Biora Therapeutics(BIOR) - 2023 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, stockholders' deficit, and cash flows, along with detailed notes explaining the company's organization, accounting policies, strategic transformation, and various financial components Condensed Consolidated Balance Sheets | Metric | Dec 31, 2022 (in thousands) | June 30, 2023 (in thousands) | Change (in thousands) | | :-------------------------------- | :-------------------------- | :--------------------------- | :-------------------- | | Cash, cash equivalents and restricted cash | $30,486 | $26,452 | $(4,034) | | Total current assets | $38,116 | $33,885 | $(4,231) | | Total assets | $53,525 | $49,673 | $(3,852) | | Total current liabilities | $23,305 | $37,668 | $14,363 | | Convertible notes, net | $127,811 | $128,568 | $757 | | Total liabilities | $155,812 | $170,554 | $14,742 | | Total stockholders' deficit | $(102,287) | $(120,881) | $(18,594) | Condensed Consolidated Statements of Operations | Metric | 3 Months Ended June 30, 2023 (in thousands) | 3 Months Ended June 30, 2022 (in thousands) | Change (in thousands) | | :----------------------------------------- | :---------------------------------------- | :---------------------------------------- | :-------------------- | | Revenues | $2 | $104 | $(102) | | Research and development | $5,983 | $5,904 | $79 | | Selling, general and administrative | $8,953 | $8,410 | $543 | | Total operating expenses | $14,936 | $14,314 | $622 | | Loss from operations | $(14,934) | $(14,210) | $(724) | | (Loss) gain on warrant liabilities | $(161) | $4,413 | $(4,574) | | Other (expense) income, net | $(5) | $5,735 | $(5,740) | | Net loss | $(17,807) | $(5,513) | $(12,294) | | Net loss per share, basic and diluted | $(1.47) | $(0.75) | $(0.72) | | Metric | 6 Months Ended June 30, 2023 (in thousands) | 6 Months Ended June 30, 2022 (in thousands) | Change (in thousands) | | :----------------------------------------- | :---------------------------------------- | :---------------------------------------- | :-------------------- | | Revenues | $4 | $211 | $(207) | | Research and development | $13,173 | $12,462 | $711 | | Selling, general and administrative | $17,309 | $21,867 | $(4,558) | | Total operating expenses | $30,482 | $34,329 | $(3,847) | | Loss from operations | $(30,478) | $(34,118) | $3,640 | | (Loss) gain on warrant liabilities | $703 | $13,402 | $(12,699) | | Other (expense) income, net | $(86) | $4,924 | $(5,010) | | Net loss | $(35,248) | $(19,321) | $(15,927) | | Net loss per share, basic and diluted | $(3.01) | $(2.63) | $(0.38) | Condensed Consolidated Statements of Stockholders' Deficit | Metric | Dec 31, 2022 (in thousands) | June 30, 2023 (in thousands) | Change (in thousands) | | :-------------------------- | :-------------------------- | :--------------------------- | :-------------------- | | Common Stock Amount | $8 | $11 | $3 | | Additional Paid-In Capital | $743,626 | $760,277 | $16,651 | | Accumulated Deficit | $(826,843) | $(862,091) | $(35,248) | | Treasury Stock Amount | $(19,078) | $(19,078) | $0 | | Total Stockholders' Deficit | $(102,287) | $(120,881) | $(18,594) | Condensed Consolidated Statements of Cash Flows | Activity | 6 Months Ended June 30, 2023 (in thousands) | 6 Months Ended June 30, 2022 (in thousands) | | :------------------------------------ | :--------------------------- | :--------------------------- | | Cash used in operating activities | $(23,720) | $(43,594) | | Cash used in investing activities | $(25) | $(556) | | Cash provided by financing activities | $19,711 | $4,259 | | Net decrease in cash, cash equivalents and restricted cash | $(4,034) | $(39,891) | | Cash, cash equivalents and restricted cash at end of period | $26,452 | $48,506 | - Net cash used in operating activities decreased by $19.874 million for the six months ended June 30, 2023, compared to the same period in 2022[97][260] - Net cash provided by financing activities increased by $15.452 million for the six months ended June 30, 2023, compared to the same period in 2022, primarily due to proceeds from common stock and warrant issuances[97][260][264] Notes to Condensed Consolidated Financial Statements 1. Organization and Description of Business - Biora Therapeutics is a biotechnology company developing oral biotherapeutics with two platforms: BIOJET™ Systemic Oral Delivery and NAVICAP™ Targeted Oral Delivery[100][106][176] - The company underwent a Strategic Transformation in June 2021, closing its genetics laboratory and selling Avero, to refocus on its therapeutics pipeline[106][179][180] - As of June 30, 2023, the company had $22.7 million in cash and cash equivalents, $3.8 million in restricted cash, and an accumulated deficit of $862.1 million, raising substantial doubt about its ability to continue as a going concern for the next 12 months without additional funding[102][108] 2. Summary of Significant Accounting Policies - A 1-for-25 reverse stock split was effected on January 3, 2023, with all share and per share data retrospectively adjusted[101][109][178][198] - The company adopted ASU No. 2016-13 (Financial Instruments—Credit Losses) on January 1, 2023, with no material impact on financial statements[112] - The company