Impact on l1b to h1b transfer with cos approval when l1b rfe is denied

[Mathewt]

Hi,

I'm curently working for employer A on L1b visa. My l1b visa and I94 was expired on Aug 25th, 2012 hence my employer A filed my L1b extension and L1b to H1b transfer with change of status around May, 2012.

My current status

Received my L1b to H1b transfer with COS approval on 14th December, 2012 and new I94

But my L1b RFE was denied on 10th Jan, 2013.

Questions

1. Whats my current status?

2. Can i continue to work for my employer A as my L1b to h1b transfer approved with COS?

3. Or do i have to leave the country and get back with the new stamping?

Please advice.

Mat