TuHURA Biosciences, Inc./NV 10-K

Item 8. Financial Statements and Supplementary Data Kintara Therapeutics, Inc. Consolidated Financial Statements For the years ended June 30, 2021 and 2020 (expressed in US dollars unless otherwise noted) 69 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of Kintara Therapeutics, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Kintara Therapeutics, Inc. (the “Company”) as of June 30, 2021 and 2020, the related consolidated statements of operations, stockholders’ equity and cash flows for each of the two years in the period ended June 30, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended June 30, 2021, in conformity with accounting principles generally accepted in the United States of America. Explanatory Paragraph – Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Accruals for Research and Development Expenses and Clinical Trials Description of the Matter As discussed in note 2 to the consolidated financial statements, the Company records accruals for research and development expenses and clinical trials based upon estimates of costs incurred through the balance sheet date that have yet to be invoiced by the contract research organizations (“CRO”) and other third-party vendors. 70 The Company accounts for these expenses according to the progress of the trial as measured by patient progression and the timing of various aspects of the trial. Estimated accruals are determined based on reviewing contractual terms and through communications with internal clinical personnel and external service providers including CRO’s as to the progress or state of its trials. The principal consideration for our determination that performing procedures related to the clinical trial expenses, specifically related to the year-end accrual for clinical trial costs, is a critical audit matter is that there was judgment by management in determining the progress of the activities included in the individual clinical trial agreements based on internal and external information. How We Addressed the Matter in Our Audit To evaluate the accruals for research and development expenses and clinical trials, our audit procedures included, among others, testing the completeness and accuracy of the underlying data used in the estimates and evaluating the significant assumptions including, but not limited, by obtaining an understanding of the Company’s estimation process, corroborating the progress of clinical trials with the Company’s clinical team, and obtaining confirmations directly from third parties. /s/ Marcum LLP Marcum LLP We have served as the Company’s auditor since 2019. San Francisco, CA September 28, 2021 71 Kintara Therapeutics, Inc. Consolidated Balance Sheets (In thousands, except par value amounts) As of June 30, 2021 2020 Note $ $ Assets Current assets Cash and cash equivalents 10,537 2,392 Prepaid expenses, deposits and other 756 365 Clinical trial deposit 4 500 — Deferred loan costs 7 — 94 Total current assets 11,793 2,851 Clinical trial deposit 4 1,600 — Property, equipment and intangibles - net 5 150 2 Deferred financing costs 8 — 85 Total assets 13,543 2,938 Liabilities and stockholders' equity Liabilities Current liabilities Accounts payable and accrued liabilities 2,219 2,011 Related party payables 6 561 664 Total current liabilities 2,780 2,675 Milestone payment liability 3 182 — Total liabilities 2,962 2,675 Stockholders’ equity Preferred stock Authorized 5,000 shares, $ 0.001 par value Issued and outstanding 279 Series A shares at June 30, 2021 (June 30, 2020 – 279 ) 6,8 279 279 0 Series B shares at June 30, 2021 (June 30, 2020 – 649 ) 8 — 4,525 20 Series C shares at June 30, 2021 (June 30, 2020 – 0 ) 8 14,652 — Common stock Authorized 175,000 shares at June 30, 2021 (June 30, 2020 - 95,000 ) $ 0.001 par value 32,740 issued at June 30, 2021 (June 30, 2020 – 11,458 ) 33 11 Additional paid-in capital 106,821 65,148 Accumulated deficit ( 111,225 ) ( 69,721 ) Accumulated other comprehensive income 21 21 Total stockholders’ equity 10,581 263 Total liabilities and stockholders’ equity 13,543 2,938 Nature of operations, corporate history, going concern and management plans (note 1) Commitments and contingencies (note 10) Subsequent events (note 13) The accompanying notes are an integral part of these consolidated financial statements. 72 Kintara Therapeutics, Inc. Consolidated Statements of Operations (In thousands, except per share amounts) For the years ended June 30, Note 2021 2020 $ $ Expenses Research and development 11,815 3,630 General and administrative 9,757 4,514 Merger costs 3 500 1,054 In-process research and development 3 16,094 — ( 38,166 ) ( 9,198 ) Other income (loss) Foreign exchange ( 12 ) ( 3 ) Amortization of deferred loan costs 7 ( 94 ) — Interest - net 7 ( 26 ) 75 ( 132 ) 72 Net loss for the year ( 38,298 ) ( 9,126 ) Computation of basic loss per share Net loss for the year ( 38,298 ) ( 9,126 ) Deemed dividend recognized on beneficial conversion features of Series C Preferred stock issuance 8 ( 3,181 ) — Series A Preferred cash dividend 8 ( 8 ) ( 8 ) Series B Preferred stock dividend 8 ( 17 ) ( 9 ) Net loss for the year attributable to common stockholders ( 41,504 ) ( 9,143 ) Basic and fully diluted loss per share ( 1.60 ) ( 0.87 ) Basic and fully diluted weighted average number of shares 25,886 10,444 The accompanying notes are an integral part of these consolidated financial statements. 73 Kintara Therapeutics, Inc. Consolidated Statements of Stockholders’ Equity For the years ended June 30, 2021 and 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, 2019 3,839 4 57,543 21 4,978 ( 60,578 ) 1,968 Issuance of shares and warrants - net of issue costs 4,895 5 6,578 — — — 6,583 Exercise of pre-funded warrants for cash 2,655 2 24 — — — 26 Exercise of warrants for cash 25 — 25 — — — 25 Conversion of Series B preferred stock to common stock 6 — 174 — ( 174 ) — — Shares issued for services 23 — 13 — — — 13 Warrants issued for services — — 287 — — — 287 Stock option expense — — 495 — — — 495 Series A preferred cash dividend — — — — — ( 8 ) ( 8 ) Series B preferred stock dividend 15 — 9 — — ( 9 ) — Loss for the year — — — — — ( 9,126 ) ( 9,126 ) 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 — — — — ( 3,455 ) — ( 3,455 ) Deemed dividend recognized on beneficial conversion features of Series C Preferred stock issuance — — 3,181 — — ( 3,181 ) — Conversion of Series B Preferred stock to common stock 162 — 4,525 — ( 4,525 ) — — Conversion of Series C Preferred stock to common stock 4,251 5 3,708 — ( 3,713 ) — — Series C Agent Warrants exercised — — ( 79 ) — 79 — — Exercise of warrants 4,677 4 4,400 — — — 4,404 Warrants issued for services — — 569 — — — 569 Stock options exercised 170 1 76 — — — 77 Stock option expense — — 5,276 — — — 5,276 Series A Preferred cash dividend — — — — — ( 8 ) ( 8 ) Series B Preferred stock dividend 11 — 17 — — ( 17 ) — Loss for the year — — — — — ( 38,298 ) ( 38,298 ) Balance - June 30, 2021 32,740 33 106,821 21 14,931 ( 111,225 ) 10,581 The accompanying notes are an integral part of these consolidated financial statements. 74 Kintara Therapeutics, Inc. Consolidated Statements of Cash Flows June 30, 2021 (In thousands) For the years ended June 30, 2021 2020 Note $ $ Cash flows from operating activities Loss for the year ( 38,298 ) ( 9,126 ) Adjustments to reconcile net loss to net cash used in operating activities Amortization of intangible assets 2 10 Depreciation of property and equipment 5 30 — Impairment of in-process research and development 3 16,094 — Change in fair value of milestone liability 3 ( 6 ) — Interest expense 7 30 — Amortization of deferred loan costs 7 94 — Shares issued for services 8 — 13 Warrants issued for services 8 569 193 Stock option expense 8 5,276 495 Changes in operating assets and liabilities Prepaid expenses, deposits and other ( 381 ) ( 59 ) Clinical trial deposits 4 ( 2,100 ) — Accounts payable and accrued liabilities ( 67 ) 207 Related party payables ( 103 ) 339 Net cash used in operating activities ( 18,860 ) ( 7,928 ) Cash flows from investing activities Cash acquired on merger with Adgero 3 969 — Purchase of equipment ( 8 ) — Proceeds on sale of equipment 3 — Net cash provided by investing activities 964 — Cash flows from financing activities Net proceeds from the issuance of shares and warrants 8 21,598 6,583 Warrants exercised for cash 8 4,404 51 Stock options exercised for cash 77 — Proceeds from loan 7 500 — Repayment of loan 7 ( 500 ) — Interest paid 7 ( 30 ) — Deferred financing costs 8 — ( 25 ) Series A preferred cash dividend 8 ( 8 ) ( 8 ) Net cash provided by financing activities 26,041 6,601 Increase (decrease) in cash and cash equivalents 8,145 ( 1,327 ) Cash and cash equivalents – beginning of year 2,392 3,719 Cash and cash equivalents – end of year 10,537 2,392 Supplementary information (note 11) The accompanying notes are an integral part of these consolidated financial statements. 