SHARE STRUCTURE ADDRESSED in emails from GREENTIME (BOTH EMAILS)
PER ZRZH, NO CHANGE TO SHARE STRUCTURE, PER EMAIL BELOW:
On Jan 28, 2017, at 8:14 PM,
wrote:
Don,
Again, nice job with the most recent interview on Money TV. For investors such as myself, we are very excited to see the revenues coming in. We are grateful be invested in a company that is seeking to move the stock onto the list of top 5 of MJ related stocks, and plans on doing it by releasing results-not fluff PR’s. However, many of us are gravely concerned that the current share structure needs to be reduced, and reduced quickly. Given the current share structure, we feel the stock is topped out due to market cap being WAY TOO HIGH for the income presented.
Share Structure
Market Value1 $222,986,390 a/o Jan 27, 2017
Authorized Shares 10,000,000,000 a/o Jun 30, 2016
Outstanding Shares 5,574,659,739 a/o Nov 01, 2016
-Restricted Not Available
-Unrestricted Not Available
Held at DTC Not Available
Float 1,383,336,622 a/o Nov 01, 2016
Par Value 0.00001
As you can see above, the market cap, A/S and OS are outrageous and will kill any chance of attracting any savvy investors. So, please get the share structure reduced and PR the shareholders when you have filed and again once its completed. You will then put yourself in a position of growing shareholder value, as of right now you are topped out due to market cap. Moreover, if you don’t do something about share structure, many of the existing shareholders will take exit and move to investments with a more favorable share structure.
Thanks for listening!
Respectfully,
REPLY FROM ZRZH:
We appreciate your concern. We addressed this in our last money TV interview by outlining the company's growth plans. The smart greenhouse market is estimated at 6 billion alone. If Zerez/ next gen simply capture 10 percent of that market ( which we will easily do) thats $600 million in annual revenue.
Second, our automated proprietary control software is ubiquitous to ANY greenhouse company and we are pursuing license deals- which means wholesale revenues and retail subscriptions.
Third, acquiring additional assets and businesses will strengthen the balance sheet.
Finally one should not make assumptions about the holdings of the balance of the outstanding shares ( difference between the float and outstanding shares ). Remember , as officers we are not able to sell any restricted stock for at least 12 months from our taking over the company. Therefore, it's obviously In our best personal interest as well as that of the shareholders to maximize the company's potential.
In short, we are confident that our company's share structure is adequate at this time and that the value of our company is completely supported by our current and future business plan implementation. If anything should change we will stay true to our duty to maximize shareholder value and take whatever action is necessary to do so.
Thank you for your inquiry.
Second email response from Don:
On Jan 30, 2017, at 11:44 AM,
wrote:
Don,
Most of the folks that are invested right now have made an assumption that you would clean up the share structure you inherited from the reverse merger. It’s pretty common and is about the easiest way to increase share price. I won’t disagree with you on market cap. Eventually, it will matter very much, as the elite MJ stocks will be judged by fundamentals, float size, O/S, & AS. Fundamentally, ZRZH is separating itself from the non performers. However, with the current share structure is one of the largest I’ve ever seen and I don’t believe you will sustain the current pps and will see a ceiling in pps approaching fast.
Look at the Canadian MJ stocks, as they are a few years ahead of us-due to a more liberal political environment. Take a look Canopy growth, they are MJ stock number 1 and have a 930 million market cap that is based on 2 year projected forward earnings of 145 million. That’s where we are headed in a few years.
My point is that ZRZH has an enormous A/S & O/S. Let’s just say you have a target of being a 500,000 million dollar company. Based on the current share structure, that would put your price per share at about 0.08. Now imagine you are an investor that wants to invest large in ZRZH in their infancy, because they sold 1.4 million in the first 90 days, even though $900,000 is on a long term lease option and income only drizzles in. Why would they, if at best they could see their investment double? It’s not enough incentive for the MJ sector Don and you should recognize that. So, you will have a hard time attracting investors from the current price point higher, because there are myriad MJ plays that have more potential of a higher return.
Now, if you reduce your share structure by half and play the above scenario, you could expect a 0.16 pps for a 500 million market cap. Ask yourself, how much easier will it be to attract or KEEP investors from
0.04-0.16 than from 0.04-0.08? Who wants to invest or stay invested in a start-up with a max potential of 100% return?
You either want higher share price potential from less shares or lower share price potential and your current share structure. It’s up to you, because market cap does matter-even in MJ sector. It’s really simple supply and demand.
Thanks for your response and have a wonderful afternoon. If you are open to a reduction, please let me know-as I would love to stay invested in ZRZH!
Respectfully,
RESPONSE:
Typically I do not address these questions, but since I did here is another thought for you. Look at MJNA, CBIS, GRNH. Their annual reported revenues are at most 250k, have very little cash, and all lose money. Granted their outstanding shares are less, but o must point out 1.4 million in revenue on 75 days is far from the 6 years those companies have worked just to continue to lose money and have in my opinion unjustified market capitalizations.
Don Smith
