Genesis Holdings, Inc. (OTCID: GNIS) announced the completion of a series of Partial Debt Exchange Agreements with substantially all holders of its outstanding convertible promissory notes, converting two-thirds of each holder's outstanding balance into shares of newly designated Series D Preferred Stock. This restructuring, which finalizes Phase I of the balance sheet initiative announced in May 2026, significantly improves the company's capital structure by capitalizing legacy debt into preferred equity and removing dilutive conversion discounts and price-based kickers.
CEO Oscar Brito stated, "This restructuring fundamentally cleans up our balance sheet. We have taken a substantial majority of our outstanding convertible debt and capitalized it into preferred equity. Just as importantly, in doing so we have eliminated the conversion discounts, price-based kickers, and other dilutive features that came with the legacy convertible notes — which materially reduces our go-forward cost of capital and removes a significant overhang for our shareholders."
As a result of the exchange, the company's pro forma balance sheet as of June 30, 2026, reflects total stockholders' equity of approximately $901,550, compared to a stockholders' deficit as of December 31, 2025 — a swing of roughly $3.0 million. Total liabilities were reduced to approximately $42,745 from convertible debt and other current liabilities. The pro forma balance sheet shows cash and cash equivalents of $3,412, software assets of $925,000, and total assets of $944,296.
The restructuring follows the strategic partnership between Travaleo, the company's wholly owned digital investment platform, and Aurami Capital, announced in April 2026. Under that partnership, Genesis and Aurami Capital have been working together to bring branded luxury real estate investment opportunities to market through structured, digitally structured fund offerings. The company is looking to launch its first two funds under the Travaleo/Aurami Capital partnership within the next 45 days, though no assurance can be given.
Brito added, "With our capital structure now substantially cleaned up, we are entering the next phase of our business from a position of real strength. This restructuring was completed ahead of the planned launch of our first digitally structured funds through our partnership with Aurami Capital and Miami Real Investment (MRI), and we believe it positions Genesis and our partners to engage investors from a much stronger footing."
The company cautioned that while the exchange transactions have been completed, there can be no assurance regarding the timing or completion of the anticipated fund launches, and actual results may differ materially from current expectations. The pro forma balance sheet has not been audited or reviewed by the company's independent accountants.