75 Kintara Therapeutics, Inc. Notes to Consolidated Financial Statements June 30, 2021 (In thousands) 1 Nature of operations, corporate history, and going concern and management plans Nature of operations Kintara Therapeutics, Inc. (the “Company”) is a clinical stage drug development company with a focus on the development of novel cancer therapies for patients with unmet medical needs. The Company is developing two late-stage, Phase 3-ready therapeutics - VAL-083 for glioblastoma multiforme and REM-001 for cutaneous metastatic breast cancer. In order to accelerate the Company’s development timelines, it leverages existing preclinical and clinical data from a wide range of sources. The Company may seek marketing partnerships in order to potentially offset clinical costs and to generate future royalty revenue from approved indications of its product candidates. Corporate history The Company is a Nevada corporation formed on June 24, 2009 under the name Berry Only, Inc. On January 25, 2013, the Company entered into and closed an exchange agreement (the “Exchange Agreement”), with Del Mar Pharmaceuticals (BC) Ltd. (“Del Mar (BC)”), 0959454 B.C. Ltd. (“Callco”), and 0959456 B.C. Ltd. (“Exchangeco”) and the security holders of Del Mar (BC). Upon completion of the Exchange Agreement, Del Mar (BC) became a wholly-owned subsidiary of the Company (the “Reverse Acquisition”). On August 19, 2020, the Company completed its merger with Adgero Biopharmaceuticals Holdings, Inc. (“Adgero”) (note 3). In conjunction with the Adgero merger, the Company changed its name from DelMar Pharmaceuticals, Inc. to Kintara Therapeutics, Inc. Kintara Therapeutics, Inc. is the parent company of Del Mar (BC), a British Columbia, Canada corporation and Adgero, a Delaware corporation, which are clinical stage companies with a focus on the development of drugs for the treatment of cancer. The Company is also the parent company to Callco and Exchangeco which are British Columbia, Canada corporations. Callco and Exchangeco were formed to facilitate the Reverse Acquisition. In connection with the Adgero merger, the Company also became the parent company of Adgero Biopharmaceuticals, Inc. (“Adgero Inc.”), formerly a wholly-owned subsidiary of Adgero. References to the Company refer to the Company and its wholly-owned subsidiaries. Going concern and management plans These consolidated financial statements have been prepared on a going concern basis which assumes that the Company will continue its operations for the foreseeable future and contemplates the realization of assets and the settlement of liabilities in the normal course of business. For the year ended June 30, 2021, the Company reported a loss of $ 38,298 and a negative cash flow from operations of $ 18,860 . The Company had an accumulated deficit of $ 111,225 and had cash and cash equivalents of $ 10,537 as of June 30, 2021. The Company is in the clinical stage and has not generated any revenues to-date. The Company does not have the prospect of achieving revenues until such time that its product candidates are commercialized, or partnered, which may not ever occur. Despite the receipt of approximately $ 13.6 million in net proceeds from a registered direct financing subsequent to June 30, 2021, in the near future, the Company will require additional funding to maintain its clinical trials, research and development projects, and for general operations. These circumstances indicate substantial doubt exists about the Company’s ability to continue as a going concern within one year from the date of filing of these consolidated financial statements. Consequently, management is pursuing various financing alternatives to fund the Company’s operations so it can continue as a going concern. However, the coronavirus (“COVID-19”) pandemic has created significant economic uncertainty and volatility in the credit and capital markets. Management plans to secure the necessary financing through the issue of new equity and/or the entering into strategic partnership arrangements but the ultimate impact of the COVID-19 pandemic on the Company’s ability to raise additional capital is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak and any new information which may emerge concerning the severity of the COVID-19 pandemic. The Company may not be able to raise sufficient additional capital and may tailor its drug candidates 76 development programs based on the amount of funding the Company is able to raise in the future. Nevertheless, there is no assurance that these initiatives will be successful. These financial statements do not give effect to any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. Such adjustments could be material. 2 Significant accounting policies Basis of presentation The consolidated financial statements of the Company have been prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”) and are presented in United States dollars. The functional currency of the Company and each of its subsidiaries is the United States dollar. The principal accounting policies applied in the preparation of these consolidated financial statements are set out below and have been consistently applied to all years presented. Certain prior period balances have been reclassified to conform with the current year’s presentation. Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Adgero, Adgero Inc., Del Mar BC, Callco, and Exchangeco as of, and for the years ended June 30, 2021 and 2020. All intercompany balances and transactions have been eliminated in consolidation. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events that affect the reported amounts of assets, liabilities, expenses, contingent assets, and contingent liabilities as at the end of, or during, the reporting period. Actual results could significantly differ from those estimates. Significant areas requiring management to make estimates include the fair value of the milestone payment liability, the valuation of equity instruments issued for services, clinical trial accruals, deferred tax valuation allowance and assessment of going concern. Further details of the nature of these assumptions and conditions may be found in the relevant notes to these consolidated financial statements. Cash and cash equivalents Cash and cash equivalents consist of cash and highly liquid investments with original maturities from the purchase date of three months or less that can be readily convertible into known amounts of cash. Cash and cash equivalents are held at recognized Canadian and United States financial institutions. Interest earned is recognized in the consolidated statement of operations. Foreign currency translation The functional currency of the Company at June 30, 2021 is the United States dollar. Transactions that are denominated in a foreign currency are remeasured into the functional currency at the current exchange rate on the date of the transaction. Any foreign-currency denominated monetary assets and liabilities are subsequently remeasured at current exchange rates, with gains or losses recognized as foreign exchange losses or gains in the consolidated statement of operations. Non-monetary assets and liabilities are translated at historical exchange rates. Expenses are translated at average exchange rates during the period. Exchange gains and losses are included in consolidated statement of operations for the period. Acquired in-process research and development expense The Company acquired in-process research and development assets in connection with its Merger with Adgero. As the acquired in-process research and development assets were deemed to have no current or alternative future use, an expense of $ 16,094 was recognized in the consolidated statements of operations for the year ended June 30, 2021. 77 Property and equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over its estimated useful life of three years . Depreciation expense is recognized from the date the equipment is put into use. Income taxes The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. To the extent that deferred tax assets cannot be recognized under the preceding criteria, the Company establishes valuation allowances, as necessary, to reduce deferred tax assets to the amounts expected to be realized. As of June 30, 2021, and 2020, all deferred tax assets were fully offset by a valuation allowance. The realization of deferred tax assets is dependent upon future federal, state and foreign taxable income. The Company’s judgments regarding deferred tax assets may change due to future market conditions, as the Company expands into international jurisdictions, due to changes in U.S. or international tax laws and other factors. These changes, if any, may require material adjustments to the Company’s deferred tax assets, resulting in a reduction in net income or an increase in net loss in the period in which such determinations are made. The Company recognizes the impact of uncertain tax positions based upon a two-step process. To the extent that a tax position does not meet a more-likely-than-not level of certainty, no impact is recognized in the consolidated financial statements. If a tax position meets the more-likely-than-not level of certainty, it is recognized in the consolidated financial statements at the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company’s policy is to analyze the Company’s tax positions taken with respect to all applicable income tax issues for all open tax years in each respective jurisdiction. Interest and penalties with respect to uncertain tax positions would be included in income tax expense. As of June 30, 2021, the Company concluded that there were no uncertain tax provisions required to be recognized in its consolidated financial statements. The Company does not record U.S. income taxes on the undistributed earnings of its foreign subsidiaries based upon the Company’s intention to permanently reinvest undistributed earnings to ensure sufficient working capital and further expansion of existing operations outside the United States. As June 30, 2021, the Company’s foreign subsidiaries operated at a cumulative deficit for U.S. earnings and profit purposes. In the event the Company is required to repatriate funds from outside of the United States, such repatriation would be subject to local laws, customs, and tax consequences. Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable. Financial instruments The Company has financial instruments that are measured at fair value. To determine the fair value, the Company uses the fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use to value an asset or liability and are developed based on market data obtained from independent sources. Unobservable inputs are inputs based on assumptions about the factors market participants would use to value an asset or liability. The three levels of inputs that may be used to measure fair value are as follows: • Level one - inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities; • Level two - inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals; and • Level three - unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. As of June 30, 2021, the Company’s milestone payment liability was measured using level 3 inputs (note 3). 