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

To: scaram(o)uche who wrote (524)	4/30/2001 8:52:44 PM
From: Biomaven	Respond to of 1833

You basically can't sell a NOL (except for New Jersey state tax NOL). The tax regulations are designed precisely to prevent you doing so. If they sell the yeastie beasties they have no business to carry on. If they merge with a profitable company, then only a portion of the NOL gets to be used, based on the % change in ownership of KDUS. The bigger the change in ownership, the less NOL can get used. Bottom line is that it is hard for me to come up with plausible scenarios where the NOL has much if any value. You need to merge with a profitable but comparably sized company (so there isn't too big a % change in ownership). KDUS will be somewhat profitable going forward (interest and the OSIP license payments) but at least they won't have to pay taxes on the profits. So you can kind of think of it as an IRA where interest payments accumulate tax free and you get cap gains instead of ordinary income out when you exit. Peter