swt - true to form, page-14

re: swt - relisting Hi Extralite,

The 2 Telino holdings - one is in the unit trust of which Telino is the Trustee, the other is held directly by Telino.

The primary holding (ie: 21%) is held by the Trust, whose member /unit holder details, we do not know.

The secondary holding (ie: 0.6%) is held directly by Telino whose member /shareholder details would likely be available from ASIC.

I'm not as convinced as you, however, that they have put their money where their mouths are. Most of the shares issued to them have come about due to SWT paying for the PEO acquisition through the issue of shares.

Ultimately, they have ended up with the following shareholder spread:

SHAREHOLDERS:
Total = 2,061
< marketable parcel (ie: <10,000 shares) = 1,171
= marketable parcel (ie =10,000 shares) = 80
> marketable parcel (ie: >10,000 shares) = 810
total with marketable parcel = 890

140 shareholders hold more than 100,000. Excluding from this the Top 20, the remaining 120 shareholders hold, as between them, ~40M shares (or an average of 333,333 shares each.

A further 28M shares are held between 1,921 shareholders who, as between them, hold parcels of <100,000 shares. That's an average of ~14,600 for each of these shareholders.

The Top 20 hold 238M shares (or an average of 11.9M each) primarily due to the PEO acquisition.

The Top 20 suggests minimal institutional support with National Nominees holding 1.47% and Queensland Investment Corporation holding 0.60%.

Much the same can also be said concerning the Optionholders.

The completed pro-formas to 31 December show net assets of $46.4M which reduces to net tangible assets of $6.1M once the $40.3M in intangible values are removed.

In coming accounting periods (and very much so next year) the holding value of the intangibles (almost solely goodwill) will need to be carefully examined as the Accounting Standards will require these to either be revalued or written down (more likely, the latter).

In any event, future accounting periods will (even if nothing else changes) have to factor in a sizeable amortisation charge which will likely be spread over 10-20 years. More likely, closer to the 10 year mark.

If @10 years, future amortisation charges will approximate $4.0M per year.

If @15 years, those charges will be ~$2.7M and if @20 years, they will be ~$2.1M per annum.

Any proper analysis of the Company going forward will need to strip away the veneer of the goodwill and hunt for more meaningful information.

With 304M shares now on issue:
1)
the net asset backing (including the intangibles) is 15.3c per share, or 76.5% of the pro-forma share price of 20c; and
2)
the net tangible asset backing (excluding the intangibles) is 2c per share, or 10% of the pro-forma share price of 20c.

That still makes for some work ahead for PEO.

Of the shares on issue, 2.7M will be escrowed for 12 months until 18 May 2005, and 97.2M will be escrowed for 2 years until 8 July 2006.

This suggests that not all of Telino's, O'Hare's or Marland's holdings have been escrowed.

Between them, these 3 shareholding groups hold 160M shares, but the combined escrow arrangements extend only to ~100M shares:
1)
TELINO (including Telino A/C held by Telino and on Telino's own account) = 67.25M
65.3M and 2.0M.
2)
RYAN O'HARE (including Family # 2 account held by Nashar, Clystorm and on Nashar's own account) = 46.86M
28.4M, 15.3M, and 3.2M.
3)
COLIN MARLAND (including Family # 2 account held by Riveracre Investments, Clystar and on Riveracre's own account) = 45.86M
28.4M, 15.3M and 2.2M.