Replies to post #2354 on Firstgold Corp (fka FGOCQ)

[TOUCAN]

Subcontractors even got paid shares, this is a R/M play as well.

The NOLs value is $40M - $50M

Net Operating Loss

http://www.ibfd.org/portal/pdf/Excerpt_MergersandAcquisitions.pdf

4.1.1.3. Preservation of tax losses

All of the tax attributes of the merged corporation, including net operating losses (NOLs), transfer to the surviving corporation in a tax-free merger (Sec. 381).

Subject to the limitations discussed below, the surviving corporation in a statutory merger or consolidation of corporations may carry forward the {NOLs} of the absorbed companies to reduce its taxable income in the 20 subsequent tax years from the tax year in which the loss was incurred (Sec. 172). NOLs may be carried back 2 years.

Sec. 382, however, limits the use of NOL carry-forward losses, and certain other tax attributes by the surviving corporation. If the pre-transaction shareholders of the loss corporation do not own at least 50% of the fully diluted equity (other than non-voting, non-participating preferred stock) of the surviving entity as applied under the rules of Sec. 382, the use of the NOLs by the surviving corporation are limited to the fair market value of the merged entity immediately before the transaction multiplied by the highest long-term tax-exempt bond rate applicable for any of the 3 months before the transaction.