Stock (the “Exchange Shares”), in the amounts set forth on Schedule A hereto, representing in the aggregate 81% of the issued and outstanding shares of Common Stock prior to the consummation of the transaction contemplated by the Purchase Agreement.

(c)           At the Closing Date, each Chance High Shareholder shall, on surrender of its certificate or certificates representing the Chance High Shares owned by such Chance High Shareholder to Link or its registrar or transfer agent, be entitled to receive the Exchange Shares.

Section 4.02      Closing.  The closing of the transactions contemplated by this Agreement (the “Closing,” and the date of the Closing, the “Closing Date”) shall occur and shall be deemed to be effective immediately prior to the transactions contemplated by the Purchase Agreement.  Such Closing shall take place at a mutually agreeable time and place, and be conditioned upon all of the conditions to closing set forth in the Purchase Agreement being met.

Section 4.03      Closing Events.  At the Closing, Link, Chance High and the Chance High Shareholders shall execute, acknowledge, and deliver (or shall ensure to be executed, acknowledged, and delivered), any and all certificates, opinions, financial statements, schedules, agreements, resolutions, rulings or other instruments required by this Agreement to be so delivered at or prior to the Closing, together with such other items as may be reasonably requested by the parties hereto and their respective legal counsel in order to effectuate or evidence the transactions contemplated hereby.

Section 4.04      Termination.  This Agreement may be terminated by the parties only in the event that the parties do not meet the conditions precedent set forth in Articles VI and VII.  If this Agreement is terminated pursuant to this section, this Agreement shall be of no further force or effect, and no obligation, right or liability shall arise hereunder.

ARTICLE V

OTHER AGREEMENTS AND COVENANTS

Section 5.01      Legends.  Each Chance High Shareholder acknowledges and agrees that each certificate representing the Exchange Shares shall be endorsed with the following legends, in addition to any other legend required to be placed thereon by applicable federal or state securities laws:

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“THE SECURITIES ARE BEING OFFERED TO INVESTORS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”)) AND WITHOUT REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT IN RELIANCE UPON REGULATION S PROMULGATED UNDER THE SECURITIES ACT.”

“TRANSFER OF THESE SECURITIES IS PROHIBITED, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AVAILABLE EXEMPTION FROM REGISTRATION.  HEDGING TRANSACTIONS MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”

Section 5.02       Delivery of Books and Records.  At the Closing, Link shall deliver to the Chance High Shareholders or their representatives the originals of the corporate minute books, books of account, contracts, records, and all other books or documents of Link which is now in the possession of Link or its representatives.

Section 5.03       Third Party Consents and Certificates.  Link and the Chance High Shareholder agree to cooperate with each other in order to obtain any required third party consents to this Agreement and the transactions herein contemplated.

Section 5.04       Director and Officer.  Concurrently with the Closing: (i) Anthony Zaradic and any other officer, director or employee of Link shall tender their resignations, effective immediately, and (ii) Link shall appoint Hongwei Qu as the Chief Executive Officer and sole director of Link.

Section 5.05       Sales of Securities Under Rule 144, If Applicable.

(a)           Link will use its best efforts to at all times satisfy the current public information requirements of Rule 144 promulgated under the Securities Act so that its shareholders can sell restricted securities that have been held for the applicable restricted period as required by Rule 144 as it is from time to time amended.

(b)           Upon being informed in writing by any person holding restricted stock of Link that such person intends to sell any shares under rule 144 promulgated under the Securities Act (including any rule adopted in substitution or replacement thereof), Link will certify in writing to such person that it is compliance with Rule 144 current public information requirement to enable such person to sell such person’s restricted stock under Rule 144, as may be applicable under the circumstances.

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(c)           If any certificate representing any such restricted stock is presented to Link’s transfer agent for registration or transfer in connection with any sales theretofore made under Rule 144, provided such certificate is duly endorsed for transfer by the appropriate person(s) or accompanied by a separate stock power duly executed by the appropriate person(s) in each case with reasonable assurances that such endorsements are genuine and effective, and is accompanied by a legal opinion that such transfer has complied with the requirements of Rule 144, as the case may be, Link will promptly instruct its transfer agent to register such transfer and to issue one or more new certificates representing such shares to the transferee and, if appropriate under the provisions of Rule 144, as the case may be, free of any stop transfer order or restrictive legend.

Section 5.06       Payment of Liabilities.  Recognizing the need to extinguish all existing liabilities of Link prior to the Exchange, the Chance High Shareholders have indicated they will not enter into this Agreement unless Link has arranged for the payment and discharge of all of Link’s liabilities, including all of Link’s accounts payable and any outstanding legal fees incurred prior to the Closing Date.  Accordingly, Link has agreed to arrange for the payment and discharge of all such liabilities.

Section 5.07       Assistance with Post-Closing SEC Reports and Inquiries  Upon the reasonable request of the Chance High Shareholders, after the Closing Date, Link shall cause Anthony Zaradic to use his reasonable best efforts to provide such information available to him, including information, filings, reports, financial statements or other circumstances of Link occurring, reported or filed prior to the Closing, as may be necessary or required by Link for the preparation of the reports that Link is required to file after Closing with the SEC to remain in compliance and current with its reporting requirements under the Exchange Act.

ARTICLE VI

CONDITIONS PRECEDENT TO OBLIGATIONS OF LINK

The obligations of Link under this Agreement are subject to the satisfaction, at or before the Closing Date, of the following conditions:

Section 6.01       Accuracy of Representations and Performance of Covenants.  The representations and warranties made by Chance High and the Chance High Shareholders in this Agreement were true when made and shall be true at the Closing Date.  Chance High and the Chance High Shareholders shall have performed or complied with all covenants and conditions required by this Agreement to be performed or complied with by them prior to or at the Closing.

Section 6.02      Officer’s Certificate.  Link shall have been furnished with a certificate dated the Closing Date and signed by a duly authorized officer of Chance High to the effect that no litigation, proceeding, investigation, or inquiry is pending, or to the best knowledge of Chance High threatened, which might result in an action to enjoin or prevent the consummation of the transactions contemplated by this Agreement, or, to the extent not disclosed in the CH Schedules, which might result in any material adverse change in any of the assets, properties, business, or operations of the Group.

Section 6.03       Good Standing.  Link shall have received a certificate of good standing from The Registrar of Corporate Affairs of the British Virgin Islands, dated as of no less than fifteen (15) business days prior the Closing Date, certifying that Chance High is in good standing as a company in the British Virgin Islands.

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Section 6.04      No Governmental Prohibition.  No order, statute, rule, regulation, executive order, injunction, stay, decree, judgment or restraining order shall have been enacted, entered, promulgated or enforced by any court or governmental or regulatory authority or instrumentality which prohibits the consummation of the transactions contemplated hereby.

Section 6.05      Consents.  All consents, approvals, waivers or amendments pursuant to all contracts, licenses, permits, trademarks and other intangibles in connection with the transactions contemplated herein, or for the continued operation of Chance High and the Group after the Closing Date on the basis as presently operated shall have been obtained.

ARTICLE VII

CONDITIONS PRECEDENT TO OBLIGATIONS OF

CHANCE HIGH AND THE CHANCE HIGH SHAREHOLDERS

The obligations of Chance High and the Chance High Shareholders under this Agreement are subject to the satisfaction, at or before the Closing Date, of the following conditions:

Section 7.01      Accuracy of Representations and Performance of Covenants.  The representations and warranties made by Link in this Agreement were true when made and shall be true as of the Closing Date with the same force and effect as if such representations and warranties were made at and as of the Closing Date.  Additionally, Link shall have performed and complied with all covenants and conditions required by this Agreement to be performed or complied with by Link.

Section 7.02      Closing Certificate.  The Chance High Shareholders shall have been furnished with certificates dated the Closing Date and signed by duly authorized executive officers of Link, to the effect that no litigation, proceeding, investigation or inquiry is pending, or to the best knowledge of Link threatened, which might result in an action to enjoin or prevent the consummation of the transactions contemplated by this Agreement or, to the extent not disclosed in the Link Schedules, by or against Link, which might result in any material adverse change in any of the assets, properties or operations of Link.

Section 7.03      Officer’s Certificate.  The Chance High Shareholders shall have been furnished with certificates dated the Closing Date and signed by duly authorized executive officers of Link, certifying that there are no existing liabilities as of the Closing Date and that each representations and warranties of Link contained in this Agreement shall be true and correct on and as of the Closing Date.

Section 7.04      Secretary’s Certificate.  The Chance High Shareholders shall have been furnished with a certificate dated the Closing Date and signed by the secretary of Link, certifying to the Chance High Shareholders the resolutions adopted by the Board of Directors of Link approving, as applicable, the transactions contemplated by this Agreement and the issuance of the Exchange Shares, certifying the current versions of its certificates of incorporation and bylaws or other organizational documents and certifying as to the signatures and authority of persons signing this Agreement and related documents on its behalf.

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Section 7.05       Good Standing.  The Chance High Shareholders shall have received a certificate of good standing from the Secretary of State of Nevada, dated as of a date within ten days prior to the Closing Date, certifying that Link is in good standing as a corporation in the State of the Nevada and has filed all tax returns required to have been filed by it to date and has paid all taxes reported as due thereon.

Section 7.06      No Governmental Prohibition.  No order, statute, rule, regulation, executive order, injunction, stay, decree, judgment or restraining order shall have been enacted, entered, promulgated or enforced by any court or governmental or regulatory authority or instrumentality which prohibits the consummation of the transactions contemplated hereby.

Section 7.07       Consents.  All consents, approvals, waivers or amendments pursuant to all contracts, licenses, permits, trademarks and other intangibles in connection with the transactions contemplated herein, or for the continued operation of Link after the Closing Date on the basis as presently operated shall have been obtained.

Section 7.08       Existing Shares.  All 3,600,000 shares of Common Stock issued outstanding as of September 30, 2009 shall have been validly cancelled prior to the Closing Date.

ARTICLE VIII

MISCELLANEOUS

Section 8.01      Brokers.  The parties agree that, except as described in the Memorandum, there were no finders or brokers involved in bringing the parties together or who were instrumental in the negotiation, execution or consummation of this Agreement.  Link and the Chance High Shareholders each agree to indemnify the other against any claim by any third person other than those described in the Memorandum for any commission, brokerage, or finder’s fee arising from the transactions contemplated hereby based on any alleged agreement or understanding between the indemnifying party and such third person, whether express or implied from the actions of the indemnifying party.

Section 8.02      Governing Law; Venue.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York.  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper.  Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  EACH PARTY HERETO (INCLUDING ITS AFFILIATES, AGENTS, OFFICERS, DIRECTORS AND EMPLOYEES) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

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Section 8.03      Notices.  All notices, requests, demands and other communications provided in connection with this Agreement shall be in writing and shall be deemed to have been duly given at the time when hand delivered, delivered by express courier, or sent by facsimile (with receipt confirmed by the sender’s transmitting device) in accordance with the contact information provided below or such other contact information as the parties may have duly provided by notice.

If to Link:

392 Acadia Drive S.E.

Calgary, Alberta

Canada T2J 0A8

Attention: Anthony Zaradic

Fax Number: (619) 512-5184

with a copy (which shall not constitute notice) to:

Synergen Law Group

819 Anchorage Place, Suite 28

Chula Vista, CA 91914

Attention: Karen Batcher

Fax: (619) 512-5184

If to Chance High or the Chance High Shareholders, to:

c/o Yantai Bohai Pharmaceuticals Group Co. Ltd.

No. 9 Daxin Road, Zhifu District

Yantai, Shandong Province, China

Attention: Hongwei Qu

Fax Number: +86-0535-6763559

with a copy (which shall not constitute notice) to:

Ellenoff Grossman & Schole LLP

150 East 42nd Street, 11th Floor

New York, NY 10017

Attention: Barry I. Grossman, Esq.

Fax Number: (212) 370-7889

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Any such notice or communication shall be deemed to have been given: (i) upon receipt, if personally delivered, (ii) on the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if transmitted by facsimile and receipt is confirmed by printed receipt and (iv) three (3) days after mailing, if sent by registered or certified mail.

Section 8.04       Confidentiality.  Each party hereto agrees with the other that, unless and until the transactions contemplated by this Agreement have been consummated, it and its representatives will hold in strict confidence all data and information obtained with respect to another party or any subsidiary thereof from any representative, officer, director or employee, or from any books or records or from personal inspection, of such other party, and shall not use such data or information or disclose the same to others, except: (i) to the extent such data or information is published, is a matter of public knowledge, or is required by law to be published; or (ii) to the extent that such data or information must be used or disclosed in order to consummate the transactions contemplated by this Agreement.  In the event of the termination of this Agreement, each party shall return to the other party all documents and other materials obtained by it or on its behalf and shall destroy all copies, digests, work papers, abstracts or other materials relating thereto, and each party will continue to comply with the confidentiality provisions set forth herein.

Section 8.05       Schedules; Knowledge.  Each party is presumed to have full knowledge of all information set forth in the other party’s schedules delivered pursuant to this Agreement.

Section 8.06      No Third Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person or entity.

Section 8.07       Expenses.  Whether or not the Exchange is consummated, each of the parties hereto will bear their own respective expenses, including legal, accounting and professional fees, incurred in connection with the Exchange or any of the other transactions contemplated hereby.

Section 8.08       Entire Agreement.  This Agreement represents the entire agreement between the parties relating to the subject matter thereof and supersedes all prior agreements, understandings and negotiations, written or oral, with respect to such subject matter.

Section 8.09      Survival; Termination.  The representations, warranties, and covenants of the respective parties shall survive the Closing Date and the consummation of the transactions herein contemplated for a period of two years.

Section 8.10      Counterparts.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

Section 8.01      Amendment or Waiver.  Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing.  At any time prior to the Closing Date, this Agreement may by amended by a writing signed by all parties hereto, with respect to any of the terms contained herein, and any term or condition of this Agreement may be waived or the time for performance may be extended by a writing signed by the party or parties for whose benefit the provision is intended.

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Section 8.02      Best Efforts.  Subject to the terms and conditions herein provided, each party shall use its best efforts to perform or fulfill all conditions and obligations to be performed or fulfilled by it under this Agreement so that the transactions contemplated hereby shall be consummated as soon as practicable.  Each party also agrees that it shall use its best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective this Agreement and the transactions contemplated herein, both prior to and following the Closing.

[Signature Page Follow]

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IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement to be executed by their respective officers, hereunto duly authorized, as of the date first-above written.

LINK RESOURCES, INC.
By:	/s/ Anthony Zaradic
	Name: Anthony Zaradic
	Title:   President
CHANCE HIGH INTERNATIONAL LIMITED
By:	/s/ Hongwei QU
	Name: Hongwei Qu
	Title:   President
CHANCE HIGH SHAREHOLDERS:
GLORY PERIOD LIMITED
By:	/s/ Hongwei QU
	Name: Hongwei QU
	Title:   President
/s/ Wang Shulian
WANG Shulian
/s/ LIU Shaocui
LIU Shaocui
/s/ JIA Peicai
JIA Peicai
/s/ ZHANG Jingxin
ZHANG Jingxin

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/s/ LIANG Jiaxin
LIANG Jianxin
/s/ YU Bohai
YU Bohai
/s/ AN Zhongnan
AN Zhongnan
/s/ XU Xiaosheng
XU Xiaosheng
/s/ DONG Qin
DONG Qin
/s/ LI Yanzhi
LI Yanzhi
/s/FU Wei
FU Wei
/s/WANG Zhizhen
WANG Zhizhen
PORTSWEALTH HOLDINGS LTD.
By:	/s/Linda Lee
	Name: Linda Lee
	Title:   Manager

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Schedule A

Chance High Shareholders

Name	Shares of Chance High Held		Percentage of Chance High Shares Held			Shares of Link to be Received Upon Exchange
Glory Period Limited		33,970		67.939	%		8,942,471
WANG Shulian		2,469		4.94	%		650,228
LIU Shaocui		1,850		3.70	%		487,013
JIA Peicai		615		1.23	%		161,899
ZHANG Jingxin		615		1.23	%		161,899
LIANG Jianxin		615		1.23	%		161,899
YU Bohai		1,235		2.47	%		325,114
AN Zhongnan		615		1.23	%		161,899
XU Xiaosheng		615		1.23	%		161,899
DONG Qin		308		0.617	%		81,213
LI Yanzhi		1,543		3.086	%		406,195
FU Wei		1,850		3.70	%		487,013
WANG Zhizhen		1,850		3.70	%		487,013
Portswealth Holdings Ltd.		1,850		3.70	%		486,745
Total		50,000		100.000	%		13,162,500

EX-4.1

Exhibit 4.1

THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A FORM ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

LINK RESOURCES, INC.

8%SENIOR CONVERTIBLE PROMISSORY NOTE

US $ _________  ________, 2010   

FOR VALUE RECEIVED, Link Resources, Inc., a Nevada corporation (the “Company”), promises to pay to [] (the “Holder”), the principal sum of ___________________ DOLLARS ($_________) (the “Principal”) in lawful money of the United States of America, with interestpayable thereon at the rate of eight percent (8%) per annum.  The principal amount hereof and all accrued but unpaid interest thereon shall be paid in full to the Holder on the two (2) year anniversary of the date of closing of the Minimum Amount (the “Maturity Date”).

Capitalized terms used herein but not defined herein shall have the meaning ascribed to it in that certain Securities Purchase Agreement, dated of even date herewith (the “SPA”), pursuant to which the Holder is acquiring this Note.

The following is a statement of the rights of the Holder of this Note and the terms and conditions to which this Note is subject, and to which the Holder, by acceptance of this Note, agrees:

1.           Series.  This Note is one of a series of Notes of the Company in the aggregate principal amount of a minimum of Nine Million Three Hundred Thousand Dollars ($9,300,000) and up to a maximum of Twelve Million Dollars ($12,000,000.00)(collectively, the “Notes”) as described in that certain Confidential Private Placement Memorandum, dated December 10, 2009, delivered to the Holder in connection with the transactions contemplated by the SPA (the “Memorandum”). 

2.           Principal Repayment.  The outstanding principal amount of this Note shall be payable on the Maturity Date, unless this Note has beenearlier converted as described below.

3.           Interest.

(a)           Computation.  Interest (the “Interest”) shall accrue on the unpaid principal amount of this Note from the date hereof until such principal amount is repaid in full at the rate of eight percent (8%) per annum, payable quarterly inarrears on the last day of each fiscal quarter of the Company (i.e., March 31, June 30, September 30 and December 31) commencing January 1, 2010.  For purposes of clarity, the initial interest payment shall consist of accrued interest from the date of issuance of the Note through December 31, 2009.  Thereafter, interest payments of accrued interest shall be due and payable on the last day of each fiscal quarter until the Maturity Date, subject to earlier conversion or redemption of the Note.All computations of the interest rate hereunder shall be made on the basis of a 360-day year of twelve 30-day months.   In the event that any interest rate provided for herein shall be determined to be unlawful, such interest rate shall be computed at the highest rate permitted by applicable law.  Any payment by the Company of any interest amount in excess of that permitted by law shall be considered a mistake, with the excess being applied to the principal of this Note without prepayment premium or penalty.

(b)           Closing Escrow Holdback.  Pursuant to the SPA, $186,000 (if the Minimum Amount is raised) or up to $240,000 (if the Maximum Amount is raised) (the “Total Holdback Amount”), constituting an amount sufficient to satisfy one quarterly payment of Interest due on the aggregate principal amount of all Notes, shall be retained by the Escrow Agent and paid to the holders of the Notes and otherwise administered in accordance with the certain Closing Escrow Agreement.  At such time as 75% of all Shares underlying the Notes have been issued upon conversion of Notes, if the Company is not in breach of any of the Transaction Documents, all remaining funds of the Total Holdback Amount, if any, shall be disbursed to the Company in accordance with the Closing Escrow Agreement.

4.           Ranking.   Except for the indebtedness of the Company and its Subsidiaries in existence on the date hereof as described in the Memorandum (including the financial statements that form a part thereof), and subject to the terms and conditions of this Note and the other Transaction Documents, the obligations of the Company under this Noteshall rank senior with respect toallexisting indebtedness of the Companyas of the date hereof andto any andall indebtedness incurred hereafter.The term “indebtedness” as used in this Section 4, refers to all unsecured debts and obligations of the Company, including trade payables.

5.           Conversion.

(a)           Generally.  Each holder of the Notes shall have the right, exercisable at any time prior to the Maturity Date, to convert all, but not less than all, of the principal amount then outstanding, plus all accrued but unpaid interest thereon, into shares of the Company’s common stock, par value $0.001 per share (the “Common Stock) at a conversion price (the “Conversion Price”) equal to $2.00 per share (the Common Stock underlying the Notes being referred to herein as the “Shares”).

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(b)           Mechanics of Conversion.  The conversion of this Note shall be conducted in the following manner: upon any conversion of all but not less than all of the outstanding principal amount of this Note, plus all accrued but unpaid interest thereon: (i) the Holder shall deliver a completed and executed Notice of Conversion attached hereto as Exhibit A and surrender and deliver this Note, duly endorsed, to the Company’s office or such other address which the Company shall designate against delivery of the certificates presenting the Shares to be delivered; (ii) in exchange for the surrendered Note, the Company shall prepare and deliver irrevocable instructions addressed to the Company’s transfer and exchange agent, as applicable, to issue such required number of Shares as set forth in the Conversion Notice which Shares shall be delivered to the Holder within five (5) Business Days of the delivery of the documentation to the Company; and (iii) upon delivery of the Shares, this Note shall become fully paid and satisfied.  The Company shall, upon the written request of the Holder, use its best efforts to deliver, or cause to be delivered, the Shares hereunder electronically through the Depository Trust and Clearing Corporation or another established clearing corporation performing similar functions, if available; provided, that, the Company may, but will not be required to, change its transfer agent if its current transfer agent cannot deliver the Shares electronically through the Depository Trust and Clearing Corporation. 

(c)           Adjustments to Conversion Price.

(i)           Adjustments for Stock Splits and Combinations and Stock Dividends.  If the Company shall at any time or from time to time after the date hereof, effect a stock split or combination of the outstanding Common Stock or pay a stock dividend in shares of Common Stock, then the Conversion Price shall be proportionately adjusted. Any adjustments under this Section 5(c)(i) shall be effective at the close of business on the date the stock split or combination becomes effective or the date of payment of the stock dividend, as applicable.

(ii)           Merger Sale, Reclassification, etc.In case of any (A) consolidation or merger (including a merger in which the Company is the surviving entity), (B) sale or other disposition of all or substantially all of the Company’s assets or distribution of property to shareholders (other than distributions payable out of earnings or retained earnings), or reclassification, change or conversion of the outstanding securities of the Company or of any reorganization of the Company (or any other corporation the stock or securities of which are at the time receivable upon the conversion of this Note) or any similar corporate reorganization on or after the date hereof, then and in each such case the Holder of this Note, upon the conversion hereof at any time thereafter shall be entitled to receive, in lieu of the stock or other securities and property receivable upon the conversion hereof prior to such consolidation, merger, sale or other disposition, reclassification, change, conversion or reorganization, the stock or other securities or property to which such Holder would have been entitled upon such consummation if such Holder had converted this Note immediately prior thereto.

(iii)          Adjustments for Issuance of Additional Shares of Common Stock.

(A)           In the event the Company, shall, at any time, from time to time, issue or sell any additional shares of Common Stock (other than pursuant to Common Stock Equivalents (hereafter defined) granted or issued prior to the issuance date of this Note) (“Additional Shares of Common Stock”), at a price per share less than the Conversion Price then in effect or without consideration, then the Conversion Price upon each such issuance shall be adjusted to that price (rounded to the nearest cent) determined by multiplying the Conversion Price then in effect by a fraction:

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(1)           the numerator of which shall be equal to the sum of (x) the number of shares of Common Stock outstanding immediately prior to the issuance of such Additional Shares of Common Stock plus (y) the number of shares of Common Stock (rounded to the nearest whole share) which the aggregate consideration for the total number of such Additional Shares of Common Stock so issued would purchase at a price per share equal to the Conversion Price then in effect, and

(2)           the denominator of which shall be equal to the number of shares of Common Stock outstanding immediately after the issuance of such Additional Shares of Common Stock.

(B)           The provisions of paragraph (A) of Section 5(iii) shall not apply to any issuance of Additional Shares of Common Stock for which an adjustment is provided elsewhere in this Section 5).  No adjustment of the number of Shares for which this Note shall be convertible shall be made under this clause (iii) upon the issuance of any Additional Shares of Common Stock which are issued pursuant to the exercise of any Common Stock Equivalents, if any such adjustment shall previously have been made upon the issuance of such Common Stock Equivalents pursuant to the other provisions of this Section 5.

