UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

(Mark One)

 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2020

or

 TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                           to                          

Commission file number: 001-37823

 

Kintara Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada

 

99-0360497

(State or other jurisdiction of
incorporation or organization)

 

(I.R.S. Employer
Identification No.)

 

12707 High Bluff Dr., Suite 200
San Diego, CA

 

92130

(Address of principal executive offices)

 

(zip code)

 

(858) 350-4364

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

 

Trading Symbol(s)

 

Name of Each Exchange on Which Registered

Common Stock

 

KTRA

 

The Nasdaq Capital Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

Emerging growth company

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes  No 

Number of shares of common stock outstanding as of February 10, 2021 was 30,626,018.

 

 

 

 


 

TABLE OF CONTENTS

 

 

 

 

 

Page No.

 

 

PART I. - FINANCIAL INFORMATION

 

 

Item 1.

 

Financial Statements.

 

1

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

21

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk.

 

45

Item 4

 

Controls and Procedures.

 

45

 

 

PART II - OTHER INFORMATION

 

 

Item 1.

 

Legal Proceedings.

 

46

Item 1A.

 

Risk Factors.

 

46

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds.

 

46

Item 3.

 

Defaults Upon Senior Securities.

 

46

Item 4.

 

Mine Safety Disclosures.

 

46

Item 5.

 

Other Information.

 

46

Item 6.

 

Exhibits.

 

47

 

 

 

i


 

PART 1. - FINANCIAL INFORMATION

Item 1. Financial Statements.

Kintara Therapeutics, Inc.

Condensed Consolidated Interim Financial Statements

(Unaudited)

For the six months ended December 31, 2020

(expressed in US dollars unless otherwise noted)

1


Kintara Therapeutics, Inc.

Condensed Consolidated Interim Balance Sheet

(In thousands, except par value amounts)

 

 

 

 

 

 

 

December 31,

2020

 

 

June 30,

2020

 

 

 

Note

 

 

$

 

 

$

 

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

17,158

 

 

 

2,392

 

Prepaid expenses and deposits

 

 

 

 

 

 

551

 

 

 

356

 

Interest, taxes and other receivables

 

 

 

 

 

 

8

 

 

 

9

 

Deferred loan costs

 

 

6

 

 

 

 

 

 

94

 

 

 

 

 

 

 

 

17,717

 

 

 

2,851

 

Clinical trial deposit

 

 

4

 

 

 

2,600

 

 

 

 

Intangible assets - net

 

 

 

 

 

 

 

 

 

2

 

Property and equipment

 

 

3

 

 

 

172

 

 

 

 

Deferred financing costs

 

 

7

 

 

 

 

 

 

85

 

Total assets

 

 

 

 

 

 

20,489

 

 

 

2,938

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

 

 

 

 

1,965

 

 

 

2,011

 

Loan payable, net of deferred loan costs

 

 

6

 

 

 

473

 

 

 

 

Related party payables

 

 

5

 

 

 

289

 

 

 

664

 

 

 

 

 

 

 

 

2,727

 

 

 

2,675

 

Milestone payment liability

 

 

3

 

 

 

177

 

 

 

 

Total liabilities

 

 

 

 

 

 

2,904

 

 

 

2,675

 

Stockholders’ equity

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

Authorized

 

 

 

 

 

 

 

 

 

 

 

 

5,000 shares, $0.001 par value

 

 

 

 

 

 

 

 

 

 

 

 

Issued and outstanding

 

 

 

 

 

 

 

 

 

 

 

 

279 Series A shares at December 31, 2020

   (June 30, 2020 – 279)

 

5,7

 

 

 

279

 

 

 

279

 

610 Series B shares at December 31, 2020

   (June 30, 2020 – 649)

 

 

7

 

 

 

4,257

 

 

 

4,525

 

24 Series C shares at December 31, 2020

   (June 30, 2020 – 0)

 

 

7

 

 

 

17,298

 

 

 

 

Common stock

 

 

 

 

 

 

 

 

 

 

 

 

Authorized

 

 

 

 

 

 

 

 

 

 

 

 

95,000 shares at December 31, 2020 and June 30, 2020,

   $0.001 par value

 

 

 

 

 

 

 

 

 

 

 

 

25,868 issued at December 31, 2020 (June 30, 2020 –

   11,458)

 

 

7

 

 

 

25

 

 

 

11

 

Additional paid-in capital

 

 

7

 

 

 

93,551

 

 

 

65,148

 

Accumulated deficit

 

 

 

 

 

 

(97,846

)

 

 

(69,721

)

Accumulated other comprehensive income

 

 

 

 

 

 

21

 

 

 

21

 

Total stockholders’ equity

 

 

 

 

 

 

17,585

 

 

 

263

 

Total liabilities and stockholders’ equity

 

 

 

 

 

 

20,489

 

 

 

2,938

 

Nature of operations, corporate history, going concern

     and management plans (note 1)

 

 

 

 

 

 

 

 

 

 

 

 

Subsequent events (note 10)

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

2


Kintara Therapeutics, Inc.

