DFCT D F China Technology (MM)

DF China Technology Announces Nasdaq Delisting Notice and Plans Appeal SAN FRANCISCO, March 29 /PRNewswire-FirstCall/ -- The Board of Directors of DF China Technology, Inc. announced that on March 25, 2004, it received a letter from the Nasdaq Listing Qualifications Department indicating that the Company is subject to delisting because of its failure to comply with Marketplace Rule 4320(e)(2)(B), which requires a minimum of $2,500,000 stockholders' equity, unless the Company requests a hearing prior to the opening of business on April 1, 2004. Nasdaq staff, in the letter, stated 'it (the Company) completed a private placement 21.5 million shares its common stock resulting in proceeds to the Company of US$4.3 million. Further more, the Company stated that its shareholders approved the issuance of the shares at a shareholders' meeting held on January 6, 2004, and that based on the proceeds from the private placement, the net asset value of DFCT was US$4,754,797, exceeding the minimum Nasdaq Small Cap continued listing requirement for shareholders' equity of US$ 2, 500,000. In addition, DFCT has called a shareholders' meeting on March 25, 2004 to vote on the acquisition of DICHAIN Software (the transaction), through the issuance of 197,799,000 shares of its common stock. DFCT believes that once the merger with DICHAIN Software is completed, the Company's equity position will increase to US$ 21,174,000 and that the addition of the software business to its existing paper manufacturing operation will allow the Company to sustain the compliance going forward.' 'Regarding its private placement of securities, according to the Company's Listing of Additional Shares Notification Form and supporting documentation submitted on February 18, 2004, the Company received shareholders' approval for the private placement on January 6, 2004. According to its Proxy dated December 4, 2003, the Company proposed and obtained shareholders' approval for the authorization 'to sell any and all of the authorizedbut unissued or reserved shares of the Company's capital stock at prices not below 50 percent of the fair market value of the stock at the time the shares are paid for.' Staff has determined that the approval for the issuance is invalid because the Company failed to provide its shareholders sufficient information to make meaningful decision.' 'Consequently, Staff of Nasdaq was unable to consider either the proceeds from or the shares issued pursuant to, the private placement for purposes of determining compliance with the minimum shareholders equity or market value of listed securities requirements, as specified under Marketplace Rule 4320(e)(2)(B).' The Company plans to request an oral hearing before the Nasdaq Listing Qualifications Panel to review the determination reached by the Nasdaq Listing Qualifications Department before April 1, 2004. Under applicable rules, the hearing request will stay the delisting of the Company's securities, pending a decision by the Nasdaq Panel. The Company intends to present a plan to the Nasdaq Panel for achieving and sustaining compliance with Marketplace Rule 4320(e)(2)(B), but there can be no assurance the Nasdaq Panel will grant the Company's request for continued listing. The Company is actively pursuing various strategic alternatives with the goal of allowing it to achieve such compliance. If delisted, the Company would attempt to have its common stock traded in the over-the-counter market via the Electronic Bulletin Board. CONTACT: Aaron Zhu Executive Director and Chief Financial Officer DF China Technology Inc. Tel: +852-2255-0688 DATASOURCE: DF China Technology Inc. CONTACT: Aaron Zhu, Executive Director and Chief Financial Officer of DF China Technology Inc., +852-2255-0688

Copyright