EarthLink Network ELNK Wraps Your Fish Message Board

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Technology Stocks : EarthLink Network ELNK Wraps Your Fish

ELNK 5.630

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Mar 8 4:00 PM EST

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To: PeterR1700 who wrote (123)	8/14/1997 5:36:00 PM
From: Garry Betty	of 220

Dear PeterR1700: As you can imagine, it has been an interesting two days. We did make a mistake in the filing and in particular the characterization of our cash position being inadequate. EarthLink can last through the end of the year without additional investment but we will need money going into next year. During our IPO road show, the investment banker's were providing guidance that EarthLink would be EBITDA positive somewhere around 500K customers and profitable soon afterwards. We have not moved away from that goal whatsoever. Over the past quarter EarthLink has had discussions with several parties to provide EarthLink with additional financing to meet it's requirements entering 1998. Because of these discussions, it was determined that we should modify the wording in the 10Q to reflect this fact. This financing activity led to the unfortunate choice of words that were included with the 10Q filed on Tuesday. This lead to the press release late yesterday and the 10Q will be updated and refiled this afternoon. EarthLink negative EBITDA for Q2 was $5.2M down from $6.1M in Q1. Because much of the investment necessary to grow has already been made in Q1 and Q2, it is expected that the future EBITDA losses will decline at even a faster rate, sequentially. For that reason, EarthLink believe that it has sufficient capital in the form of cash and other capital to continue operations through the end of this year. On a more positive note, EarthLink was awarded PC Magazine's Editor's Choice Award for 1997 versus 13 other national ISP's. This very prestigious award points to all of the "neat" things that we are doing at EarthLink for our user's such as the Personal Start Page, expanded and timely customer support and our educational programs such our bimonthy news letters. This was purely and simply an mistake and EarthLink acted quickly to correct the public record. cgb

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