Joy Spreader Group Inc. — Capital/Financing Update 2007

May 17, 2007

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

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AGTech Holdings Limited 亞博科技控股有限公司[*]

(incorporated in Bermuda with limited liability)

(Stock Code: 8279)

DISCLOSEABLE TRANSACTION (Acquisition of the entire issued share capital of SHINING CHINA INC) and RESUMPTION OF TRADING

The Board is pleased to announce that on 14 May 2007, the Purchaser (being an indirect whollyowned subsidiary of the Company) entered into the Sale and Purchase Agreement with the Vendors pursuant to which the Purchaser agreed to purchase and the Vendors agreed to sell the entire issued share capital of SHINING CHINA INC at the consideration of HK$777,700,000, of which

• (i) HK$39,000,000 in cash shall be paid as a refundable deposit and partial payment of the consideration to the 1st Vendor within 5 weeks after the date of the Sale and Purchase Agreement;

• (ii) HK$272,080,000 in cash shall be paid to the 1st Vendor upon Completion; and

• (iii) the remaining balance of HK$466,620,000 shall be satisfied by the Company allotting and issuing 237,580,000 Consideration Shares (representing approximately 7.33% of the issued share capital of the Company as enlarged by the issue of such Consideration Shares) at the Issue Price to the 2nd Vendor upon Completion.

The Acquisition constitutes a discloseable transaction for the Company under the GEM Listing Rules. The Company will convene a special general meeting to seek the approval of the Shareholders for the allotment and issue of the Consideration Shares. A circular containing, among other things, information on the Sale and Purchase Agreement, the Shining China Group, a notice of the aforesaid special general meeting and other information as required under the GEM Listing Rules will be despatched to the Shareholders as soon as practicable.

At the request of the Company, trading in the Shares on the Stock Exchange was suspended from 9:30 a.m. on 15 May 2007 pending the release of this announcement. Application has been made by the Company to the Stock Exchange for the resumption of trading in the Shares on the Stock Exchange with effect from 9:30 a.m. on 17 May 2007.

* For identification purpose only

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Reference is made to the announcement of the Company dated 23 April 2007 in relation to the LOI. The Sale and Purchase Agreement is the formal binding agreement between the Parties to the LOI.

THE SALE AND PURCHASE AGREEMENT

Date: 14 May 2007

• Parties: (i) Sinoworld Global Limited as the 1st Vendor; (ii) Fine Bridge International Limited as the 2nd Vendor;

• (iii) AGTech Investment Holdings Limited (a company incorporated with limited liability under the laws of British Virgin Islands and an indirect wholly-owned subsidiary of the Company) as the Purchaser;

• (iv) Yuan Haibo (the sole beneficial owner of the 1st Vendor) as the guarantor for the 1st Vendor; and

• (v) Bai Jinmin (the sole beneficial owner of the 2nd Vendor) as the guarantor for the 2nd Vendor.

Upon Completion, the Purchaser will own 100% of the issued share capital of Shining China. Each of Mr. Yuan Haibo and Mr. Bai Jinmin entered into the Sale and Purchase Agreement as guarantor to guarantee the respective obligations of the 1st Vendor and the 2nd Vendor under the Sale and Purchase Agreement.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, as at the date of this announcement, the 1st Vendor and the 2nd Vendor and their respective controlling shareholders (namely, the Guarantors) are third parties independent of and not connected with the Company and the directors, chief executive, management shareholders or substantial shareholders of the Company or its subsidiaries, or any of their respective associates (as defined under the GEM Listing Rules).

The information regarding the Acquisition is set out as follows:

Assets to be acquired: The Purchaser shall purchase and the Vendors shall sell the entire issued share capital of Shining China.

Consideration for the Acquisition: The consideration for the Acquisition shall be HK$777,700,000, of which:

• (i) HK$39,000,000 in cash shall be paid as a refundable deposit and partial payment of the consideration (the “Deposit”) to the 1st Vendor within 5 weeks after the date of the Sale and Purchase Agreement;

• (ii) HK$272,080,000 in cash shall be paid to the 1st Vendor upon Completion; and

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• (iii) the remaining balance of HK$466,620,000 shall be satisfied by the Company allotting and issuing 237,580,000 Consideration Shares (representing approximately 7.33% of the issued share capital of the Company as enlarged by such Consideration Shares) at the Issue Price to the 2nd Vendor upon Completion.

In the event that Completion does not take place for whatever reasons on or before 5 July 2007 or that the Sale and Purchase Agreement is terminated for whatever reasons, the Deposit shall be refunded (without interest) by the 1st Vendor to the Purchaser (or its nominee) within 2 Business Days upon written request by the Purchaser.

