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The following is an excerpt from a S-1/A SEC Filing, filed by ADERIS PHARMACEUTICALS INC on 4/17/2002.
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ADERIS PHARMACEUTICALS INC - S-1/A - 20020417 - MARKET_RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURE REGARDING MARKET RISK

As of December 31, 2001, we had cash and cash equivalents of $42.8 million consisting of cash and highly liquid investments. Our exposure to market risk relates to the increase or decrease in the amount of interest income we can earn on our investment portfolio and on the increase or decrease in the amount of any interest expense we must pay with respect to any outstanding debt instruments. We currently have no long-term debt. We do not plan to invest in derivative financial instruments.

RECENT ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 141, "Business Combinations", and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires that all business combinations initiated after June 30, 2001 be accounted for using the purchase method of accounting. SFAS No. 142 discusses how intangible assets that are acquired should be accounted for in financial statements upon their acquisition and also how goodwill and other intangible assets should be accounted for after they have been initially recognized in the financial statements. Beginning on January 1, 2002, with the adoption of SFAS No. 142, goodwill and certain purchased intangibles existing on June 30, 2001 will no longer be subject to amortization over their estimated useful lives. Rather, the goodwill and certain purchased intangibles will be subject to an annual assessment for impairment based on fair value. The provisions of SFAS No. 142 are required to be adopted starting with fiscal years beginning after December 15, 2001. We do not expect adoption of these statements to have a material impact on its financial position or results of operations.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", which supersedes SFAS No. 121. SFAS No. 144 further refines the requirements of SFAS No. 121 that companies (1) recognize an impairment loss only if the carrying amount of a long-lived asset is not recoverable based on its undiscounted future cash flows and (2) measure an impairment loss as the difference between the carrying amount and fair value of the asset. In addition, SFAS No. 144 provides guidance on accounting and disclosure issues surrounding long-lived assets to be disposed of by sale. We do not expect the adoption of this statement to have a material impact on its financial position or results of operations. The provisions of SFAS No. 144 are required to be adopted starting with fiscal years beginning after December 15, 2001.


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