THE
WOODLANDS, Texas, March 1,
2023 /PRNewswire/ -- TETRA Technologies, Inc.
("TETRA" or the "Company") (NYSE: TTI) announced today that its
Board of Directors has adopted a Tax Benefits Preservation Plan
(the "Tax Plan") intended to preserve the availability of the
Company's existing net operating loss carryforwards ("NOLs") and
other tax attributes (collectively, the "Tax Attributes").
As of December 31, 2022, the
Company has U.S. federal NOLs of approximately $411 million as well as other Tax Attributes that
may be available to reduce the Company's future U.S. federal income
tax expense and represent significant value to the Company.
However, the Company's ability to use its Tax Attributes may be
materially reduced or eliminated if it were to experience an
"ownership change," as defined under Section 382 of the Internal
Revenue Code (a "change of ownership"). In general, a change of
ownership would occur if stockholders that own (or are deemed to
own) at least 5% or more of the Company's outstanding common stock
increased their cumulative ownership in the Company by more than 50
percentage points over their lowest ownership percentage within a
rolling three-year period. The Tax Plan reduces the likelihood that
changes in the Company's investor base would limit the Company's
future use of its Tax Attributes, which would significantly impair
the value of such Tax Attributes.
TETRA reported 2022 income before taxes of $11.9 million. Additionally, on February 27, 2023 TETRA reported progress on
efforts to assess and potentially develop its bromine assets in
Arkansas, which could potentially
further increase TETRA's future taxable income. The Tax Plan is
intended to ensure the Tax Attributes remain available to the
Company into the future.
In connection with the adoption of the Tax Plan, the Company's
Board of Directors declared a dividend of one Series A Junior
Participating Preferred Stock purchase right (the "Rights") on each
outstanding share of the Company's Common Stock. The Rights will be
issued to holders of record as of the close of business on
March 10, 2023. Shares of the Company's Common Stock
issued after such record date will be issued together with the
Rights.
The Rights are not currently exercisable and initially will
trade only with the Company's Common Stock. However, if any person
or group acquires 4.99% or more of the Company's Common Stock, or
if a person or group that already owns 4.99% or more of the
Company's Common Stock acquires additional shares representing 2%
of the Company's then outstanding shares of Common Stock, then,
subject to certain exceptions, the Rights would separate from the
Common Stock and become exercisable for shares of the Company's
Common Stock having a market value equal to twice the exercise
price, resulting in significant dilution to the ownership interests
of the acquiring person or group.
The Tax Plan includes a procedure pursuant to which the
Company's Board of Directors may consider requests to exempt
acquisitions of the Company's Common Stock from the Tax Plan if it
determines that doing so would not jeopardize or endanger the value
or availability of the Tax Attributes or is otherwise in the best
interests of the Company.
The Rights will expire on February 28,
2026. The Rights may also expire on an earlier date upon the
occurrence of other events, including a determination by the
Company's Board of Directors that no Tax Attributes may be carried
forward or otherwise utilized or that the Tax Plan is no longer
necessary or desirable for the preservation of the Tax Attributes.
Because the Rights may be redeemed under certain circumstances by
the Company's Board of Directors, the Tax Plan should not interfere
with any action that the Board of Directors determines to be in the
best interests of the Company and its stockholders.
The Tax Plan is similar to tax benefit preservation rights plans
that are adopted by other public companies with significant Tax
Attributes. The issuance of the Rights will not affect the
Company's reported earnings or loss per share and should not be
taxable to the Company or its stockholders.
Additional information regarding the Tax Plan will be set forth
in a Current Report on Form 8-K and in a Registration Statement on
Form 8-A that the Company is filing with the Securities and
Exchange Commission.
Investor Contact
For further information, please
contact Elijio Serrano, CFO, TETRA
Technologies, Inc. at (281) 367-1983 or via email at
eserrano@tetratec.com or Rigo
Gonzalez, Manager of Corporate Finance and Investor
Relations, at (281) 364-2213 or via email at
rgonzalez@tetratec.com.
Company Overview
TETRA Technologies, Inc. is an energy services and solutions
company operating on six continents with a focus on bromine-based
completion fluids, calcium chloride, water management solutions,
frac flowback, and production well testing services. Calcium
chloride is used in the oil and gas, industrial, agricultural,
road, food, and beverage markets. TETRA is evolving its business
model by expanding into the low carbon energy markets with its
chemistry expertise, key mineral acreage, and global
infrastructure. Low carbon energy initiatives include
commercialization of TETRA PureFlow®, an ultra-pure zinc
bromide clear brine fluid for stationary batteries and energy
storage; advancing an innovative carbon capture utilization and
storage technology with CarbonFree to capture CO2 and
mineralize emissions to make commercial, carbon-negative chemicals;
and development of TETRA's lithium and bromine mineral acreage to
meet the growing demand for oil and gas products and energy
storage. Visit the Company's website at www.tetratec.com for
more information.
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SOURCE TETRA Technologies, Inc.