Introductory Note
As previously announced, on June 15, 2023, Coherus BioSciences, Inc., a Delaware corporation (the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Crimson Merger Sub I, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub I”), Crimson Merger Sub II, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (“Merger Sub II” and together with Merger Sub I, the “Merger Subs”), and Surface Oncology, Inc., a Delaware corporation (“Surface”).
On September 8, 2023, the Company completed the previously announced acquisition of Surface pursuant to the Merger Agreement. Pursuant to the Merger Agreement, Merger Sub I merged with and into Surface (the “First Merger”), with Surface surviving such First Merger as a wholly owned subsidiary of the Company, and, as part of the same overall transaction, promptly after the First Merger, the surviving entity of the First Merger merged with and into Merger Sub II (the “Second Merger” and together with the First Merger, the “Mergers”), with Merger Sub II surviving the Second Merger (the “Surviving Entity”). The Mergers became effective on September 8, 2023 upon the filing of the Certificate of Merger for the First Merger with the Secretary of the State of Delaware (the time of the filing of the Certificate of Merger for the First Merger, the “Effective Time”). Additionally, on September 8, 2023, in connection with the Merger Agreement, the Company and Computershare Trust Company, N.A., as rights agent, entered into a contingent value right (“CVR”) agreement, pursuant to which each share of common stock, $0.0001 par value per share, of Surface (the “Surface Common Stock”) issued and outstanding immediately prior to the Effective Time (other than treasury shares, any shares of Surface Common Stock held directly by the Company or Merger Subs immediately prior to the Effective Time and shares of Surface Common Stock issued and outstanding immediately prior to the Effective Time and held by any holder who properly demands appraisal for such shares in accordance with Section 262 of the Delaware General Corporation Law) were entitled to one CVR. Each CVR entitles the holder thereof to receive contingent payments of cash and/or common stock, par value $0.0001 per share, of the Company (“Company Common Stock”) upon the achievement of certain sales milestones related to Surface’s product candidates.
The following events took place in connection with the completion of the Mergers.
Item 2.01 Completion of Acquisition or Disposition of Assets
The information included in the Introductory Note is incorporated herein by reference into this Item 2.01.
Merger Consideration
Under the Merger Agreement, at the Effective Time of the First Merger, each share of Surface Common Stock issued and outstanding immediately prior to the Effective Time (other than treasury shares, any shares of Surface Common Stock held directly by the Company or Merger Subs immediately prior to the Effective Time and shares of Surface Common Stock issued and outstanding immediately prior to the Effective Time and held by any holder who properly demands appraisal for such shares in accordance with Section 262 of the Delaware General Corporation Law) was converted automatically into the right to receive consideration per share consisting of:
| ● | 0.1960 (the “Exchange Ratio”) shares of Company Common Stock, plus any cash payable in lieu of a fractional share of Company Common Stock (the “Upfront Consideration”); and |
| ● | one CVR representing a contractual right to receive future conditional payments, settleable in cash, additional shares of Company Common Stock or a combination of cash and additional shares of Company Common Stock, at the Company’s sole discretion (and subject, in each case, to deduction for any required withholding taxes), upon the achievement of certain sales milestones related to Surface’s product candidates. |