(C)           Issuance of Common Stock Equivalents.  The provisions of this Section 5(iii) shall apply if (a) the Company, at any time after the issuance date of this Note, shall issue any securities convertible into or exchangeable for, directly or indirectly, Common Stock (“Convertible Securities”), other than the Convertible Notes, or (b) any rights or warrants or options to purchase any such Common Stock or Convertible Securities (collectively, the “Common Stock Equivalents”) shall be issued or sold.  If the price per share for which Additional Shares of Common Stock may be issuable pursuant to any such Common Stock Equivalent shall be less than the applicable Conversion Price then in effect, or if, after any such issuance of Common Stock Equivalents, the price per share for which Additional Shares of Common Stock may be issuable thereafter is amended or adjusted, and such price as so amended shall be less than the applicable Conversion Price in effect at the time of such amendment or adjustment, then the applicable Conversion Price upon each such issuance or amendment shall be adjusted as provided in the first sentence of subsection (iii)(A) of this Section 5.  No adjustment shall be made to the Conversion Price upon the issuance of Common Stock pursuant to the exercise, conversion or exchange of any Convertible Security or Common Stock Equivalent where an adjustment to the Conversion Price was made as a result of the issuance or purchase of any Convertible Security or Common Stock Equivalent.

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(D)           Certain Issues Excepted.  Anything herein to the contrary notwithstanding, the Company shall not be required to make any adjustment to the Conversion Price under this Section 5 in connection with securities of the Company issued: (i) in connection with a merger, acquisition or consolidation, (ii) in connection with bona fide joint venture, strategic license or similar business partnering arrangements (provided that the transaction or arrangement is not primarily for the purpose of raising capital from Person whose primary business is investing in securities), (iii) upon exercise of the Warrants issued together with the Notes; (iv) upon exercise any warrants issued to the placement agents and its designees for the transactions contemplated hereby; and (v) in connection with any share split, share dividend, recapitalization or similar transaction by the Company for which adjustment is made pursuant to this Section 5.

(E)           Floor Price.  Notwithstanding any provision of this Note to the contrary, no adjustment pursuant to Section 5(c)(iii) shall cause the Conversion Price to be less than $1.00, as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction.

(e)           Elimination of Fractional Interests.  No fractional shares of Common Stock shall be issued upon conversion of this Note, nor shall the Company be required to pay cash in lieu of fractional interests, it being the intent of the parties that all fractional interests shall be eliminated and that all issuances of Common Stock shall be rounded up to the nearest whole share.

6.           Events of Default.  In the event that any of the following (each, an “Event of Default”) shall occur:

(a)           Non-Payment.  The Company shall default in the payment of the principal of, or accrued interest on, this Note as and when the same shall become due and payable, whether by acceleration or otherwise; or

(b)           Default in Covenants.  The Company shall default in any material manner in the observance or performance of the affirmative or negative covenants or agreements set forth in the SPA, this Note or that certain Registration Rights Agreement, dated of even date herewith, between the Holder and the Company (collectively, the “Transaction Documents”); or

(c)           Breach of Representations and Warranties. The Company materially breaches any representation or warranty contained in the Transaction Documents; or

(d)           Exchange Act or Exchange Requirements.  Any termination of registration or suspension of the Company’s reporting obligations under the Exchange Act or suspension from trading on the OTCBB (or any exchange on which the Common Stock is traded or listed for quotation (it being agreed that the delisting of the Common Stock from any national exchange shall not be an Event of Default if the Common Stock is, within ten (10) Business Days of the effective date of such delisting, quoted on the OTCBB), or the Company’s failure to file reports with the SEC on a timely basis as required by the Exchange Act; or

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(e)           Judgments.Any final, non-appealable judgment, decree or order for the payment of money is entered against any of the Company or the Company’s subsidiaries in an amount equal to $5,000,000 or more and the same remains unsatisfied or unbonded for more than thirty (30) days; or

(f)           Nationalization.  The confiscation, expropriation or nationalization by any governmental authority to which the Company or a Subsidiary is subject of any material property or assets of the Company or its Subsidiaries, taken as a whole (it being agreed, however, that it shall not be an Event of Default if the PRC government or any local instrumentality thereof shall require that Bohai or its Affiliates move its principal venue of operations to a different location within the PRC (a “Principal Venue Move”); or

(g)           Illegality of Notes.  Any court of competent jurisdiction issues an order declaring the Notes or any provision thereunder to be illegal; or

(h)           Cross Default.  There occurs with respect to any agreement, indenture or instrument under which the Company has Indebtedness of $5,000,000 or more in the aggregate: (i) a default with respect to any payment obligation thereunder that then entitles the holder thereof to declare such Indebtedness to be due and payable prior to its stated maturity, or (ii) any other default thereunder that entitles, and has caused, the holder thereof to declare such indebtedness to be due and payable prior to its stated maturity; or

(i)           Bankruptcy.  The Company shall: (i) admit in writing its inability to pay its debts as they become due; (ii) apply for, consent to, or acquiesce in, the appointment of a trustee, receiver, sequestrator or other custodian for the Company or any of its property, or make a general assignment for the benefit of creditors; (iii) in the absence of such application, consent or acquiesce in, permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for the Company or for any part of its property; or (iv) permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Company, and, if such case or proceeding is not commenced by the Company or converted to a voluntary case, such case or proceeding shall be consented to or acquiesced in by the Company or shall result in the entry of an order for relief;

then, and so long as such Event of Default is continuing for a period of two (2)Business Days in the case of non-payment under Section 6(a), a period of five (5) Business Days in the case of a cross-default under 6(h), or for a period of thirty (30) calendar days in the case of events under Sections 6(b) through 6(g) (and the event which would constitute such Event of Default, if curable, has not been cured), by written notice to the Company from the Investor Representative, all obligations of the Company under this Note shall be immediately due and payable without presentment, demand, protest or any other action nor obligation of the Holder of any kind, all of which are hereby expressly waived, and Holder may exercise any other remedies the Holder may have at law or in equity.  If an Event of Default specified in Section 6(i) above occurs, the principal of, and accrued interest on, all the Notes shall automatically, and without any declaration or other action on the part of any Holder, become immediately due and payable.

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In addition, upon an Event of Default, and provided this Note is still outstanding, the Holder (through the Investor Representative) shall have the rights to receive its pro rata portion of 1,000,000 shares of Common Stock being held in escrow pursuant to the terms and conditions of that certain Securities Escrow Agreement between Glory Period Limited, the Investor Representative and Escrow, LLC, as escrow agent..

7.           Affirmative Covenants of the Company.  The Company hereby agrees that, so long as the Note remains outstanding and unpaid, or any other amount is owing to the Holder hereunder, the Company will:

(a)           Corporate Existence and Qualification.  Take the necessary steps to preserve its corporate existence and its right to conduct business in all states in which the nature of its business requires qualification to do business;

(b)           Books of Account.  Keep its books of account in accordance with good accounting practices;

(c)           Insurance.  Maintain insurance with responsible and reputable insurance companies or associations, as determined by the Company in its sole but reasonable discretion, in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which the Company operates;

(d)           Compliance with Law.  Comply with the charter and bylaws or other organizational or governing documents of the Company, and any law, treaty, rule or regulation, or determination of an arbitrator or a court or other governmental authority, in each case applicable to or binding upon the Company or any of its property or to which each the Company or any of its property is subject;

(e)           Taxes.  Duly pay and discharge all taxes or other claims, which might become a lien upon any of its property except to the extent that any thereof are being in good faith appropriately contested with adequate reserves provided therefore;

(f)           Reservation of Shares.  At all times have authorized, and reserved for the purpose of issuance, a sufficient number of shares of Common Stock and issuable upon conversion of this Note to provide for the issuance of all of the Shares.  Prior to complete conversion of this Note, the Company shall not reduce the number of shares of Common Stock reserved for issuance hereunder without the written consent of the Holder except for a reduction proportionate to a reverse stock split effected for a business purpose other than affecting the requirements of this Section, which reverse stock split affects all shares of Common Stock equally; and

(g)           Use of Proceeds.  Use the proceeds of the Notes for the purposes described in the Memorandum.

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(h)           Notice of Known Events of Default.  The Company shall furnish to the Investor Representative a notice of any occurrence of an Event of Default, and what action the Company is taking or proposes to take with respect thereto, promptly after such Event of Default becomes known to the Company.

(i)           Further Assurances.  The Company shall execute and deliver any and all such further documents and take any and all such other actions as may be reasonably necessary or appropriate to carry out the intent and purposes of this Note and to consummate the transactions contemplated herein.

8.           Negative Covenants of the Company.  Except for the transactions completed by the Share Exchange Agreement and all related documents between and among the Company and its Subsidiaries, and except as disclosed in the Memorandum, the Company hereby agrees that, so long as this Note remains outstanding and unpaid it will not, nor will it permit any of its Subsidiaries, without the consent of the Investor Representative, to:

(a)           Indebtedness for Borrowed Money.  Except as set forth on Schedule 8(a) hereto, incur, or permit to exist, any Indebtedness (as defined below) for borrowed money in excess of (i) US$10,000,000 during the twelve (12) month period beginning on the date hereof, or (ii) US$15,000,000 during period beginning on the date hereof and ending on the Maturity Date, except in the ordinary course of the Company’s business.  Forpurposes of this Section 8(a), “Indebtedness” shall mean: (i) all obligations of the Company for borrowed money or with respect to deposits or advances of any kind, (ii) all obligations of the Company evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of the Company for the deferred purchase price of property or services, except current accounts payable arising in the ordinary course of business and not overdue beyond such period as is commercially reasonable for the Company’s business, (iv) all obligations of the Company under conditional sale or other title retention agreements relating to property purchased by the Company, (v) all payment obligations of the Company with respect to interest rate or currency protection agreements, (vi) all obligations of the Company as an account party under any letter of credit or in respect of bankers’ acceptances, (vii) all obligations of any third party secured by property or assets of such Person (regardless of whether or not the Company is liable for repayment of such obligations), except for obligations to secure Indebtedness incurred within the limitations of this Section 8(a); (viii) all guarantees of the Company and (ix) the redemption price of all redeemable preferred stock of the Company, but only to the extent that such stock is redeemable at the option of the holder or requires sinking fund or similar payments at any time prior to the Maturity Date;

(b)           Loans; Investments.  Lend or advance money, credit or property to or invest in (by capital contribution, loan, purchase or otherwise) any Person in excess of US$2,000,000except: (i) investments in United States Government obligations, certificates of deposit of any banking institution with combined capital and surplus of at least $200,000,000; (ii) accounts receivable arising out of sales in the ordinary course of business; and (iii) inter-company loans between and among the Company and its Subsidiaries;

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(c)           Dividends and Distributions.  Pay dividends or make any other distribution on shares of the capital stock of the Company other than inter-company dividends, and distributions between and among the Company and its Subsidiaries;

(d)           Liens.  Except as set forth on Schedule 8(d) hereto, shall not create, assume or permit to exist, any lien on any of its property or assets now owned or hereafter acquired except (i) liens in favor of the Holder; (ii) liens granted to secure Indebtedness incurred within the limitations of Section 8(a) hereof; (iii) liens incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of advances or credit and which do not materially impair the use thereof in the operation of its business; (iv) liens subordinate to the liens granted to secure this Note (v) liens for taxes or other governmental charges which are not delinquent or which are being contested in good faith and for which a reserve shall have been established in accordance with generally accepted accounting principles; and (vi) purchase money liens granted to secure the unpaid purchase price of any fixed assets purchased within the limitations of Section 8(g) hereof;

(e)           Contingent Liabilities.  Assume, endorse, be or become liable for or guarantee the obligations of any Person, contingently or otherwise, excluding however, the endorsement of negotiable instruments for deposit or collection in the ordinary course of business or guarantees of the Company made within the limitations of Section 8(a) hereof;

(f)           Sales of Receivables; Sale - Leasebacks.  Except as set forth on Schedule 8(f) hereto, sell, discount or otherwise dispose of notes, accounts receivable or other obligations owing to the Company, with or without recourse, except for the purpose of collection in the ordinary course of business; or sell any asset pursuant to an arrangement to thereafter lease such asset from the purchaser thereof;

(g)           Capital Expenditures; Capitalized Leases.  Except in the case of a Principal Venue Move, expend in the aggregate for the Company and all its Subsidiaries in excess of US$5,000,000 in any fiscal year for Capital Expenditures (as defined below), including payments made on account of Capitalized Leases (as defined below).  For purposes of the foregoing, Capital Expenditures shall include payments made on account of any deferred purchase price or on account of any indebtedness incurred to finance any such purchase price.  “Capital Expenditures” shall mean for any period, the aggregate amount of all payments made by any Person directly or indirectly for the purpose of acquiring, constructing or maintaining fixed assets, real property or equipment which, in accordance with generally accepted accounting principles, would be added as a debit to the fixed asset account of such Person, including, without limitation, all amounts paid or payable with respect to Capitalized Lease Obligations and interest which are required to be capitalized in accordance with generally accepted accounting principles.  “Capitalized Lease” shall mean any lease the obligations to pay rent or other amounts under which constitute Capitalized Lease Obligations.  “Capitalized Lease Obligations” shall mean as to any Person, the obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) real and/or personal property which obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under generally accepted accounting principles and, for purposes of this Note, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with generally accepted accounting principles;

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(h)          Nature of Business.  Materially alter the nature of the Company’s business or otherwise engage in any business other than the business engaged in or proposed to be engaged in on the date of this Note;

(i)          Stock of Subsidiaries.  Sell or otherwise dispose of any Subsidiary or permit a Subsidiary to issue any additional shares of its capital stock except pro rata to its stockholders; and

(j)          Accounting Changes.  Make, or permit any Subsidiary to make any change in their accounting treatment or financial reporting practices except as required or permitted by generally accepted accounting principles in effect from time to time.

(k)          Merger or Sale.

(i)           The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, consolidate or merge with or into another Person (whether or not the Company or such Subsidiary is the surviving corporation), or sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company and its Subsidiaries taken as a whole in one or more related transactions, to any other Person, unless (A) either the Company or such Subsidiary is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than the Company or such Subsidiary) or to which such sale, assignment, transfer, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia, (B) the Person formed by or surviving any such consolidation or merger (if other than the Company or such Subsidiary) or the Person to which such sale, assignment, transfer, conveyance or other disposition shall have been made (1) assumes in writing all the obligations of the Company under the Notes and the other Transaction Documents and (2) causes to be delivered to each Holder of any Notes an opinion of nationally recognized independent counsel, or other independent counsel reasonably satisfactory to the Investor Representative, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with the terms hereof, and (C) immediately after such transaction, no default or Event of Default exists.

The foregoing paragraph in this Section 8(k)(i) shall not apply to (x) a merger of the Company with an Affiliate with no material assets, liabilities or operations solely for the purpose of reincorporating the Company in another jurisdiction; or (y) any consolidation or merger, or any sale, assignment, transfer, conveyance, lease or other disposition of assets between or among the Company and its Subsidiaries; provided, however, that such consolidation or merger shall comply with subclauses (A) and (B) in the foregoing paragraph.

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(ii)           Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of the Company or any of its Subsidiaries permitted by Section 8(k)(i) hereof, the successor corporation formed by such consolidation or into or with which the Company or such Subsidiary is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, lease, conveyance or other disposition, the provisions of this Note referring to the “Company,” or to a “Subsidiary” shall refer instead to the successor corporation and not to the Company or such Subsidiary, as the case may be), may exercise every right and power of the Company or such Subsidiary under this Note with the same effect as if such successor Person had been named as the Company or a Subsidiary herein and shall be bound by every obligation and liability of the Company or such Subsidiary under this Note and the other Transaction Documents, however, that the predecessor Person shall not be relieved from the obligation to pay the principal of and interest on the Notes.

(l)           Transactions with Affiliates.  Except for transactions contemplated by the Transaction Documents or as otherwise approved by the Board (including a majority of the independent directors then on the Board) or as disclosed in the SEC Reports or the Memorandum, the Company shall not, and shall cause its Subsidiaries not to enter into any transaction with any director, officer, employee or holder of more than five percent of the outstanding capital stock of any class or series of capital stock of the Company or any Subsidiary, member of the family of any such person, or any corporation, partnership, trust or other entity in which any such person, or member of the family of any such person, is a director, officer, trustee, partner or holder of more than five percent of the outstanding capital stock thereof.

9.           Holder Not Deemed a Stockholder.  No Holder, as such, of this Note shall be entitled to vote or receive dividends or be deemed the holder of shares of the Company for any purpose, nor shall anything contained in this Note be construed to confer upon the Holder hereof, as such, any of the rights at law of a stockholder of the Company prior to the issuance to the Holder of the shares of Common Stock which the Holder is then entitled to receive upon the due conversion of this Note.

10.           Mutilated, Destroyed, Lost or Stolen Notes.  In case this Note shall become mutilated or defaced, or be destroyed, lost or stolen, the Company shall execute and deliver a new note of like principal amount in exchange and substitution for the mutilated or defaced Note, or in lieu of and in substitution for the destroyed, lost or stolen Note.  In the case of a mutilated or defaced Note, the Holder shall surrender such Note to the Company.  In the case of any destroyed, lost or stolen Note, the Holder shall furnish to the Company: (i) evidence to its satisfaction of the destruction, loss or theft of such Note and (ii) such security or indemnity as may be reasonably required by the Company to hold the Company harmless.

11.           Waiver of Demand, Presentment, etc.  The Company hereby expressly waives demand and presentment for payment, notice of nonpayment, protest, notice of protest, notice of dishonor, notice of acceleration or intent to accelerate, bringing of suit and diligence in taking any action to collect amounts called for hereunder and shall be directly and primarily liable for the payment of all sums owing and to be owing hereunder, regardless of and without any notice, diligence, act or omission as or with respect to the collection of any amount called for hereunder.  The Company agrees that, in the event of an Event of Default, to reimburse the Holder for all reasonable costs and expenses (including reasonable legal fees of one counsel) incurred in connection with the enforcement and collection of this Note.

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12.           Payment.  All payments with respect to this Note shall be made in lawful money of the United States of America, at the address of the Holder as of the date hereof or as designated in writing by the Holder from time to time.  The receipt by the Holderofimmediately availablefunds shall constitute a payment of principal and interest hereunder and shall satisfy and discharge the liability for principal and interest on this Note to the extent of the sum represented by such payment.  Payment shall be credited first to the accrued interest then due and payable and the remainder applied to principal.   

13.           Assignment.  The rights and obligations of the Company and the Holder of this Note shall be binding upon, and inure to the benefit of, the successors and permitted assigns of the parties hereto.  The Holder may not assign, pledge or otherwise transfer this Note or any interest therein without the prior written consent of the Company.  Interest and principal are payable only to the registered Holder of this Note on the books and records of the Company.

14.           Waiver and Amendment.  Any provision of this Note, including, without limitation, the due date hereof, and the observance of any term hereof, may be amended, waived or modified (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Investor Representative.

15.           Notices.  Any notice, request or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given if given in accordance with the provisions of Section 9.2 of the SPA.

16.           Governing Law.  This Note shall be governed by and construed in accordance with the laws of the State of New York, USA, excluding that body of law relating to conflicts of laws.

17.           Consent to Jurisdiction.  Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Note (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York.  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of this Note, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper.  Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE HOLDER (INCLUDING THEIR RESPECTIVE AFFILIATES, AGENTS, OFFICERS, DIRECTORS AND EMPLOYEES) HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.

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18.           Severability.  If one or more provisions of this Note are held to be unenforceable under applicable law, such provisions shall be excluded from this Note, and the balance of this Note shall be interpreted as if such provisions were so excluded and shall be enforceable in accordance with its terms.

19.           Headings.  Section headings in this Note are for convenience only, and shall not be used in the construction of this Note.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company has caused this Noteto be issued as of the date first above written.

LINK RESOURCES, INC.
By:
	Name:
	Title:

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Exhibit A

LINK RESOURCES, INC.

NOTE CONVERSION NOTICE

Reference is made to the 8% Senior Convertible Promissory Note in the original principal amount of $___________ of Link Resources, Inc., a Nevada corporation (the “Company”), issued to the undersigned (the “Note”).

In accordance with and pursuant to the terms of the Note, the undersigned hereby elects to convert the entire outstanding principal amount due and owing under the Note, together with all accrued but unpaid interest thereon, into shares of Common Stock, $0.001 par value per share, of the Company (the “Common Stock”), by tendering the original of the Note for cancellation.

Please confirm the following information:

Principal Amount Outstanding

under the Note:_______________________

Accrued but unpaid interest

under the Note:________________________

Conversion Price:   _______________________

Number of Shares to be issued:  _________________________

Please issue the Shares into which the Note is being converted in the following name and to the following address:

Issue to:	___________________________________________________________
Address:	_____________________________________________
	_____________________________________________
	_____________________________________________
Facsimile Number:	___________________________________________________________
Authorization:	___________________________________________________________
	By:  ________________________________________________________
	Title: _______________________________________________________

Dated:  ________________________

EX-4.2

Exhibit 4.2

NEITHER THIS WARRANT NOR THE SECURITIES INTO WHICH THIS WARRANT IS EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A FORM ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

LINK RESOURCES, INC.

COMMON STOCK PURCHASE WARRANT

Initial Holder:	Original Issue Date:January 5, 2009
	No. of Shares Subject to Warrant:
	Exercise Price Per Share: $2.40
	Expiration Time: 5:00 p.m., New York time, on January 5, 2012

Link Resources, Inc., a Nevada corporation (the “Company”), hereby certifies that, for value received, the Initial Holder shown above, or its permitted registered assigns (the “Holder”), is entitled to purchase from the Company up to the number of shares of its common stock, par value $0.001 per share (the “Common Stock”),  shown above (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”) at the exercise price shown above (as may be adjusted from time to time as provided herein, the “Exercise Price”), at any time and from time to time on or original issue date indicated above (the “Original Issue Date”) and through and including the expiration time shown above (the “Expiration Time”), and subject to the following terms and conditions:

This Warrant is being issued pursuant to a Securities Purchase Agreement, dated January 5, 2009 (the “SPA”), by and between the Company, the Initial Holder and the other parties thereto. 

1.             Definitions.  In addition to the terms defined elsewhere in this Warrant, capitalized terms that are not otherwise defined herein have the meanings given to such terms in the SPA.

2.             List of Warrant Holders.  The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder (which shall include the Initial Holder or, as the case may be, any registered assignee to which this Warrant is permissibly assigned hereunder from time to time).  The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

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3.             List of Transfers; Restrictions on Transfer. The Company shall register any transfer of all or any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company at its address specified herein. Upon any such registration or transfer, a new Warrant to purchase Common Stock, in substantially the form of this Warrant (any such new Warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder.  The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations in respect of the New Warrant that the Holder has in respect of this Warrant.

4.             Exercise and Duration of Warrant.

(a)          All or any part of this Warrant shall be exercisable by the registered Holder in any manner permitted by Section 10 of this Warrant at any time and from time to time on or after the Original Issue Date and through and including the Expiration Time. Subject to Section 11 hereof, at the Expiration Time, the portion of this Warrant not exercised prior thereto shall be and become void and of no value and this Warrant shall be terminated and shall no longer be outstanding.

(b)           The Holder may exercise this Warrant by delivering to the Company: (i) an exercise notice, in the form attached hereto (the “Exercise Notice”), completed and duly signed, and (ii) payment by wire transfer of immediately available funds to an account designated by the Company of the Exercise Price for the number of Warrant Shares as to which this Warrant is being exercised.  The date such items are delivered to the Company (as determined in accordance with the notice provisions hereof) is an “Exercise Date.”  The Holder shall be required to deliver the original Warrant in order to effect an exercise hereunder.  Execution and delivery of the Exercise Notice shall have the same effect as cancellation of the original Warrant and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.

(c)           The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant pursuant to the terms hereof.

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5.            Delivery of Warrant Shares.

(a)           Upon exercise of this Warrant, the Company shall promptly (but in no event later than three (3) Trading Days after the Exercise Date) issue or cause to be issued and cause to be delivered to or upon the written order of the Holder and in such name or names as the Holder may designate, a certificate for the Warrant Shares issuable upon such exercise, free of restrictive legends.  “Trading Day” shall mean a date on which the Company’s Common Stock trades on its principal trading market.  The Holder, or any Person permissibly so designated by the Holder to receive Warrant Shares, shall be deemed to have become the holder of record of such Warrant Shares as of the Exercise Date.  The Company shall, upon the written request of the Holder, use its best efforts to deliver, or cause to be delivered, Warrant Shares hereunder electronically through the Depository Trust and Clearing Corporation or another established clearing corporation performing similar functions, if available; provided, that, the Company may, but will not be required to, change its transfer agent if its current transfer agent cannot deliver Warrant Shares electronically through the Depository Trust and Clearing Corporation.  If as of the time of exercise the Warrant Shares constitute restricted or control securities, the Holder, by exercising, agrees not to resell them except in compliance with all applicable securities laws.

(b)           To the extent permitted by law, the Company’s obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance that might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares.  Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

(c)           If the Company fails to cause its transfer agent to transmit to the Holder a certificate or the certificates (either physical or electronic) representing the Warrant Shares pursuant to the terms hereof by applicable delivery date, then, the Holder will have the right to rescind such exercise.

6.             Charges, Taxes and Expenses. Issuance and delivery of certificates for shares of Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or the Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

7.             Replacement of Warrant.  If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity, if requested. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the New Warrant.

