GERON CORPGERN
GERON CORP Debt Disclosure
DEBT
Hercules Loan Agreement
On September 30, 2020, we, Hercules Capital, Inc., or Hercules, and Silicon Valley Bank, or SVB, entered
into a term loan facility, or the Term Loan, for up to $75.0 million, which was amended in August 2021, or the Original
Loan Agreement. On June 30, 2022, we entered into a second amendment to the Original Loan Agreement. Under the
second amendment, the aggregate principal amount available to us increased from $75.0 million to $125.0 million, with
such principal being available in a series of tranches, subject to certain terms and conditions. Over the course of the Term
Loan, we had drawn down a total of $80.0 million.
All obligations outstanding under the Hercules Loan Agreement, amounting to $86.5 million, were repaid
in full on November 1, 2024, upon which the Hercules Loan Agreement was terminated and all liens on our assets granted
in connection with the Hercules Loan Agreement were released.
Pharmakon Loan Agreement
On November 1, 2024, we entered into a loan agreement, or the Pharmakon Loan Agreement, with
BioPharma Credit Investments V (Master) LP and BPCR Limited Partnership, each, a Lender, which are investment funds
managed by Pharmakon Advisors, LP, and BioPharma Credit PLC, as collateral agent, that provides for a 5-year senior
secured term loan facility of up to $250.0 million, divided into three committed tranches: (i) a Tranche A Loan in an
aggregate principal amount of $125.0 million, or the Tranche A Loan, which was funded on November 1, 2024, or the
Tranche A Closing Date; (ii) a Tranche B Loan in an aggregate principal amount of $75.0 million, or the Tranche B Loan,
which is available, subject to certain limited conditions, at our option; and (iii) a Tranche C Loan in an aggregate principal
amount of $50.0 million, or the Tranche C Loan, and together with the Tranche A Loan and the Tranche B Loan,
collectively, the Term Loans, which is available to us upon reaching a specified trailing twelve-month RYTELO revenue
milestone. The Tranche B Loan and the Tranche C Loan, once available, could have been requested on or prior to
December 31, 2025. A portion of the proceeds from the Tranche A Loan were used to repay, in full, all amounts owed
under the Hercules Loan Agreement, which was terminated effective November 1, 2024. The remaining proceeds will be
used to fund our general corporate and working capital requirements.
On January 5, 2026, the Pharmakon Loan Agreement was amended to extend the date for requesting the
Tranche B Loan and Tranche C Loan, once available, from December 31, 2025 to July 30, 2026. The amendment also
extended the Makewhole Date from November 1, 2026 to May 1, 2027.
The Term Loans mature on November 1, 2029. The Term Loans bear interest at a variable rate per annum
equal to 5.75% plus the three-month Secured Overnight Financing Rate, or SOFR, with a floor of 3.00%. As of
inception of the Tranche A Loan, the interest rate applicable to the Tranche A Loan was 10.32%. As of December 31,
2025, the applicable interest rate was 11.13%. Interest is due and payable quarterly on the last day of each quarter. The
Pharmakon Loan Agreement requires we pay an amount equal to 2.50% of the Lenders’ total committed amount to fund
the Term Loans, payable with respect to each Term Loan on the funding date of such Term Loan.
We may elect to prepay the Term Loans in part or in whole prior to the Maturity Date with such
prepayments being subject to a prepayment premium equal to the principal amount so prepaid multiplied by 3% if made
prior to the 3rd anniversary of the funding date of the applicable Term Loan, 2% if made on or after the 3rd anniversary of
the funding date of the applicable Term Loan but prior to the 4th anniversary of the funding date of the applicable Term
Loan, and 1% if made on or after the 4th anniversary of the funding date of the applicable Term Loan but prior to the
Maturity Date. In addition to the prepayment premium, prepayments of any Term Loan prior to the 2nd anniversary of the
funding date of such Term Loan are subject to a make-whole amount equal to the sum of all interest that would have
accrued through such 2nd anniversary.
Our obligations under the Pharmakon Loan Agreement are secured by substantially all of our assets,
including our intellectual property. Certain of our subsidiaries may, from time to time after the Tranche A Closing Date, be
required to guarantee our obligations under the Pharmakon Loan Agreement and, in connection with such guarantee,
pledge substantially all of their assets, including intellectual property, to secure such guarantee.
