China Public Security Announces 2006 Year End Results

Safe Harbor Statement

This press release contains certain statements that may include "forward looking statements". All statements other than statements of historical fact included herein are "forward-looking statements". 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. You 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.

    Company Contact:
    Mr. Michael Lin
    Vice President, Investor Relations
    China Public Security Technology, Inc.
    Tel: +1-949-743-0868
    Email: 
Email Contact

    Investor Relations Contact:
    Mr. Crocker Coulson
    President
    CCG Elite Investor Relations
    Tel: +1-646-213-1915 (NY office)
    
Email Contact

CONSOLIDATED INCOME STATEMENT, BALANCE SHEET, AND CASHFLOW STATEMENT, FOLLOWS



                    CHINA PUBLIC SECURITY TECHNOLOGY, INC.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                         YEAR ENDED DECEMBER 31 2005
                PERIOD FROM JANUARY 1, 2006 TO OCTOBER 8, 2006
               PERIOD FROM JANUARY 17, 2006 TO DECEMBER 31 2006

    The statements of operations for the year ended December 31, 2005 and for
the period from January 1 to October 8, 2006 reflect operations of the
Predecessor Company.

                                  PREDECESSOR        SUCCESSOR   COMBINED
                                         JANUARY 1   JANUARY 17  Non-GAAP
                             YEAR ENDED  THROUGH     THROUGH     YEAR ENDED
                             DECEMBER 31 OCTOBER 8   DECEMBER 31 DECEMBER 31
                             2005        2006        2006        2006


    REVENUE - THIRD PARTIES   $5,023,065  $9,644,332     989,755  $10,634,087

    REVENUE - RELATED PARTY          -           -     1,185,449    1,185,449

    TOTAL REVENUES             5,023,065   9,644,332   2,175,204   11,819,536

    COST OF REVENUES - THIRD
     PARTIES                  (2,292,785) (3,739,518)    (89,934)  (3,829,452)

    GROSS PROFIT               2,730,280   5,904,814   2,085,270    7,990,084

    ADMINISTRATIVE EXPENSES     (474,822)   (924,196)    (97,510)  (1,021,706)
    ANNUAL FEE TO iASPEC             -           -       (45,000)     (45,000)
    SELLING EXPENSES            (184,494)   (157,855)    (60,013)    (217,868)

    INCOME FROM OPERATIONS     2,070,964   4,822,763   1,882,747    6,705,510

    OTHER INCOME                  62,296       6,584       1,305        7,889

    INCOME BEFORE TAX          2,133,260   4,829,347   1,884,052    6,713,399

    INCOME TAXES                (321,000)   (749,381)   (289,403)  (1,038,784)

    NET INCOME                 1,812,260   4,079,966   1,594,649    5,674,615

    FOREIGN CURRENCY
     TRANSLATION GAIN                -       268,305         -        268,305

    COMPREHENSIVE INCOME      $1,812,260  $4,348,271  $1,594,649   $5,942,920

    WEIGHTED AVERAGE NUMBER
     OF SHARES                   N/A         N/A      26,958,104      N/A

    BASIC AND DILUTED
    EARNINGS PER SHARE           N/A         N/A            0.06      N/A

Reconciliation of GAAP and Non-GAAP Financial Measures:

The above Statement of Operations set forth the key components of China Public Security results of operations for the periods indicated. All of the non-GAAP financial measures used in this press release relate to the inclusion of financial information of iASPEC, which for accounting purposes is treated as China Public Security Predecessor Company. For fiscal year 2005, revenues were generated from iASPEC. For purpose of analysis in this press release the results of the Predecessor Period from January 1 through October 8, 2006 and the Successor Period from January 17 through December 31, 2006 were combined. This is not in accordance with US GAAP and the periods presented are not comparable due to the Company's reverse acquisition by China Public Security Holdings.



                    CHINA PUBLIC SECURITY TECHNOLOGY, INC.

