The U.S. federal income tax consequences to a U.S. Holder who participates in the Return of Capital Transaction depend on whether any other shareholder elects to exercise the opt-out right. If no shareholder elects to exercise the opt-out right, then the full amount of cash received by each U.S. Holder who participates in the Return of Capital Transaction will be treated as a taxable distribution to such holder, as described below under Distribution in Respect of Shares. No shareholder has provided a firm commitment to our company to opt out of the Return of Capital Transaction, however, and no assurance can be provided that the foregoing tax consequences will not apply to U.S. Holders who participate in the Return of Capital Transaction. U.S. Holders are urged to consult their own tax advisors regarding the tax consequences of the Return of Capital Transaction if no shareholder elects to opt out. The following discussion assumes that at least some shareholders elect to opt out of the Return of Capital Transaction, so that the foregoing tax consequences do not apply to U.S. Holders who participate in the Return of Capital Transaction.
The transaction is generally expected to betax-freefor Canadian tax purposes. As a result, Canadian resident shareholders are generally not eligible to opt out. Eligibility criteria for opting out of the transaction is set out on page 2 of this news release.
Process: If youre a non-registered holder (i.e., you hold shares through a bank or broker), follow your bank or brokers instructions if youd like to opt out. You should contact your bank or broker if you have not received information regarding how to opt out. Registered shareholders should follow instructions sent to them by Computershare Trust Company of Canada.
On June 30, 2020, we exercised our right to opt out of the co-development and license agreement as amended with Janssen Pharmaceutica, N.V, or Janssen, as contemplated by that certain settlement agreement with Janssen dated June 24, 2020, which became effective upon exercise of the opt out. Under the settlement agreement, we resolved certain disputes with Janssen under the co-development and license agreement related to the development of seltorexant (also known as MIN-202 or JNJ-42847922), a drug intended for the treatment of insomnia disorder and adjunctive treatment of MDD. As a result of the exercise of our opt-out right, the co-development and license agreement was deemed to have been terminated effective as of October 2, 2019, and we are eligible to collect a royalty on worldwide sales of seltorexant, if any, in all indications in the mid-single digits, with no financial obligations to Janssen. As a result of the opt-out, during the second quarter of 2020 we recognized approximately $41.2 million in collaborative revenue, which we had previously included on our balance sheet under deferred revenue.
The proxy solicitation by UNITE HERE focuses on opting out of little-known Nevada statutes that, by default, impose restrictions on the rights of large shareholders and restrict business combinations with large shareholders. Additional proposals encourage Eldorado not to adopt other takeover protections like a poison pill or supermajority voting requirement if it does opt out. The meeting date is June 19, 2019.
4. If the Company elects to opt out of all future development for one of the programs, it would be required to fund its share of the development costs over a limited period of time as provided for in Section5 of the Agreement. With the rolling budget that the Company will be involved in preparing and approving, the Company will have advance knowledge of projected development spending and its share of costs. This will allow the Company to review its upcoming funding obligation and determine if it wants to continue funding the program or opt out. The Companys near-term share of development cost for a program for the required period after opting out of future development is not a material amount and it is not significantly incremental to its planned development funding for each program. This amount would also not be considered significant to the overall value of the transaction. Accordingly, we determined that such potential saving in development costs by opting out was not considered a discount.