SHENZHEN, China, June 13 /Xinhua-PRNewswire-FirstCall/ -- China Public Security Technology, Inc., (OTC Bulletin Board: CPBY) ("China Public Security" or "the Company"), through its wholly owned subsidiary, Public Security Technology (PRC) Co., Ltd., a leading provider of public security information technology and Geographic Information Systems ("GIS") software services, announced today that it is planning to restructure its commercial arrangements with iASPEC Software Engineering Company Limited or iASPEC, a related party that has engaged the Company as its exclusive subcontractor for all public security information technology and GIS development and installation services that it provides to its clients.
China Public Security anticipates that the proposed amendment will provide it with, among other things:
-- the assignment of all of iASPEC's revenues and expenses, and
rights to, or rights to acquire for nominal consideration,
iASPEC's assets
-- an exclusive option to acquire all of the oustanding equity of
iASPEC that would be exercisable by the Company or its
subsidiaries only if PRC regulations are modified to permit
foreign ownership of PRC companies that hold security licenses
similar to those held by iASPEC
-- a voting agreement that would provide the Company with control
over iASPEC corporate decision making under certain circumstances
China Public Security is seeking to implement the Amendments to its commercial arrangements with iASPEC in part so that its interest in iASPEC will be accounted for as an interest in a variable interest entity under FASB interpretation No. 46. China Public Security believes that the modifications to its corporate structure and accounting treatment will result in greater transparency for investors and the ability to exert greater control over the business and affairs of iASPEC. China Public Security expects to implement this amendment before the end of its second fiscal quarter.
"We believe the proposed amendment of our commercial arrangements with iASPEC will give us all of the benefits of ownership, along with the financial reporting transparency that results from consolidated financial reporting under Fin. 46," said Mr. Jiang Huai Lin, the Company's CEO. "We believe that the revised structure will enhance our corporate governance and investor confidence, while enabling the Company to continue to grow our share in the very exciting market providing IT solutions for public security and Geographic Information System (GIS) related projects in the PRC."
About China Public Security Technology, Inc.
Through its wholly-owned Chinese subsidiary, CPST is focused on the development and implementation of large scale high-tech public security and Geographic Information System (GIS) related projects. The Company provides a broad portfolio of fully integrated solutions and services, including public security information technology (First Responder Coordination Platform, Intelligent Border Control and Intelligent Security Surveillance), Geographic Information System (Police-use GIS and Civil-use GIS), and e-Government Platform, software sales and maintenance as well. CPST currently has the licenses to 16 registered and copyrighted software applications in China, through its exclusive business turnkey agreement with Shenzhen iASPEC Software Engineering Company Limited (iASPEC). Under this agreement the Company acts as iASPEC's exclusive subcontractor to all its customers. To learn more about the Company, please visit the corporate website at http://www.chinacpby.com .
Safe Harbor Statement
This press release contains certain statements that may include "forward looking statements". All "forward looking statements", other than statements of historical fact included herein are "forward-looking statements" including statements regarding the benefits of the contract with the Zhuhai Special Economic Zone, the ability of the Company to achieve its commercial objectives, the business strategy, plans and objectives of the Company and its subsidiaries 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.
