SAN DIEGO--(BUSINESS WIRE)--Jan. 22, 2018--
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
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
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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180122005282/en/
Source: Inseego Corp.
Anette Gaven, +1 (858) 812-8040
Stephen Smith, +1 (858) 247-2149