What changed in this filing

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Item 1. Financial Statements

2022-08-11 compared with 2022-05-09 · 267 added, 186 removed, 645 unchanged (41% of the section changed)

34 unchanged sentences

THREE MONTHS ENDED

SIX MONTHS ENDED

License fees and royalties

Operating expenses:

7 unchanged sentences

Basic and diluted net loss per share

Shares used in computing basic and diluted net loss per share

Shares used in computing basic and diluted net

loss per share

See accompanying notes.

3 unchanged sentences

THREE MONTHS ENDED

SIX MONTHS ENDED

Net unrealized loss on marketable securities

7 unchanged sentences

Stockholders'

Balance at December 31, 2021

Balances at December 31, 2021

Other comprehensive loss

Stock-based compensation

related to issuance of common

stock and options in exchange

related to issuance of

common stock and

options in exchange

Stock-based compensation for

1 unchanged sentence

employees and directors

Balance at March 31, 2022

Balances at March 31, 2022

Other comprehensive loss

Issuance of common stock,

pre-funded warrant and

warrants to purchase

common stock in public

offering, net of issuance

costs of $ 5,066

Stock-based compensation

related to issuance of

common stock and

options in exchange

Issuances of common stock

under equity plans

Stock-based compensation for

equity-based awards to

employees and directors

Balances at June 30, 2022

GERON CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

(IN THOUSANDS, EXCEPT SHARE DATA)

Comprehensive

Stockholders'

Balance at December 31, 2020

Balances at December 31, 2020

Other comprehensive loss

4 unchanged sentences

Stock-based compensation

related to issuance of common

stock and options in exchange

related to issuance of

common stock and

options in exchange

Issuance of common stock in

connection with exercise of

Issuance of common stock

Issuances of common stock

under equity plans

2 unchanged sentences

employees and directors

Balance at March 31, 2021

Balances at March 31, 2021

Other comprehensive loss

Stock-based compensation

related to issuance of

common stock and

options in exchange

Issuance of common stock in

connection with exercise of

Issuances of common stock

under equity plans

Stock-based compensation for

equity-based awards to

employees and directors

Balances at June 30, 2021

See accompanying notes.

2 unchanged sentences

(IN THOUSANDS)

THREE MONTHS ENDED

SIX MONTHS ENDED

Cash flows from operating activities:

2 unchanged sentences

Accretion and amortization on investments, net

Amortization of debt issuance costs/debt discounts

Amortization of debt issuance costs/debt discount

Gain on sales of equity investment

14 unchanged sentences

Proceeds from issuances of common stock from equity plans

Proceeds from issuance of common stock and warrants in public offering,

net of paid issuance costs

Proceeds from issuances of common stock from at market offerings,

1 unchanged sentence

Proceeds from exercise of warrants

Proceeds from debt financing

Debt discount and issuance costs for debt financing

Net cash provided by financing activities

Effect of exchange rates on cash, cash equivalents and restricted cash

Net effect of unrealized losses and exchange rates

on cash, cash equivalents and restricted cash

Net change in cash, cash equivalents and restricted cash

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 unchanged sentences

In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 or any other period.

Operating results for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 or any other period.

These unaudited condensed consolidated financial statements and notes should be read in conjunction with the audited financial statements for each of the three years ended December 31, 2021, included in our Annual Report on Form 10-K for the year ended December 31, 2021, or the Form 10-K.

10 unchanged sentences

Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of shares of common stock outstanding for the periods presented without consideration of potential common shares.

In April 2022, we entered into an underwriting agreement in connection with a public offering of our common stock, pursuant to which we issued a pre-funded warrant to purchase 18,095,238 shares of our common stock, also known as the 2022 pre-funded warrant, together with accompanying warrants to purchase shares of our common stock.

In May 2020, we entered into an underwriting agreement in connection with a public offering of our common stock, pursuant to which we issued a pre-funded warrant to purchase 8,335,239 shares of our common stock, also known as the 2020 pre-funded warrant, together with accompanying warrants to purchase shares of our common stock.

The 2020 pre-funded warrant is exercisable immediately at an exercise price of $ 0.001 per share.

We included the 2020 pre-funded warrant in the computation of basic net loss per share, as applicable, since the exercise price is negligible, and the 2020 pre-funded warrant may be exercised at any time.

The 2022 pre-funded warrant and 2020 pre-funded warrant are exercisable immediately at an exercise price of $ 0.001 per share.

We included the 2022 pre-funded warrant and 2020 pre-funded warrant in the computation of basic net loss per share, as applicable, since their exercise price is negligible, and they may be exercised at any time.

See Note 6 on Stockholders' Equity for further discussion of the April 2022 public offering.

Diluted net income per share would be calculated by adjusting the weighted-average number of shares of common stock outstanding for the dilutive effect of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued, as determined using the treasury-stock method.

2 unchanged sentences

Accordingly, basic and diluted net loss per share is the same for all periods presented in the accompanying condensed consolidated statements of operations.

Since we incurred a net loss for the three months ended March 31, 2022 and 2021 , the diluted net loss per share calculation excludes potential dilutive securities of 118,256,294 and 107,962,895 , respectively, related to outstanding stock options and warrants as their effect would have been anti-dilutive.

Since we incurred a net loss for the three and six months ended June 30, 2022 and 2021 , the diluted net loss per share calculation excludes potential dilutive securities of 153,703,476 and 106,492,740 , respectively, related to outstanding stock options and warrants as their effect would have been anti-dilutive.

Use of Estimates

18 unchanged sentences

Declines in market value judged as other than temporary result in a charge to interest income.

We have not recorded any other-than-temporary impairment charges on our available-for-sale securities for the three months ended March 31, 2022 and 2021.

We have not recorded any other-than-temporary impairment charges on our available-for-sale securities for the three and six months ended June 30, 2022 and 2021 .

See Note 2 on Fair Value Measurements.

Equity Investments

We measure our investment in equity securities at fair value at each reporting date.

Changes in fair value resulting from observable price changes are included in change in fair value of equity investment and changes in fair value resulting from foreign currency translation are included in other income and (expense), net on our condensed consolidated statements of operations.

At the inception of an arrangement, we determine whether the arrangement is or contains a lease based on the unique facts and circumstances present.

50 unchanged sentences

Once the assessment of probability of achievement becomes probable, we recognize revenue for the milestone payment.

At each reporting date, we assess the probability of achievement of each milestone under our current agreements.

At each reporting date, we assess the probability of achievement of each milestone under any current agreements.

For agreements with sales-based royalties, including milestone payments based on the level of sales, where the license is deemed to be the predominant item to which the royalties relate, we recognize revenue at the later of (a) when the related sales occur, or (b) when the performance obligation, to which some or all of the royalty has been allocated, has been satisfied (or partially satisfied).

4 unchanged sentences

Research and development expenses currently consist of expenses incurred in developing and testing imetelstat and research related to potential next generation telomerase inhibitors.

These expenses include, but are not limited to, payroll and personnel expense, lab supplies, non-clinical studies, clinical trials, including support for investigator-led clinical trials, raw materials to manufacture clinical trial drugs, manufacturing costs for research and clinical trial materials, sponsored research at other labs, consulting, costs to maintain technology licenses, our proportionate share of research and development costs under cost sharing arrangements with collaborative partners and research-related overhead.

Our current imetelstat clinical trials are being supported by contract research organizations, or CROs, and other vendors.

3 unchanged sentences

We base our estimates on the best information available at the time.

However, additional information may become available to us which will allow us to make a more accurate estimate in future periods.

additional information may become available to us which will allow us to make a more accurate estimate in future periods.

In that event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain.

12 unchanged sentences

We evaluate whether an adjustment to the assumptions of fair value of our common stock and historical volatility are required if observed prices of our common stock materially differ from historical information.

The following table summarizes the stock-based compensation expense included in operating expenses on our condensed consolidated statements of operations related to stock options and employee stock purchases for the three months ended March 31, 2022 and 2021, which was allocated as follows:

Three Months Ended March 31,

The following table summarizes the stock-based compensation expense included in operating expenses on our condensed consolidated statements of operations related to stock options and employee stock purchases for the three and six months ended June 30, 2022 and 2021, which was allocated as follows:

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

2 unchanged sentences

Stock-based compensation expense included in operating expenses

As stock-based compensation expense recognized in our condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures, but at a minimum, reflects the grant-date fair value of those awards that actually vested in the period.

As stock-based compensation expense recognized in our condensed consolidated statements of operations for the three and six months ended June 30, 2022 and 2021 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures, but at a minimum, reflects the grant-date fair value of those awards that actually vested in the period.

Forfeitures have been estimated at the time of grant based on historical data and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

We have not recognized any stock-based compensation expense for performance-based stock options on our condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021, as achievement of the specified strategic milestones was not considered probable at that time.