is currently evaluating ASU No. 2020-06 (Accounting for Convertible Instruments and Contracts in an Entity's Own Equity), effective for annual reporting periods beginning after December 15, 2023[113][114] 3. Strategic Transformation - Laboratory Operations (genetics laboratory closure and Avero divestiture) are classified as discontinued operations[115][180] - Divested single-molecule detection platform to Enumera Molecular, Inc. in May 2022, receiving a 25% minority ownership stake valued at $6.0 million[116][303] - Licensed Preecludia™ rule-out test for preeclampsia to Northwest Pathology in November 2022, expecting commercial milestone payments and royalties[117][304] - Sold certain assets and licensed intellectual property related to preeclampsia to a diagnostics company in June 2023 for a one-time payment[118] 4. Revenues - Current revenue is related to license and collaboration agreements[119] - Historical test revenue from Laboratory Operations has been included in discontinued operations[119] 5. Balance Sheet Components | Category | June 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :----------------------- | :--------------------------- | :--------------------------- | | Prepaid expenses | $3,912 | $3,634 | | Other current assets | $193 | $565 | | Total | $4,105 | $4,199 | | Category | June 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :------------------------------------ | :--------------------------- | :--------------------------- | | Total property and equipment | $3,750 | $5,653 | | Less accumulated depreciation and amortization | $(2,399) | $(3,999) | | Property and equipment, net | $1,351 | $1,654 | | Category | June 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :---------------- | :--------------------------- | :--------------------------- | | Investment in Enumera | $6,000 | $6,000 | | Other | $478 | $201 | | Total | $6,478 | $6,201 | | Category | June 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :------------------------------------ | :--------------------------- | :--------------------------- | | Accrual for reimbursement claims and settlements, current | $8,472 | $8,372 | | Accrued interest | $4,687 | $890 | | Insurance financing | $1,517 | $445 | | Total | $21,791 | $16,161 | | Category | June 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :------------------------------------ | :--------------------------- | :--------------------------- | | Lease liabilities, net of current portion | $1,127 | $601 | | Other | $3,191 | $4,095 | | Total | $4,318 | $4,696 | 6. Fair Value Measurements - Warrant liabilities are classified as Level 3 in the fair value hierarchy and valued using the Black-Scholes Model[134] | Metric | Dec 31, 2022 (in thousands) | June 30, 2023 (in thousands) | | :-------------------------------- | :-------------------------- | :--------------------------- | | Balance | $3,538 | $10,835 | | Recognition of new warrant liabilities | N/A | $9,000 | | Change in fair value of warrant liabilities | N/A | $(703) (gain) | - The fair value of Convertible Notes was $73.1 million as of June 30, 2023, compared to a carrying value of $128.6 million[134] 7. Convertible Notes - Outstanding principal amount of Convertible Notes was $132.7 million at June 30, 2023, and December 31, 2022, with an annual interest rate of 7.25%[130] - The notes are convertible into common stock at an initial rate of 11.1204 shares per $1,000 principal amount, subject to adjustments[138] - The company can redeem the Convertible Notes on or after December 1, 2023, if the common stock price exceeds 130% of the conversion price[139] - Unamortized debt discount was $4.2 million at June 30, 2023, amortized using an effective interest rate of approximately 8.7%[142] 8. Related Party Transactions - Affiliates of Athyrium Capital Management, LP held 12.6% of the company's common stock and $103.5 million in Convertible Notes as of June 30, 2023[144][145] - In November 2022, Athyrium affiliates purchased 500,250 shares and warrants, with proceeds including a $3.8 million waiver of interest payment on Convertible Notes[146][204] - In June 2023, the company issued 1,509,434 shares and warrants for 3,018,868 shares to institutional and accredited investors, who became related parties due to greater than 5% ownership[149][209] 9. Commitments and Contingencies | Metric | June 30, 2023 | | :------------------------------------ | :------------ | | Weighted-average remaining lease term (years) | 2.5 | | Weighted-average discount rate | 9.6% | | Total minimum lease payments (in thousands) | $2,175 | | Present value of lease liabilities (in thousands) | $1,937 | - The company has agreements to resolve federal investigations, with remaining payments of approximately $1.7 million by July 15, 2023, $2.8 million by January 1, 2024, and $2.6 million by July 1, 2024[158][159] - The Corporate Integrity Agreement obligations were suspended effective March 7, 2023, due to the cessation of Laboratory Operations[162] - Anthem is seeking recoupment of approximately $27.4 million for historical payments related to discontinued billing practices, which the company disputes[164][236] - A patent infringement lawsuit by Ravgen, Inc. related to the former NIPT testing business