8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934 

Date of report (Date of earliest event reported):   August 12, 2009

CHINA WIND SYSTEMS, INC.

(Exact name of registrant as specified in Charter)

Delaware	33-16335	74-2235008
(State or other jurisdiction of incorporation or organization)	(Commission File No.)	(IRS Employee Identification No.)

No. 9 Yanyu Middle Road

Qianzhou Village, Huishan District, Wuxi City

Jiangsu Province, People’s Republic of China

 (Address of Principal Executive Offices)

(86) 510-8338-6339

 (Registrant’s Telephone number)

Copies to:

Asher S. Levitsky PC

Sichenzia Ross Friedman Ference LLP

61 Broadway, 32nd Floor

New York, New York 10006

Phone: (212) 981-6767

Fax: (212) 930 – 9725

E-mail: alevitsky@srff.com

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02  Results of Operations and Financial Condition.

On August 17, 2009, China Wind Systems, Inc., a Delaware corporation (the “Company”), announced its results of operations for the second quarter ended June 30, 2009.  A copy of the Company’s August 17, 2009 press release is filed as Exhibit 99.1.

In accordance with General Instruction B.2 of Form 8-K, the information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing.

Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

On August 14, 2009, the Company elected Megan Penick as a director.  Ms. Penick, who is an independent director, will also serve as a member of the Company’s audit and compensation committees.  On August 14, 2009, the Company issued a press release to announce this action.  A copy of the press release is being filed as Exhibit 99.2.

For services as a director and member of the audit and compensation committees, the Company shall pay Ms. Penick an annual fee of $8,000, payable quarterly, and will issue to Ms. Penick 20,690 shares of common stock, which represents $30,000 divided by the closing price of the common stock on August 14, 2009.  A copy of Ms. Penick’s agreement is filed as Exhibit 99.3

Ms. Penick, age 36, is presently the owner of Penick & Associates LLC, which provides corporate governance consulting. Prior to establishing her own company, Ms. Penick was a corporate and securities associate at Pryor Cashman, LLP, New York from April 2006 to May 2009, a legal consultant at Goldman Sachs’ Hedge Fund Strategies Group from October 2005 to April 2006, and general counsel at Global Holding & Investment Co., LLC, a financial services company, from April 2004 to October 2005. She received a B.A. degree from the University of Iowa and a J.D. from New York Law School, and is licensed to practice law in New Jersey, New York, Connecticut, and Washington, D.C.

Item 8.01. Other Events.

On August 12, 2009, the Company’s board of directors approved a one-for-three reverse split of the Company’s common stock.   Also on August 12, 2009, the holders of a majority of the outstanding shares of common stock of the Company approved the board’s actions by written consent.  The Company anticipates that the reverse split will become effective after notice is given to stockholders, a certificate of amendment is filed with the Secretary of State of the State of Delaware and all regulatory approval has been obtained.  On August 17, 2009, the Company issued a press release to announce this action.  A copy of the press release is filed as Exhibit 99.4.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

99.1	Press Release, dated August 17, 2009 relating to the earnings for the three and six months ended June 30, 2009.
99.2	Press Release, dated August 14, 2009 relating to the election of Megan Penick as a director.
99.3	Agreement, dated August 14, 2009, by and between China Wind Systems, Inc. and Megan Penick.
99.4	Press Release, dated August 17, 2009 relating to the reverse split.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 17, 2009		China Wind Systems, Inc.
	By:	/s/ Leo Wang
		Leo Wang
		Chief Financial Officer

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EX-99.1

Exhibit 99.1

 

Company Contact:	Investor Relations Contact:
Mr. Leo Wang	Mr. Crocker Coulson
Chief Financial Officer	President
China Wind Systems, Inc.	CCG Investor Relations
Tel: +1-877-224-6696 ext 705	Tel: +1-646-213-1915 (NY Office)
E-mail: leo.wang@chinawindsystems.com	E-mail:crocker.coulson@ccgir.com
Web site: www.chinawindsystems.com	Web site: www.ccgirasia.com

China Wind Systems, Inc. Reports Strong Second Quarter Fiscal 2009 Results

Net revenues increased 21.5% year-over-year to $13.6 million

Net income increased 26.2% year over year to $1.8 million, or $0.03 per diluted share

Wuxi, Jiangsu Province, China – August 17, 2009 –China Wind Systems, Inc. (OTC Bulletin Board: CWSI), (“China Wind Systems” or the “Company”), a leading supplier of forged products and industrial equipment to the wind power and other industries in China,  today announced its financial results for the quarter and six months ended June 30, 2009.