Condensed Consolidated Interim Statements of Operations

(Unaudited)

(In thousands, except per share amounts)

 

 

 

 

 

 

 

Three months ended

December 31,

 

 

Six months ended

December 31,

 

 

 

Note

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

 

 

 

 

$

 

 

$

 

 

$

 

 

$

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

 

 

 

 

2,584

 

 

 

712

 

 

 

3,941

 

 

 

1,434

 

General and administrative

 

 

 

 

 

 

2,794

 

 

 

1,054

 

 

 

4,329

 

 

 

1,967

 

Merger costs

 

 

3

 

 

 

 

 

 

 

 

 

500

 

 

 

 

In-process research and development

 

 

3

 

 

 

 

 

 

 

 

 

16,094

 

 

 

 

 

 

 

 

 

 

 

5,378

 

 

 

1,766

 

 

 

24,864

 

 

 

3,401

 

Other (income) loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange loss

 

 

 

 

 

 

3

 

 

 

2

 

 

 

2

 

 

 

2

 

Amortization of deferred loan costs

 

 

6

 

 

 

25

 

 

 

 

 

 

51

 

 

 

 

Interest expense

 

 

6

 

 

 

8

 

 

 

 

 

 

16

 

 

 

 

Interest income

 

 

 

 

 

 

(1

)

 

 

(28

)

 

 

(2

)

 

 

(57

)

 

 

 

 

 

 

 

35

 

 

 

(26

)

 

 

67

 

 

 

(55

)

Net loss for the period

 

 

 

 

 

 

5,413

 

 

 

1,740

 

 

 

24,931

 

 

 

3,346

 

Computation of basic loss per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the period

 

 

 

 

 

 

5,413

 

 

 

1,740

 

 

 

24,931

 

 

 

3,346

 

Deemed dividend recognized on beneficial conversion features of Series C Preferred stock issuance

 

 

7

 

 

 

 

 

 

 

 

 

3,181

 

 

 

 

Series A Preferred cash dividend

 

 

7

 

 

 

2

 

 

 

2

 

 

 

4

 

 

 

4

 

Series B Preferred stock dividend

 

 

7

 

 

 

4

 

 

 

3

 

 

 

9

 

 

 

5

 

Net loss for the period attributable to common stockholders

 

 

 

 

 

 

5,419

 

 

 

1,745

 

 

 

28,125

 

 

 

3,355

 

Basic and fully diluted loss per share

 

 

 

 

 

 

0.22

 

 

 

0.15

 

 

 

1.34

 

 

 

0.35

 

Basic and fully diluted weighted average number of shares

 

 

 

 

 

 

24,845

 

 

 

11,408

 

 

 

20,976

 

 

 

9,473

 

 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

3


Kintara Therapeutics, Inc.

Condensed Consolidated Interim Statements of Stockholders’ Equity

(Unaudited)

(In thousands)

For the three and six months ended December 31, 2020

 

 

 

Number

of

shares

 

 

Common

stock

$

 

 

Additional

paid-in

capital

$

 

 

Accumulated

other

comprehensive

income

$

 

 

Preferred

stock

$

 

 

Accumulated

deficit

$

 

 

Stockholders'

equity

$

 

Balance - June 30, 2020

 

 

11,458

 

 

 

11

 

 

 

65,148

 

 

 

21

 

 

 

4,804

 

 

 

(69,721

)

 

 

263

 

Adgero merger (note 3)

 

 

12,011

 

 

 

12

 

 

 

16,713

 

 

 

 

 

 

 

 

 

 

 

 

16,725

 

Issuance of Series C Preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25,028

 

 

 

 

 

 

25,028

 

Series C placement agent warrants

 

 

 

 

 

 

 

 

3,287

 

 

 

 

 

 

(3,287

)

 

 

 

 

 

 

Series C Preferred stock share issuance costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,386

)

 

 

 

 

 

(3,386

)

Deemed dividend recognized on beneficial conversion features of Series C Preferred stock issuance

 

 

 

 

 

 

 

 

3,181

 

 

 

 

 

 

 

 

 

(3,181

)

 

 

 

Exercise of warrants for cash

 

 

993

 

 

 

1

 

 

 

993

 

 

 

 

 

 

 

 

 

 

 

 

994

 

Warrants issued for services

 

 

 

 

 

 

 

 

45

 

 

 

 

 

 

 

 

 

 

 

 

45

 

Stock option expense

 

 

 

 

 

 

 

 

405

 

 

 

 

 

 

 

 

 

 

 

 

405

 

Series A Preferred cash dividend

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2

)

 

 

(2

)

Series B Preferred stock dividend

 

 

4

 

 

 

 

 

 

5

 

 

 

 

 

 

 

 

 

(5

)

 

 

 

Loss for the period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(19,518

)

 

 

(19,518

)

Balance - September 30, 2020

 

 

24,466

 

 

 

24

 

 

 

89,777

 

 

 

21

 

 

 

23,159

 

 

 

(92,427

)

 

 

20,554

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series C Preferred stock share issuance costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(69

)

 

 

 

 

 

(69

)

Conversion of Series B Preferred stock

   to common stock

 

