What changed in this filing

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Item 1. Financial Statements

2023-05-11 compared with 2022-11-07 · 349 added, 437 removed, 559 unchanged (58% of the section changed)

3 unchanged sentences

(IN THOUSANDS)

SEPTEMBER 30,

Current assets:

29 unchanged sentences

THREE MONTHS ENDED

NINE MONTHS ENDED

SEPTEMBER 30,

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

NINE MONTHS ENDED

SEPTEMBER 30,

Net unrealized gain (loss) on marketable securities

7 unchanged sentences

Stockholders'

Balances at December 31, 2021

Other comprehensive loss

Stock-based compensation

related to issuance of common

stock and options in exchange

Stock-based compensation for

equity-based awards to

employees and directors

Balances at March 31, 2022

Other comprehensive loss

Issuance of common stock,

pre-funded warrant and

warrants to purchase

Balance at December 31, 2022

Other comprehensive income

Foreign currency translation adjustment

Issuance of common stock and

pre-funded warrant to purchase

common stock in public

1 unchanged sentence

costs of $ 14,507

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

Other comprehensive income

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

Stock-based compensation related

to issuance of common stock

and options in exchange

Issuance of common stock

under equity plans

2 unchanged sentences

employees and directors

Balances at September 30, 2022

GERON CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

(IN THOUSANDS, EXCEPT SHARE DATA)

Balance at March 31, 2023

Comprehensive

Stockholders'

Balances at December 31, 2020

Other comprehensive loss

Issuance of common stock in

connection with at market

offering, net of issuance

costs of $ 374

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 March 31, 2021

Balance at December 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

Other comprehensive income

Stock-based compensation

related to issuance of common

stock and options in exchange

Foreign currency translation adjustment

Stock-based compensation related

to issuance of common stock

and options in exchange

Stock-based compensation for

1 unchanged sentence

employees and directors

Balances at September 30, 2021

Balance at March 31, 2022

See accompanying notes.

2 unchanged sentences

(IN THOUSANDS)

NINE MONTHS ENDED

SEPTEMBER 30,

THREE MONTHS ENDED

Cash flows from operating activities:

2 unchanged sentences

Accretion and amortization on investments, net

Amortization of debt issuance costs/debt discount

Gain on sales of equity investment

Amortization of debt issuance costs/debt discounts

Stock-based compensation for services by non-employees

9 unchanged sentences

Proceeds from maturities of marketable securities

Proceeds from sales of equity investment

Net cash provided by investing activities

Net cash (used in) provided by investing activities

Cash flows from financing activities:

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,

net of paid issuance costs

Proceeds from issuance of common stock from public offering

and pre-funded warrant, net of paid issuance costs

Proceeds from exercise of warrants

Proceeds from debt financing

Debt discount and issuance costs for debt financing

Net cash provided by financing activities

Net effect of unrealized losses and exchange rates

on cash, cash equivalents and restricted cash

Net change in cash, cash equivalents and restricted cash

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

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at the beginning of the period

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2022

March 31, 2023

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 and nine months ended September 30, 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 months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 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, 2022, included in our Annual Report on Form 10-K for the year ended December 31, 2022, or the Form 10-K.

The accompanying condensed balance sheet as of December 31, 2021 has been derived from audited financial statements at that date.

Since inception, we have incurred net losses and generated negative cash flows from operations.

During the three and nine months ended September 30, 2022, we incurred net losses of $ 41,051,000 and $ 99,266 000 , respectively, and in the nine months ended September 30, 2022, we generated negative cash flows from operations of $ 92,198,000 .

As of September 30, 2022, we had an accumulated deficit of $ 1,371,007,000 .

We expect our accumulated deficit will increase significantly over time and do not expect to experience positive cash flows from operations in the near future.

As of September 30, 2022, we had $ 195,151,000 of cash, restricted cash, cash equivalents, and marketable securities.

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.

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.

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

We believe our existing cash, cash equivalents and short-term marketable securities will be sufficient to fund our operations for a period of at least one year from the date of filing of this Quarterly Report on Form 10-Q.

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, 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 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.

The accompanying condensed consolidated balance sheet as of December 31, 2022 has been derived from audited financial statements at that date.

Prior Period Reclassification

The prior period presentations of other comprehensive loss in the condensed consolidated statements of stockholders' equity and accrued liabilities have been updated to conform to current period presentation.

See Note 3 on Accrued Liabilities.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Geron and our wholly-owned subsidiary, Geron UK Limited, or Geron UK, a United Kingdom company.

The condensed consolidated financial statements include the accounts of Geron and our wholly-owned subsidiaries, Geron UK Limited, or Geron UK, a United Kingdom company, and Geron Netherlands B.V., or Geron Netherlands, a Netherlands company.

Geron UK was incorporated in September 2021, and its operations commenced in January 2022.

We have eliminated intercompany accounts and transactions.

Geron Netherlands was incorporated in February 2023;

however operations have not yet commenced for that entity.

Thus, there has been no financial activity for Geron Netherlands during the first quarter of 2023.

For Geron UK, we have eliminated intercompany accounts and transactions.

We prepare the financial statements of Geron UK using the local currency as the functional currency.

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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 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.

In January 2023, we entered into an underwriting agreement in connection with a public offering of our common stock, or the January 2023 offering, pursuant to which we issued a pre-funded warrant to purchase 25,000,000 shares of our common stock, or the 2023 pre-funded warrant.

In April 2022, we entered into an underwriting agreement in connection with a public offering of our common stock, or the April 2022 offering, 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, or the May 2020 offering, 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 2023 pre-funded warrant, 2022 pre-funded warrant and 2020 pre-funded warrant are exercisable immediately at an exercise price of $ 0.001 per share each and as of March 31, 2023, none of these warrants has been exercised.

We included the 2023 pre-funded warrant, 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 January 2023 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 and nine months ended September 30, 2022 and 2021 , the diluted net loss per share calculation excludes potential dilutive securities of 174,347,456 and 105,466,722 , 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 months ended March 31, 2023 and 2022 , the diluted net loss per share calculation excludes potential dilutive securities of 107,971,822 and 118,256,294 , respectively, related to outstanding stock options and warrants as their effect would have been anti-dilutive.

GERON CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

Use of Estimates

2 unchanged sentences

GAAP requires us to make estimates and assumptions that affect the reported amounts of 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.

On an ongoing basis, we evaluate our estimates, including those related to accrued liabilities, revenue recognition, fair value of marketable securities and equity investments, operating leases, right-of-use assets, lease liabilities, income taxes, and stock-based compensation.

On an ongoing basis, we evaluate our estimates, including those related to accrued liabilities, revenue recognition, fair value of marketable securities, operating leases, right-of-use assets, lease liabilities, income taxes, and stock-based compensation.

We base our estimates on historical experience and on various other market specific and relevant assumptions that we believe to be reasonable under the circumstances.

10 unchanged sentences

Dividend and interest income are recognized when earned and included in interest income on our condensed consolidated statements of operations.

We recognize a charge when the declines in the fair values below the amortized cost bases of our available for sale securities are judged to be other than temporary.

We consider various factors in determining whether to recognize an other than temporary charge, including whether we intend to sell the security or whether it is more likely than not that we would be required to sell the security before recovery of the amortized cost basis.

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 and nine months ended September 30, 2022 and 2021 .

See Note 2 on Fair Value Measurements.

22 unchanged sentences

(iii) measure the transaction price, including the constraint on variable consideration;

(iv) allocate the transaction price to the performance obligations based on stand-alone selling prices;

(iv) allocate the transaction

GERON CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

price to the performance obligations based on stand-alone selling prices;

and (v) recognize revenue when (or as) we satisfy each performance obligation.

15 unchanged sentences

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

Licenses of Intellectual Property.

If we determine the license to intellectual property is distinct from the other performance obligations identified in the agreement and the licensee can use and benefit from the license, we recognize revenue from non-refundable upfront fees allocated to the license upon the completion of the transfer of the license to the licensee.

