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Biotech / Medical : Cadus Pharmaceutical Corp. (KDUS) -- Ignore unavailable to you. Want to Upgrade?

To: scaram(o)uche who wrote (239)	9/9/2000 5:37:10 PM
From: peter michaelson	Read Replies (3) \| Respond to of 1833

Hi All: From KDUS 10K: At December 31, 1999, the Company had tax net operating loss carryforwards of approximately $30.7 million and research and development credit carryforwards of approximately $2.6 million which expire in years 2009 through 2019. The Company's ability to utilize such net operating loss and research and development credit carryforwards is subject to certain limitations due to ownership changes as defined by rules enacted with the Tax Reform Act of 1986. I am very rusty on my carryforward rules, so correct me where I err, please. 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. That should be ample to cover passive income on the cash balances. Therefore I doubt the tax credits can be put to good use. In any case, it looks as though the $25 million in cash is free and clear of corporate taxes. However, would there not be an awful tax hit to the individual if cash were to be distributed out? Is there a way to use remaining carryforwards to ease the hit on the individuals in case of a large dividend? Thank you. Peter