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Verastem Oncology (VSTM) $60 M Private Placement Offering of Series B Convertible Preferred Stock

January 24, 2023 8:07pm

Definitive agreement to sell approximately 2.1 million shares of its Series B Convertible Preferred Stock to affiliates of BVF Partners L.P. of $60 million in two tranches

VSTM closed up +$0.02 to $0.61 with a negative -$0.01 or -1.66% aftermarket - so far and STILL de-listed from Nasdaq

Caveats:

The initial tranche, consisting of 1.2 million shares of Preferred Stock for gross proceeds of approximately $30 million, representing a purchase price per common share equal to $0.5901, is anticipated to close on 1/27/23, subject to the satisfaction of customary closing conditions.

The second tranche, consisting of 900 K shares of Preferred Stock for gross proceeds of approximately $30 million, resulting in a purchase price per common share equal to $0.75, will close within seven trading days of VSTM’s common stock trading for a 10-day volume weighted average price of at least $1.125 per share with aggregate trading volume during the same 10-day period of at least $25 million within 18 months from the closing date of the initial tranche.

Obligations:

· The Preferred Stock ranks senior to all of the Common Stock;

· Senior to all other classes and series of equity securities of the Corporation that by their terms do not rank senior to the Preferred Stock;

· Senior to all shares of VSTM’s Series A Convertible Preferred Stock; (iv) on parity with any class or series of capital stock of the Company hereafter created specifically ranking by its terms on parity with the Preferred Stock;

· Junior to any class or series of capital stock of the Company hereafter created specifically ranking by its terms senior to any Preferred Stock; and

· Junior to all of VSTM’s existing and future debt obligations.

The Bottom Line: status – desperate to add multiple levels of DEBT

52-week low of $0.29 and a high of $2.13

Cash position: 103.98 (Yahoo)

Debt: $27.11 M

Book value: $0.30

Operating cash Flow: -$56.99 M

What about the delisting = speak to shareholders - NADA

35 companies, 1 interpreter!

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