Inseego Corp. Adopts NOL Rights Plan and Declares Dividend Distribution of Preferred Share Purchase Rights
January 22 2018 - 9:05AM
Business Wire
Inseego Corp. (Nasdaq: INSG) (the “Company”), a global leader in
software-as-a-service (SaaS) business intelligence solutions,
Internet of Things (IoT) and mobile technology, today announced
that its Board of Directors (the “Board”) has adopted a NOL rights plan (the
“Rights Plan”) and declared a dividend
distribution of one Preferred Share Purchase Right on each
outstanding share of Company common stock.
The Rights Plan is designed to protect the Company’s ability to
use its valuable net operating loss (“NOL”) carryforwards and certain other valuable tax
attributes. “This Rights Plan is similar to rights plans adopted by
other public companies and is designed to diminish the risk that
Inseego’s existing NOL carryforwards and other tax attributes
become limited under Section 382 of the Internal Revenue Code
(“Section 382”) for use to reduce potential future federal income
tax liability,” said Stephen Smith, Chief Financial Officer of the
Company. “These NOLs will become particularly valuable as we drive
Inseego to sustained profitability,” Smith said.
As of December 31, 2016, the Company had a U.S. federal NOL
carryforward of approximately $239.3 million, a California State
NOL carryforward of approximately $40.6 million, and an Oregon
State NOL carryforward of approximately $2.5 million. The Company’s
ability to utilize NOL carryforwards would be substantially limited
if an ownership change as defined under Section 382 were to occur.
In general, an ownership change will occur when the percentage of
the Company’s ownership by one or more 5-percent stockholders as
defined under Section 382 has increased by more than 50 percentage
points at any time during the prior three years. The purpose of the
Rights Plan is to deter an ownership change from occurring under
these technical rules, which will protect the Company’s ability to
utilize its valuable NOLs and other tax attributes. The Company
also has Foreign NOL carryforward of approximately $35.7 million as
of the same date that are not contemplated for in this Rights
Plan.
The Board has determined that the Rights Plan is warranted and
in the best interest of all stockholders due to the substantial
size of the NOL carryforward asset and the risk of losing such
potential tax benefits if the Company experiences an ownership
change under Section 382. While current stockholders are not
required to take any action in connection with the adoption of the
Rights Plan, the Company will submit the continuation of the Rights
Plan to a stockholder vote at the 2018 annual meeting of
stockholders. The failure to obtain stockholder approval will
result in the termination of the Rights Plan following the close of
voting at such meeting. If stockholders approve the Rights Plan, it
will continue in effect until January 22, 2021, unless terminated
earlier.
Under the Rights Plan, each common stockholder of the Company at
the close of business on February 2, 2018 will receive a dividend
of one right for each share of the Company’s common stock held of
record on that date. Each right will entitle the holder to purchase
from the Company, in certain circumstances described below, one
one-thousandth of a share of newly-created Series D Junior
Participating Preferred Stock of the Company for an initial
purchase price of $10.00 per one-thousandth share. The rights
distribution will not be taxable to stockholders, will not
interfere with the Company’s business plans or be dilutive to or
affect the Company’s reported per share results.
Initially, the rights will be represented by the Company’s
common stock certificates and will not be exercisable. Pursuant to
the Rights Plan, if a person or group acquires a position of 4.9%
or more of the Company’s outstanding common stock, without meeting
certain customary exceptions, the rights would become exercisable
and entitle stockholders (other than the acquiring person or group)
to purchase additional shares of the Company’ common stock at a 50%
discount, or the Company may exchange each right held by such
holders for one share of common stock.
Existing stockholders who currently beneficially own 4.9% or
more of the outstanding shares of common stock will cause this
dilutive event to occur only if they acquire a specified amount of
additional shares.
The Company may redeem the rights at a price of $0.0001 per
right at any time prior to the date on which the rights become
exercisable or the expiration of the rights.
The Company will file with the Securities and Exchange
Commission a Current Report on Form 8-K describing the Rights
Plan. The Form 8-K will include as an exhibit a copy of the
Rights Agreement governing the Rights Plan.
About Inseego Corp.
Inseego Corp. (Nasdaq: INSG), a global leader in software-as-
a-service (SaaS) business intelligence solutions, Internet of
Things (IoT) and mobile technology, is transforming business
mobility through its broad portfolio of solutions. We enable a wide
array of applications for worldwide service provider, enterprise
and SMB markets with our asset tracking and carrier activation
solutions. Inseego’s high-performance Skyus modems and gateways,
and MiFi branded intelligent mobile devices power a wide array of
consumer, service provider, SMB and mission critical enterprise
applications with a “zero unscheduled downtime” mandate - including
industrial IoT, SD WAN failover management and broadband mobile
WiFi hotspots. Inseego is headquartered in San Diego, California
with offices worldwide. www.inseego.com Twitter @inseego
Cautionary Note Regarding Forward-Looking Statements
This release may contain forward-looking statements, which are
made pursuant to the safe harbor provisions of the United States
Private Securities Litigation Reform Act of 1995, as amended to
date. These forward-looking statements involve risks and
uncertainties. A number of important factors could cause actual
results to differ materially from those in the forward-looking
statements contained herein. These factors include risks relating
to the growth of the business, the timing of such growth and future
opportunities, achieving and maintaining profitability,
technological changes, new product introductions, continued
acceptance of Inseego’s products and dependence on intellectual
property rights. These factors, as well as other factors that could
cause actual results to differ materially, are discussed in more
detail in Inseego’s filings with the United States Securities and
Exchange Commission (available at www.sec.gov) and other regulatory
agencies.
©2018. Inseego Corp. All rights reserved. The Inseego name and
logo are trademarks of Inseego Corp. Other Company, product or
service names mentioned herein are the trademarks of their
respective owners.
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version on businesswire.com: http://www.businesswire.com/news/home/20180122005282/en/
Inseego Corp.Media Contact:Anette Gaven, +1 (858)
812-8040Anette.Gaven@inseego.comorInvestor Relations
Contact:Stephen Smith, +1 (858)
247-2149Stephen.Smith@inseego.comwww.inseego.com
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