Joy Spreader Group Inc. — Proxy Solicitation & Information Statement 2006

Oct 6, 2006

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in MegaInfo Holdings Limited (the “Company”), you should at once hand this circular with the enclosed form of proxy to the purchaser or transferee or the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, 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 circular.

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(incorporated in Bermuda with limited liability) (Stock Code: 8279)

PROPOSED SUBDIVISION OF SHARES AND CHANGE OF BOARD LOT SIZE

Financial adviser to MegaInfo Holdings Limited

CIMB-GK Securities (HK) Limited

A notice convening the special general meeting to be held at Boardroom 3-4, M/F., Renaissance Harbour View Hotel, 1 Harbour Road, Wanchai, Hong Kong on Monday, 23 October 2006 at 10:20 a.m. (or such later time immediately after the close of the annual general meeting of the Company to be held at 10:00 a.m. on the same date and at the same place) is set out on pages 11 to 12 of this circular. Whether or not you are able to attend the special general meeting, you are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return it to the Company’s Hong Kong branch share registrar, Abacus Share Registrars Limited, at 26/F, Tesbury Centre, 28 Queen’s Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the special general meeting or any adjournment thereof if you so wish.

• For identification purposes only

6 October 2006

CHARACTERISTICS OF GEM

GEM has been established as a market designed to accommodate companies to which a high investment risk may be attached. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. Furthermore, there may be risks arising out of the emerging nature of companies listed on GEM and the business sectors or countries in which the companies operate. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM. The principal means of information dissemination on GEM is publication on the internet website operated by the Stock Exchange. Listed companies are not generally required to issue paid announcements in gazetted newspapers. Accordingly, prospective investors should note that they need to have access to the GEM website at www.hkgem.com in order to obtain up-to-date information on GEM-listed issuers.

– i –

CONTENTS

		Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		3
**LETTER **	FROM THE BOARD
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		5
I.	Subdivision of Shares and change of board lot size . . . . . . . . . . . . . . . . . .	6
	Capital structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
	Conditions of the Share Subdivision . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
II.	Adjustments to Share Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
III.	Listing and dealing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
IV.	Free exchange of share certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
V.	Trading arrangement for Subdivided Shares. . . . . . . . . . . . . . . . . . . . . . . .	9
VI.	Special general meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
VII.	Procedures for demanding a poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
VIII.	Responsibility statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
IX.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
**NOTICE **	OF SPECIAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . .	11

– ii –

DEFINITIONS

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

“Board”	the board of directors of the Company
“CCASS”	the Central Clearing and Settlement System established
	and operated by HKSCC
“Company”	MegaInfo Holdings Limited, a company incorporated in
	Bermuda with limited liability, the issued Shares of
	which are listed on GEM
“Directors”	the directors of the Company
“Existing Share Certificates”	certificates of existing Shares
“GEM”	the Growth Enterprise Market of the Stock Exchange
“GEM Listing Committee”	the listing sub-committee of the Stock Exchange with
	responsibility for GEM
“GEM Listing Rules”	the Rules Governing the Listing of Securities on GEM
“HK$”	Hong Kong Dollars, the lawful currency in Hong Kong
“HKSCC”	Hong Kong Securities Clearing Company Limited
“Hong Kong”	the Hong Kong Special Administrative Region of the
	People’s Republic of China
“Latest Practicable Date”	3 October 2006, being the latest practicable date prior to
	the printing of this circular for ascertaining certain
	information in this circular
“New Share Certificates”	new certificates for the Subdivided Shares
“SGM”	the special general meeting of the Company to be held on
	23 October 2006 to consider and, if thought fit, approve
	the Share Subdivision
“Share(s)”	existing ordinary share(s) of HK$0.01 each in the capital
	of the Company

– 1 –

DEFINITIONS

“Share Subdivision” the subdivision of every Share of HK$0.01 each into five shares of HK$0.002 each “Shareholder(s)” holder(s) of Share(s) in issue “Stock Exchange” The Stock Exchange of Hong Kong Limited “Subdivided Share(s)” ordinary share(s) of HK$0.002 each in the share capital of the Company upon completion of the Share Subdivision “Supplementary Guidance” the supplementary guidance dated 5 September 2005 issued by the Stock Exchange regarding adjustment of share options under Rule 23.03(13) of the GEM Listing Rules