For such licenses, we recognize revenue from annual license maintenance fees upon the start of the new license period.

For licenses that are bundled with other performance obligations, we assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable upfront fees or annual license maintenance fees.

At each reporting date, we reassess the progress and, if necessary, adjust the measure of performance and related revenue recognition.

Milestone Payments .

At the inception of each agreement that includes milestone payments, we evaluate whether the milestones are considered probable of being achieved and estimate the amount to be included in the transaction price using the most likely amount method.

If it is probable that a significant revenue reversal would not occur, the value of the associated milestone is included in the transaction price.

For milestones that we do not deem to be probable of being achieved, the associated milestone payments are fully constrained and the value of the milestone is excluded from the transaction price with no revenue being recognized.

For example, milestone payments that are not within our control, such as regulatory-related accomplishments, are not considered probable of being achieved until those accomplishments have been communicated by the relevant regulatory authority.

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 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).

13 unchanged sentences

Depreciation and Amortization

GERON CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

We record property and equipment at cost and calculate depreciation using the straight-line method over the estimated useful lives of the assets, generally four years .

10 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 and nine months ended September 30, 2022 and 2021, which was allocated as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

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, 2023 and 2022, which was allocated as follows:

Three Months Ended March 31,

(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 and nine months ended September 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.

As stock-based compensation expense recognized in our condensed consolidated statements of operations for the three months ended March 31, 2023 and 2022 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 and nine months ended September 30, 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 months ended March 31, 2023 and 2022, 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 nine months ended September 30, 2022 and 2021 has been estimated at the date of grant using the Black Scholes option-pricing model with the following assumptions:

Nine Months Ended September 30,

The fair value of service-based stock options granted during the three months ended March 31, 2023 and 2022 has been estimated at the date of grant using the Black Scholes option-pricing model with the following assumptions:

Three Months Ended March 31,

Dividend yield

6 unchanged sentences

Expected term

GERON CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

Employee Stock Purchase Plan

The fair value of employees’

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

Nine Months Ended September 30,

stock purchase rights during the three months ended March 31, 2023 and 2022 has been estimated using the Black Scholes option-pricing model with the following assumptions:

Three Months Ended March 31,

Dividend yield

24 unchanged sentences

New Accounting Pronouncements –

Issued But Not Yet Adopted

Recently Adopted

In June 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2016-13, Measurement of Credit Losses on Financial Instruments , or ASU 2016-13.

The main objective of ASU 2016-13 is to provide financial statement users with more decision-useful information about an entity's expected credit losses on financial instruments and other commitments to extend credit at each reporting date.

To achieve this objective, the amendments in this update replace the incurred loss impairment methodology currently used today with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to develop credit loss estimates.

Subsequent to issuing ASU 2016-13, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments –

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Credit Losses , or ASU 2019-11, which expands the scope of the practical expedient that allows entities to exclude the accrued interest component of amortized cost from various disclosure.

Entities that elect to apply the practical expedient must disclose the total amount of accrued interest that they exclude from their disclosures of amortized cost.

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.

Early adoption is permitted.

We plan to adopt ASU 2016-13 and related updates as of January 1, 2023.

We do not expect the adoption of this standard to have a material impact on our condensed consolidated financial statements.

We adopted ASU 2016-13 and related updates as of January 1, 2023.

Adoption of this new guidance did not have a material impact on our condensed consolidated financial statements.

New Accounting Pronouncements –

Issued But Not Yet Adopted

In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , or ASU 2020-06.

8 unchanged sentences

We do not expect the adoption of this standard to have a material impact on our condensed consolidated financial statements.

GERON CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

Other recent accounting pronouncements issued by the FASB did not or are not believed by management to have a material impact on our condensed consolidated financial statements.

1 unchanged sentence

Cash Equivalents and Marketable Securities

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

Cash equivalents, restricted cash and marketable securities by security type at March 31, 2023 were as follows:

(In thousands)

1 unchanged sentence

Money market funds

Government-sponsored enterprise securities

Commercial paper

3 unchanged sentences

Marketable securities:

Treasury securities (due in less

than one year)

Municipal securities (due in less than

Government-sponsored enterprise

securities (due in less than one year)

Government-sponsored enterprise

securities (due in one to two years)

Commercial paper (due in less than

Corporate notes (due in less than

Corporate notes (due in less than one year)

Corporate notes (due in one to two years)

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

GERON CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

(In thousands)

1 unchanged sentence

Money market funds

Commercial paper

Restricted cash:

2 unchanged sentences

Marketable securities:

Treasury securities (due in less than

Treasury securities (due in one to

Municipal securities (due in one to

Government-sponsored enterprise

securities (due in less than one year)

Treasury securities (due in

less than one year)

Municipal securities (due in

less than one year)

Government-sponsored enterprise securities

(due in less than one year)

Commercial paper (due in less than

Corporate notes (due in less than one year)

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 September 30, 2022 and December 31, 2021 were as follows:

GERON CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

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, 2023 and December 31, 2022 were as follows:

Less Than 12 Months

1 unchanged sentence

(In thousands)

As of September 30, 2022:

Treasury securities (due in

less than one year)

Municipal securities (due in less

than one year)

As of March 31, 2023:

Government-sponsored enterprise

securities (due in less than

Commercial paper (due in less

than one year)

securities (due in less than one year)

Commercial paper (due in less than

Corporate notes (due in less than

Corporate notes (due in one to

As of December 31, 2022:

Treasury securities (due in

Treasury securities

(due in less than one year)

Municipal securities

(due in less than a year)

Government-sponsored

enterprise securities

(due in less than one year)

Commercial paper (due in less than

Corporate notes (due in

less than one year)

Treasury securities (due in

one to two years)

Municipal securities (due in one

to two years)

Government-sponsored enterprise

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

The gross unrealized losses related to U.S.

Treasury securities, municipal securities, government-sponsored enterprise securities, commercial paper and corporate notes as of September 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 September 30, 2022 and December 31, 2021 were temporary in nature.

Treasury securities, municipal securities, government-sponsored enterprise securities, commercial paper and corporate notes as of March 31, 2023 and December 31, 2022 were due to changes in interest rates and not credit risk.

If an available-for-sale security’s fair value is less than its amortized cost basis, we evaluate whether the decline is the result of a credit loss, in which case an impairment is recorded through an allowance for credit losses.

We have not recorded any allowances for credit losses on our available-for-sale securities for the three months ended March 31, 2023 and 2022 as we have not identified any unrealized losses for these securities attributable to credit factors.

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.

We review our investments quarterly to identify and evaluate whether any investments have indications of possible other-than-temporary impairment.

Factors considered in determining whether a loss is temporary include the length of time and extent to which the fair value has been less than the amortized cost basis and whether we intend to sell the security or whether it is more likely than not that we would be required to sell the security before recovery of the amortized cost basis.

We currently do not intend to sell these securities before recovery of their amortized cost bases.

Fair Value on a Recurring Basis

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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.

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.

Money market funds are categorized as Level 1 within the fair value hierarchy as their fair values are

GERON CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

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 September 30, 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 March 31, 2023 and December 31, 2022 and indicates the fair value category assigned.

Fair Value Measurements at Reporting Date Using

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(In thousands)

As of September 30, 2022:

As of March 31, 2023:

Money market funds (1)(2)

Treasury securities (2)

Municipal securities (2)

Certificate of deposit (2)

Government-sponsored enterprise

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Money market funds (1)(2)

Certificate of deposit (2)

Treasury securities (3)

5 unchanged sentences

(1) Included in cash and cash equivalents on our condensed consolidated balance sheets.

(2) Included in restricted cash on our condensed consolidated balance sheets.

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

1 unchanged sentence

ACCRUED LIABILITIES

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

September 30,

Accrued liabilities consisted of the following as of March 31, 2023 and December 31, 2022:

(In thousands)

CRO and clinical trial costs

Securities class action settlement

Manufacturing activities

Legal settlements

Professional legal and accounting fees

Interest payable

See Note 5 on Contingencies and Uncertainties - Purported Securities Lawsuits for further information on the securities class action settlement.

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.

GERON CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

On September 30, 2020, we, Hercules Capital, Inc., or Hercules, and Silicon Valley Bank, a Division of First-Citizens Bank & Trust Company (successor by purchase to the Federal Deposit Insurance Corporation as receiver for Silicon Valley Bridge Bank, N.A.

(as successor to Silicon Valley Bank)), or SVB, entered into a term loan facility, or the Original Loan Agreement, consisting of up to $ 75,000,000 aggregate principal amount available to us, 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 September 30, 2022 , a total of $ 50,000,000 had been drawn under the Loan Agreement.

Under the second amendment, the $ 75,000,000 in remaining loan principal as of September 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.

As of March 31, 2023 , a total of $ 50,000,000 has been drawn under the Loan Agreement.

As of March 31, 2023, $ 55,000,000 remains as committed principal that can be drawn as follows:

(a) one 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;

(b) a second 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 (c) a 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 are 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.

We incurred approximately $ 75,000 in legal fees in connection with the second amendment, which we recognized as debt issuance costs and are 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.

Under the Loan Agreement, 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:

Under the Loan Agreement, 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:

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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 September 30, 2022.

As of September 30, 2022 , the net carrying value of the debt under the Loan Agreement was $ 50,758,000 , which includes the principal amount of $ 50,000,000 less net unamortized debt discounts and issuance costs of $ 747,000 plus accrued end of term charge

of $ 1,505,000 .

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

We are in compliance with the covenants under the Loan Agreement as of March 31, 2023.

The interest-only payment period was extended from April 2023 to April 2024 upon the achievement of positive top-line results from the IMerge Phase 3 clinical trial in January 2023.

As of March 31, 2023 , the net carrying value of the debt under the Loan Agreement was $ 51,399,000 , which includes the principal amount of $ 50,000,000 less net unamortized debt discounts and issuance costs of $ 556,000 plus accrued end of term charge of $ 1,955,000 .

The carrying value of the debt approximates the fair value as of March 31, 2023.

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 September 30, 2022 (in thousands):

The following table presents future minimum payments, including interest and the end of term charge, under the Loan Agreement as of March 31, 2023 (in thousands):

Remainder of 2023

amount representing interest

unamortized debt discounts and issuance costs

unamortized end of term charge

unamortized debt discount and issuance costs

unaccrued end of term charge

current portion of debt

Noncurrent portion of debt

GERON CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

CONTINGENCIES AND UNCERTAINTIES

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On April 12, 2021, the Court granted in part and denied in part our motion to dismiss.

Our answer to the amended and consolidated class action complaint was filed on May 13, 2021.

Our answer to the amended consolidated class action complaint was filed on May 13, 2021.

On September 30, 2021, lead plaintiffs filed their motion for class certification, and on April 2, 2022, the Court granted the lead plaintiffs’

motion for class certification.

On September 2, 2022, the parties agreed to a settlement, which is subject to Court approval.

On September 2, 2022 , the parties agreed to a settlement and entered into a Stipulation and Agreement of Settlement, or the Stipulation, which is subject to Court approval.

On October 13, 2022, the Court preliminarily approved the parties’

settlement, permitted notice to be distributed to the class members, and scheduled a final approval hearing for March 30, 2023.

In connection with the settlement, the parties entered into a Stipulation and Agreement of Settlement, or the Stipulation, on September 2, 2022 to resolve the consolidated class action complaint.

Under the terms of the Stipulation, in exchange for the release and dismissal with prejudice of all claims against the defendants in the consolidated class action complaint, we agreed to pay and/or to cause our insurance carriers to pay a total of $ 24,000,000 , comprised of $ 17,000,000 in cash, which is expected to be paid under the available D&O insurance coverage and, at our election, $ 7,000,000 in either shares of Geron common stock and/or cash.

settlement, and permitted notice to be distributed to the class members.

On March 30, 2023, the Court held a hearing on the motion for final approval of settlement and plan of allocation and ordered supplemental notice be sent to all of the class members.

A second final approval hearing is scheduled for August 24, 2023.

Final approval of the settlement by the Court is subject to a number of conditions and contingencies out of our control.

There can be no guarantee that all of these conditions and contingencies will occur.

Should a material condition or contingency to the settlement fail to occur, one or both of the parties to the settlement may exercise their right to terminate the settlement agreement.

Under the terms of the Stipulation, in exchange for the release and dismissal with prejudice of all claims against the defendants in the consolidated class action complaint, we agreed to pay and/or to cause our insurance carriers to pay a total of $ 24,000,000 , comprised of $ 17,000,000 in cash, which was paid into an escrow account under our available insurance coverage and, at our election, $ 7,000,000 in either shares of our common stock and/or cash which is payable after final approval of the settlement by the Court.

The proposed settlement does not constitute an admission of fault or wrongdoing by Geron or our Chief Executive Officer.

The proposed settlement remains subject to final approval by the Court and certain other conditions.

As of September 30, 2022, on our condensed consolidated balance sheet, we have recorded the total settlement amount of $ 24,000,000 as accrued liabilities and $ 17,000,000 as interest and other receivables.

For the three and nine months ended September 30, 2022, we have recognized $ 7,000,000 as general and administrative expense on our condensed consolidated statements of operations.

As of March 31, 2023 and December 31, 2022, our portion of the settlement amount of $ 7,000,000 has been included in accrued liabilities on our condensed consolidated balance sheets.

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.

Of these actions, or the Derivative Lawsuits, two were filed in the Northern District, two were filed in the Court of Chancery of the State of Delaware, two were filed in the U.S.

District Court for the District of Delaware, and one was filed in the Superior Court of California for the County of San Mateo, respectively.

Of these actions, or the Derivative Lawsuits, two were filed in the Northern District, two were filed in the Court of Chancery of the State of Delaware, or the Chancery Court, two were filed in the U.S.

District Court for the District of Delaware, or the District of Delaware, and one was filed in the Superior Court of California for the County of San Mateo, or the San Mateo Superior Court, respectively.

The plaintiffs in the Derivative Lawsuits allege breach of fiduciary duty and/or violations of Section 14 of the Exchange Act, based on the same underlying facts as the consolidated class action lawsuit described above.

The plaintiffs seek damages, corporate governance

reforms, equitable relief, restitution, and an award of reasonable costs, including attorneys’

The plaintiffs seek damages, corporate governance reforms, equitable relief, restitution, and an award of reasonable costs, including attorneys’

The status of the seven Derivative Lawsuits is currently as follows:

On July 2, 2021, we filed a motion to dismiss the consolidated shareholder derivative actions filed in the Court of Chancery of the State of Delaware, or the Chancery Court Derivative Lawsuits.

On July 2, 2021, we filed a motion to dismiss the consolidated shareholder derivative actions filed in the Chancery Court, or the Chancery Court Derivative Lawsuits.

On September 1, 2021, the plaintiffs filed a consolidated amended complaint in the Chancery Court Derivative Lawsuits.

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, and, on June 22, 2022, issued an order staying its decision on our motion to dismiss until after final resolution of the consolidated class action lawsuit described above;

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

District Court for the District of Delaware have been stayed pending the ruling on our motion to dismiss the Chancery Court Derivative Lawsuits;

The consolidated shareholder derivative actions filed in the Northern District were stayed through the ruling on our motion to dismiss the Chancery Court Derivative Lawsuits.

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 Chancery Court 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 final resolution of the consolidated class action lawsuit described above.

On December 21, 2022, the parties in the Chancery Court Derivative Lawsuits entered into a Stipulation of Settlement, or the Derivative Stipulation, that, subject to final approval by the Chancery Court, will resolve the Chancery Court Derivative Lawsuits.

