Allarity Therapeutics, Inc 8-K/A, filed Apr 1, 2022
Allarity Therapeutics, Inc. (ALLR)
About this 8-K/A
Allarity Therapeutics, Inc filed this 8-K/A on April 1, 2022, reporting on events of March 25, 2022.
Items reported
- Item 4.02: Earlier financial statements no longer reliable
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(To Form 8-K originally filed on March 31, 2022)
CURRENT REPORT
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Explanatory Note
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
(a) As previously reported, on March 25, 2022, the Company’s Board, including its audit committee members, concluded that the previously issued financial statements for the quarters ended June 30, 2021, and September 30, 2021, which were filed with the Securities and Exchange Commission on August 20, 2021 (as amended on Form S-4/A), and November 23, 2021, respectively, should no longer be relied upon because of an accounting error in such financial statements relating to the accounting of derivative liability of certain warrants has occurred and a restatement should be undertaken.
The Company is attaching an explanation and effect of the restatement as Exhibit 99.1 which may be subject to further review and adjustment.
Item 9.01 Financial Statements and Exhibits.
| 99.1 | Restatement of Previously Issued Unaudited Financial Statements |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on our behalf by the undersigned hereunto duly authorized.
| Allarity Therapeutics, Inc. | ||
| By: | /s/ Jens Erik Kundsen | |
|
Jens Erik Knudsen | ||
| Chief Financial Officer | ||
| Dated: April 1, 2022 | ||
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Exhibit 99.1
Restatement of Previously Issued Unaudited Financial Statements (Unaudited)
In connection with the subscription of Offer Units in rights issue carried out in June 2021, the Company issued 121,162,817 investor warrants (“TO3 Warrants”). At the time of issuance of the TO3 Warrants on June 24, 2021, a Black-Scholes model was used, and a value of $5,151 was calculated. After the issuance of the Company's September 30, 2021, financial statements on November 23, 2021, management revised its valuation method to incorporate additional Black-Scholes models under different market conditions, as scheduled below, resulting in a probability weighted value of the TO3 warrants as of June 24, 2021, of $2,000 and as of June 30, 2021, of $2,100.
The restatement relates to the reduction in value of the derivative liability, the allocation of offering costs in the amount of $393 and a reduction in value of the exercised warrants from $483 to $206. Based upon the above, values attributed to the derivative liability, the change in value of the derivative liability, interest costs, and foreign exchange have been adjusted in the following tables for each of the periods presented below:
Dollar amounts used herein are in thousands except for per share amounts and share numbers.
| i. | Balance sheets |
| Impact of correction of error | ||||||||||||
| June 30, 2021 (Unaudited) | As previously reported | Adjustments | As restated | |||||||||
| Total assets | $ | 38,780 | $ | — | $ | 38,780 | ||||||
| Derivative liabilities | 5,270 | (3,051 | ) | 2,219 | ||||||||
| Other | 4,690 | — | 4,690 | |||||||||
| Total liabilities | 9,960 | (3,051 | ) | 6,909 | ||||||||
| Accumulated deficit | (45,090 | ) | (493 | ) | (45,583 | ) | ||||||
| Additional paid-in capital | 70,054 | 3,544 | 73,598 | |||||||||
| Others | 3,856 | — | 3,856 | |||||||||
| Total stockholders' equity | 28,820 | 3,051 | 31,871 | |||||||||
| Total liabilities & stockholders’ equity | $ | 38,780 | $ | — | $ | 38,780 | ||||||
| Impact of correction of error | ||||||||||||
| September 30, 2021 (Unaudited) | As previously reported | Adjustments | As restated | |||||||||
| Total assets | $ | 36,987 | $ | — | $ | 36,987 | ||||||
| Derivative liabilities | 218 | — | 218 | |||||||||
| Other | 4,001 | — | 4,001 | |||||||||
