China Agritech Announces $15 Million Private Placement Financing
June 29 2007 - 12:56PM
PR Newswire (US)
BEIJING, June 29 /Xinhua-PRNewswire-FirstCall/ -- China Agritech,
Inc., a Delaware corporation, (OTC:CAGC.OB) (BULLETIN BOARD:
CAGC.OB) ("China Agritech"), a leading liquid fertilizer
manufacturer in China, announced that it has entered into an
agreement with certain accredited investors for the private
placement of 5,556,000 shares of common stock at a purchase price
of $2.70 per share, for anticipated gross proceeds of approximately
$15.0 million. The private placement is expected to close early
next week. In connection with the private placement financing,
1,124,564 shares of China Agritech's common stock which are
beneficially owned by the company's Chairman, President and Chief
Executive Officer, Mr. Yu Chang, have been placed into an escrow
account as part of a "make good" obligation. The "make good"
provision stipulates that in the event that China Agritech's
after-tax net income for fiscal year 2007 is less than $8.35
million, the escrowed shares will be distributed pro-rata to
investors who participated in the private placement. If China
Agritech's after-tax net income for the fiscal year 2007 exceeds
$8.35 million, the escrowed shares will be returned to Mr. Chang.
China Agritech intends to use the majority of the proceeds to add
organic granular fertilizer to its product lines and construct a
granular fertilizer line in each of its new factories, located in
Hebei, Anhui, Chongqing and Xinjiang. China Agritech will use
approximately $6.0 million for the purchase and installation of new
equipment, approximately $3.0 million for the initial purchase of
raw materials and the balance will be used for working capital and
financing expenses. "Sustainable agriculture is a top priority for
the People's Republic of China. The Chinese government is
encouraging farmers to use more "green" or 100% organic cultivating
methods which now account for about a fifth of China's
agriculture," commented Mr. Yu Chang, Chairman, President and CEO
of China Agritech. "With this additional capital, we intend to take
advantage of this trend by expanding our production capabilities,
marketing efforts and recently established distribution network to
include organic granular fertilizer." For more detailed information
on the financing referred to in this release, reference is made to
the Company's Form 8-K filing with the Securities and Exchange
Commission and related Exhibits thereto. The common stock referred
to in this release has not been registered under the Securities Act
of 1933 and may not be subsequently offered or sold by investors in
the United States, except pursuant to an effective registration
statement or an applicable exemption from the registration
requirement. The company has agreed to file a registration
statement covering resale of the common stock by investors. This
press release does not constitute an offer to sell or the
solicitation of an offer to buy any security and shall not
constitute an offer, solicitation or sale of any securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of such jurisdiction. About China Agritech Inc.
China Agritech is headquartered in Beijing, China and is engaged in
the development, manufacturing, sale and distribution of organic
liquid compound fertilizers and related products in the People's
Republic of China. The company has developed proprietary formulas
that provide a continuous supply of high-quality agricultural
products while maintaining soil fertility. The company sells it
products to farmers located in twelve provinces of China including:
Heilongjiang, Hebei, Liaoning, Jilin, Shandong, Inner Mongolia,
Henan, Sichuan, Guangdong, Xinjiang, Yunnan and Guizhou. For more
information visit http://www.chinaagritechinc.com/. Safe Harbor
Statement The statements contained in this Release that are not
purely historical are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 and are made in reliance on the
safe harbor provisions contained therein. Such forward-looking
statements include, without limitation, statements regarding the
Company's expectations, hopes, beliefs, intentions or strategies
regarding the future. These forward-looking statements are based on
the Company's current expectations and beliefs concerning future
developments and their potential effects on the Company. There can
be no assurance that future developments affecting the Company will
be those anticipated by the Company. These forward-looking
statements involve a number of risks, uncertainties (some of which
are beyond the control of the Company) or other assumptions that
may cause actual results or performance to be materially different
from those expressed or implied by such forward-looking statements
such as the inability to protect the proprietary formula, the price
of raw materials, any liabilities from unknown harmful effects of
the product, and adverse weather conditions and other important
factors described in the Company's Form 10-K for the fiscal year
ended December 31, 2006 in the section entitled "Risk Factors". The
Company undertakes no obligation and does not intend 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 laws. You are cautioned
not to place undue reliance on these forward-looking statements,
which speak only as of the date of this press release. Contact: CCG
Elite Investor Relations Crocker Coulson, President Leslie J.
Richardson (310) 231-8600 DATASOURCE: China Agritech, Inc. CONTACT:
Crocker Coulson, President, +1-310-231-8600, , or Leslie J.
Richardson, +1-310-231-8600, both of CCG Elite Investor Relations
Web site: http://www.chinaagritechinc.com/
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