Transaction Announcement
An investment for the Year of the Tiger in the fast growing healthcare sector in China

Mars 4, 2010 - Lotus Pharmaceuticals, Inc. United States OTC Bulletin Board (LTUS:OB), has entered into a USD $10,000,000 Equity Line Facility.

Lotus engages in the production, trade, and retail of pharmaceutical products in the People's Republic of China and plans to use the funds for the group's general corporate and working capital purposes. Lotus currently sells twenty prescription drugs covered by the National Health Insurance Program in the PRC, and four of which are self-produced. The company operates GMP certified facilities, with direct sales channels to 42 hospitals and a national sales network through 10 regional centres in the PRC.

Dr. Liu Zhong Yi, Chief Executive Officer and Chairman of Lotus is pleased to draw down a total of USD $10,000,000 equity capital in tranches. This provides additional flexibility to fund the growth strategy.

Lotus engages in the production, trade, and retail of pharmaceuticals in the People's Republic of China. The company operates through its two controlled entities: Liang Fang Pharmaceutical, Ltd. and En Ze Jia Shi Pharmaceutical, Ltd. Lotus' current drug development pipeline is focused on the treatment of cerebro-cardiovascular disease, asthma, and diabetes. Liang Fang sells drugs directly and indirectly through its national sales channels to hospitals, clinics and drugstores in 30 provinces of the PRC. Its self-produced products include four drugs covered by the National Health Insurance Program: Valsartan for treating hypertension or high blood pressure; Brimonidine Tartrate, a drug used to constrict adrenaline receptors; Nicergoline for Injection, an a-receptor blockage nerve system blood-brain medicine; and Levofloxacin, an anti-bacterial drug for the treatment of mild, moderate, and severe infections caused by susceptible strains of the designated microorganisms in conditions, such as acute maxillary sinusitis, acute bacterial exacerbation of chronic bronchitis, community-acquired pneumonia, and acute pyelonephritis, as well as complicated and uncomplicated skin and skin structure infections, and urinary tract infections. The Company's product pipeline pending final SFDA approval status includes Isosorbide Mononitrate-Sustained Release Tablets for cardiovascular disease, Gliclazide-Controlled Release Tablets for Type 2 diabetes and Laevo-Bambutero for asthma. Lotus Pharmaceuticals' products under pre-clinical studies comprise Lovastatin, Verapamil Hydrochloride, and Valsartan-Controlled Release tablets. Lotus is also involved in the retailing of both Western and traditional Chinese medications and medical treatment equipment, research and development, leasing space to various retail merchants and licensed medical practitioners, and the sale of developed drug formulas. It currently operates10 drug stores in Beijing.



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The information contained herein is for informational and discussion purposes only and is not intended to be, nor shall it be, construed as legal, tax or investment advice or as an offer, or the solicitation of any offer, to buy or sell any securities. Before entering into any investment you should thoroughly review the respective transaction documents with your legal, tax and investment advisors.




Lotus Pharmaceutical, Inc.
$10,000,000
Equity Line Facility
Common stock

March 5, 2010

Transaction Overview
  • Lotus may, at its sole and exclusive option, periodically sell to the investor shares of its common stock, $0.001 par value per share (the "Common Stock") for a total purchase price of up to ten million dollars ($10,000,000)
  • For each share of Common Stock purchased the investor will pay to the Company the higher of (i) ninety-three (93%) of the lowest daily volume weighted average price of the Common Stock during the five (5) consecutive trading days following delivery by the Company of an advance notice or (ii) $0.87, the minimum acceptable price
  • Proceeds to be used for additional flexibility to fund the growth strategy