Crossroads Systems, Inc. (NASDAQ: CRDS) said that its board of directors has adopted a tax benefit preservation plan designed to preserve the value of its significant net operating loss carryforwards in relation to the potential limitations under Section 382 of the Internal Revenue Code.
Crossroads said it intends to seek stockholder approval of the plan at its 2015 annual meeting of stockholders.
Crossroads has federal NOLs totaling approximately USD128m as of October 31, 2013. Pursuant to US federal income tax rules, Crossroads´ use of those tax assets could be substantially limited if Crossroads experiences an “ownership change.” In general, an ownership change occurs if there is a cumulative change in Crossroads´ ownership by “5 percent shareholders” that increases by more than 50 percent over the lowest percentage owned by such shareholders at any time during the prior three years on a rolling basis. Crossroads noted that the Plan is designed to serve the interests of all stockholders by helping to protect the company´s ability to use its net operating losses to offset future tax liabilities and is similar to plans adopted by many other public companies with significant tax attributes.
Founded in 1996 and headquartered in Austin, TX, Crossroads Systems is a global provider of data archive solutions. Through the innovative use of new technologies, Crossroads delivers customer-driven solutions that enable proactive data security, advanced data archiving, optimized performance and significant cost-savings. Its website is at www.crossroads.com.