Ann: Shareholder Update, page-20

Hello Archer,

Arguably this is one of the reasons for the sell down, which may be what Arion is referring to (Sourced from the Appendix 3B)

6g If +securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation.

Response: Yes

ESI: Issue date, 14 March 2016; Issue Price, 2.0¢; VWAP: 1.44¢; Source: ASX data ESIOB: Issue date, 14 March 2016; Issue Price 0.6¢; Issue P

Looks like the options were issued on the Volume weighted Average Price.

So theoretically say you were going to obtain some free options and you knew that you were going to keep getting incentivised to exercise them, (by getting some more free options).

Why not sell some of your shares, or most of your shares, to drop the volume weighted average price. (You can then use these funds to exercise your options)

Your going to get more anyway, this will increase your overall allotment substantially.

Thus the source of my frustration, the company is arguably facilitating the above by implementing their option policy by incentivising the recipients to sell down the share.

Sure, reward those that assist in the companies growth, but not at the determinant to the greater share registry.