ASX listed penny stocks are unfortunately always bound to be...

ASX listed penny stocks are unfortunately always bound to be diluted, with novice shareholders prepared to finance the gravy-train in the hopes there will be massive returns in the future.

I believe any lending agreements which involve directors of a company need to be carefully examined: (1) why couldn't the company source funding from a third-party lender or PE? (2) what benefits are there for the company or directors with respect to the funding there wouldn't have otherwise been by using a third-party lender? (3) what is the cost of this funding? Is it worth having access to additional funds, which may or may not be used, if it will result in further dilution of the stock? (4) what is the benefit of the funding? In this case, why increase the debt facility if the existing facility has $6 million still undrawn?

At least in this case the directors are lending the company money, I have seen instances where the directors have been borrowing money from the company... with ASX and ASIC, as usual, asleep as the wheel.