George - Effeciency of money. Some assumptions, if the FA is a bust or if there is no deal by 26 Dec this year, all will be lost in either shares or warrants. If you buy 1000 shares today let's assume you spent $1,400. Now let's assume that instead of buying the shares you used that same $1,400 to buy warrants at say $.50 a piece to buy 2800 warrants. Now let's assume that a miracle happens and the company does a CVR type of deal for a total of $30 per share. In a CVR deal shares seem to trade for about 80% of the total share price offered, so in this case $24 per share. Now here's how the math works for the warrants, in a perfect world. 1000 shares = $24,000.00 or 2800 warrants = ($24 - $2.05 = $21.95) X 2800 = $61,460.00 for the the same $1,400 out of your pocket. Obviously in this scenario the most efficient use of capital would be the warrants.

I have made a bold assumption here in that I am assuming there will be zero value for the shares or warrants if a deal is not done. In that case all existing shareholders aside from maybe 1 or 2 will be walking away with empty pockets.

Don't take my word for this. If you are considering the use of warrants talk to a licensed advisor about how they would work for your specific situation and risk profile. They're not for everyone.

IMHO if this drug ends up being acquired we should be looking at a $5 billion plus price. Fantacy or not thats what my model says.

Bring on the rest of the year.

dyodd

tada