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Technology Stocks : ADSP - Ariel -- Ignore unavailable to you. Want to Upgrade?

To: Grainne who wrote (1138)	1/31/1998 11:16:00 PM
From: Jim McCormack	Respond to of 2263

Check the SEC 1/15/98 Filing.... I'm new here... Don't own ADSP but am intrigued by it. I will buy a Rascal 2000 this month for my Corporate Network...As for Horizon it is explained in detail in the SEC filing. I encourage everyone to read all the SEC filings and watch closely for new filings as they are the only reliable information you can trust - It is a federal crime and results in huge shareholder lawsuits when companies lie when filing them. They are a great source. And with ADSP it was no exception. The 1/15/98 filing is loaded with info! I think the Rascal product appeals to corporate customers as well as ISP provideres. It sounds very good and will fill a large gap for corporate buyers who don't need and industrial strength ISP class solution for remote access users. As for investing in ADSP I'm going to have to see the Year End Data. When are earnings due? The SEC filing indicates that: 1. Profitability is unlikely for 2 more quarters as stated in the Filing 2. Another Stock offering is coming in the second quarter after the warrants are redeemed (250,000 shares) so the number of shares outstanding is going to move up diluting the earnings when they come - and I think they will. The size of the planned offering is anyones guess right now but it is likely to be large given the amount of cash the company needs to raise at least 5 million to fund itself. 3. The magic number for sales is 27 million to keep afloat in 1998. That is a lot of sales for a company that does 10 million today. Cash on hand will last until the end of April and something has happen before then - Horizon sale, Secondary Offering, huge sales increases...Probably a combo of all these IMO.. 4. There is an anti-takover provision in place that calls for preferred stock to be issued - So a friendly deal would be required for a merger or company sale. 5. The ADSL unit has a carrier solution that has to go up against some serious industry heavy weights like Paradyne and Pargain. Selling Horizon or teaming with a "Heavy" is the right move IMHO but the price will be falling as the players focus on other companies and other technologies. We all read the recent announcment by the industry leaders MS CPQ and regional Bells etc.... Yes ADSP supports it but it would have been nice to be at the party and not reacting to it. 5 million is the target price for the Horizon group... Here is caption from the SEC filing from Edgar: "Continuance of the Company as a going concern is dependent upon the Company's ability to generate capital and its attainment of profitable operations. If the Company is able to meet its increased levels of new product sales of at least $27 million for fiscal 1998 and attain profitability and is able to raise a minimum of $5 million from its sale of the Horizon product and team or through an equity offering, the Company believes it will be able to continue as a going concern through December 31, 1998. However, if the increased levels of sales and the attainment of profitability are not met, the dollar amount needed to be raised will be significantly greater. The Company has commenced discussions with potential underwriters concerning the possibility of an additional equity offering. While there can be no assurances that an equity offering will be completed, the Company foresees closing such offering during the second quarter of 1998. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. The Company's present capital resources are expected to provide sufficient capital through April 30, 1998 before an additional infusion of capital is required." All this having been said I do like the company product and positioning but I have to use the product "Rascal" and then see the year end numbers and read managements discussion of the coming year before I part with some cash.... Seems I own way too many turnaround plays. Well maybe I'll add just one more.... Here is the link to SEC filings for ADSP excite.elogic.com May all you Investments be Winners! Jim McCormack