Typically, if the custodian has taken over an abandoned shell, the custodian will rework the preferred stock so the custodian owns and then sells the control bloc and keeps the proceeds. In other cases, if a company hires a custodian to work on the shell, the custodian would be compensated in a different way. Anyway, the merging company sometimes does but never needs to own common shares for control, and once they control the company, the merging company often grants its execs and officers shares in lieu of salary, or offers common stock to the shareholders of the private company that's going public. Typically those would be restricted shares in that scenario.
Hopefully that helps.
H
Nothing I say is a buy/sell/hold recommendation or financial advice. My posts are opinion only. Always review SEC and OTC Markets filings yourself for balance sheet, income vs. expenses, and especially toxic debt.
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