IPOs by Companies Converting from “S” Corporation to "C" Corp. Status

Vera Bradley, Inc. Form S-1 filed on 7/1/10 (file no. 333-167934)
LINC Logistics Co. Form S-1 filed on 6/29/10 (file no. 333-167934)

Prior to the offerings, both issuers have been treated as an S-corporation under Subchapter S of Chapter 1 of the Internal Revenue Code and thus generally have not been subject to income taxes.  The Summary and the Selected Consolidation Financial Data tables presented in both Registration Statements reflect pro forma income tax data as if the companies had been treated as C-corporations, which will be their tax status once they are public.
 
Both filings discuss the risk relating to C-corporation conversion, noting that claims of taxing authorities related to the prior status as an S-corporation could be harmful.  Vera Bradley intends to use a portion of its IPO proceeds to fund its final S-Corporation distribution.  Historically, Vera Bradley has distributed annually to its shareholders an amount no less than 40.5% of the prior year’s taxable income.