Prosticks International Holdings Limited
(Stock Code: 8055)

Major Shareholder:

• Mr. Goh Gen Cheung ¡V 14.46% interest
• Mr. Li Ching Ping, Vincent - 22.62% interest
• Karrie International Holdings Ltd(1050) - 18.82% interest

Company Subsidiaries:

• ProSticks.com Ltd (100%): Development and provision of financial market software applications.

The Group is principally engaged in the development, production and distribution of financial software products in Hong Kong. The financial software products currently distributed and to be distributed by the Group can be categorized into two types: financial instrument analysis software products (for investors) and operational software applications products (for financial institutions such as banks and securities houses).

Financial instruments analysis software products are designed to provide analytical solutions to both institutional and individual investors by organizing and processing data transmitted from the financial markets into various charts and tabular display formats which allow end-users to interpret and utilize the information for their own purposes. The key product urgently distributed by the Group under this category is ProSticks.

In addition, the Group has developed a variety of software products based on the principles of ProSticks. Some of these products are PC-based operating in the Microsoft Windows environment, while others are Internet-based applications. The three major products are the Website, the ProSticks Trend-Rider System, a PC-based software, and ITATSIS, an Internet-based application. The Website was launched in May 2000 while the Group launched the other two products in October 2001.

Operational software applications products distributed by the Group are designed to provide solutions to financial institutions for the automation and integration of various operational functions to enhance operational efficiency, streamline work procedures and strengthen risk control measures. The Group provides system upgrading, subsequent maintenance and enhancement services to its customers for operational software applications products including the CFXMTS, SOFIT and TAS.

In view of the development of the financial services industries in other Asian countries including China, Indonesia and Thailand, the Directors envisage enormous business potential for the Group's operational software applications products in these markets.

The Directors believe that the Group has the following competitive advantages:

• The ProSticks chart is distinctive in its design in that it is able to display information on pricing and trading volume at the same time. Financial instruments analysis charts currently available in the market including line charts, bar harts and candlesticks charts can at most display OHLC.
• ProSticks software products are highly adaptable to market needs as new variants of ProSticks can be created by changing or incorporating display elements according to market demand and trends in technical analysis.
• ProSticks offers additional financial instrument analysis data, which is not provided in other financial instrument analysis software products currently available in the market. In addition to tracking price movements of the underlying financial instruments, ProSticks incorporates data regarding the corresponding trading volume in the same chart.
• ProSticks is applicable to a wide range of financial instruments including, among others, stocks, currencies and futures and shall be applicable to options in the future.
• The key members of the Group's management team had previously worked for financial institutions, including banks and securities houses for more than 20 years and have knowledge of the operation of financial institutions. Thus enable the Group to better understand customers' needs and to provide practical solutions to them.

• The Group may be liable for loss incurred by customers using Prosticks.
• The Group faces significant competition in the market of financial software products.
• Part of the Group's business plan is based upon an unproven business model that may not be successful.
• The Group is dependent on key executives and personnel and may not be able to retain and recruit competent personnel.
• The Group incurred significant salary expenses during the Track Record period.

The Group has adopted an active marketing strategy to enhance market awareness of ProSticks. The Directors intend to continue to promote ProSticks through a series of sales and marketing campaigns including seminars, workshops, exhibitions, roadshows, advertisements and publications. Through focused and continuous marketing efforts, the Directors believe that the Group will effectively build up market awareness for ProSticks in Hong Kong and gradually in the overseas markets.

The Group has leased a shop in the Mass Transit Railway station in Central as its first outlet. The outlet was opened in September 2001.The Group will seek to establish more outlets in major commercial areas to promote its products and to conduct product demonstrations to potential customers. Besides serving as showrooms to display the products of the Group, the outlets will also serve as customer service centres for inquires.

In the near future, the Group plans to focus on its PC-based ProSticks products in the PRC market and will seek local distributors/sales agents such as computer hardware and software companies, securities houses, retail banks, Investment houses and large corporations to co-operate in the distribution of PC-based ProSticks software in the PRC market. The Company plans to launch its Internet-based ProSticks products after a good reputation for its PC-based ProSticks products has been established in the PRC market.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$25.5 million (based on the offer price HK$0.33 per share). The Group at present intends to apply the net proceeds as follows: