20 percent on $1M

by Volker Weber

On August 13, 2012, GBS Enterprises Incorporated, a Nevada corporation (the "Company"), entered into a Note Purchase and Security Agreement with John A. Moore, a member of the Board of Directors of the Company, and his wife (collectively, the "Lender") pursuant to which the Company sold a secured promissory note (the "Note") to the Lender in the aggregate principal amount of $1,000,000 bearing interest at a rate of 20% per year and maturing on the first anniversary date of the date of issuance with a 2% prepayment penalty. To secure the obligations of the Company under the Note, the Company granted the Lender a first priority security interest in the accounts receivable (the "Collateral") of the Company and its subsidiaries located in the United States of America on a one-for-one (1:1) basis.

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This report is also interesting. Look for "India".

Comments

So, on August 13, GBS were at $0.39, let's call it $0.40. Couldn't they just have given him 2.5 million new shares? I understand GBS is a pretty good investm... oh, wait, $0.32 as of today.

Joerg Michael, 2012-08-21 22:28

$0.07 or less

Jeff Gilfelt, 2012-08-22 15:37

I don't get this one. Volker, you seem to be implying that M. Moore and his wife are ripping off the company.

When the bosses have to lend money to a company, surely this is a sign of distress, certainly one of liquidity problems, if not of solvency. The rate of return does seem high, but then that implies that M. Moore himself has doubts about the future of the company he is on the board of.

Also, I don't get your reference to the India bit. Are you implying 'we fire all the guys in the us and get cheap indians to do the job?'

Andrew Magerman, 2012-08-22 22:40

Andrew, I am not implying anything. I am just taking note. Today I read a filing that can be described as you "can't rely upon" cash flow statements. I find this all very confusing.

Volker Weber, 2012-08-25 01:07

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