8-K/A 1 FORM 8-K/A ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------ FORM 8-K/A (AMENDMENT NO. 3) 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 25, 1994 SYNBIOTICS CORPORATION (Exact name of registrant as specified in its charter) COMMISSION FILE NUMBER 0-11303 CALIFORNIA 95-3737816 (State or other jurisdiction (I.R.S. Employer of incorporation) Identification No.) 11011 VIA FRONTERA SAN DIEGO, CALIFORNIA 92127 (Address of principal executive offices) (Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (619) 451-3771 ================================================================================ 1 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS ------------------------------------ On July 25, 1994, ImmunoPharmaceutics, Inc. ("IPI"), of which Synbiotics Corporation (the "Company") was a 41% shareholder, was acquired by Texas Biotechnology Corporation ("TBC") in a triangular merger transaction whereby unregistered shares of TBC common stock were issued in exchange for all of the outstanding stock of IPI. The carrying value of the Company's investment in IPI had previously been reduced to zero due to the application of the equity method of accounting for the investment in IPI. In conjunction with the acquisition, the Company converted its $600,000 note receivable from IPI into voting stock of IPI. As a result of the transaction, the Company received approximately 655,000 shares of TBC common stock, and may receive in addition approximately 982,000 more shares of TBC common stock if certain contingencies are met by IPI. In fact, approximately 409,000 of the approximately 982,000 shares have been formally issued to the Company, and are being held in escrow pending satisfaction or failure of certain contingencies. The Company has valued its investment in TBC at $4.025 per share and, as a result, will recognize a gain for financial reporting purposes of approximately $2,036,000 in the fiscal quarter ending September 30, 1994. No amounts have been recorded related to the approximately 982,000 contingent shares of TBC common stock, and no amounts will be recorded until such time that the contingencies are satisfied. The Company had originally valued its investment in TBC at $4.625 per share, the closing price on July 25, 1994 of a TBC common stock/warrant unit as reported by the American Stock Exchange. The per unit price was not discounted to reflect a value for the warrant component of the unit based on the following factors: 1) the warrants were not separately tradeable on July 25, 1994; 2) the warrants, which have an exercise price of $8.4375 per share, were significantly out-of- the-money on July 25, 1994; 3) there was no reliable method for valuing non- tradeable warrants; 4) management believed that, if there was a value for the warrants, any value would be de minimis in nature and 5) based on the previously mentioned factors, management believed that there was no justification for assigning a value, other than zero, to the warrants. On November 7, 1994, the TBC units were split into separately trading common stock and warrants, and the closing market price of the warrants on that day (with the warrants even more out-of-the-money than they had been on July 25, 1994) was $0.25 per warrant. The Company then had a reliable method, in hindsight, of valuing the warrant at July 25, 1994 and adjusted its estimate of the fair market value of its investment in TBC accordingly. The result was a reduction in the recognized gain of approximately $393,000. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS --------------------------------- a) Financial statements of business acquired. ------------------------------------------ Not applicable. b) Pro forma financial information. -------------------------------- On July 25, 1994, ImmunoPharmaceutics, Inc. ("IPI"), of which Synbiotics Corporation (the "Company") was a 41% shareholder, was acquired by Texas Biotechnology Corporation ("TBC") in a triangular merger transaction whereby shares of TBC common stock were issued in exchange for all of the outstanding stock of IPI. The following pro forma condensed balance sheet and pro forma condensed statement of operations reflect the financial condition and results of operations of Synbiotics Corporation as of and for the year ended March 31, 1994 as if the transaction had occurred on April 1, 1993. 2 SYNBIOTICS CORPORATION PRO FORMA CONDENSED BALANCE SHEET
HISTORICAL PRO FORMA PRO FORMA MARCH 31, 1994 ADJUSTMENTS MARCH 31, 1994 -------------- ----------- -------------- ASSETS Current assets: Cash and equivalents $ 3,635,000 $ 3,635,000 Accounts receivable, net 3,135,000 3,135,000 Notes receivable from affiliates 600,000 $ (600,000)(1) Inventories 2,148,000 2,148,000 Other current assets 605,000 605,000 ----------- ---------- ------------ Total current assets 10,123,000 (600,000) 9,523,000 Property and equipment, net 1,286,000 1,286,000 Securities held for sale 2,636,000(2) 3,782,000 1,146,000(3) Other assets 2,041,000 2,041,000 ----------- ---------- ------------ $13,450,000 $3,182,000 $ 16,632,000 =========== ========== ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 2,041,000 $ 2,041,000 Other current assets 217,000 217,000 ----------- ---------- ------------ Total current liabilities 2,258,000 2,258,000 ----------- ---------- ------------ Other liabilities 486,000 486,000 ----------- ---------- ------------ Shareholders' equity: Common stock 29,317,000 29,317,000 Unrealized holding gains from securities held for sale $1,146,000(3) 1,146,000 Accumulated deficit (18,611,000) 2,036,000(4) $(16,575,000) ----------- ---------- ------------ Total shareholders' equity 10,706,000 3,182,000 13,888,000 ----------- ---------- ------------ $13,450,000 $3,182,000 $ 16,632,000 =========== ========== ============
3 SYNBIOTICS CORPORATION PRO FORMA CONDENSED STATEMENT OF OPERATIONS
HISTORICAL PRO FORMA YEAR ENDED PRO FORMA YEAR ENDED MARCH 31, 1994 ADJUSTMENTS MARCH 31,1994 -------------- ----------- ------------- Revenues: Products $14,144,000 $14,144,000 Interest 137,000 137,000 License fees and other 352,000 352,000 ----------- ---------- ----------- 14,633,000 14,633,000 ----------- ---------- ----------- Cost and expenses: Cost of products 6,700,000 6,700,000 Research and development 1,133,000 1,133,000 Selling and marketing 3,742,000 3,742,000 General and administrative 2,701,000 2,701,000 ----------- ---------- ----------- 14,276,000 14,276,000 ----------- ---------- ----------- Income before pro forma effect of gain on disposition of investment in ImmunoPharmaceutics, Inc. 357,000 357,000 Pro forma effect of gain on disposition of investment in ImmunoPharmaceutics, Inc. $2,036,000(4) 2,036,000 ----------- ---------- ----------- Net income $ 357,000 $2,036,000 $ 2,353,000 =========== ========== =========== Net income per share $ .06 $ .35 $ .41 =========== ========== =========== Weighted average shares outstanding 5,859,000 5,859,000 5,859,000 =========== ========== ===========
------------------------- 1) Conversion of note receivable from IPI into voting stock of IPI. 2) Fair market value of TBC common stock of $4.025 per share based on management's estimate (see Item 2). 3) Unrealized holding gain based on management's estimate of the fair value of the TBC common stock on March 31, 1994. Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" requires that securities held for sale be carried at fair market value. Any unrealized gains or losses are to be credited or charged to shareholders' equity. 4) Gain on disposition of investment in IPI calculated as the fair market value in 2 above less the converted note receivable in 1 above. 4 c) Exhibits. --------- 2.1 Plan and Agreement of Merger of Texas Biotechnology Corporation, TBC Acquisition Company No. 1 and ImmunoPharmaceutics, Inc. dated as of June 17, 1994(1) -------------------- (1) Incorporated herein by reference to Exhibit A to Texas Biotechnology Corporation's Current Report on Form 8-K, as amended, dated July 25, 1994, File No. 0-20117 (confidential treatment has been granted with respect to certain portions of this exhibit). 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. SYNBIOTICS CORPORATION Date: March 24, 1995 /s/ Michael K. Green -------------------------------------- Michael K. Green Vice President of Finance and Chief Financial Officer 5