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Chardan South China Acquisition Corp.
Announces the Filing of Its Amended S4 Registration Statement
Aug.14, 2007
Chardan South China Acquisition Corp. (OTCBB: CSCA, CSCAU, CSCAW) ("Chardan
South"), a SPAC(R) incorporated in March 2005 for the purpose of
acquiring an operating entity in the PRC, announced today the
unaudited financial results for the three months ended March 31,
2007 for its acquisition candidate, Head Dragon Holdings Limited
("Head Dragon") (see attached tables).
On April 19, 2007, Chardan South announced that it had signed a
definitive stock purchase agreement pursuant to which it will
acquire 100% of the common stock of Head Dragon, the owner of
Liaoning GaoKe Energy Group ("GaoKe"). GaoKe, founded in 2003, is
the largest private Chinese engineering company providing design,
construction, installation and operating expertise for distributed
power generation and micro power networks in China.
For the three months ended March 31, 2007 Head Dragon had net income
of $1.6 million, up from $46,000 for the three months ended March
31, 2006.
Head Dragon's backlog, which is the total value of all open
contracts less the revenue recognized from those contracts, grew
dramatically during the first quarter of 2007. The contract backlog
as of March 31, 2007 was $322.5 million, an increase of 271% from
$86.9 million as of March 31, 2006. Since contracts historically
have been completed over twelve to eighteen months, a substantial
portion of this revenue will be realized during the current year,
with the remainder to be recognized in fiscal 2008. In addition,
GaoKe signed another two MOUs during the first quarter of 2007.
Mr. Jinxing Lu, GaoKe's Chairman and CEO commented, "During the
first three months of 2007 we experienced a rapid expansion of our
business revenue and backlog. Our revenue grew to $17.5 million in
the first quarter from $3.6 million for the same period a year
earlier. This increase occurred despite the seasonally poor weather
and related contract delays in the Northern provinces of China where
most of our projects are located. Our backlog also continued to
surge as more and more factories and development zones seek to
install economical distributed power generation systems to augment
or replace power from the national grid. We expect that the trend
will continue into the foreseeable future, which bodes well for
GaoKe."
Additional information regarding Chardan South, Head Dragon
Holdings, and GaoKe is available in the Form S-4/A that China Energy
Technology Limited ("China Energy"), the BVI subsidiary of Chardan
South, filed with the Securities and Exchange Commission on Tuesday,
August 14, 2007. A copy of the filing in its entirety is available
at www.sec.gov.
A registration statement relating to these securities has been filed
with the Securities and Exchange Commission but has not yet become
effective. These securities may not be sold, nor may offers to buy
be accepted, prior to the time the registration statement becomes
effective. This press release shall not constitute an offer to sell
or the solicitation of an offer to buy, nor shall there be any sale
of these securities in any state in which such offer, solicitation
or sale would be unlawful prior to registration or qualification
under the securities laws of any such state.
This press release may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
about Chardan South, GaoKe and their combined business after
completion of the proposed acquisition. Forward-looking statements
are statements that are not historical facts. Such forward-looking
statements, based upon the current beliefs and expectations of
Chardan South's and GaoKe's management, are subject to risks and
uncertainties, which could cause actual results to differ from the
forward looking statements. The following factors, among others,
could cause actual results to differ from those set forth in the
forward-looking statements: business conditions in China; continued
compliance with government regulations; legislation or regulatory
environments, requirements or changes adversely affecting the
businesses in which GaoKe is engaged; cessation or changes in
government incentive programs: potential trade barriers affecting
international expansion; fluctuations in customer demand; management
of rapid growth and transitions to new markets; intensity of
competition from or introduction of new and superior products by
other providers of distributed power generation and other energy
generation technology; timing, approval and market acceptance of new
product introductions; general economic conditions; geopolitical
events and regulatory changes, as well as other relevant risks
detailed in Chardan South's BVI subsidiary, China Energy
Technology's filings with the Securities and Exchange Commission,
and the registration statement on Form S-4 (Reg. No. 333-142894).
The information set forth herein should be read in light of such
risks. Neither Chardan South nor GaoKe assumes any obligation to
update the information contained in this press release.
In connection with the pending transaction, China Energy Technology
Limited ("China Energy") has filed with the SEC a Registration
Statement on Form S-4 containing a Proxy Statement/Prospectus for
the stockholders of Chardan South. The stockholders of Chardan South
are urged to read the Registration Statement and the Proxy
Statement/Prospectus, when it is available, as well as all other
relevant documents filed or to be filed with the SEC, because they
will contain important information about Head Dragon, GaoKe, China
Energy, Chardan South and the proposed transaction. The final Proxy
Statement/Prospectus will be mailed to stockholders of Chardan South
after the Registration Statement is declared effective by the SEC.
Chardan South stockholders will be able to obtain the Registration
Statement, the Proxy Statement/Prospectus and any other relevant
filed documents for free at the SEC's website (www.sec.gov). These
documents can also be obtained for free from Chardan South by
directing a request to Lori Johnson c/o Chardan Capital, 625
Broadway, Suite 1111, San Diego, CA 92101.
China Energy, Chardan South and their respective directors and
officers may be deemed to be participants in the solicitation of
approvals from Chardan South stockholders in respect of the proposed
transaction. Information regarding Chardan South's participants will
be available in the Proxy Statement /Prospectus. Additional
information regarding the interests of such participants will be
included in the Registration Statement containing the Proxy
Statement / Prospectus.
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