The Chinese company Lihua International, Inc. has announced the completion of a share exchange transaction with Magnify Wealth Enterprise Limited. Under the terms of this transaction Lihua issued 14,025,000 shares of its common stock to Magnify Wealth in exchange for 100% equity interests of Ally Profit Investments Limited - British Virgin islands company having two subsidiaries operating in the PRC.
One of these subsidiaries, Danyang Lihua Electron Co., Ltd., is the leading value-added manufacturer of bimetallic composite conductor wire, located in China. The company sells to distributors in the wire and cable industries and to manufacturers in the consumer electronics, white goods, automotive, utility, telecommunications and specialty cable industries. Another Chinese subsidiary is called Jiangsu Lihua Copper Industry Co., Ltd., will utilize refined copper to manufacture and sell low content oxygen copper cable and copper magnet wire to the existing customers of the first subsidiary, and is planning to begin operations prior to the end of 2008.
Prior to the share exchange, Lihua International was a public reporting shell company with no operations, formed to pursue a business combination through the acquisition of, or merger with, an operating business. Company's common stock is not currently trading, but the company is planning to apply for listing on a national securities exchange. As a result of the share exchange, Lihua International now conducts business in the PRC operating two subsidiaries.
Immediately after the share exchange, Lihua International consummated a private placement of 6,818,182 shares of series A convertible preferred stock and warrants to purchase up to an aggregate of 1,500,000 shares of common stock to accredited investors for gross proceeds of $15 million.
The BVI-registered Ally Profit together with its subsidiaries had consolidated net sales of approximately $24.8 million and consolidated net income of approximately $5.8 million for the six months ended June 30, 2008. For the year ended December 31, 2007, Ally Profit and its subsidiaries had consolidated net sales of approximately $32.7 million, and consolidated net income of approximately $7.7 million. Compared to the 12 months ended December 31, 2006, Ally Profit and its subsidiaries experienced revenue growth of 108% and net income growth of over 71%. If comparing the six month period ended June 30, 2007 to the same period of 2008, the BVI company and its subsidiaries experienced net income growth of over 72%.
