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): May 15, 2018 (April 27, 2018)
AMESITE INC.
(Exact name of Registrant as specified in its charter)
Delaware | 000-55804 | 82-1433756 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
205 East Washington Street
Suite B
Ann Arbor, MI 48104
(Address of principal executive offices)
Registrant’s telephone number, including area code: (650) 516-7633
Lola One Acquisition Corporation
2255 Glades Road, Suite 324A
Boca Raton, Florida 33431
(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:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | 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 ☒
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. ☐
EXPLANATORY NOTE
On May 2, 2018, Amesite Inc. (previously Lola One Acquisition Corporation.) filed a Current Report on Form 8-K (the “Original Filing”) with the Securities and Exchange Commission, announcing the completion of a merger transaction (the “Merger”).
We are filing this Current Report on Form 8-K/A (the “Form 8-K/A”) to amend the Original Filing in order to prevent a lapse in reporting by providing the information required for Amesite OpCo, the accounting acquirer, including its unaudited consolidated financial statements for the three months ended March 31, 2018, as set forth in Section 12240.4 of the Securities and Exchange Commission’s Division of Corporate Finance Financial Reporting Manual, which covers situations involving reverse acquisitions where the registrant elects to adopt the fiscal year of the accounting acquirer and to provide the pro forma information required in connection with the Merger. Accordingly, we are filing herewith as Exhibit 99.3 the information that would be included in a Quarterly Report on Form 10-Q for the period ended March 31, 2018, if Amesite OpCo were to file such form and Exhibit 99.4 containing the pro forma information.
Except as described above, no other changes have been made to the Original Filing and this Form 8-K/A does not modify or update any other information in the Original Filing. Information not affected by the changes described above is unchanged and reflects the disclosures made at the time of the Original Filing. Accordingly, this Form 8-K/A should be read in conjunction with the Company’s filings made with the SEC subsequent to the date of the Original Filing.
ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS. |
(a) | Financial Statements of Business Acquired. |
Included in Exhibit 99.3 filed herewith are the unaudited consolidated financial statements of Amesite OpCo for the three months ended March 31, 2018, which are incorporated herein by reference. The Original Filing included the audited consolidated financial statements of Amesite OpCo for the period ended December 31, 2017.
(b) | Pro Forma Financial Information |
Unaudited pro forma combined financial information for the period ended March 31, 2018.
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† | Annexes, schedules and/or exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. We hereby undertake to furnish supplementally a copy of any of the omitted schedules and exhibits to the SEC on a confidential basis upon request. |
+ | Indicates a management contract or compensatory plan. |
(1) | Incorporated by reference to the indicated exhibit in Lola One Acquisition Corporation’s Current Report on Form 8-K filed on April 12, 2018. |
(2) | Incorporated by reference to the indicated exhibit in Lola One Acquisition Corporation’s registration statement on Form 10 filed on June 27, 2017. |
(3) | Incorporated by reference to the indicated exhibit in Amesite Inc.’s Current Report on Form 8-K filed on May 2, 2018. |
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SIGNATURE
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.
Dated: May 15, 2018 | AMESITE INC. | |
By: | /s/ Ann Marie Sastry | |
Name: | Ann Marie Sastry, Ph.D. | |
Title: | Chief Executive Officer |
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Exhibit 99.3
AMESITE INC.
FORM 10-Q TRANSITION DISCLOSURE
Amesite Inc.
Financial Report
March 31, 2018
Amesite Inc.
Contents
Financial Statements | |
Balance Sheet | 1 |
Statement of Operations | 2 |
Statement of Stockholder’s Equity | 3 |
Statement of Cash Flows | 4 |
Notes to Financial Statements | 5-8 |
Amesite Inc.
