answers please, page-2

(ITE).

Hi Danlupi,

Geeee... I Danlupi; wish this was an 'easy' --half dozen of crownies costs $17.00--kindly pay Max on the way out of the Pub.... errrr..... but unfortunately....Danlupi; it is not that easy....or as simple.

Up front however Danlupi; I will give you the really simple black and white easy tounderstand concept and "good news" ....and that is this....

Fact (1). Last year ...it is now agreed ....that (ITE) booked and invoiced and declared that their Top Sales Revenue Line was --$15.64 millions.

Fact (2) . That $15.64 millions, was a 55 % increase of the previous (ITE) financial years.....revenue line.

Fact (3) That Revenue of -- $15.64 millions--was achieved on a much much smaller (ITE) sales Pipeline brewing away from ... 2004/2005.

Fact (4) The (ITE) Sales Piple line for 2005/2006-- is about fives (5) times as good--in both quality and quantity....

Fact 4 B--The 'pricing power'--- is obviously now much greater. --ie: the days of initial reference sites (which are necessary--but are discounted often)-- are thankfully over ....for (ITE) .

Fact (5) Therefore ....for the above reasons-- I am very confident that the (ITE) Sales Revenue will be between 70% and 130% greater ...than the Revenue of -- $15.64 millions--from last year-- when the Full Financial Year ....for (ITE) is ...."done and dusted."---

ie: about --$30 -$32 millions.

A downside "Negative" Scenario ...however Danlupi, imo-- is still good...

why so...

Well say Danlupi, they(ITE) only replicate the 55% increase--they still do about $24.5 millions on the Top Line.

We now know Danlupi, that their break even on costs--from the last half--is between $16.5 and $16.85 millions for the full year....

So let us ....average it (the break even)-- 'up' ....to $17m---and then add a "misceallaneous $1 millions extra.--ie $18m.--to be ULTRA conservative.

We therefore Danlupi, deduct the $18m from 26 millions--not the 30 but only 26--and we still have a NPAT for (ITE) of $6 millions.

That will be ....alongside some rather very impressive New Global Cllients .....and some further unrecognized revenues that are "on the books" but not recognized under GARP accounting rules--on downside "Negative" Scenario ...but is still good...coz eventually (next period etc, will flow in the next reporting period....anyway-- thru to the (ITE) balance sheet).

For these sorts of reasons Danlupi, and other reasons that I have elaborated on before--the PE for (ITE) is likely to be 40 + on the 6 millions.(ie: because of the strength of the becoming stronger & stronger (ITE) brand equity..... going forward).

That leaves a market cap .....of about 240 million approx.....based on the "downside scenario"....

That is a share price of about $1.12-$1.15.

Okay again----discount it.

Take the sahre price-- to "only 80 cents". ...--(won't happen.... btwDanlupi, --- but there we are....for all the worry warts. ). ....

Even for people ....set in (ITE) ....at 20 cents ....that is a 4 bagger--and for folks in at 15 cents... that is a greater than 5 bagger ....etc etc.

And that above example is the downside.

And that is going to 'start'--- the moment the next announcement is unveiled.

As I say--Danlupi, ....the fair to good sceanario... is closer to 29-30 millions--Top Line depending as I say--on the Revenue Recognition situation at the time-- under GARP.

The valuation however by the market--(for ITE)-- imo-- will be the:

(1) combination of the obviously growing (ITE) Global Market Share ...as defined by the recogizability of the Global overseas Bank brands they secure as Clients--

(2) the rate (multiple) they secure them at,

(3) and the Market Forecast they (ITE) normally do at end of June 30....--

(4) combined with any update they do on Sales Pipeline status.--in next few weeks also).

(5)-- This will be alongside.... any (ITE) commentary to the Market they (ITE) provide-- alongside the New Contracts that we await at this time.... (my 'guess'-- early next week)--- for the next one.

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Okay then Danlupi, ....that ....imo---was the easy bit.

The "harder bit" to calibrate & calculate-- is each and every contract and the terms and conditions & PRICE -- and Payment period and terms-- on which it is calculated....and recognized under GARP as being bookable in a specific accounting period.

....For example....

A Tier One bank ....can either Take just the --Basic Razor--Credit Risk singular (1) module--for the time being--of Razor-- or....

.... they can take the Deluxe model-- ie: The twin (2) module Option ....including Market Risk Module-- to empower them also with their enterprise calculations.

One Module and Two Module Razors-- like a 4 Cylinder Mercedes and a V8 Mercedes have Different Pricing.

Secondly, ....they... (The Bank Client)-- can take a "perpetuity licence" or a fixed 2 or three year Licence.

Again.... different Pricing....and different terms & Conditions.

Thirdly, I imagine.... that ....say a HSBC ....that operates ...on 4 continents ...might pay a differentl Price- than a Tier One Bank... that only operates ...on one continent.

Fourthly, ...say the .....11 "sister banks " of the related to the Network of the Deal with the FHL First Bank in Pittsburgh--wanted to do a New "collective deal "--...???--

on the basis of...."as a what will you do (ITE) for 11 Licences--??on a "Bulk Buy Rate'--??-- ie: is their a 1/2 % discount ...??-- (Commercial realities.... might suggest.... their is....).

Fifthly--some of the Benchmark initial Reference Site Deals.... done in say-- 2004/2005-- would have been "possibly --??--"-- at Reference Site Rates....that are --fortunately now-- no longer applicable.

Sixthly, some of the deals involve.... more configurability...and time-- to incorporate-- existing legacy Software systems than others.--...

Again this would be reflected in the price charged .

Sevently-- each deal is ....to a very--- larger extent--Customer Centric and Customer Specific--....

ie: It is "bespoke"--...that is...it is customized to the specific Bank in question's-- own Internal Software Systems Architechture....and Service Support Requirements--....

......so I suspect that -- "each deal"--- is confidential and that no deal is exactly the same as the other ...and it is NOT-- like buying Vista from Harvey Norman-- -"out of the Box"--plug and play--- for $1700--- for example.

Finally--Danlupi, for now--- I imagine that a "deal"-- could conceivably be up to $10 millions for a mega Bank-- and that is only in the initial up fronts-- and on the other hand.... I imagine some "deals"-- might be smaller and "only"--$1.5-$2 millions.....(say like Qld Treasury)--

But frankly--Danlupi, I do not KNOW the figures--but commercial realities and requirements-- would dictate ....that say --hypothetically-- a Citibank Deal-- --would be a bigger amount ....than Qld Treasury...!!

It is for these "sort" of multiplicty of reasons....Danlupi; that I take you back to the Sales Pipe line.... that this (ITE) Financial Year will be expected to reflect--.....versus the now on the record-- Achieved Annual figure --of $15.64m-- that the previous 2004/2005- Pipeline actually achieved.

And then let me tell you--I am extremely relaxed..and that imo the next deal and the next deal after that... all so soon now imo-- will reveal an enormity-- as to where everything.... is really and truly.... "at".

Hope that helps--if only.... a little teeny bit.

Kindest Regards,

Robbo.