Ann: Loyalty and Piggyback Options Program, page-502

No, I am simply reminding of an overlooked aspect. Its ultimately a method for the company to issuing shares to receive capital, if the share price is higher than the exercise price. Fact. When you exercise the shares PAR is the issuer of the resulting shares - significantly of course we all got for free as existing shareholders, but I will come back to that.

They are becoming an increasingly attractive options, no pun intended, for companies to issue capital under a more palatable guise to shareholders - given the inherent gains to shareholders if they become in the money options. Many investors naturally see the obvious gain potential but overlook the effective issue of shares, because, yay, the stock price has gone up.

Its not all roses is all I am pointing out. Don't shoot the messenger for being a bit circumspect - ironically it wasn't that long ago I was (unfairly) painted as a PR defender when he went with the capital raise option instead of announcing a partnership. Now I am adversarial for pointing out the increased shares on issue from this effective raise and capital investors will have to fork out - and this is a method designed to allow the company to possibly raise capital by issuing more shares at $0.65 ultimately, as much as it is sold to investors as bonus options.

Like most things in finance its not one way positive effect is all I am saying. There will be dilution if successful was all I am pointing out.

Returning to that dilutive aspect; If I am big pharma taking a 100 million equity share in a company in return for a partnership, do I prefer paying $60 million in upfront payments for a near 20% stake in a company (100 million of the resulting 490 million shares on issue), or do I prefer spending the same money for a 17% share in the company (100 million of 590 million shares on issue)? Its low enough probably not to effect partnership negotiations, but if I personally am on the board of big pharma and in partnership negotiations with PAR (or any other for that matter), I certainly wouldn't want the smaller partner potential issuing too many potentially dilutive options in advance of any agreed/announced takeover.

Food for thought 2: you and other PAR shareholders are long gamma by virtue of your options ownership. The higher the stock, the higher the delta in your options from gamma, the higher, on a probability basis, the number of shares you potentially/effectively own. Professional investors who understand gamma, might look to hedge some of the gamma gains by selling stock above $0.65 and conversely buy it back below $0.65. Normally the seller would be in the market with negative gamma counteracting those pressures. In this case the seller of the options are PAR. They will not be taking stock positions in the market to hedge negative gamma. So with no counteractive negative gamma stock order flows, I would not be surprised if PAR gets "pinned" around $0.65 - until possible partnership news that is, but even after that it may revert.

Apologies for objectively discussing the mechanics and wider effects of these options. PAR going to $1.00 we are all going to be rich. Yay. Pom-poms and rocket ships. I best not bad mouth PR as was so recently fashionable on HC, as he is apparently okay again having given us "free" options.