On November 24, 2021 Allarity Therapeutics A/S ("Allarity A/S" or the "Company") reported a voluntary offer and offer document to the shareholders of Allarity A/S to acquire all shares in Allarity A/S (the "Offer"), with the intent of completing the Company’s recapitalization and reorganization ("Recapitalization") into a US holding company (Allarity Therapeutics, Inc., a Delaware corporation, hereinafter "Allarity Delaware") and listing on the US Nasdaq Stock Market, as initially announced on May 21, 2021 and approved by the shareholders at the extraordinary general meeting on November 22, 2021 (Press release, Allarity Therapeutics, NOV 24, 2021, View Source [SID1234596083]).

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The Tender Period commences on November 25, 2021, and expires on December 9, 2021, at 3:00 pm CET. The Tender Period may be extended by the Board of Directors at its discretion. Settlement is expected to commence on or around December 20, 2021. Allarity A/S has reserved the right to extend the acceptance period for the Offer and to postpone the settlement date.

Summary

The Board of Directors of Allarity A/S unanimously recommends the Company’s shareholders to accept the Offer.
The Offer is being made in connection with the Company’s recapitalization and reorganization into a US holding company, approved by unanimous vote at the Company’s extraordinary general meeting held on November 22, 2021, in order to effect the Company’s migration to the U.S. Nasdaq stock market.
Shareholders in Allarity A/S are being offered the opportunity to swap their existing shares for shares in Allarity Delaware which is currently a wholly-owned subsidiary of Allarity A/S.
Shareholders in Allarity A/S that accept the Offer will receive shares in Allarity Delaware in relation to their existing holding in Allarity A/S, where fifty (50) existing Allarity A/S held shares entitle accepting shareholders to one (1) new share in Allarity Delaware (the "Exchange Ratio").
In the event that the holding is not exactly divisible by fifty (50), the Offer will result in fractional shares. Such fractional shares cannot be validly issued under US law and will therefore be settled in cash.
After having accepted the Offer, shareholders’ nominees (bank, custodian, or other broker) will receive the tradeable US shares on shareholders’ behalf, and thereafter shareholders will be able to trade these new shares on US Nasdaq through each shareholder’s nominee. The immediate availability to trade and transact on your new Allarity Delaware shares may depend on how your nominee (bank, custodian, or other broker) elects to receive such new shares.
Allarity A/S shareholders who participate in the Offer will, as of the completion of the Recapitalization, own the same percentage of Allarity Delaware as they did in Allarity A/S prior to the Recapitalization, subject only to adjustments due to cash compensation being made with regard to fractional shares if any, and subject to ownership dilution due to the announced investment from 3i LP.
The Offer will be completed through one capital decrease of nominal DKK 11,873,736 and up to eight capital decreases of nominal DKK 989,478 each in Allarity A/S down to nominal DKK 400,000.
In the event that not all shareholders sell their Shares to Allarity A/S in the Offer, the remaining shares in Allarity Delaware are expected to be distributed to such shareholders as dividends or as liquidation proceeds in connection with the liquidation of Allarity A/S. Any such distributions may be subject to withholding taxes as applicable.
It is a condition for the acceptance of the Offer that the individual shareholder offers all shares held by the shareholder during the Tender Period. Hence, partial participation in the Offer is not possible.
Steve Carchedi, CEO of Allarity A/S, commented: "We have come a long way since this Company began humbly, more than a decade ago, as a small start-up outside of Copenhagen, Denmark. Now, we stand ready to take a quantum leap forward by migrating onto the US NASDAQ and realizing our true potential. Our Board of Directors, together with our executive management team, universally support this transformative migration of our Company to the US NASDAQ. We believe that this move is not only in the best interests of our shareholders and our Company, but is crucial and necessary for our achievement of Allarity’s vision to realize the promise of personalized cancer care by bringing our novel therapeutics and DRP companion diagnostics to market and to cancer patients."

Further information

For further information about the Offer is available in the Offer Document which is available for download; please visit: www.allarity.com/offer.

