China America Holdings Reports Financial Results for the Second Quarter and First Six Months of 2009

SHANGHAI, CHINA--(Marketwire - August 13, 2009) - China America Holdings, Inc. CAAH, a holding company operating in China, announced today the Company's financial results for the Second Quarter of 2009.

Financial Highlights:

Revenue for the second quarter of 2009 was $8.2 million, up 31.4% from the $6.2 million recorded in the first quarter of 2009. Revenue for the first six months of 2009 was $14.4 million as compared to $16.9 million in the first six months of 2008. Income from operations in the second quarter of 2009 was $183,995, up from the $9,370 recorded in the first quarter of 2009. Income from operations for the first 6 months of 2009 was $174,625 compared to $747,830 for the first six months of 2008. After including a loss of ($81,000) for its discontinued Biometric segment and deducting income attributable to its non-controlling interest, the Company recorded a net loss the first six months of 2009 of ($219,947) or $0.00 per basic share, as compared to a net loss of ($99,568) or $0.00 per basic share for the comparable period in 2008.

At June 30, 2009 total assets were $14.5 million compared to total assets of $13.7 million at December 31, 2008. At June 30, 2009, current assets were $9.5 million compared to current assets of $9.3 million at December 31, 2008. Cash and cash equivalents were $1.8 million at June 30, 2009 compared to $2.2 million at December 31, 2008. Shareholder equity at June 30, 2009 was $3.7 million with 141.3 million shares outstanding.

Mr. Shaoyin Wang, CEO of China America Holdings, stated, "We are pleased to have improved performance significantly from the first quarter of 2009. While the business environment in the first half of 2009 has been extremely challenging, we are seeing signs of improvement and believe these positive trends will continue in the second half of the year. We believe the performance of our Aohong subsidiary demonstrates our ability to quickly react to a changing environment and we intend to work diligently to increase our overall profitability in the coming quarters. We continue to have a strong current ratio of almost 2 to 1 with negligible long term debt. We look forward to further improvement and growth in the second half of 2009 for our Aohong subsidiary and remain committed to our business strategy in China."

About China America Holdings, Inc.

China America Holdings, Inc. CAAH is a holding company which owns a 56% stake in Shanghai Aohong Chemical Co., Ltd. based in Shanghai, China. Shanghai Aohong Chemical Co., Ltd. is a distributor of assorted liquid coolants which are utilized in a variety of applications, primarily as refrigerants in air conditioning systems for automobiles, residential and commercial air conditioning systems, and a manufacturer of steel non-refillable cylinders. For more information, please visit http://www.caah.us.

