Financial Performance - The company generated net losses of $83.7 million from February 6, 2024 (inception) to December 31, 2024, with net cash used for operating activities amounting to $57.8 million[411]. - The company reported total operating expenses of $88.1 million for the period from February 6, 2024, to December 31, 2024, with research and development expenses accounting for $75.1 million[441]. - The company has not generated any revenue from product sales and does not expect to do so in the foreseeable future[430]. - The company anticipates needing additional financing in the future to support ongoing research and development efforts[448]. - Interest income for the period was $5.9 million, while interest expense related to a convertible note was $1.5 million[445]. - Net cash used in operating activities from February 6, 2024, to December 31, 2024, was $57.8 million, primarily due to a net loss of $83.7 million[450]. - Net cash used in investing activities during the same period was $330.1 million, mainly attributed to purchases of marketable securities[451]. - Net cash provided by financing activities was $449.5 million, including $228.0 million from Pre-Closing Financing and $188.7 million from PIPE Financing[452]. Cash and Securities - As of December 31, 2024, the company had cash, cash equivalents, and marketable securities totaling $393.7 million, expected to fund operations for at least twelve months[413]. - As of December 31, 2024, the company had $393.7 million in cash, cash equivalents, and marketable securities[446]. Research and Development - The lead program, ORKA-001, targets IL-23p19 for psoriasis treatment and is designed for subcutaneous injection as infrequently as once or twice a year[414][415]. - The company initiated dosing of healthy volunteers in a Phase 1 trial of ORKA-001 in Q4 2024, with interim pharmacokinetic data expected in H2 2025 and initial efficacy data in psoriasis patients anticipated in H2 2026[416]. - ORKA-002, targeting IL-17A/F, is planned to begin dosing healthy volunteers in a Phase 1 trial in Q3 2025, with initial pharmacokinetic data expected in H1 2026[417]. - The company has a third mAb program, ORKA-003, targeting an undisclosed pathway, with potential for indication expansion beyond psoriasis[420]. - The company expects significant increases in both research and development and general and administrative expenses as it expands its operations[438]. - Research and development expenses included $57.7 million for external research and development, primarily related to services rendered by Paragon[442]. - The company recognized $13.5 million in development costs related to ORKA-001 as research and development expenses[459]. - The company is responsible for development costs incurred by Paragon, totaling $3.3 million for ORKA-002, recognized as research and development expenses[460]. - Research and development expenses are expensed as incurred, including costs for salaries, overhead, and contract services, with significant estimates involved in accrued balances[476]. Mergers and Financing - The merger with Pre-Merger Oruka was completed on August 29, 2024, resulting in a name change from ARCA biopharma, Inc. to Oruka Therapeutics, Inc.[421]. - The Pre-Closing Financing raised approximately $275.0 million, with transaction costs of $20.5 million recorded as a reduction to additional paid-in capital[422]. - The merger was accounted for as a reverse recapitalization, with Pre-Merger Oruka deemed the accounting acquirer for financial reporting purposes[426]. - The company raised approximately $188.7 million in net proceeds from a PIPE Financing on September 13, 2024, selling 5,600,000 shares of common stock at $23.00 per share[429]. - The company entered into a Series A Preferred Stock and Convertible Note Purchase Agreement with Fairmount, issuing a Convertible Note with an initial principal amount of $25.0 million, accruing interest at 12.0% per annum[470]. - Prior to the merger, the Convertible Note was converted into 2,722,207 shares of Company Common Stock, based on an aggregate principal amount of $25.0 million plus unpaid accrued interest of $1.5 million[471]. Stock and Compensation - The company executed a 1-for-12 reverse stock split on September 3, 2024, adjusting the share data retrospectively for all periods presented[427]. - Stock-based compensation is measured using the Black-Scholes option-pricing