INAP Adopts Plan Designed to Protect NOLs
December 19 2019 - 8:00AM
Internap Corporation (“INAP”) (NASDAQ: INAP), a leading-edge
provider of high-performance data center and cloud solutions with
global network connectivity, announced today that its Board of
Directors (the “Board”) has adopted a stockholder rights agreement
(the “NOL Rights Plan”) in order to protect the availability of
INAP’s net operating losses (“NOLs”) in future tax years under the
Internal Revenue Code.
At December 31, 2018, INAP had $366.6 million of
NOLs available for use to offset INAP’s future federal taxable
income. INAP’s ability to use its NOLs would be substantially
limited if INAP experienced an “ownership change” as defined in
Section 382 of the Internal Revenue Code. A company generally
experiences such an ownership change if the percentage of its stock
owned by its “5-percent shareholders,” as defined in Section 382,
increases by more than 50 percentage points over a rolling
three-year period. The NOL Rights Plan is intended to reduce the
likelihood of such an ownership change at INAP by deterring any
person or group from acquiring beneficial ownership of 4.9% or more
of INAP’s outstanding common stock, thereby protecting stockholder
value. The NOL Rights Plan has not been adopted as an anti-takeover
measure.
Under the NOL Rights Plan, one right will be
distributed for each share of INAP’s common stock outstanding as of
the close of business on December 30, 2019 and will trade with the
common stock until the rights expire or detach as noted below. The
distribution of the rights is not taxable to stockholders, and
stockholders are not required to take any action to receive the
rights. The NOL Rights Plan will have a limited term and the rights
will expire prior to the earliest of (1) December 18, 2022, (2) the
time at which the rights are redeemed or exchanged by INAP as
described in the NOL Rights Plan, (3) the day after INAP’s 2020
annual meeting of shareholders if shareholders do not vote to
ratify the NOL Rights Plan at the meeting, (4) the date that
Section 382 of the Internal Revenue Code is repealed if the Board
determines that the NOL Rights Plan is no longer needed for the
preservation of tax benefits, and (5) the first day of a taxable
year if the Board determines that no tax benefits are available to
be carried forward. The NOL Rights Plan may be extended by the
Board prior to the expiration of the rights, as long as the
extension is submitted to INAP’s stockholders for ratification at
the annual meeting following such extension.
If at any time after the Board's adoption of the
NOL Rights Plan (subject to certain exceptions) a person or group
obtains beneficial ownership of 4.9% or more of INAP’s common stock
outstanding at the time of such acquisition, or an existing holder
with greater than 4.9% ownership acquires additional shares
representing at least an additional 0.50% of INAP’s common stock
outstanding at the time of such acquisition (subject to certain
exceptions), there would be triggering event causing significant
dilution in the economic and voting interests of that person or
group. INAP’s independent directors have the discretion to exempt
any person or group for purposes of the NOL Rights Plan if they
determine the acquisition by that person or group will not
jeopardize tax benefits or is otherwise in the company's best
interests.
Further details of the Rights Agreement will be
contained in a Current Report on Form 8-K and a Registration
Statement on Form 8-A to be filed with the Securities and Exchange
Commission (the “SEC”).
Also, on December 13, 2019, the Board of
the Company appointed Peter D. Aquino to serve as the
Company’s Chairman of the Board, effective January 1, 2020, in
addition to serving as Chief Executive Officer, succeeding Gary
Pfeiffer. On the same day, the Board appointed Gary Pfeiffer, as
Lead Independent Director, effective as of January 1,
2020.
Cautionary Statement Regarding
Forward-Looking Statements
Certain statements in this press release contain
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include statements regarding industry trends, INAP’s
future financial position and performance, business strategy,
revenues and expenses in future periods, projected levels of
growth, availability of capital resources and liquidity and other
matters that do not relate strictly to historical facts. These
statements are often identified by words such as “may,” “will,”
“seeks,” “anticipates,” “believes,” “estimates,” “expects,”
“projects,” “forecasts,” “plans,” “intends,” “continue,” “could” or
“should,” that an “opportunity” exists, that INAP is “positioned”
for a particular result, statements regarding INAP’s vision or
similar expressions or variations. These statements are based on
the beliefs and expectations of INAP’s management team based on
information available at the time such statements are made. Such
forward-looking statements are not guarantees of future performance
and are subject to risks and uncertainties that could cause actual
results to differ materially from those contemplated by such
forward-looking statements. Therefore, actual future results and
trends may differ materially from what is forecast in such
forward-looking statements due to a variety of factors, including,
without limitation: INAP’s ability to drive growth while reducing
costs; INAP’s ability to maintain current customers and obtain new
ones, whether in a cost-effective manner or at all; the robustness
of the IT infrastructure services market; INAP’s ability to achieve
or sustain profitability; INAP’s ability to expand margins and
drive higher returns on investment; INAP’s ability to sell into new
and existing data center space; the actual performance of INAP’s IT
infrastructure services and INAP’s ability to improve operations;
INAP’s ability to correctly forecast capital needs, demand and
space utilization; INAP’s ability to respond successfully to
technological change and the resulting competition; the geographic
concentration of INAP’s data centers in certain markets and any
adverse developments in local economic conditions or the demand for
data center space in these markets; the uncertainty as to whether
any strategic alternative will be pursued or, if pursued, closed;
uncertainty as to the terms, value and timing of any such strategic
alternative; the impact of the announcement of the evaluation of
strategic alternatives on INAP’s common stock, its businesses, and
its operating results; INAP’s ability to realize anticipated
revenue and growth; the availability of services from Internet
network service providers or network service providers providing
network access loops and local loops on favorable terms, or at all;
the failure of third party suppliers to deliver their products and
services on favorable terms, or at all; failures in INAP’s network
operations centers, data centers, network access points or computer
systems; INAP’s ability to provide or improve Internet
infrastructure services to its customers; INAP’s ability to protect
its intellectual property; INAP’s substantial amount of
indebtedness, INAP’s ability to raise additional capital when
needed, on attractive terms, or at all, and its ability to service
existing debt or maintain compliance with financial and other
covenants contained in its credit agreement; INAP’s compliance with
and changes in complex laws and regulations in the U.S. and
internationally; INAP’s ability to attract and retain qualified
management and other personnel; and volatility in the trading price
of INAP common stock.
These risks and other important factors
discussed under the caption “Risk Factors” in INAP’s most recent
Annual Report on Form 10-K filed with the SEC and INAP’s other
reports filed with the SEC could cause actual results to differ
materially from those expressed or implied by forward-looking
statements made by INAP or on its behalf.
Given these risks and uncertainties, investors
should not place undue reliance on forward-looking statements as a
prediction of actual results. All forward-looking statements
attributable to INAP or persons acting on its behalf are expressly
qualified in their entirety by the foregoing forward-looking
statements. All such statements speak only as of the date made, and
INAP undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
About INAP
Internap Corporation (NASDAQ: INAP) is a leading-edge provider
of high-performance data center and cloud solutions with 100
network Points of Presence worldwide. INAP’s full-spectrum
portfolio of high-density colocation managed cloud hosting and
network solutions supports evolving IT infrastructure requirements
for customers ranging from the Fortune 500 to emerging startups.
INAP operates in 21 metropolitan markets, primarily in North
America, with 14 INAP Data Center Flagships connected by a
low-latency, high-capacity network. For more information, visit
www.INAP.com.
Investor Contacts |
|
Richard
Ramlall |
Carolyn
Capaccio/Jody Burfening |
Chief
Communications Officer INAP |
LHA |
404-302-9982 |
212-838-3777 |
ir@inap.com |
inap@lhai.com |
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