CHINA AMERICA HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, December 31, ------------ ------------ 2009 2008 ------------ ------------ (Unaudited) ASSETS CURRENT ASSETS: Cash $ 1,837,542 $ 2,228,455 Accounts receivable, net 4,518,545 3,778,096 Notes receivable 312,050 1,104,343 Inventories 2,242,495 1,719,796 Prepaid expense and other current assets 569,716 453,860 ------------ ------------ Total current assets 9,480,348 9,284,550 ------------ ------------ LONG-TERM ASSETS: Restricted cash 701,262 175,075 Property and equipment, net 3,440,415 3,394,157 Prepaid land use rights, net 832,011 84,746 Deposit on land use rights 0 744,303 Other assets 29,219 31,221 ------------ ------------ Total other assets 5,002,907 4,429,502 ------------ ------------ Total assets $ 14,483,255 $ 13,714,052 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Notes payable $ 2,286,571 $ 2,602,982 Notes payable - related party 400,000 400,000 Accounts payable and accrued expenses 1,755,049 957,190 Advances from customers 588,129 424,320 Taxes payable 517,637 487,223 Due to related parties 209,481 208,568 ------------ ------------ Total current liabilities 5,756,867 5,080,283 CHINA AMERICA HOLDINGS, INC. SHAREHOLDERS' EQUITY: Common stock, ($.001 par value, 500,000,000 shares authorized; 146,810,792 shares issued and outstanding at June 30, 2009) 146,811 135,811 Additional paid-in capital 19,859,352 19,661,352 Statutory reserves 704,200 687,717 Accumulated deficit (17,416,613) (17,180,183) Other comprehensive income 421,359 415,630 ------------ ------------ Total China America Holdings, Inc. shareholders' equity 3,715,109 3,720,327 Non-controlling Interest 5,011,279 4,913,442 ------------ ------------ Total shareholders' equity 8,726,388 8,633,769 ------------ ------------ Total liabilities and shareholders' equity $ 14,483,255 $ 13,714,052 ============ ============ See notes to unaudited consolidated financial statements. CHINA AMERICA HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) For the Three Months Ended For the Six Months Ended June 30, June 30, -------------------------- -------------------------- 2009 2008 2009 2008 ------------ ------------ ------------ ------------ Net revenues $ 8,185,254 $ 10,433,724 $ 14,414,446 $ 16,925,854 Cost of sales 7,320,478 9,456,641 13,062,568 15,143,276 ------------ ------------ ------------ ------------ Gross profit 864,776 977,083 1,351,878 1,782,578 ------------ ------------ ------------ ------------ Operating expenses: Selling expenses 314,058 150,319 535,408 420,335 Consulting and investor relations expense - 19,201 - 255,375 Consulting expense-related party 109,000 - 209,000 - Compensation and related taxes 160,856 68,089 213,946 135,316 General and administrative 96,867 (11,977) 218,899 223,722 ------------ ------------ ------------ ------------ Total operating expenses 680,781 225,632 1,177,253 1,034,748 ------------ ------------ ------------ ------------ Income from operations 183,995 751,451 174,625 747,830 ------------ ------------ ------------ ------------ Other income (expenses): Interest income 1,654 1,776 2,851 10,018 Interest expense (9,711) (15,321) (32,001) (20,350) Loss on disposition of property and equipment - - (61,958) - Realized loss on sale of marketable equity securities - (52,239) - (47,343) Gains from investments 2,338 - 2,338 - Foreign currency transaction gain (loss) (463) 5,649 (3,943) 5,649 ------------ ------------ ------------ ------------ Total other expenses (6,182) (60,135) (92,713) (52,026) ------------ ------------ ------------ ------------ Income before discontinued operations and income taxes 177,813 691,316 81,912 695,804 ------------ ------------ ------------ ------------ Discontinued operations: Gain from disposal of discontinued operations - 45,912 - 45,912 Loss from discontinued operations - (40,002) (81,250) (130,836) ------------ ------------ ------------ ------------ Total loss from discontinued operations - 5,910 (81,250) (84,924) ------------ ------------ ------------ ------------ Income before income taxes and noncontrolling interest 177,813 697,226 662 610,880 Provision for income taxes (102,699) (186,637) (129,499) (320,763) ------------ ------------ ------------ ------------ Net income (loss) 75,114 510,589 (128,837) 290,117 Less: Net income attributable to noncontrolling interest (87,805) (277,028) (91,110) (389,685) ------------ ------------ ------------ ------------ Net (loss) income attributable to China America Holdings, Inc. $ (12,691) $ 233,561 $ (219,947) $ (99,568) ============ ============ ============ ============ Comprehensive (loss) income: Unrealized foreign currency translation gain 463 217,984 5,729 316,199 ------------ ------------ ------------ ------------ Comprehensive (loss) income $ (12,228) $ 451,545 $ (214,218) $ 216,631 ============ ============ ============ ============ Basic and diluted loss per common share: Net loss from continuing operations $ (0.00) $ 0.00 $ (0.00) $ 0.00 Net loss from discontinued operations 0.00 0.00 (0.00) (0.00) ------------ ------------ ------------ ------------ Net loss per common share $ (0.00) $ 0.00 $ (0.00) $ 0.00 ============ ============ ============ ============ Weighted average number of shares outstanding: Basic and diluted 141,272,331 135,810,792 138,556,649 135,792,990 ============ ============ ============ ============ See notes to unaudited consolidated financial statements. CHINA AMERICA HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the Six Months Ended June 30, ------------------------ 2009 2008 ----------- ----------- Cash flows from operating activities: Loss from continued operations attributable to China America Holdings, Inc. $ (138,697) $ (14,644) Adjustments to reconcile loss from continuing operations to net cash provided by (used in) continuing operations: Depreciation and amortization 170,197 124,146 Allowance for doubtful accounts - (187,087) Realized and unrealized loss on marketable equity securities - 47,343 Loss on disposition of property and equipment 61,958 - Common stock, warrants and options issued for services 209,000 10,400 Contributed services - 110,000 Minority interest 91,110 389,685 Gain on sale of discontinued operations - (45,912) Changes in assets and liabilities: Accounts receivable (735,429) (354,786) Decrease in notes receivable 793,991 278,089 Inventory (520,457) (2,178,556) Prepaid expenses and other current assets (115,266) (595,459) Other assets 2,042 237,960 Accounts payable and accrued expenses 796,908 216,792 Taxes payable 29,751 243,312 Advances from customers 163,264 143,590 Deferred revenue - 18,874 ----------- ----------- Net cash provided by (used in) continuing operations 808,372 (1,556,253) ----------- ----------- Loss from discontinued operations (81,250) (84,924) ----------- ----------- Net cash used in discontinued operations (81,250) (84,924) ----------- ----------- Net cash provided by (used in) operating activities 727,122 (1,641,177) ----------- ----------- Cash flows from investing activities: Proceeds from sale of marketable equity securities - 26,919 Purchase of property and equipment (270,269) (1,398,175) Land use rights (750,776) - Deposit on land use rights 745,496 - ----------- ----------- Net cash flows used in investing activities (275,549) (1,371,256) ----------- ----------- Cash flows from financing activities: (Repayments of) Proceeds from notes payable (300,024) 1,381,381 Proceeds from related party advances (19,399) 589,947 Increase in restricted cash (526,067) (226,224) ----------- ----------- Net cash flows (used in) provided by financing activities (845,490) 1,745,104 ----------- ----------- Effect of exchange rate on cash 3,004 26,565 ----------- ----------- Net decrease in cash (390,913) (1,240,764) Cash - beginning of year 2,228,455 2,012,480 ----------- ----------- Cash - end of period $ 1,837,542 $ 771,716 =========== =========== Supplemental disclosure of cash flow information: Cash paid for: Interest $ 24,037 $ 21,950 =========== =========== Income taxes $ 180 $ - =========== =========== See notes to unaudited consolidated financial statements.

Safe Harbor Statement

In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, China America Holdings, Inc., is hereby providing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as defined in such act). Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "intends," "plans," "believes" and "projects") may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our belief about trends, our performance and profitability.

We caution that the factors described herein could cause actual results to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. This press release is qualified in its entirety by the cautionary statements and risk factor disclosure contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the year ended December 31, 2008.