UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): July 23, 2018
NABRIVA THERAPEUTICS PLC
(Exact name of registrant as specified in its charter)
Ireland |
|
001-37558 |
|
Not Applicable |
(State or other jurisdiction |
|
(Commission |
|
(I.R.S. Employer |
25-28 North Wall Quay, |
|
Not Applicable |
(Address of principal executive offices) |
|
(Zip Code) |
Registrants telephone number, including area code (610) 816-6640
Not Applicable
(Former name or former address, if changed since last report)
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:
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))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x
Item 2.01. Completion of Acquisition or Disposition of Assets.
On July 25, 2018, Nabriva Therapeutics plc (the Company) filed a Current Report on Form 8-K (the Original Form 8-K) disclosing that the Company and its newly formed, direct wholly owned subsidiaries, Zuperbug Merger Sub I, Inc. (Merger Sub I) and Zuperbug Merger Sub II, Inc. (Merger Sub II, and together with Merger Sub I, Merger Subs) entered into an Agreement and Plan of Merger (the Merger Agreement) with Zavante Therapeutics, Inc. (Zavante) and Cam Gallagher, solely in his capacity as representative of the former Zavante stockholders in connection with the Merger Agreement, pursuant to which on July 24, 2018, Merger Sub I merged with and into Zavante with Zavante surviving such merger and becoming a wholly owned subsidiary of the Company, and Zavante thereafter on such date merged with and into Merger Sub II, with Merger Sub II surviving the merger as a wholly owned subsidiary of the Company and assuming the name Zavante Therapeutics, Inc. (collectively, the Acquisition).
This amendment to the Original Form 8-K is being filed for the purpose of satisfying the Companys undertaking to file the financial statements and pro forma financial statements required by Item 9.01 of Form 8-K, and this amendment should be read in conjunction with the Original Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
(i) The audited financial statements of Zavante Therapeutics, Inc. as of and for the years ended December 31, 2017 and 2016 and the independent auditors report thereon were filed as Exhibit 99.2 to the Original Form 8-K and are incorporated into this Item 9.01(a) by reference.
(ii) The unaudited interim financial statements of Zavante Therapeutics, Inc. as of and for the six months ended June 30, 2018 are filed as Exhibit 99.3 hereto and are incorporated into this Item 9.01(a) by reference.
(b) Pro Forma Financial Information.
The unaudited pro forma combined financial statements of the Company are filed as Exhibit 99.4 hereto and are incorporated into this Item 9.01(b) by reference.
(d) Exhibits.
EXHIBIT INDEX
Exhibit |
|
Description |
|
|
|
2.1* |
|
|
|
|
|
10.1* |
|
|
|
|
|
10.2* |
|
|
|
|
|
10.3* |
|
|
|
|
|
23.1* |
|
|
|
|
|
99.1* |
|
99.2* |
|
|
|
|
|
99.3 |
|
|
|
|
|
99.4 |
|
Confidential treatment has been granted for certain portions that are omitted from this exhibit. The omitted information has been filed separately with the U.S. Securities and Exchange Commission (the SEC) pursuant to the registrants application for confidential treatment. In addition, schedules have been omitted from this exhibit pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule will be furnished supplementally to the SEC upon request; provided, however, that the registrant may request confidential treatment for any document so furnished.
* Previously filed.
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.
|
NABRIVA THERAPEUTICS PLC | |
|
|
|
Date: September 10, 2018 |
By: |
/s/ Robert Crotty |
|
|
Robert Crotty |
|
|
General Counsel and Secretary |
Zavante Therapeutics, Inc.
Financial Statements
Six Months Ended June 30, 2018
Table of Contents
Financial Statements |
|
|
|
Condensed Balance Sheets as of June 30, 2018 (unaudited) and December 31, 2017 |
1 |
Condensed Statements of Operations and Comprehensive Loss for the six months ended June 30, 2018 and 2017 |
2 |
Condensed Statements of Cash Flows for the six months ended June 30, 2018 and 2017 |
3 |
Notes to Condensed Financial Statements |
4 |
Zavante Therapeutics, Inc.
Condensed Balance Sheets
|
|
June 30, |
|
December 31, |
| ||
(in thousands, except per share data) |
|
2018 |
|
2017 |
| ||
|
|
(unaudited) |
|
|
| ||
Assets |
|
|
|
|
| ||
Current assets: |
|
|
|
|
| ||
Cash and cash equivalents |
|
$ |
13,215 |
|
$ |
17,963 |
|
Prepaid expenses |
|
731 |
|
387 |
| ||
Total current assets |
|
13,946 |
|
18,350 |
| ||
Property and equipment, net
|
|
33 |
|
38 |
| ||
Other assets |
|
10 |
|
10 |
| ||
Total assets |
|
$ |
13,989 |
|
$ |
18,398 |
|
|
|
|
|
|
| ||
Liabilities, Convertible Preferred Stock and Stockholders Deficit |
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
| ||
Accounts payable |
|
$ |
1,093 |
|
$ |
772 |
|
Accrued expenses |
|
1,031 |
|
887 |
| ||
Accrued compensation |
|
349 |
|
663 |
| ||
Notes payable |
|
9,831 |
|
7,790 |
| ||
Total current liabilities |
|
12,304 |
|
10,112 |
| ||
|
|
|
|
|
| ||
Warrant liability |
|
214 |
|
212 |
| ||
Total liabilities |
|
12,518 |
|
10,324 |
| ||
|
|
|
|
|
| ||
Convertible preferred stock: |
|
|
|
|
| ||
Series A convertible preferred stock, $0.0001 par value; 36,100,000 shares authorized; 35,862,714 shares issued and outstanding at June 30, 2018 and December 31, 2017; liquidation preference of $48,415 as of June 30, 2018 |
|
48,010 |
|
48,010 |
| ||
|
|
|
|
|
| ||
Stockholders deficit: |
|
|
|
|
| ||
Common stock, $0.0001 par value; 51,000,000 shares authorized, 7,805,210 shares issued and outstanding as of June 30, 2018 and December 31, 2017 |
|
1 |
|
1 |
| ||
Additional paid-in capital |
|
634 |
|
462 |
| ||
Accumulated deficit |
|
(47,174 |
) |
(40,399 |
) | ||
Total stockholders deficit |
|
(46,539 |
) |
(39,936 |
) | ||
Total liabilities, convertible preferred stock, and stockholders deficit |
|
$ |
13,989 |
|
$ |
18,398 |
|
The accompanying notes form an integral part of these condensed financial statements.