A final approval hearing regarding the Derivative Stipulation has been scheduled for May 17, 2023.

Final approval of the settlement is subject to a number of conditions and contingencies out of our control.

There can be no guarantee that all of these conditions and contingencies will occur.

Should a material condition or contingency to the settlement fail to occur, one or more of the parties to the settlement may exercise their right to terminate the settlement agreement;

GERON CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

The consolidated shareholder derivative actions filed in the District of Delaware have been stayed pending the ruling on our motion to dismiss the Chancery Court Derivative Lawsuits.

On December 21, 2022 , the parties in the consolidated District of Delaware derivative actions entered into the Derivative Stipulation, that, subject to final approval by the Chancery Court, will resolve the consolidated District of Delaware derivative actions;

The consolidated shareholder derivative actions filed in the Northern District were initially stayed through the ruling on our motion to dismiss in the consolidated securities class action lawsuit described above and then subsequently were stayed through the ruling on the lead plaintiffs’

motion for class certification in the consolidated securities class action lawsuit.

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

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.

The stay was continued on September 16, 2022, for an additional 60 days;

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.

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 securities class action lawsuit or a final, non-appealable judgment in the consolidated securities class action lawsuit.

On December 21, 2022, the parties in the consolidated derivative actions in the Northern District entered into the Derivative Stipulation, that, subject to final approval by the Chancery Court will resolve the consolidated derivative actions in the Northern District;

Our motion to dismiss the shareholder derivative action pursuant to the forum selection clause in our amended and restated bylaws was filed in the San Mateo Superior Court 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.

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.

At the case management conference on June 14, 2022, the court continued the stay until December 13, 2022.

On December 13, 2022, the court dismissed the action without prejudice.

Under the terms of the Derivative Stipulation, in exchange for the release and dismissal with prejudice of all claims against the defendants in the consolidated shareholder derivative actions filed in the Northern District, the District of Delaware, and the Chancery Court, we agreed to pay and/or to cause our insurance carriers to pay a total of $ 1,350,000 , comprised of $ 525,000 in cash, which is payable under our available insurance coverage and $ 825,000 in cash payable by us.

The proposed settlement remains subject to final approval by the Chancery Court and certain other conditions, upon which the settlement amounts are payable.

The proposed settlement does not constitute an admission of fault or wrongdoing by our current officers or current and former members of our board.

As of March 31, 2023 and December 31, 2022, we have recorded the total settlement amount of $ 1,350,000 as accrued liabilities and $ 525,000 as interest and other receivables on our condensed consolidated balance sheets.

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.

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We could be forced to expend significant resources in the defense against the pending lawsuits and any other related lawsuits, and we may not prevail.

In addition, we have and may continue incur substantial legal fees and costs in connection with such lawsuits.

As discussed above, we have recorded the total settlement amount for the Stipulation on our condensed consolidated balance sheet as of September 30, 2022.

In addition, we have and may continue to incur substantial legal fees and costs in connection with such lawsuits.

As discussed above, we have recorded the total settlement amount for the Derivative Stipulation on our condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022 and our portion of the settlement amount under the Stipulation remains accrued on our condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022.

We currently are not able to estimate the possible additional costs to us, if any, from these matters, and we cannot be certain how long it may take to resolve the pending lawsuits or the possible amount of any damages or legal costs that we may be required to pay.

Such amounts could be material to our consolidated financial statements if we do not prevail in the defense against the pending lawsuits and any other related lawsuits, or even if we do prevail.

We have not established any reserve for any potential liability relating to the pending lawsuits and any other related lawsuits, other than for the total settlement amount under the Stipulation.

Such amounts could be material to our condensed consolidated financial statements if we do not prevail in the defense against the pending lawsuits and any other related lawsuits, or even if we do prevail.

We have not established any reserve for any potential liability relating to the pending lawsuits and any other related lawsuits, other than settlement amounts under the Stipulation and the Derivative Stipulation.

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

Indemnifications to Officers and Directors

Our corporate bylaws require that we indemnify our directors, as well as those who act as directors and officers of other entities at our request, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceedings arising out of their services to Geron.

In addition, we have entered into separate indemnification agreements with each of our directors and officers which provide for indemnification of these directors and officers under similar circumstances and under additional circumstances.

The indemnification obligations are more fully described in our bylaws and the indemnification agreements.

We purchase standard insurance to cover claims or a portion of the claims made against our directors and officers.

Since a maximum obligation is not explicitly stated in our bylaws or in our indemnification agreements and will depend on the facts and circumstances that arise out of any future claims, the overall maximum amount of the obligations cannot be reasonably estimated.

Severance Plan

GERON CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

We have an Amended and Restated Severance Plan, or Severance Plan, that applies to all employees that are (i) above the Vice President level, (ii) hired by the Company before January 1, 2022, or (iii) not subject to performance improvement plans, and provides for, among other benefits:

(x) a severance payment upon a Change of Control Triggering Event and Separation from Service and (y) a severance payment for each non‑executive employee upon a Non‑Change of Control Triggering Event and Separation from Service.

As defined in the Severance Plan, a Change of Control Triggering Event and Separation from Service requires a “double trigger”

(i) an employee is terminated by us without cause in connection with a change of control or within 12 months following a change of control provided, however, that if an employee is terminated by us in connection with a change of control but immediately accepts employment with our successor or acquirer, the employee will not be eligible for the benefits outlined in the Severance Plan, (ii) an employee resigns because in connection with a change of control, the offered terms of employment (new or continuing) by us or our successor or acquirer within 30 days after the change of control results in a material change in the terms of employment, or (iii) after accepting (or continuing) employment with us after a change of control, an employee resigns within 12 months following a change of control due to a material change in the terms of employment.

Under the Severance Plan, a Non‑Change of Control Triggering Event and Separation from Service is defined as an event where a non‑executive employee is terminated by us without cause.

Severance payments range from three to 18 months of base salary, depending on the employee’s position with us, payable in a lump sum payment.

The Severance Plan also provides that the provisions of employment agreements entered into between us and executive or non‑executive employees supersede the provisions of the Severance Plan.

As of March 31, 2023, all our executive officers have employment agreements with provisions that may provide greater severance benefits than those in the Severance Plan.

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.

Both of these events have caused widespread, rapidly-evolving and unpredictable impacts on global societies, economies, financial markets and business practices.

Both of these events have caused widespread, continually evolving and unpredictable impacts on global societies, economies, financial markets and business practices.

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.

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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/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.

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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, 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.

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 United States, or 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.

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, the prospects for a recession, and recent and potential future disruptions in access to bank deposits or lending commitments due to bank failure 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 IMpactMF, IMproveMF and IMpress 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, the prospects for a recession, and recent and potential future disruptions in access to bank

GERON CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

deposits or lending commitments due to bank failures could materially and adversely affect our business and the value of our common stock.

The extent to which global economic conditions, including those resulting from the COVID-19 pandemic, the military conflict between Ukraine and Russia and recent and potential future bank failures, 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.

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

and/or international banking system stabilizes despite recent and any potential future bank failures.

Accordingly, we do not yet know the full extent of potential delays or impacts on our business, our regulatory and clinical development activities, clinical supply chain and other business operations or the global economy as a whole.

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Public Offering

The shares of common stock and the 2022 pre-funded warrant were immediately separable from the 2022 stock purchase warrants.

On January 10, 2023 we completed the January 2023 offering consisting of 68,007,741 shares of our common stock and the 2023 pre-funded warrant.

All of the securities were issued separately.

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

The 2022 stock purchase warrants have an exercise price of $ 1.45 per share and are exercisable immediately.

The term of the 2022 stock purchase warrants expires on the earlier to occur of (a) the date that is 30 business days following the date on which we first issue a press release disclosing, if applicable, that the United States Food and Drug Administration, or FDA, has accepted for filing a New Drug Application submitted to the FDA for imetelstat in Low or Intermediate-1 risk myelodysplastic syndromes and (b) April 1, 2027.

