Form 8-K Amendment

0001193125-14-312822.txt : 20140818 0001193125-14-312822.hdr.sgml : 20140818 20140818110737 ACCESSION NUMBER: 0001193125-14-312822 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20140602 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20140818 DATE AS OF CHANGE: 20140818 FILER: COMPANY DATA: COMPANY CONFORMED NAME: REPLIGEN CORP CENTRAL INDEX KEY: 0000730272 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 042729386 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-14656 FILM NUMBER: 141048187 BUSINESS ADDRESS: STREET 1: 41 SEYON STREET STREET 2: BUILDING 1, SUITE 100 CITY: WALTHAM STATE: MA ZIP: 02453 BUSINESS PHONE: 7814499560 MAIL ADDRESS: STREET 1: 41 SEYON STREET STREET 2: BUILDING 1, SUITE 100 CITY: WALTHAM STATE: MA ZIP: 02453 8-K/A 1 d776292d8ka.htm FORM 8-K AMENDMENT Form 8-K Amendment

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K / A

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 2, 2014

REPLIGEN CORPORATION

(Exact name of registrant as specified in charter)

Delaware

0-14656

04-2729386

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

41 Seyon Street, Bldg. 1, Suite 100, Waltham, MA 02453

(Address of Principal Executive Offices) (Zip Code)

(781) 250-0111

(Registrant’s telephone number, including area code)

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 (see General Instruction A.2. below):

¨	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))

Item 2.01. Acquisition or Disposition of Assets.

As previously reported and described in the Current Report on Form 8-K filed by Repligen Corporation (the “Company”) on June 3, 2014, the Company completed the acquisition of the Transferred Business (as defined below), pursuant to the terms of the Asset Purchase Agreement (the “Asset Purchase Agreement”), dated as of June 2, 2014, by and among the Company, Refine Technology, LLC, a company organized under the laws of New Jersey (“Refine”), Jerry Shevitz (“Shevitz”), certain members of Refine, Refine Technology Sales LLC, a company organized under the laws of New Jersey (“RTS”), and Refine Technology Sales Asia Pte. Ltd., a company organized under the laws of Singapore. The Company acquired bioprocessing assets and contract rights owned by Refine, RTS and Shevitz relating to the conduct of the business of developing, designing, manufacturing, distributing and selling a cell retention device known as the ATF System (the “ATF System”). Pursuant to the Asset Purchase Agreement, the Company purchased and licensed certain of the assets and contract rights related to the ATF System and assumed certain specified liabilities related to the ATF System from Refine, RTS and Shevitz and purchased services and licenses used in connection with the ATF System from Refine (collectively, the “Transferred Business” and the acquisition of the Transferred Business, the “Transaction”).

The foregoing description of the Transaction and the Asset Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Asset Purchase Agreement, which was filed as Exhibit 10.3 to the Company’s Form 10-Q filed on August 11, 2014, and is incorporated herein by reference.

This Current Report on Form 8-K/A amends the original Form 8-K to provide the historical financial statements of Refine under Item 9.01(a) and the pro forma financial information required under Item 9.01(b).

Item 9.01. Financial Statements, Pro Forma Financial Information and Exhibits.

(a) Financial statements of business acquired.

Included herein as Exhibits 99.3 and 99.4.

(b) Pro forma financial information.

Included herein as Exhibit 99.5.

(d) Exhibits.


Exhibit No.		Description

2.1		Asset Purchase Agreement, dated as of June 2, 2014, by and among Repligen Corporation, Refine Technology, LLC, Jerry Shevitz, certain members of Refine Technology, LLC, Refine Technology Sales LLC, and Refine Technology Sales Asia Pte. Ltd. (filed as Exhibit 10.3 to Repligen Corporation’s Quarterly Report on Form 10-Q filed on August 11, 2014 and incorporated herein by reference).

23.1*		Consent of Withum Smith + Brown, PC

99.1		Press Release by Repligen Corporation, dated June 3, 2014 (incorporated herein by reference to Repligen Corporation’s Form 8-K filed on June 3, 2014).



99.2		Investor Presentation by Repligen Corporation, dated June 3, 2014 (incorporated herein by reference to Repligen Corporation’s Form 8-K filed on June 3, 2014).

99.3*		Refine Technology, LLC Audited Financial Statements as of and for the fiscal year ended December 31, 2013.

99.4*		Refine Technology, LLC Unaudited Interim Consolidated Financial Statements as of March 31, 2014 and for the three months ended March 31, 2014 and March 31, 2013.

99.5*		Unaudited Pro Forma Combined Condensed Financial Statements as of and for the fiscal year ended December 31, 2013, and the three months ended March 31, 2014.

*	Filed herewith

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.


	REPLIGEN CORPORATION

Dated: August 18, 2014	By:	/s/ Walter C. Herlihy

		Walter C. Herlihy

		President and Chief Executive Officer

EXHIBIT INDEX


Exhibit No.		Description

2.1		Asset Purchase Agreement, dated as of June 2, 2014, by and among Repligen Corporation, Refine Technology, LLC, Jerry Shevitz, certain members of Refine Technology, LLC, Refine Technology Sales LLC, and Refine Technology Sales Asia Pte. Ltd. (filed as Exhibit 10.3 to Repligen Corporation’s Quarterly Report on Form 10-Q filed on August 11, 2014 and incorporated herein by reference).

23.1*		Consent of Withum Smith + Brown, PC

99.1		Press Release by Repligen Corporation, dated June 3, 2014 (incorporated herein by reference to Repligen Corporation’s Form 8-K filed on June 3, 2014).

99.2		Investor Presentation by Repligen Corporation, dated June 3, 2014 (incorporated herein by reference to Repligen Corporation’s Form 8-K filed on June 3, 2014).

99.3*		Refine Technology, LLC Audited Financial Statements as of and for the fiscal year ended December 31, 2013.

99.4*		Refine Technology, LLC Unaudited Interim Consolidated Financial Statements as of March 31, 2014 and for the three months ended March 31, 2014 and March 31, 2013.

99.5*		Unaudited Pro Forma Combined Condensed Financial Statements as of and for the fiscal year ended December 31, 2013, and the three months ended March 31, 2014.

