Resp. expressed concern about warrants (re-post fr
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Posted On: 04/06/2016 12:34:57 PM
Resp. expressed concern about warrants (re-post from different forum):
The warrant holders are friendly which is why they would exercise their warrants to pay off the debt owed to them. But they won't take a loss on exercising the warrants because that's not friendly - that's giving your money away. The company acknowledges this risk explicitly in the 10k. I'm essentially quoting it. If the warrants aren't exercised, this is a bad thing because then the company can't pay their debts coming due this summer and will need to refinance. Refinancing always costs money whether it's fees or added interest over time - both will add to the principal of the debt. I think the debt/warrant holders, who are friendly and I believe truly are friendly, will gladly refinance. But this will cost the company more money and increase their debt load and the number of warrants outstanding (bc as the balance of debt increases, so do the incentive warrants).
The warrant holders are friendly which is why they would exercise their warrants to pay off the debt owed to them. But they won't take a loss on exercising the warrants because that's not friendly - that's giving your money away. The company acknowledges this risk explicitly in the 10k. I'm essentially quoting it. If the warrants aren't exercised, this is a bad thing because then the company can't pay their debts coming due this summer and will need to refinance. Refinancing always costs money whether it's fees or added interest over time - both will add to the principal of the debt. I think the debt/warrant holders, who are friendly and I believe truly are friendly, will gladly refinance. But this will cost the company more money and increase their debt load and the number of warrants outstanding (bc as the balance of debt increases, so do the incentive warrants).
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