Company: MCHB
Filing Date: 2025-07-03
Form Type: S-4
Source: 0001140361-25-024872
Chunk: 78

Company: Mechanics Bancorp
Filing Date: 2025-07-03
Form: S-4
Chunk 78
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 adverse effect on its business. The combined company could lose investor confidence in the accuracy and completeness of its financial reports, which could have an adverse effect on the price of its common stock. In addition, if the combined company’s efforts to comply with new or changed laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against the combined company and its business may be harmed.

**Net operating loss carryforwards and certain other tax attributes may be limited as a result of ownership changes, including as a result of the merger.**

In general, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change net operating losses to offset future taxable income. In general, an ownership change occurs if the aggregate stock ownership of certain stockholders, generally stockholders beneficially owning five percent (5%) or more of a corporation’s common stock, applying certain look-through and aggregation rules, increases by more than 50 percentage points over such stockholders’ lowest percentage ownership during the testing period, generally three years. HomeStreet is expected to experience an ownership change as a result of the merger. It is possible that Mechanics’ and HomeStreet’s net operating loss carryforwards and certain other tax attributes may also be subject to limitation as a result of ownership changes in the past and/or as a result of the merger. Consequently, the combined company may not be able to utilize a material portion of HomeStreet’s, Mechanics’ or the combined company’s net operating loss carryforwards, if any, and certain other tax attributes, which could have a material adverse effect on cash flow and results of operations.

**HomeStreet is a “smaller reporting company,” and the combined company is expected to retain the smaller reporting company status until the fiscal year after closing. Smaller reporting companies have reduced disclosure requirements that may make their common stock less attractive to investors.**

Under Rule 12b-2 of the Exchange Act, a “smaller reporting company” is a company that is not an investment company, an asset-backed issuer or a majority-owned subsidiary of a parent company that is not a smaller reporting

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company, and had a public float of less than $250 million as of the last business day of its most recently completed second fiscal quarter or, if such public float is less than $700 million, had annual revenues of less than $100 million during the most