TuHURA Biosciences, Inc./NV

Note 1—Description of business and basis of presentation

TuHURA Biosciences, Inc., a Nevada corporation ("we”, “our”, “TuHURA”, or the “Company”), is a clinical stage immuno-oncology company developing novel personalized cancer vaccine product candidates designed to overcome primary resistance to immunotherapies like checkpoint inhibitors. The Company has entered into a Special Protocol Assessment agreement with the FDA for a single Phase 3 randomized placebo and injection controlled trial for IFx-2.0, the Company’s lead personalized cancer vaccine product candidate, as adjunctive therapy to pembrolizumab (Keytruda®) in the first line treatment of patients with advanced or metastatic Merkel cell carcinoma who are checkpoint inhibitor naïve utilizing the FDA’s accelerated approval pathway. The Company is also developing novel bi-functional antibody drug conjugates, or ADCs, targeting myeloid derived suppressor cells, or MDSCs, to modulate their immunosuppressive effects on the tumor microenvironment to overcome acquired resistance to immunotherapies and IFx-3.0 as an innate immune agonist candidate for intravenous or autologous whole cell administration for blood related cancers.

We were formed on June 24, 2009 under the name Berry Only Inc. On January 25, 2013, we entered into and closed an 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 our wholly-owned subsidiary. On August 19, 2020, we completed the merger with Adgero Biopharmaceuticals Holdings, Inc., a Delaware corporation (“Adgero”), in which Adgero continued its existence under Delaware law and became our direct, wholly-owned subsidiary. Following the completion of the merger, we changed our name from Del Mar Pharmaceuticals, Inc. to Kintara Therapeutics, Inc. (“Kintara”) and began trading on Nasdaq under the symbol “KTRA.”

In the opinion of Management, the accompanying unaudited condensed consolidated financial statements are prepared in accordance with instruction for Form 10-Q, include all adjustments which we considered necessary for a fair presentation of the results for the periods presented. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the 2024 Annual Report. The results for the three months ended March 31, 2025 are not necessary indicative of the results to be expected for future periods or the full year.

Reverse Merger with Kintara Therapeutics, Inc.

On October 18, 2024, we completed a reverse merger transaction contemplated by its Agreement and Plan of Merger, dated April 2, 2024 (the “Kintara Merger Agreement”), with TuHURA Biosciences, Inc., a privately-held Delaware corporation (“Legacy TuHURA”), and Kayak Mergeco, Inc., a Delaware corporation wholly-owned subsidiary of TuHURA (“Kintara Merger Sub”). Pursuant to the Kintara Merger Agreement, Kintara Merger Sub merged with and into Legacy TuHURA with Legacy TuHURA surviving the merger (the “Kintara Merger”) and becoming TuHURA’s direct, wholly-owned subsidiary. In connection with the completion of the Kintara Merger, effective at 12:01 a.m. Eastern Time on October 18, 2024, TuHURA effected a 1-for-35 reverse stock split of its common stock. Effective at 12:03 a.m. Eastern Time on October 18, 2024, TuHURA completed the merger, and effective at 12:04 a.m. Eastern Time on October 18, 2024, TuHURA changed its name from Kintara Therapeutics, Inc. to “TuHURA Biosciences, Inc.”

Agreement and Plan of Merger with Kineta, Inc.

On May 5, 2025, the Company, Kineta, Inc., a Delaware corporation (“Kineta”), Hura Merger Sub I, Inc., a Delaware corporation and direct wholly-owned subsidiary of the Company (“Merger Sub I”), Hura Merger Sub II, LLC, a Delaware limited liability company and direct wholly-owned subsidiary of the Company, and Craig Philips, solely in his capacity as the representative, agent and attorney-in-fact of the stockholders of Kineta, entered into the First Amendment to Agreement and Plan of Merger (the “Amendment”) to amend the terms of the previously disclosed Agreement and Plan of Merger, dated December 11, 2024 (the “Original Agreement”, and as amended by the Amendment, the “Kineta Merger Agreement”), by and among TuHURA, Kineta, Merger Sub I, Merger Sub II, and the Stockholder Representative.

