companies need cash to run their operations. PIQ is close to being out of cash
however, at 31/12/17, PIQ had 17,231,856 PIQO options exercisable at 20 cents expiring on 31/3/18.
what this means is if these PIQO options are exercised, PIQ will receive $3,446,371 in cash
however, for these PIQO options to be exercised, the PIQ share price needs to be at least 20 cents (otherwise it is cheaper to buy shares on market instead of paying 20 cents for a new share by exercising the options. for example, i own PIQO at an average buy price of 4.7 cents. if the share price is 18 cents at 31/3/18, it is cheaper for me to buy shares on market rather than pay 20 cents to exercise my options)
what is important is PIQ said they are probably entering into an 'underwriting agreement' for any unexercised options to be exercised by the underwriter
this means the receipt of $3,446,371 in cash will be guaranteed by the underwriter
in other words, in simply amounts to a guaranteed capital raising of $3,446,371 at 20 cents per share
it also places a market floor on the share price since the underwriter is willing to finance the company for 20 cents per share
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