On August 13, 1998 Research Frontiers issued a press release announcing "that it has been repurchasing its own shares". Corporations typically engage in share buybacks to lower the number of shares outstanding and thereby enhance shareholder value. in the case of Research Frontiers however, the "share buyback" announcement was simply another attempt to defraud investors by giving the false impression that the company was reducing actual shares outstanding. In fact, the stock was being massively diluted through the excercise of warrants and "back door" offerings at prices far below what retail investors were paying.
The following table lists the total shares outstanding for each fiscal year back to 1994. The information comes from the company's own SEC filings.
Year - Total shares outstanding
1994 - 8,768,801
1995 - 9,196,479
1996 - 9,924,875
1997 - 10,201,961
1998 - 10,878,141
In REFR's last 10-Q filing (3/31/99) total shares outstanding were 10,940,549.
This massive stock dilution is not surprising since REFR has no other source of income beyond selling stock to the public. unfortunately, REFR can't use legitimate underwriters to offer stock at prices at or near the current market, so it relies on highly dilutive schemes that offer warrants to vulture investors at deep discounts. Research Frontiers has not bothered to issue press releases explaining this stock dilution. |
