magicJack plans to move parent company to U.S.
The redomestication process is expected to take approximately 4-6 months and will be submitted for shareholder approval at the 2016 annual meeting expected to be held in the next several months.
The proposed redomestication will be subject to the receipt of necessary regulatory approvals, approval by magicJack's shareholders and satisfaction of other conditions.
The redomestication will make magicJack stock eligible for purchase by investors who are restricted from investing in non-U.S. companies. As of March 31, 2016, magicJack had approximately $22 million in net deferred tax assets for Israeli net operating losses related to prior operations of the parent company included on its Balance Sheet.
If the redomestication is approved by magicJack shareholders, magicJack would likely not be able to utilize those net deferred tax assets and would need to establish a corresponding valuation allowance.
Estimated costs of the redomestication, along with a discussion of the benefits and risks of the redomestication, are expected to be included in the proxy statement for the 2016 annual shareholders meeting.
"We are pleased to be redomesticating our parent company to the U.S. and believe this step will make us an attractive security for large institutional investors who cannot hold a position in non-U.S. companies. We plan to fully maintain our Israeli operations as they are critical to our business,'' said Gerald Vento CEO of magicJack. ■