Reverse Acquisition

Name	Symbol	Market	Type
Thames Water 26	LSE:TES	London	Bond

RNS Number:1097Q
Trading Exchange (The) PLC
15 August 2005

For immediate release 15 August 2005

EBT Mobile China to join AIM
via Reverse Acquisition of
The Trading Exchange PLC

HIGHLIGHTS

Introduction

*EBT Mobile China, an East China based retailer of mobile phones and
services, will join AIM next month via a reverse takeover of The Trading
Exchange in conjunction with a share placing.

*The Trading Exchange ("TTE"), an AIM listed investment company with net
cash of approximately #1.6 million, will acquire EBT Mobile Limited for
#19.7 million in total, satisfied by the issue of 96.4 million new ordinary
shares (#16.4 million) to EBT HK shareholders and a further 19.4 million
shares for the 'roll over' of EBT options.

*In addition, an underwritten share placing of 23.5 million new ordinary
shares at 17p each will raise approximately #4.0 million of new money before
expenses.

*The market capitalisation of the Enlarged Group, which will be listed as
EBT Mobile China plc ("EBT"), will be #26.5 million based on a 17p placing
price.

*The Directors of TTE commenced discussions with EBT Mobile last year.
They believe that combining EBT's business with the cash balances of TTE and
its access to the equity market has the potential for delivering attractive
shareholder returns.

*The transaction is subject to shareholder approval at an extraordinary
general meeting called for 7 September 2005.

*Trading in the shares of The Trading Exchange will resume today and the
Enlarged Group will be admitted to AIM on 8 September 2005.

*Upon completion of the transaction (on 8 September 2005), The Trading
Exchange will change its name to EBT Mobile China plc, and the ticker symbol
for the company will be "EBT".

* Currency converted at #1=RMB15 throughout announcement

EBT - background

*The business now known as EBT was founded in 1996 and has been controlled
since 2002 by the current management team, headed by US businessman Jim
Reiman as Chairman and CEO and a Chinese national with a US MBA degree -
Zhang Ge.

*It targets service driven customers rather than focusing on price alone.

*The majority of its 73 stores are currently in the Shanghai region. The
Group has expanded into the adjacent provinces of Jiangsu and Zhejiang.

*EBT opened 12 outlets to date in 2005 and at least 17 more are planned
for the second half of the year in Shanghai and 3 further provincial cities.

*In the year to 31 December 2004, EBT generated about #17.4 million* of revenue
(2003: #11.8 million).

*The bulk of sales are accounted for by mobile phones and accessories
representing 85% of sales in 2004. 14% of sales were SIM and recharge cards.

*EBT mainly operates 'outlets within stores' in department stores and 'big
box' hypermarkets including Carrefour, one of the leading hypermarket chains
in PRC.

*The Group has relationships with local branches of China Mobile and China
Unicom (currently China's only mobile cellular network service providers)
and operates co-branded outlets with both companies.

*There are long standing relationships with many leading PRC and overseas
handset manufacturers, including direct purchasing rights with Nokia and
Haier.

EBT - strategy

*Initially the focus for growth will remain within the Yangzte River basin
but, in due course, EBT will expand into cities in other regions, primarily
through organic growth.

*Higher-margin value-added products and services will be introduced - a
full range of mobile content offerings such as games, music, etc. Through
its retail network, EBT will also be able to provide customer interface and
money collection facilities.

*The Group will continue to invest in its brand through staff training,
outlet refurbishment, event sponsorship and advertising.

*Management intends to expand nationally throughout China and, ultimately,
become China's leading national mobile retail network.

Martyn Konig, Executive Director of The Trading Exchange PLC, said:
"There is a vast growth opportunity in China. There are some 360 million mobile
phone subscribers but as usage moves closer to levels seen in developed
countries that figure should increase to around 900 million in the long term.

"We have had detailed discussions with the management of EBT and we think this
deal is an excellent opportunity for both companies. EBT gains access to fresh
capital and access to the equity market while shareholders in The Trading
Exchange will own a stake in an exciting growth company."

Jim Reiman, Chairman and CEO of EBT, added:
"EBT, as a specialist mobile phone retailer at a relatively early stage in its
development, shares many characteristics with UK mobile phone retailers.
However, there are some very significant differences between China and the UK
market.

"In China, the cost mobile phone handsets are not subsidised by service
providers and are very expensive by UK standards. An average mobile costs about
#90 which is equivalent to more than half the average PRC consumer's monthly
gross income of around #165. Yet people queue in shops to purchase the latest
handset as an expensive mobile is seen as a status symbol and fashion statement
with a typical customer looking to change the phone within a year or less. Some
of the most prized phones sell for hundreds of pounds because such a purchase is
one of the few obvious statements of affluence that can be made.

"We are in a growth sector in one of the world's most important economies. It is
a unique market opportunity. Accelerating the growth of our retail network is
our prime objective and a key reason for raising the additional funding now.
Working closely with our partners, such as Carrefour, we expect to increase our
outlets to over 90 by the year end and to keep driving that forward in 2006.

"I think we are well positioned to create a true national brand within our
sector and, ultimately, become China's leading national mobile retailer."

