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Now that PDL’s stock is no longer listed on Nasdaq, what are my options as a stockholder?

We do not expect that your shares will be transferable other than through will, intestacy or operation of law. However, as a stockholder on the Final Record Date, you are entitled to receive a pro-rata amount of future liquidation distributions.

When does PDL anticipate making liquidation distributions?

PDL made a cash distribution of $1.00/share on May 13, 2022. We continue to work towards completion of the dissolution of the Company, including the resolution of pending claims and the monetization of our remaining assets. We cannot be certain of the timing and amounts of additional distributions. However, as we collect additional revenue, resolve pending and potential claims, and monetize assets through the dissolution process, and to the extent our Board of Directors believes it appropriate to do so, we will request that the Court approve additional distributions.

Can you provide more information on the Safe Harbor Procedures in Delaware and how long you anticipate the process will take to conclude?

PDL filed a Verified Petition For Determination Pursuant to 8 Del. C. Sec 280(c) on February 10, 2022, (the “Petition”) subsequent to the completion of the notice and claim resolution requirements of the Safe Harbor Procedures and additional relevant sections of the DGCL and Plan of Dissolution. The Petition requests that the Court find that PDL complied with the notice and claim resolution requirements of the Safe Harbor Procedures, requests that the Court determine the security to be retained by the Company, and among other matters, determine that PDL is authorized to make such interim distributions as are appropriate in excess of the security. On March 22, 2022, we filed with the Court a Motion for First Interim Distribution to Stockholders requesting approval for an interim distribution. On May 10, 2022, the Court granted our motion and on May 13, 2022, we made a distribution of $1.00/share to all shareholders of record as of January 4, 2021. While we cannot be certain of the timing and amounts of further distributions, as we continue to navigate the Safe Harbor Procedures, and to the extent we collect additional revenue, resolve pending and potential claims, and monetize assets through the dissolution process, and to the extent our Board of Directors believes it appropriate to do so, we will request that the Court approve additional distributions.

How much do you think will be distributed?

The amount to be distributed will depend on how much value we receive for remaining assets to be sold, potential additional revenues from our royalty rights, and amounts collected on prior asset sales as well how much it will cost to settle and otherwise make provision to pay known and unknown liabilities. We direct you to the Company’s Annual Report or Form 10-K as of December 31, 2020 as filed with the SEC, as well as our quarterly investor updates at pdl.com/investor-updates, for PDL’s estimate of net assets available in liquidation. There are many estimates and assumptions that go into the determination of net assets available in liquidation as well as many risks and uncertainties during the dissolution process and the actual amount of distributions made will vary from the estimate and may vary in material respects.

Will all future distributions be in the form of cash?

The forms of future distributions will depend on whether we sell our remaining income generating assets, such as our royalty rights, prior to completing the dissolution process. If we sell our income generating assets, such as our royalty rights, we anticipate all future distributions will be made in cash. If we do not sell our remaining income generating assets, they (and other remaining assets, if any) may be placed in a liquidating trust whereby the PDL stockholders of record as of the Final Record Date would receive a beneficial interest in the liquidating trust. Although receipt of a beneficial interest in a liquidating trust would technically not be in the form of cash, any future distributions to the beneficial interest holders in the trust would be expected to be in the form of cash, although property dispositions are possible.

Do I need to do anything to register my shares so any future distributions will be sent to me?

No. Distributions will be made to all stockholders as of the Final Record Date. Any such distributions will be made to the brokerage account with custody of your shares in PDL.

Will you notify stockholders in advance of any distribution?

We will provide necessary information to stockholders when an actual distribution will be made and expect to provide updates of other material developments by posting on the Company’s website PDL.com.

Is it possible for a market to develop for your stock?

PDL will not participate in any future market for its stock. Future distributions will be paid to the stockholders of record on the Final Record Date, January 4, 2021, the date when the transfer books closed.

What are the tax implications of the distributions made to Company stockholders in 2020 of shares of Evofem Biosciences Inc. and LENSAR, Inc.?

We intend for distributions made pursuant to PDL’s Plan of Liquidation to be treated as a series of distributions in complete liquidation of the Company. In accordance with such treatment, the distributions will be treated as received by each PDL stockholder in exchange for the stockholder’s PDL common stock. The amount of a distribution allocable to a block of shares of PDL common stock held by a stockholder will reduce the stockholder’s tax basis in such shares, but not below zero. Any excess amount allocable to such shares will be taxable as gain, which gain will be capital gain if the PDL common stock is held as a capital asset (which we assume to be the case for purposes of this response). Any tax basis remaining in a share of our common stock following the final liquidating distribution by the Company will be treated as a capital loss. The deductibility of capital losses is subject to limitations. Please see the Forms 8937 posted on the Company’s website regarding the effect of the distributions of shares of Evofem Biosciences Inc. and LENSAR, Inc. on your tax basis in your shares of PDL common stock.

We direct your attention to the Company’s 2020 proxy statement as filed with the SEC on July 7, 2020 for a discussion about material U.S. federal tax consequences to U.S. and Non-U.S. holders as defined therein. The discussion above and in our proxy statement does not purport to be a complete analysis of all potential tax effects and we encourage you to consult a tax advisor for your personal tax situation.

What are the tax implications of future distributions?

We direct your attention to the Company’s 2020 proxy statement as filed with the SEC on July 7, 2020 for a discussion about material U.S. federal tax consequences to U.S. and Non-U.S. holders as defined therein. The discussion does not purport to be a complete analysis of all potential tax effects and we encourage you to consult a tax advisor for your personal tax situation.