RE:RE:RE:RE:RE:RE:RE:RE:RE:News release questions:Reyninak wrote:
No, sir. A Call option gives the holder the option to buy, not to sell. The option to sell would be a Put option which would be used if a share price is bound to go down.
In this case, they are giving those marketing professionals the option to buy shares at $0.33 knowing (or thinking) that the share price will be higher than that when/if they buy within the next 2 years. So let's say the SP is at $0.50 in the future, the holders of the options can buy shares at $0.33... instantly in the money by $0.17 per share + money in the bank for Tinley since these are incentive type of options that were not bought on the stock exchange... What they did here is similar to giving them warrants.
Yes, it is a form of dilution, but the company doesn't have a lot of outsanding shares right now. Either way, if they agreed on the strike price of $0.33, it's because they have reasons to believe that the stock will be much higher than that; enough for those marketing professionals to want to make sure they stick around and profit from these options ("subject to continued affiliation with the Company")...
Sorry I wasnt clear. Thats right the call option allows them to buy for cheaper however they can either sell the option contract itself or exercise it and sell the shares. Thank you for clarifying. So this is in fact another way of raising money by "diluting" current shareholder stock. But since its over the span of 2 years they have a long term view of the company. Is there a way to see the distribution of the options? As in how many of the 150k options are issued in the first 6 months? 1 year? 18 months?