tell me how this merger was accomplished.
Not possible as no one here was a party to the deal, as I am sure you are aware. Best we can do is come up with guesses which make sense.
Also, there are some potential misunderstandings concerning the chronology and terminology, by way of analogy: when is a couple married? Is it when they say their vows? or when they sign the marriage license? or when they consummate the marriage [old fashioned concept, I know, but this is just an analogy].
As an example of the potential difficulties, IMHO The final act in the series of events which completed the Reverse Merger happened on April 9, 1999 (not March 9, 1999). That was the deadline for conversion of any PRWT shares into PABN shares.
The March 9th date simply marks the effective date of the new name and CUSIP number relative to the Securities in question...it has nothing whatsoever to do with the merger of the two entities, it is merely a consequence of the merger. As proof that it has nothing whatsoever to do with the merger I offer this: If the structure of the merger had been such that PRWT had not changed its name, then there would have been no need for a new symbol or CUSIP number. The events are related, of course, but the symbol and CUSIP number changes are a consequence of the merger, not a component of the merger.
"First lets look at how stock mergers are accomplished. For example A wishes to merge with B. Both companies are debt free. A has 200 shares out; B has 100 shares out. If A's fair market value is equal to B, then A offers to exchange 2 shares of its stock for each and every outstanding share of B. Once the merger is done, there are a total of 400 shares for the now combined companies. Legally, the surviving entity is A, but significantly neither the former shareholders of A or B, if they voted their shares as a block, have control.
Now as you know a reverse merger is simply a merger where the shareholders of the acquired company have control of the surviving entity.
Why didn't the outstanding share count balloon when the reverse merger was accomplished?
What currency did the shell PRWT use to pay for PanAm (Nevada)?
Interesting, and I don't dispute your description of how mergers take place (other than to say it is an over-simplification leaving out a lot of details, of course -- we have to acknowledge that it is impossible to include all the details here and that some that have been left out may end up being necessary later). Since it was a share-for-share exchange the currency was shares.
I will say that the valuation question is beside the point because both PRWT and PanAm (NV) had no actual value (book value) that we know of, and even if they did, the buyer and the seller, in both instances, was the same person(s) -- John Schmitz. Which is why I've always considered the question as to whether or not the RM went through to be silly.
The questions about how etc., are not silly, but they are pointless, because we cannot know and because it does not matter. It is an accomplished fact and no one has been defrauded, nothing illegal done, the bashers' predictions and speculations notwithstanding.
"I thought that Schmitz (either personally or as a member of an investment group) purchased the original 400 million share block of PRWT."
That is also my understanding.
"I suppose one could argue that PanAm (Nevada) purchased the original block of 400 million shares and hence the mathematics of what should be the outstanding share count become a little less ridiculous."
IMHO not possible (or at least not a rational way to construct the deal). If it happened that PanAm (NV) bought those shares, then what need for a reverse merger? In such a situation, I would have had PanAm sell its assets (which I assume were mostly its business plan...) to PRWT for the shares. No need for a RM at all. No need for any money either... John, as majority shareholder of PRWT could have accomplished everything he has accomplished without the mess of an RM.
It only makes sense to me if the purchase of the shares by John (and friends?) from other shareholders and the Reverse Merger between PanAm (NV) and PRWT are considered separately as transactions.
We can guess and guess and guess. We may get close, but for now, the discussion cannot come to any conclusions.
PCM
GO PABN!!! |
