UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (date of earliest event reported): March 9, 2012

 

Synthetic Biologics, Inc.

(Exact name of registrant as specified in charter)

 

Nevada

(State or other jurisdiction of incorporation)

 

01-12584		13-3808303
(Commission File Number)		(IRS Employer Identification No.)

 

3985 Research Park Drive, Suite 200

Ann Arbor, MI 48108

(Address of principal executive offices and zip code) 

 

(734) 332-7800

(Registrant’s telephone number including area code) 

 

Adeona Pharmaceuticals, Inc.

(Former Name and Former Address) 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of registrant under any of the following provisions:

 

o

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o

Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12)

 

o

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 1.01. Entry into a Material Definitive Agreement 

 

In connection with the change in business focus of Synthetic Biologics, Inc. (the “Company”), on March 8, 2012, the Company entered into a Membership Interest Purchase Agreement and certain related agreements listed below as exhibits, pursuant to which the Company divested all of its interest in Adeona Clinical Laboratory, LLC (the “Lab”) to Hartlab, LLC, an entity controlled by the Lab’s former owner, in consideration for (i) the immediate assignment of the Lab’s outstanding accounts receivable up through the date of closing, plus (ii) Seven Hundred Thousand Dollars ($700,000) payable pursuant to the terms of a two-year non-recourse promissory note secured by all of the assets of the Lab.

 

The information contained in this Item 1.01 is qualified in its entirety by the copy of the agreements attached to this Current Report on Form 8-K and incorporated herein by this reference.

 

Item 2.01. Completion of Acquisition or Disposition of Assets

 

Reference is made to the information set forth in Item 1.01 above. 

 

Item 9.01. Financial Statements and Exhibits

 

(b)

Pro Forma Financial Information.

 

The following unaudited pro forma condensed financial statements are required pursuant to Item 9.01(b) of the Current Report on Form 8-K and include adjustments to the Company’s Balance Sheet to reflect the sale of the Lab and to exclude the Lab results from the Company’s Statement of Operations.

 

The data are presented for informational purposes only and are not intended to represent or be indicative of the results of operations or financial condition of the Company that actually would have been reported had the disposition of the Lab been completed as of the dates presented, and should not be taken as representative of future results of operations or financial condition of the Company. The unaudited pro forma condensed financial information should be read in conjunction with the historical consolidated financial statements and the accompanying notes of the Company.

 

SYNTHETIC BIOLOGICS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET 

 

		As of December 31, 2010												As of December 31, 2009
		Historical Synthetic Biologics				Disposition				Pro Forma Synthetic Biologics				Historical Synthetic Biologics				Disposition				Pro Forma Synthetic Biologics
		(In thousands)
Assets
Current Assets:
Cash and cash equivalents		$	2,649			$	-			$	2,649			$	2,715			$	-			$	2,715
Accounts receivable, net			339				-				339				31				-				31
Other current assets			343				-				343				9				-				9
Total Current Assets			3,331				-				3,331				2,755				-				2,755
Property and equipment			511				(36	)			475				1,052				(47	)			1,005
Goodwill			178				(178	)			-				178				(178	)			-
Long term note receivable			-				700				700				-				700				700
Deposits and other assets			91				-				91				91				-				91
Total Assets		$	4,111			$	486			$	4,597			$	4,076			$	475			$	4,551
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable		$	266			$	-			$	266			$	401			$	-			$	401
Accrued liabilities			210				-				210				8				-				8
Current portion of capital lease			25				(25	)			-				17				(17	)			-
Total Current Liabilities			501				(25	)			476				426				(17	)			409
Long Term Liabilities:
Accounts payable			32				-				32				93				-				93
Capital lease			-				-				-				13				(13	)			-
Total Liabilities			533				(25	)			508				532				(30	)			502
Stockholders' Equity
Series A, convertible preferred stock,  $0.001 par value; 5,000,000 shares authorized, none issued and outstanding			-				-				-								-				-
Preferred stock,  $0.001 par value; 10,000,000 shares authorized, none issued and outstanding			-				-				-				-				-				-
Common stock,  $0.001 par value; 100,000,000 shares authorized, 23,420,189 issued and 23,338,707 outstanding and 21,530,834 issued and 21,449,352 outstanding			23				-				23				21				-				21
Additional paid-in capital			47,279				-				47,279				45,553				-				45,553
Accumulated deficit			(43,724	)			511				(43,213	)			(42,013	)			505				(41,508	)
Subscription receivable			-				-				-				(17	)			-				(17	)
Total Stockholders' Equity			3,578				511				4,089				3,544				505				4,049
Total Liabilities and Stockholders' Equity		$	4,111			$	486			$	4,597			$	4,076			$	475			$	4,551