Second Quarter 2009 Highlights and Recent Events

· Net revenues increased 21.5% to $13.6 million

· Revenue from the sale of forged products for the wind power and other industries increased 139.8 to  $9.8 million, or 72% of net revenues

· Revenue from the sale of forged products exclusively to the wind industry increased 118.2% to $3.6 million, or 26.8% of net revenue

· Gross profit increased 12.3% to $3.1 million

· Net income increased 26.2% to $1.8 million , or $0.03 per fully diluted share

· Awarded government grant

· Received ISO9001 certification for forged products manufacturing facility

· Signed $14 million contract to supply wind tower flanges to Chengxi Shipyard Co., Ltd (“Chengxi”)

· Approved one-for-three reverse stock split

· Elected Megan Penick as independent director

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“We are very pleased with the progress of our new forged product manufacturing facility, which began production in March 2009, as forged products generated nearly three-fourths of our total revenues in the second quarter,” said Mr. Jianhua Wu, Chairman and CEO of China Wind Systems, Inc.“As we achieved greater efficiency at the new facility, our gross margins for forged products increased to 23.2%.  In July, we signed a $14 million contract to supply wind tower flanges to Chengxi, who sells to some of the premier wind power companies in the world.  We are confident that our continuous efforts to provide superior products and quality customer service will further strengthen our reputation as a leading provider of components to the wind power industry.”

Second Quarter 2009 Results

Net revenues for the second quarter of 2009 increased 21.5% to $13.6 million, compared to $11.2 million for the same period in 2008. The increase was primarily due to strong sales growth of forged rolled rings.Revenues from the sale of forged rolled rings for the wind power and other industries grew 139.8% to $9.8 million, or 72.0% of net revenue, for the second quarter of 2009, compared to $4.1 million, or 36.4% of net revenue, for the same period of the prior year. Revenue from the sale of forged rolled rings exclusively for the wind power industry rose 118.2% to $3.6 million, and represented 26.8% of net revenues, compared to $1.7 million, or 15.0% of net revenues in the year-ago period.  Revenues from the Company’s dyeing and finishing equipment segment decreased 41.7% to $3.8 million, or 28.0% of net revenues, compared to $6.5 million, or 58.3% of net revenue, for the second quarter of 2009 due to impact of the global recession on China’s textile industry.

Gross profit for the second quarter of 2009 increased 12.3% to $3.1 million, from $2.8 million for the same period in the prior year. Gross margin was 22.9% compared to 24.7% for the same period in 2008. The dyeing and finishing equipment segment’s gross margin was 22.1%, down from 25.9% in the comparable period in 2008. The decrease is attributable to an increase in the cost of raw materials, such as steel and other metals, which could not be passed on to customers during that period, as well as stronger competition which drove down prices. Gross margin for forged rolled rings and electric power equipment was 23.2%, compared with 23.1% in the same period last year.  The Company believes that its gross margins will improve to the extent that it is able to utilize its factory more efficiently.

Operating expenses decreased 18.9%, to $0.6 million in the second quarter of 2009, compared with $0.7 million in the comparable period last year, primarily the result of lower professional fees and depreciation. As a percent of net revenues, operating expenses declined to 4.4%, from 6.5% in the comparable period in 2008.

Operating income increased 23.6% to $2.5 million for the second quarter of 2009, from $2.0 million for the same period in the prior year.

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Net income increased 26.2% to $1.8 million, compared to $1.4 million in the second quarter of 2008. Diluted earnings per share grew to $0.03 from $0.02 in the comparable period last year.

