dec qtr casflows out - and positive, page-3

Hi Yanlin,

Don't know about the rest of the statement, as I am yet to read through it, but of the $750K, I regard this as neutral. If ATC receives this back, does it not also have a reciprocal obligation of paying it back out?

ATC used the $750K as a deposit on acquiring FNT.

According to ASX announcement (7/11), "ATC has paid an initial deposit of A$750,000, that is to be deducted from the cash component of the purchase price on completion. This amount may be retained by FNT if ATC does not complete the transaction.....ATC raised A$750,000 by way of a short term convertible note to
enable the conclusion of the transaction as referred to above".

At first blush, this sounds non-refundable in nature. Even if recoverable, however, there would need to be a legal fight to get it back. Therefore, in practical terms, I doubt that much of the $750,000 will evntually prove recoverable, now, or in the medium term.

But, if not recovered, it could still be converted into shares, as ASX announcement (30/12) states:

"Interest on the unpaid amount of the facility accrues daily at 12% per annum. The facility terminates on 28 February 2003, which can be extended at the Company's option to 31 March 2003. If full repayment
has not occurred by that date, the facility will not terminate until repaid in full. An extension fee of 500,000 fully paid ordinary shares is payable to the Lender at each extension....The Lender may at any time convert the unpaid portion of the facility into fully paid ordinary shares at an issue price of the lower of 80%
of the average weighted price of the shares traded on ASX on the five business days before the date of the initial advance of the facility or the eventual date(s) of conversion".

Already, 1.0m shares have been allotted as part of the facilitation fee. It looks like, however, that a further 500k to 1.0m shares could soon be issued. If, however, converted now, ~12.5m new shares would need to be issued (ie: 80% of WAV @7.5c = 6c).