The cash portion of the consideration for the Acquisition will be financed by way of external fund raising activity to be carried out by the Company. The Company currently envisages that it may be funded by placement of new Shares. However, the Company has yet to determine the size and structure of such fund raising activity and no decision has been made by the Company regarding the exact source of funding and the exact time for completing the fund raising activity for the Acquisition. A further announcement disclosing the details of the funding arrangement will be made by the Company in due course.

The issue price of the Consideration Shares of approximately HK$1.964 each (i) represents a discount of approximately 2.77% to the closing price of HK$2.02 per Share as quoted on the Stock Exchange on 14 May 2007, being the last trading day prior to the release of this announcement; (ii) is equivalent to the average closing price of HK$1.964 per Share based on the closing prices of the Shares as quoted on the Stock Exchange for the 5 consecutive trading days immediately preceding the date of the Sale and Purchase Agreement; and (iii) represents a premium of approximately 11.34% over the average closing price of approximately HK$1.764 per Share quoted on the Stock Exchange for the 30 consecutive trading days leading up to and including 14 May 2007.

Based on the average closing price of HK$1.964 per Share quoted on the Stock Exchange for the five consecutive trading days immediately prior to the date of the Sale and Purchase Agreement, the value of the Consideration Shares will be approximately HK$466.6 million.

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The Consideration Shares represent approximately 7.91% of the Company’s existing issued share capital and approximately 7.33% of its issued share capital as enlarged by the issue of the Consideration Shares. The 2nd Vendor has undertaken to the Purchaser that for a period of 12 months after the allotment and issue of the Consideration Shares, it (and its associates as defined in the GEM Listing Rules) shall not sell, assign, exchange, transfer, or grant any option, right of first refusal or other right or interest whatsoever over any of the Consideration Shares.

The issue and allotment of the Consideration Shares is subject to, among other things, the passing of a resolution approving the issue and allotment of the Consideration Shares by the Shareholders at the SGM.

Application will be made by the Company to the Stock Exchange for the listing of and permission to deal in the Consideration Shares.

Guarantee:

Conditions precedent:

The Guarantors unconditionally and irrevocably guarantee to the Purchaser the due and punctual performance by the Vendors of their obligations under the Sale and Purchase Agreement, and undertake to indemnify and keep indemnified the Purchaser against all losses, damages, costs and expenses of whatsoever nature which the Purchaser may suffer or incur by reason of any default or unreasonable delay on the part of the Vendors in the performance of their obligations in the Sale and Purchase Agreement.

Completion of the Sale and Purchase Agreement is conditional upon the following conditions:

• (i) the Company obtaining the approval from the GEM Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Consideration Shares;

• (ii) the Shareholders passing resolution(s) approving the issue and allotment of the Consideration Shares and, if required, the Sale and Purchase Agreement and the transactions contemplated thereunder;

• (iii) the Purchaser obtaining a legal opinion (in such form and substance satisfactory to the Purchaser) issued by the PRC lawyers acceptable to the Purchaser advising and confirming under the laws of the PRC that the business(es) of Shining China’s subsidiary in the PRC are in compliance with all relevant laws and regulations in the PRC;

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• (iv) the Purchaser not obtaining or receiving any indication that any necessary approvals, consent or permits from any regulatory or governmental authorities in the PRC and Hong Kong to the execution of the Sale and Purchase Agreement and the performance of the transactions thereby contemplated not having been obtained as at the time that the conditions set out in (i), (ii) and (iii) above are satisfied; and

• (v) the Purchaser notifying the Vendors that it is satisfied upon inspection and investigation that the operation of the business(es) (whether current business(es) or not) of the Shining China Group and the arrangement(s) relating thereto do not contravene the Gambling Ordinance (Chapter 148 of the Laws of Hong Kong).

Long-stop date:

The above conditions precedent of the Sale and Purchase Agreement shall have been fulfilled and/or waived by Purchaser (as the case may be) on or before 30 June 2007 (or such later date as may be agreed between the Purchaser and the Vendors in writing).

The Company has engaged the PRC lawyer to give written legal opinion as to under the laws of the PRC that the business(es) of the Shining China Group are in compliance with all relevant laws and regulations in the PRC. The PRC lawyer has yet to finalise its legal opinion as at the date of this announcement. If the Company cannot obtain such legal opinion by the said long-stop date, the Company may exercise its right not to complete the Acquisition.

Completion:

Completion shall take place on or before the third Business Day after the fulfilment and/or waiver by the Purchaser (as the case may be) of all the conditions precedent of the Sale and Purchase Agreement (or such other date as the Parties may agree in writing).

