Zi-Corp (ZICA), formerly MCUAF Message Board

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Technology Stocks : Zi-Corp (ZICA), formerly MCUAF

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To: LT who wrote (1804)	12/15/1999 9:12:00 AM
From: John Stichnoth	Read Replies (2) of 2082

Good morning, LT and leigh--A month or two ago, I posted a "normalized" view of Zi's revenue growth, taking out one-time charges and gains. You might go back and try to find it. It showed clearly that Zi has been growing, and the latest quarter was a significant step up. There was a significant one-time gain in early 1998, which Zi recorded as regular income, rather than as an extraordinary event, which particularly skews comparisons. That being said, one concern not being voiced here is how the joint venture status will affect cash flow. An open question (actually several): To whom are most of the recent licensees going to be paying their royalties? Is it to the JV in China? Where does Zi expect to record its revenue gains? Is it in the JV? If most of this revenue growth is going to occur in the JV, how is this going to affect Zi's cash flow? Will they be allowed to transfer their share of the profits back out of China to the parent corporation? If they are constrained in their repatriation of profits, then where is Zi going to get the money it needs to run the parent company? They are still leaking cash at the parent level. Anyone? Best, JS

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