Hudson Global Re-Adopts Rights Agreement to Protect its Net Operating Losses
October 15 2018 - 4:30PM
Hudson Global Re-Adopts Rights Agreement to Protect its Net
Operating Losses
Hudson Global, Inc. (Nasdaq: HSON) (“Hudson” or the “Company”), a
leading global talent solutions company, today announced that its
Board of Directors (the “Board”) has adopted and the Company has
entered into a Rights Agreement (the “Rights Agreement”) with
Computershare Trust Company, N.A., as rights agent, designed to
preserve the value of the Company’s significant U.S. net operating
loss carryforwards (“NOLs”) and other tax benefits. Hudson
intends to seek stockholder approval of the Rights Agreement at its
2019 annual meeting of stockholders, although the Rights Agreement
will be effective immediately pursuant to its terms.
The Rights Agreement replaces the Company’s
prior rights agreement designed to preserve the value of the
Company’s NOLs, which was approved by stockholders in 2015 and
expired in accordance with its terms in January 2018. The
Company also has a provision in its Amended and Restated
Certificate of Incorporation (the “Charter Provision”) which
generally prohibits transfers of its common stock that could result
in an ownership change. The Company believes that in light of
the significant amount of its NOLs, it is advisable to adopt the
Rights Agreement in addition to the Charter Provision.
Hudson had U.S. federal income tax NOLs of
approximately $333.7 million as of December 31, 2017. Section
382 of the Internal Revenue Code generally allows a company to use
NOLs to offset future taxable income and therefore reduce federal
income tax obligations. However, the Company’s ability to use
its NOLs could be substantially limited if there is an “ownership
change” under Section 382. In general, an ownership change
would occur if stockholders viewed under Section 382 as owning 5%
or more of the Company’s common stock increase their collective
ownership by more than 50 percentage points over a defined period
of time.
The Rights Agreement, which is similar to tax
benefit protection plans adopted by other public companies, is
designed to preserve Hudson’s tax benefits by deterring transfers
of Hudson’s common stock that could result in an “ownership change”
under Section 382. In connection with the Rights Agreement,
the Board has declared a dividend to Company stockholders of record
as of the close of business on October 25, 2018 (the “Record
Date”), for each outstanding share of Hudson’s common stock, of one
right (a “Right”) to purchase one one-hundredth of a share of a new
series of participating preferred stock of the Company at a
specified exercise price.
Pursuant to the Rights Agreement, if any person
or group acquires 4.99% or more of the outstanding shares of
Hudson’s common stock without the Board’s permission, or if a
person or group that already owns 4.99% or more of Hudson’s common
stock acquires additional shares without the Board’s permission,
then, subject to certain exceptions, there would be a triggering
event under the Rights Agreement. The Rights would then
become exercisable and entitle stockholders (other than the
acquiring person or group) to purchase additional shares of Hudson
at a significant discount and result in significant dilution in the
economic interest and voting power of the acquiring person or
group. In its discretion, the Board may exempt certain
transactions from the provisions of the Rights Agreement, including
if the Board determines that the transaction will not jeopardize
the Company’s tax benefits, or the transaction will otherwise serve
Hudson’s best interests. Any stockholder desiring to own 5%
or more of our shares, or increase an existing ownership position
that is already at or above 5%, can request an exemption from the
Board by submitting certain basic information to the Company and
following the other instructions included in the Rights
Agreement.
The Rights Agreement and the rights issued under
the Rights Agreement will expire on October 15, 2021, or on an
earlier date if certain events occur, as described more fully in
the Rights Agreement.
Additional information regarding the Rights
Agreement will be contained in a Current Report on Form 8-K and in
a Registration Statement on Form 8-A that Hudson will file with the
U.S. Securities and Exchange Commission.
About Hudson
Hudson is a talent solutions company with
expertise in recruitment process outsourcing and managed services.
We help our clients and candidates succeed by leveraging our
expertise and our deep industry and market knowledge. Operating
around the globe through relationships across our network of
specialized professionals, we bring an unparalleled ability to
match talent with opportunities by assessing, recruiting, and
engaging the best and brightest people for our clients. We combine
broad geographic presence, world-class talent solutions, and a
tailored, consultative approach to help businesses achieve higher
performance and outstanding results. More information is available
at Hudson.com.
Forward-Looking Statements
This press release contains statements that the
Company believes to be “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995.
All statements other than statements of historical fact included in
this press release, including statements regarding the Company’s
future financial condition, results of operations, business
operations and business prospects, are forward-looking statements.
Words such as “anticipate,” “estimate,” “expect,” “project,”
“intend,” “plan,” “predict,” “believe” and similar words,
expressions and variations of these words and expressions are
intended to identify forward-looking statements. All
forward-looking statements are subject to important factors, risks,
uncertainties and assumptions, including industry and economic
conditions’ that could cause actual results to differ materially
from those described in the forward-looking statements. Such
factors, risks, uncertainties and assumptions include, but are not
limited to, Hudson’s ability to achieve anticipated benefits from
the sales of its recruitment and talent management operations in
Europe and Asia Pacific and operate successfully as a Company
focused on its RPO business; global economic fluctuations; the
Company’s ability to successfully achieve its strategic
initiatives; risks related to fluctuations in the Company’s
operating results from quarter to quarter; the ability of clients
to terminate their relationship with the Company at any time and
the impact of any loss of a significant client; competition in the
Company’s markets; the negative cash flows and operating losses
that may recur in the future; risks associated with the Company’s
investment strategy; risks related to international operations,
including foreign currency fluctuations; the Company’s dependence
on key management personnel; the Company’s ability to attract and
retain highly skilled professionals; the Company’s ability to
collect accounts receivable; the Company’s ability to maintain
costs at an acceptable level; the Company’s heavy reliance on
information systems and the impact of potentially losing or failing
to develop technology; risks related to providing uninterrupted
service to clients; the Company’s exposure to employment-related
claims from clients, employers and regulatory authorities, current
and former employees in connection with the Company’s business
reorganization initiatives and limits on related insurance
coverage; the Company’s ability to utilize net operating loss
carry-forwards; volatility of the Company’s stock price; the impact
of government regulations; restrictions imposed by blocking
arrangements; and risks related to potential acquisitions or
dispositions of businesses by the Company. Additional information
concerning these and other factors is contained in the Company’s
filings with the Securities and Exchange Commission. These
forward-looking statements speak only as of the date of this
document. The Company assumes no obligation, and expressly
disclaims any obligation, to update any forward-looking statements,
whether as a result of new information, future events or
otherwise.
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Contact: |
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Patrick
Lyons |
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Hudson |
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212-351-7425 |
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patrick.lyons@hudsonrpo.com |
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