letter to pierpont found the following at...

letter to pierpont found the following at http://www.egoli.com.au/egoli/egoliSearch.asp?Keywords=icc

cheers


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Letter to Pierpont
1/11/04

The Editor 15 October 2004
Australian Financial Review
[email protected]

Dear Sir,

IC2 Global Limited (ASX:ICC) would like to bring to readers attention certain matters relating to the Pierpont article on the back page of today’s Australian Financial Review.

Pierpont refers to expenditure of $55 million since 2000, almost $54 million of which occurred prior to the installation of the new management team 12 months ago. We recognise that a lot of shareholder funds have been invested in Project 25 (about half of the total losses) but as we have previous announced, new management expects the Project 25 part of IC2’s business to become cash flow positive during the current quarter and firmly believes that the technology now has substantial value in excess of its written down book value. Most of the losses recorded last year were amortisation charges, a non-cash item.

The article refers to “whispers around the Croesus Club” that the technology was a tad short of perfection when it was acquired from ADI. IC2 believes that this may be a reference to the UHF version of the base station that was indeed acquired as a prototype and not then “perfect”. However, we would respectfully draw to the attention of the members of the Croesus club our announcement of 10 September 2003 in which we confirmed that the US Federal Communications Commission had tested and approved our UHF base-station. We have subsequently successfully sold these units to US customers.

Whilst, as Pierpont observes, there may now be dozens of companies selling Project 25 mobiles and portable radios, IC2 is only aware of one new competitor in the Project 25 base-station market in the last 12 months, bringing the total competition, including Motorola to four. To put this in context, Booz Allen & Hamilton have estimated an annual market of USD2 billion will exist in the USA for Project 25 once the conversion to digital gets into full swing.

Pierpont’s article also appears to have been written before IC2’s announcement dated 13 October 2004 advising of the extension of the convertible note facility to June 30 2005. IC2 has also made three small private placements since 30 June 2004.

Finally, based on the current ASX price of Horizon Global Limited, IC2’s interest in Astrovision Australia Limited is worth over $1.8 million, leaving a lot of upside in the value of Project 25 (wholly owned by subsidiary Westel Wireless P/L) given the current market capitalisation of IC2 Global Limited at $4 million.

Perhaps it is time Pierpont bought Mrs. Pierpont a few ICC to cover next years Melbourne Cup milliners bills!

Yours faithfully,
Rodger Johnston
CEO IC2 Global Limited