*	Filed herewith

EX-23.1 2 d776292dex231.htm EX-23.1 EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statements (Form S-8 Nos. 333-196456, 333-184824, 333-157168, 333-89140 and 33-62796) pertaining to the Second Amended and Restated 2001 Repligen Corporation Stock Plan, the 2001 Repligen Corporation Stock Option Plan, and the 1992 Repligen Corporation Stock Plan and in Repligen Corporation’s Registration Statements on Form S-3 (Nos. 333-106109, 333-30383, 333-57951, 333-76005, 333-79611, 333-95641, 333-31728, 333-35056 and 333-36280), of our report dated August 14, 2014, with respect to the financial statements of Refine Technology, LLC included in this Current Report (Form 8-K/A) of Repligen Corporation.

/s/ Withum Smith + Brown, PC

Morristown, New Jersey

August 14, 2014

EX-99.3 3 d776292dex993.htm EX-99.3 EX-99.3

Exhibit 99.3

REFINE TECHNOLOGY, LLC

Financial Statements

December 31, 2013

With Independent Auditors’ Report

Refine Technology, LLC

Table of Contents

December 31, 2013


	Page(s)

Independent Auditors’ Report		1-2

Balance Sheet		3

Statement of Income and Members’ Equity		4

Statement of Cash Flows		5

Notes to Financial Statements		6-11

Independent Auditors’ Report

To the Members of Refine Technology, LLC

We have audited the accompanying financial statements of Refine Technology, LLC, which comprise the balance sheet as of December 31, 2013, and the related statements of income and members’ equity, and cash flows for the year then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Refine Technology, LLC as of December 31, 2013, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

/s/ Withum Smith + Brown, PC

Morristown, New Jersey

August 14, 2014

Refine Technology, LLC

Balance Sheet

December 31, 2013


Assets

Current assets
Cash and cash equivalents	$	1,194,492
Restricted cash		50,058
Accounts receivable		2,071,588
Other receivable		386,003
Inventories, net		835,287

Total current assets		4,537,428

Property and equipment, net		250,642

Other assets		9,965


Total assets	$	4,798,035


Liabilities and Members’ Equity

Current liabilities
Accounts payable	$	169,866
Accrued expenses		269,219
Deferred revenue		69,123
Deferred rent		17,562

Total current liabilities		525,770

Members’ equity		4,272,265


Total liabilities and members’ equity	$	4,798,035

The Notes to Financial Statements are an integral part of this statement.

Refine Technology, LLC

Statement of Income and Members’ Equity

Year Ended December 31, 2013


Revenue, net	$	8,251,616

Cost of revenue		2,992,631


Gross profit		5,258,985

Selling, general, and administrative expense		3,059,768


Net income		2,199,217

Members’ equity - beginning of year		4,024,274

Members’ distribution		(1,951,226	)


Members’ equity - end of year	$	4,272,265

The Notes to Financial Statements are an integral part of this statement.

Refine Technology, LLC

Statement of Cash Flows

Year Ended December 31, 2013


Cash flows from operating activities
Net income	$	2,199,217
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		121,446
(Increase) decrease in:
Restricted cash		(50,058	)
Accounts receivable		(368,000	)
Other receivable		(77,452	)
Inventories, net		40,899
Increase (decrease) in:
Accounts payable		(163,732	)
Accrued expenses		132,526
Deferred revenue		69,123
Deferred rent		(3,881	)

Net cash provided by operating activities		1,900,088

Cash flows from investing activities
Purchases of property and equipment		(108,119	)

Cash flows from financing activities
Member distributions		(1,951,226	)


Net decrease in cash and cash equivalents		(159,257	)

Cash and cash equivalents
Beginning of year		1,353,749

End of year	$	1,194,492

The Notes to Financial Statements are an integral part of this statement.

Refine Technology, LLC

Notes to Financial Statements

December 31, 2013

1.	Nature of Operations and Principles

Refine Technology, LLC (the “Company”) was organized on June 27, 2003 as a limited liability company and currently operates from Pine Brook, New Jersey. There is one class of membership in the Company with each member having limited liability. The Company primarily manufactures and sells ATF systems worldwide (the “bio-processing business”). The ATF system is a cell retention device, which is primarily known for being able to routinely generate high cell concentrations. Sales of ATF systems and related products accounted for approximately 89% of revenue, net for the year ended December 31, 2013. The Company’s remaining revenue is primarily generated by selling replacement parts.

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America.

2.	Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the Company’s financial statements and accompanying notes. The Company bases its estimates and assumptions on historical experience and on various other assumptions that it believes are reasonable under the circumstances. Actual results could differ from those estimates. The amounts of assets and liabilities reported in the Company’s balance sheet and revenues and expenses reported in the statement of income for the period presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for revenue recognition, allowance for doubtful accounts, reserve for inventory obsolescence, depreciation and amortization periods, and the warranty accrual.

Fair Value of Financial Instruments

The Company’s financial assets and liabilities include cash, accounts receivable, accounts payable, deferred revenue, accrued expenses and other current liabilities. The carrying amounts of the Company’s financial assets and liabilities approximate fair value because of the short maturity of these instruments.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The Company maintains cash balances in several financial institutions. Interest-bearing balances in U.S. Banks are insured by the Federal Deposit Insurance Corporation (“FDIC”) for up to $250,000 per institution. From time to time the Company’s balances may exceed these limits.

Restricted Cash

On December 12, 2013, the Company transferred $50,058 to a restricted cash account in Singapore for the purposes of establishing a wholly-owned subsidiary. On January 17, 2014, the Company incorporated a wholly-owned subsidiary, Refine Technology Sales Asia PTE. LTD., in Singapore. The restricted cash was transferred to the subsidiary as a capital contribution in March 2014.

Accounts Receivable

Accounts receivable are recorded at net realizable value consisting of the carrying amount less the allowance for uncollectible accounts. The Company evaluates the collectability of its accounts receivable based on a combination of factors. When the Company is aware of circumstances that may impair a specific customer’s ability to meet its financial obligations, the Company records a specific allowance against amounts due. For all other customers, the Company recognizes allowances for doubtful accounts based on the length of time the receivables are outstanding, the current business environment and its historical experience. The Company offers most customers 30-45 day terms. In special situations, the Company may offer extended terms or discounts to selected customers.

