Ann: Company Presentation - October 2022 Market Update, page-46

From the description, I think:
1. If they meet the hurdles, then they're allowed to convert the options.
2. They'd have to pay up the $1.20 to convert each option.
3. It would hardly be worth the risk for them if the SP was just around $1.20.
- But if the SP was $1.50-1.80, then the directors would pay up. It would be a bad look for them to convert, then sell them quickly to lock in the profit, so they'd only convert if the options were well in the money, and they planned to hold medium term.
- If they didn't have enough liquid cash to convert them, then they might need to take out a loan to fund the conversion, so they'd need a further margin of safety in the SP to justify the risk, so say a >$1.50 SP.

So it's not free shares, but free options. It's like a performance bonus - it's only worth something if the SP gets to $1.20-$2.00+ by late 2025.


Only if we reached a very high SP, say >$3.00, that the dilution would become more obvious.

If the SP was $1.40, and the directors paid up $1.20 to convert, then it would be like a low cost raising for $6.9m - hardly bad at all. (Equivalent to $1.15m of profit/discount given to the directors, but any alternative capital raising would have had high fees anyway).

But if the SP was $4.00, and the directors were able to convert 5.75m shares at $1.20, then it would be like giving them a $16.1m bonus (!) (the unrealised profit on the options). And worse still if they had also given themselves 10-20,000,000 more options over the following years.