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Technology Stocks : Thrustmaster (NASDAQ:TMSR) -- Ignore unavailable to you. Want to Upgrade?

To: Timothy Detjens who wrote (2239)	6/15/1999 11:00:00 AM
From: Pete Mason	Read Replies (1) \| Respond to of 2443

And it seems like just the other day when they were saying "The Company believes that available funds together with borrowings from its new credit facility will be adequate to meet the Company's anticipated cash needs through the end of December, 1999." in their SEC filings... oh wait, that WAS just the other day! Does that count as filing in bad faith? Did they honestly believe it, only to wake up one day and decide they suddenly need $6M? Here's a good paragraph from the filing: "On the Closing Date under the Debenture Purchase Agreement, the Company and Strong River modified the terms of the Securities Purchase Agreement. Strong River waived its right to receive any additional shares in connection with the first tranche of investment pursuant to the operation of the adjustment mechanism in the Securities Purchase Agreement, and the Company waived its right to require Strong River to make a tranche two investment under that agreement and issued a warrant to Strong River (the "Warrant"). The economic effect of the Warrant and the waived right to receive adjustment shares are substantially identical." If you just breeze through it, it sounds initially like Strong River gave up something, and TMSR gave up something, so it must be about even. But look at the last sentence: Strong River gave up rights to adjustment shares BUT received a new warrant, leaving them approximately equal--TMSR on the other hand waived its right to require Strong River to make a tranche two investment, basically for squat! I wonder what's up with the sudden cash crunch! With the astoundingly high margins of Internet products, it's not like they would need a lot of cash to build them to fill the massive orders which are right around the corner... Clearly, here's what's going on... their bank is leaving them (when we last tuned in, the bank had trimmed the credit line to $2.5M at prime plus 4, and had told TMSR they needed to find a different bank by July); TMSR evidently can't find a sympathetic bank to give them money to keep their money-losing operation afloat; so it's back to the British Virgin Islands to get as much cash as possible. Something like $3.3M has to go to the ex-bank by next month, and they keep the remaining $2.7M around to piddle away over the next quarter or two until the next round of financing is suddenly announced. -- Pete