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8-K/A - FORM 8-K/A - Savara Inc | c24435e8vkza.htm |
Exhibit 99.6
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
The accompanying unaudited pro forma condensed combined statement of operations present the
pro forma consolidated results of operations of the combined company for the nine months ended
September 30, 2011 based upon the historical, unaudited financial statements of ADVENTRX
Pharmaceuticals, Inc. (ADVENTRX) and SynthRx, Inc. (SynthRx), after giving effect to the
acquisition of SynthRx and adjustments described in the following footnotes, and are intended to
reflect the impact of this acquisition on ADVENTRX on a pro forma basis.
On April 8, 2011, SRX Acquisition Corporation, a Delaware corporation and wholly owned
subsidiary of ADVENTRX (Merger Sub), merged with and into SynthRx, Inc. pursuant to the terms of
the Agreement and Plan of Merger, dated February 12, 2011 (the Merger Agreement), by and among
ADVENTRX, Merger Sub, SynthRx and, solely with respect to Sections 2 and 8 of the Merger Agreement,
an individual who was a principal stockholder of SynthRx, the separate existence of Merger Sub
ceased and SynthRx continued as the surviving corporation and a wholly owned subsidiary of
ADVENTRX. As of the effective time of the merger, all issued and outstanding securities of SynthRx
were automatically converted and exchanged into the right to receive from ADVENTRX the
consideration set forth in the Merger Agreement.
The unaudited pro forma condensed combined statement of operations for the nine months ended
September 30, 2011 combines ADVENTRXs historical results for the nine months ended September 30,
2011 with SynthRxs historical results for the three months ended March 31, 2011. The unaudited
pro forma statement of operations gives effect to the acquisition as if it had been consummated on
January 1, 2010. The unaudited pro forma condensed combined statement of operations is
presented for illustrative purposes only. It does not purport to represent what ADVENTRXs
consolidated results of operations would have been had the transaction actually occurred as of
January 1, 2010, and it does not purport to project ADVENTRXs future consolidated results of
operations.
We have not presented a pro forma condensed combined balance sheet as of September 30, 2011,
because the impact of the acquisition of SynthRx, which was completed on April 8, 2011, is
reflected in the unaudited condensed consolidated balance sheet of ADVENTRX Pharmaceuticals, Inc.
as of September 30, 2011, included in ADVENTRXs Quarterly Report on Form 10-Q for the period ended
September 30, 2011, which was filed with the Securities and Exchange Commission on November 8,
2011.
Pro Forma Adjustments
The historical consolidated financial information has been adjusted to give effect to pro
forma events that are (1) directly attributable to the acquisition and (2) factually supportable
and reasonable under the circumstances. There are no events that are expected to have a continuing
impact and therefore, no adjustments to the pro forma condensed combined statement of operations
were made in that regard.
The pro forma adjustments are based upon available information and certain assumptions that
ADVENTRX believes are reasonable under the circumstances.
You should read this information in conjunction with:
| the accompanying notes to the unaudited pro forma condensed combined financial statements included in this Exhibit 99/6 to this Current Report on Form 8-K/A (Amendment No. 3); | ||
| the unaudited condensed consolidated financial statements of ADVENTRX and Subsidiaries as of September 30, 2011 and for the nine months ended September 30, 2011 included in ADVENTRXs Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 8, 2011; | ||
| ADVENTRXs Current Report on Form 8-K related to its acquisition of SynthRx filed with the Securities and Exchange Commission on April 11, 2011; | ||
| ADVENTRXs Amendment No. 1 to the Current Report on Form 8-K related to its acquisition of SynthRx filed with the Securities and Exchange Commission on June 3, 2011; and | ||
| ADVENTRXs Amendment No. 2 to the Current Report on Form 8-K related to its acquisition of SynthRx filed with the Securities and Exchange Commission on October 25, 2011. |
ADVENTRX PHARMACEUTICALS, INC.