Zavante Therapeutics, Inc.
Condensed Statements of Operations and Comprehensive Loss (unaudited)
|
|
Six Months Ended June 30, |
| ||||
(in thousands) |
|
2018 |
|
2017 |
| ||
Operating expenses: |
|
|
|
|
| ||
Research and development |
|
$ |
4,533 |
|
$ |
4,994 |
|
General and administrative |
|
1,928 |
|
1,781 |
| ||
Total operating expenses |
|
6,461 |
|
6,775 |
| ||
Other income (expense): |
|
|
|
|
| ||
Change in fair value of warrant liability |
|
(2 |
) |
1 |
| ||
Interest income |
|
33 |
|
40 |
| ||
Interest expense |
|
(345 |
) |
(30 |
) | ||
Net loss and comprehensive loss |
|
$ |
(6,775 |
) |
$ |
(6,764 |
) |
The accompanying notes form an integral part of these condensed financial statements.
Zavante Therapeutics, Inc.
Condensed Statements of Cash Flows (unaudited)
|
|
Six Months Ended June 30, |
| ||||
(in thousands) |
|
2018 |
|
2017 |
| ||
Operating activities |
|
|
|
|
| ||
Net loss |
|
$ |
(6,775 |
) |
$ |
(6,764 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
| ||
Depreciation |
|
5 |
|
5 |
| ||
Amortization of debt issuance costs and debt discount |
|
40 |
|
19 |
| ||
Change in fair value of warrant liabilities |
|
2 |
|
(1 |
) | ||
Stock-based compensation |
|
172 |
|
96 |
| ||
Changes in operating assets and liabilities: |
|
|
|
|
| ||
Prepaid expenses and other |
|
(344 |
) |
(434 |
) | ||
Accounts payable, accrued expenses and compensation |
|
152 |
|
(3,950 |
) | ||
Net cash used in operating activities |
|
(6,748 |
) |
(11,029 |
) | ||
|
|
|
|
|
| ||
Investing activities |
|
|
|
|
| ||
Capital expenditures |
|
|
|
|
| ||
Net cash used in investing activities |
|
|
|
|
| ||
|
|
|
|
|
| ||
Financing activities |
|
|
|
|
| ||
Proceeds from the issuance of notes payable |
|
2,000 |
|
1,000 |
| ||
Net cash provided by financing activities |
|
2,000 |
|
1,000 |
| ||
|
|
|
|
|
| ||
Net (decrease) increase in cash and cash equivalents |
|
(4,748 |
) |
(10,029 |
) | ||
Cash and cash equivalents at beginning of year |
|
17,963 |
|
25,647 |
| ||
Cash and cash equivalents at end of year |
|
$ |
13,215 |
|
$ |
15,619 |
|
The accompanying notes form an integral part of these condensed financial statements.
Zavante Therapeutics, Inc.
Notes to Condensed Financial Statements
(unaudited, dollars in thousands, except per share amounts)
June 30, 2018
1. Organization, Business Activities and Summary of Significant Account Policies
Zavante Therapeutics, Inc. (pre-merger, ZTI) was incorporated in Delaware in 2013. SG Pharmaceuticals, Inc. (SGP) was incorporated in Delaware in December 2014. SGP acquired all of the outstanding capital stock of ZTI from the former stockholders of ZTI (the Selling Stockholders) in May 2015, and merged with and into ZTI in June 2015, with ZTI as the surviving entity (post-merger, we, us, and ours). We are a clinical stage biopharmaceutical company engaged in the research and development of novel products that address serious unmet medical needs in the hospital. Our operations are based in San Diego, California.
Liquidity, Capital Resources, and Agreement and Plan of Merger
We have a limited operating history and the sales and income potential of our business and market are unproven. The accompanying condensed financial statements have been prepared on a going concern basis of accounting, and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from any uncertainty related to our ability to continue as a going concern. We have incurred net operating losses and negative cash flows from operations since our inception and we expect to incur additional losses into the foreseeable future. As of June 30, 2018, we had an accumulated deficit of $47,200. To date, our sources of cash have been primarily from the sale of equity securities and debt financings.
On July 23, 2018, we entered into an Agreement and Plan of Merger (the Merger Agreement), with Nabriva Therapeutics plc (Nabriva Therapeutics). The transaction is discussed in further detail in Note 8 Subsequent Events below.
Basis of Presentation
The accompanying interim condensed financial statements are unaudited. These unaudited interim condensed financial statements have been prepared in accordance with United States generally accepted accounting principles (GAAP) and following the requirements of the United States Securities and Exchange Commission (SEC) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. In our opinion, the unaudited condensed interim financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of our financial position and our results of operations and cash flows for periods presented. These condensed statements do not include all disclosures required by GAAP and should be read in conjunction with our financial statements and accompanying notes for the fiscal year ended December 31, 2017, contained in Nabriva Therapeutics Form 8-K filed on July 25, 2018. The results of the interim periods are not necessarily indicative of the results expected for the full fiscal year or any other interim period or any future year or period.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We base our estimates on historical experience and other market-specific or other relevant assumptions that we believe our reasonable under the circumstances. This process may result in actual results differing materially from those estimated amounts used in the preparation of the financial statements if these results differ from historical experience, or other
Zavante Therapeutics, Inc.
Notes to Condensed Financial Statements (continued)
assumptions do not turn out to be substantially accurate, even if such assumptions are reasonable when made. In our condensed financial statements, estimates and assumptions relied upon are used for, but not limited to, the value of accrued clinical trial costs, measurement of fair value of equity instruments, and stock-based compensation expense. We evaluate our estimates and assumptions on the ongoing basis. Actual results could differ from those estimates under different assumptions or conditions.
