Fair question Towie. To answer that question one needs to...

Fair question Towie. To answer that question one needs to segregate the interests of the the issuer of the stock and that of the market trading the stock.

The company as an entity has no specific interest in the price that the securities are traded at on market. The company simply needs the cash to survive so doesn't care if the issued stock is traded or not. And nor should they. For all the company cares the stock goes into a big black hole never to be seen again.

On the other hand those that are buying the stock generally do care about their ability to trade the stock. Its very hard to sell stock off market so if the market doesn't allow for price discovery below a certain price point then the stock becomes untradable. The less liquid the stock the harder it is generally to find takers for stock in a CR and this is the point at which the two competing interest (company vs investors) meet.

If those that take up the CR stock recognise that this CR is an all or nothing bet rather than the usual dump their placement into the market for a quick buck then it there is no real issue for them with the liquidity drying up in the short term as a result of 0.001 market minimum. In fact quite the opposite, cheaper issuance price means greater equity should the bet pay off.

Take a look at the market. Not a hope in hell the retail investors are going to absorb the additional 1.3+ billion additional shares so those that take up the offer must know this isn't the usual placement type situation where they dump the stock ASAP for a quick buck. VILs history is littered placements like that isn't it? This time is different. It isn't at a discount and there is no demand for the stock from the retail investor. Takers are on for the ride and everything seems to be on FP. In other words, short term the SP doesn't matter, nor does the ability to trade these 1.3+ billion shares because the demand simply isn't there irrespective of market minimum prices.

You ask "what would be the benefit of issueing shares at a price that they can not be traded". Simple, the market price discovery for this stock stopped long ago so not loss in undercutting an already stalled market. Two things that drive investors to part with their money the money are:

a) Promise of a big reward
b) Fear of dillution

Offering at 0.005 maximises both.

PS. As implied by my post re questions on the CR, my original post re issuing stock at 0.0005 wasn't intended to be taken seriously. I was having a little fun to start the day but all the factors discussed with you in this thread are to the best of my knowledge applicable.