Isleworth Healthcare Acqusition Corp (fka ISLE)

[Letterpenny]

Not all of the private company stockholders will have the same tax planning goals.
One thing to keep in mind when considering the consequences of a SPAC Merger is that the private company stockholders’ interests will not necessarily be fully aligned. Some stockholders may hold QSBS and other stockholders may be corporations ineligible to benefit from Section 1202’s gain exclusion. Some stockholders may have satisfied Section 1202’s five-year holding period requirement and other stockholders may have shorter holding periods. The good news is that a SPAC Merger, where stockholders have the option of exchanging their stock (including QSBS) for public company stock or a mixture of public company stock and cash, should satisfy most tax planning needs. A downside could be that, at least for some period of time, the private company stockholders are required to accept the investment risks associated with holding public company stock.