Vystar Corp (VYST)

[MTLTrader]

Read the extract from the 10K below, Vystar is well aware of all the rules, the NOL is actually now 20 million $. It could be affected by a change of ownership of 50% of VYST but since the SAME PEOPLE (that is why it is very different from the rest of the OTC with shells unrelated to purchased companies) are majority shareholders in VYST AND in Rotmans I really doubt it will happen, even with the merger. Also the big dilution that happened in January-February could have affected the ownership but the Rotmans family will get shares for the Rotmans acquisition which will re-balance the ownership and come back to an ownership close to how it was before. NOL is definitely an asset for VYST, and the Rotmans would be stupid not using it, being on both sides of the merger they can arrange it as they want to fully benefit from the NOL.

Here is a link with examples to understand how NOLs and changes in ownership work: https://www.forbes.com/sites/anthonynitti/2013/09/11/corporate-tax-filing-deadline-tip-is-your-net-operating-loss-limited/#28584726227f

And here is the extract from the 10K:

"Because of net operating losses we have experienced for federal income tax purposes at December 31, 2018, we had federal net operating loss (“NOL”) carry-forwards of approximately $20.0 million ($18.4 million for 2017) available to offset future taxable income. Our ability to utilize NOL carry-forwards to reduce future taxable income may be limited under Section 382 of the Internal Revenue Code if certain ownership changes in our Company occur during a rolling three-year period. These ownership changes include purchases of common stock under share repurchase programs, the offering of stock by us, the purchase or sale of our stock by 5% shareholders, as defined in the Treasury regulations, or the issuance or exercise of rights to acquire our stock. If such ownership changes by 5% shareholders result in aggregate increases that exceed 50 percentage points during the three-year period, then Section 382 imposes an annual limitation on the amount of our taxable income that may be offset by our NOL carry-forwards or tax credit carry-forwards at the time of ownership change. The limitation may affect the amount of our deferred income tax asset and, depending on the limitation, a significant portion of our NOL carry-forwards or tax credit carry-forwards could expire before we are able to use them. In such an event, our business, financial condition, results of operations or cash flows could be adversely affected. We believe we have not experienced an ownership change under Section 382 of the Internal Revenue Code as of December 31, 2018; however, the amount by which our ownership may change in the future could be affected by purchases and sales of stock by 5% shareholders and new issuances of stock by us, should we choose to do so."