78 The Company’s financial instruments consist of cash and cash equivalents, other receivables, accounts payable, and related party payables. The carrying values of cash and cash equivalents, other receivables, accounts payable and related party payables approximate their fair values due to the immediate or short-term maturity of these financial instruments. Intangible assets Website development costs Website development costs are stated at cost less accumulated amortization. The Company capitalizes website development costs associated with graphics design and development of the website application and infrastructure. Costs related to planning, content input, and website operations are expensed as incurred. The Company amortizes website development costs on a straight-line basis over three years . Patents Expenditures associated with the filing, or maintenance of patents, licensing or technology agreements are expensed as incurred. Costs previously recognized as an expense are not recognized as an asset in subsequent periods. Once the Company has achieved regulatory approval patent costs will be deferred and amortized over the remaining life of the related patent. Accruals for research and development expenses and clinical trials As part of the process of preparing its financial statements, the Company is required to estimate its expenses resulting from its obligations under contracts with vendors, clinical research organizations and consultants, and under clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment terms that do not match the periods over which materials or services are provided under such contracts. The Company’s objective is to reflect the appropriate expenses in its financial statements by matching those expenses with the period in which services are performed and efforts are expended. The Company accounts for these expenses according to the timing of various aspects of the expenses. The Company determines accrual estimates by taking into account discussion with applicable personnel and outside service providers as to the progress of clinical trials, or the services completed. During the course of a clinical trial, the Company adjusts its clinical expense recognition if actual results differ from its estimates. The Company makes estimates of its accrued expenses as of each balance sheet date based on the facts and circumstances known to it at that time. The Company’s clinical trial accruals are dependent upon the timely and accurate reporting of contract research organizations and other third-party vendors. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in it reporting amounts that are too high or too low for any particular period. For the years ended June 30, 2021 and 2020, there were no material adjustments to the Company’s prior period estimates of accrued expenses for clinical trials. Warrants and shares issued for services The Company has issued equity instruments for services provided by employees and non-employees. The equity instruments are valued at the fair value of the instrument issued. Stock options The Company recognizes compensation costs resulting from the issuance of stock-based awards to employees, non-employees and directors as an expense in the statement of operations over the service period based on a measurement of fair value for each stock-based award. Prior to our adoption of ASU 2018-07, Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”), stock options granted to non-employee consultants were revalued at the end of each reporting period until vested using the Black-Scholes option-pricing model and the changes in their fair value were recorded as adjustments to expense over the related vesting period. For the years ended June 30, 2021 and 2020, the determination of grant-date fair value for stock option awards was estimated using the Black-Scholes model, which includes variables such as the expected volatility of our share price, the anticipated exercise behavior of its grantee, interest rates, and dividend yields. For years ended June 30, 2021 and 2020, the Company utilized the plain vanilla method to determine the expected life of stock options. These variables are projected based on our historical data, experience, and other factors. Changes in any of these variables could result in material adjustments to the expense recognized for share-based payments. Such value is recognized as expense over the requisite service period, net of actual forfeitures, using the accelerated attribution method. The Company recognizes forfeitures as they occur. The estimation of stock awards that will ultimately vest requires judgment, and to the extent actual results, or updated estimates, differ from current estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised. 79 Loss per share Income or loss per share is calculated based on the weighted average number of common shares outstanding. For the years ended June 30, 2021 and 2020 diluted loss per share does not differ from basic loss per share since the effect of the Company’s warrants, stock options, performance stock units, and convertible preferred shares is anti-dilutive. As of June 30, 2021, potential common shares of 6,974 (2020 – 10,309 ) related to outstanding common stock warrants, 2,100 (2020 – nil) related to outstanding Series C preferred stock warrants, 6,392 (2020 – 1,559 ) related to stock options, nil (2020 – 162 ) relating to outstanding Series B convertible preferred shares, and 17,295 (2020 – nil) relating to outstanding Series C convertible preferred shares were excluded from the calculation of net loss per common share. Segment information The Company identifies its operating segments based on business activities, management responsibility and geographical location. The Company operates within a single operating segment being the research and development of cancer indications, and operates primarily in one geographic area, being North America. The Company previously conducted one clinical trial in China but the expenses incurred over the course of the study were not significant. All of the Company’s assets are located in either Canada or the United States. Recent accounting pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. Not yet adopted Accounting Standards Update (“ASU”) 2020-06 — Debt - Debt with conversion and other options (subtopic 470-20) and derivatives and hedging – contracts in entity’s own equity (subtopic 815-40): accounting for convertible instruments and contracts in an entity’s own equity The amendments in this update are intended to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. For public business entities that are not smaller reporting companies, the ASU’s amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. For all other entities, the effective date is for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The guidance may be early adopted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company has not yet evaluated the impact of adoption of this ASU on its consolidated financial statements and related disclosures. ASU 2020-10 — Codification Improvements The amendments in this update remove references to various FASB Concepts Statements, situates all disclosure guidance in the appropriate disclosure section of the Codification, and makes other improvements and technical corrections to the Codification. The amendments in Sections B and C of this amendment are effective for fiscal periods beginning after December 15, 2020, for public business entities. For all other entities, the amendments are effective for fiscal periods beginning after December 15, 2021, and interim periods within fiscal periods beginning after December 15, 2022. The Company has not yet evaluated the impact of adoption of this ASU on its consolidated financial statements and related disclosures. ASU 2021-04 — Earnings Per Share (Topic 260), Debt— Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. The amendments in this update are intended to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange and that are not within the scope of another FASB Accounting Standards Codification. The amendments in ASU 2021-04 are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the 80 amendments. Early adoption is permitted for all entities, including adoption in an interim period. The Company has not yet evaluated the impact of adoption of this ASU on its consolidated financial statements and related disclosures. During the year ended June 30, 2021, other than ASUs 2020-06, 2020-10, and 2021-04, there have been no new, or existing recently issued, accounting pronouncements that are of significance, or potential significance, that impact the Company’s consolidated financial statements. 3 Merger On June 9, 2020, the Company, Adgero Acquisition Corp., a wholly-owned subsidiary of the Company (“Merger Sub”), and Adgero, entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) pursuant to which upon closing the Merger Sub will merge with and into Adgero, with Adgero surviving the merger and becoming a direct, wholly-owned subsidiary of the Company (the “Merger”). Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), (i) each outstanding share of Adgero common stock (the “Adgero Common Stock”) was converted into shares of Company common stock (the “Kintara Common Stock”) based on the exchange ratio, (ii) each outstanding warrant to purchase Adgero Common Stock was converted into a warrant exercisable for that number of shares of Kintara Common Stock equal to the product of (x) the aggregate number of shares of Adgero Common Stock for which such warrant was exercisable and (y) the Exchange Ratio (as defined in the Merger Agreement); and (iii) each outstanding Adgero stock option, whether vested or unvested, that had not been exercised was cancelled for no consideration. On August 19, 2020, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub merged with and into Adgero , the separate corporate existence of Merger Sub ceased and Adgero continued its existence under Delaware law as the surviving corporation and a direct, wholly-owned subsidiary of the Company. The Exchange Ratio in the Merger Agreement was negotiated so that the existing stockholders of Adgero would own 49.5% of the total voting shares outstanding of the Company and the existing stockholders of the Company would own 50.5% of the total voting shares outstanding of the Company immediately after the merger (less the effect of the payment of cash in lieu of any fractional shares of Kintara Common Stock). The final Exchange Ratio determined immediately prior to the Effective Time to reflect the Company’s and Adgero’s capitalization as of immediately prior to such time was 1.574. Under the terms of the Merger Agreement, upon closing of the Merger, the Company issued 11,439 shares of Company common stock and 2,314 stock purchase warrants to the security holders of Adgero (“Adgero Warrants”). The Adgero Warrants are exercisable at $ 3.18 per share (note 8). The Adgero Warrants were valued using a Black-Scholes valuation with a weighted-average risk-free interest rate of 0.21 %, a term of one year , a volatility of 115.96 %, and a dividend rate of 0 %. The estimated volatility of the Company’s common stock at the date of measurement is based on the historical volatility of the Company. The risk-free interest rate is based on rates published by the government for bonds with a maturity similar to the expected remaining life of the instrument at the valuation date. The expected term has been estimated using the remaining life of the warrant. Also, in conjunction with the Merger, the Company issued 572 shares of common stock to the placement agent as a success fee. The shares of common stock issued to the former Adgero stockholders as well as the success fee shares, have been valued at $ 1.34 per share which was the closing price of the Company’s common stock on August 19, 2020, the date the Merger closed. In connection with the Merger, the Company completed a private placement of Series C Convertible Preferred Stock in three separate closings (note 8). To determine the accounting for this transaction under ASU 2017-01, an assessment was made as to whether an integrated set of assets and activities should be accounted for as an acquisition of a business or an asset acquisition. The guidance requires an initial screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single asset or group of similar assets. If that screen is met, the set is not a business. In connection with the Merger, substantially all of the fair value was concentrated in in-process research and development (“IPR&D”). As such, the Merger has been treated as an acquisition of Adgero assets and an assumption of Adgero liabilities. The Company incurred approximately $ 1,554 of legal, consulting and other professional fees related to the Merger, of which approximately $ 500 was incurred in the year ended June 30, 2021 (2020 - $ 1,054 ). The transaction costs applicable to the Merger have been classified as merger expenses in the consolidated statement of operations for the years ended June 30, 2021 and 2020. 81 The following summarizes total consideration transferred to the Adgero stockholders under the Merger as well as the assets acquired and liabilities assumed under the Merger: $ (in thousands) Consideration: Common stock 15,328 Warrants 630 Success fee shares 766 16,724 Net assets acquired: Cash ( 969 ) Other current assets ( 11 ) Property and equipment (note 5) ( 175 ) Accounts payable and accrued liabilities 337 Milestone payment liability 188 In-process research and development 16,094 The fair value of the IPR&D assets has been expensed as a charge in the consolidated statements of operations for the year ended June 30, 2021 as there is no alternative use for these assets. Property and equipment includes office furniture that was subsequently sold and laboratory equipment that was put into use during the third quarter of the year ended June 30, 2021. The milestone payment liability relates to an asset purchase agreement with St. Cloud Investments, LLC (“St. Cloud”) that Adgero has regarding the acquisition of REM-001. The Agreement, as amended, is dated November 26, 2012 (the “St. Cloud Agreement”). Pursuant to the terms of the St. Cloud Agreement, the Company is obligated to make certain payments under the agreement. The future contingent amounts payable under that agreement are as follows: • Upon the earlier of (i) a subsequent equity financing to take place after the Company conducts a Phase 2B clinical study in which fifty patients complete the study and their clinical data can be evaluated or (ii) the commencement of a clinical study intended to be used as a definitive study for market approval in any country, the Company is obligated to pay an aggregate amount of $ 300 in cash or an equivalent amount of common stock, with $ 240 to St. Cloud and $ 60 to an employee of the Company; and • Upon receipt of regulatory approval of REM-001 Therapy, the Company is obligated to pay an aggregate amount of $ 700 in cash or an equivalent amount of common stock, with $ 560 to St. Cloud and $ 140 to an employee of the Company. With respect to the $300 and $700 potential milestone payments referenced above (each a “Milestone Payment”), if either such Milestone Payment becomes payable, and in the event the Company elects to pay either such Milestone Payment in shares of its common stock, the value of the common stock will equal the average of the closing price per share of the Company’s common stock over the twenty (20) trading days following the first public announcement of the applicable event described above. The milestone payment liability has been estimated using a scenario-based method (or “SBM”). An SBM is an income-based approach under which possible outcomes are identified, the contingent consideration payoff of each outcome is probability weighted, and then a suitable discount rate is used to arrive at the expected present value of the contingent consideration at the valuation date. The probability used in the valuation was based on published research for the probability of success of oncology companies at a similar stage of development as the Company. The discount rate was based on published rates for corporate bonds and the term was based on an estimate of the planned timing of completion of the respective development achievement that would result in payment of the respective milestones. $ (in thousands) Balance – June 30, 2020 — Addition 188 Change in fair value estimate ( 6 ) Balance – June 30, 2021 182 82 4 Clinical trial deposit The Company has entered into an agreement with a contract research organization (“CRO”) for the management of the Company’s registration study for glioblastoma multiforme. Under the agreement, the Company will supply the drug for the study and the CRO will manage all operational aspects of the study including site activation and patient enrollment. The Company is required to make certain payments under the agreement related to patient enrollment milestones. For the year ended June 30, 2021, the Company has recognized $ 5,430 (2020 – nil) of expenses for this study. As part of study startup, the Company made an initial deposit payment of $ 2,600 to the CRO in relation to the commencement of the recruitment of patients. Of the $2,600 total, $ 500 was expensed during the year ended June 30, 2021 (2020 – nil). It is anticipated that the remainder of the deposit of $ 2,100 will be applied to future invoices, or refunded to the Company, of which $ 500 is anticipated to be applied in the near term and $ 1,600 beyond twelve months from June 30, 2021. The Company can terminate the study at any time. Upon termination, the Company will be liable for any payments due to the effective date of the termination as well as any non-refundable or non-cancellable costs incurred by the CRO prior to the date of termination. 5 Property, equipment and intangibles Property, equipment and intangibles $ (thousands) Balance, June 30, 2019 12 Less amortization ( 10 ) Balance, June 30, 2020 2 Acquired in Adgero merger (note 3) 175 Laboratory equipment purchased 8 Disposal of furniture ( 3 ) Property and equipment 182 Less depreciation and amortization ( 32 ) Balance, June 30, 2021 150 At June 30, 2021, the total capitalized cost of intangibles was $ 80 (2020 - $ 80 ) and the Company has recognized $ 2 and $ 10 , respectively, in amortization expense during the years ended June 30, 2021 and 2020. 6 Related party transactions Valent Technologies, LLC Agreements One of the Company’s officers is a principal of Valent Technologies, LLC (“Valent”) and as result Valent is a related party to the Company. On September 12, 2010, the Company entered into a Patent Assignment Agreement (the “Valent Assignment Agreement”) with Valent pursuant to which Valent transferred to the Company all its right, title and interest in and to the patents for VAL-083 owned by Valent. The Company now owns all rights and title to VAL-083 and is responsible for the drug’s further development and commercialization. In accordance with the terms of the Valent Assignment Agreement, Valent is entitled to receive a future royalty on all revenues derived from the development and commercialization of VAL-083. In the event that the Company terminates the agreement, the Company may be entitled to receive royalties from Valent’s subsequent development of VAL-083 depending on the development milestones the Company has achieved prior to the termination of the Valent Assignment Agreement. On September 30, 2014, the Company entered into an exchange agreement (the “Valent Exchange Agreement”) with Valent and Del Mar (BC). Pursuant to the Valent Exchange Agreement, Valent exchanged its loan payable in the outstanding amount of $ 279 (including aggregate accrued interest to September 30, 2014 of $ 29 ), issued to Valent by Del Mar (BC), for 279 shares of the Company’s Series A Preferred Stock. The Series A Preferred Stock has a stated value of $ 1.00 per share (the “Series A Stated Value”) and is not convertible into common stock. The holder of the Series A Preferred Stock is entitled to dividends at the rate of 3 % of the Series A Stated Value per year, payable quarterly in arrears. For the years ended June 30, 2021 and 2020 respectively, the Company recorded $ 8 related to the dividend paid to Valent. The dividends have been recorded as a direct increase in accumulated deficit. 