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

To: Nam who wrote (18430)	10/9/1998 12:13:00 AM
From: Ken Richard	Read Replies (1) \| Respond to of 29386

Kerry - Didn't you calculate that the max number of shares issued after the full conversions will be approx. 21M?.

To: Nam who wrote (18430)	10/9/1998 1:53:00 AM
From: Kerry Lee	Respond to of 29386

Nam, you wrote: << Further, the suggestion that a lower stock price leads to bankruptcy is totally absurd.>> Not only absurd. It's ludicrous. You don't have to be a bean counter to know that "bankruptcy' is caused by inability to pay creditors. FACTS ABOUT ANCR CASH SITUATION: 1. Ancor has almost zero Long term debt ( under $200,000 ), ie. no bond-holders or bankers to worry about. 2. Monthly expenses are approx $1,000,000 per month, which translates to $3 million quarterly cash burn assuming zero revenues. 3. Ancor had $5.4 million CASH/short term investments ( money market?) at the end of Q2. Subtract -$3 million expenses and add back +$3 million 1st installment from INRANGE ( General Signal )= $5 million cash at end of Q3. 4. Subtract -$3 million ( plus or minus $200K )expenses in Q3, add +$1.9 million cash from Boeing , add +$500,000 to $1,000,000 payment from Netmarks and add +$3 million 2nd installment payment from INRANGE and subtract -$1,000,000 for inventory/accounts payable ( best guesstimate )= $6-7 million CASH at end of Q4/Fiscal 1998. 5. Subtract -$3 million ( +/- $200K) expenses in Q1 1999, add $3 million 3rd installment payment from INRANGE = $6-7 million CASH as of March 31/1999....this analysis assumes ZERO new revenues over and above what has already been publicly announced and therefore no revenues/inventory build is factored into this rudimemtary cash flow analysis. In other words,as a worst case scenerio even IF Ancor does not generate one iota of new business over and above what has already been announced, the Company has sufficient cash to last thru Sept 30, 1999....ENOUGH MONEY TO CONTINUE OPERATIONS FOR APPROX 1 YEAR FROM TODAY. IF Ancor needs more money sooner than that , it will be because they need to build millions of dollars of inventory for one or more new OEM's. At that point, they could either borrow money against accounts receivable or do an equity offering at a higher price. Kiss the Reg D goodbye. The beauty of the INRANGE deal is that it generates $9 million of almost pure profit and cash because there is virtually no working capital deployed., ie, NO INVENTORY to finance.That almost sounds like the RAMBUS business model where RMBS makes its money off licensing/royalties off its technology.