Pursuant to the terms of the Kineta Merger Agreement, among other things and subject to the terms and conditions set forth therein, Merger Sub I will (a) merge with and into Kineta (the “First Merger”), with Kineta being the surviving corporation of the First Merger, also known as the “Surviving Entity”; and (b) immediately following the First Merger and as part of the same overall transaction as the First Merger, the Surviving Entity will merge with and into Merger Sub II (the “Second Merger” and, together with the First Merger, the “Mergers” ), with Merger Sub II being the surviving company of the Second Merger, also known as the “Surviving Company.” The Mergers are intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.

TuHURA filed a Registration on Form S-4 in connection with the proposed Mergers on February 7, 2025, as subsequently amended on May 6, 2025, and May 8, 2025 (as amended, the “Registration Statement”), which includes a joint proxy statement/prospectus therein. The Mergers are expected to close in the second quarter of 2025, subject to the satisfaction or waiver of the closing conditions under the Merger Agreement.

Merger Consideration

Under the terms of the Kineta Merger Agreement, upon the completion of the Mergers, Kineta stockholders will receive their pro rata share (based on the number of Kineta fully diluted shares held by them) of aggregate merger consideration consisting of a combination of cash and shares of TuHURA common stock (the “Merger Consideration”). Pursuant to the Kineta Merger Agreement, the aggregate cash component of the Merger Consideration is a base cash amount of $6,005,000 (consisting of the difference of $12,000,000 and (i) the aggregate $5,995,000 TuHURA has advanced to Kineta under the Exclusivity and Right of First Offer Agreement, dated July 3, 2024 (the “Exclusivity Agreement”), (ii) the sum of Kineta’s working capital deficit calculated as of the closing of the Mergers pursuant to the Kineta Merger Agreement, and (iii) any working capital loans made by TuHURA to Kineta between the signing of the Original Agreement and closing of the Mergers. The aggregate share component of the Merger Consideration consists of an aggregate of up to approximately 3,998,053 shares of TuHURA common stock, subject to a six-month holdback of up to approximately 1,129,883 of such shares to satisfy certain additional liabilities of the closing date that may be identified after the closing. As part of the Merger Consideration, Kineta stockholders will be entitled to payments of legacy assets not related to Kineta’s KVA12123 product and technology that Kineta may receive following the closing of the Mergers from pre-closing sales by Kineta of certain non-KVA12123 products and technologies.

In connection with the Kineta Merger Agreement, TuHURA and Kineta entered into a Clinical Trial Funding Agreement (the “CTF Agreement”) under which TuHURA agreed to continue to fund clinical trial expenses for KVA12123 in an amount of up to $900,000, which may be increased upon mutual agreement. Any amounts loaned to Kineta under the CTF Agreement shall be evidenced by a secured promissory note bearing simple interest at 5% per annum payable on the earlier of (a) following the closing of the Mergers, any date on which TuHURA demands payment by written notice to Kineta or (b) if the Kineta Merger Agreement is terminated, within ten days following the date of such termination. The Company has advanced $250,000 in working capital loans and approximately $852,000 under the CTF Agreement through March 31, 2025.

The Kineta Merger Agreement has been unanimously approved by the boards of directors of both companies and is subject to Kineta stockholder approval. The completion of the Mergers is also subject to the satisfaction or waiver of certain other conditions, including the approval by TuHURA’s stockholders of an increase in the number of authorized shares of TuHURA common stock, Kineta’s working capital deficit not exceeding $6,000,000 at the time of closing, the effectiveness of the Registration Statement registering the shares of TuHURA common stock issuable to the Kineta stockholders in the Mergers, and other customary closing conditions. The Mergers are currently targeted to close in the second quarter of 2025.

Note 2—Summary of significant accounting policies

Basis for Consolidation– The condensed 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 accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Adgero Biopharmaceuticals Holdings Inc., Adgero Biopharmaceuticals, Inc., Veterinary Oncology Services, and Legacy TuHURA. All intercompany balances and transactions have been eliminated in consolidation.

