As of December 31, 2019, the Company had estimated U.S. federal NOLs of approximately $8.6 million, state NOLs of approximately $8.8 million, U.S. federal tax credit carryforwards of approximately $5.2 million and state tax credit carryforwards of approximately $0.2 million. The Company expects its Tax Benefits to increase during 2020. The Company's ability to use its Tax Benefits would be substantially limited if it were to experience an "ownership change," as defined under Section 382 of the Internal Revenue Code (the "Tax Code"). In general, a corporation would experience an ownership change if the percentage of the corporation's stock owned by one or more "5% shareholders," as defined under Section 382 of the Tax Code, increases by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. The Plan reduces the likelihood that changes in the Company's investor base would limit the Company's future use of its Tax Benefits, which would significantly impair the value of such Tax Benefits. The Company believes that no ownership change has occurred as of the date of this press release.
The Plan is similar to plans adopted by other publicly held companies with significant NOLs or other substantial Tax Benefits and has a limited duration of three years. The Plan is not designed to prevent any action that the Board determines to be in the best interest of the Company and its stockholders. The Board intends to ask stockholders to ratify the Plan at the Company's next annual meeting of stockholders.
To implement the Plan, the Board declared a dividend of one preferred share purchase right (a "Right") for each outstanding share of the Company's common stock. The distribution of the Rights should not be taxable to the Company's stockholders. The Rights will trade with the Company's common stock and will expire at the close of business on August 24, 2023. The Board will consider an earlier termination of the Plan under certain conditions as described in the Plan. The Rights will be exercisable if a person or group of persons acquires 4.95% or more of the Company's outstanding common stock. The Rights will also be exercisable if a person or group of persons that already owns 4.95% or more of the Company's common stock acquires an additional share. If the Rights become exercisable, all holders of Rights, other than the person or group of persons triggering the Rights, will be entitled to purchase shares of the Company's common stock at a 50% discount. Rights held by the person or group of persons triggering the Rights will become void and will not be exercisable.
Additional information with respect to the Plan and the related Rights will be contained in a Current Report on Form 8-K that the Company will file with the Securities and Exchange Commission ("SEC"). The Rights issued in the Plan are issued pursuant to an agreement between the Company and the rights agent, a copy of which will be filed as an exhibit to the Form 8-K. For more information regarding the Company's Tax Benefits, please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2019.