Attached files
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EX-99.1 - EXHIBIT 99.1 - SOLENO THERAPEUTICS INC | exh991pressrelease.htm |
EX-2.1 - EXHIBIT 2.1 - SOLENO THERAPEUTICS INC | ehx21.htm |
8-K - 8-K - SOLENO THERAPEUTICS INC | a8-kjuly24.htm |
Exhibit 99.2
Soleno Therapeutics, Inc. (formerly known as Capnia, Inc.)
Unaudited Pro Forma Condensed Consolidated Financial Statements
On July 18, 2017, Soleno Therapeutics, Inc. (formerly known as Capnia, Inc.) (the “Company”) completed the sale of stock of its 100% owned subsidiary, NeoForce, Inc. ("NFI") primarily related to the Company’s portfolio of neonatology resuscitation products (the "Disposition") pursuant to a Stock Purchase Agreement (the “Purchase Agreement”), dated July 18, 2017, with NeoForce Holdings, Inc. ("Holdings"), a 100% owned subsidiary of Flexicare Medical Limited, a privately held United Kingdom company, for $720,000, plus the Company will also receive proceeds for the total outstanding accounts receivable and inventory held by NFI at the date of sale, as it is collected or sold, respectively. The Disposition was completed in accordance with the Purchase Agreement between the Company and Holdings, dated July 18, 2017.
The following unaudited pro forma condensed consolidated financial statements give effect to the Disposition, the receipt of proceeds from the Disposition, and the other assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed consolidated financial statements. These adjustments are based upon information and assumptions available at the time of the filing of this financial information on Form 8-K.
The unaudited pro forma financial information is based on financial statements prepared in accordance with U.S. generally accepted accounting principles, which are subject to change and interpretation. The unaudited pro forma condensed consolidated financial statements were based on and derived from the Company’s historical consolidated financial statements, adjusted for those amounts which were determined to be directly attributable to the Disposition, factually supportable, and with respect to the Unaudited Pro Forma Condensed Consolidated Statements of Operations, expected to have a continuing impact on the consolidated results. Actual adjustments, however, may differ materially from the information presented.
The unaudited pro forma financial information is based upon available information and assumptions that management considers to be reasonable, and such assumptions have been made solely for purposes of developing such unaudited pro forma financial information for illustrative purposes in compliance with the disclosure requirements of the Securities and Exchange Commission. The unaudited pro forma financial information is not necessarily indicative of the financial position or results of operations that would have actually occurred had the Disposition occurred on the dates indicated. In addition, these unaudited pro forma condensed consolidated financial statements should not be considered to be indicative of the future financial performance and results of operations of the Company.
The unaudited pro forma condensed consolidated balance sheet as of March 31, 2017 gives effect to the Disposition and adjustments as if it occurred on the date of the balance sheet.
The unaudited pro forma condensed consolidated statements of operations for the fiscal years ended December 31, 2016 and three months ended March 31, 2016 and 2017, give effect to the Disposition and adjustments as if they had occurred on January 1, 2016 and carried forward through to the latest period presented.
The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the Company’s historical audited consolidated financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2016 and its Quarterly Reports on Form 10-Q for the three months ended March 31, 2016 and 2017.
The unaudited condensed consolidated pro forma financial statements are prepared in accordance with Article 11 of Regulation S-X.
Soleno Therapeutics, Inc. (formerly known as Capnia, Inc.)
