Important Tax Information

Pursuant to the warrant agreements, distributions to the common stockholders may result in an adjustment to the exercise price and the conversion ratio of each warrant class. Chesapeake expects that such adjustments will be treated under Internal Revenue Code Section 305(c) as deemed distributions for U.S. federal income tax purposes. Any deemed distributions will be taxed and reported to the Internal Revenue Service in the same manner as actual distributions on stock and thus could be taxable as dividends (in whole or in part), despite the absence of any actual payment of cash or property to the warrant holder. For a non-U.S. holder of warrants, any such deemed dividends may be subject to U.S. federal withholding tax. Each holder of warrants should consult their own tax advisor concerning the tax consequences of any deemed distributions.  

IRS Form 8937s which describe the deemed dividend arising from each warrant adjustment are posted under Tax Documents

Estimated Diluted Share Count(1)

Common Shares
Total Common Shares Outstanding and Reserved for GUC 131,825,831 


FMV of Common Share Class # of Warrants Exercise Price Issuable Common Shares Upon Exercise of Warrant
  A 4,247,522 $22.903  3,830,949
$87.8463 B 4,402,963 $26.633 3,743,063
  C 5,489,009 $29.990 4,410,430
Total Common Shares Issuable upon Exercise of Warrants 11,984,442


Total Estimated Diluted Share Count(3) 143,810,273 


(1) Calculated as of 5/16/2024 using CHK common share fair market value (VWAP over the 10 trading days immediately preceding the specified date), warrant exercise price and outstanding common share and warrant counts (inclusive of 777,368 Common shares and 1,466,502 Class C warrants held in reserve for general unsecured claims) vs. the GAAP diluted share count as reported through 10-Q/K filings (CHK common share price and outstanding common share and warrant counts as an average over the reporting period and warrant exercise price as of the quarter/year end).
(2) Assumes all warrants exercised using net/costless settlement method and 1.00:1.22 ratio of warrants exercised to common shares issued (cumulative carried forward adjustment to issuable common shares of 0.02)
(3) Excludes 5,900,643 common shares held in reserve for employee incentive plan.

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