Kalytera Therapeutics, Inc. (TSX VENTURE: KALY and OTCQB: KALTF) (the “Company” or “Kalytera”) today completed certain transactions contemplated by the arrangements reached with the former shareholders of Talent Biotechs Ltd. of Israel (“Talent”) on terms that were previously announced in August 2018. These arrangements modify the Company’s obligation to make certain payment to such shareholders.
Kalytera acquired its program in the prevention and treatment of graft versus host disease (“GVHD”) in February 2017 through the acquisition of Talent. Under the purchase agreement with the former Talent shareholders, Kalytera is obligated to make certain contingent payments to them upon the achievement of various milestones, including upon issuance of patents by the U.S. Patent and Trademark Office (the “USPTO”). Two such patents issued in 2018, and Kalytera then became obligated to make milestone payments to the former Talent shareholders of US$2 million with respect to each such patent, or US$4 million in the aggregate. Kalytera has exclusive worldwide rights to these issued patents through an Exclusive License Agreement with MOR Research Applications, Ltd. of Israel (“MOR”).
As previously announced in August 2018, the current balance owing to the former Talent shareholders under these milestone payments is US$1,988,620 plus interest, which debt is evidenced by a promissory note maturing July 31, 2019 bearing interest at the rate of 8% per annum. This promissory note has been issued by a subsidiary of the Company and is secured by the rights of Talent as licensee under the Exclusive License Agreement with MOR.
In connection with the deferral arrangement with the former Talent shareholders, these former holders became entitled to an additional payment in the amount of CDN$1,038,218.73 (the “Deferral Amount”). Further to the agreement announced by the Company in August 2018, the Deferral Amount owing to the former shareholders of Talent has now been extinguished through the issuance of 9,438,352 units bearing the same terms as the units issued in the Company’s August 2018 public offering. Each unit has a deemed issue price of C$0.11 and consists of one common share and one half of one common share purchase warrant. Each whole common share purchase warrant has an exercise price of C$0.155 per common share. The units are subject to a four month hold period.
Kalytera Therapeutics, Inc. is pioneering the development of cannabidiol (“CBD”) therapeutics. Through its proven leadership, drug development expertise, and intellectual property portfolio, Kalytera seeks to establish a leading position in the development of CBD medicines for a range of important unmet medical needs, with an initial focus on GVHD and treatment of acute and chronic pain.
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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 applicable regulatory approvals will not be obtained or the risk that future clinical studies may not proceed as expected or may produce unfavourable results. 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. The forward-looking information contained in this press release are expressly qualified by this cautionary statement and are 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.