Edgar Filing: BONSO ELECTRONICS INTERNATIONAL INC

BONSO ELECTRONICS INTERNATIONAL INC.

1,087,201 Shares of Common Stock
Issuable on Exercise of Common Stock Purchase Warrants
and
855,726 Shares of Common Stock Offered by Selling Shareholders

We are registering 2,174,403 common stock purchase warrants that were
issued as a dividend to all record holders at the close of trading on January
19, 2000 of certain prior warrants, which expired on January 31, 2000, and to
all persons who exercised the prior warrants during the period commencing on
November 22, 1999 and ending at the close of trading on January 19, 2000. We are
also registering 1,087,201 shares of common stock issuable upon the exercise of
those warrants.

Each two warrants are exercisable to purchase one share of our common stock
at an exercise price of $17.50 per share. The warrants originally expired on
December 31, 2001; however, on October 2001, our board of directors extended the
expiration date until December 31, 2002. On July 5, 2002, our board of directors
extended the expiration date until 2:00 PM (Pacific Time) December 31, 2003.

The warrants are redeemable by us upon 30 days notice at a redemption price
of $0.01 per warrant but only if the public trading price for our common stock
equals or exceeds 110% of the then-current exercise price of the warrants for 20
trading days within the preceding 30 trading days.

We are also registering for resale by certain selling shareholders 200,000
shares of common stock which may be issued upon exercise of outstanding warrants
and 655,726 outstanding shares of common stock. These shares may be offered and
sold from time to time by selling shareholders at the market. We will not
receive any of the proceeds from the sale of shares by the selling shareholders.

Prior to this offering, the common stock has traded on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") under
the symbol "BNSO" and the common stock purchase warrants have traded under the
symbol "BNSOZ." As of August 1, 2002 (one trading day prior to the date of this
prospectus), the reported closing sales price of the common stock on
NASDAQ-National Market System was $2.25, and the reported closing sales price of
the common stock purchase warrants on the NASDAQ-SmallCap Market was $0.02.

An investment in these securities involves a high degree of risk. See "Risk
Factors" beginning at page 12 of this prospectus for a discussion of certain
factors that you should consider before investing in these securities.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.

The date of this prospectus is September 18, 2002

--------------------------------------------------------------------------------
Underwriting
Price to Discounts and Proceeds to
Public(1)(2) Commissions Company(3)
--------------------------------------------------------------------------------
Per Warrant $ 0.00 $ 0.00 $ 0.00
Per Share(4) $ 17.50 $ 0.00 $ 17.50
Total Offering $19,026,017.50 $ 0.00 $19,026,017.50
--------------------------------------------------------------------------------
Footnotes on following page

(1) The warrants were issued as a dividend to all record holders of our
warrants at the close of trading on January 19, 2000, and to all persons
who exercised our warrants during the period commencing on November 22,
1999 and ending at the close of trading on January 19, 2000. The shares of
common stock underlying the warrants are being offered by us to the holders
of the warrants. There is no minimum purchase amount. The shares of common
stock are offered for cash only. The exercise price of the warrants was
arbitrarily determined and bears no relationship to the value of the
company or its assets, nor does the exercise price represent that the
common stock has a value or could be resold at that price. The shares of
common stock are being sold on a "best efforts" basis by us; consequently,
no minimum number of shares is required to be sold.

(2) The 855,726 shares offered by the selling shareholders are being registered
for the benefit of, and may be sold from time to time by, the selling
shareholders at the market. We will receive no proceeds from the sale of
these shares by the selling shareholders.

(3) Before deducting other expenses of the offering payable by us estimated at
$129,835, including, among others, registration and filing fees,
professional fees and printing expenses. All proceeds received upon
exercise of the warrants will be applied directly to our benefit. There is
no escrow of funds and no assurance that all or any portion of the warrants
will be exercised.

(4) Shares underlying the dividend warrants.

You may exercise your warrants only if you live in a state where the common
stock has been qualified for issuance under applicable state laws, including
registration if required under your state's law. As a result, you may not be
permitted to exercise your warrants but may have to sell your warrants or let
them expire unexercised.

PROSPECTUS SUMMARY

This summary highlights important information about our business and about
this offering. Because it's a summary, it doesn't contain all the information
you should consider before exercising your warrants. Therefore, please read the
entire prospectus.

As used in this prospectus, "China" refers to all parts of the People's
Republic of China other than the Special Administrative Region of Hong Kong. The
term "we" or "us" refers to Bonso Electronics International Inc. and, where the
context requires or suggests, its direct and indirect subsidiaries. References
to "dollars" or "$" are to United States Dollars. "HK$" are to Hong Kong
Dollars, "Euros" or "E" are to the European Monetary Union's Currency, "DM" are
to the German Deutsche Mark, and references to "RMB" are to Chinese Renminbi.
All outstanding share data excludes 672,000 shares of common stock reserved for
issuance upon exercise of outstanding stock options, 1,087,201 shares reserved
for issuance upon exercise of outstanding warrants and 730,300 shares reserved
for issuance upon exercise of stock options which may be granted in the future
under our 1996 Stock Option Plan and our 1996 Non-Employee Directors' Stock
Option Plan.

The Warrant Dividend

On January 5, 2000, we declared a warrant dividend payable to all record
holders of our warrants at the close of trading on January 19, 2000, and to all
persons who exercised our warrants during the period commencing on November 22,
1999 and ending at the close of trading on January 19, 2000. The warrant
dividend and January 19, 2000 record date were publicly announced in a press
release. Each two warrants are exercisable to purchase one share of our common
stock at an exercise price of $17.50 per share. The warrants originally were
exercisable any time prior to 2:00 p.m. (Pacific Time) on December 31, 2001. In
October 2001, our board of directors extended the expiration date until December
31, 2002, and in July 2002, extended the expiration date until December 31,
2003.

The registration statement of which this prospectus is a part registers the
warrants and the shares of common stock underlying the warrants.

The exercise price of the warrants as described above is wholly arbitrary
and there is no assurance that the price of the common stock will, at any time,
equal or exceed the exercise price of the warrants. The warrants can be
exercised only if a current prospectus is in effect. See "Description of
Securities--Warrants."

Shares for Resale

Under the original prospectus we had registered 250,000 shares of common
stock issuable upon exercise of outstanding warrants, 50,000 of which have been
purchased and subsequently resold. Under this post-effective amendment, we are
registering for resale by certain selling shareholders the remaining 200,000
shares of common stock which may be issued upon exercise of outstanding
warrants, and 655,726 outstanding shares of common stock. These shares may be
offered and sold from time to time by selling shareholders.

The Company

We design, develop, produce and sell electronic sensor-based and wireless
products for private label Original Equipment Manufacturers (individually "OEM"
or collectively "OEMs") and Original Design Manufacturers (individually "ODM" or
collectively "ODMs"). Bonso Electronics International Inc. was formed on August
8, 1988 as a limited liability International Business Company under the laws of
the British Virgin Islands under the name "Golden Virtue Limited." On September
14, 1988, we changed our name to Bonso Electronics International, Inc. We
operate under the International Business Companies Ordinance, 1984, of the
British Virgin Islands.

As part of our ongoing expansion of the sensor-based product business,
effective as of May 1, 2001 we acquired 100% of the equity of KORONA
Haushaltswaren GmbH & Co. KG, ("Korona") which was formerly a wholly-owned
subsidiary of Augusta Technologie AG, Frankfurt am Main, Germany. We originally
acquired Korona for approximately $3,634,000 in cash and stock.

Korona had sales of approximately $16 million consolidated for the period
from May 1, 2001 to March 31, 2002. Korona markets consumer scale products
throughout Europe to retail merchandisers and distributors. These products
feature contemporary designs using the latest materials and attractive
packaging. Since 2000, we have manufactured a portion of Korona's product line
under an OEM agreement and are very familiar with Korona's stature in Europe and
its potential for wider global distribution. During the period from May 1, 2001
to March 31, 2002, we have manufactured 21.3% of Korona's products sold during
the period.

Since 1989, we have manufactured all of our products in China in order to
take advantage of the lower overhead costs and competitive labor rates. Our
factory is located in Shenzhen, China, about 50 miles from Hong Kong. The
convenient location permits us to easily manage manufacturing operations from
Hong Kong and facilitates transportation of our products out of China through
the port of Hong Kong.

For the fiscal year ended March 31, 2002, we had sales of $ 53,303,101 and
net income of $ 1,805,606. For the fiscal year ended March 31, 2001, we had
sales of $29,566,680 and net income of $ 1,603,799.

Our corporate administrative matters are conducted through our registered
agent, HWR Services Limited, P.O. Box 71, Road Town, Tortola, British Virgin
Islands. Our principal executive offices are located at Unit 1106 - 1110, 11/F,
Star House, 3 Salisbury Road, Tsimshatsui, Kowloon, Hong Kong. Our telephone
number is 852-2605-5822, our facsimile number is 852-2691-1724, our e-mail
address is info@bonso.com and our website is www.bonso.com. Our registered agent
in the United States is Henry F. Schlueter, Esq., 1050 Seventeenth Street, Suite
1700, Denver, Colorado 80265.

The Offering

Securities offered .............. 2,174,403 warrants, exercisable to purchase
one share of common stock for each two
warrants exercised until 2:00 p.m. (Pacific
Time) on December 31, 2003.

1,087,201 shares of common stock, $0.003 par
value, issuable upon exercise of warrants.
The shares are offered on a registered basis
and not as bearer shares.

Exercise price per share ........ $17.50 per share
of common stock

Terms of the offering ........... We issued 2,174,403 warrants as a dividend
to all record holders of our warrants at the
close of trading on January 19, 2000, and to
all persons who exercised our warrants
during the period commencing on November 22,
1999 and ending at the close of trading on
January 19, 2000. We are offering the shares
of common stock solely to the holders of the
warrants. Shares not issued in this offering
will not be offered or sold to the public.
However, shares issued upon exercise of the
warrants, as well as the other shares being
registered by the registration statement
which included this prospectus, may be
resold under this prospectus from time to
time.

Common stock outstanding ........ 5,709,859 shares
prior to offering

Common stock outstanding ........ 6,797,060 shares
after offering if all warrants
exercised

Estimated net proceeds to Bonso . $18,838,369
if all warrants exercised

Use of proceeds ................. We intend to use the net proceeds from this
offering for working capital. See "Use of
Proceeds."

Risk factors .................... Acquisition of shares of our common stock
entails a high degree of risk and exercise
of our warrants also entails immediate
substantial dilution. See "Risk Factors."

Nasdaq symbols .................. Common Shares.......... BNSO
Warrants............... BNSOZ

Shares Being Offered for Resale

Shares offered for resale........ Two Hundred Thousand (200,000) shares of
common stock which may be issued upon
exercise of outstanding warrants, and
655,726 shares of common stock currently
issued and outstanding. These shares may be
offered and sold from time to time by
selling shareholders.

Advisers and Auditors

Legal Advisers................... Schlueter & Associates, P.C.
1050 Seventeenth Street, Suite 1700
Denver, Colorado 80265
U.S.A.
Telephone: (303) 292-3883

Harney Westwood & Riegels
Craigmuir Chambers
P.O. Box 71
Road Town, Tortola
British Virgin Islands
(284) 494-2233

Auditors for Bonso Electronics .. PricewaterhouseCoopers
International Inc. 22nd Floor Prince's Building
Central
Hong Kong
Telephone: (852) 2289-8888
Member of the Hong Kong Society
of Accountants

Auditors for Korona.............. Ernst & Young
Deutsche Allgemeine Treuhand AG
Wirtschaftspruefungsgesellschaft
Leisewitzstrasse 47
30175
Hannover, Germany
(49) 511-340-1531
Member of the Institute for
German Accountants

RISK FACTORS

Investment in the securities offered through this prospectus involves a high
degree of risk. Please carefully consider the following risk factors, along with
the other information contained in this prospectus, before deciding whether to
exercise your warrants.

Political, Legal, Economic and Other Uncertainties of Operations in China and
Hong Kong

We Could Face Increased Currency Risks If China Does Not Maintain the
Stability of the Hong Kong Dollar. The Hong Kong dollar and the United States
dollar have been fixed at approximately 7.80 Hong Kong dollars to $1.00 since
1983. The Chinese government expressed its intention in the Basic Law to
maintain the stability of the Hong Kong currency after the sovereignty of Hong
Kong was transferred to China. If the current exchange rate mechanism is
changed, we face increased currency risks.