Refine Technology, LLC

Notes to Financial Statements

December 31, 2013

Accounts are considered past due when invoices become 30 days past the initial payment term. The Company generally does not record interest on past due accounts. Accounts are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. At December 31, 2013, the Company determined that no reserve was deemed necessary.

Inventory

Inventory is stated at the lower of costs or market. Cost is determined generally by the weighted average cost using the first-in, first-out basis. Inventory consists of parts and assembled filtration system. The Company considers obsolescence, excessive levels, deterioration, and other factors in evaluating net realizable value and obsolescence reserves.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation and amortization.

Property and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable through an assessment of the estimated future undiscounted cash flows related to such assets. In the event that assets are found to be carried at amounts that are in excess of estimated undiscounted future cash flows, the carrying value of the related asset or group of assets is reduced to a level commensurate with fair value based on a discounted cash flow analysis. No impairment indicators were identified during the year ended December 31, 2013.

Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Amortization on leasehold improvements is computed using the straight-line method over the shorter of the assets’ estimated useful lives or the lease term.

The estimated useful lives used in determining depreciation are as follows:


Leasehold Improvements			Life of the Lease
Machinery and Equipment			3-10 Years
Furniture and Fixtures			7 Years
Software			3 Years
Demo Equipment			5 Years

Deferred Revenue

Deferred revenue consists of payments received in advance of revenue being earned. Advances are recognized as revenue when earned, pursuant to the applicable revenue recognition principles for the specific type of revenue as disclosed in this Note 2.

Warranties

The Company provides parts and service warranties on its products. Liability under service and warranty policies is based upon review of historical warranty and claim experience. Adjustments are made to accruals based on actual claim data and historical experience. Management has recorded a warranty liability of approximately $43,000 at December 31, 2013 and is included in accrued expenses on the accompanying balance sheet.

Distribution Agreement

In 2012, the Company entered into a three year exclusive distribution agreement (the “Agreement”) with a vendor to sell certain vendor products to approved sub-distributors or the customers of the Company, for use with the Company’s products, within a defined territory. This vendor is the exclusive supplier of certain products defined in the Agreement. In conjunction with the Agreement, the Company is eligible to receive specified credits that can be used to offset future purchases of this vendor’s products.

Refine Technology, LLC

Notes to Financial Statements

December 31, 2013

In 2012, the Company earned incentive credits totaling $308,000 and used approximately $222,000 of these credits to offset purchases from this vendor in 2013. The Company has approximately $86,000 of the credits earned in 2012 unused as of December 31, 2013. In 2013, the Company earned credits totaling approximately $300,000 which are available to offset 2014 purchases. Total unused credits available to the Company as of December 31, 2013 totaled $386,000 and are recorded as the other receivable on the accompanying balance sheet. The earning of the incentive credits resulted in a decrease of costs of goods sold. The incentive credits expire one year from their date of issuance.

Revenue Recognition

The Company recognizes revenue on the date of the sale of its systems when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable, and collectability is reasonably assured.

Marketing Costs

Marketing costs are charged to operating expense as they are incurred. For the year ended December 31, 2013, marketing expenses were approximately $835,000 and are included in selling, general and administrative expenses on the accompanying statement of income.

Shipping and Handling Costs

The Company includes freight, postage and other shipping costs in cost of sales. Billings for third party shipping and handling costs are included in revenues.

Research and Development Costs

Research and development costs are charged to operating expense as they are incurred. For the year ended December 31, 2013, research and development expenses were approximately $73,000 and are included in selling, general and administrative expenses on the accompanying statement of income.

Income Taxes

The Members of the Company have elected under the Internal Revenue Code to be taxed as a partnership whereby in lieu of partnership income taxes, the Members are taxed on their proportionate share of the Company’s taxable income. Therefore, no provision or liability for income taxes has been included in these financial statements.

ASC Topic 740 clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. It also provides guidance on de-recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition.

The Company had no unrecognized tax benefits at December 31, 2013. The Company files tax returns in the U.S. federal jurisdiction and various states. The Company has no open years. The Company did not recognize any income tax related interest or penalties for the period presented in these financial statements.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of accounts receivable. By their nature, all such financial instruments involve risks including the credit risks of non-performance by counterparties. Trade accounts receivable are incurred pursuant to contractual terms with customers worldwide. Credit losses on accounts receivable have not been material because of a large concentration of revenues with a small number of large, established companies. The Company evaluates the creditworthiness of its clients in conjunction with its revenue recognition processes as well as through its ongoing collectability assessment processes for accounts receivable.

Refine Technology, LLC

Notes to Financial Statements

December 31, 2013

The Company transacts certain revenue transactions with international customers in foreign currencies, primarily in euros and Singapore dollars. Foreign exchange transaction gains and losses have been minimal during the year ended December 31, 2013. Revenues from international customers accounted for approximately 46% of total revenues for the year ended December 31, 2013. As of December 31, 2013, accounts receivables from international customers accounted for approximately 33% of the total accounts receivable balance.

The Company had two customers that accounted for approximately 34% of total revenue for the year ended December 31, 2013. These top two customers represented approximately 23% of the Company’s accounts receivables as of December 31, 2013.

The Company had one vendor that accounted for approximately 36% of total purchases for the year ended December 31, 2013. Amounts due to this vendor represented approximately 15% of accounts payable at December 31, 2013.

3.	Inventories, Net

Inventories, net consisted of the following at December 31, 2013:


Components	$	739,847
Finished goods		120,440

Total inventory		860,287
Inventory reserve		(25,000	)

Total inventory, net	$	835,287

4.	Property and Equipment, Net

Property and equipment, net consisted of the following at December 31, 2013:


Machinery and equipment	$	357,266
Furniture and fixtures		66,276
Leasehold improvements		77,238
Software		27,480
Demo equipment		98,677

Total cost		626,937
Accumulated depreciation and amortization		(376,295	)

Total property and equipment, net	$	250,642

Depreciation and amortization expense for the year ended December 31, 2013 was $121,446.

