Earthport ; A positive thread (Terminal Whingers need not apply!!)

. Fundamental accounting concept

The financial statements have been prepared on the assumption that the company
is a going concern. The company is engaged in a new and high growth industry
where losses are expected. These losses represent the company's investment in
its development. At the date of approving these financial statements, there
exists a fundamental uncertainty concerning the company's ability to continue as
a going concern.

Since the balance sheet date, the company has raised additional finance through
the issue of ordinary shares for cash consideration of £300,000 and convertible
loan notes of £867,000. These amounts have been used to fund trading since the
year end. The company has an immediate requirement to raise further funds. In
its current fund raising the company has secured irrevocable subscriptions for
convertible loan notes of £1,378,000. The company has also entered into an
investment agreement, subject to the completion of due diligence and agreement
of final terms by 10 January 2005,for the investment of up to £2.4m in three
monthly tranches of up to £0.8 million, through the issue of convertible loan
notes by March 2005. The loan notes include warrants. If the entire £2.4
million of loan notes is raised then it is possible that the warrants, if fully
exercised, might generate a further £2.4m by 31 December 2005.

The company has a number of formal and informal arrangements with its creditors
to defer significant outstanding payments that are past their due date until
such time as sufficient funds are available to enable the company to pay them.
The company is reliant on the continued support of these creditors. The company
is in negotiations with several creditors with a view to formalising deferred
payment terms and expects to have agreed terms in January 2005. As the amounts
owed to these creditors exceeds the £1,378,000 noted above, securing agreements
with these creditors is vital to the company's ability to continue as a going
concern.

The company's current fund raising and the negotiations with creditors are both
matters that are not yet finalised, and key events are scheduled to take place
in January 2005 concerning both these matters. As a result, whilst we have
disclosed to our auditors currently available evidence, evidence of the outcome
of these matters is not available. The company has a duty under the AIM rules to
provide its shareholders with audited accounts by 31 December 2004 and we have
decided to present our accounts to shareholders including the auditors
disclaimer of view concerning these matters rather than delay presenting them
until the evidence becomes available.

The company is dependent on the ability to generate significant revenues and
free cash flow from sales of its products to new customers. To date the company
has entered into contracts to supply its product and services to significant
customers and is in advanced discussions with other substantial potential
customers. The directors believe that many of these potential customers will
enter into contracts with the company. However, the timing and value of future
sales cannot be guaranteed.

The directors believe that these funding arrangements, together with funds which
might be realised from warrants already granted will be more than sufficient to
meet the cash needs of the company until it becomes self sufficient.

In the event that the funding arrangements are not realised, and if the deferred
creditors demand immediate payment, and if sufficient revenues and free cash
flows are not generated to meet the company's working capital requirements, the
board may be forced to consider offers for the company or the company may be
forced into liquidation or receivership.

When assessing the foreseeable future the directors have looked at a period of
twelve months from the date of approval of the financial statements. The
directors consider that the uncertainties referred to above cast doubt on the
company's ability to continue as a going concern. Nevertheless the directors
believe that sufficient revenues and finance will be generated, and that
creditors will continue to accept deferral of amounts due to them until
sufficient funds are available and therefore consider that it is appropriate to
prepare the company's financial statements on a going concern basis, which
assumes that the company is to continue in operational existence for the
foreseeable future.

The financial statements do not include any adjustment that would result should
the company not generate sufficient revenues, free cash flow or raise additional
finance through further injections of debt or equity. It is not practical to
quantify the adjustments that might be required, but should any adjustments be
required they may be significant.

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Call me Dissident Shareholder if you like but i'm really concerned E&Y have approved these accounts based on funding referred to above completing together with new contracts yet to be agreed, remember cash outflow before financing 03/04 was 6,007,942, shares in my opinion should be suspended until E&Y are satisfied have irrevocable evidence there is sufficient working capital in the business for next 12 months, this remove most of the uncertainity and also enable the company to focus on securing new contracts rather than constant distraction of trying to raise new money during year.It beggars belief when EPO report entering into an investment agreement up to 2.4m in three monthly tranches of up to 0.8m through issue of convertible loan notes and further 2.4m if warrants are fully exercised by december 2005, why mention up to 2.4m, what is the minimum amount and what are the conditions, remember Ensurepay statement 20 August and then we discover 31 December, 4+ months later it did not progress........

The Company has reached agreement in principle to sell a minority interest in
ensurePay Ltd for up to £1. 5m. The funds are to be applied to funding
earthport and the ensurePay business going forward.

Everyone understands its not easy, but many are holding stock or buying shares at inflated prices based on bullish RNS's released only to discover 6 months later many of the deals never happened or were delayed, who is policing these statements and how is the retail investor interests being protected, EPO claim they want to attract institutional support, no they don't, why, because institutions would have them removed and new management installed if they were fed the same stories as us.

Finally if new funding is not secured during January when can we rely on the directors confirming this, will they continue to overtrade, what about directors responsibilities re trading while insolvent, the directors failed to tell shareholders about cashflow problems during 03/04, i'm sure Nabarro Wells were also aware but provided suitable answers to AIM Regulatory Team when required, most shareholders in EPO are treated with contempt in my opinion.

Once again directors tell us the company is not yet cashflow positive but that goal is clearly in our sights within the current financial year, its like Crystal Palace being 9 nil down at half time against Chelsea only for Palace to score 10 in H2, dreaming , you're right and so EPO directors when they tell us they are going to turn it around by becoming cashflow positive in current financial year !!