Balance Sheet
March 31, 2018 and December 31, 2017
2018 | 2017 | |||||||
Assets | ||||||||
Current Assets | ||||||||
Cash | $ | 19,336 | $ | - | ||||
Prepaid expenses and other current assets | 13,000 | - | ||||||
Property and Equipment - Net (Note 3) | 12,168 | 12,655 | ||||||
Deferred Offering Costs (Note 9) | 215,256 | - | ||||||
Security Deposit (Note 7) | 5,000 | 5,000 | ||||||
Total assets | $ | 264,760 | $ | 17,655 | ||||
Liabilities and Stockholder’s Equity | ||||||||
Current Liabilities | ||||||||
Shareholder payables (Note 6) | $ | 91,856 | $ | 28,728 | ||||
Accrued and other current liabilities: (Note 6) | ||||||||
Accrued professional fees | 255,199 | 2,500 | ||||||
Accrued subcontractor fees | 40,278 | 13,500 | ||||||
Other accrued liabilities | 3,112 | 3,992 | ||||||
Total liabilities | 390,445 | 48,720 | ||||||
Stockholder’s Equity: | ||||||||
Class A stock, $.0001 par value, authorized 6,000,000 shares, 0 shares issued and outstanding (Note 4) | ||||||||
Class B stock, $.0001 par value, authorized 4,000,000 shares, 4,000,000 shares issued and outstanding | 400 | 400 | ||||||
Additional paid-in capital | 18,640 | - | ||||||
Accumulated Deficit | (144,725 | ) | (31,465 | ) | ||||
Total stockholder’s equity | (125,685 | ) | (31,065 | ) | ||||
Total liabilities and stockholder’s equity | $ | 264,760 | $ | 17,655 |
See notes to financial statements.
1 |
Amesite Inc.
Statement of Operations
Quarter Ended March 31, 2018
2018 | ||||
Operating Expenses - General and Administrative | ||||
Other general and administrative expenses | $ | 21,969 | ||
Subcontract development services | 26,778 | |||
Insurance | 2,000 | |||
Office rent | 11,200 | |||
Professional fees | 48,567 | |||
Travel expenses | 2,746 | |||
Total operating expenses | 113,260 | |||
Net Loss | $ | (113,260 | ) | |
Earnings per Share | ||||
Basic earnings per share | $ | (.03 | ) | |
Weighted average shares outstanding | 4,000,000 |
See notes to financial statements.
2 |
Amesite Inc.
Statement of Stockholder’s Equity
November 14, 2017 (date of incorporation) through Quarter ended March 31, 2018
Common Stock - Class A | Common Stock - Class B | Additional Paid-In Capital | Accumulated Deficit | Total | ||||||||||||||||
Balance - November 14, 2017 | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Consolidated net income | - | - | - | - | - | |||||||||||||||
Balance - December 31, 2017 | - | 400 | - | (31,465 | ) | (31,065 | ) | |||||||||||||
Net loss | - | - | - | (113,260 | ) | (113,260 | ) | |||||||||||||
Stock option compensation expense (Note 5) | - | - | 18,640 | - | 18,640 | |||||||||||||||
Balance - March 31, 2018 | $ | - | $ | 400 | $ | 18,640 | $ | (144,725 | ) | $ | (125,685 | ) |
See notes to financial statements.
3 |
Amesite Inc.
Statement of Cash Flows
Quarter Ended March 31, 2018
2018 | ||||
Cash Flows from Operating Activities | ||||
Net loss | $ | (113,260 | ) | |
Adjustments to reconcile net loss to net cash from operating activities: | ||||
Depreciation | 487 | |||
Stock option expense | 18,640 | |||
Changes in operating assets and liabilities which (used) provided cash: | ||||
Prepaid expenses and other assets | (13,000 | ) | ||
Equity issuance costs | (215,256 | ) | ||
Accrued and other liabilities | 278,597 | |||
Net cash used in operating activities | (43,792 | ) | ||
Cash Flows from Financing Activities | ||||
Advances from stockholder | 63,128 | |||
Net cash provided by in financing activities | 63,128 | |||
Net Increase in Cash | 19,336 | |||
Cash - Beginning of year | - | |||
Cash - End of year | $ | 19,336 |
See notes to financial statements.
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Amesite Inc.
Notes to Financial Statements
March 31, 2018
Note 1 - Nature of Business
Amesite Inc. (the “Company”) was formed in 2017 and is in the early stages of research and development of educational software that may be used at higher educational institutions.
Through March 31, 2018, the company had yet to generate revenue from its services and products. The Company’s activities are subject to significant risks and uncertainties, including failure to secure additional funding to execute the current business plan.
Note 2 - Significant Accounting Policies
Basis of Accounting
The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements. Actual results could differ from these estimates.
Property and Equipment
Property and equipment are recorded at cost. The straight-line method is used for computing depreciation. Assets are depreciated over their estimated useful lives (primarily three to seven years). Costs of maintenance and repairs are charged to expense when incurred.
Subsequent Events
The financial statements and related disclosures include evaluation of events up through and including May 14, 2018, which is the date the financial statements were available to be issued.
