IMO dys1 is correct - they'd have a tax obligation for the $10M face value paid. And he makes a good point about the one year hold, qualifying any value appreciation of the stock (if sold one year and one day after the transaction). However, I doubt any taxes would actually have to be paid by those CrossFlo stakeholders, as I'd bet the entire "gain" would be offset ("setoff" to you, as most non-USA refer to what we call "offsets" as "setoffs" in international contracting) by their previous investment dollars in that enterprise - start up.

And here I'll say again that the added value of Crossflo to us may be in it's accumulated operating losses over the years. We pay $10M, and MAY get tax write-off carry-forwards worth an even greater amount, making the deal extremely attractive to PTSC in its rather unique revenue situation (very few companies have our kind of revenue generation with relatively little in operating costs).

FWIW,

SGE