Warrant Liability Accounting
We issued a warrant for the purchase of Series A preferred shares to the Lender in connection with the Loan and Security Agreement (see Note 6) and classified the warrant as a liability in accordance with authoritative guidance. We recorded the initial warrant liability at the fair market value as of the issuance date, with subsequent re-measurement as of each reporting period, using the Black-Scholes valuation model which includes a risk-free interest rate, expected term and volatility assumptions derived from comparable companies in the biotechnology industry whose share prices are publicly available for a sufficient period of time. The expected life of the warrant was calculated using the remaining life of the warrant. The risk-free rate is based upon U.S. Treasury securities with remaining terms similar to the expected term of the warrant being valued. Changes in fair value of the warrant liability are calculated at the end of each reporting period using the Black-Scholes pricing model and are recorded as other income (expense). We will continue to adjust the carrying value of the warrant for changes in the estimated fair value until the earlier of the modification, exercise or expiration of the warrant. At that time, the liabilities will be reclassified to additional paid-in capital, a component of stockholders deficit.
2. Fair Value Measurements
The carrying values of our financial instruments such as cash and cash equivalents, prepaid expenses and other, accounts payable, and accrued expenses, and accrued compensation approximate their respective fair values because of the short-term nature of those financial instruments. Based on the borrowing rates currently available to us for loans with similar terms, we believe the carrying amounts of the term loan, approximate its fair value. The preferred stock warrant liability is recorded at fair value.
The fair value of cash equivalents was determined based on Level 1 inputs utilizing quoted prices in active markets. The fair value of our preferred stock warrant liability was determined based on Level 3 inputs using a valuation model with significant unobservable inputs (see Note 6). The following tables present the assets and liabilities measured at fair value and classified by level according to the fair value measurement hierarchy:
|
|
As of June 30, 2018 |
| ||||||||||
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
| ||||
Assets |
|
|
|
|
|
|
|
|
| ||||
Money Market Fund |
|
$ |
15,089 |
|
$ |
|
|
$ |
|
|
$ |
15,089 |
|
Total Assets |
|
$ |
15,089 |
|
$ |
|
|
$ |
|
|
$ |
15,089 |
|
|
|
|
|
|
|
|
|
|
| ||||
Liabilities |
|
|
|
|
|
|
|
|
| ||||
Warrant to purchase Series A preferred stock |
|
$ |
|
|
$ |
|
|
$ |
214 |
|
$ |
214 |
|
Total Liabilities |
|
$ |
|
|
$ |
|
|
$ |
214 |
|
$ |
214 |
|
Zavante Therapeutics, Inc.
Notes to Condensed Financial Statements (continued)
|
|
As of December 31, 2017 |
| ||||||||||
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
| ||||
Assets |
|
|
|
|
|
|
|
|
| ||||
Money Market Fund |
|
$ |
17,673 |
|
$ |
|
|
$ |
|
|
$ |
17,673 |
|
Total Assets |
|
$ |
17,673 |
|
$ |
|
|
$ |
|
|
$ |
17,673 |
|
|
|
|
|
|
|
|
|
|
| ||||
Liabilities |
|
|
|
|
|
|
|
|
| ||||
Warrant to purchase Series A preferred stock |
|
$ |
|
|
$ |
|
|
$ |
212 |
|
$ |
212 |
|
Total Liabilities |
|
$ |
|
|
$ |
|
|
$ |
212 |
|
$ |
212 |
|
The following table reconciles liabilities measured at fair value using significant unobservable events (Level 3) for the six months ended June 30, 2018:
|
|
Warrant |
| |
Balance at December 31, 2017 |
|
$ |
212 |
|
Additions |
|
|
| |
Payments made during period |
|
|
| |
Change in fair value |
|
2 |
| |
Balance at June 30, 2018 |
|
$ |
214 |
|
3. Stock Purchase Agreement and Merger
In May 2015, the Selling Stockholders entered into a Stock Purchase Agreement (SPA) with SGP, pursuant to which SGP acquired all of the outstanding capital stock of ZTI from the Selling Stockholders. As consideration for the acquisition, SGP paid $400 in cash and issued 1,420,000 shares of SGP common stock to the Selling Stockholders on a pro rata basis, both of which were expensed as purchased in-process research and development. In addition to the closing consideration, we (as successor to SGP) are obligated to make: (i) additional milestone payments totaling up to $30,500, which include (a) $1,500 paid in April 2016 upon the closing of the Series A preferred stock financing (see Note 6), which was expensed as purchase in-process research and development, (b) $3,000 payable upon the marketing approval by the U.S. Food and Drug Administration (FDA) with respect to any oral, intravenous or other form of fosfomycin (the Fosfomycin Products), and (c) $26,000 in milestone payments upon the occurrence of various specified levels of net sales with respect to the Fosfomycin Products; and (b) single digit tiered royalties on net sales of our Fosfomycin Products. Our obligation to pay such royalties will be reduced by 50%, on a country-by-country basis, if and when a generic competitive product accounts for half of the market for such Fosfomycin Product in each country. Given the early-stage nature of ZTI, we accounted for the SPA as an asset acquisition.
In June 2015, SGP, as the sole shareholder of ZTI, merged into ZTI and we became the surviving company.
Zavante Therapeutics, Inc.
Notes to Condensed Financial Statements (continued)
4. Balance Sheet Details
Prepaid Expenses and Other
Prepaid expenses and other consisted of the following:
|
|
June 30, 2018 |
|
December 31, 2017 |
| ||
|
|
|
|
|
| ||
Prepaid study costs |
|
$ |
390 |
|
$ |
|
|
Prepaid insurance |
|
36 |
|
55 |
| ||
Prepaid rent |
|
10 |
|
10 |
| ||
ERN reimbursable costs(1) |
|
257 |
|
305 |
| ||
Other |
|
38 |
|
17 |
| ||
Total prepaid expenses and other |
|
$ |
731 |
|
$ |
387 |
|
(1) We have entered into a development arrangement with ERN, see Note 7.
