SHENZHEN, China, July 15 /Xinhua-PRNewswire-FirstCall/ -- China Information Security Technology, Inc., (Nasdaq: CPBY) ("China Information Security," "CIST" or the "Company"), a leading provider of Information Security and 3S (Geographic Information System - GIS, Global Positioning System - GPS and Remote Sensing - RS) services in China, today announced that Mr. Jiang Huai Lin, the Chairman and Chief Executive Officer of the Company consummated the purchase the 24% minority interest in iASPEC Software Co. Ltd. ("iASPEC"), CIST's variable interest entity, from Mr. Jin Zhu Cai, for a total consideration of RMB60 million (approximately $8.72 million).
Mr. Lin paid the purchase price by delivering to Mr. Cai, 1,527,855 shares of restricted common stock of CIST owned by him, valued at $5.708 per share (based on a 5-day average of CIST's share price during the week of June 23, 2008). As a result of the transaction, Mr. Lin now holds 100% of the equity interests of iASPEC. Details of the transaction can be found in an 8-K filed by the Company on July 3, 2008.
Management believes that the transaction solidifies the economic relationship between CIST and iASPEC and better aligns Mr. Cai's interest with the interests of CIST shareholders. CIST will continue to receive 100% of the economic benefits of iASPEC.
"We are pleased that we have consummated this transaction with Mr. Cai," said Mr. Lin. "Mr. Cai has been extremely instrumental in iASPEC's success and we value his continued presence as a CIST shareholder." "I have developed a strong and respectful relationship with the management of CIST over the years," said Mr. Jin Zhu Cai, "and I look forward to sharing in iASPEC's continued success through CIST."
About China Information Security Technology, Inc.
Through its wholly-owned Chinese subsidiary, China Information Security is focused on the development and implementation of large scale, high-tech information security and 3S ("Geographic Information System - GIS, Global Positioning System - GPS and Remote Sensing - RS") related projects. The Company provides a broad portfolio of fully integrated solutions and services, including Information Security (First Responder Coordination Platform, Intelligent Border Control System and Residence Card Information Management System), 3S (GIS, GPS and RS), and Product Sales and Services. Through its exclusive contractual arrangement with iASPEC Software Company Limited (iASPEC), China Information Security has the licenses to numerous registered and copyrighted software applications in China. In addition, iASPEC is considered the Company's variable interest entity, and its financial data and information is consolidated into the Company's accounts. To learn more about the Company, please visit the corporate website at http://www.chinacpby.com.
Safe Harbor Statement
This press release may contain certain "forward-looking statements" relating to the business of China Information Security Technology, Inc., and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements" including statements regarding the general 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. Investors 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.
