2007 Qualifying Criteria and Scoring

PLEASE REVIEW THE FOLLOWING CRITERIA TO DETERMINE IF YOU MAY QUALIFY FOR THIS PROGRAM (Failing any one of the five criteria will result in ineligibility of any applicant to sell NEW NOL’s and/or R&D Tax Credits):

No application shall be approved in which the new or expanding Technology or Biotechnology Business:

 1) has demonstrated positive net income in any of the two previous full years of ongoing operations as determined on its financial statements; Or,

 2) has demonstrated a ratio in excess of 110% of operating revenues divided by operating expenses in any of the two previous full years of operations as determined on its financial statements; Or,

 3) is directly or indirectly at least 50% owned or controlled by another corporation that has demonstrated positive net income in any of the two previous full years of ongoing operations as determined on its financial statements OR is part of a consolidated group of affiliated corporations, as filed for federal income tax purposes, that in the aggregate has demonstrated positive net income in any of the two previous full years of ongoing operations as determined on its combined financial statements; Or,

 4) has total employment (includes all subsidiaries, affiliates, and parent) in excess of 224 employees, on a global basis; Or,

 5) has fewer than 75% of total employment (see item 7 on Page 2 of the application for details) in New Jersey.

Additional Scoring Criteria

2007 TECHNOLOGY BUSINESS TAX CERTIFICATE TRANSFER PROGRAM EVALUATION GUIDELINES FOR MAKING THE STATUTORY DETERMINATIONS

1. Positive Growth in Full-Time Employment in NJ

(The applicant needs to adequately demonstrate one (or more) of the following. Authority staff will assess the information provided and, if it is satisfactory, a positive Determination will be made.)

A) If the applicant demonstrates that jobs will be created due to a new production contract having been awarded.

B) If the applicant demonstrates it is moving to a larger facility to accommodate employment growth or making a substantial investment in production equipment.

C) If the applicant demonstrates it has entered or is near completion of Phase III trials, has finished testing and is nearing production of a new product or recently began producing a new product.

D) If the applicant has created jobs in New Jersey since the preceding year end.

E) If the applicant has created jobs in New Jersey since the second most recent year.

F) If the applicant has created jobs in New Jersey since the third most recent year.

2. Insufficient Resources to Operate in Short Term OR Can’t Secure Financing

(The applicant needs to adequately demonstrate one (or more) of the following. Authority staff will assess the information provided and, if it is satisfactory, a positive Determination will be made.)

A) If applicant hasn’t secured ANY form of financing/product sales in last 2 years.

B) If applicant demonstrates a “Burn Rate” that would exhaust Total Current Assets within 12 months.

C) If applicant demonstrates it must issue debt or equity, seek venture capital or financial assistance within 12 months to continue operations.

D) If applicant has a Quick Ratio less than .75:1.

E) If applicant has a Current Ratio less than 1:1.

3. Significant Positive Change in Net Income

(The applicant needs to adequately demonstrate one (or more) of the following. Authority staff will assess the information provided and, if it is satisfactory, a positive Determination will be made.)

A) If Operating Revenues exceed Operating Expenses in most recent year.

B) If applicant demonstrates that a new production contract was awarded.

C) If applicant demonstrates it has entered or is near completion of Phase III trials, has finished testing and is nearing production of a new product or recently began producing a new product.

D) If applicant has a decreasing Net Loss trend over the 3 preceding fiscal years.

E) If applicant has a decreasing Net Loss trend over the 2 preceding fiscal years.

F) If the applicant’s Net Loss is increasing due to Financial Investor funded direct Research & Development expenses where:

a) The Financial Investor’s investment, evidenced by subscription documents, in the prior two years is greater than or equal to the most recent full-year Net Loss on the Financial Statements; and

b) The detailed schedule of Financial Investor funded Research & Development for the two most recent years shows an increase in Research and Development expenditures at least as large as the increase in the Net Loss of the applicant.

As of April 15, 2007

Download 2007 NJEDA Application
 
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