Note 3 - Property and Equipment
Property and equipment are summarized as follows:
Furniture and fixtures | $ | 11,057 | |||
Computer equipment and software | 1,843 | ||||
Total cost | 12,900 | ||||
Accumulated depreciation | 732 | ||||
Net property and equipment | $ | 12,168 |
Depreciation and amortization expense for period ending March 31, the three months ended March 31, 2018 was $487.
Note 4 - Capital Stock
The capital structure of the Company includes 6,000,000 authorized shares of Class A common stock and 4,000,000 authorized shares of Class B common stock. Both classes of stock have a par value of $0.0001 per share.
During 2017, the Company was incorporated with the issuance of 4,000,000 shares of Class B common stock to its founder and President.
As of March 31, 2018, there were 4,000,000 shares of Class B common stock issued and outstanding.
Class A and Class B common stock contain certain rights, privileges, and preferences including the following:
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Amesite Inc.
Notes to Financial Statements
March 31, 2018
Note 4 - Capital Stock (Continued)
Dividend Rights
Holders of Class A and Class B common stock shall be entitled to receive on a pari passu basis, when and as declared by the Company’s Board of Directors, but only out of assets legally available, cash dividends or the rights to acquire capital stock. As of March 31, 2018, there were no declared or unpaid dividends.
Voting Rights
Class A common stock entitles the stockholder to one vote for each share held. Class B Common Stock entitles the stockholder to ten votes for each share held. Holders of Class A Common Stock and Class B Common Stock vote together as one class on all matters submitted to a vote or for the consent of the stockholders of the Company. The Class B common stockholders, voting as a separate class, are entitled to elect two members of the board. These board members are entitled to two votes as a director at each meeting. Additional members of the board shall be elected by the holders of Class A and Class B common stockholders, voting together as a single class. These board members are entitled to one vote as a director at each meeting.
Conversion Rights
Any shares of Class B common stock may, at the option of the holder, be converted into one fully paid and nonassessable share of Class A common stock. Class B common stock automatically converts to one fully paid and nonassessable Class A common stock upon the transfer of a share or the death of a Class B stockholder.
Note 5 - Stock Options
The Company has a share-based compensation plan, which is described below. The compensation cost that has been charged against income for this plan was $18,640 for the three months ended March 31, 2018.
The Company’s 2017 Equity Incentive Plan (the “Plan”), which is stockholder approved, permits the grant of stock options, stock appreciation rights, restricted stock, or restricted stock units to officers, employees, directors, consultants, agents, and independent contractors of the Company for up to 1,000,000 shares of Class A common stock. The Company believes that such awards better align the interests of its employees, directors, and consultants with those of its stockholders. Option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant; those option awards generally vest based on two years of continuous service and generally have ten-year contractual terms. Certain option awards provide for accelerated vesting (as defined in the Plan).
The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model that uses the weighted-average assumptions noted in the following table. Expected volatilities are based on historical volatility of comparable companies. The Company uses historical data to estimate option exercise within the valuation model. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.
When calculating the amount of annual compensation expense, the Company has elected not to estimate forfeitures and instead accounts for forfeitures as they occur.
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Amesite Inc.
Notes to Financial Statements
March 31, 2018
Note 5 - Stock Options (Continued)
A summary of option activity under the Plan for the period ended March 31, 2018 is presented below:
Options | Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Total Shares | |||||||||||||
Outstanding at December 31, 2017 | - | $ | - | - | |||||||||||||
Granted | 883,334 | 1.50 | 1.99 | 883,334 | |||||||||||||
Outstanding at March 31, 2018 | 883,334 | - | 883,334 |
Note 6 - Related Party Transactions
The following is a description of transactions between the Company and related parties:
Advances from stockholder
As of March 31, 2018, the Company had received advances from a stockholder totaling $91,856 to fund certain costs, of which $63,128 was provided during the three month period ending March 31, 2018. Subsequent to quarter end, the Company received additional advances of approximately $140,000 to cover additional operating expenses.
Note 7 - Operating Leases
The Company is obligated under operating leases primarily for its offices. The lease requires the Company to pay insurance, utilities, and shared maintenance costs in addition to the monthly rent of $3,733. A refundable security deposit of $5,000 was also required as part of the lease. The lease expires in November 2018 and has a one year renewal option. Total rent expense under the lease was $11,200 for the three months ended March 31, 2018. The future minimum annual commitments under these operating leases are $27,600 for 2018.
Note 8 - Income Taxes
The Company has incorporated as a taxable corporation for tax purposes. For the three month period ending March 31, 2018, the Company’s activities have not generated any taxable income or tax liabilities. Accordingly, no tax expense, provision or deferred benefits have been recorded.
