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Gold/Mining/Energy : Arcon Energy (MIDL Presently) The Ultimate Sleeper
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To: Ga Bard who wrote (1464)5/29/1998 1:17:00 PM
From: Jay Lowe  Read Replies (5) of 4142
 
Clarification and dispelling of latest warrant rumor ...

So, let me see if I can summarize, GB.

You have talked to Dan Fisher twice since the rumor arose.

It is Dan's position that he would PREFER the warrants to
be exercised by the end of June, but there is NO REQUIREMENT
to do so AND in fact there CAN BE NO SUCH REQUIREMENT according
to SEC rules and the current filings under which the warrants
are being issued by the company.

The WORST thing that can happen according to the current
filings governing the warrants is that the company MIGHT
recall them if the stock price exceeds $2.50 for 10 days,
but the company would have to provide a suitable warning
period (what? 30 days?). So even if the company wants to
recall the warrants, we still have PLENTY of time to exercise
them first, which would be a fine thing for us with the stock
price over $2.50.

Furthermore, exercising the warrants is not necessarily a cash-out
operation. One can exercise a batch, sell the common, exercise
another batch, etc ... so no one will be caught strapped for cash.

Indeed there are various different cash strategies for converting the
warrants to common, and we here on the thread will support any
warrant holders in understanding their options. The only downside to
the exercise of lots of warrants is that it increases the amount of
circulating common which may create temporary downward price pressure.
Even this will not occur if the investors exercise the warrants and
hold the resulting common, which is, in fact, the best outcome.

Is this an accurate summary of the situation?

Please correct me if I've made any mistakes.

[Disclosure: I hold a large warrant position and am not worried]
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