Giggles N'''''''' Hugs Inc. (fka GIGL)

[kickask]

Warrants are usually pretty far out of the money. You would exercise the warrant at a later date if they were in the money. The assumption is with the warrant period, they would be in the money at some point. Also, warrants that are out of the money trade all of the time on the market. I don't know what the current value would be of the current warrants, but for discussion sake, let's say the market says they are worth .002. This is just a hedge that somebody thinks they will be in the money down the road and are willing to pay .002 to be able to buy them at .06 in the future. If after a year, the stock price is .10, they could exercise the warrant and make .1-06-.002 or they could resell the warrants for the current market price which would be something above .04, a pretty healthy return on .002. If the stock price is rising quickly and there is a lot of time left on the warrants, the warrant price can run very quickly.