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8-K/A - FORM 8-K/A - APRICUS BIOSCIENCES, INC.v324428_8ka.htm
EX-99.2 - EXHIBIT 99.2 - APRICUS BIOSCIENCES, INC.v324428_ex99-2.htm
EX-23.1 - EXHIBIT 23.1 - APRICUS BIOSCIENCES, INC.v324428_ex23-1.htm
EX-99.1 - EXHIBIT 99.1 - APRICUS BIOSCIENCES, INC.v324428_ex99-1.htm

 

Exhibit 99.3

 

 

FINESCO SAS

Table of Contents

         
    Page
Condensed Consolidated Balance Sheet (Unaudited) at June 30, 2012 and December 31, 2011     2  
Condensed Consolidated Statements of Comprehensive Income (Unaudited) for the Six Months Ended June 30, 2012 and 2011     3  
Condensed Consolidated Statements of Changes in Equity (Unaudited) for the Six Months Ended June 30, 2012     4  
Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2012 and 2011     5  
Notes to the Condensed Consolidated Financial Statements (Unaudited)     6  

 

 
 

 

 

   

Finesco SAS and Subsidiaries

Condensed Consolidated Balance Sheet (Unaudited)

 

(All amounts in € thousand unless otherwise stated)

 

    Successor 
   June 30, 2012   December 31,
2011
 
Assets          
Non-current assets          
Fixed assets, net   53    48 
Restricted cash   255    113 
Other non-current financial assets   41    76 
Deferred tax assets   218    244 
    567    481 
Current assets          
Customer accounts receivable   949    722 
Prepaid expenses and other current assets   76    113 
Cash and cash equivalents   2,027    3,202 
    3,052    4,037 
Total assets   3,619    4,518 
           
Shareholders' Equity and Liabilities          
Shareholders' Equity          
Share capital   60    60 
Share premium   -    - 
Other consolidated reserves   -    - 
Retained earnings and net profit   1,177    1,159 
Total shareholders' equity   1,237    1,219 
           
Non-current liabilities          
Loans and borrowings   -    - 
Pension benefit obligations   490    380 
Provision L/T   -    - 
Other non-current liabilities   -    - 
Deferred tax liabilities   -    - 
    490    380 
Current liabilities          
Short-term borrowings   182    182 
Provisions S/T   56    56 
Trade accounts payable   362    417 
Income tax payable   -    715 
Other current liabilities   1,292    1,549 
    1,892    2,919 
Total liabilities   2,382    3,299 
Total shareholders' equity and liabilities   3,619    4,518 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

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Finesco SAS and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

 

(All amounts in € thousand unless otherwise stated)

 

    Successor    Predecessor 
      January 1 to
June 30,
2012
   May 16 to
June 30,
2011
   January 1 to May 15,
2011
 
Revenue      3,785    867    2,710 
Cost of services      (2,880)   (842)   (1,960)
Gross profit      905    25    750 
Selling, general and administrative expenses      (872)   (273)   (633)
Negative goodwill      -    1,309   - 
Other operating income      13    -    11
Other operating expenses      (1)   -    (17)
Profit (loss) from operations      45    1,061    111 
Finance income      -    -    - 
Finance costs      (1)   -    - 
Finance costs, net      (1)   -    - 
Share of profit (loss) of associates      -    -    - 
Profit (loss) before income taxes      44    1,061    111 
Income tax expense      (26)   (311)   (42)
                   
Net profit (loss) for the year from continuing operations      18    750    69 
Discontinued operations                  
Net profit (loss) for the year from discontinued operations      -   -    (108)
Net profit (loss)      18    750    (39)
Other comprehensive income                  
Total comprehensive income (loss)      18    750    (39)
Total comprehensive income (loss) from:                  
Continuing operations      18    750    69 
Discontinued operations               (108)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

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Finesco SAS and Subsidiaries

Condensed Consolidated Statement of Change in Equity (Unaudited)

 

(All amounts in € thousand unless otherwise stated)

 

  Share Capital   Share premium   Other consolidated reserves   Retained earnings including net profit    Total Shareholder's equity 
Successor                    
Balance at December 31, 2011   60    -    -    1,159    1,219 
Issuance from share capital   -    -    -    -    - 
Dividends   -    -    -    -    - 
Changes in scope of consolidation   -    -    -    -    - 
Total comprehensive income (loss)   -    -    -    18    18 
Balance at June 30, 2012   60    -    -    1,177    1,237 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

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Finesco SAS and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

 (All amounts in € thousand unless otherwise stated)

 

  Successor    Predecessor 
  January 1 to
June 30,
2012
   May 16 to
June 30,
2011
   January 1 to
May 15,
2011
 