For Further Information Contact:

Martyn Konig, Executive Director
The Trading Exchange PLC 0700 4956 956

Jim Reiman, Chairman and CEO
EBT 001 847 784 8100

Tom Price/ Bobbie Hilliam
Evolution Securities Limited 0207 071 4300

Terry Garrett/ John Moriarty/Stephanie Badjonat
Weber Shandwick Square Mile 0207 067 0700

Acquisition of EBT Mobile Limited
Placing of 23,529,412 Placing Shares at 17p per share
Capital Reorganisation
Re-admission to trading on AIM
Change of name to EBT Mobile China plc
Approval of waiver of Rule 9 of the City Code on Takeovers and Mergers
and
Notice of Extraordinary General Meeting

Introduction
Your Board announced today that the Company has agreed to acquire, subject,
inter alia, to Shareholder approval, the entire issued share capital of EBT HK.
The total consideration for the Acquisition is #16.4 million (based on the Issue
Price), to be satisfied by the issue of 96,364,998 Consideration Shares. In
addition, the Company announced today that it is raising #4.0 million (gross of
expenses) by way of a Placing of 23,529,412 Placing Shares at 17 pence per
Ordinary Share for the ongoing working capital for the Enlarged Group and to
meet the costs of the Acquisition and Admission. The Placing has been
underwritten by Evolution Securities. Your Board is also recommending the
Company undertakes the Capital Reorganisation.

The Directors believe that due to the size of the proposed fundraising when
compared to the Company's market capitalisation, and the additional costs and
regulatory burden of undertaking a pre-emptive issue, it is necessary to
disapply pre-emption rights.

The Acquisition is classified as a "reverse takeover" under the AIM Rules by
virtue of the size and nature of the transaction. As such it is subject to the
approval of Shareholders which is to be sought at the Extraordinary General
Meeting.

Immediately following Completion, certain Shareholders of the Enlarged Group
whom the Panel deems to be acting in concert (the "Concert Party") will own
approximately 87,276,224 Ordinary Shares (representing approximately 56.03 per
cent. of the Enlarged Issued Ordinary Share Capital). Further to this, the
Concert Party will through the exercise of options in the Company be able to
acquire up to an additional 14,479,082 Ordinary Shares. These additional
Ordinary Shares under option when added to the post-Admission holdings of the
Concert Party would amount to 101,755,306 Ordinary Shares, representing 58.08
per cent. of the Ordinary Share capital as enlarged as a result of the full
exercise of the options by the Concert Party only.

As the Concert Party would be immediately acquiring more than 30 per cent. of
the voting rights of the Company on Completion, in normal circumstances, the
Concert Party would be required under Rule 9 of the City Code to make a cash
offer to acquire all of the Ordinary Shares in the Company it did not at that
time own. Approval from the Shareholders will be sought at the EGM by way of
ordinary resolution to enable this requirement to be waived as further described
below. The Acquisition will be conditional on the requirement being waived.

Under the terms of the Placing Agreement, Evolution Securities has agreed
conditionally as agent of the Company, to procure subscribers for the Placing
Shares at the Issue Price and to the extent that such subscribers are not
obtained for any of the Placing Shares, Evolution Securities shall itself
subscribe at the Issue Price for such Placing Shares.

Upon Completion, the Company intends to change its name to EBT Mobile China plc
to reflect its new business and approval from the Shareholders will be sought at
the EGM by way of special resolution.

The Proposals are conditional, inter alia, upon the approval of the Resolutions
by the Shareholders at the EGM. In aggregate the Company has received
irrevocable undertakings to vote in favour of the Resolutions to be proposed at
the EGM in respect of 267,279 Ordinary Shares, representing approximately 0.77
per cent. of the Existing Ordinary Shares.

Background to and Reasons for the Acquisition
With effect from 17 May 2005, the Company disposed of its betting exchange
business by way of the sale of its operating subsidiary, The Trading Exchange
(UK) Ltd, to Intuition Capital Limited. This followed discussions with the
Company's major shareholders in which the Board was asked to evaluate strategic
options in order to deliver value to shareholders.

Since this disposal the Company has had no trading business and is treated as an
investment company under the AIM Rules meaning that it is required to make an
acquisition by 16 May 2006 that constitutes a reverse takeover. The Board
commenced discussions with the shareholders of EBT HK in late October 2004 and
has, through visits to China and further analysis, developed an appreciation of
the growth opportunities in the Chinese mobile phone market. The Directors
believe that the Acquisition represents an opportunity for Shareholders to
participate in an enlarged group which combines the EBT Mobile business with the
Company's existing cash balances and its access to the equity market and has the
potential for delivering attractive shareholder returns.

EBT Mobile
The Business
EBT Mobile is a Chinese based retailer of mobile telephone products and
services, including mobile phones, SIM cards, cell phone accessories, and cell
phone related value-added services. EBT Mobile's brand has been in the Chinese
market since 1996 in Shanghai and since that time has expanded, as of 1 July
2005, into additional cities near Shanghai (Suzhou, Kunshan, Hangzhou, Jiangyin,
Wuxi, Zhangjiagang, Xuzhou and Changshu).

EBT Mobile operates in China with the slogan "EveryBody Talk" targeted at the
service driven customer.

EBT Mobile's retail outlets are mainly located as "outlets within stores" in
department stores and "big box" hypermarkets including Carrefour, one of the
leading hypermarket chains in PRC with approximately 60 hypermarkets in China,
and Lotus. EBT Mobile has relationships with China Mobile and China Unicom's
local branches (currently China's only mobile cellular network service
providers) and operates co-branded outlets and service centres with both
companies.

EBT Mobile also has long standing relationships with many of the leading PRC and
foreign cellular handset manufacturers which include direct purchasing rights
with Nokia and Haier.

EBT Mobile's main product line is mobile handsets which accounted for
approximately 85 per cent. of revenues in 2004 followed by SIM cards which
accounted for approximately 14 per cent. in the same period. In 2004, EBT Mobile
sold approximately 173,000 handsets.

