I don't read it as they spent $420k now.
I'm not a pro at these findings but here's how i see it (based on my own experience with options).
They didn't pay a dime for it if they didn't want to at this point.
Half of 1 million options got vested immediately at .42. This means that they can sell 500,000 each right now (there may be some limitations on selling). The rest will be vested monthly for 2 years.
Once the options are vested, you can sell them.
If the PPS is at .62 during the sale then they keep the difference, i.e. $0.20... But that's only if they chose not to buy them.
If you buy that 500,000 right now at .42 the only benefit is that you pay a long term gain tax if you sell in a year. If you don't buy it right now, then see the previous paragraph.
I may be wrong but this is how i see it.