Six Months Results

For the first half of 2009, revenues increased to $21.4 million, up 9.2% from $19.6 million in the corresponding period of 2008. Gross profit decreased 4.8% to $4.7 million, as compared to $4.9 million in the same period one year ago. Gross margin was 21.9%, compared to 25.2% during the first half of 2008. Operating income was unchanged at $3.5 million. Net income attributable to common shareholders was $2.4 million, or $0.04 per diluted share, compared to net loss available to common shareholders of $2.7 million, or ($0.07) per diluted share, in the first half of 2008. For the six months ended June 30, 2008, net loss attributable to common shareholders included $2.3 million in non-cash items related to the Company’s convertible debt and a deemed preferred stock dividend of $2.9 million which had the effect of reducing our net income available to common stockholders. Non-GAAP adjusted net income available to common shareholders for the first half of 2008, which excludes the non-cash items and deemed preferred dividend, was $2.4 million, or $0.06 per diluted share.

Financial Condition

As of June 30, 2009, the Company had cash and cash equivalents of $720,827, notes receivable of $401,473 and accounts receivable of $6.3 million and working capital of $4.8 million. The Company had $1.2 million in short-term loans payable, $0.8 million of long-term debt, and stockholders’ equity of $36 million.

During the first six months of 2009, China Wind generated $2.0 million in operating cash flow and spent $2.8 million in capital expenditures primarily for equipment to produce larger forged rolled rings.

Recent Events

In August, the Company approved a one-for-three reverse stock split.

In August, the Company elected Megan Penick as independent director.

In July, the Company signed a $14 million contract to supply wind tower flanges to Chengxi from September 2009 to June 2010 in the amount of 800 to 1,200 tons per month. Chengxi is a supplier to some of the world’s top wind turbine manufacturers.

In July, the Company received International Organization for Standardization Certification ISO9001:2009 that accredits China Wind Systems’ quality management system.

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Business Outlook

“We are confident in our prospects to significantly build our wind power business, as we are gaining sales momentum and building our stature as evidenced by our recent contract with Chengxi for wind tower flanges. The Chinese government recently increased its forecast of China’s installed wind capacity from 30 GW to 150 GW in 2020, demonstrating the compelling long-term opportunities available to China Wind Systems,” said Mr. Wu. “We continue our efforts to improve our corporate governance and hope to be able to list our shares on a major US stock market.”

Use of Non-GAAP Financial Measures

China Wind Systems believes that net income adjusted for certain non-cash expenses, a non-GAAP performance measure, is a reasonable means for understanding its business in view of the significant non-cash charges which do not relate to the operation of the business. In connection with the Company's November 2007 private placement, it issued 3% convertible notes to the investors in the principal amount of the $5,525,000. Because of the favorable conversion terms, the debt was issued at a discount of $2,610,938. Upon the conversion of the debt into equity in March 2008, the unamortized debt discount of $2,263,661 was fully amortized and treated as additional interest, and the relative fair value of the warrants granted in March 2008 related to the November 2007 private placement of $2,884,062 was classified as a deemed dividend to the holders of the series A preferred stock. The amortization of the debt discount and the deemed dividend are non-cash events which do not affect the Company's operations.

Conference Call

The Company will conduct a conference call at 10:00 a.m. Eastern Time (ET) on Monday, August 17, 2009 to discuss its second quarter 2009 results. To participate in the live conference call, please dial 888-339-2688 (international callers dial 617-847-3007) approximately ten minutes prior to the start of the call and enter passcode 925 361 25.  A replay will be available for 14 days starting on August 17 at 12:00 p.m. ET. To access the replay, dial (888) 286-8010 (international callers dial 617-801-6888) and enter passcode 441 449 71.

About China Wind Systems, Inc.

China Wind Systems supplies forged rolled rings to the wind power and other industries and industrial equipment to the textile and energy industries in China.With its newly finished state-of-the-art production facility, the Company plans to increase its production and shipment of high-precision rolled rings and other essential components primarily to the wind power and other industries. For more information on the Company, visit http://www.chinawindsystems.com. Information on the Company’s Web site or any other Web site does not constitute a portion of this release.

7

Safe Harbor Statement

This release contains certain "forward-looking statements" relating to the business of the Company and its subsidiary and affiliated companies. These forward looking statements are often identified by the use of forward-looking terminology such as "believes,” “expects" or similar expressions. Such forward looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. 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 (www.sec.gov). All forward-looking statements attributable to the Company or to 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.