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Amesite Inc.
Notes to Financial Statements
March 31, 2018
Note 9 - Subsequent events
In March 2018, the Company issued
equity awards under the 2017 Equity Incentive Plan to purchase 883,334 shares of Class A common stock to officers, directors, employees
and consultants.
On April 26, 2018, the Company entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”)
by and among the Company, Lola One Acquisition Corporation, a Delaware corporation (“Lola One”), and Lola One Acquisition
Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Lola One (“Acquisition Sub”). Pursuant to the terms
of the Merger Agreement, on April 27, 2018, Acquisition Sub merged with and into the Company with the Company continuing as the
surviving corporation and as a wholly owned subsidiary of Lola One (the “Merger”). Each issued and outstanding share
of Class B common stock of the Company was converted into 1.4583333 shares of common stock of Lola One effective at the time of
the Merger (the “Effective Time”). The Merger will be accounted for as a reverse recapitalization, with the Company considered
the acquirer for accounting purposes. The Company’s equity awards for 883,334 shares of Class A common stock issued and outstanding
immediately prior to the closing of the Merger were assumed and converted into equity awards for 1,288,195 shares of common stock
of Lola One.
The Company will be a party to the 2018 Equity Incentive Plan. 2,529,000 shares of common stock will be available for awards granted
under the 2018 Plan, inclusive of 1,288,195 shares subject to options originally granted under the 2017 Plan.
Following the Effective Time of the Merger, on April 27, 2018, Lola One held an initial closing of a private placement offering
(the “Offering”) in which it sold to accredited investors 2,126,652 shares of its common stock at a price of $1.50 per
share (the “Offering Price”). Also, Lola One granted the investors in the Offering registration rights requiring it to
register those shares of common stock for public resale. The pre-Merger stockholders of the Company and Lola One became parties
to the registration rights agreement and became entitled to such registration rights. Concurrent with the initial closing, other
investors purchased 895,834 shares of Lola One’s common stock at a discounted price of $1.20 per share for aggregate gross
proceeds of approximately $1,075,000 to Lola One.
In connection with the Offering, Lola One agreed to pay its placement agent, a U.S. registered broker-dealer, or the Placement
Agent, (i) a cash commission of 10% of the gross proceeds raised from investors in the Offering introduced by them, and to issue
to the Placement Agent warrants to purchase a number of shares of common stock equal to 10% of the number of shares of common stock
sold to investors in the Offering introduced by them, with a term of five years from the initial closing date of the Offering,
or any subsequent closing, at an exercise price of $1.50 per share.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing in this report. Some of the information contained in this discussion and analysis or set forth elsewhere in this report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of our Current Report on Form 8-K filed on May 2, 2018, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Operating Overview
Amesite Inc. (“Amesite OpCo”) was incorporated in November 2017, and has no operating history in offering online courses. Amesite OpCo plans to use machine learning to provide a novel, mass customized experience to learners and is creating a cloud-based platform for college and university courses to be delivered to learners online and in hybrid online / on campus formats.
Recent Developments
Reverse Merger
On April 27, 2018, pursuant to the merger agreement, Lola One Acquisition Corporation’s acquisition sub (“Acquisition Sub”) merged (the “Merger”) with and into Amesite OpCo, with Amesite OpCo remaining as the surviving entity and a wholly-owned operating subsidiary of Lola One Acquisition Corporation. The Merger was effective as of April 27, 2018 at 12:01 a.m. Eastern Time (the “Effective Time”).
At the Effective Time, the legal existence of Acquisition Sub ceased. At the Effective Time, each outstanding share of Amesite OpCo’s capital stock issued and outstanding immediately prior to the closing of the Merger was converted into 1.4583333 shares of Lola One Acquisition Corporation’s common stock. As a result, an aggregate of 5,833,333 shares of our common stock were issued to the holders of Amesite OpCo’s capital stock after adjustments due to rounding for fractional shares. In addition, pursuant to the merger agreement equity awards to purchase 883,334 shares of Amesite OpCo’s common stock issued and outstanding immediately prior to the closing of the Merger were assumed and converted into equity awards to purchase 1,288,195 shares of our common stock.
