future, then bring them back to the present value by using a

"discount

rate."

unique

multiples applicable to that industry," says Gaughan. One industry

might use 14 times earnings. Another could use six times earnings

before interest and depreciation. "A multiple is the number of

times a financial measure that a business sells for. All are unique

and different but they are standards, available in databases."

as real estate or banking. When a business is not earnings oriented,

the net asset value represents assets minus liabilities.

Businesses usually sell for more when:

businesses more highly if they grow more rapidly.

project a higher discount rate. Jumping up and down is risky for

me."

a lower multiple or a higher discount rate," says Gaughan.

"The

higher the debt service, the more risky the proposition is."

— Barbara Fox

Top Of Page
$50K to $250K: Apply Now

Technology companies can apply for a total of $2.3

million

in technology transfer funds to be distributed by the New Jersey

Commission

on Science and Technology, says David Eater, acting director

now that former executive director J. J. Brandinger has retired.

As repayment, the recipients are expected to pay royalties on

successful

technologies.

"A major advantage to the Technology Transfer Program

funding,"

says Eater, "is that the investment is neither debt nor equity.

Debt must often be repaid independent of the company success. An

equity

investment gives the investor certain ownership and management

rights."

Most awards will be from $50,000 to $250,000 for projects that will

be finished in 12 months or less. To encourage entrepreneurs to seek

collaborators, preference is given to projects that have third-party

investors or collaborators. Whether they have third-party investors

or not, entrepreneurs must match state dollars on at least a 1:1

basis.

Eligible companies will have fewer than 500 employees and be located

in New Jersey or be willing to move to New Jersey. They are supposed

to stay in New Jersey for at least five years after the funding ends.

They should be conducting product or process development in a market

area that is likely to succeed by stimulating economic growth and

creating jobs.

The scientific/technical part of the proposal must tell

competition.

with the schedule for their completion.

for a "request for proposal" (RFP) at 609-987-1671 or fax

609-292-5920, or E-mail njcst@scitech.state.nj.us.

Proposals are due on Monday, January 25, and after peer evaluation

the awards will be announced on April 27.

Top Of Page
Biotech’s Future

Each year Robert S. Esposito and Gordon V.

Ramseier, a dynamic duo on New Jersey’s biotechnology landscape,

psych out what is really happening with biotech in the state. This

year’s "State of New Jersey Biotechnology Industry Report"

will be presented at the annual meeting of the Biotechnology Council

of New Jersey on Thursday, December 3, at 5:15 p.m. at the Nassau

Inn.

Esposito is national director of biotechnology and life sciences with

KPMG Peat Marwick LLP at 989 Lenox Drive. Ramseier is executive

director

of the Bridgewater-based Sage Group and former CEO of

OncoTherapeutics,

now Biomira U.S.A., at 1002 Eastpark Boulevard in Cranbury. Cost:

$75 ($85 for walk-ins). Call 609-890-3185.

Top Of Page
Advanced Engineering

Future biomedical engineers can get started as early

as their high school years, with a program started by the New Jersey

Institute of Technology (NJIT). NJIT received a five-year, $2 million

grant from the New Jersey Department of Education to develop an

articulated

curriculum in pre-engineering and engineering.

Engineering life sciences, which includes biomedical and biotechnical

engineering, is one of the five curriculum areas. The others are

mechanical

engineering and technology, chemical engineering and environmental

science, electrical and computer science and technology, and civil

engineering and technology.

When complete, this program will allow high school students who seek

careers in any of the engineering professions to move smoothly through

a streamlined curriculum of courses that will be taken in high school,

community colleges, or at a four-year college or university. Students

will be better prepared for employment in New Jersey’s competitive

and technology-based economy.

The program will be phased in over five years, with the first area

of study, mechanical engineering and technology, ready for students

to use next fall.

NJIT is a public research university enrolling nearly 8,200 bachelors,

masters, and doctoral students in 76 degree programs through its five

colleges.

Top Of Page
Handheld Windows?

If the "demo demon" does not appear, Mike

Rauch will showcase Microsoft’s newest operating system, Windows

CE, at a Princeton ACM/IEEE Computer Society meeting on Thursday,

November 19, at 8 p.m. at the Sarnoff auditorium on Fisher Place.

For information, call 609-924-8704. There is no charge, students with

parents are welcome, and refreshments will be served. A pre-meeting

dinner with the speaker is at the Rusty Scupper at 6 p.m., but

reservations

are needed for this.

