Hi alpha100, Eloi, Quesoche, I agree that VCs often use...

Hi alpha100, Eloi, Quesoche,

I agree that VCs often use con-notes that convert into equity at the option of the company. In fact they do this all the time.

However this loan is from 1V's debt fund, all their debt has interest payments and amortisation. The target return for these types of loans is 10-15% and they would not be expecting to convert to equity unless the share price really performs (hence the 20c strike price).

I believe this is also supported by that at $4M and 20c/share as converted it would equal 20M shares, which is 2% of outstanding shares. LVT just gave 9% of the company to My Net Zero so is quite willing to give away equity. If LVT could convert $4M of debt, which is costing $400k in interest payments and supressing the share price for 2% of equity, they would have done it months ago.

Personally on a probability basis I would put it at 95%+

I do agree that if the company goes into VA or recevies a PE buyout offer there could be debt to equity conversion there as part of a joint bid.