We have not recognized any stock-based compensation expense for performance-based stock options on our condensed consolidated statements of operations for the three and six months ended June 30, 2022 and 2021, as achievement of the specified strategic milestones was not considered probable at that time.

Stock Options

2 unchanged sentences

Performance-based stock options vest upon the achievement of specified strategic milestones.

The fair value of service-based stock options granted during the three months ended March 31, 2022 and 2021 has been estimated at the date of grant using the Black Scholes option-pricing model with the following assumptions:

Three Months Ended March 31,

The fair value of service-based stock options granted during the six months ended June 30, 2022 and 2021 has been estimated at the date of grant using the Black Scholes option-pricing model with the following assumptions:

Six Months Ended June 30,

Dividend yield

8 unchanged sentences

The fair value of employees’

stock purchase rights during the three months ended March 31, 2022 and 2021 has been estimated using the Black Scholes option-pricing model with the following assumptions:

Three Months Ended March 31,

stock purchase rights during the six months ended June 30, 2022 and 2021 has been estimated using the Black Scholes option-pricing model with the following assumptions:

Six Months Ended June 30,

Dividend yield

37 unchanged sentences

ASU 2018-19, ASU 2019-05 and ASU 2019-11 have the same effective date and transition requirements as ASU 2016-13.

ASU 2016-13 will be

effective for fiscal years beginning after December 15, 2022, using a modified retrospective approach, for smaller reporting companies.

ASU 2016-13 will be effective for fiscal years beginning after December 15, 2022, using a modified retrospective approach, for smaller reporting companies.

Early adoption is permitted.

8 unchanged sentences

ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years for public business entities that are not smaller reporting companies.

For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.

For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, and interim periods within those

fiscal years.

We plan to adopt ASU 2020-06 as of January 1, 2024.

3 unchanged sentences

Cash Equivalents and Marketable Securities

Cash equivalents, restricted cash and marketable securities by security type at March 31, 2022 were as follows:

Cash equivalents, restricted cash and marketable securities by security type at June 30, 2022 were as follows:

(In thousands)

2 unchanged sentences

Commercial paper

Corporate notes

Restricted cash:

2 unchanged sentences

Marketable securities:

Treasury securities (due in less than

Treasury securities (due in less

than one year)

Municipal securities (due in less than

2 unchanged sentences

Commercial paper (due in less than

Corporate notes (due in less than one year)

Corporate notes (due in one to two years)

Corporate notes (due in less than

Cash equivalents, restricted cash and marketable securities by security type at December 31, 2021 were as follows:

15 unchanged sentences

Corporate notes (due in one to two years)

Cash equivalents and marketable securities with unrealized losses that have been in a continuous unrealized loss position for less than 12 months and 12 months or longer at March 31, 2022 and December 31, 2021 were as follows:

Cash equivalents and marketable securities with unrealized losses that have been in a continuous unrealized loss position for less than 12 months and 12 months or longer at June 30, 2022 and December 31, 2021 were as follows:

Less Than 12 Months

1 unchanged sentence

(In thousands)

As of March 31, 2022:

As of June 30, 2022:

Treasury securities (due in

3 unchanged sentences

Government-sponsored enterprise

securities (due in less than one year)

Commercial paper (due in less than

securities (due in less than

Commercial paper (due in less

than one year)

Corporate notes (due in less than

Corporate notes (due in one to

As of December 31, 2021:

6 unchanged sentences

Government-sponsored enterprise

securities (due in less than one year)

Commercial paper (due in less than

securities (due in less than

Commercial paper (due in less

than one year)

Corporate notes (due in less than

1 unchanged sentence

The gross unrealized losses related to U.S.

Treasury securities, municipal securities, government-sponsored enterprise securities, commercial paper and corporate notes as of March 31, 2022 and December 31, 2021 were due to changes in interest rates and not credit risk.

We determined that the gross unrealized losses on our cash equivalents and marketable securities as of March 31, 2022 and December 31, 2021 were temporary in nature.

Treasury securities, municipal securities, government-sponsored enterprise securities, commercial paper and corporate notes as of June 30, 2022 and December 31, 2021 were due to changes in interest rates and not credit risk.

We determined that the gross unrealized losses on our cash equivalents and marketable securities as of June 30, 2022 and December 31, 2021 were temporary in nature.

Our exposure to unrealized losses may increase in the future due to the economic pressures or uncertainties associated with local or global economic recessions as a result of the ongoing COVID-19 pandemic and ongoing geopolitical events, such as the current military conflict between Ukraine and Russia.

11 unchanged sentences

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Below is a description of the valuation methodologies used for financial instruments measured at fair value on our condensed consolidated balance sheets, including the category for such financial instruments.

Money market funds are categorized as Level 1 within the fair value hierarchy as their fair values are based on quoted prices available in active markets.

Treasury securities, municipal securities, government-sponsored enterprise securities, commercial paper, and corporate notes are categorized as Level 2 within the fair value hierarchy as their fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows.

The following table presents information about our financial instruments that are measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021 and indicates the fair value category assigned.

The following table presents information about our financial instruments that are measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021 and indicates the fair value category assigned.

Fair Value Measurements at Reporting Date Using

5 unchanged sentences

(In thousands)

As of March 31, 2022:

As of June 30, 2022:

Money market funds (1)

16 unchanged sentences

(3) Included in noncurrent portion of marketable securities on our condensed consolidated balance sheets.

Equity Investment

We previously held an equity investment in BARD1 Life Sciences Limited, or BARD1, a company listed on the Australian stock exchange.

Our equity investment in BARD1 represented less than 20 % ownership.

We reassessed the fair value of our equity

investment in BARD1 at each reporting date and any resulting change in fair value was recognized on our condensed consolidated statements of operations.

During the first quarter of 2021, we sold all of our holdings in BARD1 and recognized a net gain of approximately $ 1,233,000 from the sales, including gains from foreign currency translation adjustments, which has been included in other income and (expense), net on our condensed consolidated statements of operations.

As of March 31, 2021, no value remained for our equity investment in BARD1.

ACCRUED LIABILITIES

Accrued liabilities consisted of the following as of the dates noted in the table below:

Accrued liabilities consisted of the following as of June 30, 2022 and December 31, 2021:

(In thousands)

3 unchanged sentences

Interest payable

On September 30, 2020, or the Closing Date, we, Hercules Capital, Inc., or Hercules, and Silicon Valley Bank, or SVB, entered into a term loan facility, or the Loan Agreement, up to $ 75,000,000 , which can be drawn in three tranches.

In August 2021, we amended the Loan Agreement to adjust the timing threshold for certain clinical milestones associated with Tranche B under the Loan Agreement.

In addition, under the amended Loan Agreement, the minimum cash covenant requirement beginning as of June 1, 2022, was increased from $ 25,000,000 to $ 30,000,000 , and the minimum cash covenant required upon the execution of certain licensing transactions being executed was increased from $ 30,000,000 to $ 35,000,000 .

All other terms of the Loan Agreement were unchanged, including the maturity date, interest rate, payment terms, events of default and other covenants.

We are in compliance with the covenants under the Loan Agreement as of March 31, 2022.

Under the amended terms of the Loan Agreement, loan principal can be drawn as follows:

(i) Tranche A loan of up to $ 35,000,000 of which $ 25,000,000 was funded on the Closing Date and the remaining $ 10,000,000 was drawn in June 2021, (ii) Tranche B loan of up to $ 15,000,000 which was fully drawn in December 2021, and (iii) Tranche C loan of up to $ 25,000,000 which is available to be drawn through December 31, 2022 , subject to approval by an investment committee comprised of Hercules and SVB.

As of March 31, 2022 , a total of $ 50,000,000 has been drawn under the Loan Agreement.

As of March 31, 2022 , the net carrying value of loan amounts under Tranches A and B was $ 50,179,000 , which includes the principal amount of $ 50,000,000 less net unamortized discounts and debt issuance costs of $ 776,000 plus accrued end of term charge of $ 955,000 .

The carrying value of the debt approximates the fair value as of March 31, 2022.

The debt discounts and debt issuance costs are being amortized to interest expense over the life of loan amounts under Tranches A and B using the effective interest rate method.

The following table presents future minimum payments, including interest and the end of term charge, under the Loan Agreement, as amended, as of March 31, 2022 (in thousands):

On September 30, 2020, we, Hercules Capital, Inc., or Hercules, and Silicon Valley Bank, or SVB, entered into a term loan facility, or the Original Loan Agreement, up to $ 75,000,000 , as amended in August 2021.

On June 30, 2022, or the Effective Date, we entered into a second amendment to the Original Loan Agreement, or as amended, the Loan Agreement.

