Value Microcaps Motherboard

[abh3vt]

Understood. However, EZEN is a far different company than it was when it recorded all those losses a few years ago.

The videoconferencing segment that generated those losses is no longer a significant part of their sales (now <4% of sales). The collaborative software segment that is growing very nicely is showing no signs of slowing.

If I were the accountant in charge, I'd make them recognize a good chunk of the valuation allowance, but there may be substantial pressure from management not to do so. Stocks tend to follow their eps growth, and recognizing the asset (and increasing the tax rate on the income statement) might put further pressure on the stock. Of course, cash flow isn't impacted by this....but many of us here follow the god of PE multiples, and a slowing growth rate in earnings might be considered a setback.