STUDIO CITY, CA--(Marketwired - Jan 2, 2014) - Tix Corporation ("Tix" or the "Company") (OTCQX: TIXC), a leading provider of discount ticketing services, today announced that its Board of Directors (the "Board") has adopted an amendment of the Company's existing stockholder rights agreement that is intended to protect the interests of all stockholders by lowering the beneficial ownership threshold to a level that could help preserve the value of the Company's net operating loss carryforwards and other deferred tax assets ("NOLs").
The rights agreement, as amended and restated, is designed to trigger if any person or group were to increase its beneficial ownership of Tix's common stock to more than 4.95%. Tix's ability to use the NOLs would be substantially limited if there were an "ownership change" as defined under Section 382 of the U.S. Internal Revenue Code and related U.S. Treasury regulations. In general, an ownership change would occur if Tix's "5-percent shareholders," as defined under Section 382, collectively increase their ownership in Tix by more than 50 percentage points over a rolling three-year period. In addition to protecting the Company's NOLs, the amended and restated rights agreement is also intended to continue to protect the Company and its stockholders from any efforts to obtain control of the Company by triggering the rights agreement if any person or group acquires beneficial ownership of 15% or more of the Company's common stock in a manner consistent with the terms of the rights agreement existing immediately prior to its amendment and restatement.
The amendment and restatement was not adopted in response to any effort to acquire control of the Company. However, the amended and restated rights agreement may continue to have an anti-takeover effect and will be an impediment to a proposed takeover which is not approved by Tix's board of directors.
Under the terms of the amended and restated rights agreement, the rights will become distributed and become exercisable if a person or group, without Board approval, acquires beneficial ownership of 4.95% or more of Tix's common stock or announces a tender or exchange offer which would result in such person or group's beneficial ownership of 4.95% or more of Tix's common stock, subject to certain exceptions. Under the amended and restated rights agreement, the Board continues to be entitled to determine, in its sole discretion, that any transaction or series of related transactions will not trigger the rights, including if the Board determines that the transaction would not jeopardize or endanger the Company's NOLs.
A person or group that owns 4.95% or more of Tix's common stock at the time of the adoption of the amended and restated rights agreement will not trigger the amended and restated rights agreement and the rights will not become exercisable at such time. However, the amended and restated rights agreement will be triggered and the rights will become exercisable if such person or group, without Board approval, acquires any additional shares of Tix's common stock. If the rights become exercisable, all rights holders (other than the person triggering the rights) will be entitled to acquire Tix's common stock at a 50% discount.
The 4.95% ownership threshold under the amended and restated rights agreement will remain applicable until March 31, 2021 (the final expiration date of the Company's existing rights agreement), or earlier, if the Board determines that the reduced threshold is no longer necessary for the preservation of the NOLs. The amended and restated rights agreement will otherwise continue to expire on March 31, 2021, unless the rights are earlier redeemed or exchanged in accordance with the amended and restated rights agreement or the amended and restated rights agreement is earlier terminated by the Board.
The foregoing description of the amended and restated rights agreement is qualified in its entirety by reference to the full text of the amended and restated rights agreement, a copy of which will be available on the Company's website and is incorporated herein by reference.
About Tix Corporation
Tix Corporation provides discount ticketing services. It currently operates eleven discount ticket stores in Las Vegas under the Tix4Tonight marquee, which offers up to a 50 percent discount for same-day shows, concerts, attractions and sporting events, as well as discount reservations for dining.
Safe Harbor Statement
Except for the historical information contained herein, certain matters discussed in this press release are forward-looking statements which involve risks and uncertainties. These forward-looking statements are based on expectations and assumptions as of the date of this press release and are subject to numerous risks and uncertainties which could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties are discussed in the Company's various filings with the Securities and Exchange Commission and, since November 2010, the Company's filings with the OTCQX. The Company assumes no obligation to update these forward-looking statements. A copy of the Company's reports for the twelve months ended December 31, 2012 and the three and nine months ended September 30, 2013 can be found on the Company's website at www.tix-corp.com or at www.otcqx.com.