Is this note intended to be converted monthly or left til...

Is this note intended to be converted monthly or left til maturity?

At 4.75% interest, it seems like its in La Jolla best interest to convert and make 15%. They get a 15% discount to VWAP and can instantly sell at market price and reap a 15% profit in 1day versus a 4.75% profit over 12months. They can then rinse and repeat.

It even has conditions like not letting them reach 20% holding. Almost forces them to convert and sell, doesn't it?

People aren't sure whether to treat La Jolla as a potential cornerstone investor. A positive thing regardless of entry price.

Or are they a trojin horse. Will they convert and supress the sp indefinately like so many of these structured finance deals do.

People were outraged a few months back when it appeared a consolidation would take place followed by cheap placement to a major. This deal is almost identical to that. Plenty of risks if intended that way.

I would be more comfortable if the interest rate was higher and the floor price higher to encourage repayment and not conversion.

And why are we locked into the first 3 notes? Surely EnergyMad will sell within 12months. Seems like we have locked ourselves in to 3 possibly 4 notes and 4years of interest/monthly dilutions.

We could have opted for one note and payed it off with Enrgy Mad proceeeds, thus filling our needs and maintaining shareholder wealth.