Targacept Inc. - Special Dividend
Frequently Asked Questions
For questions regarding the Targacept Inc. Special Dividend, please see details and stock transfer contact information below:
When did the merger occur?On August 20, 2015, Catalyst Biosciences, Inc. announced the completion of its merger with Targacept, Inc. ("Targacept"), in accordance with the terms of an agreement and plan of merger, dated March 5, 2015, as amended on May 6 and May 13, 2015.
After the merger, Targacept's name was changed to Catalyst Biosciences Inc. ("Catalyst").
What is Catalyst's ticker symbol and on what exchange does the stock trade?All stock trading, filings, and market related information will be reported under the new symbol "CBIO".
Targacept's shares of common stock, previously listed on the NASDAQ Global Select Market, ticker symbol "TRGT", traded through the close of business on Thursday, August 20, 2015.
Catalyst commenced trading on the NASDAQ Capital Market, on a post seven-for-one Reverse Stock Split adjusted basis, under the ticker symbol "CBIO" on Friday, August 21, 2015. Catalyst's common stock has a new CUSIP number 14888D 109.
When was the Special Dividend paid?On August 19, 2015, prior to and in connection with the merger, Targacept paid a dividend to holders of Targacept common stock as of August 14, 2015 (the record date for the dividend).
What does the Special Dividend include?The Special Dividend includes an initial cash dividend and non-interest bearing redeemable convertible notes.
How much was the cash dividend?An aggregate cash amount of $19,500,000, which is approximately $3.984 per share after giving effect to a seven-for-one Reverse Stock Split (or $0.5692 per share of the Targacept common stock as of the record date).
What are the non-interest bearing redeemable convertible notes?On August 19, 2015, in addition to the cash dividend payment, Targacept also granted to its shareholders non-interest bearing redeemable convertible notes in the aggregate principal amount of $37,000,000, which is $7.560 per share after giving effect to the seven-for-one Reverse Stock Split (or $1.0800 per share of the Targacept common stock as of the record date).
These redeemable convertible notes do not bear any interest.
Are the non-interest bearing redeemable convertible notes listed on any stock exchange?While the non-interest bearing redeemable convertible notes are registered securities (CUSIP number: 87611R AA6), they are not listed on an exchange, and consequently, there is no trading information on these securities.
How do I convert my non-interest bearing redeemable convertible notes to Catalyst shares or cash?
American Stock Transfer is available to help complete the forms needed to redeem cash or convert these notes into Catalyst common stock (CBIO), which is listed on the NASDAQ Capital Market.
Where can I find cost basis information relating to the common stock of Targacept?
On August 19, 2015, prior to and in connection with the merger, Targacept paid a special dividend to holders of Targacept common stock as of August 14, 2015 (the record date for the dividend). Links to the Internal Revenue Service Forms 8937 (Report of Organizational Actions Affecting Basis of Securities) for Targacept and Catalyst shareholders are available below under Additional Information.
Who may I contact if I have additional questions?Please send an email to email@example.com for any additional questions you might have. Click here for the Catalyst Biosciences Investor section.
The principal amounts are convertible, at the option of each noteholder, into cash or into registered shares of Catalyst common stock (CUSIP number 14888D 109) at a conversion rate of $9.19 per share (after taking into account the Reverse Stock Split). If not redeemed or converted at maturity (February 19, 2018) the notes will be payable in cash at maturity.
American Stock Transfer Contact:
Customer Service Dept.
6201 15th Avenue
Brooklyn, NY 11219
Because Targacept did not have any accumulated earnings and profits, as determined for federal income tax purposes, as of the end of December 31, 2014 and because Targacept is not expected to generate any current earnings and profits, as determined for federal income tax purposes, for its taxable year ending December 31, 2015, Targacept expects that the special dividend should not be treated as a dividend for federal income tax purposes. Instead, Targacept expects that the special dividend should be treated as a non-taxable return of basis and, to the extent the special dividend exceeds a shareholder's basis, should be treated as gain.
Shareholders are encouraged to consult their tax advisors regarding the income tax consequences of these distributions and stock splits under the laws of the United States (federal, state, and local) and any other applicable non-U.S. jurisdiction.
Additional InformationForm 8-K filed on August 20, 2015 by Catalyst Biosciences with the SEC.
Click here for details of the Form 8-K.
Information regarding the Indenture can be found in section G-1 of the Proxy Form 425.
Click here for Proxy.
Catalyst has requested that the applicable From 8937 be mailed to each Targacept investor; for your convenience we are providing links to these forms below.
For Targacept shareholders: click here for a Form 8937 related to Targacept's distribution of redeemable convertible notes on August 19, 2015.
For Targacept shareholders: click here for a Form 8937 related to Targacept's cash distribution.
For Targacept shareholders: click here for a Form 8937 related to Targacept's reverse stock split on August 20, 2015.