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Hey guys. I forgot about this fun fact.
Spin-offs give U.S. corporations the unique opportunity to dispose of a business without triggering tax at the corporate level. Favorable tax treatment is available only if the transaction complies with the Internal Revenue Code requirements, including:
If 50% (or more) of the stock of a portfolio company was purchased by a PE fund, the portfolio company generally cannot effect a tax-free spin-off for five years.
ParentCo and SpinCo must each operate an active business that has been held by ParentCo, directly or indirectly, for at least five years.
In general, the shareholders of ParentCo and SpinCo cannot sell their shares in a taxable transaction if the sale was contemplated at the time of the spin-off or the sale occurs relatively close in time to the spin (sales by the public are excluded). While ParentCo or SpinCo can combine with another company immediately after a spin-off in a tax-free transaction, the former shareholders of ParentCo generally must receive at least 51% of the stock of the combined company.
Facilitate Follow-on Exit or Bolt-on Acquisitions. Follow-on transactions may include partial exits in the form of partial sales or partial IPOs (separation increases the transparency of businesses with unique investment identities, unlocking sum-of-the-parts value), or bolt-on acquisitions (separation of the businesses creates separate acquisition currency in the form of SpinCo equity that may be more attractive to the target’s shareholders than equity of the combined group).
And Bruce, whomever, I suggest sticking around with the investment because of what’s stated in the first paragraph of page 11 of that last paper I posted here. Don’t ever forget the Cytolynx JV and how that will benefit us long shareholders down the road. So please don’t sell. Just hold. Hula Hula Cuckoo Penny
Hi Bruce. When you sober up from your drug induced slumber, please take a look at the last paragraph on page 10. This will hopefully help you understand where I am coming from and how active business holding period plays a very valuable role here. Hope this helps you and many others that don’t have the clearest picture. 2025 is going to be great after this transitional 2024 year. Go Trump! Go! Hula Hula Cuckoo Penny https://www.wlrk.com/wp-content/uploads/2020/05/Spin-Off-Guide-2020.pdf
I wish you all a very Happy New Years and a great transitional year ahead. 2025 is going to be truly special. One more year to go. Hula Hula Cuckoo Penny
Nothing is what it seems. Hula Hula Cuckoo Penny
Among key closing conditions, INVO must obtain shareholder approval along with certain approvals from existing warrant holders, an estimated $5 million or more (at NAYA's discretion) in interim private financing in INVO at a premium to INVO's market price at time of financing ("Interim PIPE"), and a private offering by the combined company at a target price of $5.00, representing a premium to INVO's last offering of $2.85 per share. The merger target valuation is $12,373,780 for INVO and $90,750,000 for NAYA, based on a target stock price of $5.00 per share. Subject to the Interim PIPE, immediately following the closing of the Merger (but prior to the private offering), the equity holders of NAYA are expected to own approximately 88% of the outstanding common stock of the combined company while the equity holders of INVO are expected to own approximately 12% of the outstanding common stock of the combined company.
PIPE Proceeds at BCA Signing(5). 20 million
Incremental PIPE Proceeds Sought Post-BCA Signing(5). 30 million
Incremental Convertible Note Proceeds Sought Post-BCA Signing(6). 30 million
5) $20MM of PIPE proceeds will be committed as of the signing of the BCA. We intend to pursue an additional $30MM of PIPE proceeds after the signing of the BCA from investors with which we have pre-existing relationships. There can be no
guarantees we will raise any of the incremental PIPE proceeds on terms favorable to us or at all. We may close the business
combination even it we do not raise additional cash in a Pipe otterine or otherwise (6) We intend to pursue an additional $30MM of proceeds from the issuance of convertible notes or other alternative financing sources after the signing of the BCA. There can be no guarantees we will raise any of the incremental convertible notes or alternative financing proceeds on terms favorable to us or at all. We may close the business combination even if we do not
raise additional cash through the offering of convertible notes or other alternative financings
(7) Comprised of SPAC Cash in Trust, eincremental PIPe proceeds sought post-BCA signing, incremental alternative financing proceeds sought post-BCA signing, less estimated transaction expenses
If Cytovia raises ~$100MM in proceeds, it would be funded through anticipated Phase 1/2 data readout at the end of 2H 2024
Sorry. It says complete remission. Hula Hula Cuckoo Penny
This is better news than yours RLk. Remission with first Ceplene treatment.
