Cooltech wants money to grow. It filed the two Forms D so it could legally sell its shares to a group of accredited investors (two sales).
The transaction with IFON is a reverse merger. It's possible here for a smaller fish to swallow a much larger fish. There are lots of details in the agreement that was filed with the SEC yesterday. IFON executives will resign, replaced by Cooltech people. IFON will have a four-member board of directors with Cooltech naming three of the directors. It's correct to ignore the gymnastics and to think of it as Cooltech buying IFON. Yes, Cooltech will start out as a subsidiary but the sub will control the parent. It might stay that way. They might later fold the sub into the parent. The form really doesn't matter.
Cooltech does want to be publicly traded. It will be, through IFON's listing when the transaction is completed. It becomes publicly traded without having to do an IPO. That doesn't happen if Cooltech straight up bought IFON, but it does through a reverse merger. Cooltech in effect is buying IFON's business and its listing. (Of course that gives IFON the most value to a buyer.)
No way around it, Cooltech wants to tap the public market for more money. But it's not necessarily bad. Money is always needed to grow. Why is any company publicly traded. The thing is we and the Cooltech owners will all hold the same class of shares. If they do good, we do good. So it's the business plan, the competence and integrity of the new management, and all the normal stuff. What we don't know is our starting point. There is no way to measure what we got in the transaction with no financials or SEC filings for Cooltech. That information is coming as part of the prospectus IFON will file for the shareholder vote on issuing the new shares and of course it will be in the 10Q's and 10K's following the merger. People can speculate but no one knows unless they're intimately acquainted with Cooltech. Well, I had just a few minutes here but I think it sums it up.
p.s. Yes IFON is a played stock and yes word of this deal was out before it became public. Life's not fair.
