MakeMusic, Inc. (NASDAQ: MMUS) today announced that its Board of Directors has adopted a Tax Asset Protection Plan (the “Plan”). The Plan is intended to protect MakeMusic’s substantial tax assets and to allow all of its shareholders to realize the long-term value of their investment in MakeMusic. As of December 31, 2010, MakeMusic had cumulative federal net operating loss carryforwards of approximately $14.7 million, which can be utilized in certain circumstances to offset future U.S. taxable income. For the year ended December 31, 2011, MakeMusic anticipates utilizing additional net operating losses. The Plan is similar to tax asset protection plans adopted by many other public companies with significant tax assets. "Our net operating loss carryforwards are an important and valuable asset of MakeMusic, we believe we should make every effort to protect this asset. This Plan protects the interests of our shareholders and preserves these substantial tax benefits for our company," said Karen van Lith, MakeMusic's President and Chief Executive Officer. MakeMusic's use of certain tax assets could be substantially limited if the company experiences an "ownership change," as defined by Section 382 of the Internal Revenue Code. In general, an ownership change for this purpose would occur when the percentage of the company’s ownership (by value) of one or more “5 percent shareholders” (as defined in the Code) increased by more than 50 percent over the lowest percentage owned by such shareholders at any time during the prior three years (calculated on a rolling basis). The Plan is designed to reduce the likelihood that MakeMusic experiences such an ownership change by discouraging any person or group from becoming a 5-percent shareholder and dissuading existing 5-percent or greater shareholders from acquiring additional shares of MakeMusic's common stock. As part of the Plan, MakeMusic’s Board of Directors, today declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of the company’s common stock, par value $.01 per share. The Rights will be distributable to shareholders of record as of the close of business on March 2, 2012, as well as to holders of common stock issued after that date.