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Technology Stocks : Research Frontiers (REFR)

REFR 1.560

-2.5%

Nov 7 3:59 PM EST

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To: Jonathan Babb who wrote (1089)	10/13/1998 5:30:00 PM
From: N. Dixon	Read Replies (1) of 50104

I am referring to the characterization of the S-3 filing as being like a floorless convertible. It has a floor, one which REFR sets. It has a cap of $15 and it stipulates that the only shares Ailouros is guaranteed are 65,500 at $8.25. Now with REFR and Ailouros both stating publicly that they have been buying shares in the open market, how do you propose they are going to make this financing deal a problem for investors? Why would REFR issue one share below the $8.25 that Ailouros has already agreed to pay? Why is it that not one of your scenarios takes into account the fact that REFR does not need the cash at this time, that REFR has revenues coming shortly from products that will be on the market most likely by June next year? The fact they do not need cash at this time is verified in the filing (which would HAVE to indicate a financial crunch if there was one) and the recent announcements by TWO of the three licensees that they intend to come out with SPD product certainly backs up conjecture that SPD products are coming in 1999. Now, how can you, after speaking with Joe Harary and corresponding with him, come up with a scenario that has this company needing to get ANY of the $15million for less than the $8,25 already agreed to for 65,500 shares. And since REFR can only put a MAXIMUM of $1.5 million per quarter you are looking at only 181,818 shares issued. Hardly dilutive. And what reason could you give for them asking for 1 penny less than $8.25 especially with the news that will be coming? When you can answer those questions honestly, maybe we could get at the truth. ND

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