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

To: N. Dixon who wrote (1108)	10/13/1998 9:03:00 PM
From: Jonathan Babb	Read Replies (1) \| Respond to of 50132

Dixson - I was saying that the reason that all your favorite stocks listed on your SI profile have convertibles does not necessarily mean you are promoting them. Good luck with them and any blue chips you also choose to invest in. Jon

To: N. Dixon who wrote (1108)	10/13/1998 9:20:00 PM
From: Jonathan Babb	Read Replies (1) \| Respond to of 50132

Facts only: On Nov 17, 1997 REFR filed an SEC registration for $5M worth of an interesting instrument called a "Redeemable Pre-paid warrant". In the statement it mentions that: In accordance with Rule 416 under the Securities Act of 1933, Common Stock offered hereby shall also be deemed to cover an indeterminate number of securities to be offered or issued to prevent dilution resulting from stock splits, stock dividends or similar transactions, as well as an indeterminate number of securities issuable upon exercise of the Redeemable Prepaid Warrant (and warrants issuable to the Selling Stockholders upon certain redemptions thereof by the Company) to purchase Common Stock, and is deemed to include any additional shares of Common Stock that may be issuable upon such exercise as a result of the antidilution provisions thereof or as a result of any adjustment to the exercise price. You decide what this means. Read the document for the full terms, I'm going to include here the defintion of excercise price and the soft floor provision because that is what I find interesting. 1. Definitions (a) the term "Exercise Price" shall mean the lesser of (i) the Initial Exercise Price or (ii) 82% of the average of the high and low trading prices on the Nasdaq SmallCap Market (or the Nasdaq National Market if the Common Stock is included therein) for each of the previous five trading days as of the date of exercise (the "Valuation Period"); provided, however, that in the event that the Registration Statement referred to in Section 2(b) of the Registration Rights Agreement is not declared effective by the Commission by the 120th day following the Closing Date, the Initial Exercise Price shall be reduced by 2% for each month or portion thereof that the Registration Statement shall not be declared effective, such reduction pursuant to this proviso not to exceed 8% or, in lieu of such reduction, the Company may elect, by irrevocable notice to the Warrant Holder received not later than the 120th day following the Closing Date, to pay the Warrant Holder an amount equal to 2% of the Outstanding Amount in shares of Common Stock for each month or portion thereof that the Registration Statement shall not be declared effective, such shares of Common Stock to be valued at the average of the high and low trading prices on the Nasdaq SmallCap Market (or the Nasdaq National Market if the Common Stock is included therein) for each of the five trading days immediately preceding the end of each such month (or, if the Registration Statement is declared effective during such month, for each of the five trading days immediately preceding the date the Registration Statement is declared effective) and to be issued within five (5) days after the end of each such month or effective date, as thecase may be. [cut] (d) Soft Floor Provision. The Warrant Holder may not exercise this Warrant at any time that the Exercise Price is less than or equal to $5.10 (the "Floor Price"); provided, however, that in the event that the closing price of the Common Stock on the Nasdaq SmallCap Market (or the Nasdaq National Market if the Common Stock is included therein) is less than or equal to the Floor Price for sixty (60) consecutive calendar days, the prohibition on exercise set forth in this Section 2(d) will, upon the expiration of such sixty (60) day period, be inoperative, subject to reinstatement in the event that the Exercise Price is equal to or greater than $8.37 for a period of ten (10)consecutive trading days. I'm not even going to try and interpret this. A question I have asked but not had a reply too is how many of these warrants are still outstanding and how many have been converted into stock so far. I have so far only found a mention of them in last year's 10-K and no mention in this years 10-Q's that I can find. What is your take on this? Good luck, Jon