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BioTime (NYSE MKT: BTX) Non-Binding Letter Of Intent With Geron (GERN) Regarding Stem Cell Assets

BioTime Acquisition Corporation (NYSE:BAC) jointly has entered into a non-binding letter of intent (LOI) with Geron Corporation…

The LOI contains broad terms of a potential transaction through which GERN would contribute to BAC its intellectual property and other assets related to Geron's discontinued human embryonic stem cell programs.

BioTime would contribute to BAC $5 M in cash, $30 M of BioTime common shares, warrants to purchase 8 M common shares of BioTime at a pre-specified price, rights to use certain human embryonic stem cell lines, and minority stakes in 2 of BioTime's subsidiaries. In addition, a private investor would invest $5 M in cash in BAC.

The Bottom Line: Following consummation of the potential transaction, GERN stockholders would receive shares representing 21.4% of the common stock of BAC as well as warrants to purchase 8 M shares of BTX stock at a pre-specified price. BioTime would own approximately 71.6%, and a private investor would own approximately 7% of the outstanding BAC common stock for their $5 M investment.BioTime would also receive warrants that would enable it to increase its ownership in BAC by approximately 2%, which would reduce the GERN stockholders' ownership in BAC to 19.2%. BAC would also be committed to pay to Geron royalties on the sale of products that are commercialized in reliance upon Geron patents acquired by BAC. The LOI is not a binding agreement to complete the transaction. Consummation of the transaction is necessarily subject to entering into a definitive agreement between the parties containing terms and conditions yet to be negotiated.

FINALLY … a deal structure!!

BTX closed at $2.97 up $0.06 or +2.06% while GERN closed at $1.21

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.