China TMK Battery Systems Inc. Signs Purchase Agreement with Lithium Battery Producer Dongfang Hualian

SHENZHEN, China, Aug. 16, 2011 /PRNewswire-Asia-FirstCall/ -- China TMK Battery Systems Inc. (OTC Bulletin Board: DFEL) ("TMK" or "the Company") (formerly, Deerfield Resources, Ltd.), a Chinese manufacturer and distributor of customized rechargeable battery solutions to global consumer product companies, today announced it completed a share purchase agreement with Loyal Top Capital Investment Limited ("Loyal Top") for the purchase of Shenzhen Dongfang Hualian Technology Co., Ltd. ("Dongfang Hualian"). Separately, the Company completed a $16 million preferred stock equity financing agreement ("financing agreement") with China Development Industrial Bank and ZTE Energy Limited.

On August 13, 2011, TMK completed a purchase agreement with Loyal Top, the legal entity that owns and controls 100% of Dongfang Hualian to consummate TMK's acquisition. Under the terms of the purchase agreement, the Company will acquire 100% equity interest in Dongfang Hualian in exchange for a cash payment of approximately $11 million and 8.1 million shares of the Company's common stock. Dongfang Hualian is a lithium battery producer which designs, manufactures and sells lithium batteries.

The Company previously made an advance cash payment of approximately $10.5 million toward the purchase price. The formal closing of the acquisition, expected on or before September 15, 2011, requires approval by all relevant regulatory authorities and registration of Loyal Top's ownership of Dongfang Hualian with the Shenzhen Administration for Industry and Commerce. The purchase agreement contains a make-good provision that Dongfang Hualian achieves a net profit of approximately $9.3 million for the calendar year ending December 31, 2011. The audited financial statements reported that Dongfang Hualian generated approximately $41 million in revenue and approximately $5.5 million in net income during 2010.

On May 28, 2011 and June 20, 2011, the Company signed separate purchase agreements with China Development Industrial Bank and ZTE Energy Co., Ltd., respectively, for the two investors to purchase an aggregate of 8,000,000 shares of the Company's preferred stock convertible at $2 per share.

"These transformative transactions position the Company for the next phase of growth," remarked Mr. Henian Wu, Chairman and President of the Company. "Dongfang Hualian, with a state-of-the-art production facility built in 2008 and 20 patents related to lithium ion battery technologies, provides us with an entry into a multi-billion dollar, rapidly growing global market opportunity. Their complimentary product portfolio and customer base will allow us to quickly and seamlessly integrate their operations with ours, cross-sell to our installed customer base, while capitalizing on the ability to streamline sales and distribution. With the definitive purchase agreements in place we simply need to go through a number of regulatory formalities to complete this transaction."  

About China TMK Battery Systems Inc.

Based in Shenzhen, PRC and founded in 1999, TMK manufactures and distributes high rate discharge Nickel Metal Hydride ("Ni-MH") multi-cell batteries in its manufacturing facility located in Shenzhen, China. TMK maintains a diverse roster of large, consumer-focused clients with major production facilities in China. The Company works with its clients throughout the product design cycle to develop and integrate reliable and long-lasting rechargeable power solutions for widely used consumer products, which include home appliances, cordless power tools, medical devices, multiple personal communication devices and electric bicycles segments. The Company is also focused on becoming a supplier of back-up power solutions to the telecommunications industry and for traffic lighting applications. Corporate Information can be found at www.tmk-battery.com and investor information can be found at http://ir.stockpr.com/tmk-battery/

Cautionary Statement Regarding Forward Looking Information

This press release may contain certain "forward-looking statements" relating to the business of China TMK Battery Systems Inc., and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements" including statements regarding: the impact of the proceeds from the private placement on the Company's short term business and operations, including the ability of the Company to significantly increase its Ni-MH battery manufacturing capacity and meet its current backlog of orders; the ability of the Company to introduce new battery types into its product portfolio while developing Lithium-Ion battery production capabilities, sustain aggressive growth in the coming years relative to its peers and position the Company a vertically integrated rechargeable battery supply solution provider; the general ability of the Company to achieve its commercial objectives, including the ability of the Company to sustain growth; the business strategy, plans and objectives of the Company and its subsidiaries; and any other statements of non-historical information. 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. Investors 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.

SOURCE China TMK Battery Systems Inc.