ktra-10q_20210930.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-37823

Kintara Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

Nevada		99-0360497
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

12707 High Bluff Dr., Suite 200 San Diego, CA		92130
(Address of principal executive offices)		(zip code)

(858) 350-4364

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Stock		KTRA		The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☑
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☑

Number of shares of common stock outstanding as of November 11, 2021 was 48,535,338.

TABLE OF CONTENTS

		Page No.
	PART I. - FINANCIAL INFORMATION
Item 1.	Financial Statements.	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	34
Item 4	Controls and Procedures.	34
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.	36
Item 1A.	Risk Factors.	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	36
Item 3.	Defaults Upon Senior Securities.	36
Item 4.	Mine Safety Disclosures.	36
Item 5.	Other Information.	36
Item 6.	Exhibits.	37

PART 1. - FINANCIAL INFORMATION

Item 1. Financial Statements.

Kintara Therapeutics, Inc.

Condensed Consolidated Interim Financial Statements

(Unaudited)

For the three months ended September 30, 2021

(expressed in US dollars unless otherwise noted)

Kintara Therapeutics, Inc.

Condensed Consolidated Interim Balance Sheets

(In thousands, except par value amounts)

			September 30, 2021			June 30, 2021
	Note		$			$
			(unaudited)
Assets
Current assets
Cash and cash equivalents				19,339			10,537
Prepaid expenses, deposits and other				769			756
Clinical trial deposit		4		—			500
				20,108			11,793
Clinical trial deposit		4		2,100			1,600
Property, equipment and intangibles, net		5		135			150
Total assets				22,343			13,543
Liabilities
Current liabilities
Accounts payable and accrued liabilities				2,510			2,219
Related party payables		6		491			561
				3,001			2,780
Milestone payment liability		3		179			182
Total liabilities				3,180			2,962
Stockholders’ equity
Preferred stock
Authorized
5,000 shares, $0.001 par value
Issued and outstanding
279 Series A shares at September 30, 2021 (June 30, 2021 – 279)	6,7			279			279
18 Series C shares at September 30, 2021 (June 30, 2021 – 20)		7		13,396			14,652
Common stock
Authorized
175,000 shares at September 30, 2021 and June 30, 2021, $0.001 par value
47,974 issued at September 30, 2021 (June 30, 2021 – 32,740)		7		48			33
Additional paid-in capital		7		125,074			106,821
Accumulated deficit				(119,655	)		(111,225	)
Accumulated other comprehensive income				21			21
Total stockholders’ equity				19,163			10,581
Total liabilities and stockholders’ equity				22,343			13,543
Nature of operations, corporate history, going concern and management plans (note 1)
Subsequent events (note 10)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Kintara Therapeutics, Inc.

Condensed Consolidated Interim Statements of Operations

(Unaudited)

(In thousands, except per share amounts)

			Three months ended September 30,
	Note		2021			2020
			$			$
Expenses
Research and development				3,793			1,357
General and administrative				2,178			1,534
Merger costs		3		—			500
In-process research and development		3		—			16,094
				(5,971	)		(19,485	)
Other income (loss)
Foreign exchange				4			1
Amortization of deferred loan costs				—			(27	)
Interest, net				1			(7	)
				5			(33	)
Net loss for the period				(5,966	)		(19,518	)
Computation of basic loss per share
Net loss for the period				(5,966	)		(19,518	)
Deemed dividend recognized on beneficial conversion features of Series C Preferred stock issuance		7		—			(3,181	)
Series A Preferred cash dividend		7		(2	)		(2	)
Series B Preferred stock dividend		7		—			(5	)
Series C Preferred stock dividend		7		(2,462	)		—
Net loss for the period attributable to common stockholders				(8,430	)		(22,706	)
Basic and fully diluted loss per share				(0.25	)		(1.33	)
Basic and fully diluted weighted average number of shares				34,281			17,106

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Kintara Therapeutics, Inc.

