There are certainly others here that will agree with your interpretation BrighterSpark but for me personally, as an option holder, it was more a "relief" than "reward" simply because I wasn't required to fork out for the conversion last month.
Imho, no existing option holder would've let their options lapse in 2010 or 2011 if this offer was not made available to them so for this reason I can't agree with the added dilution theory.
This might also help put things in a better perspective for some who feel they aren't getting a fair deal:
December 2009 Rights Issue on the basis of one (1) new share for every nine (9) shares held at the record date, at the issue price of 2.3 cents per share together with a one (1) attaching option for every two (2) new shares subscribed for exercisable at 1c each on or before 31 December 2010.
Example: If you were holding 100k shares on the record date in 2009 you were given the right to buy 11,111 shares @ 2.3c ps which would come with 5,555 attaching options exercisable at 1c each - so imo we can also look at it another way:
For those of us considered to be the "rewarded" option holders - who's really getting the better deal?
Dec 2009: 2 shares x 2.3c = 4.6c 1 "free" option to be converted to ordinary share @ 1c = 1c Total - 3 shares = 5.6c
January 2012: 3 shares x 1.8c = 5.4c Total - 3 shares = 5.4c
We must also remember that many holders first came in during the 2010 rally at much higher levels than today so although I can't speak for all some might agree that it's really the new holders who are the lucky ones. ___
We've speculated on this topic many times now but I still think the important question regarding this rights issue for option holders is, what's the real motivation behind it?
After many non option holders expressed their disappointment to management in 2010 over this should we really believe that they sat around the boardroom again during October just gone and unanimously voted to piss off all their ordinary fully paid s/holders - Not a chance imo!
I believe this could possibly have more to do with an anticipated license agreement or similar which could have been delayed for a number of plausible reasons by a partner company, or even out of their control also - Quite possibly FMCG#1 as we have not received any update regarding them for sometime now and 1shareholder1 and company were also advised that no partners have walked away.
Many unforeseen circumstances can arrive in this industry such as implimentation of new FDA Regulation Guidance for Devices, etc.
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