Transforming a never-successful company formed to hunt for minerals into a fashion marketer takes a leap of faith.
But Jeffrey Lubell appears ready to do that with his newly named True Religion Apparel Inc.
Over the past few years of Lubell’s 25-year tenure in the jeans industry, he launched and lost two lines, Bella Dahl and Hippie Jeans. When Lubell unveiled his latest creation, True Religion, last fall, he told WWD his priorities relied upon protecting his business by taking care to register his trademarks to himself and set himself up as majority owner of the brand.
Over the past two months, Lubell has furthered that aura of stability by quietly merging his company into a publicly traded entity, which now trades over-the-counter, according to filings with the Securities and Exchange Commission.
In June, Lubell agreed to sell his El Segundo, Calif., denim company, Guru Denim Inc., to Vancouver-based Gusana Explorations Inc., a shell of a publicly traded company that was founded in April 2001 as an exploration vehicle to try to find minerals, such as oil or valuable metals. However, according to SEC filings, the company never generated any revenues and by May its directors had determined that, with remaining assets of $2,819 and debts of $9,773, something had to be done.
Gusana on June 4 agreed to acquire Guru, in turn giving Lubell a 62 percent stake in the firm. After the company sold $300,000 of its shares in a private placement earlier this month, Lubell, who had been named president and a director, agreed to surrender 4.7 million of his shares, making his total holdings 9.9 million shares, for a 52.6 percent stake.
Last week, Gusana changed its name to True Religion Apparel Inc., adopted the symbol TRLG and changed its official headquarters to El Segundo.
Lubell could not be reached for comment this week, but said in a statement at the time of the name change, “We felt the name True Religion Apparel Inc. reflected our core business, and the future of development of the company and what we do.”
The stock is traded very lightly. No shares changed hands Wednesday, after closing at $1.37 in Tuesday’s over-the-counter trading.Because of the legal and underwriting expenses associated with taking a privately owned business public, it is not uncommon for smaller private enterprises seeking a listing to merge with shell public companies. Those companies typically are enterprises that were founded and taken public with a legitimate business plan, but find themselves unsuccessful.
The move leaves Lubell at the helm of a small public company. According to the SEC filings, as of July 1, True Religion had three other employees. They included Lubell’s wife, designer Kymberly, as well as an unnamed production supervisor and a product designer.
The filings do not disclose True Religion’s sales or earnings, saying the firm does “not have a meaningful historical record of sales and revenues.”
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