yes, i think they have the out of existence covered because they have the next round of financing covered, but i think it becomes more costly as the share price decreases. Just thinking out loud but suppose you were the source of funding and you could drive the share price down so that your new shares were cheaper than the shares you sold to drive the price down? What is not to like about doing this. Sell from $1.20 or so down to 60 and then buy at about 60. Why not give it a try and if the share price declines then go for it?
john, would still suggest caution. there has been some comments here about the financing and the probable lender forcing down the share price to get more control for their money. Short it down and get more shares for a set amount of funding seems like an option. Heads they win and tails is not so bad either. Nice strategy if this is it.
One would also want to consider the occasions where a small firm is shorted out of existence. Doubt that is happening here but what do any of use know?