Gediminas Jasionis

Lumonall, Inc. (OTCBB: LUNL) Exited After Merger Announcement

by Gediminas Jasionis November 10, 2009
lumonall.jpgLumonall, Inc. (OTCBB: LUNL) has signed an acquisition agreement with Clean Wear Products Ltd. Upon execution Lumonall will combine its operations with the mentioned company as well as JM Harris Holdings Inc. which are both owned by a single shareholder Mr. Jonathan M. Harris.

Due diligence still has to take place and the merger is currently expected to close by January 31, 2010. The acquisition will be made by issuing restricted common shares and secured promissory notes which value will equal that of all the outstanding shares of Clean Wear and JM Harris Holdings.

Stock price jumped nearly 3000% on the announcement and continued to climb until stopping at all time high of $0.65. Some profit taking took place afterwards and we saw the price ending up at the $0.025 mark for the day.

Despite great intraday interest in the company's stock there likely won't be a sustained uptrend development. The reason is Lumonall has no fundamental base for it, the merger will take time to complete and business integration will be resource costly. Also, even after the merger is complete we will likely get to wait until the new entity files a financial report to get an idea of where their business is going.

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