increase shares proposal

[jayfish101]

approval to amend our Restated Certificate of Incorporation to increase the total number of
authorized shares of our common stock from 675,000,000 to 1,350,000,000 shares
This is startling to me. What the heck?

[biopearl123]

I nominate Dr. Samuel Hahnemann to the board.

[Hoosier Investor]

Make sure to vote "No" on behalf of your shares.

Hopefully, RA Capital will vote their 49M shares (9.99 percent ownership) as "No" as well. BTW.....I wonder how RA Capital feels about being upside down on the shares they were allowed to purchase at a significant discount only a couple of months ago. I hope RA Capital demands the right to fill the open BOD seat with one of their own, and they make any/all future executive bonuses a function of the common share price.

[biopearl123]

HI, was waiting for your take on this. Either they think someone is going to want a whole of shares e.g. a partner or couldn’t this be a poison pill strategy to prevent a hostile take over? Admittedly my understanding of this is limited and an expanded discussion of what they could possibly be thinking would be appreciated. By the way, one less open position on the jobs board today. Voting no a distinct possibility with out some definite positive guidance from the company. This board is the place to lead that charge if it is justified and you (and Kmall—pretty sure he is not going to love this) are the folks to do it. If there is some momentum here we might be able to squeeze some information from our generally opaque company. They pushed the shareholders meeting to the very last day of May so it is likely they (and EHA and some as yet unknown journal) will provide some balm to us by then. Thanks in advance for your thoughts. bp

[Ryan]

Poison pill.

[biopearl123]

Ryan, perhaps you would like to lead the discussion as to how a poison pill might work as it pertains to Geron and how that might protect share holder value. If this is part of a poison pill strategy, Geron must be concerned about a potential hostile takeover.

[Gwikley]

IMO sequence of events: Just the same as with the TLR announcement. We get the news of the FDA NDA approval, and simultaneously get the news of a 675Million dilution.
Frustration is turning to anger over here on this side of the fence.

I thought I remember hearing that the current bankroll was more than sufficient to carry Geron well into the commercialization phase.
Guess I read/heard wrong.

Gonna be some serious share/price erosion with this latest development.

[kmall]

Bp - I have to think we're in similar shoes on this. Although my gut tells me that doubling share count isn't exactly in the shareholders best interest. A definition as to why this is necessary would help to subdue any fears. A poison pill in the event of a hostile takeover is a very real possibility, however, is a hostile takeover exactly negative in the case of Geron?

Not quite sure how to answer that.

Having an activist investor like Carl Icahn, Bill Ackman or Nelson Peltz who can ACTUALLY create shareholder value instead of talk about it, would certainly be welcomed by myself at this point. I for one am getting tired of the constant "bait & switch" from management or total lack of communication to investors on crucial topics such as Clinical Trial extensions and delays.

There are numerous headwinds moving forward which I think a good number of us smaller retail investors fail to consider when building out a Biotech brick by brick to mid size Pharma model as Dr. Scarlett seems intent on doing. Competition, Formulary Insurance, Channel Distribution/Supply Chain, Healthcare Marketing and Manufacturing, amongst others, are all challenges on the horizon, with some taking substantial time to resolve/initiate. I'm in no ways saying it's impossible, but they are valid concerns which can impede in the progress of maximizing the revenue stream potential of Imetelstat over the next 5-10yrs.

In the example of Carl Icahn, here are a few things to consider:

"Icahn argues that most CEOs are overpaid and that their salaries are not comparable to shareholder returns."

"To deliver value to shareholders, Icahn purchases a large number of a corporation's shares and then requests a new board of directors or the sale of its assets."

"The Icahn lift is a phenomenon whereby a stock's price rises after Carl Icahn purchases its shares."

https://www.investopedia.com/articles/f ... n-lift.asp aww

Once again, I'm on the fence....can go either way depending on the reasoning behind the necessity of doubling share count. Personally, I'm looking forward to the conclusion of the Geron story. File the NDA already and create value for shareholders like you said you would over 5yrs ago. -Kmall

[Ryan]

Ryan, perhaps you would like to lead the discussion as to how a poison pill might work as it pertains to Geron and how that might protect share holder value. If this is part of a poison pill strategy, Geron must be concerned about a potential hostile takeover.

Here are the basics on the poison pill strategy:

https://www.investopedia.com/terms/p/poisonpill.asp

[jayfish101]

Geron had a poison pill in effect years ago. It was a time limited thing as I recall, and it expired unused and not renewed. I wonder why Geron did not explain this was a poison pill effort to double the number of shares. Makes me wonder.

[kmall]

Jayfish.....from what I understand, legally they can't say that funding will be used in the event of a poison pill. SEC doesn't allow it....or something like that. However, the burn rate of this company at the moment is staggering. It's a concern considering P3 IMpact hasn't even reached 50% enrollment two years after the first patient was dosed. Get ready for some amazing buying opportunities next week for any of us with dry powder left. -Kmall

[mistergern]

From TalksOnLaw

A “poison pill” is a defensive tactic used to discourage a hostile takeover. Professor John D. Morley of Yale Law School explains (1) how they work, (2) why they are so effective at stopping hostile acquisitions, and (3) how can they be overcome.

