SHENZHEN, China, Sept. 20 /Xinhua-PRNewswire-FirstCall/ -- Lincoln International Corporation (OTC Bulletin Board: LCNIA) (“Lincoln International Corporation”, or “the Company”), a leading manufacturer of optoelectronic products, specializing in small- to mid-sized LED and CCFL backlight units for LCD displays, today announced that it has completed a share exchange with the shareholder of Keep On Holdings Ltd., a British Virgin Islands company (“Keep On”) pursuant to which Keep On became a wholly-owned subsidiary of the Company. Keep On is the sole shareholder of Suny Electronics (Shenzhen), Ltd., a Chinese corporation. Concurrent with the share exchange, the Company completed a $4.0 million private placement of convertible preferred stock and warrants with accredited investors led by Barron Partners LP.
Suny designs, manufactures and markets small- to mid-sized LED and CCFL backlights for various types of displays. Its products have applications in electronic consumer products, such as mobile phones, PDAs, GPS systems, portable DVD/VCD players, MP3s and MP4s, medical equipment and household appliances with displays. The management team of the Company is led by President and Chief Executive Officer Mr. Lawrence K Y Chan, the founder of SUNY. The Company has approximately 87 million shares outstanding, and is quoted on the OTC Bulletin Board under the symbol LCNIA. The Company intends to complete a 1 for 7.5 reverse stock split, which would reduce the outstanding shares outstanding to 11.6 million. An additional 26.3 million shares would be issuable, after giving effect to the reverse split, if the convertible preferred stock is converted in full and all of the warrants are exercised.
In 2006, Suny generated $15.9 million in revenue and $2.4 million in net income, up 120% and 245%, respectively from 2005. Revenue for the six months ended June 30, 2007 increased 91% over the comparable period in 2006 to $11.3 million.
“The completion of this share exchange and private placement enables us to develop a solid financial position to support our anticipated continued growth. First, we plan to purchase equipment that will enhance the quality and quantity of our small- to mid-sized back-lighting units. Next, we will target the large-sized back-lighting units and liquid crystal display television market which we believe can generate a higher profit margin,” said Mr. Chan, CEO of the Company. “We believe our advantages in terms of cost and engineering will enable us to maintain strong relationships with our customers.”
Backlight units consist of a light source (LED or CCFL), a light guide that acts as a medium for light to pass through, and film (such as a thin film transistor) that evenly reflects and diffuses the light for high uniformity. It is one of the major components for LCD displays, and represents 20% or more of the cost of an LCD module. According to IDC research, revenues for the TFT-LCD market in 2005 were over $60 billion and are expected to increase to $94 billion by 2010. The backlight portion of an LCD was a $19 billion market in 2005 and a $20.2 billion market in 2006. Mobile phone displays continue to represent the majority of shipments in the small- to mid-sized category, while demand for large-sized LCD panels has been increasing rapidly since plasma and LCD-TV have been introduced. The backlight industry has boomed since the early 1990s, beginning in Japan and Korea. In late 1990s, due to cost advantages of producing in China, mainland Chinese manufacturers began to take a much larger share of the world market.
Concurrent with the share exchange, the Company completed a private placement in which Barron Partners LP and EOS Holdings LLC purchased, for $4.0 million, (i) 3,703,704 shares of the Company’s series A preferred stock at $1.08 per share, with each share of series A preferred stock being initially convertible to 7.5 shares of common stock, (ii) common stock purchase warrants (the “Warrants”) to purchase 41,250,000 shares of Common Stock at $.17 1/3 per share, and (iii) Warrants to purchase 45,000,000 shares of Common Stock at $0.20 per share. Additional details of this transaction can be found in the Company’s Form 8-K filed on September 19, 2007.
In connection with the private placement, Lincoln International Corporation placed an aggregate of 3,700,000 shares of Series A Preferred Stock in an escrow account. The Target Number for 2007 is RMB0.9894 per share (or $0.13), and the Target Number for 2008 is RMB1.569 per share (or $0.20), except that, if all of the Warrants shall not have been exercised by March 31, 2008, the Target Number for 2008 shall be RMB1.368 per share (or $0.18). The targets in US dollars are based on an exchange rate of 7.8 RMB for $1.00 and give effect to the one-for-7.5 reverse split.
Safe Harbor Statement
This release contains certain "forward-looking statements" relating to the business of Lincoln International Corporation and its subsidiary companies. These forward looking statements are often identified by the use of forward-looking terminology such as "believes, expects" or similar expressions. Such forward looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. 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 company’s 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 Lincoln International Corporation or to persons acting on its behalf are expressly qualified in their entirety by these factors other than as required under the securities laws. The Company does not assume a duty to update these forward-looking statements.