Under the second amendment, the aggregate principal amount available to us increased from $ 75,000,000 to $ 125,000,000 , with such principal being available in a series of tranches, subject to certain terms and conditions.

As of June 30, 2022 , a total of $ 50,000,000 has been drawn under the Loan Agreement.

Under the second amendment, the $ 75,000,000 in remaining loan principal as of June 30, 2022 can be drawn as follows:

a) the first tranche of $ 20,000,000 is available within 30 days of the achievement of certain clinical and financial milestones until September 15, 2023 , subject to the achievement of such milestones;

b) the second tranche of $ 10,000,000 is available from January 1, 2023 until December 15, 2023 , subject to the achievement of certain clinical and regulatory milestones, and satisfaction of certain other requirements;

c) the third tranche of $ 20,000,000 is available from September 15, 2023 until September 15, 2024 , subject to the achievement of certain clinical and regulatory milestones, and satisfaction of certain capitalization requirements;

and d) the final tranche of $ 25,000,000 is available through December 31, 2024 , subject to approval by an investment committee comprised of Hercules and SVB.

With the exception of the final tranche, and subject to achievement of the applicable milestones and other requirements with respect to each tranche, draw downs are at our election.

On the Effective Date of the second amendment, we paid $ 100,000 as a facility charge that we recognized as a debt discount and will be amortizing such cost to interest expense over the life of the loan using the effective interest rate method.

Additional facility charges applied to future draw downs will be treated similarly.

As of June 30, 2022, we also incurred approximately $ 14,000 in legal fees in connection with the second amendment, which we recognized as debt issuance costs and will be amortizing such cost to interest expense over the life of the loan using the effective interest rate method.

Future debt issuance costs will be treated similarly.

Under the second amendment, if we choose to prepay the principal with respect to any future draw down after the Effective Date, any such prepayment within the first 36 months after the Effective Date will be subject to a prepayment charge equal to 1.5 % of the principal amount prepaid.

No prepayment charge will be assessed for any prepayment occurring more than 36 months after the Effective Date.

Under the second amendment, the maturity date, interest only payment dates, end of term charges, collateral, events of default, representations, warranties and covenants remain consistent with the terms of the Original Loan Agreement, except as follows:

Beginning June 1, 2022 and prior to the regulatory approval for imetelstat, or the potential Regulatory Approval, if any, we are required to maintain a minimum cash balance in an amount equal to the greater of:

50 % of the outstanding principal amount under the Loan Agreement or $ 30,000,000 .

After the potential Regulatory Approval, if any, the minimum cash requirement may be satisfied through one of the following three options, as elected by us:

a) maintaining a cash balance in an amount not less than 40 % of the outstanding principal amount under the Loan Agreement;

b) maintaining a cash balance in an amount not less than 25 % of the outstanding principal amount under the Loan Agreement, if our market cap is or exceeds $ 750,000,000 ;

or c) maintaining six month net product revenues of at least 70 % of net product revenues forecasted by us, should any potential Regulatory Approval for imetelstat be obtained.

We are in compliance with the covenants under the Loan Agreement as of June 30, 2022.

As of June 30, 2022 , the net carrying value of the debt under the Loan Agreement was $ 50,420,000 , which includes the principal amount of $ 50,000,000 less net unamortized debt discounts and issuance costs of $ 801,000 plus accrued end of term charge of $ 1,221,000 .

The carrying value of the debt approximates the fair value as of June 30, 2022.

The debt discounts and debt issuance costs are being amortized to interest expense over the life of the outstanding loan amounts using the effective interest rate method.

The following table presents future minimum payments, including interest and the end of term charge, under the Loan Agreement as of June 30, 2022 (in thousands):

Remainder of 2022

amount representing interest

unamortized debt discount and issuance costs

unamortized debt discounts and issuance costs

unamortized end of term charge

16 unchanged sentences

motion for class certification.

Discovery has commenced and will be completed by August 2, 2022.

Trial is scheduled to begin on October 31, 2022.

Discovery has commenced and will be completed by October 14, 2022.

Trial is scheduled to begin on January 17, 2023.

Between April 23, 2020 and June 8, 2021, seven shareholder derivative actions were filed, naming as defendants certain of our current officers and certain current and former members of our board.

7 unchanged sentences

On October 12, 2021, we filed our motion to dismiss the consolidated amended complaint.

The Court of Chancery of the State of Delaware heard oral argument on the motion on February 15, 2022, but has not yet issued an order deciding the motion;

The Court of Chancery of the State of Delaware heard oral argument on the motion on February 15, 2022, and, on June 22, 2022, issued an order staying its decision on our motion to dismiss until after the trial in the consolidated class action lawsuit described above;

The consolidated shareholder derivative actions filed in the U.S.

2 unchanged sentences

Subsequent to the grant of class certification on April 2, 2022, in the consolidated class action lawsuit described above, on May 3, 2022, the Northern District entered an order providing plaintiffs until June 7, 2022, to file an amended complaint.

The parties will have fifteen calendar days from plaintiffs filing of an amended complaint, or until June 22, 2022, to submit a stipulation regarding further proceedings.

The Northern District has also scheduled an initial case management conference to occur on July 14, 2022;

On June 7, 2022, plaintiffs filed an amended shareholder derivative complaint.

On July 6, 2022, the Northern District entered an order staying the consolidated shareholder derivative actions filed in the Northern District until the earlier of either a public announcement of a settlement in the consolidated class action lawsuit described above or a final, non-appealable judgment in the consolidated class action lawsuit described above;

Our motion to dismiss the shareholder derivative action pursuant to the forum selection clause in our amended and restated bylaws was filed in the Superior Court of California for the County of San Mateo on August 5, 2021.

At the hearing on the motion to dismiss on November 2, 2021, the court granted our motion to dismiss and stayed the case until April 19, 2022.

At the case management conference on April 19, 2022, the court continued the stay until June 14, 2022, when the court will hold a further hearing to decide whether the case should be dismissed.

At the case management conference on April 19, 2022, the court continued the stay until June 14, 2022.

At the case management conference on June 14, 2022, the court continued the stay until December 13, 2022, when it will hold a further case management conference.

The pending lawsuits and any other related lawsuits are subject to inherent uncertainties, and the actual defense and disposition costs will depend upon many unknown factors.

6 unchanged sentences

It is possible that we could, in the future, incur judgments or enter into settlements of claims for monetary damages.

Risks Related to COVID-19 and the Military Conflict Between Ukraine and Russia

Risks Related to Global Economic Conditions, COVID-19 and the Military Conflict Between Ukraine and Russia

As of the date of this filing, significant uncertainty exists concerning the ultimate duration and severity of the COVID-19 pandemic and the military conflict between Ukraine and Russia.

1 unchanged sentence

With respect to the COVID-19 pandemic, we are closely monitoring the impact of the pandemic, the identification of new variants of the COVID-19 virus and related developments, and our focus remains on promoting employee health and safety while continuing to advance the development of imetelstat.

For both our Phase 3 clinical trials, IMerge and IMpactMF, we have limited ongoing clinical trial activity in Ukraine and Russia.

With support from our international clinical research organization, or CRO, we are monitoring the potential impact of the conflict on our clinical trial activities.

For both our Phase 3 clinical trials, IMerge and IMpactMF, we have limited ongoing clinical trial activity in Ukraine and Russia, but we have experienced, and may continue to experience, delays and suspensions in clinical trial activities at clinical sites in Ukraine and Russia due to the current political and civil unrest conditions.

With support from our CRO, we are monitoring the impact of the conflict on our clinical trial activities.

Due to the dynamic and unpredictable effects of the COVID-19 pandemic, we have had and expect to continue to have disruptions and/or delays in our imetelstat development program, including with respect to our ability to initiate trial sites, enroll and assess patients, maintain patient enrollment, ensure patient clinical and lab collection visits, conduct monitoring visits, supply study drug, report trial results, and interact with regulators or other important agencies due to limitations in employee resources or otherwise.

Restrictions on travel, availability of site personnel, and diversion of hospital staff and resources to COVID-19 patients, have disrupted our trial operations, as well as patient recruitment in many areas, resulting in a slowdown in patient enrollment and/or deviations from or disruptions in key clinical trial activities, such as clinical trial site initiation and monitoring.

If the effects of the COVID-19 pandemic continue and persist for an extended period of time and/or become more severe, we could experience significant disruptions to our clinical development timelines, delays in clinical site initiation and patient enrollment in IMpactMF, IMproveMF and the planned investigator-led clinical trials in acute myeloid leukemia, or AML, and Intermediate-2 or High-risk myelodysplastic syndromes, or higher risk MDS, and other disruptions that could severely impact our business and the imetelstat development program.

