As of a few days ago, we now know that Merck (by virtue of the below private placement, and prior stock purchases) effectively controls NGM -- which is what reaching the 19.9 per cent threshold signals, under Schedule 13G rules. However, Merck will not absorb its proportionate share of NGM's losses, under the so-called equity method accounting rules, until it crosses 20 per cent. Now you know -- here's the bit:
. . . .On April 8, 2019, NGM Biopharmaceuticals, Inc. (the “Company”) issued and sold 4,121,683 shares (the “Private Placement Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), to Merck Sharp & Dohme Corp. (“Merck”) in a private placement that occurred concurrently with the closing of the Company’s initial public offering (the “IPO”) of its Common Stock.
The aggregate cash purchase price of the Private Placement Shares was $65.9 million, representing a per share price of $16.00, the same price at which shares of Common Stock were sold to the public in the IPO.
The sale and issuance by the Company of the Private Placement Shares to Merck were not registered under the Securities Act of 1933, as amended (the “Securities Act”) or any state securities laws. The Company has relied on the exemption from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof and the rules and regulations promulgated thereunder relating to transactions not involving any public offering. . . .
So. . . Merck plainly believes in this company -- and its promise, in the diabetes space. Onward, to a sunny warm weekend away, after a pro bono bond hearing for another undocumented refugee client. . . .
नमस्ते
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