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Technology Stocks : Research Frontiers (REFR) -- Ignore unavailable to you. Want to Upgrade?

To: Jonathan Babb who wrote (1089)	10/13/1998 5:30:00 PM
From: N. Dixon	Read Replies (1) \| Respond to of 50113

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

To: Jonathan Babb who wrote (1089)	10/13/1998 6:33:00 PM
From: Jonathan Babb	Read Replies (1) \| Respond to of 50113

Folks - I am posting the answers to my earlier technical questions that have been forwarded to me by the company. I make no representations about the accuracy of these answers and am only repeating what was in an email. 1. If no electric current is applied to the window, will it be light or dark? With no voltage applied, an SPD film reverts to its darkest state. This is not necessarily opaque since one can tailor chemically how dark the film gets in its off state. 2A. How much power is consumed per square foot when the window is dark? No power 2B Light? About 60 watts (ie power for one dim light bulb) would be needed to make 100 square feet (about 10 windows) fully transparent. This negligible power consumption should be more than offset by energy savings. 3. What voltage levels are required? Current? AC/DC? 5-7 volts for SPD displays. We use line voltage (110 volts) for windows because that's what's running through most people's homes. Current is miniscule (see answer to question 2B). We use AC current (just like liquid crystal displays). Because of low current and fact that it is easy and cheap to invert battery powered dc to ac, and step up voltage, we actually have Hankuk's casement window running off of a 9 VOLT RADIO BATTERY with the dc voltage converted to ac and stepped up to line voltage. 4. What is the cost per square foot of glass? What is the cost per square foot for the glass alone on some of the office buildings that are being targeted? What percentage of this cost is materials, what percentage is labor? The selling price is up to our licensees. Their raw materials cost should be dirt cheap, enabling them eventually (as more licensees enter into the market and cause competition) to drive the selling price way down. Graeme Fairlie from MSC is quoted in the Wall Street Journal article as saying that the SPD feature should add about $15 per square foot to the consumer's cost of a window. Not bad when one considers energy savings and the money avoided on expensive window shades, blinds, curtains, etc. They also mentioned that although I had pointed out that 2 of the patents had expired, the core technology was covered by patents dating from 1991 to 1995 and would not expire for some time. I am not making comments on these answers, only sharing them - you'll have to confirm with the company if you want to make an investment decision. Send me private email if you want to discuss. Thanks, Jon