Inseego Corp. (Nasdaq: INSG), a global provider of software-as-a-service (SaaS) business intelligence solutions, Internet of Things (IoT) and mobile technology, has announced that its board of directors has adopted a net operating loss (NOL) rights plan and declared a dividend distribution of one Preferred Share Purchase Right on each outstanding share of company common stock, the company said.
The Rights Plan is designed to protect the company´s ability to use its valuable NOL carryforwards and certain other valuable tax attributes.
As of December 31, 2016, the company had a US federal NOL carryforward of approximately USD 239.3 million, a California State NOL carryforward of approximately USD 40.6 million, and an Oregon State NOL carryforward of approximately USD 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 USD 35.7 million as of the same date that are not contemplated for in this Rights Plan.
Inseego enables a wide array of applications for worldwide service provider, enterprise and SMB markets with asset tracking and carrier activation solutions. It is headquartered in San Diego, California with offices worldwide.