Lingxian Capital Inc. Signs Letter of Intent for Proposed Qualifying Transaction

LIngxian Capital Inc.


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Lingxian Capital Inc. Signs Letter of Intent for Proposed Qualifying Transaction

Vancouver, BC / ACCESSWIORE / August 14, 2014 / Lingxian Capital Inc. (the "Company"), a capital pool company pursuant to Policy 2.4 (the "Policy") of the TSX Venture Exchange (the "TSXV"), is pleased to announce that it has entered into a letter of intent (the "LOI") dated August 13, 2014 with Jinsili International Steel Holdings Co., Ltd. ("Jinsili"). The Company will complete a business combination (the "Transaction") with Jinsili by acquiring all of the issued and outstanding securities of Jinsili from its shareholders. The proposed Transaction is intended to constitute the "qualifying transaction" (as such term is defined in the Policy) of the Company. On closing (the "Closing") of the Transaction, the resulting issuer (the "Resulting Issuer") will be listed as a Tier 2 "Industrial" issuer on the TSXV.

Transaction Summary

Pursuant to the LOI, the Transaction will be effected by the Company issuing not greater than 22,000,000 common shares to shareholders of Jinsili to acquire all of the issued and outstanding securities of Jinsili, which will result in Jinsili becoming a wholly-owned subsidiary of the Resulting Issuer. It is currently anticipated that 22,000,000 common shares will be issued at a deemed price of $0.19 per share for an aggregate purchase price of $4.18 million.

The Company intends to complete a non-brokered private placement (the "Concurrent Offering") which will close concurrently with the Closing of the Transaction, pursuant to which the Company intends to issue an aggregate of approximately 2,500,000 common shares at a price of $0.20 per share to arm's length subscribers for gross proceeds of $500,000. The proceeds of the Concurrent Offering will be used for working capital and general corporate purposes of the Resulting Issuer.

Upon Closing of the Transaction and subject to acceptance of the Exchange, a finder's fee is payable to Profitsion Global Holding Company Limited ("Profitsion Global"), a private company registered in British Virgin Islands ("BVI") and an arm's length party to the Company and Jinsili. The finder's fee is to be paid in 500,000 common shares (the "Finder's Shares") of the Resulting Issuer at the deemed price of $0.19 together with 500,000 non-transferable finder's warrants (the "Finder's Warrants"). Each of Finder's Warrants entitles Profitsion Global to purchase one additional common share of the Resulting Issuer at a price of $0.19 for a period of two years from the date of the Closing of the Transaction.

The proposed Transaction is not a "Non-Arm's Length Qualifying Transaction" as such term is defined in the Policy and will therefore not be subject to shareholder approval. The Company will prepare a filing statement for submission to the TSXV in accordance with TSXV policies.

The Company currently has 6,000,000 common shares issued and outstanding, as well as 280,000 incentive stock options and 400,000 agent's options to acquire common shares at $0.10 per share.

Following the Closing of the Transaction, the completion of the Concurrent Offering and the issuance of the Finder's Shares, approximately 31,000,000 common shares of the Resulting Issuer would be issued and outstanding on a non-diluted basis. Shareholders of the Company will hold common shares representing approximately 19.35% of the capital of the Resulting Issuer following the Closing of the Transaction on a non-diluted basis.

The proposed Transaction is subject to a number of terms and conditions, including the entering into by the parties of a definitive agreement with respect to the Transaction (which agreement shall include representations, warranties, conditions and covenants typical for a transaction of this nature); the completion of the Concurrent Offering; the receipt of all necessary regulatory, corporate and third party approvals, including the approval of the TSXV, and compliance with all applicable regulatory requirements and conditions in connection with the Transaction; the absence of any material adverse condition with respect to the financial and operational condition or the assets of each of the parties; and the delivery of customary closing documentation including, without limitation, legal opinions, officers' certificates and certificates of good standing or compliance.

The completion of the Transaction is expected to occur following the satisfaction or waiver of the conditions precedent. The parties have agreed to use best efforts to close the Transaction as soon as possible. Each of the Company and Jinsili will be responsible for the payment of their own professional fees and the Company has agreed to bear the sponsorship fee, listing fee and any other expenses in connection with the foreign due diligence searches required by the TSXV.

Trading in the common shares of the Company is halted and will remain halted pending the satisfaction of all applicable requirements of the TSXV. There can be no assurance that trading in the common shares of the Company will resume prior to the completion of the Transaction.

