SHENZHEN, China, Dec. 19 /Xinhua-PRNewswire/ -- China Security &
Surveillance Technology, Inc., "China Security" (OTC Bulletin Board: CSCT), a
leading provider of digital surveillance technology in China, announced today
that the Company recently received official approval from the Shanghai
Industry and Commerce Bureau regarding the closing of the acquisition of
Shanghai Chengfeng Digital Technology Co. Ltd. "Cheng Feng", which was
initially announced on July 7, 2006.
As part of the closing of the acquisition, China Security will pay cash
consideration of approximately $6.25 million (equivalent of RMB 50 million)
and 1,331,376 shares of restricted common stock, in addition to the $1.25
million in cash paid last quarter. Under the share transfer agreement, the
stockholders of Cheng Feng will pledge to China Security approximately $2.50
million (equivalent of RMB 20 million) worth of China Security common stock to
secure a "make good" obligation made by such stockholders to China Security,
which targets a range of between approximately $1.25 million to $1.88 million
in net income for the Cheng Feng business for 2006 and approximately $2.0
million to $3.13 million in net income for the Cheng Feng business in 2007.
The net income contribution from Cheng Feng is not included in the previously
disclosed make good that China Security made to certain of its investors for
2006 and 2007. For more disclosure relating to the Cheng Feng make good
provision please refer to the 6-K filed by China Security with the SEC on July
7, 2006.
"We are very pleased to officially complete the purchase of Shanghai Cheng
Feng, which significantly improves the depth of our intellectual property
portfolio and enables us to offer one of the most comprehensive security and
surveillance packages in the market, while further diversifying our
distribution footprint," commented Mr. Tu Guo Shen, Chief Executive Officer of
China Security. "Mr. Shufang Yang, the founder of Cheng Feng, was recently
appointed as Chief Operating Officer for China Security and his experience
surrounding the industry and technology will serve to further strengthen our
senior management team."
About Cheng Feng:
Cheng Feng is a leader in security surveillance software development and
manufacturing in China. Cheng Feng owns advanced video technology which
seamlessly integrates with other software and hardware applications.
Proprietary software owned by Cheng Feng includes the Security Resource
Integration Management Platform and the Security Integration Platform, which
are designed to integrate all security installations, both hardware and
software, onto a single operating platform to greatly improve the management
of the entire security system. Additionally, Cheng Feng has an established
brand name and 22 valuable distribution channels across China.
About China Security & Surveillance Technology, Inc.
Based in Shenzhen, China, China Security manufactures, distributes,
installs and maintains security and surveillance systems through its wholly
owned subsidiary, Golden Group Corporation (Shenzhen) Limited. China Security
has a manufacturing facility located in Shenzhen and an R&D facility which
leverages an exclusive collaboration agreement with Beijing University. In
addition, China Security has built a diversified customer base through its
extensive sales and service network that includes 37 points of presence
throughout the PRC. To learn more about China Security, visit their website
at: http://www.goldengroup.cn/eindex.asp
Safe Harbor Statement:
This release contains certain "forward-looking statements" relating to the
business of China Security and its subsidiary companies, which can be
identified by the use of forward looking terminology such as "believes,
expects" or similar expressions. The forward looking statements contained in
this press release include statements regarding the ability of the Cheng Feng
acquisition to enhance China Security's core operations and provide
technological and cross selling benefits, the expectation that the acquisition
will be immediately accretive to earnings and revenue and Cheng Feng's ability
to meet the disclosed Make Good targets for 2006 and 2007. Such forward
looking statements involve known and unknown risks and uncertainties,
including, but are not limited to, general business conditions, managing
growth, and political and other business risk. All forward-looking statements
are expressly qualified in their entirety by this Cautionary Statement and the
risks and other factors detailed in the Company's reports filed with the
Securities and Exchange Commission. China Security and Surveillance Technology
Inc. undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise, except as may be required under applicable securities law.
