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Biotech / Medical : Cadus Pharmaceutical Corp. (KDUS)
KDUS 1.6000.0%Jul 2 5:00 PM EST
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To: peter michaelson who wrote (240)9/10/2000 1:24:32 PM
From: RCMac  Read Replies (1) of 1833
 
>> Did KDUS previously deduct the $18.5 escrow when the liability was established? If so, $18 of the $30 loss carryforward would be eliminated on reversing the liability, leaving a $12 million carryforward. <<

I'm no expert on corporate tax issues, but there’s also this in the 10-K:

“The Company has incurred operating losses in each year since its inception, including net losses of approximately $8.5 million during the year ended December 31, 1999. At December 31, 1999, the Company had an accumulated deficit of approximately $52.1 million, which includes a $19.1 million reserve (including interest earned on the escrowed cash) for litigation damages with respect to the patent infringement litigation with SIBIA.“

The net operating loss carryforward (NOLCF) should roughly equal accumulated operating losses – “roughly” because financial accounting rules and tax accounting rules have different requirements, with some major and some trivial differences.

I translate all this to mean that the NOLCF of $30.7 million that Peter asked about does not include the amount of the litigation reserve. The reversal of the SIBI v. KDUS judgment therefore leaves that $30.7 million number unchanged, and available to net out any future net profits.
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