Biomagnetics Diagnostics, a developer of diagnostic systems and technology for viral disease detection, has signed a Letter of Intent (LOI) with Lanzhou Sanhuan new technology development of Ganzu, China.

Biomagnetics claimed that the expected acquisition is the first of several planned acquisitions targeted at a $1.00 share price for company’s common shares. The company plans for rapid transition of the trading of its shares to the OTCBB upon the expected completion of its full audit and financial review, which is targeted for release within the next few weeks.

Under the terms of the LOI, Biomagnetics is expected to acquire all assets of Lanzhou, including polyvinyl alcohol film (PVA) film formulation, equipment and patented manufacturing process rights, for which the company’s partners, including the Chinese government, have spent more than ten years and approximately $40m in developing.

Reportedly, the utility patent for ‘Equipment of Rotary-Drum Production of PVA Film’ was issued on April 14, 2008.

In addition to the assets of Lanzhou, Biomagnetics also expects to inherit an ongoing Chinese government contract for 600,000 tons annually, upon reaching that production level (gross profit is approximately $1,400 per ton) of PVA film product for a minimum of three years, although additional annual renewals are expected.

Clayton Hardman, CEO of Biomagnetics Diagnostics, said: “PVA film is in huge demand worldwide in the healthcare, agricultural, meat packing industries. Lanzhou has developed a unique, proprietary and patented process for large scale manufacture. Relative to the market opportunity in the PVA market, the number of shares we are issuing for this acquisition is minimal.”