The key here is the last part of the sentence:

"The note is convertible into shares of Class A Common Stock at $0.04 per share, subject to adjustment downward under certain circumstances defined in the note."

I guarantee you Iliad is not paying $0.04, or even market price, for their shares. They want discounted shares they can flip for a quick 10-20%, which is why they require that half of the payments be in shares. Why settle for a measly 8%, which is what they would get if the loan were repaid in cash?