Bergamo Acquisition Corp. (BGMO)

[old man river]

Good question.

For the part year 2012, the complied statements show that BGMO earned lots of money and had cash. They also showed that they owed $ 40 million to each of HH and SP.

The IRS will have an interesting time with this one.

According to the statements, BGMO had the money to pay however it was accrued. No subsequent statements have been issued (either full 2012 or part 2013). If we believe the press releases, then, the profits and likely the commissions payable should be even higher. Now, I do not know is the IRS uses cash or accrual accounting for employees. But HH and SP are not employees but officers so the rules may be different.

The real kicker will be the corporation. Federal tax rules for corporations use the accrual basis so tax money much be remitted. None of this accounting provision stuff but real cash. It would have to be remitted by now for FY 2012. Given the magnitude, even interim payments would need to be reported.

My guess is that we will see all of the FY 2012 transactions disappear as to avoid any corporate or personal tax liability. This would result in severe SEC issues for BGMO.

If BGMO does earn the cash then the IRS would be front in line to grab the cash. So where does the cash come from to invest in VSTA after the IRS has their hands out?

The big question is if the IRS has been advised of the BGMO story?