Replies to post #17383 on Gifa Inc (GIFX)

[ForReal]

GIFA purchased the vehicle to go public from FRFS. As part of the payment for that vehicle, money as well as the original assets of FRFS were tendered as the purchase price.

A merger, with GIFA as the surviving company would still allow FRFS assets to be held by the combined company.

So, in essence, this was a straight forward purchase of the public "shell" as it became one, when the assets were taken private by Harsh Shetty (previous owner and CEO).

[janice shell]

I don't know what it'd be called. Normally, when a private company wants to go public this way, it buys a shell and reverse merges the private company into it, usually with the help of a merger subsidiary. When the transaction is complete, the once-private company will be the surviving entity.

In connection with the merger transaction, the name of the shell is changed in Nevada. But sometimes things go awry, as anyone who's followed the ORRV/MHHC fiasco knows. I wouldn't expect to see anything that incompetent happen again, but the result of the screwups was that for a long time the Nevada shell had a new name, but no assets attached to it.

In this case, Kisa could merge the shell with one or more of his existing companies. Or it could purchase assets from those companies. We don't know what he plans to do. But I doubt he has any intention of putting all his holdings into the Nevada company. Theoretically, at least, that would expose everything he controls to U.S. regulation.

[WiseYoda]

Reorganization Agreement (RA) or a Reverse Merger (RM). When taking over a public traded company its important to know if the vehicle was ever classified as a shell or not at one time. If the former company was never a shell before then a RA would be the better pathway in order to maintain the non-shell status, BUT if the company was classified as a shell before then a RM would be the better route. The difference between the vehicle ever being a shell or not is actually a very important factor for the new company taking over. If it was a shell at one point then the new company would have to become fully reporting for over 18 months before any stock can become free trading shares. The new company can surely do business by using its stock and after holding periods expire legends can be removed preparing the cert for deposit but no shares can become actual free trading shares until the new company becomes fully reporting and maintains that fully reporting status for over 18 months.