We Face Significant Risks If the Chinese Government Changes Its Policies,
Laws, Regulations, Tax Structure, Or Its Current Interpretations of Its Laws,
Rules, and Regulations Relating to Our Operations In China. Our manufacturing
facility is located in China. As a result, our operations and assets are subject
to significant political, economic, legal and other uncertainties. Changes in
policies by the Chinese government resulting in changes in laws or regulations
or the interpretation of laws or regulations, confiscatory taxation,
restrictions on imports and sources of supply, import duties, corruption,
currency revaluation or the expropriation of private enterprise could materially
and adversely affect us. Over the past several years, the Chinese government has
pursued economic reform policies including the encouragement of private economic
activity and greater economic decentralization. If the Chinese government does
not continue to pursue its present policies that encourage foreign investment
and operations in China, or if these policies are either not successful or are
significantly altered, then our business operations in China could be adversely
affected. We could even be subject to the risk of nationalization, which could
result in the total loss of investment in that country. Following the Chinese
government's policy of privatizing many state-owned enterprises, the Chinese
government has attempted to augment its revenues through increased tax
collection. Continued efforts to increase tax revenues could result in increased
taxation expenses being incurred by us. Economic development may be limited as
well by the imposition of austerity measures intended to reduce inflation, the
inadequate development of infrastructure and the potential unavailability of
adequate power and water supplies, transportation and communications. If for any
reason we were required to move our manufacturing operations outside of China,
our profitability would be substantially impaired, our competitiveness and
market position would be materially jeopardized and we might have to discontinue
our operations.

We Face Risks by Operating In China, Because the Chinese Legal System
Relating to Foreign Investment and Foreign Operations Like Bonso's Is New And
Evolving And The Application of Chinese Laws Is Uncertain. The legal system of
China relating to foreign investments is both new and continually evolving, and
currently there can be no certainty as to the application of its laws and
regulations in particular instances. The Chinese legal system is a civil law
system based on written statutes. Unlike common law systems, it is a system in
which decided legal cases have little precedential value. In 1979, the Chinese
government began to promulgate a comprehensive system of laws and regulations

governing economic matters in general. Legislation over the past 20 years has
significantly enhanced the protections afforded to various forms of foreign
investment in Mainland China. Enforcement of existing laws or agreements may be
sporadic and implementation and interpretation of laws inconsistent. The Chinese
judiciary is relatively inexperienced in enforcing the laws that exist, leading
to a higher than usual degree of uncertainty as to the outcome of any
litigation. Even where adequate law exists in China, it may not be possible to
obtain swift and equitable enforcement of that law.

We Could Be Adversely Affected If China Changes Its Economic Policies In
the Shenzhen Special Economic Zone Where We Operate. As part of its economic
reform, China has designated certain areas, including Shenzhen where our
manufacturing complex is located, as Special Economic Zones. Foreign enterprises
in these areas benefit from greater economic autonomy and more favorable tax
treatment than enterprises in other parts of China. Changes in the policies or
laws governing Special Economic Zones could have a material adverse effect on
us. Moreover, economic reforms and growth in China have been more successful in
certain provinces than others, and the continuation or increase of these
disparities could affect the political or social stability of China.

If China Becomes Involved In Trade Controversies with the United States,
the United States May Impose Higher Duties or Taxes On Goods Manufactured In
China And Imported Into the United States, Which Would Result in the Prices of
Our Products In the United States Increasing. Further, Such Controversies Could
Have A Negative Impact Upon the Market Prices Of Our Stock And Warrants. In
2000, China concluded bilateral negotiations of the major terms for its entry
into the World Trade Organization ("WTO") with a number of countries, including
the United States, and the European Union, and congress voted to make China's
trade status as a most favored nation ("MFN") permanent when it formally entered
the WTO. China entered the WTO in December 2001. In the past, various interest
groups have urged that the United States not renew MFN for China. Controversies
between the United States and China may arise in the future that threaten the
status quo involving trade between the United States and China. These
controversies could adversely affect our business by, among other things,
causing our products in the United States to become more expensive, which could
result in a reduction in the demand for our products by customers in the United
States. Trade friction between the United States and China, whether or not
actually affecting our business, could also adversely affect the prevailing
market price of our common shares and warrants.

If Our Sole Factory Were Destroyed Or Significantly Damaged As A Result of
Fire Or Some Other Natural Disaster, We Would Be Adversely Affected. All of our
products are currently manufactured at our manufacturing facility located in
Shenzhen, China. Fire fighting and disaster relief or assistance in China may
not be as developed as in Western countries. We currently maintain property
damage insurance aggregating approximately $23,000,000 covering our stock in
trade, goods and merchandise, furniture and equipment and buildings. We do not
maintain business interruption insurance. Investors are cautioned that material
damage to, or the loss of, our factory due to fire, severe weather, flood or
other act of God or cause, even if insured against, could have a material
adverse effect on our financial condition, results of operations, business and
prospects.

Risk Factors Relating to Our Business

We Depend Upon Our Largest Customers For A Significant Portion Of Our Sales
Revenue, And We Cannot Be Certain That Sales To These Customers Will Continue.
If Sales To These Customers Do Not Continue, Then Our Sales Will Decline And Our
Business Will Be Negatively Impacted. Three major customers accounted for
approximately 34% of our sales in the fiscal year ended March 31, 2000, and four
major customers accounted for approximately 44% of our sales in the fiscal year
ended March 31, 2001, and a major customer accounted for approximately 22% of
our sales in the fiscal year ended March 31, 2002. We do not enter into
long-term contracts with our customers, but manufacture based upon purchase
orders and therefore cannot be certain that sales to these customers will
continue. The loss of any of these major customers could have a material
negative impact on our sales revenue and our business.

Our Exclusive Arrangements With Some Customers May Restrict Our Ability To
Pursue Market Opportunities And May Result in Loss of Sales. We have granted
some of our customers exclusivity on specific products, which precludes us from
selling those products to other potential customers. We expect that in some
cases our existing customers and new customers may require us to give them
exclusivity on certain products, which may force us to forego opportunities to
supply these products to other prospective customers. In addition, if we enter
into exclusive relationships with customers who are unsuccessful, our net sales
will be negatively affected.

If We Are Not Able To Increase Our Manufacturing Capacity, We May Not Be
Able To Meet The Demands Of Our Customers, Which Could Result In The Loss Of
Sales And Our Customer Base. Our long-term competitive position will depend to a
significant extent on our ability to increase our manufacturing capacity. We
will need to invest in additional plant and equipment to expand capacity in our
current facilities or obtain additional capacity through acquisitions. Either of
these alternatives will require additional capital, which we may not be able to
obtain on favorable terms, or at all. Further, we may not be able to acquire
sufficient capacity or successfully integrate and manage additional facilities.
The failure to obtain capacity when needed or to successfully integrate and
manage additional manufacturing facilities could adversely impact our
relationships with our customers and materially harm our business and results of
operations.

Defects In Our Products Could Impair Our Ability To Sell Our Products Or
Could Result In Litigation And Other Significant Costs. Detection of any
significant defects in our products may result in, among other things, delay in
time-to-market, loss of market acceptance and sales of our products, diversion
of development resources, injury to our reputation, or increased warranty costs.
Because our products are complex, they may contain defects that cannot be
detected prior to shipment. These defects could harm our reputation, which could
result in significant costs to us and could impair our ability to sell our
products. The costs we may incur in correcting any product defects may be
substantial and could decrease our profit margins.

Since certain of our products are used in applications that are integral to
our customers' businesses, errors, defects, or other performance problems could
result in financial or other damages to our customers. Product liability
litigation, even if it were unsuccessful, would be time consuming and costly to
defend. Our product liability insurance may not be adequate to cover claims.

Our Sales Through Retail Merchants Result In Seasonality And Susceptibility
To A Downturn In The Retail Economy And Sales Variances Resulting From Retail
Promotional Programs. With the acquisition of Korona, a significant portion of
our net sales involve sales of bathroom and kitchen scales to retail merchants
in Europe such as the Metro Group, Media-Saturn, Frigicoll, Quelle, and
Rewe-Markte. In addition, many of our other customers sell to retail merchants.
Accordingly, these portions of our customer base are susceptible to a downturn
in the retail economy. Sales of certain of our scale and telecommunications
products are seasonal, with sales of our scale products declining in the summer
months and sales of our telecommunications products increasing during the
summer. A significant portion of our sales in Europe are attributable to the
promotional programs of our retail industry customers. These promotional
programs result in significant orders by customers who do not carry our products
on a regular basis. Promotional programs often involve special pricing terms or
require us to spend funds to have our products promoted. We cannot assure you
that promotional purchases by our retail industry customers will be repeated
regularly, or at all. Our promotional sales could cause our quarterly results to
vary significantly.

Customer Order Estimates May Not Be Indicative Of Actual Future Sales. Some
of our customers have provided us with forecasts of their requirements for our
products over a period of time. We make many management decisions based on these
customer estimates, including purchasing materials, hiring personnel, and other
matters that may increase our production capacity and costs. If a customer
reduces its orders from prior estimates after we have increased our production
capabilities and costs, this reduction may decrease our net sales and we may not
be able to reduce our costs to account for this reduction in customer orders.
Many customers do not provide us with forecasts of their requirements for our
products. If those customers place significant orders, we may not be able to
increase our production quickly enough to fulfill the customers' orders. The
inability to fulfill customer orders could damage our relationships with
customers and reduce our net sales.

Pressure By Our Customers To Reduce Prices And Agree To Long-Term Supply
Arrangements May Cause Our Net Sales Or Profit Margins To Decline. Our customers
are under pressure to reduce prices of their products. Therefore, we expect to
experience pressure from our customers to reduce the prices of our products. Our
customers frequently negotiate supply arrangements with us well in advance of
delivery dates, thereby requiring us to commit to price reductions before we can
determine if we can achieve the assumed cost reductions. We believe we must
reduce our manufacturing costs and obtain higher volume orders to offset
declining average sales prices. If we are unable to offset declining average
sales prices, our gross profit margins will decline.

We Depend Upon Our Key Personnel, And The Loss Of Any Key Personnel, Or Our
Failure to Attract And Retain Key Personnel, Could Adversely Affect Our Future
Performance, Including Product Development, Strategic Plans, Marketing And Other
Objectives. The loss or failure to attract and retain key personnel could
significantly impede our performance, including product development, strategic
plans, marketing and other objectives. Our success depends to a substantial
extent not only on the ability and experience of our senior management, but
particularly upon Anthony So our President, Secretary, Treasurer and Chairman of
the Board. We do not have an employment contract with Mr. So, and we have not
obtained key man life insurance on Mr. So. To the extent that the services of
Mr. So would be unavailable to us, we would be required to obtain another person
to perform the duties that he otherwise would perform. It is possible that we
will not be able to employ another qualified person, with the appropriate
background and expertise, to replace Mr. So on terms suitable to us.

We Face The Pressures Of A Competitive Industry. Our business is in an
industry that is highly competitive, and many of our competitors, both local and
international, have substantially greater technical, financial and marketing
resources than we have. We compete with scale manufacturers in the Far East, the
United States, and Europe. We believe that our principal competitor in the scale
market is Measurement Specialties, Inc.; however, as a contract and OEM and ODM,
we compete with all companies engaged in the contract and original equipment
manufacturing business. Further, subsequent to the acquisition of Korona, we
compete with distributors of scales in Europe. Our principal competitors in the
distribution of scales in Europe are Soehnle and EKS. Both the scale and the
telecommunications markets are highly competitive and we face pressures on
pricing and lower margins as evidenced by the decline in margins that we have
experienced with our telecommunications products. Lower margins may effect our
ability to cover our costs which could have a material negative impact on our
operations and our business.

We Are Controlled By Our Management, Whose Interest May Differ From Those
Of The Other Shareholders. At the present time, Mr. Anthony So, our founder and
president, beneficially owns approximately 33.31% of the outstanding shares of
common stock, including shares underlying his outstanding options, or 28.48%
without including his outstanding options. Due to his stock ownership, Mr. So
may be in a position to elect the board of directors and, therefore, to control
our business and affairs including certain significant corporate actions such as
acquisitions, the sale or purchase of assets and the issuance and sale of our
securities. Mr. So may be able to prevent or cause a change in control. Further,
we may also be prevented from entering into transactions that could be
beneficial to us without Mr. So's consent. The interest of our largest
shareholder may differ from the interests of other shareholders.

Our Operating Results Are Subject to Wide Fluctuations. Our quarterly and
annual operating results are affected by a wide variety of factors that could
materially and adversely affect net sales, gross profit and profitability. This
could result from any one or a combination of factors, many of which are beyond
our control. Results of operations in any period should not be considered
indicative of results to be expected in any future period, and fluctuations in
operating results may also result in fluctuations in the market price of our
common stock.

Certain Legal Consequences of Foreign Incorporation and Operations

Judgments Against Us and Our Management May Be Difficult to Obtain or
Enforce. We are a holding corporation organized as an International Business
Company under the laws of the British Virgin Islands, our principal operating
subsidiary is organized under the laws of Hong Kong, where our principal
executive offices are also located, and our second operating subsidiary is
located in Germany. Outside the United States, it may be difficult for investors
to enforce judgments against us obtained in the United States in actions brought
against us, including actions predicated upon civil liability provisions of
federal securities laws. In addition, most of our officers and directors reside
outside the United States and the assets of these persons and of the company are
located outside of the United States. As a result, it may not be possible for
investors to effect service of process within the United States upon these
persons, or to enforce against the company or these persons judgments predicated
upon the liability provisions of United States securities laws. We have been
advised by our Hong Kong counsel and our British Virgin Islands counsel that
there is substantial doubt as to the enforceability against us or any of our
directors or officers located outside the United States in original actions or
in actions for enforcement of judgments of United States courts of liabilities
predicated solely on the civil liability provisions of federal securities laws.

