Advanced Delivery and Chemical Systems Nevada, Inc. - Page 8

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          above.  Also, before the merger, Stephen Siegele was president of           
          ADCS, and after the merger Stephen Siegele was president of                 
          petitioner.  Also, the other officers and directors of petitioner           
          were essentially the same as the officers and directors of ADCS             
          before the merger.1                                                         
               As a result of ADCS’ 1996 merger into petitioner, petitioner           
          acquired ADCS’ 99-percent membership interests in Holdings LLC              
          and in Operating LLC, ADCS’ 70-percent stock interest in ADCS-              
          Korea, ADCS’ licensor rights under the license agreement with               
          ADCS-Korea, and the patents, intangibles, and stock interests               
          that were retained by ADCS in the January reorganization.                   
               ADCS-Limited was managed by the same individuals who had               
          managed ADCS and who continued to manage petitioner.                        
               The same business activities that had been conducted by ADCS           
          before ADCS’ merger into petitioner were conducted by petitioner            
          after ADCS’ merger into petitioner.                                         
               In 1997, ADCS-Limited purchased for $65,860 4.383 acres of             
          land adjacent to its chemical manufacturing plant in Burnet,                
          Texas, for the purpose of constructing thereon a 22,500-square-             
          foot chemical manufacturing plant at a projected cost of $6                 

               1  Robert Jackson, a vice president of ADCS, became a                  
          shareholder in petitioner, but the record is unclear as to                  
          whether he became a vice president of petitioner.                           

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Last modified: May 25, 2011