Current and potential investors in the common stock of CV Holdings, Inc (the “Corporation”) are advised that the Corporation’s charter (the “Charter”) restricts beneficial ownership and constructive ownership and transfer of the Corporation’s common stock for the purpose, among others, of the Corporation's maintenance of its ability to utilize the net operating loss carryovers, capital loss carryovers, general business credit carryovers, alternative minimum tax credit carryovers and foreign tax credit carryovers, as well as any “net unrealized built-in loss” within the meaning of section 382 of the Internal Revenue Code, of the Corporation or any direct or indirect subsidiary thereof (“tax benefits”).
Among other restrictions, the Charter provides that no person may beneficially own or constructively own shares of the Corporation's common stock in excess of 4.9 percent (by value or by number of shares, whichever is more restrictive) of the outstanding shares of common stock of the Corporation or such other percentage determined by the board of directors unless such person is an excepted holder (in which case the excepted holder limit for such excepted holder shall be applicable). AT PRESENT THIS LIMITATION IS 3,156,275 SHARES.
Any person who beneficially owns or constructively owns or attempts to beneficially own or constructively own shares of common stock which causes or will cause a person to beneficially own or constructively own shares of common stock in excess or in violation of the above limitation must immediately notify the Corporation, or in the case of such a proposed or attempted transaction, give at least fifteen (15) days prior written notice, and shall provide to the Corporation such other information as the Corporation may request in order to determine the effect, if any, of such transfer on the Corporation’s ability to utilize its tax benefits.
If the restrictions on transfer or ownership are violated, the shares of common stock in excess or in violation of the above limitation (or any of the other ownership and transfer limitations set out in the Charter) will be automatically transferred to a trustee of a trust for the benefit of one or more charitable beneficiaries effective as of the close of business on the business day prior to the date of such transfer (or other event). In addition, the Corporation may redeem shares upon the terms and conditions specified by the board of directors in its sole discretion, refuse to give effect to such transfer on the books of the Corporation or institute proceedings to enjoin such transfer or other event if the board of directors determines that ownership or a transfer or other event may violate the restrictions described above. Furthermore, if the ownership restrictions above would be violated or upon the occurrence of certain events, attempted transfers in violation of the restrictions described above may be void ab initio.
A copy of the Charter, as the same may be amended from time to time, including the restrictions on transfer and ownership, will be furnished to each holder of capital stock of the Corporation on request and without charge. Requests for such a copy may be directed to the secretary of the Corporation at its principal office.
Dated as of October 6th, 2021