As previously disclosed on June 15, 2023, Surface Oncology, Inc., a Delaware corporation (the Company), entered into an
Agreement and Plan of Merger (the Merger Agreement) by and among the Company, Coherus BioSciences, Inc., a Delaware corporation (Parent), Crimson Merger Sub I, Inc., a Delaware corporation and wholly owned
subsidiary of Parent (Merger Sub I), and Crimson Merger Sub II, LLC, a Delaware limited liability company and wholly owned subsidiary of Parent (Merger Sub II and together with Merger Sub I, the Merger
Subs). On July 26, 2023, each of the Company and Parent filed the definitive version of the proxy statement with the United States Securities and Exchange Commission (the SEC) in connection with the Mergers (the
Proxy Statement).
Minimum Net Cash Requirement
Pursuant to the Merger Agreement, and subject to the terms and conditions set forth therein, Merger Sub I will merge with and into the Company
(the First Merger), with the Company surviving such First Merger as a wholly owned subsidiary of Parent, and, as part of the same overall transaction, promptly after the First Merger, the surviving corporation of the First Merger
will merge 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).
Under the terms of the Merger Agreement, the consummation of the Mergers is subject to the satisfaction or waiver of certain customary closing
conditions of the respective parties, including, among other closing conditions, that the Company Net Cash (as defined in the Merger Agreement), calculated as of the applicable dates of determination under the Merger Agreement (the Company
Net Cash Determination Dates), shall be no less than $19,600,000 (or such lower amount as may be consented to in writing by Parent prior to the closing of the First Merger) (the Minimum Net Cash Condition). In accordance
with the terms of the Merger Agreement, the Company delivered to Parent a schedule (the Net Cash Schedule) setting forth the Companys good faith estimated calculation of the Company Net Cash as of the applicable Company Net
Cash Determination Dates (the Net Cash Calculation). On August 24, 2023, Parent notified the Company in writing that it has no objections to the Net Cash Calculation as set forth in the Net Cash Schedule and such Net Cash
Calculation is thus deemed to have been determined for purposes of the Merger Agreement and to represent the Company Net Cash as of the applicable Company Net Cash Determination Dates. Accordingly, the Minimum Net Cash Condition is deemed to have
been satisfied as of the closing of the Mergers.
The consummation of the Mergers remains subject to the satisfaction (or written waiver
by each of the Company, Parent and the Merger Subs if permissible by law) of other closing conditions, including, but not limited to, the approval of the adoption of the Merger Agreement by holders of at least a majority of the Companys
outstanding common stock. The parties expect that the Mergers will be consummated in September 2023.
Litigation Matters
Since the filing of the Proxy Statement, three complaints have been filed by purported stockholders of the Company as individual actions
against the Company and the members of its Board of Directors. Two complaints have been filed in the United States District Court for the Southern District of New York, captioned Guentter v. Surface Oncology, Inc. et al., Case No. 1:23-cv-06687 (filed July 31, 2023) and Finger v. Surface Oncology, Inc. et al., Case No.
1:23-cv-7180 (filed August 14, 2023), respectively, and one complaint has been filed in the United States District Court for the District of Delaware, captioned
Lang v. Surface Oncology, Inc. et al., Case No. 1:23-cv-897 (filed August 15, 2023). The foregoing complaints are referred to as the Filed Merger
Actions.
Furthermore, on August 3, 2023, and August 23, 2023, two purported stockholders of the Company sent draft
complaints asserting claims against the Company and the members of its Board of Directors. The foregoing draft complaints are referred to as the Draft Merger Actions and the Filed Merger Actions and Draft Merger Actions are
referred to collectively as the Merger Actions.
The Merger Actions allege that the Proxy Statement misrepresents
and/or omits certain purportedly material information. The Merger Actions assert claims for violations of Section 14(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Rule 14a-9 promulgated thereunder against the Company and its Board of Directors, and violations of Section 20(a) of the Exchange Act against the Companys Board of Directors.