China Linen Textile Industry Announces Completion of Convertible Note Financing

China Linen Textile Industry, Ltd. (OTC Bulletin Board: CTXIF, "China Linen" or the "Company"), a China-based company engaged in the production and sale of linen yarn and various types of linen fabric, today announced that it has consummated a private placement to a group of institutional and accredited investors for approximately $7 million of 7.5% notes that are convertible into the Company's ordinary shares. The offering will result in gross proceeds of approximately $6.4 million to the Company.

The 7.5% note carries a fixed conversion price of $1.52, which is equal to 115% of the 10-day volume weighted average price prior to November 3, 2010, and carries a 2-year term. Assuming full conversion of the notes issued to investors, the company would expect to issue approximately 4,634,869 ordinary shares. There were no warrants issued in this offering. The total outstanding ordinary shares of the Company after conversion and exercise would be approximately 24,849,872 shares. Net proceeds from the offering are expected to fund the acquisition of Lanxi Tianxianfang Linen Co., Ltd, which includes a 23,358 square foot building in Lanxi Town, China, a spinning production line with an annual capacity of approximately 620 tons of linen yarn, and a bleaching factory with annual capacity to bleach 10 million meters of linen fabric., which the Company is currently leasing.

Rodman & Renshaw, LLC, a subsidiary of Rodman & Renshaw Capital Group, Inc. (Nasdaq: RODM), acted as placement agent for the transaction.