Because We Are Incorporated in the British Virgin Islands, Our Shareholders
May Not Have the Same Protections as Shareholders of U.S. Corporations. We are
organized under the laws of the British Virgin Islands. Principles of law
relating to matters affecting the validity of corporate procedures, the
fiduciary duties of our management, directors and controlling shareholders and
the rights of our shareholders differ from, and may not be as protective of
shareholders as, those that would apply if we were incorporated in a
jurisdiction within the United States. Our directors have the power to take
certain actions without shareholder approval, including an amendment of our
Memorandum or Articles of Association and certain fundamental corporate
transactions, including reorganizations, certain mergers or consolidations and
the sale or transfer of assets. In addition, there is doubt that the courts of
the British Virgin Islands would enforce liabilities predicated upon United
States securities laws.

Our Shareholders Do Not Have the Same Protections or Information Generally
Available to Shareholders of U.S. Corporations Because the Reporting
Requirements for Foreign Private Issuers Are More Limited Than Those Applicable
to Public Corporations Organized In the United States. We are a foreign private
issuer within the meaning of rules promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). As a result, and though our common
stock is registered under Section 12(g) of the Exchange Act, we are not subject
to certain provisions of the Exchange Act applicable to United States public
companies including: the rules under the Exchange Act requiring the filing with
the Securities and Exchange Commission of quarterly reports on Form 10-Q or
current reports on Form 8-K, the sections of the Exchange Act regulating the
solicitation of proxies, consents or authorizations in respect to a security
registered under the Exchange Act and the sections of the Exchange Act requiring
insiders to file public reports of their stock ownership and trading activities
and establishing insider liability for profits realized from any "short-swing"
trading transaction (i.e., a purchase and sale, or sale and purchase, of the
issuer's equity securities within six months or less). Because we are not
subject to certain provisions of the Exchange Act as a foreign private issuer,
our shareholders are not afforded the same protections or information generally
available to investors in public companies organized in the United States.

Dispute With Augusta Technologie AG ("Augusta") Regarding Repurchase
Obligation May Result In Obligation For The Company To Redeem Certain Shares.
Effective May 1, 2001, we acquired Korona from Augusta. Part of the purchase
price was paid to Augusta by the issue of 180,726 shares of our restricted
common stock based on an agreed-upon price of $8.00 per share pursuant to the
Stock Purchase Agreement (the "Agreement") with Augusta. For accounting
purposes, the issue of the shares was originally recorded at the value of $5.00
per share, based on the average price per share for a total of 5 days before and
after the completion date of the acquisition. Under the terms of the Agreement
we had an obligation to register the common stock with the SEC. The Agreement
gave Augusta the right to have us redeem the common stock if the registration of
the stock had not been declared effective by the SEC on or before January 31,
2002. We filed a registration statement to register the common stock held by
Augusta which was declared effective by the SEC on March 7, 2002. In March 2002,
Augusta exercised the repurchase obligation requesting to return the 180,726
shares of common stock to us in exchange for a promissory note of $1,445,808,
repayable in nine monthly payments which would have commenced April 1, 2002 and
bearing interest at a rate of 8% per annum which would result in an interest
cost of approximately $50,000 for the whole period of the promissory note. We
are currently in negotiations with Augusta regarding the redemption. Although we
are optimistic that we will be successful in these negotiations, there can be no
assurance that this will occur. Further, if this matter goes to arbitration,
there can be no assurance that we will succeed in any such proceeding. If the
issue is arbitrated, there will be legal fees, travel expenses and other costs
related to the arbitration that will be incurred by us in defending this matter.
If we do not succeed we will be obligated to repurchase the stock and repay the
promissory note, plus accrued interest, over a nine-month period of time.

Risks Relating to this Offering

You May Not be Able to Sell Your Shares of Common Stock for What You Paid
for Them. The exercise price of the warrants has been arbitrarily determined by
us and does not necessarily bear any relationship to our assets, operating
results, book value or shareholders' equity or any other statistical criterion
of value. The exercise price of the warrants should not under any circumstances
be regarded as an indication of any future market price of our common stock.

You May Not Be Able to Exercise Your Warrants If We Do Not Have An
Effective Registration Statement Or Have Not Complied With Applicable Laws.
Exercise of our outstanding warrants is subject to our either maintaining the
effectiveness of our registration statement, or filing an effective registration
statement with the SEC and complying with the appropriate state securities laws.
If we do not have an effective registration statement or we have not complied
with all appropriate state securities laws, you will not be able to exercise
your warrants to purchase a share of common stock.

Future Sales of Restricted Shares and Shares Underlying Outstanding
Publicly Traded Warrants Into the Public Market Could Depress the Market Price
of the Common Stock. Approximately 3,276,077outstanding shares of our common
stock are restricted securities as that term is defined in Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"). Although the
Securities Act and Rule 144 place certain prohibitions on the sale of restricted
securities, they may be sold into the public market under certain conditions.
Further, we have outstanding options and restricted warrants to purchase 714,000

shares of common stock and have reserved an additional 730,300 shares for
issuance upon exercise of stock options which may be granted in the future under
our existing stock option plans, in addition to 1,087,201 shares issuable upon
exercise of our publicly traded warrants. It is possible that, when permitted,
the sale to the public of the restricted shares or the shares acquired upon
exercise of the options or warrants, could have a depressing effect on the price
of the common stock. Further, future sales of these shares and the exercise of
these options and warrants could adversely affect our ability to raise capital
in the future.

Because the Market Price of Our Common Stock Fluctuates, You May Not be
Able to Sell Your Shares of Common Stock for What You Paid for Them. The markets
for equity securities have been volatile and the price of our common stock has
been and could continue to be subject to wide fluctuations in response to
quarter to quarter variations in operating results, news announcements, trading
volume, sales of common stock by officers, directors and principal shareholders,
general market trends and other factors. Therefore, you may not be able to sell
your stock for what you paid for it.

Shareholders Who Do Not Exercise Their Warrants Would Be Diluted By the
Exercise of Other Warrants. Our current shareholders who hold dividend warrants
will have their percentage of ownership in the company diluted if they choose to
let their warrants expire and other warrant holders choose to exercise their
warrants.

We Might Decide to Redeem the Warrants And You Could Be Adversely Affected.
The warrants are redeemable by us at any time at $0.01 per warrant upon 30 days
notice if the public trading price of the common stock equals or exceeds 110% of
the then-current exercise price of the warrants for 20 trading days within the
preceding 30 trading days. If we call the warrants for redemption, the holders
of the warrants must either (i) exercise the warrants and pay the exercise price
at a time when it may be disadvantageous for them to do so; (ii) sell the
warrants at the then current market price when they might otherwise wish to hold
the warrants; or (iii) accept the nominal redemption price, which is likely to
be substantially less than the market value of the warrants. If we redeem the
Warrants and do not have an effective registration statement or have not
complied with all appropriate state securities laws, you will not be able to
exercise your warrants and will have to accept the $0.01 per warrant redemption
price or sell the Warrants (if a market exists).

WHERE YOU CAN FIND MORE INFORMATION

We file annual and special reports and other information with the
Securities and Exchange Commission. You may read and copy any document we file
at the Commission's Public Reference Room 450 Fifth Street, N.W., Washington,
D.C. You may obtain information on the operation of the Public Reference Room by
calling the Commission at 1-800-SEC-0330. You can also obtain copies of our
Commission filings by going to the Commission's website at http://www.sec.gov.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The Commission requires us to both "incorporate by reference" certain
information we file with them, which means that we can disclose important
information to you by referring you to those documents, and to deliver with this
prospectus copies of certain documents previously filed with the Commission on
our behalf. The information incorporated by reference is considered to be part
of this prospectus. We incorporate by reference our annual report on Form 20-F,
for the fiscal year ended March 31, 2002 filed with the Commission on July 3,
2002. This document is also delivered with this prospectus. This document is
part of a registration statement we filed with the Commission.

We will provide, without charge, to each person, including any beneficial
owner, to whom this prospectus is delivered, upon written or oral request, a
copy of any document incorporated by reference into this prospectus but not
delivered with this prospectus. You should direct your request for these filings
to Henry F. Schlueter, Schlueter & Associates, P.C., 1050 Seventeenth Street,
Suite 1700, Denver, Colorado 80265; (303) 292-3883. You may view and copy any
materials that we file with the Commission at the Commission's Public Reference
Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Also you may obtain
information on the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330. You may also obtain these filings electronically
at the Commission's worldwide website at http://www.sec.gov/edgarhp/htm.

You should rely only on the information incorporated by reference,
contained in the documents delivered with this prospectus or provided in this
prospectus or any supplement to this prospectus. We have not authorized anyone
else to provide you with different information. We are not making an offer of
these securities in any state where the offer is not permitted.

FORWARD-LOOKING STATEMENTS

Any statements in this prospectus which discuss our expectations,
intentions and strategies for the future are "forward-looking statements" within
the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. Forward-looking statements may be identified by such words or phrase as
"anticipate," "believe," "estimate," "expect," "intend," "project," "will likely
result," "are expected to," "will continue," "is anticipated," "estimated,"
"projected" or similar expressions. These statements are based on information
available to us on the date of this prospectus and we assume no obligation to
update them. These forward-looking statements reflect our current views with
respect to future events and are not a guarantee of future performance. Several
factors could cause future results to differ materially from those expressed in
any forward-looking statements in this prospectus including, but not limited to:

o Timely development, market acceptance and warranty performance of new
products

o Impact of competitive products and pricing

o Continuity of trends

o Customers' financial condition

o Continuity of sales to major customers

o Interruptions of suppliers' operations affecting availability of component
materials at reasonable prices

o Potential emergence of rival technologies

o Success in identifying, financing and integrating acquisition candidates

o Fluctuations in foreign currency exchange rates

o Uncertainties of doing business in China and Hong Kong

o Such additional risks and uncertainties as are detailed from time to time
in the Company's reports and filings with the Commission.

Assumptions relating to these factors involve judgments with respect to,
among other things, future economic, competitive and market conditions and
future business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond our control. Although we believe that
the assumptions underlying the forward-looking statements are reasonable, any of
the assumptions could prove inaccurate and, therefore, there can be no assurance
that the results contemplated in forward-looking information will be realized.
We intend that the forward-looking statements contained in this prospectus be
subject to the safe harbors created by Section 27A of the Securities Act and
Section 21E of the Exchange Act.

USE OF PROCEEDS

If all of the 2,174,403 warrants are exercised, of which there can be no
assurance, the maximum estimated net proceeds to us will be approximately
$18,838,369 after deduction of fees and the expenses of this offering.

We intend to use the net proceeds for working capital. Working capital may
be used for further expansion of our operations, on-going operations, general
and administrative expenses or any other use which the board of directors deems
appropriate.

Pending utilization, we intend to make temporary investments of the
proceeds in bank certificates of deposit, interest-bearing savings and checking
accounts, prime commercial paper or government obligations. An investment in
interest-bearing assets, if continued for an extensive period of time within the
definitions of the Investment Company Act of 1940, as amended, could subject us
to classification as an "investment company" under the Investment Company Act of
1940 and to registration and reporting requirements thereunder, although we do
not intend this to be a result.

SELECTED UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED
STATEMENT OF INCOME

The following unaudited pro forma condensed consolidated statements of
income reflect the acquisition of KORONA Haushaltswaren GmbH & Co. KG ("Korona")
by Bonso Electronics International Inc. ("Bonso") as if the acquisition had
occurred on April 1, 2001, for the year ended March 31, 2002. The unaudited
results of operations of Korona for the twelve month period ended March 31,
2002, have been included in the pro forma condensed consolidated statement of
income on a U.S. GAAP basis for the year ended March 31, 2002. As the
acquisition was effective May 1, 2001, the unaudited results of operations of
Korona for the month of April 2001 have been included in the pro forma condensed
consolidated statement of income on a U.S. GAAP basis for the year ended March
31, 2002. The financial information of Korona is translated into United States
dollars from Deutsche Marks at the average exchange rate for the month ended
April 30, 2001.

The acquisition was accounted for using the purchase method of accounting.
The pro forma condensed consolidated statement of income includes the effect of
the excess of the purchase price over the estimated fair values of net assets
acquired of approximately $3.2 million. Of this amount $3.0 million has been
allocated to the brand name of Korona and is being amortized over a period of 15
years, and approximately $204,000 has been recorded as goodwill.

The pro forma condensed consolidated statement of income may not
necessarily reflect the results of operations had the acquisition actually
occurred as of the dates indicated.

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF INCOME

Fiscal year ended March 31, 2002 (in thousands, except share data)

Pro Forma
Bonso (5) Korona Adjustment Consolidated
--------- ------ ---------- ------------

Net sales 53,303 948 54,251
Cost of sales (40,192) (706) 103(1) (40,795)
Gross margin 13,111 242 103 13,456
Operating expenses (10,194) (235) (17)(2) (10,446)
51(3) 51
Income from operations 2,917 7 137 3,061
Other income (expense), net (921) 66 -- (855)
Income before income taxes 1,996 73 137 2,206
Income tax expenses (190) -- (190)
Net income 1,806 73 137 2,016

Earnings per share
Basic $ 0.32 $ 0.36
Diluted $ 0.32 $ 0.35

Shares used in per share calculation:
Basic 5,586,920 14,854(4) 5,601,774
Diluted 5,652,852 14,854(4) 5,667,706

(1) Represents elimination of unrealized profit on inventories held by Korona
on April 30, 2001, which were acquired from Bonso.