-Financial Tables Follow-

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CHINA WIND SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2009			2008			2009			2008
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
NET REVENUES	$	13,584,030		$	11,182,950		$	21,444,897		$	19,630,024
COST OF SALES		10,479,370			8,419,505			16,743,588			14,692,331
GROSS PROFIT		3,104,660			2,763,445			4,701,309			4,937,693
OPERATING EXPENSES:
Depreciation		83,393			141,568			160,923			219,588
Selling, general and administrative		509,408			589,420			1,010,356			1,205,988
Total Operating Expenses		592,801			730,988			1,171,279			1,425,576
INCOME FROM OPERATIONS		2,511,859			2,032,457			3,530,030			3,512,117
OTHER INCOME (EXPENSE):
Interest income		98			4,011			328			9,644
Interest expense		(176,058	)		(18,753	)		(199,729	)		(2,278,447	)
Foreign currency loss		-			-			(11	)		-
Grant income		146,130			-			146,130			-
Debt issuance costs		-			-			(12,000	)		(21,429	)
Total Other Income (Expense)		(29,830	)		(14,742	)		(65,282	)		(2,290,232	)
INCOME BEFORE INCOME TAXES		2,482,029			2,017,715			3,464,748			1,221,885
INCOME TAXES		701,494			606,531			1,038,155			1,060,562
NET INCOME		1,780,535			1,411,184			2,426,593			161,323
DEEMED PREFERRED STOCK DIVIDEND		-			-			-			(2,884,062	)
NET INCOME (LOSS) ALLOCABLE TO COMMON SHAREHOLDERS	$	1,780,535		$	1,411,184		$	2,426,593		$	(2,722,739	)
COMPREHENSIVE INCOME:
NET INCOME	$	1,780,535		$	1,411,184		$	2,426,593		$	161,323
OTHER COMPREHENSIVE INCOME:
Unrealized foreign currency translation gain		3,253			605,039			44,793			1,612,284
COMPREHENSIVE INCOME	$	1,783,788		$	2,016,223		$	2,471,386		$	1,773,607
NET INCOME (LOSS) PER COMMON SHARE:
Basic	$	0.04		$	0.04		$	0.05		$	(0.07	)
Diluted	$	0.03		$	0.02		$	0.04		$	(0.07	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		45,241,307			38,036,208			45,104,302			37,760,355
Diluted		63,768,461			65,712,820			60,623,310			37,760,355

See notes to unaudited consolidated financial statements

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CHINA WIND SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	June 30,		December 31,
	2009		2008
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	720,827	$	328,614
Notes receivable		401,473		269,549
Accounts receivable, net of allowance for doubtful accounts (Note 2)		6,271,623		4,518,259
Inventories, net of reserve for obsolete inventory (Note 3)		2,516,385		1,892,090
Advances to suppliers		123,919		117,795
Due from related party (Note 8)		-		437,688
Prepaid value-added taxes on purchases		234,089		-
Prepaid expenses and other		72,344		21,744
Total Current Assets		10,340,660		7,585,739
PROPERTY AND EQUIPMENT - net (Note 4)		28,126,754		25,939,596
OTHER ASSETS:
Land use rights, net (Note 5)		3,768,468		3,806,422
Total Assets	$	42,235,882	$	37,331,757
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Loans payable (Note 7)	$	1,168,770	$	1,021,272
Accounts payable		2,891,880		2,485,137
Accrued expenses		269,991		187,605
VAT and service taxes payable		-		97,341
Advances from customers		471,847		45,748
Income taxes payable		701,168		569,371
Total Current Liabilities		5,503,656		4,406,474
LONG-TERM LIABILITIES:
Loan payable - net of current portion and debt discount (Note 7)		758,397		-
Total Liabilities		6,262,053		4,406,474
RELATED PARY TRANSACTIONS (Note 8)
STOCKHOLDERS' EQUITY: (Note 6)
Preferred stock $0.001 par value;
(June 30, 2009 and December 31, 2008 - 60,000,000 shares authorized, all of which
were designated as series A convertible preferred, 13,626,728 and 14,028,189 shares issued and outstanding;
at June 30, 2009 and December 31, 2008, respectively)		13,627		14,028
Common stock ($0.001 par value; 150,000,000 shares authorized;
46,039,342and 44,895,546 shares issued and outstanding
at June 30, 2009 and December 31, 2008, respectively)		46,038		44,896
Additional paid-in capital		16,147,706		15,571,288
Retained earnings		15,858,198		13,639,641
Statutory reserve		829,239		621,203
Committments (Note 11)		-		-
Other comprehensive gain - cumulative foreign currency translation adjustment		3,079,020		3,034,227
Total Stockholders' Equity		35,973,828		32,925,283
Total Liabilities and Stockholders' Equity	$	42,235,881	$	37,331,757

