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Microcap & Penny Stocks : FONR...Patent on Cancer Detection....
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To: Tom Hofmann who wrote (166)2/14/1997 9:32:00 PM
From: Dick Jaffe   of 560
 
I have studied the terms of the class action suit settlement relative to the preferred stock dividend. I'll try to simplify the legalese.
There were five patents at issue in the GE suit, not including the "Open MRI" patent. The first and original 1974 patent was overturned by Judge Wexler in the GE suit. Fonar appealed that one. If the Appellate Court reverses the District Court judge, the damages awarded by the jury on that one (I think it was $48 million) would be reinstated. Those damages would be the subject of an award to the COMMON shareholders to the tune of 3 1/4% of the first $10 million, 4 1/2% of the next $20 million and 5 1/2% of all additional recoveries on that patent only.

Now, as to the preferred stock issued to all common holders as of 10/20/95 as a dividend of one share of preferred for every five common held: Those shareholders will receive the same payout as above with respect to all five patents (less the amount paid to the common, if any, on the first patent)including any recovery on lawsuits commenced within six months after the effective date of this settlement.

Also, as an additional bonus to the common shareholders, they will receive one warrant for every eight shares held with a strike price equal to Fonar's market price on the date the warrants are issued (which will be on or within 60 days after 4/7/97). NOW HEAR THIS!
Those warrants will have a life of FIVE YEARS!

Read my last post techstocks.com If
Fonar prevails on the appeal, I would think the minimum dividend on the preferred stock to be .50 per share, and possibly a whole lot more. Remember, there is another suit awaiting GE after this one is resolved . . . for infringing on Fonar's "Open MRI" patent. GE's CEO, Jack Welch, recently bragged on CNBC that GE had locked up 25% of the Open MRI market. I'm sure Fonar's lawyers have that on tape.

Our patience will be rewarded!
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