Attached files
| file | filename |
|---|---|
| EX-99.1 - Vitality Biopharma, Inc. | ex99-1.htm |
| EX-23.1 - Vitality Biopharma, Inc. | ex23-1.htm |
| 8-K/A - Vitality Biopharma, Inc. | form8-ka.htm |
Exhibit 99.2
Vitality Biopharma, Inc. and Subsidiaries
Summary of Unaudited Pro Forma Condensed Consolidated Financial Information
On October 22, 2018, Vitality Biopharma, Inc. (the “Company”), completed its acquisition of Summit Healthtech, Inc. (“Summit”) and its wholly owned subsidiary The Control Center. Pursuant to the terms of a share exchange agreement, the stockholders of Summit exchanged all the outstanding capital stock of Summit for 6,000,000 shares of the Company’s common stock. The shares of the Company’s common stock were valued at a contemporaneous private placement offering price of $1.50 per share resulting in an aggregate purchase price of $9,000,000 for the acquisition.
As required by Accounting Standards Codification Topic 805-20, the Company will allocate the purchase price to assets and liabilities based on their estimated fair value at the acquisition date. The fair values of the assets acquired, as set forth below, are considered provisional and subject to adjustment as additional information is obtained through the purchase price measurement period (a period of up to one year from the closing date). The provisional allocation of the purchase price is based on management’s preliminary estimates. Once management completes its analysis to finalize the purchase price allocation with assistance from a third-party valuation firm, it is reasonably possible that there could be changes to the preliminary values. The primary areas of the purchase price allocation that are not yet finalized relate to identifiable intangible assets and goodwill.
| Fair value of assets acquired: | ||||
| Cash | $ | 14,574 | ||
| Accounts receivables | 24,464 | |||
| Prepaid expenses | 31,121 | |||
| Property and equipment | 12,269 | |||
| Cost in excess of acquired net assets-to be allocated | 9,179,546 | |||
| Total | 9,261,974 | |||
| Fair value of liabilities assumed | (261,974 | ) | ||
| Purchase price | $ | 9,000,000 | ||
The unaudited pro forma condensed consolidated balance sheet as of September 30, 2018, gives effect to the acquisition as if it had occurred on September 30, 2018. The unaudited pro forma condensed consolidated statements of operations for the fiscal year ended March 31, 2018, and the six months ended September 30, 2018, are presented as if the acquisition was consummated on April 1, 2017, the beginning of the Company’s 2018 fiscal year. The historical financial data has been adjusted to give pro forma effect to events that are (1) directly attributable to the acquisition, (2) factually supportable, and (3) with respect to the statements of operations, expected to have a continuing impact on the consolidated results.
The unaudited pro forma condensed consolidated financial information presented herein is provided for illustrative purposes only. The unaudited pro forma condensed consolidated financial information is based on management’s estimate of the effects of the acquisition, had such transaction occurred on the dates indicated, based on currently available information and certain assumptions and estimates that the Company believes are reasonable under the circumstances. The unaudited pro forma condensed consolidated financial information is not necessarily indicative of the results of operations or financial position that actually would have been achieved had the acquisition been consummated on the dates indicated, or that may be achieved in the future.
The unaudited pro forma condensed consolidated financial information presented herein should be read in conjunction with the financial statements of The Control Center, Inc. contained elsewhere in this Current Report on Form 8-K/A, as filed with the Securities and Exchange Commission, the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2018, as filed with the Securities and Exchange Commission on June 28, 2018, and the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2018, as filed with the Securities and Exchange Commission on November 14, 2018.
Vitality Biopharma, Inc.
Pro Forma Condensed Consolidated Balance Sheet
September 30, 2018
(unaudited)
| Vitality Biopharma, Inc. | The Control Center, Inc. | Pro Forma Adjustments | Pro Forma Total | |||||||||||||
| (unaudited) | ||||||||||||||||
| Current assets | ||||||||||||||||
| Cash | $ | 336,680 | $ | 14,574 | $ | $ | 351,254 | |||||||||
| Accounts receivable, net | 20,065 | 24,464 | 44,529 | |||||||||||||
| Prepaid expenses | 8,058 | 31,121 | 39,179 | |||||||||||||
| Total current assets | 364,803 | 70,159 | - | 434,962 | ||||||||||||
| Fixed assets | - | 12,269 | 12,269 | |||||||||||||
| Cost in excess of acquired net assets from The Control Center acquisition | - | - | 9,179,546 | (2) | 9,179,546 | |||||||||||
| Total Assets | 364,803 | 82,428 | 9,179,546 | 9,626,777 | ||||||||||||
| Current liabilities | ||||||||||||||||
| Accounts payable and accrued liabilities | 572,473 | 52,748 | 625,221 | |||||||||||||
| Deferred revenue | - | 14,350 | 14,350 | |||||||||||||
| Line of credit- bank | - | 194,876 | 194,876 | |||||||||||||
| Derivative liability | 215,391 | - | 215,391 | |||||||||||||
| Total liabilities | 787,864 | 261,974 | - | 1,049,838 | ||||||||||||
| Stockholders’ deficit | ||||||||||||||||
| Common stock | 24,483 | 1,000 | 6,000 | (1) | 30,483 | |||||||||||
| (1,000 | )(3) | |||||||||||||||
| Additional paid-in capital | 23,953,408 | 180,000 | 8,994,000 | (1) | 32,947,408 | |||||||||||
| (180,000 | )(3) | |||||||||||||||
| Accumulated deficit | (24,400,952 | ) | (360,546 | ) | 360,546 | (3) | (24,400,952 | ) | ||||||||
| Total stockholders’ deficit | (423,061 | ) | (179,546 | ) | 9,179,546 | 8,576,939 | ||||||||||
| Total liabilities and stockholders’ deficit | $ | 364,803 | $ | 82,428 | $ | 9,179,546 | $ | 9,626,777 | ||||||||
Notes
(1) Represents the issuance of 6,000,000 shares of Vitality Biopharma, Inc.’s common stock valued at $9,000,000 for the acquisition of The Control Center.