 

10

 

 

 

 

 

 

268

 

 

 

 

 

 

(268

)

 

 

 

 

 

 

Conversion of Series C Preferred stock

   to common stock

 

 

1,168

 

 

 

1

 

 

 

987

 

 

 

 

 

 

(988

)

 

 

 

 

 

 

Exercise of warrants for cash

 

 

186

 

 

 

 

 

 

186

 

 

 

 

 

 

 

 

 

 

 

 

186

 

Warrants issued for services

 

 

 

 

 

 

 

 

183

 

 

 

 

 

 

 

 

 

 

 

 

183

 

Exercise of stock options for cash

 

 

35

 

 

 

 

 

 

21

 

 

 

 

 

 

 

 

 

 

 

 

21

 

Stock option expense

 

 

 

 

 

 

 

 

2,125

 

 

 

 

 

 

 

 

 

 

 

 

2,125

 

Series A Preferred cash dividend

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2

)

 

 

(2

)

Series B Preferred stock dividend

 

 

3

 

 

 

 

 

 

4

 

 

 

 

 

 

 

 

 

(4

)

 

 

 

Loss for the period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,413

)

 

 

(5,413

)

Balance - December 31, 2020

 

 

25,868

 

 

 

25

 

 

 

93,551

 

 

 

21

 

 

 

21,834

 

 

 

(97,846

)

 

 

17,585

 

 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

4


Kintara Therapeutics, Inc.

Condensed Consolidated Interim Statements of Stockholders’ Equity

(Unaudited)

(In thousands)

For the three and six months ended December 31, 2019

 

 

 

Number

of

shares

 

 

Common

stock

$

 

 

Additional

paid-in

capital

$

 

 

Accumulated

other

comprehensive

income

$

 

 

Preferred

stock

$

 

 

Accumulated

deficit

$

 

 

Stockholders'

equity

$

 

Balance - June 30, 2019

 

 

3,839

 

 

 

4

 

 

 

57,543

 

 

 

21

 

 

 

4,978

 

 

 

(60,578

)

 

 

1,968

 

Issuance of shares and warrants - net of

   issue costs

 

 

4,895

 

 

 

5

 

 

 

6,578

 

 

 

 

 

 

 

 

 

 

 

 

6,583

 

Exercise of pre-funded warrants for cash

 

 

2,655

 

 

 

2

 

 

 

24

 

 

 

 

 

 

 

 

 

 

 

 

26

 

Conversion of Series B Preferred stock

   to common stock

 

 

6

 

 

 

 

 

 

174

 

 

 

 

 

 

(174

)

 

 

 

 

 

 

Shares issued for services

 

 

7

 

 

 

 

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

5

 

Stock option expense

 

 

 

 

 

 

 

 

51

 

 

 

 

 

 

 

 

 

 

 

 

51

 

Series A Preferred cash dividend

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2

)

 

 

(2

)

Series B Preferred stock dividend

 

 

4

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

 

(2

)

 

 

 

Loss for the period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,606

)

 

 

(1,606

)

Balance - September 30, 2019

 

 

11,406

 

 

 

11

 

 

 

64,377

 

 

 

21

 

 

 

4,804

 

 

 

(62,188

)

 

 

7,025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Warrants issued for services

 

 

 

 

 

 

 

 

35

 

 

 

 

 

 

 

 

 

 

 

 

35

 

Shares issued for services

 

 

5

 

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

 

 

 

3

 

Stock option expense

 

 

 

 

 

 

 

 

160

 

 

 

 

 

 

 

 

 

 

 

 

160

 

Series A Preferred cash dividend

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2

)

 

 

(2

)

Series B Preferred stock dividend

 

 

4

 

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

(3

)

 

 

 

Loss for the period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,740

)

 

 

(1,740

)

Balance - December 31, 2019

 

 

11,415

 

 

 

11

 

 

 

64,578

 

 

 

21

 

 

 

4,804

 

 

 

(63,933

)

 

 

5,481

 

 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

5


Kintara Therapeutics, Inc.

Condensed Consolidated Interim Statements of Cash Flows

(Unaudited)

(In thousands)

 

 

 

 

 

 

 

Six months ended

December 31,

 

 

 

 

 

 

 

2020

 

 

2019

 

 

 

Note

 

 

$

 

 

$

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the period

 

 

 

 

 

 

(24,931

)

 

 

(3,346

)

Adjustments to reconcile net loss to net cash used in operating

   activities

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

 

 

 

 

2

 

 

 

6

 

In-process research and development

 

 

3

 

 

 

16,094

 

 

 

 

Change in fair value of milestone liability

 

 

 

 

 

 

(11

)

 

 

 

Amortization of deferred loan costs

 

 

 

 

 

 

51

 

 

 

 

Interest expense

 

 

6

 

 

 

16

 

 

 

 

Shares issued for services

 

 

7

 

 

 

 

 

 

8

 

Warrants issued for services

 

 

7

 

 

 

228

 

 

 

35

 

Stock option expense

 

 

7

 

 

 

2,530

 

 

 

211

 

Changes in operating assets and liabilities