(2) Reflects the amortization of brand name of approximately $3 million on a
straight line basis over a period of 15 years.

(3) Reflects the (i) elimination of the effects of amortizating the goodwill
generated from the acquisition by Korona's former shareholder in 1996 and
(ii) the effect of the difference in depreciation expense upon the
revaluation of certain long-term assets, primarily a building, acquired
upon the purchase of Korona by Bonso.

(4) Reflects additional shares of our common stock issued as a partial
consideration for the acquisition.

(5) Includes operations of Korona subsequent to the acquisition (from May 2001
to March 2002).

PURCHASE PRICE ALLOCATION

Under purchase accounting, the total purchase price had been allocated to
the acquired assets and liabilities of Korona based on management's best
estimate of the fair value of assets acquired and the liabilities assumed as of
May 1, 2001. Due to legal restrictions on the timing of the transfer of the
title of certain assets, the net assets purchased included a warehouse and an
investment in a wholly-owned subsidiary of Korona. As required under the terms
of the sales and purchase agreement, in June and July 2001, respectively,
Augusta repurchased the warehouse and investment from Korona at approximate net
book value for cash.

Three million dollars of the excess of the purchase price over the fair
value of net assets acquired has been allocated to the brand name of Korona,
with approximately $204,000 recorded as goodwill. The brand name is being
amortized on a straight-line basis over a 15-year period, the estimated life of
the asset. The expected useful life of the brand name is reviewed at each
balance sheet date and, where it differs significantly from previous estimates,
the amortization period is changed accordingly. Where an indication of
impairment exists, such as the down turn of economic inflow from the brand name,
changes in business plan and so on, the carrying amount of the brand name is
assessed and written down to its recoverable amounts. The measurement of the
fair value of brand name is subject to management's assumptions regarding future
estimated cash flows, discount rates, etc. Changes in these assumptions could
significantly affect the recording of an impairment charge related to this
asset.

The total purchase price is approximately $4.18 million of which $2.73
million was paid in cash and $1.45 million in our common stock. We issued
180,726 shares of our restricted common stock based on an agreed-upon price of
$8.00 per share pursuant to the Stock Purchase Agreement (the "Agreement") with
Augusta. For accounting purposes, the issue of the shares was originally
recorded at the value of $5.00 per share, based on the average price per share
for a total of 5 days before and after the completion date of the acquisition.
Under the terms of the Agreement, we had an obligation to register the common
stock with the SEC. The Agreement gave Augusta the right to have us redeem the
common stock if the registration of the stock had not been declared effective by
the SEC on or before January 31, 2002. We filed a registration statement to
register the common stock held by Augusta which was declared effective by the
SEC on March 7, 2002. In March, 2002, Augusta exercised the repurchase
obligation requesting to return the 180,726 shares of common stock to us in
exchange for a promissory note of $1,445,808, repayable in nine monthly payments
which would have commenced April 1, 2002 and bearing interest at a rate of 8%
which would have resulted in interest costs of approximately $50,000 for the
whole period of the promissory note. We are currently in negotiations with
Augusta regarding the redemption. If we are not successful in resolving the
matter favorably through negotiations or in an arbitration, we may have to pay
Augusta $1,445,808 plus interest and attorneys fees. While this would be a
significant cash expenditure for us, we do not believe making that payment to
Augusta would have a material adverse effect upon our results of operations.

As we do not have sole control over the occurrence of events that gave rise
to Augusta's right to return the shares, these shares have been classified
outside of permanent equity as "redeemable common stock" Since the redemption

option was exercised by Augusta prior to March 31, 2002, we have adjusted the
carrying amount of the redeemable common stock to its full redemption amount as
of March 31, 2002 of $1,445,808. The adjustment of approximately $542,000 to
accrete to the value of the promissory note of $1,445,808 was treated as an
adjustment to the original purchase price and resulted in the recognition of
goodwill of approximately $204,000. Any final amendment to the redemption amount
resulting from the current negotiations with Augusta will result in a subsequent
adjustment to this goodwill amount.

The allocation of the purchase price is as follows:

Cash Consideration .......................... $ 2,730,000
Common stock Consideration .................. 1,445,808
Less: Fair value of net assets acquired .... (1,294,512)
Less: Fair value of the brand name ......... (3,000,000)
Less: Cash received for the warehouse
and investment ....................... (1,176,975)
Plus: Book value of warehouse and investment 1,176,975
Plus: Transaction and closing costs ........ 322,921
-----------
Goodwill .................................... $ 204,217

In July 2001, the FASB issued Statement of Financial Account Standards No.
142, "Goodwill and Other Intangible Assets" ("SFAS 142"), which is effective for
fiscal years beginning after December 15, 2001. SFAS 142 requires, among other
things, the discontinuance of goodwill amortization. In addition, the standard
includes provisions for the reclassification of certain existing recognized
intangibles as goodwill, reassessment of the useful lives of existing recognized
intangibles, reclassification of certain intangibles out of previously reported
goodwill and the identification of reporting units for the purpose of assessing
any potential future impairments of goodwill. SFAS 142 also requires us to
identify any intangible assets that have indefinite lives and to complete a
transitional impairment test on such assets in the first interim period of the
fiscal year of adoption. Effective for the fiscal year ended March 31, 2003, we
will not amortize the goodwill related to this purchase and will assess it for
impairment on a regular basis.

CAPITALIZATION AND INDEBTEDNESS

The following table sets forth our capitalization as of March 31, 2002.
Adjustments have not been made to give effect to the exercise of the warrants,
because the current trading price of the Common Stock is so far below the
exercise prices of the warrants that exercise is unlikely. In addition, there
have not been any major subsequent events since March 31, 2002, and accordingly
no adjustments have been included in the capitalization set forth below. This
table should be read in conjunction with the more detailed information and
financial statements included in our annual report on Form 20-F for the fiscal
year ended March 31, 2002, which has been incorporated by reference into this
prospectus.

March 31, 2002
(Audited)
-----------------------------------------------------------------------
Long-term debt and capital lease obligations, $317,009
net of current maturities (1), (2)
-----------------------------------------------------------------------
Redeemable common stock, par value $0.003; 1,445,808
180,726 shares issued and outstanding (2)
-----------------------------------------------------------------------
Shareholders' equity: 0
Preferred stock par value $0.01 per share
10,000,000 shares authorized; no shares
issued and outstanding
-----------------------------------------------------------------------
Common stock, $0.003 par value; 23,333,334 16,208
shares authorized; 5,404,133 shares
issued and outstanding
-----------------------------------------------------------------------
Additional paid-in capital 21,152,502
-----------------------------------------------------------------------
Deferred consultancy fee (381,420)
-----------------------------------------------------------------------
Retained earnings 8,176,958
-----------------------------------------------------------------------
Accumulated other comprehensive income 235,972
-----------------------------------------------------------------------
Common stock held in treasury, at cost 0
-----------------------------------------------------------------------
Total long term liabilities, redeemable $29,200,220
common stock and shareholders' equity
-----------------------------------------------------------------------

(1) We have banking facilities through our wholly owned Hong Kong based
operating company-Bonso Electronics Ltd. ("BEL"), and our wholly-owned
subsidiary KORONA Haushaltswaren GmbH & Co. KG ("Korona"). The Company's
banking facilities are secured by certain of our leasehold properties with
a net book value of $3,942,336, bank guarantees of $5,129,908, and
restricted cash deposits in the approximate amount of $3,972,542 at March
31, 2002, respectively. The Company's banking facilities are guaranteed by
Bonso Electronics International Inc. None of the Company's banking
facilities or outstanding indebtedness is guaranteed by any of our officers
or directors.

(2) Since Augusta exercised the redemption option prior to March 31, 2002, we
have adjusted the carrying amount of the redeemable common stock to its
full redemption amount as of March 31, 2002 of $1,445,808. The adjustment
of approximately $542,000 to accrete to the value of the promissory note of
$1,445,808 was treated as an adjustment to the original purchase price and
resulted in the recognition of goodwill of approximately $204,000. Any
final amendment to the redemption amount resulting from the current
negotiations with Augusta will result in a subsequent adjustment to this
goodwill amount. If required to redeem the stock, we anticipate using
internally generated funds for the redemption. Further, although this would
be a significant cash expenditure for us, we do not believe making that
this would have a material adverse effect upon our results of operations.

THE OFFER AND LISTING

Market and Price Range of Common Stock

Our common stock is traded only in the United States over-the-counter
market. It is quoted on the Nasdaq National Market System ("NASDAQ") under the
trading symbol "BNSO." The following table sets forth, for the periods
indicated, the range of high and low closing sales prices per share reported by
NASDAQ. The quotations represent prices between dealers and do not include
retail markup markdown or commissions and may not necessarily represent actual
transactions.

The following table sets forth the high and low closing sale prices as
reported by NASDAQ for each of the last five years:

Period High Low
------ ---- ---

April 1, 1997 to March 31, 1998 $10.125 $1.6875
April 1, 1998 to March 31, 1999 $11.375 $3.5625
April 1, 1999 to March 31, 2000 $19.875 $5.75
April 1, 2000 to March 31, 2001 $17.5625 $6.00
April 1, 2001 to March 31, 2002 $7.625 $2.38

Last Two Fiscal Years and Current Fiscal Year
---------------------------------------------
April 1, 2000 to June 30, 2000 $17.5625 $12.125
July 1, 2000 to September 30, 2000 $12.50 $7.9375
October 1, 2000 to December 31, 2000 $11.5625 $6.375
January 1, 2001 to March 31, 2001 $12.875 $6.00
April 1, 2001 to June 30, 2001 $7.625 $3.64
July 1, 2001 to September 30, 2001 $4.85 $2.38
October 1, 2001 to December 31, 2001 $3.42 $2.45
January 1, 2002 to March 31, 2002 $3.15 $2.47
April 1, 2002 to June 30, 2002 $3.45 $2.52

Most Recent Seven Months
------------------------
June 2002 $3.40 $2.74
May 2002 $3.22 $2.61
April 2002 $3.45 $2.52
March 2002 $3.00 $2.47
February 2002 $2.98 $2.47
January 2002 $3.15 $2.49
December 2001 $3.19 $2.86

Selling Securityholders

The following table sets forth

o the number of shares of our common stock owned of record and
beneficially by the selling securityholders as of the date of this
prospectus,

o the number of shares of our common stock that are to be offered and
sold by the selling securityholders from time to time under this
prospectus, assuming exercise of all of the warrants to be issued to
selling securityholders,

o the number of shares of our common stock to be owned by the selling
securityholders after the offering, assuming the sale of all 855,726
of the shares of our common stock by the selling securityholders and

o the percent of our outstanding shares to be owned by the selling
securityholders after the offering, assuming that all 2,174,403
warrants are exercised.

Shares Beneficially Shares Beneficially
Selling Owned Shares to be Owned % Owned
Securityholder Prior to Offering Offered After Offering After Offering
-------------- ----------------- ------- -------------- --------------

J. Stewart Jackson 583,075 350,000 233,075 4.0%
Profit Concepts, Ltd. 200,000 200,000 0 0.0%
Augusta Technologie AG 180,726 180,726 0 0.0%
Mohan Thadani 125,000 125,000 0 0.0%

J. Stewart Jackson is a member of our board of directors. An aggregate of
100,000 of the shares beneficially owned by Mr. Jackson underlie warrants that
were issued to Mr. Jackson in connection with the warrant dividend, and an
aggregate of 20,000 of the shares beneficially owned by Mr. Jackson underlie
options that were issued to Mr. Jackson pursuant to our 1996 Non-Employee
Directors' Stock Option Plan. All of the shares listed above as owned by Profit
Concepts, Ltd. underlie warrants previously issued to that securityholder.
Profit Concepts originally was issued warrants to acquire 250,000 shares, but
exercised warrants for 50,000 shares and resold those shares. All of the shares
listed above as owned by Augusta Technologie AG are currently outstanding and
were issued as partial consideration for KORONA Haushaltswaren GmbH & Co. KG.
See "Recent Developments--Acquisition of KORONA Haushaltswaren GmbH & Co. KG,"
below. All of the shares listed above as owned by Mohan Thadani are currently
outstanding and were issued as partial consideration for the acquisition of 51%
of Gram Precision Scales, Inc. from Mr. Thadani. See "Recent Developments--Acquisition
of Gram Precision Scales, Inc.," below.

Plan of Distribution

We issued warrants as a dividend to the record holders of our warrants at
the close of trading on January 19, 2000, and to all persons who exercised
warrants between November 22, 1999 and the close of trading on January 19, 2000.
The warrants were distributed in June 2000. The warrants entitle the holders to
purchase up to 1,087,201 shares of common stock at an exercise price of $17.50
per share. The warrants originally expired on December 31, 2001; however, our
board of directors has extended the expiration date until December 31, 2003.

