Novatex & Hengxin Kaibo to use Lizhan Evergreen Products

Lizhan Environmental Corporation, one of China's leading manufacturers of eco-friendly fabrics made from patented technologies, announced two separate orders totaling $12.4 million from two new international furniture customers. Lizhan expects to deliver approximately 915,000 meters of Evergreen Products over the next twelve months.

Chairman and Chief Executive Officer Jianfeng Liu said, "We are delighted to have secured orders from two leading international customers, who provide penetration in new important markets and will generate revenue starting in the 3rd quarter. Novatex and Beijing Hengxin Kaibo Textile Co. Ltd. placed orders after conducting extensive quality testing, validating the high quality and compelling value that our Evergreen Products offer."

Lizhan signed a one-year agreement with Novatex S.p.A. ("Novatex") for delivery of approximately 495,000 meters of Evergreen Products. Novatex is a leading manufacturer and distributor of textiles based in Forli, Italy. Lizhan's custom recycled fabrics will be utilized by Novatex to produce sofa and home furnishing products. Novatex obtained the exclusive rights to distribute Evergreen Products in Turkey and the European Union, excluding Poland and Denmark.

The Company also signed a two-year agreement with Beijing Hengxin Kaibo Textile Co. Ltd. ("Hengxin Kaibo"), which includes approximately 420,000 meters of its Evergreen Products for the first year. Hengxin Kaibao paid a $255,000 deposit for its first order and obtained the exclusive right to distribute Evergreen Products in Russia and 10 surrounding countries.

Lizhan's Evergreen Products met the quality of genuine leather products after extensive testing by an independent testing firm in Italy, the Daedalus Company ("Dedalo"). Dedalo specializes in analyzing the chemical and physical qualities of a wide variety of products and materials, including leather and textiles. Dedalo conducted these tests at the request of Novatex.

To support enhanced production capacity and meet governmental regulations, the Company announced that it has completed installation of the water treatment equipment for Line 1 at its Evergreen Products manufacturing facility. The new production line will be capable of manufacturing approximately 3,000 meters per day initially, gradually ramping to 5,000 meters per day over the next several months. Using customized equipment imported from the U.S., the new Evergreen Product facility will be able to manufacture high-grade recycled leather.

Mr. Liu continued, "After several months of rigorous testing, our first Evergreen Products manufacturing line has started volume production. Using our patented production technology, we truly believe we have developed a unique, environmentally friendly recycled leather product that can meet our clients' quality demands while being utilized in a wide variety of applications. These orders confirm our ability to secure sizeable orders with significant customers. In addition, we are in active discussions with several prospective domestic and international customers and expect additional orders to be forthcoming."