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Similarly, Mr. Whelpley testified that "Weeden expected
only to receive shares in CPI in return for its investment
in CPI."
As we view the facts, CPI had entered into the
agreement with Avant-Garde to develop a computer processor.
Weeden agreed to advance moneys to CPI to assist CPI in
performing its obligations under the agreement with Avant-
Garde. Weeden expected to obtain stock in CPI if the
venture was successful. Weeden made the subject payments
pursuant to its agreement with CPI. Mr. Whelpley was the
principal officer of both WAI and CPI, but the two were
separate corporations, and WAI was not formally involved in
the CPI project. Weeden issued the advances to WAI as a
convenience to Mr. Whelpley, but it did not intend to
obtain an equity investment in WAI or to lend money to WAI.
From Weeden's point of view, the advances were made to CPI.
This is made clear by the fact that at the end of 1987, the
advances were reclassified on Weeden's books into an
account entitled RECEIVABLE FROM CPI.
Petitioners attempt to blur the distinction between
CPI and WAI by arguing that CPI was a "division" of WAI.
However, we find that CPI was, at all relevant times, a
separate and distinct corporation from WAI. Although
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