Breaking News

tvmarketpulse.com
carpartscom unveils strategic plan to fortify tax benefits 27

Business

CarParts.com Unveils Strategic Plan to Fortify Tax Benefits

reading

Leo Gonzalez

April 5, 2024 - 21:26 pm

reading

Strategic Tax Benefits Preservation Plan Adopted by CarParts.com

TORRANCE, Calif., April 5, 2024 /PRNewswire/ -- CarParts.com, Inc. (the "Company"), a leading online auto parts retailer, proclaimed the institution of a Tax Benefits Preservation Plan ("the Plan"). This move serves as a safeguard, specifically designed to ensure the long-term value of certain tax advantages, referred to as the Tax Attributes, for the benefit of the Company and its shareholders.

New CarParts.com Logo Unveiled Logo new - April 2024 starting (PRNewsfoto/CarParts.com, Inc.)

As reported at the close of the year on December 30, 2023, the Company possessed substantial federal and state Tax Attributes, amounting to $105,224 and $84,780, respectively. Despite their considerable value, these assets remain vulnerable to significant reduction or outright loss, should the Company encounter a "change of ownership," as outlined under Section 382 of the Internal Revenue Code.

A "change of ownership" might occur under the circumstance where shareholders, holding at least a five percent stake in the Company's outstanding common stock, increase their cumulative ownership by over 50 percentage points within a designated rolling three-year period, beyond their lowest ownership percentage during that time frame.

The Company's Board of Directors authorized the issuance of one Series B Junior Participating Preferred Stock purchase right (termed "the rights") for each outstanding share of the Company's common stock. This declaration sets a distribution on April 16, 2024, to shareholders registered by the end of the business day. Further share issuances post-record date will accompany these rights.

These rights are non-exercisable initially and will be tradeable with the Company's common stock. Should any individual or group accrue 4.99% or more of the Company's common stock, or if an existing shareholder with a minimum of 4.99% ownership acquires additional shares, the rights would disengage from the common stock. When exercised, these rights would allow the acquisition of Company's common stock at a market value double that of the exercise price. Such an event would significantly dilute the influence and holding of the rights-acquiring party or parties.

Included in the Plan is a procedure that permits the Board of Directors to evaluate and potentially exempt certain stock acquisitions from the Plan’s implications, should they discern that such actions would not affect the Tax Attributes detrimentally. The rights granted by the Plan are set to expire on April 5, 2027, unless used or deemed unnecessary due to the Tax Attributes being exploited or becoming otherwise unavailable prior to this date.

The Board of Directors reserves the right to terminate the Plan at any point, provided the rights remain non-exercisable. Moreover, the Plan will be presented for approval during the Company's annual meeting of shareholders in 2024. Should it fail to secure approval by the first anniversary following the Plan’s adoption, it would accordingly expire after business hours on said date.

This strategy aligns with the actions of numerous public entities holding significant Tax Attributes, aiming to preserve these vital resources. The Rights issuance is projected to leave the Company's earnings per share or share value unchanged and will incur no tax consequences for either the Company or its shareholders.

For a comprehensive discussion about the Plan, interested parties are directed to the information available within a Current Report on Form 8-K and a Registration Statement on Form 8-A, which the Company is submitting to the Securities and Exchange Commission (SEC).

CarParts.com – Revolutionizing Auto Parts Shopping

For over a quarter-century, CarParts.com, Inc. has revolutionized the e-commerce space, providing drivers with an efficient and reliable source for vehicle repair and maintenance parts. The company's commitment to exemplary customer service is demonstrated through their user-friendly, mobile-optimized website and app, which simplifies the shopping experience and eases the stress typically associated with car repair.

With an extensive fulfillment network operated by the company, CarParts.com guarantees fast delivery of high-quality, branded parts to customers nationwide. This impressive service draws from the collective effort of a dedicated global team, unified under the vision of empowering drivers on their automotive journeys.

