Edgio, Inc. Adopts Tax Benefits Preservation Plan Designed to Protect the Availability of Its Tax Benefits
07 Giugno 2024 - 2:00PM
Business Wire
Move preserves long-term stockholder value by
adopting a rights plan intended to protect tax assets
To be submitted for stockholder ratification at
2024 annual meeting of shareholders
Edgio, Inc. (Nasdaq: EGIO) (the “Company”), today
announced that its Board of Directors (the “Board”) has adopted a Tax Benefits
Preservation Plan (the “Tax
Plan”).
The Company has significant U.S. federal and state net operating
loss carryforwards (“NOLs”). As
of December 31, 2023 the Company has U.S. federal NOLs of
approximately $300 million that can be used to offset taxable
income.
The Tax Plan is designed to protect the availability of the
Company’s U.S. federal and state NOLs and other tax attributes
(collectively, the “Tax
Benefits”), which can potentially
be utilized in certain circumstances to reduce the Company’s future
income tax obligations. Utilization of the Tax Benefits depends on
many factors, including the Company’s future taxable income. The
Tax Plan reduces the likelihood that any changes in the Company’s
investor base would limit the Company’s future use of its Tax
Benefits, which would significantly impair the value of such Tax
Benefits.
The Company’s ability to use its Tax Benefits would be
substantially limited if it were to experience an “ownership
change,” as defined under Section 382 of the Tax Code
(“Section 382”). In general, a
corporation would experience an ownership change if the percentage
of the corporation’s stock owned by one or more “5% shareholders,”
as defined under Section 382, were to increase by more than 50
percentage points over their lowest ownership percentage within a
rolling three-year period (or, if a shorter period, since the
Company’s last ownership change). The Company believes that, as a
result of prior acquisitions of the Company’s common stock, the
Company is at a significant risk of experiencing an ownership
change for Section 382 purposes.
The Company may experience ownership changes under Section 382
in the future as a result of subsequent shifts in the Company’s
stock ownership that cannot be predicted or controlled that could
result in limitations being placed on the Company’s ability to
utilize its Tax Benefits. If the Company is limited in its ability
to use its Tax Benefits in future years in which the Company has
taxable income, the Company will pay more taxes than if it were
able to utilize the Tax Benefits fully, which could have a negative
impact on the Company’s financial position, results of operations
and cash flows. The Tax Plan is designed to reduce the likelihood
that the Company will experience an ownership change under Section
382.
The Tax Plan is similar to plans adopted by other publicly held
companies with significant NOLs or other substantial Tax Benefits
and has a limited duration. The Tax Plan is not designed to prevent
any action that the Board determines to be in the best interest of
the Company and its shareholders.
To implement the Tax Plan, the Board declared a dividend of one
preferred share purchase right (a “Right”) for each outstanding share of the
Company’s common stock. The Rights will be issued to the Company’s
common stock shareholders of record at the close of business on
June 17, 2024 pursuant to the Tax Plan. The Rights will be
exercisable if a person or group of persons acquires (i) 4.95% or
more of the Company’s common stock then-outstanding or (ii) in the
Board’s determination, 4.95% or more (by value) of the shares of
Company Stock (as defined in the Tax Plan, which defined term
includes the Company’s common stock) then-outstanding. The Rights
will also be exercisable if a person or group of persons that
already owns shares equal to, or exceeding, either such threshold
acquires one or more additional shares of Company Stock other than
as a result of a dividend or a stock split or for acquisitions
pursuant to certain existing securities of the Company described in
the Tax Plan. Existing shareholders that already beneficially own
shares equal to, or exceeding, either such threshold will be
“grandfathered in” at their current ownership level. If the Rights
become exercisable, all holders of Rights, other than the person or
group of persons triggering the Rights, will be entitled to
purchase shares of the Company’s common stock at a 50% discount, if
the Rights are not earlier redeemed or exchanged. Rights held by
the person or group of persons triggering the Rights will become
void and will not be exercisable.
The Tax Plan also includes an exchange option. At any time after
any person or group of persons acquires (i) 4.95% or more of the
Company’s common stock then-outstanding or (ii) in the Board’s
determination, 4.95% or more (by value) of the Company Stock
then-outstanding, but in each case, less than 50% or more of the
outstanding shares of the Company Stock, the Board, at its option,
may exchange all or part of the Rights (other than Rights owned by
such person or group of persons which will have become void) at an
exchange ratio of one share of the Company’s common stock per
outstanding Right (subject to adjustment).
The Rights will expire at the close of business on June 30,
2025. The Rights will expire under other circumstances as described
in the Tax Plan, including (i) if the stockholders of the Company
do not approve the Tax Plan at the 2024 annual meeting of
stockholders of the Company or (ii) on the date set by the Board
following a determination that the Tax Plan is no longer necessary
or desirable for the preservation of the Tax Benefits or no Tax
Benefits are available to be carried forward or are otherwise
available. The Board may terminate the Tax Plan prior to the time
the Rights are triggered or may redeem the Rights prior to the
Distribution Date, as defined in the Tax Plan.
Additional information with respect to the Tax Plan and the
related Rights will be contained in a Current Report on Form 8-K
that the Company will file with the U.S. Securities and Exchange
Commission (the “SEC”). The
Rights issued in the Tax Plan are issued pursuant to an agreement
between the Company and Equiniti Trust Company, LLC, as the rights
agent, a copy of which agreement will be filed as an exhibit to the
Form 8-K. For more information regarding the Company’s Tax
Benefits, please refer to the Company’s most recent Annual Report
on Form 10-K.
About Edgio
Edgio (NASDAQ: EGIO) helps companies deliver online experiences
and content faster, safer, and with more control. Our
developer-friendly, globally scaled edge network, combined with our
fully integrated application and media solutions, provide a single
platform for the delivery of high-performing, secure web properties
and streaming content. Through this fully integrated platform and
end-to-end edge services, companies can deliver content quicker and
more securely, thus boosting overall revenue and business value. To
learn more, visit edg.io and follow us on Twitter, LinkedIn and
Facebook.
Forward-Looking Statements
This press release may include “forward-looking statements”
within the meaning of the federal securities laws. A reader can
identify forward-looking statements because they are not limited to
historical fact or they use words such as “expects,” “estimates,”
“intends,” and similar expressions that concern the Company’s
strategy, plans, intentions or beliefs about future occurrences or
results. It is very difficult to predict the effect of known
factors, and the Company cannot anticipate all factors that could
affect actual results that may be important to an investor. All
forward-looking information should be evaluated in the context of
these risks, uncertainties and other factors, including those
factors disclosed in our SEC filings, including in our most recent
reports on Form 10-K and 10-Q, particularly under the heading “Risk
Factors.”
All forward-looking statements in this press release are based
on information available to the Company as of the date hereof. The
Company undertakes no obligation to revise or publicly release the
results of any revision to these forward-looking statements, except
as required by law. Given these risks and uncertainties, readers
are cautioned not to place undue reliance on such forward-looking
statements..
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version on businesswire.com: https://www.businesswire.com/news/home/20240607240783/en/
Investor Relations: Sameet Sinha 602-850-4973
ir@edg.io
Grafico Azioni Edgio (NASDAQ:EGIO)
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Da Dic 2024 a Gen 2025
Grafico Azioni Edgio (NASDAQ:EGIO)
Storico
Da Gen 2024 a Gen 2025
