Impact Research Corporation, Joan C. Benz, Tax Matters Person - Page 7




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          videodisc technology for shareholders in the to-be-formed S                 
          corporations.                                                               
               Once Gould and Systems agreed to form the two S                        
          corporations, Gould began to locate potential shareholders in               
          what would become IRC and RIC.  Gould tried to locate                       
          shareholders who would qualify under the private placement rules            
          of the Securities Act of 1933.  To ensure qualification,                    
          prospective shareholders completed "investor qualification forms"           
          which solicited the information necessary to determine whether              
          potential shareholders satisfied the Securities and Exchange                
          Commission’s rules regarding private placement offerings.  The              
          investor qualification forms provided information about the                 
          potential shareholder’s balance sheets, income statements, tax              
          returns, and experience with investing in private placements.               
          Potential shareholders in IRC and RIC had to have a minimum net             
          worth of $200,000.  Gould reviewed the investor qualification               
          form of each potential shareholder.  Shareholders in the S                  
          corporations were not selected on the basis of education and                
          experience in manufacturing or in marketing.                                
               A majority of the shareholders of IRC and RIC were                     
          professionals and had some managerial and business expertise.               
          Frank Colenda (supra note 1) participated in the U.S. Navy’s                
          development of the “Sparrow” missile program.  Among the                    
          shareholders of RIC were the following:  Joan C. Benz, a Ph.D.,             






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