I took this directly from the PTA website.
"June 9, 2011
Bought Deal Financing–157,999,500 units at .20 per unit.
Each unit consists of one share and one half warrant. Each full warrant entitles the holder to purchase an additional share at .35 until May 9, 2014."
When you exercise your B warrant you forfeit the money invested into the warrant shares themselves. So when you purchase 1 share of pta.wt.b you get 1 share and 1 half warrant. Upon exercising - the share goes byebye and you are left with half a warrant which you need 2 of in order to be eligable to purchase 1 share of pta at .35 cents. So you need capital in order to benefit from the discounted price. Here is the math......
You buy 20 000 shares of pta.wt.b at .025 = 500$
You exercise, 500$ goes byebye. You are left with 20 000 X .5 warrants = 10 000 warrants
You use saved capital(you hopefully have) to pay for the exercising... 10 000 X .35 = 3500$
Pta has popped to 1.00. You sell 10 000 shares. = 10 000$
Your net profit. 10 000 - 3500(capital) - 500(original pta.wt.b investment) = $6000
Why is it ok for your $500 to poof? Here is why.
If you had bought normal pta shares with $500 dollars and pta goes up to 1.00.
$500/.15(average price of pta share) = 3333 shares. 3333 shares X 1.00 = $3333
Based on the language on their website and speaking with a broker this is my understanding of the situation. Please feel free to respond if you disagree.