SIMPLE IRA - VCP - Employer Eligibility Failure

I have a client that acquired a company with a SIMPLE and we are now outside of the transition period and the SIMPLE was not terminated.  There is no other 401(k) plan in place yet, but the client wants to start a 401(k) plan as they were not a part of the SIMPLE.  

For 2019, could the employees (only 4) of the acquiring employer just begin contributing to the SIMPLE IRA?

Alternatively, since we are in January, very few contributions have been made so far to the SIMPLE IRA.  Should I suggest the client go through VCP and claim an Employer Eligibility Failure for 2019 and state that all contributions cease the day after the NEW qualified plan is signed into place? 

Is that it?  Will the IRS just approve this or will the January contributions be subject to repercussions as a result of the SIMPLE becoming disqualified?

Any other suggestions greatly appreciated!

In theory, since you know that adoption of the k plan would make ineligible for SIMPLE, you should not be able to correct through VCP because would be deliberate error/lack of administrative procedures. I vote you notify employees now that last SIMPLE year is 2019 and have the acquiring company employees join SIMPLE for rest of year if still < 100.

I was wondering if the acquiring entity could join the SIMPLE for the 2019 plan year as an alternative.  These are two small entities, so the two combined would not exceed the 100 threshold. I assume since they are now considered one employer under the controlled group, all employees of the employer would be able to participate in the SIMPLE, but wanted to make sure I wasn't missing anything in that regard.