Replies to post #43126 on Zenergy International Inc. (ZENG)

[Mr Wizard a1a]

Zenergy's PR characterized it that way, but Business Week correctly called it for what it was - a Reverse Merger designed to backdoor this company around their SEC applications into publically traded stock.

A RM by any other name is still a RM - as everyone else has always called it.

[bly03]

ghcnj,

In your post to Mr. Wizard, you stated:

"I have explained to you the difference between and acquisition and a merger many times to help you out. Sorry if you can't comprehend the difference."

Yes, indeed you have posted this same information regarding acquisitions vs mergers many times. However, even if you post it 100 more times, it will not change the fact that it is probably a rather meaningless distinction in the case of ZENG.

In your posts, you have stressed how the role of the prior management differs in an acquisition vs. a merger. This difference is meaningfull when two "real" companies come together and need to iron out how the two company's business will operate under one corporate umbrella. However, in this case, unless Zenergy is planning to sell Radsafes or FriskerPros, etc., then this distinction is not overly meaningfull. I do agree that it is a good thing that Vince is presumably no longer involved, but this could have been the case with either a merger or an acquisition.

Realistically, whether you call it a merger or an acquisition, the net effect is that it is really more like a partial IPO. I don't believe that Zenergy had any interest in merging with or acquiring Paradigm's business. Rather, they were looking to become a publicly traded company, and buying the Paradigm shell was likely easier, cheaper, and quicker than going through the steps (issuing a prospectus, hiring a underwriter, registering the new shares with the SEC, etc.) to have an actual IPO.

So, why did they want to become a publicly traded company? For the same reason lots of companies have issued IPO's in the past (think dot-coms during the tech boom) - to get rich(er). A private company with no profits doesn't make any money for the owners, but the ability to sell shares does.

This does NOT mean that I am saying this is a scam or that they are doing anything wrong. Plenty of perfectly legit companies have done IPO's and made their owners plenty rich. IF the company is successfull (or if the market believes that they WILL BE successfull) then they make us common shareholders rich(er) as well. Just make sure you understand why they would want to become publicly traded in the first place. When the financials come out, they should show just how many shares the insiders have. Certainly they will be in the tens of millions (and it would not surprise me if our CEO had in the range of a hundred million, but this is just a wild azz guess). Even at the current price range, this makes him plenty wealthy.