Attached files
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| 8-K - SEELOS THERAPEUTICS, INC. | v227930_8k.htm |
| EX-2.1 - SEELOS THERAPEUTICS, INC. | v227930_ex2-1.htm |
| EX-99.1 - SEELOS THERAPEUTICS, INC. | v227930_ex99-1.htm |
Exhibit 99.2
Unaudited Pro Forma Financial Information as of and for the Three Months Ended
March 31, 2011 and for the year ended December 31, 2010
Introduction to Unaudited Pro Forma Condensed Consolidated Financial Statements
On June 30, 2011, Apricus Biosciences, Inc. ("Apricus Bio" or the “Company”) and Samm Solutions, Inc. (doing business as BioTox Sciences), a California corporation (“BioTox”) entered into a Stock Purchase Agreement (the “Agreement”), pursuant to which the Company sold to BioTox on that date, all of the outstanding capital stock of Bio-Quant, Inc., which was the Company’s wholly owned subsidiary.
The unaudited pro forma condensed consolidated balance sheet as of March 31, 2011 is presented as if the transaction had occurred as of that date. The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2010 and for the three months ended March 31, 2011 are presented as if the transaction had occurred as of January 1, 2010.
The pro forma adjustments represent, in the opinion of management, all adjustments necessary to present the Bio-Quant operations, which were sold to BioTox, pro forma results of operations and financial position in accordance with Article 11 of Securities and Exchange Commission Regulation S-X and are based upon available information and certain assumptions considered reasonable under the circumstances.
The unaudited pro forma condensed consolidated financial statements should be read in conjunction with Apricus Bio’s consolidated financial statements and notes thereto included in Apricus Bio’s Annual Report on Form 10-K for the period ended December 31, 2010 and its Report on Form 10-Q for the period ended March 31, 2011.
The unaudited pro forma condensed consolidated financial information is for informational purposes only and may not necessarily be indicative of Apricus Bio’s results of operations or financial position for any future period or date. The pro forma adjustments are based upon available information and certain assumptions that Apricus Bio believes are reasonable under circumstances. The actual amounts could differ.
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Apricus Biosciences, Inc. and Subsidiaries
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Pro Forma Condensed Consolidated Balance Sheets
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As reported
March 31, 2011
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March 31, 2011 Adjustments
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Notes
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March 31, 2011
Pro Forma
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Current assets
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Cash and cash equivalents
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$ | 10,175,120 | $ | 500,000 | A | $ | 10,675,120 | ||||||||
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Accounts receivable
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469,133 | (469,133 | ) | B | - | ||||||||||
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Other receivable
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275,990 | - | 275,990 | ||||||||||||
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Restricted cash
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279,260 | - | 279,260 | ||||||||||||
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Prepaid expenses and other current assets
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219,721 | - | 219,721 | ||||||||||||
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Total current assets
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$ | 11,419,224 | $ | 30,867 | $ | 11,450,091 | |||||||||
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Fixed assets, net
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5,251,371 | (573,580 | ) | B | 4,677,791 | ||||||||||
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Intangible assets, net of accumulated amortization
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2,642,014 | (2,642,014 | ) | C | - | ||||||||||
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Accrued rental income and other assets
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224,581 | (70,674 | ) | B | 153,907 | ||||||||||
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Debt issuance cost, net of accumulated amortization
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65,115 | - | 65,115 | ||||||||||||
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Total assets
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$ | 19,602,305 | $ | (3,255,401 | ) | $ | 16,346,904 | ||||||||
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Liabilities and Stockholders' Equity
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Current liabilities
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Short-term borrowing from banks
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$ | 216,000 | $ | (216,000 | ) | B | $ | - | |||||||
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Accounts payable and accrued expenses
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1,410,796 | (334,586 | ) | B | 1,076,210 | ||||||||||
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Payroll related liabilities
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613,237 | (249,243 | ) | B | 363,994 | ||||||||||
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Deferred revenue
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195,420 | (185,220 | ) | B | 10,200 | ||||||||||
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Capital lease payable - current portion
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31,723 | (31,723 | ) | B | - | ||||||||||
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Deferred compensation - current portion
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70,726 | - | 70,726 | ||||||||||||
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Total current liabilities
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$ | 2,537,902 | $ | (1,016,772 | ) | $ | 1,521,130 | ||||||||
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Long term liabilities
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Convertible notes payable
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$ | 4,000,000 | $ | - | $ | 4,000,000 | |||||||||
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Deferred revenue
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69,700 | - | 69,700 | ||||||||||||
