On November 24, 2021 Allarity Therapeutics A/S ("Allarity" or the "Company") reported that the Board of Directors of Allarity has exercised the authorization granted by the shareholders at the Extraordinary General Meeting held on November 22, 2021, to issue new warrants (Press release, Allarity Therapeutics, NOV 24, 2021, View Source [SID1234596082]). The Board has resolved to grant a total of 51,292,653 warrants as a part of a new incentive program for the Board of Directors, employees and consultants in Allarity. All warrants are issued free of charge and are issued to ensure alignment of interests between the Company’s employees, management, Board of Directors, and shareholders as the Company completes its recapitalization, restructuring, and migration to the U.S. Nasdaq stock market.

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The 51,292,653 warrants to employees, consultants and board members of the company are granted as follows:

46,608,675 warrants are granted to the employees of Company, including executive management, and a consultant
4,683,978 warrants are granted to members of the Board of Directors
Each warrant confers the right to subscribe for one share of nominal DKK 0.05 in Allarity Therapeutics A/S at the following exercise prices:

For 38,807,413 warrants, the exercise price for each warrant is SEK 0.945 (Grant 1)
For 7,801,262 warrants, the exercise price for each warrant is SEK 1.592 (Grant 2)
For 4,683,978 warrants, the exercise price for each warrant is SEK 1.85 (Grant 3)

By application of the Black-Scholes formula, the aggregate fair value of the issued warrants subject to Grant 1, Grant 2 and Grant 3 can be calculated as USD $5,143,821, USD $1,034,037 and USD $620,849 (corresponding to DKK 34,172,459, DKK 6,869,520 and DKK 4,124,548), respectively.

Additional terms and conditions applicable to the issued warrants are set forth in appendix 14 to the articles of association of Allarity Therapeutics A/S, provided, however, that 38,807,413 warrants to the employees, including executive management, and consultant shall vest with 25% on the grant date and hereafter with 1/36 per month calculated from 7 July 2021, and that 4,683,978 warrants to the board members shall vest with 25% on the grant date and hereafter with 1/48 per month calculated from 24 November, 2021. A further 7,801,262 warrants shall be deemed fully vested at the time of issuance.

In addition to the above the Board of Directors has with regard to existing outstanding warrants resolved that

With respect to 3,996,864 warrants issued on the terms and conditions set out in Appendix 8 to the articles of association, the Board of Directors has pursuant to clause 5 of Appendix 8 resolved that the warrants may be exercised in an extraordinary exercise window in the period 23 November – 8 December 2021. If these warrants are exercised fully, Allarity A/S will receive SEK 13,189,651 in cash proceeds and the warrants will be replaced with 79,937 Delaware Common Stock by applying an exchange ratio corresponding 3,996,864 divided by 50. In the event that these warrants are not exercised these warrants will lapse and become null and void.
The board of directors has resolved that 4,287,381 existing warrants with an exercise price of SEK 2.20 per Share in connection with the Reorganization Exchange Agreement shall be converted into similar instruments of similar value in Allarity Therapeutics Inc.
The Board of Directors has resolved that 1,980,000 existing warrants with an exercise price of SEK 1.41 per Share in connection with the Reorganization Exchange Agreement shall be converted into similar instruments of similar value in Allarity Therapeutics Inc.
The Board of Directors has resolved that 1,409,555 existing warrants with an exercise price of SEK 2.42 per Share in connection with the Reorganization Exchange Agreement shall be converted into similar instruments of similar value in Allarity Therapeutics Inc.