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EXPECTED TIMETABLE

It is currently expected that the Share Subdivision will become effective on 24 October 2006. The expected timetable for the implementation of the Share Subdivision and the associated trading arrangement are set out as follows:

2006

Circular relating to the Share Subdivision to be

despatched on or before . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 6 October

Latest time for lodging forms of proxy

for the SGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10:20 a.m. on Saturday, 21 October SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10:20 a.m. (or such later time

immediately after the close of the annual general meeting of the Company to be held at 10:00 a.m. on the same date and at the same place) on Monday, 23 October

The following events are conditional on the fulfillment of the conditions set out in the sub-section headed “Conditions of the Share Subdivision” in this circular:

Publication on the GEM website of further

announcement for the effectiveness of

the Share Subdivision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 24 October Effective date of the Share Subdivision . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 24 October Dealings in the Subdivided Shares commence . . . . . . . . . 9:30 a.m. on Tuesday, 24 October Original counter for trading in existing

Shares in board lots of 8,000 Shares

each temporarily closes. . . . . . . . . . . . . . . . . . . . . . . . . 9:30 a.m. on Tuesday, 24 October

Temporary counter for trading in board lots of 40,000 Subdivided Shares each (in the

form of Existing Share Certificates) opens . . . . . . . . . . 9:30 a.m. on Tuesday, 24 October First day of free exchange of Existing

Share Certificates for New Share Certificates . . . . . . . . . . . . . . . . . . Tuesday, 24 October Original counter for trading in Subdivided Shares in board lots of 20,000 Subdivided Shares each (in the form of New Share Certificates) re-opens . . . . . . . . . . . . . . . . . . . . . . . 9:30 a.m. on Wednesday, 8 November

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2006

EXPECTED TIMETABLE

• Parallel trading in Subdivided Shares

• (in the form of New Share Certificates

and Existing Share Certificates) commences . . . . . . 9:30 a.m. on Wednesday, 8 November

• Parallel trading in Subdivided Shares

• (in the form of New Share Certificates

and Existing Share Certificates) ends . . . . . . . . . . 4:00 p.m. on Wednesday, 29 November

• Temporary counter for trading in board lots of 40,000 Subdivided Shares each (in the form of Existing Share Certificates)

• closes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Wednesday, 29 November

• Last day for free exchange of Existing

Share Certificates for New Share Certificates . . . . . . . . . . . . . . . . . .Monday, 4 December

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LETTER FROM THE BOARD

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(incorporated in Bermuda with limited liability)

(Stock Code: 8279)

Executive Directors: Registered office: Mr. Sun Ho (Chairman) Clarendon House Mr. Kot Wai Ming 2 Church Street Hamilton HM 11 non-executive Directors: Bermuda

Independent non-executive Directors: Bermuda Mr. Kwok Wing Leung Andy Mr. Wang Ronghua Head office and principal Mr. Hua Fengmao place of business: Unit 3912, 39/F., Shell Tower Times Square Causeway Bay Hong Kong

6 October 2006

To the Shareholders and, for information only, holders of the share options of the Company

Dear Sir or Madam,

PROPOSED SUBDIVISION OF SHARES AND CHANGE OF BOARD LOT SIZE

INTRODUCTION

The Board announced on 22 September 2006 that it intends to put forward to the Shareholders for approval the proposals relating to the Share Subdivision and change of board lot size. The purpose of this circular is to provide you with details of the Share Subdivision, the change of board lot size, the trading arrangements in respect of the Subdivided Shares and the procedure for the free exchange of Existing Share Certificates for New Share Certificates together with a notice convening the SGM.

