The current private placement is for 16,946,000 units with each unit comprised of one common share and one half warrent exerciseable at $0.90 per share. Each unit is priced at $0.72 each. While it would be nice if the buyers of these 16,946,000 units were long term holders, I think about 1/2 of them are locking in guarenteed profits by selling short at 75 to 80 cents the last few weeks thus making a few pennies on the shares plus getting the warrents for free. Once the private placement is completed they will absolve their shorts by delivering the new private placement shares and will then sell their warrents for about 20 cents per share thus making a risk free 25 cents per unit.

Since volume had died down before today's spike, it is my hunch that today's shorts have inside info that the private placement will be completed within 3 days. This means that today, Tuesday and maybe Wedensday they will be able to naked short without borrowing the shares and will be able to cover within the 3 day reporting period.

The fact that the share price has stayed above 72 cents per share during this onslaught of short sales portends good things for the stock price once shorting stops. There will be no short covering in the traditional sense since the shorts will be covered with new shares from the private placement. We also might see continued heavy selling for a few days after the placement is qualified as more sellers lock in the free warrents.