Avid Bioservices Inc (CDMO)

[Protector]

SK has 160K shares. If the price goes down for us it goes down for him and he looses.

SK has 2.1Milj options. His gains out of these options are the difference between his exercising price and the pps of the day (assuming for simplicity he would sell the exercised shares immediately because there is no reason to exercise up-front since his exercising date is not short term as the options on the open market).

So:
1) AGAIN, if the pps goes down his net profit goes down

2) AGAIN, if the pps goes below his exercising price his options are worthless for the time being, and just like us he cannot exercise them.

3) AGAIN, if his options expire and they are replaced he gets NOTHING new, he gets something that he already had, very probably at a worse exercising price if the pps at that moment would be some up.

4) AGAIN, the NEW options that he receives are not just: He gets new ones. No they are part of the compensation package of the NEW period for which he receives them.

So YES, if you have ANY speculative instrument in your compensation package, like stock, stock options, etc your are equally open to the market fluctuation of the instrument as any retail investor.

The fact that you received the options doesn't mean you have nothing to loose. They could have given him a CASH bonus instead of the options. The fact that he went for the options shows he doesn't see them as a risk in the long term because some day he'll have to cash in on them and that alone proves that he has something to loose when the pps goes down.

And by the way, with 2.1+0.16=2.26Milj entities he is better of with the pps going up 1$ then with 3 years of salary. So for 5$ pps increase SK must work 15 years to have the same. Now tell me AGAIN he has nothing to loose and sits there for the fat salary and doesn't care about the options.

You logic that if you receive something as compensation you have nothing to loose as well as your logic that when such item can be replaced that then that is new compensation is flawed.

It is so for all of us. If our employers give us stock options as part of compensation packages then are you saying that we have nothing to loose if the pss evolves as such that they are never in the money? An employer likes to give this types of compensation because it motivates you to do EVERYTHING to make the company progress and hence get the pps UP so you get more reward. That's all the point of the system.

Saying that SK has nothing to loose because he received them (just like anyone else) or because he can get them renewed if he doesn't exercise them to replace 1 option with another doesn't hold.

And by the way, as said he also has about 160K PPHM shares left after his divorce.

Why is it so important that SK would have nothing to loose. We have been hearing endlessly about the CHEAP OPTIONS and now you say that they don't mean ANYTHING.

So EITHER there is no argument about cheap options any more (because they are worthless anyway and they must be in order for SK having nothing to loose) or they are CHEAP OPTIONS and SK has something to loose.

It is going to have to be the one or the other!