Avid Bioservices Inc (CDMO)

[NoMoDo]

I believe what happened was that they considered the tax loss an asset to be used in future quarters to offset any gain. If they didn’t expense it as likely unusable, they still would have shown a loss from the year - roughly $10 mil loss compared to a $300k gain for 2023. Instead of taking the hit in 2025 for any loss not used, they took the hit during an already bad year.

Now, if they are able to use any of the loss to offset a gain in 2025, it will lower taxes as well as lower expenses by an equal amount as a contra expense - readjusting the adjustment. This could make 2025 look especially good if they are able to show any profit.