Ann: Half Yearly Report and Accounts, page-156

A fair analysis from BootBoot given the level of detail provided in the Half Year Accounts as well as the uncertainties surrounding the pending Merger with Appstablishment. So well done .

And the difficulties start to become more apparent due the lengthy delays in obviously finalizing this Merger.. So while it is certainly not uncommon for a merger to take 4 to 6 months , a year to a year and 3 months would certainly highlight if anything the more complex nature of the merge given the restructuring of Cirralto as well as the ' Explosion " of values to the Fintech BNPL space we have seen during the period of the last 12 months.

So this got me thinking around the balance sheet and the type or style of Merge which is being entertained here. So from there , it is not all that hard to figure out . And to kick off this analysis we would first recognize the fact that the Merger is with an Australian publicly listed company with a Private proprietary limited company with of course common principal shareholders and Directors. So apart from the related party complexities and corporations law requirements , we would also have any potential preferred vehicle of transfer the Principal Shareholders would want their holdings to be settled - ie trust etc...

And of course some of the main determinants of choices of preferred purchasing structure of any proposed merger can be governed by Asset protection , domestic and International tax considerations , maximizing trading incomes post sale , and of course the added benefits of increased funding options and opportunities provided by ASX Publicly Listed companies.

And these enhanced funding options have now been clearly demonstrated in by this last raising of a very sizable $18 million .

Of course there are many Corporate Restrictions which can also come into play on any proposed merger including matters like Board Approval due different constitutions , pre-emptive rights , change of control particularly with regard to the 50% and 40% thresholds as well as the 20% if dealing with International Acquiring entities. Interesting that the 40% threshold is particularly relevant if a main shareholder is using a trust type structure.

Of course there are other Industry regulations like 5% control with regards to media industry assets etc..... National Interest issues and Federal Treasurer sign offs can all come into play with certain Mergers.

Thankfully none of these should matter to Cirralto ...except for the 40 - 50 control issue in that it is almost more of a ' Reverse ' takeover than perhaps a Merger of equals which is originally started as when there was only 7 hundred odd million shares on issue and the merger was proposing 825 million. So issues with respects to value and subsequent restructure of Cirralto , recent capital raised etc.... certainly change the dynamics let alone any previous complexities in terms of structure.

So with mergers there are basically 2 types of Mergers . Those which acquire some or all of the assets of the business , or those which acquire the shares in the business being acquired which gives the Buyer control over the business assets

In a more simple acquisition or merger one of the advantages of a share style merger or acquisition is that there is no need to transfer the separate assets. And this feature makes it just as good a method for more complex transactions. In these situations all contract simply continue , existing employees remain , in some cases no stamp duty , no GST , and generally all the tax losses are transferred for future use by the acquiring or merged entity.

As is with all the assets , under a share styled acquisition or merger , ALL liabilities are also inherited by the combined entity and therefore any loans receivable / loans payable are simply consolidated up to the controlling entity level.

And again the seller or main shareholder can be eligible under a trust structure for Capital Gains discounting for any gains made on the sale. So another layer to consider which may be subject to tax.

Interesting that under an Asset style acquisition or merger , the tax losses would remain with the seller or the target company and so this can be looked upon by either an advantage or disadvantage depending on who's perspective.

Interesting under an Asset styled acquisition or merger , any unwanted assets need to be disposed of prior to completion of the transactions . And this can be considered a big advantage in an asset sales as the acquirer can cherry pick the assets they want . Another advantage here is that tax rates on assets are reset to market values so in these cases the seller or major shareholders of the target can reduce their CGT liabilities.

Irrespective of these differences , one could argue there is a bit of both Asset and Share ( Equity ) being transacted in the proposed Appstablishment merger with the assets mainly being those which are seemingly more intangible than perhaps others and the more dominant method behind the merger being that of the issue to major holders of Cirralto's share equity.

Bottom line here is that there are clearly a lot of factors in play which make this transaction complex at both the Entity level as well as the Individual controlling shareholder level.

So in my opinion we have to keep these matters in mind when evaluating the extended time period for completion.