VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 22, 2010) -
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China Health Labs & Diagnostics Ltd. ("China Health"), formerly known as CCS Capital Inc., is pleased to announce that it has completed its Qualifying Transaction with Whole Vision Limited ("Whole Vision"), which includes Biochem Hengye Science & Technology Development Co., Ltd., and other related and associated companies (the "Biochem Group").
The TSX Venture Exchange (the "Exchange") issued its final bulletin today confirming the completion of the Qualifying Transaction and the listing of China Health as a Tier 1 Issuer. China Health expects its shares to resume trading on the Exchange on October 25, 2010 with the stock symbol "CHO".
Concurrent with the completion of the Qualifying Transaction, China Health completed a brokered private placement financing (the "Financing") of 6,107,834 ordinary shares of China Health at a price of $0.60 per share for gross proceeds of $3,664,700. The net proceeds from the Financing will be used by China Health to further its business objectives of developing its rural "total lab solution" business, as well as for R&D and general working capital purposes. The shares issued pursuant to the Financing are subject to concurrent four-month hold periods under the Exchange policies and securities regulations, which expire on February 21, 2011. Canaccord Genuity Corp. (the "Agent") acted as exclusive financial advisor and agent in connection with the Qualifying Transaction and the Financing.
With the completion of the Qualifying Transaction and Financing, China Health has issued and outstanding 64,441,167 shares, options for 450,000 shares, IPO agents' warrants for 99,185 shares and Financing agents' warrants for 888,725 shares.
The principal shareholder of China Health is now Century Delight Investment Limited ("Century Delight") (a BVI company controlled by Mr. Zhende Liang of Sweden), which holds 47,009,266 shares, representing 72.9% of the issued and outstanding shares of China Health on a non-diluted basis, that are subject to a Tier 1 Surplus Security Escrow Agreement. Shiping (Wilson) Yao, a director and officer of China Health, indirectly holds, through his wholly-owned company, Ahead Global Investment Limited (a BVI company), debentures that are convertible into up to approximately 100% of the share capital of Century Delight. It is expected that Ahead Global will partially convert the debentures for approximately 30% of the share capital of Century Delight within the near term, and will convert the balance of the debentures at least six months following the Qualifying Transaction.
In connection with the completion of the Qualifying Transaction, China Health is pleased to announce its board of directors as follows: Shiping (Wilson) Yao (Chairman), Hong Chang, Paul Haber, Kim Oishi, Yuqiang Tang, Bill Tunbrant, and Yumin Zhuang. In addition, China Health is pleased to announce its executive management as follows: Shiping (Wilson) Yao, President and Chief Executive Officer; Adam Kniec, Chief Financial Officer; Yuqiang Tang, Chief Operating Officer; Bill Tunbrant, Vice-President, International Marketing; Chao Zhang, Vice-President, Finance; and Stephen Wortley, Corporate Secretary.
In addition, China Health will grant options to acquire an aggregate of 3,375,000 shares (the "Options") to the directors and officers of China Health, pursuant to China Health's share option plan as follows: Shiping (Wilson) Yao (1,350,000), Kim Oishi (500,000), Yuqiang Tang (500,000), Chao Zhang (500,000), Bill Tunbrant (150,000), Paul Haber (100,000), Hong Chang (75,000), Stephen Wortley (75,000), Yumin Zhuang (75,000), and Adam Kniec (50,000). The Options will have an exercise price of $0.60 per share and will be exercisable for a period of 10 years from the date of grant.
Further, subject to Exchange approval, China Health intends to engage Infinity Alliance Corp, a British Columbia company, through its principal Jag Bal, to provide investor relations and business development services. In consideration for such services, Infinity Alliance Corp. would be paid $5,000 per month and be granted options for 100,000 shares in China Health exercisable at a price of $0.60 per share and vesting over 12 months with 25% vesting immediately and 25% vesting every three months thereafter. The agreement with Infinity Alliance Corp. would be for a term of one year.
Prior to the Financing and Qualifying Transaction, China Health continued to the jurisdiction of the Cayman Islands. As part of the Qualifying Transaction, China Health changed its name from "CCS Capital Inc." to "China Health Labs & Diagnostics Ltd." and also changed its year-end to be the same as that of Whole Vision, which is December 31.
China Health will continue with the business of the Biochem Group. China Health's business goal is to provide high quality medical diagnostic equipment and medical reagents in China. China Health's products and services may be classified into six separate but complementary offerings: (i) in-vitro diagnostic equipment; (ii) medical reagents and consumables; (iii) maintenance, training, consultation and support services; (iv) BK Clinlab total lab solution; (v) point of care technology ("POCT") systems; and (vi) Biochem LIS system and integrated lab information management box.