EBT Retail Outlets
As at 1 July 2005, EBT Mobile's retail network consisted of 49 outlets in
Shanghai, 15 outlets in Suzhou, 3 outlets in Hangzhou, plus single outlets in
Kunshan, Jiangyin, Wuxi, Zhangjiagang, Xuzhou and Changshu. EBT Mobile has
targeted organic outlet growth to increase the number of outlets within the
network to over 90 by the end of the current financial year.

As at 1 July 2005, of EBT Mobile's 73 retail outlets, 5 were co-located with one
of the two major cellular network operators (either China Mobile in Shanghai, or
China Unicom in Suzhou) and 57 outlets were located inside major department
stores, including Carrefour and Lotus where the sale is made in conjunction with
the store operator.

The Proposed Directors target the retail store profile so as to attract the
higher income sector on the basis of good quality and service rather than just
price.

EBT Operations
EBT Shanghai is EBT Mobile's Shanghai retail operations company. EBT Suzhou is
EBT Mobile's retail operations company for the Jiangsu and Zhejianq Provinces.
iAtoZ Beijing operates EBT Mobile's website and is the company through which all
electronic sales of goods and services will be conducted.

EBT Trade conducts EBT Mobile's non-retail operations business, including the
purchase of handsets and other merchandise from manufacturers. EBT Trade then
distributes products to the EBT Mobile retail operating companies. It also
houses centralised functions including finance, training and human resources.

Market Opportunity of the Enlarged Group
As at the end of June 2005, China had approximately 363.2 million mobile phone
subscribers, accounting for approximately 28 per cent. of the Chinese population
at that time (Source: MII). Sales of mobile phones in China totalled
approximately Yuan 68.9 billion for the first six months of 2005 (Source: CCID
Consulting). With an estimated population of approximately 1.3 billion people,
China is one of the largest mobile telephone markets in the world, though its
penetration rates are half those found in the UK and USA.

The Proposed Directors believe Chinese mobile user penetration will reach the
rates to be found in developed countries of approximately 70 per cent. This
implies a long-term active mobile subscriber population in China of
approximately 900 million people and implies approximately an additional 535
million new users to the reported subscriber base of 30 June 2005.

Owing to China's currently cash-based economy (credit and electronic payment
mechanism are not widely used) the majority of Chinese mobile users work on a
"pre-pay" mobile credit system rather than on a contractual basis. The Proposed
Directors believe therefore that the growth of mobile subscribers, together with
the introduction of new mobile technologies and development of mobile data
communications, will require a network of physical retail establishments where
such goods and services can be provided and paid for, and to support the network
operators' efforts to convert pre-pay customers to term contract customers.

Key Strengths of the Enlarged Group
The Enlarged Group Board believes the following to be the Enlarged Group's key
strengths:

* an established reputation and brand as a mobile telephone retailer in
the Shanghai and Suzhou markets;

* relationships with key mobile industry companies, such as China Mobile
(Shanghai Branch), China Unicom (Suzhou Branch), Nokia and other handset
manufacturers;

* relationships with a number of Chinese retail chains, including
Carrefour, Lotus, NEXT Mart and RT Mart enabling the Enlarged Group to
pursue an aggressive expansion strategy.

The Enlarged Group Board believe that these key strengths will allow the
Enlarged Group to pursue its growth strategy, capitalise on current market
trends and consolidate and increase its market share, revenues and profits
within the Chinese mobile market.

Business Strategy of the Enlarged Group
The strategy of the Enlarged Group will be to entrench the position of EBT
Mobile in its current markets and, primarily through organic growth, expand
nationally throughout China and, ultimately, become China's leading national
mobile retail network.

The Enlarged Group will initially focus its expansion within the Yangzte River
basin and, in due course, cities in other regions. As this expansion occurs, the
Proposed Directors expect to increase profit margins as sales volumes increase
through additional outlet openings, which should allow the Enlarged Group to
negotiate improved terms from suppliers.

Additionally, the Enlarged Group plans to introduce higher-margin value-added
products and services, and provide a retail platform to support the sale and
service of a full range of mobile content offerings including games, music,
ring-tones and other services and intangible products. Through its network, the
Enlarged Group plans to be able to provide customer interface and money
collection facilities for sellers of such value-added services.

The Enlarged Group plans to continue to invest in its brand through staff
training, outlet refurbishment, event sponsorship and other advertising with the
intention of targeting the quality and service driven customer.

Financial Summary on EBT

The following summary of financial information relating to EBT Mobile for the
three years ended 31 December 2004.

Year ended 31 December
2002 2003 2004
Rmb'000 Rmb'000 Rmb'000

Turnover 172,450 177,193 260,795
Gross profit 12,266 12,627 24,905
Losses before tax (20,095) (11,620) (1,656)
Losses for the year (20,099) (11,663) (1,715)

EBT Mobile experienced revenue growth of 2.7 per cent. in 2003 and 47.1 per
cent. in 2004. Revenue growth has been driven primarily by new store openings in
2003 and 2004, following a period of rationalisation and consolidation in 2002
which coincided with the new management taking control.

Gross margin has improved from 7.1 per cent. in 2003 to 9.5 per cent. in 2004
primarily due to EBT Mobile being able to negotiate improved purchasing prices
as a result of increasing scale and entering into a direct retail purchasing
agreement with Nokia which accounted for approximately 40 per cent. of mobile
phones sold by EBT Mobile in 2004.

Under the terms of the agreement with Nokia and certain other arrangements with
suppliers, EBT Mobile receives rebates dependent upon the number of mobile
phones sold or in certain circumstances SIM card usage. These rebates which are
not contractual, amounted to 6.5 per cent. of EBT Mobile's turnover in 2004.
Shareholders should be aware that whilst the Proposed Directors are not aware of
any reason why EBT Mobile, as part of the Enlarged Group, should not continue to
benefit from these arrangements, their cessation would have a material adverse
effect on the gross margin achieved and the overall financial feasibility of EBT
Mobile's current and projected business plan.

