TriCell LTD (fka TCLL)

[Arturo_Bechstone]

New N2J deal is much worse compared to the original LOI and here is why:

1. 90m shares that will be hold by former N2J stakeholder

OLD deal: issue of shares in four yearly installments bound to certain conditions

NEW deal: immediate issue of all of the 90m shares; no conditions apply

2. Cash payments

OLD deal: 120m shares issued to former N2J shareholders would be repurchased at a maximum amount of 13.2m$ over 8 months

No further cash payments apply

NEW deal: 120 shares issued to former N2J shareholders will be repurchased at a maximum amount of 24m$

1.4m$ upfront payment to former N2J shareholders

12m$ of N2J profits generated from Jan-Aug 2006 will be paid to former N2J shareholders

3. return of TCLL shares in conjunction to 2007 results

OLD deal: if N2J wouldn't have met the profit targets shares of the 120m share pool would have been cancelled on a pro rata base

NEW deal: if N2J won't meet its negotiated profit targets the former N2J shareholders can keep the difference in TCLL shares


As you can see the deal is much more in favour of the four (partly former) managers of TCLL respectively former N2J owners.

- the cash component is almost 3 times higher
- no obligation to return shares if profit target won't be met
- 90m shares will be issued immediately and free of conditions
- no shareholder approval

If there is just one little advantage to mention its the missing put option in the new arrangement. Thus means the former N2J holders have to sell their shares to TCLL.

It would be quite interesting to get some information from TCLL management about why the deal structuring so much worsened for the TCLL holders. Further it will need some clarification about the impact of the 100m$ purchases of N2J from TCLL. TCLL management has to clarify that this revenues is not related to (former) TCLL customers and why TCLL did not sell directly to those customers and who in person acquired those customers.

Cheers

Arturo

P.S.: I will send this statement to Tricell management