https://laboratoires-delbert.fr/en/marketing-of-ceplene-0-5mg-0-5ml-solution-for-injection-histamine-dihydrochloride-in-sweden-norway-and-denmark/
Great work RLK!!! Love it. Thanks for the update. Don’t know what we would do without your amazing support. lol I’m just glad we got European approval. Look forward to all the approvals. Good times. Hula Hula Cuckoo Penny
Maybe in June Teper will finally go public using the next SPAC vehicle. I believe they have up to 18 months to do the deal. Wishful thinking at best, Still lots to do in bankruptcy and Satellos will take some time with its recap. If they time it out at four months per merger and stick with the plan then maybe June is possible. But that SPAC deal as we know it can be easily stretched out until 2025 which is where I stand unless one of you smart folk can prove me wrong. Hula Hula Cuckoo
Hey RLK. Hope you have a wonderful New Years. I have a tip for you. Maybe you should turn off your notifications at night or put your communication device on Do Not Disturb from 6pm onwards. That way you only get notifications from normal folk instead of from nut bags like me. lol. I’m usually sleeping much earlier but lately I’ve been drawn in to figuring out a few things.. I can’t mess around with my sleep like so many folk or I go a little nutty. I’ve paid the price before. Trust me. Not fun, lol. Sleep is a good thing and we all need it. Any ways. On a sour note. It appears we have another year to go bud. It all comes down to that 5-year holding period / active business period. Bruce and many others are hoping we can go public before other two deals are activated but quite frankly I don’t see how that’s possible with this holding period getting in the way. I see Teper continuing to expand operations through recapitalization without taking a gain until they can do a tax free distribution. I was originally hoping that we could get the distribution and then the decision would be up to us to hold or sell. But unfortunately that’s not the case either. I have read that some of these tax burdens fall only onto the company and not the shareholders and sometimes it falls on both. All I know is that we’re at the tail end and all we need to do is merge into a publicly reporting company to do the job. I just don’t believe it is with these INVO guys. I don’t think that’s part of the plan. I think they will do all these mergers as previously stated and then just be absorbed roll up into Astra Zeneca. Teper is just taking control of each new company and then recapitalizing. He doesn’t need us shareholders to make any decisions as he’ll simply change the quorum percentage needed to get the actions completed for each merger. Each merger acquirer / partner structure has been arranged accordingly to help with the recapitalization build process. These smaller companies are perfect for a no gain transaction. The next SPAC ESHA is pretty much the same type of merger shell as the last one. 100 million should take them easily into 2025 without having to worry about needing additional funds or doing another financing. It’s going to be another tough year for many folk that could use the money but that’s the way the cookie crumbles. At my age, I’m now used to the hardship. That’s just life. Lol. Through all the pain, it’s been a fun ride and great learning experience with a ton of great exercise for my brain. At this stage in the game, I just leave it in Gods hands and continue to watch and learn. Let me know if you have any thoughts bud as I would love to hear your point of view. Stay healthy. Stay you. Live well. Hula Hula Cuckoo Penny
Bruce are you picking up what I’m laying down for you. Do you understand what I’m telling you. How about you RLK. You catching my drift. Are you hearing what I’m saying. We have quite the journey still to go. Hope you traders realize how far we must go now. Hey do you guys remember if we ever got that licensing agreement with Vector Therapeutics for Ceplene? That whole period was fun to go through. Wish we could do that again. Hula Hula Cuckoo Penny
Killer article. Helps me with timing. Hula Hula Cuckoo Penny
https://www.strictlybusinesslawblog.com/2023/12/07/the-qsbs-5-year-holding-period-and-section-83b/
So many types of reorganizations being used. DEFG people. Still learning more about Type E Recapitalizations. Now I know why all the companies were merging with are doing 50 million share offerings. We need those recaps. 5 years people. 2025. Hula Hula Cuckoo Penny.
Hope all this helps you Bruce understand what’s happening. I’m just slowly educating myself. I don’t much compared to all you professional traders. I’m just a simple farmer. Cheers
We still have quite a wait ahead of us. Very glad I kept reading about this QSBS stock. I read up on it earlier but never paid too much attention to it. Was more focused on the methods of reorganizations and recapitalization etc. So much to learn. 2025 will be a great year. Too bad 2024 is just another recap year full of mergers. Good times. Hula Hula Cuckoo Penny
I get it now. Holding periods can tack onto holding periods. All depends on when shares were issued/ acquired by shareholder. Wow. Interesting stuff. This article is so informative. Great find. Hula Hula Cuckoo Penny
https://frostbrowntodd.com/recapitalizations-involving-qualified-small-business-stock/#k
Interesting stuff.
