Morning Roger,For a quick explanation (I am short on time this...

Morning Roger,

For a quick explanation (I am short on time this morning), the exercise price (being $0.7) is the price you pay to receive an equivalent share in Nova. You do not have to exercise the option, if you chose not to it would expire worthless, but if you do, once you 'pay' $0.7 per option, you receive a new share in the company. The company receives your $0.7 per option as cash consideration, so in reality this is a creative way for Nova to raise capital whilst 'rewarding' (read: avoiding dilution for) loyal holders. Now, it doesnt make sense to exercise the option until the price is at least $0.7, and more likely that they would be exercised once the price is sufficiently above this price. For Nova, this means steady cashflow once sentiment has turned & the SP is back close to $1.

There will be holders who exercise the options and sell immediately (to make the difference between the SP and $0.7 as profit), and others who hold with a greater equity position.

Finally, usually there is an additional cost in purchasing options, so if you were to purchase from the market (some companies list the options) and the options expire worthless, there is a cost for this. But Nova, in raising the Capital, has waived this cost and so these are 'free issue', which simply means there is no cost to the Shareholder in order to receive the right to exercise.

Hope that helps, cheers.