is ongoing, with the stay lifted on March 1, 2022[193][238] - IPO-related securities class action lawsuits were dismissed by the court on July 12, 2023, but Lead Plaintiffs filed a notice of appeal on August 11, 2023[194] 10. Stockholders' Equity - A 1-for-25 reverse stock split was effected on January 3, 2023, reducing authorized shares to 164,000,000[198] - In November 2022, the company issued 1,300,250 shares and warrants in a registered direct offering, generating approximately $9.0 million in net proceeds, including a $3.8 million interest payment waiver[204] - In June 2023, the company issued 1,509,434 shares and unregistered warrants for 3,018,868 shares in a registered direct offering and concurrent private placement, generating approximately $7.3 million in net proceeds[209] - Under the ATM Sale Agreement, the company received $12.6 million in net proceeds from selling 2,853,109 shares at a weighted average price of $4.69 per share during the six months ended June 30, 2023[211] 11. Stock-Based Compensation - The Fifth Amended and Restated 2018 Equity Incentive Plan was approved on June 14, 2023, increasing reserved shares by 5,500,000[217] | Metric | Stock Options Outstanding | Weighted-Average Exercise Price | | :-------------------------- | :------------------------ | :------------------------------ | | Balance at Dec 31, 2022 | 582,557 | $59.89 | | Granted | 187,400 | $3.97 | | Forfeited/cancelled | (20,297) | $42.33 | | Expired | (40,928) | $110.06 | | Balance at June 30, 2023 | 708,732 | $42.71 | | Category | 3 Months Ended June 30, 2023 (in thousands) | 3 Months Ended June 30, 2022 (in thousands) | 6 Months Ended June 30, 2023 (in thousands) | 6 Months Ended June 30, 2022 (in thousands) | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Research and development | $773 | $26 | $1,628 | $363 | | Selling, general and administrative | $1,241 | $1,420 | $2,770 | $3,136 | | Total | $2,014 | $1,446 | $4,398 | $3,499 | 12. Income Taxes - The company had a zero effective tax rate for the three and six months ended June 30, 2023 and 2022, due to maintaining a full valuation allowance[225] - As of December 31, 2022, the company had net operating loss (NOL) carryforwards of approximately $504.8 million for federal and $246.3 million for state income tax purposes[409] - Future utilization of NOLs may be limited by Sections 382 and 383 of the Internal Revenue Code due to potential ownership changes from equity raises[226][409] 13. Net Loss Per Share | Security Type | June 30, 2023 | June 30, 2022 | | :------------------------------------------------- | :------------ | :------------ | | Stock options to purchase common stock | 708,732 | 603,278 | | Restricted stock units | 1,032,201 | 300,138 | | Common stock warrant | 5,440,465 | 1,047,353 | | Common stock issuable upon conversion of Convertible Notes | 1,623,547 | 1,623,546 | | Total | 8,804,945 | 3,574,315 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations, highlighting the strategic shift to oral biotherapeutics R&D, factors affecting performance, key financial components, and liquidity challenges General Overview - Biora Therapeutics is a biotechnology company developing oral biotherapeutics with NAVICAP™ and BIOJET™ platforms[176] - The company's historical operations included a licensed clinical laboratory for molecular testing, which has since been divested[177] Common Stock Reverse Split - A 1-for-25 reverse stock split was effected on January 3, 2023, which also decreased the number of authorized common stock shares from 350,000,000 to 164,000,000[178] Factors Affecting Our Performance - The Strategic Transformation in June 2021 refocused efforts on the R&D pipeline, including the closure of the genetics laboratory and sale of the Avero laboratory business[179][180] - The company is devoting substantially all resources to developing intellectual property, conducting R&D (preclinical and clinical studies), and raising capital for therapeutics product candidates[181] - Significant expenses and increasing operating losses are expected in the near term due to advancing preclinical and clinical development, increasing personnel and infrastructure, and defending intellectual property[183] - Significant product revenue is not expected until successful development, regulatory, and marketing approval of therapeutics product candidates, which is anticipated to take several years[184] Key Components of Our Results of Operations - Future revenue is expected from product sales or license/collaboration agreements for therapeutics, as historical revenue from molecular laboratory tests is now reported within discontinued operations[186][188] - Research and development expenses are primarily for therapeutics product candidates and are expected to remain relatively flat in the near term but increase over several years with later-stage clinical trials[189][190][191] - Selling, general and administrative expenses include personnel costs, professional fees, and legal costs related to government settlements and litigation[227] Results of Operations. Comparison of the Three and Six Months Ended June 30, 2023 and 2022 - Research and development expenses increased by $0.1 million for the three months and $0.7 million