Accrued Liabilities
Accrued liabilities consisted of the following:
|
|
June 30, 2018 |
|
December 31, 2017 |
| ||
|
|
|
|
|
| ||
Accrued outsourced research and development expenses |
|
$ |
619 |
|
$ |
598 |
|
Accrued outside consultants fees |
|
48 |
|
62 |
| ||
Unvested share liability |
|
91 |
|
118 |
| ||
Accrued interest |
|
45 |
|
32 |
| ||
Accrued other expenses |
|
228 |
|
77 |
| ||
Total accrued liabilities |
|
$ |
1,031 |
|
$ |
887 |
|
5. DEBT
Loan and Security Agreement
In August 2016, we entered into a $10,000 term loan and security agreement (the Loan Agreement) with Square 1 Bank, a division of Pacific Western Bank (the Lender) to provide growth capital to us. As of June 30, 2018, $10,000 was outstanding and no additional funds were available. The credit facility bears interest based on the greater of 5% or Prime + 1.5% (6.5% as of June 30, 2018), payable monthly. The terms include an interest-only period through August 2018, followed by equal monthly payments of principal and interest over the remaining 24-month term. The loans are collateralized by substantially all of our assets, excluding intellectual property, which are subject to a negative pledge. On July 23, 2018, in connection with the Merger Transaction (see Note 8), we repaid the loan balance in full immediately prior to the closing.
Zavante Therapeutics, Inc.
Notes to Condensed Financial Statements (continued)
In April 2017, in connection with the initial funding under the Loan Agreement, we issued to the Lender a fully exercisable warrant to purchase 185,185 shares of our Series A preferred stock at an exercise price of $1.35 per share. The warrant expires on August 5, 2026. If the warrant has not been exercised prior to its expiration date, it will be deemed to automatically convert by cashless conversion. In the event we are acquired, the warrant will be exercisable or deemed automatically converted, which shall be determined based upon whether our successor assumes the obligations of the warrant.
Future maturities of long-term debt and interest payments and unamortized discount balances under the credit facility are as follows (in thousands):
|
|
June 30, 2018 |
|
December 31, 2017 |
| ||
2018 |
|
$ |
1,870 |
|
$ |
1,737 |
|
2019 |
|
5,300 |
|
4,240 |
| ||
2020 |
|
3,534 |
|
2,827 |
| ||
Total minimum payments |
|
10,704 |
|
8,804 |
| ||
Less amounts representing interest |
|
(704 |
) |
(804 |
) | ||
Gross balance of outstanding debt |
|
10,000 |
|
8,000 |
| ||
Less debt discount (1) |
|
(141 |
) |
(175 |
) | ||
Less origination costs |
|
(28 |
) |
(35 |
) | ||
Total carrying value |
|
$ |
9,831 |
|
$ |
7,790 |
|
(1) Represents the initial fair value of the warrant to purchase Series A preferred stock issued in connection with the Loan Agreement, net of amortization.
6. Stockholders Deficit
Convertible Series A Preferred Stock
In March 2016, we completed a Series A convertible preferred stock (Series A preferred stock) financing, providing us with $35,000 in aggregate gross proceeds, net of $404 of issuance costs, from the issuance of 25,925,924 shares of Series A preferred stock at $1.35 per share. Included in the closing of the Series A preferred stock financing was the conversion of convertible notes payable and accrued interest of $10,732 for 9,936,790 shares of Series A preferred stock. Such notes converted at a 20% discount from the $1.35 Series A per share issuance price, which resulted in the recording of a $2,683 beneficial conversion feature noncash charge through additional paid-in capital and interest expense. In aggregate, 35,862,714 shares of Series A preferred stock were issued.
The Series A preferred stock have the following characteristics:
Zavante Therapeutics, Inc.
Notes to Condensed Financial Statements (continued)
Dividends
The holders of the Series A preferred stock are entitled to receive non-cumulative dividends at a rate of $0.108 per share per annum. Preferred stock dividends are payable, in preference and in priority to any dividends on common stock, when and if declared by our Board of Directors. As of June 30, 2018, our Board of Directors has not declared any dividends.
Liquidation
In the event of any liquidation, dissolution, or winding up of our operations, the holders of Series A preferred stock will be entitled to receive in preference to the holders of common stock, the amount of $1.35 per share, plus declared and unpaid dividends, if any. Thereafter, any or our remaining assets will be distributed ratably among the holders of the common stock and preferred stock, with the preferred stock limited to $4.05 per share, based upon the number of shares of common stock held by each stockholder, treating each share of preferred stock as if it were converted into shares of common stock at the then-applicable conversion rate.
If the assets and funds available to be distributed among the holders of the Series A preferred stock shall be insufficient to permit the payment of $1.35 per share, then the entire assets and funds legally available for distribution to such holders shall be distributed ratably based on the total Series A preferred stock holdings of each such holder.
Conversion and Voting
The shares of Series A preferred stock are convertible into an equal number of shares of common stock, at the option of the holder, subject to certain antidilutive adjustments. Each share of Series A preferred stock is automatically converted into common stock immediately upon the earlier of: (i) the sale of our common stock in a firm commitment underwritten public offering pursuant to a registration statement under the Securities Act of 1933, as amended, in which the per share price is at least $4.05 per share (as adjusted), and the gross cash proceeds are at least $40,000, or (ii) the date specified by written consent or agreement of the holders of not less than 50% of the then outstanding shares of preferred stock.
The holders of Series A preferred stock are entitled to one vote for each share of common stock into which such Series A preferred stock could then be converted; and with respect to such vote, such holder shall have full voting rights and powers equal to the voting rights and powers of the holders of common stock. Also, the Series A preferred stockholders have been granted certain rights with regard to the election of members of our Board of Directors and various other corporate actions.
2015 Equity Incentive Plan
In August 2015, we adopted the Zavante Therapeutics, Inc. 2015 Equity Incentive Plan (the 2015 Plan). As amended in March 2016, the 2015 Plan provides for the issuance of incentive stock options to our employees and nonstatutory stock options and restricted stock awards, in the form of a restricted stock bonus or a restricted stock purchase right, to our employees, directors, and consultants. As of June 30, 2018, we had 5,534,750 shares available for issuance under the 2015 Plan.
