Attached files
| file | filename |
|---|---|
| 8-K/A - FORM 8-K AMENDMENT NO. 1 - OPKO HEALTH, INC. | d290117d8ka.htm |
| EX-99.1 - EX-99.1 - OPKO HEALTH, INC. | d290117dex991.htm |
| EX-23.1 - EX-23.1 - OPKO HEALTH, INC. | d290117dex231.htm |
Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On December 29, 2011, OPKO Health, Inc., a Delaware corporation (the “Company”), completed the acquisition of FineTech Pharmaceutical Ltd., an Israeli corporation (“FineTech”), pursuant to a Stock Purchase Agreement (the “Purchase Agreement”) by and among the Company, FineTech, Arie Gutman, FineTech’s sole shareholder (“Seller”), and OPKO Holdings Israel Ltd, an Israeli corporation and a wholly owned subsidiary of the Company (the “Buyer”). Pursuant to the Purchase Agreement, the Buyer purchased all of the issued and outstanding shares of FineTech for $27.5 million, of which $10.0 million was paid in cash at closing and $17.5 million was paid in shares of the Company’s common stock (“Common Stock”) based on the average closing sales price per share of the Company’s Common Stock as reported on the New York Stock Exchange for the ten trading days immediately preceding the execution of the Purchase Agreement, or $4.84 per share (the “Stock Consideration”). Pursuant to the Purchase Agreement, $3 million of the Stock Consideration is being held in a separate escrow account to secure the indemnification obligations of the Seller under the Purchase Agreement. In addition, the Purchase Agreement provides for the payment of up to an additional $5 million to the Seller in cash upon the achievement of certain sales milestones by the Buyer.
As previously reported on Form 8-K/A, the Company completed the acquisition of Claros Diagnostics, Inc. (“Claros”) on October 13, 2011, pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Claros Merger Subsidiary LLC, a wholly-owned subsidiary of the Company (“Merger Sub”), Claros and certain shareholders of Claros, in each case in his or her capacity as a member of the Shareholder Representative Committee constituted under the Merger Agreement. Pursuant to the Merger Agreement, the Company paid $10 million in cash, subject to certain set-offs and deductions, and $20 million in shares of the Company’s common stock (the “Stock Consideration”), based on the average closing sales price per share of the Company’s Common Stock as reported by the New York Stock Exchange for the ten trading days immediately preceding the closing date of the merger, or $4.45 per share. In addition, the Merger Agreement provides for the payment of up to an additional $19.125 million in shares of the Company’s common stock upon and subject to the achievement of certain milestones by the surviving company.
The following unaudited pro forma financial statements of the Company are presented to comply with Article 11 Regulation S-X and follow proscribed SEC guidelines. The historical condensed consolidated financial statements of the Company have been adjusted in the unaudited pro forma condensed consolidated financial statements to give effect to pro forma events that are (1) directly attributable to the acquisitions of FineTech and Claros, (2) factually supportable, and (3) expected to have a continuing impact on the Company.
The unaudited pro forma condensed consolidated balance sheet as of September 30, 2011, presents pro forma effects of the acquisitions of FineTech and Claros as if the acquisitions had occurred on September 30, 2011. The unaudited pro forma condensed consolidated statements of operations for the fiscal year ended December 31, 2010 and the nine months ended September 30, 2011, present the pro forma effects as if the acquisitions of FineTech and Claros occurred on January 1, 2010.
The unaudited pro forma financial statements are presented for informational purposes only and do not purport to present what the Company’s results would have been had the acquisitions of FineTech and Claros actually occurred on the dates presented or to project the Company’s results from operations or financial position for any future period. These unaudited pro forma financial statements and accompanying notes should be read together with the Company’s audited consolidated financial statements and the accompanying notes, as of and for the fiscal year ended December 31, 2010 and the Company’s unaudited consolidated financial statements and the accompanying notes as of and for the three and nine months ended September 30, 2011.