Condensed Consolidated Interim Statements of Stockholders’ Equity

(Unaudited)

For the three months ended September 30, 2021

(In thousands)

	Number of shares		Common stock $		Additional paid-in capital $		Accumulated other comprehensive income $		Preferred stock $			Accumulated deficit $			Stockholders' equity $
Balance - June 30, 2021		32,740		33		106,821		21		14,931			(111,225	)		10,581
Issuance of shares and warrants - net of issue costs		7,200		7		13,627		—		—			—			13,634
Conversion of Series C Preferred stock to common stock		1,467		1		1,255		—		(1,256	)		—			—
Exercise of 2020 Investor Warrants for cash		69		—		69		—		—			—			69
Exercise of pre-funded warrants for cash		4,800		5		—		—		—			—			5
Warrants issued for services		—		—		31		—		—			—			31
Stock option expense		—		—		811		—		—			—			811
Series A Preferred cash dividend		—		—		—		—		—			(2	)		(2	)
Series C Preferred stock dividend		1,698		2		2,460		—		—			(2,462	)		—
Loss for the period		—		—		—		—		—			(5,966	)		(5,966	)
Balance - September 30, 2021		47,974		48		125,074		21		13,675			(119,655	)		19,163

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Kintara Therapeutics, Inc.

Condensed Consolidated Interim Statements of Stockholders’ Equity

(Unaudited)

For the three months ended September 30, 2020

(In thousands)

	Number of shares		Common stock $		Additional paid-in capital $		Accumulated other comprehensive income $		Preferred stock $			Accumulated deficit $			Stockholders' equity $
Balance - June 30, 2020		11,458		11		65,148		21		4,804			(69,721	)		263
Adgero merger (note 3)		12,011		12		16,713		—		—			—			16,725
Issuance of Series C Preferred stock		—		—		—		—		25,028			—			25,028
Series C placement agent warrants		—		—		3,287		—		(3,287	)		—			—
Series C Preferred stock share issuance costs		—		—		—		—		(3,386	)		—			(3,386	)
Deemed dividend recognized on beneficial conversion features of Series C Preferred stock issuance		—		—		3,181		—		—			(3,181	)		—
Exercise of warrants		993		1		993		—		—			—			994
Warrants issued for services		—		—		45		—		—			—			45
Stock option expense		—		—		405		—		—			—			405
Series A Preferred cash dividend		—		—		—		—		—			(2	)		(2	)
Series B Preferred stock dividend		4		—		5		—		—			(5	)		—
Loss for the period		—		—		—		—		—			(19,518	)		(19,518	)
Balance - September 30, 2020		24,466		24		89,777		21		23,159			(92,427	)		20,554

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Kintara Therapeutics, Inc.

Condensed Consolidated Interim Statements of Cash Flows

(Unaudited)

(In thousands)

			Three months ended September 30,
			2021			2020
	Note		$			$
Cash flows from operating activities
Loss for the period				(5,966	)		(19,518	)
Adjustments to reconcile net loss to net cash used in operating activities
Amortization of intangible assets				—			1
Depreciation of property and equipment		5		15			—
In-process research and development		3		—			16,094
Change in fair value of milestone liability		3		(3	)		—
Interest expense				—			8
Amortization of deferred loan costs				—			27
Warrants issued for services		7		31			45
Stock option expense		7		811			405
Changes in operating assets and liabilities
Prepaid expenses, deposits and other				(13	)		24
Accounts payable and accrued liabilities				122			(914	)
Related party payables				(70	)		(282	)
Net cash used in operating activities				(5,073	)		(4,110	)
Cash flows from investing activities
Cash acquired on merger with Adgero		3		—			969
Net cash provided by investing activities				—			969
Cash flows from financing activities
Net proceeds from the issuance of shares and warrants		7		13,803			21,859
Warrants exercised for cash		7		74			994
Proceeds from loan				—			500
Series A preferred cash dividend		6		(2	)		(2	)
Net cash provided by financing activities				13,875			23,351