The following table summarizes stock option activity for the six months ended June 30, 2018:
|
|
Number of |
|
Weighted |
| |
Outstanding as of December 31, 2017 |
|
2,784,010 |
|
$ |
0.26 |
|
Options granted |
|
1,190,000 |
|
$ |
0.26 |
|
Options exercised |
|
|
|
$ |
0.00 |
|
Options forfeited/cancelled |
|
|
|
$ |
0.00 |
|
Outstanding as of June 30, 2018 |
|
3,974,010 |
|
$ |
0.26 |
|
|
|
|
|
|
| |
Vested and exercisable as of June 30, 2018 |
|
2,491,014 |
|
$ |
0.26 |
|
Vested and expected to vest as of June 30, 2018 |
|
3,974,010 |
|
$ |
0.26 |
|
Zavante Therapeutics, Inc.
Notes to Condensed Financial Statements (continued)
Common Shares Reserved for Future Issuance
Our common stock reserved for future issuance consists of the following as of June 30, 2018:
Conversion of Series A preferred stock |
|
35,862,714 |
|
Warrants for Series A preferred stock |
|
185,185 |
|
Stock options issued and outstanding |
|
3,974,010 |
|
Authorized for future option grants |
|
55,530 |
|
|
|
40,077,439 |
|
7. COMMITMENTS AND CONTINGENCIES
Corporate Office Lease Obligation
Effective as of June 2016, we signed a non-cancellable three-year operating lease for our corporate office facility. The lease provides for the aggregate minimum lease payments totaling $341, and provides us an option to extend the lease at the end of the original term for a three-year period. Rent expense for the six months ended June 30, 2018 and 2017 was $57. We paid the landlord a security deposit of $10, which is included in other assets in the condensed balance sheet as of June 30, 2018.
As of June 30, 2018, the future minimum rent payments under the operating lease are as follows:
Periods ending December 31, |
|
|
| |
2018 |
|
$ |
57 |
|
2019 |
|
64 |
| |
Total |
|
$ |
121 |
|
Manufacturing and Supply Agreements
In 2014, we entered into: (i) a Pharmaceutical Manufacturing and Exclusive Supply Agreement with Laboratorios ERN, S.A. (ERN) for the exclusive supply of fosfomycin disodium and succinic acid injection for intravenous use filled, finished and packaged into containers for use by end users (Product) for sale in the United States, and (ii) a Three-Way Agreement with ERN and Ercros, S.A. (Ercros) for the supply of technical documentation, expertise and know-how in connection with the submission of a new drug application or an abbreviated new drug application, as applicable (collectively, NDA), for the Product. In 2016, we concurrently entered into: (i) an Amended and Restated Three-Way Agreement with ERN and Ercros, (ii) an Amended and Restated Pharmaceutical Manufacturing and Exclusive Supply
Zavante Therapeutics, Inc.
Notes to Condensed Financial Statements (continued)
Agreement (ERN Agreement), both of which allowed for removing the responsibility for ERN to provide commercial Product and allow us to take direct responsibility for the manufacture and supply of commercial Product with separate third-party manufacturers, and (iii) an exclusive supply agreement with Ercros for the supply of a blend of fosfomycin disodium and succinic acid at a fixed price for the first five (5) years under the agreement. Each of the agreements provide for an initial term of 10 years with automatic renewals of two (2) years for successive terms.
The ERN Agreement, as amended further through December 20, 2017, provides that: (i) ERN has development responsibilities with financial obligations not to exceed $1,000, which was met during the six months ending June 30, 2018, (ii) a milestone payment of $100 to ERN triggered upon our first commercial sale, (iii) a quarterly payment to ERN for each vial sold, payable in arrears, and (iv) an indemnification payment to ERN under certain circumstances as outlined therein.
In connection with ERNs development responsibilities, as of June 30, 2018, we have incurred reimbursable costs of $257 which are included in prepaid expenses and other. All of such reimbursable costs were collected in July 2018.
In July 2016 and April 2017, we entered into separate manufacturing and supply agreements with Antibioticos do Brasil Ltda (ABL) and Fisiopharma S.r.l (Fisiopharma), respectively, under which each party has agreed to validate and supply fosfomycin disodium for intravenous injection in bulk drug vials (the Bulk Drug Vials) to us. Each agreement has an initial term of ten years with automatic renewals of one (1) year for successive terms thereafter. To the extent that both suppliers are in compliance with governing regulatory requirements for manufacturers at the time we commence the sale of our product, then we will be obligated to purchase half of our future commercial requirements of Bulk Drug Vials for the United States from each party. In connection with such agreements, we have engaged in certain technology transfer activities. There were no significant commitments outstanding under the ABL or Fisiopharma agreements as of June 30, 2018.
8. SUBSEQUENT EVENTS
Subsequent events are events or transactions that occur after the condensed financial statement date, but before the condensed financial statements are issued. We recognize in the accompanying condensed financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the audit report, including the estimates inherent in the process of preparing the condensed financial statements. Our condensed financial statements do not recognize subsequent events that provide evidence about conditions that did not exist at the balance sheet date, but arose after the condensed financial statement date and before the condensed financial statements are issued.
We evaluated the subsequent events through July 24, 2018, the date on which these condensed financial statements were available to be issued.
Merger with Nabriva Therapeutics
In July 2018, we were acquired by Nabriva Therapeutics for: (i) upfront consideration of approximately 8.2 million of Nabriva Therapeutics ordinary shares (which includes an indemnity holdback), and (ii) potential future milestone payments up to $97.5 million in contingent consideration, of which $25.0 million would become payable upon the first approval of an NDA from the FDA for fosfomycin for injection for any indication and an aggregate of up to $72.5 million would become payable upon the achievement of specified sales milestones.
Immediately prior to or contemporaneous with the closing of the acquisition, the following occurred: (i) we repaid the loan balance under the Loan Agreement in full prior to the closing, (ii) the unvested restricted common shares or stock options outstanding were accelerated and immediately vested upon the closing of the transaction, and (iii) certain transaction expenses incurred in connection with the acquisition were assumed by Nabriva Therapeutics.
