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To: Sir Francis Drake who wrote (1590)	3/16/2000 5:57:00 PM
From: Teflon	Read Replies (2) \| Respond to of 1817

Morgan, news on ICOM: Thursday March 16, 3:24 pm Eastern Time Intelect Completes $27.6 Million Financing and Balance Sheet Improvement; Transactions Increase Cash to Over $20 Million, Eliminate Debt and Retire Preferred RICHARDSON, Texas, March 16 /PRNewswire/ -- Intelect Communications, Inc. (Nasdaq: ICOM - news), a leader in intelligent optical networking solutions, announced today that it has completed a $27.6 million private placement of 4.6 million shares of common stock (with no warrants attached), resulting in debt elimination and an increase in available cash to over $20 million. The equity placement included approximately 30 qualified institutional investors for net proceeds to the Company of approximately $25.9 million, after costs and commissions. Approximately $9.8 million of proceeds was used to repay all amounts due under its Revolving Credit Agreement with The Coastal Corporation Second Pension Trust. An additional approximately $8.5 million of proceeds is being used to redeem all of the Company's Series A Convertible Preferred Stock, which was convertible into approximately 3.7 million shares of common stock. The balance of the proceeds will be used to increase cash reserves. The net effect of these transactions will be an increase of approximately 1.3 million shares in Intelect's total potential common shares outstanding. Stonegate Securities, Inc., Dallas, Texas, provided investment banking services and acted as placement agent for the transaction. Robert Capps, Chief Financial Officer and Executive Vice President of Intelect, commented, ``This financing and related transactions essentially complete a restructuring of Intelect's balance sheet. Subsequently, Intelect has virtually no debt outstanding, has an equity structure comprised solely of common stock and has available cash well in excess of $20 million. This gives us a strong balance sheet and the financial resources to support our revenue generating products and new growth initiatives in sales, marketing and engineering." My take on this, being that I work in the private equity business, is that this is extremely positive for ICOM. Rarely will preferred stock and debt holders have their positions redeemed in leiu of a pure common stock offering. The fact that the new common private placement ocurred absent a significant discount and/or warrants leads me to believe the investors in this round are very bullish on the company. Rarely would investors underwrite a financing like this without understanding absolutely everything going on within the company. IMHO, these investors must be extremely confident that the company has bright things in store for it for this transaction to close on such terms. Curious as to your opinoin? Teflon