And therefore (and why I call him "poor Mr Phelps") his sales of 615,000 at just under 35 cents have lost him 17 cents per share or over $100,000.

I think you've answered your own question without realising it. His average cost is $.50? he also bought 62,500 shares at $4.80. In December He exercised warrants at 25 and is selling them for a 9 to 12 cent profit? maybe $70,000 total? ... Yet it is still a capital loss.

Also incidently shortly after he exercised his 700k options he was granted another 500k. Sounds like Mr phelps is doing ok.

If he starts selling his 1.6 million shares beyond the 700k options he exercised then I might start getting worried. IMO this is just a case of smart opportunism... exercise in the money options the day before they expire and sell them to reduce the average cost of existing holdings (tax free).