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Capital lease payable
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100,153 | (97,153 | ) | B | 3,000 | ||||||||||
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Deferred compensation
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786,495 | - | 786,495 | ||||||||||||
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Total liabilities
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$ | 7,494,250 | $ | (1,113,925 | ) | $ | 6,380,325 | ||||||||
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Commitments and contingencies
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Stockholders' equity:
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Common stock
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$ | 19,607 | $ | - | $ | 19,607 | |||||||||
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Additional paid-in capital
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216,739,662 | 216,739,662 | |||||||||||||
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Accumulated deficit
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(204,651,214 | ) | (2,141,476 | ) | D | (206,792,690 | ) | ||||||||
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Total stockholders' equity
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$ | 12,108,055 | $ | (2,141,476 | ) | $ | 9,966,579 | ||||||||
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Total liabilities and stockholders' equity
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$ | 19,602,305 | $ | (3,255,401 | ) | $ | 16,346,904 | ||||||||
-2-
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APRICUS BIOSCIENCES, INC. AND SUBSIDIARIES
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FOR THE 12 MONTHS
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ENDED DECEMBER 31, 2010
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Historical
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Bio-Quant
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Notes
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Pro-Forma
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License fee revenue
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$ | 40,200 | $ | - | $ | 40,200 | |||||||||
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Contract service revenue
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4,932,537 | (4,404,653 | ) | E | 527,884 | ||||||||||
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Total Revenue
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$ | 4,972,737 | $ | (4,404,653 | ) | $ | 568,084 | ||||||||
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Cost of Contract services
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3,942,711 | (3,556,530 | ) | F | 386,181 | ||||||||||
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Gross Profit (Loss)
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$ | 1,030,026 | $ | (848,123 | ) | $ | 181,903 | ||||||||
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Costs and expenses
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Research and development
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$ | 2,110,396 | $ | - | $ | 2,110,396 | |||||||||
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General and administrative
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10,152,485 | (674,250 | ) | G | 9,478,235 | ||||||||||
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Impairment of goodwill and intangible assets
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10,168,122 | - | 10,168,122 | ||||||||||||
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Total costs and expenses
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$ | 22,431,003 | $ | (674,250 | ) | $ | 21,756,753 | ||||||||
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Loss from operations
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$ | (21,400,977 | ) | $ | (173,873 | ) | $ | (21,574,850 | ) | ||||||
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Other income (expense)
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Interest income
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$ | 28,020 | $ | - | $ | 28,020 | |||||||||
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Rental income
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415,078 | - | 415,078 | ||||||||||||
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Other income
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300,000 | - | 300,000 | ||||||||||||
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Interest expense
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(8,850,467 | ) | 24,430 | H | (8,826,037 | ) | |||||||||
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Total other income (expense)
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$ | (8,107,369 | ) | $ | 24,430 | $ | (8,082,939 | ) | |||||||
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Loss before benefit from income taxes
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$ | (29,508,346 | ) | $ | (149,443 | ) | $ | (29,657,789 | ) | ||||||
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Benefit from income taxes
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- | - | - | ||||||||||||
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Net loss
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$ | (29,508,346 | ) | $ | (149,443 | ) | $ | (29,657,789 | ) | ||||||
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Basic and diluted loss per share
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$ | (2.49 | ) | $ | (2.50 | ) | |||||||||
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Weighted average common shares outstanding
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used for basic and diluted loss per share
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11,847,703 | 11,847,703 | |||||||||||||
-3-
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APRICUS BIOSCIENCES, INC. AND SUBSIDIARIES
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FOR THE 3 MONTHS
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ENDED MARCH 31, 2011
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Historical
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Bio-Quant
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Notes
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Pro-Forma
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License fee revenue
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$ | 202,550 | $ | - | $ | 202,550 | |||||||||
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Contract service revenue
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1,384,515 | (1,269,021 | ) | E | 115,494 | ||||||||||
