|12 Months Ended|
Jun. 30, 2020
|Subsequent Events [Abstract]|
The Company has evaluated its subsequent events from June 30, 2020 through the date these consolidated financial statements were issued and has determined that there are no subsequent events requiring disclosure in these consolidated financial statements other than the items noted below.
On June 9, 2020, the Company, Adgero Acquisition Corp., a wholly-owned subsidiary of the Company (“Merger Sub”), and Adgero, entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) pursuant to which Merger Sub will merge with and into Adgero, with Adgero surviving the merger and becoming a direct, wholly-owned subsidiary of the Company (the “Merger”).
Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), (i) each outstanding share of Adgero common stock (the “Adgero Common Stock”) (other than any shares held as treasury stock that will be cancelled) was converted into shares of Company common stock (the “Kintara Common Stock”) based on the exchange ratio, (ii) each outstanding warrant to purchase Adgero Common Stock was converted into a warrant exercisable for that number of shares of Kintara Common Stock equal to the product of (x) the aggregate number of shares of Adgero Common Stock for which such warrant was exercisable and (y) the Exchange Ratio (as defined in the Merger Agreement); and (iii) each outstanding Adgero stock option, whether vested or unvested, that had not been exercised was cancelled for no consideration. On August 19, 2020, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub merged with and into Adgero, the separate corporate existence of Merger Sub ceased and Adgero continued its existence under Delaware law as the surviving corporation and a direct, wholly-owned subsidiary of the Company.
The Exchange Ratio in the Merger Agreement was negotiated so that the existing stockholders of Adgero would own 49.5% of the total voting shares outstanding of the Company and the existing stockholders of the Company would own 50.5% of the total voting shares outstanding of the Company immediately after the merger (less the effect of the payment of cash in lieu of any fraction share of Kintara Common Stock). The final Exchange Ratio determined immediately prior to the Effective Time to reflect the Company’s and Adgero’s capitalization as of immediately prior to such time was 1.574.
Upon closing of the Merger, the Company issued 11,439,013 shares of Kintara Common Stock and 2,313,908 stock purchase warrants to the security holders of Adgero. The warrants issued to the Adgero warrant holders are exercisable at $3.18 per share. Upon closing of the Merger, the Company issued 571,951 shares of Kintara Common Stock to the placement agent as a success fee.
In connection with the Merger, the Company completed a private placement of Series C Convertible Preferred Stock (the “Series C Stock”) in three separate closings. Each share of Series C Stock was issued at a purchase price of $1,000 per share and is convertible into shares of Kintara Common Stock based on the respective conversion price which was determined at the closing of each round of the private placement. The Series C Stock is entitled to receive dividends, payable in shares of Kintara Common Stock at a rate of 10%, 15%, 20% and 25% of the number of shares of Kintara Common Stock issuable upon conversion of the Series C Stock, on the 12th, 24th, 36th and 48th month, anniversary of the initial closing of the private placement which occurred on August 19, 2020. In addition, the Company issued warrants to the placement agent equal to 10% of the number of shares of Series C Stock issued in the private placement. As of June 30, 2020, the Company had incurred deferred financing costs of $84,944 with respect to the private placement (note 3).
As result of the three separate closings of the private placement, the Company issued a total of 25,028 Series C Stock at a purchase price of $1,000 per share for total gross proceeds of approximately $25 million, or net proceeds of approximately $21.7 million. The conversion prices for the Series C-1 Preferred Stock, Series C-2 Preferred Stock and Series C-3 Preferred Stock are $1.16, $1.214 and $1.15, respectively. Based on the conversion prices of the three respective classes of Series C Stock, the 25,028 shares of Series C Stock will be convertible into an aggregate of 21,516,484 shares of Kintara Common Stock. In addition, the Company issued warrants to purchase 2,504 shares of Series C Stock to the placement agent.
The Merger is expected to be accounted for as an acquisition of the net assets of Adgero as Adgero does not constitute a business. As at June 30, 2020, the Company had incurred costs of $1,053,697 with respect to the Merger. These costs have been expensed as of June 30, 2020.
Loan from National Brain Tumor Society and National Foundation for Cancer Research
Subsequent to June 30, 2020, the Company received proceeds of $500,000 from NBTS and NFCR to support VAL-083's preparation for participation in the Global Coalition for Adaptive Research's (“GCAR”) sponsored trial, Glioblastoma (GBM) Adaptive Global Innovative Learning Environment (GBM AGILE) study (“NBTS Loan”). The Company issued 125,000 NBTS Warrants which are exercisable at a price of $1.09 per common share until June 19, 2025 and have been included in deferred financing costs as at June 30, 2020 (note 3). The NBTS Loan is secured by a promissory note, accrues interest at a rate of 6% per annum and matures on June 19, 2021.
Subsequent to June 30, 2020, 363,623 warrants were exercised at $1.00 per share.
Subsequent to June 30, 2020, a total of 222,887 stock options issued to directors of the Company were amended such that the period to exercise vested stock options from the date of termination with the Company was extended from 90 days to one year. Of the total of 222,887, 66,850 had their expiry increased from September 26, 2020 to June 26, 2021 and 156,037 had their expiry increased from November 19, 2020 to August 19, 2021. In addition, 14,014 stock options were forfeited.
On September 15, 2020, a total of 4,698,687 stock options were issued to executive officers and directors of the Company, all with an exercise price of $1.70 per share. Of the total granted, 4,218,687 stock options vest as to 1/6 on March 15, 2021 with the remaining portion of the 4,218,687 vesting in equal monthly installments over a period of 30 months commencing on April 15, 2021. In addition, of the total stock options granted, 480,000 vest in 12 equal monthly installments beginning on October 15, 2020. All of the stock options granted have a 10-year term and are subject to cancellation upon the grantees’ termination of service for the Company, with certain exceptions.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef