Attached files
| file | filename |
|---|---|
| EX-99.1 - Guardion Health Sciences, Inc. | ex99-1.htm |
| EX-23.1 - Guardion Health Sciences, Inc. | ex23-1.htm |
| 8-K/A - Guardion Health Sciences, Inc. | form8-ka.htm |
Exhibit 99.2
GUARDION HEALTH SCIENCES, INC.
Unaudited Condensed Combined Pro Forma Balance Sheet
March 31, 2021
| GHSI | Activ | Transaction | Pro Forma | |||||||||||||
| March 31, 2021 | March 31, 2021 | Adjustments | Combined | |||||||||||||
| Current assets | ||||||||||||||||
| Cash | $ | 43,329,674 | $ | 10 | (26,044,582 | )(a) | $ | 17,285,102 | ||||||||
| Accounts receivable | 64,897 | 2,494,372 | - | 2,559,269 | ||||||||||||
| Inventories | 288,527 | 603,776 | - | 892,303 | ||||||||||||
| Prepaid expenses | 312,523 | 69,284 | 363,000 | (i) | 744,807 | |||||||||||
| Total current assets | $ | 43,995,621 | $ | 3,167,442 | $ | (25,681,582 | ) | $ | 21,481,481 | |||||||
| Deposits | 11,751 | - | - | 11,751 | ||||||||||||
| Property and equipment, net | 265,978 | - | - | 265,978 | ||||||||||||
| Deferred Tax Asset | - | 109,068 | (109,068 | )(f) | - | |||||||||||
| Operating lease right-of-use asset, net | 379,120 | 2,115 | - | 381,235 | ||||||||||||
| Intangible assets, net | 50,000 | 7,524,978 | 4,375,022 | (b) | 11,950,000 | |||||||||||
| Goodwill | - | 1,081,760 | 11,493,263 | (b) | 12,575,023 | |||||||||||
| Total assets | $ | 44,702,470 | $ | 11,885,363 | $ | (9,922,365 | ) | $ | 46,665,468 | |||||||
| Current liabilities | ||||||||||||||||
| Accounts payable and accrued liabilities | $ | 230,403 | $ | 1,164,098 | $ | 2,461,439 | (d) | $ | 3,855,940 | |||||||
| Accrued expenses | 518,826 | 433,758 | - | 952,584 | ||||||||||||
| Payable to former officer | 67,708 | - | - | 67,708 | ||||||||||||
| Operating lease liability - current | 165,757 | 2,142 | - | 167,899 | ||||||||||||
| Due to Adare Pharmaceuticals, Inc. | - | 6,407,190 | (6,407,190 | )(e) | - | |||||||||||
| Total current liabilities | $ | 982,694 | $ | 8,007,188 | $ | (3,945,751 | ) | $ | 5,044,132 | |||||||
| Operating lease liability - long-term | 229,430 | - | - | 229,430 | ||||||||||||
| Total liabilities | $ | 1,212,124 | $ | 8,007,188 | $ | (3,945,751 | ) | $ | 5,273,562 | |||||||
| Commitments and contingencies | - | - | - | - | ||||||||||||
| Stockholders’ Equity | ||||||||||||||||
| Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding at March 31, 2021 | $ | - | $ | - | $ | - | $ | - | ||||||||
| Common stock, $0.001 par value; 250,000,000 shares authorized; 24,426,993 shares issued and outstanding at March 31, 2021. | 24,427 | - | - | 24,427 | ||||||||||||
| Additional paid-in capital | 100,192,794 | - | - | 100,192,794 | ||||||||||||
| Accumulated deficit | (56,726,875 | ) | 3,878,175 | (5,976,614 | )(c) | (58,825,314 | ) | |||||||||
| Total stockholders’ equity | $ | 43,490,346 | $ | 3,878,175 | $ | (5,976,614 | ) | $ | 41,391,907 | |||||||
See the accompanying notes to the unaudited pro forma condensed combined financial statements.
GUARDION HEALTH SCIENCES, INC.