model, with expenses recognized over the requisite service period[477]. - The fair value of Company Common Stock is determined based on the quoted market price following the completion of the merger[478]. - Prior to the merger, common stock valuations were prepared using a hybrid method, including an option pricing method and a probability-weighted expected return method[480]. Contracts and Obligations - The company entered into Option Agreements with Paragon for antibody discovery, with potential milestone payments of up to $12.0 million for clinical development milestones[455][466]. - Total expenses recognized in connection with services provided by Paragon and Paruka under the Option Agreements amounted to $42.0 million[463]. - The company recorded a $1.5 million milestone payment related to the achievement of a development candidate for the ORKA-001 program[459]. - A non-refundable license fee of $150,000 was paid to WuXi Biologics under the Cell Line License Agreement, recognized as a research and development expense[468]. - The company has exclusive licenses for ORKA-001 and ORKA-002, with royalty obligations including a low single-digit percentage for antibody products[465][466]. - The company has contractual obligations for minimum lease payments under its operating lease for headquarters in Menlo Park, California[473]. Miscellaneous - As of December 31, 2024, there is no note payable to a related party[471]. - As of December 31, 2024, the company did not have any off-balance sheet arrangements[483]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[484].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 For the transition period from ________ to ________ Commission file number: 000-22873 Oruka Therapeutics, Inc. (Exact name of registrant as specified in its charter) (650) 606-7910 (Registrant's ...

Merger and Business Combination - Oruka Therapeutics, Inc. completed a business combination with ARCA biopharma, resulting in Oruka securityholders owning approximately 97.61% of the combined company[4]. - The Exchange Ratio for the merger was set at 6.8569 shares of ARCA Common Stock for each share of Oruka Common Stock[7]. - The merger is intended to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code[9]. - The merger involved two stages: the First Merger and the Second Merger, with Oruka becoming a wholly owned subsidiary of ARCA[9]. - Approximately 28.5% of ARCA stockholders and 90% of Oruka stockholders entered into support agreements for the merger[11]. - Following the Merger and a 1-for-12 reverse stock split, the Company had 46,348,968 shares of Common Stock outstanding[22][23]. - The Company ceased to be a shell company as of the Closing Date due to the Merger[127]. - Oruka Therapeutics, Inc. is in the process of integrating operations with ARCA biopharma, Inc., as indicated in the pro forma financial statements[99.5]. Financial Information - A special cash dividend of approximately $23.4 million was paid, distributing $1.613 per share of ARCA Common Stock to stockholders[8]. - The Pre-Closing Financing raised approximately $275.0 million, including $25.0 million from a Convertible Note[14]. - Oruka issued an aggregate of 39,873,706 shares of Common Stock and 9,664,208 pre-funded warrants for gross proceeds of approximately $275.0 million in connection with the Merger[21]. - The Company’s unaudited interim condensed consolidated financial statements for the period from February 6, 2024 (inception) to June 30, 2024 are included in the report[30]. - The audited financial statements of ARCA for the years ended December 31, 2023 and 2022 are incorporated by reference in the Proxy Statement/Prospectus[31]. - The unaudited pro forma condensed combined financial information of ARCA and Oruka for the six months ended June 30, 2024 is provided in the report[32]. - The Company’s management discusses the financial condition and results of operations as of June 30, 2024, highlighting key performance metrics[32]. - Oruka Therapeutics, Inc. reported its financial results for the three months ended June 30, 2024, and the period from February 6, 2024 (inception) to June 30, 2024[99.4]. - Unaudited interim condensed consolidated financial statements for the three months ended June 30, 2024, were provided, indicating the company's financial position[99.3]. Stock and Shareholder Information - A reverse stock split of 1-for-12 is set to take effect