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Widespread Portfolios clarifies warrant extension effects

New Zealand Exchange Limited 

P.O. Box 2959 
Wellington

25 May 2012 

Dear Sir, 

Earlier this week we announced that, subject to warrant-holder approval, and the payment of .01 cents per warrant, the term of the existing warrants would be extended for five years.

It’s timely to provide shareholders with some relevant facts which we believe will demonstrate that this extension is unlikely to adversely affect the interests of existing ordinary shareholders.

Of most relevance is the exercise price of the warrants, which is $1.491 compared with the current share price of 11.5 cents (16 cents at the time of the warrant extension announcement).

Warrants will not be exercised unless the share price is at or above $1.491 and even then they probably won’t be exercised until the end of their extended term in 2017.

If they are fully exercised $25.4 million will be injected into the company at $1.491 per share. If the asset backing per share then was still at the present level (54 cents) the asset backing per share would rise 74% to 94 cents and would not be diluted.

If the asset backing in 2017 is significantly higher than present, and exceeds $1.491 per share there would be some dilution to the asset backing per share, the degree of this is clearly reliant on the asset backing per share immediately before the exercise of the warrants.   

For and on behalf of the Board,

Chris D Castle

Wellington    

25 May 2012