You can't seriously think that the Edery you provided has anything to do with, let alone any knowledge of medical device solutions. I suppose common sense hasn't dictated it to you so here goes:
The Dr. David Edery I highlighted actually has an understanding of medical devices and the medical device marketplace that DRIO is currently breaking into. He also is an Israeli resident, and has spent time specifically bringing Israeli tech to Latin America through a network he built. This would put him in the exact position to understand the depth of a $3 MM investment in a company such as this, while also giving him access to the other Israeli firm LEAD and appointing Rami Yehudiha to assist in sales and marketing for DRIO. The man you point out has a lifelong dream of creating a game for Xbox to make people "happier". Hmmmm.... Yes, common sense would say that it is easy to delineate between the two. Only fools would expect the opposite relationship.
As far as the exercisable warrant- these wouldn't tend to "cap" the price, considering the investors (institutional and otherwise) are going to want more than the price they paid for their shares. Yet again - common sense would say that they would want the price to rise as much as possible for the best ROI, not have it topped out at the price they paid for them. Their interests would lie in helping DRIO gain ground in the global marketplace, not burning the share prices down (the interest in dropping the price would come beforehand, so as to get as many shares at the cheapest price they can). As far as the R/S, the value still stays the same once split, just share amount changes. The $ 4.2 MM in financing should set DRIO up for a very viable product launch capability. Although short sighted "investors" will still just try to point out the negative points in the PR, there is much more there than a few numbers and 4 sentences. Also, here goes common sense again, if the main private investor has serious connection to Latin American government agencies, as well as CEO'S of hospitals and larger medical facilities, then he would most likely use this to his advantage to promote the product of the company he just made a substantial investment in. I suggest taking a look at Brazil's medical device industry and market to get an idea of what this could also mean for DRIO's future. It is a rather high number. So, actual investors rather than simple minded and fooled day traders, actually will probably take a look at this a second time, especially with such a large infusion of liquid capital in a firm already operating and producing a viable product. The details should help connect these dots with, wait - common sense.
As far as short sellers - With the amount of people that may be convinced to sell just because they can only read a few words out of an entire press release, it is possible folks may attempt to sell down to the base price that investors are receiving their shares for a 40% profit margin. Please remember as well, though, retail traders will need to find available shares to sell short. Most shorting in OTC stocks occurs by MM naked short selling, not all retail. I would doubt that there would be many available in the event of a panic sale. With institutional investments growing here, though a little more sense would say that this could end up being a horrible idea if the institutional investors, who have much more money, decide they want the price up on this stock instead of down. There is a very large possibility of a short term downside, but beware of intelligent investors adding shares for the longer term gains and potential of a company like DRIO and the price getting away from them from an oversell and subsequent squeeze on the price, especially after the R/S (where many squeezes have been seen to happen).
Also remember the more warrants are exercised and sold, the less representation Edery will be entitled to appoint. Typically somebody making a multi million dollar investment in a company would rather hold onto as much control as possible, than to risk throwing away such a substantial amount of money along with having the company he just invested in lose credibility from all its current/future shareholders. So there you have it - the "common sense" version, or you can choose to believe that the company is just taking on somebody trying to create an Xbox game or games for other platforms as a credible investor, while trusting him to make some serious decisions as to the future direction of DRIO (a medical device company, in case any have forgotten). Good luck, as always.