 

 

SYNTHETIC BIOLOGICS, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET

 

		As of September 30, 2011												As of September 30, 2010
		Historical Synthetic Biologics				Disposition				Pro Forma Synthetic Biologics				Historical Synthetic Biologics				Disposition				Pro Forma Synthetic Biologics
Assets		(In thousands)
Current Assets:
Cash and cash equivalents		$	4,609			$	-			$	4,609			$	3,305			$	-			$	3,305
Short-term investments			2,866								2,866				-				-				-
Accounts receivable, net			495				-				495				387				-				387
Other current assets			124				-				124				9				-				9
Total Current Assets			8,094				-				8,094				3,701				-				3,701
Property and equipment			371				(26	)			345				710				(39	)			671
Goodwill			178				(178	)			-				178				(178	)			-
Long term note receivable			-				700				700				-				700				700
Deposits and other assets			32				-				32				91				-				91
Total Assets		$	8,675			$	496			$	9,171			$	4,680			$	483			$	5,163
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable		$	193			$	-			$	193			$	307			$	-			$	307
Accrued liabilities			41				-				41				8				-				8
Current portion of capital lease			-				-				-				17				(17	)			-
Total Current Liabilities			234				-				234				332				(17	)			315
Long Term Liabilities:
Accounts payable			2				-				2				107				-				107
Capital lease			-				-				-				2				(2	)			-
Total Liabilities			236				-				236				441				(19	)			422
Stockholders' Equity
Series A, convertible preferred stock,  $0.001 par value; 5,000,000
shares authorized, none issued and outstanding			-				-				-								-				-
Preferred stock,  $0.001 par value; 10,000,000 shares authorized,
none issued and outstanding			-				-				-				-				-				-
Common stock,  $0.001 par value; 100,000,000 shares authorized,
28,209,126 issued and 28,127,644 outstanding and
23,152,068 issued and 23,070,586 outstanding			28				-				28				23				-				23
Additional paid-in capital			57,099				-				57,099				47,070				-				47,070
Accumulated deficit			(48,688	)			496				(48,192	)			(42,854	)			502				(42,352	)
Subscription receivable			-				-				-				-				-				-
Total Stockholders' Equity			8,439				496				8,935				4,239				502				4,741
Total Liabilities and Stockholders' Equity		$	8,675			$	496			$	9,171			$	4,680			$	483			$	5,163

 

 

 

SYNTHETIC BIOLOGICS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS

 

		For the year ended December 31, 2010												For the year ended December 31, 2009
		Historical Synthetic Biologics				Disposition				Pro Forma Synthetic Biologics				Historical Synthetic Biologics				Disposition				Pro Forma Synthetic Biologics
			(In thousands, except per share)
Revenues:
License revenue, net		$	2,125			$	-			$	2,125			$	-			$	-			$	-
Laboratory fees, net			551				(551	)			-				103				(103	)			-
Grant revenue			489				-				489				-				-				-
Total revenues, net			3,165				(551	)			2,614				103				(103	)			-
Operating Costs and Expenses:
General and administrative			2,701				(590	)			2,111				2,709				(262	)			2,447
Research and development			1,580				-				1,580				949				-				949
Costs of laboratory services			468				(468	)			-				127				(127	)			-
Total Operating Costs and Expenses			4,749				(1,058	)			3,691				3,785				(389	)			3,396
Loss from Operations			(1,584	)			507				(1,077	)			(3,682	)			286				(3,396	)
Other Income (Expense):
Gain on sale of Adeona Clinical Laboratory			-				511				511				-				505				505
Interest income			-				-				-				3				-				3
Impairment loss on equipment			(121	)			-				(121	)			-				-				-
Other income (expense)			(6	)			10				4				(52	)			-				(52	)
Total Other Expenses, net			(127	)			521				394				(49	)			505				456
Net Loss from Continuing Operations		$	(1,711	)		$	1,028			$	(683	)		$	(3,731	)		$	791			$	(2,940	)
Net Loss from Continuing Operations Per Share  - Basic and Dilutive		$	(0.08	)						$	(0.03	)		$	(0.18	)						$	(0.14	)
Weighted average number of shares outstanding during the period - Basic and Dilutive			22,393,568								22,393,568				21,318,906								21,318,906

