SOURCE: NeuLion, Inc.
November 22, 2010 18:00 ET
NeuLion Announces Intention to Domesticate
PLAINVIEW, NY--(Marketwire - November 22, 2010) - NeuLion, Inc. (TSX: NLN) ("NeuLion" or the "Company") announced today that, as previously approved by shareholders at its annual and special meeting of shareholders held on May 13, 2009 (the "2009 Meeting"), it intends to apply to the Director under the Canada Business Corporations Act for a letter of satisfaction for the continuance of the Corporation out of the laws of Canada (the "Continuance") and the domestication of the Corporation under the laws of the State of Delaware and Section 388 of the General Corporation Law of the State of Delaware (the "Domestication"). Subject to regulatory approval and final approval by our board of directors to proceed with the Continuance and Domestication, the Company expects that the Continuance and Domestication will take effect on November 30, 2010.
The information circular ("Circular") dated April 7, 2009 mailed to shareholders in connection with the 2009 Meeting described the principal Canadian federal income tax considerations generally applicable to a shareholder in respect of the Continuance and Domestication. Such disclosure relied on certain assumptions which Company management believe remain valid at the date hereof. Such disclosure remains substantially valid at the date hereof, subject to the following:
Tax proposals relating to the treatment of investments by Canadian resident shareholders in non-resident entities that constituted a foreign investment entity (FIE) were described in the Circular. In the March 4, 2010 budget ("Budget") the Minister of Finance (Canada) ("Minister") announced that such FIE proposals would be abandoned and that the existing offshore investment fund property rules would continue, subject to certain amendments thereto described in draft legislation released by the Minister on August 27, 2010.
Certain foreign property information reporting requirements were also described in the Circular in respect of Canadian resident shareholders. The Minister proposed expanding such rules in the Budget; however, specific proposals have yet to be publicly released.
The Circular also described certain material U.S. federal tax consequences of the Continuance and Domestication. Such disclosure remains substantially valid at the date hereof. As described in the Circular, the Company intends to enter into a new gain recognition agreement (GRA) in connection with the Continuance and Domestication as a "U.S. transferor" under relevant U.S. Treasury Regulations. Also, as described in the Circular, a U.S. shareholder who owns, directly or indirectly, less than 10% of the voting stock of the Company should consider whether to elect, under the relevant U.S. Treasury Regulations, to include in income the "all earnings and profits amount," if any, attributable to such shareholder's shares in the Company, rather than recognize any gain (but not loss) in connection with the Continuance and Domestication.
Nothing herein represents legal or tax advice or representations to any particular shareholder or any other person. As described in the Circular, shareholders are encouraged to consult their own tax advisors in relation to the tax consequences applicable to them of the Continuance and Domestication in their particular circumstances.
Based in Plainview, New York, Sanford, Florida and Toronto, Ontario, NeuLion (TSX: NLN) works with content partners to develop end-to-end solutions for multimedia IPTV services. The NeuLion IPTV Platform encodes, delivers, stores and manages an unlimited range of multimedia content and NeuLion's operational support system (OSS) maintains all billing and customer support services. Content partners are responsible for content aggregation and the sales and marketing for individual IPTV services. The Company ranks as a world leader in customer/partner relationships with sports, international and specialty television content partners including, in sports, the NHL, the NFL, the NBA, MLS and NCAA Division I schools and conferences and, with respect to international and specialty television aggregators and networks, KyLinTV (Chinese), ABS-CBN (Filipino), Talfazat and Talfazat-ART (Arabic), TV-Desi (South Asian) and Sky Angel (Christian). Customer/partner content can be viewed by way of the Internet on PCs and mobile devices and on the television through the Company's IPTV set top box.
Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this release are based upon what management believes to be reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this release and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including: regulatory approval of the Continuance and Domestication; a determination by our board of directors not to proceed with the Continuance and Domestication; our ability to generate additional revenue and achieve profitability; general economic and market conditions; our customers' subscriber levels; the financial health of our customers; our ability to pursue and consummate acquisitions in a timely manner; our continued relationships with our channel partners; our ability to negotiate favorable terms for contract renewals; competitor activity; product capability and acceptance rates; technology changes; international risk; and currency exchange. A more detailed assessment of the risks that could cause actual results to materially differ from current expectations is contained in the Company's most recent annual MD&A filed on www.sedar.com and available at www.sec.gov as well as in the "Risk Factors" section of the Company's most recent annual report on Form 10-K filed on www.sedar.com and available at www.sec.gov.
U.S. Treasury Department Circular 230 Disclosure
Any tax advice contained herein (1) is not intended or written to be used, nor can it be used, by any taxpayer for the purpose of avoiding any U.S. federal tax related penalty that may be imposed on the taxpayer and (2) may not be used in connection with promoting, marketing or recommending to another person any transaction or matter addressed herein.