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Non-Tech : Not Worthwhile

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To: Montana Wildhack who wrote (48)	4/9/2004 4:21:58 PM
From: Montana Wildhack	of 49

Dimethaid cash revenue updates: My posted estimates for Feb 29: Sales: 1,473 Actual: 1,426 Cash: 3,300 Actual: 3,406 (Being this close isn't impressive. The combinations are almost always flukes and are so in this case too. What matters is staying materially close over numerous time periods. I don't think estimates should be updated. A new set should be put up to compare change.) My posted estimates for May 31: Sales: 1,927 Cash: 1,500 The results will start diverging on this coming quarter. Several things are clear from the latest quarter: Pennsaid sales in Canada seem to have flattened and at this point the growth in Italy is not dramatic. Note that some of the 327k from Europe involved Greek upfront reported seperately but combined in the segmented reporting. The serious issue in the statements is the cost in sales and marketing. Note that the expense rise is continuing to escalate with 39% of S&M YTD in this 1/3 of the reporting year so far. The dollar volume difference between sales (exclusive of the extra revenue) and S&M costs is 2 to 1. That is some 2.6 million in expense produced some 1.4 million in revenue. The ratio is worse than that when you strip out Canada alone where most of the S&M expense occurs. The reason the next quarter will likely begin the divergence is that the extra 1.2 million in revenue is not likely to be a continuing revenue but a one time. While its not possible to predict whether other payments may be due, it's probable in my opinion that these are one times. Therefore in the next quarter the growing S&M expenses should they continue will need to be funded out of cash. I posted some of these estimates in assessing my own view of the future. They are my personal opinions and should be read as such. It's unclear what the new Canadian company can do and it's not known how Italy will do after another 3 months or how much the UK might be able to add. I greatly reduced my position because I can't foresee how the $9.2 million US due in November will not have a dramatic impact on the number of shares outstanding. I see some others have marked this personal bulletin board and I wish all of you well. I see nothing here that would change my mind on the decision I made. I suggest the cash balance will be in the few hundred thousand range May 31.

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