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Technology Stocks : Zitel-ZITL What's Happening -- Ignore unavailable to you. Want to Upgrade?

To: Arthur Radley who wrote (13135)	11/30/1997 12:39:00 PM
From: DAVID C. DeANGELIS	Read Replies (3) \| Respond to of 18263

TO ALL, Anyone have more info on DAVID ADAMCHICK of PA. New Scientist mag DEC issue; This will make ALL Y2K stocks technology obsolete. summary... Computers now store dates as a 6 digit code YYMMDD Adamchick's new code stores the date as CYYDDD where C is the century, YY year & DDD the julian date (# of days since the begining of the year) I dont know who he is or what co. he is with if any, but the whole sector might be impacted if this is credible. DD

To: Arthur Radley who wrote (13135)	12/1/1997 1:10:00 AM
From: JEFF CHAPMAN	Respond to of 18263

Jack's been nominated twice already for a very special award. Please visit this thread and explain why or why not he should deserve such honor: Subject 18311

To: Arthur Radley who wrote (13135)	12/1/1997 2:28:00 PM
From: Rubber Man	Read Replies (1) \| Respond to of 18263

Aww, give Zitel some credit- they did say the following: " In recent years the Company has not generated net sales sufficient to produce an operating profit and has relied on a stream of royalty payments under an agreement with IBM to support its activities. These royalties amounted to $15,421,000 in fiscal 1995 and $14,473,000 in fiscal 1996. In late 1996 IBM introduce a new version of the royalty bearing device with substantially greater capacity and royalty revenue declined to $2,318,000 in the first quarter of fiscal 1997 and $1,196,000 in the quarter ended March 31, 1997. The Company believes that IBM is transitioning to a device which does not bear royalty, and that royalty revenue will continue to decline. In addition, net sales further declined in the recent quarters to $1,576,000 in the quarter ended March 31, 1997 resulting in operating losses and net losses in the two most recent quarters. In the most recent quarter the Company realized a negative net margin on net sales. The Company must generate substantial additional net sales of its CASD products in order to restore gross margins on those products and must generate revenue from its new Solution Services division or develop other sources of revenue in order to remain a viable operating entity. There is no assurance that the Company can achieve those objectives." Sure, Zitel increased their sales almost 50% this year (46.9% in fact), but royalty revenue decreased by over 60% (63.1%). This accounts for a total 22.1% reduction in revenue. This brings it full circle with 1994 revenue levels. However, the number of shares differs by approximately 2.5 million and assets increased by a factor of 4. Now, given these projections.. who would want to purchase this stock after reading the prospectus and sec filings?