We are offering the shares of common stock underlying the warrants. Those
shares may be offered on a delayed or continuous basis under Rule 415 under the
Securities Act. No underwriter or placement agent will be involved and no
commissions or similar compensation will be paid to any person. You may resell
the warrants and/or shares of common stock from time to time in transactions
(which may include block transactions) on the Nasdaq SmallCap Market or the
Nasdaq National Market, respectively, in negotiated transactions or through
other methods of sale, at market prices prevailing at the time of sale, or at
negotiated prices. You may sell the warrants and/or common stock directly to
purchasers or through broker-dealers that may act as agents or principals. Such
broker-dealers may receive compensation in the form of discount, concessions or
commissions from you and/or the purchasers of the warrants and/or shares of
common stock.

You and any broker-dealers that act as a principal in connection with the
sale of the warrants and/or shares of common stock may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act and any
commissions received by them and any profit on the resale of the warrants and/or
shares of common stock might be deemed to be underwriting discounts and
commissions under the Securities Act. You may agree to indemnify any agent,
dealer or broker-dealer that participates in transactions involving sales of the
warrants and/or shares of common stock against some forms of liability,
including liability arising under the Securities Act. We will not receive any
proceeds from the issuance of the warrant dividend or from the sales of warrants
or shares of common stock by you. Transactions involving the warrants and/or
shares of common stock or even the potential of such sales, may have an adverse
effect on the market price of the warrants and/or our common stock.

We have agreed to pay all expenses incurred in connection with the
registration of the securities we are offering. You will be responsible to pay
any and all commissions, discounts and other payments to broker-dealers incurred
in connection with your sale of the warrants and/or common stock.

In order to comply with certain states' securities laws, if applicable, the
common stock may be sold in those jurisdictions only through registered or
licensed brokers or dealers. In certain states the common stock may not be sold
unless it has been registered or qualified for sale in any of those states, or
unless an exemption from registration or qualification is available and is
obtained.

Expenses of the Issue

The following table sets forth the estimated expenses in connection with
this registration:

SEC Registration Fees ..................... $ 7,085
Nasdaq Application and Entry Fees ......... $ 44,750
Printing Registration Statement, Prospectus
and Related Documents .................. $ 8,500
Accounting Fees and Expenses .............. $ 30,000
Legal Fees ................................ $ 25,000
Legal Expenses ............................ $ 5,000
Transfer/Warrant Agent Fees and Expenses .. $ 1,500
Miscellaneous ............................. $ 8,000
--------

Total ..................................... $129,835

DIRECTORS AND SENIOR MANAGEMENT

Our board of directors and executive officers are listed below:

Name Age Position with Bonso
---- --- -------------------

Anthony So 58 President, Chief Executive Officer,
Secretary, Treasurer, Chief Financial
Officer, Chairman of the Board and Director
Kim Wah Chung 44 Director of Engineering and Research and
Development and Director
Cathy Kit Teng Pang 40 Director of Finance and Director
Woo-Ping Fok 53 Director
J. Stewart Jackson, IV 66 Director
George O'Leary 64 Director
Henry F. Schlueter 51 Director and Assistant Secretary

ANTHONY SO is the founder of Bonso. He is our Chief Executive Officer and
Chief Financial Officer and has been our President, Chairman of the Board of
Directors and Treasurer since inception, and our Secretary since July 1991. Mr.
So received his BSC degree in civil engineering from National Taiwan University
in 1967 and a masters degree in business administration ("MBA") from the Hong
Kong campus of the University of Hull, Hull, England in 1994. Mr. So has been
Chairman of the Hong Kong GO Association since 1986, and also served as Chairman
of the Alumni Association of National Taiwan University for the 1993-1994
academic year. Mr. So has served as a trustee of the Chinese University of Hong
Kong, New Asia College since 1994.

KIM WAH CHUNG has been a director since September 21, 1994. Mr. Chung has
been employed by us since 1981 and currently holds the position of Director of
Engineering and Research and Development. Mr. Chung is responsible for all
research projects and product development. Mr. Chung's entire engineering career
has been spent with Bonso, and he has been involved in all of our major product
developments. Mr. Chung graduated with honors in 1981 from the Chinese
University of Hong Kong with a Bachelor of Science degree in electronics.

CATHY KIT TENG PANG has been a director of Bonso since January 1, 1998. Ms.
Pang was first employed by us as Financial Controller in December 1996 and was
promoted to Director of Finance on April 1, 1998. Ms. Pang was employed as an
auditor in an international audit firm from 1987 to 1991, at which time she
joined a Hong Kong listed company in the field of magnetic industry as Assistant
Financial Controller. From 1994 until she joined us in 1996, she was employed as
Deputy Chief Accountant in a management and property development company in Hong
Kong and China. Ms. Pang has a Bachelor of Business Administration degree from
York University in Toronto, Canada. She is a member of the American Institute of
Certified Public Accountants and of the Hong Kong Society of Accountants.

WOO-PING FOK was elected to our Board of Directors on September 21, 1994.
Mr. Fok and his firm, Norman M.K. Yeung & Co., have served as our Hong Kong
counsel since 1993. Mr. Fok was admitted to the Canadian Bar as a Barrister &
Solicitor in December 1987 and was a partner in the law firm of Woo & Fok, a
Canadian law firm with its head office in Edmonton, Alberta, Canada. In 1991,
Mr. Fok was qualified to practice as a Solicitor of England & Wales, a Solicitor
of Hong Kong and a Barrister & Solicitor of Australian Capital Territory. Mr.
Fok practices law in Hong Kong and is a partner with Wong & Fok. Mr. Fok's major
areas of practice include conveyancing or real property law, corporations and
business law, commercial transactions and international trade with a special
emphasis in China trade matters.

J. STEWART JACKSON IV has been a director since January 10, 2000. From 1962
until its merger with Republic Industries in 1996, Mr. Jackson served in various
management capacities, including president, of Denver Burglar Alarm Co., Inc., a
business founded by his family. In addition, in the mid-1960's, Mr. Jackson
founded Denver Burglar Alarm Products, a separate company which invented,
patented, manufactured, distributed and installed contained ionization smoke
detectors and which was later sold to a conglomerate manufacturer. After the
merger of Denver Burglar Alarm Co., Inc., Mr. Jackson founded Jackson Burglar
Alarm Co., Inc., of which he is currently president. Mr. Jackson served on the
advisory board of directors for Underwriter's Laboratories for burglar and fire
alarm systems for 25 years and has been an officer in the Central Station
Protection Association, which, along with the National Burglar Alarm
Association, was formed by his family in the late 1940's. Mr. Jackson graduated
from the University of Colorado in 1962 with a degree in Business Management and
Engineering.

GEORGE O'LEARY has been a director since January 1997. From November 1994
to the present time, Mr. O'Leary has been President of Pacific Rim Products,
Newport Beach, California, a trading company that provides offshore sourcing
alternatives to U.S. based electronics companies. For eight years prior to 1994,
Mr. O'Leary was President, CEO and a director of Micro General Corporation,
Santa Ana, California, a manufacturer and distributor of mechanical and
electronic scale products. For eight years prior to that, Mr. O'Leary was Vice
President and General Manager of Lanier Business Products, Atlanta, Georgia, a
manufacturer and distributor of office products. Mr. O'Leary has a Bachelor of
Science degree in Electrical Engineering from Northeastern University, Boston,
Massachusetts.

HENRY F. SCHLUETER has been a director since October 2001, and has been our
Assistant Secretary since October 6, 1988. Since 1992, Mr. Schlueter has been
the Managing Director of Schlueter & Associates, P.C., a law firm, practicing in
the areas of securities, mergers and acquisitions, finance and corporate law.
Mr. Schlueter has served as our United States corporate and securities counsel
since 1988. From 1989 to 1991, prior to establishing Schlueter & Associates,
P.C., Mr. Schlueter was a partner in the Denver, Colorado office of Kutak Rock
(formerly Kutak, Rock & Campbell), and from 1984 to 1989, he was a partner in
the Denver office of Nelson & Harding. Mr. Schlueter is a member of the American
Institute of Certified Public Accountants, the Colorado Society of CPA's, the
Colorado and Denver Bar Associations and the Wyoming State Bar.

There are no family relationships between any of our directors and
executive officers.

No arrangement or understanding exists between any such director or officer
and any other persons pursuant to which any director or executive officer was
elected as a director or executive officer. Our directors are elected annually
and serve until their successors take office or until their death, resignation
or removal. The executive officers serve at the pleasure of the Board of
Directors.

DESCRIPTION OF SECURITIES

Common Stock

We are authorized to issue 23,333,334 shares of common stock, $0.003 par
value per share.

Holders of common stock are entitled to one vote for each whole share on
all matters to be voted upon by shareholders, including the election of
directors. Holders of common stock do not have cumulative voting rights in the
election of directors. All shares of common stock are equal to each other with
respect to liquidation and dividend rights. Holders of common stock are entitled
to receive dividends if and when declared by the board of directors out of funds
legally available therefor under British Virgin Islands law. In the event of the
liquidation of the company, all assets available for distribution to the holders
of the common stock are distributable among them according to their respective
holdings. Holders of common stock have no preemptive rights to purchase any
additional, unissued shares of common stock. All of the outstanding shares of
common stock of the company are, and those to be issued pursuant to this
offering will be, fully paid and non-assessable.

Under our Memorandum and Articles of Association and the laws of the
British Virgin Islands, our Memorandum and Articles of Association may be
amended by the board of directors without shareholder approval. This includes
amendments increasing or reducing the authorized capital stock of the company
and increasing or reducing the par value of our shares. The board of directors
may also increase the capital of the company without shareholder approval by
transferring a portion of the company's surplus to capital or reduce the
company's capital by transferring a portion of the company's capital to surplus.
Our ability to amend our Memorandum and Articles of Association without
shareholder approval could have the effect of delaying, deterring or preventing
a change in control of the company without any further action by the
shareholders, including but not limited to a tender offer to purchase the common
stock at a premium over then current market prices.

Under United States law, majority and controlling shareholders generally
have certain fiduciary responsibilities to the minority shareholders.
Shareholder action must be taken in good faith and actions by controlling
shareholders that are obviously unreasonable may be declared null and void. The
British Virgin Islands law protecting the interests of the minority shareholders
may not be as protective in all circumstances as the laws protecting minority
shareholders in United States jurisdictions. While British Virgin Islands law
does permit a shareholder of a British Virgin Islands company to sue its
directors derivatively, i.e., in the name of and for the benefit of the company,
and to sue the company and its directors for his benefit and the benefit of
others similarly situated, the circumstances in which any action may be brought
and the procedures and defenses that may be available with respect to any action
may result in the rights of shareholders of a British Virgin Islands company
being more limited than those rights of shareholders in a United States company.

Preferred Stock

Under our Memorandum and Articles of Association, we are authorized to
issue up to an aggregate of 10,000,000 shares of preferred stock, $.01 par
value, divided into 2,500,000 shares each of class A preferred stock, class B
preferred stock, class C preferred stock and class D preferred stock. Shares may
be issued within each class from time to time by our board of directors in its
sole discretion without the approval of the shareholders with such designations,
powers, preferences, rights, qualifications, limitations and restrictions as
have not been fixed in our Memorandum of Association. As of the date of this
prospectus, no shares of preferred stock have been issued.

Warrants

We have issued 2,174,403 warrants which entitle the holders thereof to
purchase 1,087,201 shares of common stock at an exercise price of $17.50 per
share. We will not issue fractional shares upon exercise of warrants but,
instead, we will pay the warrant holder the current market price of the
fractional share, in cash. The warrants are exercisable until 2:00 p.m. (Pacific
Time) on December 31, 2003. In the event the warrants are not exercised within
such period, all unexercised warrants will expire and be void and of no further
force or effect. We may extend the warrant exercise period or lower the exercise
price of the warrants in our discretion. The warrants will expire, become void
and be of no further force or effect upon conclusion of the applicable exercise
period, or any extension thereof. The warrants will be governed by the terms of
a warrant agreement between U.S. Stock Transfer, Inc., as warrant agent, and us.
In our option, we may redeem the warrants upon 30 days notice, at a redemption
price of $.01 per warrant, if the public trading price for our common stock
equals or exceeds 110% of the then-current exercise price of the warrants for 20
trading days within the preceding 30 trading days. The exercise price and the
number and kind of common shares to be received upon exercise of the warrants
are subject to adjustment on the occurrence of events such as stock splits,
stock dividends or recapitalization. In the event of our liquidation,
dissolution or winding up, the holders of the warrants will not be entitled to
participate in the distribution of our assets. Additionally, holders of the
warrants have no voting, pre-emptive, liquidation or other rights of
shareholders, and no dividends will be declared on the warrants or the shares
underlying the warrants.

The warrants were issued to you as part of a dividend to our warrant
holders and are freely tradable. Prior to this offering, our warrants have been
traded on the Nasdaq SmallCap Market. Continuation of low volume trading may
adversely affect the liquidity of large holdings and may contribute to high
volatility of the price of our warrants. Additionally, we cannot assure you that
a public trading market for the warrants will continue.