83 Related party payables At June 30, 2021 there is an aggregate amount of $ 561 (2020 - $ 664 ) payable to the Company’s officers and directors for fees, expenses, and accrued bonuses and other liabilities. 7 Loan from National Brain Tumor Society and National Foundation for Cancer Research $ (in thousands) Balance – June 30, 2020 — Funding 500 Financing costs ( 94 ) Interest expense 30 Amortization of deferred financing costs 94 Payment of principal and interest ( 530 ) Balance – June 30, 2021 — During the year ended June 30, 2021, the Company received a loan of $ 500 from National Brain Tumor Society (“NBTS”) and the National Foundation for Cancer Research (the “NBTS Loan”) to support VAL-083's preparation for participation in the Global Coalition for Adaptive Research's sponsored trial, Adaptive Global Innovative Learning Environment study. In relation to the NBTS Loan, the Company issued 125 share purchase warrants which are exercisable at a price of $ 1.09 per common share until June 19, 2025 and were included in deferred financing costs as of June 30, 2020 (“NBTS Warrants”). The NBTS Loan is secured by a promissory note, accrues interest at a rate of 6 % per annum and matures on June 19, 2021 . On June 19, 2021, the Company repaid the NBTS Loan principal of $ 500 and loan interest of $ 30 . The NBTS Warrants were valued at $ 94 using a Black-Scholes valuation with a risk-free interest rate of 0.37 %, a term of 5 years, a volatility of 89.82 %, and a dividend rate of 0 %. The estimated volatility of the Company’s common stock at the date of measurement is based on the historical volatility of the Company. The risk-free interest rate is based on rates published by the government for bonds with a maturity similar to the expected remaining life of the instrument at the valuation date. The expected term has been estimated using the remaining life of the NBTS Warrants. 8 Stockholders’ equity Preferred stock Series C Preferred stock Series C Preferred Stock Number of shares $ (in thousands) Balance – June 30, 2019 and 2020 — — Issuance 25,028 18,286 Issued on exercise of Series C Agent Warrants 33 79 Conversion of Series C Preferred stock to common stock ( 4,969 ) ( 3,713 ) Balance – June 30, 2021 20,092 14,652 In connection with the Merger (note 3), the Company issued 25,028 shares of Series C Convertible Preferred Stock (the “Series C Preferred Stock”) in three separate closings of a private placement (Series C-1, C-2, and C-3) in August, 2020. Each share of Series C Preferred Stock was issued at a purchase price of $ 1,000 per share and is convertible into shares of common stock based on the respective conversion prices which were determined at the closing of each round of the private placement. Subject to ownership limitations, the owners of the Series C Preferred Stock are entitled to receive dividends, payable in shares of common stock at a rate of 10 %, 15 %, 20 % and 25 % of the number of shares of common stock issuable upon conversion of the Series C Preferred Stock, on the 12 th , 24 th , 36 th and 48 th month, anniversary of the initial closing of the private placement which occurred on August 19, 2020. The Series C Preferred Stock dividends do not require declaration by the Board of Directors and are accrued annually as of the date the dividend is earned in an amount equal to the applicable rate of the stated value. Any outstanding shares of Series C Preferred Stock will automatically convert to shares of common stock on August 19, 2024. Total gross proceeds from the private placement were $ 25,028 , or approximately $ 21,573 in net proceeds after deducting financing costs of $ 3,455 with respect to agent commissions and expenses, as well as legal and accounting fees. Of the total financing 84 costs, $ 85 was deferred as of June 30, 2020. In addition, the Company issued 2,504 Series C Preferred Stock purchase warrants with a fair value of $ 3,287 to the placement agent (“Series C Agent Warrants”) . The conversion prices for the Series C-1 Preferred Stock, Series C-2 Preferred Stock and Series C-3 Preferred Stock are $ 1.16 , $ 1.214 and $ 1.15 , respectively. Based on the conversion prices of the three respective classes of the Series C Preferred Stock, the originally issued 25,028 shares of Series C Preferred Stock were convertible into an aggregate of 21,516 shares of common stock. The cumulative dividends to be issued on the 12 th , 24 th , 36 th and 48 th month anniversary of the initial closing of the private placement for the initially issued 25,028 shares of Series C Preferred Stock were 15,062 shares of common stock. Conversion shares are rounded up to the nearest whole share The Company’s Series C Preferred Stock outstanding, conversion shares, and future dividends as of June 30, 2021 are as follows: Series Number Conversion Price $ Number of conversion shares (in thousands) Dividend Shares (in thousands) Series 1 16,564 1.16 14,279 9,995 Series 2 1,148 1.21 946 662 Series 3 2,380 1.15 2,070 1,449 20,092 17,295 12,106 Series C Dividends Dividend Shares (in thousands) 10% - August 19, 2021 1,729 15% - August 19, 2022 2,594 20% - August 19, 2023 3,459 25% - August 19, 2024 4,324 12,106 The conversion feature of the Series C Convertible Preferred Stock at the time of issuance was determined to be beneficial on the commitment date. Because the Series C Convertible Preferred Stock was perpetual with no stated maturity date, and the conversions could occur any time from inception, the Company immediately recorded a non-cash deemed dividend of $3,181 related to the beneficial conversion feature arising from the issuance of Series C Convertible Preferred Stock. This non-cash deemed dividend increased the Company’s net loss attributable to common stockholders and net loss per share. The Series C Preferred Stock shall with respect to distributions of assets and rights upon the occurrence of a liquidation, rank (i) senior to the Company’s common stock and (ii) senior to any other class or series of capital stock of the Company hereafter created which does not expressly rank pari passu with, or senior to, the Series C Preferred Stock. The Series C Preferred Stock shall be pari passu in liquidation to the Company’s Series A and Series B Preferred Stock. The liquidation value of the Series C Preferred Stock at June 30, 2021 is the stated value of $20,092. Series B Preferred stock Series B Preferred Stock (in thousands) Number of shares $ Balance – June 30, 2019 674 4,699 Conversion of Series B Preferred stock to common stock ( 25 ) ( 174 ) Balance – June 30, 2020 649 4,525 Conversion of Series B Preferred stock to common stock ( 649 ) ( 4,525 ) Balance – June 30, 2021 — — 85 During the year ended June 30, 2016, the Company issued an aggregate of 902 shares of Series B Preferred Stock at a purchase price of $ 8.00 per share. Each share of Series B Preferred Stock was convertible into 0.25 shares of common stock equating to a conversion price of $ 32.00 (the “Conversion Price”) and automatically converted to common stock on April 29, 2021 . T he holders of the Series B Preferred Stock were entitled to an annual cumulative, in arrears, dividend at the rate of 9 % payable quarterly. The 9% dividend accrued quarterly commencing on the date of issue and was payable on September 30, December 31, March 31, and June 30 of each year commencing on June 30, 2016. Dividends were payable solely by delivery of shares of common stock in an amount for each holder equal to the aggregate dividend payable to such holder with respect to the shares of Series B Preferred Stock held by such holder divided by the Conversion Price. The Series B Preferred Stock did not contain any repricing features. Each share of Series B Preferred Stock entitled its holder to vote with the common stock on an as-converted basis. The liquidation value of the Series B Preferred Stock at June 30, 2021 was the stated value of $nil (2020 - $ 5,189 ). In addition, in relation to the VAL-083 compound, the Company and the former holders of the Series B Preferred Stock entered into a royalty agreement pursuant to which the Company will pay the former holders of the Series B Preferred Stock, in aggregate, a single-digit royalty based on their pro rata ownership of the former Series B Preferred Stock on products sold directly by the Company or sold pursuant to a licensing or partnering arrangement (the “Royalty Agreement”). Rights to the royalties vested during the first three years following the applicable original closing dates in equal thirds to the former holders of the Series B Preferred Stock on each of the three vesting dates. Upon such vesting dates, the royalty amounts became vested royalties. If the holder converted their Series B Preferred Stock to common stock prior to a respective vesting date, such holder forfeited any royalty rights that had not vested prior to such conversion date and shall no longer receive ongoing future royalty payments under the Royalty Agreement but will be entitled to receive any residual royalty payments that have vested. Pursuant to the Series B Preferred Stock dividend, during the year ended June 30, 2021, the Company issued 11 (2020 – 15 ) shares of common stock and recognized $ 17 (2020 – $ 9 ) as a direct increase in accumulated deficit. Prior to mandatory conversion to common stock on April 29, 2021, during the year ended June 30, 2021, a total of 48 (2020 – 25 ) shares of Series B Preferred Stock were converted for an aggregate 12 (2020 – 6 ) shares of common stock. On April 29, 2021, the remaining 601 shares of Series B Preferred Stock were converted into 150 shares of common stock pursuant to the five-year mandatory conversion feature. A total of nil (2020 – 649 ) shares of Series B Preferred Stock are outstanding as of June 30, 2021, such that a total of nil (2020 – 162 ) shares