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

To: Greg Hull who wrote (18238)	9/25/1998 2:39:00 PM
From: Kerry Lee	Read Replies (1) \| Respond to of 29386

Ancor mgr told me about 15% per month limitation on conversion for Series C..No time to ferret out the specific clause right now..BTW, suggest you go to FreeEdgar to see today's 8K filing regarding Ancor changing to new auditor KPMG ( aka Peat Marwick ): ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANTS On September 25, 1998, the Company engaged KPMG Peat Marwick LLP ("KPMG") as its new independent auditors, effective immediately. Prior to the engagement of KPMG, the Company had sought proposals from other accounting firms with a view toward engaging a new independent accounting firm. The decision to engage KPMG was approved by the unanimous consent of the Company's Board of Directors upon the recommendation of its Audit Committee. Prior to the engagement of KPMG, on September 18, 1998, Ancor Communications, Incorporated (the "Company") received notice from McGladrey & Pullen, LLP ("McGladrey") that McGladrey was terminating the client-auditor relationship between the Company and McGladrey. Such termination was effective on September 18, 1998. The reports of McGladrey on the financial statements of the Company for its fiscal years ended December 31,1997 and December 31, 1996 did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. During the Company's two most recent fiscal years and the subsequent interim period through September 18, 1998, (i) there were no disagreements between the Company and McGladrey on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure which, if not resolved to the satisfaction of McGladrey, would have caused McGladrey to make reference to the subject matter of the disagreement in connection with its reports (a "Disagreement") and (ii) there were no reportable events, as defined in Item 304(a)(1)(v) of Regulation S-K of the Securities and Exchange Commission (a "Reportable Event"). The Company has not, during the Company's two most recent fiscal years or the subsequent interim period through September 18, 1998, consulted with KPMG regarding (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company's financial statements, and no written report was provided to the Company or oral advice was provided that KPMG concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue, or (ii) any matter that was either the subject of a Disagreement with McGladrey or a Reportable Event. The Company has furnished McGladrey with a copy of this Form 8-K and has requested that McGladrey furnish it with a letter addressed to the Securities and Exchange Commission (the "Commission") stating whether it agrees with the above statements. A copy of McGladrey's letter to the Commission, dated September 25, 1998, is filed as Exhibit 16.1 to this current report on Form 8-K.

To: Greg Hull who wrote (18238)	9/25/1998 4:18:00 PM
From: Kerry Lee	Read Replies (1) \| Respond to of 29386

Clarification on the 15% per month on Series C Reg D holders. The 15% number is CUMULATIVE from the period where they became eligible to convert. If I got my dates right, Series C could start converting starting in June 15 1998. Therefore, as of July 15, 1998 if I were a Series C holder who had $100 of preferred stock, I could convert up to a maximum of $15. IF I chose not to convert any shares in the June 15-July 15 period, then I could theoretically convert up to a maximum of 30% or $30 by August 15/98...EXAMPLES: Series C Holder #1: as of Sept 15/98 converted 45% of Series C stock and has 55% still left to convert. Series C Holder #2: as of Sept 15/98 converted 0% of Series C stock and and could theoretically convert as much as 60% by Oct 15/98 ( Cumulative 45% built up in first 3 months plus 15% in current month ) From what I understand, conversion/sale of the stock usually go hand in hand from a timing perspective, BUT theoretically they can convert at a buck and hang on to the shares indefinitely and/or sell and a later date at a much higher price.The 15% per month stipulation implies that the fastest period to unwind a Series C position is 7 months. EOM.