Tix Corporation (the "Company" or "we") (OTCQX:TIXC), a leading provider of discount ticketing services, today announced its Board of Directors (the "Board") has voted to suspend the quarterly dividend on the Company's common stock due to the continued difficult operating environment in Las Vegas and to preserve capital.
Under the terms of the Stockholder Rights Agreement, as summarized below, the Board also approved the request by Mitch Francis, the CEO of the Company, to purchase up to two million shares of the Company's common stock at such times and at such prices that Mr. Francis may determine in his discretion.
Stockholder Rights Agreement
As a reminder to our existing and future stockholders, on January 2, 2014, the Company announced that the Board adopted an amendment of the Company's Stockholder Rights Agreement (the "Rights Agreement") to protect the interests of all Company stockholders by lowering the beneficial ownership threshold to a level that could help preserve the value of the NOLs. The Company'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 ("Section 382"). In general, an "ownership change" would occur under Section 382 if the Company's "5-percent shareholders," as defined under Section 382, collectively increase their ownership in the Company by more than 50 percentage points over a rolling three-year period.
Under the terms of the amended and restated Rights Agreement, subject to certain exceptions, in the event a person or group, without Board approval, acquires beneficial ownership of 4.95% or more of the outstanding 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 the outstanding Common Stock (a "Triggering Stockholder"), then all stockholders of the Company (other than the Triggering Stockholder) will be entitled to acquire shares of Common Stock at a 50% discount (a "Dilution Event").
A person or group that owns 4.95% or more of the outstanding Common Stock at the time of the adoption of the amended and restated Rights Agreement (an "Existing Major Stockholder") will not trigger a Dilution Event. However, a Dilution Event will be triggered if an Existing Major Stockholder, without Board approval, acquires any additional shares of Common Stock.
The 4.95% beneficial ownership threshold under the amended and restated Rights Agreement will remain applicable until March 31, 2021, or earlier, if the Board determines that the reduced threshold is no longer necessary for the preservation of the NOLs.
The amendment and restatement of the Rights Agreement 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 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 (OTCQX:TIXC) provides discount ticketing services. It currently operates ten discount ticket stores in Las Vegas under its 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. Tix4Tonight also serves as the Official Las Vegas Guest Services Partner for Expedia and its other brands. The co-branded Expedia Local Expert service provides both pre-arrival concierge-type services and in-market concierge-type desk services and related customer service support at physical locations in Las Vegas, featuring Tix4Tonight's inventory of discount show and attraction tickets, along with discount dining reservations.
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. Forward-looking statements include, but are not limited to, statements about our future revenues and financial position. 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 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, 2016, can be found on the Company website at www.tixcorp.com or at www.otcmarkets.com.
Contact: Steve Handy, CFO, 818-761-1002