5.	Related Party Transactions

The Company sells, promotes, and markets its products exclusively through Refine Technology Sales LLC, which is a related party via common ownership. Refine Technology Sales LLC operates for the sole purpose of selling the Company’s products. The Company had the following transactions with this related party during the year ended December 31, 2013:


Selling, general, and administrative expenses
Paid to Refine Technology Sales LLC	$	422,946

The Company had the following due to this related party at December 31, 2013:


Due to Refine Technology Sales LLC	$	—

Refine Technology, LLC

Notes to Financial Statements

December 31, 2013

6.	Line of Credit

The Company had a $1,100,000 demand line of credit agreement with PNC Bank at December 31, 2013. The line of credit is secured by substantially all Company assets and has an interest rate at the bank’s prime rate. The interest rate at December 31, 2013 was 3.25%. The line of credit matures on September 30, 2014, however due to the sale of the Company in June 2014 (see Note 9), the line was closed. The line had no outstanding balance at December 31, 2013 or during the year then ended.

7.	Commitments and Contingencies

Operating Lease

The Company leases office and warehouse space under a seven-year lease that expires April 30, 2017. Rent expense for the facility was approximately $78,000 for the year ended December 31, 2013.

On January 31, 2014, the Company entered into an agreement to lease additional warehouse space that expires April 30, 2017.

Minimum annual rent commitments under the leases for the years ending December 31 are as follows:


Year Ending December 31,	Total Lease Payments
2014	$	126,102
2015		139,311
2016		142,942
2017		48,055

Total	$	456,409

For leases with scheduled rent increases, the Company has recorded rent expense on a straight-line basis over the term of the lease. Deferred rent of $17,562 has been recorded at December 31, 2013. This obligation represents the excess of rent expense over cash payments.

Put Agreement

In 2008, the Company entered into a put agreement with the 99% owner of Refine Technology Sales LLC. Pursuant to the put agreement, if the Company or one or more of its members accepts an offer that would result in a change in control, the Company would be obligated to purchase that interest in Refine Technology Sales LLC.

The put agreement states that the offer to purchase this interest will be calculated as 15% of the net proceeds, if the net proceeds are less than $15,000,000 and $2,250,000 plus 10% of net proceeds that exceed $15,000,000, if the net proceeds are greater than $15,000,000.

Due to the sale of the Company in June 2014 (see Note 9), the Company recorded the put liability due to the 99% owner of Refine Technology Sales LLC as of the purchase date.

Letter of Credit

In the ordinary course of business, the Company is required to post a letter of credit in support of performance under certain contracts. The letter of credit is issued by a bank and commits the issuer to pay specified amounts to the holder of the letter of credit if the holder claims that the Company has failed to perform contractually specified actions. If this were to occur, the Company would be required to reimburse the issuer of the letter of credit, which, depending upon the circumstances could result in a charge to earnings. As of December 31, 2013, the approximate amount of this letter was $331,000.

In February 2014, the Company obtained another letter of credit issued by a bank for approximately $225,000.

Refine Technology, LLC

Notes to Financial Statements

December 31, 2013

8.	Employee Benefit Plan

The Company maintains an employee retirement plan pursuant to section 401(k) of the Internal Revenue Code. Employees are eligible to participate in the Company’s 401(k) plan after one year of service. The 401(k) plan allows for voluntary elective deferrals of compensation up to 92% of taxable compensation. The Company makes matching contributions in an amount equal to the employee’s elective deferrals that do not exceed 1% of annual compensation, plus 50% of the elective deferrals that exceed 1% of annual compensation but do not exceed 6% of annual compensation. In addition, the 401(k) plan allows the Company to make a profit sharing contribution to the accounts of employees determined in accordance with a discretionary formula. The Company contributed $13,371 to the plan as a match in the year ended December 31, 2013. The Company also made a discretionary profit sharing contribution of $52,093 for the year ended December 31, 2013.

9.	Subsequent Events

The Company evaluated subsequent events through August 14, 2014 which is the date the financial statements were available to be issued. Based upon this evaluation no events required disclosure in or adjustment to the financial statements, other than the following:

On June 2, 2014, the Company sold its bio-processing business to Repligen Corporation for approximately $25 million, subject to certain contingencies or holdbacks. The Company could earn additional proceeds if certain revenue targets are achieved through 2016. The bio-processing operations subsequent to the acquisition date are included in Repligen’s consolidated operations.

EX-99.4 4 d776292dex994.htm EX-99.4 EX-99.4

Exhibit 99.4

REFINE TECHNOLOGY, LLC

Interim Consolidated Financial Statements

March 31, 2014

(Unaudited)

Refine Technology, LLC

Table of Contents

March 31, 2014


Interim Consolidated Financial Statements	Page(s)

Unaudited Consolidated Balance Sheets		1

Unaudited Consolidated Statements of Income and Members’ Equity		2

Unaudited Consolidated Statements of Cash Flows		3

Notes to Unaudited Interim Consolidated Financial Statements		4-9

Refine Technology, LLC

Unaudited Consolidated Balance Sheets


	March 31, 2014		December 31, 2013

Assets

Current assets
Cash and cash equivalents	$	2,430,618	$	1,194,492
Restricted cash		—		50,058
Accounts receivable		825,799		2,071,588
Other receivable		375,000		386,003
Inventories, net		1,118,892		835,287

Total current assets		4,750,309		4,537,428

Property and equipment, net		364,709		250,642

Other assets		14,956		9,965


Total assets	$	5,129,974	$	4,798,035


Liabilities and Members’ Equity

Current liabilities
Accounts payable - trade	$	840,373	$	169,866
Accrued expenses		158,562		269,219
Deferred revenue		312,290		69,123
Deferred rent		20,716		17,562

Total current liabilities		1,331,941		525,770

Members’ equity		3,798,033		4,272,265


Total liabilities and members’ equity	$	5,129,974	$	4,798,035

The Notes to the Unaudited Consolidated Financial Statements are an integral part of these statements.

Refine Technology, LLC

Unaudited Consolidated Statements of Income and Members’ Equity

For the Three Months Ended March 31, 2014 and 2013


	2014			2013

Revenue	$	1,662,493		$	1,813,545

Cost of revenue		703,446			673,120


Gross profit		959,047			1,140,425

Selling, general, and administrative expense		876,336			635,957


Net income		82,711			504,468

Members’ equity - beginning of period		4,272,265			4,024,274

Members’ distribution		(556,943	)		(779,070	)


Members’ equity - end of period	$	3,798,033		$	3,749,672

The Notes to the Unaudited Consolidated Financial Statements are an integral part of these statements.