A shareholder may exchange QSB stock for stock in another corporation as part of a tax-free incorporation under Sec. 351 or a tax-free reorganization under Sec. 368. If the stock received in the transaction would not, on its own terms, meet the definition of QSB stock, the stock is nonetheless treated as QSB stock in the hands of the transferring shareholder because the stock that was exchanged was QSB stock.72 The holding period of the QSB stock received in the transaction begins on the date the exchanged stock was acquired; however, upon a subsequent disposition of the stock, only the appreciation inherent at the time of the original transfer may be taken into account under Sec. 1202.
I would love if this applies to us. Small business stock would be nice. Hula Hula Cuckoo Penny
https://www.thetaxadviser.com/issues/2018/nov/qualified-small-business-stock-more-attractive.html
Active conduct for five-year period preceding distribution. Under section 355(b)(2)(B), a trade or business that is relied upon to meet the requirements of section 355(b) must have been actively conducted throughout the five-year period ending on the date of the distribution. For purposes of this subparagraph (3)—
(i) Activities which constitute a trade or business under the tests described in paragraph (b)(2) of this section shall be treated as meeting the requirement of the preceding sentence if such activities were actively conducted throughout the 5-year period ending on the date of distribution, and
(ii) The fact that a trade or business underwent change during the five-year period preceding the distribution (for example, by the addition of new or the dropping of old products, changes in production capacity, and the like) shall be disregarded, provided that the changes are not of such a character as to constitute the acquisition of a new or different business. In particular, if a corporation engaged in the active conduct of one trade or business during that five-year period purchased, created, or otherwise acquired another trade or business in the same line of business, then the acquisition of that other business is ordinarily treated as an expansion of the original business, all of which is treated as having been actively conducted during that five-year period, unless that purchase, creation, or other acquisition effects a change of such a character as to constitute the acquisition of a new or different business.
The earliest of any substantial payment was October 19, 2019. So you know what that means.
This explains Teper us doing what he’s doing. No liquidity until 2025 or until later this year. All transactions here forward will be recapitalizations as I claimed it would happen. Hula Hula Cuckoo Penny
Oh boy.
Alexion Pharmaceuticals, Inc. completed the acquisition of certain assets of Immune Pharmaceuticals, Inc. (OTCPK:IMNP.Q).
April 11, 2021
Share
Alexion Pharmaceuticals, Inc. (NasdaqGS:ALXN) entered into an asset purchase agreement to acquire certain assets of Immune Pharmaceuticals, Inc. (OTCPK:IMNP.Q) for $6 million on October 21, 2019. The transaction has been approved by the US Bankruptcy Court. On November 25, 2019 the transaction has received all requisite court approvals. The closing of the transaction is expected prior to the end of first quarter of 2020.
Alexion Pharmaceuticals, Inc. (NasdaqGS:ALXN) completed the acquisition of certain assets of Immune Pharmaceuticals, Inc. (OTCPK:IMNP.Q) on April 12, 2021.
Yikes. 2021 is when payment was made for the 50%
Five-year period.
(E) Five-year period. If the requirements of 1.4824 (f)(2)(ii)(B) or (f)(2)(ii)(C) are met for each year of the five-year period beginning with the first year in which substantial periodic consideration was required to be paid, then no periodic adjustment will be made under paragraph (f)(2)(i) of this section in any subsequent year.
Hey Bruce RL. Just read this. Page 444 may just be what I was looking for. Maybe it can help you or just me understand how this will work. https://www.steptoe.com/a/web/2630/4358.pdf
Hula Hula Cuckoo Penny
At the end of the day people, they don’t have to do the public merger with INVO. But in order to finish what they started they’ll have to go public with a public reporting company. So stay tuned. I have see multiple outfits reporting that Cytovia was incorporated in 2019. Some folk are saying the end of year. I think there are many ways to figure this out. I like surprises though. So excited to see what happens with bankruptcy. So much to go through still. We should see the answers soon. This next merger will be the defining moment for me. I will know exactly what’s happening after that next move. Hula Hula Cuckoo Penny
We have come pretty far with this RMT transaction. Thus far we’ve completed the carve-out / subsidiary transaction and the Spin Off transaction but we still have to go through a public merger transaction which I believe ends with Naya/ INVO transaction. Certainly has been a long educational process for me. Maybe there is hope here Bruce and just maybe we will see something sooner than later. 2024 is looking brighter by the minute and possibly those mergers will just be add-ons as you previously stated. I’m pretty confident with my prediction that Satellos and ESHA are our future transactions. I’m sure they plan to price build after they pounded it to the floor the last few years. Hope this helps you. Hula Hula Cuckoo Penny
hey Bruce, I’m now reading up on RMT transaction comparisons and seeing if I missed anything from years back. Sometimes the answers will pop out of the fine print when I read articles for a tenth time. I will let you guys know if I find anything. Hula Hula Cuckoo Penny
We just need 5 years Bruce. Five years. Lots happening since 2021. I don’t remember much happening in 2019 other than share transfer. I’m wondering if it matters if it was Cytovia International first and then Cytovia Oncology soon after Vector Therapeutics. lol. I remember when we were called Vector Therapeutics and that’s when Cytovia International and its “capital shares” were transferred over through 363b sale and Vector became Cytovia Oncology Inc. Let’s not forget VectorLabs and that whole fiasco. I believe share transfer was a pretty significant date for Cytovia. In my mind it was, Separation should count under this Active Business stipulation. Don’t forget Oxygen Therapeutics Inc. Geez. So crazy. Hilarious. Crazy times, Hula Hula Cuckoo Penny
Looks like Cytovia has been incorporated for a while.