of common stock are issuable upon conversion of the Series B Preferred Stock as at June 30, 2021. Converted shares are rounded up to the nearest whole share. Series A Preferred Stock Effective September 30, 2014, the Company filed a Certificate of Designation of Series A Preferred Stock (the “Series A Certificate of Designation”) with the Secretary of State of Nevada. Pursuant to the Series A Certificate of Designation, the Company designated 279 shares of preferred stock as Series A Preferred Stock. The shares of Series A Preferred Stock have a stated value of $ 1.00 per share (the “Series A Stated Value”) and are not convertible into common stock. The holder of the Series A Preferred Stock is entitled to dividends at the rate of 3 % of the Series A Stated Value per year, payable quarterly in arrears. Upon any liquidation of the Company, the holder of the Series A Preferred Stock will be entitled to be paid, out of any assets of the Company available for distribution to stockholders, the Series A Stated Value of the shares of Series A Preferred Stock held by such holder, plus any accrued but unpaid dividends thereon, prior to any payments being made with respect to the common stock. The Series A Preferred Stock is held by Valent (note 6). The Series A Preferred Stock shall with respect to distributions of assets and rights upon the occurrence of a liquidation, rank (i) senior to the Company’s common stock, and (ii) senior to any other class or series of capital stock of the Company hereafter created which does not expressly rank pari passu with, or senior to, the Series A Preferred Stock. The Series A Preferred Stock shall be pari passu in liquidation to the Company’s Series B and Series C Preferred Stock. The liquidation value of the Series A Preferred stock at June 30, 2021 of $ 279 . There was no change to the Series A Preferred stock for the years ended June 30, 2021 or 2020. 86 Common stock Amended articles of incorporation On June 25, 2021, the Company amended its articles of incorporation to increase the number of authorized shares of common stock from 95,000 to 175,000 shares. Stock Issuances Year ended June 30, 2020 Underwritten public offering On August 16, 2019, the Company closed on the sale of (i) 4,895 shares of its common stock, par value $ 0.001 per share (the “Common Stock”), (ii) pre-funded warrants (“PFW”) to purchase an aggregate of 2,655 shares of Common Stock and (iii) common warrants to purchase an aggregate of 7,763 shares of Common Stock (“2020 Investor Warrants”), including 800 shares of Common Stock and 2020 Investor Warrants to purchase an aggregate of 1,013 shares of Common Stock sold pursuant to a partial exercise by the underwriters of the underwriters’ option to purchase additional securities, in the Company’s underwritten public offering (the “Offering”). Each share of Common Stock or PFW, as applicable, was sold together with a 2020 Investor Warrant to purchase one share of Common Stock at a combined effective price to the public of $1.00 per share of Common Stock and accompanying 2020 Investor Warrant. The net proceeds from the Offering, including from the partial exercise of the underwriters’ option to purchase additional securities, were $ 6,583 after deducting underwriting discounts and commissions, and other offering expenses. The 2020 Investor Warrants are exercisable at $1.00 per share until their expiry on August 16, 2024 and the PFW are exercisable at $0.01 per share at any time after August 16, 2019. The Company also issued 377 warrants to the underwriters of the Offering. The underwriter warrants are exercisable at $ 1.15 per share commencing February 10, 2020 until their expiry on August 14, 2022 . During the year ended June 30, 2020, all of the 2,655 PFW were exercised at $ 0.01 per PFW for proceeds of $ 27 . Shares issued for services During the year ended June 30, 2021, the Company issued nil (2020 – 23 ) shares of common stock for services resulting in the recognition of $nil (2020 – $ 13 ) in expense. All of the shares issued for services for the year ended June 30, 2020 have been recognized as research and development expense. 2017 Omnibus Incentive Plan As subsequently approved by the Company’s stockholders at an annual meeting of stockholders on April 11, 2018, the Company’s board of directors approved adoption of the Company’s 2017 Omnibus Equity Incentive Plan (the “2017 Plan”). The board of directors also approved a form of Performance Stock Unit Award Agreement to be used in connection with grants of performance stock units (“PSUs”) under the 2017 Plan. As approved by the Company’s stockholders on June 25, 2021, the number of common shares available under the 2017 Plan was increased to 13,000 shares. Under the 2017 Plan 13,000 shares of Company common stock are currently reserved for issuance, less the number of shares of common stock issued under the Del Mar (BC) 2013 Amended and Restated Stock Option Plan (the “Legacy Plan”), or that are subject to grants of stock options made, or that may be made, under the Legacy Plan, or that have been previously exercised. A total of 136 shares of common stock have been issued under the Legacy Plan and/or are subject to outstanding stock options granted under the Legacy Plan, and a total of 6,256 shares of common stock have been issued under the 2017 Plan and/or are subject to outstanding stock options granted under the 2017 Plan leaving 6,414 shares of common stock available at June 30, 2021 for issuance under the 2017 Plan if all such options under the Legacy Plan were exercised, net of stock options previously exercised. The maximum number of shares of Company common stock with respect to which any one participant may be granted awards during any calendar year is 8 % of the Company’s fully diluted shares of common stock on the date of grant (excluding the number of shares of common stock issued under the 2017 Plan and/or the Legacy Plan or subject to outstanding awards granted under the 2017 Plan and/or the Legacy Plan). No award will be granted under the 2017 Plan on or after July 7, 2027, but awards granted prior to that date may extend beyond that date. 87 During the year ended June 30, 2021, a total of 223 options to purchase shares of common stock issued to directors of the Company were amended such that the period to exercise vested options to purchase shares of common stock from the date of termination of continuous service with the Company was extended from 90 days to one year . Of the total, 67 had their expiry extended from September 26, 2020 to June 26, 2021 and 156 had their expiry extended from November 19, 2020 to August 19, 2021. As a result of the amendments, a total of $9 in stock-based compensation expense has been recognized. In addition, 250 options to purchase shares of common stock previously granted to an officer of the Company were amended such that the vesting of the options to purchase shares of common stock was changed from a completely contingent vesting to a time-based vesting such that 1/6 th of the options to purchase shares of common stock vest on the six-month anniversary of the amendment date with the remaining portion vesting in equal monthly installments over a period of 30 months commencing on the seven-month anniversary of the amendment date. A total compensation expense of $ 319 will be recognized over the amended vesting period for the 250 options to purchase shares of common stock. Also, during the year ended June 30, 2021, the Board of Directors approved the acceleration of vesting of 280 options at an exercise price of $ 0.61 per share to purchase shares of common stock previously granted on September 5, 2019 to an executive officer of the Company resulting in the recognition of an accelerated expense of $ 53 . During the year ended June 30, 2021, a total of 4,834 options to purchase shares of common stock were granted to executive officers and directors of the Company. Of these, 4,699 have an exercise price of $ 1.70 per share, 60 have an exercise price of $ 1.355 per share, and 75 have an exercise price of $ 1.37 . Of the total granted, 4,279 options to purchase shares of common stock vest as to 1/6 on the six-month anniversary of the grant date with the remaining portion vesting in equal monthly installments over a period of 30 months commencing on the seven-month anniversary of the grant date, 480 vest in 12 equal monthly installments beginning on October 15, 2020, and 75 vest as to 1/6 on the twelve-month anniversary of the grant date with the remaining portion vesting in equal quarterly installments over a period of eight quarters commencing on the fifteen-month anniversary of the grant date. All of the options to purchase shares of common stock granted have a 10 -year term and are subject to cancellation upon the grantees’ termination of service for the Company, with certain exceptions. Stock Options The following table sets forth changes in stock options outstanding under all plans: Number of stock options outstanding (in thousands) Weighted average exercise price Balance – June 30, 2019 288 22.31 Granted 1,291 0.63 Forfeited ( 19 ) 0.61 Expired ( 1 ) 40.00 Balance – June 30, 2020 1,559 4.61 Granted 5,074 1.67 Exercised ( 195 ) 0.61 Expired ( 32 ) 34.88 Forfeited ( 14 ) 1.42 Balance – June 30, 2021 6,392 2.26 88 The following table summarizes stock options outstanding and exercisable under all plans at June 30, 2021: Exercise price $ Number Outstanding at June 30, 2021 (in thousands) Weighted average remaining contractual life (years) Number exercisable at June 30, 2021 (in thousands) 0.61 816 8.18 729 0.74 250 8.37 62 1.36 300 9.23 75 1.37 75 9.83 — 1.70 4,699 9.21 1,415 6.10 25 7.36 24 7.00 3 6.98 3 8.70 12 6.34 12 9.83 83 6.89 83 10.60 4 6.79 4 11.70 30 1.66 30 16.14 3 0.92 3 20.00 9 0.59 9 21.10 11 6.02 11 29.60 5 3.60 5 37.60 5 4.61 5 41.00 4 5.36 4 42.00 30 2.13 30 44.80 3 4.61 3 49.50 13 5.63 13 53.20 8 4.85 8 61.60 1 1.75 1 92.00 3 1.92 3 6,392 2,532 Included in the number of stock options outstanding are 2.5 stock options granted at an exercise price of CA$20.00. The exercise price of these options shown in the above table have been converted to US$ 16.14 using the period ending closing exchange rate. Stock options issued during the years ended June 30, 2021 and 2020 have been valued using a Black-Scholes pricing model with the following assumptions: June 30, 2021 June 30, 2020 Dividend rate — % — % Volatility 103% to 152% 89% to 102% Risk-free rate 0.19% to 1.28% 0.32% to 1.50% Term – years 0.4 to 5.9 4.7 to 5.7 The estimated volatility of the Company’s common stock at the date of issuance of the stock options is based on the historical volatility of the Company. The risk-free interest rate is based on rates published by the government for bonds with a maturity similar to the expected remaining life of the stock options at the valuation date. The expected life of the stock options has been estimated using the plain vanilla method. 