Transfer and Warrant Agent

The transfer agent and registrar for the common stock and the warrant agent
for the public warrants is U.S. Stock Transfer Corporation, 1745 Gardena Avenue
#200, Glendale, California 91204.

Reports to Shareholders

We intend to furnish annual reports to shareholders which include audited
financial statements reported on by our independent accountants and quarterly
reports for each of our first three quarters which contain unaudited financial
statements. We will continue to comply with the periodic reporting requirements
imposed on foreign issuers by the Exchange Act. We plan to furnish the same
annual and quarterly reports to holders of our public warrants.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, we will have 6,797,060 shares of common
stock outstanding if all of the dividend warrants are exercised. Of these,
approximately 3,420,983 shares of common stock, other than shares held by our
affiliates, will be freely transferable and tradeable without restriction under
the Securities Act. This includes 987,201 of the 1,087,201 shares to be issued
upon exercise of the warrants. The remaining 3,376,077 shares of common stock
are restricted securities. These shares may only be sold in the public United
States market under an effective registration statement or in accordance with
Rule 144 promulgated under the Securities Act.

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are required to be aggregated) who has beneficially owned his or
her shares for at least one year, including our affiliates, would be entitled to
sell within any three-month period a number of shares equal to the greater of 1%
of the then outstanding shares of our common stock (approximately 67,970 shares
immediately after this offering if all of the warrants are exercised) or the
average weekly trading volume of our common stock during the four calendar weeks
preceding the filing of the required notice of the sale. Sales under Rule 144
also are subject to certain manner of sale restrictions, notice requirements and
the availability of current public information about us. Under Rule 144(k), a
person who is not deemed to have been an affiliate of ours at any time during
the 90 days preceding a sale, and who has beneficially owned the shares proposed
to be sold for at least two years, is entitled to sell the shares without regard
to the requirements described above. Sales of substantial numbers of shares of
common stock pursuant to a registration statement, Rule 144 or otherwise,
whether in the United States or abroad, could adversely affect the market price
of the common stock.

We also have reserved 672,000 shares of common stock for issuance upon
exercise of certain outstanding options, 200,000 selling shareholder shares
reserved for issuance upon exercise of certain restricted warrants and 730,300
shares for issuance upon exercise of stock options which may be granted in the
future under our stock option plans. If the holders of the options exercise the
options, the shares of common stock to be issued will constitute restricted
securities, subject to Rule 144.

RECENT DEVELOPMENTS

Acquisition of Gram Precision Scales, Inc.

Effective as of August 1, 2002, we acquired 51% of the equity of Gram
Precision Scales, Inc. ("Gram") from Mohan Thadani for approximately $ 500,000
(subject to adjustment after completion of an audit) in cash, a promissory note
in the amount of $ 500,000 (subject to adjustment after completion of an audit),
and the issuance of 125,000 shares of our common stock valued at approximately
$300,000. The purchase price was determined through arms-length negotiations
between us and Mr. Thadani, which negotiations took into consideration Gram's
business, financial position, operating history, products, intellectual property
and other factors relating to Gram's business. Gram is primarily engaged in the
distribution and marketing of pocket scales in the United States, Canada, and
Europe. Our acquisition of Gram is not considered by us to be a material
acquisition, and it does not meet the Securities and Exchange Commission's tests
for the acquisition of a significant subsidiary.

Acquisition of KORONA Haushaltswaren GmbH & Co. KG

Effective as of May 1, 2001 we acquired 100% of the equity of KORONA
Haushaltswaren GmbH & Co. KG ("Korona"), which was formerly a wholly-owned
subsidiary of Augusta Technologie AG ("Augusta"), Frankfurt am Main, Germany,
for a total purchase price of approximately $4,176,000. We paid approximately
$2,730,000 in cash and 180,726 shares of our common stock based on an
agreed-upon price of $8.00 per share pursuant to the Stock Purchase Agreement
(the "Agreement") with Augusta. The purchase price was determined through
arms-length negotiations between us and Augusta, which negotiations took into
consideration Korona's business, financial position, operating history,
products, intellectual property and other factors relating to Korona's business.

For accounting purposes, the issue of the shares was originally recorded at
the value of $5.00 per share, based on the average price per share for a total
of 5 days before and after the completion date of the acquisition. Under the
terms of the Agreement we had an obligation to register the common stock with
the SEC. The Agreement gave Augusta the right to have us redeem the common stock
if the registration statement relating to the issuance of the common stock had
not been declared effective by the SEC on or before January 31, 2002. We filed a
registration statement to register the common stock held by Augusta which was
declared effective by the SEC on March 7, 2002. In March 2002, Augusta exercised
the repurchase obligation requesting to return the 180,726 shares of common
stock to us in exchange for a promissory note of $1,445,808, repayable in nine
monthly payments which would have commenced April 1, 2002 and bearing interest
at a rate of 8% per annum which would have resulted in an interest cost of
approximately $50,000 for the whole period of the promissory note. As Augusta
requested redemption prior to March 31, 2002, we accreted the redeemable common
stock up to its full redemption value of $1,445,808 as of March 31, 2002,
resulting in an adjustment to the original purchase price of approximately
$542,000.

We believe we are not required to accept Augusta's tender of their shares
because Augusta hindered the registration process by refusing to allow Korona's
auditors to update and certify Korona's financial statements. Augusta and Korona
had used the same auditors and under German law Augusta had to consent to the
auditors continuing to work for Korona after the acquisition. Augusta withheld
their consent until October 12, 2001. We believe this delay of approximately
three months was the direct cause of our inability to meet the January 31, 2002
deadline. We have had various discussions with Augusta about resolving this
dispute; however, we have not reached a resolution of this matter. At this time
no litigation or arbitration is pending between us and Augusta. We believe that
we will be successful if this matter is arbitrated. If we are not successful, we
do not believe that repayment of the related promissory note would materially
affect the future results of our operations.

New Audit Committee Member

On July 5, 2002, George O'Leary resigned as a member of our audit committee
and the Board of Directors appointed Mr. John Stewart Jackson IV to replace Mr.
O'Leary. The adjustment to the audit committee was made by the Board of
Directors to comply with the independent director and audit committee standards
pursuant to the NASDAQ Stock Market Marketplace Rules 4350(c) and 4350(d)(2).
The members of the audit committee now consists of Mr. Jackson, Woo-Ping Fok and
Henry F. Schlueter.

ADDITIONAL INFORMATION

Share Capital

Our authorized capital is $170,000 consisting of 23,333,334 shares of
common stock, $0.003 par value per share, and 10,000,000 authorized shares of
preferred stock, $0.01 par value, divided into 2,500,000 shares each of class A
preferred stock, class B preferred stock, class C preferred stock and class D
preferred stock. Information with respect to the number of shares of common
stock outstanding at the beginning and at the end of the last three fiscal
years, is presented in the Consolidated Statements of Changes in Shareholders'
Equity for the years ended March 31, 2000, 2001 and 2002 included in our Annual
Report on Form 20-F as incorporated by reference into this prospectus.

At May 31, 2002, there were 5,584,859 shares of our common stock
outstanding, all of which were fully paid. At May 31, 2002, we had outstanding
2,174,403 warrants to purchase common stock which are publicly traded and are
exercisable to purchase 1,087,201 shares of common stock at $17.50 per share
until December 31, 2002. In addition, at May 31, 2002, we had outstanding
672,000 options to purchase common stock as follows:

Number of Exercise Price Expiration
Options per Share Date
------- --------- ----

228,000 $8.00 January 6, 2010
20,000 $8.125 January 12, 2010
30,000 $7.875 January 9, 2011
196,000 $3.65 April 9, 2011
30,000 $2.55 October 14, 2011
168,000 $2.50 March 6, 2012

At June 30, 2002, there were no shares of our preferred stock outstanding.

Memorandum and Articles of Association.

We are registered in the British Virgin Islands and have been assigned
company number 9032 in the register of companies. Our registered agent is HWR
Services Limited and is at Craigmuir Chambers, P.O. Box 71, Road Town, Tortola,
British Virgin Islands. The object or purpose of the Company is to engage in any
act or activity that is not prohibited under British Virgin Islands law as set
forth in Paragraph 4 of our Memorandum of Association. As an International
Business Company, we are prohibited from doing business with persons resident in
the British Virgin Islands, owning real estate in the British Virgin Islands,
acting as a bank or insurance company, or conducting trust or company management
business since we are not licensed to do so. We do not believe that these
restrictions materially affect our operations.

Paragraph 57(c) of our Amended Articles of Association (the "Articles")
provides that a director may be counted as one of a quorum in respect of any
contract or arrangement in which the director is materially interested; however,
if the agreement or transaction cannot be approved by a resolution of directors
without counting the vote or consent of any interested director, the agreement
or transaction may only be validated by approval or ratification by a resolution
of the members. Paragraph 53 of the Articles allows the directors to vote
compensation to themselves in respect of services rendered to the Company.
Paragraph 66 of the Articles provides that the directors may by resolution
exercise all the powers of the Company to borrow money and to mortgage or charge
its undertakings and property or any part thereof, to issue debentures,
debenture stock and other securities whenever money is borrowed or as security
for any debt, liability or obligation of ours or of any third party. Such
borrowing powers can be altered by an amendment to the Articles. There is no
provision in the Articles for the mandatory retirement of directors. Directors
are not required to own shares of the Company in order to serve as directors.

Our authorized share capital is $170,000 divided into 23,333,334 shares of
common stock, $0.003 par value, and 10,000,000 authorized shares of preferred
stock, $0.01 par value. Holders of our common stock are entitled to one vote for
each whole share on all matters to be voted upon by shareholders, including the
election of directors. Holders of our common stock do not have cumulative voting
rights in the election of directors. All of our shares of common stock are equal
to each other with respect to liquidation and dividend rights. Holders of our
common stock are entitled to receive dividends if and when declared by our board
of directors out of funds legally available under British Virgin Islands law. In
the event of our liquidation, all assets available for distribution to the
holders of our common stock are distributable among them according to their
respective holdings. Holders of our common stock have no preemptive rights to
purchase any additional unissued common stock.

Paragraph 7 of the Memorandum of Association provides that without
prejudice to any special rights previously conferred on the holders of any
existing shares, any share may be issued with such preferred, deferred or other
special rights or such restrictions, whether in regard to dividend, voting,
return of capital or otherwise as the directors may from time to time determine.

Paragraph 10 of the Memorandum of Association provides that if at any time
the authorized share capital is divided into different classes or series of
shares, the rights attached to any class or series may be varied with the
consent in writing of the holders of not less than three-fourths of the issued
shares of any other class or series of shares which may be affected by such
variation.

Paragraph 105 of the Articles of Association provide that our Memorandum
and Articles of Association may be amended by a resolution of members or a
resolution of directors. Thus, our board of directors without shareholder
approval may amend our Memorandum and Articles of Association. This includes
amendments to increase or reduce our authorized capital stock. Our ability to
amend our Memorandum and Articles of Association without shareholder approval
could have the effect of delaying, deterring or preventing a change in control
of the Company, including a tender offer to purchase our common stock at a
premium over the then current market price.

Provisions in respect of the holding of general meetings and extraordinary
general meetings are set out in Paragraphs 68 through 77 of the Articles and
under the International Business Companies Act. The directors may convene
meetings of the members at such times and in such manner and places as the
directors consider necessary or desirable, and they shall convene such a meeting
upon the written request of members holding more than 30% of the votes of our
outstanding voting shares.

British Virgin Islands law and our Memorandum and Articles of Association
impose no limitations on the right of nonresident or foreign owners to hold or
vote our securities. There are no provisions in the Memorandum and Articles of
Association governing the ownership threshold above which shareholder ownership
must be disclosed.

A copy of our Memorandum and Articles of Association, as amended, has been
filed as an exhibit to the Registration Statement on Form F-2 (SEC File No.
333-32524).

Material contracts.

We have not entered into any material contracts outside of the ordinary
course of business during the last two years except for our Agreement to acquire
Gram and Korona. For additional information about the acquisition of Gram
Precision Scales, Inc., please see "Recent Developments - Acquisition of Gram
Precision Scales, Inc.," above. For additional information about the acquisition
of Korona, please see "Recent Developments - Acquisition of KORONA
Haushaltswaren GmbH & Co. KG," above.

Exchange controls.

There are no exchange control restrictions on payments of dividends on our
common stock or on the conduct of our operations either in Hong Kong, where our
principal executive offices are located, or the British Virgin Islands, where we
are incorporated. Other jurisdictions in which we conduct operations may have
various exchange controls. Taxation and repatriation of profits regarding our
China operations are regulated by Chinese laws and regulations. To date, these
controls have not had and are not expected to have a material impact on our
financial results. There are no material British Virgin Islands laws that impose
foreign exchange controls on us or that affect the payment of dividends,
interest or other payments to holders of our securities who are not residents of
the British Virgin Islands. British Virgin Islands law and our Memorandum and
Articles of Association impose no limitations on the right of nonresident or
foreign owners to hold or vote our securities.

Taxation.

