GNZR...negative dilution potential......
"My primary concern at the moment regarding GNZR is that promissary note and any remaining debt that wasn't covered by the money Krieg used to purchase control of the shell (since one of the conditions of the control change was that all of VOIG's debt other than the promissary note be eliminated, I am assuming that money was used to pay off the debt). As long as there hasn't been some unexpectedly ugly pre-split dilution, or some kind of ugly change to the note terms that would result in an ugly post-split dilution situation, I generally like my chances of walking away from this investment with a profit."
I'm not pleased at all with the note terms. By keeping the conversion price of the note at .001, and not having it get adjusted upward along with the reverse split, GNZR has taken a step along the negative dilution pathway.
The agreement immediately turns GNZR into an extremely unattractive shell on a fully-diluted, fundamental basis (11.89M shares outstanding, market cap around $8-20+M). This is the last thing I wanted to see because it places GNZR into a potentially ugly situation, particularly if they wish to attract institutional investors at some future point in the development of the company.
To offset the effects of the note on the fundamental picture, GNZR will need to basically inject assets/business into the shell at prices that are extremely favorable to GNZR and its shareholders. As I mentioned in the post above, my main concern with this investment was the note and any changes to that note that would result in a negative dilution situation. This is definitely not what I wanted to see the company do, and from this point forward management's actions will need to decisively/soundly offset that negative dilution event.