For more information, visit CarParts.com, headquartered in the vibrant city of Torrance, California.

Forward-Looking Statements and Cautionary Notes

This press release contains forward-looking statements which are covered under the safe harbor protection of Sections 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. These statements predict, anticipate, or indicate future plans or events and are identified through words like "anticipates," "expects," "plans," "believes," "estimates," and other similar expressions or their negatives.

The forecasts encompass the utilization of Tax Attributes, the Plan's operational execution, and potential influences on the Company's business outcomes. There is no commitment to update these predictions barring stipulations mandated by law.

Due to their speculative nature, these forward-looking statements are not guaranteed and hinge on a plethora of variables, which, if inaccurate, could lead to actual results varying substantially from the projections. Some crucial factors that may contribute to such disparities include, but are not limited to, market conditions, stockholder reception of the Plan, the effectiveness of the Plan in preserving Tax Attributes, among others.

For more preciseness on these factors, interested parties may refer to the Risk Factors detailed in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, available on www.carparts.com/investor and the SEC's official site at www.sec.gov. Stakeholders are urged to carefully evaluate the forward-looking statements in this release.

Investor and Media Relations

For further details about the company's strategies and financial prospects, interested analysts and investors are encouraged to reach out to Ryan Lockwood, CFA, at [email protected] Press inquiries and media-related requests can be directed to Tina Mirfarsi at [email protected]

About CarParts.com

CarParts.com stands out as a technologically driven e-commerce firm, reforming the way drivers shop for necessary automotive parts. The palpable emphasis on customer satisfaction defines the operation, evident through the seamless shopping solutions offered, coupled with the elimination of the common hassles associated with vehicle maintenance and repair.

The continual dedication to drive forward, paired with an internationally diverse team, cements CarParts.com’s status as the premier go-to for every driver's automotive journey, from repairs to routine maintenance, equipping customers with the expertise and parts they need every step of the way.

In conclusion, CarParts.com’s Tax Benefits Preservation Plan is a strategic initiative to protect the Company’s valuable tax assets from potential dilution due to ownership changes. This plan echoes the practices of other public companies and aims to solidify CarParts.com’s financial strength while ensuring shareholder interests remain a top priority.

As CarParts.com paves the path towards an even brighter future through technological advancements in e-commerce, its unwavering commitment to its customers and shareholders alike positions the company at the helm of the auto parts industry.

For additional information and updates on CarParts.com's initiatives and financial outlook, investors and the press are encouraged to consult the comprehensive disclosures in the Company's SEC filings and to engage with the investor and media relations contacts provided.

CarParts.com's latest endeavors, marked by its innovative approach and focus on customer needs, serves as testament to the Company's established legacy and anticipates an upward trajectory in the evolving automotive diagnostics and ecommerce sector.

With these measures in place, CarParts.com reiterates its core objective of empowering drivers and providing streamlined solutions for auto part needs nationwide. The adoption of the Tax Benefits Preservation Plan is merely one step forward in the company's journey of strategic growth and industry leadership, setting the tone for its continued success.

This concludes the detailed announcement regarding CarParts.com, Inc.'s adoption of the Tax Benefits Preservation Plan, underscoring its dedication to safeguarding the Company's future financial stability and reinforcing its pledge to deliver unparalleled service to its extensive customer base.

As the company ventures into the future, it remains firmly rooted in the principles that have driven its success for over 25 years — a testament to the enduring power of innovation and customer-centricity in the thriving world of e-commerce auto parts.

For further communications or detailed inquiries into CarParts.com, Inc.'s financial strategies, investors can access the latest information by visiting the investor relations webpage and media representatives are invited to connect with the aforementioned contacts.

As the automotive industry continues to evolve, CarParts.com is committed to staying ahead of the curve, constantly enhancing its platform, and fortifying its position as an indispensable resource for auto parts shoppers and the driving community at large.

SOURCE: CarParts.com, Inc.