Greenshift Corporation (GERS)

[Harry Winston]

Yes, and there is a reason why those aren’t necessary anymore. It’s thanks to the absence of filings and due to that the absence of large dillution.

This is the third paragraph of the famous Management Update that this company posted last October.

The stakes couldn’t be more material. We have about 30 million shares outstanding. Full conversion of our legacy debt at $0.10 per share would increase our outstanding stock by more than 160 million shares. That amount obviously increases as the price decreases; for example, to 1.6 billion shares at $0.01 per share, 16 billion shares at $0.001 per share, and 160 billion shares at $0.0001 per share. Worse, that last price is our par value, and it’s the trigger point at which we would be forced to gut ourselves by completing yet another reverse split to comply with our loan agreements. It wouldn’t take much selling to drive the price down to that level. Getting current would just start a fire and news would add the fuel. You’d get increased transparency, but you’d also get to watch your investments burst into flame and burn to ash; and, once we got current, there would be little that we could do to protect you without breaching our debt agreements. I’m not going to allow any of that to happen. Not again.

"That amount obviously increases as the price decreases; for example, to 1.6 billion shares at $0.01 per share, 16 billion shares at $0.001 per share, and 160 billion shares at $0.0001 per share."

As I've said many times, Kevin's prediction of the dilution that would occur at certain GERS stock prices is inadequate because it fails to mention the sharply reduced amount of dilution that would occur at prices higher than 1¢. For example, if his math is accurate, then if the stock price is 10¢, only 160 million shares would be added to his total of 30 million outstanding shares by the owners of convertible bonds.

This scenario is a real one. The GERS price closed above 9¢ every day of the trading week from June 24th through the 28th, and then stayed at 9.35¢ for more than a week because there was no trading from July 1st through the 8th. The GERS price went down to 6¢ on the 9th and then this scenario was repeated. The price went up to 9.35¢ on Wednesday, July 10th and stayed there for days because there was no trading in GERS stock on Thursday the 11th, Friday the 12th, or on any of the first four days of the next week.

The lack of a realistic dilution scenario is a reason to ask or even demand that the Greenshift management send all of the missing 10-Ks, 10-Qs, 8-Ks, and Form 4s to the SEC. As I've said many times, the first missing report that I would personally like to see is the 10-K for 2016.