Kalytera Announces $5 Million Private Placement of Convertible Debenture Units

/NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRE SERVICES/

SAN FRANCISCO and TEL AVIV, Israel, Nov. 22, 2017 (GLOBE NEWSWIRE) --  Kalytera Therapeutics, Inc. KALY KALTF (the "Company" or "Kalytera") announced today that it has entered into an agreement with Echelon Wealth Partners Inc. ("Echelon" or the "Agent"), to lead a brokered best efforts private placement of up to $5,000,000 aggregate principal amount of convertible debenture units (the "Convertible Debenture Units") at a price of $1,000 per Convertible Debenture Unit (the "Offering"). Each Convertible Debenture Unit will consist of: (i) $1,000 principal amount of 9.0% secured convertible debentures (the "Convertible Debentures"); and (ii) 3,846 common share purchase warrants (each whole warrant, a "Warrant") of the Company (representing 50% warrant coverage on each Convertible Debenture).  

The Convertible Debentures will bear interest from the date of closing at 9.0% per annum, payable semi-annually in arrears on June 30, 2018 and thereafter semi-annually on the last day of June and December in each year and will mature two years following the closing of the Offering (the "Maturity Date").

The Convertible Debentures will be senior secured obligations of the Company and rank pari passu in right of payment of principal and interest with all other Convertible Debentures issued under the Offering and all previously existing secured indebtedness of the Company.

The Agent will have an option to sell up to 750 additional Convertible Debenture Units, each having the same terms as the Convertible Debenture Units above.

The Convertible Debentures will be convertible at the option of the holder into common shares of the Company (the "Common Shares") at any time prior to the close of business on the Maturity Date at a conversion price of $0.13 per Common Share (the "Conversion Price"). Beginning on the date that is four months and one day following the Closing Date (as hereinafter defined), the Company may force the conversion of all of the principal amount of the then outstanding Convertible Debentures at the Conversion Price on 30 days prior written notice should the daily volume weighted average trading price of the Common Shares be greater than $0.75 for any 10 consecutive trading days.

Each Warrant will be exercisable to acquire one Common Share (a "Warrant Share") at an exercise price of $0.13 per Warrant Share for a period of two years following the Closing Date, subject to customary adjustments in certain events and, provided that if, at any time following the date that is four months and one day from the Closing Date, the daily volume weighted average trading price of the Common Shares equals or exceeds $1.00 for any 10 consecutive trading days, the Company may, on prior written notice, accelerate the expiry date of the Warrants to the date that is 30 days following the date of such notice. Any unexercised Warrants shall thereafter automatically expire.

The Convertible Debentures and the Warrants comprising the Convertible Debenture Units and any Common Shares issuable upon conversion or exercise thereof, as applicable, will be subject to a statutory hold period lasting four months and one day following the Closing Date.

The Company intends to use the net proceeds of the Offering to advance its Phase 2 clinical program evaluating the use of cannabidiol in the prevention of graft versus host disease, as well as for general corporate purposes. Completion of the Company's Phase 2 program will take approximately eight months, and is required by the FDA prior to the initiation of a pivotal Phase 3 study. The Company anticipates that, following completion of the Phase 2 study, it will initiate the Phase 3 study as quickly as possible.

"Echelon is a leading Canadian investment bank with expertise in the field of healthcare funding and a history of successful transactions," said Robert Farrell, J.D., Kalytera's Chief Executive Officer. "We are delighted to announce this agreement with Echelon, and we are looking forward to working with them as we advance Kalytera's program in using cannabidiol in the prevention of graft versus host disease."

Closing of the Offering is expected to occur on or about December 14, 2017 (the "Closing Date"). The Offering is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and stock exchange approvals, including the approval of the TSX Venture Exchange.

The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

About Kalytera Therapeutics

Kalytera is pioneering the development of a next generation of cannabinoid therapeutics. Through its proven leadership, drug development expertise, and intellectual property portfolio, Kalytera seeks to establish a leading position in the development of novel cannabinoid medicines for a range of important unmet medical needs, with an initial focus on graft versus host disease ("GVHD").  

Kalytera also intends to develop a new class of proprietary cannabidiol ("CBD") therapeutics. CBD is a remarkable compound that has shown activity against a number of pharmacological targets. However, there are limitations associated with natural CBD, including its poor oral bioavailability. Kalytera will seek to develop innovative CBD formulations and prodrugs in an effort to overcome these limitations, and to target specific disease sites within the body. Kalytera intends to file composition of matter and method of use patents covering its novel inventions, with the goal of limiting future competition.

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Cautionary Statements
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 the closing of Offering and the timing thereof, the use of proceeds from the Offering, its product candidate pipeline, planned clinical trials, the completion of the Phase 2 program, the timing thereof and the initiation of the Phase 3 study, 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 of failure to obtain a Notice of Allowance for the Company's other US Patent Application 14/787,515 and the risk that future clinical studies may not proceed as expected or may produce unfavorable 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 is 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.

Contact Information

Robert Farrell
President, CEO
(888) 861-2008
info@kalytera.co