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SHAREHOLDING STRUCTURE

The shareholding structure of the Company as at the date of this announcement and that immediately upon Completion are as follows:

Shareholders MAXPROFIT GLOBAL INC_(Note 1) Mr. SUN Ho(Note 2) Mr. KOT Wai Ming (Note 2) Mr. WANG Ronghua (Note 2) Mr. HUA Fengmao (Note 2) Mr. KWOK Wing Leung Andy(Note 2)_ 2nd Vendor Public Shareholders Total	As at the date of this announcement Approximate percentage of total issued share capital of the No. of Shares Company 2,006,250,000 66.84% 26,750,000 0.89% 26,750,000 0.89% 2,675,000 0.09% 1,355,000 0.04% 2,675,000 0.09% – – 935,340,000 31.16% 3,001,795,000 100.00%	Immediately upon Completion Approximate percentage of total issued share capital of the No. of Shares Company 2,006,250,000 61.93% 26,750,000 0.83% 26,750,000 0.83% 2,675,000 0.08% 1,355,000 0.04% 2,675,000 0.08% 237,580,000 7.33% 935,340,000 28.88% 3,239,375,000 100.00%	Immediately upon Completion Approximate percentage of total issued share capital of the No. of Shares Company 2,006,250,000 61.93% 26,750,000 0.83% 26,750,000 0.83% 2,675,000 0.08% 1,355,000 0.04% 2,675,000 0.08% 237,580,000 7.33% 935,340,000 28.88% 3,239,375,000 100.00%
			100.00%

Notes:

1. MAXPROFIT GLOBAL INC is beneficially and wholly-owned by Mr. Sun Ho, an executive Director and Chairman of the Company.

2. These are Shares held by Directors.

INFORMATION ON THE VENDORS AND THE SHINING CHINA GROUP

The 1st Vendor is an investment holding company incorporated with limited liability under the laws of the British Virgin Islands and is wholly-owned by Mr. Yuan Haibo.

The 2nd Vendor is an investment holding company incorporated with limited liability under the laws of the British Virgin Islands and is wholly-owned by Mr. Bai Jinmin.

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Shining China is an investment holding company and the Shining China Group is principally engaged in the provision of consultancy services (including providing training services as well as proposals, recommendations and advice on (i) the selection of location, and the setting up, of sales venues; (ii) brand-building; (iii) the operations and sales management; and (iv) the advertising and marketing strategies in respect of sports lottery tickets issuance and sales).

The Shining China Group has commenced to provide the said consultancy services in the sports lottery market in the PRC since 1 November 2006.

Currently, under continuous contracts, the Shining China Group has been providing the said consultancy services to a PRC company (which is now the principal customer of the Shining China Group and a third party independent of and not connected with the Company and the directors, chief executive, management shareholders or substantial shareholders of the Company or its subsidiaries, or any of their respective associates (as defined under the GEM Listing Rules)) which is engaged by contractual arrangement with the respective 體育彩票管理中心 (the sports lottery administration centres) as hereinafter mentioned in, among other things, the provision of marketing strategy, promotional and sales management services to the sports lottery administration centres of the municipality of Chongqing (重慶市 ) and the provinces of Hunan (湖南省 ) and Jiangxi (江西 省 ) in the PRC which are government bodies of the PRC. Further information regarding the revenue model of the Shining China Group will be disclosed in the circular to be issued to the Shareholders.

Based on the unaudited consolidated accounts of the Shining China Group for the period from 3 January 2006 (being the date of incorporation) to 31 December 2006, the Shining China Group had turnover of approximately HK$0.4 million and a loss (both before and after taxation) of approximately HK$0.6 million. Based on the unaudited management accounts of the Shining China Group for the three months ended 31 March 2007, the Shining China Group had turnover of approximately HK$1.2 million and a loss (both before and after taxation) of approximately HK$0.4 million. The unaudited net asset value of the Shining China Group as at 31 March 2007 was approximately HK$93,000.

INFORMATION ON THE GROUP

The Company is an investment holding company incorporated in Bermuda and its issued Shares are listed on GEM. The Group is principally engaged in the research, development and sale of software products and systems as well as the provision of information technology solutions (including project implementation, system integration and after-sales maintenance services) to customers in the PRC and the Macao Special Administrative Region of the PRC. As part of its corporate strategy to strengthen its business in the PRC, the Group now focuses on promoting the fixed odds betting products through its joint venture with Ladbroke Group (as announced by the Company on 23 January 2007) as well as on the payment-related products.