Information concerning Jinsili

Jinsili is a private company incorporated on January 10, 2012 under the laws of BVI and is currently controlled by Mr. Xizhou Tong, a resident in the People's Republic of China (the "PRC"). Jinsili's registered office is located at 263 Main Street, P.O. Box 2196, Road Town, Tortola, British Virgin Islands. Jinsili owns 100% of Jinsili (Hong Kong) International Steel Holdings Co., Ltd., a private company registered in Hong Kong. Jinsili is a global specialty steel trader and service provider through the integration of Chinese specialty steel suppliers, and focuses on providing a ready and quality supply of specialty steel products and supplying superior customer service in the international markets.

Based on Jinsili's May 31, 2014 draft unaudited financial statements, prepared in accordance with International Financial Reporting Standards, for the five months ended May 31, 2014, Jinsili had $2,435,402 revenues and a net profit of $430,078. As at May 31, 2014, Jinsili's total assets and liabilities were approximately $5.3 million and $3.1 million, respectively.

Board of Directors and Management of the Resulting Issuer

Upon Closing, the board of directors of the Resulting Issuer shall consist of five (5) members, four of whom will be independent directors. The names and backgrounds of the five director nominees and proposed senior officers who are expected to become insiders of the Resulting Issuer are as follows:

  1. (a)Xizhou Tong: Chief Executive Officer, President and Director

Mr. Tong has more than 8 years experience in international trading, brokerage and securities business, special steel industry and corporate management in the PRC. Mr. Tong jointed Jinsili at the end of 2013, and he has been using his investment and industrial experience to manage Jisili and position it as a professional international steel trader and industry service provider. Mr. Tong obtained his Bachelor Degree from Chongqing Technology and Business University, China.

  1. (b)Herrick Lau: Chief Financial Officer and Corporate Secretary

Mr. Lau is currently Managing Director of Baron Global Financial Canada Ltd., which firm provides financial advisory services to private and public companies. As a seasoned investment banking professional, Mr. Lau has more than 15 years experience in public company management, corporate finance, corporate governance, investment search and various advisory service. He is currently the Chief Financial Officer of Jayden Resources Inc. (TSX: JDN), the Chief Financial Officer and a director of Novo Resources Corp. (CSE: NVO), the Chief Financial Officer of First Growth Holdings Ltd. (TSXV: FGH) and Kariana Resources Inc. (CSE: KAA). Mr. Lau obtained his Bachelor and Master Degrees in Business and Economics from Simon Fraser University. He is also a charter holder of the Chartered Financial Analyst designation. Mr. Lau is fluent in Mandarin, Cantonese and English.

  1. (c)Ian Mallmann: Director

Mr. Mallmann has been the principal of Chagford Square Capital Inc., a corporate finance and real estate advisory firm since October 2003. He was the Chairman and Chief Executive Officer of Del Cano Properties Trust (a reporting issuer in British Columbia, Ontario and Yukon) from June 1998 to May 2003. Mr. Mallmann has more than 5 years experience in serving as director, Chief Financial Officer and Chair of Audit Committee for PRC-based reporting issuers on the TSXV and Canadian Securities Exchange. He is currently the director of Symax Lift (Holding) Co., Ltd. (TSXV: SYL), Canada Renewable Bioenergy Corporation (CSE: XZX), and ASB Capital Inc. (TSXV: ASB.P). Mr. Mallmann holds Master Degree in Business Administration, Juris Doctor and Bachelor Degree in Arts from the University of British Columbia.

  1. (d)Alvin Wu: Director

Mr. Wu acted as a financial consultant in a certified public accountants firm in the United States from May 2002 to November 2009. From October 2008 until December 2011, he served as a manager of the audit department for Zhejiang Boyuan Construction Co., Ltd., whose parent company is currently listed on the TSX under the symbol BOY. Mr. Wu also has extensive experience in auditing, industrial and investment sectors gained from working with various companies in the PRC. Mr. Wu is currently a director of Moral & Honor Capital Fund Management Company Limited, a private company carrying on business in capital management, investment, and financing planning in Hong Kong. Mr. Wu graduated from Zhongyan Radio and TV University, Guangzhou China and obtained a Doctorate Degree in Business Administration from the University of Southern California. Mr. Wu has also obtained a Certification in Risk Management Assurance from The Institute of Internal Auditors in the United States. Mr. Wu is fluent in Mandarin and Cantonese.

