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To: Steve Patterson who wrote (517)	7/17/1998 2:40:00 PM
From: mod	Read Replies (1) \| Respond to of 994

<<So OCOM has to come up with at least $2.5 million in PROFITS (not sales) by October 6. >> You misread this part. Cash is cash, all they need are enough revenues, not profits, to redeem the convertibles. If they fix whatever the problems are, they should receive more then $5 million in revenues from previous shipments, more then enough to redeem the convertibles. If they redeem the convertibles, then you will get killed on your short, as it means they are delivering and getting paid for products. If that happens, OCOM will double or triple in short order. If they don't redeem, you'll probably do well. Why did management put in the October 6 redemption date? Obviously because they think they will get paid for the previously shipped systems by then. Will that happen? I have no idea, but based on some of the technical discussions, it certainly appears possible. Dennis

To: Steve Patterson who wrote (517)	7/17/1998 3:04:00 PM
From: mod	Respond to of 994

<< At least this is how I read it. On October 6, the "Institutional Investors" with the $2.5 million are free from all restrictions, including shorting. Since the convertible is floorless, this sets the stage for the well-known "death spiral", in which the stock falls, so they have to issue more shares to cover the warrants, so dilution increases, so the stock falls, ... lather, rinse, repeat. And since the warrant holders (including the company directors!) can short at that time, driving down the price which gives them more free shares to cover the short, pain is guaranteed for shareholders>> Steve, The convertibles and the warrants are two different things. The warrants are only issued when the convertibles are redeemed. Since the warrants are exercisable at $11, there is no incentive to short the stock after redemption of the convertibles. Also, are you suggesting company directors will short their own stock? I doubt it, I do not believe that would be allowed by SEC rules. Dennis