Claritas Announces Transfer of GVHD Program and Cancellation of Related Debt as Company Focuses on Nitric Oxide Therapeutics
Claritas Pharmaceuticals (KALTF) announced a Debt Forgiveness Agreement with Talent Biotechs Ltd., transferring its cannabidiol assets in exchange for debt forgiveness, including approximately USD $4.3 million in liabilities. This strategic move is aimed at improving the company’s financial position as it shifts focus to R-107, targeting pulmonary arterial hypertension and COVID-19 related sepsis. Approval from the TSX Venture Exchange and shareholders is required. A special meeting is scheduled for June 17, 2021 to discuss the agreement.
- Transfer of assets eliminates approximately USD $4.3 million in debt.
- Strategic shift towards R-107 for unmet medical needs in pulmonary arterial hypertension and COVID-19.
- Kalytera Israel is in default regarding previous financial obligations.
- Dependence on shareholder approval for the Debt Forgiveness Agreement.
SAN FRANCISCO and TORONTO, June 01, 2021 (GLOBE NEWSWIRE) -- Claritas Pharmaceuticals, Inc. (TSX VENTURE EXCHANGE: CLAS and OTC: KALTF) (the "Company" or "Claritas") today announced that it has entered into an agreement (the “Debt Forgiveness Agreement”) with the former shareholders of Talent Biotechs Ltd. (the “Talent Shareholders”), under which Claritas will transfer all assets of its program developing cannabidiol for the prevention and treatment of graft versus host disease (the “GVHD Program”) to the Talent Shareholders in exchange for forgiveness of debt and contingent liabilities.
“Claritas is focused on becoming the industry leader in nitric oxide therapeutics,” stated Robert Farrell, Claritas’ President and CEO. “Our approach is to supplement the body’s natural production of nitric oxide with nitric oxide that will be delivered by our drug, R-107. Based on the exceptionally positive data we have seen with R-017 in an animal models of pulmonary arterial hypertension and COVID-19 related sepsis, as well as the data we have seen from Massachusetts General Hospital with nitric oxide in treatment of COVID-19 infection, our Board has made the decision to re-direct the Company’s resources to the development of R-107 in these indications. Consistent with this decision, the Board has chosen to divest the assets of the GVHD Program. The transaction that we are announcing today will eliminate debt and certain contingent liabilities, substantially improving the Company’s financial position.”
The Debt Forgiveness Agreement remains subject to satisfaction of customary conditions, approval of the TSX Venture Exchange (the “TSXV”), and approval by the Company’s shareholders. The Company has scheduled an Annual and Special Meeting of shareholders that will occur on June 17, 2021 (the “Meeting”). At the Meeting, shareholders will be asked to pass a special resolution approving the Debt Forgiveness Agreement, under which the Company will transfer and sell to the Talent Shareholders all assets of the Company’s program developing cannabidiol for the prevention and treatment of graft versus host disease (the “GVHD Program”) in consideration for the release and discharge by the Talent Shareholders of the obligations the Company and its subsidiaries have to the Talent Shareholders.
The Company’s wholly owned subsidiary, Kalytera Therapeutics Israel, Ltd. (“Kalytera Israel”) acquired Talent Biotechs Ltd. (“Talent”) in 2017 from the Talent Shareholders under the terms of a share purchase agreement (the “SPA”) between the Company, Kalytera Israel, Talent and the Talent Shareholders. Under the terms of the SPA, Kalytera Israel is obligated to make contingent payments to the Talent Shareholders (the “Milestone Payments”). Kalytera Israel did not pay certain Milestone Payments when they became due under the SPA, and issued a promissory note (the “Note”) in favor of the Talent Shareholders evidencing such debt. Kalytera Israel is obligated to pay approximately USD
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 Talent Shareholders as security for the Note (the “Pledged Assets”). The Pledged Assets are the assets of the Company’s GVHD Program. 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.
Under the Debt Forgiveness Agreement, the Company will transfer ownership of all Pledged Assets, other than the shares of Kalytera Israel, to the Talent Shareholders in consideration for the release and discharge by the Talent Shareholders of all obligations the Company and its subsidiaries may have to the Talent Shareholders, including all obligations under the Note, which are approximately USD
About Claritas Pharmaceuticals
Claritas Pharmaceuticals, Inc. is a clinical stage biopharmaceutical company focused on developing and commercializing therapies for patients with significant unmet medical needs. Claritas 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://claritaspharma.com/
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- Investors: https://claritaspharma.com/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. 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 results. Claritas undertakes no obligation to comment on analyses, expectations or statements made by third parties, its securities, or financial or operating results (as applicable). Although Claritas 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 Claritas’ control. The company’s name change has not yet been affected and the company believes that it will affect the name change subject to regulatory compliance as soon as practicable after this news release. The forward-looking information contained in this press release is expressly qualified by this cautionary statement and is made as of the date hereof. Claritas 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@claritas.co
FAQ
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