Columbia Laboratories Extends Stockholder Rights Plan to Preserve Use of Net Operating Losses under Section 382
Last update: 3/6/2013 6:50:00 AM
LIVINGSTON, N.J., Mar 06, 2013 (BUSINESS WIRE) -- Columbia Laboratories, Inc. (CBRX) (the "Company") today announced that its Board of Directors on March 1, 2013 adopted an amendment to its Stockholder Rights Plan (the "Rights Plan"), originally adopted on March 12, 2002, to extend the expiration date of the Rights Plan from July 3, 2013 to July 3, 2016 to preserve the value of significant tax assets associated with the Company's tax net operating loss carryforwards ("NOLs") under Section 382 of the Internal Revenue Code. The Company's 2013 Proxy Statement will include a non-binding advisory proposal asking the Company's stockholders to ratify the extension of the expiration date of the Rights Plan from July 3, 2013 to July 3, 2016. If the Company's stockholders do not ratify the amendment, the Company's Board of Directors will decide how to proceed.
The Company has NOLs totaling approximately $156 million as of December 31, 2012. United States Federal income tax rules, and Section 382 of the Internal Revenue Code in particular, substantially limit the use of those tax assets if the Company experiences an "ownership change." Ownership changes under Section 382 generally relate to a cumulative change in ownership among stockholders with at least a 5% ownership interest (as determined under the rules of Section 382) of more than 50% over a rolling three-year period. The Company's current cumulative change in ownership among stockholders with at least a 5% ownership interest (as determined under the rules of Section 382) is approximately 35.7% as of December 31, 2012.
Pursuant to the Rights Plan, if any person or group (subject to certain exceptions specified in the Rights Plan) acquires 4.99% or more of the outstanding shares of Common Stock, or if any current 5% stockholder were to acquire additional Common Stock other than by exercising or converting existing equity-linked securities, without the prior approval of the Company's Board of Directors, a significant dilution in the voting and economic ownership of such person or group would occur.
The amendment to the Rights Plan was not adopted primarily as an anti-takeover measure. The Board of Directors may terminate the Rights Plan at any time prior to the rights being triggered. Further, if the Board of Directors determines that the NOLs have been substantially realized, are no longer substantially available, or would otherwise not be adversely impacted by an ownership change, the amendment will be rescinded.
About Columbia Laboratories
Columbia Laboratories, Inc. is a publicly traded specialty pharmaceutical company with a successful history of developing proprietary, vaginally administered products for women's health indications. The Company receives sales and royalty revenues from CRINONE(R) 8% (progesterone gel), which is marketed by Actavis, Inc. in the United States and by Merck Serono S.A. in over 60 foreign countries.
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