DEF 14A: Tevogen Bio Seeks Reverse Split, Boosts Incentive Plan

Tevogen Bio Holdings Inc. calls a special meeting to vote on a reverse stock split to maintain Nasdaq listing and a significant increase in its equity incentive plan shares.

Summary

• A Special Meeting of Stockholders is scheduled for February 19, 2026, at 11:00 a.m. Eastern Time, to be held virtually.
• Stockholders will vote on Proposal 1: an amendment to the 2024 Omnibus Incentive Plan to increase shares available for issuance by 100 million, from 58,951,432 to 158,951,432 shares. The Board recommends a "FOR" vote.
• Stockholders will also vote on Proposal 2: an amendment to the certificate of incorporation to effect a reverse stock split at a ratio between 1:25 and 1:85, with the exact ratio and timing at the Board's discretion. The Board recommends a "FOR" vote.
• The company received a Nasdaq Notification on September 23, 2025, for non-compliance with the $1.00 minimum bid price rule (Rule 5450(a)(1)), having an average closing bid price below $1.00 for 30 consecutive trading days.
• The deadline to regain Nasdaq compliance is March 23, 2026.
• As of January 23, 2026, the closing price per share of common stock on Nasdaq was $0.3499.
• As of January 14, 2026, 201,417,282 shares of common stock were issued and outstanding.
• Directors and executive officers held 70.51% of outstanding shares entitled to vote as of the Record Date.
• The Reverse Stock Split would not reduce the number of authorized shares (800,000,000 common, 20,000,000 preferred), but would increase the number of authorized and unissued shares available for future issuance.
• Fractional shares resulting from the reverse split will be paid out in cash based on the closing trading price immediately preceding the effective time.

Sentiment

Score: 3

Explanation: The filing indicates significant challenges, primarily the Nasdaq delisting threat due to a low stock price, necessitating a reverse stock split. While the incentive plan aims to retain talent, the substantial dilution potential and the large executive stock awards, coupled with the current low share price, suggest underlying performance issues and a high-risk investment profile. The company's innovative pipeline offers long-term potential, but immediate concerns overshadow it.

Positives

• The proposed reverse stock split aims to maintain the company's Nasdaq listing, which is crucial for liquidity and investor interest.
• Increasing the share pool for the 2024 Omnibus Incentive Plan is intended to attract, retain, and motivate employees, directors, and consultants, linking executive pay to long-term stockholder value.
• The company is leveraging artificial intelligence and precision T cell therapy platforms for drug development, with two patents pending for innovations like PredicTcell and AdapTcell.
• Tevogen has completed a proof-of-concept clinical trial for TVGN 489, highlighting the potential of its single-human leukocyte antigen (HLA)-restricted, genetically unmodified allogeneic T cells.
• The company's pipeline spans virology and oncology, addressing significant health needs such as Acute COVID, Long COVID, EBV-associated Leukemia & lymphomas, Chronic HBV infection, and HPV-associated cancers.

Negatives

• The company is currently non-compliant with Nasdaq's $1.00 minimum bid price rule, with a closing price of $0.3499 per share as of January 23, 2026.
• A reverse stock split does not guarantee a sustained increase in stock price, and the market capitalization could be lower post-split.
• The reverse stock split may reduce the liquidity of common stock and result in higher transaction costs, especially for odd lots.
• The increased proportion of unissued authorized shares post-split could have an anti-takeover effect, potentially diluting existing shareholder ownership if new shares are issued.
• Significant equity awards were granted to named executive officers in 2024 and 2025, with Dr. Saadi receiving $87,263,783 in stock awards in 2024 and $9,920,000 in 2025.
• The vesting for some executive equity awards is long-term (e.g., Dr. Saadi's Special RSU Award restrictions lapse starting February 14, 2031, and June 2025 Awards start vesting June 27, 2032).

Risks

• Failure to regain compliance with Nasdaq's $1.00 minimum bid price rule by March 23, 2026, could lead to delisting, adversely affecting liquidity, marketability, and the ability to raise capital.
• A reverse stock split may not lead to a sustained increase in stock price, and the total market capitalization could decrease.
• The reverse stock split could reduce the liquidity of common stock and increase transaction costs, particularly for odd lots.
• The perception of lower-priced stocks as riskier and more speculative may persist even after a reverse stock split.
• The increase in authorized but unissued shares after a reverse stock split could lead to future dilution of existing stockholders' ownership interests if these shares are issued.
• The company's internally developed assets are not reflected on the balance sheet under U.S. GAAP, which may obscure their potential value or risks.
• Forward-looking statements involve substantial risks and uncertainties, and actual results may vary materially from expectations.

Future Outlook

The company aims to maintain its Nasdaq listing through a reverse stock split to improve marketability and attract a broader range of investors. It also seeks to enhance its ability to recruit, retain, and motivate key personnel through a significantly expanded equity incentive plan, which is deemed essential for long-term growth and profitability. The Board reserves the right not to proceed with the reverse stock split if it determines it's no longer in the company's best interest.

