Town Sky Technology Group Limited (“TST” or the “Company”) is one of the leading networking and application solutions providers in the People’s Republic of China (“PRC”), specializing in designing and building large complex communication architecture and network IP solutions for clients in the telecommunications, government, enterprise markets with over 250 customers throughout China. The major role that TST plays in the China communications industry is demonstrated by the Company having sold installed and commissioned more than 150,000 Internet remote access ports for 4 of the 5 major nationwide telecommunication operators, the China Customs and multinational giants such as Motorola/Ford/Lucent.

The Company has approximately 100 employees in three subsidiaries, each of which is responsible for different lines of business. Town Sky International is for fulfillment, UNet Systems for R&D and private-label software products, and Beijing TST for network system integration with 4 business units: (i) Large Enterprise & Government (“LEG”), which focuses on government entities, state-owned enterprises (SOEs”) and multinational corporations (MNCs”) and financial institutes, (ii) Telecom Services Providers and Distribution, servicing wire-line and wireless carriers, broadband service providers and distribution of IP video/voice products, (iii) East China Region, covering Eastern part of China and (iv) South China Region, covering Southern part of China.

In particular, the Company’s clients includes: China Mobile, China Netcom, China Telecom, China Unicom, China Railcom, Jiangxi Telecom, Henan Telecom and Shandong Telecom in the communications industry; Agricultural Bank of China, Industrial and Commercial Bank of China, China Life Insurance Company and Hubei Stock Exchange, the Embassy House Service Apartment in Beijing in the financial and commercial services industry; and the National Customs Department, the National Immigration & Visa Office, the Tax Bureau of Hubei, Beijing University and Jinan University among the governmental sector. The Company’s revenues have traditionally been split 60% in Telecom, 40% in LEG (2/3 in Government and 1/3 in Financial and Commercial sector) among the different business units.

Substantial and Growing Services and Software Business

The Company is working to rapidly expand and develop and the service component of its business in order to differentiate itself from its competitors, strengthen its ability to attract and retain customers with its proprietary value-added capability and increase operating and net margins. Over 35% of the Company’s revenues in FY2001 and FY2002 were revenues from services with an increasing portion of that revenue coming from the sale and deployment of the Company’s proprietary software and application solutions. The company has developed and commercially deployed applications in billing, network management, CRM and video control and streaming. In FY 2001, software comprised a mere 2.3% of the Company revenues. By FY2004, software and services accounted for over 14.5% of the Company’s revenues, reflecting a six fold increase.

Experienced Management with Proven Operational Track Record

The senior management of TST are networking and video professionals with deep technological knowledge with over 15 years of operating experience in the IT industry in China. The Company has developed and implemented a stringent information management process, which provides tight control of sales, inventory, engineering and accounting operations to minimize costs and maximize efficiency. Through its proprietary in-house developed web-based Sales Tracker software (“eSales”), the Company monitors closely not only its sales and project visibility by market and salesperson, but also overall project margins and profitability. Other proprietary web-based software such as “eExpenses” and “eServices” are developed and deployed to enhance management control on expenses and contract implementation.

Background

The Company, a premier China Network System Integration company, is headquartered in Hong Kong with 3 branch offices in China. The Company was founded in 1991 and currently has over 100 employees of which over 70% have technical training and background. TST provides complete end-to-end network application and solutions. In addition to management and founders, the Company’s other major shareholders are a venture capital investor and a Main Board listed company from Hong Kong.

SkyView Technology Group

In recent years, the Company has made substantial investment on IP Video Surveillance converged network system, major customers of which includes China Customs and Internet board-band converged network of Beijing Embassy House service apartment of Hines Real Estate Investment Trust Inc. SkyView Technology Group, a spin-off from Town Sky Technology Group, specialized in video products and solutions based on international standards and protocols has thus been established.