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I just went out on Edgar to see what Peregrine is telling the SEC. The last posting is their loan agreement with Foothill Capital, a Silicon Valley outfit. The loan is for $56 million, net $50 million to Peregrine. The loan colateral is basically everything of value in the company, the most valuable of which in my view is their customer service intellectual property (software). It also forced the sale of the supply chain business to Golden Gate Capital. Repayment of the loan is at the rate of just over $1 million a month, beginning in February of 2003 and ending with a baloon payment at the end of the year. Both of these investment firms a vulture capital outfits looking for assets at very distressed prices. They did well here.

Sexton is pretty closed mouth about what all this means but I infer is that this bridge loan will keep the company going through 2003 at the current business rate and that it is unlikely that they will enter bankruptsy court in the near term. That also implies that they will clean up their books and get re-instated on NASDQ.

Where they are is in a horse race. If the economy improves and they execute well and get back on their feet, they will emerge winners by the end of next year. If they don't, Foothill Capital will get all the assets of the company and the stock will be worthless.

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