Yes, agreed. But the graph and formulae also point out what impact the 60% factor has on leverage. In plain english, the advantage of the warrant is a lower strike price (2.40 vs 5). The advantage of the option is you control 40% more shares.

If my math is correct, the warrant will be a better investment than the option at any share price between $2.40 and $8.90. Joe is correct, if mnkd fails to get approval, both options and warrants are basically worthless. If they get approval in 2014, how likely is it that the share price goes over 8.90? I'd take that bet.