The Merger was accounted for as a reverse recapitalization. Amesite OpCo is the acquirer for financial reporting purposes, and Lola One Acquisition Corporation is the acquired company under the acquisition method of accounting in accordance with FASB ASC Topic 805, Business Combination. Consequently, the assets, liabilities and operations that will be reflected in the historical financial statements prior to the Merger will be those of Lola One Acquisition Corporation and will be recorded at the historical cost basis of Lola One Acquisition Corporation, and the consolidated financial statements after completion of the Merger will include the assets, liabilities and results of operations of Amesite OpCo up to the day prior to the closing of the Merger and the assets, liabilities and results of operations of the combined company from and after the closing date of the Merger.
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Private Placement and Insider Investment
Following the Effective Time of the Merger, Lola One Acquisition Corporation held a closing of a private placement offering in which it sold to accredited investors approximately $3.19 million of its shares of common stock, or 2,126,652 shares, at a price of $1.50 per share. Also, Lola One Acquisition Corporation granted the investors in the private placement registration rights requiring us to register those shares of common stock for public resale, as described in more detail below. The then existing stockholders of Amesite OpCo who agreed to become parties to the registration rights agreement also became entitled to such registration rights. The first closing of the private placement occurred on April 27, 2018.
Concurrent with the closing of the private placement offering, Amesite OpCo investors purchased 895,834 shares of Lola One Acquisition Corporation’s common stock at a price of $1.20 per share for aggregate gross proceeds of approximately $1,075,000 in the Insider Investment. Such investors were also granted registration rights, subject to a twenty-four (24) month lock-up period.
Critical Accounting Policies and Significant Judgments and Estimates
Basis of Accounting
The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements. Actual results could differ from these estimates.
Recent accounting pronouncements
None.
Results of Operations
Period Ended March 31, 2018
Amesite OpCo was incorporated in November 2017.
Revenues - We are a development stage enterprise and have not yet generated any revenues.
Expenses - Operating expenses for quarter ended March 31, 2018 were $113,260.
Liquidity and Capital Resources
Overview
We are not profitable, and we cannot provide any assurance that we will ever be profitable. As of March 31, 2018, we have a net loss of $113,260. We believe that our cash and cash equivalents in addition to the proceeds of the closing of the private placement should be sufficient to satisfy our anticipated operating and investing needs through the 2018 calendar year. See “Funding Requirements” below for additional information on our future capital needs.
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Cash Flows
As of March 31, 2018, we had $19,336 in cash. The following table shows a summary of our cash flows for the period ended March 31, 2018.
March 31, | ||||
(in thousands) | 2018 | |||
Net cash used in operating activities | $ | (43,792 | ) | |
Net cash used in investing activities | - | |||
Net cash provided by financing activities | 63,128 | |||
Increase (decrease) in cash and cash equivalents | $ | 19,336 |
Operating activities
Amesite OpCo was incorporated in November 2017 and has no operating history.
Investing activities
Amesite OpCo was incorporated in November 2017 and has no investing history.
Financing activities
Net cash provided by financing activities was $ 63,128 for the period ended March 31, 2018.
Funding requirements
We expect that our primary uses of capital will continue to be the development of our artificial intelligence software, course offerings and for general and working capital. We believe that the estimated net proceeds from the closing of the private placement will be sufficient to meet our anticipated cash requirements through the 2018 calendar year. However, we may require additional capital for the further development of our products.
To the extent that we raise additional capital through future equity financings, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing common stockholders. If we raise additional funds through the issuance of debt securities, these securities could contain covenants that would restrict our operations. We cannot assure you that such additional financing, if available, can be obtained on terms acceptable to us. If we are unable to obtain such additional financing, we would need to reevaluate our future operating plans.
Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially as a result of a number of factors. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. Our future capital requirements are difficult to forecast and will depend on many factors, including:
● | the timing of our costs incurred in connection with the launch of new programs and the delay in receiving revenue from these new programs, which delay may last for several years; |
● | seasonal variation driven by the schedules for our customers’ programs, which may vary from year to year; |
● | changes in the student enrollment and retention levels in our customers’ programs from one term to the next; |
● | changes in our customers’ tuition rates; |
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● | the timing and amount of our program marketing and sales expenses; |
● | changes in the prospects of the economy generally, which could alter current or prospective customers’ or students’ spending priorities, or could increase the time it takes us to launch new customer programs. |
● | Our operating results may fall below the expectations of market analysts and investors in some future periods, which could cause the market price of our common stock to decline substantially. |
Please see the section titled “Risk Factors” in our Current Report on Form 8-K filed with the SEC on May 2, 2018 for additional risks associated with our substantial capital requirements.