If the effects of the COVID-19 pandemic continue and/or become more severe, we could experience significant disruptions to our clinical development timelines, delays in clinical site initiation and patient enrollment in IMpactMF, IMproveMF and the planned investigator-led clinical trials in acute myeloid leukemia, or AML, and Intermediate-2 or High-risk myelodysplastic syndromes, or higher risk MDS, and other disruptions that could severely impact our business and the imetelstat development program.

We have taken and intend to take those actions with regard to COVID-19 that may be required by federal, state or local authorities or that we determine are in the best interests of our patients, investigators, employees and stockholders.

In response to the COVID-19 pandemic and “shelter in place”

and similar orders issued by state and local governments, we have allowed limited voluntary access to our offices in California and New Jersey to employees who have been vaccinated, and almost all of our employees continue to work remotely without any significant disruption to our business.

and similar orders issued by state and local governments, we have allowed voluntary access to our offices in California and New Jersey to employees who have been vaccinated, and almost all of our employees continue to work remotely without any significant disruption to our business.

Our increased reliance on personnel working remotely could increase our cybersecurity risk, create data accessibility concerns and make us more susceptible to communication disruptions, any of which could adversely impact our business operations.

These and similar, and perhaps more severe, disruptions in our operations could occur which would negatively impact our business and business prospects, our financial condition and the future of imetelstat.

The effects of the COVID-19 pandemic and the military conflict between Ukraine and Russia, including the significant sanctions imposed against Russia, have increased market volatility and could result in a significant long-term disruption of global financial markets, reducing or eliminating our ability to raise additional capital, which could negatively affect our liquidity, our ability to complete IMerge Phase 3 and IMpactMF and to commence, conduct and complete any other potential future clinical trials of imetelstat.

In addition, the global economic slowdown caused by the COVID-19 pandemic and the military conflict between Ukraine and Russia could materially and adversely affect our business and the value of our common stock.

The extent to which the COVID-19 pandemic and the military conflict between Ukraine and Russia ultimately impact our business, our regulatory and clinical development activities, clinical supply chain and other business operations, as well as the value of and market for our common stock, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration and severity of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the U.S.

The effects of the COVID-19 pandemic and the military conflict between Ukraine and Russia, including the significant sanctions imposed against Russia, as well as broader economic conditions, including inflation, rising interest rates and the prospects for recession, have increased market volatility and could result in a significant long-term disruption of global financial markets, reducing or eliminating our ability to raise additional capital, which could negatively affect our liquidity, our ability to complete IMerge Phase 3 and IMpactMF and to commence, conduct and complete any other potential future clinical trials of imetelstat.

In addition, the global economic slowdown caused by, among other things, the COVID-19 pandemic and the military conflict between Ukraine and Russia, as well as inflation, rising interest rates and the prospects for recession, could materially and adversely affect our business and the value of our common stock.

and business closure requirements in the U.S.

and in other countries, the effectiveness of actions taken globally to contain and treat COVID-19 and whether the military conflict between Ukraine and Russia resolves in a timely manner, or at all.

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STOCKHOLDERS’

2018 Inducement Award Plan

In December 2018, our board of directors approved the adoption of the 2018 Inducement Award Plan, or the Inducement Plan, pursuant to which we reserved 3,000,000 shares of Geron common stock (subject to customary adjustments in the event of a change in capital structure) to be used exclusively for grants of inducement awards to individuals who were not previously Geron employees or non-employee directors, other than following a bona fide period of non-employment.

In January 2019, February 2020, February 2021, May 2021 and February 2022, our Compensation Committee approved amendments to increase the reserve of shares of our common stock under the Inducement Plan by 5,000,000 , 1,300,000 , 800,000 , 5,000,000 and 1,000,000 shares, respectively.

As a result, an aggregate total of 16,100,000 shares of common stock have been reserved under the Inducement Plan.

The Inducement Plan provides for the grant of nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock awards, and all awards under the Inducement Plan are intended to meet the standards under Rule 5635(c)(4) of the Nasdaq Listing Rules.

The terms and conditions of the Inducement Plan and the inducement awards to be granted thereunder are substantially similar to our stockholder-approved 2018 Equity Incentive Plan.

SUBSEQUENT EVENT

Public Offering

On April 1, 2022, we completed an underwritten public offering of 53,333,334 shares of our common stock and a pre-funded warrant to purchase 18,095,238 shares of our common stock, also known as the 2022 pre-funded warrant, together with accompanying warrants to purchase 35,714,286 shares of our common stock, also known as the 2022 stock purchase warrants.

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The 2022 pre-funded warrant has an exercise price of $ 0.001 per share and may be exercised at any time until the 2022 pre-funded warrant is exercised in full.

The estimated net cash proceeds from this offering are approximately $ 69,700,000 , after deducting the underwriting discount and other estimated offering expenses payable by us, and excludes any future proceeds from the exercise of the 2022 pre-funded warrant or the 2022 stock purchase warrants.

As of June 30, 2022 , none of the 2022 pre-funded warrant and 2022 stock purchase warrants have been exercised.

The net cash proceeds from this offering were $ 69,916,000 , after deducting the underwriting discount and other offering expenses paid by us, and exclude any future proceeds from the exercise of the 2022 pre-funded warrant and 2022 stock purchase warrants.

Upon the issuance of the 2022 pre-funded warrant and 2022 stock purchase warrants, we evaluated the terms of each warrant to determine the appropriate accounting and classification pursuant to FASB Accounting Standards Codification Topic 480, Distinguishing Liabilities from Equity , and FASB Accounting Standards Codification Topic 815, Derivatives and Hedging .

Warrants are classified as liabilities when the warrant terms allow settlement of the warrant exercise in cash and classified as equity when the warrant terms only allow settlement in shares of common stock.

The terms of the 2022 pre-funded warrant and the 2022 stock purchase warrants include certain provisions related to fundamental transactions and a cashless exercise provision in the event registered shares are not available, and do not include any mandatory redemption provisions.

Based on our evaluation, we concluded the 2022 pre-funded warrant and the 2022 stock purchase warrants should be classified as equity with no subsequent remeasurement as long as such warrants continue to be classified as equity.

Employee Stock Purchase Plan

In May 2022, our stockholders approved an amendment to our 2014 Employee Stock Purchase Plan to increase the total number of shares issuable under such plan by 1,000,000 shares of common stock.

2018 Equity Incentive Plan

In May 2022, our stockholders approved an amendment to our 2018 Equity Incentive Plan to increase the total number of shares issuable under such plan by 11,000,000 shares of common stock.

2018 Inducement Award Plan

In December 2018, our board of directors approved the adoption of the 2018 Inducement Award Plan, or the Inducement Plan, to be used exclusively for grants of inducement awards to individuals who were not previously our employees or non-employee directors, other than following a bona fide period of non-employment.

As of June 30, 2022, a total of 16,100,000 shares of our common stock had been reserved (subject to customary adjustments in the event of a change in capital structure) under the Inducement Plan.

In July 2022, our Compensation Committee approved an amendment to increase the reserve under the Inducement Plan by 5,000,000 shares.

The terms and conditions of the Inducement Plan and the inducement awards to be granted thereunder are substantially similar to our stockholder-approved 2018 Equity Incentive Plan.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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For IMerge Phase 3, we expect top-line results to be available in early January 2023, based on current planning assumptions.

In July 2022, the regularly scheduled Independent Data Monitoring Committee for IMerge Phase 3 met, and the committee recommended the trial continue without modification.

Assuming the results of IMerge Phase 3 support regulatory submissions, we plan to submit a New Drug Application, or NDA, in the U.S.

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In Europe, we anticipate review of the MAA by the European Medicines Agency, or EMA, could take approximately 12 months and, if approved, that commercial launch of imetelstat in lower risk MDS in Europe could occur as early as the second half of 2024.

For IMpactMF, under current planning assumptions, we expect the trial to be fully enrolled in 2024.

For IMpactMF, clinical site openings and patient screening and enrollment continue.

Under current planning assumptions, we expect the trial to be fully enrolled in 2024.

In addition, we expect the interim analysis for overall survival, or OS, for IMpactMF may occur in 2024 and the final analysis in 2025.

Because these analyses are event-driven, the results may be available at different times than currently expected.

We plan to start IMproveMF, a Phase 1 clinical trial of imetelstat in combination with ruxolitinib in frontline Intermediate-2 or High-risk myelofibrosis, or frontline MF, patients, in the first half of 2022.

In May 2022, the first clinical site opened for enrollment in IMproveMF, a Phase 1 clinical trial of imetelstat in combination with ruxolitinib in frontline Intermediate-2 or High-risk myelofibrosis, or frontline MF, patients.

