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Non-Tech : Bill Wexler's Dog Pound -- Ignore unavailable to you. Want to Upgrade?

To: Land Shark who wrote (1895)	7/11/1999 5:42:00 PM
From: DanZ	Respond to of 10293

Yields, By the time the clinical study is made public in a medical journal, GUMM will very likely be higher because investors/traders will probably have already discounted the news to some degree. Investing requires us to make judgements about the likelihood that certain events will occur. I participated in a conference call about a month ago and Dr. Davidson was very optimistic that the NEJM would publish the clinical study on Zicam. I am confident that they will publish the study for several reasons: a. The statistical significance was very high (p-value < 0.001). b. A major California University backed the study. c. The common cold is a big health concern, not so much in terms of severity, but in terms of the number of people affected, lost productivity, and financial burden on the economy. d. This study would bring a lot of publicity to the NEJM, and let's face it, they love publicity. You asked for a copy of the study prior to it being published by a medical journal. Sorry, but your request can not be fulfilled. You can read the study after it is published in a journal. The company can't release it prior to then because they would risk having it rejected. Using your logic, everything that has ever been submitted to the NEJM is snake oil because the company did not publish the studies while they were being reviewed by a medical journal. The clause from the S3 that you copied is a standard disclaimer that one can find in any SEC filing. It doesn't concern me because the SEC requires these types of risk statements. Those who are negative on a company can take them out of context and try to convince people that there is something real to worry about, but I know better and so do most other investors. You asked about bank financing. GumTech established a $2 million credit facility with a commercial bank in February 1999 and hasn't borrowed under it yet. It is possible that GumTech couldn't get a $6 million loan from a bank because banks are generally more risk averse than private investors. It is also possible that the terms of the financing with Citadel are better than what GumTech could have obtained from a bank. For example, the warrants issued to Citadel probably resulted in a lower rate of interest and dividends then GumTech could have gotten from a bank. Companies of all shapes and sizes obtain loans through private investors and I disagree that this particular financing package shafts investors. GumTech turned down financing offers from other lenders because they would have shafted investors. They settled on Citadel precisely because the terms are good for shareholders. The financing with Citadel is NOT a "death spiral" as some have called it. If you read the terms of the financing in the 8K, I think you will come to the same conclusion. I agree that it is better for shareholders if the stock price is higher when the notes or preferred are converted into common stock. The company made a judgement call based on where they see their business going over the next year or two and they believe that their stock price will be higher because of Zicam and nicotine gum. GumTech can also redeem the preferred stock and notes with cash, and they may well do that if sales increase like they predict.