Until such time, if ever, we generate product revenue, we expect to finance our cash needs through a combination of public or private equity offerings, debt financings and research collaboration and license agreements. We may be unable to raise capital or enter into such other arrangements when needed or on favorable terms or at all. Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and our ability to develop our therapeutic candidates.
Contractual Obligations and Commitments
The following is a summary of our significant contractual obligations as of March 31, 2018 (in thousands).
Payments Due by Period | ||||||||||||||||||||
Contractual Obligations | Total | Less than 1 Year | 1-3 Years | 3-5 Years | After 5 Years | |||||||||||||||
Operating lease obligations (1) | $ | 27,600 | $ | 27,600 | $ | - | - | |||||||||||||
Total | $ | 27,600 | $ | 27,600 | $ | - | - | $ |
(1) | Future minimum lease payments under operating lease for our current office space in Ann Arbor, Michigan that expires November 12, 2018. |
We enter into agreements in the normal course of business with contractors and vendors, and other services and products for operating purposes, which are cancelable at any time by us, generally upon 30 days prior written notice.
Off-balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES.
During the three months ended March 31, 2018, we were not subject to the disclosure controls and procedures requirements of Rule 13a-15 under the Exchange Act.
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PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.
ITEM 1A. RISK FACTORS.
There have been no material changes in our risk factors from those disclosed in our most recent Current Report on Form 8-K filed May 2, 2018.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURE.
Not Applicable.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS.
Not Applicable.
13
Exhibit 99.4
Amesite Inc. and Lola One Acquisition Corporation
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
March 31, 2018
We were incorporated as Lola One Acquisition Corporation in the State of Delaware on April 6, 2017. Prior to the Merger (as defined below), we were a “shell company” (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended).
On April 27, 2018, our wholly-owned subsidiary, Lola One Acquisition Sub, Inc., a corporation formed in the State of Delaware on March 26, 2018, or the Acquisition Sub, merged with and into Amesite Inc., a Delaware corporation referred to herein as Amesite OpCo. Pursuant to this transaction, or the Merger, Amesite OpCo was the surviving corporation and became our wholly-owned subsidiary. All of the outstanding capital stock of Amesite OpCo was converted into shares of our common stock. The issuance of shares of our common stock, or options to purchase our common stock, to holders of Amesite OpCo’s capital stock and options converted into Amesite OpCo capital stock or options, as applicable, are collectively referred to as the Share Conversion.
Upon effectiveness of the Certificate of Merger on April 27, 2018, Amesite OpCo changed its name to Amesite Operating Company and we adopted Amesite OpCo’s former company name, Amesite Inc., as our company name by filing a Certificate of Amendment to our Certificate of Incorporation on April 30, 2018.
On April 26, 2018, our board of directors and our pre-Merger (as defined below) stockholders approved an amended and restated certificate of incorporation, which, among other things, will increase our authorized capital stock from 50,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value $0.0001 per share, to 100,000,000 shares of common stock, par value $0.0001 per share. Our amended and restated certificate of incorporation will be effective upon its filing with the Secretary of State of the State of Delaware on the date that is 20 days after the mailing of a definitive Schedule 14C information statement to our pre-Merger stockholders. On April 26, 2018, our board of directors adopted the amended and restated bylaws.
As a result of the Merger, we acquired the operations of Amesite OpCo and will continue the existing operations of Amesite OpCo as a company subject to the Exchange Act periodic reporting requirements under the name Amesite, Inc.
On April 27, 2018, we closed a private placement offering, or the Offering, of 2,126,652 shares of our common stock, at a purchase price of $1.50 per share. Concurrent with the closing of the Offering, Amesite OpCo investors purchased 895,834 shares of our common stock at a price of $1.20 per share for aggregate gross proceeds of approximately $1,075,000, or the Insider Investment.
In accordance with “reverse recapitalization” accounting treatment, our historical financial statements as of period ends, and for periods ended, prior to the Merger will be replaced with the historical financial statements of Amesite OpCo prior to the Merger, in all future filings with the SEC.
