Twenty-four technology and biotechnology companies were approved for inclusion in the state’s Technology Business Tax Certificate Transfer Program, more commonly known as the Net Operating Loss (NOL) Program, the New Jersey Economic Development Authority (NJEDA) announced in October.
Combined, these companies will receive approximately $75 million through the program to fund working capital or research and development (R&D), the maximum total amount available from the program.
Now in its 23rd year, the NOL Program enables participants to sell their New Jersey net-operating-loss and unused-R&D tax credits to unrelated profitable corporations for cash. The NJEDA and the New Jersey Department of Treasury’s Division of Taxation jointly administer the program.
The average award this year was over $3.1 million, which is high compared with the awards given in the early years of the program. According to an NJEDA statement, 36 percent of the program applicants are private businesses, while the remaining 64 percent are publicly traded companies. Two applicants are located in an Opportunity Zone, and three are in an Innovation Zone. Three of the 24 approved companies are participating in the NOL Program for the first time this year, according to the release.
Since the program’s inception, in the late 1990s, more than $1.17 billion in funding has been distributed to over 570 technology and life-science companies.
“One of the many advantages of the NOL Program is that it enables growing companies to obtain cash without sacrificing equity,” stated NJEDA CEO Tim Sullivan in a release. In January 2021, Governor Phil Murphy signed the New Jersey Economic Recovery Act of 2020 (ERA), which increased the program’s annual cap from $60 million to $75 million. It also increased the lifetime cap for individual applicants from $15 million to $20 million.
“Legislation created under the ERA has been extremely beneficial to New Jersey’s innovation community and to NOL Program participants in particular,” stated NJEDA Chief Economic Transformation Officer Kathleen Coviello in a release. “Companies that had previously maxed out of the program are able to participate once again due to the increased cap the Act provides to individual businesses.”
The program also provides major benefits to the profitable companies that are buying the net- operating-loss and unused-R&D tax credits. A profitable company can purchase the tax credits at a discount, based on the market price at the time. These tax credits have traditionally traded somewhere between 88 and 94 cents on the dollar. Once purchased, they can be used to reduce the buyer’s state tax obligation.
Most of the NOL money this year went to biotech companies, as was the case last year. In previous years, however, it was more evenly divided between the biotech and tech/clean tech sectors. One of the tech companies taking part is IoTecha, a Cranbury-based clean technology company that has developed an integrated smart charging platform — including hardware, software and cloud-based services — for the electric-vehicle charging infrastructure.
“New Jersey’s transformation to a green economy, combined with our ability to access state resources like the NOL Program, has been extremely beneficial to our company,” said Oleg Logvinov, IoTecha’s president and CEO.
Approved Company NJ Headquarters or Base of Operations County Sector / Company Mission 1 Acuitive Technologies Allendale Bergen The mission of Acuitive Technologies is to advance the art and science of orthopedic surgery by developing material technologies in combination with unique device designs. 2 Advaxis Monmouth Junction Middlesex Advaxis is a clinical-stage biotechnology company focused on the development and commercialization of proprietary Listeria monocytogenes (Lm)-based antigen delivery products. 3 AIM ImmunoTech New Brunswick Middlesex AIM ImmunoTech is engaged in the clinical development of new drugs for the treatment of seriously debilitating disorders. 4 Angel Medical Systems (AKA AngelMed) Eatontown Monmouth AngelMed is a medical device company offering a Class III implantable that detects silent and atypical
symptomatic heart attacks in real time. This is the first such device approved by the Food and Drug Administration (FDA).
5 Bellerophon Therapeutics Warren Somerset Bellerophon Therapeutics is a clinical-stage biotherapeutics company focused on developing therapies for cardiopulmonary diseases. 6 Brilliant Light Power Cranbury Middlesex Brilliant Light Power has developed a new commercially competitive, nonpolluting, plasma-based primary source of massive power from the conversion of hydrogen atoms in water molecules to dark matter, the previously unidentified matter that makes up most of the mass of the universe. 7 Caladrius Biosciences (Acquired/merged; now Lisata Therapeutics Basking Ridge Somerset Lisata Therapeutics is a clinical-stage pharmaceutical company dedicated to the discovery, development and commercialization of innovative therapies for the treatment of advanced solid tumors and other major diseases. 8 Celsion Corporation (Now Imunon) Lawrenceville Mercer Imunon is a fully integrated clinical-stage biotechnology company advancing a portfolio of innovative treatments that harness the body’s natural mechanisms to generate safe, effective and durable responses to a broad array of diseases. 9 Citius Pharmaceuticals Cranford Union Citius Pharmaceuticals is a late-stage biopharmaceutical company focused on the development and commercialization of first-in-class critical care products, with a pipeline of anti-infectives in oncology, adjunct cancer care, stem cell therapy and unique prescription products. 10 CytoSorbents Corporation (DBA CytoSorbents Medical, Inc.) Princeton Mercer CytoSorbents is a leader in critical care immunotherapy. Its CytoSorb is a unique blood-purification therapy. The product is currently approved in the European Union and distributed in 58 countries around the world. 11 electroCore Rockaway Morris electroCore is a commercial-stage bioelectronic medicine company dedicated to improving patient outcomes through its noninvasive vagus nerve-stimulation therapy, initially focused on the treatment of multiple neurological conditions. 12 Hepion Pharmaceuticals Edison Middlesex Hepion is a clinical-stage biopharmaceutical company that’s developing targeted therapies for liver disease. 13 IoTecha Cranbury Middlesex IoTecha focuses on the internet of things (IoT) as an enabling technology for the future of transport electrification and power grid modernization. 14 Iveric Bio Parsippany Morris Iveric Bio is a biopharmaceutical company that develops treatments for retinal diseases. 15 Matinas BioPharma Holdings Bedminster Somerset Matinas BioPharma is improving the intracellular delivery of important therapeutics. 16 Ocean Power Technologies (also called “OPT”) Monroe Township Middlesex OPT specializes in ocean energy technology. 17 OncoSec Medical Pennington Mercer OncoSec Medical is a late-stage biotechnology company that is developing immunotherapy cancer treatments. 18 Palatin Technologies Cranbury Middlesex Palatin delivers treatments that harness the healing power of the melanocortin system. 19 PDS Biotechnology Florham Park Morris PDS Biotechnology is a clinical-stage biopharmaceutical company with a growing pipeline of cancer immunotherapies and infectious-disease vaccines. 20 Provention Bio Red Bank Monmouth Provention Bio has a different approach to autoimmune diseases. 21 Rafael Holdings Newark Essex Rafael Holdings is focused on developing novel cancer and immunity therapies. 22 Cornerstone Pharmaceuticals (FKA Rafael Pharmaceuticals) Cranbury Middlesex Cornerstone addresses significant unmet needs with regard to therapies for rare cancers. 23 Soligenix Princeton Mercer Soligenix is a late-stage biopharmaceutical company that develops and commercializes products for treating rare diseases where there is an unmet medical need. 24 TrueFort Weehawken Hudson TrueFort is the leader in delivering Zero Trust segmentation and workload protection for critical applications.