Refine Technology, LLC

Unaudited Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2014 and 2013


	2014			2013

Cash flows from operating activities
Net income	$	82,711		$	504,468
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		18,403			18,216
(Increase) decrease in:
Restricted cash		50,058			—
Accounts receivable		1,245,789			621,743
Other receivable		11,003			(79,354	)
Inventories, net		(283,605	)		(155,640	)
Other assets		(5,100	)		—
Increase (decrease) in:
Accounts payable		670,507			179,503
Accrued expenses		(110,657	)		(93,193	)
Deferred revenue		243,167			184,861
Deferred rent		3,154			(970	)

Net cash provided by operating activities		1,925,430			1,179,634

Cash flows from investing activities
Purchases of property and equipment		(132,361	)		(4,115	)

Cash flows from financing activities
Member distributions		(556,943	)		(779,070	)


Net increase in cash and cash equivalents		1,236,126			396,449

Cash and cash equivalents
Beginning of period		1,194,492			1,353,749

End of period	$	2,430,618		$	1,750,198

The Notes to the Unaudited Consolidated Financial Statements are an integral part of these statements.

Refine Technology, LLC

Notes to Unaudited Interim Consolidated Financial Statements

March 31, 2014

1.	Nature of Operations, Principles and Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared on a consolidated basis and reflect the financial statements of Refine Technology, LLC and its wholly-owned subsidiary, Refine Technology Sales Asia PTE. LTD. in Singapore, formed in the quarter ended March 31, 2014. All intercompany balances and transactions have been eliminated in consolidation.

The unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information. Accordingly, they do not include all the information and footnotes required by US GAAP for annual financial statements and therefore should be read in conjunction with the audited financial statements and footnotes for the year ended December 31, 2013.

The unaudited interim consolidated financial statements reflect all adjustments (of a normal and recurring nature) that management considers necessary for a fair presentation of such statements for the interim periods presented. The unaudited consolidated statements of income for the interim periods presented are not necessarily indicative of the results for the full year or for any subsequent period.

2.	Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the Company’s financial statements and accompanying notes. The Company bases its estimates and assumptions on historical experience and on various other assumptions that it believes are reasonable under the circumstances. Actual results could differ from those estimates. The amounts of assets and liabilities reported in the Company’s consolidated balance sheets and revenues and expenses reported in the consolidated statements of income for the periods presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for revenue recognition, allowance for doubtful accounts, reserve for inventory obsolescence, depreciation and amortization periods, and the warranty accrual.

Fair Value of Financial Instruments

Cash and Cash Equivalents

Refine Technology, LLC

Notes to Unaudited Interim Consolidated Financial Statements

March 31, 2014

Restricted Cash

Accounts Receivable

Accounts are considered past due when invoices become 30 days past the initial payment term. The Company generally does not record interest on past due accounts. Accounts are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. At March 31, 2014 and December 31, 2013, the Company determined that no reserve was deemed necessary.

Inventory

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation and amortization.

The estimated useful lives used in determining depreciation are as follows:


Leasehold Improvements			Life of the Lease
Machinery and Equipment			3-10 Years
Furniture and Fixtures			7 Years
Software			3 Years
Demo Equipment			5 Years

Refine Technology, LLC

Notes to Unaudited Interim Consolidated Financial Statements

March 31, 2014

Deferred Revenue

Warranties

The Company provides parts and service warranties on its products. Liability under service and warranty policies is based upon review of historical warranty and claim experience. Adjustments are made to accruals based on actual claim data and historical experience. Management has recorded a warranty liability of approximately $43,000 at both March 31, 2014 and December 31, 2013 and is included in accrued expenses on the accompanying consolidated balance sheets.

Distribution Agreement

In 2012, the Company earned incentive credits totaling $308,000 and used approximately $222,000 of these credits to offset purchases from this vendor in 2013. The Company has approximately $86,000 of the credits earned in 2012 unused as of December 31, 2013. In 2013, the Company earned credits totaling approximately $300,000 which are available to offset 2014 purchases. Total unused credits available to the Company as of December 31, 2013 totaled $386,000. For the three months ended March 31, 2014, the Company earned approximately $75,000 of credits and used approximately $86,000 of credits. Total unused credits available to the Company as of March 31, 2014 totaled $375,000. These unused credits are recorded as the other receivable on the accompanying consolidated balance sheets. The earning of the incentive credits resulted in a decrease of costs of goods sold. The incentive credits expire one year from their date of issuance.

Revenue Recognition

Marketing Costs

Marketing costs are charged to operating expense as they are incurred. For the three months ended March 31, 2014 and 2013, marketing expenses were approximately $262,000 and $216,000, respectively and are included in selling, general and administrative expenses on the accompanying consolidated statements of income.

Shipping and Handling Costs

The Company includes freight, postage and other shipping costs in cost of sales. Billings for third party shipping and handling costs are included in revenues.

Research and Development Costs

Research and development costs are charged to operating expense as they are incurred. For the three months ended March 31, 2014 and 2013, research and development expenses were approximately $500 and $10,800, respectively, and are included in selling, general and administrative expenses on the accompanying consolidated statements of income.

Income Taxes

Refine Technology, LLC

Notes to Unaudited Interim Consolidated Financial Statements

March 31, 2014

The Company had no unrecognized tax benefits at March 31, 2014 and December 31, 2013. The Company files tax returns in the U.S. federal jurisdiction and various states. The Company has no open years. The Company did not recognize any income tax related interest or penalties for the period presented in these consolidated financial statements.

Concentration of Credit Risk

The Company transacts certain revenue transactions with international customers in foreign currencies, primarily in euros and Singapore dollars. Foreign exchange transaction gains and losses have been minimal during the three months ended March 31, 2014 and 2013. Revenues from international customers accounted for approximately 75% and 52% of total revenues for the three months ended March 31, 2014 and 2013, respectively. As of March 31, 2014 and December 31, 2013, accounts receivables from international customers accounted for approximately 59% and 33%, respectively, of the total accounts receivable balance.

The Company had three and two customers that accounted for approximately 46% and 50% of total revenue for the three months ended March 31, 2014 and 2013, respectively. These top customers represented approximately 38% and 23% of the Company’s accounts receivables as of March 31, 2014 and December 31, 2013, respectively.

