TORRANCE, Calif., April 5,
2024 /PRNewswire/ -- CarParts.com, Inc. (the
"Company") announced today that its Board of Directors has adopted
a Tax Benefits Preservation Plan (the "Plan") intended to preserve
the value of certain of the Company's tax attributes (the "Tax
Attributes").
As of December 30, 2023, federal and state Tax Attributes
were $105,224 and $84,780, respectively. However, these Tax
Attributes may 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 B Junior Participating Preferred Stock
purchase right (the "rights") on each outstanding share of the
Company's common stock. The dividend will be payable on
April 16, 2024 to holders of record
as of the close of business on April 16,
2024. 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 Plan includes a procedure pursuant to which the Company's
Board of Directors may 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 April 5,
2027. 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 Company's Board of Directors before
the rights become exercisable. The Company intends to submit
the Plan for stockholder approval at its 2024 annual meeting of
stockholders. If stockholder approval of the Plan is not
obtained prior to the first anniversary of the date of the adoption
of the Plan, the Plan will expire on the close of business on such
date.
The Plan is similar to Tax Benefits Preservation 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.
Additional information regarding the Plan will be set forth in a
Current Report on Form 8-K and in a Registration Statement on Form
8-A that the Company is filing with the Securities and Exchange
Commission.
About CarParts.com
CarParts.com, Inc. is a technology-driven eCommerce company
improving the way drivers shop for the parts they
need. Operating over 25 years, CarParts.com has established
itself as a premier destination for drivers seeking repair and
maintenance solutions. Our commitment lies in placing the customer
at the forefront of our operations, evident in our easy-to-use,
mobile-friendly website and app. Offering a seamless shopping
experience, we aim to eliminate the uncertainty and stress often
associated with vehicle repair and maintenance. Backed by a robust
company-operated fulfillment network, we ensure swift delivery of
top-quality parts from leading brands to customers across the
nation.
At CarParts.com, our global team is united by a shared vision:
Empowering Drivers Along Their Journey.
CarParts.com is headquartered in Torrance, California.
Forward-Looking Statement
This press release contains statements which are forward looking
statements for the purposes of the safe harbor provided by Section
21E of the Securities Exchange Act of 1934, as amended and Section
27A of the Securities Act of 1933, as amended. Words such as
"anticipates," "could," "expects," "intends," "plans," "potential,"
"believes," "predicts," "projects," "seeks," "estimates," "may,"
"will," "would," "will likely continue" and variations of these
words or similar expressions are intended to identify
forward-looking statements. These statements include, but are not
limited to, the Company's ability to utilize the Tax Attributes,
the application and effectiveness of the Plan, and the impact of
the Plan on our business and results of operations. We undertake no
obligation to revise or update publicly any forward-looking
statements for any reason, except as required by law. These
statements are not guarantees of future performance and are subject
to certain risks, uncertainties and assumptions that are difficult
to predict. Therefore, our actual results could differ materially
and adversely from those expressed in any forward-looking
statements as a result of various factors. Important factors that
may cause such a difference include, but are not limited to, market
risks and uncertainties, the risk that our stockholders will not
approve the Plan, the risk that the Plan will not be effective at
preserving the Tax Attributes, and any other factors discussed in
the Company's filings with the Securities and Exchange Commission
(the "SEC"), including the Risk Factors contained in the Company's
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q,
which are available at www.carparts.com/investor and the SEC's
website at www.sec.gov. You are urged to consider these factors
carefully in evaluating the forward-looking statements in this
release and are cautioned not to place undue reliance on such
forward-looking statements, which are qualified in their entirety
by this cautionary statement. Unless otherwise required by law, the
Company expressly disclaims any obligation to update publicly any
forward-looking statements, whether as result of new information,
future events or otherwise, except as required by law.
Investor Relations:
Ryan Lockwood, CFA
IR@carparts.com
Media Relations:
Tina Mirfarsi
tina@carparts.com
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SOURCE CarParts.com, Inc.
