Innovative Food Holdings Inc (IVFH)

[ghouyou]

$10 is quite misleading, because IVFH also decreased its net liabilities by $4.6MM (from memory), calculation that included $4MM in intangible assets, became creditor to the tune of $8.7MM and will be able to convert this debt into additional equity under certain conditions, and kept a 10% ownership.

So in effect they got $10+$4.6MM+8.7MM= $13.3MM plus a 10% ownership.

Had they received $4.6MM in cash and kept $4.6MM in net current liabilities might have looked better in a PR, but would have been the same. The $8.7MM note is different, but still valuable (in the case of a full write-off this would reduce corporate tax expenses for a while).