Cash flow from operating activities            
Net profit (loss)   18    750    (39)
Adjustments to reconcile net profit (loss) to net cash provided by (used in) operating activities               
Depreciation and amortization   2    -    - 
Net increase (decrease) in provisions   110    38    146 
(Gain) loss on disposals, negative goodwill    -    (1,309)   - 
Deferred taxes   26    -    (62)
Cash flows provided by (used in) operations before deferred tax and
finance costs
   156    (521)   45 
Changes in operating working capital   (1,216)   (1,496)   2,275 
Total net cash provided by (used in) operating activities   (1,060)   (2,017)   2,320 
Net cash provided by (used in) operating activities - continuing
operations
   (1,060)   (2,017)   3,116 
Net cash provided by (used in) operating activities - discontinued
operations
   -    -    (796)
Cash flow from investing activities               
Proceeds from disposal of discontinued operations, net of transaction costs and cash disposed   -    -      
Acquisition of Scomedica, net of cash acquired   -    4,398    - 
Capital expenditures   (7)   (41)   - 
Proceeds from sale of fixed assets   -    -    - 
Total net cash provided by (used in) investing activities   (7)   4,357    - 
Net cash provided by (used in) investing activities - continuing
operations
   (7)   4,357    - 
Net cash provided by (used in) investing activities - discontinued
operations
   -    -    - 
Cash flow from financing activities               
Dividends paid   -    -    - 
Issuance of share capital   -    40    - 
Release (deposit) of financial assets   (107)   21    (39)
Proceeds from short-term borrowings   -    -    - 
Repayment of short-term borrowings   -   -    - 
Other   (1)   -    - 
Total net cash provided by (used in) financing activities   (108)   61    (39)
Net cash provided by (used in) financing activities - continuing
operations
   (108)   61    (39)
Net cash provided by (used in) financing activities - discontinued
operations
   -    -    - 
Net increase (decrease) in cash and cash equivalents   (1,175)   2,401    2,281 
Cash and cash equivalents, beginning of period   3,202    -    1,173 
Cash and cash equivalents, end of period   2,027    2,401    3,454 
Additional information           
Interest (paid) / received   (1   -    - 
Income tax paid   751    -    - 

 

The accompanying notes are an integral part of these condensed consolidated financial statements. 

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Finesco SAS and Subsidiaries

Notes to

Condensed Consolidated Financial Statements (Unaudited)

 

(All amounts in € thousand unless otherwise stated)

 

1.Company information

 

Finesco SAS is a French holding company and owns 100% of the company Scomedica SAS. Scomedica is a healthcare contract sales and marketing company serving customers in France. Its medical sales representatives promote and market medical products to doctors’ practices.

 

“Predecessor” / “Successor”

 

As consequence of the Acquisition of 100% of Scomedica’s shares by Finesco SAS on May 16, 2011, the term “Successor” refers to Finesco following the Acquisition. The term “Predecessor” refers to Scomedica prior to the change of control on May 16, 2011. Therefore, the “Successor periods” corresponds to the period from May 16, 2011 to June 30, 2011 and to the half-year period ended June 30, 2012. The “Predecessor period” corresponds to the period from January 1, 2011 to May 15, 2011.

 

Consequently, financial statements have been divided into Successor and Predecessor periods.

 

Safeguard procedure and Management buyout of Scomedica

 

Until May 15, 2011, Scomedica was a subsidiary of Wockhardt France Holding (“Wockhardt”). Wockhardt was placed under a safeguard procedure (a procedure equivalent to “Chapter 11 procedure” in the United States) by the Versailles commercial court on October 14, 2010 including some of its subsidiaries and Scomedica to ensure the survival of the company. In the course of this procedure, M. Gérard Burger, president of Scomedica, decided to acquire Scomedica from Wockhardt in order to maintain and develop the existing medical representative business. He created the holding Finesco on March 8, 2011 and conducted through Finesco a management buyout; on May 16, 2011, Finesco acquired 100% of Scomedica’s shares from Wockhardt (refer above “Creation of Finesco and acquisition of Scomedica”). In this context, members of the Scomedica management team transferred from Wockhardt group to Scomedica and an agreement was signed for Wockhardt to provide administrative support to Scomedica during a transition period.

 

On December 2011, four managers of Scomedica, including Martine Burger (Gérard Burger’s sister), participated in a capital increase of Finesco. Consequently, as of December 31, 2011, Gérard Burger and Martine Burger hold 95% of Finesco’s share capital.

 

As part of the safeguard procedure and the sale of Scomedica’s shares to Finesco, compensation of debts and receivables between Scomedica and Wockhardt group and debt write offs from Wockhardt France Holding and its subsidiaries were agreed upon.

 

On October 20, 2011, the administrator appointed by the commercial court of Versailles allowed the settlement of all the outstanding liabilities and the Scomedica “safeguard proceedings” were terminated.