In addition, in collaboration with key opinion leaders with expertise in acute myeloid leukemia, or AML, we plan to support one or more investigator-led clinical trials in AML and Intermediate-2 or High-risk myelodysplastic syndromes, or higher risk MDS, to evaluate imetelstat as a single agent and in combination with venetoclax or hypomethylating agents, or HMAs, in the second half of 2022.

Imetelstat has been granted Fast Track designations by the FDA for the treatment of patients with transfusion-dependent anemia due to lower risk MDS, who do not have a deletion 5q chromosomal abnormality, also known as non-del(5q), and who are refractory or resistant to treatment with an erythropoiesis stimulating agent, or ESA, and for the treatment of patients with myelofibrosis, or MF, who have relapsed after or are refractory to treatment with a janus associated kinase, or JAK, inhibitor, also known as relapsed/refractory MF.

who have relapsed after or are refractory to treatment with a janus associated kinase, or JAK, inhibitor, also known as relapsed/refractory MF.

Imetelstat has also been granted orphan drug designations by the FDA in the U.S.

and by the European Commission for the EMA in the EU for the treatment of myelodysplastic syndromes, or MDS, and also for the treatment of MF.

October 2021, we gained access to the Innovative Licensing and Access Pathway, or ILAP, in the United Kingdom, or U.K., through the receipt of an Innovation Passport for imetelstat to treat lower risk MDS.

In October 2021, we gained access to the Innovative Licensing and Access Pathway, or ILAP, in the United Kingdom, or U.K., through the receipt of an Innovation Passport for imetelstat to treat lower risk MDS.

Financial Overview

Since our inception, we have primarily financed our operations through the sale of equity securities, interest income on our marketable securities and payments we received under our collaborative and licensing arrangements.

As of March 31, 2022, we had approximately $178.0 million in cash, cash equivalents, restricted cash and current and noncurrent marketable securities and a long-term principal debt balance of $50.0 million.

As of June 30, 2022, we had approximately $219.7 million in cash, cash equivalents, restricted cash and marketable securities and a long-term principal debt balance of $50.0 million.

In April 2022, we completed an underwritten public offering of 53,333,334 shares of our common stock and a pre-funded warrant to purchase 18,095,238 shares of our common stock, also known as the 2022 pre-funded warrant, together with accompanying warrants to purchase 35,714,286 shares of our common stock, also known as the 2022 stock purchase warrants.

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The combined public offering price of the 2022 pre-funded warrant and accompanying 2022 stock purchase warrant was $1.049 per share.

The estimated net cash proceeds from this offering are approximately $69.7 million, after deducting the underwriting discount and other estimated offering expenses payable by us, and excludes any future proceeds from the exercise of the 2022 pre-funded warrant or the 2022 stock purchase warrants.

See Note 7 on Subsequent Event in Notes to Condensed Consolidated Financial Statements of this quarterly report on Form 10-Q for additional information about the underwritten public offering completed in April 2022.

The net cash proceeds from this offering were $69.9 million, after deducting the underwriting discount and other offering expenses paid by us, and exclude any potential future proceeds from the exercise of the 2022 pre-funded warrant and 2022 stock purchase warrants.

See Note 6 on Stockholders' Equity in Notes to Condensed Consolidated Financial Statements of this quarterly report on Form 10-Q for additional information about the underwritten public offering completed in April 2022.

In June 2022, we entered into a second amendment to the Loan Agreement with Hercules and SVB.

Under the second amendment, the aggregate principal amount available to us increased from $75.0 million to $125.0 million.

As of June 30, 2022, $75.0 million is available to be drawn in a series of tranches under the Loan Agreement, subject to certain terms and conditions.

See Note 4 on Debt in Notes to Condensed Consolidated Financial Statements of this quarterly report on Form 10-Q for additional information about the second amendment.

Substantially all of our revenues to date have been payments under collaboration agreements, and milestones, royalties and other revenues from our licensing arrangements.

We currently have no source of product revenue.

While we reported a small profit for the year ended December 31, 2015 due to our recognition of revenue in connection with the upfront payment under a former imetelstat collaboration agreement, until 2015 we had never been profitable, and have not reported any profit since.

We have incurred significant net losses since our inception in 1990, resulting principally from costs incurred in connection with our research and development activities and from general and administrative costs associated with our operations.

As of March 31, 2022, we had an accumulated deficit of approximately $1.3 billion.

As of June 30, 2022, we had an accumulated deficit of approximately $1.3 billion.

The significance of future losses, future revenues and any potential future profitability will depend primarily on the clinical and commercial success of imetelstat, our sole product candidate.

Under current planning assumptions, we believe our existing capital resources, including the net proceeds from the public offering completed in April 2022, and projected future proceeds of up to $124.3 million from the exercise of currently outstanding warrants will be sufficient to fund our projected level of operations, which includes preparatory activities for potential U.S.

commercial launch of imetelstat in lower risk MDS, until the end of 2023.

Absent these projected warrant proceeds, under current planning assumptions, we believe our existing capital resources, including the net proceeds from the public offering completed in April 2022, will be sufficient to fund our projected level of operations, which includes preparatory activities for potential U.S.

commercial launch of imetelstat in lower risk MDS, until the end of the second quarter of 2023.

We will require additional funding to further advance the imetelstat program, including through the completion of IMpactMF and the planned exploratory studies in new indications, including IMproveMF and investigator-led trials in AML and higher risk MDS, as well as conducting the clinical, regulatory and potential commercialization activities necessary to potentially bring imetelstat to market in lower risk MDS and refractory MF.

Under current planning assumptions, we believe our existing capital resources, potential future proceeds of up to $124.3 million from the exercise of currently outstanding warrants and up to $50.0 million in potential available drawdowns under the Loan Agreement that are subject to our achievement of certain clinical and regulatory milestones and satisfaction of certain capitalization and other requirements, would be sufficient to fund our projected level of operations, which includes stage-gated activities for potential U.S.

commercial launch of imetelstat in lower risk MDS, until the middle of 2024.

Absent these potential future warrant proceeds and availability of debt drawdowns, under current planning assumptions, we believe our existing capital resources will be sufficient to fund our projected level of operations, which includes stage-gated activities for potential U.S.

commercial launch of imetelstat in lower risk MDS, until the end of the third quarter of 2023.

We will require substantial additional funding to further advance the imetelstat program, including through the completion of IMpactMF and IMproveMF and the planned investigator-led trials in AML and higher risk MDS, as well as conducting the clinical, regulatory and potential commercialization activities necessary to potentially bring imetelstat to market in lower risk MDS and refractory MF.

If approved for marketing by regulatory authorities outside of the U.S., we may seek potential commercialization partners for such territories.

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The ongoing COVID-19 pandemic and the military conflict between Ukraine and Russia are having widespread, rapidly-evolving, and unpredictable impacts on global societies, economies, financial markets and business practices.

For both our Phase 3 clinical trials, IMerge and IMpactMF, we have limited ongoing clinical trial activity in Ukraine and Russia.

With support from our international clinical research organization, or CRO, we are monitoring the potential impact of the conflict on our clinical trial activities.

For both our Phase 3 clinical trials, IMerge and IMpactMF, we have limited ongoing clinical trial activity in Ukraine and Russia, but we have experienced, and may continue to experience, delays and suspensions in clinical trial activities at clinical sites in Ukraine and Russia, including delays in clinical site initiations, patient screening and enrollment, as well as constraints on available sites and site personnel.

With support from our international clinical research organization, or CRO, we are monitoring the impact of the conflict on our clinical trial activities.

We do not anticipate the pandemic or the conflict to affect our projected timing for top-line results in IMerge Phase 3 in early January 2023.

For a discussion regarding the effect of the ongoing COVID-19 pandemic and the military conflict between Ukraine and Russia on our business and financial results, see the section entitled “Risk Factors”

in Part II, Item 1A and Note 5 on Contingencies and Uncertainties –

Risks Related to COVID-19 and the Military Conflict Between Ukraine and Russia in Notes to Condensed Consolidated Financial Statements of this quarterly report on Form 10-Q.

in Part II, Item 1A and Note 5 on

Contingencies and Uncertainties –

Risks Related to Global Economic Conditions, COVID-19 and the Military Conflict Between Ukraine and Russia in Notes to Condensed Consolidated Financial Statements of this quarterly report on Form 10-Q.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There have been no significant changes in our critical accounting policies and estimates during the three months ended March 31, 2022, as compared to the critical accounting policies and estimates disclosed in our 2021 Form 10-K.

There have been no significant changes in our critical accounting policies and estimates during the six months ended June 30, 2022, as compared to the critical accounting policies and estimates disclosed in our 2021 Form 10-K.

Our condensed consolidated financial statements have been prepared in accordance with U.S.

