Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - ARROWHEAD PHARMACEUTICALS, INC. | d8k.htm |
Exhibit 99.1
ARROWHEAD RESEARCH CORPORATION
INDEX TO (UNAUDITED) PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
| Page | ||||
| Pro Forma Financial Information |
B-2 | |||
| Pro Forma Combined Condensed Balance Sheet at September 30, 2010 |
B-3 | |||
| Pro Forma Combined Condensed Statement of Operations for the year ended September 30, 2010 |
B-4 | |||
| Notes to the Pro Forma Combined Condensed Financial Statements |
B-5 | |||
B-1
ARROWHEAD RESEARCH CORPORATION
(UNAUDITED) PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
The accompanying (unaudited) pro forma combined condensed financial statements present the historical financial information of Arrowhead Research Corporation (“Arrowhead”), as adjusted for the disposition of Unidym, Inc. (“Unidym”).
The accompanying pro forma combined condensed balance sheet presents the historical financial information of Arrowhead as of September 30, 2010, as adjusted assuming the disposition of Unidym took place on September 30, 2010.
The accompanying pro forma combined condensed statement of operations for the year ended September 30, 2010, presents the historical financial information of Arrowhead with adjustments to reflect the exclusion of Unidym for the respective period, as if the disposition had occurred on October 1, 2009.
The pro forma combined condensed financial statements have been prepared by management, based on the historical financial statements of Arrowhead and Unidym. These pro forma combined condensed financial statements may not be indicative of the results that actually would have occurred if the disposition had taken place on the dates indicated. The pro forma combined condensed financial statements should be read in conjunction with the historical financial statements of Arrowhead for the year ended September 30, 2010.
B-2
ARROWHEAD RESEARCH CORPORATION
PRO FORMA COMBINED CONDENSED BALANCE SHEET (UNAUDITED)
AS OF SEPTEMBER 30, 2010
| Arrowhead Research Corp. (consolidated) |
Unidym, Inc. | Pro Forma Adjustments |
Footnote Reference |
Proforma Combined |
||||||||||||||||
| ASSETS | ||||||||||||||||||||
| CURRENT ASSETS |
||||||||||||||||||||
| Cash and cash equivalents |
$ | 6,847,162 | $ | 302,613 | 302,613 | (1 | ) | $ | 6,847,162 | |||||||||||
| Trade receivable, net of allowances |
58,864 | 58,555 | 309 | |||||||||||||||||
| Other receivables |
871,819 | — | 622,823 | (1 | ) | 1,494,642 | ||||||||||||||
| Prepaid expenses |
239,097 | 125,635 | 113,462 | |||||||||||||||||
| Other current assets |
114,833 | — | 2,500,000 | (3 | ) | 2,614,833 | ||||||||||||||
| TOTAL CURRENT ASSETS |
8,131,775 | 486,803 | 11,070,408 | |||||||||||||||||
| PROPERTY AND EQUIPMENT |
||||||||||||||||||||
| Computers, office equipment and furniture |
335,784 | 60,191 | 275,593 | |||||||||||||||||
| Research equipment |
752,850 | 749,336 | 3,514 | |||||||||||||||||
| Software |
150,445 | 73,425 | 77,020 | |||||||||||||||||
| Leasehold improvements |
78,594 | 12,146 | 66,448 | |||||||||||||||||
| 1,317,673 | 895,098 | 422,575 | ||||||||||||||||||
| Less: Accumulated depreciation and amortization |
(1,176,404 | ) | (795,762 | ) | (380,642 | ) | ||||||||||||||
| NET PROPERTY AND EQUIPMENT |
141,269 | 99,336 | 41,933 | |||||||||||||||||
| OTHER ASSETS |
||||||||||||||||||||
| Rent deposit |
34,735 | 34,735 | — | |||||||||||||||||
| Patents |
2,046,836 | 73,816 | 1,973,020 | |||||||||||||||||
| Investments and other noncurrent assets |
1,999,927 | — | 2,757,644 | (3 | ) | 4,757,571 | ||||||||||||||
| TOTAL OTHER ASSETS |
4,081,498 | 108,551 | 6,730,591 | |||||||||||||||||
| TOTAL ASSETS |
$ | 12,354,542 | $ | 694,690 | $ | 17,842,932 | ||||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
| CURRENT LIABILITIES |
||||||||||||||||||||
| Accounts payable |
$ | 681,563 | $ | 257,867 | $ | 423,696 | ||||||||||||||
| Accrued expenses |
371,236 | 119,564 | 251,672 | |||||||||||||||||
| Accrued payroll and benefits |
191,425 | 35,027 | 156,398 | |||||||||||||||||
| Accrued severance |
23,500 | — | 23,500 | |||||||||||||||||
