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Gold/Mining/Energy : Nuvo Research Inc

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To: mark t who wrote (1532)3/12/1999 10:37:00 PM
From: Ron Nairn  Read Replies (1) of 14101
 
Mark B & T, Jim & Tom et al. Just back after a wonderful holiday in Montego Bay. Too much reading to catch up on when you're completely out of the loop for 10 days. Looks like same old/same old. But I'm not swayed. My rationale says hold for pending news. Time sure tests the committed.

Tom, you deferred to me I believe a question someone had about the possible accounting of revenues from a distribution agreement with a major. At this point, it could be set up in so many ways, I couldn't begin to speculate. County of origin? Payor's tax situation? Earned or unearned revenues? (Unearned would be recorded as a liability and not taxed until earned but available for cash flow...like a loan with no interest) What about some form of equity investment? Preferred or special shares? A lump sum payment might be OK because the company had several years losses carried forward that would offset balloon income.

I'd rather think about revenues and let the lawyers and tax accountants concern themselves about taxes. This would be normal up front consideration in any significant deal IMO. By the time we find out what the deal is, the tax decisions will be done and well thought through.

Cheers all

Rondo
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