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Technology Stocks : VALENCE TECHNOLOGY (VLNC)
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To: Larry Brubaker who wrote (9753)3/24/1999 4:00:00 AM
From: add  Read Replies (1) of 27311
 
Larry,

I warrants are an inducement in the financing. CC,Gemini, and Carl Berg all have received them as part of a package deal, thus they must be accounted for.

Will they have to pay when they exercise them? Usually, they would have to but in this case its their choice. The terms are they can get a "cashless" exercise. This means if the stock price is above the strike price of the warrants, the can get some shares without paying anything. For example, if the stock price is 50% more than the strike price, then the warrant holder can get 1/2 a share for each warrant he holds without paying a penny. His other choice is to pay the strike price to Valence and get 1 share for each warrant.

I'm not sure the cashless feature was given to all three parties, but I think it was. So, technically, you're outvoted 3-1 since they can choose to exercise by paying the strike price.
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