Genta, Inc (fka GNTAQ)

[fmrick]

Finally had time to read through the Proxy this morning. Most is pretty standard stuff.

But I did find this:

As of June 19, 2012, we had (i) 100,000,000,000 shares of authorized common stock, of which 5,959,717,543 shares of common stock, par value $0.001 per share, were issued and outstanding, (ii) 7,700 shares of our Series A Convertible Preferred Stock, par value $0.001 per share, were outstanding, (iii) approximately $38.4 million in aggregate principal amount of Convertible Notes outstanding convertible into approximately 38.4 billion shares of common stock at a conversion rate of $0.001, and (iv) 2,000,000 shares of authorized Series G Participating Cumulative Preferred Stock, of which no shares were issued and outstanding. Authorized but unissued shares will be available for issuance, and we may issue such shares in the future. If we issue additional shares, the ownership interest of holders of common stock will be diluted.

I added the underline and bold. I added it because that points out how bad this has actually gotten. I used $10MM in my post yesterday to calculate the amount of debt outstanding and how many shares will be received when that debt is converted. This document puts that number at $38.4 million, convertible into 38.4 billion shares. There are currently about 6 billion outstanding. No wonder they are worried. When all the debt is converted this will be diluted by about 700% from where it is now. This will not change after the corporation switch, it will only change the number of shares. The ratio will be the same. So a share you own today is really worth about 1/7th of what it is selling for, fully diluted.

Man, how did they let this get this screwed up?

But the point yesterday and the point that still is, where will they set the conversion price for the debt? Until we know that, I'd stay away for any additional purchases. Then when we find that out, I pay close attention to that number and the number of shares that you buy, until we see much dilution will result.

If anyone can find anything in the Proxy about how they will do future debt conversion, please post it. I looked and I can't find it. Might have to go back to the actual 8K for the debt to figure it out.