Hi Art:

As mentioned, if the stock price does not go higher than $1.00 by May 15, 2012, the warrants expire unexercised. That means you have lost the money you paid for them. I think some people buy both, shares and warrants in order to provide some measure of protection.

That means if the stock is at e.g. $0.99 by May 15, 2012 and the shares were bought at $0.35, there will have been a share appreciation of $0.64 cents per share. Some of these profits can then be applied to the money lost on the warrants.

As mentioned before, buying warrants is basically a bet that the shares will go up strongly. If the investor does not believe that, then warrants are not a good buy.