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of March 31, 2017
(in thousands)
As Reported | Sale of NFI (a) | Proceeds from Sale | Pro Forma | |||||||||||||
Assets | ||||||||||||||||
Current assets | ||||||||||||||||
Cash and cash equivalents | $ | 10,539 | $ | — | $ | 671 | (b) | $ | 11,210 | |||||||
Accounts receivable | 110 | 62 | — | 49 | ||||||||||||
Receivable from sale of NFI | — | — | 237 | (c) | 237 | |||||||||||
Restricted cash | 35 | — | — | 35 | ||||||||||||
Inventory | 855 | 170 | — | 685 | ||||||||||||
Prepaid expenses and other current assets | 261 | — | — | 261 | ||||||||||||
Total current assets | $ | 11,800 | $ | 232 | $ | 909 | $ | 12,477 | ||||||||
Long-term assets | ||||||||||||||||
Property and equipment, net | 93 | 42 | — | 51 | ||||||||||||
Other assets | 126 | — | — | 126 | ||||||||||||
Goodwill | 718 | 718 | — | — | ||||||||||||
Other intangible assets, net | 21,128 | 311 | — | 20,817 | ||||||||||||
Total assets | $ | 33,865 | $ | 1,303 | $ | 909 | $ | 33,471 | ||||||||
Liabilities and stockholders' equity | ||||||||||||||||
Current liabilities | ||||||||||||||||
Accounts payable | 935 | 23 | — | 913 | ||||||||||||
Accrued compensation and other current liabilities | 1,237 | 128 | — | 1,108 | ||||||||||||
Total current liabilities | 2,172 | 151 | — | 2,021 | ||||||||||||
Long-term liabilities | ||||||||||||||||
Series A warrant liability | 291 | — | — | 291 | ||||||||||||
Series C warrant liability | 58 | — | — | 58 | ||||||||||||
Other liabilities | 1,201 | 81 | — | 1,120 | ||||||||||||
Total long-term liabilities | 1,549 | 81 | — | 1,468 | ||||||||||||
Total liabilities | 3,721 | 232 | — | 3,489 | ||||||||||||
Stockholders' equity | ||||||||||||||||
Common stock | 47 | — | — | 47 | ||||||||||||
Series B Convertible Preferred | — | — | — | — | ||||||||||||
Additional paid-in-capital | 131,296 | 1,197 | — | 130,098 | ||||||||||||
Accumulated deficit | (101,199 | ) | (277 | ) | 909 | (100,013 | ) | |||||||||
Total stockholders' equity | 30,144 | 920 | 909 | 30,133 | ||||||||||||
Total liabilities and stockholders' equity | $ | 33,865 | $ | 1,303 | $ | 909 | $ | 33,471 | ||||||||
Soleno Therapeutics, Inc. (formerly known as Capnia, Inc.)
Unaudited Pro Forma Condensed Consolidated Statement of Operations
for the Year Ended December 31, 2016
(in thousands)
As Reported | Sale of NFI | Pro Forma | |||||||||
Product revenue | $ | 1,451 | $ | 1,058 | (d) | $ | 393 | ||||
Cost of product revenue | 1,509 | 515 | (d) | 994 | |||||||
Gross profit | (58 | ) | 543 | (d) | (601 | ) | |||||
Expenses | |||||||||||
Research and development | 5,185 | 147 | (d) | 5,038 | |||||||
Sales and marketing | 1,631 | 252 | (d) | 1,379 | |||||||
General and administrative | 6,736 | 355 | (d) | 6,381 | |||||||
Total expenses | 13,552 | 754 | (d) | 12,798 | |||||||
Operating loss | $ | (13,610 | ) | $ | (211 | ) | (d) | $ | (13,399 | ) | |
Interest and other income (expense) | |||||||||||
Other expense | (7) | — | (7) | ||||||||
Change in fair value of warrants liabilities | 1,667 | — | 1,667 | ||||||||
Cease-use expense | (93) | — | (93) | ||||||||
Other income | 1,567 | — | 1,567 | ||||||||
Net loss before provision for Income Taxes | (12,043 | ) | (211 | ) | (d) | (11,832 | ) | ||||
Provision for Income Taxes | (22) | — | (22) | ||||||||
Net loss after provision for Income Taxes | (12,065 | ) | (211 | ) | (d) | (11,854 | ) | ||||
Loss on extinguishment of convertible preferred stock | 3,651 | 3,651 | |||||||||
Net loss applicable to common stockholders | $ | (15,716 | ) | $ | (211 | ) | $ | (15,505 | ) | ||
Basic and diluted net loss per share applicable to common stockholders | $ | (1.01 | ) | $ | (1.00 | ) | |||||
Weighted-average common shares outstanding | |||||||||||
used to calculate net loss per | |||||||||||
common share: | |||||||||||
Basic and diluted | 15,507,484 | 15,507,484 | |||||||||
Soleno Therapeutics, Inc. (formerly known as Capnia, Inc.)
Unaudited Pro Forma Condensed Consolidated Statements of Operations
for the Three Months Ended March 31, 2016
(in thousands)
As Reported | Sale of NFI | Pro Forma | |||||||||
Product revenue | $ | 447 | $ | 322 | (d) | $ | 125 | ||||
Cost of product revenue | 461 | 194 | (d) | 266 | |||||||
Gross profit | (14 | ) | 127 | (d) | (141 | ) | |||||
Expenses | |||||||||||
Research and development | 1,772 | 29 | (d) | 1,743 | |||||||
Sales and marketing | 538 | 51 | (d) | 487 | |||||||
General and administrative | 1,939 | 90 | (d) | 1,849 | |||||||
Total expenses | 4,249 | 170 | (d) | 4,079 | |||||||
Operating loss | 4,263 | (43 | ) | (4,220 | ) | ||||||
Interest and other income (expense) | |||||||||||
Change in fair value of warrants liabilities | 1,170 | — | 1,170 | ||||||||
Cease-use expense | (94 | ) | — | 94 | |||||||
Other expense | (2 | ) | — | (2 | ) | ||||||
Interest and other income (expense), net | 1,074 | — | 1,074 | ||||||||
Net loss | $ | (3,189 | ) | (43 | ) | (d) | (3,146 | ) | |||
Net loss per common share: | |||||||||||
Basic and diluted | $ | (0.22 | ) | $ | (0.21 | ) | |||||
Weighted-average common shares outstanding | |||||||||||
used to calculate net loss per | |||||||||||
common share: | |||||||||||
Basic and diluted | 14,796,119 | 14,796,119 | |||||||||
Soleno Therapeutics, Inc. (formerly known as Capnia, Inc.)