(A Development Stage Enterprise)
(A Development Stage Enterprise)
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2011
Pro Forma | Pro Forma | |||||||||||||||
ADVENTRX | SynthRx | Adjustments | Combined | |||||||||||||
Grant revenue |
$ | | $ | | $ | | $ | | ||||||||
Cost of goods sold |
| | | | ||||||||||||
Gross margin |
| | | | ||||||||||||
Operating expenses: |
||||||||||||||||
Research and development |
4,004,180 | 3,000 | | 4,007,180 | ||||||||||||
Selling, general and administrative |
5,379,723 | 35,277 | | 5,415,000 | ||||||||||||
Transaction-related expenses |
1,541,087 | 301,566 | (1,071,090) | (a) | 771,563 | |||||||||||
Depreciation and amortization |
28,735 | | | 28,735 | ||||||||||||
Total operating expenses |
10,953,725 | 339,843 | (1,071,090 | ) | 10,222,478 | |||||||||||
Loss from operations |
(10,953,725 | ) | (339,843 | ) | 1,071,090 | (10,222,478 | ) | |||||||||
Interest income |
51,212 | 26 | | 51,238 | ||||||||||||
Interest expense |
(272 | ) | (1,746 | ) | 1,746 | (b) | (272 | ) | ||||||||
Other expense |
14,830 | | | 14,830 | ||||||||||||
Loss before income taxes |
(10,887,955 | ) | (341,563 | ) | 1,072,836 | (10,156,682 | ) | |||||||||
Provision for income taxes |
| | | | ||||||||||||
Net loss |
(10,887,955 | ) | (341,563 | ) | 1,072,836 | (10,156,682 | ) | |||||||||
Deemed dividends on preferred stock |
| | | | ||||||||||||
Net loss applicable to common stock |
$ | (10,887,955 | ) | $ | (341,563 | ) | $ | 1,072,836 | $ | (10,156,682 | ) | |||||
Loss per common share basic and diluted |
$ | (0.43 | ) | $ | (0.39 | ) | ||||||||||
Weighted average shares outstanding basic and diluted |
25,170,734 | 26,176,966 | ||||||||||||||
See accompanying notes to unaudited pro forma condensed combined statement of operations.
ADVENTRX PHARMACEUTICALS, INC.
(A Development Stage Enterprise)
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
(A Development Stage Enterprise)
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
1. Basis of Presentation
The unaudited pro forma condensed combined statement of operations included herein has been
prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain
information and certain footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles in the United States (U.S. GAAP) have
been condensed or omitted pursuant to such rules and regulations; however, management believes that
the disclosures are adequate to make the information presented not misleading.
We have not presented a pro forma condensed combined balance sheet as of September 30, 2011,
because the impact of the acquisition of SynthRx, which was completed on April 8, 2011, is
reflected in the unaudited condensed consolidated balance sheet of ADVENTRX Pharmaceuticals, Inc.
as of September 30, 2011, included in ADVENTRXs Quarterly Report on Form 10-Q for the period ended
September 30, 2011, which was filed with the Securities and Exchange Commission on November 8,
2011.
2. Acquisition of SynthRx
On April 8, 2011, SynthRx, a private biotechnology company developing a novel, purified,
rheologic and antithrombotic compound, poloxamer 188, now referred to as ANX-188, became a wholly
owned subsidiary of ADVENTRX pursuant to the terms of the Agreement and Plan of Merger, dated
February 12, 2011 (the Merger Agreement), by and among ADVENTRX, SRX Acquisition Corporation, a
wholly owned subsidiary of ADVENTRX, SynthRx and, solely with respect to Sections 2 and 8 of the
Merger Agreement, an individual who was a principal stockholder of SynthRx. The acquisition is
accounted for as a business combination.
