Every stock issuance has its corresponding value or purchase price. However, the manner in which it was paid is unknown to us by just looking at the cap table.
Through the Sales And Purchase Agreement (SPA), we will be able to know if the shares were issued for cash, check, stock compensation, Intellectual Properties (IP), service rendered/to be rendered, or in seldom cases, properties (assets).
Recording of stock issuance in your books vary depending on the consideration.
Our comments may not contain a full description of all the facts or a complete exposition and analysis of all relevant authorities. Furthermore, the use of certain words such as “should, would, or will” is merely for grammatical convenience, is not intended to indicate a specific level of authority regarding a particular issue, and no explicit or implicit references should be taken there from. Our comments expressed herein are based upon the provisions of the Internal Revenue Code and Regulations in force on the date hereof, all proposed amendments to these Acts, Regulations and treaties publicly announced by the relevant authorities. Each and all of these authorities are subject to change at any time. Any such change could be given retroactive effect with respect to the transactions described herein and could cause the conclusions provided to become invalid, in whole or in part, with respect to any entity involved. There can be no assurance that these authorities will not disagree with, or challenge, the views set forth in this memorandum or that any such challenge will be unsuccessful.