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Technology Stocks : The New QLogic (ANCR) -- Ignore unavailable to you. Want to Upgrade?

To: Arthur who wrote (18157)	9/24/1998 6:39:00 PM
From: Craig Stevenson	Read Replies (1) \| Respond to of 29386

Art, No idea. There are probably a lot of shares to be converted yet, and unless Ancor sold a bunch of switches in the quarter, the numbers probably won't be much to talk about, so that will probably put a lid on things. There is also apt to be some profit taking along the way. It will be interesting to watch. It has been a long time since we saw good news back to back. I'm glad I didn't sell at $1. <g> Craig

To: Arthur who wrote (18157)	9/24/1998 8:02:00 PM
From: Kerry Lee	Read Replies (3) \| Respond to of 29386

While I have no idea of where the stock price goes short term due to Reg D guys converting, here are some interesting tidbits on today's HUGE NEWS for ANCR: 1) The $9 million is really $7 million in NON-REFUNDABLE licensing fees paid to Ancor in 3 chunks, ie $7 million lump sum CASH, PLUS $2 million in pre-paid royalties. It is not clear yet whether Ancor will recognize the entire $9 MILLION REVENUE in this quarter ( Q3 ) or whether they will spread the $9 million revenue over several quarters.The 3 quarters referred to in today's press release were Q3'98, Q4'98 and Q1'99. For example, Q3 revenues could be as much as $9 million OR perhaps in the range of $3 million (?).. 2) The Company has not decided yet whether to reflect the entire $7-9 million revenue at ZERO COST, subject to external auditor review. In other words, it is entirely possible to see this revenue fall right to the bottom line, eg. $7-9 million revenue - 0 COGS = $7-9 million gross margin. Another scenerio would be to assign some arbitrary R&D/engineering costs to this deal. WE ARE LOOKING AT $$$PROFIT!!! 3)This deal is to license Ancor's technology to INRANGE/GENERAL SIGNAL ,the only other supplier other than McData into the Mainframe/ESCON market which requires high redundancy, huge number of ports (eg 256 ports in the high end data center )..INRANGE is the only competition to McData in this ESCON market...INRANGE products DO NOT COMPETE with Ancor's MKII SAN markets.This is WIN, WIN , WIN for Ancor, as they enter this high end ( mainframe/ESCON ) data center market in a very profitable fashion ( licensing and royalites ) without incurring mfgr/sales expenses. PS - $9 MILLION CASH and ZERO DILUTION on top of $1.9 million Boeing AWACS order where a huge chunk of the product was already written off...READ BETWEEN THE LINES.THE BEST KIND OF VALIDATION OF ANCOR FIBRE CHANNEL TECHNOLOGY..WHEN SOMEONE PAYS YOU $7 MILLION UPFRONT, NO STRINGS ATTACHED FOR A LICENSE TO USE YOUR TECHNOLOGY! BTW, this deal was successfully kept under wraps via the dreaded "NDA".