My reply:
1. No we do not know. However, it is common for new start ups to issue directors, promoters etc.,fully paid ordinary shares at a nominal sum. This is to get the ball rolling. I participated in a seed capital raising to buy an existing company with a viable & profitable business. The stock was issued at 15c and was not trade-able fr two years. On listing the stock did decline briefly below 15c but is now comfortably above at $2.
2. The two directors already own 30% odd of the capital and I believe for a start up are well paid at $250,000 p.a. I would also state that there would be side benefits in travel, entertainment etc., I doubt very much that we would lose them.
I do agree that options should be granted but set a high strike price to get superior returns. Options with a low strike can be issued once performance hurdles have been achieved. As it is now the first tranche of the proposed options are in-the-money, the second tranche just about in-the-money and the third tranche, not too far away.
Once the coy is profitable, yes, give directors and senior staff some options. In the meantime, issuing the options as proposed is simply diluting yours & my holdings. I suggest that you vote "No".
A similar proposal earlier this year was howled down for the reasons that I have stated.
GSW Price at posting:
$1.02 Sentiment: Buy Disclosure: Held
