March 29, 2018; $12.00 / share
In connection with the Merger, announced on July 6, 2020, Cogent entered into a Contingent Value Rights Agreement, pursuant to which each holder of shares of common stock of record immediately prior to the effective time of the Merger is entitled to one contractual contingent value right ("CVR") for each share of common stock. Each CVR entitles the holder thereof to receive certain common stock and/or cash payments from the net proceeds, if any, related to the disposition of Cogent’s legacy cell therapy assets within three years following the closing of the Merger. The CVRs are not transferable, except in certain limited circumstances as will be provided in the CVR Agreement, will not be certificated or evidenced by any instrument and will not be registered with the SEC or listed for trading on any exchange.
Cogent does not have a material amount of accumulated earnings and profits, and expects no or a small amount of current earnings and profits for the relevant taxable year. Thus, Cogent expects most or all of this distribution would be treated as other than a dividend for U.S. federal income tax purposes.
As per the CVR Agreement, after Cogent has a disposition of any of Cogent’s legacy cell therapy assets, stock payments relating to the CVRs are expected to be issued approximately fifty-five (55) days following the end of each calendar quarter that ends on or prior to December 31, 2020, and cash payments relating to the CVRs are expected to be issued approximately fifty-five (55) days following the end of each calendar quarter that ends on or following March 31, 2021.
PLEASE CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER AND THE ISSUANCE OF THE CVRS IN LIGHT OF YOUR PERSONAL CIRCUMSTANCES AND THE PROPER CHARACTERIZATION OF THE RECEIPT OF THE CVRs.
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