Opportunity, the naked short list criteria is as follows:
<<Regulation SHO also created the "Threshold Security List," which reported any stock where more than 0.5% of a company's total outstanding shares failed delivery for five consecutive days.>>>
They would not be using the latest number of outstanding shares of 73 million but the last reported of 53 million. The .5% would be 265,000 shares short for 5 days or since Oct 2nd. 700,000 shares have traded since the 2nd. If half that was shorting, then there would probably be almost 600,000 share or so currently on the short list.
$100,000 in notes converted at 14 cents would equal 714,000 shares. My guess is that Smithline will convert notes and be off the naked short list next week.
IMO, Smithline could have just screwed up and intended to cover before he ever got flagged on the naked short list. On Monday, we can check to see if the company is still on the list.
