Geron Corp. (GERN) announced that it has entered into an agreement to exchange outstanding warrants held by certain institutional investors for shares of Geron common stock. In connection with the exchange, the company sold additional shares of common stock to the investors at a premium for gross proceeds of $10.0 million, and issued a call option to the investors to purchase an additional $5.0 million of common stock at the premium price.
The institutional investors will deliver warrants to purchase about 5.6 million shares of common stock for cancellation in exchange for the issuance by the company of 2.7 million shares of its common stock. The same investors will purchase 1.5 million shares of common stock at an 8% premium to market, or $6.75 per share. The purchase includes a call option to acquire an additional $5.0 million of common stock at the premium price. The option expires on October 31, 2010.
A number of shares equal to those issued in exchange for the outstanding warrants cannot be sold during the 12 month period from the date of issuance unless the sales are at prices in excess of $9.11 per share.
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