Business Context and Reporting Period
This Form 6-K filing by Stratasys Ltd. covers the month of March 2013. The report was issued to clarify U.S. federal income tax consequences for shareholders regarding the merger (the "Merger") of Stratasys, Inc. with Oaktree Merger Inc., which closed on December 1, 2012. The document supplements the proxy statement/prospectus dated August 8, 2012.
Key Financial Metrics
The filing text does not provide a clear value for revenue, profit, cash flow, margins, debt, or liquidity. This report is strictly informational regarding tax implications and does not contain financial performance data.
Material Changes
The primary material event discussed is the completed Merger where Stratasys Ltd. ordinary shares were exchanged for Stratasys, Inc. common stock at a one-for-one ratio. The filing clarifies that this exchange is treated as a taxable event for U.S. federal income tax purposes, resulting in the recognition of capital gains or losses for U.S. holders based on the difference between the fair market value of shares received and their adjusted tax basis.
Guidance, Outlook, and Risks
- Tax Treatment: The exchange is a taxable share-for-share exchange. Gains or losses are recognized as capital gains or losses, potentially long-term if the original shares were held for more than one year.
- Tax Rates: Long-term capital gains recognized in 2012 for individuals, trusts, and estates are subject to a maximum federal income tax rate of 15%.
- Basis and Holding Period: The adjusted tax basis in the new ordinary shares equals the fair market value at the time of the Merger. The holding period for the new shares commences the day after the Merger.
- Limitations: The discussion is limited to U.S. holders and does not address state, local, or foreign tax laws. The company explicitly states it cannot provide guidance on determining the fair market value of shares received.
Investor Verification Checklist
- Verify the adjusted tax basis of the Stratasys, Inc. common stock surrendered in the Merger.
- Determine the fair market value of the Stratasys Ltd. ordinary shares received on December 1, 2012.
- Confirm the holding period of the original Stratasys, Inc. shares to determine if gains/losses qualify as long-term.
- Consult a tax advisor regarding the deductibility of capital losses and applicability of alternative minimum tax.
- Review the proxy statement/prospectus dated August 8, 2012, for additional tax consequences not covered in this summary.