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To: EACarl who wrote (975)	11/30/1998 12:31:00 AM
From: Ian@SI	Respond to of 3661

Don't expect MTSN to loan Brad another $3M+ if he gets another margin call. Removing that item and factoring in the lower break even should give MTSN ample cash until the next up cycle. If the cycle turns up sharply rather than gradually, cash will be required to ramp up inventory (i.e. raw materials, WIP) before revenues start flowing from the finished goods. FWIW, Ian.

To: EACarl who wrote (975)	11/30/1998 6:51:00 AM
From: Q.	Respond to of 3661

You were right to focus on the cash burn last Q. Even worse was the working capital burn. Brad was asked about this in the last cc. Looking forward, he expected a burn of something like one or two million per Q (I don't have my notes in front of me, so I'm quoting from memory). I suppose this assumes that revenues remain sequentially flat, although he didn't say. He emphasized that this burn rate is not 'threatening', and if it does come out to one or two million a quarter, he is right. It was significantly higher last Q due to a couple of non-recurring items: a large loan to Brad to meet his margin call, and a lot of acquisition related burn. The loan is something that will get repaid eventually, so that should reverse, provided the stock doesn't go bust.