So the way this will work looks like this.
When the number of "new" shares is determined, that number will be divided into $1,295 million. The resulting number will be the warrant strike price.
Notice that number has nothing to do with whatever the actual share price is.
Existing shareholders will own no stock in the new company. They will have the right to purchase shares by exercising the warrants priced on the above formula.
The number of warrants that will be issued is 6% of the total number of shares in the "new" common stock.
Until the number of "new" shares is determined there is no way to compute the number of warrants you will receive or their price.
If you assume that the number of shares is equal to the present number of 43 million shares, then 6% of 43 mil = 2.58 mil warrants will be issued.
So, a shareholder that presently holds 10,000 shares will receive 600 warrants in place of his 10,000 shares.
Assume his cost basis for those 10,000 was $3 his total investment was $30,000. To get back to even on his investment those 600 warrants will have to be worth $50 ea.
Assuming those warrants are priced at close to the share price, which is a generous assumption, The share price would have to make an astronomical gain for the shareholder to just break even.
This is a truly dismal picture.
"Wise men talk because they have something to say, fools because they have to say something."
PLATO
