Cantronic Systems Inc.
TSX VENTURE : CTS

Cantronic Systems Inc.

June 25, 2009 11:06 ET

Cantronic Systems Inc. Completes the Acquisition of Shenzhen Huanghe Digital Technology Co. Ltd.

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 25, 2009) - Cantronic Systems Inc. ("Cantronic" or the "Company") (TSX VENTURE:CTS) announced today that pursuant to the news release issued by the Company on May 13, 2009, it has completed the acquisition of a 51.0 percent interest in Shenzhen Huanghe Digital Technology Co. Ltd. ("Yellow River") in China.

Established in 2005, Yellow River is a profitable leading designer and manufacturer of digital IP-based and high definition cameras for medium to large-scale networked video surveillance applications. This strategic acquisition will significantly broaden Cantronic's existing product portfolio to an end-to-end solution provider, enhancing its revenue growth potential.

Under the terms of the agreement, Cantronic has fully paid a total of RMB 3.72 million (approximately CDN$676,000) in cash for the acquisition of its 51.0 percent interest in Yellow River. Cantronic has also committed to pay RMB 2.5 million (approximately CDN$455,000) worth of stock to Yellow River management under an earn-out performance based arrangement. All Cantronic stock issued under such arrangement will be issued one year later with the price to be calculated based on market price at the time of issuance and will have a two-year lock-up period after issuance. All of Yellow River's management will remain working for either Yellow River or Cantronic China to ensure the smooth and successful integration of the acquisition.

"With the acquisition of Yellow River, we now have a basic end to end solution to offer high end city wide digital networked video surveillance systems by combining AVINFO's digital networked video management platform software and Yellow River's advanced IP-based high definition cameras," noted James Zahn, President and Chief Executive Officer of Cantronic Systems Inc.

About Cantronic

Cantronic manufactures, distributes, and provides training and services in the fields of infrared vision and video security surveillance technologies, specializing in passive and active infrared cameras, infrared illuminators, low light infrared sensitive CCD cameras and long-range night vision surveillance systems for demanding homeland security and surveillance application.

Cantronic, through its US subsidiary QWIP Technologies, Inc. ("QWIPTECH"), holds a worldwide, exclusive license from the California Institute of Technology ("Caltech") to produce and sell infrared detectors and sensors based on Caltech's Quantum Well Infrared Photodetector technology.

Cantronic is a Tier 1 issuer on the TSX-V exchange, trading under the symbol CTS. For further information about Cantronic and QWIPTECH, please visit our websites at www.cantronics.com and www.qwip.com.

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