According to SEC rules, GZFX had to "ISSUE" enough shares to cover the GGI deal. These shares are "authorized", but not in the O/S. They are "authorized" (according to the CEO) to meet the SEC rules. If they had not "authorized" this issuance, the deal with GGI could not have gone through.
Anyone claimng that these shares were issued merely to raise money is pulling the wool over your eyes.
GZFX "could" receive money from GGI, but is NOT required to. It's an "as needed" situation. Proceeds are for the working capitol of the company, and not for the CEO and friends:
Use of proceeds We will not receive any proceeds from the sale of the common stock. However, we will receive up to $16,350,000 upon exercise of the warrants by the selling stockholder. We expect to use the proceeds received from the exercise of the warrants, if any, for general working capital purposes. We received an aggregate of $150,000 in connection with the issuance of the convertible debenture to the selling stockholder. We used the $150,000 for the general working capital purposes and the payment of professional fees.
The amount of shares that had to be issued were with respect to the market cap, respectively with the share price. As the share price went down, more shares were required by the SEC rules to be issued. Now that we are over 2 cents, we have the worst behind us ( which was at just over 0.002 cents). With subscribers coming in, GZFX can become so financially indepentent, that it does not need to use the GGI-related finance. GZFX is NOT required to use the financing. My personal guess - the financing was necessary to convince CircuitCity that GZFX could "pony-up" if need be. In the near future, we shall see if monies were used in acquisitions, new DCs. expansion into other areas, etc. This information will be in future filings, and any guesses now would be....guesses.
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