DEF 14A: Telesis Bio Seeks Stockholder Approval for Reverse Stock Split and Director Elections at 2024 Annual Meeting

Telesis Bio is holding its 2024 Annual Meeting of Stockholders virtually on May 1, 2024, to vote on director elections, a reverse stock split, and the ratification of its independent accounting firm.

Summary

• Telesis Bio is convening its Annual Meeting of Stockholders on May 1, 2024, conducted virtually.
• Stockholders will vote on three key proposals: electing three Class III directors, approving a reverse stock split of the company's common stock at a ratio of 1-for-18, and ratifying the appointment of WithumSmith+Brown, PC as the independent registered public accounting firm for the fiscal year ending December 31, 2024.
• The board of directors recommends voting FOR the election of the director nominees, FOR the reverse stock split proposal, and FOR the ratification of the accounting firm appointment.
• The record date for determining stockholders eligible to vote at the Annual Meeting was April 8, 2024.
• As of the record date, there were 30,103,284 shares of common stock outstanding and 280,000 shares of preferred stock outstanding, representing an aggregate of 42,770,138 votes entitled to be cast at the Annual Meeting.
• The reverse stock split aims to regain compliance with Nasdaq's minimum bid price requirement and potentially increase the marketability of the company's common stock.
• The board of directors has the authority to decide whether to implement the reverse stock split even if approved by stockholders.
• The company is facing potential delisting from the Nasdaq Global Select Market due to non-compliance with the minimum bid price requirement, as the company received a letter from Nasdaq on November 24, 2023.
• The company also received a letter from the Staff of Nasdaq on April 3, 2024, notifying them that they are not in compliance with the minimum stockholders equity requirement for continued listing set forth in Nasdaq Listing Rule 5450(b)(1)(A).
• The company intends to submit a compliance plan relating to the Stockholders Equity Requirement on or before May 20, 2024.

Sentiment

Score: 5

Explanation: The document is primarily informational, outlining the proposals for the annual meeting. While the company faces challenges related to Nasdaq compliance, the document presents the reverse stock split as a potential solution, resulting in a neutral sentiment.

Positives

• The board believes a reverse stock split could increase the marketability and liquidity of the company's common stock.
• Maintaining Nasdaq listing qualifications can help attract, retain, and motivate employees and members of the board of directors.
• The virtual meeting format provides the opportunity for participation by a broader group of stockholders, while reducing costs.

Negatives

• The reverse stock split may not increase the price of the common stock over the long term.
• The reverse stock split may lead to a decrease in the company's overall market capitalization.
• The reduced number of shares of common stock resulting from a reverse stock split could adversely affect the liquidity of the company's common stock.
• The company is facing potential delisting from the Nasdaq Global Select Market due to non-compliance with the minimum bid price requirement.

Risks

• The reverse stock split may be viewed negatively by the market.
• There is no guarantee that the company will regain compliance with Nasdaq's listing requirements, even if the reverse stock split is approved.
• If the company's common stock were to be delisted from The Nasdaq Global Select Market, the common stock would likely trade in the over-the-counter (OTC) market.

Future Outlook

The company intends to submit a compliance plan to Nasdaq regarding the Stockholders Equity Requirement by May 20, 2024. The board of directors reserves the right to elect not to proceed with the Reverse Stock Split if it determines it is no longer in the best interests of the company and its stockholders.

Management Comments

• Our board of directors believes that holding the annual meeting of stockholders in a virtual format provides the opportunity for participation by a broader group of stockholders, while reducing the costs associated with planning, holding and arranging logistics for in-person meeting proceedings.
• Our board of directors believes that effecting the Reverse Stock Split would be the most effective means of regaining compliance with the Minimum Bid Price Requirement for continued listing of our common stock on the Nasdaq Global Select Market.
• Our board of directors believes that a higher stock price, which may be achieved through a Reverse Stock Split, would increase the marketability of our common stock, which in turn could help generate investor interest in the Company and help attract, retain, and motivate employees.

Industry Context

Reverse stock splits are a relatively common strategy for companies facing delisting from major exchanges due to low stock prices. The success of a reverse stock split in maintaining listing and improving market perception varies depending on company-specific factors and overall market conditions.

Comparison to Industry Standards

• Many biotechnology companies facing similar challenges have implemented reverse stock splits to maintain their Nasdaq listing.
• Comparable companies that have recently undertaken reverse stock splits include XOMA Corporation and Agenus Inc.
• The effectiveness of these splits has varied, with some companies experiencing a sustained increase in stock price while others have seen only a temporary effect.

Management Changes

Related Party Transactions

• On May 31, 2023, the Company entered into a redeemable convertible preferred stock and warrant purchase agreement with Novalis LifeSciences Investments II, L.P., (a fund with which Greg Herrema, one of our Board members, has a working relationship) and certain other investors, including current investors Northpond Ventures, LP, a fund with which Andrea Jackson, one of our Board members works as a partter (NPV), BroadOak Fund IV LLC (BroadOak) and M-185 Corporation (M-185), an affiliate of the Companys former Chief Executive Officer, Todd Nelson.

Stakeholder Impact

• The reverse stock split could impact shareholders by potentially increasing the stock price and marketability, but also carries the risk of decreasing overall market capitalization.
• Employees and directors compensated with equity-based securities may be affected by the company's Nasdaq listing status.
• The company's ability to raise funds in the future could be affected if it is delisted from Nasdaq.

Next Steps

• Stockholders are urged to vote on the proposals outlined in the proxy statement.
• The board of directors will decide whether to implement the reverse stock split if approved by stockholders.
• The company intends to submit a compliance plan relating to the Stockholders Equity Requirement on or before May 20, 2024.

Key Dates

Keywords

reverse stock split, annual meeting, proxy statement, director election, Nasdaq, compliance, Telesis Bio, stockholders