 

Liquidity

 

The financial statements have been prepared on a going concern basis which considers the realization of assets and settlement of liabilities in the ordinary course of business. Finesco is operating under only one short-term contract with a multinational customer since July 2012, which raises substantial doubt about Finesco's ability to continue as a going concern. The ongoing operation of Finesco is dependent upon:

 

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-Finesco maintaining its current activity with a multinational customer and/or Finesco gaining new business in the near future, and/or

 

-Finesco raising additional funding from shareholders or other parties.

 

Finesco’s President is in continuous business development negotiations to attract new contracts and has reasonable expectations that the company has adequate resources to continue its operations for the next twelve months and therefore continue to use the going concern basis in preparing the financial statements for the following reasons:

 

-Commercial targets have consistently been met leading to a steady revenue stream and positive cash flows. This led to develop a long lasting relationship with the multinational customer which is a major pharmaceutical company. Starting from September 2008, the multinational customer has always renewed its commercial contracts.

 

-In line with Finesco’s strategy to find a business partner, Apricus accepted, by way of a share contribution, 100% of all outstanding common stock of Finesco SAS on July 12, 2012 and Finesco acquired Portalis, a pharmaceutical laboratory, on July 27, 2012. This provides a new market and new perspectives to Scomedica as Apricus expects to explore registration and/or commercialization of their current product Vitaros ® and their other pipeline products in the near future on the French market through Portalis, and with the support of Scomedica medical representative teams.

 

In the event these circumstances that support the ability of Finesco to continue as a going concern are not met (loss of the multinational customer contract or no new customer contracts, it may not be able to continue its operations as a going concern and therefore may not be able to realize its assets and extinguish its liabilities in the ordinary course of operations and at the amounts stated in the financial report.

 

2.Basis of Presentation and Significant Accounting Policies

 

Finesco's financial statements have been prepared in accordance with International Accounting Standards (“IAS”) 34 “Interim Financial Reporting” issued by the International Accounting Standards Board (“IASB”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting only of normal recurring adjustments which are necessary for a fair presentation of financial results of such periods. As used herein, the terms “Group,” “we,” “us” and “our” refer to Finesco SAS and its subsidiaries, unless the context indicates to the contrary. These unaudited condensed consolidated financial statements have been prepared for the special purpose of filing with the United States Securities and Exchange Commission in compliance with Rule 3-05 of Regulation S-X and Form 8-K under the Securities Exchange Act of 1934. This filing requirement is based on the Company being a significant business acquired by Apricus Biosciences, Inc. (“Apricus”).

 

The accompanying unaudited condensed consolidated financial statements have been prepared on the historical cost basis, except for items that are required to be measured at fair values. The accounting policies used in the unaudited consolidated financial statements are consistent with those followed on the Company’s consolidated financial statements for the periods ended June 30, 2012 and December 31, 2011. New standards, amendments and interpretations which have been issued by the IASB but have not yet come into effect are not expected to have a material impact on Finesco financial statements.

 

The preparation of financial statements in conformity with International Financial Reporting Standards (“IFRS”) requires the use by management of certain critical accounting estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent asset and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reported periods. Although these estimates are based on management’s best knowledge of the amount, event or actions, actual results may differ from these estimates.

 

These unaudited financial statements should be read in conjunction with the audited financial statements presented here in exhibit 99.2. IAS 34 requires a description of significant events and transactions that are necessary to the understanding of the changes in financial position and performance of the company since the last reported period. There were no significant or unusual events other than the acquisition of Scomedica SAS by Finesco SAS between May 16, 2011 and June 30, 2011. See Note number 8.6 in the audited financial statements presented here in exhibit 99.2.

  

3.Related Party Transactions

 

There were no additional related party transactions beyond those that are disclosed in Note 11 in the audited financial statements presented here in exhibit 99.2.

 

4.Events after the reporting period

 

Commercial contracts

 

-Commercial contract with the multinational customer valid for 6 months to 1 year for marketing pharmaceuticals developed by the customer. The contract was renewed in July 2012 for a short-term period.

 

-Commercial contracts with Wockhardt’s subsidiaries: All contracts signed with Wockhardt ended in July 2012 and have not been renewed since then.

 

Business combination

 

-Apricus Biosciences, Inc (“Apricus Bio”), an American pharmaceutical company listed on the NASDAQ, accepted, by way of a share contribution, 100% of all outstanding common stock of Finesco SAS on July 12, 2012.

 

Apricus’ objective is to benefit from the sales force of Scomedica to market products developed or licensed by Apricus.

 

-Finesco acquired Portalis, a pharmaceutical laboratory (refer to note 2 “Basis of preparation and adoption of IFRS”, Going Concern).

  

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