Biora Therapeutics Proposes Stock Issuance

The company seeks approval for share issuance, equity plan adjustments, and flexibility for future financing efforts ahead of special meeting.

October 14, 2024

Overview of Proposals for the November 2024 Special Meeting

Biora Therapeutics, a biotechnology company focused on developing targeted therapies, has outlined key proposals for its upcoming Special Meeting of Stockholders, scheduled for November 13, 2024. The company is seeking shareholder approval on several important matters, including the issuance of additional shares, amendments to its 2018 Equity Incentive Plan, and authority to adjourn the meeting if necessary to solicit additional proxies.

The proposals come at a pivotal moment for the company, which has been navigating financing challenges while continuing to advance its clinical-stage programs. The meeting, set to take place virtually, is intended to ensure that Biora Therapeutics maintains the flexibility needed to execute its strategic plans and attract long-term investors.

Key Proposals on the Agenda

The agenda for the special meeting includes three key proposals, each of which is critical for Biora's future direction:

• Approval of Issuance of Additional Common Stock:
  Biora Therapeutics is asking shareholders to approve the issuance of common stock tied to several recent financing transactions, including convertible notes and warrants. The company's financing arrangements, particularly the issuance of Payment Priority Convertible Notes, allow for the conversion of debt into equity. This conversion could significantly dilute existing shareholders’ ownership if the proposal is approved, as it involves the issuance of shares that may exceed 20% of the company's outstanding stock.



• Amendments to the 2018 Equity Incentive Plan:
  In a bid to maintain competitiveness and retain top talent, Biora Therapeutics has proposed amendments to its existing 2018 Equity Incentive Plan. The company seeks to increase the number of shares available for issuance under the plan by an additional 2.5 million shares and extend the plan’s expiration date to October 10, 2034. This change is crucial to keep the company’s employees motivated and aligned with shareholder interests.



• Adjournment of the Special Meeting:
  The third proposal on the agenda is to allow the Board of Directors to adjourn the special meeting if it does not receive enough votes to pass the proposals. This measure would give the company more time to solicit additional proxies from shareholders who may not have participated in the initial round of voting.

Rationale Behind the Proposals

Biora Therapeutics is currently in a critical phase of its development, with several clinical-stage programs targeting diseases in need of novel therapies. However, the company has been managing significant financial constraints, as evidenced by its recent convertible note offerings and efforts to restructure its debt.

The issuance of additional shares through the conversion of warrants and notes is aimed at improving the company’s balance sheet. By converting some of its debt into equity, Biora aims to reduce its financial liabilities, freeing up capital to support ongoing research and development. The proposed stock issuance also provides the company with more flexibility to raise additional capital in the future, a necessity for its continued operation and development of its pipeline.

Meanwhile, the amendments to the equity incentive plan reflect Biora’s need to remain competitive in a highly specialized labor market. The biotechnology industry, particularly in the area of clinical-stage development, is fiercely competitive, and companies must offer compelling compensation packages to attract and retain the best talent. Increasing the pool of available shares for incentive awards allows Biora to use stock options and restricted stock units (RSUs) more effectively in its compensation strategy.

Potential Impact on Shareholders

While the proposals are crucial for Biora’s operational flexibility and long-term success, they may have short-term implications for shareholders. The proposed issuance of new shares could result in significant dilution of existing shareholders’ stakes in the company. If the share issuance proposals are approved, shareholders may see their ownership percentage decrease as more shares are issued to convertible noteholders and warrant holders.

Moreover, while the expansion of the equity incentive plan is likely to benefit Biora in terms of talent retention, it also increases the potential for further dilution as more shares are granted to employees and directors. This could weigh on the stock price in the short term, although the company argues that the long-term benefits of retaining a skilled workforce will ultimately outweigh these concerns.

Governance and Voting Rights

The Board of Directors of Biora Therapeutics has recommended that shareholders vote in favor of all three proposals. The board emphasizes that the approval of these proposals is necessary for the company to continue its strategic initiatives, reduce debt, and incentivize its workforce.

To participate in the special meeting, shareholders must be registered by October 18, 2024. They will be able to vote online, by mail, or via telephone, and detailed instructions have been provided in the proxy materials distributed ahead of the meeting.

Should any proposal fail to receive sufficient votes, Biora will be required to reconvene a special meeting every 90 days until shareholder approval is secured or the securities tied to the proposal are no longer outstanding. This ongoing process could result in additional costs for the company and delay its ability to execute its strategic plans.

Conclusion: A Critical Moment for Biora Therapeutics

Biora Therapeutics faces significant decisions at its November 2024 Special Meeting. The proposals outlined by the company are intended to strengthen its financial position and enhance its ability to attract and retain top talent. However, these actions come with potential trade-offs for shareholders, particularly in the form of dilution.

As the company seeks to push forward with its clinical programs and maintain its position in the competitive biotechnology space, shareholder support for these proposals will be crucial. The decisions made at this special meeting could shape the company’s trajectory in the coming years, influencing not only its financial stability but also its ability to deliver on its therapeutic promises.

Next Steps for Shareholders:

• Review proxy materials


• Register for the Special Meeting by October 18, 2024


• Vote on the proposals via mail, phone, or online by the specified deadlines

Company Contact Information

Biora Therapeutics, Inc.

4330 La Jolla Village Drive, Suite 300, San Diego, CA 92122

Website: https://investors.bioratherapeutics.com

Final Thoughts

While Biora continues to position itself as a leader in the biotech sector, its financial health and ability to attract critical talent hinge on the outcomes of the Special Meeting. The proposals up for vote will allow the company to restructure, bolster its workforce, and move forward with key clinical trials.