SHENZHEN, China, Jan. 18 /Xinhua-PRNewswire/ -- Irish Mag, Inc. (OTC Bulletin Board: IRHM) (proposed new name China Public Security Technology Inc.), a provider of real-time Geographic Information System (“GIS”) and Software Operating Service in China, today announced that it has entered a Securities Purchase Agreement with two accredited investors to issue and sell a total of 7,868,422 shares of the Company's common stock at a purchase price of $1.90 per share for aggregate gross proceeds of $14.95 million. The proceeds will be used for general working capital purposes, including the enhancement of the Company's software operating service, software research and development, sales channel expansion and possibly for acquisition opportunities.
The sale of the shares is expected to be completed at two separate closings. At the first closing, fifty percent of the shares would be issued to the investors for one-half of the aggregate proceeds, approximately $7.5 million. The first closing is expected to occur on or before January 31st, 2007. The first closing is subject to several closing conditions, including, without limitation: the Company and/or its shareholders' execution and delivery to the investors of a satisfactory registration rights agreement, make good escrow agreement and lockup agreement; the Company's completion of a proposed restructuring of the Company involving Shenzhen iASPEC Software Engineering Company Limited (“iASPEC”), a Chinese company owned by the Company's controlling shareholder; and the Company's delivery of an opinion from its legal counsel in the People's Republic of China confirming the legality under Chinese law of the proposed restructuring.
Thereafter, a second closing would occur if the Company meets certain other conditions to the second closing, including obtaining consents from certain third parties. At the second closing, the remaining fifty percent of the shares will be issued for the balance of the aggregate proceeds. The second closing is expected to occur on or before April 30th, 2007.
Under the Securities Purchase Agreement, the Company's controlling shareholder, Mr. Jiang Huai Lin agrees to transfer to the Investors an additional 3,947,368 shares of the Company's common stock owned by him, if the after tax net income (ATNI) for the Company's 2007 fiscal year is less than $12.5 million, and another 3,947,368 shares of the Company's common stock owned by him, if either the Company's ATNI for the 2008 fiscal year is less than $21 million or the Company's earnings per share for the same period is less than $0.480 on a fully diluted basis. The company expects to achieve gross revenues of approximately $27 million and $45 million in fiscal years 2007 and 2008, respectively, to support achievement of these “make-good” net income targets.
The common stock that will be sold to the investors will be restricted under the Securities Act of 1933. Accordingly, the shares may not be offered or sold in the United States, except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act. The Company has agreed to file a registration statement covering re-sales of these shares by the investors. This press release does not constitute an offer to sell or the solicitation of an offer to buy the common stock.
For more information about the securities purchase agreement and the private placement contemplated by that agreement, see the current report on Form 8-K filed by the Company on January 17, 2007.
About Irish Mag, Inc.
Through its indirect wholly-owned Chinese subsidiary, the Company is a real-time Geographic Information System (GIS) solution provider in China. The company provides a broad portfolio of fully integrated products and services, including system design and database management for Police-use GIS, Civil-use GIS, e-government and other security related products. The Company currently has an exclusive license of 16 patents in China. Through its exclusive business turnkey agreement with Shenzhen iASPEC Software Engineering Company Limited or iASPEC, under which the Company acts as iASPEC's exclusive subcontractor, the Company's key customers include Shenzhen City Public Security Bureau, China Unicom Shenzhen Division, Shenzhen Urban Planning Bureau, and the Shenzhen Fire Department. To learn more about the Company, please visit the corporate website at http://www.chinapsh.com .
Safe Harbor Statement
This press release contains certain statements that may include "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact included herein are "forward-looking statements" including statements regarding the ability of the Company to consummate the private placement, the company's and its subsidiaries business strategy, plans and objectives and any other statements of non-historical information. These forward looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You 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 the Company or 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.
For more information, please contact:
Michael Lin
Vice President, Investor Relations
China Public Security Technology, Inc.
Tel: +1-949-929-0601
Email: mlin@chinapsh.com
Dixon Chen
The Global Consulting Group
Tel: +1-646-284-9403
Email: dchen@hfgcg.com
