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Dear Reader,

Since the last issue, we closed four positions, two for gains and two for messy losses, which we had expected for some time.

PHYSIOMETRIX (1/5/03). Closed position 3/26/03 at 96¢ for a 75% GAIN.

ORBITAL SCIENCES (8/20/02). Closed position 3/17/03 at $6.05 for a 51% GAIN.

SONICblue (6/5/99). Closed position 3/21/03 at 5¢ for a 99% LOSS.

ANTEX (11/20/00). Closed position 3/26/03 at 12¢ for a 96% LOSS.

After a two month drought, it felt good to finally close a few positions for gains. We honestly don’t know what propelled Physiometrix, and, with a 75% gain, who cares? For those of you still holding Orbital Sciences, you could see even higher gains; we still like ORB, even at these prices. SONICblue, for which we held a flicker of hope, went Chapter 11, and it is time to close that book. Ditto with Antex.

Watching the war has been like seeing a surreal drama play out on the Martian landscape, and investors have been reacting accordingly. Gee whiz, it’s not over, yet?! It’s been a whole two weeks! Hey, WWII took six years and Vietnam dragged on for nearly a decade. Today’s market players have become too addicted to video games and TV sitcoms, which last all of thirty minutes. May we suggest that they try reading War and Peace?

This will soon end and our optimism about the market’s future remains intact. Not only do we have interest rates at 40-year lows, but, soon, we should see $22 to $26 bbl. oil. There are only two scenarios that can botch this up. One is more terrorist attacks in the U.S. The other is George Bush. Will he stop at Iraq or go after Iran and North Korea? Someone better tell him that there is a presidential election in 19 months. Psst, is Karl Rove home?

Our Portfolio, still in the dumper, did show signs of breathing during the last few weeks, as did the rest of the markets. In fact, the Russell 2000 even made it over 370 at one point! Wow!

Here are the headline since the last issue about companies in the Current Portfolio. Dates in parentheses are when we first recommended them.

New York Health Care (NYHC) (3/20/97). Subsidiary receives patent on its core technology. Yeah, we know. This one’s been in the Portfolio for six years, but maybe, just maybe.

Mountain Province Diamonds (MPVI) (10/20/97). Provides exploration update on drilling near the Faraday kimberlite body. (TIXX) (6/5/00). Inks contract with Pabst Theater. This one’s on the “Endangered List”.

DOR BioPharma (DOR) (9/20/00). Names new CEO. This, too, is on the “Endangered List”, but, in recent months, its future seems a little brighter. We thought the stock would get a boost because of the war, but that does not seem to be happening.

Digital Power (DPW) (2/20/01). Year-end numbers show a 20% drop in revenue, but reports earnings and a slightly improved balance sheet.

InSite Vision (ISV) (4/20/01). Reports year-end numbers, and, from looks of the balance sheet, ISV will soon need a cash infusion.

ViroLogic (VLGC) (7/20/01). Entry assay may accelerate HIV Vaccine development. Enters pact with Intl. AIDS Vaccine Initiative.

OXiGENE (OXGN) (9/20/01). Awarded U.S. patent for vascular targeting technology.

Abraxas (ABP) (10/5/01). Year-end results not pretty.

Saba Software (SABA) (11/20/01). A few new business announcements. Quarterly numbers not great, but balance sheet still appears to be okay.

Orthovita (VITA) (12/20/01). Enters pact with Kensey Nash to jointly develop and sell new biomaterials-based spine products.

Superconductor Technologies (SCON) (1/5/02). Expands strategic alliance with Heinz to offer one-stop performance solution to carriers.

Airspan (AIRN) (1/20/02). Inks agreement in China with Jinpeng.

VASCO Security (VDSI) (2/5/02). Signs letter of intent to sell its Snareworks business.

eXegenics (EXEG) (5/5/02). Year-end balance sheet still shows company appearing to be pretty solvent.

Bruker AXS (BAXS) (6/20/02). Enters joints venture with Baltic Scientific for solid state x-ray detector technology.

Diomed (DIO) (7/5/02). Gets Canadian approval for its EndoVenous laser system to treat varicose veins. Releases annual numbers, which are not great. We are tempted to place it on the Endangered List, but let’s give it a few more quarters (maybe).

Generex (GNBT) (8/5/02). May receive NASDAQ delisting notice. 2nd QT results show bigger losses due to higher costs, but balance sheet still looks good.

SpeechWorks (SPWX) (9/5/02). Wins award from Adds new voices to Speechify Text-To-Speech software.

Millennium Cell (MCEL) (9/20/02). Receives patent on system for hydrogen generation.

Viewpoint (VWPT) (11/20/02). Last issue, we placed this on the “Endangered List” due to a breach notice from bondholders. Now, those noteholders have withdrawn their default notices. Still, not a very good situation.

Titan Pharmaceuticals (TTP) (11/20/02). Year-end balance sheet still looks pretty healthy.

Interactive Intelligence (ININ) (12/5/02). ININ communication software wins Network Computing’s “Editor’s Choice Award”.

LogicVision(LGVN) (12/20/02). Several releases on products.

LookSmart (LOOK) (1/5/03). Additions to its directory surpass 250,000 mark worldwide.

Kana Software (KANA) (1/20/03). Helps improve public information campaign for Austria state government.

Allscripts (MDRX) (1/20/03). TouchWorks mEMR selected by INTEGRIS.

