The potential nightmare scenario could get even worse for current Infotopia stockholders. Say, for example, that each preferred share was also to be treated as if it were the equivalent of 26 or more common shares upon liquidation. In that case, the preferred shareholders might hold the equivalent of 520 million shares, while the common shareholders would hold about 463 million shares. When it came time to distribute those 13.1 million EntrePort shares, less than one half would go to the present common shareholders. Such a scenario may never come to pass, but there are other reasons why current Infotopia common shareholders might not receive the full benefit of those EntrePort shares.
Shareholders are at the end of the line.
Current Infotopia shareholders may also wonder who will control the surviving American Stock Exchange company. Right now EntrePort has about 17.8 million shares outstanding, but Infotopia says there will be a 1 for 30 reverse stock split of EntrePort stock before the closing. Not surprisingly, the Company press releases announcing the deal do not address these questions. The deal faces serious hurdles, including American Stock Exchange review. Infotopia would appear to fall short here since it has not been in business as an independent entity for two years.