Advanced Delivery and Chemical Systems Nevada, Inc. - Page 13

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               As indicated, on October 10, 1997, ATMI’s acquisition of               
          petitioner and indirectly of petitioner’s affiliated                        
          corporations, limited liability companies, and partnership was              
          consummated.                                                                
               On or about April 15, 1997, there was filed on behalf of               
          petitioner a subchapter S Federal corporate income tax return for           
          petitioner’s stated short taxable year commencing April 1, 1996,            
          and ending December 31, 1996.  At the time this subchapter S                
          corporate tax return was filed, management of petitioner and                
          petitioner’s tax return preparer were unaware that on October 7,            
          1996, petitioner’s subchapter S status inadvertently had been               
          terminated when one of petitioner’s individual shareholders,                
          apparently without knowing the transfer would terminate                     
          petitioner’s subchapter S status, transferred to a partnership,             
          an ineligible subchapter S corporate shareholder, his minority              
          stock interest in petitioner.                                               
               Thereafter, on approximately June 30, 1997, when termination           
          of petitioner’s subchapter S status had come to the attention of            
          petitioner’s management, there was filed on behalf of petitioner            
          an amended subchapter S Federal corporate income tax return for             
          petitioner’s corrected short taxable year commencing                        
          April 1, 1996, and ending October 7, 1996, to reflect the                   









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