The rationale for the proposed combination

The purpose of the recapitalization and reorganization is to enable the Company to further its mission of facilitating personalized medicine for cancer patients through advancing its pipeline programs and DRP companion diagnostics. It is expected that the change of marketplace will enhance the Company’s ability to achieve market values more in line with its US Nasdaq listed peer group and secure the necessary financing for its future success, with greater participation by institutional investors who primarily invest in US listed companies. The USD 20,000,000 investment is subject to, inter alia, a listing of the shares of Allarity Delaware on the US Nasdaq Stock Market.

Background for the Offer

On May 21, 2021 Allarity A/S announced that it has entered into an agreement with 3i LP, a U.S. fund formed under a single family office umbrella investing in public companies, for a USD 20,000,000 investment (the "Securities Purchase Agreement") to support Allarity A/S’ recapitalization and reorganization into Allarity Delaware and an application for listing on the U.S. Nasdaq Stock Market. The USD 20,000,000 investment will be made directly into Allarity Delaware and was subject to, inter alia, completion of the Reorganization and a listing of the Delaware Common Stock on the U.S. Nasdaq Stock Market. Shareholders of Allarity A/S approved the investment by 3i LP and the Reorganization Agreement at the extraordinary general meeting held on November 22, 2021.

Allarity Delaware has initially been organized as a wholly owned subsidiary of Allarity A/S and as of the date of this Offer Document has no business operations or assets and has engaged in no commercial activities other than pursuing the Reorganization described herein and in the information statement/prospectus.

Simultaneously with the execution of the Securities Purchase Agreement, Allarity A/S has entered into a Plan of Reorganization and Asset Purchase Agreement with Allarity Delaware to facilitate Allarity Delaware becoming a U.S. holding company listed on the U.S. Nasdaq Stock Market (the "Reorganization Agreement"). As of November 25, 2021, Allarity Delaware purchased, indirectly through a special purpose wholly owned subsidiary, all of the assets and assumed substantially all of the liabilities of Allarity A/S in exchange for shares of common stock in Allarity Delaware, for which an application for trading on the U.S. Nasdaq Stock Market has been made to be effective on completion of the Recapitalization. The purchase is conditional upon completion of the Recapitalization Agreement.

In connection with receipt by Allarity A/S of the Delaware Common Stock, Allarity A/S is, by way of publication of this Offer Document, commencing a share swap program offering the shareholders of Allarity A/S to exchange their shares in Allarity A/S with Allarity Delaware common stock on the basis of the Exchange Ratio. In the event that not all shareholders exchange their Shares to Allarity A/S in the Offer the remaining Delaware Common Stock are expected to be distributed to such shareholders as dividends or as liquidation proceeds in connection with a liquidation of Allarity A/S. Withholding taxes may apply to such distributions and will be deducted accordingly.

As a result of the Recapitalization, Allarity Delaware will become the direct or indirect holder of all of the assets and substantially all of the liabilities formerly held by Allarity A/S, except for the shareholding in Allarity Delaware and a certain level cash position to defray running costs also related to liquidation. Allarity A/S’ shareholders who participate in the Offer will, as of the completion of the Recapitalization, own the same percentage of Allarity Delaware as they did in Allarity A/S prior to the Recapitalization, subject only to adjustments due to cash compensation being made with regard to fractional shares, if any, and subject to ownership dilution due to the announced investment from 3i LP.

Upon the completion of the Recapitalization, 3i LP will invest USD 20,000,000 in Allarity Delaware in exchange for convertible preferred stock in Allarity Delaware at an initial fixed conversion price of USD 9.906, which, if fully converted, would be convertible into a 20% ownership of the Allarity Delaware shares of common stock over time, subject to the condition that 3i may not beneficially own more than 4.99% of Allarity Delaware shares of common stock at any point in time. There is an implied pre-investment value for Allarity Delaware of USD 80,000,000 and a post-investment implied value of USD 100,000,000 assuming that the Recapitalization is completed and that Allarity Delaware is listed on the U.S. Nasdaq Stock Market.

It is the belief of the Board of Directors that the Reorganization, the listing of Allarity Delaware on the U.S. Nasdaq Stock Market and completion of the 3i LP investment will secure necessary working capital, give better access to future capital, unlock the true value of the Company, and in the end increase the value for the shareholders in a more liquid and accessible market. For further information on the reasons behind the Reorganization please see pages 7 and 8 of the Registration Statement.