                          CONSOLIDATED BALANCE SHEET

                              DECEMBER 31, 2006
                                                         (Audited)


        ASSETS

        CURRENT  ASSETS
        Cash  and  cash  equivalents                                                              $172,316
        Related  party  receivables                                                            1,410,471
        Advances  receivable                                                                            332,479
        Other  receivables  and  deposits                                                      243,948

        TOTAL  CURRENT  ASSETS                                                                      2,159,214

        PROPERTY  AND  EQUIPMENT                                                                        49,826

        TOTAL  ASSETS                                                                                    $2,209,040

        LIABILITIES  AND  STOCKHOLDERS'  EQUITY

        CURRENT  LIABILITIES
        Advances  payable                                                                                $200,000
        Accrued  expenses                                                                                    66,832
        Tax  payable                                                                                            215,255
        Amounts  due  to  a  director                                                                  82,304

        TOTAL  CURRENT  LIABILITIES                                                                564,391

        STOCKHOLDERS'  EQUITY
        Common  stock,  par  $0.01
        Authorized  capital,  75,000,000  shares
        Shares  issued  and  outstanding
          31,550,298  shares                                                                                50,000
        Reserves                                                                                                  159,465
        Retained  earnings                                                                            1,435,184

        TOTAL  STOCKHOLDERS'  EQUITY                                                          1,644,649

        TOTAL  LIABILITIES  AND  STOCKHOLDERS'
          EQUITY                                                                                              $2,209,040



                                        CHINA  PUBLIC  SECURITY  TECHNOLOGY,  INC.

                                                      STATEMENT  OF  CASH  FLOWS

                                                  YEAR  ENDED  DECEMBER  31  2005
                                PERIOD  FROM  JANUARY  1,  2006  TO  OCTOBER  8,  2006
                              PERIOD  FROM  JANUARY  17,  2006  TO  DECEMBER  31  2006

        The  statements  of  cash  flows  for  the  year  ended  December  31  2005  and  for
the  period  from  January  1  to  October  8  2006  reflect  operations  of  the
Predecessor  Company.
                                                                    (Audited)


                                                                                                PREDECESSOR              SUCCESSOR
                                                                                                            JANUARY  1      JANUARY  17
                                                                                    YEAR  ENDED    THROUGH          THROUGH
                                                                                    DECEMBER  31,OCTOBER  8,    DECEMBER  31,
                                                                                    2005                2006                  2006
        OPERATING  ACTIVITIES
        Net  income                                                          $1,812,260    $4,079,966    $1,594,649
        Adjustments  to  reconcile  net  income
            to  net  cash  providing  from
            operations
                          Depreciation                                          362,970          422,946              1,131
                          Amortization  of  intangible
                            assets                                                      61,122          105,630                  -

        Changes  in  operating  assets  and
          liabilities
              (Increase)  decrease  in  inventories        (274,288)        203,236                  -
              Increase  in  trade  and  other
                receivables                                                (1,632,279)    1,516,215        (243,948)
              Increase  in  related  parties
                receivables                                                              -                      -        (1,295,159)
              Increase  in  trade  payables                              6,956          150,266                  -
              Increase  in  accrued  expenses                        40,640          (11,332)          66,832
              Increase  in  tax  payable                                        -              354,520          215,255

        Net  cash  provided  by  operating
          activities                                                              377,381      6,821,447          338,760

        INVESTING  ACTIVITIES
        Advances  receivable                                                      -                      -            (332,479)
        Advances  to  Hong  Kong  United  Development            -        (1,563,806)      (115,312)
        Purchase  of  plant  and  equipment                      (30,876)  (3,329,474)        (50,957)
        Capitalised  software  development  cost        (331,491)      (102,953)                -

        Net  cash  used  by  investing  activities        (362,367)  (4,996,233)      (498,748)

        FINANCING  ACTIVITIES
        Advances  payable                                                            -                      -              200,000
        Amount  due  to  stockholder                                          -                      -                82,304
        Short  term  loan                                                              -              632,591                  -
        Capital  contribution                                                    -                      -                50,000

        Net  cash  provided  by  financing
          activities                                                                      -              632,591          332,304

        NET  INCREASE  IN  CASH  AND  CASH
              EQUIVALENTS                                                          15,014      2,457,805          172,316

        EFFECT  OF  EXCHANGE  RATE  ON  CASH                              -                65,740                  -

        CASH  AND  CASH  EQUIVALENTS,  BEGINNING            42,744            57,758                  -

        CASH  AND  CASH  EQUIVALENTS,  ENDING                  $57,758    $2,581,303        $172,316

        Supplemental  disclosure  of  cash  flow
          information
        Income  tax  paid                                                    $159,380        $508,712          $74,148
 





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