The Company’s significant accounting policies are described herein and in Note 2, “Summary of significant accounting policies,” in the 2024 Annual Report. There have been no changes to the significant accounting policies during the three months ended March 31, 2025

Accounting Estimates – The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect various amounts reported in condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Grant Income – The Company assumed in the Kintara Merger a $2,000,000 Business Innovation Research grant, a two year grant that was initiated in June 2023 and set to expire in June 2025, to support the clinical development of REM-001 for the treatment of CMBC. As of the closing date of the Kintara Merger, the balance under the grant was $900,000. For the three months ended March 31, 2025 and 2024, the Company recognized approximately $252,000 and $0 of grant income in the condensed consolidated statements of operations.

Research and Development Expenses – Research and development consists of expenses incurred in connection with the discovery and development of product candidates. The Company expenses research and development costs as incurred.

Concentration of Credit Risk – The Company maintains cash balances in domestic financial institutions. These balances are insured by the Federal Deposit Insurance Corporation up to $250,000. As of March 31, 2025, the uninsured portion of cash held by the Company was approximately $5,600,000.

Stock Compensation Expense – The Company accounts for stock-based awards to employees and nonemployees using the fair value-based method to determine compensation for all arrangements where shares of stock or equity instruments are issued for compensation. Fair value of each common stock option is estimated on the date of grant using the Black-Scholes valuation model. The Black-Scholes model uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatility is based on historical volatility of a peer group’s common stock and other factors estimated over the expected term of the options. The expected term of the options granted is derived using the “simplified method” which computes expected term as the average of the sum of the average vesting term plus the contract term. The risk-free rate is based on the U.S. Treasury yield.

Business Combinations and Asset Acquisitions – We account for acquired businesses using the acquisition method of accounting, which requires that the assets acquired, and liabilities assumed be recorded at the date of acquisition at their respective fair values if the acquisition meets the definition of a business combination. If the acquisition does not meet the definition of a business combination, then it is accounted for as an asset acquisition and the purchase consideration is allocated to the acquired assets.

ASC 805, Business Combinations, provides a model for determining whether an acquisition represents a business combination. In order to be a business, the integrated set of activities of the acquired entity needs to have an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired entity must also pass the “Screen Test” which involves determining whether the acquisition represents an in-substance asset acquisition based on whether the fair value of the gross assets acquired is “substantially all” concentrated in a single asset or group of similar assets. This evaluation excludes certain acquired assets such as cash, deferred taxes, and goodwill associated with deferred taxes, but includes all other gross assets, including any consideration transferred in excess of the identified assets.

Segment data– In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The Company has adopted ASU 2023-07, and the guidance did not have a material impact on the Company's condensed consolidated financial statements. The Company operates in one reportable segment, which includes all activities related to advancing therapies for cancer treatment. The determination of a single reportable segment is consistent with the consolidated financial information regularly provided to the Company’s chief operating decision maker (CODM), which is itschief executive officer, who reviews and evaluates consolidated net loss for purposes of assessing performance, making operating decisions, allocating resources and planning and forecasting for future periods. The measure of segment assets is reported on the balance sheet as total assets. There isno segment revenue for thethree months ended March 31, 2025, and 2024. The accounting policies of the cancer treatment segment are the same as those described in the summary of significant accounting policies. All tangible assets are held in the United States.

Net loss per share – Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is the same as basic net loss per share, since the effects of potentially dilutive securities are antidilutive given the Company has reported net losses for each period presented.

Note 3—Liquidity and management’s plans

The Company has been engaged in research and development activities related to ImmuneFx, the Company’s proprietary, multi-indication immunomodulatory platform, which will require additional investment until revenue-generating activities can begin.

The Company has historically incurred negative cash flows from operations.

For the three months ended March 31, 2025, the Company incurred $4.7 million of negative cash flows from operations. The Company has approximately $6.2 million of cash and cash equivalents on hand at March 31, 2025. The Company expects that its existing capital resources, including anticipated payment of the Warrant Exercise Notes (as defined and described in Note 9 below), will be sufficient to fund the Company’s planned future operations into the late fourth quarter of 2025.

The Company expects to raise cash through the sale of preferred shares, common shares, debt issuances, obtaining grants, or commercial partnerships. However, there can be no assurance that any fundraising will be achieved or on commercially reasonable terms, if at all. As such, there is substantial doubt about the Company’s ability to continue as a going concern for the next 12 months from the date that these unaudited interim consolidated financial statements were available to be issued.

