Item 1.01. |
Entry into a Material Definitive Agreement. |
On December 18, 2023, Biora Therapeutics, Inc. (the “Company”) entered into the transactions described below (collectively, the “Debt Exchange Transactions”). The Debt Exchange Transactions are expected to close on December 19, 2023 (the “Closing Date”).
Note Exchange Agreements and Note Purchase Agreements
The Company entered into Exchange Agreements (the “Note Exchange Agreements”), dated December 18, 2023, with certain holders of the Company’s 7.25% Convertible Senior Notes due 2025 (the “Existing Notes”), pursuant to which the Company agreed to acquire an aggregate of $72,500,000 of the Company’s Existing Notes from the holders in exchange for (i) $23,930,000 in aggregate principal amount of 11.00% / 13.00% Convertible Senior Secured Notes due 2028 (the “Notes”), (ii) for certain investors, an aggregate of 625,000 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), (iii) for certain investors, warrants to purchase 5,039,236 shares of Common Stock (the “Exchange Warrants”), and (iv) for certain investors, accrued and unpaid interest on the Existing Notes exchanged to, but excluding, the Closing Date.
The Company also entered into Note Purchase Agreements (the “Note Purchase Agreements”), dated December 18, 2023, with certain investors named therein (the “Purchasers”). Pursuant to the Note Purchase Agreements, the Purchasers agreed to purchase $16,953,000 in aggregate principal amount of additional Notes from the Company for cash at par value. Pursuant to the terms of the Note Purchase Agreements, the Purchasers were granted warrants to purchase an aggregate of 5,084,613 shares of Common Stock (the “Additional Warrants”) and certain of the Purchasers were also granted warrants to purchase an aggregate of 7,352,941 shares of Common Stock (the “Commitment Warrants” and, together with the Exchange Warrants and the Additional Warrants, the “Warrants”). For more information regarding the Exchange Warrants, the Commitment Warrants and the Additional Warrants, see “—Warrants” below.
In connection with the entry into the Note Exchange Agreements and the Note Purchase Agreements, the Company has agreed to allow certain of the parties thereto to designate one board observer.
Copies of the form of Note Exchange Agreement and form of Note Purchase Agreement are filed with this Current Report on Form 8-K as Exhibit 10.1 and 10.2, respectively, and are incorporated herein by reference, and the foregoing descriptions of the Note Exchange Agreements and Note Purchase Agreements are qualified in their entirety by reference thereto.
Indenture
The Notes will be issued pursuant to, and will be governed by, an indenture (the “Indenture”), to be dated as of the Closing Date, by and between the Company and GLAS Trust Company LLC, as trustee (the “Trustee”). The Notes will be the Company’s senior secured obligations, and are secured by substantially all of the Company’s and its subsidiaries’ assets. The Notes will be (i) senior in right of payment to the Company’s existing and future senior, unsecured indebtedness to the extent of the value of the collateral; and (ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the Notes.
Interest on the Notes is payable in cash, or at the Company’s election subject to certain limitation, with a combination of cash and shares of Common Stock of the Company (“blended payments”) or, with the agreement of the applicable holder, through payment-in-kind. The Notes will accrue interest at a rate of 11.00% per annum in the case of cash payment and 13.00% in the case of blended payments or payments-in-kind, payable semi-annually in arrears on June 1 and December 1 of each year, with the initial payment on June 1, 2024. The Notes will mature on the earlier of December 19, 2028 and the date that is 90 days prior to the maturity of the Existing Notes solely to the extent there are Existing Notes outstanding in a principal amount equal to or greater than $5,000,000 as of such date, unless earlier repurchased, redeemed or converted. At any time from the Closing Date and before the close of business on the second scheduled trading day immediately before the maturity date, noteholders may convert their Notes at their option into shares of the Company’s common stock, together, if applicable, with cash in lieu of any fractional share, at the then-applicable conversion rate. The initial conversion rate is 641.02564 shares of common