Youzan Technology Limited — M&A Activity 2010

Sep 10, 2010

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

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SYSCAN Technology Holdings Limited 矽感科技控股有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock code: 8083)

MEMORANDUM OF UNDERSTANDING IN RELATION TO THE POSSIBLE ACQUISITION OF THE GROUP

The Board wishes to announce that on 10 September 2010 (after trading hours), the Memorandum was entered into between the Company, as the proposed purchaser, and the Vendor, as the proposed vendor, in respect of the Proposed Acquisition by the Group of the Sale Share and the Sale Loan, being the entire equity interests in the Target Company and the aggregate amount of all outstanding advances, loans or indebtedness owed by the Target Company to the Vendor (if any) respectively. The Memorandum is non-legally binding save for certain provisions relating to confidentiality and exclusivity.

The Proposed Acquisition, if materializes, may constitute a notifiable transaction which is subject to the requirements under the GEM Listing Rules, which may include obtaining the approval of Shareholders at a general meeting.

The Board wishes to emphasize that no definitive agreement(s) in relation to the Proposed Acquisition has been entered into by the Group as at the date of this announcement and the Proposed Acquisition may or may not proceed. Further announcement(s) in respect of the Proposed Acquisition will be made by the Company in accordance with the applicable requirements of the GEM Listing Rules as and when appropriate.

As the Proposed Acquisition may or may not proceed, Shareholders and potential investors are advised to exercise caution when trading in the Shares.

* For identification purposes only

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INTRODUCTION

The Board wishes to announce that on 10 September 2010 (after trading hours), the Memorandum was entered into between the Company, as the proposed purchaser, and the Vendor, as the proposed vendor, in respect of the Proposed Acquisition. The Memorandum is non-legally binding save for certain provisions relating to confidentiality and exclusivity.

THE MEMORANDUM

The Memorandum sets out certain preliminary understandings of the parties in principle, which are subject to further negotiation and execution of definitive agreements, for the Proposed Acquisition by the Group of the Sale Shares and the Sale Loan.

The material terms of the Memorandum are summarized below:

Date

10 September 2010

Parties

• (a) the Company, as the proposed purchaser; and

• (b) the Vendor, as the proposed vendor. The Vendor and its ultimate beneficial owners, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, are third parties independent of the Company and its connected persons and are not connected persons of the Company.

Assets to be acquired

• (1) the Sale Shares, being the entire issued share capital of the Target Company; and

• (2) the Sale Loan, being the aggregate amount of all outstanding advances, loans or indebtedeness owed by the Target Company to the Vendor (if any).

Information of the Target Group

The Target Group is a cross-region, cross-industry consolidated payment services provider in the PRC. The Target Group is continuously developing and operating different kinds of payment tools including prepaid cards, aiming to build up a consolidated multi-channel payment platform that covers the entire PRC.

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Conditions precedent to the Proposed Acquisition

Subject to the entering of the definitive agreements, the Proposed Acquisition shall be subject to certain conditions precedent which include the followings:

• (i) the Vendor obtaining the relevant approvals from its board of directors and its shareholder(s);

• (ii) the Company obtaining the relevant approvals from the Board and the Shareholders;

• (iii) completion, execution and delivery of all definitive contractual documentation in respect of the Proposed Acquisition;

• (iv) the Proposed Acquisition complies with the requirements of the GEM Listing Rules or otherwise of rules and requirements of the Stock Exchange, the Securities and Futures Commission and other regulatory authorities; and

• (v) the Company being satisfied with the results of its due diligence review of the Target Group.

Consideration

The consideration payable for the Proposed Acquisition and manner of settlement have not yet been finalized and are subject to further negotiation and execution of definitive agreements.

The Memorandum is non-legally binding save for certain provisions relating to confidentiality and exclusivity.

The Vendor agreed that they shall not, and will cause the Target Group not to, at any time during a period of six (6) months commencing on the date of the Memorandum, contact, discuss or negotiate with any third party other than the Company (or a subsidiary of the Company) either directly or indirectly; or solicit, initiate, invite or encourage submission of proposals or offers to acquire the Sale Shares and the Sale Loan or any part thereof from such third party; or directly or indirectly enter into any legally binding commitment or any negotiation, arrangement or agreement resulting in the disposal or otherwise dilution of the Vendor’s interests in all or a significant portion of their shareholdings in the Target Group.

