Kintara Therapeutics Announces 1-for-35 Reverse Stock Split in Connection with the Proposed Merger with TuHURA Biosciences

Rhea-AI Summary

Kintara Therapeutics (NASDAQ: KTRA) has announced a 1-for-35 reverse stock split in connection with its proposed merger with TuHURA Biosciences. The split is expected to take effect on October 17, 2024, with the company's common stock trading under the new name TuHURA Biosciences, Inc. and the symbol 'HURA' on the Nasdaq Capital Market. This move will reduce Kintara's outstanding common stock from approximately 55.6 million to 1.6 million shares.

The reverse split will not alter stockholders' equity percentages, except for fractional shares, which will be rounded up. It will also apply to stock issuable upon exercise of outstanding warrants and options. Post-merger, the combined company's total outstanding common stock is expected to be about 42.0 million shares. Stockholders with shares in book-entry form or brokerage accounts need not take action, but beneficial holders should contact their financial institutions with any questions.

Positive

• Potential to meet Nasdaq listing requirements post-merger
• Reduction in outstanding shares may increase stock price visibility
• No fractional shares issued, with rounding up benefiting shareholders

Negative

• Significant reduction in number of outstanding shares (from 55.6M to 1.6M)
• Potential for share price volatility following the reverse split
• Substantial dilution for existing Kintara shareholders post-merger (42.0M shares outstanding)

Insights

Financial Analyst

This reverse stock split is a significant move for Kintara Therapeutics, primarily aimed at maintaining Nasdaq listing compliance and facilitating the merger with TuHURA Biosciences. The 1-for-35 ratio will dramatically reduce the number of outstanding shares from 55.6 million to approximately 1.6 million. This consolidation could potentially improve the stock's marketability and attract institutional investors who often have minimum share price requirements.

However, it's important to note that the reverse split doesn't inherently change the company's market capitalization or value. The post-merger entity, to be named TuHURA Biosciences, will have about 42 million outstanding shares, indicating significant dilution for current Kintara shareholders. This suggests that TuHURA will be the dominant party in this merger.

Investors should be aware that while reverse splits can sometimes lead to short-term price volatility, the long-term performance will depend on the combined company's fundamentals and execution of its business strategy in the solid tumor cancer therapies market.

Legal Expert

The reverse stock split and merger transaction have several legal and regulatory implications. Firstly, the company has followed proper corporate governance procedures by obtaining shareholder approval for the reverse split range at a special meeting. The Board's subsequent decision to implement a 1-for-35 ratio falls within the approved range, demonstrating compliance with shareholder rights.

The change in company name, ticker symbol and CUSIP number are standard practices in mergers and require filings with the SEC and Nasdaq. The treatment of fractional shares, where additional fractions will be issued to round up to whole shares, is a shareholder-friendly approach that avoids cash payouts for fractional interests.

Importantly, the adjustment of outstanding warrants and stock options to reflect the reverse split maintains the economic rights of these security holders. However, investors should carefully review the new terms of these instruments post-split. The maintenance of the authorized share count despite the reduced outstanding shares could provide significant flexibility for future capital raising, which may be dilutive to existing shareholders.

SAN DIEGO, Oct. 16, 2024 /PRNewswire/ -- Kintara Therapeutics, Inc. ("Kintara") (NASDAQ: KTRA), a biopharmaceutical company focused on the development of new solid tumor cancer therapies, today announced that its Board of Directors (the "Board") has approved a reverse stock split of Kintara's common stock at a ratio of 1-for-35. Kintara's common stock is expected to begin trading on a post-reverse stock split basis on the Nasdaq Capital Market on October 17, 2024, under the new name TuHURA Biosciences, Inc. and under the new symbol "HURA" following the anticipated closing of the merger (the "Merger") with TuHURA Biosciences, Inc. ("TuHURA"), with a new CUSIP number 898920 103.

The reverse stock split was approved by Kintara's stockholders at Kintara's special meeting of stockholders held on October 4, 2024, to be effected in the Board's discretion of not less than 1-for-20 and not more than 1-for-40. The final reverse stock split ratio of 1-for-35 was approved by the Board on October 4, 2024.