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

The public offering price of the common stock was $ 2.45 per share.

The public offering price of the 2023 pre-funded warrant was $ 2.449 per share.

The 2023 pre-funded warrant has an exercise price of $ 0.001 per share and may be exercised at any time until the 2023 pre-funded warrant is exercised in full.

As of September 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 .

As of March 31, 2023 , none of the 2023 pre-funded warrant has been exercised.

The net cash proceeds from this offering were $ 213,337,000 , after deducting the underwriting discount and other offering expenses paid by us, and exclude any future proceeds from the exercise of the 2023 pre-funded warrant.

Upon the issuance of the 2023 pre-funded warrant, 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.

The terms of the 2023 pre-funded warrant 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 2023 pre-funded warrant should be classified as equity with no subsequent remeasurement as long as such warrant continue to be classified as equity.

Warrant Exercises

In the third quarter of 2022, warrants to purchase 2,798,003 shares of Geron common stock were exercised for net cash proceeds of approximately $ 3,638,000 .

The warrants were issued in connection with an underwritten public offering of common stock and a pre-funded warrant, together with accompanying stock purchase warrants in May 2020.

As of September 30, 2022, the pre-funded warrant to purchase 8,335,239 shares of our common stock was outstanding and stock purchase warrants to purchase 52,975,463 shares of our common stock associated with the May 2020 public offering remained outstanding.

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.

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

As of September 30, 2022, a total of 21,100,000 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.

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.

In the first quarter of 2023, warrants to purchase 44,983,194 shares of Geron common stock were exercised for net cash proceeds of approximately $ 59,835,000 .

The warrants were issued in connection with underwritten public offerings of common stock and pre-funded warrants, together with accompanying stock purchase warrants in May 2020 and April 2022.

As of March 31, 2023, the following warrants remained outstanding:

pre-funded warrants with an exercise price of $ 0.001 per shares to purchase 51,430,477 shares of our common stock;

stock purchase warrants with an exercise price of $ 1.30 per share to purchase 8,174,503 shares of our common stock related to the May 2020 offering;

stock purchase warrants with an exercise price of $ 1.45 per share to purchase 26,666,669 shares of our common stock related to the April 2022 offering.

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

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contained in our Form 10-K for the year ended December 31, 2022, as filed with the United States Securities and Exchange Commission, or SEC, on March 16, 2023, or 2022 Form 10-K.

Business Overview

Geron is a late-stage clinical biopharmaceutical company that is focused on the development and potential commercialization of imetelstat, a first-in-class telomerase inhibitor.

Geron’s vision is to become a leader in the treatment of blood cancers, or hematologic malignancies, and is committed to improving and extending the lives of patients by changing the course of these diseases by targeting telomerase.

We believe data from our prior Phase 2 clinical trials provide strong evidence that imetelstat targets telomerase to inhibit the uncontrolled proliferation of malignant stem and progenitor cells enabling recovery of bone marrow and blood cell production, which indicate potential disease-modifying activity.

We believe this potential disease modification may differentiate imetelstat from other currently approved and investigational treatments in myeloid hematologic malignancies.

We are conducting two ongoing Phase 3 clinical trials that are designed to enable registration of imetelstat:

(i) IMerge Phase 3 in Low or Intermediate-1 risk myelodysplastic syndromes, or lower risk MDS, and

(ii) IMpactMF in Intermediate-2 or High-risk myelofibrosis, or relapsed/refractory MF.

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

In September 2022, the Hepatic Expert Committee for IMerge Phase 3 convened at a regularly scheduled meeting, and recommended the trial continue without modification.

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

in the first half of 2023, and a marketing authorization application, or MAA, in Europe in the second half of 2023, for imetelstat in lower risk MDS.

Under either priority or standard review for the NDA and, upon potential approval by the FDA, we expect that commercial launch of imetelstat in lower risk MDS in the U.S.

could occur as early as the first half of 2024.

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, clinical site openings and patient screening and enrollment continue.

In October 2022, the first meeting of the Independent Data Monitoring Committee for IMpactMF was held, and the committee recommended the trial continue without modification.

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

Based on assumptions for enrollment and event (death) rates in the trial, we expect the interim analysis for overall survival, or OS, for IMpactMF may occur in 2024 and the final analysis in 2025.

Company Overview

We are a late-stage biopharmaceutical company pursuing therapies with the potential to extend and enrich the lives of patients living with hematologic malignancies.

Our investigational first-in-class telomerase inhibitor, imetelstat, harnesses Nobel Prize winning science in a treatment that may alter the underlying course of these diseases.

Our lead indication for imetelstat is in Low or Intermediate-1 risk myelodysplastic syndromes, or lower risk MDS.

In January 2023, we reported positive top-line results from our IMerge Phase 3 clinical trial.

The trial met its primary endpoint of 8-week transfusion independence rate and a key secondary endpoint of 24-week transfusion independence rate, demonstrating highly statistically significant (i.e., P<0.001 for both) and clinically meaningful benefits in imetelstat versus placebo.

Furthermore, statistically significant and clinically meaningful efficacy results were observed in the trial across key subtypes, including patients who were ringed sideroblast positive, or RS positive, and ringed sideroblast negative, or RS negative;

patients with high and very high baseline transfusion burden;

and patients classified as Low or Intermediate-1 risk according to the International Prognostic Scoring System, or IPSS.

Based on the positive top-line data from IMerge Phase 3 and the prior IMerge Phase 2, we plan to submit a New Drug Application, or NDA, to the FDA in the United States, or U.S., in mid-2023 and a marketing authorization application, or MAA, in Europe in the second half of 2023 for the use of imetelstat in adult patients with lower risk MDS.

If the NDA is accepted for filing and imetelstat is approved for commercialization by the FDA within the timelines we expect, we anticipate commercial launch of imetelstat in lower risk MDS in the U.S.

could occur in the first half of 2024.

In Europe, we anticipate review of the planned MAA, if validated by the European Medicines Agency, or EMA, could take approximately 14 months and, if approved, we anticipate that the commercial launch of imetelstat in lower risk MDS in Europe could occur by the end of 2024.

We believe that the positive top-line data from IMerge Phase 3 and IMerge Phase 2, as well as our prior Phase 2 clinical trial of imetelstat in patients with Intermediate-2 or High-Risk myelofibrosis who have relapsed after or are refractory to treatment with a janus associate kinase inhibitor, or JAK inhibitor, or relapsed/refractory MF, provide strong evidence that imetelstat targets telomerase to inhibit the uncontrolled proliferation of malignant stem and progenitor cells enabling recovery of bone marrow and normal blood cell production, which suggest potential disease-modifying activity.

We believe this potential for disease modification could differentiate imetelstat from currently approved treatments in myeloid hematologic malignancies.

Accordingly, in addition to lower risk MDS, we are developing imetelstat for the treatment of several myeloid hematologic malignancies with the following ongoing clinical trials:

IMpactMF, a Phase 3 clinical trial in relapsed/refractory MF with overall survival, or OS, as the primary endpoint, that currently is enrolling patients.

Based on our planning assumptions for enrollment and event (death) rates in the trial, we expect the interim analysis for OS in IMpactMF may occur in 2024, and the final analysis may occur in 2025.

Because these analyses are event-driven and it is uncertain whether actual rates for enrollment and events will reflect current planning assumptions, the results may be available at different times than currently expected.

In addition to the ongoing Phase 3 clinical trials, we have several exploratory clinical programs designed to investigate the potential use of imetelstat in additional indications.

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.

We expect to present preliminary data from this trial by the end of 2023.

In collaboration with key opinion leaders with expertise in acute myeloid leukemia, or AML, we plan to support a Phase 2 investigator-led trial named IMpress to evaluate imetelstat as a single agent in AML and Intermediate-2 or High-risk myelodysplastic syndromes, or higher risk MDS.

We expect this study to start in the fourth quarter of 2022.

