Newstrike Brands Ltd NWKRF

RE:VERY IMPRESSED WITH DENNIS FONG - CFA

[silkroad007]

You are correct but im shocked this wasn't obvious to you already, that literally is the definition of a warrant.   I wonder how many times IR gets this question.   

goldman777 wrote: To help clarify the mis-understanding on this board I sent off an e-mail to IR @ 2:00 pm, Alberta time - had my response within 5 minutes. So let`s focus on the A warrants - pre conversion to Hexo. Question - If the common share price exceeds $1.00 does each A warrant still entitle me to buy one common share @ the strike price of $1.00. Answer - A warrant is a contract that allows the holder to buy common shares at the exercise price before expiry - so in this example your entitled to buy shares @ $1.00. Question - Example - common share price is $1.25, I have 100,000 A warrants, does this allow me to buy 100,000 common shares @ $1.00 - hence 25% below fair market value. Answer - Yes. Question - If the common share price goes to $2.00 and the A warrant is @ $1.00 and I choose to exercise my 100,000 do I effectively get 100,000 common shares for $1.00. Answer - Yes, the cost of your exercise would be $1.00 x 100,000 = $100,000, and you could then sell for $200,000 making a $100,000 profit. I had a few more questions to which his answers were concise and to point, those I will keep for myself. It should be noted that when a company raises money in a public offering, they only receive money for the shares , the warrants are a sweetener to the participants in the offering to make the deal more attractive - they do not contribute cash to the company until they get exercised into common shares. If the common share is worth $5.00, you still get 1 x $5.00 common share for every A warrant you hold. Every A warrant you hold entitles you to buy 1 x common share @ $1.00 regardless of what the common share price is, could be $5.00, could be $10.00. The fact that they are free trading was at the companies discretion, all warrants are not free trading. I would like to thank Dennis for his response...basically every A warrant you own will allow you to buy one common share for $1.00 ( the strike price ) regardless of what the common share is trading at - THE "A" WARRANTS ARE AN OBVIOUS BUY HERE.