the holder of shares representing a majority of the voting power of GreenShift Corporation (the “Company”) has given its written consent to a resolution adopted by the Board of Directors of the Company to amend the articles of incorporation so as to effect a reverse split of the Company’s common stock in a ratio of 1-for-1,000 . We anticipate that this Information Statement will be mailed on August 17, 2011 to shareholders of record. On or after September 6, 2011, the amendment of the articles of incorporation will be filed with the Delaware Secretary of State and will become effective.
So that 1:1000 Reverse split could happen any day now.
With all the debts they are having to pay off this won't be their last ever Reverse split. I expect that they will probably get back to no bid again pretty quickly after the split is executed.
Judging by GERS financial troubles they will be issuing shares right away towards debt and interest owed. That will drive the share price back down quickly and it probably won't take long before they are back in the triple zeroes again back in the same situation with worthless stock than isn't paying down the debts fast enough to counter the accruing interest and no resources left over to keep operations going. They lost millions of dollars last quarter.
I noticed that they have some of the dirtiest debt Note holders among the list of companies they have done toxic debentures with including:
E-Lionheart Associates and JMJ Financial Corp
A total of $30,556,441 in principal is owed for the convertible debt notes all of which can be converted into free trading discounted common stock of the Company. $2,357,558 in notes mature this year (2011) and can be converted at the demand of the Note holder once matured.
That isn't even counting interest already accumulating. In the first quarter of 2011 GERS paid out $1.1 million in interest alone.
The company also has tons of preferred shares outstanding that can be converted into common shares.
They have pending legal issues mostly focused around accusations of patent infringement.
GERS did claim in past filings to be reducing the working capital deficit, but over the last quarter it increased by about $2 million up to $14 million total. Between the deficit, accrued expenses and liabilities, and the extraordinarily high debt Notes all of which will be matured by the end of 2012, I would expect at least 1 more big R/S some time in 2012 and maybe 1 more after that.
The dilution threats to this stock are just sickening. Might take another 2 more massive reverse splits before they can start to get their debt issues under control.
Got a question about dilution in general. When a company dilutes, you will see people comment, "don't know why they're diluting at this pps instead of higher." Most the times I've seen dilution, the pps has been low. Do companies benefit from diluting low? Are there accounting purposes or laws requiring they dilute at the target pps or something of that nature?
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