Warrant coverage is an agreement between a company and an investor, where the company issues a warrant to the investor allowing them to acquire shares at a predetermined price. The holder of a warrant coverage has the right, but not obligation to, buy the additional shares of stock. Warrant coverage is typically issued in situations when a higher-than-normal level of risk is present.There are many reasons why companies offer warrant coverage, the two most significant are to attract more investors and ensure the maximum participation by committed investors.