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8.             Reservation of Warrant Shares.  The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares that are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of persons other than the Holder (taking into account the adjustments and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable.

9.             Certain Adjustments to Exercise Price.  The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 9.

(a)         Adjustments for Stock Splits and Combinations and Stock Dividends.  If the Company shall at any time or from time to time after the date hereof, effect a stock split or combination of the outstanding Common Stock or pay a stock dividend in shares of Common Stock, then the Exercise Price shall be proportionately adjusted.  Any adjustments under this Section 9(a) shall be effective at the close of business on the date the stock split or combination becomes effective or the date of payment of the stock dividend, as applicable.

(b)         Merger Sale, Reclassification, etc.In case of any: (i) consolidation or merger (including a merger in which the Company is the surviving entity), (ii) sale or other disposition of all or substantially all of the Company’s assets or distribution of property to shareholders (other than distributions payable out of earnings or retained earnings), or reclassification, change or conversion of the outstanding securities of the Company or of any reorganization of the Company (or any other corporation the stock or securities of which are at the time receivable upon the exercise of this Warrant) or any similar corporate reorganization on or after the date hereof, then and in each such case the Holder of this Warrant, upon the exercise hereof at any time thereafter shall be entitled to receive, in lieu of the stock or other securities and property receivable upon the exercise hereof prior to such consolidation, merger, sale or other disposition, reclassification, change, conversion or reorganization, the stock or other securities or property to which such Holder would have been entitled upon such consummation if such Holder had exercised this Warrant immediately prior thereto.

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(c)         Adjustments for Issuance of Additional Shares of Common Stock.

  (i)           In the event the Company, shall, at any time, from time to time, issue or sell any additional shares of Common Stock (other than pursuant to Common Stock Equivalents (hereafter defined) granted or issued prior to the issuance date of this Warrant) (“Additional Shares of Common Stock”), at a price per share less than the Exercise Price then in effect or without consideration, then the Exercise Price upon each such issuance shall be adjusted to that price (rounded to the nearest cent) determined by multiplying the Exercise Price then in effect by a fraction:

  (A)           the numerator of which shall be equal to the sum of (1) the number of shares of Common Stock outstanding immediately prior to the issuance of such Additional Shares of Common Stock plus (2) the number of shares of Common Stock (rounded to the nearest whole share) which the aggregate consideration for the total number of such Additional Shares of Common Stock so issued would purchase at a price per share equal to the Exercise Price then in effect, and

  (B)           the denominator of which shall be equal to the number of shares of Common Stock outstanding immediately after the issuance of such Additional Shares of Common Stock.

  (ii)           The provisions of paragraph (i) of Section 9(c) shall not apply to any issuance of Additional Shares of Common Stock for which an adjustment is provided elsewhere in this Section 9).  No adjustment of the number of Shares for which this Warrant shall be convertible shall be made under this clause (ii) upon the issuance of any Additional Shares of Common Stock which are issued pursuant to the exercise of any Common Stock Equivalents, if any such adjustment shall previously have been made upon the issuance of such Common Stock Equivalents pursuant to the other provisions of this Section 9.

  (iii)           Issuance of Common Stock Equivalents.  The provisions of this Section 9(c) shall apply if (A) the Company, at any time after the issuance date of this Warrant, shall issue any securities convertible into or exchangeable for, directly or indirectly, Common Stock (“Convertible Securities”), other than the Convertible Notes, or (B) any rights or warrants or options to purchase any such Common Stock or Convertible Securities (collectively, the “Common Stock Equivalents”) shall be issued or sold.  If the price per share for which Additional Shares of Common Stock may be issuable pursuant to any such Common Stock Equivalent shall be less than the applicable Exercise Price then in effect, or if, after any such issuance of Common Stock Equivalents, the price per share for which Additional Shares of Common Stock may be issuable thereafter is amended or adjusted, and such price as so amended shall be less than the applicable Exercise Price in effect at the time of such amendment or adjustment, then the applicable Exercise Price upon each such issuance or amendment shall be adjusted as provided in the first sentence of subsection (c)(i) of this Section 9.  No adjustment shall be made to the Exercise Price upon the issuance of Common Stock pursuant to the exercise, conversion or exchange of any Convertible Security or Common Stock Equivalent where an adjustment to the Exercise Price was made as a result of the issuance or purchase of any Convertible Security or Common Stock Equivalent.

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  (iv)           Certain Issues Excepted.  Anything herein to the contrary notwithstanding, the Company shall not be required to make any adjustment to the Exercise Price under this Section 9 in connection with securities of the Company issued: (i) in connection with a merger, acquisition or consolidation, (ii) in connection with bona fide joint venture, strategic license or similar business partnering arrangements (provided that the transaction or arrangement is not primarily for the purpose of raising capital from Person whose primary business is investing in securities), (iii) upon exercise of this Warrant or the other Warrants issued together with the Notes; (iv) upon exercise any warrants issued to the placement agents and its designees for the transactions contemplated hereby; and (v) in connection with any share split, share dividend, recapitalization or similar transaction by the Company for which adjustment is made pursuant to this Section 9.

  (v)           Floor Price.  Notwithstanding any provision of this Warrant to the contrary, no adjustment pursuant to Section 9(c) shall cause the Exercise Price to be less than $1.20, as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction.

10.           No Fractional Shares.  No fractional Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of any fractional shares that would otherwise be issuable, the Company shall pay cash equal to the product of such fraction multiplied by the closing price of one Warrant Share as reported by the applicable Trading Market on the Exercise Date.

11.          Notices.  Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall be delivered in accordance with the procedures set forth in Section 9.2 of the SPA.

12.          Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’ notice to the Holder, the Company may appoint a new warrant agent.  Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.

13.           Miscellaneous.

(a)           This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant.  This Warrant may be amended only in writing signed by the Company and the Holder, or their successors and assigns.

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(b)           Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York.  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of this Warrant, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper.  Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  EACH PARTY HERETO (INCLUDING ITS AFFILIATES, AGENTS, OFFICERS, DIRECTORS AND EMPLOYEES) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(c)           The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.

(d)           In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefore, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

(e)           Prior to exercise of this Warrant, the Holder hereof shall not, by reason of by being a Holder, be entitled to any rights of a stockholder with respect to the Warrant Shares.

(f)           No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.

LINK RESOURCES, INC.
By:	/s/ Hongwei QU
	Name: Hongwei Qu
	Title:   President, CEO and Chairman

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LINK RESOURCES, INC.

EXERCISE NOTICE

Ladies and Gentlemen:

(1)           The undersigned hereby elects to exercise the above-referenced Warrant with respect to [                          ] shares of Common Stock.  Capitalized terms used herein and not otherwise defined herein have the respective meanings set forth in the Warrant.

(2)           The holder hereby tenders the sum of $ ______________      to the Company in accordance with the terms of the Warrant.

(3)           Pursuant to this Exercise Notice, the Company shall deliver to the Holder the number of Warrant Shares determined in accordance with the terms of the Warrant.

Dated:	HOLDER:
	Print name
	By:
	Title:

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LINK RESOURCES, INC.

FORM OF ASSIGNMENT

To be completed and signed only upon transfer of Warrant

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _________________ the right represented by the within Warrant to purchase _________________ shares of Common Stock to which the within Warrant relates and appoints __________________ attorney to transfer said right on the books of the Company with full power of substitution in the premises.

Dated:	TRANSFEROR:
	Print name
	By:
	Title:
	TRANSFEREE:
	Print name
	By:
	Title:
WITNESS:
	Address of Transferee:
Print name

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EX-4.3

Exhibit 4.3

NEITHER THIS WARRANT NOR THE SECURITIES INTO WHICH THIS WARRANT IS EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A FORM ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

IN ADDITION, THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED, OR BE THE SUBJECT OF ANY HEDGING, SHORT SALE, DERIVATIVE, PUT, OR CALL TRANSACTION THAT WOULD RESULT IN THE EFFECTIVE ECONOMIC DISPOSITION OF SUCH SECURITIES BY ANY PERSON, UNTIL JULY 5TH, 2010, EXCEPT IN ACCORDANCE WITH FINRA RULE 5110(G)(2).

LINK RESOURCES, INC.

PLACEMENT AGENT WARRANT

Initial Holder:	Original Issue Date: January 5, 2009
	No. of Shares Subject to Warrant:
	Exercise Price Per Share: $2.40
	Expiration Time: 5:00 p.m., New York time, on January 5, 2013

Link Resources, Inc., a Nevada corporation (the “Company”), hereby certifies that, for value received, the Initial Holder shown above, or its permitted registered assigns (the “Holder”), is entitled to purchase from the Company up to the number of shares of its common stock, par value $0.001 per share (the “Common Stock”),  shown above (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”) at the exercise price shown above (as may be adjusted from time to time as provided herein, the “Exercise Price”), at any time and from time to time on or original issue date indicated above (the “Original Issue Date”) and through and including the expiration time shown above (the “Expiration Time”), and subject to the following terms and conditions:

1.             Definitions.  In addition to the terms defined elsewhere in this Warrant, capitalized terms that are not otherwise defined herein have the meanings given to such terms in the SPA.

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2.             List of Warrant Holders.  The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder (which shall include the Initial Holder or, as the case may be, any registered assignee to which this Warrant is permissibly assigned hereunder from time to time).  The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

3.             List of Transfers; Restrictions on Transfer. The Company shall register any transfer of all or any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company at its address specified herein. Upon any such registration or transfer, a new Warrant to purchase Common Stock, in substantially the form of this Warrant (any such new Warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder.  The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations in respect of the New Warrant that the Holder has in respect of this Warrant.

4.             Exercise and Duration of Warrant.

(a)          All or any part of this Warrant shall be exercisable by the registered Holder in any manner permitted by Section 10 of this Warrant at any time and from time to time on or after the Original Issue Date and through and including the Expiration Time. Subject to Section 11 hereof, at the Expiration Time, the portion of this Warrant not exercised prior thereto shall be and become void and of no value and this Warrant shall be terminated and shall no longer be outstanding.

(b)           The Holder may exercise this Warrant by delivering to the Company: (i) an exercise notice, in the form attached hereto (the “Exercise Notice”), completed and duly signed, and (ii) payment by wire transfer of immediately available funds to an account designated by the Company of the Exercise Price for the number of Warrant Shares as to which this Warrant is being exercised.  The date such items are delivered to the Company (as determined in accordance with the notice provisions hereof) is an “Exercise Date.”  The Holder shall be required to deliver the original Warrant in order to effect an exercise hereunder.  Execution and delivery of the Exercise Notice shall have the same effect as cancellation of the original Warrant and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.

(c)           The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant pursuant to the terms hereof.

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5.            Delivery of Warrant Shares.

(a)           Upon exercise of this Warrant, the Company shall promptly (but in no event later than three (3) Trading Days after the Exercise Date) issue or cause to be issued and cause to be delivered to or upon the written order of the Holder and in such name or names as the Holder may designate, a certificate for the Warrant Shares issuable upon such exercise, free of restrictive legends.  “Trading Day” shall mean a date on which the Company’s Common Stock trades on its principal trading market.  The Holder, or any Person permissibly so designated by the Holder to receive Warrant Shares, shall be deemed to have become the holder of record of such Warrant Shares as of the Exercise Date.  The Company shall, upon the written request of the Holder, use its best efforts to deliver, or cause to be delivered, Warrant Shares hereunder electronically through the Depository Trust and Clearing Corporation or another established clearing corporation performing similar functions, if available; provided, that, the Company may, but will not be required to, change its transfer agent if its current transfer agent cannot deliver Warrant Shares electronically through the Depository Trust and Clearing Corporation.  If as of the time of exercise the Warrant Shares constitute restricted or control securities, the Holder, by exercising, agrees not to resell them except in compliance with all applicable securities laws.

(b)           To the extent permitted by law, the Company’s obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance that might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares.  Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

(c)           If the Company fails to cause its transfer agent to transmit to the Holder a certificate or the certificates (either physical or electronic) representing the Warrant Shares pursuant to the terms hereof by applicable delivery date, then, the Holder will have the right to rescind such exercise.

6.             Charges, Taxes and Expenses. Issuance and delivery of certificates for shares of Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or the Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

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7.             Replacement of Warrant.  If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity, if requested. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the New Warrant.

8.             Reservation of Warrant Shares.  The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares that are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of persons other than the Holder (taking into account the adjustments and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable.

9.             Certain Adjustments to Exercise Price.  The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 9.

(a)         Adjustments for Stock Splits and Combinations and Stock Dividends.  If the Company shall at any time or from time to time after the date hereof, effect a stock split or combination of the outstanding Common Stock or pay a stock dividend in shares of Common Stock, then the Exercise Price shall be proportionately adjusted.  Any adjustments under this Section 9(a) shall be effective at the close of business on the date the stock split or combination becomes effective or the date of payment of the stock dividend, as applicable.

(b)         Merger Sale, Reclassification, etc.In case of any: (i) consolidation or merger (including a merger in which the Company is the surviving entity), (ii) sale or other disposition of all or substantially all of the Company’s assets or distribution of property to shareholders (other than distributions payable out of earnings or retained earnings), or reclassification, change or conversion of the outstanding securities of the Company or of any reorganization of the Company (or any other corporation the stock or securities of which are at the time receivable upon the exercise of this Warrant) or any similar corporate reorganization on or after the date hereof, then and in each such case the Holder of this Warrant, upon the exercise hereof at any time thereafter shall be entitled to receive, in lieu of the stock or other securities and property receivable upon the exercise hereof prior to such consolidation, merger, sale or other disposition, reclassification, change, conversion or reorganization, the stock or other securities or property to which such Holder would have been entitled upon such consummation if such Holder had exercised this Warrant immediately prior thereto.

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(c)         Adjustments for Issuance of Additional Shares of Common Stock.

  (i)           In the event the Company, shall, at any time, from time to time, issue or sell any additional shares of Common Stock (other than pursuant to Common Stock Equivalents (hereafter defined) granted or issued prior to the issuance date of this Warrant) (“Additional Shares of Common Stock”), at a price per share less than the Exercise Price then in effect or without consideration, then the Exercise Price upon each such issuance shall be adjusted to that price (rounded to the nearest cent) determined by multiplying the Exercise Price then in effect by a fraction:

  (A)           the numerator of which shall be equal to the sum of (1) the number of shares of Common Stock outstanding immediately prior to the issuance of such Additional Shares of Common Stock plus (2) the number of shares of Common Stock (rounded to the nearest whole share) which the aggregate consideration for the total number of such Additional Shares of Common Stock so issued would purchase at a price per share equal to the Exercise Price then in effect, and

  (B)           the denominator of which shall be equal to the number of shares of Common Stock outstanding immediately after the issuance of such Additional Shares of Common Stock.

  (ii)           The provisions of paragraph (i) of Section 9(c) shall not apply to any issuance of Additional Shares of Common Stock for which an adjustment is provided elsewhere in this Section 9).  No adjustment of the number of Shares for which this Warrant shall be convertible shall be made under this clause (ii) upon the issuance of any Additional Shares of Common Stock which are issued pursuant to the exercise of any Common Stock Equivalents, if any such adjustment shall previously have been made upon the issuance of such Common Stock Equivalents pursuant to the other provisions of this Section 9.

  (iii)           Issuance of Common Stock Equivalents.  The provisions of this Section 9(c) shall apply if (A) the Company, at any time after the issuance date of this Warrant, shall issue any securities convertible into or exchangeable for, directly or indirectly, Common Stock (“Convertible Securities”), other than the Convertible Notes, or (B) any rights or warrants or options to purchase any such Common Stock or Convertible Securities (collectively, the “Common Stock Equivalents”) shall be issued or sold.  If the price per share for which Additional Shares of Common Stock may be issuable pursuant to any such Common Stock Equivalent shall be less than the applicable Exercise Price then in effect, or if, after any such issuance of Common Stock Equivalents, the price per share for which Additional Shares of Common Stock may be issuable thereafter is amended or adjusted, and such price as so amended shall be less than the applicable Exercise Price in effect at the time of such amendment or adjustment, then the applicable Exercise Price upon each such issuance or amendment shall be adjusted as provided in the first sentence of subsection (c)(i) of this Section 9.  No adjustment shall be made to the Exercise Price upon the issuance of Common Stock pursuant to the exercise, conversion or exchange of any Convertible Security or Common Stock Equivalent where an adjustment to the Exercise Price was made as a result of the issuance or purchase of any Convertible Security or Common Stock Equivalent.

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  (iv)           Certain Issues Excepted.  Anything herein to the contrary notwithstanding, the Company shall not be required to make any adjustment to the Exercise Price under this Section 9 in connection with securities of the Company issued: (i) in connection with a merger, acquisition or consolidation, (ii) in connection with bona fide joint venture, strategic license or similar business partnering arrangements (provided that the transaction or arrangement is not primarily for the purpose of raising capital from Person whose primary business is investing in securities), (iii) upon exercise of this Warrant or the other Warrants issued together with the Notes; (iv) upon exercise any warrants issued to the placement agents and its designees for the transactions contemplated hereby; and (v) in connection with any share split, share dividend, recapitalization or similar transaction by the Company for which adjustment is made pursuant to this Section 9.

  (v)           Floor Price.  Notwithstanding any provision of this Warrant to the contrary, no adjustment pursuant to Section 9(c) shall cause the Exercise Price to be less than $1.20, as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction.

10.           No Fractional Shares.  No fractional Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of any fractional shares that would otherwise be issuable, the Company shall pay cash equal to the product of such fraction multiplied by the closing price of one Warrant Share as reported by the applicable Trading Market on the Exercise Date.

11.          Notices.  Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall be delivered in accordance with the procedures set forth in Section 9.2 of the SPA.

12.          Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’ notice to the Holder, the Company may appoint a new warrant agent.  Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.

13.           Miscellaneous.

(a)           This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant.  This Warrant may be amended only in writing signed by the Company and the Holder, or their successors and assigns.

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(b)           Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York.  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of this Warrant, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper.  Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  EACH PARTY HERETO (INCLUDING ITS AFFILIATES, AGENTS, OFFICERS, DIRECTORS AND EMPLOYEES) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(c)           The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.

(d)           In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefore, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

(e)           Prior to exercise of this Warrant, the Holder hereof shall not, by reason of by being a Holder, be entitled to any rights of a stockholder with respect to the Warrant Shares.

(f)           No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company has caused this Placement Agent Warrant to be duly executed by its authorized officer as of the date first indicated above.

LINK RESOURCES, INC.
By:
	Name: Hongwei Qu
	Title:   President, CEO and Chairman

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LINK RESOURCES, INC.

EXERCISE NOTICE

Ladies and Gentlemen:

(1)           The undersigned hereby elects to exercise the above-referenced Warrant with respect to [                          ] shares of Common Stock.  Capitalized terms used herein and not otherwise defined herein have the respective meanings set forth in the Warrant.

(2)           The holder hereby tenders the sum of $ ______________      to the Company in accordance with the terms of the Warrant.

(3)           Pursuant to this Exercise Notice, the Company shall deliver to the Holder the number of Warrant Shares determined in accordance with the terms of the Warrant.

Dated:	HOLDER:
	Print name
	By:
	Title:

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LINK RESOURCES, INC.

FORM OF ASSIGNMENT

To be completed and signed only upon transfer of Warrant

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _________________ the right represented by the within Warrant to purchase _________________ shares of Common Stock to which the within Warrant relates and appoints __________________ attorney to transfer said right on the books of the Company with full power of substitution in the premises.

Dated:	TRANSFEROR:
	Print name
	By:
	Title:
	TRANSFEREE:
	Print name
	By:
	Title:
WITNESS:
	Address of Transferee:
Print name

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EX-10.1

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated January 5, 2010, is between Link Resources Inc., a Nevada corporation (the “Company”), and each purchaser identified on Schedule A hereto (each, including their respective successors and assigns, an “Investor” and collectively, the “Investors”) and, with respect to certain sections hereof, Euro Pacific Capital, Inc. (the “Lead Placement Agent”).

WHEREAS, this Agreement has been entered into pursuant to the terms of the Company’s Confidential Private Placement Memorandum, dated December 10, 2009 (together with any and all amendments and/or supplements thereto, the “Memorandum”);

WHEREAS, the Lead Placement Agent is acting in such capacity in connection with the Company’s offering of Units as described in the Memorandum;

WHEREAS, as described in the Memorandum, immediately prior to the Closing (as defined herein), the shareholders of Chance High International Limited, a British Virgin Islands company (“Chance High”) and an Affiliate of Yantai Bohai Pharmaceuticals Group Co., Ltd., a company organized under the laws of the PRC (“Bohai”), shall have consummated a share exchange transaction with the Company pursuant to a Share Exchange Agreement, in the form attached to the Memorandum (the “Share Exchange Agreement”), with the result being that Chance High will become a wholly-owned subsidiary of the Company;

WHEREAS, upon the consummation of the transactions contemplated by the Share Exchange Agreement, Bohai shall become a controlled variable interest entity of the Company’s subsidiary, Yantai Shencaojishi Pharmaceuticals Co., Ltd., a company organized under the laws of the PRC (“WFOE”), which, in turn, will be a wholly-owned subsidiary of Chance High;

WHEREAS, in light of the Company’s transaction with Bohai, the Investors wish to purchase from the Company, and the Company wishes to sell and issue to the Investors, upon the terms and conditions stated in this Agreement, a minimum of 4,650,000 units (the “Minimum Amount”) and a maximum of 6,000,000 units (the “Maximum Amount”) at a purchase price of $2.00 per unit (each, a “Unit”);

WHEREAS, each Unit shall consist consisting of: (i) an eight (8%) percent convertible promissory note (each a “Note,” and, collectively, the “Notes”) of the Company in the aggregate principal amount of $2.00, which Note shall be convertible into shares (the “Conversion Shares”) of the Company’s common stock, par value $0.001 per share (together with any securities into which such shares may be reclassified, the “Common Stock”) at $2.00 per Conversion Share (subject to adjustment as set forth in the Note), which Notes shall be in the form annexed hereto as Exhibit A hereto and (ii) a common stock purchase warrant (each a “Warrant,” and, collectively, the “Warrants”) to purchase one (1) share (collectively, the “Warrant Shares”) of Common Stock at an exercise price of $2.40 per share (subject to adjustment as set forth in the Warrants), which Warrants shall be in the form attached hereto as Exhibit B , upon the terms and conditions set forth in this Agreement;

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WHEREAS, at the Closing, the parties hereto will execute and deliver a Registration Rights Agreement, substantially in the form attached hereto as Exhibit C (the “Registration Rights Agreement”), pursuant to which the Company will agree to provide certain registration rights with respect to the Warrant Shares under the Securities Act and the rules and regulations promulgated thereunder, and applicable state securities laws;

WHEREAS, in order to provide security upon an event of default under the Notes, Glory Period Limited, a British Virgin Islands company and an Affiliate of Bohai (the “Principal Stockholder”), shall deposit one million (1,000,000) shares of Common Stock received by it in connection with the Share Exchange Agreement with Escrow, LLC, as securities escrow agent (the “Securities Escrow Agent”), pursuant to that certain Securities Escrow Agreement by and among the Company, the Lead Placement Agent, the Principal Stockholder and the Securities Escrow Agent, dated as of the date hereof and substantially in the form of Exhibit D hereto (the “Securities Escrow Agreement”); and

EX-10.2

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated January 5, 2010, is between Link Resources Inc., a Nevada corporation (the “Company”), and each purchaser identified on Schedule A hereto (each, including their respective successors and assigns, an “Investor” and collectively, the “Investors”).

WHEREAS, in connection with the Securities Purchase Agreement by and among the parties hereto of even date herewith (the “Securities Purchase Agreement”), the Company has agreed, upon the terms and subject to the conditions set forth in the Securities Purchase Agreement, to issue and sell to each Investor units comprised of (i) $2 principal amount 8% convertible promissory notes (the “Notes”), which notes are convertible into shares (the “Conversion Shares”) of the Company’s common stock, $0.001 par value per share (the “Common Stock”) and (ii) warrants (the “Warrants”), which will be exercisable to purchase shares of Common Stock (as exercised collectively, the “Warrant Shares”); and

WHEREAS, in accordance with the terms of the Securities Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “1933 Act”), and applicable state securities laws.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Investors hereby agree as follows:

1.                 Definitions.

Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Securities Purchase Agreement.  As used in this Agreement, the following terms shall have the following meanings:

(a)           “Additional Effectiveness Date” means the date the Additional Registration Statement is declared effective by the SEC.

(b)           “Additional Effectiveness Deadline” means the date which is sixty (60) calendar days after the Additional Filing Date or, in the event that the Registration Statement is subject to a review by the SEC, one-hundred and twenty (120) calendar days after the Additional Filing Date.

(c)           “Additional Filing Date” means the date on which the Additional Registration Statement is filed with the SEC.

(d)          “Additional Filing Deadline” means if Cutback Shares are required to be included in the Additional Registration Statement, one hundred eighty (180) days from the Initial Effective Date or the last Additional Effective Date, as applicable.

(e)          “Additional Registrable Securities” means, (i) any Cutback Shares not previously included on a Registration Statement and (ii) any share capital of the Company issued or issuable with respect to the Conversion Shares, the Warrants, the Warrant Shares or Cutback Shares, as applicable, as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitations on exercises of the Warrants.