on September 3, 2024[5]. - The Reverse Stock Split became effective on September 3, 2024, with trading commencing on a post-split basis[23]. - The Company’s beneficial ownership table indicates a total of 29,398,595 shares of Common Stock outstanding as of August 29, 2024, post-reverse stock split[34]. - Fairmount Funds Management LLC holds 6,611,255 shares, representing 19.99% of shares outstanding[36]. - Venrock Healthcare Capital Partners owns 2,937,064 shares, accounting for 9.99% of shares outstanding[36]. - FMR LLC has 2,573,301 shares, which is 8.75% of shares outstanding[36]. - RTW Investments, LP possesses 1,543,984 shares, equating to 5.25% of shares outstanding[36]. - The group of all executive officers and directors collectively owns 7,548,826 shares, or 23.18% of shares outstanding[36]. - As of the closing date, the company has approximately 29,398,595 shares of common stock issued and outstanding[47]. - The company was listed on The Nasdaq Global Market under the symbol "ORKA" following the merger[47]. - The number of holders of record is approximately 68, excluding a larger number of beneficial holders[47]. Governance and Management - Indemnification agreements were established for directors and executive officers, replacing previous agreements[16]. - The board has determined that all directors, except for the CEO, qualify as independent directors under Nasdaq rules[45]. - The Company appointed Kristine Ball, Carl Dambkowski, and Cameron Turtle to the Audit Committee, with Kristine Ball serving as the chair[118]. - The Compensation Committee was formed with Peter Harwin, Samarth Kulkarni, and Cameron Turtle, with Cameron Turtle as the chair[119]. - The Nominating and Corporate Governance Committee includes Kristine Ball, Samarth Kulkarni, and Peter Harwin, with Peter Harwin as the chair[119]. - The Board appointed Lawrence Klein as President and CEO, and increased its size from five to six members on August 29, 2024[99]. - The newly appointed directors will serve staggered terms, with Class I directors' terms expiring in 2025 and Class III directors' terms expiring in 2027[100]. - The Company believes Dr. Klein is qualified for the Board due to his experience in biotechnology and senior management[103]. - The Company believes Ms. Ball is qualified for the Board due to her executive experience in life sciences and finance[109]. - The Company believes Dr. Dambkowski is qualified for the Board due to his significant experience in biotechnology and academic accomplishments[112]. - The Company believes Dr. Kulkarni is qualified for the Board due to his executive experience in the biopharmaceutical industry[115]. - The Company believes Dr. Turtle is qualified for the Board due to his leadership experience in biopharmaceutical organizations[118]. - The Company believes Mr. Harwin is qualified for the Board due to his experience in biotechnology and fund management[113]. Corporate Policies and Compliance - The Company has obtained insurance covering certain liabilities of its directors and officers effective August 29, 2024[51]. - The Company adopted an amendment and restatement of its Bylaws on August 29, 2024, which includes increasing the quorum requirement for stockholder meetings from one-third to a majority of stock outstanding[122]. - A new Code of Business Conduct and Ethics was adopted on August 29, 2024, which establishes policies regarding conflicts of interest, legal compliance, and anti-corruption standards[124]. - The Company has established a whistleblower hotline and procedures for reporting potential violations under the new Code of Conduct[126]. - The Company has updated its governance structure to align with the new Bylaws and Code of Conduct, removing duplicative provisions[122]. - The Delaware Court of Chancery has been designated as the sole forum for certain types of disputes, as allowed by law[122]. - The Company has opted out of electronic delivery of documents or information under DGCL Section 116[122]. - The Company has made various updates to its governance documents, including clarifying and conforming changes[122]. Employee and Incentive Plans - The 2024 Stock Incentive Plan was approved, allowing for the grant of up to 4,634,897 shares of Company Common Stock[68][70]. - The 2024 Stock Plan will automatically increase the share pool by 5% of diluted stock annually from 2025 to 2034[70]. - Approximately 21 employees and