Here’s our weekly look at which ASX small cap directors are buying or selling their own stock (week of Nov 5):

Water cleanup play Phoslock has more than doubled since it was discovered by investors a year ago — which is good news for directors choosing to exercise options.

Long-time China water remediation expert and Phoslock (ASX:PET) director Zhigang Zhong exercised 20 million options and only had to sell 5 million shares to cover his costs.

In the end he paid $100,000 for his extra stock — worth (after the cost-covering sale) a handy $6.45 million.

Mr Zhang’s $15.8m Phoslock stake represents 7 per cent of the company — still a long way off matching key chairman and famous South African investor Lawrence Freedman’s 18 per cent however.

>> Scroll down for a list of last week’s significant small cap director trades

Also playing the arbitrage game was Ka Wui Lim, boss of software maker 8Common (ASX:8CO).

He converted 9.6m options into stock and sold 8.4m shares to pay for it. He ended up with about 1.2m new shares and at Friday’s share price bagged $45,600 of profit.

Danakali (ASX:DNK) chairman Seamus Cornelius was trying out the company’s new ‘cashless exercising’ system.

Options are often given to directors and staff as a way to reward them as the company’s stock rises in value. But as we’ve noted before these things are taxable and you’ve got to pay to exercise them.

So Danakali is using a cashless system: it issues the number of shares equal in value to the difference between the exercise price and the market value of the shares.

Mr Cornelius exercised 750,000 options for which he received the difference between the exercise and the market price — 216,364 shares worth $167,250.

Asset swaps

A director in Eclipse Metals (ASX:RPM), a miniature minerals explorer with a schizophrenic array of projects, was party to an asset swap last week.

Ghan Resources — run by Habibullah Sabah Totakhil — sold 17 per cent of the company to Uranium Resources, which is also run by Habibullah Sabah Totakhil.

Eclipse director Carl Popal is a shareholder in Ghan but apparently not in Uranium Resources. Uranium Resources was registered with ASIC last month although we couldn’t turn up its Australian company number.

Mr Totakhil was a top 20 shareholder in Eclipse until he sold out sometime in 2016.

Ghan Resources became Eclipse’s largest shareholder from 2013, when it advanced the company a $500,000 loan, and Mr Popal became its representative on the board.

That loan, and the 30 per cent interest on it, was converted into the 21.47 per cent stake Ghan would maintain until last week three months after it was issued.

Eclipse’s share price surged in late 2017 to levels not seen since 2013, but have since fallen back to their usual sub-1c level.

Another cap raise

AudioPixels (ASX:AKP) has raised another round of money to keep founder Fred Bart’s dream alive.

The company — which has been developing a new kind of speaker for the past 12 years — doubled in price over the past three weeks for a market cap of more than $500 million.

Mr Bart tipped in another $1.5m as a convertible note and received 154,949 shares when it converted. The shares in the note were priced at $9.68 each.

Mr Bart has indirect interests in the company of about 12 per cent if holdings owned by his wife, relatives and super funds are taken into account.

Audio Pixels has raised a $30.9m since 2012 — $10m of that was just last month — but is yet to deliver its speaker.

The technology is supposed to produce directional sound — meaning you won’t need headphones when you listen to music on your phone.

The last update was in August.

Audio Pixels had managed to produce musical sound from its chips — the tech that’ll go in the speaker — but sound that’s “noisy and muddled”, adding yet more months of tinkering to the already lengthy design and production process.

Here’s a list of last week’s significant small cap director trades:

Swipe or scroll to reveal full table. Click headings to sort

ASX code Company Director Change Date Volume $ Where Total holdings controlled
CDA Codan Donald McGurk Sell Oct 31-Nov 6 100,000 307594 On market 746342
CG1 Carbonxt Group Matthew Quinn Buy Nov 7 575,000 230000 Entitlement issue 3.3m
D2O Duxton Water Edouard Peter Buy Oct 30 145,000 192270 On market 1.9m
PET Phoslock Zhigang Zhang Buy Nov 7 20m 2100000 Convert options 56.7m
PET Phoslock Zhigang Zhang Sell Nov 7 5m 2000000 On market 36.7m
SE1 Sensera Jonathan Tooth Buy Nov 7 1m 100000 On market 11.5m
WTP Watpac Peter Watson Sell Nov 1 138,639 128467 Accept takeover bid 0
8CO 8Common Ka Wui Lim Buy Nov 2 9.6m 335982 Convert options 32.8m
8CO 8Common Ka Wui Lim Sell Nov 2 8.4m 333066 Off market 24.5m
NWC New World Cobalt Michael Haynes Buy Nov 5 10m 360000 Convert performance rights 34.7m
NWC New World Cobalt Richard Hill Buy Nov 5 10m 360000 Convert performance rights 23.5m
EQT EQT Holdings Kevin Eley Buy Oct 29-Nov 5 6448 143790 On market 122,088
PFP Propel Funeral Partners Albin Kurti Buy Nov 2 60,000 158696 On market 9.9m
RRL Regis Resources Jim Beyer Buy Nov 1-5 29,000 124249 On market 29,000
EPM Eclipse Metals Carl Popal Sell Oct 30 204.8m 614400 Off market 49m
AKP AudioPixels Fred Bart Buy Nov 7 154,949 0 Convert convertible note 5.7m
BMN Bannerman Resources Ronnie Beevor Buy Nov 7 3.9m 172612 Convert options 8.7m
CMI CMI Michael Glennon Buy Nov 8 100,000 146381 On market 353,943
DNK Danakali Seamus Cornelius Buy Nov 7 216,364 167250 Convert options 10m
EXP Experience Co Kerry East Buy Nov 9 350,000 102700 On market 350,000
DFM Dongfang Modern Agriculture Holding Group Hongwei Cai Buy Nov 7 373564 369828 On market 270m
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