Exercise Warrants that are out of the money
While it may not make any sense, normally, to exercise a warrant that is out of the money, there is a reason to do it here. Without being able to buy shares of HYCT directly or from another holder of HYCT common shares, the only other way I can see to get at least one share of the common shares would be to buy some warrants and then exercise one of them. That is what I was trying to do on Thursday when I bought 101 warrants at the ask. My plan was to exercise one warrant for one common shares and then get a copy of the financial statements. After that I could see if I wanted to buy more warrants or just hold onto the 100 of HYCTW. It also would give an idea as to how much HYCT could take part in the project it owns 25% of with West Kirkland Mining (WKLDF).
Once you have a share of the HYCT common, then you can get a copy of the financials, see what the numbers are, and have some information to value the common which then can be used to value the warrants.
While the warrants are out of the money, one should be allowed to exercise them and get common shares if they want to, in spite of the fact that it may not make any sense in that the common trades for less than the exercise price.
If a brokerage firm will try to exercise a warrant but objects on the basis of the common being less than the exercise price, I would recommend telling them that you know that but you are looking to get some common shares so you can get a copy of the financial statements and then be able to value the warrants. As far as I know, there is no rule or law that prevents someone from exercising warrants to get common shares when the common shares are less than the exercise price.
Louis J. Desy Jr.
