If you prefer to assume the best case scenario then go ahead. I'd rather be skeptical first and be proven wrong. The way it reads to me is that there are 13.5M each. Plus, the math doesn't work out otherwise. Do you think that someone would pay 1.10 for warrants to buy stock at 2.255 when the stock price is less than 2.255 already? Warrants have a strike price of 2.255, so when exercised have to be paid the company 2.255/warrant to get common shares. 13.5M preferred x 1.10 (per PR) = 14.8M (which is also what they said they raised). So the warrants are included in the 1.10/ea? No way, no how. You typically see warrants in deals like this as a sweetener to get investors to come aboard. That's the most likely case here as well...they're freebies.
The company needed 10-15M NOW, to get inventory and complete the railway system. Warrants that won't be exercised for 6+months don't help this cause, so they ARE above and beyond the 13.5M preferred shares that raised the 14.8M dollars. Perhaps, it's not a 1:1 warrant per preferred share issued, but it's still above and beyond the 13.5M preferred shares.
Again, if the CFO had been clear in the PR this wouldn't be a question right now..which is my problem with the guy. This is the second time he's had to retract/restate something he's put out that caused the shares to drop hard. He's had two chances on this PR, yet there are still questions to be answered. I'm not a basher, but I do think it's ridiculous to still not know the terms of this financing after two PR's on the subject. Defend him all you want, that's bush league.
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