Replies to post #76967 on Electronic Cigarettes International Group Ltd fka

[Full Contact Yoga]

Some of the warrants are prepaid and exercised already. Others are a right to buy at that price. But, some of the convertible debt can be paid in cash at a pretty big up charge rather than convert the debt to shares. The potential excess isn't very big and anything could happen. The least complicated is to raise the AS if exceeded, but I don't envision that occurring. Dan could also use cash received from warrants or current available cash to buy back shares which, IMO, would be most beneficial to shareholders. But, again, tons of options and opinions based on not knowing the whole current story. We should find out on 11/9 after market with the 10Q. GLTA.

[FreezeThese]

The new warrants were solely to incentivize the lenders. The old warrants contained ratchets and anti-dilution clauses. The latter provided the holder the right to maintain its percentage ownership of a company should the company issue additional securities in the future; the ratchet protected holders by adjusting the price at which they were entitled to purchase shares. It essentially enabled holders to obtain more stock for a lower price.

Most of the new warrants contain perpetual cashless exercise options instead:

For example, suppose a holder is entitled to 100 shares of common stock under a warrant and decides to acquire its shares by a cashless exercise. Suppose further that under the warrant’s cashless exercise formula that the holder is required to “pay” the issuer the equivalent of 20 shares of stock to obtain its 100 shares. Under this scenario, the issuer would retain 20 shares and the holder would receive 80 shares. In effect, the holder has “paid” the issuer by permitting it to cancel 20 of its own shares, the consideration being “cashless.”