Enzolytics Inc (ENZC)

[foxi]

In less technical terms:
(and I'm tired as heck so bear with the sloppy verbiage!)


Potential Future Dilution:

There is potential dilution in the pipeline. If we ignore Series B for now, there are still the following potential Common shares that have not been sold yet. I say "potential" because some require conversion from ENZC's Preferred Series C and some are investors' option to purchase (which they don't have to exercise):

380,289,565 Restricted Common shares that are already issued & eligible to be flipped to Unrestricted.
94,107,800 Common shares from converting existing Series C.
176,332,400 Common shares from using warrants to buy Series C and then converting.
188,215,600 Common shares purchased directly using warrants.

Right here we're looking at 838,945,365 potential Common shares that might eventually be sold into the market. These numbers are from the latest filing plus an assumption I carefully documented about the Series C conversion rate.


The Series B, Series E, possible "derivative liability" conversions, company insiders' stock options, crowdfunded notes account for at least 4,471,800,000 additional Common shares IF they are each and all converted, warrants exercised, etc. They surely won't all be converted, but that additional total is also a lowball since we don't currently have all the accounting details available for major categories (derivative liabilties, stocks options, Series D, Series E) in the filings. If even 20% are converted and sold, we're talking almost a billion additional shares.



Potential Dilution Today:

Thankfully (from our point of view), ENZC can't currently issue many more Common shares due to nearly exhausting the 3 Billion Authorized. So the new selling we Retail investors are at risk for today is from the 380,289,565 Restricted Common shares that are already issued & eligible to be flipped to Unrestricted, and up to another 169,564,047 (the difference between Outstanding and Authorized) the company can create out of thin air at any time as dilution to raise operating capital.

That's up to 549,853,612 Common shares waiting to be sold -- though surely not all will be sold since ENZC said here that some people are choosing to hold. And ENZC probably won't dilute with ALL remaining potential shares. Point being this dumping could start Monday or start Never, no way to know how it'll play out.



Outstanding Debt:

ENZC owes a lot of people a lot of money. They quoted an accumulated deficit of $29,533,234. They need to account for these stakeholders if tides turn and the company starts making money. ENZC will be further incentivized to dilute if it can't discharge the old debt by other means.

Put another way, if there's "room" to dilute and convert, and big money to be made in doing so, a lot of parties besides Retail will want their piece of the pie.




Reverse Split:

ENZC has an obligation to all its shareholders, and this also includes the Preferred shareholders. The Preferred shareholders can't convert with the current O/S being so maxed out. ENZC may feel some pressure to do share restructuring to be fair with the conversion options it owes its Preferred shareholders. ENZC may be incentivized to do a reverse split to 'unlock' the full potential of these classes of shares.





Perspective:

This is only one side of the coin. Don't forget all the potential value in the pipeline as well. If ENZC makes it big, there might just be enough money to go around. And we're not privvy to any new funding or equity deals they may be striking with partners or investors behind the scenes.