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
On July 23, 2018, Nabriva Therapeutics plc (the Company or Nabriva) and its newly formed, direct wholly owned subsidiaries, Zuperbug Merger Sub I, Inc. (Merger Sub I) and Zuperbug Merger Sub II, Inc. (Merger Sub II, and together with Merger Sub I, Merger Subs) entered into an Agreement and Plan of Merger (the Merger Agreement) with Zavante Therapeutics, Inc. (Zavante) and Cam Gallagher, solely in his capacity as representative of the former Zavante stockholders in connection with the Merger Agreement, pursuant to which on July 24, 2018, Merger Sub I merged with and into Zavante with Zavante surviving such merger and becoming a wholly owned subsidiary of the Company, and Zavante thereafter on such date merged with and into Merger Sub II, with Merger Sub II surviving the merger as a wholly owned subsidiary of the Company and assuming the name Zavante Therapeutics, Inc. (collectively, the Acquisition). The Acquisition was completed on July 24, 2018 (the Closing).
The unaudited pro forma combined financial statements presented below are based on, and should be read together with, the historical information that the Company has presented in its filings with the Securities and Exchange Commission. The unaudited pro forma combined balance sheet as of June 30, 2018 gives effect to the Acquisition as if it had occurred on June 30, 2018, and combines the historical balance sheets of the Company and Zavante as of June 30, 2018. The unaudited pro forma combined statements of operations for the year ended December 31, 2017 and for the six months ended June 30, 2018 are presented as if the Acquisition of Zavante had occurred on January 1, 2017, and combines the historical results of the Company and Zavante for the year ended December 31, 2017 and for the six months ended June 30, 2018. The historical financial information is adjusted to give effect to pro forma events that (i) are directly attributable to the Acquisition, (ii) are factually supportable and (iii) with respect to the statements of operations, must be expected to have a continuing impact on the combined results.
The pro forma adjustments related to the Acquisition are based on a preliminary purchase price allocation whereby the cost to acquire Zavante was allocated to the assets acquired and the liabilities assumed, based upon their estimated fair values. The final purchase price allocation will be performed using estimated fair values as of the date of the Acquisition. Differences between the preliminary and final purchase price allocations could have a material impact on the accompanying unaudited pro forma combined financial statements and the Companys future results of operations and financial position.
The unaudited pro forma combined financial statements do not reflect the realization of potential cost savings, or any related restructuring or integration costs. Although the Company believes that certain cost savings may result from the Acquisition, there can be no assurance that these cost savings will be achieved.
The unaudited pro forma combined financial statements are presented for illustrative purposes only and are not necessarily indicative of the consolidated financial position or results of operations in future periods or the results that actually would have been realized if the Acquisition had been completed as of the dates indicated. As a result, the actual financial condition and results of operations of the Company following the Acquisition may not be consistent with, or evident from, these pro forma combined financial statements. In addition, the assumptions used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect the Companys financial condition or results of operations following the Acquisition.
NABRIVA THERAPEUTICS plc
PRO FORMA COMBINED BALANCE SHEET (unaudited)
AS OF JUNE 30, 2018
|
|
|
|
|
|
Pro Forma |
|
|
|
|
| ||||
|
|
Nabriva |
|
Zavante |
|
Adjustments |
|
|
|
Pro Forma |
| ||||
(in thousands) |
|
Historical |
|
Historical |
|
(Note 4) |
|
Notes |
|
Combined |
| ||||
Assets |
|
|
|
|
|
|
|
|
|
|
| ||||
Current assets: |
|
|
|
|
|
|
|
|
|
|
| ||||
Cash and cash equivalents |
|
$ |
75,253 |
|
$ |
13,215 |
|
$ |
(9,831 |
) |
(a) |
|
$ |
78,637 |
|
Short-term investments |
|
225 |
|
|
|
|
|
|
|
225 |
| ||||
Other receivables |
|
6,820 |
|
|
|
|
|
|
|
6,820 |
| ||||
Contract asset |
|
1,500 |
|
|
|
|
|
|
|
1,500 |
| ||||
Prepaid expenses |
|
1,150 |
|
731 |
|
|
|
|
|
1,881 |
| ||||
Total current assets |
|
84,948 |
|
13,946 |
|
(9,831 |
) |
|
|
89,063 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
Property and equipment, net |
|
1,285 |
|
33 |
|
|
|
|
|
1,318 |
| ||||
Intangibles assets, net |
|
127 |
|
|
|
|
|
|
|
127 |
| ||||
Long-term receivables |
|
428 |
|
|
|
|
|
|
|
428 |
| ||||
Other |
|
|
|
10 |
|
|
|
|
|
10 |
| ||||
Total assets |
|
$ |
86,788 |
|
$ |
13,989 |
|
$ |
(9,831 |
) |
|
|
$ |
90,946 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Liabilities and equity |
|
|
|
|
|
|
|
|
|
|
| ||||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
| ||||
Accounts payable |
|
$ |
2,928 |
|
$ |
1,093 |
|
|
|
|
|
$ |
4,021 |
| |
Accrued expenses and other current liabilities |
|
8,364 |
|
1,381 |
|
5,476 |
|
(e) |
|
15,221 |
| ||||
Current portion of long-term debt |
|
|
|
9,831 |
|
(9,831 |
) |
(a) |
|
|
| ||||
Total current liabilities |
|
11,292 |
|
12,304 |
|
(4,355 |
) |
|
|
19,241 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