for the six months ended June 30, 2023, compared to 2022, driven by salaries, benefits, software, consulting, and supplies[246] - Selling, general and administrative expenses increased by $0.5 million for the three months but decreased by $4.6 million for the six months ended June 30, 2023, compared to 2022, primarily due to changes in consulting fees, salaries, benefits, and business insurance[247] - The change in (loss) gain on warrant liabilities decreased by $4.6 million for the three months and $12.7 million for the six months ended June 30, 2023, compared to 2022, due to fair value changes of warrants[248][249] - Other (expense) income, net, decreased by $5.7 million for the three months and $5.0 million for the six months ended June 30, 2023, compared to 2022, primarily due to a non-recurring gain on investment in Enumera Molecular, Inc. in 2022[250] Liquidity and Capital Resources. - As of June 30, 2023, the company had $22.7 million in cash and cash equivalents, $3.8 million in restricted cash, and $128.6 million in Convertible Notes, with an accumulated deficit of $862.1 million[254] - Current cash and cash equivalents are not expected to fund operations for at least 12 months, creating substantial doubt about the company's ability to continue as a going concern[102][255] - The company plans to raise additional capital through equity offerings (including ATM), debt financings, collaborations, licensing, or asset sales, but faces limitations from SEC 'baby shelf rules' (one-third of public float in 12 months)[108][255][292] | Activity | 6 Months Ended June 30, 2023 (in thousands) | 6 Months Ended June 30, 2022 (in thousands) | | :------------------------------------ | :--------------------------- | :--------------------------- | | Cash used in operating activities | $(23,720) | $(43,594) | | Cash used in investing activities | $(25) | $(556) | | Cash provided by financing activities | $19,711 | $4,259 | Critical Accounting Policies and Significant Judgments and Estimates. - No significant changes to critical accounting policies or estimates were reported during the six months ended June 30, 2023[268] Recent Accounting Pronouncements. - Refer to Note 2, 'Summary of Significant Accounting Policies' for information on recently issued accounting pronouncements[269] JOBS Act Accounting Election. - As an emerging growth company, Biora has elected to use the extended transition period for new accounting standards and other exemptions provided by the JOBS Act[270][58][59] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Biora Therapeutics is not required to provide quantitative and qualitative disclosures about market risk - The company is not required to provide market risk disclosures as it is a smaller reporting company[271] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2023, and reported no material changes to internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of June 30, 2023[272] - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2023[273] PART II. OTHER INFORMATION Item 1. Legal Proceedings This section incorporates by reference the information on material pending legal proceedings from Note 9 to the condensed consolidated financial statements - Material pending legal proceedings are incorporated by reference from Note 9 to the condensed consolidated financial statements[275] Item 1A. Risk Factors This comprehensive section outlines the significant risks and uncertainties that could materially and adversely affect the company's business, financial condition, operating results, and stock price. Risks span financial, operational, product development, regulatory, legal, intellectual property, and stock ownership aspects Risk Factor Summary - Operating the business requires significant cash, necessitating additional capital, which if unavailable, could lead to curtailment or cessation of operations[277][288] - Reliance on a limited number of suppliers, or single suppliers, poses risks if replacements or transitions to alternatives are not cost-effective or possible[277][297] - The manufacturing of therapeutics product candidates is complex and dependent on third parties, introducing risks related to supply and quality[277][299] - The company operates in a highly competitive business environment, which could limit growth and profitability[277][305] - Developing new product candidates is complex, costly, and uncertain, with no assurance of regulatory authorization or commercial success[277][312][318] - Outstanding debt and any new debt may impair financial and operating flexibility[277][341] - Third-party claims of intellectual property infringement could result in costly litigation and limit commercialization[277][17] Risks Related to Our Business and Industry Financial and Operational Risks - The company has incurred losses and expects significant costs for product development, requiring substantial additional capital, which may not be available on acceptable terms[278][279][285][288] - Ability to raise capital in public markets is limited by SEC 'baby shelf' rules, restricting sales to one-third of public float in any 12 consecutive months if public float is less than $75 million[255][292] - Reliance on a limited number of sole suppliers