Ann: Funding and Convertible Notes update, page-2

Well here is your rabbit!
On face value this is a good deal by the MD and secures the survival of the company (and his "reduced" salary) into 2016. Given market conditions to raise $7m is remarkable and the dilution does not seem significant. On the downside the notes are now secured which means the Note holders hold the keys. In reality they already had the keys with such a swamping unsecured debt position.
The noteholders must see some value in keeping current management in place which is an endorsement. The alternative for them was to push for repayment in November and take control of the assets directly. They would then have had to put in place their own management team and then fund ongoing activities. So one way of seeing this new funding is that the note holders have worked out that $7m is their holding cost through to 2017 and their preference is to fund this through SDL? In any case expect a radical cut in company expenditure to be part of this deal.
MD will still be among the best paid CEOs?
Doesn't change my view but this funding deal is good news for holders.
Good luck!
J9