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To: Mahesh who wrote (300)	1/23/1998 2:21:00 PM
From: JakeStraw	Respond to of 934

Deferred revenue is revenue that is shown on the balance sheet in the liability section. As for lawsuits, who knows, what they did is really not against the law and follows GAAP (Generally Accepted Accounting Principles).

To: Mahesh who wrote (300)	1/23/1998 2:42:00 PM
From: squirrel	Read Replies (2) \| Respond to of 934

Firm backlog and deferred revenue of $6.0 million Deferred revenue is the inventory, sitting on the distributors' shelves, which apparently can be returned at the distributors' discretion or remain unpaid until it is sold to the end user. Firm backlog to me would represent booked orders (but keep in mind these might be orders from these same distributors and end up as deferred revenue) that have yet to be shipped. Anticipated but unrealized fourth quarter orders $6.8 million (again these might be orders from distributors). If they had realized these Q4 orders, does this press release tell us that the $6.0 million would have been stated higher to $12.8 million. I do not get a sense that these orders (the $6.8 million) would have made it to the income statement Q4. In other words, my interpretation opens the possibility that the future sales growth may be as bleak as the ugly past. They chopped off $9.5 million in revenue for the preceding two qtrs and now are going to report approx. $4.7 million in Q4 revenue. "We also plan to REDUCE our rate of recruitment of other staff and expenses in order to better align with the rate of top line growth we have been experiencing" This statement refers to the "revised" sales figures. The figures are muddy and they smell. To anybody out there still wrestling with this one, be cautious and good luck!

To: Mahesh who wrote (300)	1/23/1998 5:29:00 PM
From: squirrel	Respond to of 934

CLASS ACTION PENDANCY biz.yahoo.com 2. How much financial impact will lawsuits have - any guesses? It was inevitable; lawyers - you gotta love 'em.

To: Mahesh who wrote (300)	1/23/1998 10:36:00 PM
From: ahhaha	Read Replies (1) \| Respond to of 934

Revenue that they counted but hadn't yet received or revenue that they have received but don't want recognized for, say, tax purposes. At this point we can't say what they mean, because we can't trust them. e.g. it may mean dough they wired to the Cayman Islands in case they couldn't hide the deception. If the product was selling, they could then repatriate the funds. If they got caught, there's always joining up with Robert Vesco once they jumped bail! The acts allegedly committed are criminal, so the officers are culpable. In this case there is no justifiable suit against the corporation as a legal individual. That doesn't mean the company won't be sued. The shareholders are the only ones justified in suing appropriate officers. The company has not perpitrated any illegal act against someone outside the company. That is, as far as we know. But if that's true, there shouldn't be much legal trouble. I'll tell you what I'm going to do with my 100 shares. Hold. There's no reason to sell, the position is almost worthless. So I will never sell because there's nothing to lose. If you have a much larger position, you have a tougher problem. There's long term capital loss status that could be quite irritating. There's the possibility of bankruptcy because the business world gets tough about this sort of conduct even if the retribution exacted is not justified. In the best of all worlds for them the history of this sort of thing has been that you won't see 8 for at least 1 1/2 years. That's the best I can do. If I knew they would survive, I'd hold. It may be 1 1/2 years before you want to look at investing in any stock except for maybe the golds, anyway! After a nasty bash like this, it is wise to stay away from the stock market. You have to heal.