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The preparation of these financial statements requires management to make estimates and assumptions that affect the reported assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Note 1 on Summary of

Significant Accounting Policies in Notes to Condensed Consolidated Financial Statements of this quarterly report on Form 10-Q describes the significant accounting policies used in the preparation of the condensed consolidated financial statements.

Note 1 on Summary of Significant Accounting Policies in Notes to Condensed Consolidated Financial Statements of this quarterly report on Form 10-Q describes the significant accounting policies used in the preparation of the condensed consolidated financial statements.

Estimates and assumptions about future events and their effects cannot be determined with certainty.

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In order for imetelstat to be commercialized, we must conduct non-clinical tests and clinical trials to demonstrate the safety and efficacy of imetelstat, obtain regulatory approvals or clearances and enter into manufacturing, distribution and marketing arrangements, as well as obtain market acceptance.

We do not expect to receive revenue based on sales of imetelstat for many years, if at all.

We previously entered into license or collaboration agreements with companies involved with oncology, diagnostics, research tools and biologics production, whereby we granted certain rights to our non-imetelstat related technologies.

We do not expect to receive revenue based on sales of imetelstat for several years, if at all.

Under these agreements, non-refundable upfront fees and annual license maintenance fees were considered fixed consideration, while milestone payments and royalties were identified as variable consideration.

As of June 30, 2021, no active license agreements remain.

In connection with the divestiture of Geron’s human embryonic stem cell assets, including intellectual property and proprietary technology, to Lineage Cell Therapeutics, Inc.

(formerly BioTime, Inc.

As of June 30, 2021, no active license agreements for our imetelstat and non-imetelstat related technologies remain.

In connection with the divestiture of Geron’s human embryonic stem cell assets, including intellectual property and proprietary technology, to Lineage Cell Therapeutics, Inc., or Lineage, (formerly BioTime, Inc.

which acquired Asterias Biotherapeutics, Inc.) in 2013, we are entitled to receive royalties on sales from certain research or commercial products utilizing Geron’s divested intellectual property.

We recognized royalty revenues of $123,000 for the three months ended March 31, 2022, compared to $137,000 for the same period in 2021.

We recognized license fee revenues of $28,000 for each of the three and six months ended June 30, 2021 related to a previous license agreement for our non-imetelstat related technologies.

No comparable amounts were recognized for the three and six months ended June 30, 2022.

We recognized royalty revenues of $73,000 and $196,000 for the three and six months ended June 30, 2022, respectively, compared to $79,000 and $216,000 for the same periods in 2021.

Royalty revenues in 2022 and 2021 primarily reflect estimated royalties from sales of cell-based research products from our divested stem cell assets.

Future license fee and royalty revenues are dependent on additional agreements being signed, if any, our current license agreement being maintained and the underlying patent rights for the license remaining active.

Future license fee and royalty revenues are dependent on additional agreements being signed, if any, our current license agreement with Lineage being maintained and the underlying patent rights for the license remaining active.

Historical revenues may not be predictive of future revenues.

Absent the one-time payment for retroactive royalties received in the fourth quarter of 2021, we expect revenues in 2022 to be lower than 2021 as a result of reduced royalties from sales of cell-based research products from our divested stem cell assets.

Absent any retroactive royalty payments, such as the one-time payment received from Lineage in

the fourth quarter of 2021, we expect revenues in 2022 to be lower than 2021 as a result of reduced royalties from sales of cell-based research products from our divested stem cell assets.

Research and Development Expenses

During the three months ended March 31, 2022 and 2021, our imetelstat program and our research discovery program related to potential next generation telomerase inhibitors were the only research and development programs we supported.

During the three and six months ended June 30, 2022 and 2021, our imetelstat program and our research discovery program related to potential next generation telomerase inhibitors were the only research and development programs we supported.

For these research and development programs, we incur direct external, personnel-related and other research and development costs.

For the three months ended March 31, 2022 and 2021, direct external expenses included costs for our CROs, consultants and other clinical-related vendors, as well as expenses for contract manufacturing and quality activities.

For the three and six months ended June 30, 2022 and 2021, direct external expenses included costs for our CROs, consultants and other clinical-related vendors, as well as expenses for contract manufacturing and quality activities.

Personnel-related expenses primarily consist of salaries and wages, stock-based compensation, payroll taxes and benefits for our employees involved with ongoing research and development efforts.

Other research and development expenses primarily consist of research-related overhead associated with allocated expenses for rent and maintenance of facilities and other supplies.

Research and development expenses for the three months ended March 31, 2022 and 2021 were as follows:

Three Months Ended March 31,

Research and development expenses for the three and six months ended June 30, 2022 and 2021 were as follows:

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

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Total research and development expenses

The increase in research and development expenses for the three months ended March 31, 2022, compared to the same period in 2021, primarily reflects higher personnel-related expenses as a result of additional development and manufacturing headcount being hired.

We expect research and development expenses to increase in the future as we support the current two Phase 3 clinical trials of imetelstat, IMerge and IMpactMF, the planned IMproveMF trial and planned investigator-led trials in AML and higher risk MDS.

The decrease in research and development expenses for the three and six months ended June 30, 2022, compared to the same periods in 2021, primarily reflects the net result of decreased manufacturing costs due to the timing of imetelstat manufacturing batches;

partially offset by increased personnel-related expenses for additional headcount and higher consulting costs related to preparation for top-line results and regulatory submissions in lower risk MDS.

We expect research and development expenses to increase in the future as we support the current two Phase 3 clinical trials of imetelstat, IMerge and IMpactMF, the IMproveMF trial and planned investigator-led trials in AML and higher risk MDS.

At this time, we cannot provide reliable estimates of how much time or investment will be necessary to advance imetelstat toward commercialization.

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General and Administrative Expenses

General and administrative expenses were $6.7 million for the three months ended March 31, 2022, compared to $7.5 million for the same period in 2021.

The decrease in general and administrative expenses for the three months ended March 31, 2022, compared to the same period in 2021, primarily reflects the net result of reduced consulting costs of approximately $915,000 related to modernizing the internal infrastructure to support potential commercial launch and lower legal fees of approximately $181,000;

partially offset by higher personnel-related expenses of approximately $387,000 for additional headcount.

We expect general and administrative expenses to increase in the future as the imetelstat program matures and potential commercialization preparatory activities increase.

General and administrative expenses were $7.4 million and $14.1 million for the three and six months ended June 30, 2022, respectively, compared to $7.1 million and $14.5 million for the same periods in 2021.

The increase in general and administrative expenses for the three months ended June 30, 2022, compared to the same period in 2021, primarily reflects the net result of increased costs for commercial preparatory activities of approximately $563,000 and higher personnel-related expenses of approximately $573,000 for additional headcount;

partially offset by lower legal fees of approximately $364,000 and reduced consulting costs of approximately $530,000 related to modernizing the internal infrastructure to support potential commercial launch.

The decrease in general and administrative expenses for the six months ended June 30, 2022, compared to the same period in 2021, primarily reflects the net result of reduced consulting costs of approximately $1.2 million related to modernizing the internal infrastructure to support potential commercial launch and lower legal fees of approximately $586,000;

partially offset by higher personnel-related expenses of approximately $797,000 for additional headcount and higher costs for commercial preparatory activities of approximately $349,000.

We expect general and administrative expenses to increase in the future as the imetelstat program matures and potential stage-gated commercialization activities continue.

Interest Income

Interest income was $112,000 for the three months ended March 31, 2022, compared to $173,000 for the same period in 2021.

The decrease in interest income for the three months ended March 31, 2022, compared to the same period in 2021, primarily reflects the decline in the size of our marketable securities portfolio and lower yields due to low interest rates.

We expect interest income to increase during the remainder of 2022 as we invest the net cash proceeds received from our underwritten public offering completed in April 2022 and yields from marketable securities increase as interest rates rise.

However, interest earned in future periods will depend on the size of our marketable securities portfolio and prevailing interest rates.

Interest income was $330,000 and $442,000 for the three and six months ended June 30, 2022, respectively, compared to $136,000 and $309,000 for the same periods in 2021.

The increase in interest income for the three and six months ended June 30, 2022, compared to the same periods in 2021, primarily reflects a larger marketable securities portfolio with the receipt of net cash proceeds from the underwritten public offering completed in April 2022 and higher yields from recent marketable securities purchases.

Interest earned in future periods will depend on the size of our marketable securities portfolio and prevailing interest rates.

Interest Expense

Interest expense was $1.5 million for the three months ended March 31, 2022, compared to $743,000 for the same period in 2021.

Interest expense was $1.6 million and $3.1 million for the three and six months ended June 30, 2022, respectively, compared to $804,000 and $1.5 million for the same periods in 2021.