OPKO Health, Inc. and subsidiaries
Pro Forma Condensed Consolidated Balance Sheets
As of September 30, 2011
(unaudited)
(in thousands, except share and per share data)
| OPKO Health, Inc. As reported |
Claros Diagnostics, Inc. |
Claros Pro Forma adjustments |
Pro Forma Combined including Claros |
FineTech Pharmaceuticals Ltd. |
FineTech Pro Forma adjustments |
Pro Forma Combined including Claros and FineTech |
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| ASSETS |
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| Current assets |
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| Cash and cash equivalents |
$ | 47,235 | $ | 77 | $ | (10,000 | ) a | $ | 37,312 | $ | 5,477 | $ | (10,000 | ) g | $ | 32,789 | ||||||||||||
| Marketable securities |
40,182 | — | — | 40,182 | — | — | 40,182 | |||||||||||||||||||||
| Accounts receivable, net |
12,688 | — | — | 12,688 | 1,381 | — | 14,069 | |||||||||||||||||||||
| Inventory, net |
10,516 | — | — | 10,516 | 875 | 500 | i | 11,891 | ||||||||||||||||||||
| Prepaid expenses and other current assets |
1,729 | 10 | — | 1,739 | — | — | 1,739 | |||||||||||||||||||||
| Current assets of discontinued operations |
5,279 | — | — | 5,279 | — | — | 5,279 | |||||||||||||||||||||
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| Total current assets |
117,629 | 87 | (10,000 | ) | 107,716 | 7,733 | (9,500 | ) | 105,949 | |||||||||||||||||||
| Property and equipment, net |
3,271 | 349 | — | 3,620 | 1,465 | — | 5,085 | |||||||||||||||||||||
| Intangible assets, net |
14,252 | — | 39,082 | e | 53,334 | 1,952 | (1,952 | ) | 75,381 | |||||||||||||||||||
| 22,047 | i | |||||||||||||||||||||||||||
| Goodwill |
6,234 | — | — | 6,234 | — | — | 6,234 | |||||||||||||||||||||
| Investments, net |
5,862 | — | — | 5,862 | — | — | 5,862 | |||||||||||||||||||||
| Other assets |
824 | 24 | — | 848 | 250 | 767 | i | 1,865 | ||||||||||||||||||||
| Assets of discontinued operations |
2,929 | — | — | 2,929 | — | — | 2,929 | |||||||||||||||||||||
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| TOTAL ASSETS |
$ | 151,001 | $ | 460 | $ | 29,082 | $ | 180,543 | $ | 11,400 | $ | 11,362 | $ | 203,305 | ||||||||||||||
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| LIABILITIES SERIES D PREFERRED STOCK AND SHAREHOLDERS EQUITY (DEFICIT) |
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| Current liabilities |
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| Accounts payable |
$ | 2,556 | $ | 611 | $ | (475 | ) a | $ | 2,692 | $ | 50 | $ | — | $ | 2,742 | |||||||||||||
| Accrued expenses |
3,678 | 106 | — | 3,784 | 237 | — | 4,021 | |||||||||||||||||||||
| Current portion of notes payable |
12,547 | 4,299 | (4,299 | ) a | 12,547 | — | — | 12,547 | ||||||||||||||||||||
| Current liabilities of discontinued operations |
1,460 | — | — | 1,460 | — | — | 1,460 | |||||||||||||||||||||
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| Total current liabilities |
20,241 | 5,016 | (4,774 | ) | 20,483 | 287 | — | 20,770 | ||||||||||||||||||||
| Long-term liabilities |
2,154 | — | 9,300 | f | 11,454 | 258 | 4,500 | f | 16,212 | |||||||||||||||||||
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| Total liabilities |
22,395 | 5,016 | 4,526 | 31,937 | 545 | 4,500 | 36,982 | |||||||||||||||||||||
| Commitments and contingencies |
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| Series D Preferred Stock - $0.01 par value, 2,000,000 shares authorized; 1,209,677 shares issued and outstanding (liquidation value of $34,813) |
26,128 | — | 26,128 | — | 26,128 | |||||||||||||||||||||||
| Shareholders’ equity |
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| Series A Preferred Stock - $0.01 par value, 4,000,000 shares authorized; No shares issued or outstanding |
— | 3,335 | (3,335 | ) b | — | — | — | — | ||||||||||||||||||||
| Series C Preferred Stock - $0.01 par value, 500,000 shares authorized; No shares issued or outstanding |
— | — | — | — | — | — | — | |||||||||||||||||||||
| Common Stock - $0.01 par value, 500,000,000 shares authorized, 288,141,824 shares issued |
2,881 | 4 | (4 | ) b | 2,926 | 81 | (81 | ) h | 2,962 | |||||||||||||||||||
| 45 | a | 36 | g | |||||||||||||||||||||||||
| Treasury stock - 2,443,894 shares |
(7,893 | ) | — | — | (7,893 | ) | — | — | (7,893 | ) | ||||||||||||||||||
| Additional paid-in capital |
485,181 | 12,057 | (12,057 | ) b | 505,136 | 8,741 | (8,741 | ) h | 522,817 | |||||||||||||||||||
| 19,955 | a | 17,681 | g | |||||||||||||||||||||||||
| Accumulated other comprehensive income |
434 | (41 | ) | 41 | b | 434 | — | — | 434 | |||||||||||||||||||
| (Accumulated deficit) retained earnings |
(378,125 | ) | (19,911 | ) | 19,911 | b | (378,125 | ) | 2,033 | (2,033 | ) h | (378,125 | ) | |||||||||||||||
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| Total shareholders’ equity (deficit) |
102,478 | (4,556 | ) | 24,556 | 122,478 | 10,855 | 6,862 | 140,195 | ||||||||||||||||||||
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| TOTAL LIABILITIES SERIES D PREFERRED STOCK AND SHAREHOLDERS’ EQUITY (DEFICIT) |
$ | 151,001 | $ | 460 | $ | 29,082 | $ | 180,543 | $ | 11,400 | $ | 11,362 | $ | 203,305 | ||||||||||||||
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The accompanying notes are an integral part of these pro forma condensed consolidated financial statements.
OPKO Health, Inc. and subsidiaries
Pro Forma Condensed Consolidated Statements of Operations
For the nine months ended September 30, 2011
(unaudited)
(in thousands, except share and per share data)
| OPKO Health, Inc. As reported |
Claros Diagnostics, Inc. |
Claros Pro Forma adjustments |
Pro Forma Combined including Claros |
FineTech Pharmaceutical Ltd. |
FineTech Pro Forma adjustments |
Pro Forma Combined including Claros and FineTech |
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| Revenue |
$ | 22,185 | $ | — | $ | — | $ | 22,185 | $ | 5,656 | $ | — | $ | 27,841 | ||||||||||||||
| Cost of goods sold |
13,085 | — | — | 13,085 | 1,537 | — | 14,622 | |||||||||||||||||||||
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| Gross margin |
9,100 | — | — | 9,100 | 4,119 | — | 13,219 | |||||||||||||||||||||
| Operating expenses |
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| Selling, general and administrative |
14,102 | 2,349 | — | 16,451 | 311 | — | 16,762 | |||||||||||||||||||||
| Research and development |
7,097 | 514 | — | 7,611 | 160 | — | 7,771 | |||||||||||||||||||||
| Other operating expenses, principally amortization of intangible assets |
2,615 | — | 2,400 | d | 5,015 | — | 1,255 | d | 6,270 | |||||||||||||||||||
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| Total operating expenses |
23,814 | 2,863 | 2,400 | 29,077 | 471 | 1,255 | 30,803 | |||||||||||||||||||||
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| Operating (loss) income |
(14,714 | ) | (2,863 | ) | (2,400 | ) | (19,977 | ) | 3,648 | (1,255 | ) | (17,584 | ) | |||||||||||||||
| Other expense, net |
(757 | ) | (4 | ) | (825 | ) c | (1,586 | ) | (4 | ) | (825 | ) c | (2,415 | ) | ||||||||||||||
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| (Loss) income before provision for income taxes, investment loss and discontinued operations |
(15,471 | ) | (2,867 | ) | (3,225 | ) | (21,563 | ) | 3,644 | (2,080 | ) | (19,999 | ) | |||||||||||||||
| Income tax provision |
199 | — | — | 199 | — | — | 199 | |||||||||||||||||||||
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| (Loss) income before investment loss and discontinued operations |
(15,670 | ) | (2,867 | ) | (3,225 | ) | (21,762 | ) | 3,644 | (2,080 | ) | (20,198 | ) | |||||||||||||||
| Loss from investment in investees |
(1,175 | ) | — | — | (1,175 | ) | — | — | (1,175 | ) | ||||||||||||||||||
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| Net (loss) income before discontinued operations |
