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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: Michael T Currie who wrote (12321)	2/18/1999 9:55:00 AM
From: John Wu	Read Replies (1) \| Respond to of 122087

TheStreet.com article today on CYOE: Coyote Warns of Cash Shortage By Kevin Petrie Staff Reporter 2/18/99 9:02 AM ET Desperately seeking cash. That is Coyote Network's (CYOE:Nasdaq) message in its latest financial documents. Tuesday evening, the telecom company reported that it lost $4.2 million, or 41 cents a share, in its fiscal third quarter ended Dec. 31, compared to a net loss of $3.4 million, or 44 cents a share, a year earlier. The company's losses widened even as revenue grew a whopping 680% to $12.9 million from $1.7 million a year earlier. Cost of goods sold ballooned to $10.2 million from $516,000. Coyote has acquired numerous "resellers" of phone services, but it still draws much of its revenue from selling network equipment. It does not break down revenue in the most recent quarterly filing. With negative working capital of $3.9 million at year-end, Coyote is suffering from a paucity of cash. "The Company is currently in the process of seeking to raise funds through debt and equity financing and if this process is successful, management believes that it will provide adequate liquidity to meet the Company's planned capital and operating requirements through March 31, 1999," Coyote's latest 10-Q filing with regulators states. On Dec. 9, TSC reported that it was unable to find active tax records, a business license or the physical headquarters of Crescent Communications Inc., a major customer that accounted for almost 75% of Coyote's revenue in the September quarter. Coyote's stock fell 1 9/16, or nearly 20%, to 6 7/16 Wednesday. The stock traded around 14 in early December. Coyote warned of possible trouble ahead with the regulators. "Since the publication of the articles, the Nasdaq National Market and the Securities and Exchange Commission (the "Commission") have asked the Company to provide documents and other material about the Crescent Communications transaction. The Company is cooperating with both the Nasdaq National Market and the Commission in connection with these requests. However, because of the Commission's practice of keeping its inquiries confidential, the Company does not know the status of the inquiry." The document adds that the inquiries "could have a material adverse effect on the Company." A company official declined to comment on questions about this and other matters raised in the 10-Q. Contrary to its September 1998 press release, Coyote now states in the 10-Q that it sold network gear worth $12 million to Comdisco (CDO:NYSE), a computer-leasing company based in Illinois, which in turn leased it to Crescent Communications. The deal is to deliver another $16 million in equipment and $9 million in services. But now Coyote is raising concerns about Crescent, which it claims is a young provider of international calling services. "Crescent's development is not within the Company's control and such future sales and deliveries may or may not occur." Comdisco owned 6.6% of Coyote through stock and warrants as of Jan. 12. Coyote also says in the filing that it did not focus on the "business history or individual creditworthiness" of Gene Curcio, president of Crescent. There are other worrying signs. Early this month, Coyote said it bought a majority interest in Systeam SpA, Rome, for $5 million in cash and 880,000 unregistered Coyote shares. But the 10-Q now raises questions of whether Coyote has enough cash to pay for the purchase. With cash reserves of only $2.1 million as of Dec. 31, the company has to pay $3.5 million by March 18 and is trying to raise funds to do so. "If the Company [is] unable to obtain the funds by March 18, 1999, the Company may ask Systeam to extend such date. There can be no assurance that an extension will be granted and this agreement may be terminated, which could have a material adverse effect on the Company," the document states. In another interesting development, Coyote said it sold $7.2 million of goods to Wireless USA, a long-distance carrier, but Wireless USA might be unable to pay. Coyote has deferred a $3.7 million profit from the sale and set an unusual arrangement, a promissory note that is "partially secured by a personal guarantee from the president of Wireless USA." Coyote declined to comment on numerous phone messages and a set of emailed questions.

To: Michael T Currie who wrote (12321)	2/18/1999 9:57:00 AM
From: Mama Bear	Read Replies (1) \| Respond to of 122087

"Suggest you take a close look at CYOE." For those who are unaware of it, CYOE used to trade on the NYSE as Diana Corp, DNA. They were a failing meatpacking operation that reinvented themselves as a networking company. Networking stocks were the Internet stocks of the time, and it ran to 120 in a massive short squeeze based on hype and euphoria, and of course a small float. They were delisted from the NYSE and traded on the OTC:BB as DNAK until they changed their name and symbol to Coyote Systems, CYOE. The Nasdaq listed them earlier this year. Barb