Investment in China

Brainspark PLC
22 May 2007


For Immediate Release 22 May 2007


                 Brainspark Plc ('Brainspark' or 'the Company')

                  Incorporation of Company to invest in China

                                First Investment

                           Related Party Transaction


Brainspark has incorporated China IPO Group Limited ('China IPO Group'), a
wholly-owned company, under the 1991 Jersey Company Act.


The business model of the China IPO Group, is to make investments in China, both
on 6-12 months returns, in pre-IPO situations, and in 3-5 year return with high
growth small- to medium- sized technology companies. In order to secure the deal
flow the company is entering into first refusal relationships with some of the
most important Chinese Science Parks and Incubators.


As the name of China IPO Group indicates, the preferred exit from investments
will be through IPOs with London Stock Market as the favourite choice.. China
IPO Group has received an initial start up capital injection of approx £100,000
from Brainpark. IPO on the London market will be viewed as the preferred choice
by China IPO Group to raise additional funds, following an initial round of
financing which will begin in June 2007.


Directors of China IPO Group will be the Rt. Hon. Earl of Cromer, Non-Executive
Chairman, Professor Francesco Gardin, Executive Director, Mr. Edward Burman,
Executive Director, and as Non-Executive Directors Mr. Dennis Bailey and
Professor Liu Man Hong. Bedell Trust in Jersey will act as company secretary.
Allen & Overy in Beijing has been retained as China IPO Group's law firm.


Lord Cromer has extensive experience of China where he worked for almost 20
years as Managing Director and Director of several companies; he is also
Chairman of JF China Region Fund, Japan High Yield Property Fund and Pedder
Street Asia Absolute Return Fund, and is on the boards of the Cambridge Asia
Fund, Schroder AsiaPacific Fund, Pacific Basin Shipping and other companies. He
is Chairman of Cromer Associates Limited, a company which advises foreign
companies investing in China and Chinese companies investing overseas.


Francesco Gardin, Edward Burman and Dennis Bailey are Chairman and Directors of
Brainspark Plc. Mr Edward Burman lives in Beijing, where he moved in 2003.


Prof. Liu Man Hong is Director of the Venture Capital R&D Centre at Renmin
University and Honorary Vice-Chairman of the Chinese Venture Capital
Association, she holds a Ph.D. in Economics from Columbia University.


China IPO Management Ltd is being incorporated as a WFOE (Wholly Foreign Owned
Enterprise) in China, located in Beijing, as a wholly owned subsidiary of China
IPO Group acting as local management company.





In April 2007 China IPO Group signed an exclusive contract with Xi'an
International Business Incubator (XIBI) with more than 350 companies being
incubated. XIBI is part of the Xi'an High Tech Zone, which hosts around 8,000
companies. Xi'an is one of the main Chinese centres for the Military Aerospace
industry with 50 universities and research centres. Xi'an has a population of 8
million people and is the capital of Shaanxi Province, which has a total
population of approximately 30 million.


The contract gives Brainspark first-refusal rights on investment in the 350
companies currently incubated in XIBI, for an initial period of 2 years
renewable for up to 10 years. Business sectors of the 350 companies range from
alternative energies to advanced sensor technologies and added value services
for mobile communications. Under the terms of the agreement, China IPO
Management Limited will open an office within the incubator, provide training to
entrepreneurs of the companies on capital markets, investment principles and
international marketing. In addition the company will identify and monitor
investment opportunities among the initial 350 incubated companies.


China IPO Group is currently engaged in negotiations with further selected
Science Parks in China.


China IPO Group made its first pre-IPO investment in China in ET-China Holdings
Ltd ('ET-China'), a travel company with its main operations in Guangzhou
(Guangdong Province). ET-China is is primarily engaged in serving the leisure
market in South China through the sale of air tickets, hotel rooms, packaged
group tours and associated products and services to corporate entities and to
individual travellers. In addition, ET-China, through a joint venture with China
Southern Airlines, provides the e-ticketing service and back office support
services for China Southern Airlines. South China covers nine provinces with a
total population of 450 million people, and is considered the 16th largest
economy in the world by GDP.


China IPO Group has invested $200,000 (£100,000) as part of a $7,000,000 (£
3,500,000) unsecured convertible loan note for pre-IPO funding; the minimum
investment unit to be entitled to the best terms of the loan note is $500,000 (£
250,000). The unit was offered to China IPO Group but the current capital
structure of the company prevented it from subscribing the minimum investment.
Two directors of China IPO Group, as well of Brainspark, Professor Francesco
Gardin and Mr Dennis Bailey, agreed to subscribe the remaining $300,000
(£150,000) to match the minimum unit. The independent Directors of Brainspark
confirmed that the investment by Professor Gardin and Mr Bailey is on no more
favourable terms than the investment by China IPO Group. Mr. Luigi Fogliani, an
8.89% investor in Brainspark, has agreed to subscribe an additional $100,000
(£50,000) under the same terms as China IPO Group. The total investment
therefore amounts to $600,000 (£300,000).


Due to the co-investment by Brainspark Directors as set out above, the
investment by Brainspark into ET-China is being treated as a Related Party
Transaction under the AIM Rules for Companies. Accordingly, the independent
Directors being Messrs. Edward Burman Alfredo Villa and David Meacher consider,
having consulted Beaumont Cornish Limited, the Company's Nominated Adviser,
consider that the terms of the investment by Brainspark are fair and reasonable
insofar as the shareholders of Brainspark are concerned.


For further information, please contact:


Francesco Gardin, Brainspark plc, telephone: [phone]

Roland Cornish, Beaumont Cornish Limited, telephone: [phone]






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