• For identification purposes only

– 5 –

LETTER FROM THE BOARD

I. SUBDIVISION OF SHARES AND CHANGE OF BOARD LOT SIZE

The Board proposes that each of the existing issued and unissued Shares of HK$0.01 each in the share capital of the Company be subdivided into five shares of HK$0.002 each. The Share Subdivision will become effective upon the fulfillment of the conditions set out in the sub-section headed “Conditions of the Share Subdivision” below. The Shares are currently traded in board lots of 8,000 Shares. Upon the Share Subdivision becoming effective, the Subdivided Shares will be traded in board lots of 20,000 Subdivided Shares. The change of board lot size will not result in any change in the relative rights of the Shareholders. No odd lots of Subdivided Shares will be resulted from the Share Subdivision and the change of the board lot size, other than those already existed before the Share Subdivision becoming effective.

The Board believes that the Share Subdivision coupled with the change of the board lot size may facilitate trading and improve the liquidity of the Subdivided Shares, thereby enabling the Company to attract more investors and broaden its shareholder base. Accordingly, the Board considers the Share Subdivision to be in the best interests of the Company and its Shareholders.

Save for the costs to be incurred by the Company in implementing the Share Subdivision, the Share Subdivision will not alter the underlying assets, business operations, management or financial position of the Company or the proportional interests of the Shareholders in the Company. The Board considers that the Share Subdivision will not have any adverse effect on the financial position of the Company.

Capital Structure

As at the Latest Practicable Date, the authorised share capital of the Company was HK$10,000,000, divided into 1,000,000,000 Shares, of which 556,935,000 Shares were issued and fully paid. Assuming that no further Shares will be issued or repurchased after the Latest Practicable Date and prior to the Share Subdivision becoming effective, the effect of the Share Subdivision is set out as follows:

	Prior to the	After the
	Share	Share
	Subdivision	Subdivision
Par value of each share	HK$0.01	HK$0.002
Number of authorised shares	1,000,000,000	5,000,000,000
Authorised share capital	HK$10,000,000	HK$10,000,000
Number of shares in issue	556,935,000	2,784,675,000
Issued share capital	HK$5,569,350	HK$5,569,350
Number of unissued shares	443,065,000	2,215,325,000
Unissued share capital	HK$4,430,650	HK$4,430,650

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LETTER FROM THE BOARD

The Subdivided Shares will rank pari passu in all respects with each other and the Share Subdivision will not result in any change in the relative rights of the Shareholders.

Conditions of the Share Subdivision

The Share Subdivision is conditional upon:

• (a) the passing of an ordinary resolution to approve the Share Subdivision by the Shareholders at the SGM; and

• (b) the GEM Listing Committee granting the listing of and permission to deal in the Subdivided Shares.

II. ADJUSTMENTS TO SHARE OPTIONS

As at the Latest Practicable Date, other than the Shares in issue and outstanding options granted by the Company pursuant to its share option scheme adopted on 18 November 2004 entitling the holders thereof to subscribe for up to an aggregate of 2,070,000 Shares at exercise prices as shown below (subject to adjustment), the Company did not have any warrants, other types of options, derivatives, convertible securities or other securities in issue.

In accordance with the terms of the aforesaid shares option scheme of the Company and the Supplementary Guidance, the exercise price and the number of Subdivided Shares falling to be allotted and issued upon full exercise of the outstanding share options of the Company will be adjusted in the following manner after the Share Subdivision becoming effective:

Date of grant 14 August 2006 27 September 2006 Total	Number of Shares issuable on the exercise in full of all the outstanding share options of the Company as at the Latest Practicable Date Exercise price per Share as at the Latest Practicable Date (HK$) 1,070,000 0.28 1,000,000 1.09 2,070,000	Adjusted number of Subdivided Shares issuable on the exercise in full of all the outstanding share options of the Company after the Share Subdivision Adjusted exercise price per Subdivided Share after the Share Subdivision (HK$) 5,350,000 0.056 5,000,000 0.218 10,350,000

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LETTER FROM THE BOARD

Veda Capital Limited, the Company’s independent financial adviser, has checked the accuracy of the computation of the above adjustments by reference to the terms of the aforesaid share option scheme of the Company and the Supplementary Guidance, and it has come to a conclusion that such adjustments are fair and reasonable. Separate notification regarding the above adjustments will be sent to holders of the share options of the Company.