We also expect to support another investigator-led trial named TELOMERE, which is a Phase 1/2

study to evaluate imetelstat in combination with venetoclax or azacitidine in relapsed/refractory AML.

The planned start date for TELOMERE is pending IMpress single-agent imetelstat data.

We expect such data to help inform the dose and schedule to be used in the two combination dosing regimens to be evaluated in TELOMERE.

We also have a non-clinical research program in lymphoid malignancies that is being conducted in collaboration with MD Anderson Cancer Center.

Additionally, we have an ongoing discovery research program to identify next generation small molecule telomerase inhibitors, with a goal to identify a lead compound(s) in 2023.

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.

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.

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.

Recent Data from the IMerge Phase 2 Clinical Trial

In November 2022, we reported longer treatment and follow-up data of patients in IMerge Phase 2, including the characteristics and clinical benefits for those patients who experienced continued transfusion independence, or TI, for greater than one year while treated with imetelstat.

Baseline characteristic

Patients with TI >1 year (n=11)

IPSS category, n (%)

Intermediate-1 risk

MDS-RS, n (%)

Prior RBC transfusion burden over 8 weeks prior to study treatment, median (range)

6.0 units (4-14)

Prior ESA, n (%)

≥2 years since initial diagnosis, n (%)

Normal karyotype, n (%)

Of the 38 lower risk MDS patients in IMerge Phase 2 who were non-del(5q) and naïve to treatment with lenalidomide or hypomethylating agents, 29% (11/38) of patients achieved >1-year sustained TI, representing 69% (11/16) of the responders who achieved 8-week TI and 92% (11/12) of the responders who achieved ≥

These 11 patients were treated with imetelstat for a median duration of 126.1 weeks (range:

70.1-168.1) for a median of 27 cycles (range:

The median duration of TI for these 11 patients was 92.4 weeks (95% confidence interval:

After a median follow-up of 51.5 months, median progression-free survival was 34.2 months (95% confidence interval:

25.1, 39.2), median overall survival was 57.0 months (95% confidence interval:

29.4, not evaluable), and none of the 11 patients progressed to AML.

Furthermore, 27 of the 38 patients were ring sideroblast positive, or RS+, and of these, 37% (10/27) achieved TI for > 1 year.

Of the 11 patients who achieved >1-year sustained TI, nine had mutation data available;

and 89% (8/11) had a reduction in SF3B1 variant allele frequency, or VAF, and 56% (5/11) achieved ≥50% VAF reduction.

Reduction in VAF correlated with longer TI duration (median TI >20 months) and shorter time to onset of TI (<10 weeks).

Safety findings were consistent with the overall population, and the most frequent adverse events were reversible thrombocytopenia and neutropenia.

IMproveMF, a Phase 1 combination clinical trial in first-line Intermediate-1, Intermediate-2 or High-Risk myelofibrosis, or frontline MF, that currently is enrolling patients and the first patient was dosed in April 2021;

IMpress, an investigator-led Phase 2 clinical trial in Intermediate-2 or High-Risk myelodysplastic syndromes, or higher risk MDS, and acute myeloid leukemia, or AML, with the initial clinical site planned to open in 2023.

Current Status of Phase 3 Clinical Trials

IMerge Phase 3 in Lower Risk MDS

The trial has been extended to allow remaining patients to continue to receive treatment of either imetelstat or placebo.

In addition, patients are being followed for survival and disease progression, which allows us to continue to assess the longer-term durability of transfusion independence, as well as survival, disease progression and safety.

Further data and analyses from longer patient follow up is expected to be presented at future medical meetings.

IMpact MF in Relapsed/Refractory MF

As of March 31, 2023, 150 of 176 selected sites were open for patient enrollment.

Additional site selection and site openings are ongoing.

Several recruitment initiatives are being conducted, as well as more engagement with investigators through on site visits or interactions at medical meetings.

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 September 30, 2022, we had approximately $195.2 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.

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.

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.

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 the third quarter of 2022, warrants to purchase 2,798,003 shares of Geron common stock were exercised for net cash proceeds of approximately $3.6 million.

The warrants were issued in connection with an underwritten public offering of common stock and a pre-funded warrant, together with accompanying stock purchase warrants in May 2020.

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 September 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.

As of March 31, 2023, we had approximately $409.2 million in cash, cash equivalents, restricted cash and marketable securities and a long-term principal debt balance of $50.0 million.

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

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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 September 30, 2022, we had an accumulated deficit of approximately $1.4 billion.

As of March 31, 2023, we had an accumulated deficit of approximately $1.5 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, potential future proceeds of up to $120.7 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, with stage-gated activities for potential U.S.

commercial launch of imetelstat in lower risk MDS contingent upon positive top-line results from the IMerge Phase 3 trial, until the end 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.

In any event, imetelstat may require significant additional clinical testing prior to possible regulatory approval in the U.S.

and other countries.

We expect research and development expenses, general and administrative expenses, and losses to substantially increase in future periods as we continue to support the imetelstat development program, including the conduct and completion of IMpactMF, IMproveMF and IMpress, as well as the potential U.S.

commercialization of imetelstat lower risk MDS.

Based on our current operating plan and our expectations regarding the timing of the submission and potential acceptance and approval of our planned NDA by the FDA for imetelstat in lower risk MDS and the potential commercialization in the U.S.

for the use of imetelstat in adult patients with lower risk MDS, we believe that our existing cash, cash equivalents, restricted cash and current and noncurrent marketable securities will be sufficient to fund our projected operating requirements through the end of the third quarter of 2025, which includes potential U.S.

commercial launch of imetelstat in lower risk MDS in the first half of 2024.

In the absence of potential proceeds from exercises of currently outstanding warrants and potential drawdowns under the Loan Agreement, we will require substantial additional funding to further advance the imetelstat program, including through the completion of IMpactMF, IMproveMF and IMpress, as well as conducting the clinical, regulatory and potential commercialization activities necessary to potentially bring imetelstat to market in relapsed/refractory MF and any other future indications, and our need for additional funds may arise sooner than planned.

We cannot predict with any certainty whether and to what extent the outstanding warrants will be exercised for cash, or the timing or availability of additional funds under the Loan Agreement, if at all.

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

We do not expect imetelstat to be commercially available for several years, if at all.

Until the FDA or similar international regulatory authorities approve imetelstat for marketing in lower risk MDS, if at all, we cannot begin commercialization.

Note on the COVID-19 Pandemic and Military Conflict Between Ukraine and Russia

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, 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.

The ongoing COVID-19 pandemic is having widespread, continually evolving, and unpredictable impacts on global societies, economies, financial markets, and business practices.

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 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”

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There have been no significant changes in our critical accounting policies and estimates during the nine months ended September 30, 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 three months ended March 31, 2023, as compared to the critical accounting policies and estimates disclosed in our 2022 Form 10-K.

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

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We do not expect to receive revenue based on sales of imetelstat for several 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 imetelstat and non-imetelstat related technologies.

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 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 zero license fee revenues for the three months ended September 30, 2021, and $28,000 for the nine months ended September 30, 2021, related to a previous license agreement for our non-imetelstat related technologies.

No license fee revenues were recognized for the three and nine months ended September 30, 2022.

We recognized royalty revenues of $297,000 and $493,000 for the three and nine months ended September 30, 2022, respectively, compared to $109,000 and $325,000 for the same periods in 2021.

We recognized royalty revenues of $21,000 for the three months ended March 31, 2023, compared to $123,000 for the same period in 2022.

Royalty revenues in 2023 and 2022 primarily reflect estimated royalties from sales of cell-based research products from our divested stem cell assets.

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Historical revenues may not be predictive of future revenues.

Absent any retroactive royalty payments, such as the one-time payment received from Lineage in the fourth quarter of 2021, we expect royalty revenues in 2022 to be comparable to 2021 from sales of cell-based research products from our divested stem cell assets.

We expect royalty revenues in 2023 to be comparable to 2022 from sales of cell-based research products from our divested stem cell assets.