| Total liabilities | 4,219 | — | 4,219 | |||||||||
| Accumulated deficit | (43,418 | ) | (3,268 | ) | (46,686 | ) | ||||||
| Additional paid-in capital | 74,107 | 3,268 | 77,375 | |||||||||
| Others | 2,079 | — | 2,079 | |||||||||
| Total stockholders' equity | 32,768 | — | 32,768 | |||||||||
| Total liabilities & stockholders’ equity | $ | 36,987 | $ | — | $ | 36,987 | ||||||
| ii. | Statements of operations |
| Impact of correction of error - quarter | ||||||||||||
| Three months ended June 30, 2021 (Unaudited) | As previously reported | Adjustments | As restated | |||||||||
| Loss from operations | $ | (4,595 | ) | $ | — | $ | (4,595 | ) | ||||
| Finance expenses | — | (393 | ) | (393 | ) | |||||||
| Change in value of derivative liabilities | 75 | (100 | ) | 25 | ||||||||
| Others | (546 | ) | — | (546 | ) | |||||||
| Other income (expense) | (471 | ) | (493 | ) | (964 | ) | ||||||
| Net (loss) income before income tax benefit | (5,066 | ) | (493 | ) | (5,559 | ) | ||||||
| Income tax benefit | 373 | — | 373 | |||||||||
| Net loss | $ | (4,693 | ) | $ | (493 | ) | $ | (5,186 | ) | |||
| Basic (Loss) per Share | $ | (0.94 | ) | $ | (0.10 | ) | $ | (1.04 | ) | |||
| Weighted Average Shares Outstanding – Basic | 5,017,183 | 5,017,183 | 5,017,183 | |||||||||
| Impact of correction of error – year to date | ||||||||||||
| Six months ended June 30, 2021 (Unaudited) | As previously reported | Adjustments | As restated | |||||||||
| Loss from operations | $ | (7,276 | ) | $ | — | $ | (7,276 | ) | ||||
| Finance expenses | — | (393 | ) | (393 | ) | |||||||
| Change in value of derivative liabilities | (30 | ) | (100 | ) | (130 | ) | ||||||
| Others | (1,007 | ) | — | (1,007 | ) | |||||||
| Other income (expense) | (1,037 | ) | (493 | ) | (1,530 | ) | ||||||
| Net (loss) income before income tax benefit | (8,313 | ) | (493 | ) | (8,806 | ) | ||||||
| Income tax benefit | 655 | — | 655 | |||||||||
| Net loss | $ | (7,658 | ) | $ | (493 | ) | $ | (8,151 | ) | |||
| Basic (Loss) per Share | $ | (1.60 | ) | $ | (0.10 | ) | $ | (1.70 | ) | |||
| Weighted Average Shares Outstanding - Basic | 4,776,643 | 4,776,643 | 4,776,643 | |||||||||
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| Impact of correction of error - quarter | ||||||||||||
| Three months ended September 30, 2021 (Unaudited) | As previously reported | Adjustments | As restated | |||||||||
| Loss from operations | $ | (3,193 | ) | $ | — | $ | (3,193 | ) | ||||
| Change in value of derivative liability | 4,517 | (2,732 | ) | 1,785 | ||||||||
| Others | (58 | ) | (42 | ) | (100 | ) | ||||||
| Other income (expense) | 4,459 | (2,774 | ) | 1,685 | ||||||||
| Net (loss) income before income tax benefit | 1,266 | (2,774 | ) | (1,508 | ) | |||||||
| Income tax benefit | 406 | — | 406 | |||||||||
| Net loss | $ | 1,672 | $ | (2,774 | ) | $ | (1,102 | ) | ||||
| Basic Earnings (Loss) per Share | $ | 0.22 | $ | (0.36 | ) | $ | (0.14 | ) | ||||
| Weighted Average Shares Outstanding - Basic | 7,753,051 | 7,753,051 | 7,753,051 | |||||||||
| Impact of correction of error – year to date | ||||||||||||
| Nine months ended September 30, 2021 (Unaudited) | As previously reported | Adjustments | As restated | |||||||||
| Loss from operations | $ | (10,469 | ) | $ | — | $ | (10,469 | ) | ||||
| Finance expense | — | (393 | ) | (393 | ) | |||||||
| Change in value of derivative liability | 4,547 | (2,832 | ) | 1,715 | ||||||||
| Others | (1,125 | ) | (42 | ) | (1,167 | ) | ||||||
| Other income (expense) | $ | 3,422 | $ | (3,268 | ) | $ | (154 | ) | ||||
| Net (loss) income before income tax benefit | (7,047 | ) | (3,268 | ) | (10,315 | ) | ||||||
| Income tax benefit | 1,061 | — | 1,061 | |||||||||
| Net loss | $ | (5,986 | ) | $ | (3,268 | ) | $ | (9,254 | ) | |||
| Basic (Loss) per Share | $ | (1.04 | ) | $ | (0.57 | ) | $ | (1.61 | ) | |||
| Weighted Average Shares Outstanding - Basic | 5,779,681 | 5,779,681 | 5,779,681 | |||||||||
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