five non-employee directors are expected to be eligible to participate in the 2024 Stock Plan[72]. - The 2024 Employee Stock Purchase Plan (ESPP) was approved with an initial share pool of 463,490 shares, subject to adjustments for changes in capitalization[83][85]. - The ESPP allows eligible employees to purchase shares at a price no less than 85% of the fair market value on the first or last day of the offering period[90]. - Approximately 21 employees are expected to be eligible to participate in the ESPP, with a maximum purchase limit of $25,000 per calendar year[87]. - The ESPP will automatically increase the share pool by 1% of diluted stock annually from 2025 to 2034, unless a lower increase is determined[85]. - Participants can purchase shares through payroll deductions ranging from 1% to 15% of their salary[89]. - The ESPP allows for pro rata allocation of shares if the total number of shares requested exceeds the available shares[86]. - The ESPP will continue until terminated by the Administrator, with provisions for adjustments in case of corporate transactions[97][96]. - Each of the departing executive officers will receive a severance payment equivalent to 12 months of their annual base salary[66]. - The consulting agreement for Mr. Dekker includes a fee of $20,000 for initial services and $250 per hour thereafter, up to a total of $27,500[67]. Strategic Focus and Future Outlook - The Company emphasizes the risks associated with its business, including limited operating history and regulatory challenges[29][25]. - The Company’s forward-looking statements include expectations regarding future performance and market conditions, subject to various risks and uncertainties[25][26]. - Future outlook includes a focus on expanding its market presence and potential strategic partnerships[99.4]. - The company is actively pursuing antibody discovery and option agreements to enhance its research and development capabilities[10.23][10.24]. - The company is planning to leverage its equity incentive plan to attract and retain key talent in the industry[10.15].

Core Points - ARCA biopharma announced a special cash dividend of $1.613 per share, payable on August 28, 2024, to stockholders of record as of August 26, 2024, in connection with its merger with Oruka Therapeutics [1] - The special dividend exceeds 25% of ARCA's stock price on the declaration date, resulting in an ex-dividend date of August 29, 2024, as per Nasdaq rules [2] - The merger with Oruka Therapeutics is expected to close on August 29, 2024, pending the satisfaction or waiver of all conditions under the merger agreement [3] Company Information - ARCA biopharma focuses on developing genetically and other targeted therapies for cardiovascular diseases through a precision medicine approach [4] - Oruka Therapeutics is developing novel biologics aimed at treating chronic skin diseases, with a mission to achieve high rates of complete disease clearance for conditions like plaque psoriasis [5]

Company Overview - ARCA biopharma, Inc. has announced a reverse stock split at a ratio of 1-for-12, effective September 3, 2024, following its merger with Oruka Therapeutics, Inc. [1] - The company will change its name to Oruka Therapeutics, Inc. and its stock symbol to "ORKA" post-merger [1]. Stock Split Details - The reverse stock split will reduce the number of outstanding shares from approximately 14,507,143 to about 1,208,928 shares [2]. - The authorized common stock will increase from 100,000,000 shares to 545,000,000 shares in connection with the merger [2]. - Stockholders will receive cash payments for any fractional shares resulting from the reverse stock split, calculated based on the closing price on September 3, 2024 [2]. Merger Implications - Following the merger, the total issued and outstanding common stock is expected to be approximately 29,490,443 shares, with additional shares underlying warrants and convertible preferred stock [4]. - Proportionate adjustments will be made to the exercise prices and number of shares underlying outstanding equity and warrant awards as a result of the reverse stock split [3]. Company Missions - ARCA biopharma focuses on developing targeted therapies for cardiovascular diseases through a precision medicine approach [5]. - Oruka Therapeutics aims to develop novel biologics for chronic skin diseases, particularly targeting conditions like plaque psoriasis [6].

