That's the point. It is a high risk play, so you have to believe...

That's the point. It is a high risk play, so you have to believe that in doing it you would get them through to the blue sky territory. Alternatively there is not much other debt so if it falls over you have to believe you can recover $2M from the carcass.

Still if you have a reasonable exercise price of say 1c (still a 30% premium on the current), then it wouldn't take mch before you be in the money considerably.

I guess with that structure it effectively becomes a capital raising at 1c with a bit of a reduction in the price risk for the note holder.