Biora Therapeutics, Inc. (NASDAQ:BIOR), a pharmaceutical company, announced significant changes to its capital structure following a Special Meeting of Stockholders held on October 9, 2024. The company's Board of Directors approved a reverse stock split and a reduction in the total number of authorized shares.
Effective October 18, 2024, Biora Therapeutics will implement a 10-for-1 reverse stock split, consolidating every ten shares of existing common stock into one new share. Concurrently, the total number of authorized shares of common stock will decrease from 300 million to 255 million. This reverse stock split aims to increase the per-share trading price of the company's stock, potentially making it more appealing to investors.
Stockholders will not receive fractional shares in the reverse stock split. Instead, the company will pay cash for the fractional shares based on the closing price of the stock on the Nasdaq Stock Market on October 17, 2024, adjusted to reflect the reverse split ratio.
The reverse stock split will also result in proportional adjustments to the conversion rate of Biora Therapeutics' outstanding convertible notes and the terms of the company's equity plans, including outstanding equity awards and future issuance reserves.
At the Special Meeting, stockholders voted in favor of both the reverse stock split and the authorized shares reduction. The vote for the reverse stock split was 19,349,243 for, 4,867,765 against, and 36,976 abstentions. The vote for the reduction in authorized shares was 20,435,303 for, 3,562,086 against, and 256,595 abstentions.
The reverse stock split is expected to commence trading on a split-adjusted basis when the market opens on October 18, 2024, under a new CUSIP number.
The information in this article is based on a press release statement from Biora Therapeutics, Inc.
In other recent news, Biora Therapeutics has secured an additional $4 million in financing, bringing the total recent funding to $8 million. This is part of the company's broader effort to raise up to $16 million in capital.
In addition, the company has entered a series of transactions, including a Convertible Notes Purchase Agreement, a Convertible Notes Exchange Agreement, and issuing additional warrants. These actions aim at restructuring the company's debt and providing additional capital for ongoing operations and projects.
Biora Therapeutics reported favorable advancements in its BT-600 program and BioJet platform, with second-quarter 2024 earnings surpassing negative estimates, resulting in earnings per share (EPS) of $0.18.
Investment firm H.C. Wainwright reiterated a Buy rating for Biora Therapeutics, anticipating an increase in business development and collaboration announcements over the next year. The company aims to initiate a partnership for its BioJet platform in 2024 and increase the production of its NaviCap devices through automation.
InvestingPro Insights
Biora Therapeutics' recent decision to implement a reverse stock split comes amid challenging financial circumstances, as revealed by InvestingPro data. The company's market capitalization stands at a modest $20.13 million, reflecting its current struggles. InvestingPro Tips highlight that Biora is "quickly burning through cash" and "operates with a significant debt burden," which may have contributed to the need for this capital restructuring.
Despite a remarkable revenue growth of 777.55% over the last twelve months, Biora's operating income remains deeply negative at -$67.97 million, with an alarming operating income margin of -7903.14%. These figures underscore the company's financial challenges and explain the motivation behind the reverse stock split to potentially attract new investors.
InvestingPro Tips also indicate that the stock "has fared poorly over the last month" and has "fallen significantly over the last year," with a one-year price total return of -70.64%. This context provides insight into why management might view the reverse split as necessary to improve the stock's marketability.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for Biora Therapeutics, providing a deeper understanding of the company's financial health and market position.
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