Kalytera Therapeutics, Inc. (TSX VENTURE: KLY and OTC: KALTF) (the
"
Company" or "
Kalytera") today
provided the following updates regarding recent and ongoing
activities.
Private Placement
As previously announced on July 24, 2020, the
Company closed in escrow it’s previously announced non-brokered
private placement (the “Private Placement”) of
units comprised of common shares (“Shares”) and
one half common share purchase warrants
(“Warrants”) in the capital of the Company. The
Company confirms that it received final acceptance for the Private
Placement on July 24, 2020, and has completed escrow closing and
post-closing matters, culminating in a final raised amount of gross
proceeds of CDN $309,430.50 from the issuance of 20,628,700 shares
and 10,314,350 warrants. The Company wishes to thank all involved
parties in assisting with the closing and post-closing matters in
light of the Covid-19 slow down.
Each unit had a purchase price of $0.015 per
unit. Each full common share purchase warrant will have an exercise
price of CDN $0.05, and a term of 24 months. At any time on or
after the date that is 4 months from the closing date, if the daily
volume weighted average trading price of the common shares on the
TSX Venture Exchange (the “TSXV”) equals or
exceeds $0.10 CAD for a period of at least 10 consecutive trading
days, the Company shall be entitled to accelerate the expiration
date of the Warrants to the date that is 30 days from the date that
notice of such acceleration is given. From and after the new
accelerated expiration date, no Warrant may be exercised, and all
unexercised Warrants shall be void. The securities offered
have not been, and will not be, registered under the U.S.
Securities Act of 1933, as amended or any U.S. state securities
laws, and any securities issued to US Persons are restricted
securities subject to an indefinite hold period unless traded in
compliance with applicable exemptions.
The company paid a cash commission of 8% of the
gross proceeds raised and closed in respect of the offering to
Echelon Wealth Partners Inc. (“Echelon”) with
respect of the funds raised by it, and broker’s warrants to this
finder, exercisable within 30 months following the relevant closing
date, to acquire in aggregate that number of common shares which is
equal to 8% of the number of units sold under the offering with
respect of the funds raised by it, which warrants expiry 30 months
from issuance (closing date of July 22, 2020) and are exercisable
at $0.05 per warrant. Accordingly, Echelon received a cash
finder fee of $20,000.04 and 1,333,336 broker warrants. Except for
the mentioned commission and warrants to Echelon, no bonus,
finder’s fee, commission, agent’s option, or similar compensation,
whether in cash or securities, has been paid or is payable in
connection with the Private Placement.
The proceeds from the placement will be used to
pay auditor and accounting fees, director & officer insurance
premiums and other accounts payable.
Trading Halt
On June 22, 2020, the British Columbia
Securities Commission (the “BCSC”) issued a
Failure-to-File Cease Trade Order against the Company (the
"FFCTO") due to the Company's failure to file by
the prescribed filing deadlines its annual financial statements for
the year ending December 31, 2019, and the accompanying
Management’s Discussion and Analysis and certifications, (the
“Filings”). Please refer to the Company’s press
release of June 30, 2020 for more details. The Company had been
granted the Order to commence the Private Placement as an exception
to the FFCTO. The Company is working to complete the Filings. Upon
filing of the Filings, the Company will apply to have the FFCTO
fully revoked. The Company expects that the FFCTO would be removed
prior to the expiration of the customary hold period for private
placement offerings that affect all issuers, in which case
investors would not be subject to any hold periods beyond what is
expected for all private placements.
Appointment of Director
Effective July 16, 2020 the board of directors
of the Company appointed Robin Hutchison to fill a vacancy on the
Company's board of directors. Mr. Hutchison was previously a
director of the Company and the Company welcomes his return to the
board.
Salzman Group Acquisition
The Company previously announced that it has entered into a
binding Letter of Intent to acquire Salzman Group.
Transaction Highlights
- Kalytera announced on July 16, 2020 that it has entered into a
License Agreement (the “License Agreement”), under
which Salzman Group has granted to Kalytera an exclusive, worldwide
license to develop and commercialize R-107, for the treatment of
coronavirus and COVID-19 infection.
- The License Agreement is the first step in a larger transaction
in which Kalytera will acquire Salzman Group (the
“Acquisition”). The Acquisition is expected to
close later this year, subject to customary conditions including
TSXV and shareholder approvals.
- Salzman Group is the owner of R-107, a proprietary drug with
issued and pending composition of matter and method of use patents
in approximately 40 countries, including the U.S., Australia,
Brazil, China, Europe, India, Japan, Russia and South Korea.
- R-107 is a liquid prodrug of nitric oxide. Based on the fact
that nitric oxide is an approved treatment for acute respiratory
failure in newborns, and the clinical evidence of nitric oxide’s
antiviral activity against strains of coronavirus, Salzman Group is
developing R-107 for treatment of coronavirus and COVID-19
infection.
- Salzman Group is also developing R-107 for chlorine inhalation
lung injury (“CILI”). This project has been funded in whole or in
part with Federal funds from the U.S. Department of Health and
Human Services.
In connection with the acquisition of Salzman
Group, the Company anticipates that it will announce the following
matters shortly after the Company's shares resume trading after it
has been granted full revocation of the FFCTO:
- Initiation of an equity or debt financing to provide 6-months
working capital, which is a TSXV requirement for close of Salzman
Group acquisition, as previously disclosed
- Scheduling of a special meeting of shareholders to approve the
acquisition of Salzman Group, as previously disclosed
Status of Debt Owed to Former
Shareholders of Talent Biotechs, Ltd.