A poison pill is a tool used by corporate boards to make an acquisition intolerably expensive. The way that a poison pill works is by setting a trigger or threshold in the terms of stock ownership which, if reached or surpassed by a particular shareholder, will result in the dilution of that shareholder's interest in the company. Morley gives the example of a company that sets its poison pill trigger at 15% of the company’s stock. If a shareholder then purchases a 17% position in the company, the company may then make significant quantities of stock available for purchase to all other shareholders at a reduced price or even at no cost at all. This can both make the potential acquisition more expensive and at the same time significantly dilute the potential acquirer's share.

Professor Morley explains that poison pills are so effective that they can make takeover bit through purchase of a majority of stock an impossibility. So how can they be overcome? Generally, the only options are either to get the approval of the board, by increasing the purchase price or to replace sufficient board members to permit the removal of the poison pill.



John D. Morley a professor of law at Yale Law School. His research focuses on the law and economics of organization, with a special emphasis on the regulation and structure of investment funds.

[mistergern]

After reading the Proxy Statement it is clear that Geron anticipates raising capital through stock sales at every opportunity - which is both nauseating and understandable. They will not have any significant revenue until late 2024 at the earliest. They have also failed in their 'Stretch Goal' of increasing enrollment in the MF trial. All in all a very discouraging prognosis for shareholders. I have held this stock for over 20 years and own a significant number of shares and I am disgusted. Why wasn't the share price of the stock a criterion in determining Scarlett's excessive bonus? It was my hope that a European partnership would have been announced or at least anticipated by now. Given the blood bath Geron shareholders have experienced over the last two months, Geron's request to double the number of authorized shares speaks to an incredible lack of concern for their shareholders. I hope and pray that I am wrong and that Scarlett will allow the stock price to appreciate to a level that actually rewards the folks who helped sustain this company with their hard-earned funds.

[Ryan]

It’s always darkest right before the dawn.

MisterGern losing faith has to be about the darkest moment

As BioPearl has pointed out, the April “miracle” always seems to quell/change the sentiment.

It’s amazing that everyone is unnerved right as Imetelstat is on the cusp of New Drug Application. We’ll see what happens.

I’m not hoping for the end of the Geron story, I’m hoping for the beginning of the newly named “Imetelstat” for marketing purposes…. It’s coming…

[bucbeard]

I'm curious if someone can provide thoughts on this potentially concerning scenario:

what if the party "interested" in acquiring the controlling shares in a hostile takeover, isn't interested in controlling the company to maximize their own financial stake on the cheap...what if it's an attempt to hinder Geron further by weaponizing the poison pill to inflict further financial self-harm?

Is this a possibility to be concerned about? Could this further delay/negatively impact the financial health of the company, the time-table and any anticipated share-price appreciation?

Don't wish to think about negative things, but I would like to know all angles of this unusual move of the request for the doubling of our share count to 1.5b

[mistergern]

Ryan - I still have faith in the ultimate success of Imetelstat and do not plan to sell any of my shares in this price range. I do believe that Scarlett is potentially taking the appropriate action needed to protect against a hostile takeover. OTH, he has not shown any capability of managing the pps while raising funds. Geron clearly lacks the type of financial management needed to protect shareholders while funding operations (Wall Street does not seem to be overly impressed by Scarlett or Geron's potential). One bright spot I noticed in the Proxy draft is that the Exercise price for most of Scarlett's remaining options (approximately 5 million shares) ranges from $2.15 to over $5.00. Hopefully he will not award himself new options below the current pps.

[Ryan]

All good. Although I think “managing the share price” is nearly impossible, and definitely much more difficult than managing the operations of the company (despite what anyone thinks, they would not be able to do it as well as Doctor Scarlett, period.)

Let me just point out a few no-revenue biotechs… there are literally countless others… I’ll focus on ‘stem-cell’ related concerns:

VCEL - check how it went from about 50 to 2 before achieving approval. Then went from 2 to 50. Note it was in the 3 range or so when it received marketing approval. Much smaller revenue opp than Imetelstat.

ATHX
LCTX
MNKD
STEM (long gone)
ACTC (acquired for $0.07)

Off stems, where over 3 decades has had zero winners, despite the groundbreaking technology.
Once revenue is achieved, everything will change:

PCYC
MRNA
JAZZ
Obviously countless others.

NDA takes a long time as well, and patience obviously wanes… but now is literally the worst time to start playing Sunday afternoon QB …. IMO

[mistergern]

Ryan, Scarlett is the CEO and the stock has responded miserably to what should have been excellent news - why do you think that is the case?

[jayfish101]

When geron had the poison pill in place before, they had a clear public statement about how a hostile buyout offer would trigger issuance of additional shares to current shareholders at little or no cost to the shareholders. I see nothing like that now.

[biopearl123]

Maybe that’s because Dr. Scarlett wants to give his long suffering shareholders a special stock dividend?