As a result of the reverse stock split, every thirty-five pre-split shares of Kintara's common stock outstanding will become one share of common stock. The reverse stock split is expected to reduce the number of shares of Kintara's outstanding common stock from approximately 55.6 million shares to approximately 1.6 million shares. The par value of Kintara's common stock will remain unchanged at $0.001 per share after the reverse stock split. The reverse stock split will not change the authorized number of shares of Kintara's common stock. The reverse stock split will affect all stockholders uniformly and will not alter any stockholder's percentage interest in Kintara's equity, except to the extent that the reverse stock split results in some stockholders owning a fractional share. No fractional shares will be issued in connection with the reverse stock split. Instead, in lieu of any fractional shares to which a stockholder of record would otherwise be entitled as a result of the reverse stock split, Kintara will issue to such stockholder such additional fraction of a share as is necessary to increase such resulting fractional share to a full share of common stock. The reverse stock split will also apply to common stock issuable upon the exercise of Kintara's outstanding warrants and stock options, with a proportionate adjustment to the exercise prices thereof, and under Kintara's equity incentive plans.

Following the closing of the Merger, the combined company's total outstanding common stock is expected to be approximately 42.0 million shares.

Equinity Trust Company, LLC is acting as the exchange agent and transfer agent for the reverse stock split. Stockholders holding their shares in book-entry form or in brokerage accounts need not take any action in connection with the reverse stock split. Beneficial holders are encouraged to contact their bank, broker or custodian with any procedural questions.

About TuHURA Biosciences, Inc.

TuHURA Biosciences is a Phase 3 registration-stage immuno-oncology company developing novel technologies to overcome resistance to cancer immunotherapy. TuHURA's lead personalized cancer vaccine candidate, IFx-2.0, is designed to overcome primary resistance to checkpoint inhibitors. TuHURA is preparing to initiate a single randomized placebo-controlled Phase 3 registration trial of IFx-2.0 administered as an adjunctive therapy to Keytruda^® (pembrolizumab) in first line treatment for advanced Merkel Cell Carcinoma.

In addition, TuHURA is leveraging its Delta receptor technology to develop novel bi-functional antibody drug conjugates (ADCs), targeting Myeloid Derived Suppressor Cells to inhibit their immune suppressing effects on the tumor microenvironment to prevent T cell exhaustion and acquired resistance to checkpoint inhibitors and cellular therapies.

For more information, please visit tuhurabio.com and connect with TuHURA on Facebook, X, and LinkedIn.

About Kintara Therapeutics, Inc.

Located in San Diego, California, Kintara is dedicated to the development of novel cancer therapies for patients with unmet medical needs. Kintara is developing therapeutics for clear unmet medical needs with reduced risk development programs. Kintara's lead program is REM-001 Therapy for cutaneous metastatic breast cancer (CMBC).

Kintara has a proprietary, late-stage photodynamic therapy platform that holds promise as a localized cutaneous, or visceral, tumor treatment as well as in other potential indications. REM-001 Therapy, which consists of the laser light source, the light delivery device, and the REM-001 drug product, has been previously studied in four Phase 2/3 clinical trials in patients with CMBC who had previously received chemotherapy and/or failed radiation therapy. In CMBC, REM-001 has a clinical efficacy to date of 80% complete responses of CMBC evaluable lesions and an existing robust safety database of approximately 1,100 patients across multiple indications.

