Led the short answer to your question of why warrants is leverage. I guess this is what makes it a market :), with what you have said so far I would agree with you and if you think that the potential of RVX is only $2 to $4 I would still agree with you that the warrants are not the place to be. If however you think RVX could reach $10 to $15, which I think is possible even before BetOnMace is successful, then the warrants are a good place to be.  Let's use your example of $6500 and either 5000 shares or 14,400 warrants. At $10 per share the 5000 shares are worth $50,000, the 14,400 warrants will be worth $114,480 if exercised. The leverage of the warrants gives you over twice the gross return for the same investment at this point and just gets better if the share price increases. Real world example, yesterday I sold about 12% of the RVX in my TFSA and used the proceeds to buy warrants.  This increased my total call (shares plus warrants) on RVX in my TFSA by about 50%. I also bought a lot of warrants for my cash account and will buy more if they get cheaper. Out of money warrants are a little nebulous in pricing I would agree but in this case I feel the share price can turn around quickly for a few reasons and there are not really that many RVX warrants available relative to share count and further I doubt if Eastern or Hepalink will be selling their warrants at a low share price. I could of course be wrong.

I guess what it boils down to here is what share price level you believe RVX can attain in the next 4 years. One of great things about warrants is they give a lot of flexibility to move up and down the risk/reward curve.