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To: sandbag who wrote (1612)	11/14/1998 1:36:00 PM
From: Nevada	Read Replies (3) \| Respond to of 3015

Thanks- have been working with the numbers all morning- was intrigued by the statement in the 10q that management thought it had enough cash to last it through 1999. I went back to the three months P&L, adjusted it for noncash activity- depreciation of roughly $200,000 and amortization of the intangibles of 1.2 mm- brought the deficit cash flow for the three months to about 7.1 mm- works out to about 78,000 per day, every day. Taking their 13.6 mm in unrestricted cash, they will be officially broke 174.35 days after Sept 30th or March 24th, 1999 at 8:24 AM. (Us accountants like to do silly stuff like that!!!) Their salvation must be the new initiatives they talked about. Three further observations- I am puzzled by the amount of cash restricted at 9/30- 17.6 mm and yet the accrued interest is only 5 mm at that date. Are there also some principal payments due? If not, then the covenants of the debt apparently require some sort of pre-funding- would mean that some of the future interest expense have been pre-funded and therefore the day of doom (Mar 24th) is prolonged into May or June. The 3.2 mm in unearned revenue will be noncash revenue next year. Will be interesting to see if they try a spin on that- was a little higher last year and found no reference in the 10q. I did not find the problem Pluvia found with the current liabilities, but I did not examine June 30, 1998. Year to year at 9/30 amounts appear consistent. The average collection period is approximately 68 days- maybe some of you know whether this is close for the industry. PIK is preferred is scary stuff- can someone save me a search through the 10k and summarize the terms of these? If my numbers and those of the others on this thread are close to correct, then I agree that E & Y is going to have to look long and hard at the going concern problem- such a paragraph in the audit opinion could possibly be a major problem for future financing. On the other hand, E&Y has a reputation of staying on top of problem clients and the fact that they are still the auditors is a positive for the company.