| Item 1.01 | Entry into a Material Definitive Agreement. |
On November 6, 2022, Biora Therapeutics, Inc. (the “Company”) entered into a securities purchase agreement with certain institutional and accredited investors (the “Purchase Agreement”) relating to the offering and sale of an aggregate of 32,506,250 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), and accompanying warrants to purchase 32,506,250 shares of Common Stock (the “Warrants”) at a combined purchase price of $0.30 per Share and accompanying Warrant (the “Offering”). The Warrants have an exercise price of $0.3288 per share, will become exercisable commencing six months following the date of issuance and will expire five years following the initial exercise date.
The Company received gross proceeds from the Offering of approximately $9.75 million before deducting placement agent fees and estimated offering expenses. Approximately $3.75 million of the gross proceeds from the Offering are being received as an in-kind payment. Such in-kind payment will be made in the form of a waiver of the Company’s cash interest payment obligation of approximately $3.75 million due on certain of the Company’s 7.25% Convertible Senior Notes due 2025 held by affiliates of Athyrium Capital Management, LP for the payment date occurring on December 1, 2022. The Offering closed on November 9, 2022.
The securities were offered and sold to the public pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-258301) initially filed with the Securities and Exchange Commission (the “Commission”) on July 30, 2021 and declared effective on August 6, 2021. A prospectus supplement relating to the Offering was filed with the Commission on November 9, 2022 (the “Prospectus Supplement”).
Pursuant to an engagement letter, dated as of October 20, 2022, between the Company and H.C. Wainwright & Co., LLC (the “Placement Agent”), the Company agreed to pay the Placement Agent a cash fee of equal to $472,556. The Company also agreed to pay the Placement Agent up to $25,000 for non-accountable expenses, up to $50,000 of legal counsel and other out-of-pocket expenses and a $15,950 for a clearing fee.
The Purchase Agreement contains customary representations, warranties and agreements by the Company and customary conditions to closing. In addition, the Company has agreed not to issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock or securities convertible into or exchangeable for shares of common stock or file any registration statement or amendment or supplement thereto, other than the Prospectus Supplement or a registration statement on Form S-8 in connection with any employee benefit plan, until January 23, 2023 and for twelve (12) months following the closing date not to issue any shares of Common Stock or Common Stock Equivalents in a Variable Rate Transaction (as defined in the Purchase Agreement), subject to limited exceptions.
The Company agreed to indemnify the placement agent against certain liabilities relating to or arising out of the placement agent’s activities under the engagement letter agreement and to contribute to payments that the placement agent may be required to make in respect of such liabilities.
The foregoing descriptions of the Purchase Agreement and the Warrants are qualified in their entirety by reference to the full text of the Purchase Agreement and the Form of Warrant, which are attached to this Current Report on Form 8-K as Exhibit 10.1 and 10.2, respectively, and incorporated herein by reference in their entirety.
The Company notes that the representations, warranties and covenants made by the Company in any agreement that is filed as an exhibit to any document that is incorporated by reference in the Prospectus Supplement or the accompanying base prospectus were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to or in favor of any stockholder or potential stockholder of the Company other than the parties thereto. In addition, the assertions embodied in any representations, warranties and covenants contained in such agreements may be subject to qualifications with respect to knowledge and materiality different from those applicable to security holders generally. Moreover, such representations, warranties or covenants were accurate only as of the date when made, except where expressly stated otherwise. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing the current state of the Company’s affairs at any time.
The Prospectus Supplement relating to the Offering was filed with the Commission and is available on the Commission’s web site at http://www.sec.gov. Copies of the Prospectus Supplement may also be obtained from the web site maintained by the Placement Agent, and the Placement Agent may distribute the Prospectus Supplement electronically.
An opinion of Gibson, Dunn & Crutcher LLP regarding the validity of the Shares is filed as Exhibit 5.1.
This Current Report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy, and these securities cannot be sold in any state or jurisdiction in which this offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any state or jurisdiction. Any offer will be made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement.
