BEIJING and NEW YORK, March 7, 2011 /PRNewswire/ -- Kirin China Holding, Ltd. ("Kirin"), the largest private developer of residential mixed-use properties in Xingtai, North China's oldest city, announced that it has completed a reverse acquisition of Ciglarette, Inc. (OTC Bulletin Board: CRTT) ("Ciglarette" or the "Company"), effective March 1, 2011. In connection with the transaction, Ciglarette received all of the issued and outstanding shares of Kirin, which became a wholly owned subsidiary of the Company. As a result of the reverse acquisition, the former controlling shareholders of Kirin became the controlling shareholders of Ciglarette. In addition, effective March 1, 2011, the previous officers and directors of Ciglarette resigned from the Company, Mr. Jianfeng Guo was appointed as the Chairman of the Company's Board of Directors and Mr. Longlin Hu and Mr. Yaojun Liu were appointed as members of the Company's Board of Directors. Mr. Hu was appointed as the Company's President and Chief Executive Officer.
Concurrent with the reverse acquisition, the Company closed a private placement (the "Offering") of 69,000 investment units (the "Units"), valuing the company at $100,000,000. The Units consist of an aggregate of 276,000 shares of the Company's common stock, Series A Warrants to purchase an aggregate of 69,000 shares of common stock with an exercise price of $6.25 and Series B Warrants to purchase an aggregate of 69,000 shares of common stock with an exercise price of $7.50. The Units were sold for gross proceeds of $1,380,000 to the Company with Hunter Wise Securities, LLC as the exclusive placement agent.
As a component of the Offering, Kirin entered into a "Make Good" provision whereby the Company must achieve after-tax net income, as determined in accordance with U.S. GAAP and as adjusted for certain non-cash charges, of at least $20,000,000 for the fiscal year ended December 31, 2010 and $35,000,000 for the fiscal year ended December 31, 2011. If those targets are not attained, investors in the Offering shall receive, on a pro rata basis, additional shares of the Company's common stock currently held in an escrow account for such purpose.
"We are pleased to achieve a U.S. listing for Kirin as we expand outside our home market of Xingtai and into the Bohai Bay area," said Kirin founder and Chairman Jianfeng Guo. "Our current projects Kirin Bay and No. 79 Courtyard will benefit from the increased profile and awareness that comes from being publicly traded," Chairman Guo continued, "and our top management has experience as officers for Shenzhen Stock Exchange and Hong Kong Stock Exchange listed companies, so we look forward to actively participating in the U.S. capital markets, he stated.
"Since most of our senior management are from the top 10 real estate players in China, their practices will be reflected in Kirin's internal control systems as well as allow a more internationalized stock incentive plan for management," Chairman Guo commented.
Kirin's projects are currently concentrated in the southern area of Hebei Province of the PRC, primarily in the city of Xingtai, approximately three hours south of Beijing, and nearby regions. Kirin's real estate developments target first-time, owner-occupied homebuyers consisting primarily of young urban professional families and middle class clients. According to Kirin, approximately half of Kirin's homebuyers pay cash for their housing units and another quarter of their purchasers make 50% down payments.
Kirin's estimated average selling prices for the Kirin Bay and No. 79 Courtyard projects range from USD$70 to USD$86 per SF, compared to prices in Beijing and Shanghai that have reached as high as USD$350 to USD$500 per SF. The Company's home market of Xingtai demonstrates the real estate development potential of China's Third Tier cities: continued urban migration, a balanced and growing economy, the need for trade up housing from an emerging middle class eager and willing to improve itself economically, and much greater relative affordability than the PRC's First Tier and megacities.
Kirin China has completed the following projects in Xingtai City:
- Ming Shi Hua Ting residential center comprised of two buildings with 14 and 19 floors each and eight residential buildings with six floors each. This project was developed in 2002 and total construction area consisted of 109,260 square meters.
- Wancheng New World Commercial Center includes a shopping center, restaurants, recreation facilities, entertainment and tourist attractions and over 300 residential properties. The total land area for this project was 57,000 square meters, commenced construction in 2007, and has been in service since June 2009.
- Kirin County Community construction commenced in September 2009 and was completed in November 2010. This project covers land area of 47,900 square meters, with a total construction area of 180,000 square meters comprised of residences, commercial buildings and hotel-style apartments.
Kirin China's project pipeline includes the Kirin Bay and No. 79 Courtyard projects, each of which are located in Xingtai City.
- Kirin Bay covers a total building area of approximately 660,000 square meters, and the Company expects it will be the largest high-end residential community in Xingtai in terms of total construction area upon completion. Comprised of three sections of mixed residential and commercial properties, the first phase residences are expected to be delivered by the end of 2013 while final phase residences are expected to be delivered in May 2015.
- No. 79 Courtyard covers a total building area of approximately 450,000 square meters. Positioned as a high-end residential development with some mixed-use commercial, construction is expected to start in the second quarter of 2011 and completion is planned for the last quarter of 2014. The first phase residences are expected to be delivered by the end of 2012 while the final phase residences are expected to be delivered in January 2015.
In addition to its projects in Xingtai, Kirin China has started gaining knowledge on property conditions and related land and development approval procedures in Shijiazhuang of Hebei Province and in Dezhou and Tai'an of Shandong Province, and the suburban area of Tianjin, all adjacent to the Beijing-to-Shanghai high-speed rail corridor.
The Company has filed a Current Report on Form 8-K with the Securities and Exchange Commission describing in more detail the terms of the reverse acquisition and the Offering:
Mr. Longlin Hu, President and CEO, Kirin China Holding
+86 186 3191 6611
Mr. Dan McClory, Managing Director, Hunter Wise Financial Group, LLC
+1 949 732 4102
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward looking statements are based upon the current plans, estimates and projections of Kirin's management and are subject to risks and uncertainties, which could cause actual results to differ from the forward looking statements.
Such statements include, among others, the impact of the Offering on Kirin's business and operations and the ability of Kirin to fulfill its obligations thereunder; those concerning market and industry segment growth and demand for Kirin's communities; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; uncertainties related to conducting business in China, as well as all assumptions, expectations, predictions, intentions or beliefs about future events.
Therefore, you should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The following factors, among others, could cause the Company's actual results to differ materially from those anticipated in such forward-looking statements: business conditions in China, general economic conditions; geopolitical events and regulatory changes, availability of capital, the Company's ability to maintain its competitive position and dependence on key management and other factors 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.
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.
SOURCE Kirin China Holding, Ltd.; Ciglarette, Inc.