incentivisation to participate in the SPP? so that they can...

incentivisation to participate in the SPP? so that they can raise capital to get production started, this was offered to all eligible SH's and it helps to minimise the dilutive effect of a CR. The SPP was not viewed that favourably by the register judging by the poor take up, though interestingly i think all the directors took their full $15000 allocation. This same offer was made to soph's in a placement that was oversubscribed - go figure! As for the strike price, well if you consider that the directors probably have a fair idea that kicking off production and getting first sales will most likely see the SP above 10c sometime early to mid next year, chances are oppies will be exercised well before they expire, and if this is Q3/Q4 2016 then it will mean an injection of cash that can then be used to accelerate the production timeline. Which means that instead of raising all the cash now at the lower price, they delay this cash injection and effectively the next "CR" is at 10c and so pretty much its the same amount of cash for half the number of shares, and no need to pay the likes of armada or fec a fee to make it happen. Consider the alternative of not offering the free option - less involvement in the SPP, more likely the placement to sophs would have occured at a lower price and would have raised less cash at a lower price - i.e. more dilutive whilst also providing less funds. Also consider if the strike price was say 20c again possibly less uptake of the SPP, also probable that this would not be exercised until Q3/Q4 2017 by which time sales (hopefully) will be providing enough cash to bring more shafts online so an injection of cash, even though its a lot more, at this point is a whole lot less transformative for the company and would result in the same amount of dilution. But as Nasa says, could be 100% wrong!