Management Comments

• "We believe strongly that the increase in shares of common stock reserved for issuance with respect to awards granted under the 2024 Plan is essential to our continued success and therefore is in the best interests of the Company and our stockholders."
• "Our employees are our most valuable assets."
• "The Board believes that grants of restricted stock, restricted stock units (RSUs), and other equity awards under the 2024 Plan help create long-term equity participation in the Company and thereby assist us in attracting, retaining, motivating, and rewarding employees, directors, and consultants."
• "The Board also believes that long-term equity compensation is essential to link executive pay to long-term stockholder value creation."
• "The Board has determined that it would be advisable and in the best interests of the Company and our stockholders to provide the Board with authority to effect a reverse stock split of all shares of our common stock issued and outstanding to maintain our listing on Nasdaq."

Industry Context

Tevogen Bio operates in the highly competitive biotechnology and healthcare sector, focusing on T-cell therapy and AI-driven drug discovery. The need for a reverse stock split to maintain Nasdaq listing is a common challenge for smaller or developing biotech companies whose stock prices may fluctuate significantly due to clinical trial results, regulatory approvals, or market sentiment. The emphasis on attracting and retaining talent through equity incentives is standard practice in the biotech industry, where specialized expertise is critical. The company's pipeline in virology and oncology aligns with major disease areas of focus across the industry.

Comparison to Industry Standards

• The proposed reverse stock split ratio range (1:25 to 1:85) is aggressive, indicating a significant need to boost the per-share price to meet Nasdaq's $1.00 minimum bid requirement. This is a common strategy for companies facing delisting, but the wide range suggests uncertainty about the exact price needed or market reaction.
• The request to increase the 2024 Omnibus Incentive Plan by 100 million shares, bringing the total to 158,951,432, represents a substantial portion relative to the 201,417,282 outstanding shares. While equity incentives are standard in biotech, such a large increase could be viewed as potentially dilutive by some investors, especially given the current low stock price.
• The high beneficial ownership by directors and executive officers (70.51%) is notable. While this can indicate strong insider alignment, it also means a significant portion of voting power is concentrated, which could influence shareholder votes on proposals like the incentive plan and reverse split.
• The executive compensation, particularly the large stock awards to Dr. Saadi in 2024 ($87.26 million) and 2025 ($9.92 million), is substantial, especially when compared to the company's current market valuation (implied by the $0.3499 share price). The long vesting periods (e.g., Dr. Saadi's Special RSU Award restrictions lapse starting 2031) are designed for long-term retention but also mean the value realized by executives is highly dependent on future stock performance.

Corporate Governance

Stakeholder Impact

• Shareholders: Potential for increased stock price and continued Nasdaq listing if reverse split is successful, but also risk of further price decline and dilution from both the reverse split (due to increased authorized shares) and the expanded incentive plan. Fractional shares will be cashed out.
• Employees/Directors/Consultants: Benefit from expanded equity incentive plan, providing long-term compensation and retention incentives.
• Investment Professionals: The reverse stock split aims to make the stock more attractive to institutional investors and brokers who may have policies against low-priced stocks.
• Regulatory Authorities: The company is actively addressing Nasdaq listing compliance issues.

Next Steps

• Stockholders to vote on the 2024 Plan Amendment Proposal and the Reverse Stock Split Proposal at the Special Meeting on February 19, 2026.
• If approved, the Board will determine whether and at what ratio (between 1:25 and 1:85) to effect the Reverse Stock Split.
• The company must regain compliance with Nasdaq's $1.00 minimum bid price rule by March 23, 2026.
• The company will file a Current Report on Form 8-K with the SEC within four business days after the Special Meeting to disclose voting results.

Key Dates

Recommendation

The company is facing a critical Nasdaq delisting threat due to its low stock price ($0.3499 as of Jan 23, 2026), necessitating a highly dilutive reverse stock split (1:25 to 1:85). While the reverse split is a necessary step to maintain listing, it does not address underlying business fundamentals or guarantee a sustained price increase, and often leads to further price erosion post-split. The proposed massive increase in the equity incentive plan (100 million shares) on top of existing shares, combined with already substantial executive stock awards, signals significant potential future dilution for existing shareholders. The high insider ownership (70.51%) could also be a concern for minority shareholders. Given these factors, the immediate outlook is highly speculative and risky, suggesting a "sell" recommendation for risk-averse investors.

Keywords

Tevogen Bio, TVGN, SEC Filing, DEF 14A, Proxy Statement, Special Meeting, Reverse Stock Split, Nasdaq Listing, Incentive Plan, Equity Compensation, Stock Options, Restricted Stock Units, Corporate Governance, Shareholder Vote, Biotechnology, T-cell Therapy, AI Drug Discovery, Oncology, Virology, COVID-19, Leukemia, Lymphoma, HBV, HPV