Because they are broke and the common stock is essentially without significant value. We also don't know how many common shares are currently outstanding as over $70 million was due to the Series G preferred holders on June 30th. Cash which INBI did not have.
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 as follows:
· The stated value of $11,500,000 is payable on June 30, 2013.
· An additional dividend equal to $1.00 per share of Series G Preferred Stock was payable on June 30, 2011 if the special preferred distribution discussed in the next bullet point has not been paid before that date (aggregate redemption value $11,500,000). The investor waived payment of this additional dividend on the payment date, but it will continue to accrue dividends as provided in the Certificate of Designation at a rate of 8.0%. That is, the original face value of the Series G Preferred Stock accrues dividends at 8% from the issuance date and the unpaid additional dividend amount accrues dividends at 8% from June 30, 2011.
· A special preferred distribution equal to $4.096 per share of Series G Preferred Stock is payable on June 30, 2013 or earlier at our option (aggregate redemption value of $47,099,651). This special preferred distribution could have been reduced by the amount of the additional dividend discussed in the preceding bullet point if the additional dividend was paid on the June 30, 2011.
Based on the MOU for the merger announced yesterday, the common shareholders are unlikely to receive much, if any, value in the merger due to the preferred shares outstanding.
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