Immune Pharmaceuticals Inc (fka IMNPQ)

[Letterpenny]

Internal Revenue Code Section 355(a)(1)(A) provides that in order for a spin-off, split-off, or split-up for Section 355 tax-free treatment, the distributing corporation must distribute stock or securities of “a corporation which it controls immediately before the [spin-off, split-off, or split-up].” The stock distributed must consist either of all of the stock of the subsidiary, or an amount of stock constituting control within the meaning of Section 368(c). Under Section 368(c), control is defined as ownership of at least 80 percent of the total combined voting power of all classes of stock entitled to vote and at least 80 percent of all other classes of the corporation.

The distributing corporation must distribute either 1) all the stock and securities of the controlled corporation owned by the distributing corporation immediately before the distribution or 2) an amount of the controlled corporation’s stock constituting control and establish to the satisfaction of the Internal Revenue Service (“IRS”) that the retention of the controlled corporation’s stock or securities is not part of a plan having one of its principal purposes being the avoidance of federal income tax.