In conjunction with the revenue growth and increasing gross margin, overhead
costs as a percentage of sales are declining proportionately, demonstrating the
operational gearing of EBT Mobile's business and resulting in positive earnings
before interest, tax, depreciation and amortisisation in 2004 compared to a loss
of over RMB 9 million in 2002. However going forward EBT HK's overheads are
likely to increase as certain salaries of the proposed executive directors not
historically borne by EBT HK will be done so on an ongoing basis.

Since the current management assumed control of the business in 2002, EBT Mobile
has been funded primarily from its existing cash resources and unsecured loans
from GMAI-A together with a small private fundraising of US$1.5 million. As part
of the Acquisition and Admission, outstanding loans have either been capitalised
or the beneficiary of the loan amount has irrevocably undertaken to not request
repayment of the amount due for an indefinite period of time. These amounts
include inter-company loans which, whilst not affecting the consolidated EBT
Mobile balance sheet, do affect the ability of the individual trading
subsidiaries to pay dividends until substantial profits have been generated as
the write off of any inter-company loan as opposed to its repayment will deplete
distributable reserves within EBT Mobile. The quantum of any inter-company loan
to be written off or repaid remains subject to further detailed tax advice
within the PRC.

Current Trading and Prospects
The Company announced a total loss of #3,080,247 for the year ended 31 December
2004, being made from #1,951,257 of operating losses and #1,183,058 of
reorganisation costs. Net assets at 31 December 2004 were #2,526,797 with cash
of #2,860,335.

On 30 April 2005, the Company agreed to sell its trading subsidiary, The Trading
Exchange (UK) Ltd, to Intuition Capital Limited for #125,000 following the
approval by the Company's then shareholders at an extraordinary general meeting
of the Company on 17 May 2005. Since this date, the Company has not traded but
has incurred a monthly cash burn of approximately #17,000, which together with
the prepayment of certain fees related to this transaction has left it with
unaudited net assets consisting predominately of cash of approximately #
1,570,000 as at 11 August 2005, being the latest practicable date prior to this
announcement.

Since 31 December 2004, EBT HK has continued to see retail turnover growth and
has increased its total number of outlets by 12, with the Proposed Directors
aiming to open at least 17 more retail outlets during 2005 in Shanghai and three
further provincial cities in PRC.

As part of its expansion programme, EBT Mobile has entered into an agreement
with Carrefour in China, one of the leading hypermarket retailers in China,
serving EBT Mobile's target demographic segment, to install EBT Mobile outlets
into many of Carrefour's remaining stores in China in the next 12 months,
thereby adding up to another 30 outlets to its portfolio. Certain of these are
included in the 17 further outlets planned for 2005 referred to above.
Similarly, EBT Mobile has entered into an agreement with Wu Mart, a PRC
hypermarket operator, to install outlets into its five Shanghai stores. Both the
Carrefour and Wu Mart roll out programmes have commenced and are ongoing. EBT
Mobile is in discussions with other PRC foreign owned hypermarket and department
store operators to install its outlets in their PRC stores.

EBT Mobile continues to evaluate value-added services opportunities which can be
operated from its outlets in conjunction with content providers and as such it
has recently signed a letter of intent with a mobile phone game manufacturer and
is in discussions to distribute their content in EBT Mobile's outlets.

Competition
There are three main retail channels in China for mobile handset and SIM card
sales, being chain store electronic retailers, specialised handset retail chains
and small independent retailers operating a small number of stores. The Proposed
Directors also believe that one or more new network operators may enter into the
China mobile retail market.

A low-cost alternative to a traditional mobile phone service is operated by
China Telecom and China Netcom, China's fixed line operators, called PAS. PAS
operates in limited networks at low costs. While the Enlarged Group Board is not
aware of any official statistics, it believes that the PAS system is unlikely to
pose a material threat to the Enlarged Group's business because the PAS system
has a limited network coverage and technological limitations and they believe
that EBT Mobile's target customers form a different demographic to PAS
customers.

Terms of the Acquisition
Under the Acquisition Agreements, the Company has agreed, conditional inter alia
on the Placing Agreement becoming unconditional (save for conditions relating to
the Acquisition Agreements and Admission), to acquire the entire issued share
capital of EBT HK in consideration for the issue of 96,364,998 Consideration
Shares to the shareholders of EBT HK. In addition the 19,418 options currently
issued in EBT will roll-over into options over Ordinary Shares.

The Acquisition Agreements contain warranties concerning the present and past
assets and activities of EBT Mobile given by GMAI-A and James Reiman.

Suspension, Dealings and Trading
The Existing Ordinary Shares were suspended from trading on AIM on 21 December
2004, but such suspension will cease on the publication of this announcement.
Application will be made by the Company for the New Ordinary Shares to be
admitted to AIM and the Existing Ordinary Shares to be re-admitted to AIM on
Completion. Subject to Completion, trading in such shares is expected to
commence on 8 September 2005. If the Proposals are not completed, the Existing
Ordinary Shares will continue to be traded on AIM, the New Ordinary Shares will
be neither issued nor admitted to AIM and the Proposed Directors will not become
directors of the Company.

