Investo - in reading Stock190's post, I gather that if MLXO does not draw on the Cornell LOC, then Cornell does not have the incentive to further short the stock, or the right to immediately convert whatever shares they gain in the deal. In other words, where MLXO refuses to take Cornell's money, Cornell runs the risk of being stuck in its position while the stock price rises. See this line in the post:
<<Downward pressure on the market price of our common stock that likely will result from sales of our common stock by Cornell issued in connection with a draws under the SEDA Facility, could encourage short sales of common stock by Cornell. Pursuant to the Agreement, Cornell may be permitted to sell shares of our common stock during a pricing period in connection with an advance from the SEDA Facility. These sales could include short sales. A "short sale" is defined as the sale of stock by an investor that the investor does not own. Typically, investors who sell short believe that the price of the stock will fall, and anticipate selling at a price higher than the price at which they will buy the stock. Significant amounts of such short selling could place further downward pressure on the market price of our common stock.>>
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