Replies to post #48712 on Funr (FUNR)

[trademax42]

wingtrade/bradenhead:

Thanks for your insight into how the merger and post-merger events that may or may not unfold. Understandably all speculation at this point.

I thought I would bring up the TSN*P/HMB*L merger case as an example to show how merger agreement was structured (not suggesting it would be the same for CUBV reverse merger). If my memory serves me well, TSN*P had an OS closer to 4 billion at the time of the merger, while CUBV has about 3 billion.

Take a look at how the TSN*P/HMB*L merger agreement was structured.

On December 3, 2020, HUMBL, LLC (“HUMBL LLC”) merged into the Company in what is accounted for as a reverse
merger. Under the terms of the Merger Agreement, HUMBL LLC exchanged 100% of their membership interests for 552,029 shares of newly created Series B Preferred Stock. The Series B Preferred shares were issued to the respective members of HUMBL LLC following the approval by FINRA of the one-for-four reverse stock split of the common shares and the increase in the authorized common shares to 7,450,000,000 shares. The FINRA approval for both the increase in the authorized common shares and reverse stock split occurred on February 26, 2021. To assume control of the Company, the former CEO, Henry Boucher assigned his 7,000,000 shares of Series A Preferred Stock to Brian Foote, the President and CEO of HUMBL LLC for a $40,000 note payable. The Series A Preferred Stock is not convertible into common stock, however, it has voting rights of 10,000 votes per 1 share of stock. After the reverse merger was completed, HUMBL LLC ceased doing business, and all operations were conducted under Tesoro Enterprises, Inc. which later changed its name to HUMBL, Inc. (“HUMBL” or the “Company”).

https://www.otcmarkets.com/otcapi/company/financial-report/278615/content

A few points that stand out from above:

1. A RS was built into the merger agreement, at a ratio of 1 for 4 shares. The AS was also increased.

2. The RS was not immediately implemented, about a year after the merger was consummated.

3. The incoming company's CEO was given series A Preferred stock not convertible into commons and with high voting rights ( as a control block).

4. HUMBL LLC also exchanged 100% of their membership interests for 552,029 shares of newly created Series B Preferred Stock.

5. After the merger was completed, Humbl LLC ceased doing business and all operations were conducted under TSN*P which later changed name to Humbl Inc.

As you maybe aware, TSN*P's share price rose to about $1.93 pre-split and the post-split pps climbed to $7.72 at the peak.

For CUBV RM, a reg A offering and a RS may not occur right out the gate (but I could be wrong also). I would think they would let the pps rise organically to a certain level say about .25 cents, and then implement a RS (if so they decide) and do a reg A offering. At this presumptive .25 cents pps, a one for four RS would translate to a share price of a dollar. Lets say the new company needs about $100 million dollars to fund growth. It then might decide to offer about 100 million shares. This way it would have a less dilutive effect on the market.

Just my two cents and agreed, none of us knows what will happen here. So take it for what it's worth. Just speculation at this point.

Best to all!!

$CUBV

[bradenhead]

I have given due consideration to your your response. I have not delved too deeply into why some shares are restricted, or for what period of time, nor do I have the time to do so. Nevertheless, you raise a somewhat valid point in that the company has no preferred class of stock and there are insufficient restricted shares (even if they are all closely held by the corporate entity) to support a claim of undeniable control by the merging entity once transferred. Selling those shares into the open market would likely have a negative impact on the control question. Without reviewing the Articles of Incorporation, it is impossible to determine if a preferred class could be created without a vote being put to the common shareholders. In my meek opinion, it is of paramount importance to the merging entity that they ultimately hold a control block of preferred shares that insure they have the votes to act at their discretion for the collective good of the organization and its common shareholders. Without a definitive control block, every material or substantively definitive move by the corporate officers would need to be put to a vote of the shareholders, i.e. unless the Articles of Incorporation grant the officers and/or Board of Directors specific authority. I suspect the issue of control, and how to structure same, is what may be deleterious to completing the merging documents at the worst, and most certainly is causing a dilatory process at best.