Proposed Directors of the Enlarged Group
Details of the Enlarged Group Board following implementation of the Proposals
are set out below:

Executive directors
James Reiman Chairman and Chief Executive Officer - Age 50
Mr. Reiman is CEO of GMAI-A, EBT HK's predecessor company. From 1999 to 2003,
Mr. Reiman served as the Executive Vice President of Greg Manning Auctions, Inc.
("GMAI") a US based auctioneering group. Mr. Reiman is a licensed (United States
) attorney and a member of the bars of US Federal Courts and the State of
Illinois. Before joining GMAI, Mr. Reiman practiced law in private law firms for
18 years, representing domestic and international clients in domestic and
international business transactions. Mr. Reiman received his Juris Doctor degree
from Northwestern University, and his Bachelor of Arts degree from Columbia
University. He also holds a Certificate from the Advanced Executive Program,
J.L. Kellogg Graduate School of Management, Northwestern University. Mr. Reiman
serves on the board of trustees of Kendall College, Illinois.

Zhang Ge, President and Chief Operating Officer - Age 38
Mr. Zhang has been President and Chief Operating Officer of the PRC companies
within EBT Mobile since 2002. Prior to joining EBT Mobile, Mr. Zhang spent 11
years in the retail industry in Hong Kong and mainland China with China
Resources Group Co., Ltd. ("CRC Group"), a Hong Kong conglomerate with interests
in retail operations (including supermarkets), power and real estate
development. At CRC Group, Mr. Zhang served as Buyer, Deputy Purchasing Manager,
Operation Manager and Senior Manager of China Resources Purchasing Co., Ltd.,
Director & Deputy General Manager of China Resources Purchasing & Investment
Co., Ltd., and Director & General Manager of China Resources Supermarket Company
Ltd. A native of Shanghai, Mr. Zhang received his undergraduate degree in
economics from Shanghai Institute of Foreign Trade and an MBA from the McLaren
School of Business at the University of San Francisco. He also received a
Certificate from the Senior Executive Program of Tsing Hua University. Mr. Zhang
currently serves as the Director of the China Chain Store & Franchise
Association.

Non-Executive director
Martyn Konig, Non-Executive Director - Age 47
Mr. Konig is a qualified Barrister, and Fellow of the Chartered Institute of
Bankers. Mr. Konig joined The Trading Exchange plc as a non executive director
in May 2003. Mr Konig has 25 years experience in the investment banking and the
financial markets sector, having been a main board director and member of the
executive committee of NM Rothschilds and Sons Ltd, where he worked between 1980
and 1995, an executive director at Goldman Sachs from 1995 to 1996 and managing
director and deputy global head of the resource and commodity operations of UBS
between 1996 and 1999. Mr. Konig co-founded Resourceworks plc in 2001, a
specialist resource investment fund and is currently chief executive of AIM
listed, Latitude Resources plc.

Roger Mitchell, Non-Executive Director - Age 41
Mr Mitchell joined The Trading Exchange in May 2004, becoming the Chief
Executive Officer in July 2004. Mr Mitchell's past experience has been in
mergers and acquisitions while at HSBC and James Capel Investment Banking and as
the Chief Financial Officer and Chief Operating Officer of Virgin Music Italy
(EMI Group). Mr Mitchell became the inaugural Chief Executive Officer of the
Scottish Premier League holding the post for five years from 1998 to 2003. He is
a member of the Institute of Chartered Accountants of Scotland.

Senior Management

Jonathan Serbin, Chief Financial Officer and Chief Strategic Officer - Age 36
Mr. Serbin is the Chief Financial Officer & Executive Vice President of EBT HK
and has held such positions since that company's creation. Prior to the creation
of EBT HK, Mr. Serbin served as a consultant to EBT HK's predecessor company's
principal shareholder, primarily assisting in the finance department. Prior to
this consultancy, Mr. Serbin was Chief Financial Officer at Hana Biosciences, a
US technology company, assisting the company through two rounds of financing and
its successful transition from a private firm to publicly traded company. Mr.
Serbin was also President of Sinosure Financial Group ("Sinosure"), a
Shanghai-based financial and strategic advisory firm from 2000 to 2003. At
Sinosure, Mr. Serbin advised western and Chinese retail and communications
firms, helping them achieve their strategic and financial objectives in China.
Prior to Sinosure, Mr. Serbin was an investment banker at Lehman Brothers,
specializing in telecom and media mergers & acquisitions. Before Lehman, he was
a corporate attorney at Coudert Brothers, focusing on mergers & acquisitions in
the media and communications sector. Mr. Serbin served as the Chairman of the
American Chamber of Commerce's Venture Capital Committee from 2002 to 2003. He
received his MBA degree from Columbia University, a Juris Doctor degree from
Boston University, and a BA in economics from Washington University in St. Louis.

Consultancy Agreement and other Board Matters
The Enlarged Board recognises that being a board of a public quoted company
places a significant onus on the directors and the financial reporting
procedures of the Company. In order to assist the Company and the Enlarged Group
Board in this regard, it is intended that Albachiara Limited, a company owned by
Mr. Roger Mitchell and his wife, will provide the services of Mr. Roger Mitchell
and Mr. Greg Hall, currently Chief Executive Officer and Interim Chief Financial
Officer respectively of the Company, as consultants to the Enlarged Group from
Admission. The Enlarged Group's results for both the six months ended 30 June
2005 and the 15 year ending 31 December 2005 will reflect matters that have
occurred within the Company of which the Proposed Directors have no direct
knowledge. Consequently in addition to their experience of working within
publicly quoted companies, Mr. Mitchell and Mr. Hall should be of great
assistance in preparing the Enlarged Group's accounts for the current year.

The Enlarged Group Board believe that as the Enlarged Group grows, it will be
necessary and beneficial to appoint a full time Finance Director to the Enlarged
Group Board.

The Enlarged Group Board intends to appoint additional independent non-executive
directors in due course.

Waiver of Rule 9 of the City Code
(a) Background on the City Code
The terms of the Proposals give rise to certain considerations under the City
Code. Brief details of the City Code, the Panel and the protections they provide
are set out below.