See notes to unaudited consolidated financial statements

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CHINA WIND SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Six Months Ended
	June 30,
	2009			2008
	(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	2,426,593		$	161,323
Adjustments to reconcile net income from operations to net cash
provided by operating activities:
Depreciation		697,127			322,923
Amortization of debt discount to interest expense		16,997			2,263,661
Amortization of debt offering costs		-			21,429
Amortization of land use rights		43,191			66,761
Increase in allowance for doubtful accounts		143,620			170,024
Interest expense related to debt converion		128,489			-
Stock-based compensation expense		119,612			75,000
Changes in assets and liabilities:
Notes receivable		(131,584	)		-
Accounts receivable		(1,891,180	)		(1,860,346	)
Inventories		(621,840	)		(911,684	)
Prepaid value-added taxes on purchases		(234,142	)		-
Prepaid and other current assets		(50,602	)		235,398
Advances to suppliers		(5,964	)		647,106
Due from related party		438,389			-
Accounts payable		403,527			(137,507	)
Accrued expenses		82,146			3,085
VAT and service taxes payable		(97,497	)		(230,670	)
Income taxes payable		131,045			74,150
Advances from customers		426,134			864
NET CASH PROVIDED BY OPERATING ACTIVITIES		2,024,061			901,517
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease in due from related parties		-			98,058
Proceeds from sale of cost-method investee		-			35,348
Deposit on long-term assets - related party		-			(88,783	)
Deposit on long-term assets		-			(2,648,096	)
Purchase of property and equipment		(2,849,156	)		(2,126,847	)
NET CASH USED IN INVESTING ACTIVITIES		(2,849,156	)		(4,730,320	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loans payable		1,133,612			141,390
Proceeds from exercise of warrants		83,111			854,340
Payments on related party advances		-			(101,905	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		1,216,723			893,825
EFFECT OF EXCHANGE RATE ON CASH		585			184,068
NET INCREASE (DECREASE) IN CASH		392,213			(2,750,910	)
CASH  - beginning of year		328,614			5,025,434
CASH - end of period	$	720,827		$	2,274,524
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for:
Interest	$	46,443		$	35,505
Income taxes	$	921,760		$	1,169,603
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Debt discount for grant of warrants	$	92,985		$	-
Deemed preferred stock dividend reflected in paid-in capital	$	-		$	2,884,062
Convertible debt converted to series A preferred stock	$	-		$	5,525,000
Deposit on long-term assets-related party reclassified to intangible assets	$	-		$	5,500,030
Series A preferred converted to common shares	$	401		$	759
Common stock issued for debt	$	152,963		$	-

See notes to unaudited consolidated financial statements.

 

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CHINA WIND SYSTEMS, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS AND DILUTED EPS

	For the Six Months ended June 30,
	2009				2008
	Net Income		Diluted EPS		Net Income			Diluted EPS
Adjusted Amount of Net Income available to Common Shareholders	$	2,426,593	$	0.04	$	2,424,984		$	0.06
Adjustment
Interest expenses related to amortization of convertion of convertible debt to common stock (1)		-		-		2,263,661			0.06
Deemed preferred stock dividend (2)						2,884,062.0			0.08
Amount per consolidated statement of operations	$	2,426,593	$	0.04	$	(2,722,739	)	$	(0.07	)

(1) One-time, non-cash interest expenses related to amortization of debt discount to interest expense, Q1 2008 and Q1 2009  

(2) Deemed preferred stock dividend related to Weighted average diluted shares, 60,623,311 for six months ended June 30,2009 and 37,760,355 for six months ended June 30, 2008

###

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EX-99.2

Exhibit 99.2

China Wind Systems, Inc. Elects Megan Penick as an Independent Director

Press Release

Source: China Wind Systems, Inc.

