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Technology Stocks : Source Media SRCM -- Ignore unavailable to you. Want to Upgrade?

To: Nevada who wrote (1617)	11/14/1998 3:10:00 PM
From: MW	Read Replies (2) \| Respond to of 3015

Nevada; I don't know who you are or how long you've been lurking here but welcome to the board. In 2 posts I can see you due your homework, know what you are talking about , but most importantly you appear to have no "agenda" and are open to hearing all facts and opinions. I feel exactly the same way. I only deal with pluvia and his groupies because I am very long and I want to hear his opinions so I could be comfortable with mine. despite what he might think I look into every claim he makes just to satisfy myself I'm not missing anything. I'm still long so that will tell you what I think of his opinion so far. As you have seen already you won't be able to corroborate most of pluvia's assertions. He exagerates, manipulates, misstates, things all the time. You'll see thru him in no time . Now on to SRCM. First, I agree the financials suck, big time. Of course I am concerned about that but this has never been a financial story it has ALWAYS been a technology story so in this case no DD is complete without that. What do we really know at this time??? 1. Srcm claims to have a very broad patent portfolio concerning addressable presentations over a cable tv environment. There have been 2 challenges to date. The first was settled favorably for srcm against GTE for approx 750,000$ and gte liscensed the tech for its MAINSTREET product. The project has not been very successful otherwise srcm would have received more. The other action has srcm sueing Worldgate for infringement which is still pending. No one else is either challenging them yet and no one else is infringing on it yet either. certainly not conclusive but positive. 2.GIC in their last conf. call stated they were ahead of schedule on delivering their new digital boxes and the cable co's are putting the finishing touches on their marketing plans to roll out digital service. Srcm has a deal with Insight Comm for it's Interactive Channel. The way it works is insight or any cable co will have a digital product which will consist of a number of digital applications including internet access and they will charge a bundled price for these services though internet access might be a separate item. Srcm will be paid a fixed amount[ not sure but probably in the.50 to 1.00 range per month per sub. as well as share in e-commerce and other revenue possibilities. Srcm also plans on leveraging their national sales force for the IT Network to Local Source{interactive channel]. The business model for the Virtual Modem revolves around the patents. Cable co's will select an ISP [@home, roadrunner, aol] to provide internet access. In order for these isp's to deliver addressable presentations to individual homes from a set top box over cable lines you must go thru srcm's patents. Wilson Sonsini represents srcm re their patents and while that also doesn't guarantee anything it is another good sign. 3. NO big cable co's have announced who their partners are going to be yet clearly they will have to start soon as they all will roll out something in 99. Until I see cable co's making deals with other co's to do what srcm does I'm not concerned. Why not SRCM??? It works, it's simple for the cable co to install, it's easy for the consumer to use, it's inexpensive, it keeps control of the industry in the hands of the cable co's and not the likes of msft. What co or technology will make these new boxes work if it's not SRCM??? I haven't seen or heard of any and we're getting close. 4.SRCM and it's technology will be on display and available to anyone who wants to see it DECEMBER 2,3,4 at the WESTERN CABLE SHOW IN ANAHEIM CALIFORNIA. See for yourself at the GENERAL INSTRUMENTS, SCIENTIFIC ATLANTA, AND CABLESOURCE BOOTHS. So bottom line , financials suck, how can they get out of this mess??? IF they liscence their virtual modem technology, and/or sign carriage agreements with major cable operators, and/or continue to grow the IT Network and leverage the sales force and advertising for yellow pages and cable then I would imagine all types of financing options would be available if needed. So no hype, but would you want to be short and wake up one morning to SRCM announcing a liscence deal with aol, or yahoo, or @home or maybe a carriage agreement with TCI or Time Warner or Comcast or Adelphia??? With a huge short interest and small float and the mania that sometimes has done wicked things with anything internet related? See Broadvision this week? Somebody is going to be getting these deals. If not SRCM then who?? How do you know for sure?? I REPEAT. I AM NOT PREDICTING ANY OF THE ABOVE IS GOING TO HAPPEN. I DO HOWEVER INTERPRET WHAT I SEE AS POSITIVE AND THEREFORE I AM LONG. IF I AM RIGHT, HOW CONCERNED WOULD YOU BE OVER THEIR CURRENT FINANCIALS???? Regards; MW

To: Nevada who wrote (1617)	11/14/1998 3:36:00 PM
From: Rajiv	Respond to of 3015

Nevada, Late last year, SRCM issued 12% bonds for 100 million. 22.4 Million was put in an escrow account to cover 4 bi-annual interest payments (May 1998, Nov 1998, May 1999 and Nov 1999). The 17.6 million shown as cash restricted represents the money in the escrow account (this would have been reduced by 6 million on Nov 1,1998). SRCM also issued some preferred stock for 20 million carrying interest of 13.5%. This is of the PIK variety. They also come with some juicy warrants. SRCM used the 120 million for - retiring previously existing debt - funding the Brite/VNN acquisitions - 22.4 million went into the escrow account - cash to fund its operations Hope this helps. Regards. Rajiv

To: Nevada who wrote (1617)	11/14/1998 4:02:00 PM
From: Pluvia	Read Replies (1) \| Respond to of 3015

Nevada, <<<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.>>> Glad to have you on the thread. I was not looking at the current liabilities on the Consolidated Balance sheet, rather the line item "Trade accounts payable and accrued liabilities" in the Consolidated Statement Of Cash Flows, and comparing Q2 to Q3 '98 which shows a SIGNIFICANT increase... The issue of aging is not my concern, rather the fact that there never seems to have been this large a dollar amount in this catergory in the past... Here is the 98 Q2 ending June 30 1998, please see page 6 line item "Trade accounts payable and accrued liabilities" in the Consolidated Statement Of Cash Flows. edgar-online.com Here is the 98 Q3 ending Sept 30, please see page 6 line item "Trade accounts payable and accrued liabilities" in the Consolidated Statement Of Cash Flows. freeedgar.com You will notice Q2 shows $683.00, while Q3 shows $2,495,913.00, for an increase of $2,495,230.00. I find it very curious this spike in current payables, (liabilities), seems not to be clearly reflected in the Consolidated balance Sheet (page 4) under Current Liabilities? Maybe you could help me understand this? I'm scratching my head over it right now... Where do you think they burried these expenses on the Consolidated Balance Sheet - or am I missing something? All comments IMO Thanks Steve