$200K Chomp, page-38

"Due to the dynamic nature of the business, the parties have built in flexible repayment options, contingent upon various planned activities, allowing for repayment in cash or shares. Assuming activities go to plan, the loan may be satisfied in cash, or – at the lenders’ discretion – via a placement of ECT shares priced at 2 cents. Should the VWAP of the ESI share price fall below 0.6¢ per share for 10 consecutive days, the conversion price shall become the lower of 2.0¢, or a 5% discount to the lowest daily VWAP for the prior 10 trading days. The Directors believe this facility provides short-term capital management flexibility to the company as it pursues its key objective of technology demonstration in India"


Now, why would somebody want to sell options they got nearly for free?

Management talks about a placement at 2 cents.
Is that why the price was pushed towards that level?
Are options sold as leverage for those parties involved so they basically purchase the issued shares through their options sales?

Food for thought, one would think.