Re: NOL Carryforwards $51,800,000
in response to
by
Message: NOL Carryforwards $51,800,000
OK, as of last year they had not completed the analysis. This is last year's statement on this matter. Nice to see they have quantified this asset just in time for a "dynamic" 2011.
********
Income Taxes
We account for income taxes using the asset and liability method described in SFAS No. 109, Accounting For Income Taxes (“SFAS 109”), the objective of which is to establish deferred tax assets and liabilities for the temporary differences between the amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards at enacted tax rates expected to be in effect when such amounts are realized or settled. A valuation allowance related to deferred tax assets is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized. We provide a full valuation reserve related to our net deferred tax assets. In the future, if sufficient evidence of an ability to generate sufficient future taxable income in certain tax jurisdictions becomes apparent, we may be required to reduce the valuation allowances, resulting in income tax benefits in the consolidated statement of operations. We evaluate the realizability of our deferred tax assets and assesses the need for valuation allowance quarterly. The utilization of the net operating loss carry forwards could be substantially limited due to restrictions imposed under federal and state laws upon a change in ownership. We have experienced various ownership changes as a result of past financings and could experience future ownership changes.
21
We adopted the provisions of FASB interpretation No. 48 Accounting for Uncertainty in Income Taxes (“FIN 48”) an interpretation of SFAS 109 on April 1, 2007. As a result of the implementation of FIN 48, we recognized no adjustment for uncertain tax provisions and the total amount of unrecognized tax benefits as of April 1, 2007 was $-0-. At the adoption date of April 1, 2007, deferred tax assets were fully reserved by a valuation allowance to reduce the deferred tax assets to zero, the amount that more likely than not is expected to be realized. For the year ended March 31, 2008, we removed our net operating loss (“NOL”) carryforwards from our deferred tax asset accounts as well as the related full valuation reserve because an analysis of Section 382 of the Internal Revenue Code (“IRC”) of 1986 ownership changes had not been completed. Based on a preliminary analysis of ownership changes performed in fiscal 2009 we determined that that no Section 382 ownership changes occurred since March 31, 2000 but have not yet determined how much, if any, the use of the approximately $31.4 million of prior period losses will be limited until their expiration. Accordingly, NOL carryforwards generated during the 2001 through 2008 fiscal years are generally not subject to Section 382 limitations and we will be able to utilize such NOLs and any documented research and development (“R&D”) carryforwards provided the Company generates sufficient future earnings. Accordingly at March 31, 2009, we re-established deferred tax assets associated with such federal NOLs, related state NOLs, and certain California research and development tax credits and recorded a corresponding increase to our valuation allowance.
5 Recommendations
Loading...
Loading...
New Message
Please
login
to post a reply