Non-current liabilities: |
|
|
|
|
|
|
|
|
|
|
| ||||
Warrant liability |
|
|
|
214 |
|
(214 |
) |
(b) |
|
|
| ||||
Note payable |
|
592 |
|
|
|
|
|
|
|
592 |
| ||||
Other non-current liabilities |
|
236 |
|
|
|
|
|
|
|
236 |
| ||||
Total non-current liabilities |
|
828 |
|
214 |
|
(214 |
) |
|
|
828 |
| ||||
Total liabilities |
|
12,120 |
|
12,518 |
|
(4,568 |
) |
|
|
20,069 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
Convertible preferred stock |
|
|
|
48,010 |
|
(48,010 |
) |
(b) |
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
Stockholders equity (deficit): |
|
|
|
|
|
|
|
|
|
|
| ||||
Ordinary shares/ Common stock |
|
410 |
|
1 |
|
81 |
|
(c) |
|
492 |
| ||||
Additional paid-in capital |
|
384,557 |
|
634 |
|
26,186 |
|
(c) |
|
411,377 |
| ||||
Accumulated other comprehensive income |
|
27 |
|
|
|
|
|
|
|
27 |
| ||||
Accumulated deficit |
|
(310,326 |
) |
(47,174 |
) |
16,481 |
|
(d) |
|
(341,019 |
) | ||||
Total stockholders equity (deficit) |
|
74,668 |
|
(46,539 |
) |
42,748 |
|
|
|
70,877 |
| ||||
Total liabilities, convertible preferred stock and stockholders equity (deficit) |
|
$ |
86,788 |
|
$ |
13,989 |
|
$ |
(9,831 |
) |
|
|
$ |
90,946 |
|
See notes to unaudited pro forma combined financial statements
NABRIVA THERAPEUTICS plc
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS (unaudited)
SIX MONTHS ENDED JUNE 30, 2018
|
|
|
|
|
|
Pro Forma |
|
|
|
|
| ||||
|
|
Nabriva |
|
Zavante |
|
Adjustments |
|
|
|
Pro Forma |
| ||||
(in thousands, except per share data) |
|
Historical |
|
Historical |
|
(Note 4) |
|
Notes |
|
Combined |
| ||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
| ||||
Collaboration revenue |
|
$ |
6,500 |
|
$ |
|
|
|
|
|
|
$ |
6,500 |
| |
Research premium and grant revenue |
|
1,898 |
|
|
|
|
|
|
|
1,898 |
| ||||
Total revenue |
|
8,398 |
|
|
|
|
|
|
|
8,398 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
| ||||
Research and development |
|
(19,996 |
) |
(4,533 |
) |
|
|
|
|
(24,529 |
) | ||||
General and administrative |
|
(18,973 |
) |
(1,928 |
) |
|
|
|
|
(20,901 |
) | ||||
Total operating expenses |
|
(38,969 |
) |
(6,461 |
) |
|
|
|
|
(45,430 |
) | ||||
Loss from operations |
|
(30,571 |
) |
(6,461 |
) |
|
|
|
|
(37,032 |
) | ||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
| ||||
Other income (expense), net |
|
(118 |
) |
(2 |
) |
|
|
|
|
(120 |
) | ||||
Interest income |
|
28 |
|
33 |
|
|
|
|
|
61 |
| ||||
Interest expense |
|
(11 |
) |
(345 |
) |
345 |
|
(e) |
|
(11 |
) | ||||
Loss before income taxes |
|
(30,672 |
) |
(6,775 |
) |
345 |
|
|
|
(37,102 |
) | ||||
Income tax expense |
|
(458 |
) |
|
|
|
|
|
|
(458 |
) | ||||
Net loss |
|
$ |
(31,130 |
) |
$ |
(6,775 |
) |
$ |
345 |
|
|
|
$ |
(37,560 |
) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Loss per share |
|
|
|
|
|
|
|
|
|
|
| ||||
Basic and Diluted ($ per share) |
|
$ |
(0.80 |
) |
|
|
|
|
|
|
$ |
(0.80 |
) | ||
|
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average number of shares: |
|
|
|
|
|
|
|
|
|
|
| ||||
Basic and Diluted |
|
38,723,718 |
|
|
|
|
|
|
|
46,875,810 |
| ||||
See notes to unaudited pro forma combined financial statements
NABRIVA THERAPEUTICS plc
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS (unaudited)
YEAR ENDED DECEMBER 31, 2017
|
|
|
|
|
|
Pro Forma |
|
|
|
|
| ||||
|
|
Nabriva |
|
Zavante |
|
Adjustments |
|
|
|
Pro Forma |
| ||||
(in thousands, except per share data) |
|
Historical |
|
Historical |
|
(Note 4) |
|
Notes |
|
Combined |
| ||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
| ||||
Research premium and grant revenue |
|
$ |
5,319 |
|
$ |
|
|
|
|
|
|
$ |
5,319 |
| |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
| ||||
Research and development |
|
(49,615 |
) |
(8,834 |
) |
|
|
|
|
(58,449 |
) | ||||
General and administrative |
|
(29,472 |
) |
(3,414 |
) |
|
|
|
|
(32,886 |
) | ||||
Total operating expenses |
|
(79,087 |
) |
(12,249 |
) |
|
|
|
|
(91,336 |
) | ||||
Loss from operations |
|
(73,768 |
) |
(12,249 |
) |
|
|
|
|
(86,017 |
) | ||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
| ||||
Other income (expense), net |
|
492 |
|
9 |
|
|
|
|
|
501 |
| ||||
Interest income |
|
318 |
|
73 |
|
|
|
|
|
391 |
| ||||
Interest expense |
|
(43 |
) |
(203 |
) |
203 |
|
(e) |
|
(43 |
) | ||||
Loss before income taxes |
|
(73,001 |
) |
(12,369 |
) |
203 |
|
|
|
(85,167 |
) | ||||
Income tax expense |
|
(1,355 |
) |
|
|
|
|
|
|
(1,355 |
) | ||||
Net loss |
|
$ |
(74,356 |
) |
$ |
(12,369 |
) |
$ |
203 |
|
|
|
$ |
(86,522 |
) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Loss per share |
|
|
|
|
|
|
|
|
|
|
| ||||
Basic and Diluted ($ per share) |
|
$ |
(2.49 |
) |
|
|
|
|
|
|
$ |
(2.28 |
) | ||
|
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average number of shares: |
|
|
|
|
|
|
|
|
|
|
| ||||
Basic and Diluted |
|
29,830,669 |
|
|
|
|
|
|
|
37,982,761 |
| ||||
See notes to unaudited pro forma combined financial statements
Nabriva Therapeutics plc
Notes to the Unaudited Pro Forma Combined Financial Information
1. Description of the Transaction
On July 23, 2018, the Company entered into the Merger Agreement for the Acquisition. In connection with the Closing, the Company issued 7,336,906 ordinary shares to former Zavante stockholders, which together with the 815,186 ordinary shares that are issuable upon release of the Holdback Shares (as defined below) constitute approximately 19.9% of the Company ordinary shares outstanding as of immediately prior to the Closing (the Upfront Shares).