On Friday August 14, 2009, 11:00 am EDT

WUXI, China, Aug. 14 /PRNewswire-Asia-FirstCall/ -- China Wind Systems, Inc. (OTC Bulletin Board: CWSI - - News; "China Wind Systems" or the "Company"), a leading supplier of forged products and industrial equipment to the wind power and other industries in China, announced today that the board of directors has elected Ms. Megan Penick as a director. Following the election of Ms. Penick, who is an independent director, the Company's board of directors is now comprised of five members, three of whom are independent.

Ms. Penick will serve on the Company's audit and compensation committees. Ms. Penick is an attorney, licensed to practice in New York State. In her work, she focuses on working with United States and China-based companies and their boards in developing corporate governance best practices. She is presently the owner of Penick & Associates LLC, which provides corporate governance consulting. Prior to establishing her own company, Ms. Penick was a corporate and securities associate at Pryor Cashman, LLP, New York from April 2006 to May 2009, a legal consultant at Goldman Sachs' Hedge Fund Strategies Group from October 2005 to April 2006, and general counsel at Global Holding & Investment Co., LLC, a financial services company, from April 2004 to October 2005. She received her J.D. from New York Law School and is fluent in both Mandarin and English.

"We are delighted to have Ms. Penick join our board and believe she will provide valuable guidance to the senior management team as the Company grows and implements improved corporate governance practices," Mr. Jianhua Wu, Chairman and CEO of China Wind Systems, Inc., said. "Once again, our board is comprised of a majority of independent directors."

About China Wind Systems, Inc.

China Wind Systems supplies forged rolled rings to the wind power and other industries and industrial equipment to the textile and energy industries in China. With its newly finished state-of-the-art production facility, the Company is expected soon to significantly increase its shipment of high-precision rolled rings and other essential components primarily to the wind power and other industries. For more information on the Company, visit http://www.chinawindsystems.com .. Information on the Company's Web site or any other Web site does not constitute a portion of this release.

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Safe Harbor Statement

This release contains certain "forward-looking statements" relating to the business of the Company and its subsidiary companies. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions. Such forward looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. 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 to 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.

    For further information, please contact:

    Company Contact:

    China Wind Systems, Inc.

     Mr. Leo Wang

     Chief Financial Officer

     Tel:   +1-877-224-6696 x705

     Email: leo.wang@chinawindsystems.com

     Web:   http://www.chinawindsystems.com

    Investor Relations Contact:

    CCG Investor Relations

     Mr. Crocker Coulson

     President

     Tel:   +1-646-213-1915 (NY Office)

     Email: crocker.coulson@ccgir.com

     Web:   http://www.ccgirasia.com

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EX-99.3

CHINA WIND SYSTEMS, INC.

No. 9 Yanyu Middle Road

Qianzhou Village, Huishan District

Wuxi City, Jiangsu Province, PRC

August 14, 2009

Ms. Megan J. Penick, Esq.

Penick & Associates LLC

300 Carroll Close

Tarrytown, NY 10591

Re: China Wind Systems, Inc. Board of Directors

Dear Ms. Penick:

China Wind Systems, Inc., a Delaware corporation (the “Company”), is pleased to advise you that you have been elected as a director of China Wind Systems, Inc., subject to your acceptance and agreement to serve as a member of our Board of Directors (the “Board”).  Directors are elected for a period of one year and until their successors are elected and qualified.  At each annual meeting of stockholders, we elect directors to serve for the following year.  The Board is responsible for managing our business and affairs.

This Agreement shall set forth the terms of your service as a director, keeping in mind that, as a director of a Delaware corporation, you have the responsibilities of a director under the Delaware General Corporation Law.

1.           Acceptance; Board and Committee Service.  You hereby accept your election as a director of the Company.  You agree to serve on the audit and compensation committees, and, if the Company designates a nominating committee, you agree, if you are appointed, to serve on that committee.  You confirm to us that you are an independent director as defined in the Nasdaq rules and regulations.

2.           Services.

(a)           The Board will have four regular meetings each year, one of which may be held in the People’s Republic of China.  Special meetings may be called from time to time to the extent that they are deemed necessary.  In addition, we expect that the independent directors will have separate meetings, which may be held on the same day as a board meeting.

(b)           The audit committee will have four regular meetings, one to review the financial statements for each of the first three fiscal quarters and a fourth to review the audited financial statements for the fiscal year.  At these meetings, the audit committee will meet with representatives of our independent registered accounting firm (the “auditors”) and, if the audit committee deems necessary or desirable, the chief financial officer, to review the financial statements together with any questions raised by the auditors’ review of our disclosure and internal controls.  The audit committee will also work with the auditors in connection with the implementation of internal controls.  Additional meetings of the audit committee may be held.

