Press Release

Kalytera Announces Escrowed Closing of Private Placement of Common Shares and Common Share Purchase Warrants

By July 24, 2020 No Comments

Kalytera Therapeutics, Inc. (TSX VENTURE: KLY and OTC: KALTF) (the “Company” or “Kalytera”) announced today that on and effective July 22, 2020 it has closed in escrow its previously announced non-brokered private placement (the “Private Placement”) of units comprised of common shares (“Shares”) and one half common share purchase warrants (“Warrants”) in the capital of the Company in the amount of gross proceeds of $317,970.49 from the issuance of 21,198,033 Shares and 10,599,017 Warrants.

Each unit had a purchase price of $0.015 per unit. Each full common share purchase warrant will have an exercise price of CDN $0.05, and a term of 24 months. At any time on or after the date that is 4 months from the closing date, if the daily volume weighted average trading price of the common shares on the TSX Venture Exchange (the “TSXV”) equals or exceeds $0.10 CAD for a period of at least 10 consecutive trading days, the Company shall be entitled to accelerate the expiration date of the Warrants to the date that is 30 days from the date that notice of such acceleration is given. From and after the new accelerated expiration date, no Warrant may be exercised, and all unexercised Warrants shall be void. The securities offered have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended or any U.S. state securities laws, and any securities issued to US Persons are restricted securities subject to an indefinite hold period unless traded in compliance with applicable exemptions. US investors should contact the Company for more details and discuss applicable exemptions with their legal or financial advisor(s).

The Private Placement is subject to the final acceptance of the TSX Venture Exchange, and all securities issued pursuant to the placement are subject to a four-month and one-day hold period in compliance with Canadian securities laws.

The company is paying a cash commission of 8% of the gross proceeds raised and closed in respect of the offering to Echelon Wealth Partners Inc. with respect of the funds raised by it, and broker’s warrants to this finder, exercisable within 30 months following the relevant closing date, to acquire in aggregate that number of common shares which is equal to 8% of the number of units sold under the offering with respect of the funds raised by it, which warrants expiry 30 months from issuance (closing date of July 22, 2020) and are exercisable at $0.05 per warrant. With respect of the Private Placement, Echelon Wealth Partners Inc. is receiving a cash finder fee of $20,000.04 and 1,333,336 broker warrants. Except for the mentioned commission and warrants to Echelon Wealth Partners Inc., no bonus, finder’s fee, commission, agent’s option, or similar compensation, whether in cash or securities, has been paid or is payable in connection with the Private Placement.

The proceeds from the placement will be used to pay audit and accounting fees, insurance premiums and other general and administrative expenses, subject to agreements with creditors.

Trading Halt

On June 22, 2020, the British Columbia Securities Commission (the “BCSC”) issued a Failure-to-File Cease Trade Order against the Company (the “FFCTO”) due to the Company’s failure to file by the prescribed filing deadlines its annual financial statements for the year ending December 31, 2019, and the accompanying Management’s Discussion and Analysis and certifications (the “Filings”). Please refer to the Company’s press release of June 30, 2020 for more details. The Company has been granted the Order to commence the Private Placement as an exception to the FFCTO. The Company is working with its auditors, Ernst & Young, to complete the Filings, and anticipates that final approval and posting of the Filings on will be completed soon. Upon filing of the Filings, the Company will apply to have the FFCTO fully revoked. The Company expects that the FFCTO would be removed prior to the expiration of the customary hold period for private placement offerings that affect all issuers, in which case investors would not be subject to any hold periods beyond what is expected for all private placements.

Purpose of the Private Placement

The funds that have been raised in the Private Placement will be used primarily for the purpose of paying audit and accounting fees that must be paid so that the Company can file its annual financial statements for the year ending December 31, 2019 and the accompanying Management’s Discussion and Analysis and related CEO and CFO certifications (collectively, the “Annual Filings”). Upon filing the Annual Filings, the Company will apply to have the FFCTO revoked, so that trading in the Company’s shares on the TSXV will resume.

Salzman Group Acquisition

The Company previously announced that it has entered into a binding Letter of Intent to acquire Salzman Group. In connection with the acquisition of Salzman Group, the Company anticipates that it will announce the following matters shortly after the Company’s shares resume trading:

  • Initiation of a contemplated $1.5M private placement or debt financing to provide 6-months working capital, which is a TSXV requirement for close of Salzman Group acquisition, as previously disclosed
  • Scheduling of a special meeting of shareholders to approve the acquisition of Salzman Group, as previously disclosed

About Kalytera Therapeutics

Kalytera Therapeutics, Inc. (“Kalytera”) is committed to developing new treatments for a variety of diseases and disorders, by discovering, developing, manufacturing and delivering innovative human therapeutics. Kalytera 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.

Kalytera Company Contact

Robert Farrell
President and CEO
Phone: (888) 861-2008

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. In particular, this press release contains such forward-looking information regarding the acquisition of Salzman Group, related or proposed research and development activities of Kalytera, the Private Placement, the possibility of getting a full revocation of the FFCTO or its timing to avoid any effects on the hold period of securities issued to any investors of the Private Placement, and each of the foregoing’s possible effects on the business and operations of Kalytera. 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; acquisition of Salzman Group might not be completed (including the Company not receiving final acceptance for its completion) or completed on terms currently disclosed; the Private Placement might not complete or complete as currently planned, and any funds that may be raised under it may be insufficient to carry out the activities for which they are intended for or any other activity; and even if the Private Placement fully completes as planned the proposed activities for which they are intended for and any other activity of the Company might not be completed as currently planned due to economic, business and other factors, some of which are beyond the control of the Company. Kalytera undertakes no obligation to comment on analyses, expectations or statements made by third parties, its securities, or financial or operating results (as applicable). Although Kalytera 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 Kalytera’s control. With respect of Kalytera’s press release of May 19, 2020, readers should read the disclaimers and other cautionary information in that 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. Kalytera 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.