The City Code has not and does not seek to have the force of law. It has,
however, been acknowledged by both government and other regulatory authorities
that those who seek to take advantage of the facilities of the securities
markets in the United Kingdom should conduct themselves in matters relating to
takeovers in accordance with best business standards and, therefore, in
accordance with the City Code.

The City Code is issued and administered by the Panel. The City Code applies to
all takeover and merger transactions, however effected, where the offeree
company (in this case the Company) is, inter alia, a listed or unlisted public
company resident in the United Kingdom (and to certain categories of private
limited companies). The Company is such a company and its shareholders are
entitled to the protection afforded by the City Code.

Under Rule 9 of the City Code, when a person or a group of persons acting in
concert acquires shares in a company which is subject to the City Code, and such
shares (when taken together with shares already held) would result in such
person or persons holding shares carrying 30 per cent. or more of the voting
rights in such company, such person or group is normally obliged to make a
general cash offer to all other shareholders to acquire the balance of the
shares not held by him and his concert parties at the highest price paid by any
of them during the previous 12 months.

(b) Relationship between members of the Concert Party
As EBT HK is a private entity, certain shareholders and option holders of EBT HK
are deemed to be acting in concert for the purposes of the City Code. This
includes GMAI-A, members of the senior management of EBT HK, being Zhang Ge,
Lisa Chen, Jonathan Serbin, Craig Cooper and Wang Wei and GMAI-US, a founding
shareholder of EBT HK.

Furthermore at Completion, GMAI-A intends to transfer 7,759,962 Ordinary Shares
to a trust connected with Craig Cooper, and to grant an option to acquire
8,759,277 Ordinary Shares to the Daniel and Michelle Skaff Trust, dated 24 March
1993 (as amended), a trust connected with Daniel Skaff, such option to be
exercisable at any time up to 31 December 2009 unless accelerated pursuant to
the terms of the option agreement. Due to Daniel Skaff's arrangements with
GMAI-A and his relationship with Mr Reiman, Mr Skaff is deemed to be acting in
concert with GMAI-A for the purposes of the City Code. As such any transfer of
Ordinary Shares from GMAI-A to Daniel Skaff will not affect the total holding of
the Concert Party as set out above.

GMAI-A is 100 per cent. owned by CRV 1, which is 100 per cent. owned by James
Reiman, a Proposed Director. Furthermore, Mr Reiman was employed by GMAI-US
until December 2003.

(c) Effects of Proposals and requirement for the Waiver
Immediately following Completion, the Concert Party will own 87,276,224 Ordinary
Shares (representing approximately 56.03 per cent. of the enlarged issued voting
share capital), being more than 30 per cent. of the enlarged issued voting share
capital.

Further to this, the Concert Party will through the exercise of options be able
to acquire up to an additional 14,479,082 Ordinary Shares. Assuming exercise in
full by the Concert Party of all of these options and assuming that no other
person exercises any options or any other right to subscribe for Ordinary
Shares, the Concert Party will own 101,755,306 Ordinary Shares, representing
58.08 per cent. of the Company's enlarged issued voting share capital. The
earliest date on which the options can be exercised is Admission.

The Panel has, however, agreed, subject to approval by an ordinary resolution by
the Company's shareholders at the EGM on a poll, to waive the obligation to make
a general offer for shares in the Company which would otherwise arise under Rule
9 of the City Code as a result of acquiring Ordinary Shares pursuant to full
implementation of the Proposals and further Ordinary Shares pursuant to the
exercise of the options granted to the Concert Party.

Dividend Policy
Shareholders should be aware that upon Completion, the Enlarged Group will not
have distributable reserves and hence will not be able to pay dividends until
the Company generates either sufficient profits or seeks the permission of the
Courts to create sufficient reserves.

Notwithstanding the above, the Enlarged Group Board intends to retain future
earnings from operations, together with the net proceeds of the Placing, to
finance the growth and development of its retail network and to satisfy other
expenditure requirements. As a result, the Enlarged Group Board does not
anticipate paying cash dividends in the foreseeable future.

Option Schemes
The Company currently has a number of share option schemes in place.

As part of the terms of the Acquisition, it is the Company's intention that the
holders of options to subscribe for EBT Shares be permitted to swap their
existing 19,418 options for 19,404,706 new unapproved options in the Company.
The earliest these options can be exercised is Admission. Immediately following
Admission, there will be 24,797,635 Ordinary Shares under option pursuant to the
various schemes and agreements, representing 15.92 per cent. of the Enlarged
Issued Ordinary Share Capital.

Corporate Governance
On Admission, it is proposed that the Enlarged Group will have only one
Non-Executive Director, being Martyn Konig. Following Admission, the Company
intends to appoint a further 2 to 4 Non-Executive Directors who will join, as
appropriate, the relevant board committees. The Company intends to comply with
the recommendations on corporate governance of the Quoted Companies Alliance
(QCA) where appropriate, save in particular that it may not have the required
number of independent Non-Executive Directors, and the Chairman and Chief
Executive are the same.

The Board will establish an audit committee and a remuneration committee with
formally delegated duties and responsibilities.

The audit committee will receive and review reports from management and the
auditors relating to the annual and interim accounts and the accounting and
internal control systems in use throughout the Enlarged Group. The audit
committee will have unrestricted access to the auditors.

The remuneration committee will review the scale and structure of the executive
directors' remuneration and the terms of their service contracts. The
remuneration and terms and conditions of appointment of the non-executive
directors are set by the Enlarged Group Board. No director may participate in
any meeting at which discussions or decisions regarding his own remuneration
take place. It is envisaged that the remuneration committee will also administer
the Company's share option schemes.

