Half, I don't care what the loan agreement says, logic says that Smithline is shorting the stock. This is not just a few hundred thousand someone is shorting and no one has that number of cheap warrants for insurance.
I don't think it will likely happen but if Moro somehow managed to sign another licensee, unless whoever was shorting has some sort of warrant protection, they would be for a horribe short squeeze. No one would take that risk however small. Smithline can short however much he wants. He could short almost 14 million shares and have the notes to cover. 1.95 / .14 = 13.9 million.
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