Allarity Therapeutics Announces that All Series A Preferred and All Variable Priced Warrants have Converted to Common Stock

Rhea-AI Summary

Allarity Therapeutics, Inc. announced the conversion of all Series A Preferred Stock and Variable Priced Warrants into common stock, simplifying the company's capital structure and eliminating market overhang. The conversions were investor-initiated, leaving only a number of warrants at a fixed exercise price of $20 per share. Additionally, the company has fully paid off all bridge notes, totaling $1,746,630. This restructuring aims to enhance the stock's attractiveness and focus on lead asset, stenoparib.

Positive

• Streamlined capital structure enhancing stock attractiveness

• Elimination of market overhang from warrants

• Successful conversion of securities by investors

• Focus on lead asset, stenoparib, for investor communication

Negative

• None.

Insights

Financial Analyst

The announcement from Allarity Therapeutics regarding the conversion of all Series A Preferred Stock and the majority of warrants into common stock simplifies the company's capital structure. This action could be perceived positively by the market as it eliminates the dilution potential and overhang associated with variable-priced warrants. Removing this uncertainty can make the company's financials easier to evaluate and could potentially increase stock attractiveness to investors. In the short-term, this could lead to a more stable stock price as the market digests the news. From a long-term perspective, this simplification may allow the company to attract new investors and improve capital raising prospects. The payoff of all bridge notes is another sign of financial strengthening, suggesting that the company is managing its debt efficiently. However, investors should consider the remaining 256,667 warrants with an exercise price of $20 per share, as these could still lead to dilution in the future if exercised. Overall, this represents a strengthening of the company's balance sheet and could be a strategic move ahead of potential clinical milestones or funding needs.

Biotech Market Analyst

Streamlining the capital structure, as Allarity Therapeutics has done, is often a strategic preparation for future business activities such as advancing clinical programs or preparing for potential partnerships or acquisitions. For a clinical-stage pharmaceutical company, such financial restructuring can be a prelude to pivotal trial results or regulatory submissions. Investors often look favorably upon the removal of complex financial instruments like variable-priced warrants, which can complicate valuation models due to their inherent pricing volatility and dilutive effects. The focus on the lead asset, stenoparib, indicates that management is positioning the company towards its core scientific endeavors rather than financial engineering. It's important for investors to monitor Allarity's upcoming clinical data and regulatory interactions, as these will be the primary drivers of future value. Moreover, the full repayment of bridge notes relieves the company of immediate debt obligations, potentially freeing up resources for R&D investment.

- Conversions Eliminate All Variable Priced Derivative Securities

- Conversions Eliminate Any Market Overhang from Warrants

- Series A Preferred and Warrant Conversions were Investor Initiated

- Limited Number of Warrants Convertible at $20 Per Share Remain

- Company Has Paid Off All Bridge Notes in Full

Boston (May 7, 2024)—Allarity Therapeutics, Inc. (“Allarity” or the “Company”) (NASDAQ: ALLR), a clinical-stage pharmaceutical company dedicated to developing personalized cancer treatments, today announced that its capital structure has been simplified. This was achieved by the recent investor-initiated conversion of all outstanding Series A Preferred Stock into common stock, resulting in a single class of shares outstanding, and the conversion of 93% of the Company’s outstanding warrants, including all variable-priced warrants. Following this reduction, the Company reports that only a limited number of warrants remain unexercised, specifically 256,667 warrants, each with a fixed exercise price of $20 per share. Furthermore, the Company informs that it has fully paid off all bridge notes, totaling $1,746,630, including principal and accrued interest.

Thomas Jensen, CEO of Allarity Therapeutics, stated, “The successful conversion of these securities by our investors is a key milestone, as it streamlines our financial architecture and may enhance the attractiveness of our stock. Understanding the investment case for biotech companies like ours can be complex for investors at all levels. Therefore, we are very pleased with this development, as it allows us to focus more on sharing information about our lead asset, stenoparib, and less on explaining the intricacies of our capital structure going forward.”

About Allarity Therapeutics
Allarity Therapeutics, Inc. (NASDAQ: ALLR) is a clinical-stage biopharmaceutical company dedicated to developing personalized cancer treatments. The Company is focused on development of stenoparib, a novel PARP/Tankyrase inhibitor for advanced ovarian cancer patients, using its DRP^® companion diagnostic for patient selection in the ongoing phase 2 clinical trial, NCT03878849. Allarity is headquartered in the U.S., with a research facility in Denmark, and is committed to addressing significant unmet medical needs in cancer treatment. For more information, visit www.allarity.com.

Follow Allarity on Social Media
LinkedIn: https://www.linkedin.com/company/allaritytx/
X: https://twitter.com/allaritytx

Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide the Company’s current expectations or forecasts of future events. The words “anticipates,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predicts,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements include, but are not limited to, the implications of the changes to our capital structure for share price development. Any forward-looking statements in this press release are based on management’s current expectations of future events and are subject to multiple risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to the risk that the remaining unexercised warrants could affect our stock’s performance and the impact of market reactions to the conversions. For a discussion of other risks and uncertainties, and other important factors, any of which could cause our actual results to differ from those contained in the forward-looking statements, see the section entitled “Risk Factors” in our Form S-1 registration statement filed on April 17, 2024, and our Form 10-K annual report on file with the Securities and Exchange Commission (the “SEC”), available at the SEC’s website at www.sec.gov, and as well as discussions of potential risks, uncertainties and other important factors in the Company’s subsequent filings with the SEC. All information in this press release is as of the date of the release, and the Company undertakes no duty to update this information unless required by law.

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Company Contact:         
        investorrelations@allarity.com

        
Media Contact:
        Thomas Pedersen
        Carrotize PR & Communications
        +45 6062 9390
        tsp@carrotize.com

Attachment

• Allarity Therapeutics Press Release - Capital Structure Simplified

FAQ

What securities were converted into common stock by Allarity Therapeutics?

All Series A Preferred Stock and Variable Priced Warrants were converted into common stock.

How many warrants remain unexercised after the conversion?

Only 256,667 warrants with a fixed exercise price of $20 per share remain unexercised.

What amount of bridge notes did the company pay off?

Allarity Therapeutics fully paid off all bridge notes, totaling $1,746,630.

What is the lead asset that the company is focusing on after the restructuring?

The company is focusing on its lead asset, stenoparib, for investor communication.