(16,845 | ) | (2,867 | ) | (3,225 | ) | (22,937 | ) | 3,644 | (2,080 | ) | (21,373 | ) | |||||||||||||||
| Discontinued operations |
(2,841 | ) | — | — | (2,841 | ) | — | — | (2,841 | ) | ||||||||||||||||||
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| Net (loss) income |
(19,686 | ) | (2,867 | ) | (3,225 | ) | (25,778 | ) | 3,644 | (2,080 | ) | (24,214 | ) | |||||||||||||||
| Preferred stock dividend |
(1,860 | ) | — | — | (1,860 | ) | — | — | (1,860 | ) | ||||||||||||||||||
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| Net (loss) income attributable to common shareholders |
$ | (21,546 | ) | $ | (2,867 | ) | $ | (3,225 | ) | $ | (27,638 | ) | $ | 3,644 | $ | (2,080 | ) | $ | (26,074 | ) | ||||||||
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| (Loss) income per common share from continuing operations, basic and diluted |
$ | (0.06 | ) | $ | (0.08 | ) | $ | (0.07 | ) | |||||||||||||||||||
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| (Loss) income per common share, basic and diluted |
$ | (0.08 | ) | $ | (0.10 | ) | $ | (0.09 | ) | |||||||||||||||||||
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| Weighted average number of common shares outstanding, basic and diluted |
277,359,789 | 4,494,380 | 281,854,169 | 3,615,521 | 285,469,690 | |||||||||||||||||||||||
The accompanying notes are an integral part of these pro forma condensed consolidated financial statements.
OPKO Health, Inc. and subsidiaries
Pro Forma Condensed Consolidated Statement of Operations
For the year ended December 31, 2010
(unaudited)
(in thousands, except share and per share data)
| OPKO Health, Inc. As reported |
Claros Diagnostics, Inc. |
Claros Pro Forma adjustments |
Pro Forma Combined including Claros |
FineTech Pharmaceutical Ltd. |
FineTech Pro Forma adjustments |
Pro Forma Combined including Claros and FineTech |
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| Revenue |
$ | 28,494 | $ | — | $ | — | $ | 28,494 | $ | 5,608 | $ | — | $ | 34,102 | ||||||||||||||
| Cost of goods sold |
13,495 | — | — | 13,495 | 2,070 | — | 15,565 | |||||||||||||||||||||
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| Gross margin |
14,999 | — | — | 14,999 | 3,538 | — | 18,537 | |||||||||||||||||||||
| Operating expenses |
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| Selling, general and administrative |
18,133 | 3,206 | — | 21,339 | 578 | — | 21,917 | |||||||||||||||||||||
| Research and development |
5,949 | 1,051 | — | 7,000 | 173 | — | 7,173 | |||||||||||||||||||||
| Other operating expenses, principally amortization of intangible assets |
2,053 | — | 3,200 | d | 5,253 | — | 1,673 | d | 6,926 | |||||||||||||||||||
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| Total operating expenses |
26,135 | 4,257 | 3,200 | 33,592 | 751 | 1,673 | 36,016 | |||||||||||||||||||||
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| Operating (loss) income |
(11,136 | ) | (4,257 | ) | (3,200 | ) | (18,593 | ) | 2,787 | (1,673 | ) | (17,479 | ) | |||||||||||||||
| Other (expense) income, net |
(844 | ) | 181 | (1,100 | ) c | (1,763 | ) | (398 | ) | (1,100 | ) c | (3,261 | ) | |||||||||||||||
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| (Loss) income before provision for income taxes, investment loss and discontinued operations |
(11,980 | ) | (4,076 | ) | (4,300 | ) | (20,356 | ) | 2,389 | (2,773 | ) | (20,740 | ) | |||||||||||||||
| Income tax (benefit) provision |
(18 | ) | — | — | (18 | ) | 56 | — | 38 | |||||||||||||||||||
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| (Loss) income before investment loss and discontinued operations |
(11,962 | ) | (4,076 | ) | (4,300 | ) | (20,338 | ) | 2,333 | (2,773 | ) | (20,778 | ) | |||||||||||||||
| (Loss) income from investment in investees |
(714 | ) | — | — | (714 | ) | — | — | (714 | ) | ||||||||||||||||||
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| Net (loss) income before discontinued operations |