(c)           The compensation committee is responsible for administering any stock option or other equity-based incentive plans and for determining the compensation of the chief executive officer and other executive officers.  We expect that the compensation committee will meet twice a year.

(d)           A copy of the charters for the audit and compensation committee and our code of ethics have previously been provided to you.

3.           Attendance.  Meetings for each year shall be scheduled at the beginning of the year and shall be reasonably acceptable to all directors.  If you are unable to attend a meeting in person, you may participate by conference call.  In addition, you shall be available to consult with the other members of the Board as necessary via telephone, electronic mail or other forms of correspondence.   In addition, you will review our financial statements and annual and quarterly reports prior to the audit committee meetings.  We anticipate that your participation by means other than personal attendance, including review of our financial statements and annual and quarterly reports, as described herein shall be, on the average during the year, not more than ten hours per month.

4.           Services for Others.  While we recognize that you may serve as a director of other companies, you understand and agree that you are and will be subject to our policy that restricts you from using or disclosing any material non-public information concerning our company or from using or disclosing any of our trade secrets or other proprietary information.  Similarly, you agree that you will not use or disclose, in the performance of your duties as a director, any trade secrets or proprietary information of any other company.  You agree to execute our standard non-disclosure agreement.

5.           Blackout Period.   You understand that we have a policy pursuant to which no officer, director or key executive may engage in transactions in our stock during the period commencing two weeks prior to the end of a fiscal quarter and ending the day after the financial information for the quarter or year has been publicly released.  As a member of the audit committee, if you have information concerning our financial results at any time, you may not engage in transactions in our securities until the information is publicly disclosed.

6.           Compensation.  As an independent director and member of the audit, compensation and, if appointed, nominating, committees, you will receive the following compensation:

(a)           An annual fee of $8,000, payable quarterly.

(b)           Such number of shares of common stock as has a value on the date of your acceptance, of $30,000, based on the closing price of the stock on such date.  You shall have piggyback registration rights with respect to such shares; provided, that such right will be subordinate to the rights of any investors in any past or present private placement of securities and such right may not be exercised if the total number of shares issued to you pursuant to this Agreement is more than 1% of our outstanding common stock or if you may sell all of your shares pursuant to Rule 144 of the Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933.

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7.           Compensation for Subsequent Years.  Your compensation for subsequent years shall be determined by the Board or the compensation committee, provided that the compensation for any year shall not be less than the compensation for the immediately prior year.

8.           Reimbursement of Expenses.  You will be reimbursed for all reasonable expenses incurred in connection with the performance of your services as a director and committee member and/or chairman, including your travel, lodging and related expenses.  If the Board or any committee has more than one meeting in China, you may attend that meeting by conference call unless you are otherwise in China.

9.           Officers’ and Directors’ Liability Insurance.  We presently have officers’ and directors’ liability insurance in the amount of $3 million, and we will maintain such insurance in not less than that amount.

10.           Certain Representations.

(a)           You represent and agree that you are accepting the shares of common stock being issued to you pursuant to this Agreement for your own account and not with a view to or for sale of distribution thereof.  You understand that the securities are restricted securities and you understand the meaning of the term “restricted securities.”  You further represent that you were not solicited by publication of any advertisement in connection with the receipt of the Shares and that you have consulted tax counsel as needed regarding the Shares.

(b)           You further represent that, during the past five years:

(i)           No petition has been filed under the federal bankruptcy laws or any state insolvency law by or against, or a receiver, fiscal agent or similar officer has been appointed by a court for your business or property, or any partnership in which you were a general partner at or within two years before the time of such filing, or any corporation or business association of which you were an executive officer at or within two years before the time of such filing;

(ii)           You have not been convicted in a criminal proceeding and are not the subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

(iii)           You have not been the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining you from, or otherwise limiting, the following activities:

(A)           Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

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(B)           Engaging in any type of business practice; or

(C)           Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws;

(D)           You have not been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or otherwise limiting, for more than 60 days, your right to engage in any activity described in Section 10(b)(iii)(A) of this Agreement, or to be associated with persons engaged in any such activity; or

(iv)           You have not been found by a court of competent jurisdiction in a civil action or by the SEC to have violated any federal or state securities law, and the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended, or vacated.