Group 1 - ARCA biopharma has declared a special cash dividend estimated at $1.59 per share in connection with its merger with Oruka Therapeutics [1][2] - The special dividend will be payable to stockholders of record as of August 26, 2024, with a payment date scheduled for August 28, 2024 [2][3] - The payment of the special dividend is contingent upon ARCA stockholder approval of the merger, which will be voted on at a special meeting on August 22, 2024 [3] Group 2 - ARCA biopharma focuses on developing genetically and targeted therapies for cardiovascular diseases through a precision medicine approach [4] - Oruka Therapeutics is developing novel biologics aimed at treating chronic skin diseases, with a mission to achieve high rates of complete disease clearance for conditions like plaque psoriasis [5]

Core Viewpoint - ARCA biopharma, Inc. is undergoing a strategic review process, including a merger with Oruka Therapeutics, and has reported its second quarter 2024 financial results, highlighting the company's financial position and operational changes. Financial Results - As of June 30, 2024, cash and cash equivalents were $33.3 million, down from $37.4 million as of December 31, 2023, indicating a decrease of approximately 11.5% [6][18]. - General and administrative expenses for the quarter were $3.0 million, an increase of approximately 76.5% from $1.7 million in the same period of 2023 [7][19]. - Research and development expenses decreased to $0.1 million from $0.3 million year-over-year, primarily due to reduced headcount and the cessation of certain research grants [9][19]. - Total operating expenses for the quarter were $3.1 million, compared to $2.0 million in the second quarter of 2023 [10][19]. - The net loss for the quarter was $2.7 million, or $0.18 per share, compared to a net loss of $1.5 million, or $0.10 per share, in the same quarter of 2023 [10][19]. Strategic Developments - In April 2024, ARCA entered into a Merger Agreement with Oruka Therapeutics, which involves a two-step merger process intended to qualify as a tax-free reorganization [2][3]. - The company is in the process of disposing of legacy technology and intellectual property, contingent upon stockholder approval for the merger [4]. - Future operations are highly dependent on the successful completion of the merger, with the possibility of exploring other strategic alternatives if the merger does not proceed [5]. Corporate Update - The company has established a Special Committee to review strategic alternatives, including potential acquisitions, mergers, or licensing transactions [1]. - Significant costs are expected to be incurred in connection with the evaluation of strategic alternatives and the merger, including legal and advisory fees [6][8].

Financial Performance - The net loss for the three months ended June 30, 2024, was $2,678,000, compared to a net loss of $1,480,000 for the same period in 2023, indicating an increase in losses of approximately 80.8%[8] - The company reported a basic and diluted net loss per share of $(0.18) for the three months ended June 30, 2024, compared to $(0.10) for the same period in 2023, reflecting a deterioration of 80%[8] - General and administrative expenses for the three months ended June 30, 2024, were $2,992,000, compared to $1,719,000 for the same period in 2023, an increase of approximately 74.1%[8] - The accumulated deficit increased from $(188,741,000) as of December 31, 2023, to $(193,428,000) as of June 30, 2024, indicating a worsening of the deficit by approximately 2.9%[9] - ARCA biopharma has not generated any revenue to date and has incurred substantial losses and negative cash flows since inception[14] Assets and Liabilities - Total current assets decreased from $37,592,000 as of December 31, 2023, to $33,820,000 as of June 30, 2024, representing a decline of approximately 10.3%[7] - Total liabilities increased from $841,000 as of December 31, 2023, to $1,271,000 as of June 30, 2024, representing an increase of approximately 51.1%[7] - Cash and cash equivalents decreased from $37,431,000 at the beginning of the year to $33,283,000 at the end of the period, a decline of approximately 11.5%[11] - Total stockholders' equity decreased from $37,020,000 as of December 31, 2023, to $32,573,000 as of June 30, 2024, a decline of approximately 12.0%[9] Cash Flow and Operating Activities - The net cash used in operating activities for the six months ended June 30, 2024, was $(4,162,000), compared to $(2,289,000) for the same period in 2023, representing an increase in cash outflow of approximately 82%[11] - The company expects its current cash and cash