Kintara Therapeutics, Inc. is headquartered in San Diego, California. For more information, please visit www.kintara.com or follow us on X at @Kintara_Thera, Facebook and LinkedIn.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements based upon Kintara's and TuHURA's current expectations. This communication contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are identified by terminology such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "could," "should," "would," "project," "plan," "expect," "goal," "seek," "future," "likely" or the negative or plural of these words or similar expressions. Examples of such forward-looking statements include but are not limited to express or implied statements regarding Kintara's or TuHURA's management team's expectations, hopes, beliefs, intentions or strategies regarding the future including, without limitation, statements regarding: the proposed Merger and the expected effects, perceived benefits or opportunities and related timing with respect thereto, expectations regarding clinical trials and research and development programs, in particular with respect to TuHURA's IFx-Hu2.0 product candidate novel bifunctional ADCs, and any developments or results in connection therewith; the anticipated timing of the results from those studies and trials; expectations regarding the use of capital resources, including the net proceeds from the financing that closed in connection with the signing of the definitive agreement, and the time period over which the combined company's capital resources will be sufficient to fund its anticipated operations; and the expected trading of the combined company's stock on the Nasdaq Capital Market. These statements are only predictions. Kintara and TuHURA have based these forward-looking statements largely on their then-current expectations and projections about future events, as well as the beliefs and assumptions of management. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond each of Kintara's and TuHURA's control, and actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to: (i) the risk that the conditions to the closing or consummation of the proposed Merger are not satisfied; (ii) uncertainties as to the timing of the consummation of the proposed Merger and the ability of each of Kintara and TuHURA to consummate the transactions contemplated by the proposed Merger; (iii) risks related to Kintara's and TuHURA's ability to correctly estimate their respective operating expenses and expenses associated with the proposed Merger, as applicable, as well as uncertainties regarding the impact any delay in the closing would have on the anticipated cash resources of the resulting combined company upon closing and other events and unanticipated spending and costs that could reduce the combined company's cash resources; (iv) the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the proposed Merger by either Kintara or TuHURA; (v) the effect of the announcement or pendency of the proposed Merger on Kintara's or TuHURA's business relationships, operating results and business generally; (vi) costs related to the proposed Merger; (vii) the outcome of any legal proceedings that may be instituted against Kintara, TuHURA, or any of their respective directors or officers related to the Merger Agreement or the transactions contemplated thereby; (vii) the ability of Kintara or TuHURA to protect their respective intellectual property rights; (viii) competitive responses to the proposed Merger; (ix) unexpected costs, charges or expenses resulting from the proposed Merger; (x) whether the combined business of TuHURA and Kintara will be successful; (xi) legislative, regulatory, political and economic developments; and (xii) additional risks described in the "Risk Factors" section of Kintara's Annual Report on Form 10-K for the fiscal year ended June 30, 2024, and the Registration Statement on Form S-4 related to the proposed Merger filed with the SEC. Additional assumptions, risks and uncertainties are described in detail in Kintara's registration statements, reports and other filings with the SEC, which are available on Kintara's website, and at www.sec.gov. Accordingly, you should not rely upon forward-looking statements as predictions of future events. Neither Kintara nor TuHURA can assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements. The forward-looking statements made in this communication relate only to events as of the date on which the statements are made. Except as required by applicable law or regulation, Kintara and TuHURA undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. Investors should not assume that any lack of update to a previously issued "forward-looking statement" constitutes a reaffirmation of that statement.

INVESTOR INQUIRIES:
Robert E. Hoffman
Kintara Therapeutics
rhoffman@kintara.com

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SOURCE Kintara Therapeutics

FAQ

What is the reverse stock split ratio announced by Kintara Therapeutics (KTRA)?

Kintara Therapeutics (KTRA) announced a 1-for-35 reverse stock split, meaning every 35 pre-split shares will become one share of common stock.

When will Kintara Therapeutics (KTRA) begin trading under its new name and symbol?

Kintara Therapeutics (KTRA) is expected to begin trading as TuHURA Biosciences, Inc. under the new symbol 'HURA' on October 17, 2024, following the anticipated closing of the merger with TuHURA Biosciences.

How will the reverse stock split affect Kintara Therapeutics (KTRA) shareholders?

The reverse stock split will not alter stockholders' percentage interest in Kintara's equity, except for fractional shares, which will be rounded up to the nearest whole share. Shareholders do not need to take any action if their shares are held in book-entry form or brokerage accounts.

What will be the total number of outstanding shares for Kintara Therapeutics (KTRA) after the reverse split and merger?

Following the reverse split, Kintara's outstanding shares will reduce from approximately 55.6 million to 1.6 million. After the merger with TuHURA Biosciences, the combined company is expected to have approximately 42.0 million outstanding shares.