(2) Represents the preliminary fair value of goodwill and intangible assets related to the acquisition of The Control Center.
(3) Elimination of common stock, additional paid-in capital, and accumulated deficit of The Control Center related to the acquisition of The Control Center by Vitality Biopharma, Inc.
Vitality Biopharma, Inc.
Pro Forma Condensed Consolidated Statement of Operations
Six Months Ended September 30, 2018
(unaudited)
| Vitality Biopharma, Inc. | The Control Center, Inc. | Pro Forma Adjustments | Pro Forma Total | |||||||||||||
| (unaudited) | ||||||||||||||||
| Revenues | $ | 62,833 | $ | 268,585 | $ | $ | 331,418 | |||||||||
| Operating expenses | ||||||||||||||||
| Cost of products | 40,457 | - | 40,457 | |||||||||||||
| Salaries and costs of outpatient services | - | 271,350 | 271,350 | |||||||||||||
| General and administrative | 1,223,057 | 190,102 | 1,413,159 | |||||||||||||
| Research and development | 1,092,986 | - | 1,092,986 | |||||||||||||
| Total operating expenses | 2,356,500 | 461,452 | 2,817,952 | |||||||||||||
| Loss from operations | (2,293,667 | ) | (192,867 | ) | (2,486,534 | ) | ||||||||||
| Other expense-change in fair value of derivative liability | (62,349 | ) | - | (62,349 | ) | |||||||||||
| Net loss | $ | (2,356,016 | ) | $ | (192,867 | ) | $ | $ | (2,548,883 | ) | ||||||
| Net loss per share - Basic and diluted | $ | (0.10 | ) | $ | (.08 | ) | ||||||||||
| Weighted average common shares outstanding - Basic and diluted | 24,301,786 | 6,000,000 | (1) | 30,301,786 | ||||||||||||
Notes
(1) Represents the issuance of 6,000,000 shares of Vitality Biopharma, Inc.’s common stock valued at $9,000,000 for the acquisition of The Control Center.
Vitality Biopharma, Inc.
Pro Forma Condensed Consolidated Statement of Operations
Year ended March 31, 2018
(unaudited)
| Vitality Biopharma, Inc. | The Control Center, Inc. | Pro Forma Adjustments | Pro Forma Total | |||||||||||||
| (unaudited) | ||||||||||||||||
| Revenues | $ | 102,419 | $ | 433,744 | $ | - | $ | 536,163 | ||||||||
| Operating expenses | ||||||||||||||||
| Cost of products | 77,943 | - | 77,943 | |||||||||||||
| Salaries and costs of outpatient services | - | 588,079 | 588,079 | |||||||||||||
| General and administrative | 2,523,405 | 418,990 | 2,942,395 | |||||||||||||
| Research and development | 1,897,817 | - | 1,897,817 | |||||||||||||
| Total operating expenses | 4,499,165 | 1,007,069 | 5,506,234 | |||||||||||||
| Loss from operations | (4,396,746 | ) | (573,325 | ) | (4,970,071 | ) | ||||||||||
| Other income- change in fair value of derivative liability | 87,749 | - | 87,749 | |||||||||||||
| Net loss | $ | (4,308,997 | ) | $ | (573,325 | ) | $ | $ | (4,882,322 | ) | ||||||
| Net loss per share - Basic and diluted | $ | (0.19 | ) | $ | (0.17 | ) | ||||||||||
| Weighted average common shares outstanding - Basic and diluted | 23,121,003 | 6,000,000 | (1) | 29,121,003 | ||||||||||||
Notes
(1) Represents the issuance of 6,000,000 shares of Vitality Biopharma, Inc.’s common stock valued at $9,000,000 for the acquisition of The Control Center.