Immediately after giving effect to the Merger, the Share Conversion and the closing of the Offering and the Insider Investment, there were 11,955,819 shares of our common stock issued and outstanding as of the Closing Date, as follows:
● | the stockholders of Amesite OpCo prior to the Merger hold 5,833,333 shares of our common stock, excluding shares purchased by them in the Offering and after adjustments due to rounding for fractional shares; |
● | investors in the closing of the Offering and the Insider Investment hold an aggregate of 3,022,486 shares of our common stock, excluding shares held by stockholders of Amesite OpCo prior to the Merger; and |
● | the remaining 3,100,000 shares are held by persons who purchased or received such shares for services rendered from pre-Merger Lola One Acquisition Corporation. |
In addition, there are:
● | 400,000 shares of common stock issuable upon the exercise of a Pre-Funded Common Stock Purchase Warrant; |
● | equity awards to purchase an aggregate of 1,288,195 shares of our common stock that were subject to equity awards originally granted under Amesite OpCo’s 2017 Equity Incentive Plan, or the 2017 Plan, to former Amesite OpCo option holders and assumed by us in connection with the Merger; and |
● | 2,529,000 shares of our common stock, less the number of shares subject to issued and outstanding awards under the 2017 Plan that were assumed in the Merger, reserved for issuance under our 2018 Equity Incentive Plan as future incentive awards to executive officers, employees, consultants and directors. |
The Merger is being accounted for as a reverse recapitalization. Amesite OpCo is the acquirer for financial reporting purposes, and Lola One Acquisition Corporation is the acquired company under the acquisition method of accounting in accordance with FASB ASC Topic 805, Business Combination. Consequently, the assets, liabilities and operations that will be reflected in the historical financial statements prior to the Merger will be those of Lola One Acquisition Corporation and will be recorded at the historical cost basis of Lola One Acquisition Corporation, and the consolidated financial statements after completion of the Merger will include the assets, liabilities and results of operations of Amesite OpCo up to the day prior to the closing of the Merger and the assets, liabilities and results of operations of the combined company from and after the closing date of the Merger.
The following unaudited pro forma combined financial statements give effect to both the merger between Lola One Acquisition Corporation and Amesite OpCo and the Offering and the Insider Investment.
Certain fees associated with the acquisition and the Offering that were incurred by Amesite OpCo and Lola One Acquisition Corporation, such as fees for legal and financial services, are not reflected in these unaudited pro forma combined financial statements. The unaudited pro forma combined statements of operations eliminate any non-recurring charges directly related to the Merger that the combined entities incur upon completion of the Merger.
The unaudited pro forma combined balance sheets as of March 31, 2018 gives effect to the Merger and the closing of the Offering and the Insider Investment as if they had been consummated on March 31, 2018 and includes adjustments that give effect to events that are directly attributable to the transactions and that are factually supportable. The unaudited pro forma combined statement of operations for the periods ended March 31, 2018 gives effect to the transactions as if they had been consummated on November 14, 2017 and include adjustments that give effect to events that are directly attributable to the transactions, are expected to have a continuing impact, and that are factually supportable. The notes to the unaudited pro forma combined financial information describe the pro forma amounts and adjustments presented below.
The unaudited pro forma combined financial information does not purport to represent what the combined company’s results of operations and comprehensive loss or financial position would actually have been had the transactions occurred on the dates described above or to project the combined company’s results of operations and comprehensive loss or financial position for any future date or period.
The unaudited pro forma combined financial information should be read together with (1) Amesite OpCo’s unaudited balance sheet as of March 31, 2018 and the related statement of operations, statement of stockholders’ (deficit) equity and statement of cash flows for the period from inception (November 14, 2017) through March 31, 2018 and the accompanying notes, (2) Lola One Acquisition Corporation’s unaudited interim balance sheet as of March 31, 2018 and the related statements of operations, statements of cash flows, and statements of stockholders’(deficit) equity for the period from inception (April 6, 2017) through March 31, 2018 and the accompanying notes.
