Kitov Pharma Announces ADS Ratio Change

TEL AVIV, Israel, Aug. 12, 2020 (GLOBE NEWSWIRE) -- Kitov Pharma Ltd. (“Kitov”) (NASDAQ/TASE: KTOV), a clinical-stage company advancing first-in-class therapies to overcome tumor immune evasion and drug resistance, announced today that the Company will change the ratio of its American Depositary Shares (ADSs) to ordinary shares from one (1) ADS representing one (1) ordinary shares to a new ratio of one (1) ADS representing ten (10) ordinary shares. The ratio change will be effective at the beginning of trading on August 21, 2020. The primary purpose of the ADS ratio change is to enable the Company to regain compliance with the $1.00 minimum bid price requirement for continued listing on the Nasdaq Capital Market. 

For ADS holders, the ratio change will have the same effect as a one-for-ten reverse ADS split. On the effective date, each ADS holder will be required to exchange every ten (10) ADSs then held for one (1) new ADS. The Bank of New York Mellon, the depositary bank, will arrange for the exchange of the current ADSs for the new ones. The Company’s ADSs will continue to trade on the NASDAQ Capital Market under the symbol “KTOV,” although a new CUSIP number 49803V206 has been assigned as a result of the change in the ratio of ADS to ordinary shares. The change in the ADS ratio will have no impact on Kitov’s ordinary shares, which are traded on The Tel Aviv Stock Exchange, and holders of Kitov’s ordinary shares are entirely unaffected by the new exchange ratio for ADSs. Upon effectiveness of the ratio change, each outstanding Series A warrant to purchase one ADS, currently trading on the Nasdaq Capital Market under the symbol “KTOVW,” shall become a warrant to purchase 1/10 of one ADS, at an exercise price of $37.80 per one full ADS. Proportional adjustments will be made to all of the Company's other outstanding non-public warrants to purchase ADSs.

No fractional new ADSs will be issued in connection with the change in the ADS ratio. Instead, fractional entitlements to new ADSs will be aggregated and sold by the depositary bank and the net cash proceeds from the sale of the fractional ADS entitlements (after deduction of fees, taxes and expenses) will be distributed to the applicable ADS holders by the depositary bank.

As a result of the change in the ADS ratio, the ADS price is expected to increase proportionally, enhancing the suitability of the ADSs for trading on the Nasdaq Capital Market, although the Company can give no assurance that the ADS price after the change in the ADS ratio will be equal to or greater than ten times the ADS price before the change.