(f)           “Additional Registration Statement” means a registration statement or registration statements of the Company filed under the 1933 Act covering any Additional Registrable Securities.

(g)          “Additional Required Registration Amount” means any Cutback Shares not previously included on a Registration Statement, all subject to adjustment as provided in Section 2(f), without regard to any limitations on exercises of the Warrants, if any.

(h)          “Business Day” means any day other than Saturday, Sunday or any other day on which commercial banks in the City of New York are authorized or required by law to remain closed and that the SEC is open for business.

(i)           “Closing Date” shall have the meaning set forth in the Securities Purchase Agreement.

(j)           “Cutback Shares” means any of the Initial Required Registration Amount of Registrable Securities not included in all Registration Statements previously declared effective hereunder as a result of a limitation on the maximum number of shares of Common Stock of the Company permitted to be registered by the staff of the SEC pursuant to Rule 415.

(k)          “Effective Date” means the Initial Effective Date and the Additional Effective Date, as applicable.

(l)           “Effectiveness Deadline” means the Initial Effectiveness Deadline and the Additional Effectiveness Deadline, as applicable.

(m)         “Filing Deadline” means the Initial Filing Deadline and the Additional Filing Deadline, as applicable.

(n)         “Initial Effective Date” means the date that the Registration Statement has been declared effective by the SEC.

(o)         “Initial Effectiveness Deadline” means the date: (i) in the event that the Registration Statement is subject to a review by the SEC, one hundred sixty (160) calendar days after the Initial Filing Deadline or (ii) the date which is within five (5) Business Days after the date on which the SEC informs the Company (A) that the SEC will not review such Registration Statement or (ii)that the Company may request the acceleration of the effectiveness of such Registration Statement and the Company makes such request; provided that, if the Initial Effectiveness Date falls on a Saturday, Sunday or any other day which shall be a legal holiday or a day on which the SEC is authorized or required by law or other government actions to close, the Initial Effectiveness Deadline shall be the following Business Day.

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(p)          “Initial Filing Deadline” means the date that is sixty (60) calendar days after the final Closing Date.

(q)          “Initial Registrable Securities” means (i) the Conversion Shares, (ii) the Warrant Shares and (iii) any capital stock of the Company issued or issuable, with respect to the Conversion Shares, the Warrant Shares or the Warrants as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitations on exercises of the Warrants.

(r)           “Initial Required Registration Amount” means (I) the sum of (i) the number of Conversion Shares issued and issuable pursuant to the Notes as of the trading day immediately preceding the applicable date of determination, and (ii) the number of Warrant Shares issued and issuable pursuant to the Warrants as of the trading day immediately preceding the applicable date of determination, all subject to adjustment as provided in Section 2(f), without regard to any limitations on exercises of the Warrants, if any or (II) such other amount as may be required by the staff of the SEC pursuant to Rule 415.

(s)          “Initial Registration Statement” means a registration statement or registration statements of the Company filed under the 1933 Act covering the Initial Registrable Securities.

(t)           “Investor” means an Investor or any transferee or assignee thereof to whom a Investor assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9 and any transferee or assignee thereof to whom a transferee or assignee assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9.

(u)          “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.

(v)          “register,” “registered,” and “registration” refer to a registration effected by preparing and filing one or more Registration Statements in compliance with the 1933 Act and pursuant to Rule 415 and the declaration or ordering of effectiveness of such Registration Statement(s) by the SEC.

(w)         “Registrable Securities” means the Initial Registrable Securities and the Additional Registrable Securities.

(x)          “Registration Statement” means a registration statement or registration statements of the Company filed under the 1933 Act covering the Registrable Securities.

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(y)          “Required Holders” means the holders of at least a majority of the Registrable Securities or the Investor Representative acting on behalf of such requisite number of holders.

(z)           “Required Registration Amount” means either the Initial Required Registration Amount or the Additional Required Registration Amount, as applicable.

(aa)        “Rule 415” means Rule 415 under the 1933 Act or any successor rule providing for offering securities on a continuous or delayed basis.

(bb)        “SEC” means the United States Securities and Exchange Commission.

2.           Registration.

(a)         Mandatory Registration.  The Company shall prepare, and, as soon as practicable, but in no event later than the Initial Filing Deadline, file with the SEC the Registration Statement on Form S-1 covering the resale of all of the Registrable Securities.  The Registration Statement prepared pursuant hereto shall register for resale at least the number of shares of Common Stock equal to the Required Registration Amount determined as of the date the Registration Statement is initially filed with the SEC.  The Registration Statement shall contain customary “Selling Stockholders” and “Plan of Distribution” sections.  The Company shall use its commercially reasonable best efforts to have the Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the Initial Effectiveness Deadline.  By 9:30 a.m. New York time on the Business Day following the Effective Date, the Company shall file with the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to be used in connection with sales pursuant to such Registration Statement.

(b)         Additional Mandatory Registrations.  The Company shall prepare, and, as soon as practicable but in no event later than the Additional Filing Deadline, file with the SEC an Additional Registration Statement on Form S-1 (or Form S-3 if available) covering the resale of all of the Additional Registrable Securities not previously registered on an Additional Registration Statement hereunder.  To the extent the staff of the SEC does not permit the Additional Required Registration Amount to be registered on an Additional Registration Statement, the Company shall file Additional Registration Statements successively trying to register on each such Additional Registration Statement the maximum number of remaining Additional Registrable Securities until the Additional Required Registration Amount has been registered with the SEC.  Each Additional Registration Statement prepared pursuant hereto shall register for resale at least that number of shares of Common Stock equal to the Additional Required Registration Amount as of date the Registration Statement is initially filed with the SEC.  Each Additional Registration Statement shall contain customary “Selling Stockholders” and “Plan of Distribution” sections.  The Company shall use its commercially reasonable best efforts to have each Additional Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the Additional Effectiveness Deadline.  By 9:30 a.m. New York time on the date following the Additional Effective Date, the Company shall file with the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to be used in connection with sales pursuant to such Registration Statement.

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(c)          Allocation of Registrable Securities.  The initial number of Registrable Securities included in any Registration Statement and any increase in the number of Registrable Securities included therein shall be allocated pro rata among the Investors based on the number of Registrable Securities held by each Investor at the time the Registration Statement covering such initial number of Registrable Securities or increase thereof is declared effective by the SEC.  In the event that an Investor sells or otherwise transfers any of such Investor’s Registrable Securities, each transferee shall be allocated a pro rata portion of the then remaining number of Registrable Securities included in such Registration Statement for such transferor.  Any shares of Common Stock included in a Registration Statement and which remain allocated to any Person which ceases to hold any Registrable Securities covered by such Registration Statement shall be allocated to the remaining Investors, pro rata based on the number of Registrable Securities then held by such Investors which are covered by such Registration Statement.  In no event shall the Company include any securities other than Registrable Securities on any Registration Statement without the prior written consent of the Required Holders or the Investor Representative.If the SEC requires that the Company register less than the amount of Registrable Securities originally included on any Registration Statement at the time it was filed, the Registrable Securities on such Registration Statement shall be decreased on a pro rata basis and, unless otherwise requested by an Investor, the Warrant Shares included on such Registration Statement shall be decreased first.

(d)         Sufficient Number of Shares Registered.  In the event the number of shares available under a Registration Statement filed pursuant to Section 2(a) is insufficient to cover all of the Registrable Securities required to be covered by such Registration Statement or an Investor’s allocated portion of the Registrable Securities pursuant to Section 2(c), the Company shall amend the applicable Registration Statement, or file a new Registration Statement (on Form S-3, if available), or both, so as to cover at least the Required Registration Amount as of the trading day immediately preceding the date of the filing of such amendment or new Registration Statement, in each case, as soon as practicable, but in any event not later than fifteen (15) days after the necessity therefor arises.  The Company shall use its commercially reasonable best efforts to cause such amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof.  For purposes of the foregoing provision, the number of shares available under a Registration Statement shall be deemed “insufficient to cover all of the Registrable Securities” if at any time the number of shares of Common Stock available for resale under the Registration Statement is less than the product determined by multiplying (i) the Required Registration Amount as of such time by (ii) 0.90.

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(e)         Effect of Failure to File and Obtain and Maintain Effectiveness of Registration Statement.  If: (i) a Registration Statement covering all of the Registrable Securities required to be covered thereby and required to be filed by the Company pursuant to this Agreement is (A) not filed with the SEC on or before the respective Filing Deadline (a “Filing Failure”) or (B) not declared effective by the SEC on or before the respective Effectiveness Deadline or (ii) on any day after the Effective Date sales of all of the Registrable Securities required to be included on such Registration Statement cannot be made (other than during an Allowable Grace Period (as defined in Section 3(m)) pursuant to such Registration Statement or otherwise (including, without limitation, because of a failure to keep such Registration Statement effective, to disclose such information as is necessary for sales to be made pursuant to such Registration Statement, to register a sufficient number of shares of Common Stock or to maintain the listing of the Common Stock) (a “Maintenance Failure”) then, as liquidated damages (and in complete satisfaction and to the exclusion of any claims or remedies inuring to any holder of Registrable Securities) to any holder of Registrable Securities by reason of any such delay in or reduction of its ability to sell the underlying shares of Common Stock, the Company shall pay to each holder of Registrable Securities relating to such Registration Statement their pro rata portion (based on the amount of Registrable Securities held) an amount in cash) equal to one percent (1%) of the aggregate Purchase Price (as such term is defined in the Securities Purchase Agreement) of paid by the applicable Investor for the Registrable Securities included in such Registration Statement on each of the following dates: (i) 20 days following the date of a Filing Failure; (ii) 20 days following the date of an Effectiveness Failure; (iii) 30 days following the initial day of a Maintenance Failure; (iv) on every thirtieth day after the day of a Filing Failure and thereafter (pro rated for periods totaling less than thirty days) until such Filing Failure is cured; (v) on every thirtieth day after the day of an Effectiveness Failure and thereafter (pro rated for periods totaling less than thirty days) until such Effectiveness Failure is cured; and (vi) on every thirtieth day after the initial day of a Maintenance Failure and thereafter (pro rated for periods totaling less than thirty days) until such Maintenance Failure is cured.  The payments to which a holder of Registrable Securities shall be entitled pursuant to this Section 2(f) are referred to herein as “Registration Delay Payments.”  Notwithstanding anything herein or in the Securities Purchase Agreement to the contrary, in no event shall the aggregate amount of Registration Delay Payments exceed, in the aggregate, six percent (6%) of the aggregate Purchase Price paid by all Investors pursuant to the Securities Purchase Agreement.

3.           Related Obligations.  At such time as the Company is obligated to file a Registration Statement with the SEC pursuant to Section 2(a), 2(d) or 2(e), the Company will use its commercially reasonable best efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations:

(a)         The Company shall promptly prepare and file with the SEC a Registration Statement with respect to the Registrable Securities and use its commercially reasonable best efforts to cause such Registration Statement relating to the Registrable Securities to become effective as soon as practicable after such filing (but in no event later than the Effectiveness Deadline).  The Company shall keep each Registration Statement effective pursuant to Rule 415 at all times until the earlier of: (i) the date as of which the Investors may sell all of the Registrable Securities covered by such Registration Statement without restriction pursuant to Rule 144 (or any successor thereto) promulgated under the 1933 Act (“Rule 144”) or (ii) the date on which the Investors shall have sold all of the Registrable Securities covered by such Registration Statement (the “Registration Period”).  The Company shall ensure that each Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading.

(b)        The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary to keep such Registration Statement effective at all times during the Registration Period, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement.

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(c)         The Company shall use its commercially reasonable best efforts to: (i) register and qualify, unless an exemption from registration and qualification applies, the resale by Investors of the Registrable Securities covered by a Registration Statement under such other securities or “blue sky” laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(c), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction.  The Company shall promptly notify the Investor Representative of  the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.

(d)         The Company shall notify the Investor Representativein writing of the happening of any event, as promptly as practicable after becoming aware of such event, as a result of which the prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain any material, nonpublic information), and, subject to Section 3(m), promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission.  The Company shall also promptly notify the Investor Representative in writing when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective.

(e)         The Company shall use its commercially reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify the Investor Representative of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

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(f)          If any Investor is required under applicable securities laws to be described in the Registration Statement as an underwriter, at the reasonable request of such Investor, the Company shall furnish to such Investor, on the date of the effectiveness of the Registration Statement and thereafter from time to time on such dates as an Investor may reasonably request: (i) a letter, dated such date, from the Company’s independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the Investors, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form, scope and substance reasonably acceptable to such counsel and as is customarily given in an underwritten public offering, addressed to the Investors.

(g)         The Company shall hold in confidence and not make any disclosure of information concerning an Investor provided to the Company unless: (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement.  The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to such Investor and allow such Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.

(h)         The Company shall use its commercially reasonable best efforts either to: (i) cause all of the Registrable Securities covered by a Registration Statement to be listed on each national securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange.  The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(h).

(i)          The Company shall cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts, as the case may be, as the Investors may reasonably request and registered in such names as the Investors may request.

(j)          If requested by an Investor, the Company shall as soon as practicable: (i) incorporate in a prospectus supplement or post-effective amendment such information as an Investor reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement if reasonably requested by an Investor holding any Registrable Securities.

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(k)         The Company shall use its commercially reasonable best efforts to cause the Registrable Securities covered by a Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities.

(l)          The Company shall otherwise use its commercially reasonable best efforts to comply with all applicable rules and regulations of the SEC in connection with any registration hereunder.

(m)        Notwithstanding anything to the contrary herein, at any time after the Effective Date, the Company may delay the disclosure of material, non-public information concerning the Company the disclosure of which at the time is not, in the good faith opinion of the Board of Directors of the Company and its counsel, in the best interest of the Company and, in the opinion of counsel to the Company, otherwise required (a “Grace Period”); provided, that the Company shall promptly: (i) notify the Investor Representative in writing of the existence of material, non-public information giving rise to a Grace Period (provided that in each notice the Company will not disclose the content of such material, non-public information to the Investors) and the date on which the Grace Period will begin, and (ii) notify Investor Representative in writing of the date on which the Grace Period ends; and, provided further, that no Grace Period shall exceed twenty (20) consecutive days and during any three hundred sixty five (365) day period such Grace Periods shall not exceed an aggregate of sixty (60) days and the first day of any Grace Period must be at least five (5) Trading Days (as defined in the Securities Purchase Agreement) after the last day of any prior Grace Period (each, an “Allowable Grace Period”).  For purposes of determining the length of a Grace Period above, the Grace Period shall begin on and include the date the Investor Representative receives the notice referred to in clause (i) and shall end on and include the later of the date the Investor Representativereceives the notice referred to in clause (ii) and the date referred to in such notice.  The Company’s obligations under Section 3(f) shall not be applicable during and Allowable Grace Period.

4.           Obligations of the Investors.

(a)         At least five (5) Business Days prior to the first anticipated filing date of a Registration Statement, the Company shall notify the Investor Representativein writing of the information the Company requires from each Investor if such Investor elects to have any of such Investor’s Registrable Securities included in such Registration Statement.  It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of a particular Investor that such Investor shall, within five (5) Business Days of the Company’s request, furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect and maintain the effectiveness of the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request.

(b)         Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement hereunder, unless such Investor has notified the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities from such Registration Statement.

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(c)         Each Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(d) or 3(e), such Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement(s) covering such Registrable Securities until such Investor’s receipt of the copies of the supplemented or amended prospectus or receipt of notice that no supplement or amendment is required.

(d)         Each Investor covenants and agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it or an exemption therefrom in connection with sales of Registrable Securities pursuant to the Registration Statement.

5.           Expenses of Registration.  All reasonable expenses, other than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company shall be paid by the Company.

6.           Indemnification.  In the event any Registrable Securities are included in a Registration Statement under this Agreement:

(a)         To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor, the directors, officers, members, partners, employees, agents, representatives of, and each Person, if any, who controls any Investor within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Person”), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in settlement or expenses, joint or several, (collectively, “Claims”) incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon:  (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading or (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement (the matters in the foregoing clauses (i) through (iii) being, collectively, “Violations”).  Subject to Section 6(c), the Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees and reasonable expenses incurred by them in connection with investigating or defending any such Claim.  Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a):  (i) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by such Indemnified Person for such Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(d); and (ii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed.  Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the Investors pursuant to Section 9.

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(b)         In connection with any Registration Statement in which an Investor is participating, each such Investor agrees to severally and not jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers who signs the Registration Statement and each Person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against any Claim or Indemnified Damages to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use in connection with such Registration Statement; and, subject to Section 6(c), such Investor will reimburse any legal or other expenses reasonably incurred by an Indemnified Party in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably withheld or delayed; provided, further, however, that the Investor shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the sale of Registrable Securities pursuant to such Registration Statement.  Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by the Investors pursuant to Section 9.

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(c)         Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses of not more than one counsel for all such Indemnified Person or Indemnified Party to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding.  In the case of an Indemnified Person, legal counsel referred to in the immediately preceding sentence shall be selected by the Investors holding at least a majorityin interest of the Registrable Securities included in the Registration Statement to which the Claim relates.  The Indemnified Party or Indemnified Person shall cooperate reasonably with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or Claim.  The indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto.  No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent.  No indemnifying party shall, without the prior written consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability in respect to such Claim or litigation, and such settlement shall not include any admission as to fault on the part of the Indemnified Party.  Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made.  The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action.

(d)        The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred.

(e)         The indemnity agreements contained herein shall be in addition to: (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.

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7.           Contribution.  To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that: (i) no Person involved in the sale of Registrable Securities which Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in connection with such sale shall be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities pursuant to such Registration Statement.

8.           Reports Under the 1934 Act.  With a view to making available to the Investors the benefits of Rule 144 or any other similar rule or regulation of the SEC that may at any time permit the Investors to sell securities of the Company to the public without registration, the Company agrees, for so long as Registrable Securities are outstanding, to:

(a)         make and keep public information available, as those terms are understood and defined in Rule 144;

(b)         file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such requirements and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and

(c)         furnish to each Investor so long as such Investor owns Registrable Securities, promptly upon request, such information as may be reasonably and customarily requested to permit the Investors to sell such securities pursuant to Rule 144 without registration.

9.           Assignment of Registration Rights.  The rights under this Agreement shall be automatically assignable by the Investors to any permitted transferee of all or any portion of such Investor’s Registrable Securities if: (i) the Investor agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within five (5) Business Days after such assignment; (ii) the Company is, within five (5) Business Days after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned; (iii) immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the 1933 Act or applicable state securities laws; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein; and (v) such transfer shall have been made in accordance with the applicable requirements of the Securities Purchase Agreement.

10.         Amendment of Registration Rights. Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investor Representative who shall have obtained the consent of the Requisite Holders.  Any amendment or waiver effected in accordance with this Section 10 shall be binding upon each Investor and the Company.  No such amendment shall be effective to the extent that it applies to less than all of the holders of the Registrable Securities.  No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration also is offered to all of the parties to this Agreement.

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11.         Miscellaneous.

(a)         A Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities.  If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from such record owner of such Registrable Securities.

(b)         Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered if delivered in accordance with Section 9.2 of the Securities Purchase Agreement.

(c)         Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.

(d)         All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.

(e)         Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Note (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York.  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of this Note, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper.  Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  EACH PARTY HERETO (INCLUDING ITS AFFILIATES, AGENTS, OFFICERS, DIRECTORS AND EMPLOYEES) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.

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(f)          This Agreement, the other Transaction Documents (as defined in the Securities Purchase Agreement) and the instruments referenced herein and therein constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof.  There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein.  This Agreement, the other Transaction Documents and the instruments referenced herein and therein supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof.

(g)         Subject to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of each of the parties hereto.

(h)         The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(i)          This Agreement may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement.  This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

(j)          Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

(k)         All consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise specified in this Agreement, by the Investor Representative.

(l)          The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party.

(m)        This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

(n)         The obligations of each Investor hereunder are several and not joint with the obligations of any other Investor, and no provision of this Agreement is intended to confer any obligations on any Investor vis-à-vis any other Investor.  Nothing contained herein, and no action taken by any Investor pursuant hereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated herein.

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(o)         The Lead Placement Agent and any co-placement agent are intended third party beneficiaries of this Agreement and have all of the rights of an “Investor” under this Agreement and the shares of Common Stock issuable upon the exercise of the warrants issued to the Lead Placement Agent and any co-placement agent (and any capital stock of the Company issued or issuable, with respect to the warrants issued to the Lead Placement Agent or any co-placement agent as a result of any stock split, stock dividend, recapitalization, exchange, anti-dilution adjustment or similar event or otherwise, without regard to any limitations on exercises of the warrants, if any) constitute Registrable Securities for all purposes of this Agreement.  Notwithstanding the foregoing, neither the Lead Placement Agent nor the co-placement agent are entitled to any Registration Delay Payments.

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IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

COMPANY:
LINK RESOURCES INC.
By:	/s/ Hongwei Qu
	Name: Hongwei QU
	Title:   President, CEO and Chairman
INVESTORS:
The Investors executing the Signature Page in the form attached hereto as Annex A and delivering the same to the Company or its agents shall be deemed to have executed this Agreement and agreed to the terms hereof.

Annex A

Registration Rights Agreement

Investor Counterpart Signature Page

The undersigned, desiring to: (i) enter into this Registration Rights Agreement, dated as of _________________, 2010 (the “Agreement”), between the undersigned, Link Resources Inc., a Nevada corporation (the “Company”), and the other parties thereto, in or substantially in the form furnished to the undersigned and (ii) purchase the securities of the Company appearing below, hereby agrees to purchase such securities from the Company as of the Closing and further agrees to join the Agreement as a party thereto, with all the rights and privileges appertaining thereto, and to be bound in all respects by the terms and conditions thereof.

IN WITNESS WHEREOF, the undersigned has executed the Agreement as of _____________________, 2010.

