Hi YowieUnless Cannacord Genuity are reallly stupid, which they...

Hi Yowie

Unless Cannacord Genuity are reallly stupid, which they are most likely not, then the option pricing that they agreed upon would be a a huge discount to where they think the SP will be in 3 years time. A few things that need to be considered.

• Cannacord Genuity are providing corporate advisory services for no other payment apart from the option issue. Apart from the options they are doing the work for free.
• To be remuneratured, Cannacord must first pay AJM up to a total of $1,050,000 in order to exercise their options
• They then need the SP to be will north of the average option exercise price to receive payment for the services.

So if I were Cannacord and working for free for now with the only the possibility of a delayed windfall I would:

1. Make sure that the option exercise price was way below where I predicted the sharepice could be in the future, and
2. Ensure that I negotiated as much time as I could on the option expiry date

Cannacord will want to ensure they get paid, so you can be fairly sure that would have negotiated their price and expiry so that they were almost 100% confident they would at least get their money back, but more importantly positioned to profit handsomely from the agreement.

Nobody can tell the future, but this agreement at least says that Cannacord see the SP being a lot higher than $0.007 within 3 years. They wouldn't have taken this form of payment otherwise.