The way I read it is they are raising $3.5m odd (forget the...

The way I read it is they are raising $3.5m odd (forget the exact number) by con notes and looking to raise $10m by equity raising.

It appears that the notes will be in place before the equity raising - the latter will fail miserably if they even ever actually attempt it (which may well mean it is simply a smoke screen).

Why would anyone tip equity in if you're ranking behind the note holders?

The note holders (who appear to be largely Gandel and associates) and a few others will gain control of the kit & kaboodle that way it would appear....