Charting 2.0, page-940

Sadly we never established the company's fair value, but give that the company is looking for $40 million and its MC is currently $82.4 million, in round figures we are currently talking $120 million in post funding valuation of which any financier would own about 33%. The financier naturally would want a discount rate for converting capital into equity, kind of as interest payment on the loan amount, which I guess is part of the negotiations as we speak.
Currently $40 million would be worth about 166.7 million shares, however I'd suggest it would be in the interest of the financier if SP would drop even further while negotiations are ongoing. Further more it might be possible that the financier after the deal is done, could start shorting the stock to depress SP even further. They could do that to improve on the number of shares they would receive on partial conversion of capital to equity and given their discount rate as well they would only need to use a fraction of their newly issued shares to cover their short position.

It doesn't matter what the actual numbers will be in the end, but the principal remains the same. I guess we will only find out what the fine print will reveal once the announcement is out, however this is my general understanding of quasi debt-convertible. The above is my thinking behind my expectations for the SP to drop again after an initial relieve rally when the funding announcement hits the market.

From the current charting perspective today's CS is a "Bullish Hammer" and having hit Fib 61.8% retracement from the top and messured over the entire run from 8.8c, is quite justified and could indicate a possible bullish reversal, which being a single CS needs bullish confirmation tomorrow!