The "demo demons," of course, are those gremlins that seem

to surface at most cutting edge computer demonstrations. Rauch, one

guesses, has seen his share of them. He bills himself as a

"software

development ronin" and "vice president of pointers and

semicolons"

at the Cranbury Software Development Center Inc. He is developing

high performance communications servers under Windows NT and Visual

C++. Currently he is involved with network management systems for

fiber optic networks. In another area he develops games — three

casino games for Windows CE hand held computers. These Phillips

Electronics

computers are being distributed by MobileSoft.

Rauch will talk about Windows CE applications and platforms. If that

proverbial demo demon is not present, he will develop a sample

application

and load it to a hand held PC. Next month’s IEEE meeting, on December

17, will feature Mike Keith discussing "Algorithms,

Computers,

and the Art of Constrained Poetry and Prose."

Top Of Page
Sales and Use Tax

Sales tax, as complicated as it was, is even more so

now that transactions are being made on the Internet. In general,

only the state in which a sale occurs is entitled to tax a sale, and

out-of-state sales are exempt from tax, says Susan A. Feeney,

an attorney with McCarter & English. She will discuss "Current

Issues in New Jersey Sales and Use Tax" at the seminar organized

by the New Jersey Society of CPAs on Tuesday, November 24, at 5:30

p.m. at the Forrestal. Cost: $40. Call Henry Murphy at 609-258-1550.

Feeney will discuss interstate sales, Internet sales, and recent

rulings

and taxpayer concerns in these areas. A graduate of Seton Hall

University

and Fordham Law School, she completed a clerkship in the New Jersey

Tax Court before joining McCarter & English in Newark.

A vendor may not be required to collect a sales or use tax unless

it has a "nexus" or connection with New Jersey, says Feeney.

"A vendor needs sufficient connection with the state in order

for the state to assert its jurisdiction."

However, Feeney warns, businesses should not lure customers by

claiming

that transactions are tax exempt. "A vendor may not advertise

or hold out to the public in any manner that the tax is not an element

of the sales price, amusement charge, or rent," she says. "Vendors

may not indicate that they will pay the tax, that the tax will not

be separately charged, or that the tax will be refunded to the

customer."

With regard to mail order sales, the U.S. Supreme Court, in the 1967

National Bellas Hess v. Department of Revenue ruling, held that in

the absence of any retail outlets, solicitors, or property of the

state, a foreign mail order company could not be required to collect

and remit use tax on sales made to residents of that state. This is

still the law today, says Feeney.

Are Internet sales regarded in the same manner? Feeney points out

some state and local tax concerns:

selling state or the delivery state? Where is the product consumed?

merchants

have a physical presence in the state of the buyer?

a sale of tangible property or a service subject to tax? Possible

services are Internet access services, consulting services using video

conferencing, on-line information databases, stock trading, banking,

and gambling opportunities.

types of Internet sales:

on an hourly or lump sum monthly basis are treated as nontaxable

charges

for sale or use of information.

they are a charge for advertising space which is not an enumerated

taxable service.

exempt as professional services.

taxable

services.

charging

for transmission-related services, like dedicated phone numbers and

telephone connect time, such charges are taxable telecommunication

services for New Jersey service addresses.

advertising services.

corporate

managers on how to plan for or deal with a sales and use tax audit.

For instance, expect to keep your records for at least four years.

Conduct periodic self audits to ensure that sales tax compliance

measures

are in place.

"Many businesses, particularly those with multi-state locations

or those which have grown substantially over the years, may find that

no internal programs are in place for accurate sales compliance,"

says Feeney. "Those business could benefit by having a sales and

use tax manual prepared detailing the taxation of particular purchases

and sales made by the business."

While dealing with the auditor, Feeney says, use the

"hard-on-issues,

soft-on-people approach. Be cordial, cooperative and firm." Agree

on procedures, required documentation, audit location, and any special

needs up front. Designate a specific work area for the auditor.

Control

access to corporate facilities and personnel.

Feeney offers some tips for entrepreneurs to protect themselves:

personnel

to directly answer auditor’s questions.

data. Allow only one auditor to visit your workplace at a time.

through the individual designated as auditor coordinator. Do not

volunteer

"any" information not specifically requested by the auditor.

Do not volunteer information regarding any corporation in the group

other than those under audit.

"skeletons," and audit "hot spots" for the particular

state, and estimate your company’s potential exposure before the audit

process begins. Be sure filing positions are well documented.

answers and logical approaches to getting the job done will often

be accepted," says Feeney. "For this reason, anticipating

potential issues before the auditor encounters them, and formulating

reasonable solutions or compromises for presentation to the auditor

may result in significant tax savings."

And stalling tactics sometimes can work. As Feeney points out:

"Remember,

the auditor has time constraints."

— Teena Chandy

Corrections or additions?

— the web site for U.S. 1 Newspaper in Princeton, New Jersey.