GTC Biotherapeutics (fka GTCB)

[DewDiligence]

Re: Option repricing

>Remember if the options are underwater they can be repriced with relative ease. It happened after the 2000 tech decline.<

Since the late 1990s, option repricing has been treated severely under GAAP. Moreover, GAAP considers any re-issuance of canceled options at a lower strike within six months to be a repricing.

Development-stage biotechs do not normally care a lot about GAAP profit and loss, but the GAAP treatment of options repricing requires companies to explain the accounting treatment in great detail and this brings unwanted attention to the transaction. As a result, option repricing simply isn’t done anymore by reputable companies.