Pursuant to the Merger Agreement, former Zavante stockholders and other equity holders, in the aggregate and subject to the terms and conditions of the Merger Agreement, will also be entitled to receive from the Company up to $97.5 million in contingent consideration, of which $25.0 million would become payable upon the first approval of a new drug application from the U.S. Food and Drug Administration (the FDA) for fosfomycin for injection for any indication (the Approval Milestone Payment) and an aggregate of up to $72.5 million would become payable upon the achievement of specified sales milestones (the Net Sales Milestone Payments).
Subject to approval of the Companys shareholders of the issuance of ordinary shares in satisfaction of the Companys milestone payment obligations in accordance with Nasdaq listing rules and Irish law (the Milestone Share Approval) in excess of 19.9% of the issued and outstanding ordinary shares of the Company outstanding as of immediately prior to the Closing, the Approval Milestone Payment will be settled in Company ordinary shares and the Company will have the right to settle the Net Sales Milestone Payments in Company ordinary shares, except as otherwise provided in the Merger Agreement. In the absence of obtaining the Milestone Share Approval, all milestone payments will be settled in cash. The Company has agreed to use commercially reasonable efforts after the Closing to obtain the Milestone Share Approval and to call a meeting of Company shareholders no later than December 31, 2018 to seek the Milestone Share Approval.
In connection with the Acquisition, former Zavante stockholders agreed to cause any Upfront Shares received by them to abstain from voting on the Milestone Share Approval and to vote any other Company ordinary shares held by them in favor of the Milestone Share Approval.
Subject to the terms of the Merger Agreement, 10% of the Upfront Shares (the Holdback Shares) will serve as a source for the satisfaction of indemnification and other obligations of the former Zavante stockholders and, subject to reduction in respect of these obligations, will be issued to the former Zavante stockholders following the first anniversary of the Closing.
Former Zavante stockholders who do not comply with specified procedural requirements set forth in the Merger Agreement, and former holders of Zavante options and warrants, will receive cash in lieu of any Company ordinary shares that otherwise would be issuable to them pursuant to the Merger Agreement.
2. Estimated Preliminary Purchase Price Consideration
Total estimated purchase price is summarized as follows:
Number of Ordinary shares issued (including holdback shares) |
|
8,152,092 |
| |
Closing date stock price |
|
$ |
3.30 |
|
Preliminary purchase price consideration (in thousands) |
|
$ |
26,902 |
|
3. Estimated Preliminary Purchase Price Allocation
The Company accounted for the Acquisition as an asset acquisition as the arrangement did not meet the definition of a business pursuant to the guidance prescribed in ASC Topic 805, Business Combinations. The Company concluded the Acquisition did not meet the definition of a business because it principally resulted in the acquisition of the exclusive rights to intravenous fosfomycin in the United States, which is a single identifiable asset and represents substantially all the fair value of the assets acquired. The Company did not acquire tangible assets, processes, protocols, operating systems or the minimum required inputs and processes necessary to be a business.
The Company expensed the acquired intellectual property as of the acquisition date on the basis that the cost of intangible assets purchased from others for use in research and development activities, and that have no alternative future uses, are expensed at the time the costs are incurred. The Company recorded $25.2 million, the fair value of the ordinary shares in connection with the Closing less the tangible net assets acquired, as in-process research and development expense.
The table below represents the estimated preliminary purchase price allocation to the net assets acquired based on their estimated fair values. Such amounts were estimated using the most recent interim financial statements of Zavante as of June 30, 2018. The Company does not believe the use of Zavantes balances as of June 30, 2018 instead of July 23, 2018 will result in a materially different allocation, however, certain amounts, such as the balances of cash and cash equivalents, prepaid expenses, accounts payable and other current liabilities may vary based upon changes in Zavantes balances between June 30, 2018 and July 23, 2018, with offsetting changes to the amount recognized as research and development expense. As the final valuations are being performed, increases or decreases in the fair value of relevant balance sheet amounts will result in adjustments, which may result in material differences from the information presented herein. The Companys consolidated financial statements as of September 30, 2018 will include updated amounts reflecting the July 23, 2018 estimated fair values.
(in thousands) |
|
|
| |
Assets Acquired |
|
|
| |
Cash and cash equivalents |
|
$ |
3,384 |
|
Prepaid expenses |
|
731 |
| |
Property and equipment, net
|
|
33 |
| |
Other non current assets |
|
10 |
| |
Total assets acquired |
|
4,158 |
| |
|
|
|
| |
Liabilities Assumed |
|
|
| |
Accounts payable |
|
1,093 |
| |
Accrued expenses and other current liabilities |
|
1,381 |
| |
Total liabilities assumed |
|
2,473 |
| |
|
|
|
| |
Tangible net assets acquired |
|
1,685 |
| |
|
|
|
| |
Purchase price |
|
26,902 |
| |
Accrued Deal costs |
|
5,476 |
| |
Total amount expensed as in-process R&D |
|
$ |
30,693 |
|
The $30.7 million of in-process R&D has been excluded from the pro forma financial statements as it is a material nonrecurring charge which results directly from the transaction and will be included in the Companys third quarter results of operations.
4. Pro Forma Adjustments
The following is a description of the unaudited pro forma adjustments reflected in the unaudited pro forma combined financial statements (amounts in thousands):
Adjustments to the pro forma combined balance sheet:
(a) Reflects the cash utilized to payoff Zavantes note payable at Closing.
(b) To eliminate Zavantes historical warrant liability and convertible preferred stock.
(c) To record the issuance of ordinary shares and elimination of Zavantes historical stockholders equity:
Issuance of Nabriva ordinary shares |
|
$ |
82 |
|
Elimination of Zavante common stock |
|
(1 |
) | |
|
|
$ |
81 |
|
Issuance of Nabriva ordinary shares |
|
$ |
26,820 |
|
Elimination of Zavante additional paid-in capital |
|
(634 |
) | |
|
|
$ |
26,186 |
|
(d) To eliminate Zavantes historical accumulated deficit and reflect the total amount expensed as in-process R&D as of the date of the Acquisition.
Adjustments to the pro forma combined statements of operations:
(e) To eliminate Zavantes historical interest expense associated with the note payable paid off prior to the Closing.