Replies to post #2179 on Infusion Brands International, Inc. (INBI)

[1manband]

Because Infusion Brands International sold their operating unit (Infusion Brands Inc.) for common stock of As Seen on TV. That way they don't assume the massive debt of the parent corporation.

As I predicted earlier, the common shareholders of INBI are likely to end up with little to nothing in the deal. After the merger, INBI owns 452,960,490 common shares of ASTV worth about $36 million. Sounds great, until you consider that INBI had current liabilities of around $11 million and the convertible preferred shareholders are owed over $70 million:

"The outstanding 11,500,000 shares of Series G Preferred Stock are mandatorily redeemable for cash of $70,099,651, which is payable on June 30, 2013"

http://www.sec.gov/Archives/edgar/data/1298095/000114420412062635/v326743_10q.htm

And that is just the Series G preferred. They also have Series C and Series E outstanding, all of whom are also due money.

Which means the creditors have first call on the assets, and the preferred holders get the rest up to the amounts owed plus any interest accrued since then on top of that. Which means the common shareholders are left with..........nothing.