(v)           You have not been found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated.

(c)           Stock Ownership.  Except as set forth on the signature page of this Agreement, you do not own any shares of any class or series of our capital stock or any options or warrants to purchase our capital stock or any securities convertible into our capital stock.

11.           Independent Contractor.  You understand that, as a director, you will be an independent contractor and not an employee, and, unless the Board expressly grants you such authorization, you shall have no authority to bind us or to act as our agent.

12.           Entire Agreement; Amendment; Waiver.  This Agreement expresses the entire understanding with respect to the subject matter hereof and supersedes and terminates any prior oral or written agreements with respect to the subject matter hereof.  This Agreement may be modified or amended, and no provision of this Agreement may be waived, except by a writing that expressly refers to this Agreements, states that it is an amendment, modification or waiver and is signed by both parties, in the case of an amendment or modification or the party granting the waiver in the case of a waiver.  Waiver of any term or condition of this Agreement by any party shall not be construed as a waiver of any subsequent breach or failure of the same term or condition or waiver of any other term or condition of this Agreement.  The failure of any party at any time to require performance by any other party of any provision of this Agreement shall not affect the right of any such party to require future performance of such provision or any other provision of this Agreement.

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The Agreement has been executed and delivered by the undersigned and is made effective as of the date set first set forth above.

Sincerely,
CHINA WIND SYSTEMS, INC.
By:	/s/ Jianhua Wu
	Jianhua Wu
	Chief Executive Officer

AGREED AND ACCEPTED:

/s/ Megan J. Penick

Megan J. Penick

Shares of common stock, warrants, options or convertible securities owned as of the date of this Agreement:

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EX-99.4

Exhibit 99.4

China Wind Systems, Inc. Announces Approval for One-for-Three Reverse Stock Split

Press Release

Source: China Wind Systems, Inc.

On Monday August 17, 2009, 7:00 am EDT

WUXI, China, Aug. 17 /PRNewswire-Asia-FirstCall/ -- China Wind Systems, Inc. (OTC Bulletin Board: CWSI - - News; "China Wind Systems" or the "Company"), a leading supplier of forged products and industrial equipment to the wind power and other industries in China, announced today that its board of directors approved a one-for-three reverse stock split of the Company's common stock and that the holders of a majority of the Company's outstanding stock have consented to the reverse split.

The reverse split will become effective following completion of the necessary filings and approvals, which the Company expects by late September 2009. The Company currently has approximately 46.0 million shares of common stock outstanding. After the reverse split becomes effective, the Company will have approximately 15.3 million shares outstanding.

"We have chosen to pursue a reverse stock split as a strategic step to position the Company to list our common stock on a major U.S. stock exchange and thereby increase our visibility and grow our institutional shareholder base," Mr. Jianhua Wu, Chairman and CEO of China Wind Systems, Inc., said. "We anticipate that the reverse split, along with other steps that we are taking, will enable us to meet the criteria for such a listing."

About China Wind Systems, Inc.

China Wind Systems supplies forged rolled rings to the wind power and other industries and industrial equipment to the textile and energy industries in China. With its newly finished state-of-the-art production facility, the Company is expected soon to significantly increase its shipment of high- precision rolled rings and other essential components primarily to the wind power and other industries. For more information on the Company, visit http://www.chinawindsystems.com .. Information on the Company's Web site or any other Web site does not constitute a portion of this release.

Safe Harbor Statement

This release contains certain "forward-looking statements" relating to the business of the Company and its subsidiary companies. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions. Such forward looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. 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 to 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.

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    For more information, please contact:

    Company Contact:

     Mr. Leo Wang

     Chief Financial Officer

     China Wind Systems, Inc.

     Tel:     +1-877-224-6696 x705

     Email:   leo.wang@chinawindsystems.com

     Website: http://www.chinawindsystems.com

    Investor Relations Contact:

     Mr. Crocker Coulson

     President

     CCG Investor Relations

     Tel:     +1-646-213-1915 (NY Office)

     Email:   crocker.coulson@ccgir.com

     Website: http://www.ccgirasia.com

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