BDAZ - You are correct ZE could retain the proceeds of the sales of that compound and the $1 billion in this example would then become taxable at the corporate tax rate. In Canada I believe that tax rate is around 40%. There are a number of shareholders that might be more than a little choked with that process. Come to think of it there is currently a number of shareholders more than a little choked with the process that's going on now.

Anyway back to divvying up the booty. If a sale does happen and we use the example of $1 billion, structuring the sale like my understanding of how it will happen saves about $150 million in taxes. At least in Alberta, Canada the gross portion of the proceeds going to the shareholders would end up costing them just 24%. Each Provence has a different tax rate but not to far off 25% for capital gains. This sceme would allow all the shareholders to get cash in their pockets and then if they so choose reinvest up to 15% of their profits and still be left with more than if the proceeds were retained by ZE and then distributed. Of course in your scenario you made no mention of ZE distributing anything. Personally I don't think I would want the company to have $600 million to spend, at their discretion, would you? It would be much more palatable for the shareholders to receive $750 million and then give some back in the form of a Rights offering or some other form of financing directed at existing shareholders.

The process contemplated being used would be even better with amounts of a sale being $2 or $3 billion. Well hay everyone needs to dream a little.

ZC and the royalty; It would be nice to get past the Top Line Results before worrying about the royalties. My best guess is that something would have to be retained by ZC in order for them to continue to operate.

All IMO

dyodd

tada