REASONS AND BENEFITS OF THE PROPOSED ACQUISITION

The Company is an investment holding company and its subsidiaries are principally engaged in the design, research, development, manufacturing and sale of optical image capturing devices and related barcode reader equipment, and is gradually transforming into twodimensional (“ 2D ”) barcode reader and laser spectrum identification device provider and laser system equipment provider.

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For the past few years, the Group has devoted substantial research and development efforts in exploring the barcode and laser reader equipment in different fields of business. Examples of some of the successful development of application of 2D barcode technology in the recent years include bank cards, ID card identification device and food tracking and tracing system in sourcing and tracking for food and medical products.

The Directors are of the view that the Proposed Acquisition represents a good opportunity for the Group to deploy the application of its self-developed 2D barcode technology to the fast growing electronic payment service industry in the PRC. This is because the Group’s 2D barcode technology can be applied as an effective means of authentication as well as an efficient, reliable and secure means of transmission and recording of transaction data in an electronic payment process.

GEM LISTING RULES IMPLICATION

The Proposed Acquisition, if materializes, may constitute a notifiable transaction which is subject to the requirements under the GEM Listing Rules, which may include obtaining the approval of Shareholders at a general meeting.

GENERAL

This announcement is made by the Company pursuant to Rule 17.10 of the GEM Listing Rules.

The Board wishes to emphasize that no definitive agreement(s) in relation to the Proposed Acquisition has been entered into by the Group as at the date of this announcement and the Proposed Acquisition may or may not proceed. Further announcement(s) in respect of the Proposed Acquisition will be made by the Company in accordance with the applicable requirements of the GEM Listing Rules as and when appropriate.

As the Proposed Acquisition may or may not proceed, Shareholders and potential investors are advised to exercise caution when trading in the Shares.

DEFINITIONS

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

“Board”	the board of Directors
“Company”	SYSCAN Technology Holdings Limited, a company
	incorporated in Bermuda with limited liability, the issued
	shares of which are listed on the GEM
“connected person(s)”	has the meaning ascribed to it under the GEM Listing
	Rules
“Director(s)”	the director(s) of the Company
“GEM”	the Growth Enterprise Market of the Stock Exchange
“GEM Listing Rules”	the Rules Governing the Listing of Securities on the GEM

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“Group”	the Company and its subsidiaries
“Memorandum”	a memorandum of understanding dated 10 September
	2010 entered between the Company, as the proposed
	purchaser, and the Vendor, as the proposed vendor, in
	respect of the Proposed Acquisition
“PRC”	the People’s Republic of China
“Proposed Acquisition”	proposed acquisition by the Group of the Sale Shares and
	the Sale Loan
“Sale Shares”	the entire issued share capital of the Target Company
“Sale Loan”	the aggregate amount of all outstanding advances, loans or
	indebtedeness owed by the Target Company to the Vendor
	(if any)
“Share(s)”	ordinary share(s) of HK$0.01 each in the share capital of
	the Company
“Shareholder(s)”	holder(s) of the Shares
“Stock Exchange”	the Stock Exchange of Hong Kong Limited
“Target Company”	Country Praise Enterprises Limited, a company
	incorporated in the British Virgin Islands with limited
	liability
“Target Group”	the Target Company and its subsidiaries
“Vendor”	Mighty Advantage Enterprises Limited, a company
	incorporated in the British Virgin Islands with limited
	liability

By order of the Board of SYSCAN Technology Holdings Limited Cheung Wai Chairman

Hong Kong, 10 September 2010

As at the date of this announcement, the Board comprises two executive Directors, namely Mr. Cheung Wai and Mr. Frank Cheung, and three independent non-executive Directors, namely Dr. Fong Chi Wah, Mr. Wang Ruiping and Professor He Zhiyi.

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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 on the “Latest Company Announcements” page of the GEM website for at least 7 days from the date of its posting and on the Company’s website at www.syscangroup.com.

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