exactly.. the shares at 28cents are at a discount to Friday...

exactly.. the shares at 28cents are at a discount to Friday close. The 40 cent options will be at a discount to the SP at some future time. Obviously they will be only exercised if the SP is north of 40 cents.

if the holder can't get an effective discount they won't strike the options. Obviously if the SP is north of 40 cents the company could do a CR at a higher price so the holder is always better off and the company has always given discount stock.

Agree with you that its a bit of a mischief to be trying to spin it as 32 cents...