What we're seeing today is a reality check. When a board knows that they have six months of cash--and they're always raising new capital--the first thing they do is scale back their programs. The company's non-core programs get terminated, and along with that the scientists and the highly skilled jobs as well. The challenge is that once these people are let go from a company, they typically will reapply their skills elsewhere, so we start to lose the people. They either go to other institutes that might be taking that skill base or they simply leave the country, and we're starting to see an exodus of skills in that one. You don't retrain scientists; they simply go and apply their skills elsewhere.
That's the first stage. Then, as companies scale back down in size and put more and more programs on hold, they do become attractive targets, because they have intellectual property that's reached a certain stage, they're cash-poor, and their valuations are grossly undervalued. We are seeing companies being bought by multinationals, which can be a good thing if they keep their research going, but a lot of times you'll see companies being bought by a large, profitable company simply for the tax losses in that company.
We had an example of one in December. In this case the company went under and was finally sold for $1 million. A Canadian subsidiary bought it, and they got $28 million in tax losses, so the net was that the government paid them $5 million, in terms of avoiding taxes, to buy a company for a million bucks. If we lose the IP, we lose the jobs.
That's what we'll see more of, as these companies go into stasis. It becomes a fire sale.