Hi all,

I got some positive feedback regarding my post yesterday about Market Manipulation and figured I'd take a stab at the warrants issue that has been coming up on the boards for the past few weeks as there seems to be a lot of misconceptions.

(Please correct me if I am wrong for those that know more than me and if I say something that is incorrect)

There seems to be the misconception that warrants exercising is a terrible thing and similar to Insider Selling. This of course is not the case as most of you know. Warrants being exercised gives the company a few advantages such as:

• Immediate money in the bank (PC has gotten this company on great financial footing with 11m in the bank and no need to raise funds for at least the next year.
• Getting the warrants out of the way now as opposed to at a higher level has a positive. The positive is that they are getting exercised at a level that isn't outrageous and say a million shares get exercised, that's around 1.5-1.8 million dollars according to the very, very recent SP (1.50-1.80 roughly). That means that we need the equivalent number of buyers of that value to keep the SP flat. Now picture if they were exercising around 5$ per share. We'd need 5 million dollars worth of buyers to just get the same warrants out of the way. So there is a big advantage getting them out of the way at these low levels.
• Obviously with a stock like PTK trading on the vulture exchange, there is a downside to this as well. The Market Manipulators (MM's) that I tried to explain in my previous post will see these being exercised and take advantage and try and create downward pressure on the stock. There were rumors that warrant holders were asked to sell some and if true the MM's knew about this and could sell a little bit or short the stock to drive the price down.
• This manipulation needs to be expected by all those on the board and considering like Chris said, we're pre-revenue it's tough to give a value for the company right now for trading. This allows the MM's to make these swings and make lots of money along the way. Best way is to purchase in chunks along the way. If you think you've found a bottom, pick up say 40% of your desired amount of shares, then wait and see what will happen. If we continue down, you pick up another 30% and then repeat and wait and see what happens. If by chance we continue down, you still have another 30% to put down to "fix" your position.

At the end of the day, these warrants are getting exercised. Their prices and trigger prices are so low that we're not going to see levels below again before they expire (or ever again IMO). Therefore for some short term pain, it's better to get as many as you can out of the way now, as opposed to many millions getting exercised at 5$ or higher at a buyout price.

One thing to keep in mind also is that if for example we have a flat day and 1 million shares are exercised. We're currently at something like 159 million shares O/S roughly. This would bring the share count to 160 million with the 1 million exercised and our SP would remain flat. That means that our actual market value went up by 1 million x the current share price of say 1.75. So in a sense, the SP remained flat, we got 1 million warrants out of the way, we got additional money into the bank and our Market Cap or company worth increased by 1.75 million.

So these warrants exercising and us trading flat is actually us increasing in value, putting money in the bank, and getting the warrants out of the way at a lower level as opposed to at 5$ or a buyout at say 10-20$ where they would really make a difference.

Hope this helps!

My $0.02