Subsequent Events

9 Months Ended

Sep. 30, 2011

Note 13 – Subsequent Events

Acquisition of Biocalth International

On October 20, 2011, the Company entered into an agreement with Jackson Wen, individually and as trustee for the shareholders of Biocalth International, Inc., Giantceuticals, Inc. and HerbSource Enterprises, Inc. (collectively, “Biocalth”), to purchase all of the issued and outstanding shares of stock of Biocalth (“Shares”). Biocalth’s business is the manufacturing, marketing and sales of nutraceutical products in Asia and Europe.

Closing is scheduled for November 23, 2011 with a deadline on closing of December 31, 2011. The purchase price, which was negotiated by the parties, is $5,000,000 to be paid in restricted shares of Company common stock. In addition, the Seller shall receive an “earn-out” based on the sales performance of products sold by Biocalth as follows (all to be paid in restricted shares of Company common stock):

Year:	Gross Revenue Target:		Earn-out Amount
1 (ending in 2012)	$	5,000,000	$	5,000,000
2 (ending in 2013)	$	10,000,000	$	5,000,000
3 (ending in 2014)	$	15,000,000	$	2,500,000

The Company’s obligation to close the purchase of the Shares is contingent upon completion of its due diligence on the Company, which will occur prior to closing.

Leakout Agreements

During October 2011, the Company entered into leakout agreements whereby in exchange for limiting the manner in which 12,102,500 shares of stock being sold over a six month period, the Company granted 3,000,500 five year warrants to purchase the Company’s common stock for $1.00 per share. The leakout agreements were executed by various shareholders in the Company to limit the amount of stock that could be sold into the market until February 2012 when the Company will have almost a full year of operation.

Interest Waiver

During October 2011, the Company obtained majority consent from the convertible note payable holders whereby all interest payments owed as of September 30, 2012 through March 31, 2012, will be deferred until March 31, 2012 in exchange for 925,225 five year warrants to purchase the Company’s common stock at $0.50 per shares the Company. The warrants have the same rights and privileges as the warrants issued in connection with the April 6, 2011 Notes.

LTS Nutraceuticals, Inc. 10-Q