Raptor Networks reduces strike price on warrants issued in June 2004

By Sheri Kasprzak

New York, Sept. 26 - Raptor Networks Technology, Inc. said it has reduced the strike price on the series D warrants associated with its June 2004 private placement.

The strike price on the 972,223 series D warrants issued in the placement was reduced to $0.50 from $3.50.

"The company determined the $0.50 exercise price to be fair given certain ambiguities in the terms of the anti-dilution provisions of the series D warrants," Raptor said in an 8-K filed with the Securities and Exchange Commission.

"The reduction in exercise price of the series D warrants was also provided as consideration for the waiver by the investors of penalties the company would likely otherwise be subject to under the terms of the registration rights agreement."

A new agreement entered into by Raptor and DMK Investments, LLC; Transglobal Investments, LLC and Uptrend Investments, Inc. - the original investors of the offering - waives anti-dilution protection to which the investors might otherwise be entitled.

When the strike price of the 972,223 series C warrants issued in the June 2004 offering was reduced to $1.25 from $3.00 in August of 2004, there was some ambiguity about whether the repricing triggered anti-dilution provisions. The investors and Raptor entered into a clarification to ensure that the repricing of both the series D and series C warrants does not trigger anti-dilution provisions.

Based in Santa Ana, Calif., Raptor develops switching hardware and software for the education, government and telecommunications sectors.

On Monday, Raptor's stock gained $0.03 to end at $0.53.

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