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Biotech / Medical : Ergobilt (ERGB) - Ergonomic Chairs -- Ignore unavailable to you. Want to Upgrade?

To: Cosmo Daisey who wrote (808)	4/2/1998 2:28:00 PM
From: Scott D. Hakala	Read Replies (3) \| Respond to of 900

Coz,Argent Securities initiated coverage with a trading buy recommendation the other day. Target price is $7.00. Can confirm that Gerald is very concerned with increasing shareholder value. He is reportedly not very happy over the losses he took or the lack of progress on properly presenting earnings and financial results. The key is to lower the relative overhead expenses and charges to earnings from CTSS development and Cheetah activities in the coming year. If that happens, then the Company should be worth more than the $7.00 forecast by Argent. IF ERGB doesn't do a better job of controlling op. expenses and development expenses, then Argent is probably on target. Also, ERGB needs to communicate better a vision of where it is going and the sources of its expenses. The core company is growing well in terms of sales and gross margins, there are just a lot of expenses associated with CTSS development activities and ERGB corporate activities that caught some of us by surprise. Also, my understanding was the Gerald's stock was restricted and that was an issue with his margin account. Another thing you're missing in your comments is that Gerald owned significant shares in BodyBilt and worked for BodyBilt before ERGB acquired BodyBIlt through the IPO. He sat out on a bridge loan for approx. six months or more hoping he could take the Company public in late 1997. That's an awful lot more risk (and stress) and cost than getting stock for "free". I've seen some other people take the same risks and lose their shirts. I've also seen a number of very well known people make huge returns through acquiring private companies and taking them public or merging them into a public company largely using debt and other investors' money.