The Company had two vendors that accounted for approximately 35% and 42% of total purchases for the three months ended March 31, 2014 and 2013, respectively. Amounts due to these vendors represented approximately 34% and 45% of accounts payable at March 31, 2014 and December 31, 2013, respectively.

3.	Inventories, Net

Inventories, net consisted of the following at March 31, 2014 and December 31, 2013:


	2014			2013

Components	$	983,747		$	739,847
Finished goods		160,145			120,440

Total inventory		1,143,892			860,287
Inventory reserve		(25,000	)		(25,000	)

Total inventory, net	$	1,118,892		$	835,287

Refine Technology, LLC

Notes to Unaudited Interim Consolidated Financial Statements

March 31, 2014

4.	Property and Equipment, Net

Property and equipment, net consisted of the following at March 31, 2014 and December 31, 2013:


	2014			2013

Machinery and equipment	$	459,443		$	357,266
Furniture and fixtures		76,212			66,276
Leasehold improvements		77,238			77,238
Software		32,011			27,480
Demo equipment		114,394			98,677

Total cost		759,298			626,937
Accumulated depreciation and amortization		(394,589	)		(376,295	)

Total property and equipment, net	$	364,709		$	250,642

Depreciation and amortization expense for the three months ended March 31, 2014 and 2013 was $18,403 and $18,216, respectively.

5.	Related Party Transactions


	2014		2013
Selling, general, and administrative expenses
Paid to Refine Technology Sales LLC	$	121,390	$	85,426

The Company had the following due to this related party at March 31, 2014 and December 31, 2013:


	2014		2013

Due to Refine Technology Sales LLC	$	100,000	$	—

6.	Line of Credit

The Company had a $1,100,000 demand line of credit agreement with PNC Bank at December 31, 2013. The line of credit is secured by substantially all Company assets and has an interest rate at the bank’s prime rate. The interest rate at December 31, 2013 was 3.25%. The line of credit matures on September 30, 2014, however, due to the sale of the Company in June 2014 (See Note 9), the line was closed. The line had no outstanding balance at March 31, 2014 and December 31, 2013 or during the periods then ended.

7.	Commitments and Contingencies

Operating Lease

The Company leases office and warehouse space under a seven-year lease that expires April 30, 2017. Rent expense for the facility was approximately $34,000 and $20,000 for the three months ended March 31, 2014 and 2013, respectively.

On January 31, 2014, the Company entered into an agreement to lease additional warehouse space that expires April 30, 2017.

There has been no significant changes in the minimum lease payments since December 31, 2013.

Refine Technology, LLC

Notes to Unaudited Interim Consolidated Financial Statements

March 31, 2014

For leases with scheduled rent increases, the Company has recorded rent expense on a straight-line basis over the term of the lease. Deferred rent of $20,716 and $17,562 has been recorded at March 31, 2014 and December 31, 2013, respectively. This obligation represents the excess of rent expense over cash payments.

Put Agreement

Due to the sale of the Company in June 2014 (see Note 9), the Company recorded the put liability due to the 99% owner of Refine Technology Sales LLC as of the purchase date.

Letter of Credit

In February 2014, the Company obtained another letter of credit issued by a bank for approximately $225,000.

8.	Employee Benefit Plan

The Company maintains an employee retirement plan pursuant to section 401(k) of the Internal Revenue Code. Employees are eligible to participate in the Company’s 401(k) plan after one year of service. The 401(k) plan allows for voluntary elective deferrals of compensation up to 92% of taxable compensation. The Company makes matching contributions in an amount equal to the employee’s elective deferrals that do not exceed 1% of annual compensation, plus 50% of the elective deferrals that exceed 1% of annual compensation but do not exceed 6% of annual compensation. In addition, the 401(k) plan allows the Company to make a profit sharing contribution to the accounts of employees determined in accordance with a discretionary formula. The Company contributed approximately $13,000 and $14,000 to the plan as a match in the three months ended March 31, 2014 and 2013, respectively. There were no discretionary profit sharing contributions during the three months ended March 31, 2014 and 2013.

9.	Subsequent Events

On June 2, 2014, the Company sold its bio-processing business to Repligen Corporation for approximately $25 million, subject to certain contingencies or holdbacks. The Company could earn additional proceeds if certain revenue targets are achieved through 2016. All bio-processing operations subsequent to the acquisition date are included in Repligen’s consolidated operations.

EX-99.5 5 d776292dex995.htm EX-99.5 EX-99.5

Exhibit 99.5

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

INDEX TO FINANCIAL STATEMENTS


	Page
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS:
Introduction		F-2
Unaudited Pro Forma Condensed Combined Balance Sheet as of March 31, 2014		F-3
Unaudited Pro Forma Condensed Combined Statement of Operations for the Three Months Ended March 31, 2014		F-4
Unaudited Pro Forma Condensed Combined Statement of Operations for the Year Ended December 31, 2013		F-5
Notes to Unaudited Pro Forma Condensed Combined Financial Statements		F-6

F-1

INTRODUCTION

On June 2, 2014, pursuant to the terms of the Asset Purchase Agreement, dated as of June 2, 2014 (the “Asset Purchase Agreement”), by and among Repligen, Refine Technology, LLC (a limited liability company formed under the laws of the State of New Jersey) (“Refine”), the members of Refine Technology, LLC, Jerry Shevitz, Refine Technology Sales LLC (a limited liability company formed under the laws of the State of New Jersey) and Refine Technology Sales Asia PTE. LTD. (a limited private company organized in the Republic of Singapore), the Company acquired the business of Refine, including Refine’s Alternating Tangential Flow (“ATF”) System, a device used to significantly increase product yield during the fermentation step of the biologic drug manufacturing process (the “Refine Business” and the acquisition of the Refine Business, the “Refine Acquisition”). Pursuant to the Asset Purchase Agreement, Repligen purchased all of the assets related to Refine’s ATF system and assumed certain specified liabilities related to Refine’s ATF system.

The accompanying unaudited proforma condensed combined financial statements combine the historical consolidated financial statements of Repligen Corporation with the historical financial information of the Refine Business after giving effect to the acquisition of substantially all of the assets and assumption of certain liabilities of Refine Business by Repligen using the acquisition method of accounting in accordance with Accounting Standards Codification (ASC) 805, Business Combinations and applying the assumptions and adjustments described in the accompanying notes.

