Greenshift Corporation (GERS)

[Harry Winston]

We’re working on our filings while we finalize restructuring agreements with our lenders. While we’re targeting year-end to get everything done, our reports will be delayed if execution of the restructuring agreements is delayed. If that occurs, it will be to mitigate the risk of dilution.

We regret any confusion that may cause. Transparency is obviously a legitimate concern. It has been almost two years since our last filing, and I empathize with the impact. There would be no void to fill with speculation if there was no void to fill. That said, bringing our filings current carries an immediate risk of dilution from lenders that can be expected to convert their debt into stock as soon as they can deposit, clear, and sell our shares - before the Federal Circuit’s decision, before we make progress building value again, and before buyers come to the table.

Again, I'm going to reprint part of the above statement, with boldfacing added to emphasize it.

"... bringing our filings current carries an immediate risk of dilution from lenders that can be expected to convert their debt into stock as soon as they can deposit, clear, and sell our shares ...."

This statement from the Greenshift Corporation was made on September 28, 2018. I looked up the historical data for this stock on that date, using NASDAQ's website. During the trading week that began on Monday the 24th and ended on Friday the 28th, the only trades happened on Monday. The total trading volume that day was 7,500 shares. The opening price, high price, low price, and closing price on Monday the 24th was $0.052 or 5.2¢/share, and it was maintained throughout the rest of the week because there were no trades for the rest of that week. If those 7,500 shares were traded by only one buyer and seller on Monday the 24th, then $390 changed hands, give or take a brokerage commission. That was a realistic amount to spend on this stock at that time, and a realistic amount to expect to receive from a buyer if you were a seller at that time. In fact, from October 8th until November 26th, about seven weeks, only eight trading days had some trades.

That trading price on September 24th, 5.2¢/share, is just under half of today's closing price, just under a dime per share. I'm going to make four conclusions based on the above facts.

1. Any debt holder who did what Kevin was afraid he would do (convert, deposit, clear, and sell his shares) made a foolish decision. He sold his new stock for a nickel (or less, given a very illiquid market) and lost out on the opportunity to hold stock that almost doubled in value since late September with the potential for more gains.

2. Any debt holder who converted and held his new shares made a wise decision, for the same rational reason. The price has doubled since late September.

3. Kevin has less need to worry about the debt holders. As the price goes up, they will receive fewer and fewer shares if they do convert their debt into stock.

4. Because there is less need for Kevin to worry about the actions that could be taken by the debt holders, he now has a bigger obligation to bring the SEC filings up-to-date. The increased stock price is giving him a less valid excuse to delay writing those reports and sending them in to the SEC.