BioAmber Inc fka BIOAQ

[Koan]

A 338h10 STARTS with acquistion of the equity of a company and then AFTERWARDS allows it to be treated as an asset purchase instead for tax purposes.

This is not correct.

A Section 338(h)(10) election allows a stock purchase to be treated as an asset purchase. The equity sale occurs under the guise of an asset purchase for tax purposes. The assets are not sold afterwards. Acquiring the equity in a qualified stock purchase comes after acquiring the assets in a liquidation scenario.

This sounds exactly like what is happening with BioAmber. It nearly explains everything that has happened to date. This restructuring and outcome was likely discussed long before the initial bankruptcy filing and subsequent CCAA proceeding.

For example, BioAmber had already signed a 15 year off-take agreement with Vinmar on derivative products from the production of 100,000 metric tons of bio-based succinic acid. As the Sarnia Plant only had a nameplate capacity of 30,000 metric tons, this would require the building of a second plant, of which Vinmar would take a 10% stake.

Some of the challenges were cash, time, and strategic management. Eno repeatedly talked about cutting costs and increasing efficiency to reduce cash burn. If BioAmber could be acquired by another company in any scenario that would allow bio-based succinic acid and its derivatives to continue to be produced this would be in the best interests of all stakeholders.