| Intercompany liability |
— | 925,436 | 925,436 | (1 | ) | — | ||||||||||||||
| Derivative liability |
2,408,522 | — | 2,408,522 | |||||||||||||||||
| Note payable |
500,000 | — | 500,000 | |||||||||||||||||
| TOTAL CURRENT LIABILITIES |
4,176,246 | 1,337,894 | 3,763,788 | |||||||||||||||||
| TOTAL STOCKHOLDERS’ EQUITY |
8,178,296 | (643,204 | ) | 5,257,644 | (3 | ) | 14,079,144 | |||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ | 12,354,542 | $ | 694,690 | $ | 17,842,932 | ||||||||||||||
B-3
ARROWHEAD RESEARCH CORPORATION
PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED SEPTEMBER 30, 2010
| Arrowhead Research Corp. (consolidated) |
Unidym, Inc. | Pro Forma Adjustments |
Footnote Reference |
Proforma Combined |
||||||||||||||||
| REVENUE |
$ | 620,097 | $ | 620,097 | $ | — | ||||||||||||||
| OPERATING EXPENSES |
||||||||||||||||||||
| Salaries |
4,297,930 | 1,727,244 | 534,801 | (2 | ) | 3,105,487 | ||||||||||||||
| Consulting |
514,041 | 102,463 | 411,578 | |||||||||||||||||
| General and administrative expenses |
3,183,077 | 748,360 | 2,434,717 | |||||||||||||||||
| Research and development |
1,111,473 | 863,677 | 247,796 | |||||||||||||||||
| Patent amortization |
315,625 | 73,817 | 241,808 | |||||||||||||||||
| TOTAL OPERATING EXPENSES |
9,422,146 | 3,515,561 | 6,441,386 | |||||||||||||||||
| OPERATING LOSS |
(8,802,049 | ) | (2,895,464 | ) | (6,441,386 | ) | ||||||||||||||
| OTHER INCOME (EXPENSE) |
||||||||||||||||||||
| Loss on equity of investments - Nanotope |
(219,540 | ) | — | (219,540 | ) | |||||||||||||||
| Gain on sale of subsidiary |
— | — | 4,002,455 | (4 | ) | 4,002,455 | ||||||||||||||
| Gain/(loss) on sale of fixed assets, net |
10,881 | 10,881 | — | |||||||||||||||||
| Interest income (expense), net |
(48,025 | ) | (25,242 | ) | (22,783 | ) | ||||||||||||||
| Change in value of derivative liability |
1,761,385 | — | 1,761,385 | |||||||||||||||||
| Other income |
(87,032 | ) | (88,804 | ) | 1,772 | |||||||||||||||
| TOTAL OTHER INCOME |
1,417,669 | (103,165 | ) | 5,523,289 | ||||||||||||||||
| LOSS FROM CONTINUING OPERATIONS |
(7,384,380 | ) | (2,998,629 | ) | (918,097 | ) | ||||||||||||||
| Earnings per share - basic and diluted: |
||||||||||||||||||||
| Loss from continuing operations |
$ | (0.10 | ) | $ | (0.01 | ) | ||||||||||||||
| Weighted average shares outstanding - basic and diluted |
64,342,448 | 64,342,448 | ||||||||||||||||||
B-4
Note 1 - Basis of presentation
The accompanying pro forma combined financial statements are presented to reflect the disposition of Unidym Inc. (“Unidym”) by Arrowhead Research, Inc. (“Arrowhead”).
The accompanying pro forma combined condensed balance sheet has been prepared to give effect to the disposition of Unidym by Arrowhead as if the disposition occurred on September 30, 2010. The accompanying pro forma combined condensed statements of operations include the historical operations of Arrowhead and exclude the operations of Unidym as if the disposition had occurred on October 1, 2009
Note 2 - Pro forma adjustments
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates.
The unaudited pro forma combined condensed financial statements reflect the following pro forma adjustments:
Adjustment (1) - This adjustment reflects the repayment of intercompany debt between Arrowhead and Unidym, which is assumed to be settled in cash prior to the disposition. The cash settlement is reflected at $302,613, Unidym’s cash balance at the transaction date. The balance is reflected as an other receivable.
Adjustment (2) - This adjustment reflects charges from Arrowhead to Unidym for a portion of certain Arrowhead employees costs related to management and administrative services, which amounts would be absorbed by Arrowhead in the absence of Unidym.
Adjustment (3) - This adjustment reflects the proceeds from the disposal, the gain on the transaction, and the related entries to equity and noncontrolling interest, as if the transaction occurred on September 30, 2010.
Adjustment (4) - This adjustment reflects the gain on the transaction, as if the transaction occurred on October 1, 2009.
B-5