Fog Cutter Capital Group Inc. Extends Stockholder Rights Plan to Preserve Use of Net Operating Losses
January 08 2018 - 6:00AM
Business Wire
Fog Cutter Capital Group Inc. (OTC:FCCG) (the “Company”), the
parent company of FAT Brands Inc. (Nasdaq:FAT), today announced
that on February 2, 2017, its Board of Directors adopted an
amendment to the Company’s Rights Agreement, originally adopted on
October 18, 2002 (the “Rights Plan”), to extend the “Final
Expiration Date” under the Rights Plan to October 28, 2019. The
amendment was adopted to preserve the value of significant tax
assets associated with the Company’s tax net operating loss
carryforwards under Section 382 of the Internal Revenue Code. Under
the Rights Plan, stock purchase rights were originally distributed
to holders of the Company’s common stock at the rate of one right
for each share of common stock held of record as of the close of
business on October 28, 2002. The Company currently has 7,954,928
issued and outstanding shares of common stock.
“The Rights Plan was originally adopted by Fog Cutter as a means
of protecting the potential tax benefits of the Company’s net
operating loss carryforward ('NOL'),” said Donald J. Berchtold,
President of the Company. “Under Federal tax rules, the NOL’s will
be limited if the Company undergoes a significant change in
ownership. The Rights Plan addresses the Board’s duty to protect
the best interests of the Company and its stockholders by diluting
any new 5% holder, or any existing 5% holder, that increases its
stake by 1% or more, thereby preserving the Company’s NOL.”
Mr. Berchtold continued, “The extension of the Rights Plan was
adopted in connection with planning for the initial public offering
of FAT Brands, which was completed in October 2017. The
preservation of Fog Cutter’s NOL is more important than ever, since
Fog Cutter has entered into a written tax sharing agreement with
FAT Brands in connection with the IPO.”
A copy of the original Rights Agreement, dated October 18, 2002,
was publicly filed by the Company with the U.S. Securities and
Exchange Commission. Although the Company’s securities are no
longer registered under the Securities Exchange Act of 1934, as
amended, a copy of the Rights Agreement continues to be available
publicly through the EDGAR database of the SEC at www.sec.gov.
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version on businesswire.com: http://www.businesswire.com/news/home/20180108005731/en/
Konnect AgencyEmily Johnston,
213-988-8344ejohnston@konnectagency.com
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