Name and Address, Fax No. and Social Security No./EIN

of Investor:

Fax No.:

Soc. Sec. No./EIN:

If a partnership, corporation, trust or other business entity:
By:
	Name:
	Title:

If an individual:

Signature

Schedule A

SCHEDULE OF INVESTORS

No.	Investor Name	No. of Shares Subject to Notes	No.ofShares Subjectto Warrant
1.	IRA FBO ROBERT STEPHEN ADAMS PERSHING LLC AS CUSTODIAN	50,000	50,000
2.	SELWYN ADELSON	30,000	30,000
3.	SYED HASNAT AHMED & MIRIAN F AHMED JT TEN	55,000	55,000
4.	AM-PER ENTERPRISES INC.	50,000	50,000
5.	DAVID ARITA TOD DTD 05/10/2009	25,000	25,000
6.	WILLIAM C ARTHUR BY PASS TRUST DATED 10/18/1990 UAD 10/18/90	21,600	21,600
7.	JAMES V. BACON TRUST DTD 09/14/1995 UAD 03/26/09	125,000	125,000
8.	IRA FBO JEFFREY P BAKER PERSHING LLC AS CUSTODIAN	25,000	25,000
9.	MICHAEL BALDWIN	25,000	25,000
10.	BALFOUR HOLLOW LLC	25,000	25,000
11.	THE SARAH J. BASLER LIVING TRUST UAD 07/02/98	25,000	25,000
12.	RICHARD E BENAMY	25,000	25,000
13.	MIDDLESEX ORTHO SURGEONS 401K FBO LAWRENCE BERSON	25,000	25,000
14.	JEFF BLACKBURN	25,000	25,000
15.	RONALD BOVASSO & LINDA BOVASSO JT TEN	25,000	25,000
16.	BRADLEY ANESTHESIOLOGY PC PROFT SHARING PLAN & TST	50,000	50,000
17.	TEN BRINK TRUST DATED 10/02/1986 UAD 10/02/86	50,000	50,000
18.	WHITE PINE PRODUCTIONS DEFINED BENEFIT PENSION PLN	25,000	25,000
19.	SEP FBO JAMES BROWN	45,000	45,000
20.	IRA FBO PAT BROWNE PERSHING LLC AS CUSTODIAN	25,000	25,000
21.	SCOTT BURNS	25,000	25,000
22.	ROBERT CARLSON & MICHELLE CARLSON JT TEN	25,000	25,000
23.	BRAD K CARR & ROXANE CARR JT TEN	25,000	25,000
24.	LOWELL CERISE	37,500	37,500
25.	SRC CORPORATION DEFINED BENEFIT PENSION PLAN	25,000	25,000
26.	DONALD T CLEMETSON	25,000	25,000
27.	ROLAND CRAM TOD DTD 06/03/2009	25,000	25,000
28.	INTEGRITY FUNDS LP	25,000	25,000
29.	THE 2000 JORGE &ELENA ECHEVERRIA FAMILY TRUST UAD 11/09/00	25,000	25,000
30.	IRA FBO HY ECHT PERSHING LLC AS CUSTODIAN	30,000	30,000
31.	IRA FBO RALPH DALE EDSON PERSHING LLC AS CUSTODIAN	50,000	50,000
32.	JONATHAN EDWARDS & VIRGINIA C ADAMS JT TEN	25,000	25,000

33.	THE ARTHUR EKLUND & JANET EKLUND 1998 INTER VIVOS TRUST	25,000	25,000
34.	STEVEN JAY EPSTEIN	25,000	25,000
35.	IRA FBO DONALD FAGEN PERSHING LLC AS CUSTODIAN	125,000	125,000
36.	SEP FBO VIC FERRER PERSHING LLC AS CUSTODIAN	25,000	25,000
37.	WALTER FRIESEN	75,000	75,000
38.	THE ALEXANDER GALUZ AND YANA GALUZ JT LIVING TST UAD 08/24/05	25,000	25,000
39.	ANDREW GARNOCK	50,000	50,000
40.	RICHARD GLASER MDDBPP AND TRUST	25,000	25,000
41.	THE GOLDSCHLAGER FAMILY TRUST UAD 06/24/04	25,000	25,000
42.	RICHARD GRIFF & JACKIE GRIFF JT TEN	50,000	50,000
43.	RICHARD D HELPPIE JR TRUST UAD 04/02/92	25,000	25,000
44.	HOWARD J HICKINGBOTHAM JR & SANDRA B HICKINGBOTHAM JT TEN	25,000	25,000
45.	THE ROBERT K HEIMANN LIVING TRUST UAD 07/24/01	25,000	25,000
46.	HOKE LIVING TRUST UAD 04/19/02	25,000	25,000
47.	ULRICH HONIGHAUSEN & AMANDA HONIGHAUSEN JT TEN	25,000	25,000
48.	HERSCHEL HUNTER TRUST UAD 11/30/88	25,000	25,000
49.	BERT HUNTSINGER	99,500	99,500
50.	INGRAM LIVING TRUST DATED 11/02/2005 UAD 11/02/05	25,000	25,000
51.	AJAY KALRA	40,000	40,000
52.	KARGES REVOCABLE INTERVIVOS TRUST UAD 04/29/85	25,000	25,000
53.	IRA FBO JON MURRAY KARKOW PERSHING LLC AS CUSTODIAN	25,000	25,000
54.	PATRICK KIRK & GLORIA KIRK JTWROS	25,000	25,000
55.	DARREL LEE KLOECKNER	25,000	25,000
56.	NORMAN S KRAMER & LINDA L KRAMER JT TEN	50,000	50,000
57.	IRA FBO THOMAS A LADNER PERSHING LLC AS CUSTODIAN	50,000	50,000
58.	SCOTT AND LORI LANGMACK FAMILY TRUST UAD 06/22/02	50,000	50,000
59.	SEP FBO CARTER LAREN PERSHING LLC AS CUSTODIAN	50,000	50,000
60.	DAVID W LARSON & JENNIFER L LARSON JT TEN	25,000	25,000
61.	SCOTT R. LENNES IRA LLC	50,000	50,000
62.	IRA FBO GREGG LINHOFF PERSHING LLC AS CUSTODIAN	55,000	55,000
63.	SEP FBO GEORGE MADARAZ PERSHING LLC AS CUSTODIAN	35,000	35,000
64.	SEP FBO GERALD E MANWILL PERSHING LLC AS CUSTODIAN	37,500	37,500
65.	DAVID MARBLE	25,000	25,000
66.	NORTHERN STAR GROWTH TRUST DTD 10/20/1998 UAD 10/20/98	25,000	25,000
67.	MITCHELL MARTIN & DEBORAH MARTIN JT TEN	25,000	25,000
68.	F BRENT MAY PS PLAN FBO JONI MAY	50,000	50,000
69.	STEPHEN P MCCARRON PSP-PERSHING LLC AS CUSTODIAN	50,000	50,000

70.	IRA FBO JOSEPH MCCARTHY PERSHING LLC AS CUSTODIAN	25,000	25,000
71.	ROD MCINTYRE TRUST U A DATED 5/1/01	25,000	25,000
72.	IRA FBO JERRY MCWILLIAMS PERSHING LLC AS CUSTODIAN	25,000	25,000
73.	THE MEISTER NON-EXEMPT MARITAL TRUST UAD 11/17/83	50,000	50,000
74.	CARLOS ALFONSO MERINO REV LIVING TRUST UAD 12/04/96	25,000	25,000
75.	IRA FBO MARK MITCHELL PERSHING LLC AS CUSTODIAN	25,000	25,000
76.	MARK R MITCHELL M.D. A MEDICAL CORPORATION	25,000	25,000
77.	MMH GROUP, LLC	47,900	47,900
78.	IRA FBO GERALD MONA PERSHING LLC AS CUSTODIAN	25,000	25,000
79.	KEVIN MOORE	37,500	37,500
80.	DEEPAK MUNJAL	25,000	25,000
81.	KENNETH H & MAUREEN K NASS CHARI REMAINDER UNITRUST UAD 06/07/05	50,000	50,000
82.	IRA FBO TIM NASS PERSHING LLC AS CUSTODIAN	31,000	31,000
83.	MARY NEIBERG	50,000	50,000
84.	KEVIN P O'NEILL & SUZANNE ODELL ONEILL JT TEN	25,000	25,000
85.	JOSEPH A & PAMELA M PANELLA LIVING TRUST 1 UAD 05/11/04	25,000	25,000
86.	BRENT PAULGER & SHARISSA PAULGER JT TEN	25,000	25,000
87.	TINA C PETERSON & HENDRIKUS M SCHRAVEN JT TEN	100,000	100,000
88.	E.A. PICKERING PAINTING INC.	30,000	30,000
89.	POM INVESTMENTS LLC	50,000	50,000
90.	BRUCE WALKER RAVENEL III	125,000	125,000
91.	M. CARL RICE SELF EMPLOYED RETIREMENT PLAN #1	125,000	125,000
92.	JOHN RUSSELL RIEDMUELLER & NICOLE CAMERON RIEDMUELLER TEN COM	25,000	25,000
93.	JOHN A RUPP TRUST UAD 03/25/94	25,000	25,000
94.	STEVEN V SANN TOD DTD 10/16/2009	25,000	25,000
95.	ROBERT C SAYSON & ALICE K SAYSON JT TEN	50,000	50,000
96.	PETER SCHORTMANN & SUSAN SCHORTMANN JT TEN	25,000	25,000
97.	KIMBERLY S SCHWENKE	25,000	25,000
98.	CHRISTIANNA SEIDEL SEPARATE PROPERTY TRUST UAD 11/05/99	25,000	25,000
99.	JAMES A SHEAHAN & MELODY K SHEAHAN JT TEN	50,000	50,000
100.	IRA FBO   DONALD FRANCIS SHOFF PERSHING LLC AS CUSTODIAN	25,000	25,000
101.	JOHN D SMEAD	37,500	37,500
102.	MICHAEL J SPLITTGERBER & RENEE J SPLITTGERBER JT TEN	25,000	25,000
103.	IRA FBO DIANE SPOLUM PERSHING LLC AS CUSTODIAN	125,000	125,000
104.	SPONGBOB VENTURES II LLC	25,000	25,000
105.	AMY J STEFANIK REVOCABLE TRUST UAD 02/06/01	50,000	50,000

106.	IRA FBO LYNN ROLLINS STULL PERSHING LLC AS CUSTODIAN	25,000	25,000
107.	IRA FBO CHARLES SULLIVAN PERSHING LLC AS CUSTODIAN	25,000	25,000
108.	IRA FBO GERARD SURERUS PERSHING LLC AS CUSTODIAN	25,000	25,000
109.	IRA FBO JAMES A TAMBORELLO PERSHING LLC AS CUSTODIAN	50,000	50,000
110.	ABDOLHOSAYN TASLIMI & SHIDAN TASLIMI JT TEN	50,000	50,000
111.	MEHRAN M TASLIMI	250,000	250,000
112.	RUHA TASLIMI & SHIDAN TASLIMI JT TEN	50,000	50,000
113.	SHIDAN TASLIMI	250,000	250,000
114.	SUSANNE A TASLIMI	50,000	50,000
115.	TRILLION GROWTH CHINA LP	125,000	125,000
116.	ROBERT VECCHIONE	25,000	25,000
117.	IRA FBO MATTHEW A WALTON PERSHING LLC AS CUSTODIAN	55,000	55,000
118.	TIMOTHY M WEAVER	125,000	125,000
119.	GRAMERCY 87 LLC	25,000	25,000
120.	DIPAOLO WORTHINGTON FAMILY TRUST DTD 1/31/2008 UAD 01/31/08	50,000	50,000
121.	LAMBERT WU & LIYING CHU JT TEN	25,000	25,000
122.	WYMOND INVESTMENTS, LLC	250,000	250,000
123.	LAYNE YOSHIDA	25,000	25,000
124.	IRA FBO PAUL HARPER ZINK PERSHING LLC AS CUSTODIAN	25,000	25,000
125.	JAYHAWK PRIVATE EQUITY II, L.P.	250,000	250,000
126.	NORTH MILITARY LTD	100,000	100,000
127.	CHADDS FORD LTD	25,000	25,000
128.	CHARDAN SPAC ASSET MANAGEMENT	75,000	75,000

EX-10.3

Exhibit 10.3

SECURITIES ESCROW AND PLEDGE AGREEMENT

This SECURITIES ESCROW AND PLEDGE AGREEMENT (this “Agreement”), dated as of January 5, 2010, is entered into by and among Link Resources, Inc., a Nevada corporation (the “Company”), Euro Pacific Capital, Inc., as representative of the Investors (the “Investor Representative”), Glory Period Limited, a company organized in the British Virgin Islands (the “Principal Stockholder”), and Escrow, LLC (the “Escrow Agent”). Capitalized terms used but not defined herein shall have the meanings set forth in the Purchase Agreement (as defined below).

WHEREAS, concurrently with the execution hereof, the Company is consummating a private placement transaction with certain accredited investors (the “Investors”), whereby the Company will issue units, with each unit consisting of: (i) an eight (8%) percent senior convertible promissory note (the “Notes”) of the Company in the aggregate principal amount of $2.00, which Notes shall be convertible into shares of the Company’s common stock, par value $0.001 per share (together with any securities into which such shares may be reclassified, the “Common Stock”) and (ii) a common stock purchase warrant to purchase one (1) share of Common Stock  (the “Financing Transaction”);

WHEREAS, in connection with the Financing Transaction, the Company has entered into a Securities Purchase Agreement, dated as of the date hereof (the “Purchase Agreement”), by and among the Company and the Investors;

WHEREAS, in order to provide security to the Investors in the event of an occurrence of an Event of Default (as defined in the Notes) under the Notes , the Principal Stockholder has agreed to pledge and deposit stock certificate(s) representing 1,000,000 shares of Common Stock (the “Escrow Shares”) into escrow for the benefit of the Investors; and

WHEREAS, the Company and the Investor Representative (acting as the lawful agent and attorney-in-fact of the Investors) have requested that the Escrow Agent hold the Escrow Shares on the terms and conditions set forth in this Agreement and the Escrow Agent has agreed to act as escrow agent pursuant to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the covenants and mutual promises contained herein and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged and intending to be legally bound hereby, the parties agree as follows:

ARTICLE I.

TERMS OF THE ESCROW

Section 1.01         Appointment of Escrow Agent.  The parties hereby agree to appoint the Escrow Agent as escrow agent to act in accordance with the terms and conditions set forth in this Agreement, and Escrow Agent hereby accepts such appointment and agrees to act in accordance with such terms and conditions.

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Section 1.02          Establishment of Escrow Account.

(a)           Upon the execution of this Agreement, the Principal Stockholder shall, as a pledge of securities, deposit the Escrow Agent a certificate or certificates representing the Escrow Shares, together with duly executed stock powers or other appropriate transfer documents executed in blank by the Principal Stockholder (such certificates and such transfer documents, collectively, the “Escrow Materials”).  The Escrow Agent shall hold the Escrow Materials and distribute the same as contemplated by this Agreement.

(b)           The Principal Stockholder and the Investor Representative (as the lawful agent and attorney-in-fact of the Investors) hereby agree that the deposit by the Principal Stockholder of the Escrow Materials with the Escrow Agent on the terms and conditions set forth herein is intended to be a bona fide pledge of securities by an affiliate of the Company for the benefit of the Investors (as pledgees), in each case within the meaning of and as contemplated by Rule 144(d)(3)(iv) promulgated by the Securities and Exchange Commission.

Section 1.03          Release of Escrow Shares.

(a)           Release Upon an Event of Default.  Upon and anytime after the occurrence of an Event of Default (following the expiration of applicable cure periods, as the case may be, as provided for in the Notes), and provided that the Investors have incurred damages as a result of the occurrence of such Event of Default, the Investor Representative shall have the right to provide written notice of such Event of Default (the “Default Notice”) to the Escrow Agent, with copies to the Principal Stockholder and the Company.  The Default Notice shall contain a written description of: (i) the specific Event of Default(s) which occurred and (ii) a recitation of the damages incurred by the Investors as a result thereof.  As soon as is practicable after receipt of the Default Notice, the Escrow Agent shall deliver to the Investor Representative the Escrow Materials held by the Escrow Agent hereunder.  Upon receipt of the Escrow Materials, the Investor Representative shall have the right to distribute the Escrow Shares to the Investors then holding Notes based on their pro rata participation in the Financing Transaction, provided that any such distribution shall be undertaken in full compliance with all applicable federal, state or foreign laws, rules and regulations.  The Investor Representative shall indemnify and hold harmless the Company, the Principal Stockholder and their respective affiliates from and against (and shall pay for, on demand, the cost of) all claims, damages, costs, fees and expenses incurred by them as a result of the failure by the Investor Representative to distribute the Escrow Shares in compliance with applicable federal, state or foreign laws, rules and regulations.

(b)           Release and Termination Upon Payment or Conversion.  Upon the earlier to occur of: (i) the full payment of all amounts due to the Investors under the Notes by repayment in accordance with the terms of the Notes or (ii) the conversion of fifty percent (50%) of the principal face value of Notes into shares of Common Stock in accordance with the terms of the Notes (the date of earlier to occur of such two events being referred to as the “Release Date”), all parties hereto (including the Investor Representative on behalf of all Investors) shall notify the Escrow Agent to such effect in writing.  Upon receipt of such written notice, the Escrow Agent shall return all Escrow Materials to the Principal Stockholder, whereupon any and all rights of Investor Representative and the Investors in the Escrow Materials shall be terminated.  Notwithstanding anything to the contrary contained herein, upon the Release Date, this Agreement and the Investors’ rights in and to the Escrow Shares shall terminate.

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Section 1.04          Compensation.  For services rendered pursuant to this Agreement, the Company shall pay a documentation fee to the Escrow Agent of $1,000.00 out of the proceeds of the Financing Transaction.

ARTICLE II.

REPRESENTATIONS OF THE PRINCIPAL STOCKHOLDER

Section 2.01          Representations and Warranties. The Principal Stockholder hereby represents and warrants to the Investors and the Investor Representative as follows:

(a)           The Principal Stockholder is the record and beneficial owner of the Escrow Shares placed into escrow and owns the Escrow Shares, free and clear of all pledges, liens, claims and encumbrances, except encumbrances created by this Agreement. There are no restrictions on the ability of the Principal Stockholder to transfer the Escrow Shares, other than transfer restrictions under the Lock-Up Agreement and/or applicable federal and state securities laws.

(b)           The performance of this Agreement and compliance with the provisions hereof will not violate any provision of any law applicable to the Principal Stockholder and will not conflict with or result in any material breach of any of the terms, conditions or provisions of, or constitute a default under the terms of the certificate of incorporation or by-laws of the Principal Stockholder, or any indenture, mortgage, deed of trust or other agreement or instrument binding upon the Principal Stockholder or affecting the Escrow Shares or result in the creation or imposition of any lien, charge or encumbrance upon, any of the properties or assets of the Principal Stockholder, the creation of which would have a material adverse effect on the business and operations of the Principal Stockholder. No notice to, filing with, or authorization, registration, consent or approval of any governmental authority or other person is necessary for the execution, delivery or performance of this Agreement or the consummation of the transactions contemplated hereby by the Principal Stockholder, other than those already obtained. Upon the transfer of the Escrow Shares to the Investors pursuant to this Agreement, the Investors will be the record and beneficial owners of all of such shares and have good and valid title to all of such shares, free and clear of all encumbrances.

ARTICLE III.

ESCROW AGENT

Section 3.01          The Escrow Agent’s duties hereunder may be altered, amended, modified or revoked only by a writing signed by the Company, the Principal Stockholder, the Investor Representative and the Escrow Agent.

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Section 3.02          The Escrow Agent shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by the Escrow Agent to be genuine and to have been signed or presented by the proper party or parties. The Escrow Agent shall not be personally liable for any act the Escrow Agent may do or omit to do hereunder as the Escrow Agent while acting in good faith and in the absence of gross negligence, fraud or willful misconduct, and any act done or omitted by the Escrow Agent pursuant to the advice of the Escrow Agent’s attorneys-at-law shall be conclusive evidence of such good faith, in the absence of gross negligence, fraud or willful misconduct.

Section 3.03          The Escrow Agent is hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law and is hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case the Escrow Agent obeys or complies with any such order, judgment or decree, the Escrow Agent shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction.

Section 3.04          The Escrow Agent shall not be liable in any respect on account of the identity, authorization or rights of the parties executing or delivering or purporting to execute or deliver any documents or papers deposited or called for thereunder in the absence of gross negligence, fraud or willful misconduct.

Section 3.05          The Escrow Agent shall be entitled to employ such legal counsel and other experts as the Escrow Agent may deem necessary to properly advise the Escrow Agent in connection with the Escrow Agent’s duties hereunder, may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor which shall be paid by the Escrow Agent.

Section 3.06          The Escrow Agent’s responsibilities as escrow agent hereunder shall terminate if the Escrow Agent shall resign by giving written notice to the Company and the Investors. In the event of any such resignation, the Investors and the Company shall appoint a successor Escrow Agent and the Escrow Agent shall deliver to such successor Escrow Agent any escrow funds and other documents held by the Escrow Agent.

Section 3.07          If the Escrow Agent reasonably requires other or further instruments in connection with this Escrow Agreement or obligations in respect hereto, the necessary parties hereto shall use its best efforts to join in furnishing such instruments.

Section 3.08          It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the documents or the Escrow Shares or Escrow Materials held by the Escrow Agent hereunder, the Escrow Agent is authorized and directed in the Escrow Agent’s sole discretion (1) to retain in the Escrow Agent’s possession without liability to anyone all or any part of said documents or the Escrow Shares until such disputes shall have been settled either by mutual written agreement of the parties concerned by a final order, decree or judgment or a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but the Escrow Agent shall be under no duty whatsoever to institute or defend any such proceedings or (2) to deliver the Escrow Shares and any other property and documents held by the Escrow Agent hereunder to a state or Federal court having competent subject matter jurisdiction and located in the City of New York, Borough of Manhattan, in accordance with the applicable procedure therefor.

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Section 3.09          The Company agrees to indemnify and hold harmless the Escrow Agent and its partners, employees, agents and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to the duties or performance of the Escrow Agent hereunder or the transactions contemplated hereby other than any such claim, liability, cost or expense to the extent the same shall have been determined by final, unappealable judgment of a court of competent jurisdiction to have resulted from the gross negligence, fraud or willful misconduct of the Escrow Agent.

ARTICLE IV.

MISCELLANEOUS

Section 4.01          Investor Representative Status.  Investor Representative hereby represents and warrants to the Company, the Principal Stockholder and the Escrow Agent that, pursuant to the terms of the Purchase Agreement, it is the lawful agent and attorney-in-fact of each of the Investors and has the due power and authority to act on behalf of the Investors under this Agreement.

Section 4.02          Waiver.  No waiver of, or any breach of any covenant or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof, or of any other covenant or provision herein contained. No extension of time for performance of any obligation or act shall be deemed an extension of the time for performance of any other obligation or act.

Section 4.03          Notices. All notices, demands, consents, requests, instructions and other communications to be given or delivered or permitted under or by reason of the provisions of this Agreement or in connection with the transactions contemplated hereby shall be in writing and shall be deemed to be delivered and received by the intended recipient as follows: (i) if personally delivered, on the business day of such delivery (as evidenced by the receipt of the personal delivery service), (ii) if mailed certified or registered mail return receipt requested, two (2) business days after being mailed, (iii) if delivered by overnight courier (with all charges having been prepaid), on the business day of such delivery (as evidenced by the receipt of the overnight courier service of recognized standing), or (iv) if delivered by facsimile transmission, on the business day of such delivery if sent by 6:00 p.m. in the time zone of the recipient, or if sent after that time, on the next succeeding business day (as evidenced by the printed confirmation of delivery generated by the sending party’s fax machine).  If any notice, demand, consent, request, instruction or other communication cannot be delivered because of a changed address of which no notice was given (in accordance with this Section 4.02), or the refusal to accept same, the notice, demand, consent, request, instruction or other communication shall be deemed received on the second business day the notice is sent (as evidenced by a sworn affidavit of the sender).  All such notices, demands, consents, requests, instructions and other communications will be sent to the following addresses or facsimile numbers as applicable.

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If to Escrow Agent:

Escrow, LLC

215 Mockingbird Lane

Warrenton, VA  20186

Attention: Johnnie L. Zarecor

Telephone: (540) 347-2212

Fax: (540) 347-2291

If to the Company or the Principal Stockholder:

c/o Yantai Bohai Pharmaceuticals Group Co. Ltd.

No. 9 Daxin Road, Zhifu District

Yantai, Shandong Province, China

Attention: Hongwei Qu

Fax Number: +86-0535-6763559

With a copy to (which shall not constitute notice):

Ellenoff Grossman & Schole LLP

150 East 42nd Street, 11th Floor

New York, NY 10017

Attention: Barry I. Grossman, Esq.

Fax No.: (212) 370-7889

If to the Investor Representative:

Euro Pacific Capital, Inc.

88 Post Road West, 3rd Floor

Westport, CT 06880

Attention: Mr. Thomas Tan

Fax Number: (203) 662-9771

With a copy to (which shall not constitute notice):

Pillsbury Winthrop Shaw Pittman LLP

2300 N Street N.W.

Washington, DC  20037

Attention:  Louis A. Bevilacqua, Esq.

Fax No.:  (202) 663-8007

or to such other address and to the attention of such other person as any of the above may have furnished to the other parties in writing and delivered in accordance with the provisions set forth above.

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Section 4.04               Successors and Assigns.  This Escrow Agreement shall be binding upon and shall inure to the benefit of the permitted successors and permitted assigns of the parties hereto.

Section 4.05              Entire Agreement; Amendment.  This Agreement contains the entire understanding and agreement of the parties relating to the subject matter hereof and supersedes all prior and/or contemporaneous understandings and agreements of any kind and nature (whether written or oral) among the parties with respect to such subject matter.  This Escrow Agreement may not be modified, changed, supplemented, amended or terminated, nor may any obligations hereunder be waived, except by written instrument signed by the parties to be charged or by its agent duly authorized in writing or as otherwise expressly permitted herein.  Notwithstanding anything to the contrary in this Agreement, none of the provisions of Article I hereof or this Section 4.4 may be modified, changed, supplemented, amended or terminated, nor may any such provision be waived, without the prior written consent of the Investors holding a majority of the Preferred Shares as of the date of such modification, change, supplement, amendment, termination or waiver (based on the aggregate number of Preferred Shares held by all of the Investors as of the date of such modification, change, supplement, amendment, termination or waiver).

Section 4.06              Headings.  The section headings contained in this Agreement are inserted for reference purposes only and shall not affect in any way the meaning, construction or interpretation of this Agreement. Any reference to the masculine, feminine, or neuter gender shall be a reference to such other gender as is appropriate. References to the singular shall include the plural and vice versa.

Section 4.07              Governing Law.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to any of the conflicts of law principles which would result in the application of the substantive law of another jurisdiction. This Agreement shall not be interpreted or construed with any presumption against the party causing this Agreement to be drafted.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Securities Escrow and Pledge Agreement as of date first written above.

COMPANY:
LINK RESOURCES INC.
By:	/s/ Anthony Zaradic
	Name: Anthony Zaradic
	Title:   President
INVESTOR REPRESENTATIVE:
EURO PACIFIC CAPITAL, INC.
By:	/s/Gordon McBean
	Name: Gordon McBean
	Title:   Head of Capital Markets
PRINCIPAL STOCKHOLDER:
GLORY PERIOD LIMITED
By:	/s/ Hongwei Qu
	Name: Hongwei QU
	Title:   President
ESCROW AGENT:
ESCROW, LLC
By:	/s/ Johnnie Zarecor
	Name: Johnnie Zarecor
	Title:   Vice President

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EX-10.4

Exhibit 10.4

CLOSING ESCROW AGREEMENT

This CLOSING ESCROW AGREEMENT, dated as of December 10, 2009 (this “Agreement”), is entered into by and among Link Resources, Inc., a Nevada corporation (the “Company”), Euro Pacific Capital, Inc. (the “Placement Agent”) and Escrow, LLC, with its principal offices located at 215 Mockingbird Lane, Warrenton, Virginia 20186 (the “Escrow Agent”). The Placement Agent and the Company are sometimes each referred to herein as an “Escrowing Party” and collectively, the “Escrowing Parties.”

