I don’t like it. It’s highly unusual.If the directors don’t have...

I don’t like it. It’s highly unusual.

If the directors don’t have the cash then their usual recourse would be to see some shares on market, but DKM isn’t very liquid so this might depress the sp in the short term, and never looks good. This cashless idea though looks even worse imho.

If the company end up doing a CR at a latter date then that will not be as cheap a funds as option conversion, because it will no doubt be at the usual 15% or so discount and require fees or other costs. So perhaps the cashless version should do a 15% discount on the market price in the formula, in which case for their 40 cent worked example that would be 34 cents instead, resulting in less than half the number of cashless shares issued.

Also this cashless conversion really leaves itself open to market manipulation, a bit of PR or timing of news to get the sp up, thereby getting more shares.

EL