RE:RE:RE:RE:RE:RE:RE: The Very Important ReasonFarmerInvestor4 wrote: MoneyLuck wrote: Well one can Vest but 121 days you can not sell. Why will someone pay and wiat for 4 months & 1 day to see what will be the price on 121st day?? He can vest on 121st day if he is on the poitive turf means if he got it @0.35Cents and he can take a call?? Would you pay money today and wait with the stocks if you can not trade for next 121 days... To me it does not make a business case...
The difference between the option price and the market price at the close of day that you exercise the option is taxable at 100%. So it is beneficial to exercise the option at a price closer to the strike price to avoid taxes. So now the new exercise price then becomes your Cost Base for taxable gains going forward.... Which are only taxed at 50%.
Example:
The new director has options available at $0.35 and chooses to exercise them when the price is $0.37. He now is liable to pay the taxes on the $0.02 gain at 100% as a taxable benefit. His new cost base for the shares is $0.37
Now 121 Days later, if he chooses to sell the shares, and they are worth $0.47, he has made a $0.10 per share gain. This "Gain" is considered a capital gain which in which only half of the total is taxable.
I hope I explained this well enough...
Cheers!, FI4
On another note, if the directors/management are all exercising their options, it might be a signal that good things are coming! It may mean that they think the share price is going up within 121 days, so that if/when they do sell to take some incentive cash, that they pay the least amount of tax when doing so.
IMO, the price has to try to get above $0.50 before June deadline for the expiring warrants, but there will be some news coming with 2 quarters of financials before then (I think Smithwicks figured End of Feb for Year End and possibly mid to end of April for Q1) to help give the share price a boost.
I will predict the next 2 quarters of Financials will help take the share price above 50 cents, however, there will be some pressure again once the warrants begin to be exercised. Regardless, I think this stock is a hold and patience is key