Under current British Virgin Islands law, we are not subject to tax on our
income. Most of our subsidiaries' profits accrue in Hong Kong, Germany, and
Canada where the corporate tax rates are currently 16%, 26.375%, and 30%,
respectively. However, as Korona is a partnership, it is only subject to 14.17%
of the local statutory rate. In addition, our Canadian subsidiary Gram is
subject to a value added tax on goods and services of 7%, and a Provincial sales
tax for Ontario of 8%. There is no tax payable in Hong Kong on offshore profit
or on dividends paid to Bonso Electronics Limited by its subsidiaries or to us
by Bonso Electronics Limited. Therefore, our overall effective tax rate may be
lower than that of most United States corporations; however, this advantage
could be materially and adversely affected by changes in the tax laws of the
British Virgin Islands, Germany, Hong Kong or China.

Our subsidiary Bonso Electronics (Shenzhen) Company Limited was fully
exempt from state income tax in the PRC for the first two years starting from
the first profit making year followed by a 50% reduction over the ensuing three
years. The first profit-making year of Bonso Electronics (Shenzhen) Company
Limited was deemed to be the fiscal year ended December 31, 1998. Therefore, we
are subject to income tax at the rate of 7.5% in the PRC effective January 1,
2000 to December 31, 2002.

No reciprocal tax treaty regarding withholding exists between the United
States and the British Virgin Islands. Under current British Virgin Islands law,
dividends, interest or royalties paid by us to individuals are not subject to
tax as long as the recipient is not a resident of the British Virgin Islands. If
we were to pay a dividend, we would not be liable to withhold any tax, but
shareholders would receive gross dividends, if any, irrespective of their
residential or national status.

Dividends, if any, paid to any United States resident or citizen
shareholder are treated as dividend income for United States federal income tax
purposes. Such dividends are not eligible for the 70% dividends-received
deduction allowed to United States corporations on dividends from a domestic
corporation under Section 243 of the United States Internal Revenue Code of 1986
(the "Internal Revenue Code"). Various Internal Revenue Code provisions impose
special taxes in certain circumstances on non-United States corporations and
their shareholders. You are urged to consult your tax advisor with regard to
such possibilities and your own tax situation.

In addition to United States federal income taxation, shareholders may be
subject to state and local taxes upon their receipt of dividends.

LEGAL MATTERS

The validity of the common stock registered hereunder, will be passed upon
by Harney, Westwood & Riegels, Tortola, British Virgin Islands, who have also
advised us on all matters of BVI law disclosed in this prospectus. The validity
of the warrants and the common stock underlying the warrants have been passed
upon by Schlueter & Associates, P.C. of Denver, Colorado.

EXPERTS

The consolidated financial statements incorporated in this prospectus by
reference to the annual report on Form 20-F for the year ended March 31, 2002
have been so incorporated in reliance on the report of PricewaterhouseCoopers,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

The financial statements of KORONA Haltshauswaren GmbH & Co. KG at December
31, 2000, and 1999, and for each of the two years in the period ended December
31, 2000, appearing in this Prospectus and Registration Statement have been
audited by Ernst & Young, independent auditors, as set forth in their report
thereon appearing elsewhere herein, and are included in reliance upon such
report given on the authority of such firm as experts in accounting and
auditing.

INDEPENDENT AUDITORS' REPORT

To the Shareholders of
KORONA-Haltshauswaren GmbH & Co. KG

We have audited the accompanying balance sheets of KORONA-Haltshauswaren GmbH &
Co. KG as of December 31, 2000 and 1999, and the related statements of
operations, shareholders' equity, and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States and Germany. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of KORONA-Haltshauswaren GmbH &
Co. KG as of December 31, 2000 and 1999, and the results of their operations and
their cash flows for the two years ended December 31, 2000, in conformity with
accounting principles generally accepted in Germany.

Accounting principles generally accepted in Germany vary in certain respects
from accounting principles generally accepted in the United States. Application
of accounting principles generally accepted in the United States would have
affected shareholder's equity as of December 31, 2000 and 1999, to the extent
summarized in Note 17 to the financial statements.

Ernst & Young
Deutsche Allgemeine Treuhand AG
Wirtschaftspruefungsgesellshaft

Hannover, Germany
January 4, 2002

F-1

KORONA-Haushaltswaren GmbH & Co. KG
Balance Sheets
German GAAP (in DEM thousands)

December 31,
ASSETS 2000 1999
----------- ------
Fixed assets
Intangible assets
-----------------
Concessions, industrial property rights
and similar rights and values,
as well as licenses thereto 26 48

Tangible assets, net
--------------------
Land and leasehold rights and buildings,
including buildings on third-party land 2,084 2,196

Other fixtures and fittings,
tools and equipment 483 344

Financial assets
----------------
Shares in affiliated companies 50 50
------- -------
2,643 2,638
Current assets

Inventories
-----------
Finished goods and goods for resale 5,769 6,024

Accounts receivable and other assets
------------------------------------
Trade accounts receivable 10,951 7,898
Due from affiliated companies 45 3
Other assets 7 83

Checks, cash on hand, cash on deposit at banks 46 304
---------------------------------------------- ------- -------
16,818 14,312

Prepaid expenses 235 700

Total assets 19,696 17,650
======= =======

SHAREHOLDERS' EQUITY AND LIABILITIES
December 31,
Shareholders' equity 2000 1999
----------- ------
Fixed capital
-------------
Capital of limited partners 1,000 1,000

Retained Earnings
-----------------
Revenue reserves 1,610 1,610

Profit (loss) available for distribution (1,314) 1,578
---------------------------------------- ------- -------
1,296 4,188
Special item 710

Accrued Liabilities
Provisions for taxes 0 370
Other accrued liabilities 1,734 1,495
------- -------
1,734 1,865
Liabilities
Bank borrowings 8,661 9,603
Trade accounts payable 330 747
Due to affiliated companies 7,032 4
Other liabilities 643 533
------- -------
16,666 10,887

Total shareholders' equity and liabilities 19,696 17,650
======= =======
F-2

KORONA-Haushaltswaren GmbH & Co. KG
Statement of operations
German GAAP (in DEM 000)

Year Ended
December 31,
2000 1999
---- ----

Net revenue 32,196 31,592

Other operating income 1,300 349

Cost of materials

- Cost of raw materials, consumables
and supplies, and of purchased goods (23,542) (19,899)

- Cost of purchased services (105) (180)
------- -------
Gross profit 9,849 11,862
------------

Personnel costs
- Wages and salaries (1,965) (2,214)
- social security and other pension costs (354) (350)

Depreciation

- Depreciation and amortization of
tangible and intangible assets (338) (323)

Other operating expenses (7,672) (6,625)

Investment income 7 0

Interest expense, net (836) (489)
------- -------

Income (loss) from ordinary business activities (1,309) 1,861
-----------------------------------------------

Income taxes 0 (269)

Other taxes (5) (14)
------- -------

Net income (loss) (1,314) 1,578
---------------- ======= =======

F-3

KORONA-Haushaltswaren GmbH & Co. KG
Statement of Shareholders' equity
German GAAP (in DEM thousands)

Fixed Revenue Profit (loss) available
capital reserves for distribution Total
------- -------- ---------------- -----

As of December 31, 1998 1,000 1,610 1,000 3,610

Dividends declared (1,000) (1,000)
Net income 1,578 1,578
----- ----- ----- -----

As of December 31, 1999 1,000 1,610 1,578 4,188

Dividends declared (1,578) (1,578)
Net loss (1,314) (1,314)
----- ----- ----- -----

As of December 31, 2000 1,000 1,610 (1,314) 1,296
===== ===== ===== =====

F-4

KORONA-Haushaltswaren GmbH & Co. KG
Statement of cash flows
German GAAP (in DEM thousands)

Year Ended
December 31,
2000 1999
------------ -------

Net income (loss) (1,314) 1,578

Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities
Depreciation and amortization 338 323
Other non cash income/expenses (710) (32)
Gain/Loss on disposals of property, plant and equipment (62) 0
Change in
inventories 256 569
trade accounts receivable (3,054) 3,767
other assets 499 (274)
trade accounts payable (417) (570)
other liabilities (746) (3,875)
------ ------
Cash flows provided by (used in) operating activities (5,210) 1,486

Proceeds from disposals of property, plant and equipment 12 2
Purchase of property, plant and equipment (342) (204)
Purchase of intangible assets (2) (19)
Proceeds from disposals of investments 50 0
------ ------
Cash flows used in investing activities (282) (221)

Cash payments to owners (78) (1,000)
Borrowings from banks, net 5,312 (163)
------ ------
Cash flows provided by (used in) financing activities 5,234 (1,163)

Change in cash and cash equivalents (258) 102
Cash and cash equivalents at the beginning of the period 304 202
------ ------
Cash and cash equivalents at the ending of the period 46 304
====== ======

F-5

KORONA-Haushaltswaren GmbH & Co. KG

Notes to the Financial Statements
German GAAP
(in DEM thousands, unless otherwise noted)

(1) Accounting Principles and Valuation Standards
---------------------------------------------

The annual financial The annual financial statements for
KORONA-Haushaltswaren GmbH & Co. KG, Nienhagener Strasse 34, Moringen ("the
Company"), as of December 31, 2000 were prepared in accordance with the
provisions of the German Commercial Code (HGB).

Intangible assets and tangible assets
-------------------------------------
Intangible assets and tangible assets are shown at acquisition cost less
scheduled depreciation based on tax regulations. The straight-line method
of depreciation was applied. New additions under non-real estate tangible
fixed assets in the first 6 months are depreciated at the full depreciation
rate, later additions are depreciated at 50% of the depreciation rate.
Low-value assets are expensed in full in the year in which they are
acquired and reported both as an increase and a decrease in the assets.

Financial assets
----------------
Financial assets are valued at acquisition cost.

Inventories
-----------
Inventories are listed at average acquisition cost unless a lower market
price applies as of the reporting date or a lower value applies because the
purchase prices as of the reporting date are lower than acquisition cost.
Appropriate reductions for obsolescence on slow-moving items were made. A
flat rate of 3.41 percentage points was applied for incidental acquisition
expenses (for inventories purchased in the year 2000).

Accounts receivable and other assets
------------------------------------
Accounts receivable and other assets are reported at nominal values;
allowances are made as required.

Accrued liabilities
-------------------
The accrued liabilities appropriately cover all recognizable risks and
obligations.

Liabilities
-----------
Liabilities are reported at repayment values.

Currency translation
--------------------
Currency claims and liabilities, stock on hand and all related
income/expenses were valued at the average exchange rate based on the
foreign currency purchase prices, unless a lower exchange rate on the
balance sheet date necessitated a devaluation of the receivables or the
stock, or a higher exchange rate on the balance sheet date necessitated an
increase in the valuation of the liability.

The accounting principles and valuation standards are the same as in the
prior year.

F-6

Notes regarding certain balance sheet items and the statement of operations
---------------------------------------------------------------------------

(2) Fixed assets

The classification and analysis of Fixed Assets and the depreciation for
the fiscal year are shown in the tables below "Statement of Changes in
Fixed Assets".

a) Intangible assets

Acquisition/manufacturing cost
2000 1999
---------------------------------------------------------------------------
As of January 1 85 66
Additions 2 19
Disposals - -
------ ------
As of December 31 87 85
====== ======

Accumulated Depreciation
2000 1999
---------------------------------------------------------------------------
As of January 1 37 16
Additions 24 21
Disposals - -
------ ------
As of December 31 61 37
====== ======

Net book value
2000 1999
---------------------------------------------------------------------------

As of December 31 26 48
====== ======

F-7

b) Tangible assets - Land and buildings

Acquisition/manufacturing cost
2000 1999
---------------------------------------------------------------------------
As of January 1 2,539 2,539
Additions - -
Disposals - -

------ ------
As of December 31 2,539 2,539
====== ======

Accumulated Depreciation
2000 1999
---------------------------------------------------------------------------
As of January 1 343 231
Additions 112 112
Disposals - -
------ ------
As of December 31 455 343
====== ======

Net book value
2000 1999
---------------------------------------------------------------------------
As of December 31 2,084 2,196
======= =======

Tangible assets - Other fixtures and fittings, tools and equipment

Acquisition/manufacturing cost
2000 1999
---------------------------------------------------------------------------
As of January 1 1,054 1,123
Additions 342 204
Disposals 68 273
------ ------
As of December 31 1,328 1,054
====== ======

Accumulated Depreciation
2000 1999
---------------------------------------------------------------------------
As of January 1 710 791
Additions 202 191
Disposals 68 272
------ ------
As of December 31 845 710
====== ======

Net book value
2000 1999
---------------------------------------------------------------------------
As of December 31 483 344
====== ======

F-8

c) Financial assets - shares in affiliated companies

Acquisition/manufacturing cost
2000 1999
---------------------------------------------------------------------------

As of January 1 50 50
Additions - -
Disposals - -
------ ------
As of December 31 50 50
====== ======

Accumulated Depreciation
2000 1999
---------------------------------------------------------------------------

As of January 1 - -
Additions - -
Disposals - -
------ ------
As of December 31 - -
====== ======

Residual book value
2000 1999
---------------------------------------------------------------------------
As of December 31 50 50
====== ======

The company holds 100% of the shares of R.I.S.O. Haushaltswaren GmbH,
headquartered in Moringen. The equity capital as of 12/31/2000 was DM 57,
in the year 2000, the company achieved a net profit of DM 1.