WITNESSETH:

WHEREAS, the Company proposes to make a private offering pursuant to the Securities Act of 1933, as amended (the “Offering”) consisting of a minimum of 4,650,000 units and a maximum of 6,000,000 units at a purchase price of $2.00 per unit (each, a “Unit”). Each Unit shall consist of (i) an eight (8%) percent senior convertible promissory note (the “Notes”) of the Company in the aggregate principal amount of $2.00, which Notes shall be convertible into shares (the “Conversion Shares”) of the Company’s common stock, par value $0.001 per share (together with any securities into which such shares may be reclassified, the “Common Stock”) and (ii) a common stock purchase warrant to purchase one (1) share of Common Stock, pursuant to a Securities Purchase Agreement to be entered into by and among the Company and the investors party thereto (the “Investors,” and such agreement, the “Securities Purchase Agreement”), and

WHEREAS, the Placement Agent is acting as the Company’s lead placement agent in connection with the Offering;

WHEREAS, the Company and the Placement Agent desire to deposit all gross proceeds received from subscriptions for the shares of Units being sold (the “Securities”) in the Offering (the “Escrowed Funds”) with the Escrow Agent, to be held in escrow until joint written instructions are received by the Escrow Agent from the Company and the Placement Agent, from time to time, at which time the Escrow Agent will disburse the Escrowed Funds in accordance with such joint written instructions (a “Closing”); and

WHEREAS, Escrow Agent is willing to hold the Escrowed Funds in escrow in subject to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties hereto hereby agree as follows:

1.           Appointment of Escrow Agent.  The Company and the Placement Agent hereby appoint Escrow Agent as escrow agent in accordance with the terms and conditions set forth herein and the Escrow Agent hereby accepts such appointment.  The Escrow Agent acknowledges that that corporate name of the Company will change following the Closing to “Bohai Pharmaceuticals Group Inc.” or another corporate name indentified in writing by the Company to the Escrow Agent.

2.           Delivery of the Escrowed Funds.

2.1           The Placement Agent and/or the Company will direct the Investors in the Offering to deliver the Escrowed Funds to the Escrow Agent on or prior to the closing of the Offering, addressed to the following account of the Escrow Agent:

Domestic Wires

Virginia Commerce Bank

Leesburg, VA

ABA# 056005253

Account Name: Escrow, LLC

Account #: 01194186

Reference: Link Resources, Inc.

International Wires

Correspondent Bank: Wells Fargo Bank

San Francisco, CA

SWIFT# WFBIUS6S

Credit Acct: 412-11-08146

Virginia Commerce Bank

FBO Account Name: Escrow, LLC

Account #: 01194186

Reference: Link Resources, Inc.

2.2           (a) All Investors’ checks shall be made payable to “Escrow, LLC, as agent for Link Resources, Inc.” and shall be delivered to the Escrow Agent at the address set forth on Exhibit A hereto and shall be accompanied by a written account of subscription in the form attached hereto as Exhibit B and executed by each Investor (the “Subscription Information”).  The Escrow Agent shall, upon receipt of Subscription Information, together with the related purchase price being paid by such Investor therefore (the “Investment Amount”), deposit the related Investment Amount of such Subscription Information in the Escrow Account for collection; or (b) all funds to be wired shall be wired to the account set forth in Section 2.1 above and written Subscription Information shall be faxed or emailed to the Escrow Agent in accordance with the information provided on Exhibit A.

2.3           Any checks which are received by Escrow Agent that are made payable to a party other than the Escrow Agent shall be returned directly to the Placement Agent together with any documents delivered therewith.  Simultaneously with each deposit of a check with the Escrow Agent, the Placement Agent shall provide the Escrow Agent with the Subscription Information to include the name, address and taxpayer identification number of each Investor and of the aggregate principal amount of Securities subscribed for by such Investor. The Escrow Agent is not obligated, and may refuse, to accept checks that are not accompanied by a Subscription Information containing the requisite information.

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2.4           In the event a wire transfer is received by the Escrow Agent and the Escrow Agent has not received Subscription Information, the Escrow Agent shall notify the Placement Agent.  If the Escrow Agent does not receive the Subscription Information by such Investor prior to close of business on the third business day (days other than a Saturday or Sunday or other day on which the Escrow Agent is not open for business in the State of Texas) after notifying Placement Agent of receipt of said wire, the Escrow Agent shall return the funds to such Investor.

3.           Escrow Agent to Hold and Disburse Escrowed Funds.  The Escrow Agent will hold and disburse the Escrowed Funds received by it pursuant to the terms of this Agreement, as follows:

3.1           Upon receipt of joint written instructions from the Company and the Placement Agent, in substantially the form of Exhibit C hereto, the Escrow Agent shall release the Escrowed Funds as directed in such instructions.

3.2           In the event this Agreement, the Escrowed Funds or the Escrow Agent becomes the subject of litigation, the Company authorizes the Escrow Agent, at its option, to deposit the Escrowed Funds with the clerk of the court in which the litigation is pending, or a court of competent jurisdiction if no litigation is pending, and thereupon the Escrow Agent shall be fully relieved and discharged of any further responsibility with regard thereto. The Company also authorizes the Escrow Agent, if it receives conflicting claims to the Escrow Funds, is threatened with litigation or if the Escrow Agent shall desire to do so for any other reason, to interplead all interested parties in any court of competent jurisdiction and to deposit the Escrowed Funds with the clerk of that court and thereupon the Escrow Agent shall be fully relieved and discharged of any further responsibility hereunder to the parties from which they were received.

3.3           In the event that the Escrow Agent does not receive joint instructions by a date that is January 31, 2010 (the “Escrow Termination Date”), all Escrowed Funds shall be returned to the parties from which they were received, without interest thereon or deduction therefrom.

4.           Escrow Holdback.

4.1           Pursuant to the Securities Purchase Agreement, a minimum of $186,000 (if the Minimum Amount is raised) and a maximum of $240,000 (if the Maximum Amount is raised), or a pro rata portion in between such minimum and maximum amounts depending on the gross proceeds of the Offering (the “Holdback Amount”) of the Escrowed Funds, constituting an amount sufficient to satisfy the payment to the Investors of one quarterly interest payment due on the aggregate principal amount of all Notes issued in the Offering, shall be retained by the Escrow Agent.  Notwithstanding anything to the contrary contained herein, upon written notification by the Placement Agent to the Escrow Agent that an Event of Default (as defined in the Note) under Section 6(a) of the Notes has been declared by the Placement Agent with respect to a failure by the Company to make a quarterly interest payment in accordance with the Notes (the “Interest Payment Notice”), the Escrow Agent shall disburse such portion of the Holdback Amount to the Investors and in the amounts as set forth in the Interest Payment Notice.

3

4.2           Until such time as 75% of the aggregate Conversion Shares have been issued upon conversion of the Notes, within thirty (30) days following the disbursement of the Holdback Amount in accordance with Section 4.1 hereof, the Company shall deposit an additional amount equal to the Holdback Amount with the Escrow Agent to be retained and disbursed in accordance with Section 4.1 hereof.

4.3           It is acknowledged and agreed that the Placement Agent may only deliver an Interest Payment Notice following complete fulfillment by the Placement Agent of all procedures, and the lapse of applicable cure periods, set forth in the Note relating to the declaration of an Event of Default under Section 6(a) of the Notes with respect to a failure by the Company to make a quarterly interest payment in accordance with the Notes.

4.4           At such time as 75% of the Conversion Shares have been issued upon conversion of the Notes (provided that the Company is not then in material breach of any of the Transaction Documents (as defined in the Securities Purchase Agreement)), the Placement Agent shall provide a joint written instruction to the Escrow Agent directing that all remaining funds of the Holdback Amount shall promptly be disbursed to the Company.

5.           Exculpation and Indemnification of Escrow Agent.

5.1           The Escrow Agent shall have no duties or responsibilities other than those expressly set forth herein.  The Escrow Agent shall have no duty to enforce any obligation of any person other than itself to make any payment or delivery, or to direct or cause any payment or delivery to be made, or to enforce any obligation of any person to perform any other act.  The Escrow Agent shall be under no liability to the other parties hereto or anyone else, by reason of any failure, on the part of any other party hereto or any maker, guarantor, endorser or other signatory of a document or any other person, to perform such person’s obligations under any such document.  Except for amendments to this Agreement referenced below, and except for written instructions given to the Escrow Agent relating to the Escrowed Funds, the Escrow Agent shall not be obligated to recognize any agreement between or among any of the parties hereto, notwithstanding that references hereto may be made herein and whether or not it has knowledge thereof.

5.2           The  Escrow Agent shall not be liable to the Company or the Placement Agent or to anyone else for any action taken or omitted by it, or any action suffered by it to be taken or omitted, in good faith and acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Escrow Agent), statement, instrument, report, or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained), which is believed by the Escrow Agent to be genuine and to be signed or presented by the proper person or persons.  The  Escrow Agent shall not be bound by any of the terms thereof, unless evidenced by written notice delivered to the Escrow Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are affected, unless it shall give its prior written consent thereto.

4

5.3           The Escrow Agent shall not be responsible for the sufficiency or accuracy of the form, or of the execution, validity, value or genuineness of, any document or property received, held or delivered to it hereunder, or of any signature or endorsement thereon, or for any lack of endorsement thereon, or for any description therein; nor shall the Escrow Agent be responsible or liable to the Company, the Placement Agent, or to anyone else in any respect on account of the identity, authority or rights, of the person executing or delivering or purporting to execute or deliver any document or property or this Agreement. The Escrow Agent shall have no responsibility with respect to the use or application of the Escrowed Funds pursuant to the provisions hereof.

5.4           The Escrow Agent shall have the right to assume, in the absence of written notice to the contrary from the proper person or persons, that a fact or an event, by reason of which an action would or might be taken by the Escrow Agent, does not exist or has not occurred, without incurring liability to the Company, the Placement Agent, or to anyone else for any action taken or omitted to be taken or omitted, in good faith and in the exercise of its own best judgment, in reliance upon such assumption.

5.5           To the extent that the Escrow Agent becomes liable for the payment of taxes, including withholding taxes, in respect of income derived from the investment of the Escrowed Funds, or any payment made hereunder, the Escrow Agent may pay such taxes; and the Escrow Agent may withhold from any payment of the Escrowed Funds to the Company to the extent due to the Company in accordance with the instructions delivered as set forth in Exhibit C such amount as the Escrow Agent estimates to be sufficient to provide for the payment of such taxes not yet paid, and may use the sum withheld for that purpose.  The Escrow Agent shall be indemnified and held harmless by the Company against any liability for taxes and for any penalties in respect of taxes, on such investment income or payments in the manner provided in Section 4.6.

5.6           The Escrow Agent will be indemnified and held harmless by the Company from and against all expenses, including all reasonable counsel fees and disbursements, or loss suffered by the Escrow Agent in connection with any action, suit or proceedings involving any claim, or in connection with any claim or demand, which in any way, directly or indirectly, arises out of or relates to this Agreement, the services of the Escrow Agent hereunder, except for claims relating to gross negligence or willful misconduct by Escrow Agent or breach of this Agreement by the Escrow Agent, or the monies or other property held by it hereunder.  Promptly after the receipt of the Escrow Agent of notice of any demand or claim or the commencement of any action, suit or proceeding, the Escrow Agent shall, if a claim in respect thereof is to be made against an Escrowing Party, notify each of them thereof in writing, but the failure by the Escrow Agent to give such notice shall not relieve any such party from any liability which an Escrowing Party may have to the Escrow Agent hereunder, unless the Escrowing Party shall be materially prejudiced by such delay.

5

5.7           For purposes hereof, the term “expense or loss” shall include all amounts paid or payable to satisfy any claim, demand or liability, or in settlement of any claim, demand, action, suit or proceeding settled with the express written consent of the Escrow Agent, and all costs and expenses, including, but not limited to, reasonable counsel fees and disbursements, paid or incurred in investigating or defending against any such claim, demand, action, suit or proceeding.

6.           Termination of Agreement and Resignation of Escrow Agent.

6.1          Termination.  This Agreement shall terminate with respect to the rights and obligations of the Escrow Agent and the Escrowing Parties regarding the Escrowed Funds upon disbursement of all of the Escrowed Funds in accordance with the terms hereof.  This Agreement shall terminate with respect to the rights and obligations of the Escrow Agent and the Escrowing Parties regarding the Holdback Amount upon return of the Holdback Amount to the Company in accordance with Section 4.4 hereof.

6.2          Resignation.

(a)           General.  The Escrow Agent may resign at any time and be discharged from its duties as Escrow Agent hereunder by giving the Company and the Placement Agent at least twenty (20) business days written notice thereof (the “Notice Period”).

(b)           Regarding the Escrowed Funds.  Prior to the Closing and with respect to the Escrowed Funds, upon providing the written notice called for in Section 6.2(a) above, the Escrow Agent shall have no further obligation hereunder except to hold as depositary the Escrow Funds that it receives until the end of the Notice Period.  In such event, the Escrow Agent shall not take any action, other than receiving and depositing the Investors’ checks and wire transfers in accordance with this Agreement, until the Company and the Placement Agent have jointly designated a banking corporation, trust company, attorney or other person as successor escrow agent.  As soon as practicable after its resignation, the Escrow Agent shall, if it receives written notice from the Company and the Placement Agent within the Notice Period, turn over to a successor escrow agent appointed jointly by the Company and the Placement Agent all Escrowed Funds (less such amount as the Escrow Agent is entitled to retain pursuant to Section 7) upon presentation of the document appointing the new escrow agent and its acceptance thereof.  If no new agent is so appointed within the Notice Period, the Escrow Agent shall return the Escrowed Funds to the parties from which they were received without interest or deduction.

(c)           Regarding the Holdback Amount.  Following the Closing and with respect to the Holdback Amount, upon providing the written notice called for in Section 6.2(a) above, the Escrow Agent shall have no further obligation hereunder except to hold as depositary the Holdback Amount.  In such event, the Escrow Agent shall not take any action with respect to the Holdback Amount until the Company and the Placement Agent have jointly designated a banking corporation, trust company, attorney or other person as successor escrow agent.  As soon as practicable after its resignation, the Escrow Agent shall, if it receives written notice from the Company and the Placement Agent within the Notice Period, turn over to a successor escrow agent appointed jointly by the Company and the Placement Agent the entirety of the Holdback Amount only upon presentation of the document appointing the new escrow agent and its acceptance thereof.  With respect to the Holdback Amount only, the Escrow Agent shall not be permitted to fully resign until a successor escrow agent is designated and the Holdback Amount turned over to such successor escrow agent.

6

7.           Form of Payments by Escrow Agent.

7.1           Any payments of the Escrowed Funds by the Escrow Agent pursuant to the terms of this Agreement shall be made by wire transfer unless directed to be made by check by the Escrowing Parties.

7.2           All amounts referred to herein are expressed in United States Dollars and all payments by the Escrow Agent shall be made in such dollars.

8.           Compensation.  The Company shall pay a documentation fee to the Escrow Agent of $2,000.00 and a Closing fee of $500.00 out of the Closing.  If the Escrow Agent is required to return the funds to the Investors prior to the Closing, there will be $25 fee for each wire returning the funds (it being agreed that that aggregate return wire fees shall not exceed $5,000).  A $250 fee will be charged to the Company in the event that all or any portion of the Holdback Amount is required to be disbursed pursuant to the terms of this Agreement.

9.           Notices.  All notices, requests, demands, and other communications provided herein shall be in writing, shall be delivered by hand or by first-class mail, shall be deemed given when received and shall be addressed to parties hereto at their respective addresses first set forth on Exhibit A hereto.

10.         Further Assurances.  From time to time on and after the date hereof, the Company and the Placement Agent shall deliver or cause to be delivered to the Escrow Agent such further documents and instruments and shall do and cause to be done such further acts as the Escrow Agent shall reasonably request (it being understood that the Escrow Agent shall have no obligation to make any such request) to carry out more effectively the provisions and purposes of this Agreement, to evidence compliance herewith or to assure itself that it is protected in acting hereunder.

11.         Consent to Service of Process.  The Company and the Placement Agent hereby irrevocably consent to the jurisdiction of the courts of the State of New York and of any Federal court located in New York County, New York in connection with any action, suit or proceedings arising out of or relating to this Agreement or any action taken or omitted hereunder, and waives personal service of any summons, complaint or other process and agrees that the service thereof may be made by certified or registered mail directed to it at the address listed on Exhibit A hereto.

7

12.         Miscellaneous.

12.1           This Agreement shall be construed without regard to any presumption or other rule requiring construction against the party causing such instrument to be drafted.  The terms “hereby,” “hereof,” “hereunder,” and any similar terms, as used in this Agreement, refer to the Agreement in its entirety and not only to the particular portion of this Agreement where the term is used.  The word “person” shall mean any natural person, partnership, corporation, government and any other form of business of legal entity.  All words or terms used in this Agreement, regardless of the number or gender in which they were used, shall be deemed to include any other number and any other gender as the context may require.  This Agreement shall not be admissible in evidence to construe the provisions of any prior agreement.

12.2           This Agreement and the rights and obligations hereunder of the parties to this Agreement may not be assigned.  This Agreement shall be binding upon and inure to the benefit of each party’s respective successors, heirs and permitted assigns.  No other person shall acquire or have any rights under or by virtue of this Agreement. This Agreement may not be changed orally or modified, amended or supplemented without an express written agreement executed by the Escrow Agent and the Escrowing Parties.  This Agreement is intended to be for the sole benefit of the parties hereto and their respective successors, heirs and permitted assigns, and none of the provisions of this Agreement are intended to be, nor shall they be construed to be, for the benefit of any third person.

12.3           This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York. The representations and warranties contained in this Agreement shall survive the execution and delivery hereof and any investigations made by any party.  The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect any of the terms thereof.

13.         Execution of Counterparts.  This Agreement may be executed in a number of counterparts, each of which shall be deemed to be an original as of those whose signature appears thereon, and all of which shall together constitute one and the same instrument.  This Agreement shall become binding when one or more of the counterparts hereof, individually or taken together, are signed by all the parties.  In the event that any signature is delivered by facsimile transmission or other electronic transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or other electronic signature page were an original thereof.

[Signature Page Follows]

8

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement on the day and year first above written.

ESCROW AGENT:
ESCROW, LLC
By:	/s/ Johnnie Zarecor
	Name: Johnnie Zarecor
	Title:  Vice President
COMPANY:
LINK RESOURCES, INC.
By:	/s/ Anthony Zaradic
	Name: Anthony Zaradic
	Title:   President
PLACEMENT AGENT:
EURO PACIFIC CAPITAL, INC.
By :	/s/ Gordon McBean
	Name:  Gordon McBean
	Title:    Head of Capital Markets

9

EXHIBIT A

PARTIES TO AGREEMENT

Link Resources, Inc.

c/o Yantai Bohai Pharmaceuticals Group Co. Ltd.

No. 9 Daxin Road, Zhifu District

Yantai, Shandong Province, China

Attention: Hongwei Qu

Fax Number: +86-0535-6763559

Email: office@sdtzyy.com

With a copy to:

Ellenoff Grossman & Schole LLP

150 East 42nd Street, 11th Floor

New York, NY 10017

Attention: Barry I. Grossman, Esq.

Telephone: (212) 370-1300

Fax: (212) 370-7889

Email: bigrossman@egsllp.com

Escrow, LLC

215 Mockingbird Lane

Warrenton, VA 20186

Attention: Johnnie L. Zarecor

Telephone: 540.347.2212

Fax: 540.347.2291

Email: jzarecor@escrowllc.net

Euro Pacific Capital, Inc.

88 Post Road West, 3rd Floor

Westport, CT 06880

Attention: Mr. Thomas Tan

Telephone: 203-662-9700

Fax: (203) 662-9771

Email: ttan@europac.net

With a copy to:

Pillsbury Winthrop Shaw Pittman LLP

2300 N Street, N.W.

Washington, DC 20037-1122

Attention: Louis A. Bevilacqua, Esq.

Telephone: (202) 663-8158

Fax: (202) 663-8007

Email: louis.bevilacqua@pillsburylaw.com

EXHIBIT B

SUBSCRIPTION INFORMATION

Name of Investor

Address of Investor

$ Amount of Securities

Subscribed

Subscription Amount

Submitted Herewith

Taxpayer ID Number/

Social Security Number

Signature of Investor

EXHIBIT C

DISBURSEMENT REQUEST

Pursuant to that certain Agreement by and among Link Resources, Inc., Euro Pacific Capital, Inc., and Escrow, LLC, the Company and Placement Agent hereby request disbursement of funds in the amount and manner described below from Virginia Commerce Bank account number 01194186, styled Escrow, LLC Escrow Account.

Please disburse to:
Amount to disburse:
Form of distribution:
Payee:
	Name:
	Address:
	City/State:
	Zip:
Please disburse to:
Amount to disburse:
Form of distribution:
Payee:
	Name:
	Address:
	City/State:
	Zip:

Subscriptions Accepted From

Investor	Amount
Total:

Statement of event or condition which calls for this request for disbursement:

COMPANY:
LINK RESOURCES, INC.
By:
	Name:
	Title:
PLACEMENT AGENT:
EURO PACIFIC CAPITAL, INC.
By:
	Name:
	Title:

EX-10.5

EX-10.10

EX-17.1

EX-99.1

Exhibit 99.1

Link Resources, Inc. Completes Share Exchange Transaction and

$12 Million Private Placement

Yantai Bohai Pharmaceuticals Group Co., Ltd.,

 a Revenue and Profit Generating Traditional Chinese Medicine Company in China, Becomes Link’s Principal Operating Subsidiary

CALGARY, Canada & YANTAI, China--January 5, 2010--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”).

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.

About Link Resources, Inc.

Link was incorporated under the laws of the State of Nevada on January 9, 2008. Since the first quarter of 2009, Link has engaged in an ongoing search for suitable business opportunities, including a potential merger. Pursuant to the Share Exchange Agreement, Bohai became Link’s principal operating company.

About Yantai Bohai Pharmaceuticals Group Co., Ltd.

Based in the city of Yantai, Shandong Province, China, Bohai is a profitable company principally engaged in the production, manufacturing and distribution of herbal pharmaceuticals based on traditional Chinese medicine in China. Bohai’s medicines address common health problems such as rheumatism, rheumatoid arthritis, respiratory diseases, viral infections, gynecological diseases and cardio vascular issues. Bohai’s products are sold either by prescription through hospitals or Over the Counter through local pharmacies and retail drug store chains. Sales and distribution are managed and executed by about 260 sales representatives located in 20 offices throughout China as of November 2009. In a significant development, on December 1, 2009, two of Bohai’s lead products, Tongbi Capsules and Tablets and Lung Nourishing Cream, became eligible for reimbursement under China’s National Medical Insurance Program. In fiscal year ended June 30, 2009, these two products accounted for more than 50% of Bohai’s revenues.

Cautionary Note Regarding Forward Looking Statements

This press release and the statements of representatives and partners of Link Resources, Inc., Yantai Bohai Pharmaceuticals Group Co., Ltd. and related entities (collectively, the “Company”) related thereto contain, or may contain, among other things, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact included herein are “forward-looking statements,” including statements regarding: the impact of the proceeds from the private placement on the business and operations of the Company; the ability of the Company to achieve its commercial objectives; the business strategy, plans and objectives of the Company; and any other statements of non-historical information. These forward-looking statements are subject to significant involve known and unknown risks and uncertainties ad are often identified by the use of forward-looking terminology such as “projects,” “may,” “could,” “would,” “should,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” or similar expressions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the periodic reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. The Company undertakes no duty to update these forward-looking statements except as required by law.

Contact:

Trilogy Capital Partners - Asia

Darren Minton, Executive Vice President

Toll-free:               800-592-6067         800-592-6067

info@trilogy-capital.com

EX-99.2

Exhibit 99.2

Yantai Bohai Pharmaceuticals Group Co., Ltd.

Audited Financial Statements

Fiscal Years Ended June 30, 2009 and 2008

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To: The Board of Directors and Stockholders of Yantai Bohai Pharmaceuticals Group Co., Ltd.

We have audited the accompanying balance sheets of Yantai Bohai Pharmaceuticals Group Co., Ltd. (the “Company”) as of June 30, 2009 and 2008, and the related statements of income, stockholders’ equity and cash flows for each of the two years in the years ended June 30, 2009 and 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2009 and 2008, and the results of its operations and its cash flows for each of the two years in the years ended June 30, 2009 and 2008, in conformity with accounting principles generally accepted in the United States of America.

/s/ Parker Randall CF (H.K.) CPA Limited

Parker Randall CF (H.K.) CPA Limited

Certified Public Accountants

Hong Kong

December 1, 2009

F-1

YANTAI BOHAI PHARMACEUTICALS GROUP CO., LTD.