for critical components poses risks of delays, re-design requirements, or increased costs if supply is interrupted[297] - The company's cash held in non-interest-bearing and interest-bearing accounts exceeds FDIC insurance limits, exposing it to potential losses from bank failures[296] - Unfavorable global economic conditions, including public health crises, military conflicts, and natural disasters, may adversely affect business and financial results[396][398][401] - Operating results may fluctuate significantly due to various factors, impacting the value of common stock[402] Product Development and Manufacturing Risks - Manufacturing of therapeutics product candidates is highly exacting and complex, relying on third parties, which increases risks of non-compliance with cGMP/QSR, supply chain disruptions, and regulatory actions[299][300][301] - The company may be unable to successfully divest certain assets or recover historical R&D investments, as seen with the single-molecule detection platform and Preecludia™ test[302][303][304] - Product development is complex, costly, and uncertain, with no guarantee of meeting target profiles, demonstrating efficacy in trials, obtaining regulatory authorization, or achieving market acceptance[312][313][317][318] - Clinical trials are lengthy, expensive, and subject to uncertain outcomes, with preclinical and early clinical results not necessarily predictive of later-stage success[323][337] - Delays in clinical trials can arise from regulatory disagreements, slow patient enrollment, failures by third-party contractors, or adverse events[326][329][335][336] - Interim and preliminary data from studies may change as more data become available, and final data may not support product use or be replicated in later studies[330][331][332][339] - Drug-device combination products may require additional time for marketing authorization due to coordinated regulatory review processes[371][372] - Biologics development is long, expensive, and uncertain, carrying unique risks and potential competition from biosimilars after exclusivity periods[374][375][376][377] - Undesirable side effects from product candidates could delay or prevent regulatory authorization, limit commercial profiles, or lead to significant negative consequences post-approval, including recalls and product liability claims[383][384][385][393] Competition and Market Risks - The company operates in a highly competitive environment, facing major pharmaceutical and biotechnology companies with greater financial and human resources[305][308][311] - Competition for intellectual property assets may increase acquisition prices or prevent the company from capitalizing on opportunities[309] - Competitor developments could render products obsolete or force price reductions, adversely affecting revenue, operating income, or market share[310][311] Data Protection and Personnel Risks - The company is subject to evolving and complex data protection and privacy laws (e.g., HIPAA, HITECH, CPRA), with non-compliance risking negative publicity, investigations, fines, and liability[346][347][352][353][354][359] - Security breaches, data loss, or unauthorized access could compromise sensitive information (PHI, PII, IP), disrupt operations, and lead to legal claims, penalties, and reputational harm[355][356][357][360] - Success depends on retaining senior management and key employees; loss of talent could materially and adversely affect business strategy and financial condition[361] - Inability to attract and retain highly skilled employees in a competitive market could adversely affect business operations[362] - Reliance on third parties for product design, preclinical research, and clinical trials means their unsatisfactory performance could cause delays, increased costs, or termination of studies[367][368] Acquisition and Tax Risks - Future acquisitions could disrupt business, cause dilution to stockholders, or reduce financial resources due to integration difficulties, debt incurrence, or diversion of management attention[403][404][406] - Changes in U.S. and foreign tax laws (e.g., TCJA) or their interpretation could materially affect taxes, potentially leading to litigation, additional payments, penalties, and interest[408] - The ability to utilize net operating loss (NOL) carryforwards may be limited by 'ownership change' rules under Sections 382 and 383 of the Internal Revenue Code, potentially increasing future tax obligations[409] Reimbursement Risks Related to Our Historical Testing Business - The company continues to face billing disputes and recoupment requests from third-party payors related to its former testing business, which could result in significant refunds and impact financial results[410][412] - Challenges to the validity of informed consent from patients could force the company to refund amounts previously paid by third-party payors or exclude patient data from clinical trial results[413] - Future success depends on obtaining and maintaining adequate third-party payor coverage and reimbursement for new tests or products, as lack thereof could limit revenue generation[414] Regulatory and Legal Risks Related to Our Business - The company is subject to extensive healthcare