As consideration for the transaction, all shares of SynthRx common stock outstanding
immediately prior to the effective time of the merger were cancelled and automatically converted
into the right to receive shares of ADVENTRXs common stock, in the aggregate, as follows:
(i) 862,078 shares (the Fully Vested Shares) of ADVENTRXs common stock, which shares were
issued on April 8, 2011 and represent 1,000,000 shares, less 137,922 shares that were deducted as a
result of certain expenses of SynthRx, and 200,000 of which were deposited into escrow (the
Closing Escrow Amount) to indemnify ADVENTRX against breaches of representations and warranties;
(ii) up to 1,938,773 shares of ADVENTRXs common stock, which shares were issued and
outstanding on April 8, 2011 (the Subject to Vesting Shares, and together with the 862,078 Fully
Vested Shares issued to the former stockholders of SynthRx and the escrow agent, the Closing
Shares), which Subject to Vesting Shares are subject to various repurchase rights by ADVENTRX and
fully vest, subject to reduction upon certain events, upon achievement of the First Milestone
(defined below);
(iii) up to 1,000,000 shares of ADVENTRXs common stock, which shares will be issued, if at
all, upon achievement of the First Milestone (the First Milestone Payment); provided, however,
that in the event the First Milestone is achieved prior to the first anniversary of the closing of
the merger, 20% of the First Milestone Payment shall be deposited into escrow (the First Milestone
Escrow Amount, and together with the Closing Escrow Amount, the Escrow Amount). The First
Milestone means the dosing of the first patient in a phase 3 clinical study carried out pursuant
to a protocol that is mutually agreed to by SynthRx and ADVENTRX; provided, however, that the
number of evaluable patients planned to target statistical significance with a p value of 0.01 in
the primary endpoint shall not exceed 250 (unless otherwise mutually agreed) (the First
Protocol). In the event that the FDA indicates that a single phase 3 clinical study will not be
adequate to support approval of a new drug application covering the use of ANX-188 for the
treatment of sickle cell crisis in children (the ANX-188 NDA), First Milestone shall mean the
dosing of the first patient in a phase 3 clinical study carried out pursuant to a protocol that (a)
is mutually agreed to by SynthRx and ADVENTRX as such and (b) describes a phase 3 clinical study
that the FDA has indicated may be sufficient, with the phase 3 clinical study described in the
First Protocol, to support approval of the ANX-188 NDA. The amount of shares that becomes issuable
upon achievement of the First Milestone may be reduced by up to 75%, or 750,000 shares, based on
the timing of achievement of the First Milestone and whether and the extent to which the number of
evaluable patients planned to target statistical significance with a p value of 0.01 in the primary
endpoint exceeds 250 patients, unless otherwise agreed;
(iv) 3,839,400 shares of ADVENTRXs common stock, which shares will be issued, if at all, upon
achievement of the Second Milestone. The Second Milestone means the acceptance for review of the
ANX-188 NDA by the FDA; and
(v) 8,638,650 shares of ADVENTRXs common stock, which shares will be issued, if at all, upon
achievement of the Third Milestone. The Third Milestone means the approval by the FDA of the
ANX-188 NDA.
3. Pro Forma Condensed Combined Statement of Operations
The unaudited pro forma condensed combined statement of operations presents the pro forma
consolidated results of operations of the combined company based upon the historical, unaudited
financial statements of ADVENTRX and SynthRx, after giving effect to the SynthRx acquisition and
adjustments described in the following footnotes, and are intended to reflect the impact of this
acquisition on ADVENTRX on a pro forma basis.
The unaudited pro forma condensed combined statement of operations for the nine months ended
September 30, 2011 combines ADVENTRXs historical results for the nine months ended September 30,
2011 with SynthRxs historical results for the three months ended March 31, 2011. The unaudited pro
forma statement of operations gives effect to the acquisition as if it had taken place on January
1, 2010.
The unaudited pro forma condensed combined statement of operations is presented for
illustrative purposes only.
4. Pro Forma Adjustments
The pro forma adjustments included in the unaudited pro forma condensed combined statement of
operations are as follows:
a. | To eliminate transaction-related expenses incurred in connection with the SynthRx acquisition. Refer to Note 6 below for additional information. |
b. | To eliminate interest expense related to SynthRxs recorded liabilities that ADVENTRX did not assume. |
5. Pro Forma Net Loss per Share
Shares used to calculate unaudited pro forma combined basic and diluted net loss per share are
based on the sum of the following:
a. | The number of ADVENTRX weighted-average shares used in computing historical net loss per share, basic and diluted; and |
b. | The number of ADVENTRX weighted-average shares issued to the former stockholders of SynthRx on April 8, 2011, as initial consideration for the acquisition, giving effect to such shares as if they were issued on January 1, 2010.. |
6. Transaction Costs
For the nine months ended September 30, 2011, transaction costs incurred related to the
acquisition of SynthRx totaling $1,071,090, $769,524 of which were incurred by ADVENTRX and $301,566
of which were incurred by SynthRx, each reflected in the historical
statements of operations for the respective companies, have been
excluded from the pro forma statement of operations because such
costs are non-recurring costs that are directly attributable to the
transaction.
The combined company may incur charges to operations in subsequent periods that ADVENTRX
cannot reasonably estimate to reflect costs associated with integrating the two businesses. In
addition, the combined company may incur additional transaction-related expenses in subsequent
periods, which could have a material impact on the combined companys financial position or results
of operations.