Research and Development Expenses

During the three and nine months ended September 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.

During the three months ended March 31, 2023 and 2022, 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 and nine months ended September 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.

For the three months ended March 31, 2023 and 2022, 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 and nine months ended September 30, 2022 and 2021 were as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Research and development expenses for the three months ended March 31, 2023 and 2022 were as follows:

Three Months Ended March 31,

(In thousands)

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Total research and development expenses

The increase in research and development expenses for the three and nine months ended September 30, 2022, compared to the same periods in 2021, primarily reflects the net result of 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;

The increase in research and development expenses for the three months ended March 31, 2023, compared to the same period in 2022, primarily reflects the net result of increased personnel-related expenses for additional headcount and higher clinical trial costs related to supporting IMerge Phase 3 and IMpactMF;

partially offset by decreased manufacturing costs due to the timing of imetelstat manufacturing batches.

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.

We expect research and development expenses to increase in the future as we conduct and complete ongoing clinical trials of imetelstat.

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 $15.6 million and $29.8 million for the three and nine months ended September 30, 2022, respectively, compared to $7.3 million and $21.8 million for the same periods in 2021.

The increase in general and administrative expenses for the three and nine months ended September 30, 2022, compared to the same periods in 2021, primarily reflects increased costs for commercial preparatory activities of approximately $826,000 and $725,000 respectively;

higher personnel-related expenses of approximately $1.2 million and $2.2 million, respectively for additional headcount;

and approximately $7.0 million recorded in the third quarter of 2022 for our portion of the potential settlement in connection with the class action lawsuit.

See Note 5 on Contingencies and Uncertainties in Notes to Condensed Consolidated Financial Statements of this quarterly report on Form 10-Q for additional information about the settlement.

General and administrative expenses were $12.9 million for the three months ended March 31, 2023, compared to $6.7 million for the same period in 2022.

The increase in general and administrative expenses for the three months ended March 31, 2023, compared to the same period in 2022, primarily reflects new costs for commercial preparatory activities of approximately $1.7 million;

and higher personnel-related expenses of approximately $3.5 million for additional headcount.

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 $852,000 and $1.3 million for the three and nine months ended September 30, 2022, respectively, compared to $112,000 and $421,000 for the same periods in 2021.

The increase in interest income for the three and nine months ended September 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 income was $3.9 million for the three months ended March 31, 2023, compared to $112,000 for the same period in 2022.

The increase in interest income for the three months ended March 31, 2023, compared to the same period in 2022, primarily reflects a larger marketable securities portfolio with the receipt of net cash proceeds from the underwritten public offering completed in January 2023, as well as 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.

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.

Interest Expense

Interest expense was $1.8 million and $4.9 million for the three and nine months ended September 30, 2022, respectively, compared to $1.1 million and $2.6 million for the same periods in 2021.

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

Interest expense was $1.9 million for the three months ended March 31, 2023, compared to $1.5 million for the same period in 2022.

The increase in interest expense for the three months ended March 31, 2023, compared to the same period in 2022, primarily reflects rising interest rates.

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

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Other Income and (Expense), Net

Net other expense was $138,000 and $77,000 for the three months ended September 30, 2022 and 2021, respectively.

Net other income was $916,000 and $1.1 million for the nine months ended September 30, 2022 and 2021, respectively.

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.

Net other income was $39,000 for the three months ended March 31, 2023 and net other expense was $56,000 for the three months ended March 31, 2022.

Net other income and (expense) primarily reflects bank charges related to our cash operating accounts and marketable securities portfolio and foreign currency transaction adjustments.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2022, we had cash, restricted cash, cash equivalents, and marketable securities of $195.2 million, compared to $212.7 million at December 31, 2021.

The increase in cash, restricted cash, cash equivalents and marketable securities during the nine months ended September 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.

In the third quarter of 2022, warrants to purchase 2,798,003 shares of Geron common stock were exercised for net cash proceeds of approximately $3.6 million.

The warrants were issued in connection with an underwritten public offering of common stock and a pre-funded warrant, together with accompanying stock purchase warrants in May 2020.

As of September 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.

As of March 31, 2023, we had cash, restricted cash, cash equivalents, and marketable securities of $409.2 million, compared to $173.1 million at December 31, 2022.

The increase in cash, restricted cash, cash equivalents and marketable securities during the three months ended March 31, 2023 was primarily the net result of the receipt of net cash proceeds of $213.3 million from our underwritten public offering completed in January 2023 and receipt of cash proceeds from exercise of outstanding warrants of $59.8 million, partially offset by cash being used for operations.

On January 10, 2023, we completed an underwritten public offering of 68,007,741 shares of our common stock and a pre-funded warrant to purchase 25,000,000 shares of our common stock, or the 2023 pre-funded warrant.

The net cash proceeds from this offering are $213.3 million, after deducting the underwriting discount and other offering expenses paid by us, and excludes any future proceeds from the exercise of the 2023 pre-funded warrant, which has not been exercised.

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 January 2023.

From January 1, 2023 through March 31, 2023, we have received $46.7 million in cash proceeds from the exercise of the 2020 purchase warrants, representing 35,935,576 shares of our common stock.

From January 1, 2023 through March 31, 2023, we have received $13.1 million in cash proceeds from the exercise of the 2022 purchase warrants, representing 9,047,617 shares of our common stock.

As of March 31, 2023, 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 September 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.

As of March 31, 2023, a total of $55.0 million is available to be drawn in a series of tranches under the Loan Agreement, subject to certain terms and conditions.

Of this amount, $30.0 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 (First-Citizens Bank & Trust Company as of March 27, 2023).

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.

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Treasury securities, municipal securities, government and agency securities, commercial paper and corporate notes.

Our investment portfolio does not contain securities with exposure to sub-prime mortgages, collateralized debt obligations, asset-backed securities or auction rate securities and, to date, we have not recognized any other-than-temporary impairment charges on our marketable securities or any significant changes in aggregate fair value that would impact our cash resources or liquidity.

Our investment portfolio does not contain securities with exposure to sub-prime mortgages, collateralized debt obligations, asset-backed securities or auction rate securities and, to date, we have not recognized any impairment charges on our marketable securities or any significant changes in aggregate fair value that would impact our cash resources or liquidity.

To date, we have not experienced lack of access to our invested cash and cash equivalents;

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Riley Securities under the 2020 Sales Agreement.

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 nine months ended September 30, 2022.

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

We did not sell any shares of our common stock pursuant to the 2020 Sales Agreement during the three months ended March 31, 2023.

Approximately $79.1 million of our common stock remained available for issuance under the 2020 Sales Agreement as of March 31, 2023.

The 2020 Sales Agreement will expire upon the earlier of:

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Future Funding Requirements

Under current planning assumptions, we believe our existing capital resources, including the potential future proceeds of up to $120.7 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 contingent upon positive top-line results from the IMerge Phase 3 trial, until the end of 2023.

Importantly, our ability to raise additional capital to fund our operations after the end 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 2023 will be substantially impaired, which might cause us to cease operations.

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 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).

commercial launch of imetelstat in lower risk MDS in the first half of 2024.

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 which we may be unable to do in a timely manner or at all.

