when ann. will available?, page-14

From experience convertible notes are like a bank loan - the company gets the money up front, and pays monthly (variable) interest on it - usually a 1-3% level above the bank rate. The noteholders can also be more secure than the shareholders if everything goes to pot (ie first in line to get their money back). The dilution in nr of shares is not immediate (similar to options).

From the noteholder point of view - they are lending money that they get good interest on and is guaranteed to be paid back regardless of share price, and if the share price goes up they can buy shares at the set original price - sort of like guaranteed risk free income producing options.

From the company point of view - they get access to significant funds, but have to make sure they are in a good position to grow the company so they can pay it back easily.

Its a good thing to be able to get any funding these days, and options would not be any good because the money will not show up in the short term. Cap raising will not get this amount either.

Like I said - this is my first hand experience of convertible notes, but may be different in this case. I think the bottom line is that they are getting ready for the big commercialisation push, and need to have it adequately funded - like blasting off into space - once your in orbit things are fine...

cheers
MD