BALANCE SHEETS AS OF JUNE 30, 2009 AND 2008

(Stated in US Dollars)

	Notes	2009		2008
ASSETS
Current assets
Cash and cash equivalents		$	2,491,726	$	781,282
Accounts receivable			11,070,129		8,918,209
Other receivables and prepayments	3		4,908,800		1,007,082
Inventories	4		307,834		1,049,191
Total current assets			18,778,489		11,755,764
Non-current assets
Property, plant and equipment, net	6		8,149,279		7,663,164
Intangible assets	5		17,298,720		17,227,872
Total non-current assets			25,447,999		24,891,036
TOTAL ASSETS			44,226,488		36,646,800
LIABILITES AND STOCKHOLDERS’ EQUITY
Current liabilities
Short-term borrowings	7		5,860,000		1,896,700
Accounts payable			971,208		3,065,389
Other accrued liabilities	8		2,785,672		5,254,040
Income taxes payable			677,666		598,190
Total current liabilities			10,294,546		10,814,319
STOCKHOLDERS’ EQUITY
Registered and Paid-in Capital	13		2,918,000		2,918,000
Capital reserve			5,836,000		5,836,000
Accumulated other comprehensive income			490,931		384,698
Statutory reserves	14		2,201,811		1,464,861
Retained earnings			22,485,200		15,228,922
Total stockholders’ equity			33,931,942		25,832,481
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY			44,226,488		36,646,800

See accompanying notes to the financial statements

F-2

YANTAI BOHAI PHARMACEUTICALS GROUP CO., LTD.

STATEMENT OF INCOME FOR THE YEARS ENDED JUNE 30, 2009 AND 2008

(Stated in US Dollars)

	Notes	2009			2008
		$			$
Sales			50,170,014			38,172,513
Less: Sales Tax			(821,400	)		(629,489	)
Net sales			49,348,614			37,543,024
Cost of sales			(7,975,267	)		(5,950,680	)
Gross profit			41,373,347			31,592,344
Selling, general and administrative expenses	9		(31,301,811	)		(22,601,932	)
Interest expenses	10		(184,404	)		(234,101	)
Operating income			9,887,132			8,756,311
Non-operating income			49,447			8
Non-operating costs			(36,366	)		(835	)
Income before taxes			9,900,213			8,755,484
Income taxes	11		(1,906,985	)		(2,303,712	)
Net income			7,993,228			6,451,772

See accompanying notes to the financial statements

F-3

YANTAI BOHAI PHARMACEUTICALS GROUP CO., LTD.

STATEMENT OF STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED JUNE 30, 2009 AND 2008

(Stated in US Dollars)

	Paid-in Capital		Capital reserve		Accumulated other comprehensive income		Statutory reserves		Retained earnings		Total
Balance, July 1, 2007	$	2,918,000	$	5,836,000	$	-	$	885,025	$	9,356,986	$	18,996,011
Net income for the year		-		-		-		579,836		5,871,936		6,451,772
Foreign currency translation adjustment		-		-		384,698		-		-		384,698
Balance, June 30, 2008		2,918,000		5,836,000		384,698		1,464,861		15,228,922		25,832,481
Net income for the year		-		-		-		736,950		7,256,278		7,993,228
Foreign currency
translation adjustment		-		-		106,233		-		-		106,233
Balance, June 30, 2009	$	2,918,000	$	5,836,000	$	490,931	$	2,201,811	$	22,485,200	$	33,931,942

See accompanying notes to the financial statements

F-4

YANTAI BOHAI PHARMACEUTICALS GROUP CO., LTD.

STATEMENT OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2009 AND 2008

(Stated in US Dollars)

	2009			2008
Cash flows from operating activities
Net income	$	7,993,228		$	6,451,772
Adjustments to reconcile net income to net cash provided
by operating activities
Depreciation		302,762			283,417
Loss on disposals of property, plant and equipment		31,630			-
Changes in assets and liabilities
Increase in accounts receivable		(2,151,920	)		(1,885,681	)
(Increase)/decrease in other receivables and prepayments		(3,901,718	)		1,244,060
Decrease in inventories		741,357			655,446
(Decrease)/increase in accounts payable		(2,094,181	)		242,734
Decrease in accrued liabilities		(2,468,368	)		(4,786,934	)
Increase in income taxes payable		79,476			160,490
Net cash (used in)/provided by operating activities		(1,467,734	)		2,365,304
Cash flows from investing activities
Purchases of property, plant and equipment		(803,643	)		(80,647	)
Proceeds from disposals of property, plant and equipment		14,650			-
Net cash used in investing activities		(788,993	)		(80,647	)
Cash flows from financing activities
Proceeds of borrowings		5,860,000			1,896,700
Repayment of borrowings		(1,896,700	)		(4,085,200	)
Net cash provided by/(used in) financing activities		3,963,300			(2,188,500	)
Net increase in cash and cash equivalents		1,706,573			96,157
Effect of foreign currency translation on cash and cash equivalents		3,871			384,698
Cash and cash equivalents at beginning of year		781,282			300,427
Cash and cash equivalents at end of year		2,491,726			781,282

See accompanying notes to the financial statements

F-5

YANTAI BOHAI PHARMACEUTICALS GROUP CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FISCAL YEARS ENDED JUNE 30, 2009 AND 2008

1. ORGANIZATION AND PRINCIPAL ACTIVITIES

Bohai Pharmaceuticals Group Co., Ltd. (the “Company” or “Bohai”) was incorporated in the People’s Republic of China (“PRC”) on July 8, 2004, with the principal business objective of development, production and distribution of medicine within PRC.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)           Method of Accounting

The Company maintains its general ledger and journals with the accrual method accounting for financial reporting purposes. The financial statements and notes are representations of management. Accounting policies adopted by the Company conform to generally accepted accounting principles in the United States of America and have been consistently applied in the presentation of financial statements, which are compiled on the accrual basis of accounting.

(b)           Basis of Presentation

The Company’s financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

This basis of accounting differs in certain material respects from that used for the preparation of the books of account of the Company, which are prepared in accordance with the accounting principles and the relevant financial regulations applicable to enterprises with limited liabilities established in the PRC (“PRC GAAP”), the accounting standards used in the places of their domicile. The accompanying financial statements reflect necessary adjustments not recorded in the books of account of the Company to present them in conformity with US GAAP.

(c)           Economic and Political risks

The Company’s operations are conducted in the PRC. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.

(h)           Fair value of Financial Instruments

The carrying values of the Company’s financial instruments, including cash and cash equivalents, accounts receivables, other receivables and prepayments, short-term borrowings, accounts payables, and other accrued liabilities their fair values due to the short-term maturity of such instruments.

(i)           Intangible Assets

Intangible assets as “Pharmaceutical Formulas”, which acquired and with indefinite useful live are measured initially at cost and not subject to amortization shall be tested for impairment annually or more frequently if there is indication of impairment. If the carrying amount exceeds fair value, an impairment loss should be recognised. Subsequently reversal of a recognised impairment loss is prohibited.

F-6

(j)           Property, plant and equipment

Property, plant and equipment, other than construction in progress, are stated at cost less depreciation and amortization and accumulated impairment loss.  Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use.  Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized.

Depreciation of property, plant and equipment is calculated to written off the cost , less their estimated residual value, if any, using the straight-line method over their estimated useful lives.  The principal annual rates are as follows:-

Leasehold land and buildings	30 to 40 years
Motor vehicles	10 years
Plant and machinery	10 years
Office equipment	5 years

Upon sale or disposition, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income.

Construction in progress mainly represents expenditures in respect of the Company’s new corporate campus and machinery under construction. All direct costs relating to the acquisition or construction of the Company’s new corporate campus and machinery. Assets under construction are not depreciated until the construction is completed and the assets are ready for their intended use.

(k)           Accounting for the Impairment of Long-Lived Assets

The Company adopted Statement of Financial  Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Live Assets” (“SFAS 144”), which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with SFAS 144. SFAS 144 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal. Based on its review, the Company believes that, as of June 30, 2009 and 2008, there were no significant impairments of its long-lived assets.

(l)           Foreign Currency Translation

The Company maintains its financial statements in the functional currency.  The functional currency of the Company is the Renminbi (RMB).  Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates.  Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchanges rates prevailing at the dates of the transaction.  Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods.

F-7

For financial reporting purposes, the financial statements of the Company which are prepared using the functional currency have been translated into United States dollars. Assets and liabilities are translated at the exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and stockholders’ equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of stockholders’ equity.

	2009		2008
Year end US$: RMB exchange rate		6.82594		6.85401
Average periodic US$: RMB exchange rate		6.82594		7.26269

RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions.  No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation.

(m)           Revenue Recognition

Revenue represents the invoiced value of goods sold recognized upon the delivery of goods to customers. Revenue is recognized when all of the following criteria are met:

· Persuasive evidence of an arrangement exists;

· Delivery has occurred or services have been rendered;

· The seller’s price to the buyer is fixed or determinable; and

· Collectability is reasonably assured. Payments have been established.

(n)           Cost of Revenue

Regarding the trading of medicine, the respective cost of revenue consists primarily of material cost, labor cost, overhead associated with the manufacturing process and related expenses which are directly attributable to the trading.

(o)           Research and Development Costs

Research and development costs are charged as expense when incurred and included in operating expenses.

(p)           Income Taxes

Income taxes are accounted for under the asset and liability method.  Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The  effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of income and comprehensive income in the periods that includes the enactment date.

F-8

(q)           Comprehensive Income

Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners.  Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements. The Company’s current components of other comprehensive income are the foreign currency translation adjustment.

(r)           Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

(s)           Recent Accounting Pronouncements

In March 2008, the FASB issued SFAS No. 161, DISCLOSURES ABOUT DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (an amendment to SFAS No. 133). This statement is effective for financial statements issued for fiscal year and interim periods beginning after November 15, 2008 and requires enhanced disclosures with respect to derivative and hedging activities. The Company will comply with the disclosure requirements of this statement if it utilizes derivative instruments or engages in hedging activities upon its effectiveness.

In April 2008, the FASB issued FASB Staff Position No. 142-3, DETERMINATION OF THE USEFUL LIFE OF INTANGIBLE ASSETS (“FSP No. 142-3”) to improve the consistency between the useful life of a recognized intangible asset (under SFAS No. 142) and the period of expected cash flows used to measure the fair value of the intangible asset (under SFAS No. 141(R)). FSP No. 142-3 amends the factors to be considered when developing renewal or extension assumptions that are used to estimate an intangible asset’s useful life under SFAS No. 142. The guidance in the new staff position is to be applied prospectively to intangible assets acquired after December 31, 2008. In addition, FSP No.142-3 increases the disclosure requirements related to renewal or extension assumptions. The Company does not believe implementation of FSP No. 142-3 have a material impact on its financial statements.

In May 2008, the FASB issued statement No. 162, THE HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. This statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy). This statement is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “the Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles”.

In May 2008, the FASB issued FSP Accounting Principles Board (“APB”) 14-1 “Accounting for Convertible Debt instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (“FSP APB 14-1”). FSP APB 14-1 requires the issuer of certain convertible debt instruments that may be settled in cash (or other assets) on conversion to separately account for the liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer’s non-convertible debt borrowing rate. FSP APB 14-1 is effective for fiscal years beginning after December 15, 2008 on a retroactive basis. As we do not have convertible debt at this time, we currently believe the adoption of FSP APB 14-1 will have no effect on our combined results of operations and financial condition.

F-9

In May 2008, the FASB issued Statement No. 163, ACCOUNTING FOR FINANCE GUARANTEE INSURANCE CONTRACTS - AN INTERPRETATION OF FASB STATEMENT NO. 60. The premium revenue recognition approach for a financial guarantee insurance contract links premium revenue recognition to the amount of insurance protection and the period in which it is provided. For purposes of this statement, the amount of insurance protection provided is assumed to be a function of the insured principal amount outstanding, since the premium received requires the insurance enterprise to stand ready to protect holders of an insured financial obligation from loss due to default over the period of the insured financial obligation. This Statement is effective for financial statements issued for fiscal years beginning after December 15, 2008.

In June 2008, the FASB issued FASB Staff Position Emerging Issues Task Force (EITF) No. 03-6-1, DETERMINING WHETHER INSTRUMENTS GRANTED IN SHARE-BASED PAYMENT TRANSACTIONS ARE PARTICIPATING SECURITIES (“FSP EITF No. 03-6-1”). Under FSP EITF No. 03-6-1, unvested share-based payment awards that contain rights to receive nonforfeitable dividends (whether paid or unpaid) are participating securities, and should be included in the two-class method of computing EPS. FSP EITF No. 03-6-1 is effective for fiscal years beginning after December 15, 2008, and interim periods within those years, and is not expected to have a significant impact on the Company’s financial statements.

In April 2009, the FASB issued FSP 157-4, DETERMINING FAIR VALUE WHEN THE VOLUME AND LEVEL OF ACTIVITY FOR THE ASSET OR LIABILITY HAVE SIGNIFICANTLY DECREASED AND IDENTIFYING TRANSACTIONS THAT ARE NOT ORDERLY (“FSP 157-4”). FSP 157-4 provides additional guidance for estimating fair value in accordance with SFAS 157 when the volume and level of activity for the asset or liability have significantly decreased. FSP 157-4 also includes guidance on identifying circumstances that indicate a transaction is not orderly. FSP 157-4 is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. FSP 157-4 does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In periods after initial adoption, FSP 157-4 requires comparative disclosures only for periods ending after initial adoption. The adoption of the provisions of FSP 157-4 is not anticipated to materially impact on the Company’s results of operations or the fair values of its assets and liabilities.

In May 2009, the FASB issued SFAS No. 165, SUBSEQUENT EVENTS (“SFAS 165”). SFAS 165 establishes general standards for accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or available to be issued and was effective for interim and annual periods ending after June 15, 2009. The adoption of SFAS No. 165 did not have an impact on the Company’s results of operations or financial condition. The Company evaluated all subsequent events that occurred from July 1, 2009 through September 30, 2009, inclusive, and does not found any material subsequent events are required to disclose.

In June 2009, the FASB issued SFAS No. 166 ACCOUNTING FOR TRANSFERS OF FINANCIAL ASSETS (“SFAS 166). This statement is intended to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement in transferred financial assets. This Statement must be applied as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, and is required to be adopted by the Company in the first quarter of fiscal year 2011. Earlier application is prohibited. This Statement must be applied to transfers occurring on or after the effective date. The Company does not expect the adoption of SFAS 166 to have a material impact on the Company’s financial position, results of operations and cash flows.

F-10

In June 2009, the FASB issued SFAS No. 168, THE FASB ACCOUNTING STANDARDS CODIFICATION AND THE HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (“SFAS No. 168”). SFAS No. 168 will become the single source of authoritative nongovernmental U.S. generally accepted accounting principles (“GAAP”), superseding existing FASB, American Institute of Certified Public Accountants, Emerging Issues Task Force (“EITF”), and related accounting literature. SFAS No. 168 reorganizes the thousands of GAAP pronouncements into roughly 90 accounting topics and displays them using a consistent structure. Also included is relevant Securities and Exchange Commission guidance organized using the same topical structure in separate sections. SFAS No. 168 will be effective for financial statements issued for reporting periods that end after September 15, 2009. The adoption of SFAS No. 168 is not expected to have a material impact on the Company’s consolidated results of operations and financial condition.

None of the above new pronouncements has current application to the Company, but may be applicable to the Company’s future financial reporting.

3. OTHER RECEIVABLES AND PREPAYMENTS

Other receivables and prepayments as of June 30, 2009 and 2008 are consisted, of the following:

	2009		2008
Prepayment for advertising and promotion	$	1,736,025	$	45,958
Amount due from a equity holder		1,465,000		-
Loan to a third party		1,465,000		-
Loans interest receivable		18,459		-
Other receivables		224,316		961,124
	$	4,908,800	$	1,007,082

The amount due from an equity holder is unsecured, interest bearing at 3.93% per annum and has no fixed term of repayment.

Loan to a third party is unsecured, interest bearing at 4.32% per annum and repayable on November 11, 2009.

4. INVENTORIES

Inventories as of June 30, 2009 and 2008 are consisted, of the following:

F-11

	2009		2008
Raw materials	$	250,405	$	716,303
Finished goods		57,429		332,888
Total inventories	$	307,834	$	1,049,191

5. INTANGIBLE ASSETS

Intangible assets as of June 30, 2009 and 2008 are consisted, of the following:

	2009		2008
Pharmaceuticals formulas, at cost	$	17,298,720	$	17,227,872

F-12

6. PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment as of June 30, 2009 and 2008 are consisted, of the following:

	Leasehold land and buildings		Plant and equipment			Office equipment		Motor vehicles			Total
At cost
Balance, July 1, 2007	$	7,416,710	$	932,466		$	11,050	$	277,210		$	8,637,436
Acquisition during the year		-		56,025			4,129		-			60,154
Balance, June 30, 2008		7,416,710		988,491			15,179		277,210			8,697,590
Acquisition during the year		-		232,554			59,459		295,610			587,623
Disposals		-		(68,553	)		-		(184,885	)		(253,438	)
Exchange difference		30,501		4,065			62		1,140			35,768
Balance, June 30, 2009	$	7,447,211	$	1,156,557		$	74,700	$	389,075		$	9,067,543
Accumulated depreciation
Balance, July 1, 2007	$	45,826	$	481,440		$	3,903	$	240,333		$	771,502
Charge for the year		183,306		90,099			2,053		7,959			283,417
Balance, June 30, 2008		229,132		571,539			5,956		248,292			1,054,919
Charge for the year		184,059		96,475			4,700		17,528			302,762
Disposals		-		(53,085	)		-		(154,073	)		(207,158	)
Exchange difference		942		2,350			25		1,021			4,338
Balance, June 30, 2009	$	414,133	$	617,279		$	10,681	$	112,768		$	1,154,861
Construction in progress
Balance, July 1, 2007	$	-	$	-		$	-	$	-		$	-
Additions		-		20,493			-		-			20,493
Transfer to plant and equipment		-		-			-		-			-
Balance, June 30, 2008		-		20,493			-		-			20,493
Additions		-		220,884			-		-			220,884
Transfer to plant and equipment		-		(4,864	)		-		-			(4,864	)
Exchange difference		-		84			-		-			84
Balance, June 30, 2009	$	-	$	236,597		$	-	$	-		$	236,597
Net book value
At June 30, 2009	$	7,033,078	$	775,875		$	64,019	$	276,307		$	8,149,279
At June 30, 2008	$	7,187,578	$	437,445		$	9,223	$	28,918		$	7,663,164

Depreciation expense for the year ended June 30, 2009 and 2008 were $302,762 and $283,417 respectively.

As of June 30, 2009 and 2008, the Company has pledged plant and machinery having a carrying amount of $562,331 and $Nil to secure a bank loan to the Company.

F-13

7. SHORT-TERM BORROWINGS

The Company obtained several short-term loan facilities from financial institution in the PRC. Short-term borrowings as of June 30, 2009 are consisted, of the following:

Loan from financialinstitution	Loan period	Annual Interest rate			Secured by	Amount
Shanghai Pudong	From Dec 12, 2008		6.6960	%	Haiyang	$	2,197,500
Development	to Dec 11, 2009				Construction
Limited					Industry Training
					Centre and personal
					guarantee by equity
					holders
Yantai City	From Jan 20, 2009		6.9030	%	Yantai Hai Pu Can		1,318,500
Commercial Bank	to Jan 20, 2010				End Making Co. Ltd
Yantai Laishan	From Sep 27, 2008		9.3600	%	Yantai Ka Wah		293,000
Rural Credit Union	to Sep 26, 2009				Medical Equipment
					Co. Ltd
Yantai Laishan	From Sep 27, 2008		12.2400	%	Company’s		586,000
Rural Credit Union	to Sep 26, 2009				machinery and
					Vehicle
China Construction	From May 12, 2009		0.0000	%	Personal guarantee		1,465,000
Bank	to Nov 11, 2009				by equity holders
						$	5,860,000

Short-term borrowings as of June 30, 2008 are consisted, of the following:

Loan from financialinstitution	Loan period	Annual interest rate			Secured by	Amount
Yantai City Commercial Bank	From Jan 31, 2008 to Jan 20, 2009		8.0925	%	Yantai Hai Pu Can End Making Co. Ltd	$	1,313,100
Industrial and	From Jan 25, 2008		7.4700	%	Shan Dong Shui		583,600
Commercial Bank	to Jan 24, 2009				Hong Pharmaceutical
of China					Co. Ltd
						$	1,896,700

F-14

8. OTHER ACCRUED LIABILITIES

Other accrued liabilities as of June 30, 2009 and 2008 are consisted, of the following:

	2009		2008
Advanced from customers	$	-	$	735,680
Accrued selling expenses		1,677,026		321,717
Accrued staff costs		173,130		200,135
Value added tax payable		709,688		541,152
Amount due to a equity holder		-		108,426
Other taxes payable		77,374		58,863
Payable to Pharmaceutical formulas vendors		-		2,724,087
Other accrued expenses		148,454		563,980
	$	2,785,672	$	5,254,040

The amount due to an equity holder is unsecured, interest free, and has no fixed repayment terms.

9. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses for the years ended June 30, 2009 and 2008 are consisted, of the followings:

	2009		2008
Accommodation	$	5,151,876	$	4,593,639
Advertising and promotion		10,959,424		8,679,512
Audit fee		8,937		1,928
Commission		1,419,478		135,453
Conference		5,089,283		3,877,918
Depreciation		20,514		9,033
Staff costs		1,536,496		998,763
Traveling		2,755,259		1,649,162
Research and development cost		293,000		344
Other operating expenses		4,067,544		2,656,180
	$	31,301,811	$	22,601,932

10. INTEREST EXPENSES

	2009		2008
Interest on short-term bank borrowings wholly repayable within one year	$	184,404	$	234,101

F-15

11. INCOME TAXES

PRC Tax

PRC’s legislative body, the National People’s Congress, adopted the unified Enterprise Income Tax (“EIT”) Law on March 16, 2007. This new tax law replaces the existing separate income tax laws for domestic enterprises and foreign-invested enterprises and became effective on January 1, 2008. Under the new tax law, a unified income tax rate is set at 25% for both domestic enterprises and foreign-invested enterprises. However, there will be a transition period for enterprises, whether foreign-invested or domestic, that are currently receiving preferential tax treatments granted by relevant tax authorities. Enterprises that are subject to an enterprise income tax rate lower than 25% may continue to enjoy the lower rate and will transit into the new rate over a five year period beginning on the effective date of the EIT Law. Enterprises that are currently entitled to exemptions for a fixed term may continue to enjoy such treatment until the exemption term expires. Preferential tax treatments may continue to be granted to industries and projects that qualify for such preferential treatments under the new law.

	2009		2008
Income before tax	$	9,900,213	$	8,755,484
Income tax expense	$	1,906,985	$	2,303,712

The deferred tax asset and liability has not been recognized because of no valuation allowance to be established for the years ended June 30, 2009 and 2008.

12. COMMITMENTS AND CONTINGENCIES

There are no foreseeable commitments or contingencies for the year ended June 30, 2009 and 2008.

13. REGISTERED AND PAID-IN CAPITAL

Registered and Paid-in capital as of June 30, 2009 and 2008 is as follows:

	2009		2008
Registered and fully paid-in capital of RMB 20,000,000	$	2,918,000	$	2,918,000

14. STATUTORY RESERVES

According to the laws and regulations in the PRC, the Company is required to provide for certain statutory funds, namely, reserve fund by an appropriation from net profit after taxes but before dividend distribution based on the local statutory financial statements of the PRC company prepared in accordance with the accounting principles and relevant financial regulations.

The Company in PRC is required to allocate at least 10% of its net profit to the reserve fund until the balance of such fund has reached 50% of its registered capital. Appropriation of enterprise expansion fund are determined at the discretion of it directors.

F-16

The reserve fund can only be used, upon approval by the relevant authority, to offset accumulated losses or increase capital. The enterprise expansion fund can only be used to increase capital upon approval by the relevant authority.

15.  FINANCIAL INSTRUMENTS

(a)           Credit risk

The potential credit risk of the company is mainly attributable to its debtors and bank balances.  In respect of debtors, the company has policies in place to ensure that it will only accept customers from countries which are politically stable and customers with an appropriate credit history.  In addition, all the bank balances were made with financial institutions with high-credit quality.  Thus, the company is not considered to be subject to significant credit risk.

(b)           Interest rate risk

The company’s interest rate risk is primarily attributable to its short-term borrowings, loan to a third party and loan to equity holders. The company’s borrowings carry interest at fixed rate. The management has not used any interest rate swaps to hedge its exposure to interest rate risk.

(c)           Fair value estimation

All of the carrying amounts of the company’s financial assets and liabilities of short term maturities approximate their fair values.

F-17

EX-99.3

Exhibit 99.3

Yantai Bohai Pharmaceuticals Group Co., Ltd.

Unaudited Financial Statements

For three months ended September 31, 2009 and 2008

and for the quarters then ended

YANTAI BOHAI PHARMACEUTICALS GROUP CO., LTD.