III. LISTING AND DEALING

An application will be made to the Stock Exchange for the listing of and permission to deal in the Subdivided Shares arising from the Share Subdivision.

Subject to the granting of the listing of, and permission to deal in, the Subdivided Shares on the Stock Exchange, the Subdivided Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Subdivided Shares on the Stock Exchange or such other date as may be determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

For those persons whose interests in the Company are currently held through CCASS, dealings in the Subdivided Shares are expected to be capable of settlement through CCASS with effect from the commencement date of dealings in the Subdivided Shares on the Stock Exchange and without any need on the part of such persons to deposit New Share Certificates in respect of the Subdivided Shares with HKSCC.

IV. FREE EXCHANGE OF SHARE CERTIFICATES

Subject to fulfillment of the conditions set out above and the Share Subdivision taking effect, it is expected that as from 24 October 2006, New Share Certificates will be issued in board lots of 20,000 Subdivided Shares. The Existing Share Certificates will only be valid for delivery, trading and settlement purposes for the period up to 4:00 p.m. on 29 November 2006 and thereafter will not be accepted for delivery, trading and settlement purposes. However, the Existing Share Certificates will continue to be good evidence of legal title to the Subdivided Shares on the basis of one Share for five Subdivided Shares and may be exchanged free of charge for the New Share Certificates for Subdivided Shares upon submission of the Existing Share Certificates to the Company’s branch share registrar in Hong Kong, Abacus Share Registrars Limited, at 26/F, Tesbury Centre, 28 Queen’s Road East, Hong Kong, between 9:00 a.m. and 4:00 p.m. from 24 October 2006 to 4 December 2006 (both days inclusive).

After 4:00 p.m. on 4 December 2006, the Existing Share Certificates may be exchanged for New Share Certificates at any time on payment of a prescribed fee. It is expected that New Share Certificates will be available for collection within a period of 10 business days after the submission of the Existing Share Certificates. The New Share Certificates will be issued in yellow colour in order to distinguish them from the Existing Share Certificates which are in pink colour.

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LETTER FROM THE BOARD

V. TRADING ARRANGEMENT FOR SUBDIVIDED SHARES

Subject to the Share Subdivision becoming effective, dealings in the Subdivided Shares are expected to commence on Tuesday, 24 October 2006. Parallel trading arrangements will be established with the Stock Exchange and will be operated from Wednesday, 8 November 2006 to Wednesday, 29 November 2006 (both days inclusive). Full details of the expected timetable and trading arrangements are set out on pages 3 and 4 of this circular.

VI. SPECIAL GENERAL MEETING

Set out on pages 11 and 12 of this circular is the notice of SGM to be held at Boardroom 3-4, M/F., Renaissance Harbour View Hotel, 1 Harbour Road, Wanchai, Hong Kong on Monday, 23 October 2006 at 10:20 a.m. (or such later time immediately after the close of the annual general meeting of the Company to be held at 10:00 a.m. on the same date and at the same place), at which an ordinary resolution will be proposed to approve the Share Subdivision.

A proxy form for use at the SGM is enclosed herein. Whether or not you intend to attend the SGM, you are requested to complete the proxy form and return it to the Company’s Hong Kong branch share registrar, Abacus Share Registrars Limited, at 26/F, Tesbury Centre, 28 Queen’s Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the SGM or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the SGM or any adjournment thereof if you so wish.

VII. PROCEDURES FOR DEMANDING A POLL

Where a resolution is put to the vote at the SGM, the resolution shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded:

• (a) by the chairman of the SGM; or

• (b) by at least three Shareholders present in person (or in the case of a Shareholder being a corporation by its duly authorised representative) or by proxy for the time being entitled to vote at the SGM; or

• (c) by a Shareholder or Shareholders present in person (or in the case of a Shareholder being a corporation by its duly authorised representative) or by proxy and representing not less than one-tenth of the total voting rights of all Shareholders having the right to vote at the SGM; or

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LETTER FROM THE BOARD

• (d) by a Shareholder or Shareholders present in person (or in the case of a Shareholder being a corporation by its duly authorised representative) or by proxy and holding Shares conferring a right to vote at the SGM being Shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all Shares conferring that right.

