Hey William,
1. The big deal fell through
Given the size of the loan, I think this is a legitimate concern. Guess we'll find out soon (hopefully).
2. There is another two billion shares in the O/S.
I suppose this could happen, too. There is sooooo much speculation about "buyback" and "dilution" on this board that it makes my head spin :)
3. Reverse split
While I completely understand your ration for thinking this to be a possibility, this is the one topic I would disagree with. Bare with me here for a second - the company has stated it's intention to uplist to the OTCQX by the end of 2008. Let's say that this is a feasible goal. In order to uplist, I believe they need to hold the PPS at or above $0.25 for 90 days. I base the 90-day figure on heresay, but am 95% sure that $0.25 PPS is required for uplisting.
A reverse split would not hold the PPS at $0.25 long enough to uplist, in my opinion. Therefore, I think they need to find other means of strengthening the PPS to achieve those levels. I think having audited financials (with 2008 showing some profit), along with the funding of the big loan could move the PPS in the right direction. A reverse split at these levels would surely be a bad idea if the company wants to become credible and uplist..