The aggregate consideration for the Proposed Acquisition (the "Consideration") is approximately S$13.5 million, which is subject to adjustment (if any) upon completion of the due diligence and the following assumptions:-

The entire Consideration will be satisfied by the issue of new ordinary shares at the issue price of S$0.20 each in the capital of the Company ("Consideration Shares").

As such, the 18,843,300 shares being subscribed on 03 Mar 07 at $0.20 each only represents $3.768 million of the total acquisition proceeds. Therefore the company issued an illustrative reproduced below on how many share placement to be expected for the full acquisition of Novena Holdings.

"For illustrative purposes, upon the completion of the Proposed Acquisition and assuming the consideration for the Proposed Acquisition being S$13,500,000 to be satisfied by the issue of 67,500,000 new ordinary shares (the "Consideration Shares"), the issued and paid up share capital of the Company will increase to S$92,023,132, comprising 590,987,547 Shares. Upon the completion of the Prior Placement and the Placement, the Placement will increase the issued and paid up share capital of the Company to approximately S$99,447,392, comprising 628,108,847 Shares."

IMPORTANT THING IS, UNLESS, THE ACQUISITION DO CONTRIBUTES TO BOTTOMLINE AND TOPLINE GROWTH SUFFICIENTLY, THE PLACEMENTS COULD ERODE CURRENT SHAREHOLDERS' VALUE, AND THUS IS EARNINGS DILUTIVE. HENCE, SHARE PLACEMENT NOT NECESSARILY A GOOD THING FOR SHARE-HOLDERS. NOTE TE SHARE PLACEMENT WILL INCREASE OUTSTANDING SHARES BY 12.89%.

It's a significant erosion of share value, unless, the acquisition could contribute sufficiently to the group's earnings. The group did mention it will contribute to bottomline, but question is will it be sufficient to not erode shareholders' value due to the share placement? TTL also mentioned specifically that the proceeds from the 18,843,300 shares being subscribed will go to general working capital purposes, with no mention of funds to pursue further growth. This is not surprising given the companies' low interest coverage ratio, and a lot of its interest-bearing borrowings are current. So you need to really ask after looking at the balance sheet, where is the money going to go to? Note:

"The estimated net proceeds from the Placement, after deducting estimated expenses pertaining to the Placement of S$20,000, will be approximately S$3,748,600. The net proceeds will be used for general working capital purposes."

1. "the aggregate net tangible asset value of the Furniture Assets and Businesses, which should also reflect their market values, should not be less than S$5.5 million as at 31 December 2006 and as at the completion date