fraud and abuse laws (e.g., Anti-Kickback Statute, False Claims Act, Stark Law, HIPAA, EKRA), with violations potentially leading to substantial penalties, reputational damage, and operational restrictions[166][167][168][175][417][418] - Obtaining FDA marketing authorization (510(k) clearance, de novo classification, or PMA) for new medical devices and enhancements is costly, time-consuming, and uncertain, with potential for delays or denial[170][171][173] - Therapeutics product candidates are subject to complex regulations by the FDA, DOJ, and HHS, governing development, testing, manufacturing, labeling, marketing, and distribution[174] - Current and future legislation, such as the Inflation Reduction Act of 2022, may increase the difficulty and cost of obtaining marketing approval and affect drug pricing[1] - The FDA may not conclude that certain product candidates satisfy the requirements for the Section 505(b)(2) regulatory approval pathway, leading to longer, costlier, and riskier approval processes[9][11] - Misuse or off-label promotion of product candidates could harm reputation, result in product liability suits, or lead to costly investigations, fines, or sanctions by regulatory bodies[14][15][16] Risks Related to Our Intellectual Property - Third-party claims of intellectual property infringement could result in costly and time-consuming litigation or other proceedings, potentially limiting the ability to commercialize products or requiring substantial monetary damages/licenses[17][19][20][21] - Inability to effectively protect proprietary technologies (patents, trade secrets, know-how) could harm the company's competitive position, especially given the uncertainty in patentability of life sciences inventions[22][24][31][33] - The issuance of 'submarine' patents (unpublished applications) to competitors could significantly alter launch timing, reduce market size, or block market entry altogether[29][30] - Failure to adequately protect trademarks and trade names could limit the ability to build name recognition and adversely affect the business[34][35] - The company may be subject to claims that employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties, leading to litigation and potential loss of IP rights[36][37] Risks Related to Ownership of Our Common Stock - The market price of common stock has been and is likely to remain volatile due to factors such as operating results, regulatory changes, intellectual property disputes, financing efforts, and general economic conditions[38][40] - Failure to qualify for continued listing on the Nasdaq Global Market (e.g., $50 million market value requirement) could lead to reduced liquidity, 'penny stock' designation, and decreased ability to raise financing[41][42][43] - The common stock may become the target of 'short squeezes,' causing extreme price volatility disconnected from underlying value, risking significant investor losses[44] - Issuance of common stock upon conversion of Convertible Notes and exercise of warrants will dilute ownership interests and could depress the trading price of common stock[45] - Provisions in the Convertible Notes indenture could delay or prevent an otherwise beneficial takeover, and the accounting method for Convertible Notes could adversely affect reported financial results[47][48][51][53] - Insiders have substantial control over the company (significant ownership as of June 30, 2023), influencing corporate matters and potentially deterring third-party acquisitions[54] - Future sales and issuances of common stock or rights to purchase common stock, including through equity incentive plans, could result in additional dilution and a decline in stock price[56][57] - Previous material weaknesses in internal control over financial reporting, and any future weaknesses, could lead to material misstatements, restatements, and an inability to maintain compliance with listing requirements[61][62] - Corporate governance provisions in the certificate of incorporation and bylaws, along with Delaware law, could discourage, delay, or prevent a change in control or management[66][67] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. No unregistered sales of equity securities or use of proceeds were reported for the period - None[69] Item 3. Default Upon Senior Securities. No default upon senior securities was reported for the period - None[71] Item 4. Mine Safety Disclosures. This item is not applicable to the company - Not applicable[71] Item 5. Other Information. No other information was reported for the period - None[72] Item 6. Exhibits. This section lists the exhibits filed with the Quarterly Report, including forms of warrant, equity incentive plan, securities purchase agreement, and various certifications - Exhibits include Form of Warrant (4.1), Fifth Amended and Restated 2018 Equity Incentive Plan (10.1), Form of Securities Purchase Agreement (10.2), and certifications (31.1, 31.2, 32.1)[74] Signatures The report was duly signed on behalf of Biora Therapeutics, Inc. by its Chief Executive Officer and Chief Financial Officer on August 14, 2023 - The report was signed by Aditya P. Mohanty (Chief Executive Officer) and Eric d'Esparbes (Chief Financial Officer) on August 14, 2023[77]