With in-vitro diagnostic equipment, China Health manufactures and sells a wide range of medical diagnostic equipment for use in hospitals, research labs and food testing labs throughout China. With medical reagents and consumables, China Health produces and sells a variety of consumable medical reagents for use in various diagnostic services. The maintenance, training, consultation and support services provide after-market support to hospitals and research labs that use China Health's in-vitro diagnostic equipment. The BK Clinlab offers the total lab solution to rural hospital labs. With the POCT systems, China Health produces dry-chemistry diagnostic kits for use in emergency and disaster situations. With the Biochem LIS system and integrated lab information management box, China Health produces systems to assist and improve the management of information generated by medical diagnostic equipment.
China Health manufactures its medical reagents for use in its suite of in-vitro diagnostic equipment. As medical reagents are consumables, sales of medical reagents are recurring in nature. China Health views its medical reagents sales division as supporting and enhancing its in-vitro diagnostic equipment sales division.
China Health targets four distinct end markets: (i) large urban hospitals and research labs; (ii) rural diagnostic medical facilities; (iii) military users; and (iv) food safety agencies. Sales are conducted through China Health's direct sales team and distributors. China Health started its business by primarily focusing on selling its in-vitro diagnostic equipment and medical reagents to large hospitals and research labs in urban centres throughout China either directly or through other distributors. Equipment sales tend to be concentrated on large, high capacity automated machines with advanced diagnostic capabilities. Examples of diagnostic equipment sold to this market include hematology, coagulation, and biochemistry analyzers. China Health's client roster includes over 500 of the 1,000 largest hospitals in China.
China Health intends to expand its business by focusing its efforts on expanding its sales network to three areas where it has proprietary products, limited competition and strong government support: rural diagnostic medical facilities in China, military and emergency services, and food testing applications.
To this end, China Health has developed a suite of standard diagnostics equipment and reagents, hardware and software, for use in rural labs, as well as developing a service network in support of such labs. This total lab solution ("BK Clinlab") includes basic in-vitro diagnostic testing equipment and complementary reagents such as hematology analyzers, coagulation analyzers, urine analyzers, biochemistry analyzers, and electrolyte analyzers. China Health has developed proprietary computer hardware and software that connects the diagnostic equipment and assists with analysis, allowing rural labs to conduct basic diagnostic tests without having patients travel long distances. As part of the BK Clinlab, a network of service centres staffed with trained technicians has and is being set up to provide support to rural labs within the service area and to provide a dependable source of reagents. As rural diagnostic facilities in China are typically underserviced and often lack even basic diagnostic capabilities, China Health believes that it is uniquely positioned to capitalize on this opportunity, as they are the first company in China to identify and create a medical laboratory solution specifically tailored to service the 50,000 rural hospitals throughout China. Since 2007, 86 rural hospitals have adopted the BK Clinlab.
China Health has also developed proprietary POCT products for the Chinese military and emergency services and has been supplying these products to the military since 2007. China Health is working closely with the Chinese military to develop products that meet their needs and are complementary to their logistics systems. In 2008, China Health began selling lab solutions to the Beijing municipal food testing agency, and in 2009 worked with the food testing agency to develop a mobile lab using the China Health's POCT.
China Health's Filing Statement dated August 29, 2010 describes the Financing, the Qualifying Transaction, and the businesses of China Health. The Filing Statement is available on the SEDAR website at www.sedar.com.
FORWARD LOOKING INFORMATION
This press release contains forward-looking statements and information that are based on the beliefs of management and reflect China Health's current expectations. When used in this press release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. The forward-looking statements and information in this press release includes information relating to China Health's business plan (including sales to medical facilities in rural areas of China and its ability to capitalize on this market niche) and the granting of share options. Such statements and information reflect the current view of China Health with respect to risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.
By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the risks associated with China Health's business or the failure of its business plan and the risks associated with the inability to grant the share options. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and China Health undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Investors are cautioned against attributing undue certainty to forward-looking statements.
There are a number of important factors that could cause China Health's actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors include, among others, risks related to China Health's business such as failure of the business strategy, stable supply prices, demand and market prices for medical device products, and government licensing; risks related to China Health's operations, such as additional financing requirements and access to capital, reliance on key and qualified personnel, insurance, competition, intellectual property and reliable supply chains; risks related to China Health and its business generally such as potential exposure to tax under Canadian income tax, regulations of the People's Republic of China (the "PRC") relating to offshore special purpose companies, recent PRC regulations relating to cross-border mergers and acquisitions, PRC health care reform, product liability, environmental protection, currency exchange rates and conflicts of interest; and risks related to doing business in the PRC such as tax, repatriation of profit and currency conversion, acquisition and appropriation of land use rights, foreign investment, permits and business licenses, employment contracts, government intervention, shareholders' rights and enforcement of judgments and a developing legal system.
China Health cautions that the foregoing list of material factors is not exhaustive. When relying on China Health's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. China Health has assumed a certain progression, which may not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE REPRESENTS THE EXPECTATIONS OF CHINA HEALTH AS OF THE DATE OF THIS PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE CHINA HEALTH MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE LAWS.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.