The Pharmakon Loan Agreement contains customary affirmative and restrictive covenants and
representations and warranties. We and our subsidiaries are bound by certain affirmative covenants setting forth actions
that are required during the term of the Pharmakon Loan Agreement, including, without limitation, certain information
delivery requirements, obligations to maintain certain insurance, and certain notice requirements. There are no financial
covenants. Additionally, we and our subsidiaries are bound by certain restrictive covenants setting forth actions that are not
permitted to be taken during the term of the Pharmakon Loan Agreement, including, without limitation, (i) selling or
disposing of assets, (ii) amending, modifying or waiving our rights under material agreements, (iii) consummating change
in control transactions unless all amounts becoming due under the Loan Agreement are paid in full immediately upon (and
concurrent with) the consummation of any such change in control transaction, (iv) incurring additional indebtedness, (v)
incurring non-permitted liens or encumbrance on our or our subsidiaries’ assets, (vi) paying dividends or making any
distribution or payment on or redeeming, retiring or purchasing any equity interests, and (vii) making payments on
subordinated indebtedness, in each case, subject to specified exceptions. The Pharmakon Loan Agreement also contains the
following events of default: (i) failure to pay principal, interest and other amounts when due, (ii) the breach of the
covenants under the Loan Agreement, (iii) the occurrence of a material adverse change or the occurrence of a withdrawal
event in respect of RYTELO, (iv) certain attachments of the credit parties assets and restraints on their business, (v) certain
insolvency, liquidation, bankruptcy or similar events, (vi) certain cross-default of third-party indebtedness and royalty
revenue contracts, (vii) the failure to pay certain judgments, (viii) material misrepresentations, (ix) the loan documents
ceasing to create a valid security interest in a material portion of the collateral, (x) the occurrence of certain ERISA events
and (xi) the occurrence of a default under any subordination or intercreditor agreement, in each case subject to the grace
periods, cure period and thresholds as specified in the Pharmakon Loan Agreement. Upon the occurrence and during the
continuance of an event of default, the Lenders may, among other things, accelerate our obligations under the Pharmakon
Loan Agreement (including all obligations for principal, interest and any applicable make-whole and prepayment
premiums); provided that upon an event of default relating to certain insolvency, liquidation, bankruptcy or similar events,
all outstanding obligations will be immediately accelerated. As of December 31, 2025, we were in compliance with our
Pharmakon Loan Agreement covenants.
Future Minimum Payments
The following table presents future minimum payments, including interest and the end of term charge,
under the Term Loan as of December 31, 2025 (in thousands):
2025 | $3,110 |
2026 | 12,338 |
2027 | 12,338 |
2028 | 12,372 |
2029 | 135,310 |
Thereafter | — |
Total | 175,468 |
Less: amount representing interest | (50,468) |
Less: unamortized debt discount and issuance costs | (5,453) |
Noncurrent portion of debt | $119,547 |
Liabilities Related to Sale of Future Royalties
On November 1, 2024, we entered into a revenue participation right purchase and sale agreement, or the
Royalty Pharma Agreement, with Royalty Pharma Development Funding, LLC, or Royalty Pharma. Pursuant to the
Royalty Pharma Agreement, we received an upfront payment of $125.0 million, or the Purchase Price, in exchange for
which Royalty Pharma obtained the right, or the Revenue Participation Right, to receive certain amounts calculated as a
percentage of future U.S. net sales of RYTELO for each calendar quarter, or Royalty Payments, during the term
contemplated by the Royalty Pharma Agreement. Specifically, the revenue participation rate commences at 7.75% for
annual U.S. net sales of up to and equal to $500.0 million declining to 1.0% for annual U.S. net sales exceeding $1.0 billion
until the date when the aggregate Royalty Payments equal or exceed 1.65 times the Purchase Price, if this occurs by June
30, 2031 or the date when the aggregate Royalty Payments equal or exceed 2.0 times the Purchase Price.
In addition, we have the option to repurchase all of the Revenue Participation Right from Royalty Pharma
for a purchase price of equal to the Buy-Out-Payment, as defined below, if we entered into a definitive agreement to
consummate a change of control, or Buy-Back Option.
“Buy-Out Payment” means an amount equal to (a) 1.65 times the Purchase Price minus the aggregate
Royalty Payments as of the change of control, if the change of control occurs on or prior to December 31, 2027, or (b) 2.0
times the Purchase Price minus the aggregate Royalty Payments as of the change of control, if the change of control occurs
after December 31, 2027.
We accounted for the Royalty Pharma Agreement as a financing liability, primarily because it has
significant continuing involvement in generating the future revenue on which the Royalty Payments are based. The liability
related to Revenue Participation Right and the related interest expense are measured based on our current estimate of the
timing and amount of expected future Royalty Payments expected to be paid over the estimated term of the Royalty
Pharma Agreement using a discounted cash flow model. The liability is amortized using the effective interest rate method,
resulting in recognition of interest expense over the estimated term of the agreement.
We have determined the fair value of the liability related to the sale of future royalties is based on our
current estimates of future royalties expected to be paid to Royalty Pharma over the life of the arrangement, which are
considered Level 3.
The following table shows the activity within the liability related to sale of future royalties during the year
ended December 31, 2025.
Liability Related to Sale of Future Royalties | ||
(in thousands) | ||
Carrying value of liability related to sale of future royalties at December 31, 2024 | $124,793 | |
Non-cash interest expense recognized | 18,948 | |
Royalty payments | (14,159) | |
Carrying value of liability related to sale of future royalties at December 31, 2025 | $129,582 |
Embedded Derivatives
The conditional exercisable call option related to the event of default is considered to be an embedded
derivative which is required to be bifurcated and accounted for as a separate financial instrument. In the periods presented,
the value of the embedded derivative is not material and therefore, no amount has been recognized. If an event of default
becomes more probable than is currently estimated, then the embedded derivative could become material in future periods
and would be recognized as a separate financial instrument at that time. The embedded derivatives are classified within
Level 3 of the fair value hierarchy due to the use of significant unobservable inputs.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2022 | Mar 16, 2023 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.