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Biotech / Medical : Pharmos (PARS) -- Ignore unavailable to you. Want to Upgrade?

To: Omer Shvili who wrote (605)	3/4/1999 8:45:00 PM
From: Tony van Werkhooven	Respond to of 1386

Omer- Your comments on product samples was one that I tried to raise quite some time ago. Do you have any information re. the actual volume of samples and any way to measure the "lost" Rx's. Possibly, if those are factored in, one might get a different picture of the market share penetration growth curve. Tony

To: Omer Shvili who wrote (605)	3/10/1999 10:30:00 PM
From: Dr. John M. de Castro	Read Replies (1) \| Respond to of 1386

PARS should try to redeem the preferred convertibles. There is no apparent reason for PARS stock price to be where it is. IMHO the existence of the Convertible preferred shares scares away any large investors and savvy small investors know to stay away from companies with such instruments hanging over them. There are only 1500 convertible shares left. But, their presence on the balance sheet is a huge disincentive for investment. I would like to suggest that PARS management seriously take a look at redeeming the outstanding convertible shares. The agreement does not allow PARS to demand redemption (unless the stock price doubles from the level at the time of the deal). But, it could be negotiated. Recently I ran into a company called Larson-Davis (LDII). Their stock has been devastated by a "floorless" convertible. However, they have taken the offensive and have made arrangements to redeem the convertible preferred shares. "The Company has recently entered into agreements with the holders of all 2,938.75 shares of Series A Preferred Stock currently issued pursuant to which such holders have agreed to sell their shares of Series A Preferred Stock to the Company for payment of their original investment of $1,000 per share plus a calculated amount equal to 4% per annum since the date of their investment until payment. " The incentive that LDII used to convince the convertible holders to agree to this was they agreed to reprice the warrants that were issued with the convertibles to a price just slightly over the current market value of LDII stock. My guess is that this protected the "investors" from a short squeeze (But this was never said). "The Company also agreed to reprice an aggregate of approximately 295,000 warrants currently held by the preferred holders at $0.50 per share. A further 295,000 warrants will be cancelled." PARS can afford to do this. I would cost them about $1.75 million, which they have in cash. Once the stock price begins to recover PARS can recoup the cash by drawing down from their $10 million line of credit. This would reduce the resultant dilution. I would like to urge PARS to consider this. It would remove a large negative overhanging PARS stock value and allow PARS to trade at fair market value. John de C