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Racing against the "going concern" warning bell,

Beyond.com

(BYND) - Get Beyond Meat, Inc. Report

on Wednesday reported "substantial progress" in its transition to a B2B player from a failing B2C player, and said it now has cash to fuel its flames of red ink for more than 12 months.

In its first-quarter earnings release Wednesday, Beyond.com reported triple-digit revenue growth in its eStore and Government Systems Groups. Both businesses are important to Beyond's transition away from consumer e-tailing -- a transition that cost the company a restructuring charge of $13.7 million in the quarter. Some $11 million of that was spent on fees paid to terminate expensive and lengthy consumer-oriented marketing agreements with, among others,

AOL

(AOL)

,

Yahoo!

(YHOO)

,

Excite

(ATHM) - Get Autohome Inc. Report

and

ZDNet

.

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Interim CEO Rick Neely estimates future cash savings resulting from the termination of those agreements to be $24 million. The deals called for Beyond to make cash payments to several Internet portals in exchange for exclusivity agreements. In the case of AOL, Beyond was the exclusive provider of electronically delivered software on certain of AOL's sites.

Beyond's move comes a day after

drkoop.com

(KOOP)

announced that it had restructured its own marketing agreements with Internet portals AOL and the

Go Network

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. Those costly marketing deals are partly responsible for the deathwatch focused on

drkoop

(KOOP)

, which received a going concern warning from its auditors and said Tuesday it has just enough cash to go it alone through August.

Despite the positive note struck by Beyond, the company missed analysts' estimates by a wide margin. Net loss, excluding goodwill amortization, deferred compensation and the restructuring charge, was $20.6 million, or 55 cents a share. Analysts polled by

First Call/ Thomson Financial

had predicted a loss of 46 cents a share. In the first quarter of 1999, net loss was $18.1 million, or 64 cents a share, excluding goodwill amortization and deferred compensation.

Still, analyst Daniel Ries of

C.E. Unterberg Towbin

, which has business ties to Beyond, was upbeat. "I was much more pessimistic a month ago." He likened the company to an emergency room patient, saying: "Numbers weren't very important. The patient went into the emergency room in late December. The first job of management is to stabilize the company, which I think they've done, but it's still bleeding cash." Ries has a neutral rating on Beyond, and C.E. Unterberg, Towbin was one of the underwriters of Beyond's secondary offering in April of last year.

Net revenue for the first quarter was $31.3 million, 64% more than the year-ago quarter. Revenue for the eStore Group grew 166% to $9.2 million from first-quarter 1999. The Government Systems Group did even better, growing revenue 233% to $10.2 million. The eStore unit allows manufacturers and software developers to launch a full-featured Web store in a few weeks, while the Government Systems business delivers e-commerce software to the government.

Beyond said it now has $50.1 million in cash. With a quarterly cash burn rate of $12 million, the company predicts it has enough cash to continue to fund operations for the next 12 months. Auditors issue going concern warnings when they believe a company will run out of money in less than 12 months.

Beyond shares closed down 1/64 Wednesday at 2 1/2, continuing a steady decline that began in July.