November 3, 2004

Cogent Update: A good friend listened to the Cogent conference call
and says this is what was said about the Venezuela contract:

¨During the quarter, we started recognizing revenues from our $54m
Venezuela contract, which contributed to revenue this quarter. In
that, we leased certain equipment for the Chavez referendum on Aug.
15, 2004. We engaged a 3rd party evaluation firm to determine a fair
value for the lease, which was assessed at $7m in this quarter. The
lease was received in revenue this quarter. The remaining $47m of the
remaining contract was pro-rated over the life of the one-year
contract. Currently we are determining the accounting treatment for
the follow-on contract announced last week. ¨

This does not make that much sense to me, since the contract was all
paid in the quarter according to the CNE. Least of all, how anyone
could reach a conclusion that less than a quarter of the revenues are
accounted for in the most important quarter of the contract. This may
all be lock up related since the company went public on Sept. 29th.

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