Excite@Home stares down the barrel

Excite@Home Inc. and its auditors Ernst & Young LLP have warned that there is "substantial doubt about the Company's (Excite's) ability to function as a going concern" in a filing to the U.S. Securities & Exchange Commission.

The high-speed Internet access and Web site portal company's share price on the Nasdaq exchange has dropped below US$1, and its stock could be delisted for having less than the minimum required net tangible assets and stockholder equity.

The company raised $100 million in June from the issue of convertible notes and $85 million through the restructuring of its optical fiber-backbone agreement with AT&T Corp.

"If the Company's Series A common stock is delisted, the terms of the ($100 million) convertible notes provide for their acceleration of repayment in cash at that time," Ernst & Young said in the filing Monday.

During the day's trading, Excite@Home's share price (Nasdaq:ATHM) fell a further 46 percent to $0.47 per share.

"The company has incurred repeated operating losses and negative cash flows and has a substantial need for additional funding to support its operations," the filing said. "Our existing cash and other liquid assets may not be sufficient to fund operations through the end of 2001. We cannot guarantee that we will be able to obtain additional funding on acceptable terms, if at all."

The company pulled out of its European operations in June and has been shedding jobs steadily throughout the year.

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David Legard

PC World
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