Note 4—Net loss per share

Basic and diluted net loss per share attributable to common stockholders was calculated as follows:

Common stock warrants in the amount of 279,029 issued to our financial advisor, H.C. Wainwright & Co., LLC, were not outstanding as common shares as of March 31, 2025, however included in the weighted-average common shares outstanding – basic and diluted as if they were considered outstanding.

The Company’s potential dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. For the three months ended March 31, 2025 and 2024, the Company excluded the following potential common shares from the computation of diluted net loss per share attributable to common stockholders for the period because including them would have had an anti-dilutive effect:

Note 5—Other current assets

Other current assets consist of the following as of March 31, 2025, and December 31, 2024:

Note 6—Property and equipment, net

Property and equipment, net consists of the following as of March 31, 2025, and December 31, 2024:

Depreciation and amortization of property and equipment totaled approximately $14,000 and $34,000 for thethree months ended March 31, 2025, and 2024, respectively.

Note 7—Accounts payable and accrued expenses

Accounts payable and accrued expenses consist of the following as of March 31, 2025, and 2024:

Note 8—Income taxes

Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, including its net operating losses. Based on its history of operating losses, the Company believes that it is more likely than not that the benefit of its deferred tax assets will not be realized. Accordingly, the Company has provided a full valuation allowance for deferred tax assets as of March 31, 2025, and December 31, 2024.

Note 9—Stockholders’ equity

As of March 31, 2025, the Company had two classes of stock authorized in its Articles of Incorporation, as amended (the “Articles”).

Common Stock

The Company is authorized to issue up to 75,000,000 shares of common stock pursuant to its Articles. Holders of common stock are entitled to one vote for each share of common stock. As of March 31, 2025, there were 43,680,396 shares of common stock outstanding.

Preferred Stock

The Company is authorized to issue up to 5,000,000 shares of Preferred Stock pursuant to its Articles.

The historical Kintara Series A Preferred Stock were assumed in connection with the Kintara Merger and 278,530 are outstanding and have a stated value of $278,530 as of March 31, 2025, and December 31, 2024.

Warrants

The following table summarizes the Company’s outstanding common stock warrants as of March 31, 2025

Warrants exercised

There were 173,268 warrants to purchase shares of common stock that were exercised from January 1, 2025 through March 31, 2025, with proceeds in the amount of $504,211. All exercised warrants entitled the holder thereof to purchase one share of Company common stock. The warrant shares are “restricted securities” within the meaning of federal securities laws.

Note receivable to shareholders in connection with warrants exercised

On February 12, 2025, four holders (the “Makers”) of common stock purchase warrants (the “Warrants”) of the Company made and issued to the Company secured promissory notes (the “Warrant Exercise Notes”) in the aggregate principal amount of $3,011,373 as payment of the exercise price of an aggregate of 1,034,836 Warrants held by the Makers. The Makers were comprised of KP Biotech Group, LLC, CA Patel F&F Investments, LLC, Dr. Kiran C. Patel and Donald Wojnowski. Upon the exercise of the Warrants, the Company issued to the Makers an aggregate of 1,034,836 Warrant Shares, all of which are “restricted securities” within the meaning of the federal securities laws. The Warrant Exercise Notes are due and payable on May 30, 2025. In the event that a Warrant Exercise Note is not paid in full by the Maturity Date, the interest rate on such Warrant Exercise Note increases to 18% per annum.

Note 10—Stock option plans

Stock options

The Company uses the Black-Scholes option pricing model to estimate the fair value of stock-based awards on the date of grant. The assumptions employed in the calculation of the fair value of share-based compensation expense were calculated as follows for the three months ended March 31, 2025 and 2024:

Below is a summary of stock option activity for the three months ended March 31, 2025:

Options outstanding had an intrinsic value of $1,183,000 and $5,494,000 as of March 31, 2025 and December 31, 2024, respectively. As of March 31, 2025, there was approximately $14,000,000 of unrecognized stock compensation, which will be recognized over the next three years.

