The $200k Convertible Notes is structured as a liability debt...

The $200k Convertible Notes is structured as a liability debt instrument to the company. We don't know the details of debt but you can bet it is not simply a cash raising in exchange for shares at the end of the period. It would mean the company places the Notes higher than other shareholdings in the period leading up to before they are converted, so if this goes into administration the Notes allows the owner to get first dibs of whatever is left. It would allow the owner of the Notes to take precedents over the current revenue streams that have been created already by the Company. And yes, Convertible Notes are usually used when Equity can't be raised, or perhaps for the reasons outlined above.
In summary, it is not a good sign for the companies future IMO.