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Technology Stocks : Research Frontiers (REFR)
REFR 1.847-1.2%Nov 14 9:30 AM EST
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To: N. Dixon who wrote (906)10/4/1998 2:04:00 PM
From: Roger A. Babb  Read Replies (1) of 50165
 
ND, the terms of the deal are posted on the S3 at www4.edgar-online.com

You are wrong on the point that the company does not HAVE to issue one share under this agreement. Read:

1.2.1 The "Exercise Price" shall mean the lesser of (i) $15.00 or (ii)
92% of the average of the high and low trading prices on the Nasdaq
National Market (or other exchange or market if the Shares are traded
thereon) for each of the seven trading days preceding the date that a Notice
of Exercise is given. The Exercise Price in effect during a Quarter specified
in a Put Notice may never be lower than the Floor Price specified by the
Company in such Put Notice, and the Warrantholder's obligation to exercise
this Warrant shall be suspended for so long as the Exercise Price is lower
than the Floor Price. Nothing contained in the preceding sentence shall
prevent the Warrantholder from voluntarily electing to exercise this Warrant
at a price per Share equal to or greater than the Exercise Price, provided
that such price is at least as high as the Floor Price.

This means that the warrantholder can always exercise at anything above 92% of the previous 7 day price average anytime they choose. This is what makes it like a floorless convertible.

I would suggest that you and all other REFR investors, long or short, read the S3 carefully in its entirety and make your own judgements (or ask your lawyer) as to whether it is good or bad. No need to accept anyone's opinion, the facts are clearly stated in the S3.
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