(12,676 | ) | (4,076 | ) | (4,300 | ) | (21,052 | ) | 2,333 | (2,773 | ) | (21,492 | ) | |||||||||||||||
| Discontinued operations |
(6,250 | ) | — | (6,250 | ) | — | — | (6,250 | ) | |||||||||||||||||||
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| Net (loss) income |
(18,926 | ) | (4,076 | ) | (4,300 | ) | (27,302 | ) | 2,333 | (2,773 | ) | (27,742 | ) | |||||||||||||||
| Preferred stock dividend |
(2,624 | ) | — | — | (2,624 | ) | — | — | (2,624 | ) | ||||||||||||||||||
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| Net (loss) income attributable to common shareholders |
$ | (21,550 | ) | $ | (4,076 | ) | $ | (4,300 | ) | $ | (29,926 | ) | $ | 2,333 | $ | (2,773 | ) | $ | (30,366 | ) | ||||||||
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| (Loss) income per common from continuing operations share, basic and diluted |
$ | (0.05 | ) | $ | (0.08 | ) | $ | (0.08 | ) | |||||||||||||||||||
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| (Loss) income per common from continuing operations share, basic and diluted |
$ | (0.08 | ) | $ | (0.12 | ) | $ | (0.12 | ) | |||||||||||||||||||
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| Weighted average number of common shares outstanding, basic and diluted |
255,095,586 | 4,494,380 | 259,589,966 | 3,615,521 | 263,205,487 | |||||||||||||||||||||||
The accompanying notes are an integral part of these pro forma condensed consolidated financial statements.
Notes:
| (a) | Reflects the consideration paid at closing to Claros Diagnostics, Inc. shareholders representing $10.0 million in cash and $20.0 million in OPKO Common Stock. A portion of the cash paid at closing paid certain liabilities of Claros Diagnostics, Inc. |
| (b) | Reflects the elimination of Claros Diagnostics, Inc.’s equity capital |
| (c) | The pro forma interest expense assumes borrowing funds at an 11% annual interest rate for the cash consideration issued to Claros Diagnostics, Inc. and FineTech Pharmaceutical Ltd. shareholders of $10.0 million, each, respectively. The annual interest rate is based on OPKO’s US based line of credit. The interest expense assumes the closing of the transaction and funds were borrowed on January 1, 2010. |
| (d) | The pro forma amortization expense assumes the transactions closed on January 1, 2010. |
| (e) | The following table reflects the initial purchase price allocation of Claros Diagnostics, Inc., which is preliminary and subject to change: |
| Intangible asset |
Purchase price allocation | Estimated useful life | ||||
| Technology |
$ | 32,000 | 10 years | |||
| In-process research and development |
7,082 | Indefinite | ||||
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| TOTAL |
$ | 39,082 | ||||
| (f) | Reflects the estimated contingent consideration to be paid to the sellers of Claros Diagnostics, Inc. and FineTech Pharmaceutical Ltd. upon the achievement of certain milestones. This amount represents the estimated fair value of the contingent consideration, which is preliminary and subject to change. |
| (g) | Reflects the consideration paid at closing to FineTech Pharmaceutical Ltd. Shareholder representing $10.0 million in cash and $17.5 million in OPKO Common Stock. |
| (h) | Reflects the elimination of FineTech Pharmaceutical Ltd.’s. equity capital |
| (i) | Reflects the initial purchase price allocation, which is preliminary and subject to change. The following table reflects the initial intangible asset purchase price allocation of FineTech Pharmaceutical Ltd., which is preliminary and subject to change: |
| Intangible asset |
Purchase price allocation | Estimated useful life | ||||
| Customer relationships |
$ | 15,800 | 12 years | |||
| Goodwill |
3,147 | Indefinite | ||||
| Technology |
2,900 | 10 years | ||||
| Tradename |
200 | 3 years | ||||
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| Total |
$ | 22,047 | ||||