Item 4 — Purpose of Transaction
Items 3 and 5 are incorporated by reference in this Item 4 as if fully set forth herein. The purpose of the Merger (as defined below) is for Ligand to acquire control of, and the entire equity interest in, the Issuer. Merger Agreement On April 27, 2026, the Issuer entered into an Agreement and Plan of Merger (the "Merger Agreement") with Ligand and Flex Merger Sub, Inc., a Nevada corporation and wholly-owned subsidiary of Ligand ("Merger Sub") pursuant to which, and upon the terms and subject to the conditions thereof, including, without limitation, effecting the Holding Company Reorganization (as defined below), Merger Sub will merge with and into HoldCo (as defined below) (the "Merger"), with HoldCo surviving the Merger as a wholly owned subsidiary of Ligand. Pursuant to the Merger Agreement, at the time the Merger becomes effective (the "Effective Time"), each share of Common Stock issued and outstanding immediately prior to the Effective Time (other than certain shares of Common Stock to be canceled pursuant to the Merger Agreement and Dissenting Shares (as defined in the Merger Agreement)) will be automatically converted into the right to receive (i) $39.00 per share in cash, without interest, and subject to deduction for any required withholding tax, plus (ii) an amount of contingent value rights (each, a "CVR") representing a right to receive contingent payments derived from the CVR Trust's (as defined below) interest in RemainCo LLC (as defined below) in accordance with the CVR Agreement (as defined in the Merger Agreement) (as further described below) (clauses (i) and (ii) collectively, the "Merger Consideration"). In addition, pursuant to the Merger Agreement, at the Effective Time, each (i) Series X Preferred Share issued and outstanding immediately prior to the Effective Time will be converted, without any required action on the part of the holder thereof, into the right to receive the Merger Consideration with respect to the aggregate number of shares of Common Stock for which the Series X Preferred Shares were convertible into immediately prior to the Effective Time pursuant to the terms of the Certificate of Designation of Series X Preferred Shares, without interest and subject to deduction for any required withholding tax, without regard to any limitations on exercise contained therein and (ii) each 8.625% Series A Cumulative Perpetual Preferred Stock, par value $0.05 per share (the "Series A Preferred Stock") and 8.375% Series B Cumulative Perpetual Preferred Stock, par value $0.05 per share (the "Series B Preferred Stock", together with the Series A Preferred Stock, the "Perpetual Preferred Stock"), shall be redeemed prior to the Effective Time in accordance with the terms of the applicable certificate of designation governing such Perpetual Preferred Stock, including payment of all accrued and unpaid dividends thereon through the date of such redemption. The Merger Agreement also specifies the treatment of the Issuer's outstanding equity awards and warrants in connection with the Merger. The consummation of the Merger is subject to the satisfaction or waiver of customary conditions as set forth in the Merger Agreement, including (i) adoption and approval of the Merger Agreement by the holders of at least a majority of the combined voting power of the outstanding shares of Common Stock pursuant to the Nevada Revised Statutes, as amended, ("NRS"), 92A.120(5) (the "Issuer Stockholder Approval"), (ii) the applicable waiting period (and any extensions thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, having expired or been terminated and (iii) the completion of the Holding Company Reorganization and the CVR Spin in accordance with the terms of the Merger Agreement. Ligand's and Merger Sub's obligations to consummate the transactions contemplated by the Merger Agreement are not subject to any financing condition. The Merger Agreement includes representations, warranties and covenants of the parties customary for a transaction of this nature. From the date of the Merger Agreement until the earlier of the Effective Time and the termination of the Merger Agreement, except as permitted by certain exceptions, including the consummation of the Holding Company Reorganization and the CVR Spin, the Issuer has agreed to conduct its business in the ordinary course of business in all material respects and has agreed to certain other operating covenants, as set forth more fully in the Merger Agreement. The Issuer has also agreed to customary "no-shop" restrictions on its ability to solicit acquisition proposals from third parties and engage in discussions or negotiations with third parties regarding acquisition proposals. The Merger Agreement requires that the board of directors of the Issuer (the "Issuer Board") recommend that the stockholders of the Issuer vote in favor of the approval of the Merger Agreement (the "Issuer Board Recommendation") and that the Issuer Board