Gemini and Disc securityholders will generally have a reduced ownership and voting interest in, and will exercise less influence over the management of, the combined company following the completion of the merger as compared to their current ownership and voting interests in the respective companies.

After the completion of the merger, the current stockholders of Gemini and Disc will generally own a smaller percentage of the combined company than their ownership of their respective companies prior to the merger. Immediately after the merger, Gemini stockholders as of immediately prior to the merger are expected to own approximately 24% of the outstanding shares of the combined company, former Disc securityholders, excluding shares purchased in the Disc pre-closing financing are expected to own approximately 63% of the outstanding shares of the combined company and shares issued in the Disc pre-closing financing are expected to represent approximately 13% of the outstanding shares of capital stock of the combined company, subject to certain assumptions, including, but not limited to, Gemini’s net cash as of closing being between $87.4 million and $96.6 million. The Chief Executive Officer of Disc will serve as the Chief Executive Officer of the combined company following the completion of the merger.

The financial projections for Disc included in this proxy statement/prospectus under “The Merger—Certain Unaudited Financial Projections”, which were considered by the Gemini Board in evaluating the Merger and used by Gemini's financial advisor in rendering its fairness opinion and performing its related financial analyses, reflect numerous variables, estimates and assumptions and are inherently uncertain. If any of these variables, estimates and assumptions prove to be wrong, such as the assumptions relating to the approval of Disc's product candidates, the actual results for the combined company's business may be materially different than the results reflected in the financial projections.

In addition, the financial projections cover a significant period of time, specifically 19 years through 2041. This extended period was used in light of the anticipated timing for regulatory approval and the initiation of commercial sales of the Disc product candidates and the anticipated period of patent exclusivity for each product candidate. However, the risks and uncertainties regarding the financial projections, including the potential for adverse developments such as delays in obtaining or failure to obtain regulatory approvals or additional competition or changes in the competitive or regulatory landscape, increase with each successive year and the likelihood that the actual results will differ materially from the projected results increase with each successive year. The financial projections also do not reflect general business, economic, market and financial conditions and any changes in any of these conditions over the period of the projections could result in the actual results differing materially from the results reflected in the financial projections.

 

This analysis resulted in an implied equity value for Disc of approximately $495 million to $795 million and a corresponding implied exchange ratio of approximately 2.1042x to 3.3794x.

Additional Factors Observed by SVB Securities – Disc Valuation Analysis – Selected Public Companies

As additional factors not part of its financial analyses but noted for reference purposes, SVB Securities reviewed publicly available information relating to the market capitalization of certain U.S.-listed publicly traded companies whose lead products at the time of this analysis were (1) being developed for the treatment of non-malignant hematological disorders or other rare diseases and (2) in early clinical development, selected based on SVB Securities’ professional judgment and experience. These companies, which are referred to as the Selected Companies, were:

SVB Securities noted that although such companies had certain financial and operating characteristics that could be considered similar to those of Disc, none of the companies had the same management, make-up, technology, size or mix of businesses as Disc and, accordingly, there were inherent limitations on the applicability of such companies to the valuation analysis of Disc. SVB Securities did not utilize in its analysis data for three companies that generally met the criteria of being U.S.-listed publicly traded companies whose lead products were (1) being developed for the treatment of non-malignant hematological disorders or other rare diseases and (2) in early clinical development. These three companies were excluded based upon SVB Securities’ professional judgment that these companies were not comparable to Disc, in the first case, because the company had announced that a Phase 3 study for the company’s lead product failed to meet its primary endpoint, in the second case because the company had announced the completion of a Phase 2a clinical trial for its lead product that met the trial’s primary and secondary endpoints and, in the third case, because at the time SVB Securities selected the Selected Companies the company traded at an enterprise value of approximately negative $50 million. SVB Securities calculated the aggregate enterprise value of each of the Selected Companies based upon the closing price of the common stock of each Selected Company on August 8, 2022 and the fully-diluted number of shares outstanding, using the treasury stock method. Using the 25th and 75th percentile of the Selected Companies, SVB