FormerXBC Inc XEBEQ

RE:RE:RE:RE:Did you know ?

[AlwaysLong683]

Though both standard options and warrants typically offer the holder to purchase one common share at a given exercise price, there are differences:

Warrants are usually issued to external investors participating in an private placement / equity raise as a sweetener to pursuade them to buy the large quantity of (new) shares being offered in the equity raise.

The strike price of the warrant is usually somewhat higher than the purchase price of the shares at the time of the raise, but a generous time period is usually given (in this case, it appears to be three years from the time of the raise), so the warrant holder will have plenty of time to (hopefully) see the share price rise a given amount before the warrant is in the money and the holder of the warrant can buy another common share for less than the (now higher) share price the company has hit at some point over the allotted time period.

Options are usually granted to individuals who work for the company in top management postions in lieu of higher salaries or other benefits as small companies cannot usually afford to pay a CEO, CFO, etc. the full compensation they would otherwise deserve in salary alone.

Options usually have a srike price that is pretty low so its holders can take advantage of them as additonal compensation for their work.

If the share price tanks subsequent to the offering of the options to company employees and thiey expire without the holder exercising them, a company will oftern issue new options at lower prices commensurate with the (now lower) current share price.

Coversely, if warrants expire without being exercised, the holder does not usually get another kick at the can.