BALANCE SHEETS AS OF SEPTEMBER 30, 2009(UNAUDITED)

(Stated in US Dollars)

	Notes	As of September 30, 2009 (Unaudited)		As of June 30, 2009 (Audited)
ASSETS
Current assets
Cash and cash equivalents		$	5,132,388	$	2,491,726
Accounts receivable			10,938,361		11,070,129
Other receivables and prepayments	3		4,448,416		4,908,800
Inventories	4		438,628		307,834
Total current assets			20,957,793		18,778,489
Non-current assets
Property, plant and equipment, net	6		8,083,461		8,149,279
Intangible assets	5		17,322,336		17,298,720
Total non-current assets			25,405,797		25,447,999
TOTAL ASSETS			46,363,590		44,226,488
LIABILITES AND STOCKHOLDERS’ EQUITY
Current liabilities
Short-term borrowings	7		5,860,665		5,860,000
Accounts payable			847,565		971,208
Other accrued liabilities	8		3,197,779		2,785,672
Income taxes payable			555,815		677,666
Total current liabilities			10,461,824		10,294,546
STOCKHOLDERS’ EQUITY
Registered and Paid-in Capital	13		2,918,000		2,918,000
Capital reserve			5,836,000		5,836,000
Accumulated other comprehensive income			538,514		490,931
Statutory reserves	14		2,394,036		2,201,811
Retained earnings			24,215,216		22,485,200
Total stockholders’ equity			35,901,766		33,931,942
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY			46,363,590		44,226,488

See accompanying notes to the financial statements

FA-1

YANTAI BOHAI PHARMACEUTICALS GROUP CO., LTD.

STATEMENT OF INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009(UNAUDITED)

(Stated in US Dollars)

	Notes	Three months ended September 30, 2009 (Unaudited)			Three months ended September 30, 2008 (Unaudited)
Sales		$	14,181,772		$	11,412,018
Less: Sales Tax			(227,168	)		(183,821	)
Net sales			13,954,604			11,228,197
Cost of sales			(2,217,604	)		(1,854,478	)
Gross profit			11,737,000			9,373,719
Selling, general and administrative expenses	9		(9,174,693	)		(6,651,539	)
Interest expenses	10		(148,395	)		(65,038	)
Operating income			2,413,912			2,657,142
Non-operating income			69,072			-
Non-operating costs			(5,269	)		(31	)
Income before taxes			2,477,715			2,657,111
Income taxes	11		(555,474	)		(600,199	)
Net income			1,922,241			2,056,912

See accompanying notes to the financial statements

FA-2

YANTAI BOHAI PHARMACEUTICALS GROUP CO., LTD.

STATEMENT OF CASH FLOWS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009(UNAUDITED)

(Stated in US Dollars)

	Three months ended September 30, 2009 (Unaudited)			Three months ended September 30, 2008 (Unaudited)
Cash flows from operating activities
Net income	$	1,922,241		$	2,056,912
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		83,723			70,475
Loss on disposals of property, plant and equipment		6,602			-
Changes in assets and liabilities
Decrease/(increase) in accounts receivable		131,768			(264,880	)
Decrease in other receivables and prepayments		460,384			271,791
Increase in inventories		(130,794	)		(9,736	)
Decrease in accounts payable		(123,643	)		(250,101	)
Increase/(decrease) in accrued liabilities		412,107			(542,789	)
(Decrease)/increase in income taxes payable		(121,851	)		1,640
Net cash provided by operating activities		2,640,537			1,333,312
Cash flows from investing activities
Purchases of property, plant and equipment		(6,033	)		-
Net cash used in investing activities		(6,033	)		-
Cash flows from financing activities
Proceeds of borrowings		872,865			-
Repayment of borrowings		(880,200	)		-
Net cash used in financing activities		(7,335	)		-
Net increase in cash and cash equivalents		2,627,169			1,333,312
Effect of foreign currency translation on cash and cash equivalents		13,493			(5,376	)
Cash and cash equivalents at beginning of period		2,491,726			781,282
Cash and cash equivalents at end of period		5,132,388			2,109,218

See accompanying notes to the financial statements

FA-3

YANTAI BOHAI PHARMACEUTICALS GROUP CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009 (UNAUDITED)

1. ORGANIZATION AND PRINCIPAL ACTIVITIES

Yantai Bohai Pharmaceuticals Group Co., Limited. (the “Company” or “Bohai”) was incorporated in the People’s Republic of China (“PRC”) on July 8, 2004, with the principal business objective of development, production and distribution of medicine within PRC.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)           Method of Accounting

The Company maintains its general ledger and journals with the accrual method accounting for financial reporting purposes. The financial statements and notes are representations of management. Accounting policies adopted by the Company conform to generally accepted accounting principles in the United States of America and have been consistently applied in the presentation of financial statements, which are compiled on the accrual basis of accounting.

(b)           Basis of Presentation

The Company’s financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

This basis of accounting differs in certain material respects from that used for the preparation of the books of account of the Company, which are prepared in accordance with the accounting principles and the relevant financial regulations applicable to enterprises with limited liabilities established in the PRC (“PRC GAAP”), the accounting standards used in the places of their domicile. The accompanying financial statements reflect necessary adjustments not recorded in the books of account of the Company to present them in conformity with US GAAP.

(c)           Economic and Political risks

The Company’s operations are conducted in the PRC. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.

(d)           Use of Estimates

In preparing of the financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods.  These accounts and estimates include, but are not limited to, the valuation of accounts receivable, inventories, deferred income taxes and the estimation on useful lives of plant and machinery.  Actual results could differ from those estimates.

FA-4

(e)            Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company maintains bank accounts only in the PRC. The Company does not maintain any bank accounts in the United States of America. As of September 30, 2009 and June 30, 2009, there were cash and cash equivalents of $5,132,388 and $2,491,726 respectively.

(f)            Accounts Receivable

Accounts receivable consists of amounts due from customers. The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and determined based on management’s assessment of known requirements, aging of receivables, payment history, the customer’s current credit worthiness and the economic environment.

(g)           Inventories

Inventories are valued at the lower of cost or market with cost is determined on the weighted average method. Finished goods inventories consist of raw materials, direct labor and overhead associated with the manufacturing process. In assessing the ultimate realization of inventories, the management makes judgments as to future demand requirements compared to current or committed inventory levels.  The Company’s reserve requirements generally increase/decrease due to management projected demand requirements, market conditions and product life cycle changes. As of September 30, 2009 and June 30, 2009, the Company did not make any allowance for slow-moving or defective inventories.

(h)           Fair value of Financial Instruments

The carrying values of the Company’s financial instruments, including cash and cash equivalents, accounts receivables, other receivables and prepayments, short-term borrowings, accounts payables, and other accrued liabilities their fair values due to the short-term maturity of such instruments.

(i)             Intangible Assets

Intangible assets as “Pharmaceutical Formulas”, which acquired and with indefinite useful live are measured initially at cost and not subject to amortization shall be tested for impairment annually or more frequently if there is indication of impairment. If the carrying amount exceeds fair value, an impairment loss should be recognized. Subsequently reversal of a recognized impairment loss is prohibited.

(j) Property, plant and equipment

Property, plant and equipment, other than construction in progress, are stated at cost less depreciation and amortization and accumulated impairment loss.  Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use.  Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized.

Depreciation of property, plant and equipment is calculated to written off the cost, less their estimated residual value, if any, using the straight-line method over their estimated useful lives.  The principal annual rates are as follows:

FA-5

Leasehold land and buildings	30 to 40 years
Motor vehicles	10 years
Plant and machinery	10 years
Office equipment	5 years

Upon sale or disposition, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income.

Construction in progress mainly represents expenditures in respect of the Company’s new corporate campus and machinery under construction. All direct costs relating to the acquisition or construction of the Company’s new corporate campus and machinery. Assets under construction are not depreciated until the construction is completed and the assets are ready for their intended use.

(k)           Accounting for the Impairment of Long-Lived Assets

The Company adopted Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Live Assets” (“SFAS 144”), which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with SFAS 144. SFAS 144 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal. Based on its review, the Company believes that, as of September 30, 2009 and June 30, 2009, there were no significant impairments of its long-lived assets.

(l)            Foreign Currency Translation

The Company maintains its financial statements in the functional currency.  The functional currency of the Company is the Renminbi (RMB).  Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates.  Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchanges rates prevailing at the dates of the transaction.  Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods.

For financial reporting purposes, the financial statements of the Company which are prepared using the functional currency have been translated into United States dollars. Assets and liabilities are translated at the exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and stockholders’ equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of stockholders’ equity.

	9.30.2009	6.30.2009	9.30.2008
Period end US$ : RMB exchange rate	6.81663	6.82594	6.83527
Average periodic US$ : RMB exchange rate	6.82082	6.82594	6.83107

RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions.  No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation.

FA-6

(m)         Revenue Recognition

Revenue represents the invoiced value of goods sold recognized upon the delivery of goods to customers. Revenue is recognized when all of the following criteria are met:

· Persuasive evidence of an arrangement exists;\

· Delivery has occurred or services have been rendered;

· The seller’s price to the buyer is fixed or determinable; and

· Collectability is reasonably assured. Payments have been established.

(n)           Cost of Revenue

Regarding the trading of medicine, the respective cost of revenue consists primarily of material cost, labor cost, overhead associated with the manufacturing process and related expenses which are directly attributable to the trading.

(o)           Research and Development Costs

Research and development costs are charged as expense when incurred and included in operating expenses.

(p)           Income Taxes

Income taxes are accounted for under the asset and liability method.  Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of income and comprehensive income in the periods that includes the enactment date.

(q)           Comprehensive Income

Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners.  Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements. The Company’s current components of other comprehensive income are the foreign currency translation adjustment.

(r)           Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

FA-7

(s)           Recent Accounting Pronouncements

In March 2008, the FASB issued SFAS No. 161, DISCLOSURES ABOUT DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (an amendment to SFAS No. 133). This statement is effective for financial statements issued for fiscal year and interim periods beginning after November 15, 2008 and requires enhanced disclosures with respect to derivative and hedging activities. The Company will comply with the disclosure requirements of this statement if it utilizes derivative instruments or engages in hedging activities upon its effectiveness.

In April 2008, the FASB issued FASB Staff Position No. 142-3, DETERMINATION OF THE USEFUL LIFE OF INTANGIBLE ASSETS (“FSP No. 142-3”) to improve the consistency between the useful life of a recognized intangible asset (under SFAS No. 142) and the period of expected cash flows used to measure the fair value of the intangible asset (under SFAS No. 141(R)). FSP No. 142-3 amends the factors to be considered when developing renewal or extension assumptions that are used to estimate an intangible asset’s useful life under SFAS No. 142. The guidance in the new staff position is to be applied prospectively to intangible assets acquired after December 31, 2008. In addition, FSP No.142-3 increases the disclosure requirements related to renewal or extension assumptions. The Company does not believe implementation of FSP No. 142-3 have a material impact on its financial statements.

In May 2008, the FASB issued statement No. 162, THE HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. This statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy). This statement is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “the Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles”.

In May 2008, the FASB issued FSP Accounting Principles Board (“APB”) 14-1 “Accounting for Convertible Debt instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (“FSP APB 14-1”). FSP APB 14-1 requires the issuer of certain convertible debt instruments that may be settled in cash (or other assets) on conversion to separately account for the liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer’s non-convertible debt borrowing rate. FSP APB 14-1 is effective for fiscal years beginning after December 15, 2008 on a retroactive basis. As we do not have convertible debt at this time, we currently believe the adoption of FSP APB 14-1 will have no effect on our combined results of operations and financial condition.

In May 2008, the FASB issued Statement No. 163, ACCOUNTING FOR FINANCE GUARANTEE INSURANCE CONTRACTS - AN INTERPRETATION OF FASB STATEMENT NO. 60. The premium revenue recognition approach for a financial guarantee insurance contract links premium revenue recognition to the amount of insurance protection and the period in which it is provided. For purposes of this statement, the amount of insurance protection provided is assumed to be a function of the insured principal amount outstanding, since the premium received requires the insurance enterprise to stand ready to protect holders of an insured financial obligation from loss due to default over the period of the insured financial obligation. This Statement is effective for financial statements issued for fiscal years beginning after December 15, 2008.

In June 2008, the FASB issued FASB Staff Position Emerging Issues Task Force (EITF) No. 03-6-1, DETERMINING WHETHER INSTRUMENTS GRANTED IN SHARE-BASED PAYMENT TRANSACTIONS ARE PARTICIPATING SECURITIES (“FSP EITF No. 03-6-1”). Under FSP EITF No. 03-6-1, unvested share-based payment awards that contain rights to receive nonforfeitable dividends (whether paid or unpaid) are participating securities, and should be included in the two-class method of computing EPS. FSP EITF No. 03-6-1 is effective for fiscal years beginning after December 15, 2008, and interim periods within those years, and is not expected to have a significant impact on the Company’s financial statements.

FA-8

In April 2009, the FASB issued FSP 157-4, DETERMINING FAIR VALUE WHEN THE VOLUME AND LEVEL OF ACTIVITY FOR THE ASSET OR LIABILITY HAVE SIGNIFICANTLY DECREASED AND IDENTIFYING TRANSACTIONS THAT ARE NOT ORDERLY (“FSP 157-4”). FSP 157-4 provides additional guidance for estimating fair value in accordance with SFAS 157 when the volume and level of activity for the asset or liability have significantly decreased. FSP 157-4 also includes guidance on identifying circumstances that indicate a transaction is not orderly. FSP 157-4 is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. FSP 157-4 does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In periods after initial adoption, FSP 157-4 requires comparative disclosures only for periods ending after initial adoption. The adoption of the provisions of FSP 157-4 is not anticipated to materially impact on the Company’s results of operations or the fair values of its assets and liabilities.

In May 2009, the FASB issued SFAS No. 165, SUBSEQUENT EVENTS (“SFAS 165”). SFAS 165 establishes general standards for accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or available to be issued and was effective for interim and annual periods ending after June 15, 2009. The adoption of SFAS No. 165 did not have an impact on the Company’s results of operations or financial condition. The Company evaluated all subsequent events that occurred from October 1, 2009 through November 30, 2009, inclusive, and does not found any material subsequent events are required to disclose.

In June 2009, the FASB issued SFAS No. 166 ACCOUNTING FOR TRANSFERS OF FINANCIAL ASSETS (“SFAS 166). This statement is intended to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement in transferred financial assets. This Statement must be applied as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, and is required to be adopted by the Company in the first quarter of fiscal year 2011. Earlier application is prohibited. This Statement must be applied to transfers occurring on or after the effective date. The Company does not expect the adoption of SFAS 166 to have a material impact on the Company’s financial position, results of operations and cash flows.

None of the above new pronouncements has current application to the Company, but may be applicable to the Company’s future financial reporting.

FA-9

3.           OTHER RECEIVABLES AND PREPAYMENTS

Other receivables and prepayments are consisted of the following:

	As of September 30, 2009 (Unaudited)		As of June 30, 2009 (Audited)
Prepayment for advertising and promotion	$	1,265,287	$	1,736,025
Amount due from a equity holder		1,499,274		1,465,000
Loan to a third party		1,467,000		1,465,000
Loans interest receivable		49,061		18,459
Other receivables		167,794		224,316
	$	4,448,416	$	4,908,800

The amount due from an equity holder is unsecured, interest bearing at 3.93% per annum and has no fixed term of repayment.

Loan to a third party is unsecured, interest bearing at 4.32% per annum and repayable on November 11, 2009.

4.            INVENTORIES

Inventories are consisted of the following:

	As of September 30, 2009 (Unaudited)		As of June 30, 2009 (Audited)
Raw materials	$	115,851	$	250,405
Finished goods		322,777		57,429
Total inventories	$	438,628	$	307,834

5. INTANGIBLE ASSETS

Intangible assets are consisted of the following:

	As of September 30, 2009 (Unaudited)		As of June 30, 2009 (Audited)
Pharmaceuticals formulas, at cost	$	17,322,336	$	17,298,720

FA-10

6.            PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment are consisted of the following:

	Leasehold land and buildings		Plant and equipment			Office equipment		Motor vehicles			Total
At cost
Balance, June 30, 2008		7,416,710		988,491			15,179		277,210			8,697,590
Acquisition during the year		-		232,554			59,459		295,610			587,623
Disposals		-		(68,553	)		-		(184,885	)		(253,438	)
Exchange difference		30,501		4,065			62		1,140			35,768
Balance, June 30, 2009	$	7,447,211	$	1,156,557		$	74,700	$	389,075		$	9,067,543
Balance, June 30, 2009		7,447,211		1,156,557			74,700		389,075			9,067,543
Acquisition during the period		-		245,521			4,779		-			250,300
Disposals		-		-			-		(6,988	)		(6,988	)
Exchange difference		10,166		1,578			103		532			12,379
Balance, September 30, 2009	$	7,457,377	$	1,403,656		$	79,582	$	382,619		$	9,323,234
Accumulated depreciation
Balance, June 30, 2008		229,132		571,539			5,956		248,292			1,054,919
Charge for the year		184,059		96,475			4,700		17,528			302,762
Disposals		-		(53,085	)		-		(154,073	)		(207,158	)
Exchange difference		942		2,350			25		1,021			4,338
Balance, June 30, 2009	$	414,133	$	617,279		$	10,681	$	112,768		$	1,154,861
Balance, June 30, 2009		414,133		617,279			10,681		112,768			1,154,861
Charge for the period		50,898		26,678			1,300		4,847			83,723
Disposals		-		-			-		(386	)		(386	)
Exchange difference		565		842			14		154			1,575
Balance, September 30, 2009	$	465,596	$	644,799		$	11,995	$	117,383		$	1,239,773
Construction in progress
Balance, June 30, 2008		-		20,493			-		-			20,493
Additions		-		220,884			-		-			220,884
Transfer to plant and equipment		-		(4,864	)		-		-			(4,864	)
Exchange difference		-		84			-		-			84
Balance, June 30, 2009	$	-	$	236,597		$	-	$	-		$	236,597
Balance, June 30, 2009		-		236,597			-		-			236,597
Additions		-		7,347			-		-			7,347
Transfer to plant and equipment		-		(244,267	)		-		-			(244,267	)
Exchange difference		-		323			-		-			323
Balance, September 30, 2009	$	-	$	-		$	-	$	-		$	-
Net book value
At September 30, 2009 (Unaudited)	$	6,991,781	$	758,857		$	67,587	$	265,236		$	8,083,461
At June 30, 2009 (Audited)	$	7,033,078	$	775,875		$	64,019	$	276,307		$	8,149,279

FA-11

Depreciation expense for the three months ended September 30, 2009 was $83,723 and for the year ended June 30, 2009 was $302,762 respectively.

As of September 30, 2009 and June 30, 2009, the Company has pledged plant and machinery having a carrying amount of $552,710 and $562,331 to secure a bank loan to the Company.

7.           SHORT-TERM BORROWINGS

The Company obtained several short-term loan facilities from financial institution in the PRC. Short-term borrowings as of September 30, 2009 are consisted, of the following:(Unaudited)

Loan from financial institution	Loan period	Annual interest rate			Secured by	Amount
Shanghai Pudong Development Limited	From Dec 12, 2008 to Dec 11, 2009		6.6960	%	Haiyang Construction Industry Training Centre and personal guarantee by equity holders	$	2,200,500
Yantai City Commercial Bank	From Jan 20, 2009 to Jan 20, 2010		6.9030	%	Yantai Hai Pu Can End Making Co. Ltd		1,320,300
Yantai Laishan Rural Credit Union	From Sep 28, 2009 to Sep 26, 2010		5.7525	%	Yantai Ka Wah Medical Equipment Co. Ltd		286,065
Yantai Laishan Rural Credit Union	From Sep 28, 2009 to Sep 26, 2010		7.5225	%	Company’s machinery and vehicle		586,800
China Construction Bank	From May 12, 2009 to Nov 11, 2009		0.0000	%	Personal guarantee by equity holders		1,467,000
						$	5,860,665

FA-12

Short-term borrowings as of June 30, 2009 are consisted, of the following: (Audited)

Loan from financial institution	Loan period	Annual interest rate			Secured by	Amount
Shanghai Pudong  Development Limited	From Dec 12, 2008 to Dec 11, 2009		6.6960	%	Haiyang Construction  Industry Training Centre and personal guarantee by equity holders	$	2,197,500
Yantai City Commercial Bank	From Jan 20, 2009 to Jan 20, 2010		6.9030	%	Yantai Hai Pu Can End Making Co. Ltd		1,318,500
Yantai Laishan Rural Credit Union	From Sep 27, 2008 to Sep 26, 2009		9.3600	%	Yantai Ka Wah Medical Equipment Co. Ltd		293,000
Yantai Laishan Rural Credit Union	From Sep 27, 2008 to Sep 26, 2009		12.2400	%	Company’s machinery and   vehicle		586,000
China Construction Bank	From May 12, 2009 to Nov 11, 2009		0.0000	%	Personal guarantee by equity holders		1,465,000
						$	5,860,000

FA-13

8.           OTHER ACCRUED LIABILITIES

Other accrued liabilities are consisted of the following:

	As of September 30, 2009 (Unaudited)		As of June 30, 2009 (Audited)
Accrued selling expenses	$	1,948,600	$	1,677,026
Accrued staff costs		229,712		173,130
Value added tax payable		756,552		709,688
Other taxes payable		80,831		77,374
Other accrued expenses		182,084		148,454
	$	3,197,779	$	2,785,672

9.           SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses are consisted of the followings:

	Three months ended September 30, 2009 (Unaudited)		Three months ended September 30, 2008 (Unaudited)
Accommodation	$	679,228	$	1,250,393
Advertising and promotion		3,307,323		2,098,597
Commission		1,127,694		23,487
Conference		1,051,418		1,577,506
Depreciation		8,614		1,192
Staff costs		576,091		385,325
Traveling		587,294		190,766
Research and development cost		293,220		-
Other operating expenses		1,543,811		1,124,273
	$	9,174,693	$	6,651,539

10.           INTEREST EXPENSES

	Three months ended September 30, 2009 (Unaudited)		Three months ended September 30, 2008 (Unaudited)
Interest on short-term bank borrowings wholly repayable within the three-month periods	$	148,395	$	65,038

FA-14

11.          INCOME TAXES

PRC Tax

PRC’s legislative body, the National People’s Congress, adopted the unified Enterprise Income Tax (“EIT”) Law on March 16, 2007. This new tax law replaces the existing separate income tax laws for domestic enterprises and foreign-invested enterprises and became effective on January 1, 2008. Under the new tax law, a unified income tax rate is set at 25% for both domestic enterprises and foreign-invested enterprises. However, there will be a transition period for enterprises, whether foreign-invested or domestic, that are currently receiving preferential tax treatments granted by relevant tax authorities. Enterprises that are subject to an enterprise income tax rate lower than 25% may continue to enjoy the lower rate and will transit into the new rate over a five year period beginning on the effective date of the EIT Law. Enterprises that are currently entitled to exemptions for a fixed term may continue to enjoy such treatment until the exemption term expires. Preferential tax treatments may continue to be granted to industries and projects that qualify for such preferential treatments under the new law.

	Three months ended September 30, 2009 (Unaudited)		Three months ended September 30, 2008 (Unaudited)
Income before tax	$	2,477,715	$	2,657,111
Income tax expense	$	555,474	$	600,199

The deferred tax asset and liability has not been recognized because of no valuation allowance to be established as of September 30, 2009 and June 30, 2009.

12.         COMMITMENTS AND CONTINGENCIES

There are no foreseeable commitments or contingencies as of September 30, 2009 and June 30, 2009.

13.          REGISTERED AND PAID-IN CAPITAL

	As of September 30, 2009 (Unaudited)		As of June 30, 2009 (Audited)
Registered and fully paid-in capital of RMB 20,000,000	$	2,918,000	$	2,918,000

14.          STATUTORY RESERVES

According to the laws and regulations in the PRC, the Company is required to provide for certain statutory funds, namely, reserve fund by an appropriation from net profit after taxes but before dividend distribution based on the local statutory financial statements of the PRC company prepared in accordance with the accounting principles and relevant financial regulations.

FA-15

The Company in PRC is required to allocate at least 10% of its net profit to the reserve fund until the balance of such fund has reached 50% of its registered capital. Appropriation of enterprise expansion fund are determined at the discretion of it directors.

The reserve fund can only be used, upon approval by the relevant authority, to offset accumulated losses or increase capital. The enterprise expansion fund can only be used to increase capital upon approval by the relevant authority.

15.         FINANCIAL INSTRUMENTS

(a)           Credit risk

The potential credit risk of the company is mainly attributable to its debtors and bank balances.  In respect of debtors, the company has policies in place to ensure that it will only accept customers from countries which are politically stable and customers with an appropriate credit history.  In addition, all the bank balances were made with financial institutions with high-credit quality.  Thus, the company is not considered to be subject to significant credit risk.

(b)           Interest rate risk

The company’s interest rate risk is primarily attributable to its short-term borrowings, loan to a third party and loan to equity holders. The company’s borrowings carry interest at fixed rate. The management has not used any interest rate swaps to hedge its exposure to interest rate risk.

(c)           Fair value estimation

All of the carrying amounts of the company’s financial assets and liabilities of short term maturities approximate their fair values.

FA-16