Unaudited Condensed Combined Pro Forma Statement of Operations
For the Three Months Ended March 31, 2021
| GHSI Three Months Ended | Activ Three Months Ended | Transaction | Autonomy | Pro Forma | ||||||||||||||||
| March 31, 2021 | March 31, 2021 | Adjustments | Adjustments | Combined | ||||||||||||||||
| Revenue | ||||||||||||||||||||
| Total revenue | $ | 233,297 | $ | 3,740,419 | $ | - | $ | - | $ | 3,973,716 | ||||||||||
| Total cost of goods sold | $ | 133,015 | $ | 1,996,660 | $ | - | $ | - | $ | 2,129,675 | ||||||||||
| Gross profit (loss) | $ | 100,282 | $ | 1,743,759 | $ | - | $ | - | $ | 1,844,041 | ||||||||||
| Operating expenses | ||||||||||||||||||||
| Research and development | 20,608 | - | - | - | 20,608 | |||||||||||||||
| Sales and marketing | 457,727 | - | - | - | 457,727 | |||||||||||||||
| General and administrative | 2,291,472 | 773,308 | 15,000 |
(i) | 15,000 | (g) | 3,094,780 | |||||||||||||
| Amortization - Intangibles | - | 176,367 | 121,133 | (h) | - | 297,500 | ||||||||||||||
| Total operating expenses | $ | 2,769,807 | $ | 949,675 | $ | 136,133 | $ | 15,000 | $ | 3,870,615 | ||||||||||
| Loss from operations | $ | (2,669,525 | ) | $ | 794,084 | $ | (136,133) | $ | (15,000 | ) | $ | (2,026,574 | ) | |||||||
| Other income (expenses): | ||||||||||||||||||||
| Interest expense | - | (4,581 | ) | - | - | (4,581 | ) | |||||||||||||
| Total other income (expenses) | $ | - | $ | (4,581 | ) | $ | - | $ | - | $ | (4,581 | ) | ||||||||
| Net loss before income taxes | $ | (2,669,525 | ) | $ | 789,503 | $ | (136,133 | ) | $ | (15,000 | ) | $ | (2,031,155 | ) | ||||||
| Income taxes | - | (170,059 | ) | 170,059 | (f) | - | - | |||||||||||||
| Net Loss | $ | (2,669,525 | ) | $ | 619,444 | $ | 33,926 | $ | (15,000 | ) | $ | (2,031,155 | ) | |||||||
| Net loss per common share - basic and diluted | (0.13 | ) | (0.09 | ) | ||||||||||||||||
| Weighted average common shares outstanding - basic and diluted | 21,351,380 | 21,351,380 | ||||||||||||||||||
See the accompanying notes to the unaudited pro forma condensed combined financial statements.
GUARDION HEALTH SCIENCES, INC.
Unaudited Condensed Combined Pro Forma Statement of Operations
For the Year Ended December 31, 2020
| GHSI Year Ended | Activ Year Ended | Transaction | Autonomy | Pro Forma | ||||||||||||||||
| December 31, 2020 | December 31, 2020 | Adjustments | Adjustments | Combined | ||||||||||||||||
| Revenue | ||||||||||||||||||||
| Total revenue | $ | 1,889,844 | $ | 11,930,248 | $ | - | $ | - | $ | 13,820,092 | ||||||||||
| Total cost of goods sold | $ | 1,946,635 | $ | 6,258,669 | $ | - | $ | - | $ | 8,205,304 | ||||||||||
| Gross profit (loss) | $ | (56,791 | ) | $ | 5,671,579 | $ | - | $ | - | $ | 5,614,788 | |||||||||
| Operating expenses | ||||||||||||||||||||
| Research and development | 160,978 | - | - | - | 160,978 | |||||||||||||||
| Sales and marketing | 1,450,205 | - | - | - | 1,450,205 | |||||||||||||||
| General and administrative | 7,450,245 | 3,800,585 | 2,282,438 | (d) | 60,000 | (g) | 13,593,268 | |||||||||||||
| Costs related to resignation of former officer (including the reversal of previously recognized stock compensation expense of $965,295 during the year ended December 31, 2020) | (615,936 | ) | - | - | - | (615,936 | ) | |||||||||||||
| Loss on sales of equipment | 18,500 | - | - | - | 18,500 | |||||||||||||||
| Equipment impairment | 30,948 | - | - | - | 30,948 | |||||||||||||||
| Amortization - Intangibles | - | 705,467 | 484,533 | (h) | - | 1,190,000 | ||||||||||||||
| Total operating expenses | $ | 8,494,940 | $ | 4,506,052 | $ | 2,766,971 | $ | 60,000 | $ | 15,827,963 | ||||||||||
| Loss from operations | $ | (8,551,731 | ) | $ | 1,165,527 | $ | (2,766,971 | ) | $ | (60,000 | ) | $ | (10,213,175 | ) | ||||||
| Other income (expenses): | ||||||||||||||||||||
| Interest expense | (7,271 | ) | (18,886 | ) | - | - | (26,157 | ) | ||||||||||||
| Change in fair value of derivative liability | (12,655 | ) | - | - | - | (12,655 | ) | |||||||||||||
| Total other income (expenses) | $ | (19,926 | ) | $ | (18,886 | ) | $ | - | $ | - | $ | (38,812 | ) | |||||||