The Existing Directors do not consider that, given the size of the Board, it is
appropriate to have a nomination committee. However, this will be kept under
regular review by the Enlarged Group Board.

The Company will take all reasonable steps to ensure compliance by the Enlarged
Group Board and applicable employees with the provisions of the AIM Rules
relating to dealings in securities of the Company.

Lock-in Arrangements
James Reiman, Zhang Ge, Jonathan Serbin and Craig Cooper who following Admission
will, in aggregate, have an interest in approximately 49.7 per cent. of the
Enlarged Issued Ordinary Share Capital, have given undertakings not to sell,
charge or grant any interests over any Ordinary Shares held by them or acquired
by them as a result of the exercise of options (subject to certain exemptions)
at any time prior to the publication by the Company of its audited accounts for
the financial year ending 31 December 2006.

In the case of Zhang Ge and Jonathan Serbin and Craig Cooper, their lock-in
agreements allow for them to sell up to 25 per cent.of their holdings as at
Admission one year from Admission.

GMAI-A has committed to transfer 7,759,962 Ordinary Shares held by it at
Admission to a trust connected with Craig Cooper and to grant an option to
acquire 8,759,277 Ordinary Shares to the Daniel and Michelle Skaff Trust,as
amended, 24 March 1993. This is expressly permitted pursuant to the terms of Mr
Reiman's lock-in arrangements provided that he procures that the recipients
enter into the same lock-in arrangements.

Details of the Capital Reorganisation
As set out in the section titled 'Option Schemes', it is the Company's intention
that the holders of options to subscribe for EBT HK Shares be permitted to swap
their existing options for new unapproved options in the Company. Based on the
current exercise price of certain options to subscribe for EBT HK Shares the
Company would be required to issue Ordinary Shares at a discount to the nominal
value of the Existing Ordinary Shares. Therefore, in order to facilitate the
exercise of the options to subscribe for EBT HK Shares, it is proposed that each
Existing Ordinary Share of 10p will be sub-divided following the passing of the
Resolutions into one new Ordinary Share of 0.1p and ninety nine Deferred Shares
of 0.1p and each authorised, but unissued, Ordinary Share of 10p will be
sub-divided following the passing of the Resolutions into one new Ordinary Share
of 0.1p and ninety nine Deferred Shares of 0.1p. In the absence of any other
factors affecting the Company's share price, the sub-division is not expected to
result in a change of the market price of Ordinary Shares. The rights attaching
to the Deferred Shares will in effect render them worthless. The Capital
Reorganisation will enable the Proposals to be effected and will apply to those
Shareholders on the register of members of the Company as at the close of
business on 7 September 2005.

The necessary approvals to effect the Capital Reorganisation are included in the
Resolutions.

Effect of Capital Reorganisation on Existing Ordinary Shares
Save in respect of their nominal value, there will be no material differences
between the Existing Ordinary Shares and the new Ordinary Shares after the
Capital Reorganisation. The sub-division will not affect the voting rights of
holders of Existing Ordinary Shares. The sub-division will be made by reference
to holdings of Existing Ordinary Shares on the register of members of the
Company as at the close of business on 7 September 2005.

It is expected that the dealings and settlement in CREST in the Existing
Ordinary Shares will continue until the close of business on 7 September 2005.
Subject to the necessary approval at the EGM, Admission of the New Ordinary
Shares and, following the Capital Reorganisation, the Ordinary Shares is
expected to occur at 7.30 a.m. on 8 September 2005. The Deferred Shares will not
be admitted to trading on any securities exchange, but will be transferable and
capable of being repurchased by the Company for a nominal amount.

No share certificates in respect of the new Ordinary Shares arising as a result
of the Capital Reorganisation will be issued and the Company's registrars will,
following the sub-division, register transfers of the new Ordinary Shares
against certificates in respect of the Existing Ordinary Shares. No share
certificates will be issued in respect of the Deferred Shares.

Effect of Capital Reorganisation on TTE Options
There will be no adjustment by reason of the sub-division to the rights of
Shareholders following Completion (as the number of issued new Ordinary Shares
will be the same as the number of Existing Ordinary Shares). Accordingly, no
change will be made to the number of Existing Ordinary Shares over which options
have been granted or the exercise price of those options under the TTE Option
schemes (unless Her Majesty's Revenue and Customs requires an adjustment in
relation to those schemes it has approved).

Change of Name
To reflect the new business of the Enlarged Group, it is proposed that the
Company change its name to EBT Mobile China plc and this change will take place
if the Resolutions are passed. If Admission does not subsequently take place, a
further resolution will be put to Shareholders to change the name of the
Company.

Extraordinary General Meeting
You will find set out at the end of this document a notice convening the
Extraordinary General Meeting of the Company to be held at the offices of
Evolution Securities, 100 Wood Street, London EC2V 7AN at 11.00 a.m. on 7
September 2005. At this meeting, the following resolutions will be proposed:

Resolution 1 (a special resolution)
Subject to the passing of Resolution 2 below,

(a) to approve the Acquisition for the purposes of Rule 14 of the AIM Rules;
(b) to split each existing issued and unissued ordinary shares of 10p in the
capital of the Company into one ordinary share of 0.1p and 99 deferred
shares of 0.1p each;
(c) to increase the authorised share capital of the Company;
(d) to grant authority to allot authorised but unissued Ordinary Shares;
(e) to disapply statutory pre-emption rights on the issue of new Ordinary
Shares for cash to enable:
(i) the issue of the Placing Shares pursuant to the Placing;
(ii) the issue of the Consideration Shares and the issue of shares
pursuant to the options over Ordinary Shares granted to option
holders of EBT HK;
(iii) the issue of shares pursuant to any share option scheme adopted by
the Company;
(iv) rights issues, open offers or equivalent offers and the like to be
implemented on a basis which enables the Directors to make
arrangements to deal with (inter alia) fractional entitlements and
overseas securities laws; and
(v) the issue of Ordinary Shares up to an aggregate nominal amount of
#31,156 (this represents approximately 20 per cent. of the issued
share capital of the Company assuming implementation of the
Placing and the Acquisition);
(f) to change the name of the Company to EBT Mobile China plc; and
(g) to adopt new articles of association for the Company.