REASONS FOR AND BENEFITS OF THE ACQUISITION

The Group has been looking for suitable investment opportunities in order to broaden its income source and maximise the return of the Shareholders. The Board considers that the Acquisition is an attractive investment opportunity for the Group to widen the scope of its services in the PRC market and, in particular, represents a major step forward of the Group in further expanding its business into the sports lottery market in the PRC following its first foray into such market through the establishment of a joint venture company with Ladbroke Group. In addition, by acting as the consultant to its principal customer which is engaged in, among other things, the provision of marketing strategy, promotional and sales management services to the sports lottery administration centres of the municipality of Chongqing and the provinces of Hunan and Jiangxi in the PRC, the

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Shining China Group has established a foothold in the sports lottery market in the PRC and, after and assuming Completion, such provision of consultancy services to the said principal customer will be a valuable asset to the Group as it will allow the Group to accelerate its penetration into the sports lottery sector in the PRC. The municipality of Chongqing and the provinces of Hunan and Jiangxi are just the initial entry points for the Shining China Group in the sports lottery sector of the PRC and, after and assuming Completion, the Group intends to leverage on the Shining China Group’s track record and experience to continue to penetrate other provinces or municipalities in the PRC. Based on the official data released by 國家體育總局體育信息中心 (the Information Centre of General Administration of Sports of China), the total sales of sports lottery for the year of 2006 recorded a record-high of over RMB32.3 billion (equivalent to approximately HK$32.3 billion), representing an increase of approximately RMB2.1 billion (equivalent to approximately HK$2.1 billion) over 2005. The population of Chongqing, Hunan and Jiangxi in aggregate amounted to approximately 134.35 million for 2005, representing approximately 10.3% of the total population in the PRC (source of information: Bloomberg), with Chongqing being the largest and most populous municipality in the country. Given this enormous sports lottery market in the PRC, the Board believes that the Group will benefit from the existing geographical coverage of the Shining China Group alone as well as the aforesaid growth of the sports lottery sales in general, not to mention any future expansion of the Shining China Group’s business to other geographical areas in the PRC.

Furthermore, after and assuming Completion, should opportunities arise, the Group will also explore the opportunity of cross-selling its products (such as the fixed odds betting games for proposed adoption in the PRC sports lottery market) through the Shining China Group to various sports lottery administration centres in the PRC.

With the momentum building up in the run-up to the 2008 Beijing Olympic Games, China is on the track of becoming one of the fastest growing and ultimately one of the largest sports lottery markets in the world. In order to capitalise on this unprecedented market opportunity, the Group is committed to becoming a leading solutions provider for the sports lottery market in the PRC, ranging from the provision of software games and technologies to the related consultancy services. With advanced technologies, industry know-how, a highly skilled and experienced working team and its creative ideas, the Group is well-positioned to assist the licensed/authorised sports lottery operator(s) and/or the sports lottery administration centres to provide the Chinese citizens with healthy and legitimate lottery entertainment and to increase sports charity funds, thereby supporting the sports development in the PRC.

The consideration for the Acquisition was determined after arm’s length negotiations between the Parties having regard to the unaudited consolidated net asset value of the Shining China Group as at 31 March 2007, the above-mentioned business potential to be brought about by the Shining China Group to the Group following Completion, and the above-mentioned synergistic effects that may be brought about by the Shining China Group to other product lines (including the fixed odds betting products) of the Group following Completion. 60% of the consideration for the Acquisition will be satisfied by the issue and allotment of the Consideration Shares, thus reducing the overall cash outlay required for the Acquisition. Also, the Consideration Shares will be subject to a lock-up period of 12 months after their issuance and will be issued at the Issue Price which represents a premium of approximately 11.34% over the average closing price of approximately HK$1.764 per Share quoted on the Stock Exchange for the 30 consecutive trading days leading up to and including 14 May 2007. The Issue Price was arrived at by the Parties after taking into account the average closing price of HK$1.964 per Share based on the closing prices of the Shares as quoted on the Stock Exchange for the 5 consecutive trading days immediately preceding the date of the Sale and Purchase Agreement.

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In view of the above, the Directors are of the view that the Acquisition is in the interests of the Company and the Sale and Purchase Agreement is on normal commercial terms, which are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

GENERAL

The Acquisition constitutes a discloseable transaction for the Company under the GEM Listing Rules. The Company will convene a SGM to seek the approval of the Shareholders for the allotment and issue of the Consideration Shares. A circular containing, among other things, information on the Sale and Purchase Agreement, the Shining China Group, a notice of the SGM and other information as required under the GEM Listing Rules will be despatched to the Shareholders as soon as practicable.

SUSPENSION AND RESUMPTION OF TRADING

At the request of the Company, trading in the Shares on the Stock Exchange was suspended from 9:30 a.m. on 15 May 2007 pending the release of this announcement. Application has been made by the Company to the Stock Exchange for the resumption of trading in the Shares on the Stock Exchange with effect from 9:30 a.m. on 17 May 2007.

DEFINITIONS

In this announcement, unless the context requires otherwise, the following expressions have the following meanings:

• “1st Vendor” Sinoworld Global Limited, a company incorporated with limited liability under the laws of the British Virgin Islands and holds a 40% equity interest in Shining China

• “2nd Vendor” Fine Bridge International Limited, a company incorporated with limited liability under the laws of the British Virgin Islands and holds a 60% equity interest in Shining China

• “Acquisition” the acquisition by the Purchaser of the entire issued share capital of Shining China from the Vendors in accordance with the terms and conditions of the Sale and Purchase Agreement

• “Board” the board of Directors

• “Business Day” any day other than a Saturday, Sunday or other day on which commercial banks in Hong Kong are required or authorised by law or executive order to be closed or on which a tropical cyclone warning no. 8 or above or a “black” rainstorm warning signal is hoisted in Hong Kong at any time between 9:00 a.m. and 5:00 p.m. Hong Kong time

“Company” AGTech Holdings Limited, a company incorporated in Bermuda with limited liability and the issued Shares of which are listed on GEM

“Completion” completion of the sale and purchase of the entire issued share capital of Shining China under the Sale and Purchase Agreement

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“Consideration Shares”	237,580,000 new shares of HK$0.002 each in the capital of the Company
	to be allotted and issued by the Company in accordance with the terms
	and conditions of the Sale and Purchase Agreement
“Directors”	the directors of the Company
“GEM”	the Growth Enterprise Market of the Stock Exchange
“GEM Listing	the listing sub-committee of the Stock Exchange with responsibility for
Committee”	GEM
“GEM Listing Rules”	the Rules Governing the Listing of Securities on GEM
“Group”	the Company and its subsidiaries
“Guarantors”	Mr. Yuan Haibo and Mr. Bai Jinmin
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Issue Price”	the issue price of approximately HK$1.964 per Consideration Share
“LOI”	the letter of intent dated 23 April 2007 entered into between the Purchaser
	and the Vendors in relation to the possible acquisition by the Purchaser
	of the entire issued share capital of Shining China
“Parties”	the parties to the Sale and Purchase Agreement and their respective
	successors and permitted assigns and “Party” means any of them
“PRC”	the People’s Republic of China which, for the purpose of this
	announcement, excludes Hong Kong, the Macao Special Administrative
	Region of the PRC and Taiwan
“Purchaser”	AGTech Investment Holdings Limited, a company incorporated with
	limited liability under the laws of the British Virgin Islands and is an
	indirect wholly-owned subsidiary of the Company
“Sale and Purchase	the sale and purchase agreement dated 14 May 2007 entered into between
Agreement”	the Vendors, the Purchaser and the Guarantors for the purpose of
	acquiring the entire issued share capital of Shining China
“SGM”	the special general meeting of the Company to be held to consider and,
	if thought fit, approve, among other things, the issue and allotment of
	the Consideration Shares
“Share(s)”	ordinary share(s) of HK$0.002 each in the share capital of the Company
“Shareholder(s)”	holder(s) of the Share(s)
“Shining China”	SHINING CHINA INC, a company incorporated in the British Virgin
	Islands with limited liability and is beneficially owned as to 40% by the
	1st Vendor and 60% by the 2nd Vendor

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“Shining China Group” SHINING CHINA INC and its subsidiaries “Stock Exchange” The Stock Exchange of Hong Kong Limited “Vendors” the 1st Vendor and the 2nd Vendor “HK$” Hong Kong dollars, the lawful currency of Hong Kong “RMB” Renminbi, the lawful currency of the PRC “%” per cent.

Note: In this announcement, the exchange rate of HK$1.00 to RMB1.00 has been used for reference only.

By order of the Board Sun Ho Chairman

Hong Kong, 16 May 2007

As at the date of this announcement, the Board comprises two executive Directors, namely Mr. Sun Ho and Mr. Kot Wai Ming, and three independent non-executive Directors, namely Mr. Wang Ronghua, Mr. Hua Fengmao and Mr. Kwok Wing Leung Andy.

This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief: (1) the information contained in this announcement is accurate and complete in all material respects and not misleading; (2) there are no other matters the omission of which would make any statement in this announcement misleading; and (3) all opinions expressed in this announcement have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

This announcement will remain at www.hkgem.com on the “Latest Company Announcement” page of the GEM website for at least 7 days from the date of its posting.

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