-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N5aPDpeiEM6Rxh08QI/nV8QKALXmrurKVdQJkUvexK/qQgwg1MjR9DaGw4Q07tyo F4asnH/CVgOUbgjIbrBrVQ== 0001144204-05-001863.txt : 20050121 0001144204-05-001863.hdr.sgml : 20050121 20050121063520 ACCESSION NUMBER: 0001144204-05-001863 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050121 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050121 DATE AS OF CHANGE: 20050121 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RITA MEDICAL SYSTEMS INC CENTRAL INDEX KEY: 0001056421 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 943199149 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-30959 FILM NUMBER: 05539890 BUSINESS ADDRESS: STREET 1: 967 N SHORELINE BLVD CITY: MOUNTAIN VIEW STATE: CA ZIP: 94013 BUSINESS PHONE: 6503858500 MAIL ADDRESS: STREET 1: 967 NORTH SHORELINE BLVD CITY: MOUNTAIN VIEW STATE: CA ZIP: 94043 8-K 1 form8k.htm Unassociated Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 21, 2005

RITA Medical Systems, Inc.
(Exact name of registrant as specified in its charter)

000-30959
(Commission File Number)

Delaware
94-3199149
(State or other jurisdiction of incorporation)
(I.R.S. Employer Identification No.)
 
967 N. Shoreline Blvd.
Mountain View, CA 94043
(Address of principal executive offices, with zip code)

(650) 314-3400
(Registrant's telephone number, including area code)



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
  o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
  o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
  o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
  o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 

     
 

 
 
Item 2.01. Financial Statements and Exhibits.
 
As previously reported in a Current Report on Form 8-K filed on August 9, 2004, RITA Medical Systems, Inc., a Delaware corporation, completed its acquisition of Horizon Medical Products, Inc., a Georgia corporation, on July 29, 2004. The previously filed Current Report on Form 8-K has a description of the terms of the acquisition of Horizon by RITA and material agreements associated with the acquisition were filed as exhibits to the previous report.
 
RITA has prepared pro forma financial information for the year ended December 31, 2003 and for the nine months ended September 30, 2004. This pro forma financial information is filed as an exhibit to this report.
 
 
Item 9.01. Financial Statements and Exhibits.
 
 
(a) Financial Statements of Business Acquired.
 
The financial statements of Horizon Medical Products, Inc. previously were filed as an exhibit to the Registrant's Current Report on Form 8-K filed on August 9, 2004.
 
 
(b) Pro Forma Financial Information.
 
The required pro forma financial information is filed as an exhibit to this report and is incorporated by reference herein.
 
 
(c) Exhibits:
 
99.1 Unaudited Pro Forma Condensed Consolidated Financial Information.

     
 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
     
  RITA MEDICAL SYSTEMS, INC.
 
 		  
 		  
 
Date: January 21, 2005 By:   /s/ Donald Stewart
 
Donald Stewart
  Chief Financial Officer



     
 

EXHIBIT INDEX
     
Exhibit No.
Description
99.1
Unaudited Pro Forma Condensed Consolidated Financial Information.
 
 


 EX-99 2 ex99.htm Unassociated Document

 RITA MEDICAL SYSTEMS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
 
The following unaudited pro forma condensed consolidated financial information gives effect to the merger of RITA Medical Systems, Inc. (“RITA” or “the Company”) and Horizon Medical Products, Inc. (“Horizon”) in a transaction that was accounted for as a purchase with RITA treated as the acquiror. The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2003 and for the nine months ended September 30, 2004, presented below, combine the historical consolidated statements of operations of RITA and Horizon for those periods, giving effect to the merger as if it occurred on January 1, 2003, reflecting only pro forma adjustments expected to have a continuing impact on the combined results. RITA’s quarterly report on Form 10-Q for the nine months ended September 30, 2004 contains our unaudited condensed consolidated balance sheet as of September 30, 2004,which presents the consolidated assets, liabilities and equity of the two companies as of that date.

This unaudited pro forma condensed consolidated financial information is for informational purposes only. It does not purport to indicate the results that would have actually been obtained had the merger been completed on the assumed date or for the periods presented, or which may be realized in the future. To produce the pro forma financial information, the Company allocated the purchase price using its best estimates of fair value. These estimates are based on the most recently available information. This unaudited pro forma condensed consolidated financial information should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the historical consolidated financial statements, including the related notes, of RITA and Horizon covering these periods, contained in our joint proxy statement/prospectus, and also in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the historical financial statements, including the related notes, of the Company contained in our quarterly report on Form 10-Q for the nine months ended September 30, 2004.

 

 
     
 


RITA MEDICAL SYSTEMS, INC.
 
Unaudited Pro-forma Condensed Consolidated Statement of Operations
Year Ended December 31, 2003
 
(In thousands, except per share amounts)
 
 
Historical
RITA 
Historical
Horizon  
Pro-forma
adjustments
Pro-forma 
 
  
Sales
$
16,607
  
$
27,975
  
$
-
        
$
44,582
        
Cost of goods sold
  
6,166
    
11,248
    
575
    
(a)
 
  
17,989
        
Gross profit
  
10,441
    
16,727
    
(575
)
        
26,593
        
Operating expenses:
                                    
Research and development
  
4,294
    
973
    
-
          
5,267
        
Selling, general and administrative
  
17,418
    
14,123
    
882
    
(a)
 
  
32,423
        
Total operating expenses
  
21,712
    
15,096
    
882
          
37,690
        
Loss from operations
  
(11,271)   
  
1,631
    
(1,457
)
        
(11,097
)
      
Interest income
  
201
    
-
    
-
          
201
        
Interest expense
  
-
    
(2,373
)
  
-
          
(2,373
)
      
Other expense, net
  
(9
)
  
(45
)
  
-
          
(54
)
      
Net loss
$
(11,079
)
$
(787
)
$
(1,457
)
      
$
(13,323
)
      
Net loss per common share, basic and diluted
$
(0.63
)
$
(0.02
)
            
$
(0.37
) 
  
(b
)
Shares used in computing net loss
                                    
per common share, basic and diluted
  
17,647
    
36,656
                
36,352
    
(b
)

The accompanying notes are an integral part of the pro forma condensed consolidated financial information.

 
     
 
 
RITA MEDICAL SYSTEMS, INC.
 
Unaudited Pro-forma Condensed Consolidated Statement of Operations
Nine Months Ended September 30, 2004
 
(In thousands, except per share amounts)


   
Historical
  
Historical
 
Pro-forma
     
   
RITA
 
Horizon
 
adjustments
 
Pro-forma
 
Sales
 
$
17,254
  
$
15,864
  
$
-
  
$
33,118
  
Cost of goods sold
   
6,106
    
6,555
    
335
(a)
  
12,996
 
Gross profit
   
11,148
    
9,309
    
(335
)
  
20,122
 
Operating expenses:
                  
Research and development
   
2,752
   
388
   
-
    
3,140
  
Selling, general and administrative
   
14,523
   
11,648
   
511
(a)
  
26,682
  
Restructuring charges
   
1,089
    
-
    
-
    
1,089
 
Total operating expenses
    
18,364
    
12,036
    
511
    
30,911
  
                           
Loss from operations
   
(7,216
)
  
(2,727
)
  
(846
)
  
(10,789
)
                           
Interest income
   
65
   
2
   
-
    
67
 
Interest expense
   
(242
)
  
(1,403
)
  
-
    
(1,645
)
Other expense, net
   
(38
)
  
(69
)
  
-
   
(107
)
                           
Net loss
 
$
(7,431
)
$
(4,197
)
$
(846
)
$
(12,474
)
                           
Net loss per common share, basic and diluted
 
$
(0.33
)
$
(0.10
)
    
$
(0.34)
(b)
                           
Shares used in computing net loss
                 
per common share, basic and diluted
   
22,399
    
44,132
        
36,735
(b)


The accompanying notes are an integral part of the pro forma condensed consolidated financial information.




 
     
 

RITA MEDICAL SYSTEMS, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

1.    Basis of presentation
 
On July 29, 2004, the Company merged with Horizon Medical Products, Inc. (“Horizon”) in a transaction accounted for under the purchase method of accounting. The combined companies will continue to operate under the name RITA Medical Systems, Inc. The merger was pursued and completed because the management groups and stockholders of each company believe the combined entity will achieve higher sales and profitability than either or both of the pre-merger companies on a stand-alone basis. These factors contributed to a purchase price in excess of the fair value of Horizon’s net tangible and intangible assets acquired and, as a result, the Company has recorded goodwill in connection with this transaction.
 
Each Horizon common stockholder received 0.4212 of a share of the Company’s common stock for each share of Horizon common stock held. The Company thereby issued approximately 18.7 million shares of its common stock to acquire all issued and outstanding shares of Horizon common stock, and further assumed all outstanding Horizon options and warrants that, upon exercise, will result in the issuance of approximately 3.9 million shares of the Company’s common stock. The fair value of shares issued by the Company was approximately $91.6 million based on a price per share of $4.896, the Company’s average closing price the day the proposed merger was announced (May 13, 2004), the two business days preceding the announcement and the two business days following the announcement. The fair value of options and warrants, all of which were fully vested when assumed by the Company was determined to be approximately $15.3 million using the Black-Scholes valuation model. Costs incurred to effect the merger included as a component of purchase price were $2.4 million. The total purchase price was approximately $109.3 million. The fair value of assets acquired, net of liabilities assumed, was approximately $18.0 million, resulting in goodwill of $91.3 million.

2. Purchase price

The purchase price of the acquisition is $109.3 million as follows (in thousands):

Issuance of RITA common stock   $  91,578  
Assumption of Horizon options and warrants
    
15,322
  
Transaction costs
    
2,386
  
Total
 
$
109,286
  
 
The fair value of the RITA shares used in determining the purchase price was $4.896 per share based on the average closing price of RITA’s common stock from the two days before through two days after May 13, 2004, the date of the public announcement of the merger. The fair value of the Horizon options and warrants assumed was determined using the Black-Scholes option pricing model assuming a market price of $4.896 per share, exercise prices ranging from $0.83 to $34.72 and averaging $1.95, an expected average life of 5 years, a risk-free interest rate of 3.79%, volatility of 75% and no expected dividends.

The allocation of purchase price is as follows (in thousands):

Current assets
  
$
10,666
  
Property and equipment
    
1,312
  
Intangible assets
    
27,309
  
Goodwill
    
91,339
  
Other assets
    
6
  
Current liabilities
    
(11,337
)
Debt
    
(9,928
)
Other long term liabilities
    
(81
)
Net assets
 
$
109,286
  
3. Pro forma adjustments

a)
Represents amortization of identifiable intangible assets based on estimated fair values and useful lives assigned to these assets at the date of acquisition.


 
     
 

b)
Pro forma basic and diluted earnings per common share is calculated by dividing the pro forma net loss by the pro forma weighted average shares of RITA’s common stock outstanding (in thousands):


   
Year ended
  
Nine months ended
  
   
December 31,
  
September 30,
  
   
2003
  
2004
  
RITA weighted average common shares outstanding,
              
excluding common shares issued to acquire Horizon
    
17,647
    
18,030
  
Common shares issued to acquire Horizon
   
18,705
    
18,705
  
Pro forma weighted average common shares outstanding
    
36,352
    
36,735
  
Shares issuable upon the exercise of outstanding stock options have been omitted from the calculation of pro forma loss per share as their effect would be anti-dilutive.
 -----END PRIVACY-ENHANCED MESSAGE-----