Condensed Consolidated Statements of Operations
for the three months ended March 31, 2017
(in thousands)
As Reported | Sale of NFI | Pro Forma | |||||||||
Product revenue | $ | 265 | $ | 217 | (d) | $ | 48 | ||||
Cost of product revenue | 209 | 125 | (d) | 85 | |||||||
Gross profit | 56 | 92 | (d) | (36 | ) | ||||||
Expenses | |||||||||||
Research and development | 994 | 60 | (d) | 934 | |||||||
Sales and marketing | 114 | 61 | (d) | 53 | |||||||
General and administrative | 1,158 | 102 | (d) | 1,056 | |||||||
Total expenses | 2,266 | 223 | (d) | 2,043 | |||||||
Operating loss | (2,210 | ) | 131 | (d) | 2,079 | ||||||
Interest and other income (expense) | |||||||||||
Interest Income | 1 | 1 | |||||||||
Other Expense | (602 | ) | (602 | ) | |||||||
Change in fair value of warrants liabilities | (69 | ) | (69 | ) | |||||||
Cease-use expense | (7 | ) | (7 | ) | |||||||
Interest and other income (expense), net | (677 | ) | — | (677 | ) | ||||||
Net loss | $ | (2,887 | ) | $ | (131 | ) | (d) | $ | (2,756 | ) | |
Basic and diluted net loss per share applicable to common stockholders | $ | (0.11 | ) | $ | (0.11 | ) | |||||
Weighted-average common shares outstanding | |||||||||||
used to calculate net loss per | |||||||||||
common share: | |||||||||||
Basic and diluted | 26,853,433 | 26,853,433 | |||||||||
Soleno Therapeutics, Inc. (formerly known as Capnia, Inc.)
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
1. | Basis of Presentation |
The unaudited proforma condensed consolidated statements of operations for the year ended December 31, 2016 were derived from the historical audited consolidated financial statements for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The unaudited pro forma condensed consolidated balance sheet as of March 31, 2017 and the unaudited pro forma condensed consolidated statement of operations for the three months ended March 31, 2016 and 2017 were derived from the unaudited condensed consolidated financial statements included in the Company’s Quarterly Report on Form 10-Q as of and for the three months ended March 31, 2016 and 2017.
2. | Disposition of NFI |
On July 18, 2017, Soleno Therapeutics, Inc. (the “Company”) completed the sale of stock of its 100% owned subsidiary, NeoForce, Inc. ("NFI") primarily related to the Company’s portfolio of neonatology resuscitation products (the "Disposition")pursuant to a Stock Purchase Agreement (the “Purchase Agreement”), dated as of July 18, 2017, with NeoForce Holdings, Inc. ("Holdings") for $720,000 and adjustments for inventory and the current cash balances held at NFI. The Company will also receive proceeds for the total outstanding accounts receivable and inventory held by NFI at the date of sale, as it is collected or sold, respectively. The Disposition was completed in accordance with the Purchase Agreement between the Company and Holdings, dated July 18, 2017.
Transaction costs consisting of legal, tax, accounting and other professional fees, employee severance payments and other costs are approximately $69 thousand; and the net book value of assets being transferred in the Disposition was $1.1 million as of March 31, 2017.
3. | Pro Forma Adjustments |
The unaudited pro forma condensed consolidated balance sheet as of March 31, 2017 reflects the following adjustments:
(a) | Represents the amounts of NFI assets and liabilities which were sold or transferred to Holdings as if the Disposition had occurred on March 31, 2017. |
(b) | Reflects the proceeds received at closing from the Disposition. The sale price of $720,000 was reduced by (1) approximately $69,000 for estimated transaction expenses assumed to be paid at closing and increased by $20,000, representing $20,000 of the maximum of $100,000 saleable inventory for purposes of this calculation. |
(c) | Reflects the proceeds receivable from the sale of NFI for the remaining saleable inventory of $110,841 and accounts receivable of $126,565 to be received by the Company as sold or collected, respectively. |
The unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2016 and 2017 and the year ended December 31, 2016 reflect the following adjustments:
(d) | The elimination of operating results of NFI business in the unaudited condensed consolidated statements of operations for the Company for the three months ended March 31, 2016 and 2017 and the year ended December 31, 2016, as if the Disposition had occurred on January 1, 2016. |