The authority in (d) and (e) above if given will expire 15 months after the date
of the Resolutions.
Resolution 2 (an ordinary resolution)

Subject to the passing of Resolution 1 above, to approve the Waiver.

Resolution 2 above is being put to Shareholders as a requirement of the City
Code. As a condition of the Waiver, the resolution must be passed on a poll
taken in accordance with the requirements of the Panel in order for dispensation
from Rule 9 of the City Code to be given.

Following the proposed increase in authorised share capital pursuant to the
Resoutions, the issue of the New Ordinary Shares and taking into account the
Ordinary Shares reserved and to be reserved pursuant to options granted by the
Company, there will remain unissued and unreserved approximately 119.5 million
Ordinary Shares, representing approximately 39.8 per cent. of the increased
authorised ordinary share capital, to preserve flexibility for the future. Save,
however, for the issue of the New Ordinary Shares under the Proposals and
pursuant to options granted by the Company, your Board has no present intention
of issuing any further Ordinary Shares.

To be passed, the matters described in paragraphs (a), (b), (c), (d), (e), (f),
and (g) above which are being proposed as a single resolution require a majority
of not less than 75 per cent. of the Shareholders voting on a poll in person or
by proxy in favour of the resolution at the Extraordinary General Meeting. To be
passed, Resolution 2 requires a majority of not less than 50 per cent. Of the
Shareholders voting on a poll in person or by proxy in favour of this resolution
at the Extraordinary General Meeting. The Resolutions are interconditional,
therefore if both the Resolutions are not passed, NONE of the Proposals can be
implemented.

Details of the Placing
The Company proposes to raise approximately #4.0 million (net of expenses of
approximately #1.8 million) by the issue of 23,529,412 Placing Shares at 17p per
share. The net cash proceeds of approximately #2.16 million from the Placing
will be to provide additional working capital for the Enlarged Group.

The Placing Shares will represent 67.6 per cent. of the Existing Ordinary Shares
and 15.1 per cent. of the Enlarged Issued Ordinary Share Capital. The Placing
has been fully underwritten by Evolution Securities. The Placing Shares will,
when issued and fully paid, rank pari passu in all respects with the Existing
Ordinary Shares.

The Placing has been underwritten by Evolution Securities pursuant to which it
has conditionally agreed, as agent for TTE, to procure cash subscribers for the
Placing Shares to be issued under the Placing. To the extent that it fails to
procure cash subscribers for all or any of the Placing Shares, Evolution
Securities has conditionally agreed to subscribe itself, as principal, at the
Issue Price for such shares. The Placing Shares are not being made available to
Existing Ordinary Shareholders in proportion to their holdings of Existing
Ordinary Shares.

The Placing is conditional, inter alia, upon the Resolutions being passed at the
Extraordinary General Meeting to be held at 11.00 a.m. on 7 September 2005, the
Placing Agreement becoming unconditional and not being terminated in accordance
with its terms and Admission occurring by no later than 8.00 a.m. on 8 September
2005, or such later date (being no later than 8.00 a.m. on 31 October 2005) as
Evolution Securities and the Company may decide.

Recommendation
Your Directors, who have been so advised by Evolution Securities, consider that
the Waiver is fair and reasonable and in the best interests of the Company and
its Shareholders as a whole. In providing advice to the Directors, Evolution
Securities has taken into account the Directors' commercial assessments.
Furthermore, your Directors consider that the Proposals contained in this
document are in the best interests of the Company and its Shareholders as a
whole.

Accordingly, your Directors unanimously recommend Shareholders to vote in favour
of the Resolutions as they have irrevocably undertaken to do in respect of their
own shareholdings amounting to 267,279 Ordinary Shares (representing
approximately 0.77 per cent. of the Company's Existing Ordinary Shares).

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Latest date and time for receipt of completed
Forms of Proxy 10.00 a.m. on 5 September 2005
Extraordinary General Meeting 11.00 a.m. on 7 September 2005
Dealings commence in the New Ordinary Shares on AIM 8.00 a.m. on 8 September 2005
Completion of Acquisition 8 September 2005
Delivery in CREST of New Ordinary Shares and Existing
Ordinary Shares to be held in uncertificated form 8.00 a.m. on 8 September 2005
Restoration of trading on AIM of the Existing Ordinary
Shares 15 August 2005
Despatch of definitive share certificates in respect of New
Ordinary Shares to be held in certificated form by 31 September 2005

ACQUISITION AND PLACING STATISTICS

Issue Price 17 pence
Net proceeds of the Placing #2.16 million
Number of New Ordinary Shares being issued pursuant to the Acquisition 96,364,998
Number of New Ordinary Shares being issued pursuant to the Placing 23,529,412
Number of Ordinary Shares in issue following the Acquisition and the Placing 155,780,827
Market capitalisation at the Placing Price following completion of the
Acquisition and the Placing #26.48 million
New Ordinary Shares expressed as a percentage of the Existing
Ordinary Shares 344.25 per cent.
Existing Ordinary Shares expressed as a percentage of the Enlarged
Issued Ordinary Share Capital 22.36 per cent.

This information is provided by RNS
The company news service from the London Stock Exchange

END
MSCEALPSFSXSEFE

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