Replies to post #50 on China Ceramics Co. Ltd. (CCLTF)

[stocktrader2222]

On #2....no that isn't the case...because if they reedeem and you get your warrants converted over...your cost basis per share is less...

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=48275896

So, let's assume possible cashless exercise and the best scenario for the company, that would mean the minimal dilution. That would be when common are traded at around $8.50 for the last 3 days before redemption.

Then, the formula for calculating the common shares all warrant holders will receive when exercising would be as following:

N [warrants] = N * (current_common_price - exercise_price) / current_common_price [shares]

10k warrants = 10k * (8.50 - 5.00) / 8.50 = 4,117 shares

So, your 10k warrants get exchanged for 4,117 shares without any cash from you, assuming the price of common is at 8.50 at a time of redemption call. The higher the price, the more shares you will receive.


Company doesn't get any cash for it, but the dilution is minimal. With normal redemption, they would get cash ($5 for each warrant), but all 10k will be added to O/S.

If the common stays at 9.50, then for your 10k warrants you get 10k * (9.50 - 5.00) / 9.50 = 4,736 shares.


Again, the formula depends only on common_price prior to redemption and exercise price.

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So let's say you bought 10k at $1.65 that's $16,500 cash outlay
Now after the conversion let's say you get 4200 shares that means to break even your cost basis is $3.92 for the common...

You see what I'm saying now? The risk/reward is fantastic IMO especially since they got to that 20 day above $8.50 requirement already.