89 The Company has recognized the following amounts as stock option expense for the periods noted: Years ended June 30, 2021 $ 2020 $ Research and development 1,478 87 General and administrative 3,798 408 5,276 495 All of the stock option expense for the periods ended June 30, 2021 and 2020 has been recognized as additional paid in capital. The aggregate intrinsic value of stock options outstanding at June 30, 2021 was $ 4,759 (2020 - $ 80 ) and the aggregate intrinsic value of stock options exercisable at June 30, 2021 was $ 2,181 (2020 - $ 35 ). As of June 30, 2021, there was $ 3,014 in unrecognized compensation expense that will be recognized over the next 2.25 years. The following table sets forth changes in unvested stock options under all plans: Number of options (in thousands) Weighted average exercise price $ Unvested at June 30, 2019 85 11.35 Granted 1,291 0.63 Vested ( 500 ) 1.87 Forfeited ( 18 ) 0.61 Unvested at June 30, 2020 858 0.98 Granted 5,074 1.67 Vested ( 2,058 ) 1.52 Forfeited ( 14 ) 1.42 Unvested at June 30, 2021 3,860 1.60 The aggregate intrinsic value of unvested stock options at June 30, 2021 was $ 2,577 (2020 - $ 45 ). The unvested stock options have a remaining weighted average contractual term of 9.16 (2020 – 9.19) years. Common Stock Warrants The following table sets forth changes in outstanding warrants: Number of warrants (in thousands) Weighted average exercise price $ Balance – June 30, 2019 1,543 12.60 Underwritten public offering 10,418 0.75 Issuance of 2020 Underwriter Warrants 377 1.15 Exercise of PFW ( 2,655 ) 0.01 Exercise of 2020 Investor Warrants ( 25 ) 1.00 Warrants issued for services (i) 655 0.77 Expiry of warrants issued for services (i) ( 4 ) 59.30 Balance – June 30, 2020 10,309 2.71 Issuance of Adgero Warrants 2,314 3.18 Exercise of warrants (ii) ( 4,907 ) 1.00 Warrants issued for services (i) 600 1.74 Expiry of warrants ( 1,342 ) 6.00 Balance – June 30, 2021 6,974 3.34 90 i) Warrants issued for services are exercisable at various prices and expire at the various dates noted in the table below. ii) A total of 4,404 2020 Investor Warrants were exercised at $ 1.00 per share and 503 warrants issued as either agent warrants or issued for services were exercised on a cashless basis for which 273 common shares were issued. The following table summarizes the Company’s outstanding warrants as of June 30, 2021: Description of warrants Number (in thousands) Exercise price $ Expiry date 2020 Investor warrants 3,333 1.00 August 16, 2024 2019 Investor warrants 760 3.10 June 5, 2024 2018 Investor warrants 280 12.50 September 22, 2022 2017 Investor warrants 208 35.00 April 19, 2022 NBTS Warrants (i) 125 1.09 June 19, 2025 Warrants issued for services 6 17.80 January 25, 2023 Warrants issued for services 34 11.70 February 27, 2023 Warrants issued for services 12 9.00 September 15, 2023 Warrants issued for services 2 9.00 October 11, 2023 Warrants issued for services 280 0.75 November 18, 2023 Warrants issued for services 125 0.64 January 20, 2024 Warrants issued for services 330 1.49 September 22, 2023 Warrants issued for services 50 1.82 November 13, 2023 Warrants issued for services 100 1.47 January 7, 2024 Warrants issued for services 70 2.75 February 17, 2024 Warrants issued for services 50 2.38 February 25, 2024 2019 Agent warrants 47 3.88 June 3, 2024 2018 Agent warrants 40 12.50 September 20, 2022 2017 Agent warrants 14 40.60 April 12, 2022 Adgero Warrants (ii) 353 3.18 August 31, 2021 Adgero Warrants 755 3.18 January 17, 2022 6,974 (i) NBTS Warrants were issued with respect to loan proceeds received during the year ended June 30, 2021 (note 7). (i i ) Expired unexercised subsequent to June 30, 2021. Series C Preferred Stock Warrants In connection with the Series C Preferred Stock private placement, the Company initially issued 2,504 Series C Agent Warrants. The Series C Agent Warrants have an exercise price of $ 1,000 per share, provide for a cashless exercise feature, and are exercisable for a period of four years from August 19, 2020. The Series C Preferred Stock issuable upon exercise of the Series C Agent Warrants is convertible into shares of common stock in the same manner as each respective underlying series of outstanding Series C Preferred Stock and will be entitled to the same dividend rights as each respective series. 91 The Series C Agent Warrants were valued at a total of $ 3,287 using a binomial pricing model with a risk-free interest rate of 0.27 %, a term of 4.0 years, and a volatility of 95.2 % to 95.8 %. The estimated volatility of the Company’s common stock at the date of measurement is based on the historical volatility of the Company’s common stock. The risk-free interest rate is based on rates published by the government for bonds with a maturity similar to the expected remaining life of the instrument at the valuation date. The expected term has been estimated using the contractual term of the warrant. The following table sets forth changes in outstanding Series C Agent Warrants: Balance June 30, 2020 Number of Warrants Issued Number of Warrants Exercised Balance, June 30, 2021 Exercise price $ Issuance of Preferred Series C-1 Agent Warrants — 1,959 ( 30 ) 1,929 1.16 Issuance of Preferred Series C-2 Agent Warrants — 219 — 219 1.21 Issuance of Preferred Series C-3 Agent Warrants — 326 ( 30 ) 296 1.15 — 2,504 ( 60 ) 2,444 The following table summarizes the Company’s outstanding Series C Agent Warrants as of June 30, 2021: Series C Agent Warrants Number Conversion price $ Number of conversion shares (in thousands) Cumulative common stock dividends (in thousands) Series 1 1,929 1.16 1,663 1,164 Series 2 219 1.21 180 126 Series 3 296 1.15 257 180 2,444 2,100 1,470 9 Income taxes For the years ended June 30, 2021, and 2020, the Company did not record a provision for income taxes due to a full valuation allowance against the deferred tax assets. Significant components of the Company’s deferred tax assets and deferred tax liabilities are shown below: June 30, 2021 $ June 30, 2020 $ Deferred tax assets: Non-capital losses carried forward 20,148 11,871 Stock-based compensation 155 — Capital losses carried forward 18 18 Financing costs 326 221 Scientific research and development 761 604 Scientific research and development – Investment Tax Credits (“ITC”) 665 534 22,073 13,248 Deferred tax liabilities: Scientific research and development – ITC ( 110 ) ( 88 ) 21,963 13,160 Valuation allowance ( 21,963 ) ( 13,160 ) Net future tax assets — — 92 The income tax benefit of these tax attributes has not been recorded in these consolidated financial statements because of the uncertainty of their recovery. The Company’s effective income tax rate differs from the statutory income tax rate of 21 % (2020 – 21 %). The differences arise from the following items: June 30, 2021 $ June 30, 2020 $ Tax recovery at statutory income tax rates ( 8,015 ) ( 1,916 ) Permanent differences 4,506 142 Effect of rate differentials between jurisdictions ( 551 ) ( 239 ) Effect of foreign exchange rates ( 954 ) 347 Non-capital losses acquired with Adgero ( 4,114 ) — Scientific research and development – ITC 97 ( 38 ) Adjustment to prior year's provision versus statutory tax returns 228 323 Change in valuation allowance 8,803 1,381 — — The Company has no current income tax expense for the year ended June 30, 2021, as there was a taxable loss for this period. The components of the Company’s loss before income taxes for the year ended June 30, 2021 were allocated as to $ 29.0 million in the U.S. and $ 9.2 million in Canada. As of June 30, 2021, the Company had combined U.S. and Canadian net operating loss (“NOL”) carry forwards of $ 77.7 million (2020 – $ 47.8 million). The U.S. federal NOL carryforwards consist of $ 15.8 million generated before July 1, 2018, which begin expiring in 2026 , and $ 20.4 million that can be carried forward indefinitely, but are subject to the 80 % taxable income limitation. The Canadian NOL carryforwards of $ 41.5 million begin expiring in 2030 . In addition, the Company has non-refundable Canadian federal investment tax credits of $ 407 (2020 - $ 329 ) that expire between 2031 and 2040 and non-refundable British Columbia investment tax credits of $ 258 (2020 – $ 205 ) that expire between 2021 and 2030 . The Company also has Canadian scientific research and development tax incentives of $ 2.8 million (2020 – $ 2.2 million) that do not expire. The Company files U.S. federal, U.S. state, and Canadian income tax returns with varying statues of limitations. The tax years from 2007 to 2021 remain open to examination due to the carryover of unused NOL carryforwards and tax credits. The Company currently is not under examination by any tax authority. Internal Revenue Code (“IRC”) Section 382 and 383 places a limitation on the amount of taxable income that can be offset by NOL and credit carryforwards after a change in control (generally greater than 50 % change in ownership within a three-year period) of a loss corporation. Generally, after a change in control, a loss corporation cannot deduct NOL and credit carryforwards in excess of the IRC Section 382 and 383 limitation. The limitation in the federal and state NOL and research and development credit carryforwards reduce the deferred tax assets, which are further offset by a full valuation allowance. The limitation can result in the expiration of the NOLs and research and development credit carryforwards available. The Company has performed an IRC Section 382 and 383 analysis and determined there was an ownership change in 2013. The Company has not performed any section 382 and 383 analyses since 2013. An assessed change in ownership subsequent to 2013 could limit future use of NOL and research and development credit carryforwards. The acquisition of Adgero Biopharmaceuticals Holdings, Inc. also triggers IRC Section 382 on the pre-acquisition NOLs. An analysis for IRC Section 382 has not been performed at this time on the pre-acquisition NOLs. The CARES Act, was enacted March 27, 2020. Among the business provision, the CARES Act provided for various payroll tax incentives, changes to net operating loss carryback and carryforward rules, business interest expense limitation increases, and bonus depreciation on qualified improvement property. Additionally, the Consolidated Appropriations Act of 2021 was signed on December 27, 2020 which provided additional COVID-19 relief provisions for businesses. The Company has evaluated the impact of both the Acts and has determined that any impact is not material to its financial statements. 