Sometimes its not just about having the biggest discount to current share price.
What happens:
If you chose not to exercise the Option at 10c, that is your choice.
What happens if you chose not to exercise your 10c Option?
* You will lose any 10c options on the expiry date and the price you paid is gone/lost.
* The company has less money (doesn't gain the 10c price) and therefore less chance of success
What would happen if you exercised your 10c options?
* You will pay 10c more for the shares (you said 0.066 purchase price for options, meaning a 16.6c effective price for the shares)
* The company will receive the 10c per share money directly to the company (less registry management fees)
* The company can use that money to grow and increase the chances of success.
Try buying all the options on market, it probably wont work:
Depending on the number of Options you hold, you may not be able to buy all the shares on-market to replace them at a price under 10c.
If everyone started trying to buy replacements under 10c the supply will surely dry up and the price will go above 10c quickly.
The underwriting agreement:
Please note however, Lake has a unique condition just at the moment. This thread is talking about an underwriting agreement, meaning if you chose not to exercise the options, another backer / another holder (see announcement for details) will put up the 10c price per share and cover the potential loss, taking that percentage of the company for themselves.
In this case, should you chose not to exercise your options, then the company isn't hurt, as someone else will pay up, and they may become more wealthy.
If you do chose to support the company and exercise your options, then you are reducing the amount of cash our backer is having to spend, meaning they will have more cash later to possibly help the company with further funding at a later time.
Options are not just about how much discount you get personally. Some consideration should be given to the effects of exercising your options or letting them expire.
This is not investment advice, and I am not trying to talk you into exercising your options or letting them expire. Please DYOR. IMO, and all that.
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