Stock compensation expense

Total stock-based compensation expense for thethree months ended March 31, 2025 and 2024 was allocated as follows:

Note 11—Commitments and contingencies

Lease Commitments – The Company leases facilities under non-cancelable operating leases for the laboratory and offices in Tampa, Florida. The current lease expires in March 2026.

Future minimum lease payments under these leases are as follows:

Total lease expense was approximately $70,000 and $62,000 for thethree months ended March 31, 2025 and 2024, respectively.

Cash paid for amounts included in the measurement of lease liabilities was approximately $43,000 and $33,000 for thethree months ended March 31, 2025 and 2024.

For the current lease, the weighted-average lease term is 1.00 years and 2.00 years and the weighted average discount rate is 10.0% and 10.0% as of March 31, 2025 and 2024

Employment Agreements – The Company maintains employment agreements with its Chief Executive Officer and Chief Financial Officer, each entered into in May 2023 by Legacy TuHURA and as subsequently assumed by the Company in connection with the closing of the Kintara Merger.

Future minimum payments under these employment agreements are as follows:

Note 12—Subsequent events

Subsequent events –The Company has evaluated subsequent events through May 15, 2025 in connection with the preparation of these unaudited interim consolidated financial statements, which is the date they were available to be issued.

Merger Agreement Amendment with Kineta

On May 5, 2025, the Company entered into the Amendment with Kineta, Merger Sub I, Merger Sub II and the Stockholder Representative, amending the terms of the Original Merger Agreement. Under the terms of the Kineta Merger Agreement, as amended, upon the completion of the Mergers, Kineta stockholders will receive their pro rata share (based on the number of Kineta fully diluted shares held by them) of aggregate merger consideration consisting of a combination of cash and shares of TuHURA common stock. Pursuant to the Kineta Merger Agreement, the aggregate cash component of the Merger Consideration is a base cash amount of $6,005,000 (which consists of the difference of $12,000,000 and (i) the aggregate $5,995,000 TuHURA has advanced to Kineta under the Exclusivity Agreement), (ii) the sum of Kineta’s working capital deficit calculated as of the closing of the Mergers pursuant to the Kineta Merger Agreement, and (iii) any working capital loans made by TuHURA to Kineta between the signing of the Original Agreement and closing of the Mergers). The aggregate share component of the Merger Consideration consists of an aggregate of up to approximately 3,998,053 shares of TuHURA common stock, subject to a six-month holdback of up to approximately 1,129,883 of such shares to satisfy certain additional liabilities of the closing date that may be identified after the closing. As part of the Merger Consideration, Kineta stockholders will be entitled to payments of legacy assets not related to Kineta’s KVA12123 product and technology that Kineta may receive following the closing of the Mergers from pre-closing sales by Kineta of certain non-KVA12123 products and technologies.

Inaddition, pursuant to the Amendment, the parties agreed that, as a condition precedent to the obligation of TuHURA and the Merger Subs to effect the Mergers and otherwise consummate the transactions contemplated by the Kineta Merger Agreement,

TuHURA’sfinancing event raised in connection with the Mergers shall have been completed and TuHURA shall have received gross proceeds of no less than Twenty Million Dollars ($20,000,000), which gross proceed shall have been received by TuHURA, or will be received by TuHURA substantially simultaneously with the closing of the Mergers.

Also, pursuant to the Amendment, the end date has been extended from April 30, 2025, to June 30, 2025, subject to possible extension as provided by the Amendment.

Separation Agreement with Dennis Yamashita

On May 5, 2025, TuHURA and Dennis Yamashita, TuHURA’s former Chief Scientific Officer, entered into a Separation Agreement relating to the termination of Mr. Yamashita’s employment with TuHURA (the “Separation Agreement”). The Separation Agreement confirms that Mr. Yamashita’s employment with TuHURA terminated effective December 16, 2024, and it provides for the payment to Mr. Yamashita of severance compensation in the form of $145,833.34 paid over a period of 5 months plus COBRA premium reimbursement for the 6-month period following his termination. The Separation Agreement also provides that Mr. Yamashita vested as to 65,597 of his previously granted options, all of which will be exercisable through January 19, 2027. As a part of the Separation Agreement, Mr. Yamashita has agreed to a general release and waiver of claims against TuHURA upon the terms more particularly set forth in the Separation Agreement.