10 Commitments and contingencies The Company has the following obligations over the next five fiscal years ending June 30, 2026: 93 Clinical development The Company has entered into contracts for drug manufacturing, clinical study management and safety related to its clinical trials for a total of $ 10,049 . Pursuant to the commitments for clinical trials, the Company has paid a total of $ 2,310 in deposits related to study initiation and certain study costs. These deposits are available to be applied against invoices received from the contract research organization but have not been netted against the Company’s commitments for the fiscal year ended June 30, 2021. Office lease The Company currently rents its shared head office on a one-year renewable lease at $ 2.3 per year and rents its administrative offices on a month-to-month basis at a total rate of $ 3.5 (CA $ 4.4 per month) per month. During the year ended June 30, 2021, the Company recorded a total of $ 40 as rent expense (2020 - $ 40 ). 11 Supplementary statement of cash flows information Year ended June 30, 2021 Year ended June 30, 2020 Series B Preferred Stock common stock dividend (note 8) 17 9 Deemed dividend recognized on beneficial conversion features of Series C Preferred stock issuance (note 8) 3,181 — Non-cash issue costs (note 8) 3,287 182 Deferred costs in accounts payable — 60 Warrants issued as deferred costs (note 7) — 94 Cashless exercise of Series C warrants (note 8) 79 — Conversion of Series B Preferred Stock to common stock (note 8) 4,525 174 Conversion of Series C Preferred Stock to common stock (note 8) 3,713 — Income taxes paid — — Interest paid — — 12 Financial risk management Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or valuation of its financial instruments. The Company is exposed to financial risk related to fluctuation of foreign exchange rates. Foreign currency risk is limited to the portion of the Company’s business transactions denominated in currencies other than the United Sates dollar, primarily general and administrative expenses incurred in Canadian dollars. The Company believes that the results of operations, financial position and cash flows would be affected by a sudden change in foreign exchange rates but would not impair or enhance its ability to pay its Canadian dollar accounts payable. The Company manages foreign exchange risk by converting its US$ to CA$ as needed. The Company maintains the majority of its cash in US$. As of June 30, 2021, Canadian dollar denominated accounts payable and accrued liabilities exposure in US$ totaled $ 59 . a) Foreign exchange risk Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. If foreign exchange rates were to fluctuate within +/-10% of the closing rate at year-end, the maximum exposure is $ 10 . 94 Balances in foreign currencies at June 30, 2021 and 2020 were as follows: June 30, 2021 balances CA$ June 30, 2020 balances CA$ Trade payables 114 167 Cash 30 21 Interest, taxes, and other receivables 11 13 95 b) Interest rate risk The Company is subject to interest rate risk on its cash and cash equivalents and believes that the results of operations, financial position and cash flows would not be significantly affected by a sudden change in market interest rates relative to the investment interest rates due to the short-term nature of the investments. As of June 30, 2021, cash and cash equivalents held by the Company were $ 10,537 . The Company’s cash balance currently earns interest at standard bank rates. If interest rates were to fluctuate within +/-10% of the closing rate at year end the impact of the Company’s interest-bearing accounts will be not be significant due to the current low market interest rates. The only financial instruments that expose the Company to interest rate risk are its cash and cash equivalents. Liquidity risk Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet cash flow requirements associated with financial instruments. The Company continues to manage its liquidity risk based on the outflows experienced for the period ended June 30, 2021 and is undertaking efforts to conserve cash resources wherever possible. The maximum exposure of the Company’s liquidity risk is $ 2,962 as of June 30, 2021. Credit risk Credit risk arises from cash and cash equivalents, deposits with banks, financial institutions, and contractors as well as outstanding receivables. The Company limits its exposure to credit risk, with respect to cash and cash equivalents, by placing them with high quality credit financial institutions. The Company’s cash equivalents consist primarily of operating funds with commercial banks. Of the amounts with financial institutions on deposit, the following table summarizes the amounts at risk should the financial institutions with which the deposits are held cease trading: The maximum exposure of the Company’s credit risk is $ 8 at June 30, 2021 relating to interest, taxes, and other receivables. The credit risk related to uninsured cash and cash equivalents balances is $ 9,909 at June 30, 2021. Cash and cash equivalents $ Insured amount $ Non- insured amount $ 10,537 628 9,909 Concentration of credit risk Financial instruments that subject the Company to credit risk consist primarily of cash and cash equivalents. The Company places its cash and cash equivalents in accredited financial institutions and therefore the Company’s management believes these funds are subject to minimal credit risk. The Company has no significant off-balance sheet concentrations of credit risk such as foreign currency exchange contracts, option contracts or other hedging arrangements. 13 Subsequent events The Company has evaluated its subsequent events from June 30, 2021 through the date these consolidated financial statements were issued and has determined that there are no subsequent events requiring disclosure in these consolidated financial statements other than the items noted below. Registered direct financing On September 24, 2021, the Company announced it had entered into securities purchase agreements with certain investors to raise approximately $ 15 million in gross proceeds, before placement agent fees and other offering expenses payable by the Company, through the issuance of 7,200,000 shares of its common stock, 4,800,000 pre-funded warrants, and investor warrants to purchase up to an aggregate of 12,000,000 shares of common stock in a registered direct offering priced at-the-market under Nasdaq rules. Each share of common stock, or pre-funded warrant, was together with one investor warrant to purchase one share of common stock offered at a combined price of $ 1.25 . The pre-funded warrants are exercisable at $ 0.001 per share until they are exercised in full. The investor warrants have an exercise price of $ 1.25 per share and are exercisable for three and one half years from the date of issuance . In addition, 96 the Company will issue 600,000 agent warrants exercisable at $ 1.5625 per share. The closing of the offering occu r r ed on September 28, 2021. Series C Preferred Stock On August 19, 2021, the Company paid the common stock dividend on its Series C Preferred Stock as well as the Series C Agent Warrants. The common stock dividend corresponds to the 10 % dividend payable on the first anniversary of the initial closing of the Series C Preferred Stock which occurred on August 19, 2020. The 10 % stock dividend is payable on August 19, 2021 to the holders of the Series C Preferred Stock and the Series C Agent Warrants on that date. No dividends are payable on Series C Preferred Stock or Series C Agent Warrants that were converted, or exercised, prior to August 19, 2021. The dividend resulted in 1,698 shares of common stock being issued to the Series C Preferred Stock holders and 210 shares of common stock being accrued to the Series C Agent Warrants holders. The common stock accrued to the Series C Agent Warrants holders will be released to the Series C Agent Warrant holders upon the exercise of the respective Series C Agent Warrant. Subsequent to June 30, 2021, 1,125 shares of Series C-1 Preferred Stock were converted into 970 shares of common stock, 250 shares of Series C-2 Preferred Stock were converted into 206 shares of common stock, and 335 shares of Series C-3 Preferred Stock were converted into 291 shares of common stock. Warrants Subsequent to June 30, 2021, 69 warrants were exercised at $ 1.00 per share and 353 warrants exercisable at $ 3.18 per share expired. Stock Options Subsequent to June 30, 2021, 435 stock options were issued to directors of the Company. The stock options are exercisable at $ 1.24 per share until September 22, 2031 . The options vest in 12 equal monthly installments commencing October 22, 2021 . 97 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.