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Amesite OpCo and Lola One Acquisition Corporation
Unaudited Pro Forma Combined Balance Sheets
as of March 31, 2018
Amesite Inc. | Lola One Acquisition Corporation | Pro Forma Adjustments- Merger | Pro Forma Adjustments- Private placement | Pro Forma Combined | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Cash | $ | 19,336 | $ | 3,375 | B | $ | 150,000 | D | $ | 2,666,980 | ||||||||||||||
C | $ | (274,998 | ) | |||||||||||||||||||||
E | $ | 1,075,000 | $ | 3,639,693 | ||||||||||||||||||||
Prepaid expense | 13,000 | - | - | - | 13,000 | |||||||||||||||||||
Property and Equipment- net | 12,168 | - | - | - | 12,168 | |||||||||||||||||||
Deferred offering costs | 215,256 | D | (215,256.00 | ) | 0 | |||||||||||||||||||
Security Deposit | 5,000 | - | - | - | 5,000 | |||||||||||||||||||
Total assets | $ | 264,760 | $ | 3,375 | $ | (124,998 | ) | $ | 3,526,724 | $ | 3,669,861 | |||||||||||||
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||||||||||||||
Accounts payable | $ | - | $ | 3,365 | $ | - | $ | - | $ | 3,365 | ||||||||||||||
Accrued expenses | 298,589 | - | - | D | (215,256.00 | ) | 83,333 | |||||||||||||||||
Notes payable - stockholders | 91,856 | 33,142 | B | 150,000 | - | |||||||||||||||||||
C | (274,998 | ) | - | - | ||||||||||||||||||||
Total liabilities | 390,445 | 36,507 | (124,998 | ) | (215,256 | ) | 86,698 | |||||||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||||||||||||||
Common stock, par value $.0001 | $ | 400 | $ | 310 | $ | - | D | $ | 213 | |||||||||||||||
E | 90 | |||||||||||||||||||||||
F | 184 | $ | 1,196 | |||||||||||||||||||||
Additional paid in papital | 18,640 | 74,690 | A | (108,132 | ) | D | 2,666,767 | |||||||||||||||||
E | 1,074,910 | |||||||||||||||||||||||
F | (184 | ) | ||||||||||||||||||||||
D | 3,726,692 | |||||||||||||||||||||||
Accumulated deficit | (144,725 | ) | (108,132 | ) | A | 108,132 | (144,725 | ) | ||||||||||||||||
Total stockholders' (deficit) equity | $ | (125,685 | ) | $ | (33,132 | ) | $ | - | $ | 3,741,980 | $ | 3,583,163 | ||||||||||||
Total liabilities and stockholders' (deficit) equity | $ | 264,760 | $ | 3,375 | $ | (124,998 | ) | $ | 3,526,724 | $ | 3,669,861 |
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Amesite OpCo and Lola One Acquisition Corporation
Unaudited Pro Forma Combined Statements of Operations
For the periods ended March 31, 2018
Amesite Inc. For the period November 14, 2017 through March 31, 2018 | Lola One Acquisition Company For the period April 6, 2017 through March 31, 2018 | Pro Forma Adjustments- Merger | Pro Forma Adjustments- Private placement | Pro Forma Combined | |||||||||||||||||||
Revenue | |||||||||||||||||||||||
Total revenue | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Operating expenses | |||||||||||||||||||||||
General and administrative expense | 144,725 | 106,602 | 251,327 | ||||||||||||||||||||
Total operating expenses | 144,725 | 106,602 | - | - | 251,327 | ||||||||||||||||||
Operating loss | (144,725 | ) | (106,602 | ) | - | - | (251,327 | ) | |||||||||||||||
Other income (expense) | |||||||||||||||||||||||
Interest expense | - | (1,530 | ) | - | - | (1,530 | ) | ||||||||||||||||
Other income (expense), net | - | - | - | - | - | ||||||||||||||||||
Total other income (loss), net | - | (1,530 | ) | - | - | (1,530 | ) | ||||||||||||||||
Net loss | $ | (144,725 | ) | $ | (108,132 | ) | $ | - | $ | - | $ | (249,797 | ) | ||||||||||
Basic loss per common share | $ | (0.04 | ) | $ | (0.03 | ) | $ | - | $ | - | $ | (0.02 | ) | ||||||||||
Basic and diluted weighted-average common shares outstanding | 4,000,000 | 3,100,000 | F | 1,833,333 | D, E | 3,022,486 | 11,955,819 |
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Pro Forma Adjustments
A | To eliminate the accumulated deficit of Lola One Acquisition Corporation. |
B | To record the $150,000 of advances by shareholders after March 31, 2018 and before the date of the merger. |
C | To pay-off the notes payable at the time of closing in conformity with the terms and conditions of the notes payable. |
D | Proceeds of $2,666,980 from the private placement that closed April 27, 2018, net of transaction costs of $522,998. There are additional legal & professional fees that were incurred as a result of this transaction, totaling approximately $76,000. |
E | Concurrent with the closing of the Offering, Amesite OpCo investors purchased 895,834 shares of our common stock at a price of $1.20 per share for aggregate gross proceeds of approximately $1,075,000, or the Insider Investment. |
F | To reflect the conversion of Amesite OpCo Class B common stock, common shares held by persons who purchased or received such shares for services rendered from pre-Merger Lola One Acquisition Corporation; par value $0.0001, into 5,833,333 shares of Lola One Acquisition Corporation common stock. |
The result is an aggregate of 11,955,819 shares of common stock, par value $0.0001, of the combined company in connection with the Merger.
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