The unaudited pro forma condensed combined statements of operations combine Repligen’s operating results for the three months and year ended March 31, 2014 and December 31, 2013, respectively, with the operating results of the Refine Business for the three months and year ended March 31, 2014 and December 31, 2013, respectively. The unaudited pro forma condensed combined balance sheet combine the balances of Repligen as of March 31, 2014 with the balances of Refine as of March 31, 2014. The unaudited pro forma condensed combined statements of operations give effect to the acquisition as if it had occurred on January 1, 2013, and the unaudited pro forma condensed combined balance sheet gives effect to the acquisition as if it had occurred on March 31, 2014. The unaudited pro forma condensed combined financial information includes all material pro forma adjustments necessary for this purpose that are directly attributable to the acquisition and are factually supportable. The unaudited pro forma condensed combined financial information herein should be read in conjunction with the historical financial statements and the related notes thereto of Repligen Corporation which are presented in the Annual Report on Form 10-K for the year ended December 31, 2013, filed on March 14, 2014 (File No. 000-14656), the Quarterly Report on Form 10-Q for the three months ended March 31, 2014, filed on May 9, 2014 (File No. 000-14656), and the financial statements of Refine Technology, LLC that are presented as exhibits to this Form 8-K.

The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating results or financial position that would have been achieved if the acquisition had been consummated as of the beginning of the periods presented, nor are they necessarily indicative of the future operating results or financial position of the combined company. No effect has been given in these pro forma financial statements for synergistic benefits that may be realized through the combination or costs that may be incurred in integrating operations.

F-2

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF MARCH 31, 2014

(Amounts in thousands)


	Repligen March 31, 2014 (Note 2)			Refine March 31, 2014 (Note 2)		Pro Forma Adjustments (Note 4)			Pro Forma Combined March 31, 2014
Assets
Current assets:
Cash and cash equivalents	$	49,210		$	2,431	$	(22,031	)(a)	$	27,179
							(2,431	)(l)
Marketable securities		21,551			—					21,551
Accounts receivable, net		5,037			826					5,863
Inventories, net		11,441			1,119		111	(i)		12,671
Prepaid expenses and other current assets		1,458			375		(316	)(l)		1,517

Total current assets		88,697			4,751		(24,667	)		68,781
Property, plant and equipment, net		12,447			364					12,811
Long-term deferred tax asset, net		177			—					177
Long-term marketable securities		10,904			—					10,904
Intangible assets, net		5,915			—		10,700	(b)		16,615
Goodwill		994			—		13,814	(f)		14,808
Restricted cash		200			—					200
Other assets		—			15		(15	)(l)		—

Total assets	$	119,334		$	5,130	$	(168	)	$	124,296

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	1,483		$	840	$	(661	)(l)	$	1,662
Accrued liabilities		5,639			159		(115	)(l)		5,683
Deferred revenue		—			312		(178	)(l)		134
Deferred rent		—			21		(21	)(l)		—

Total current liabilities		7,122			1,332		(975	)		7,479
Long-term liabilities		3,360			—		1,400	(d)		4,760

Total liabilities		10,482			1,332		425			12,239
Stockholders’ equity:
Accumulated deficit		(84,780	)		—		(795	)(a)		(85,575	)
Other stockholders’ equity		193,632			—		4,000	(m)		197,632
Members’ equity		—			3,798		(3,798	)(k)		—

Total stockholders’ equity		108,852			3,798		(593	)		112,057

Total liabilities and stockholders’ equity	$	119,334		$	5,130	$	(168	)	$	124,296

See accompanying notes to unaudited pro forma condensed combined financial statements which are an integral part of these financial statements.

F-3

UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2014

(Amounts in thousands, except per share amounts)


	Repligen Three Months ended March 31, 2014 (Note 2)			Refine Three Months ended March 31, 2014 (Note 2)		Pro Forma Adjustments (Note 4)			Pro Forma Combined Three Months ended March 31, 2014
Revenue:
Product revenue	$	14,335		$	1,662	$			$	15,997
Royalty and other revenue		1,991			—					1,991

Total revenue		16,326			1,662					17,988
Operating expenses:
Cost of product revenue		6,335			703					7,038
Research and development		1,201			—					1,201
Selling, general and administrative		3,384			876		(160	)(g)		4,293
							193	(c)
Contingent consideration - fair value adjustments		98			—					98

Total operating expenses		11,018			1,579		33			12,630
Income from operations		5,308			83		(33	)		5,358

Investment income		102			—					102
Interest expense		(14	)		—					(14	)
Other expense		3			—					3

Income before taxes		5,399			83		(33	)		5,449
Income tax provision		1,121			—		72	(h)		1,193

Net income	$	4,278		$	83	$	(105	)	$	4,256

Earnings per share:
Basic	$	0.13							$	0.13
Diluted	$	0.13							$	0.13
Weighted average shares outstanding:
Basic		31,963					215			32,178
Diluted		32,831					215			33,046

See accompanying notes to unaudited pro forma condensed combined financial statements which are an integral part of these financial statements.

F-4

UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2013

(Amounts in thousands, except per share amounts)


	Repligen Year ended December 31, 2013 (Note 2)			Refine Year ended December 31, 2013 (Note 2)		Pro Forma Adjustments (Note 4)			Pro Forma Combined Year ended December 31, 2013
Revenue:
Product revenue	$	47,482		$	8,252	$			$	55,734
Royalty and other revenue		20,687			—					20,687

Total revenue		68,169			8,252					76,421
Operating expenses:
Cost of product revenue		22,481			2,993		111	(j)		25,585
Cost of royalty and other revenue		2,682			—					2,682
Research and development		7,341			—					7,341
Selling, general and administrative		12,701			3,060		321	(g)		16,855
							773	(c)
Contingent consideration - fair value adjustments		91			—					91

Total operating expenses		45,296			6,053		1,205			52,554
Income from operations		22,873			2,199		(1,205	)		23,867

Investment income		301			—					301
Interest expense		(50	)		—					(50	)
Other expense		(111	)		—					(111	)

Income before taxes		23,013			2,199		(1,205	)		24,007
Income tax provision		6,921			—		287	(h)		7,284
							76	(e)

Net income	$	16,092		$	2,199	$	(1,568	)	$	16,723

Earnings (loss) per share:
Basic	$	.51							$	.52
Diluted	$	.50							$	.51
Weighted average shares outstanding:
Basic		31,667					215			31,882
Diluted		32,407					215			32,622

See accompanying notes to unaudited pro forma condensed combined financial statements which are an integral part of these financial statements.

