Ocean Power Technologies Inc (NYSE-A:OPTT) (OPT) said its Board of Directors has adopted a new tax benefits preservation plan in a bid to protect long-term shareholder value by preserving significant tax assets.
The company said that the plan was designed to protect and preserve its tax assets primarily associated with net operating loss (NOL) carryforwards that could be potentially utilized in certain circumstances to offset OPT’s future taxable income and reduce its federal income tax liability.
Without the plan, the company’s ability to benefit from its tax assets could be substantially limited by a section of the Internal Revenue Code that limits the future use of NOLs in the event of an “ownership change.”
As such, the plan is designed to reduce the likelihood of an unintended “ownership change” occurring through the buying and selling of OPT stock.
It is also intended to deter any person or group from acquiring beneficial ownership of 4.99% or more of the company’s stock without the approval of the Board. However, it does not block investors from buying or selling the company’s stock, OPT noted.
Under the terms of the plan, OPT will distribute to its shareholders one preferred stock purchase right for every share of OPT stock held as of the close of business on July 11, 2023.
Any shares issued after the July 11, 2023 record date will be issued with associated preferred stock purchase rights.
Additional details of the new plan can be found here.
OPT is a provider of ocean energy and intelligent data services through its innovative, low-carbon distributed and autonomous ocean power and data solutions, combined with its offshore engineering and design services.
Contact the author at emily.jarvie@proactiveinvestors.com
Follow her on Twitter @emilyjjarvie