SCHEDULE: Keros Therapeutics Repurchases $95.66M in Shares

Keros Therapeutics, Inc. has entered into a stock purchase agreement to repurchase 5,389,264 shares of its common stock from ADAR1 Capital Management and its affiliates for $95,659,436, as part of its previously announced $375 million Capital Return Program.

Summary

• Keros Therapeutics, Inc. (the "Company") has agreed to purchase 5,389,264 shares of its Common Stock from ADAR1 Capital Management, LLC and its affiliates (the "ADAR1 Parties").
• The per share purchase price is $17.75, totaling an aggregate price of $95,659,436.
• This transaction is part of the Company's previously disclosed intention to return $375 million in excess capital to its stockholders (the "Capital Return Program").
• Upon closing, the ADAR1 Parties will no longer beneficially own any shares of Keros Therapeutics Common Stock.
• A standstill agreement is in effect until the final certification of voting results for the 2028 Annual Meeting of Stockholders, restricting the ADAR1 Parties from acquiring more than 4.9% of outstanding shares or engaging in certain activist behaviors.
• The ADAR1 Parties have committed to voting any beneficially owned shares in accordance with the Board of Directors' recommendations on most proposals during the standstill period, with exceptions for ISS/Glass Lewis differing recommendations and Extraordinary Transactions.
• A mutual non-disparagement clause is included, preventing public or private statements that undermine or criticize either party.
• The confidentiality agreement between Keros Therapeutics and ADAR1 Capital Management, dated August 27, 2025, will automatically terminate upon the effective date of this agreement.

Sentiment

Score: 8

Explanation: The sentiment is positive. A significant share buyback, especially as part of a larger capital return program, typically signals management confidence in the company's valuation and future prospects. It also reduces the share count, which can be accretive to earnings per share. The standstill agreement also provides governance stability.

Positives

• The share repurchase is a significant component of the Company's $375 million Capital Return Program, demonstrating a commitment to returning value to shareholders.
• Reducing the outstanding share count through this buyback can enhance earnings per share and other per-share metrics for remaining shareholders.
• The standstill agreement with ADAR1 Capital Management provides stability by limiting potential future activist actions or significant ownership accumulation by the ADAR1 Parties for an extended period until the 2028 Annual Meeting.

Negatives

• The ADAR1 Parties, previously significant shareholders, will no longer hold any beneficial ownership in the Company, potentially reducing institutional oversight or engagement.

Future Outlook

The Company is executing its previously announced $375 million Capital Return Program, with this share repurchase being a significant step. The standstill agreement ensures a period of stability regarding shareholder activism from the ADAR1 Parties until the 2028 Annual Meeting.

Industry Context

Share repurchases are a common strategy for companies with strong cash flows or excess capital to return value to shareholders, often signaling management's belief that the stock is undervalued. This move aligns with a broader trend of companies optimizing capital allocation and enhancing shareholder returns.

Corporate Governance

Related Party Transactions

• Keros Therapeutics, Inc. entered into a Stock Purchase Agreement with ADAR1 Capital Management, LLC and its affiliates, who were significant beneficial owners of the Company's common stock prior to this transaction.

Stakeholder Impact

• **Shareholders:** Existing shareholders benefit from the capital return program and reduced share count, which can lead to increased earnings per share and potentially higher stock valuation. The removal of a large institutional holder might shift the shareholder base.
• **ADAR1 Capital Management:** The ADAR1 Parties are fully divesting their stake in Keros Therapeutics, receiving $95.66 million in cash, and are subject to a multi-year standstill and voting agreement.
• **Management/Board:** The standstill agreement provides a period of reduced external pressure from a significant shareholder, allowing management to execute its strategy with greater stability.

Next Steps

• The Company will deliver the applicable Purchase Price to each Seller Affiliate by wire transfer within one Business Day following confirmation of share transfer.
• ADAR1 Capital Management will file an amendment to its Schedule 13D with the SEC within two business days of the Effective Date.
• The Company will continue to execute its $375 million Capital Return Program.

Key Dates

Recommendation

The share repurchase is a strong positive signal, indicating management's confidence in the company's intrinsic value and commitment to returning capital to shareholders. This action, as part of a larger capital return program, typically leads to a reduced share count, which can enhance per-share metrics and potentially drive stock appreciation. The accompanying standstill agreement also provides a period of governance stability, which is favorable for long-term strategic execution.

Keywords

Keros Therapeutics, ADAR1 Capital Management, Share Repurchase, Stock Buyback, Capital Return Program, Common Stock, Standstill Agreement, SEC Filing, Schedule 13D Amendment, Corporate Governance