BioAmber Inc fka BIOAQ

[chapmac]

… relative to this case (IMO/R):
First - A net operating loss (NOL) makes a company unprofitable for tax purposes.
However - An NOL may be considered a valuable asset because it can lower a company’s amount of taxable income. For this reason, the IRS restricts using an acquired company simply for its NOL’s tax benefits. If a company with a NOL has at least a 50% ownership change, the acquiring company may use only that part of the NOL in each concurrent year that is based on the long-term tax-exempt bond rate multiplied by the stock of the acquired company. However, purchasing a business with a substantial NOL may mean an increased amount of money going to the acquired company’s shareholders than if the business possessed a smaller NOL. Multiple year NOLs has a # of years (20?) of limitations (cancelled) if not all timely used. Can go back two previous years for a refund. Key is the time value of money shows that tax savings at that time is more valuable than in the future. A buyer will leverage this if % stock ownership is high enough but in the context of the aforementioned.