https://www.globenewswire.com/news-release/2021/02/16/2175695/0/en/Cytovia-Therapeutics-and-Cellectis-Partner-to-Develop-TALEN-Gene-Edited-iPSC-Derived-Natural-Killer-Cells.html
Exactly. Well said Bruce. I’m glad you understand it all. I sure didn’t at the beginning. It was quite crazy for me to say the least. As boards know I’ve been humbled multiple times here and have had to step out of my comfort zone and learn the hard way. Thankfully, I am very patient, I never give up and I always want to keep learning. The only thing I can’t do is predict the future. I don’t have the crystal ball here Bruce. Sorry I don’t have any answers to help you out. I’m pretty sure that I’m on the right track here Bruce. I wish I wasn’t. Trust me. It’s not about money anymore. It’s time. Money means nothing if you can’t enjoy it at a ripe age. I’m becoming over ripe now with this investment. Just enjoying life the best way I can bud. Hopefully you as well are having a great holiday and enjoying the best things in life. Hula Hula Cuckoo Penny
Is don’t think you understand how a spinoff works Bruce. If you do know, it certainly doesn’t sound that way. They cannot in any way finish any merger that would realize a gain or loss. This is why they are recapitalizing and simply growing the company’s value for whenever the time is right to split the company and pay out the dividend. The company cannot complete a merger as it would trigger certain transactions that can’t be done until we reach the active business date which is a major stipulation they must abide by. If this is going to be a tax free arrangement for US shareholders then all must be done accordingly. I’m sorry to be the shitty mailman. This is why I was hoping the incorporation happened a while ago. Maybe their foreign incorporation is enough to get the job done. Let’s cross the fingers. Otherwise if I am right about timing then we in for one more year of building. Look at it as they are now working on the interior decorating. Then soon the landscaping will follow. Then the sale of the property. Hula Hula Cuckoo Penny
The Merger Agreement provides for, among other things, the following transactions at the closing: (i) First Merger Sub will merge with and into Cytovia (the “First Merger”), with Cytovia as the surviving company in the First Merger as a wholly-owned subsidiary of Isleworth (the “Surviving Corporation”), and immediately following the First Merger and as part of the same overall transaction as the First Merger, the Surviving Corporation will merge with and into Second Merger Sub (the “Second Merger” and, together with First Merger, the “Mergers”), with Second Merger Sub being the surviving entity of the Second Merger. In connection with the Mergers, Isleworth will change its name to Cytovia Therapeutics, Inc. The Mergers and the other transactions contemplated by the Merger Agreement are hereinafter referred to as the “Business Combination.”
I think Cytovia Therapeutics should have their head office in Puerto Rico. That manufacturing building looks like it could house a few crooks. Hula Hula Cuckoo Penny
Just as I never knew about Naya being created so do I not know anything about these jokers and their next move. Nor do I care. I’m sitting pretty. I can wait all this out. It pays to be me. Like I said Mike, I highly doubt anything is happening next year that will benefit us legacy shareholders. It is what it is. Enjoy the show bud. Hula Hula Cuckoo Penny
Yes Mike you are right about Cytovia being a wholly owned subsidiary of Immune Pharmaceuticals. We’ve been saying that for years. Liquidations play a role with mergers. Part of life bud.
Hope this definition below helps you.
Merger Liquidation means a Liquidation which constitutes a consolidation or merger of the Corporation with one or more entities that are not affiliates of the Corporation and as a result of which the Corporation is not the surviving entity.
I also don’t believe Immune goes public. It wouldn’t need to at all. Astra could easily just absorb all as planned as I just mentioned it could. Astra could also just be acting as long term investor / collaborator and doesn’t have any actual plan of doing anything for a while. That’s the real question right. Who really knows what Astra the Supreme has in their mind and what plans they have in the end. lol. We are just micro players in their universe, Hula Hula Cuckoo Penny