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Technology Stocks : Lightpath Technologies: LPTH New WDM player -- Ignore unavailable to you. Want to Upgrade?

To: GBT who wrote (465)	9/21/1999 8:41:00 PM
From: PartyTime	Read Replies (1) \| Respond to of 1219

GBT--I once had warrant thing down, but that was back in '97. And I don't know if the structure has changed since that time. But let me see if I can remember how it goes--it's been a long time. I'm sure someone will correct any errors. But this will get you going anyway. First off, the warrant system is a classic of DH Blair, LightPath's underwriters. Blair does this with several stocks. LPTHA = Common Shares, as in any stock. LPTHW = Class A Warrants. When the Common Share price reaches in excess of 6-something (forget the exact figure) the holder cam exercise their right to convert (buy) each A Warrant into one Common Share and also one Class B Warrant. A twp-for-oner, so to speak. LPTHZ = Class B Warrants. When the common share price reaches in excess of--if my memory serves me correctly--8.75 the B Warrant can be converted (bought) into a common share. LPTHU = Units of 1/3 Common Share; 1/3 A Warrant and 1/3 B Warrant. I forget the conversion price for the units, but it's some combination close to what is described above with respect to the A and B Warrant. In effect, they work like options. But they are better than options since they don't expire till the year 2001. I think their original life expectancy was approximately five years. Meanwhile, the warrants and the units trade just like common shares trade in the market. Although the holder of the warrants has an option to convert, so also does the company There are certain target prices at which the company can call in the warrants. This helps the company raise money. Given the difficult financial constraints LPTHA has seen over the years, I'm sure it wished it could have called in the warrants. The underwriters, however, make money from trading them, so very likely wish to hang onto this trading option as long as possible. What's good about the warrants is they enable you to buy into the company cheaply and you're still guaranteed the conversion price even if the share price should suddenly surge beyond the conversion range. Were this to happen, however, be rest assured the warrants would be called and you'd be forced to convert. What's bad about the warrants is, if nothing happens, they can become worthless. Another consideration is warrant holders do not have shareholder voting rights and thus no say in the direction of the company. First to be converted into Common Shares will be the A Warrant, then the B Warrant and then the Units. I'm sure I screwed this up somewhere. Please, someone, correct me if I've made an error. Thanks. Recommend you visit the Yahoo LPTHA thread as the bulk of LightPath investor communication is taking place over there. Perhaps you should repeat the question there and compare my answer with whatever answer you get there. Of course, you could also call LightPath's investor relations department or review the SEC filings where all of this is explained. Good luck to ya!