wade: re KSWW
I called them and tried to speak to the CFO, but he transferred me to their IR guy. He was not too knowledgeable on tax matters, so consulted with the CFO to answer my questions. Maybe the CFO has spoken with too many stockholders already !
He did say that they have substantial tax loss carryforwards remaining ($3.7M as of 12/31/04) plus a $1.5M deferred tax asset. So they won't be paying any taxes for several more quarters. However they will be reporting taxes as they expense the deferred tax asset. Q4 tax rate could be around 46% is what they told me, but of course for the year, there should still be a tax benefit given the big credit they took in Q3. Next year they'll still have around $3M in tax credits remaining, so it just depends on the accounting treatment as to the timing of those credits and the interim tax rate. For next year as a whole, the tax rate should be very low given the remaining tax credits, as I understand it.
