My understanding is you have to pay taxes on the difference between the price on the day you exercise (lowest on that day) and the exercise price of the warrants/options.

Example 1 (warrant exercise price - $0.35, Stock price on day of exercise - $1.75):

$1.75 - $0.35 = $1.40 capital appreciation X tax rate (e.g. 25%) = $0.35/share paid in taxes today

Example 2 (warrant exercise price - $0.35, Stock price on day of exercise - $3.00):

$3.00 - $0.35 = $2.65 capital appreciation X tax rate (e.g. 25%) = $0.66/share paid in taxes today

To your previous point: Once he actually sells the shares, and if the share price has further appreciated from the day of exercise, you are correct that he will have to pay taxes on the higher price in the future. You always have to pay the piper. I believe he may have chosen to exercise now thinking that this recent dip is a price we may no longer see going forward and therefore told himself "i'll take the tax hit now at a lower price that way once the price really appreciates i'm free and clear of paying further taxes until I decide to sell". A simple way of delaying having to pay more taxes sooner working under the premise of an increasing share price.

I guess time will tell. If Sheldon sold today everything mentioned above goes out the window lol

Cheers,

Sandman