Unassociated Document
Filed by HLS Systems International Ltd.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Corporation: HLS Systems International Ltd.
Commission File No.: 333-132826
CONTACT:
-OR-
INVESTOR RELATIONS COUNSEL:
Li Zhang, Chief Executive Officer
  
The Equity Group Inc.
HLS Systems International Ltd.
  
Adam Prior
(619) 795-4627
  
(212) 836-9606
   
aprior@equityny.com
   
Devin Sullivan
   
(212) 836-9608
   
dsullivan@equityny.com
 
FOR IMMEDIATE RELEASE
 
CHARDAN NORTH CHINA ACQUISITION CORP. FILES FORM S-4 WITH
SECURITIES AND EXCHANGE COMMISSION

San Diego, CA and Beijing, China - March 30, 2006 - Chardan North China Acquisition Corp. (OTCBB: CNCA, CNCAU, CNCAW) ("Chardan North") and its wholly-owned subsidiary, HLS Systems International Ltd. announced today that they have filed a Form S-4 with the Securities and Exchange Commission for the purpose of registering the securities to be issued to the stockholders of Chardan North in connection with its previously announced definitive stock purchase agreement to acquire a controlling interest in Beijing HollySys Company, Limited and Hangzhou HollySys Automation, Limited (collectively referred to as “HollySys”). Included in this filing are unaudited financial results for HollySys for the six months ended December 31, 2005. (see attached tables). 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 North, Beijing HollySys Company, Limited and Hangzhou HollySys Automation, Limited (collectively referred to as “HollySys”) 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 North's and HollySys’ 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 HollySys is engaged; fluctuations in customer demand; management of rapid growth; intensity of competition from or introduction of new and superior products by other providers of automation and control system 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 North's filings with the Securities and Exchange Commission, including its report on Form 10-KSB for the period ended December 31, 2005 and in the Form S-4 registration statement. The information set forth herein should be read in light of such risks. Neither Chardan North nor HollySys assumes any obligation to update the information contained in this press release.
 
 
Chardan North China Acquisition Corp.
March 30, 2006
Page 2             
 
 
The Registration Statement on Form S-4 contains a Proxy Statement/Prospectus for the stockholders of Chardan North. The stockholders of Chardan North are urged to read the Registration Statement and the Proxy Statement/Prospectus as well as all other relevant documents filed or to be filed with the SEC, because they contain important information about HollySys, HLS Systems, Chardan North and the proposed transaction. The final Proxy Statement/Prospectus will be mailed to stockholders of Chardan North after the Registration Statement is declared effective by the SEC. Chardan North stockholders may 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 North by directing a request to Lori Johnson c/o Chardan Capital, 625 Broadway, Suite 1111, San Diego, CA 92101.

HLS Systems, Chardan North and their respective directors and officers may be deemed to be participants in the solicitation of approvals from Chardan North stockholders in respect of the proposed transaction. Information regarding Chardan North’s participants is contained in the Proxy Statement /Prospectus. Additional information regarding the interests of such participants is included in the Registration Statement containing the Proxy Statement / Prospectus.
 
###


Chardan North China Acquisition Corp.
March 30, 2006
Page 3             
 
 
HOLLYSYS CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(In US Dollars)

   
 
Years Ended June 30,
  
Six Months Ended
December 31,
  
   
2003
  
2004
  
2005
  
2004
  
2005
  
               
(Unaudited)
  
(Unaudited)
  
Revenues:
                      
Integrated contract revenue
  
$
32,927,629
  
$
51,224,340
  
$
75,027,422
  
$
38,935,801
  
$
46,916,576
  
    Products sales
    
3,057,979
    
1,849,916
    
4,545,410
    
1,596,980
    
2,515,450
  
                               
Total revenues
    
35,985,608
    
53,074,256
    
79,572,832
    
40,532,781
   
49,432,026
  
                               
Cost of integrated contract
    
23,347,692
    
37,569,353
    
52,164,176
    
27,399,787
    
31,949,229
  
Cost of products sold
    
1,532,781
    
338,167
    
2,518,835
    
182,027
    
1,478,696
  
                               
Gross profit
    
10,105,135
    
15,166,736
    
24,889,821
    
12,950,967
   
16,004,101
  
                               
Operating expenses:
                              
Selling
   
2,995,307
    
4,521,884
    
5,646,565
    
3,049,084
   
3,382,998
  
General and administrative
    
2,613,109
    
2,678,262
    
5,136,383
    
2,794,272
    
3,789,349
  
Research and development
    
346,243
    
383,059
    
202,344
    
—
    
—
  
Impairment loss
    
621,893
    
139,937
    
—
    
—
    
—
  
Loss on disposal of assets
    
13,020
    
11,963
    
29,511
    
2,806
    
14,512
  
                               
Total operating expenses
    
6,589,572
    
7,735,105
    
11,014,803
    
5,846,162
   
7,186,859
  
                               
Income from operations
    
3,515,563
    
7,431,631
    
13,875,018
    
7,104,805
   
8,817,242
  
                               
Other income (expense), net
    
20,839
    
31,792
    
194,547
    
75,639
   
(89,846
)
Interest expense, net
    
(903,744
)
  
(832,110
)
  
(555,796
)
  
(197,069
    
(580,379
)
Investment income (loss)
    
246,764
    
90,492
   
664,889
    
565,835
   
544,223
  
Subsidy income
    
634,612
    
2,782
    
2,292,880
    
1,824,172
    
2,737,028
  
                               
Income before income taxes
    
3,514,034
   
6,724,587
   
16,471,538
    
9,373,382
   
11,428,268
  
                               
Income taxes expenses
    
636,816
    
947,768
   
401,468
    
169,717
    
249,035
  
                               
Income before minority interest
    
2,877,218
    
5,776,819
    
16,070,070
    
9,203,665
    
11,179,233
  
                               
Minority interest
    
650,084
   
1,041,543
   
2,366,549
   
1,632,303
   
2,184,443
  
                               
Net income
 
$
2,227,134
  
$
4,735,276
  
$
13,703,521
  
$
7,571,362
  
$
8,994,790
  
                               
Other comprehensive income (loss):
                              
Translation adjustments
    
(310
)
  
1,212
    
(2,119
)
  
270
    
796,241
  
                               
Comprehensive income
 
$
2,226,824
  
$
4,736,488
  
$
13,701,402
  
$
7,571,632
  
$
9,791,031