equivalents to fund operations through the end of fiscal year 2025[15] Research and Development - Research and development expenses for the three months ended June 30, 2024, were $130,000, down from $254,000 in the same period of 2023, reflecting a decrease of approximately 48.8%[8] Strategic Initiatives and Mergers - The company is in the process of merging with Oruka Therapeutics, which is intended to be a tax-free reorganization[13] - The merger will involve the disposal of legacy technology and intellectual property, contingent upon stockholder approval[13] - The future viability of the company is highly dependent on the success of the merger and its ability to raise additional capital[15] - The merger agreement between ARCA and Oruka is set to close with Oruka becoming a wholly owned subsidiary of ARCA, with Oruka stockholders owning approximately 97.61% of the combined company[44] - ARCA anticipates declaring a cash dividend of approximately $20.0 million to pre-First Merger ARCA stockholders, with net cash expected to be around $5.0 million at closing[44] - The financing transaction associated with the merger includes a subscription agreement for the purchase of PIPE Securities totaling approximately $275.0 million[46] - The board of directors of the combined company will consist of six members, all designated by Oruka, with Oruka's CEO leading the new entity[45] - The merger is subject to various closing conditions, including stockholder approvals and Nasdaq's approval for listing[45] Employee Compensation and Management Changes - Dr. Michael Bristow's employment was mutually concluded on April 3, 2024, with a severance payment of 12 months' base salary and a cash payment of $25,000[30] - Retention bonuses for certain employees were increased by 50% in November 2023, totaling $265,000, with unpaid bonuses amounting to $444,000 as of June 30, 2024[33] - The company recorded severance benefits of $159,000 for the former Secretary and General Counsel during the year ended December 31, 2023[34] - Thomas A. Keuer has been appointed as ARCA's President and principal executive officer, effective April 3, 2024[47] - The retention bonus for executives Thomas A. Keuer and C. Jeffrey Dekker has been increased to $200,000[48] Legal and Regulatory Matters - A complaint has been filed against the company regarding a proposed merger, alleging a misleading registration statement, with potential implications for the merger[32] - The company has recorded a full valuation allowance against its net deferred tax assets due to uncertainty in future taxable income[43] Stock Options and Shareholder Matters - The company has outstanding stock options totaling 607,055 as of June 30, 2024, down from 619,782 in 2023[23] - Share-based compensation expense for the three months ended June 30, 2024, was $112,000, compared to $145,000 for the same period in 2023[40] - As of June 30, 2024, options outstanding were 607,055 with a weighted average exercise price of $4.17[42]

Core Viewpoint - Ademi LLP is investigating ARCA (NASDAQ: ABIO) for potential breaches of fiduciary duty and other legal violations related to its transaction with Oruka, where ARCA stockholders will own approximately 2.38% of the combined company, while Oruka stockholders will own about 97.62% [1][2] Group 1 - The investigation focuses on whether ARCA's board of directors is fulfilling their fiduciary duties to all shareholders [2] - Certain ARCA stockholders, holding approximately 28.5% of the outstanding shares, have entered into support agreements to vote in favor of the transaction and against alternative acquisition proposals [1] - ARCA insiders are expected to receive substantial benefits as part of the change of control arrangements [1]

Mergers and Acquisitions Overview - Kuehn Law, PLLC is investigating potential claims related to proposed mergers involving several companies, focusing on whether the boards acted to maximize shareholder value and disclosed material information [1][2] - ARCA Biopharma has entered a merger agreement with Oruka Therapeutics, with ARCA stockholders expected to own approximately 2.38% of the combined entity [1] - Squarespace, Inc. has agreed to sell to Permira, with shareholders set to receive $44.00 per share in cash upon transaction closure [1] - SouthState Corporation is acquiring Independent Bank Group Inc. in an all-stock transaction valued at approximately $2 billion, offering 0.60 shares of SouthState for each share of Independent Bank Group [2] - HMN Financial, Inc. will be acquired by Alerus Financial Corporation, with a share exchange ratio of 1.25 shares of Alerus for each share of HMN [2]