DYNASTY BUYS INTO ONLINE CHINESE MAHJONG DEVELOPER

6 July 2007

Ten percent of the action could grow to quarter ownership of Shanghai company

The Chinese facing mahjong distributor and marketer Dynasty Gaming Inc. has signed a letter of intent to acquire an initial 10 percent stake in Shanghai online mahjong games developer 3Q1Technologies in exchange for an undisclosed cash payment. The deal includes an option for Dynasty to eventually acquire up to a 25 percent holding in 3Q1.

The initial transaction with 3Q1 is expected to complete by the end of next (August) month.

A Dynasty spokesman said that possible beneficial spin-offs in the relationship could be the eventual transfer of Dynasty's play-for-points and non-cash technology development work to the 3Q1 team in China. "Dynasty will achieve a substantial savings in salary and hardware costs over the next twelve months by moving development to China," he said.

"This initial purchase of a stake in 3Q1 will provide Dynasty with an opportunity to further its China strategy and to get even closer to China's universe of online mahjong players, a good number of whom are already 3Q1 clients," said Albert Barbusci, Dynasty's chief executive. "As well, the acquisition will enable an integration of our best-in-class play-for-points technology with that of 3Q1's game client and tournament platform and it will ensure that future product development is completely in line with market appetites."

For 3Q1 the partnership with Dynasty will provide access to an impressive network of marketing and distribution channels serving several million registered users.

Desmond Chu, 3Q1's chief executive officer, acknowledged that, "Dynasty's powerful channels will enable us virtually overnight to increase exponentially our mahjong player base and our revenue generating potential."

Managing 3Q1's integration with Dynasty will be mahjong industry veteran Huang Jianzhong, who set up his own company organizing offline tournaments prior to joining 3Q1 as COO. Apart from being an avid online mahjong player and having won numerous titles, Huang is also a Co-founder and Chairman of the China Mahjong Federation (CMF). CMF is an alliance of the top mahjong players throughout China.

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