The shares in Moringer Haushaltswaren GmbH were sold to Augusta Technologie
Aktiengesellschaft, effective April 1, 2000.

(3) Accounts receivable and other assets
------------------------------------

Accounts receivable and other assets have a remaining term of less than one
year. Specific allowances in the amount of DM 105 and general allowances in
the amount of DM 286 were made at December 31, 2000.

Other assets include travel expense advances to employees.

Cash on deposits at banks include bank deposits with the postal bank,
Deutsche Bank, Gottingen, and Volksbank Solling.

F-9

(4) Due from affiliated companies
-----------------------------
The item due from affiliated companies includes a DM 45 cost allocation to
R.I.S.O. Haushaltswaren GmbH, Moringen.

(5) Prepaid expenses
----------------
Prepaid expenses include prepaid interest in the amount of DM 10.

(6) Special item
------------
The analysis of the special item with a reserve portion (additional tax
write-off as per ss.3 Code Supporting Special Regions) is shown below:

December 31. Cancellation December 31.
1999 in 2000 2000
---------------------------------------------------

Warehouse 710 710 0
===================================================

The cancellation was based on a property addition in the tax balance sheet
(reinstatement of original value).

(7) Fixed capital
-------------
The fixed capital is reported in accordance with the legal guidelines for
corporations. The variable capital accounts are reported under due to
affiliated companies. The amount of DM 4 reported in the previous year was
reclassified.

(8) Accrued liabilities
-------------------
Other accrued liabilities primarily consist of costs for customer
incentives, advertising allowances, collection reimbursements and for the
preparation of the annual financial statements and invoices not yet
received.

(9) Due to affiliated companies
---------------------------
The amounts owed to affiliated companies primarily relate to liabilities to
Augusta Technologie-AG, Frankfurt, in the amount of DM 7,040 for loans
granted (DM 5,538), cost allocations (DM 2) and non-transferred profits in
the prior year (DM 1,500).

F-10

(10) Liabilities
-----------
The maturity of the liabilities is listed in the following schedule (1999
in parenthesis):

secured by
Total with a remaining with a remaining with a remaining liens
liabilities term up to term of term of more or similar
1 year 1 to 5 years than 5 years rights
------------------------------------------------------------------------------------------

Bank borrowings 8,662 7,425 781 456 8,662
(9,603) (8,179) (766) (658) (9,603)

Trade accounts payable 330 330 0 0 0
(747) (747) (0) (0) (0)

Due to affiliated companies 7,032 7,032 0 0 0
(4) (4) (0) (0) (0)

Other liabilities 643 643 0 0 0
(533) (533) (0) (0) (0)
--------------------------------------------------------------------------------------
Total 16,667 15,430 781 456 8,662
(1999) (10,887) (9,463) (766) (658) (9,603)
======================================================================================

As of the reporting date, the bank borrowings were secured as follows:

a) DM 2,000 mortgage
b) Assignment of inventory as security
c) Assignment of receivables

The other liabilities include tax liabilities (VAT and income tax on wages
and salaries) in the amount of DM 217 (1999: DM 0) and social security
liabilities in the amount of DM 52 (1999: DM 57).

(11) Revenues
--------
Most of the company's sales are made to domestic customers. Sales revenues
consist of the following:

2000 1999
---------------------------------
Domestic 26.119 28.266
Export 5,417 3,326
--------------- -------------
32,196 31,592
=============== =============

(12) Other operating income
----------------------
Other operating income primarily includes income from reversal of
allowances in the amount of DM 5, the cancellation of special items of DM
710, the cancellation of provisions of DM 343 (of which, DM 311 is
provisions for taxes) and the receipt of written-off accounts receivable in
the amount of DM 24.

F-11

(13) Personnel costs
---------------
DM 10 (previous year DM 8) of the expenses for social security and other
pension costs are related to pensions.

(14) Other operating expenses
------------------------
Other operating expenses includes, selling, general and administration
costs of DM 7,536 and among others, increases in the provision for
warranties in the amount of DM 52 and the group value adjustment in the
amount of DM 82.

The liability compensation to KORONA-Haushaltswaren GmbH in the amount of
DM 2 is reported under other operating expenses in accordance with the
Augusta-Technologie-AG group guidelines.

(15) Interest expense, net
---------------------
DM 102 (previous year DM 21) of interest expenses and DM 0 (previous year
DM 13) of interest income are related to affiliated companies.

(16) Other taxes
-----------
The item for other taxes includes only real estate taxes. In the previous
year, the real estate taxes were reported under other operating expenses.
The previous year's amount (DM 13) was reclassified to allow a better
comparison.

F-12

(17) Reconciliation to U.S. GAAP
-------------------------
KORONA-Haushaltswaren GmbH & Co. KG's financial statements are presented in
accordance with German GAAP, which differ in certain significant respects
from U.S. GAAP.

Use of Estimates
----------------
The preparation of financial statements requires management to make
estimates and assumptions that, affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the
date of the consolidated balance sheet. Actual amounts could differ from
those estimates.

The significant differences that affect net income and shareholders' equity
of the KORONA-Haushaltswaren GmbH & Co. KG are set forth below:

Reconciliation of net income (loss) from German GAAP to U.S. GAAP
Year ended
December 31,
2000 1999
--------------------------------------------------------------------------------
Net (loss) income as reported in the
statements of operations under German
GAAP (1,314) 1,578
Purchase accounting (a) (1,341) (439)
Special item for tax purposes (b) (710) (33)
Deferred taxes (c) 103 5
Consolidation of wholly-owned
subsidiaries (d) (51) 4
------------------------------

Net income (loss) in accordance with
U.S. GAAP (3,313) 1,115
==============================

Reconciliation of shareholders' equity from German GAAP to U.S. GAAP
December 31,
2000 1999
--------------------------------------------------------------------------------

Shareholders' equity as reported in
the statements of shareholders'
equity under German GAAP 1,296 4,188
Purchase accounting (a) 4,056 5,397
Special item for tax purposes (b) 0 710
Deferred taxes (c) 0 (103)
Consolidation of wholly-owned
subsidiaries (d) 3 54
----------------------------------

Shareholders' equity in accordance
with U.S. GAAP 5,355 10,246
==================================

F-13

(a) PURCHASE ACCOUNTING

AUGUSTA Technologie Aktiengesellschaft ("AUGUSTA") acquired the Company in
1996. For German GAAP purposes, the recorded amounts of the Company's assets
acquired and liabilities assumed by AUGUSTA remained at historical cost basis.
For U.S. GAAP purposes, a new basis of accounting is established for the
Company's assets and liabilities based upon the fair values of the respective
assets acquired and liabilities assumed by AUGUSTA at the acquisition date
reflected below:

Useful Life Fair Value
(Years) Adjustments
--------------------------------------------------------------------------------

Inventory 1 360
Land and building 25 1,077
Other fixtures 8 74
Other assets 0.5 1,496
Deferred taxes 1 (52)
Goodwill 15 5,767

As a result of the new basis accounting, shareholders' equity was increased
and additional charges reflected in the reconciliation of net income for the
effects of increases in cost of sales, depreciation expense of tangible and
intangible assets, and related deferred income tax effects. The deferred tax
effects are reflected in Note 17 (c).

(b) SPECIAL ITEM FOR TAX PURPOSES

Income from the cancellation of the off-the-line-item for tax purposes
(Sonderposten mit Rucklageanteil) is shown as a part of other income in the
statement of operations under German GAAP. The item was first established
pursuant to German Tax Law (ss. 3 Zonenrandforderungsgesetz) for tax purposes in
connection with the warehouse-building and was subsequently reversed in 2000. As
there is no off-the-line-item under U.S. GAAP, the income from the cancellation
of this item is not part of other income 2000 under U.S. GAAP, as well.

F-14

Under German GAAP, deferred tax assets and liabilities are generally recognized
for temporary differences between book carrying values and tax bases of assets
and liabilities, with the exception of deferred tax assets relating to net
operating loss carry-forwards which are recognized to the extent of offsetting
deferred tax liabilities. Deferred tax assets are recognized to the extent they
are expected to be realized.

Under U.S. GAAP, deferred tax assets and liabilities for temporary differences
using enacted tax rates in effect at period-end are recognized in accordance
with Statement of Financial Accounting Standards No. 109 ,,Accounting for Income
Taxes" ("SFAS 109"). Under SFAS 109, net operating loss carry-forwards that are
available to reduce future taxes are recognized as deferred tax assets. Such
amounts are reduced by a valuation allowance to the extent that it is more
likely than not that the deferred tax assets will not be realized.

There is a net operating loss carry-forward for tax purposes in 2000. No
deferred tax asset is reported in the balance sheet under U.S. GAAP as of
December 31, 2000 due to the impairment of such tax assets (DM 360). Under
German Tax Law, tax loss carry-forwards are lost if a purchase of 100% of the
partnership occurs.

(d) CONSOLIDATION OF WHOLLY-OWNED SUBSIDIARIES

Under German GAAP, the Company has not consolidated one company (1999:2) as it
is not material to the Company's net assets, financial position and operating
results. For U.S. GAAP purposes, these companies have been consolidated in 2000
and 1999.

(18) Other information
------------------
Commitments and contingencies:
------------------------------
KORONA-Haushaltswaren GmbH & Co. KG and R.I.S.O. Haushaltswaren GmbH are
joint and severally liable for a credit line in the amount of DM 6,000 from
Commerzbank AG. R.I.S.O. Haushaltswaren GmbH's liability as of December 31,
2000 was DM 0.

F-15

Other financial obligations from lease agreements consist of the following:

from 2001 to
expiration

Rent 91
Leasing 74
------------
165
============

Employees:
----------
On average, the Company had 27 employees (1999: 28). The administration was
also handled for the Moringer Haushaltswaren (until March 31, 2000) and R.I.S.O.
Haushaltswaren GmbH subsidiaries; the costs were charged at a flat rate in
accordance with the agreement.

F-16

Management
----------
The Management is under the leadership of the general partner, KORONA
Haushaltswaren GmbH, Frankfurt.

General Managers:

Mr. Klaus W. Reitz, Friedrichsdorf
Mr. Axel Haas, Trier

Group Relationships
-------------------
The Company is a wholly-owned subsidiary of Augusta Technologie-AG,
Frankfurt. The latter prepares consolidated annual financial statements,
which include the annual results of KORONA Haushaltswaren GmbH & Co. KG.
The consolidated financial statements are filed with the Amtsgericht
[District Court] Frankfurt/ Main under Ref. HRB 41371.

(19) Subsequent events
-----------------
Effective May 1, 2001, Bonso Electronics International Inc. ("Bonso")
acquired 100% of the equity of the Company for approximately US$ 3.6
million. As a result of purchase accounting which will be applied to this
transaction by Bonso, significant changes can be expected to the recorded
assets and liabilities of the Company.

F-17

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 18, 2002
F-2 REGISTRATION No. 333-97795
--------------------------------------------------------------------------------

[Back Cover Page]

BONSO ELECTRONICS INTERNATIONAL INC.

1,087,201 Shares of Common Stock
Issuable on Exercise of Common Stock Purchase Warrants
and
855,726 Shares of Common Stock Offered by Selling Shareholders

TABLE OF CONTENTS
Page
----
Prospectus Summary ......................................................... 4
Risk Factors ............................................................... 8
Where you Can Find More Information ........................................ 16
Incorporation of Certain Documents by Reference............................. 16
Forward-Looking Statements ................................................. 17
Use of Proceeds ............................................................ 17
Selected Unaudited Pro Forma Condensed Consolidated Statement of Income .... 19
Capitalization and Indebtedness ............................................ 22
The Offer and Listing....................................................... 24
Markets and Price Range of Common Stock................................ 24
Selling Securityholders ............................................... 25
Plan of Distribution .................................................. 26
Expenses of the Issue.................................................. 27
Directors and Senior Management............................................. 27
Description of Securities .................................................. 29
Shares Eligible for Future Sale ............................................ 31
Recent Developments ........................................................ 32
Additional Information...................................................... 33
Share Capital.......................................................... 33
Memorandum and Articles of Association................................. 34
Material Contracts..................................................... 35
Exchange Controls...................................................... 35
Taxation............................................................... 36
Legal Matters .............................................................. 36
Experts .................................................................... 36
Audited Financial Statements for KORONA-Haushaltswaren GmbH & Co. .......... F-1

No person has been authorized to give any information or to make any
representation not contained in this prospectus in connection with the offering
made hereby. If given or made, such information or representations must not be
relied upon as having been authorized by Bonso. This prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any securities
other than the securities offered by this prospectus to which it relates, or an
offer to sell or a solicitation of an offer to buy to any person in any
jurisdiction where such offer to sell or solicitation of an offer to buy would
be unlawful. Neither the delivery of this prospectus nor sale hereunder shall,
under any circumstances, create an implication that there has been no change in
the affairs of the company since the date hereof. Bonso has undertaken to file
post-effective amendments to the registration statement of which this prospectus
is a part if material changes or events occur during any period in which offers
or sales are being made.