Ok, so
1) cash dividends are always paid by ITUP, as I mentioned before?
2) The company will hold on to 6% of the stock at cost (half of which belongs to the shareholders). At some point in the future there will be a distribution to the shareholders, either stock dividend or cash (stock sold).
If stock is distributed it will go through the normal regulatory (FINRA) process. And the cut-off date when shareholders will qualify is unknown at this stage. Until that day, anyone can buy ITUP shares and qualify for the stock dividends.
I can see the tax advantage. OTOH, I didn't expect the company to have to pay tax anyhow until the stock is distributed to the shareholders.
3) So I'm not sure what the advantages are here.
4) btw, may I suggest simply selling the stock and distributing cash to the shareholders. It makes life so much easier for us :-)
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