In 2017, Kalytera’s wholly owned subsidiary,
Kalytera Therapeutics Israel, Ltd. (“Kalytera Israel”) acquired
Talent Biotechs Ltd. (“Talent”) from the former shareholders of
Talent (the “Former Shareholders”, under the terms of a share
purchase agreement (the "SPA") between Kalytera, Kalytera Israel,
Talent and the Former Shareholders. Under the terms of the SPA,
Kalytera Israel is obligated to make certain milestone payments
(the “Milestone Payments”) to the Former Shareholders.
Kalytera Israel failed to pay certain Milestone
Payments when they became due under the SPA, and issued a
promissory note (the “Note”) in favor of the Former Shareholders
evidencing such debt. Kalytera Israel is obligated to pay USD $3
million to the Former Shareholders under the terms of the Note.
Kalytera Israel is in default under the terms of
the SPA and the Note, and has received a formal notice of default
from the representative of the Former Shareholders. The obligations
of Kalytera Israel under the Note are guaranteed by Talent, and
both Kalytera Israel and Talent are parties to a Security
Agreement, under which they have secured their obligations under
the Note by pledging certain assets to the Former Shareholders as
security for the Note (the “Pledged Assets’). The Pledged Assets
are the assets of the Company’s product development program under
which the Company was evaluating cannabidiol (“CBD”) in the
prevention and treatment of graft versus host disease (“GVHD”). The
Pledged Assets are both tangible and intangible assets, consisting
primarily of tangible assets, such as patient blood samples, and
intangible assets, such as contract rights, clinical and
preclinical data, know how, and intellectual property rights that
are held under a license agreement between MOR Research
Applications, Ltd. and Talent. The Pledged Assets also include all
shares of the Company’s two subsidiaries, Kalytera Israel and
Talent.
The Company and the representative of the Former
Shareholders are in discussions regarding a contemplated agreement
(the “Agreement”) under which Kalytera Israel will transfer
ownership of all Pledged Assets, other than the shares of Kalytera
Israel, to the Former Shareholders in consideration for the release
and discharge by the Former Shareholders of all obligations the
Company and its subsidiaries may have to such Former Shareholders,
including all obligations under the Note and SPA.
The Company and the representative of the Former
Shareholders expect to complete discussions regarding the
contemplated Agreement, and will enter into the Agreement subject
to approval by the Company's shareholders and the TSXV as
applicable. The Company will schedule a meeting of shareholders at
which it will seek such approval. The Company confirms that no
securities of the Company are to be traded with respect of the
contemplated Agreement and the Company’s securities remain subject
to the FFCTO.
The Company confirms that there is no other
material information concerning the affairs of the Company that has
not been previously generally disclosed.
About Kalytera Therapeutics
Kalytera Therapeutics, Inc.
("Kalytera") is committed to developing new
treatments for a variety of diseases and disorders, by discovering,
developing, manufacturing and delivering innovative human
therapeutics. Kalytera focuses on areas of unmet medical need, and
leverages its expertise to find solutions that will improve health
outcomes and dramatically improve people's lives.
- Website Home: https://kalytera.co/
- News and Insights: https://kalytera.co/news/
- Investors: https://kalytera.co/investors/
Cautionary Statements
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This press release may contain certain
forward-looking information and statements ("forward-looking
information") within the meaning of applicable Canadian securities
legislation, that are not based on historical fact, including
without limitation in respect of its product candidate pipeline,
planned clinical trials, regulatory approval prospects,
intellectual property objectives and other statements containing
the words "believes", "anticipates", "plans", "intends", "will",
"should", "expects", "continue", "estimate", "forecasts" and other
similar expressions. In particular, this press release contains
such forward-looking information regarding the acquisition of
Salzman Group, related or proposed research and development
activities of Kalytera, the Private Placement, the discussions and
the results of such discussions with Talent with respect of the
Note, SPA, the Pledged Assets, and other matters related to the
same (which may or may not transpire as currently contemplated),
the possibility of getting a full revocation of the FFCTO or its
timing to avoid any effects on the hold period of securities issued
to any investors of the Private Placement, and each of the
foregoing’s possible effects on the business and operations of
Kalytera. Readers are cautioned to not place undue reliance
on forward-looking information. Actual results and developments may
differ materially from those contemplated by these statements
depending on, among other things, the risk that: future clinical
studies may not proceed as expected or may produce unfavorable;
acquisition of Salzman Group might not be completed (including the
Company not receiving final acceptance for its completion) or
completed on terms currently disclosed; and any funds raised
may be insufficient to carry out the activities for which
they are intended for or any other activity; and the proposed
activities for which they are intended for and any other activity
of the Company might not be completed as currently planned due to
economic, business and other factors, some of which are beyond the
control of the Company . Kalytera undertakes no obligation to
comment on analyses, expectations or statements made by third
parties, its securities, or financial or operating results (as
applicable). Although Kalytera believes that the expectations
reflected in forward-looking information in this press release are
reasonable, such forward-looking information has been based on
expectations, factors and assumptions concerning future events
which may prove to be inaccurate and are subject to numerous risks
and uncertainties, certain of which are beyond Kalytera's control.
With respect of Kalytera’s press releases , readers should read the
disclaimers and other cautionary information in such news releases.
The forward-looking information contained in this press
release is expressly qualified by this cautionary statement and is
made as of the date hereof. Kalytera disclaims any intention and
has no obligation or responsibility, except as required by law, to
update or revise any forward-looking information, whether as a
result of new information, future events or otherwise.
Contact Information
- Robert Farrell President, CEO (888) 861-2008
info@kalytera.co
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