On a poll votes may be given either personally or by proxy.

VIII.RESPONSIBILITY STATEMENT

This circular, 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 circular 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 circular misleading; and (3) all opinions expressed in this circular have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

IX. RECOMMENDATION

The Directors consider that the proposed Share Subdivision and change of board lot size are in the interests of the Company and its Shareholders as a whole. The Directors therefore recommend the Shareholders to vote in favour of the resolution in respect of the Share Subdivision to be proposed at the SGM.

Yours faithfully, By order of the Board MegaInfo Holdings Limited Sun Ho Chairman

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NOTICE OF SPECIAL GENERAL MEETING

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(incorporated in Bermuda with limited liability)

(Stock Code: 8279)

NOTICE IS HEREBY GIVEN that a special general meeting (the “SGM”) of MegaInfo Holdings Limited (the “Company”) will be held at Boardroom 3-4, M/F., Renaissance Harbour View Hotel, 1 Harbour Road, Wanchai, Hong Kong on Monday, 23 October 2006 at 10:20 a.m. (or such later time immediately after the close of the annual general meeting of the Company to be held at 10:00 a.m. on the same date and at the same place) for the purpose of considering and, if thought fit, passing with or without amendment the following resolution which will be proposed as an ordinary resolution:

ORDINARY RESOLUTION

“ THAT :

subject to and conditional upon the listing sub-committee of the directors of The Stock Exchange of Hong Kong Limited with responsibility for the Growth Enterprise Market granting the listing of, and permission to deal in, the Subdivided Shares (as hereinafter defined) to be resulted from the Share Subdivision (as hereinafter defined), each of the existing issued and unissued shares of HK0.01 each in the share capital of the Company be and is hereby subdivided into five shares of HK$0.002 each (the “Subdivided Shares”) with effect from the business day immediately following the day on which this resolution is passed (the “Share Subdivision”) and the directors of the Company be authorised to issue new share certificates in respect of the Subdivided Shares to holders of existing shares of the Company pursuant to the Share Subdivision and to do all things and execute all documents as they shall, in their absolute discretion, deem appropriate to effect and implement the Share Subdivision and any transactions contemplated thereby.”

By order of the Board MegaInfo Holdings Limited Sun Ho Chairman

Hong Kong, 6 October 2006

* For identification purposes only

– 11 –

NOTICE OF SPECIAL GENERAL MEETING

Notes:

1. Any member entitled to attend and vote at the SGM is entitled to appoint one or more proxies to attend and vote in his stead in accordance with the bye-laws of the Company. A proxy need not be a member of the Company.

2. Where there are joint registered holders of any share, any one of such persons may vote at the meeting, either personally or by proxy, in respect of such share as if he were solely entitled thereto; but if more than one of such joint holders shall be present at the meeting personally or by proxy, that one of the holders so present whose name stands first on the register of members of the Company in respect of such share shall alone be entitled to vote in respect thereof.

3. The form of proxy (as enclosed with the circular of the Company dated 6 October 2006) and the power of attorney or other authority, if any, under which it is signed or a certified copy of such power of attorney or authority must be deposited at the Company’s Hong Kong branch share registrar, Abacus Share Registrars Limited at 26/F, Tesbury Centre, 28 Queen’s Road East, Hong Kong, not less than 48 hours before the time for holding the SGM, and in default the form of proxy shall not be treated as valid. The completion and return of the form of proxy shall not preclude members from attending and voting in person at the SGM (or any adjourned meeting thereof) should they so wish.

4. In accordance with the Company’s bye-laws, the following categories of members may demand that the vote in respect of any resolution to be put to the general meeting should be taken on a poll:

5. (a) at least three members present in person (or in the case of a member being a corporation by its duly authorised representative) or by proxy for the time being entitled to vote at the meeting; or

6. (b) any member or members present in person (or in the case of a member being a corporation by its duly authorised representative) or by proxy and representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; or

7. (c) any member or members present in person (or in the case of a member being a corporation by its duly authorised representative) or by proxy and holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right; or

8. (d) the chairman of such meeting.

A poll may be so demanded before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll.

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