Ann: Investor Presentation, page-8

Thanks for your thoughts, stoeger. I looked at the terms of the loan and did not find them onerous, so maybe you could explain what I've missed:

1. The term of the loan is 5 years - that seems to give a bit of time to stash cash for repayment.
2. The interest rate is 10% pa - (seems typical if not on the low side for finance in this sort of deal?)
3. First year's interest is payable in shares at 1.7cps - ok, so if we take the weighted average share price at time of announcement as 2.08cps (based on average of 7 shares at 2.3cps and 4 at 1.7cps), then the actual equivalent interest in shares they will receive is more like 12.2%. Except they still have to sell they shares to realise the interest AND obviously they could do a lot worse if the share price falls. They do better if it rises, but holders are unlikely to be complaining then - and it's only the equivalent of one years interest, not the whole loan that converts.
4. Secured over assets of nitro drilling - so presume that does not include the assets of current MSV?
5. Future years interest payments may be paid in shares but based on 30 day VWAP - doesn't even appear to be at a discount? At least there isn't much risk of defaulting on interest in the first two years. Okay, there is a chance this goes into a conversion death spiral, but for now we are talking about a conversion at VWAP of around $800k on a fully diluted market cap of about $30m, so, would have to fall a lot for a spiral to take effect.

Seems to me that the terms are a lot more favourable than any vulture funding, convertible loan deal would allow? And it is hardly like bank terms are going to be on offer at this point.

Btw, correct me if I'm reading it wrong, but it looks like cash might have been $1.1m at end of April (page 21) and $1.8m at end of May (page 20), so after falling in April, looks like may have been cashflow positive in May? So it is possible they believe they can fund working capital out of existing cashflows?

As for the options they hold, surely needing the share price to be over 7cps for any of them to vest has to be at least some reassurance to current holders and those buying at 1.7cps?