I understand. So you pay $0.0001 x the number of your options...

I understand.
So you pay $0.0001 x the number of your options you want to take up.
Once you have done that you own the options and they can be traded.
Presumably the options would go up and down in value as the share price rises and falls.
This means...
a) you could sell your options to offset any overall negative effect the existence of the options has on the share price or
b) if the shares have gone up in value, you can buy the shares at $0.04 each knowing you will make a profit on the deal and maintain the overall value of your holding or
c) if the shares have not moved, avoid further losses by not exercising the options

So the overall effect is that the company will raise more capital but only if it first proves it is going well. That's fair enough.