[RawAlex]

Fausty, normally the idea is that the companies "merge" and stock is issued to the winners. It seems this time instead that AFF was sold on notes (which appear by the report to not have been respected / late / in default). If Andrew and Lars are lucky, they didn't finance the notes themselves and rather actually got paid out. I somehow manage to doubt it, but you never know.

So what happens is that instead of the boys having a stake in a relatively debt free (but money losing) company, they hold notes payable only if a public offering for a debt laden and unprofitable company works out. It's pure hail mary, more so because little or none of the public offering money would get turned into operating capital, which means that at least in the short term, their cash position would not improve. Further, because the notes have not been paid in a timely manner, it is unlikely that any debt service has been going on, so retiring that debt (aka, paying off L&A) wouldn't do anything to fix the go forward business.

What I find most interesting is that those in the investment world that chose to comment on the potential IPO all came to the same conclusion really, really quickly. I think the online adult community is still in shock from finding out that the huge cash cow that was AFF in fact is a debt laden, money losing pig in a poke. It is also the best case anyone can every put forward for why you don't pay $100 or more for a member, or at least that you can't unless you are jamming them the deecash way.