  1. (e)Fiona Zhou: Director

Ms. Zhou has 18 years experience in public listings, financial management and corporate finance, especially for the North American listed companies. She has acted in the capacity of Controller of a number of TSX and TSXV companies since 2004 and has participated various transactions in respect of public listings of Canadian and PRC companies on the TSX and TSXV. From April 2009 until January 2013, Ms. Zhou was a Controller of a private mineral company in Canada and mainly responsible for the financial management, financial reporting, mergers & acquisitions, and share and debt financing. In 2007, Ms. Zhou served as a director and Chief Financial Officer for Oatpoint Capital Company, a capital pool company, and assisted with its completion of the qualifying transaction. From June 2004 to January 2009, Ms. Zhou was the Controller of Minco Mineral Group, including Minco Gold Mining Company (TSX: MMM, AMEX: MGH), Minco Silver Company (TSX: MSV), Minco Metal Company (TSXV: M110484) and Pacific Link Mineral Company (TSX: PKC). Ms. Zhou is currently a member of CGA Canada. She graduated from Fudan University in the PRC with a Bachelor Degree in Commerce. She is currently the president of Fionsun Consultant Company, a consulting firm specialized in public listings, mergers and acquisitions, fund-raising, investor relations, financial reporting and internal control services for public and private companies. Ms. Zhou is fluent in Mandarin and English.

  1. (f)Vincent Pang: Director

Mr. Pang formerly a senior manager at KPMG Financial Advisory Ltd., where he has been working for over 12 years and had involved in various transactions with respect to corporate finance, restructuring and financial arrangements. He served as the Chief Financial Officer of China Ming Yang Win Power Group Limited (NYSE: MY) from March 2012 to June 2013 and oversaw the corporate finance, accounting, compliance and investor relations as well as participated in developing new business and investing activities. Mr. Pang is currently the Financial Controller and Corporate Secretary of Jianhua Concrete Pile Holdings Limited, a company based in Zhongshan, China and oversees corporate finance, accounting and investor relations as well as participating in financing and investing activities in respect of mergers and acquisitions and financing arrangements. Mr. Pang is fluent in Mandarin, Cantonese and English.

  1. (g)Selina Tung: Vice President, Finance

Ms. Tung is currently a Manager, Corporate Finance of Baron Global Financial Canada Ltd., where she has been working for over 3 years. Prior to joining Baron Group, Ms. Tung was employed as a Senior Accountant at the assurance department of PricewaterhouseCoopers Vancouver. She also worked as a Project Accountant at Public Guardian and Trustee of British Columbia. Ms. Tung is knowledgeable in performing financial reporting, financing structuring and maintaining compliance with corporate governance. She obtained her Bachelor Degree in Business from Simon Fraser University and also obtained her Chartered Accountant designation in February 2009. Ms. Tung is fluent in Mandarin and English.


Leede Financial Markets Inc., subject to completion of satisfactory due diligence, has agreed to act as sponsor in connection with the Transaction pursuant to an engagement letter dated August 2, 2014.

An agreement to sponsor should not be construed as any assurance with respect to the merits of the Transaction or the likelihood of the completion of the Transaction.

About Lingxian Capital Inc.

Lingxian Capital Inc., a capital pool company within the meaning of the Policy of the TSXV, was incorporated in British Columbia on July 16, 2012 and listed on the TSXV on May 23, 2014. The Company does not have any operations and has no assets other than cash. The Company's business is to identify and evaluate businesses and assets with a view to completing a qualifying transaction (as such term is defined in the Policy).

For More Information

For more information, please contact:

Herrick Lau, Director, Chief Financial Officer and Corporate Secretary of the Company

Telephone: 1-778-331-2082

E-mail: [email protected]

This press release may contain "forward-looking information" within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein may be forward-looking information. Generally, forward-looking information may be identified by the use of forward-looking terminology such as "plans" "expects" or "does not expect", "proposed", "is expected", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. This forward-looking information in respect of the Company and Jinsili reflects the Company's and Jinsili's, as the case may be, current beliefs and is based on information currently available to the Company and Jinsili, respectively, and on assumptions the Company and Jinsili, as the case may be, believes are reasonable. These assumptions include, but are not limited to, management's assumptions about the TSXV approval for the Transaction, closing of the Concurrent Offering, the Resulting Issuer's anticipated share structure.

Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company, Jinsili or the Resulting Issuer to be materially different from those expressed or implied by such forward-looking information. Although the Company and Jinsili have attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

The forward-looking statements contained in this press release represent the expectations of the Company and Jinsili as of the date of this press release and, accordingly, are subject to change after such date. However, each of the Company and Jinsili expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities law.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV requirements, majority of minority approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

All information contained in this press release with respect to Jinsili was provided by Jinsili to the Company for inclusion herein. The Company and its directors and officers have not independently verified such information and have relied exclusively on Jinsili for any information concerning Jinsisli.

Investors are cautioned that, except as disclosed in the filing statement or information circular, as the case may be, to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSX Venture Exchange has in no way passed on the merits of the proposed Transaction and has neither approved or disapproved the contents of this press release.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility of the adequacy or accuracy of this press release.