Origen Financial Announces Adoption Of Net Operating Loss Shareholder Rights Agreement
SOUTHFIELD, Mich., Sept. 13, 2017 /PRNewswire/ -- Origen Financial, Inc., a Delaware corporation ("Origen" or "the Company") (OTC US: ORGN), announced today that its Board of Directors has adopted a Section 382 rights plan (the "Plan") intended to preserve the value of certain of the Company's tax attributes (the "Tax Attributes").
As of July 31, 2017, the Company has Tax Attributes which may entitle the Company to reduce taxable income that may be generated in the future by approximately $76 million of net operating loss carryforwards. However, these Tax Attributes would be materially reduced or eliminated by a "change of ownership" of the Company under Section 382 of the Internal Revenue Code (a "change of ownership"). In general, a change of ownership would occur if stockholders that own (or are deemed to own) at least 5 percent or more of the Company's outstanding common stock increased their cumulative ownership in the Company by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period.
As part of the Plan, the Company's Board of Directors declared a dividend of one Series A Junior Participating Preferred Stock purchase right (the "Rights") on each outstanding share of the Company's common stock. The dividend will be payable on September 27, 2017 to holders of record as of the close of business on September 25, 2017. Shares of the Company's common stock issued after the record date will be issued together with the Rights.
The Rights are not currently exercisable and initially will trade only with the Company's common stock. However, if any person or group acquires 4.99% or more of the Company's common stock, or if a person or group that already owns 4.99% or more of the Company's common stock acquires additional shares, then, subject to certain exceptions, the Rights would separate from the common stock and become exercisable for shares of the Company's common stock having a market value equal to twice the exercise price, resulting in significant dilution to the ownership interests of the acquiring person or group.
The Company's Board of Directors has established a procedure to consider requests to exempt acquisitions of the Company's common stock from the Plan if it determines that doing so would not limit or impair the availability of the Tax Attributes.
The Rights will expire on September 12, 2020. The Rights may also expire on an earlier date upon the occurrence of other events, including a determination by the Company's Board of Directors that the Tax Attributes have been utilized or are no longer available, or that the Plan is no longer necessary to protect the Tax Attributes. The Plan also may be terminated at any time by the Board of Directors before the Rights become exercisable. The Plan is similar to Section 382 rights plans adopted by many other public companies with significant Tax Attributes. The issuance of the Rights will not affect the Company's reported earnings or loss per share and is not taxable to the Company or its stockholders.
In connection with the Plan, the Company will use its reasonable best efforts to identify suitable candidates for investment, with a goal of generating income for the Company that may be offset for income tax purposes by all or a portion of the Company's net operating loss ("NOL") that have been carried forward.
The Company also announced that Michael J. Wechsler has resigned from the Company's Board of Directors. After Mr. Wechsler's departure, the continuing directors of the Company are Mark Z. Ames, Paul A. Halpern and Ronald A. Klein.
A copy of the Plan is available on the Company's website at www.origenfinancial.com under the "Investors" tab. If you would like the Company to send you a copy of the Plan, please send a request by mail to: Origen Financial, Inc., 959 Pleasure Road, Sevierville, TN 37876 or by email to: email@example.com. This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Plan, which is incorporated herein by reference.
About Origen Technologies
For more information about Origen, please visit www.origenfinancial.com
Forward Looking Statements
This press release contains various "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, and Origen intends that such forward-looking statements will be subject to the safe harbors created thereby. The words "will," "may," "could," "expect," "anticipate," "believes," "intends," "should," "plans," "estimates," "approximate" and similar expressions identify these forward-looking statements. These forward-looking statements reflect Origen's current views with respect to future events and financial performance, but involve known and unknown risks and uncertainties, both general and specific to the matters discussed in this press release. These risks and uncertainties may cause Origen's actual results to be materially different from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, the foregoing assumptions, and the facts that Origen cannot predict whether successful transactions will be completed under the Phoenix agreement on any particular terms, or at all; whether and to what extent Origen's NOLs will be available to be used to offset any income; and the fact that if a transaction is not successfully completed, expenses incurred in pursuing transactions will reduce liquidating distributions made to Origen's stockholders. The forward-looking statements contained in this press release speak only as of the date hereof and Origen expressly disclaims any obligation to provide public updates, revisions or amendments to any forward- looking statements made herein to reflect changes in Origen's expectations or future events.
SOURCE Origen Financial, Inc.Back to top