On status H4 and H1B was approved as a New Application with no I-94

[BuzzVasu]

Hi,
I am on currently on h4 Visa in US applied for a change of status to H1B.

INS has denied the change of request petition(since I was away from country during the

status change was pending).

INS has APPROVED the Application as a new H1B application with no I-94. Now for me to start

working I need to go out of country and re-enter USA on H1B.

1) My question is Will me current continuation of stay in USA till I have H1B stamped is still

legal??
2) I my current stay is still legal, Can I apply of H4 extension, since my H4 is expirting in next 2

months. Will we have any issues in applying for H4.

Please suggest.

Thanks,
Vasu