They are paying $ 4.6 per warrant with an exercise price of $ 10. The warrant has a maturity of 5 years. Black scholes calculations show that even with a volatility of 50 % you need an underlying stock price value of at least $10 to justify this price.
What I don't get is they buy equity in the company and then put handcuffs on them in that they can't sell this to another company for 12 months after the 5000th unit is installed. 5 years, 25000 units implies 5000 units in 1 year. so 1 year from 1 year from now is when IDSY can sell this to another company.
Is this more about getting money from their investment or keeping it away from others?
Well obviously they don't want the company to sell the stock below $ 10 as then their warrants will be worthless. Without such a constraint they would not agree to such a deep out of the money warrant. They believe that 2 years from now investors start valuing this company well above $ 10. So be patient !