We believe that the Spin-Off Distribution generally will be taxable to our shareholders for U.S. federal income tax purposes. See “Tax Considerations – U.S. Federal Income Tax Treatment of the Spin-Off Distribution’’ below. For U.S. federal income tax purposes, our distribution of common shares and Class A shares and cash in lieu of fractional shares to you in the Spin- Off Distribution is not expected to qualify as a tax-free corporate division for U.S. federal income tax purposes and as a result is expected to be treated like other distributions from OLB. Consistent with this expected treatment, the total value of this Spin- Off Distribution, as well as your initial tax basis in our shares, will be determined by the trading price of our common shares at the time of the Spin-Off Distribution. A portion of the value of this Spin-Off Distribution will be taxable to you as a dividend, to the extent of OLB’s current and accumulated earnings and profits as determined for U.S. federal income tax purposes, and the remainder, if any, will be a reduction in the adjusted tax basis in your shares of OLB common stock. The tax treatment of the Spin-Off Distribution is discussed in further detail below in “Tax Considerations.” You are urged to consult your own tax advisor to determine the particular tax consequences of the Spin-Off Distribution to you in your specific circumstances, including the applicability and effect of any federal, state, local and foreign tax laws.
