On May 21, 2020, Geron Corporation (the "Company") reported that it entered into an underwriting agreement (the "Underwriting Agreement") with Stifel, Nicolaus & Company, Incorporated and MTS Securities, LLC, as representatives of the several underwriters named therein (collectively, the "Underwriters"), relating to the issuance and sale (the "Offering") of 107,049,375 shares of the Company’s common stock ("Common Stock"), and pre-funded warrants to purchase 8,335,239 shares of Common Stock (the "Pre-Funded Warrants"), together with accompanying warrants to purchase 57,692,307 shares of Common Stock (the "Common Stock Warrants", and together with the Pre-Funded Warrants, the "Warrants") (Filing, 8-K, Geron, MAY 21, 2020, View Source [SID1234558472]). The combined offering price to the public of each share of Common Stock and accompanying Common Stock Warrant is $1.30. The combined offering price to the public of each Pre-Funded Warrant and accompanying Common Stock Warrant is $1.299. The gross proceeds to the Company from the Offering are expected to be approximately $150 million, before deducting underwriting discounts and estimated offering expenses. All of the securities in the Offering are being sold by the Company. The Offering is expected to close on May 27, 2020, subject to satisfaction of customary closing conditions.
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Each Pre-Funded Warrant will have an initial exercise price per share of $0.001, subject to certain adjustments. The Pre-Funded Warrants will be exercisable immediately and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. A holder (together with its affiliates and other attribution parties) may not exercise any portion of a Pre-Funded Warrant to the extent that immediately prior to or after giving effect to such exercise the holder would own more than 9.99% of the Company’s outstanding Common Stock immediately after exercise, which percentage may be changed at the holder’s election to a lower or higher percentage not in excess of 19.99% (if exceeding such percentage would result in a change of control under Nasdaq Listing Rule 5635(b) or any successor rule) upon 61 days’ notice to the Company subject to the terms of the Pre-Funded Warrants.
Each Common Stock Warrant will have an initial exercise price per share of $1.30, subject to certain adjustments. The Common Stock Warrants will be exercisable immediately and will expire on the earlier to occur of (a) the date that is 30 business days following the date on which the Company first issues a press release disclosing, if applicable, positive top-line safety and efficacy results from the Phase 3 portion of IMerge, the Company’s Phase 2/3 clinical trial of imetelstat for the treatment of patients with Low or Intermediate-1 risk myelodysplastic syndromes (or, if such date is not a business day, then the next business day following such date) and (b) December 31, 2025. A holder (together with its affiliates and other attribution parties) may not exercise any portion of a Common Stock Warrant to the extent that immediately prior to or after giving effect to such exercise the holder would own more than 9.99% of the Company’s outstanding Common Stock immediately after exercise, which percentage may be changed at the holder’s election to a lower or higher percentage not in excess of 19.99% (if exceeding such percentage would result in a change of control under Nasdaq Listing Rule 5635(b) or any successor rule) upon 61 days’ notice to the Company subject to the terms of the Common Stock Warrants.
The Offering is being made pursuant to the Company’s shelf registration statement on Form S-3 filed with the Securities and Exchange Commission (the "SEC") on May 24, 2018, which became effective on July 12, 2018 (Registration Statement No. 333-225184), and a prospectus supplement thereunder (the "Prospectus Supplement"), and pursuant to a related registration statement on Form S-3 (No. 333-238595) filed with the SEC pursuant to Rule 462(b) of the Securities Act of 1933, as amended (the "Securities Act").
The Underwriting Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company and the Underwriters, including for liabilities arising under the Securities Act other obligations of the parties and termination provisions. The representations, warranties and covenants contained in the Underwriting Agreement were made only for the purposes of such agreement and as of specific dates, and were solely for the benefit of the parties to such agreement.
The foregoing descriptions of the terms of the Underwriting Agreement, Pre-Funded Warrants and Common Stock Warrants are each qualified in their entirety by reference to the Underwriting Agreement, form of Pre-Funded Warrant and form of Common Stock Warrant, respectively, which are attached as Exhibit 1.1, Exhibit 4.1 and Exhibit 4.2 hereto, respectively, and incorporated by reference herein.