The increase in interest expense for the three and six months ended June 30, 2022, compared to the same periods in 2021, primarily reflects rising interest rates and an increased principal debt balance under the Loan Agreement.

Currently, we have $50.0 million in principal debt outstanding.

Interest expense reflects interest owed under the Loan Agreement, as well as amortization of associated debt issuance costs and debt discounts using the effective interest method and accrual for an end of term charge.

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Other Income and (Expense), Net

Net other expense was $56,000 for the three months ended March 31, 2022, compared to net other income of $1.2 million for the same period in 2021.

During the first quarter of 2021, we sold our entire equity investment resulting in a net realized gain of $1.2 million, including foreign currency translation adjustments.

See Note 2 on Fair Value Measurements –

Equity Investment in Notes to Condensed Consolidated Financial Statements of this quarterly report on Form 10-Q for additional information about the sale of our equity investment.

Other income and (expense) also includes bank charges related to our cash operating accounts and marketable securities portfolio.

Net other income was $1.1 million and $1.1 million for the three and six months ended June 30, 2022, respectively, compared to net other expense of $17,000 and net other income of $1.2 million for the same periods in 2021.

In the second quarter of 2022, we recognized other income of approximately $1.3 million related to the reimbursement of certain legal expenses under our insurance policies.

During the first quarter of 2021, we sold our entire equity investment in BARD1 Life Sciences Limited, a company listed on the Australian stock exchange, resulting in a net realized gain of $1.2 million, including foreign currency translation adjustments.

Net other income and (expense) also includes bank charges related to our cash operating accounts and marketable securities portfolio.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2022, we had cash, restricted cash, cash equivalents, and current and noncurrent marketable securities of $178.0 million, compared to $212.7 million at December 31, 2021.

The decrease in cash, restricted cash, cash equivalents and current and noncurrent marketable securities during the three months ended March 31, 2022 was primarily the result of cash being used for operations.

As of March 31, 2022 and December 31, 2021 we had a long-term principal debt balance of $50.0 million under the Loan Agreement with Hercules and SVB.

See Note 4 on Debt in Notes to Condensed Consolidated Financial Statements of this quarterly report on Form 10-Q for additional information on the Loan Agreement.

As of June 30, 2022, we had cash, restricted cash, cash equivalents, and marketable securities of $219.7 million, compared to $212.7 million at December 31, 2021.

The increase in cash, restricted cash, cash equivalents and marketable securities during the six months ended June 30, 2022 was primarily the net result of the receipt of net cash proceeds of $69.9 million from our underwritten public offering completed in April 2022, partially offset by cash being used for operations.

The combined public offering price of the common stock and accompanying 2022 stock purchase warrants was $1.05 per share.

The combined public offering price of the 2022 pre-funded warrant and accompanying 2022 stock purchase warrant was $1.049 per share.

As of June 30, 2022 and December 31, 2021 we had a long-term principal debt balance of $50.0 million under the Loan Agreement with Hercules and SVB.

In June 2022, we entered into a second amendment to the Loan Agreement with Hercules and SVB.

Under the second amendment, the aggregate principal amount available to us increased from $75.0 million to $125.0 million.

As of June 30, 2022, a total of $75.0 million is available to be drawn in a series of tranches under the Loan Agreement, subject to certain terms and conditions.

Of this amount, $50.0 million is available subject to our achievement of certain clinical and regulatory milestones and satisfaction of certain capitalization and other requirements, and the remaining $25.0 million is available subject to approval by an investment committee comprised of Hercules and SVB.

See Note 4 on Debt in Notes to Condensed Consolidated Financial Statements of this quarterly report on Form 10-Q for additional information on the second amendment.

We have an investment policy to invest our cash in liquid, investment grade securities, such as interest-bearing money market funds, certificates of deposit, U.S.

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For the year ended December 31, 2021, we sold an aggregate of 10,571,556 shares of our common stock pursuant to the 2020 Sales Agreement, resulting in net cash proceeds to us of approximately $20.4 million, after deducting sales commissions and other offering expenses payable by us.

We did not sell any shares of our common stock pursuant to the 2020 Sales Agreement during the three months ended March 31, 2022.

Approximately $79.1 million of our common stock remained available for issuance under the 2020 Sales Agreement as of March 31, 2022.

We did not sell any shares of our common stock pursuant to the 2020 Sales Agreement during the six months ended June 30, 2022.

Approximately $79.1 million of our common stock remained available for issuance under the 2020 Sales Agreement as of June 30, 2022.

The 2020 Sales Agreement will expire upon the earlier of:

(a) the sale of all common stock subject to the 2020 Sales Agreement, or (b) September 4, 2023.

The combined public offering price of the common stock and accompanying 2022 stock purchase warrants was $1.05 per share.

The combined public offering price of the 2022 pre-funded warrant and accompanying 2022 stock purchase warrant was $1.049 per share.

Financing Strategy

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Future Funding Requirements

commercial launch of imetelstat in lower risk MDS, until the end of 2023.

commercial launch of imetelstat in lower risk MDS, until the end of the second quarter of 2023.

Under current planning assumptions, we believe our existing capital resources, including the potential future proceeds of up to $124.3 million from the exercise of currently outstanding warrants and potential drawdowns of up to $50.0 million under the Loan Agreement that are subject to our achievement of certain clinical and regulatory milestones and satisfaction of certain capitalization and other requirements, would be sufficient to fund our projected level of operations, which includes stage-gated activities for potential U.S.

commercial launch of imetelstat in lower risk MDS, until the middle of 2024.

Absent these potential warrant proceeds and availability of debt drawdowns under the Loan Agreement, under current planning assumptions, we believe our existing capital resources will be sufficient to fund our projected level of operations, which includes stage-gated activities for potential U.S.

commercial launch of imetelstat in lower risk MDS, until the end of the third quarter of 2023.

Importantly, our ability to raise additional capital to fund our operations after the end of the third quarter of 2023 will be substantially dependent on the top-line results from IMerge Phase 3.

If the top-line results from IMerge Phase 3 are negative, inconclusive or otherwise do not meet the expectations of investors, analysts and our lenders, our ability to raise additional capital to fund our operations after the end of the third quarter of 2023 will be substantially impaired, which might cause us to cease operations.

In any event, we will require substantial additional funding to further advance the imetelstat program, including through the completion of IMpactMF and IMproveMF and the planned investigator-led trials in AML and higher risk MDS, as well as conducting the clinical, regulatory and potential commercialization activities necessary to potentially bring imetelstat to market in lower risk MDS and refractory MF.

In addition, our ability to commercialize imetelstat in the U.S., if regulatory approval is granted, depends on us being able to establish sales and marketing capabilities.

Because the outcome of any clinical activities and/or regulatory approval process is highly uncertain, we cannot reasonably estimate whether any development activities we may undertake will succeed, and we may never recoup our investment in any imetelstat development, which would adversely affect our financial condition and our business and business prospects, and might cause us to cease operations.

In addition, our plans and timing expectations will be further delayed or interrupted if COVID-19 or pandemic conditions continue unabated, or worsen, creating further limitations on our clinical trial activities, or could be disrupted by

civil or political unrest (such as the current military conflict between Ukraine and Russia).

In addition, our plans and timing expectations will be further delayed or interrupted if COVID-19 or pandemic conditions worsen, creating further limitations on our clinical trial activities, or could be disrupted by civil or political unrest (such as the current military conflict between Ukraine and Russia).

Further, our future capital requirements are difficult to forecast and will depend on many factors, including:

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the scope, progress, timing, magnitude and costs of clinical development, manufacturing and potential commercialization of imetelstat, including the number of indications being pursued, subject to clearances and approvals by the FDA and similar regulatory authorities in other countries;

the scope, progress, duration, results and costs of current clinical trials, including IMerge Phase 3 and IMpactMF, and potential future clinical trials of imetelstat, such as IMproveMF and planned investigator-led clinical trials in AML and higher risk MDS, as well as non-clinical studies and assessments of imetelstat;

delays or disruptions in opening sites, screening and enrolling patients or treating and following patients, in IMpactMF or any potential future clinical trials of imetelstat, such as IMproveMF and planned investigator-led clinical trials in AML and higher risk MDS, whether as a result of the effects of the COVID-19 pandemic, the effects of the current military conflict between Ukraine and Russia or for any other reasons;

the scope, progress, duration, results and costs of current clinical trials, including IMerge Phase 3, IMpactMF and IMproveMF, and potential future clinical trials of imetelstat, such as the planned investigator-led clinical trials in AML and higher risk MDS, as well as non-clinical studies and assessments of imetelstat;

delays or disruptions in opening sites, screening and enrolling patients or treating and following patients, in IMpactMF and IMproveMF or any potential future clinical trials of imetelstat, such as the planned investigator-led clinical trials in AML and higher risk MDS, whether as a result of the effects of the COVID-19 pandemic, the effects of the current military conflict between Ukraine and Russia or for any other reasons;

the costs, timing and outcomes of regulatory reviews or other regulatory actions related to imetelstat, such as obtaining and maintaining regulatory clearances and approvals for IMerge Phase 3 and IMpactMF in the U.S.

