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Biotech / Medical : ACMI - Accumed Inc.

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To: CARYTRE who wrote (1237)	1/21/1998 11:54:00 PM
From: Frank Buck	Read Replies (2) of 1894

Cary, Your ...do it right the second time statement has me confused. Are you talking about AccuMed using an investment banking firm (IBF) for NewCo or AccuMed - (for a secondary offering)? The reference you make to "the second IPO" has me really unsure I am clear on that meaning. AccuMed International,Inc. was originated in late '95 as a merger and had "no" original IPO. I will assume you are talking about NewCo as the ??second?? IPO. The next point that I am unsure of is your statement; The allowable percentage of ownership enabling consolidation is a question but it may be as little as 20%. What are you saying? AccuMed's ownership in NewCo initially starts at 50% and drops to a lower XX% ? Why? Relinquishing shares to be sold-off to an IBF and subsequently resold in the IP offering? There are a few different ways that an IBF can approach an IPO. They can underwrite - buy the designated shares (always low) from the company and resell at a higher price than initially purchased for. Or an alternative way (if an IBF is unwilling to underwrite a stock) is to handle it on a best efforts basis. See what the market will bear. A "company" bears the risk of unsold shares in that scenario. Both have risks! A public offering is usually a back door exit for original investors. Are you suggesting that AccuMed will be taking that "back-door" with an eventual XX% sale of their ownership in NewCo? Your statement; Secondly and perhaps of greater value to us would be the ownership itself. The value of the underlying company stock could be the biggest kicker. Because for every share of acmi there is the underlying value in Newco stock. doesn't lend credence to the above relinquishment of ownership. They are contradictory. I don't understand how long-term value comes to AccuMed shareholders from selling off a percentage piece of NewCo. I would rather see an undiminished AccuMed ownership in NewCo. A one time sell off (of a significant percentage of shares) for a one time "non-operating gain" doesn't sound too good. Not in view of the expected long term revenue capability of cytometric evaluation. AccuMed shareholders already have a partnership with Xillix in OncoMetrics. Now a new partner in Sakura. Don't you think the percentages are getting pretty small if we are to sell off/reduce another XX% of our ownership to the public. The conference call referenced that NewCo was beyond "the developmental stage" and would't need large amounts of cash. Why take it public and trade equity for cash? Frank

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