F-5

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS

1.	Description of the Transaction

2.	Basis of Presentation

The accompanying unaudited proforma condensed combined financial statements combine the historical consolidated financial statements of Repligen Corporation with the historical financial information of the Refine Business after giving effect to the acquisition of substantially all of the assets and assumption of certain liabilities of the Refine Business by Repligen using the acquisition method of accounting in accordance with Accounting Standards Codification (ASC) 805, Business Combinations and applying the assumptions and adjustments described in the accompanying notes.

The unaudited pro forma condensed combined statements of operations combine Repligen’s operating results for the three months and year ended March 31, 2014 and December 31, 2013, respectively, with the operating results of Refine Business for the three months and year ended March 31, 2014 and December 31, 2013, respectively. The unaudited pro forma condensed combined balance sheet combine the balances of Repligen as of March 31, 2014 with the balances of Refine as of March 31, 2014. The unaudited pro forma condensed combined statements of operations give effect to the acquisition as if it had occurred on January 1, 2013, and the unaudited pro forma condensed combined balance sheet gives effect to the acquisition as if it had occurred on March 31, 2014. The unaudited pro forma condensed combined financial information includes all material pro forma adjustments necessary for this purpose that are directly attributable to the acquisition and are factually supportable. The unaudited pro forma condensed combined financial information herein should be read in conjunction with the historical financial statements and the related notes thereto of Repligen Corporation which are presented in the Annual Report on Form 10-K for the year ended December 31, 2013, filed on March 14, 2014 (File No. 000-14656), the Quarterly Report on Form 10-Q for the three months ended March 31, 2014, filed on May 9, 2014 (File No. 000-14656), and the financial statements of Refine Technology, LLC that are presented as exhibits to this Form 8-K.

3.	Preliminary Estimate of Consideration Expected to be Transferred

The terms of the acquisition included an upfront cash payment of $21,235,937 which is subject to a potential adjustment upon a final determination of working capital, issuance of 215,285 of the Company’s $0.01 par value common stock valued at $4,000,000, future potential milestone payments totaling up to $10,900,000 if specific sales targets are met for the years 2014, 2015 and 2016, and future potential payments up to $7,500,000 out of any amounts that might be received in connection with the resolution, withdrawal or settlement of certain patent disputes with a third party. The $10,900,000 contingent consideration had an initial probability weighted fair value at acquisition of $1,400,000. The $7,500,000 contingent consideration had only a nominal probability weighted fair value at acquisition. In addition to the initial consideration, approximately $725,000 will be paid to Refine in monthly installments over six months under a Transition Services Agreement under which certain employees of Refine will continue to provide services to the Company in support of the Refine Business. Since these payments are contingent upon the future service they will be recognized as operating expense ratably as the services are provided.

The Company accounted for the Refine Acquisition as the purchase of a business under U.S. GAAP. Under the acquisition method of accounting, the assets of the Refine Business were recorded as of the acquisition date, at their respective fair values, and consolidated with those of Repligen. The fair value of the net assets acquired was approximately $26,635,937.

The preparation of the valuation required the use of significant assumptions and estimates. Critical estimates included, but were not limited to, future expected cash flows, including projected revenues and expenses, and the applicable discount rates. These estimates were based on assumptions that the Company believes to be reasonable. However, actual results may differ from these estimates.

F-6

The total consideration transferred follows:


Cash consideration	$	21,235,937
Value of common stock issued		4,000,000
Estimated fair value of contingent consideration		1,400,000

Total consideration transferred	$	26,635,937

The fair value of contingent consideration was determined based upon a probability weighted analysis of expected future milestone payments to be made to the seller. The liability for contingent consideration is included in current and long-term liabilities on the consolidated balance sheets and will be remeasured at each reporting period until the contingency is resolved.

The total purchase price has been allocated to Refine’s tangible assets, identifiable intangible assets and assumed liabilities based on a preliminary estimate of their fair values as of March 31, 2014. The excess of the purchase price over the tangible assets, identifiable intangible assets and assumed liabilities will be recorded as goodwill. The Company’s estimates and assumptions in determining the estimated fair values of certain assets and liabilities are preliminary and are subject to change. The total purchase price was allocated as follows:


Accounts receivable	$	825,799
Inventory		1,230,079
Other current assets		59,081
Fixed assets		364,709
Customer relationships		6,400,000
Developed technology		2,000,000
In process research and development (“IPR&D”)		1,600,000
Trademark and trade name		700,000
Accounts payable and other liabilities assumed		(357,399	)
Goodwill		13,813,668

Net assets acquired	$	26,635,937

The assessment of fair value is preliminary and is based on information that was available to management at the time the condensed consolidated pro forma financial statements were prepared. Accordingly, such amounts may change. The most significant open items include the working capital adjustment, intangibles and fixed assets.

4.	Pro Forma Adjustments

This note should be read in conjunction with Notes 1, 2 and 3. Adjustments included in the proforma columns include the following:

(a)	To record the following adjustments to cash:


Cash paid relating to acquisition	$	21,236
Cash paid for acquisition-related transaction costs (1)		795

Cash used from the Company’s cash and cash equivalents	$	22,031

(1)

Reflects Company’s best estimate of transaction costs of $795 expected to be incurred related to the acquisition. This amount has been recorded as an adjustment to accumulated deficit.

(b)	To reflect the fair value of acquired intangibles.

(c)	To adjust amortization expense based on fair value of acquired intangible assets.

(d)	To record fair value of contingent consideration.

(e)	To record pro forma income tax expense on Refine’s income.

(f)	To record adjustment for purchase price in excess of fair value of net assets acquired to goodwill

(g)	To reflect direct acquisition costs associated with the acquisition of Refine.

(h)	To record deferred tax liability resulting from tax amortization of goodwill.

(i)	To adjust inventory to fair value.

(j)	To adjust cost of product revenue to reflect inventory adjusted to fair value.

(k)	To eliminate Refine’s historic members’ equity account.

(l)	To eliminate Refine’s assets not acquired by Repligen and liabilities not assumed by Repligen.

(m)	To record issuance of stock consideration for Refine.

F-7