WALTHAM, Mass., Jan. 19, 2018 /PRNewswire/ -- ModusLink
Global Solutions™, Inc. (the "Company" or "ModusLink")
(NASDAQ: MLNK), today announced that its Board of Directors has
adopted a tax benefits preservation plan (the "Plan") designed to
preserve ModusLink's ability to utilize its net operating loss
carryforwards and other tax attributes (collectively, "Tax
Benefits"). ModusLink intends to submit the Plan, which is
similar to plans adopted by other public companies with significant
Tax Benefits, for stockholder approval at its 2017 Annual Meeting
of Stockholders.
ModusLink had net operating loss carryforwards for federal and
state tax purposes of approximately $2.1
billion and $209.8 million,
respectively, as of July 31, 2017.
ModusLink's ability to use its Tax Benefits would be substantially
limited if ModusLink undergoes an "ownership change" (within the
meaning of Section 382 of the Internal Revenue Code). The Plan is
intended to prevent an "ownership change" of ModusLink that would
impair ModusLink's ability to utilize its Tax Benefits.
As part of the plan, the Board of Directors of ModusLink
declared a dividend of one right (a "Right") for each share of
common stock, par value $0.01 per
share, of ModusLink (the "Common Stock") then outstanding.
The dividend will be payable to holders of record as of the close
of business on January 29,
2018. Any shares of Common Stock issued after the record date
will be issued together with the Rights. Each Right initially
represents the right to purchase one one-thousandth of a share of
newly created Series D Junior Participating Preferred Stock.
Initially, the Rights will be attached to all certificates
representing shares of Common Stock then outstanding and no
separate rights certificates will be distributed. In the case of
book entry shares, the Rights will be evidenced by notations in the
book entry accounts. Subject to certain exceptions specified in the
Plan, the Rights will separate from the Common Stock and a
distribution date (the "Distribution Date") will occur upon the
earlier of (i) ten (10) business days following a public
announcement that a stockholder (or group) has become a beneficial
owner of 4.99% or more of the shares of Common Stock then
outstanding and (ii) ten (10) business days (or such later date as
the Board determines) following the commencement of a tender offer
or exchange offer that would result in a person or group becoming a
4.99 percent stockholder.
Pursuant to the Plan and subject to certain exceptions, if a
stockholder (or group) becomes a 4.99 percent stockholder after
adoption of the Plan, the Rights would generally become exercisable
and entitle stockholders (other than the 4.99-percent stockholder
or group) to purchase additional shares of ModusLink at a
significant discount, resulting in substantial dilution in the
economic interest and voting power of the 4.99-percent stockholder
(or group). In addition, under certain circumstances in which
ModusLink is acquired in a merger or other business
combination after an non-exempt stockholder (or group) becomes a
4.99 percent stockholder, each holder of the Right (other than the
4.99-percent stockholder or group) would then be entitled to
purchase shares of the acquiring company's common stock at a
discount.
The Rights are not exercisable until the Distribution Date and
will expire at the earliest of (i) 11:59
p.m. on the date that the votes of the stockholders of
Company with respect to the Company's next annual meeting or
special meeting of stockholders are certified (which date will be
no later than January 18, 2019),
unless the continuation of the Plan is approved by the affirmative
vote of the majority of shares of Common Stock present at such
meeting of stockholders (in which case clause (ii) will govern);
(ii) 11:59 p.m., on January 18, 2021; (iii) the time at which the
Rights are redeemed or exchanged as provided in the Plan; and (iv)
the time at which the Board determines that the Plan is no longer
necessary or desirable for the preservation of Tax Benefits.
Additional details of the Plan will be communicated in a current
report on Form 8-K to be filed with the U.S. Securities and
Exchange Commission.
About ModusLink Global Solutions, Inc.
ModusLink
Global Solutions, Inc. is a diversified holding company, publicly
traded on the Nasdaq Global Select Market under the symbol
"MLNK". Through its wholly owned subsidiary ModusLink
Corporation, the Company provides digital and physical supply chain
solutions to many of the world's leading brands across a diverse
range of industries including consumer electronics,
telecommunications, computing and storage, software and content,
consumer packaged goods, medical devices, retail and luxury, and
connected devices, among others. With a global footprint spanning
North America, Europe and the Asia-Pacific region, the Company's solutions
and services are designed to improve end-to-end supply chains in
order to drive growth, lower costs and improve profitability. IWCO
Direct, a wholly owned subsidiary is a leading provider of
data-driven marketing solutions that help clients drive response
across all marketing channels to create new and more loyal
customers. They are the largest direct mail production provider in
North America, with a full range
of services including strategy, creative, and production for
multichannel marketing campaigns, along with one of the industry's
most sophisticated postal logistics strategies for direct mail.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Statements in this release that are not historical facts are
hereby identified as "forward-looking statements" for the purpose
of the safe harbor provided by Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. All statements other than statements of
historical fact, including without limitation, those with respect
to the Company's goals, plans, expectations and strategies set
forth herein are forward-looking statements. The following
important factors and uncertainties, among others, could cause
actual results to differ materially from those described in these
forward-looking statements: the Company's ability to execute on its
business strategy, including any cost reduction plans and the
continued and increased demand for and market acceptance of its
services, which could negatively affect the Company's ability to
meet its revenue, operating income and cost savings targets,
maintain and improve its cash position, expand its operations and
revenue, lower its costs, improve its gross margins, reach and
sustain profitability, reach its long-term objectives and operate
optimally; failure to realize expected benefits of restructuring
and cost-cutting actions; the Company's ability to preserve and
monetize its net operating losses; difficulties integrating
technologies, operations and personnel in accordance with the
Company's business strategy; client or program losses; demand
variability in supply chain management clients to which the Company
sells on a purchase order basis rather than pursuant to contracts
with minimum purchase requirements; failure to settle disputes and
litigation on terms favorable to the Company; risks inherent with
conducting international operations; and increased competition and
technological changes in the markets in which the Company competes.
For a detailed discussion of cautionary statements and risks that
may affect the Company's future results of operations and financial
results, please refer to the Company's filings with the Securities
and Exchange Commission, including, but not limited to, the risk
factors in the Company's most recent Annual Report on Form 10-K.
These filings are available in the Investor Relations section of
our website under the "SEC Filings" tab.
ModusLink Investor Relations
Contact:
GW
Communications
Glenn
Wiener
Tel:
212-786-6011
Email:
gwiener@GWCco.com
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SOURCE ModusLink Global Solutions, Inc.