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Kiwa Bio-Tech Revenues for 1st Half Exceed $3.25 Million
Date:8/19/2007

BEIJING and CLAREMONT, Calif., Aug. 14 /Xinhua-PRNewswire-FirstCall/ -- Kiwa Bio-Tech Products Group Corporation (OTC Bulletin Board: KWBT) announced that revenues for the second quarter of 2007 increased more than 35% over the first quarter of 2007 exceeding $1,872,000 and were 139 times revenues of just $13,351 for the same period in the previous year.

Revenues for the first half of 2007 were $3,256,000 compared to only $24,374 in the first half of 2006. These significant increases are due to the growth of Kiwa's new bio-enhanced feed business.

Review of Second Quarter

Costs of sales were $1,798,905 and $12,545 for the three months ended June 30, 2007 and 2006, respectively. The increase in cost of sales was primarily due to the rapid increase of sales. Gross profit was $73,742 for the three months ended June 30, 2007, representing an average profit margin of 3.9%. The profit margins for bio-fertilizer and bio-enhanced feed were 18.9% and 3.8%, respectively.

Mr. Wei Li, Chairman and CEO of Kiwa, stated, "The significant improvement in revenues reflects the efforts at the 60 distributors in our joint venture, Tianjin Kiwa Feed Co., Ltd. We appreciate the efforts of our team in building this business and we are now focusing on raising the profit margins for bio- enhanced feed products."

Net loss increased by $780,979 or 148.5% to $1,306,893 (including non-cash expenses of $537,164) for the three months ended June 30, 2007, as compared to $525,914 for the three months ended June 30, 2006. This increase resulted from the following factors: (1) increase in gross profit of $72,936; (2) increase in operating expenses of $192,923; (3) increase in interest expenses of $247,233; (4) there was $750 of net loss born as a minority shareholder in a subsidiary in 2007 and no similar loss in 2006; and (5) we recognized $414,509 expenses in connection with urea entrepot trade during the current period.

In July 2007, the Company entered into three termination agreements with each party of the Urea entrepot trade for the termination of contracts between the Company and Shengkui Technologies, Hua Yang Roneo Corporation and UPB International Sourcing Limited. Pursuant to these termination agreements, the Company shall have neither rights nor obligations under previous contracts in connection with urea entrepot trade with exception to commission due to UPB. Based on these facts, we classified urea entrepot trade as discontinued operation and charged all unamortized payments and the remaining commission due into expenses in the second quarter.

Please refer to documents filed today with the Securities and Exchange Commission for additional information on the results for the second quarter and first half of 2007.

About Kiwa Bio-Tech Products Group Corporation

The Company develops, manufactures, distributes and markets innovative, cost-effective, and environmentally safe bio-technological products for agricultural and natural resources and environmental conservation. The Company's products are designed to enhance the quality of human life by increasing the value, quality and productivity of crops and decreasing the negative environmental impact of chemicals and other wastes. For more information about the Company, please review documents filed with the SEC (http://www.sec.gov) or visit the Company's website at http://www.kiwabiotech.com.

This press release contains information that constitutes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements involve risk and uncertainties that could cause actual results to differ materially from any future results described by the forward-looking statements. Risk factors that could contribute to such differences include those matters more fully disclosed in the Company's reports filed with the Securities and Exchange Commission. The forward-looking information provided herein represents the Company's estimates as of the date of the press release, and subsequent events and developments may cause the Company's estimates to change. The Company specifically disclaims any obligation to update the forward-looking information in the future. Therefore, this forward-looking information should not be relied upon as representing the Company's estimates of its future financial performance as of any date subsequent to the date of this press release.

Contact:

Kiwa Bio-Tech Products Group Corporation

Yvonne Wang

(626) 715-5855

kiwabiotech@gmail.com

Robert Schechter

Equity Communications

212-499-6809

ir4kiwa@hotmail.com

Kiwa Bio-Tech Products Group Corporation

Consolidated Statements of Operations and Comprehensive Income (Unaudited)

Item Three Months Ended Six Months Ended

June 30, June 30,

2007 2006 2007 2006

Net sales $1,872,647 $13,351 $3,256,740 $24,374

Cost of sales 1,798,905 12,545 3,044,675 19,955

Gross profit 73,742 806 212,065 4,419

Operating expenses:

Consulting and

professional fees 267,678 243,914 457,139 288,314

Officers' compensation 89,427 109,102 154,469 115,070

General and

administrative 196,499 79,660 375,523 148,594

Selling expenses 63,642 19,601 207,267 22,889

Research and development 43,495 8,461 92,799 16,362

Depreciation and

amortization 29,591 37,069 60,864 70,232

Allowance and provision 398 - 664 -

Total operating expenses 690,730 497,807 1,348,725 661,461

Operating loss (616,988) (497,001) (1,136,660) (657,042)

Interest expenses - net (276,146) (28,913) (401,904) (53,317)

Minority interest in a

subsidiary's loss 750 - 6,921 -

Loss from continuing

operations (892,384) (525,914) (1,531,643) (710,359)

Loss on discontinued

operations:

Discontinued urea

entrepot trade -

Commission paid

to a related party (414,509) - (414,509) -

Net loss $(1,306,893) $(525,914) $(1,946,152) $(710,359)

Other comprehensive

income (loss):

Translation

adjustment (37,337) 9,556 (161,131) 16,197

Comprehensive loss $(1,344,230) $(516,358) $(2,107,283) $(694,162)

Net loss from continuing

operations per common

share - basic and diluted $(0.0120) $(0.0085) $(0.0210) $(0.0118)

Net loss on discontinued

operations per common

share - basic and diluted $(0.0056) $- $(0.0057) $-

Weighted average

number of common shares

outstanding - basic and

diluted 74,157,432 61,598,567 72,971,896 60,423,775

Kiwa Bio-Tech Products Group Corporation

Consolidated Balance Sheet

Item June 30, 2007 December 31, 2006

(unaudited) (audited)

ASSETS

Current assets

Cash and cash equivalents $208,229 $498,103

Accounts receivable, net of bad

debt allowance of $265,900

and $258,667, respectively 153,659 929,446

Inventories 882,962 541,340

Prepaid expenses 186,816 302,007

Other current assets 45,348 57,011

Total current assets 1,477,014 2,327,907

Property, Plant and Equipment:

Buildings 1,079,195 1,046,116

Machinery and equipment 633,316 585,282

Automobiles 43,841 47,772

Office equipment 81,560 78,096

Computer software 9,474 9,240

Property plant and equipment - total 1,847,386 1,766,506

Less: accumulated depreciation (352,185) (286,039)

Property plant and equipment - net 1,495,201 1,480,467

Construction in progress 43,424 34,548

Intangible asset - net 314,864 337,027

Deferred financing costs 170,793 211,793

Deposit to purchase the proprietary

technology 126,444 126,443

Total assets $3,627,740 $4,518,185

LIABILITIES AND STOCKHOLDERS' EQUITY

(DEFICIENCY)

Current liabilities

Accounts payable and accrued expenses $1,507,207 $983,980

Construction costs payable 317,095 366,879

Due to related parties 397,400 496,806

Current portion of bank notes payables 4,157 5,405

Total current liabilities 2,225,859 1,853,070

Long-term liabilities, less current portion:

Unsecured loans payable 1,510,078 1,472,717

Bank notes payable - 1,351

Long-term convertible notes payable 2,171,401 2,365,962

Discount relating to warrants issued

with long-term convertible notes (1,066,342) (1,371,446)

Total long-term liabilities 2,615,137 2,468,584

Minority interest in a subsidiary 95,292 103,362

Shareholders' equity (deficiency)

Common stock - $0.001 par value

Authorized 200,000,000 shares at

June 30, 2007 and December 31, 2006

respectively. Issued and outstanding

75,120,710 and 70,149,556 shares at

June 30, 2007 and December 31, 2006,

respectively 75,121 70,150

Preferred stock - $0.001 par value

Authorized 20,000,000 shares, nil

shares issued and outstanding

at June 30, 2007 and December

31, 2006, respectively - -

Additional paid-in capital 8,714,848 8,311,975

Stock-based compensation reserve (389,342) (523,468)

Deficit Accumulated (9,712,807) (7,766,654)

Accumulated other comprehensive income 3,632 1,166

Total shareholders' equity (deficiency) (1,308,548) 93,169

Total liabilities and stockholders'

equity $3,627,740 $4,518,185


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SOURCE Kiwa Bio-Tech Products Group Corporation

Copyright©2007 PR Newswire.

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