FUQING CITY, China, Nov. 15 /Xinhua-PRNewswire-FirstCall/ -- China Clean
Energy Inc. (OTC Bulletin Board: CCGY) (“China Clean Energy”), today
announced that it has completed a share exchange with China Clean Energy
Resources, Ltd., a rapidly growing manufacturer and distributor of biodiesel
fuel and specialty chemicals made from renewable resources, on October 24,
2006. The merged public company is headquartered in Fuqing City in the
Fujian province of the People’s Republic of China (“PRC”) and will operate
under the name China Clean Energy Inc. The management team is led by
Chairman and Chief Executive Officer Mr. Tai-ming Ou, and Vice President of
Production and Engineering, Mr. Ri-wen Xue. The newly-formed public company
has approximately 21.3 million common shares outstanding, and is quoted on
the OTC Bulletin Board under the symbol CCGY.
China Clean Energy, through its wholly-owned subsidiary Fujian Zhongde
Technology Co., Ltd. (“Fujian Zhongde”), manufactures biodiesel fuel and
high-quality specialty chemical products from renewable resources, such as
waste grease and vegetable oils. The company currently owns a patent with
the PRC’s State Intellectual Property Office for Multi-purpose Polyamide Hot
Melt Adhesive and its Production Method, and has another patent pending for
its proprietary biodiesel production method. In addition, the company is
continuously re-evaluating new manufacturing technologies, and expects to
pursue more patent protection for its proprietary technology and processes.
China Clean Energy also has an established research and development facility
with close ties to prominent universities and research centers in China.
“China is now the second largest oil consumer in the world, with current
consumption at approximately seven million barrels of oil per day, and its
need for petroleum continues to grow rapidly,” Mr. Tai-ming Ou stated.
“While China’s biodiesel industry is still very much in its infancy, we
anticipate greater demand for alternatives like biodiesel fuel, particularly
in light of recent government legislation designed to reduce China’s
dependence on fossil fuels.”
China Clean Energy has been producing specialty chemicals since 1995.
China Clean Energy began commercially producing and selling biodiesel fuel in
December 2005, and sales have steadily increased. For the six months period
ended June 30, 2006, biodiesel fuel sales accounted for over 27% of the
company’s total $6.1 million in sales. Also for the six months period ended
June 30, 2006, the company’s consolidated gross profit margin was 27.4% and
net income reached $0.7 million over the same period.
China Clean Energy’s ISO 9001-certified plant is located in Fuzhou City’
s technology and industrial zone in the Fujian Province of China, and
currently has annualized capacity for 4,800 tons (or approximately 1.4
millions gallons) for biodiesel fuel and 15,000 tons for specialty
chemicals. The company is currently in the process of expanding the capacity
of the plant’s annualized biodiesel fuel production to 10,000 tons (or
approximately 3.0 million gallons) expected to be in place by the first
quarter of 2007.
"The completion of this merger enables China Clean Energy to broaden our
investor base, create a liquid market for our stock, and financially support
the accelerated growth of our business," commented Mr. Tai-ming Ou. “Our
near-term goal is to expand our capacity, which we expect to execute with
minimal disruption to our current infrastructure and production schedules.
This added capacity will bring us one step further in our longer-term goal of
becoming a global market leader for the development and manufacturing of
energy products and specialty chemicals made from renewable resources.
“We are currently evaluating our options to build at least two new
biodiesel plants, and expect to have a new plant online in the year 2008,
which should add about 50,000 tons of annual biodiesel capacity, taking our
total annual biodiesel production capacity to approximately 60,000 tons (or
approximately 18 million gallons). We also plan to build our third plant in
early 2009 which we anticipate would add approximately 60,000 tons of annual
biodiesel capacity to our company. We believe we can achieve our growth
strategy given our early entry advantage and the strong demand for our
biodiesel as well as specialty chemicals from renewable resources.”
The Share Exchange and Private Placement
On October 24, 2006, China Clean Energy Inc. (formerly Hurley Exploration
Inc.), and China Clean Energy Resources Limited, a privately-held British
Virgin Islands corporation, entered into a share exchange to reorganize as a
publicly-traded company. The transaction was consummated on October 24, 2006,
resulting in China Clean Energy Resources Ltd. becoming 100% owned by China
Clean Energy Inc. In connection with the share exchange, the company also
closed a $1.05 million private placement, in which it sold a total of
1,050,000 shares of common stock. Following the share exchange and private
placement, there were 21,082,269 common shares issued and outstanding. On
November 9th, 2006 the company sold an additional 250,000 shares through a
private placement for $250,000 bringing the total number of common shares
issued and outstanding to 21,332,269 as of November 9, 2006. Additional
details of these transactions can be found in the company’s Current Reports
on Form 8-K filed with the Securities & Exchange Commission on October 30,
2006 and November 13, 2006. Westminster Securities Corp. -- the financial
advisor to China Clean Energy -- advised China Clean Energy in the share
exchange transaction.
About China Clean Energy
China Clean Energy, through its wholly-owned subsidiary, Fujian Zhongde,
is engaged in the development, manufacturing, and distribution of biodiesel
fuel and specialty chemical products made from renewable resources. Since its
inception, the company has been engaged in the manufacture of high-quality
specialty chemical products from renewable resources. Through its research
and development efforts, the company developed a proprietary process for
refining biodiesel fuel from waste grease and certain vegetable oils. Using
this proprietary process, the Company began producing biodiesel in 2005 and
commenced selling biodiesel commercially starting in December 2005.
About Westminster Securities Corp.
Westminster Securities Corp. is a full-service brokerage firm operating
in five principal areas: investment banking, equity research, account
management, execution services and clearing. Founded in 1971, Westminster
Securities Corp. is a member of the New York Stock Exchange, National
Association of Securities Dealers and the Securities Investor Protection
Corporation. Westminster is headquartered at 100 Wall Street, New York, with
branch offices in Atlanta, Cyprus, Miami, New York, St. Louis and Toronto.
Safe Harbor Statement
This announcement contains forward-looking statements within the meaning
of the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. All statements other than statements of historical fact in this
announcement are forward-looking statements, including but not limited to,
the company’s ability to raise additional capital to finance the company’s
activities; the effectiveness, profitability, and the marketability of its
products; legal and regulatory risks associated with the share exchange; the
future trading of the common stock of the company; the ability of the company
to operate as a public company; the period of time for which its current
liquidity will enable the company to fund its operations; the company’s
ability to protect its proprietary information; general economic and business
conditions; the volatility of the company’s operating results and financial
condition; the company’s ability to attract or retain qualified senior
management personnel and research and development staff; and other risks
detailed in the company’s filings with the Securities and Exchange
Commission. These forward-looking statements involve known and unknown risks
and uncertainties and are based on current expectations, assumptions,
estimates and projections about the companies and the industry. The company
undertakes no obligation to update forward-looking statements to reflect
subsequent occurring events or circumstances, or to changes in its
expectations, except as may be required by law. Although the company
believes that the expectations expressed in these forward looking statements
are reasonable, they cannot assure you that their expectations will turn out
to be correct, and investors are cautioned that actual results may differ
materially from the anticipated results.
