Replies to post #154 on Learn to Trade

[DonLeopoldo]

Warrants have that "Ratchet Antidilution" thing:

Seems they could exercise A & B Warrants this way:

instead of 6 million warrants at 0.4, in example:

They will exercise
some 48 million at $0.05 pre-split

or 480,000 shares @ $5 after the R/S.


This situation would mean that CBPC will be a Nasdaq Stock, probably above $10 post-split.


The antidilution stuff means that: because when the 12.4 million warrants were issued, the O/S was around 90 million...

beeing 12.4/90= 14% of the O/S...

then, they will get a number of shares equal to 14% of the new O/S (antidilution).

& the exercise price will be such that they invest the same amount of CASH in the company, whatever the number of shares is at the time they exercise (depending of the O/S.


Example:

O/S=700 million
# of Warrants 14%x700,000,000= 98 million
Average Exercise price:

At the beginning: 14.5 million at average 0.35 (aprox.)= $5 million investment

With 98 million shares, to invest $5,000,000, the average exercise price will be $5,000,000/98,000,000= $0.051

This is considering O/S=700Million.


with this example, to know what happens after the R/S: there would be x100 less warrants, at a x100 higher price.



Right now we'd have (aprox.):

100,000,000 warrants average @ $0.05 pre-split.
1,000,000 warrants averaged @ $5 post-split.


Nice numbers, ... IF there come news that get us to that x50 to x100 BAGGER, LOL ... worth the gamble, imho, with a market value of $770,000 as of right now.

Warrants would be exercised IF they get the PPS above $0.1 pre-split, or $10 post-split, so that the holders get at least +100% profit.

By then, the O/S would be no less than 700+100 million pre-split (or 7 to 8 million post-split), and the market value would be $70,000,000 to $80,000,000 at twice the warrants' average exercise price.


When CBPC issued the warrants, the market value was around 35 to 40 million dollars. And if the warrants are exercised, the exercise price would be at the same market value (antidilution) of around 35 to 40 million dollars..


We are talking about the kind of news that would make CBPC PPS go from 0.001 to 0.100, and the market value go from $700,000 to $70,000,000.


GL

imho.


Follow me at your own risk; look where I'm fishin' LOL
All I say is my opinion &I could be wrong. Do your DD!
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[DonLeopoldo]

Just checked the latest Form, released today. They say the options are affected by the R/S, but they don't say any of that about the Warrants.

They say that the Warrants are "Full Ratchet Antidilution".


I don't know what is going to happen, but if they exercise the Warrants, I think that would be good news. That's a lot of fresh money for the company.

We'll find out within 3 weeks or so, with the 10Q, the Shareholder Meeting, &/or the R/S.





Follow me at your own risk; look where I'm fishin' LOL
All I say is my opinion &I could be wrong. Do your DD!
http://investorshub.advfn.com/boards/addBrdMrk.asp?board_id=11428