EX-99.1 3 d575754dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

SIENTRA, INC. AND SUBSIDIARIES

PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

On June 11, 2017, Sientra, Inc. (“Sientra”) entered into the Agreement and Plan of Merger, dated June 11, 2017, as amended by the Amendment No. 1 to Agreement and Plan of Merger dated June 25, 2017 (the “Merger Agreement”) with miraDry, Inc. (formerly known as Miramar Labs, Inc.) (“miraDry”), pursuant to which Sientra commenced a tender offer to purchase all of the outstanding shares of miraDry’s common stock for (i) $0.3149 per share, plus (ii) the contractual right to receive one or more contingent payments upon the achievement of certain future sales milestones. The total merger consideration was $18.7 million in upfront cash and the contractual rights represent potential contingent payments of up to $14 million. The transaction, which closed on July 25, 2017 (the “Acquisition Date”), added the miraDry System, the only FDA cleared device indicated to reduce underarm sweat, odor and hair of all colors, to Sientra’s aesthetics portfolio. The aggregate preliminary acquisition date fair value of the consideration transferred was approximately $29.6 million.

Basis of Pro Forma Presentation

The unaudited pro forma consolidated statement of operations for the 12 months ended December 31, 2017 is based on the historical financial statements of Sientra and miraDry, after giving effect to the cash paid and financing used to consummate the acquisition of miraDry as well as certain pro forma adjustments assuming the transaction occurred at January 1, 2017.

The unaudited pro forma consolidated statement of operations for the 12 months ended December 31, 2017 should be read in conjunction with the historical financial statements and accompanying notes contained in the Sientra, Inc. Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 13, 2018, and the historical financial statements and accompanying notes contained in the miraDry Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (SEC) on May 16, 2017 . The unaudited pro forma consolidated statement of operations for the 12 months ended December 31, 2017 is presented for informational purposes only and is not necessarily indicative of the operating results or the financial position that would have been achieved had the acquisition been consummated as of the date indicated or of the results that may be obtained in the future.

Due to the timing of the miraDry acquisition, which closed during the third quarter of 2017, our estimates of fair values of the assets that we acquired and the liabilities that we assumed are based on information that was available as of the acquisition date of miraDry and are preliminary. We are continuing to evaluate the underlying inputs and assumptions used in our valuations. Accordingly, these preliminary estimates are subject to change during the measurement period, which is the period subsequent to the acquisition date during which the acquirer may adjust the provisional amounts recognized for a business combination, not to exceed one year form the acquisition date.


The following table summarizes the fair values of the assets acquired and liabilities assumed from the miraDry acquisition (in thousands):

 

     July 25,
2017
 

Cash

   $ 205  

Accounts receivable, net

     2,091  

Inventories, net

     7,064  

Other current assets

     170  

Property and equipment, net

     528  

Goodwill

     7,629  

Intangible assets

     14,800  

Restricted cash

     305  

Other assets

     12  

Liabilities assumed:

  

Accounts payable

     (908

Accrued and other current liabilities

     (2,294

Other current liabilities

     (30
  

 

 

 

Net assets acquired

   $ 29,572  
  

 

 

 


Sientra, Inc. and Subsidiaries

Unaudited Pro Forma Condensed Consolidated Statement of Operations

12 Months Ended December 31, 2017

(Amounts in thousands, except per share and share amounts)

 

     FY 2017
Historical
Sientra, Inc. (1)
    Three months ended
March 31, 2017
Miramar Labs (2)
    04/01 - 7/25/17
Miramar Labs (3)
    Financing
Adjustments
    Pro Forma
Adjustments
    Pro Forma
Consolidated
 

Net sales

   $ 36,542     $ 3,815     $ 6,389     $ —       $ —       $ 46,746  

Cost of goods sold

     14,171       1,693       2,487       —         109   A      18,460  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     22,371       2,122       3,902       —         (109     28,286  

Sales and marketing

     33,911       3,004       3,751       —         —         40,666  

Research and development

     9,813       753       866       —         —         11,432  

General and administrative

     31,537       1,540       2,232       —         (2,036 ) B      33,273  

Legal settlement

     10,000       —         —         —         —         10,000  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     85,261       5,297       6,849       —         (2,036     95,371  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (62,890     (3,175     (2,947     —         1,927       (67,085

Interest income

     172       1       —         —         —         173  

Interest expense

     (1,232     (3,941     (1,740     805  C      3,624   D      (2,484

Other income (expense), net

     (95     (143     286       —         —         48  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

     (64,045     (7,258     (4,401     805       5,551       (69,348

Income tax expense (benefit)

     (17     2       (2     —         —         (17
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     (64,028     (7,260     (4,399     805       5,551     $ (69,331
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Per share information:

            

Loss from continuing operations - basic and diluted

   $ (3.34           $ (3.61 ) E 

Weighted average shares outstanding:

            

Basic & Diluted

     19,159,057               19,197,240   E 

See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations


Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations

 

(1) Reflects Sientra’s audited Statement of Operations for the 12 months ended December 31, 2017.

 

(2) Reflects miraDry, Inc.’s unaudited Statement of Operations for the 3 months ended March 31, 2017.

 

(3) Reflects miraDry, Inc.’s unaudited Statement of Operations for the period April 1, 2017 to July 25, 2017.

The following adjustments have been reflected in the unaudited pro forma consolidated statement of operations for the twelve months ended December 31, 2017, as though the acquisition occurred as of the beginning of the period presented herein:

 

  A To record $109,500 of amortization expense relating to developed technology established upon acquisition.

 

  B To record $432,100 of amortization expense relating to customer relationships and trade names established upon acquisition and $1,182,400 of accretion expense relating to contingent consideration established upon acquisition. And to eliminate $3,650,700 of nonrecurring transaction fees directly attributable to the acquisition incurred during 2017.

 

  C To eliminate $2,008,000 of interest expense associated with the debt repayment and to record $1,202,600 of new interest expense associated with the new debt entered into on July 25, 2017, as disclosed in the 8-K filed on July 25, 2017.

 

  D To eliminate $3,624,000 associated with the revaluation of miraDry’s derivative liability related to the issuance of January 2017 Bridge Notes that were cancelled as part of the merger.

 

  E Represents the pro forma loss from continuing operations per share calculated using the historical weighted average Sientra shares outstanding for 2017.