 

SYNTHETIC BIOLOGICS, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS

 

 

		For the nine months ended September 30, 2011												For the nine months ended September 30, 2010
		Historical Synthetic Biologics				Disposition				Pro Forma Synthetic Biologics				Historical Synthetic Biologics				Disposition				Pro Forma Synthetic Biologics
License revenue, net		$	-			$	-			$	-			$	2,125			$	-			$	2,125
Laboratory fees, net			972				(972	)			-				420				(420	)			-
Total revenues, net			972				(972	)			-				2,545				(420	)			2,125
Operating Costs and Expenses:
General and administrative			2,649				(311	)			2,338				2,000				(223	)			1,777
Research and development			801				-				801				963				-				963
Costs of laboratory services			806				(806	)			-				430				(430	)			-
Total Operating Costs and Expenses			4,256				(1,117	)			3,139				3,393				(653	)			2,740
Loss from Operations			(3,284	)			145				(3,139	)			(848	)			233				(615	)
Other Income (Expense):
Warrant expense			(1,492	)			-				(1,492	)			-				-				-
Change in fair value of stock warrants			(242	)			-				(242	)			-				-				-
Gain on sale of Adeona Clinical Laboratory			-				496				496				-				502				502
Interest income			7				-				7				-				-				-
Impairment loss on equipment			-				-				-				-				-				-
Impairment loss on goodwill			-				-				-				-				-				-
Other income (expense)			47				-				47				7				3				10
Total Other Expenses, net			(1,680	)			496				(1,184	)			7				505				512
Net Loss from Continuing Operations		$	(4,964	)		$	641			$	(4,323	)		$	(841	)		$	738			$	(103	)
Net Loss from Continuing Operations Per Share  - Basic and Dilutive		$	(0.18	)						$	(0.16	)		$	(0.04	)						$	(0.00	)
Weighted average number of shares outstanding during the period - Basic and Dilutive			27,075,730								27,075,730				22,095,349								22,095,349

 

 

   

(d)

Exhibits

 

The following exhibits are being filed as part of this Report.

 

Exhibit Number	Description
10.1	Membership Interest Purchase Agreement by and among Synthetic Biologics, Inc., Hartlab LLC, and Adeona Clinical Laboratory, LLC, dated as of March 7, 2012.
10.2	Pledge and Security Agreement between Synthetic Biologics, Inc. and Hartlab, LLC dated as of March 7, 2012.
10.3	Non-Recourse Promissory Note between Synthetic Biologics, Inc. and Hartlab, LLC dated as of March 7, 2012

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated March 12, 2012	SYNTHETIC BIOLOGICS, INC.
	(Registrant)
	By:	/s/ Jeffrey Riley
	Name: Jeffrey Riley
	Title: Chairman, President and Chief Executive Officer

 

 

 

 

EXHIBIT INDEX

 

 

Exhibit Number	Description
10.1	Membership Interest Purchase Agreement by and among Synthetic Biologics, Inc., Hartlab LLC, and Adeona Clinical Laboratory, LLC, dated as of March 7, 2012
10.2	Pledge and Security Agreement between Synthetic Biologics, Inc. and Hartlab, LLC dated as of March 7, 2012
10.3	Non-Recourse Promissory Note between Synthetic Biologics, Inc. and Hartlab, LLC dated as of March 7, 2012