Reminder from Apr 06, 2009...significance being that 1) SYNM should be profitable this year (assuming production) and 2) three-year testing period for Tyson foods as the only 5% shareholder has passed.
Syntroleum Advises Shareholders About Protecting Valuable NOLs
TULSA, Okla., Apr 6, 2009 (GlobeNewswire via COMTEX) -- Syntroleum Corporation (Nasdaq:SYNM) today advised its shareholders about the implications of shareholders owning 5% or more of the Company's shares in order to protect its valuable Federal net operating losses ("NOLs"). There are no adverse implications to Syntroleum's NOLs for ownership stakes of less than 5% of the Company's outstanding shares. At the end of 2008, Syntroleum had approximately $320 million in NOLs which can be used to offset taxable income and could have a potential value of up to $112 million in tax savings.
Section 382 of the Internal Revenue Code contains provisions that limit the use of NOLs to offset taxable income if there has been an "ownership change" as defined by the Internal Revenue Code and Treasury Regulations. In general, an ownership change occurs when increases in the percentage ownership of Syntroleum by shareholders owning 5% or more of Syntroleum's common stock ("5% shareholders") add up to more than 50 percentage points over a three-year period. Purchases and sales by less than 5% shareholders are generally disregarded. If an ownership change of Syntroleum occurs at Syntroleum's current stock price, its use of NOLs will be subject to a severe limitation under Section 382, resulting in a material amount of NOLs expiring unused.
Syntroleum currently has 64 million shares of common stock outstanding. Ownership of 3.2 million shares would therefore make the owner a 5% shareholder under these rules. Syntroleum strongly urges any shareholder contemplating owning more than 2.8 million Syntroleum shares to please contact the company before acquiring the shares.
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