Applied Molecular (AMEV) (2/5/03). Hits milestone in Eli Lilly collaboration; financial terms not disclosed.

Interep (IREP) (2/5/03). FY2002 numbers not bad, not good. Names new execs.

Avaya (AV) (2/20/03). About a half dozen new releases.

E*TRADE (ET) (2/20/03). The “Bonehead of the Month” award must go to ET for giving its former CEO a 2002 bonus of $4 million.

Integrated Silicon (ISSI) (3/5/03). Partners with Goyatek on IP for the networking industry.

Interwoven (IWOV) (3/20/03). IWOV enables KQED public broadcasting to expand reach to international audiences.

Our picks for this issue are two more of those beaten-up small techs.

CONCURRENT COMPUTER CORPORATION (NASDAQ: CCUR) – $2.15. Twelve-month hi-low has been $9.29 – $1.25. Based in Duluth, GA, with about 420 employees, this systems company has 62 million shares outstanding, $57.1 million in total current assets, $93.5 million in total assets, little debt, and $28.2 million in total liabilities. Four analysts rate the stock a “strong buy”, four as a “moderate buy”, and six as a “hold”. Institutional ownership is about 42%.

Why not another beaten-down high tech with a half-decent balance sheet, owns proprietary technology, and has withstood the storm. And, so, we add Concurrent Computer to the Portfolio. Founded in 1996, Concurrent bills itself as the market leader in broadband video-on-demand (VOD) solutions and as a leading provider of high-performance, real-time computer systems. However, it should be mentioned that the company is now focusing more on the VOD than on the real-time systems, which process large amounts of data instantaneously for such applications as weather predictions, engine testing, and product design.

CCUR’s XSTREME Division is the maker of its MediaHawk Video Server that is capable of supporting over 1000 digital video data streams, and the company claims that it provides the fastest and most reliable response time in today’s marketplace. Concurrent’s products enable digital cable and DSL providers to offer their customers VOD services as an alternative to home video rentals or pay-per-view. MediaHawk is also used in hospitality, intranet video systems, and in-flight entertainment. Some of CCUR’s partners include HBO-On-Demand, ICTV, iNDEMAND, Sony, Samsung, TV Guide, and Motorola.

Concurrent’s steaming media technology currently powers 57 commercial broadband VOD deployments in North America with eight leading cable operators. In addition, CCUR has been making significant inroads into China. Just two weeks ago, the company announced that it was stepping up its marketing efforts in that country, which now has over 100 million cable TV households.

For FY2002, ending 6/30/02, revenue was $89.36 million with $4.38 million in net income versus FY2001 revenue of $72.82 million and $6.19 million in losses. During the first six months of FY2003, ending 12/31/02, revenue was $42.27 million with $4.04 million in losses. In mid-March, CCUR lowered expectations for the present quarter due mostly to continued concern by select customers regarding capital spending. Hopefully, this is just a temporary blip because of the war.

Concurrent appears to be financially healthy and has not stood still during the last few years.

Our 24-month target for the stock is $3.75 to $4.25.

For more information, call CCUR at 678-258-4000;

NANOMETRICS, INC. (NASDAQ: NANO) – $4.05. Twelve-month hi-low has been $20.81 – $1.82. Located in Milpitas, CA, with about 280 employees, this instrument maker has 12 million shares outstanding, $80.5 million in total current assets, $133.8 million in total assets, and $9.75 million in total liabilities, of which $3.13 million is debt. The founder and chairman owns 29% of the company with institutional ownership at around 54%. Three analysts rate the stock a “strong buy” and two have it as a “hold”.

One thing the war has reawakened in many of us is just how extensive nanotechnology has permeated into nearly every aspect of our lives. Over the years, we have had success with a few nano-stocks, so, maybe it’s time for another, and Nanometrics seems to have the kind of balance sheet we like.

Founded in 1975, and public since 1984, Nanometrics designs, manufactures, and services thin-film metrology and inspection systems used by makers of precision electronic gear, particularly in advanced IC, flat panel display (FPD), and magnetic head manufacturing. These systems, that can be stand-alone, integrated, or tabletop, are measuring devices that gauge the thickness and consistency of film materials used in making semiconductors, magnetic reading heads, and FPDs. Basically, NANO’s systems precisely measure a wide range of film types deposited on substrates during manufacturing in order to control manufacturing processes and increase production yields. The company also has microscope and software-based technology for measuring the relative alignment of adjacent thin film layers. NANO’s systems make use of several advanced technologies including visible/DUV reflectometry and spectroscopic ellipsometry to measure film thickness, critical dimensions, optical constants, and overlay accuracy.

NANO’s primary market is the global semiconductor industry, and it is also a leading metrology supplier to the FPD and magnetic recording head industries. The company’s main customer is Applied Materials, and others include Samsung, IBM, and United Microelectronics.

For FY2002, ending 12/31/02, revenue was $34.7 million with $8.26 million in losses compared to FY2001 revenues of $47.58 million and $960,000 in net income. Obviously, 2002 was a tough year for NANO, as with most techs, however, 4thQT sales jumped 14% over the previous quarter due from stronger demand in the Pacific Rim countries.

NANO is another one of those torn-up techs with a seemingly decent-looking balance sheet whose future appears to be brightening.

Our 24-month target for the stock is $8.00 to $10.

For more information, contact NANO’s Paul Nolan at 408-435-9600, ext. 122;

Expect to see the April 20, 2003 issue posted on 4/16 or 4/17.

Good luck,

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