Replies to post #248261 on Innovation Pharmaceuticals Inc (IPIX)

[loanranger]

"However they could certainly be shorting shares to effect such an outcome that I described."

Without commenting on the second half of that sentence I believe the first half to be true, contrary to some of the assertions here and elsewhere. Short selling can be done by the MFO.

There are two sections in the agreement that preclude the MFO from short selling but only during specific periods of time.
(highlights added)

Under 3.2 Representations and Warranties of the Purchasers.
"(e) Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof."
(The execution date being October 5th.)

and under 4.15 Certain Transactions and Confidentiality.
"Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales, of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the Signing Form 8-K as described in Section 4.6."


Those clauses are basically boilerplate language intended to prevent the investor from short selling ahead of the public announcement of the agreement. That prohibition ended on 10/9, when the 8-K was filed.


It's probably worth noting that a week before the Agreement was signed the short interest in IPIX was 1,431,819 (9/28 settlement) and the latest figures show that number to have dropped to 717,854 (10/31 settlement). That would suggest that IF the MFO has done any significant short selling they did it after 10/29.