China Advanced Construction Materials Group Announces $7.0 Million Private Placement to Accelerate Growth Strategy
16 June 2008 - 9:30PM
PR Newswire (US)
Plans to Build Two New Plants to Support Increased Demand for
Advanced Ready-Mix Concrete NEW YORK and BEIJING, June 16
/PRNewswire-FirstCall/ -- China Advanced Construction Materials
Group, Inc. ("China ACM") (OTC:CADC) (BULLETIN BOARD: CADC) today
announced that it has completed a $7.0 million private placement
led by Professional Traders Management, LLC (PTM) and other
accredited investors. China ACM issued approximately 875,000 Units,
each consisting of one share of Series A Convertible Preferred
Stock (the "Preferred Stock"), which is convertible into four
shares of the Company's common stock based on a fixed conversion
price of $2.00 per share, and one warrant to purchase two shares of
common stock at an exercise price equal to $2.40 per share (the
"Warrants"). Proceeds of the private placement will be used to
increase capacity through the building of a portable plant and for
general working capital. Any remaining proceeds will be used to
begin construction of a fixed plant for the Tianjin and Bohai Bay
area. Mr. Xianfu Han, Chairman and Chief Executive Officer, stated,
"China ACM is increasingly called upon for major projects such as
inter-city railways, transit stations, bridges, and skyscrapers due
to our proven track record and strong relationships with China's
top construction companies, general contractors, architects, and
engineering firms. This funding will enable us to build a portable
plant to support our involvement in the Beijing to Shanghai High
Speed Railway, as well as the start-up funds for a fixed plant to
cover the Tianjin and Bohai Bay area. We are extremely encouraged
by the outlook for the business given the increasing demand for
ready-mix concrete throughout China and our strong pipeline of new
contracts. In addition to expanding our geographic presence, our
plan is to vertically integrate our operations across the supply
chain, which will further lower our costs and provide even greater
efficiency." As part of the transaction, China ACM entered into a
Make Good Escrow Agreement whereby the company must achieve certain
milestones, including net income of $5.2 million and $9.0 million
for the fiscal years ended June 30, 2008 and June 30, 2009,
respectively, adjusted for certain transaction related charges. The
Preferred Stock, Warrants and the common stock underlying the
Preferred Stock and Warrants issued in the private placement have
not been registered under the Securities Act of 1933 as amended
(the "Act"), and may not be offered or sold in the United States
absent registration or pursuant to an exemption from registration.
China ACM has agreed to register the Warrants and the shares of
common stock underlying the Preferred Stock and Warrants under the
Act covering the resale of these shares. Maxim Group LLC served as
placement agent in connection with the private placement. This
press release does not constitute an offer to sell or the
solicitation of an offer to buy nor will there be any sale of these
securities in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such state or
jurisdiction. China ACM has filed a Current Report on Form 8-K with
the Securities and Exchange Commission describing in more detail
the terms of the private placement. About China ACM China ACM,
founded in 2002 and based in Beijing, China, is a leading producer
of advanced construction materials for large scale commercial,
residential, and infrastructure developments. The company is
primarily focused on producing and supplying a wide range of
advanced ready-mix concrete materials for highly technical, large
scale, and environmental construction projects. The company also
aims to develop and produce new and innovative environmentally
conscious construction materials. China ACM provides materials and
services through its seven ready-mix concrete plant network
covering Beijing metropolitan area. China ACM owns one plant,
leases two plants and has technical services and preferred
procurement agreements with four other independently owned plants.
China ACM is ISO 9001 (product quality), ISO 14001 (environmental
safety), and ISO 18001 (employment environment safety) certified.
Additional information about the company is available at
http://www.china-acm.com/. Safe Harbor Statement This press release
contains "forward-looking statements" within the meaning of the
"safe-harbor" provisions of the Private Securities Litigation
Reform Act of 1995. Such statements involve known and unknown
risks, uncertainties and other factors that could cause the actual
results of the Company to differ materially from the results
expressed or implied by such statements, including changes from
anticipated levels of sales, future national or regional economic
and competitive and regulatory conditions, changes in relationships
with customers, access to capital, difficulties in developing and
marketing new products, marketing existing products, customer
acceptance of existing and new products, and other factors.
Additional Information regarding risks can be found in the
Company's Annual Report on Form 10K and in the Company's recent
report on Form 8K filed with the SEC. Accordingly, although the
Company believes that the expectations reflected in such
forward-looking statements are reasonable, there can be no
assurance that such expectations will prove to be correct. The
Company has no obligation to update the forward-looking information
contained in this press release. Contact: Crescendo Communications,
LLC David Waldman or Klea Theoharis Tel: (212) 671-1020 Email: Web:
http://www.china-acm.com/ DATASOURCE: China Advanced Construction
Materials Group, Inc. CONTACT: David Waldman or Klea Theoharis,
both of Crescendo Communications, LLC, +1-212-671-1020, , for China
ACM Web site: http://www.china-acm.com/
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