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the costs of manufacturing imetelstat, including our ability to achieve any meaningful reduction in manufacturing costs;

the costs of multiple third-party vendors and service providers, including our CROs and CMOs, to pursue the development, manufacturing and potential commercialization of imetelstat;

the costs of multiple third-party vendors and service providers, including our CROs and third-party manufacturers, to pursue the development, manufacturing and potential commercialization of imetelstat;

our ability to establish, enforce and maintain collaborative or other strategic arrangements for research, development, clinical testing and manufacturing of imetelstat and potential future commercialization and marketing;

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the costs and timing necessary to build a sales force in the U.S.

to market and sell imetelstat, should it receive regulatory approval;

and potentially other countries to market and sell imetelstat, should it receive regulatory approval;

the sales price for imetelstat, if any;

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the costs of maintaining and operating facilities in California and New Jersey, telecommunications and administrative oversight, as well as higher expenses for travel;

broader economic conditions, including inflation, rising interest rates and the prospects for recession, that may reduce our ability to access debt capital or financing on preferable terms, which may adversely affect future capital requirements and forecasts;

the costs of enabling our personnel to work remotely, including providing supplies, equipment and technology necessary for them to perform their responsibilities.

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Additional financing through public or private debt or equity financings, including pursuant to the 2020 Sales Agreement with B.

Riley Securities, the remaining $25.0 million Tranche C drawdown under the Loan Agreement to the extent available, capital lease transactions or other financing sources may not be available on acceptable terms, or at all.

Riley Securities, the remaining tranches of up to $75.0 million available under the Loan Agreement, subject to the achievement of certain clinical and regulatory milestones and satisfaction of certain capitalization and other requirements, including approval by an investment committee comprised of Hercules and SVB, capital lease transactions or other financing sources may not be available on acceptable terms, or at all.

We may be unable to raise equity capital, or may be forced to do so at a stock price or on other terms that could result in substantial dilution of ownership for our stockholders.

The receptivity of the public and private debt and equity markets to proposed financings has been substantially affected by uncertainty in

the general economic, market and political climate caused by the effects of the COVID-19 pandemic, and may in the future be affected by other factors which are unpredictable and over which we have no control.

The receptivity of the public and private debt and equity markets to proposed financings has been substantially affected by uncertainty in the general economic, market and political climate caused by the effects of the COVID-19 pandemic, the current military conflict between Ukraine and Russia and general economic conditions, and may in the future be affected by other factors which are unpredictable and over which we have no control.

In this regard, the effects of the COVID-19 pandemic have increased market volatility and could result in a significant long-term disruption of global financial markets, which could reduce or eliminate our ability to raise additional funds through financings, and could negatively impact the terms upon which we may raise those funds.

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We cannot assure you that our existing capital resources, future interest income, and potential future sales of our common stock, including under the 2020 Sales Agreement with B.

Riley Securities or potential future drawdown, if available, of the remaining $25.0 million of Tranche C under our Loan Agreement, will be sufficient to fund our operating plans.

In this regard, under the Loan Agreement, our ability to draw down any funds under Tranche C is subject to certain conditions, including approval by an investment committee comprised of Hercules and SVB.

Without investment committee approval, we will not be eligible to draw down any funds under Tranche C of the Loan Agreement, and we will need to obtain additional or alternative financing to advance our development of imetelstat.

In any event, we will require additional funding to further advance the imetelstat program, including through the completion of IMpactMF and the planned exploratory studies in new indications, including IMproveMF and investigator-led trials in AML and higher risk MDS, as well as conducting the clinical, regulatory and potential commercialization activities necessary to potentially bring imetelstat to market in lower risk MDS and refractory MF, and our need for additional funds may arise sooner than planned.

If adequate funds are not available on a timely basis, if at all, we may be unable to pursue further development, including completing IMpactMF, or commencing, conducting or completing potential future clinical trials of imetelstat, such as IMproveMF and planned investigator-led clinical trials in AML and higher risk MDS, or pursuing potential commercialization of imetelstat, which would severely harm our business and we might cease operations.

Riley Securities or potential future drawdowns, if available, of the remaining up to $75.0 million under the Loan Agreement, will be sufficient to fund our operating plans.

In this regard, under the Loan Agreement, our ability to draw down any funds is subject to our achievement of certain clinical and regulatory milestones and satisfaction of certain capitalization requirements and other conditions, including approval by an investment committee comprised of Hercules and SVB.

Without such approval, we will not be eligible to draw down any funds under the final $25.0 million tranche of the Loan Agreement, and we will need to obtain additional or alternative financing to advance our development of imetelstat.

If adequate funds are not available on a timely basis, if at all, we may be unable to pursue further development, including completing IMpactMF and IMproveMF, or commencing, conducting or completing potential future clinical trials of imetelstat, such as the planned investigator-led clinical trials in AML and higher risk MDS, or pursuing potential commercialization of imetelstat, which would severely harm our business and we might cease operations.

Cash Flows from Operating Activities

Net cash used in operations for the three months ended March 31, 2022 and 2021 was $34.0 million and $32.7 million, respectively.

The increase in net cash used in operations for the three months ended March 31, 2022, compared to the same period in 2021, primarily reflects higher payments for research and development expenses in connection with supporting the current Phase 3 clinical trials, IMerge and IMpactMF, and increases in headcount.

Net cash used in operations for the six months ended June 30, 2022 and 2021 was $62.6 million and $50.5 million, respectively.

The increase in net cash used in operations for the six months ended June 30, 2022, compared to the same period in 2021, primarily reflects higher payments for research and development expenses in connection with supporting the current Phase 3 clinical trials, IMerge and IMpactMF, and increases in headcount.

Cash Flows from Investing Activities

Net cash provided by investing activities for the three months ended March 31, 2022 and 2021 was $30.4 million and $38.1 million, respectively.

The decrease in net cash provided by investing activities for the three months ended March 31, 2022, compared to the same period in 2021, primarily reflects a lower rate of maturities than purchases of marketable securities in 2022.

Net cash provided by investing activities for the six months ended June 30, 2022 and 2021 was $33.2 million and $69.0 million, respectively.

The decrease in net cash provided by investing activities for the six months ended June 30, 2022, compared to the same period in 2021, primarily reflects a higher rate of purchases than maturities of marketable securities in 2022 from the investment of net cash proceeds received from the underwritten public offering completed in April 2022.

Cash Flows from Financing Activities

Net cash provided by financing activities for the three months ended March 31, 2021 was $16.3 million.

Net cash provided by financing activities for the six months ended June 30, 2022 and 2021 was $70.6 million and $28.9 million, respectively.

Financing activities in 2022 primarily reflect the receipt of net cash proceeds from the underwritten public offering completed in April 2022.

Financing activities in 2021 primarily reflect the receipt of net cash proceeds from the sales of our common stock under the 2020 Sales Agreement with B.

Riley Securities.

No comparable amounts were incurred for the three months ended March 31, 2022.

Riley Securities and a $10.0 million draw down under the Loan Agreement with Hercules and SVB.

Contractual Obligations

We have entered into arrangements that contractually obligate us to make payments that will affect our liquidity and cash flows in future periods.

Our contractual obligations primarily consist of our noncurrent debt obligations under the Loan Agreement with Hercules and SVB, as described above and in Note 4 on Debt in Notes to Condensed Consolidated Financial Statements of this quarterly report on Form 10-Q, and obligations under non-cancellable operating leases.

The aggregate amount of our future operating lease payments was reported in our 2021 Form 10-K and there have been no changes to the contractual terms of our operating leases during the three months ended March 31, 2022.

In the normal course of business, we enter into agreements with CROs for clinical trials and CMOs for clinical supply manufacturing and with other vendors for preclinical research studies, investigator-led trials and other services and products for operating purposes.

Our contractual obligations primarily consist of our current and noncurrent debt obligations under the Loan Agreement with Hercules and SVB, as described above and in Note 4 on Debt in Notes to Condensed Consolidated Financial Statements of this quarterly report on Form 10-Q, and obligations under non-cancellable operating leases.

In the normal course of business, we enter into agreements with CROs for clinical trials and third-party manufacturers for clinical supply manufacturing and with other vendors for preclinical research studies, investigator-led trials and other services and products for operating purposes.

We have not considered these payments to be contractual obligations since the contracts are generally cancelable at any time by us upon less than 180 days’

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What changed 10-Q

Item 1. Financial Statements