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Total Revenue
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$ | 1,587,065 | $ | (1,269,021 | ) | $ | 318,044 | ||||||||
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Cost of Contract services
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1,005,008 | (912,448 | ) | F | 92,560 | ||||||||||
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Gross Profit (Loss)
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$ | 582,057 | $ | (356,573 | ) | $ | 225,484 | ||||||||
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Costs and expenses
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Research and development
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$ | 1,100,546 | $ | - | $ | 1,100,546 | |||||||||
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General and administrative
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2,906,253 | (255,571 | ) | G | 2,650,682 | ||||||||||
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Impairment of goodwill and intangible assets
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- | - | - | ||||||||||||
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Total costs and expenses
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$ | 4,006,799 | $ | (255,571 | ) | $ | 3,751,228 | ||||||||
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Loss from operations
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$ | (3,424,742 | ) | $ | (101,002 | ) | $ | (3,525,744 | ) | ||||||
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Other income (expense)
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Rental income
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$ | 111,480 | $ | - | $ | 111,480 | |||||||||
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Interest expense, net
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(97,744 | ) | 7,055 | H | (90,689 | ) | |||||||||
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Total other income (expense)
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$ | 13,736 | $ | 7,055 | $ | 20,791 | |||||||||
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Loss before benefit from income taxes
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$ | (3,411,006 | ) | $ | (93,947 | ) | $ | (3,504,953 | ) | ||||||
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Benefit from income taxes
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- | - | - | ||||||||||||
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Net loss
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$ | (3,411,006 | ) | $ | (93,947 | ) | $ | (3,504,953 | ) | ||||||
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Basic and diluted loss per share
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$ | (.18 | ) | $ | (.18 | ) | |||||||||
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Weighted average common shares outstanding
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used for basic and diluted loss per share
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19,141,353 | 19,141,353 | |||||||||||||
-4-
Notes to Pro Forma Condensed Consolidated Financial Statements
Basis of Presentation
The unaudited pro forma condensed consolidated financial statements present financial information for Apricus Bio giving effect to the sale of its Bio-Quant CRO business to BioTox. Apricus Bio received $500,000 in cash at the closing date and is contractually entitled to receive future minimum earn-out payments totaling $4.5 million over the ten year earn-out period or earn-out payments based on between 10% to 15% of the gross revenues of Bio-Quant and BioTox over the ten year earn-out period. Future earn-out payments were not assigned value for this proforma presentation pending Apricus Bio’s assessment of collectability, including collateral evaluation. Upon completion of this assessment, a receivable may be recorded representing the net present value of these future payments. The unaudited pro forma condensed consolidated balance sheet as of March 31, 2011 is presented as if the transaction occurred on that date. The unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2010 and March 31, 2011 are presented as if the transaction had occurred as of January 1, 2010.
Unaudited Pro Forma Condensed Consolidated Financial Adjustments:
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A)
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This pro forma adjustment reflects proceeds of $0.5 million from the sale to BioTox.
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B)
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This pro forma adjustment removes the assets and liabilities that were sold to BioTox.
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C)
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This adjustment reflects the write-off of the intangible assets associated with the Bio-Quant CRO business.
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D)
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This adjustment reflects the estimated non-cash loss of $2.1 million on the sale of the business to BioTox primarily related to the disposition of $2.6 million of intangibles without consideration of the future earn-out amounts as the net present value and collectability of those amounts has not been assessed at this time. This loss is reflected in the unaudited pro forma condensed consolidated balance sheet, but is not reflected in the unaudited pro forma condensed consolidated statements of operations included herein since this adjustment is non- recurring and directly attributable to the transaction. This loss is currently being assessed and is subject to change based on the valuation of the collateral.
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E)
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These adjustments reflect the elimination of revenue in connection with the Bio-Quant CRO business.
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F)
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These adjustments reflect the elimination of the cost of goods sold for the Bio-Quant CRO activities.
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G)
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These adjustments reflect the elimination of the general and administrative cost for the Bio-Quant CRO activities.
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H)
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These adjustments reflect the elimination of interest expense related to the line of credit in place for the Bio-Quant CRO business.
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-5-