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, whether we will be able to commercialize imetelstat, 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 could be further delayed or interrupted by macroeconomic conditions, such as if COVID-19 or pandemic conditions worsen, creating further limitations on our clinical trial or commercial preparatory activities, or if U.S.

and/or international banking system fails to stabilize in light of recent and potential future bank failures, or could be disrupted by civil or political unrest or military conflicts around the world, 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:

the accuracy of the assumptions underlying our estimates for our capital needs;

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, 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 scope, progress, duration, results and costs of current clinical trials, including IMerge Phase 3, IMpactMF, IMproveMF and IMpress, and any potential future clinical trials of imetelstat, 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, IMproveMF, IMpress, or any potential future clinical trials of imetelstat, whether as a result of the effects of macroeconomic conditions like the COVID-19 pandemic, or civil or political unrest or military conflicts around the world, such as the military conflict between Ukraine and Russia;

the costs, timing and outcomes of regulatory reviews or other regulatory actions related to imetelstat, such as obtaining and maintaining regulatory clearances and approvals to continue clinical development of imetelstat in current and potential future clinical trials, as well as to commence potential commercialization of imetelstat in the U.S.

and in other countries;

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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;

our ability to establish, enforce and maintain collaborative or other strategic arrangements for research, development, clinical testing and manufacturing of imetelstat on favorable terms, if at all;

our efforts to enhance operational, financial and management processes and systems that will be required for future development and commercialization of imetelstat, and our ability to successfully recruit and retain additional key personnel to support the development and potential future commercialization of imetelstat;

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

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

and potentially other countries to market and sell imetelstat, should it receive regulatory approval, to the extent that such sales, marketing, manufacturing and distribution are not the responsibility of any collaborator;

the sales price for imetelstat, if any;

the availability of coverage and adequate third-party reimbursement for imetelstat;

expenses associated with the pending securities class action lawsuits and derivative lawsuits, as well as any other potential litigation;

the availability of coverage and adequate third-party reimbursement for imetelstat, if any;

the extent to which we acquire or in-license other drugs and technologies, or invest in businesses, products or technologies, although we currently have no commitments or agreements relating to any of these types of transactions, or to which we out-license imetelstat;

the extent to which we are able to enter into strategic partnerships, collaborations and alliances or licensing arrangements with third parties including for the commercialization and marketing of imetelstat in certain global regions;

the success of any collaborations that we may enter into with third parties;

expenses associated with settlement of the pending securities class action lawsuits, and the ongoing derivative lawsuits, as well as any other potential litigation;

the extent and scope of our general and administrative expenses, including expenses associated with potential future litigation;

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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;

broader economic conditions, including inflation, rising interest rates, the prospects for a recession, and recent and potential future disruptions in access to bank deposits or lending commitments due to bank failure, 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;

the amount of proceeds, if any, of cash exercises of our currently outstanding warrants.

Until we can generate a sufficient amount of revenue from imetelstat to finance our cash requirements, which we may never achieve, we expect to finance future cash needs through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements, which may not be possible.

Availability of such financing sources may be negatively impacted with any further delays in reporting results from IMerge Phase 3 or IMpactMF.

Availability of such financing sources may be negatively impacted by any further delays in reporting results from IMpactMF or investors’

perception of top-line results from IMerge Phase 3, despite our interpretation of such data being positive, as well as factors such as the global economic slowdown, inflation, rising interest rates and the prospects for a recession, as well as recent and potential future disruptions in access to bank deposits or lending commitments due to bank failure.

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

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.

Riley Securities, Inc., or B.

Riley, the remaining tranches of up to $55.0 million available under the Loan Agreement, which are subject to the achievement of certain clinical and regulatory milestones and satisfaction of certain capitalization and other requirements, as well as approval by an investment committee comprised of Hercules and SVB (First-Citizens Bank & Trust Company as of March 27, 2023) for the final $25.0 million tranche;

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, 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.

Similarly, political and civil unrest, such as the current military conflict between Ukraine and Russia and the related significant sanctions imposed against Russia, has created extreme volatility and disruption in the capital markets and is expected to have further global economic consequences.

If the equity and credit markets deteriorate, including as a result of a resurgence of COVID-19, the current military conflict between Ukraine and Russia or other political unrest or war, including the possibility of expanded regional or global conflict, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive.

If we are unable to raise additional capital or establish alternative collaborative arrangements with third-party collaborative partners for imetelstat, the development of imetelstat may be further delayed, altered or abandoned, which might cause us to cease operations.

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 due to the effects of macroeconomic conditions like the COVID-19 pandemic, civil or political unrest or military conflicts around the world, such as the military conflict between Ukraine and Russia, inflation, rising interest rates, prospects of a recession, or recent and potential future disruptions in access to bank deposits or lending commitments due to bank failure, 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.

Similarly, these macroeconomic conditions have created extreme volatility and disruption in the capital markets and is expected to have further global economic consequences.

If the equity and credit markets deteriorate, including as a result of macroeconomic conditions like the COVID-19 pandemic, civil or political unrest or military conflicts around the world, such as the military conflict between Ukraine and Russia, inflation, rising interest rates, prospects of a recession or recent and potential future disruptions in access to bank deposits or lending commitments due to bank failure, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive.

If we are unable to raise additional capital or establish alternative collaborative arrangements with third-party collaborative partners for imetelstat, the development and potential commercialization of imetelstat may be further delayed, altered or abandoned, which might cause us to cease operations.

In addition, we may seek additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

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Moreover, if we raise additional funds through alliance, collaborative or licensing arrangements with third parties, we may have to relinquish valuable rights to imetelstat or our technologies or grant licenses on terms that are not favorable to us.

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 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.

We cannot assure you that our existing capital resources, including net cash proceeds from our recent underwritten public offering in January 2023, future interest income, future proceeds from potential cash exercises of currently outstanding warrants and potential future sales of our common stock, including under the 2020 Sales Agreement with B.

Riley or potential future drawdowns, if available, of the remaining up to $55.0 million under the Loan Agreement (which are subject to the achievement of certain clinical and regulatory milestones and satisfaction of certain capitalization and other requirements, as well as approval by an investment committee comprised of Hercules and SVB (First-Citizens Bank & Trust Company as of March 27, 2023) for the final $25.0 million tranche), will be sufficient to fund our operating plans.

While we did not hold cash deposits or securities at SVB, if other banks and financial institutions enter receivership, become insolvent or otherwise fail in the future in response to financial conditions affecting the banking system and financial markets or otherwise, our ability to access our existing cash, cash equivalents and marketable securities may be delayed or precluded, which could have a material adverse effect on our business, business prospects and financial position.

Cash Flows from Operating Activities

Net cash used in operations for the nine months ended September 30, 2022 and 2021 was $92.2 million and $73.4 million, respectively.

The increase in net cash used in operations for the nine months ended September 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.

Net cash used in operations for the three months ended March 31, 2023 and 2022 was $46.4 million and $34.0 million, respectively.

The increase in net cash used in operations for the three months ended March 31, 2023, compared to the same period in 2022, primarily reflects higher payments to support ongoing clinical trials of imetelstat, commercial preparatory activities, and increases in headcount to support pre-approval and commercialization efforts.

Cash Flows from Investing Activities

Net cash provided by investing activities for the nine months ended September 30, 2022 and 2021 was $43.1 million and $63.6 million, respectively.

The decrease in net cash provided by investing activities for the nine months ended September 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.

Net cash used in investing activities was $178.7 million for the three months ended March 31, 2023 and net cash provided by investing activities was $30.4 million for the three months ended March 31, 2022.

The increase in net cash used in investing activities for the three months ended March 31, 2023, compared to the same period in 2022, primarily reflects a higher rate of purchases than maturities of marketable securities in 2023 from the investment of net cash proceeds received from the underwritten public offering completed in January 2023 and warrant exercises in the first quarter of 2023.

Cash Flows from Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2022 and 2021 was $75.3 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 and proceeds from the exercise of currently outstanding warrants.

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

Net cash provided by financing activities for the three months ended March 31, 2023 and 2022 was $281.0 million and none, respectively.

Financing activities in 2023 primarily reflect the receipt of net cash proceeds from the underwritten public offering completed in January 2023 and warrant exercises in the first quarter of 2023.

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 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.

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 nine months ended September 30, 2022.

Our contractual obligations primarily consist of our current and noncurrent debt obligations under the Loan Agreement with Hercules and SVB (First-Citizens Bank & Trust Company as of March 27, 2023), 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 2022 Form 10-K and there have been no changes to the contractual terms of our operating leases during the three months ended March 31, 2023.

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 non-clinical 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’

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

prior written notice.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements