Ontario, Canada
|
000-31198
|
Not Applicable
|
||
(State or other jurisdiction
of incorporation)
|
(Commission File Number)
|
(I.R.S. Employer Identification Number)
|
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 9.01
|
Financial Statements and Exhibits.
|
Exhibit
No.
|
|
Description
|
Consent of PricewaterhouseCoopers AG
|
||
|
Audited Statements of Revenue and Related Expenses
|
|
|
Pro Forma Condensed Consolidated Financial Statements
|
TRIBUTE PHARMACEUTICALS CANADA INC. | |||
Date: October 29, 2015
|
By:
|
/s/ Scott Langille | |
Name: Scott Langille | |||
Title: Chief Financial Officer | |||
Exhibit
No.
|
|
Description
|
Consent of PricewaterhouseCoopers AG
|
||
|
Audited Statements of Revenue and Related Expenses
|
|
|
Pro Forma Condensed Consolidated Financial Statements
|
/s/ Martin Kennard
|
/s/ Steve Johnson
|
|||
Martin Kennard
|
Steve Johnson
|
/s/ Martin Kennard
|
/s/ Steve Johnson
|
|||
Martin Kennard
|
Steve Johnson
|
Nine months ended
September 30, 2014
|
Year ended
December 31, 2013
|
|
Net sales
|
5'203'253
|
15'783'726
|
Cost of Sales
|
(464'800)
|
(1'394'670)
|
Gross Profit
|
4'738'453
|
14'389'056
|
Operating expenses:
|
||
General and Administrative
|
(156'098)
|
(473'512)
|
Total operating expenses
|
(156'098)
|
(473'512)
|
Excess of revenues over direct operating expenses
|
4'582'355
|
13'915'544
|
1.
|
Description of Business and Basis of Presentation
|
1.
|
Description of Business and Basis of Presentation, continued:
|
2.
|
Summary of Significant Accounting Policies:
|
3.
|
Subsequent Events
|
● |
The accompanying notes to the unaudited pro forma condensed combined financial statements;
|
●
|
Tribute’s audited consolidated financial statements and related notes thereto contained in its Annual Report on Form 10-K for the year ended December 31, 2013 and Tribute’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014; and
|
●
|
The Novartis Products audited statements of revenue and related expenses along with the related notes thereto furnished on this Form 8-K/A by Tribute on October 29, 2015.
|
Tribute Pharmaceuticals
|
||||||||||||||||||||
Unaudited Pro Forma Condensed Combined Balance Sheet
|
||||||||||||||||||||
As of September 30, 2014
|
||||||||||||||||||||
Historical Tribute | Historical Novartis Products | Historical Novartis Products | Pro Forma Adjustments | Pro Forma Tribute | ||||||||||||||||
(Note 4)
|
||||||||||||||||||||
($ CAD)
|
( $USD)
|
( $CAD)
|
($ CAD)
|
($ CAD)
|
||||||||||||||||
ASSETS
|
||||||||||||||||||||
Current
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 28,725,849 | $ | - | $ | - | $ | (25,596,007 | )[a] | $ | 3,129,842 | |||||||||
Accounts receivable, net of allowance of
|
1,922,835 | - | - | - | 1,922,835 | |||||||||||||||
Inventories
|
857,206 | - | - | - | 857,206 | |||||||||||||||
Taxes recoverable
|
47,481 | - | - | - | 47,481 | |||||||||||||||
Loan receivable
|
15,814 | - | - | - | 15,814 | |||||||||||||||
Prepaid expenses and other receivables
|
232,461 | - | - | - | 232,461 | |||||||||||||||
Current portion of debt issuance costs, net
|
121,992 | - | - | 97,686 | [b] | 219,678 | ||||||||||||||
Other current asset
|
13,158 | - | - | - | 13,158 | |||||||||||||||
Total current assets
|
31,936,796 | - | - | (25,498,321 | ) | 6,438,475 | ||||||||||||||
Property, plant and equipment, net
|
1,026,008 | - | - | - | 1,026,008 | |||||||||||||||
Intangible assets, net
|
9,378,881 | - | - | 32,000,000 | [c] | 41,378,881 | ||||||||||||||
Goodwill
|
3,599,077 | - | - | - | 3,599,077 | |||||||||||||||
Debt issuance costs, net
|
286,925 | - | - | - | 286,925 | |||||||||||||||
Total assets
|
$ | 46,227,687 | $ | - | $ | - | 6,501,679 | $ | 52,729,366 | |||||||||||
LIABILITIES
|
||||||||||||||||||||
Current
|
||||||||||||||||||||
Accounts payable and accrued liabilities
|
3,340,542 | - | - | - | 3,340,542 | |||||||||||||||
Current portion of long term debt
|
737,263 | - | - | - | 737,263 | |||||||||||||||
Warrant liability
|
3,250,811 | - | - | 303,341 | [d] | 3,554,152 | ||||||||||||||
Other current liability
|
- | - | - | - | - | |||||||||||||||
Total current liabilities
|
7,328,616 | - | - | 303,341 | 7,631,957 | |||||||||||||||
Long term debt
|
7,645,299 | - | - | 6,315,859 | [e] | 13,961,158 | ||||||||||||||
Total liabilities
|
14,973,915 | - | - | 6,619,200 | 21,593,115 | |||||||||||||||
SHAREHOLDERS' EQUITY
|
||||||||||||||||||||
Capital Stock
|
||||||||||||||||||||
AUTHORIZED
|
||||||||||||||||||||
Common shares
|
41,189,440 | - | - | - | 41,189,440 | |||||||||||||||
Additional paid-in capital options
|
2,646,881 | - | - | - | 2,646,881 | |||||||||||||||
Warrants
|
6,347,349 | - | - | - | 6,347,349 | |||||||||||||||
Accumulated other comprehensive loss
|
13,158 | - | - | - | 13,158 | |||||||||||||||
Deficit
|
(18,943,056 | ) | - | - | (117,521 | ) | (19,060,577 | ) | ||||||||||||
Total shareholders' equity
|
31,253,772 | - | - | (117,521 | ) | 31,136,251 | ||||||||||||||
Total liabilities and shareholders' equity
|
$ | 46,227,687 | $ | - | $ | - | 6,501,679 | $ | 52,729,366 |
Tribute Pharmaceuticals
|
||||||||||||||||||||
Unaudited Pro Forma Combined Statement of Operations
|
||||||||||||||||||||
For the Nine Months Ended September 30, 2014
|
||||||||||||||||||||
Historical Tribute
|
Historical Novartis Products | Historical Novartis Products |
Pro Forma
|
Pro Forma Tribute | ||||||||||||||||
Adjustments
|
||||||||||||||||||||
(Note 4)
|
||||||||||||||||||||
($ CAD)
|
( $USD)
|
( $CAD)
|
($ CAD)
|
($ CAD)
|
||||||||||||||||
Revenues
|
'
|
|||||||||||||||||||
Licensed domestic product net sales
|
$ | 7,121,403 | $ | - | $ | - | $ | - | $ | 7,121,403 | ||||||||||
Other domestic product sales
|
2,945,936 | 5,203,253 | 5,827,643 | - | 8,773,579 | |||||||||||||||
International product sales
|
1,318,002 | - | - | - | 1,318,002 | |||||||||||||||
Royalty and licensing revenues
|
18,414 | - | - | - | 18,414 | |||||||||||||||
Total revenues
|
11,403,755 | 5,203,253 | 5,827,643 | - | 17,231,398 | |||||||||||||||
Cost of Sales
|
'
|
|||||||||||||||||||
Licensor sales and distribution fees
|
4,457,240 | - | - | - | 4,457,240 | |||||||||||||||
Cost of products sold
|
1,252,370 | 464,800 | 520,576 | - | 1,772,946 | |||||||||||||||
Expired products
|
38,584 | - | - | - | 38,584 | |||||||||||||||
Total Cost of Sales
|
5,748,194 | 464,800 | 520,576 | - | 6,268,770 | |||||||||||||||
Gross profit
|
5,655,561 | 4,738,453 | 5,307,067 | - | 10,962,628 | |||||||||||||||
Expenses
|
'
|
|||||||||||||||||||
Selling, general and administrative
|
8,161,873 | 156,098 | 174,830 | - | 8,336,703 | |||||||||||||||
Amortization of assets
|
883,649 | - | 960,000 | [g] | 1,843,649 | |||||||||||||||
Total operating expenses
|
9,045,522 | 156,098 | 174,830 | 960,000 | 10,180,352 | |||||||||||||||
Loss from operations
|
(3,389,961 | ) | 4,582,355 | 5,132,238 | (960,000 | ) | 782,277 | |||||||||||||
Non-operating income (expenses)
|
'
|
|||||||||||||||||||
(Loss) on derivative instrument
|
(180,913 | ) | - | - | - | (180,913 | ) | |||||||||||||
Change in warrant liability
|
(163,184 | ) | - | - | - | (163,184 | ) | |||||||||||||
Accretion expense
|
(102,264 | ) | - | - | (74,289 | )[h] | (176,553 | ) | ||||||||||||
Interest income
|
58,088 | - | - | - | 58,088 | |||||||||||||||
Interest expense
|
(868,911 | ) | - | - | (680,400 | )[i] | (1,549,311 | ) | ||||||||||||
Income (loss) before tax
|
(4,647,145 | ) | 4,582,355 | 5,132,238 | (1,714,689 | ) | (1,229,596 | ) | ||||||||||||
Income tax benefit
|
- | - | - | 325,843 | [j] | 325,843 | ||||||||||||||
Net income (loss) for the period
|
(4,647,145 | ) | 4,582,355 | 5,132,238 | (1,388,846 | ) | (903,753 | ) | ||||||||||||
Loss Per Share
|
||||||||||||||||||||
-Basic
|
$ | (0.07 | ) | $ | (0.01 | ) | ||||||||||||||
-Diluted
|
$ | (0.07 | ) | $ | (0.01 | ) | ||||||||||||||
Weighted Average Number of Common Shares Outstanding
|
||||||||||||||||||||
-Basic
|
64,283,839 | 64,283,839 | ||||||||||||||||||
-Diluted
|
64,283,839 | 64,283,839 |
Tribute Pharmaceuticals
|
||||||||||||||||||||
Unaudited Pro Forma Combined Statement of Operations
|
||||||||||||||||||||
For the Year Ended December 31, 2013
|
||||||||||||||||||||
Historical Tribute
|
Historical Novartis Products | Historical Novartis Products |
Pro Forma
|
Pro Forma Tribute | ||||||||||||||||
Adjustments
|
||||||||||||||||||||
(Note 4)
|
||||||||||||||||||||
($ CAD)
|
( $USD)
|
( $CAD)
|
($ CAD)
|
($ CAD)
|
||||||||||||||||
Revenues
|
'
|
|||||||||||||||||||
Licensed domestic product net sales
|
$ | 8,598,385 | $ | - | $ | - | $ | - | $ | 8,598,385 | ||||||||||
Other domestic product sales
|
3,366,374 | 15,783,726 | 16,730,750 | - | 20,097,124 | |||||||||||||||
International product sales
|
1,277,678 | - | - | - | 1,277,678 | |||||||||||||||
Royalty and licensing revenues
|
197,924 | - | - | - | 197,924 | |||||||||||||||
Total revenues
|
13,440,361 | 15,783,726 | 16,730,750 | - | 30,171,111 | |||||||||||||||
Cost of Sales
|
'
|
|||||||||||||||||||
Licensor sales and distribution fees
|
5,844,494 | - | - | - | 5,844,494 | |||||||||||||||
Cost of products sold
|
1,541,662 | 1,394,670 | 1,478,350 | - | 3,020,012 | |||||||||||||||
Expired products
|
56,935 | - | - | - | 56,935 | |||||||||||||||
Total Cost of Sales
|
7,443,091 | 1,394,670 | 1,478,350 | - | 8,921,441 | |||||||||||||||
Gross profit
|
5,997,270 | 14,389,056 | 15,252,399 | - | 21,249,669 | |||||||||||||||
Expenses
|
'
|
|||||||||||||||||||
Selling, general and administrative
|
9,830,132 | 473,512 | 501,923 | - | 10,332,055 | |||||||||||||||
Amortization of assets
|
1,245,846 | - | - | 1,280,000 | [g] | 2,525,846 | ||||||||||||||
Total operating expenses
|
11,075,978 | 473,512 | 501,923 | 1,280,000 | 12,857,901 | |||||||||||||||
Loss from operations
|
(5,078,708 | ) | 13,915,544 | 14,750,477 | (1,280,000 | ) | 8,391,769 | |||||||||||||
Non-operating income (expenses)
|
'
|
|||||||||||||||||||
Change in warrant liability
|
(399,217 | ) | - | - | - | (399,217 | ) | |||||||||||||
Accretion expense
|
(103,775 | ) | - | - | (84,814 | )[h] | (188,589 | ) | ||||||||||||
Loss on disposal of intangible asset
|
(161,200 | ) | - | - | - | (161,200 | ) | |||||||||||||
Loss on extinguishment of loan
|
(620,835 | ) | - | - | - | (620,835 | ) | |||||||||||||
Interest income
|
3,559 | - | - | 3,559 | ||||||||||||||||
Interest expense
|
(527,079 | ) | - | - | (907,200 | )[i] | (1,434,279 | ) | ||||||||||||
Income (loss) before tax
|
(6,887,255 | ) | 13,915,544 | 14,750,477 | (2,272,014 | ) | 5,591,208 | |||||||||||||
Deferred income tax recovery
|
314,900 | - | - | (314,900 | )[j] | - | ||||||||||||||
Income tax expense
|
- | - | - | (1,481,670 | )[j] | (1,481,670 | ) | |||||||||||||
Net income (loss) for the period
|
(6,572,355 | ) | 13,915,544 | 14,750,477 | (4,068,584 | ) | 4,109,538 | |||||||||||||
Loss Per Share
|
||||||||||||||||||||
-Basic
|
$ | (0.13 | ) | $ | 0.08 | |||||||||||||||
-Diluted
|
$ | (0.13 | ) | $ | 0.06 | |||||||||||||||
Weighted Average Number of Common Shares Outstanding
|
||||||||||||||||||||
-Basic
|
49,169,414 | 49,169,414 | ||||||||||||||||||
-Diluted
|
49,169,414 | 66,661,614 |
1.
|
DESCRIPTION OF TRANSACTIONS
|
2.
|
BASIS OF PRESENTATION
|
3.
|
CONSIDERATION TRANSFERRED AND FAIR VALUE OF NET ASSETS ACQUIRED
|
4.
|
PRO FORMA ADJUSTMENTS
|
(a)
|
Cash and cash equivalents - Adjustment reflects the preliminary net adjustment to cash in connection with the acquisition and related financing:
|
Cash paid for Novartis products
|
$ | (32,000,000 | ) | |
Transaction costs related to the acquisition
|
(117,521 | ) | ||
Cash drawings from SWK Loan
|
6,720,000 | (i) | ||
Debt issuance costs
|
(198,486 | )(ii) | ||
Pro Forma Adjustment to cash and cash equivilents
|
$ | (25,596,007 | ) |
(i)
|
Relates to the drawing from the SWK debt facility of USD 6.0 million, which has been converted in to Canadian dollars at the spot rate of $1.12 on September 30, 2014, the date on which the loan was drawn, to fund the acquisition.
|
(ii)
|
Relates to the issuance costs incurred in connection with the drawing from the SWK debt facility.
|
(b)
|
Debt issuance costs – Adjustment related to the debt issuance costs to be capitalized paid in connection with the drawings from the SWK Loan.
|
(c)
|
Intangible assets – In conjunction with the transaction, Tribute has reflected the fair value of the acquired identifiable intangible assets as follows:
|
Intangible Asset
|
Fair value
|
|||
Fiorinal® Product Line
|
$ | 29,814,769 | ||
Visken® Product Line
|
2,185,231 | |||
Total Pro forma adjustment | 32,000,000 |
(d)
|
Warrant liability – Adjustment relates to the fair value of the warrant liability recorded, whereby in connection with the funding of the first tranche, SWK was issued an aggregate of 740,000 common share purchase warrants with each such warrant entitling the holder thereof to acquire, at any time before October 1, 2019, one common share of Tribute at a price of US$0.70 per share. The warrant has been recorded under liabilities as it is denominated in U.S. Dollars.
|
(e)
|
Debt – Adjustment reflects the preliminary net adjustment to debt in connection with the related financing obtained to fund the acquisition:
|
Cash drawings from SWK Loan
|
6,720,000 | (i) | ||
Warrant liability
|
(303,341 | )(i) | ||
Issuance costs
|
(100,800 | )(ii) | ||
Pro Forma Adjustment to cash and cash equivilents
|
$ | 6,315,859 |
(i)
|
In connection with the acquisition the Company increased its existing debt facility with SWK by up to US$9.0 million, US$6.0 million ($6.7 million converted at a spot rate of $1.12 at September 30, 2014) of which was drawn upon in connection with the acquisition of the Novartis Products. In connection with this funding, the Company also issued to SWK an aggregate of 740,000 common share purchase warrants, which was fair valued at $0.3 million.
|
(ii)
|
Issuance cost recognized in connection with the issuance of the debt.
|
(f)
|
Transaction costs – Adjustment relates to the recognition of transaction costs incurred by Tribute. This amount has been excluded from the unaudited pro forma combined statement of operations for the year ended December 31, 2013 and the nine months ended September 30, 2014 as it is non-recurring in nature and directly related to the acquisition.
|
(g)
|
Amortization – Adjustment reflects the of amortization expenses related to the intangible assets acquired as part of the acquisition.
|
Intangible Asset
|
Fair value
|
Amortization Expense for the year ended December 31, 2013
|
Amortization Expense for the nine months ended September 30, 2014
|
|||||||||
Fiorinal® Product Line
|
$ | 29,814,769 | $ | 1,192,591 | $ | 894,443 | ||||||
Visken® Product Line
|
2,185,231 | 87,409 | 65,557 | |||||||||
Total Pro forma adjustment | 32,000,000 | 1,280,000 | 960,000 |
(h)
|
Accretion expense – Adjustment relates to the amortization of the debt issuance costs incurred related to the drawing on the SWK facility and the issuance of the share purchase warrants.
|
(i)
|
Interest expense – Adjustment reflects the interest expense recognized for the $ 6.7 million (USD 6.0 million) that was drawn to fund the acquisition. The Loan accrues interest at an annual rate of 11.5% plus LIBOR Rate (as defined in the Amended Credit Agreement), with LIBOR Rate being subject to a minimum floor of 2%, such that the minimum interest rate is 13.5%.
|
(j)
|
Income tax expense (benefit) — Adjustment reflects the income tax impacts of the sum of the historical results of Tribute and the Novartis products as well as the pro forma adjustments using the Canadian statutory tax rate of 26.5%.
|