| Net loss before income taxes | $ | (8,571,657 | ) | $ | 1,146,642 | $ | (2,766,971 | ) | $ | (60,000 | ) | $ | (10,251,986 | ) | ||||||
| Income taxes | - | (245,703 | ) | 245,703 | (f) | - | - | |||||||||||||
| Net loss | $ | (8,571,657 | ) | $ | 900,939 | $ | (2,521,268 | ) | $ | (60,000 | ) | $ | (10,251,986 | ) | ||||||
| Net loss per common share - basic and diluted | (0.60 | ) | (0.73 | ) | ||||||||||||||||
| Weighted average common shares outstanding - basic and diluted | 14,256,856 | 14,256,856 | ||||||||||||||||||
See the accompanying notes to the unaudited pro forma condensed combined financial statements.
GUARDION HEALTH SCIENCES, INC.
NOTES TO CONDENSED COMBINED PRO FORMA UNAUDITED FINANCIAL STATEMENTS
Unaudited Pro Forma Condensed Financial Information
On June 1, 2021, the Company acquired all of the issued and outstanding equity securities of Activ Nutritional, LLC (“Activ”) pursuant to an Equity Purchase Agreement (“Purchase Agreement”) dated as of May 18, 2021, as disclosed in a Current Report on Form 8-K filed with the SEC on June 4, 2021 (the “Acquisition”).
The preliminary allocation of the purchase price used in the unaudited pro forma condensed combined financial statements is based upon preliminary estimates. The preliminary estimated fair values of certain assets and liabilities have been determined by management with the assistance of a third-party valuation firm. Our estimates and assumptions are subject to change during the measurement period (up to one year from the acquisition date) as the Company finalizes the valuations of certain tangible and intangible assets acquired and liabilities assumed in connection with the Acquisition.
The pro forma condensed combined balance sheet has been adjusted to reflect the preliminary allocation by the Company’s management of the Activ purchase price to identifiable tangible and intangible net assets acquired and the excess purchase price to goodwill. The preliminary purchase price allocation is based upon an estimated total purchase price of approximately $26 million.
Upon completion of the fair value assessment, the Company anticipates that the final purchase price allocation may differ from the preliminary assessment provided above. Any changes to the initial estimates of the fair value of the assets and liabilities will be recorded as adjustments to those assets and liabilities and the residual amounts will be allocated as an increase or decrease to goodwill, as appropriate.
Pro Forma Adjustments
The following pro forma adjustments are incorporated into the pro forma condensed combined balance sheet as of March 31, 2021 and the pro forma condensed combined statements of operations for the three months ended March 31, 2021 and for the year ended December 31, 2020.
.
| (a) | To account for the cash consideration paid to Adare Pharmaceuticals, Inc. for the acquisition of Activ on June 1, 2021. | |
| (b) | To recognize the identified intangible assets and goodwill at fair value as a result of the acquisition of Activ. | |
| (c) | To eliminate the pre-existing equity of Activ and record the impact to net assets from the recognition of the transaction fees (see (d) below) | |
| (d) | To recognize the transaction-related costs. | |
| (e) | To settle the existing outstanding intercompany payable with the former sole equityholder, Adare Pharmaceuticals, Inc. (“Adare”) | |
| (f) | To recognize the valuation allowance against the Activ Deferred Tax Asset and offset taxable income through the utilization of existing Company net operating losses to reduce income tax expense of Activ. | |
| (g) | To account for standalone company cost. Resources including accounting personnel for various month-end activities and external legal services that were previously shared resources provided by Adare (former sole equityholder) at no cost to Activ. | |
| (h) | To account for the amortization of the identified intangible acquired in the acquisition of Activ. | |
| (i) | To account for prepaid insurance costs related to the transaction |