One thing you have to know is that YA can convert the money it lent to Neomedia into shares, thereby being able to add shares to the market as they recover their loans. That's why it's called dilution. How it works is in the post above. Poptech also once posted that convertibles are actually excellent financial instruments. Still, so far they have sucked up a lot of shareholder capital.
One thing to note is that this company is only still alive because folks like you and me believe in its potential. No potential = no hope = no buyers of shares = no conversion = no new loans = shutdown of company = no 400K annual CEO salary.
If you reverse the equation you might come up with the strange idea that all we have here is the classic story of the thief disguised as the cop trying to catch himself. Be careful.
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