Holter-- I think you're getting confused by wondering how much you're being offered for your shares. You're not being offered anything. You're being asked to approve the sale of virtually all the company assets at a price of .012 per share compared to Friday's closing price of .0043 per share. If the transaction is approved and closes the company has said it will make an initial distribution to shareholders of between .0025 and .0035 per share. Assuming an initial distribution of .003 per share, the company will still have .009 per share in cash before closing costs, taxes and any other liabilities. Separately, the company has $1 million in cash which it will retain so let's assume that $1 million is sufficient to cover closing costs, taxes and other liabilities including the cost of dissolving the company. We know .0015 of the .009 per share must be held in escrow for two years which still leaves up to .0075 per share for potential distribution during the two years prior to any final escrow distribution. Assuming the escrow is untapped and ultimately distributed, there would be total distributions of .003 + .0075 + .0015= .012 per share compared to the current share price of .0043.
Assuming the transaction closes I think the biggest risk in terms of potential liabilities is whether there's litigation from a third-party in the company's sordid past, from plaintiff lawyers trying to exploit the transaction or maybe even from the buyer after taking over the assets and finding something he doesn't like. So distributions to shareholders could end up lower because of litigation expenses but I still think this is a great arbitrage opportunity.
