RE: Relax30 Oct 2025 10:34
Hi gameplayer,
I am questioning the issue of warrants as a means of providing funding for an embryonic company. The example (from google) below shows the potential profits achievable for warrant holders, while at the same time bringing about a vast depreciation in the value of investors’ shares. If this has actually happened, is there any wonder that the greedy warrant holders have continued to sell their warrants for so long?
Richard Edwards is very well qualified in financial matters. Presumably this is what he arrived at when researching various methods for providing the necessary initial funding. Hopefully, this process will not need to repeated? I gather from knowledgable contributors on this forum that the company’s running costs are relatively small?
“To illustrate how to calculate profit, here is a hypothetical scenario based on CapAI's April 2025 warrant exercise:
a) Original warrant purchase price: Assume an investor paid a nominal amount for the warrants.Exercise price: CapAI specified a total consideration of £41,523 for the exercise of 110,728,300 warrants. This gives an exercise price of approximately £0.000375 per share (£41,523 / 110,728,300 shares).
b) Market price at exercise: As of late October 2025, the CapAI (CPAI) share price traded around 2.38 pence (£0.0238).
c) Number of warrants held: Let's assume an investor holds 10,000 warrants.
d) The profit for this hypothetical investor would be:
* Calculate the value of the shares:
10,000 shares x £0.0238/share=£238
* Calculate the total exercise cost:
10,000 warrants x £0.000375/warrant = £3.75
* Calculate the gross profit:
£238-£3.75=£234.25
* Subtract the initial warrant cost: Since the initial cost was likely nominal, the gross profit is very close to the total profit.