-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AnE53F2a/4jGF4MY584WJwIFBp867+IIy5dJ0wuYhcAaHcCL9W3uNoReSYtETbM/ AycPtLq/Xn6CYxcE8bf7FA== 0000909012-02-000879.txt : 20021127 0000909012-02-000879.hdr.sgml : 20021127 20021127172229 ACCESSION NUMBER: 0000909012-02-000879 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020916 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20021127 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERA PHARMACEUTICALS INC CENTRAL INDEX KEY: 0000837490 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH [8731] IRS NUMBER: 043683628 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 033-23460 FILM NUMBER: 02844254 BUSINESS ADDRESS: STREET 1: 73-4460 QUEEN KA'AHUMANU HWY. STREET 2: SUITE 110 CITY: KAILUA-KONA STATE: HI ZIP: 96740 BUSINESS PHONE: (808) 326-9301 MAIL ADDRESS: STREET 1: 73-4460 QUEEN KA'AHUMANU HWY. STREET 2: SUITE 110 CITY: KAILUA-KONA STATE: HI ZIP: 96740 FORMER COMPANY: FORMER CONFORMED NAME: AQUASEARCH INC DATE OF NAME CHANGE: 19920703 8-K 1 t25023.txt MERA PHARMACEUTICALS - CURRENT REPORT 9/16/02 ================================================================================ 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 Action of 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 16, 2002 -------------------------- MERA PHARMACEUTICALS, INC. (FORMERLY AQUASEARCH, INC. ) (Exact name of Registrant as specified in its charter) -------------------------- DELAWARE 33-23460-LA 04-368-3628 (State or other jurisdiction of (Commission File (IRS Employer incorporation or organization Number) Identification Number) 73-4460 QUEEN KA'AHUMANU HIGHWAY, SUITE 110 KAILUA-KONA, HAWAII 96740 (Address of principal executive offices) (808) 326-9301 (Registrant's telephone number, including area code) ================================================================================ ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On September 16, 2002, Mera Pharmaceuticals, Inc. ("Mera" or the "Company") merged with Aqua RM Co., Inc. ("Aqua RM") with Mera being the surviving corporation (the "Merger). As a consequence of the Merger, the former shareholders of Aqua RM now own, collectively, a majority of the issued and outstanding shares of common stock of Mera, and, as a result, the transaction was treated as a disposition of Mera's assets to Aqua RM for accounting purposes. Assets disposed of by Mera as a result of the Merger consisted primarily of Cash, Accounts Receivable, Inventories, Prepaid Expenses and Plant and Equipment. The total assets received by Aqua RM from Mera were valued at approximately $4,700,000. In addition, as a result of the Merger, Aqua RM assumed approximately $2,960,000 in liabilities of Mera. The sole consideration paid by the former Aqua RM shareholders for the Mera common stock that they received in the Merger was their Aqua RM common stock. Mera filed a timely report on Form 8-K on October 1, 2002 to announce the Merger and report a change in control and an acquisition or disposition of assets resulting from the Merger. This Amendment No. 1 to the Form 8-K is filed to include pro forma financial information required by Item 7 of Form 8-K. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements of Business Acquired None are required because Aqua RM is not considered a business under Rule 11-01(d) of Regulation S-X and per Securities and Exchange Commission letter to Aquasearch, Inc. (predecessor to Mera) dated July 29, 2002. (b) Pro Forma Financial Information The following unaudited pro forma combined financial statements give effect to the Merger and the application of fresh start accounting principles adopted by Mera as a result of the satisfaction by September 16, 2002 (the "Effective Date") of all conditions of its Plan of Reorganization (the "Plan") confirmed by the U.S. Bankruptcy Court for the District of Hawaii. The unaudited pro forma condensed combined balance sheet as of July 31, 2002 gives effect to the Merger and application of fresh start accounting principles as if both had occurred on July 31, 2002. The unaudited pro forma condensed combined statement of operations for the nine months ended July 31, 2002 gives effect to the Merger and the application of fresh start accounting principles as if both had occurred on November 1, 2001. Aqua RM was formed on February 4, 2002 and had no activity during any of Mera's prior fiscal years. As a result, a pro forma condensed combined statement of operations using Mera's fiscal year ended October 31, 2001 is not presented. The unaudited pro forma condensed combined financial statements were derived by adjusting Mera's and Aqua RM's historical financial statements. The unaudited pro forma condensed combined financial statements are provided for informational purposes only and should not be construed to be indicative of Mera's combined financial position or results of operations had the Merger been consummated and fresh start accounting principles adopted on the date assumed and do not project Mera's combined financial position or results of operations for any future date or period. The unaudited pro forma condensed combined financial statements and accompanying notes should be read in conjunction with Mera's historical financial statements and notes thereto included in Mera's Annual Report on Form 10-KSB as of and for the year ended October 31, 2001 and its quarterly report on Form 10-QSB as of and for the nine months ended July 31, 2002.
Mera Pharmaceuticals, Inc. Unaudited Pro Forma Condensed Combined Balance Sheet As of July 31, 2002 Mera Pharmaceuticals Aqua RM Pro Forma Discharge July 31, 2002 July 31, 2002 Pro Forma Combined of (Unaudited) (Unaudited) Adjustments July 31, 2002 Debt --------------------------------------------------------------------------------------------- Cash and cash equivalents $ 923,341 $ 90,943 $ 194,000 (a) $ 1,208,284 $ - Accounts receivable, net 42,439 - - 42,439 Tax receivable 208,955 - - 208,955 Investment Receivable - - - - 850,000 (b) Inventories 714,331 - - 714,331 Prepaid expenses and other 80,246 - - 80,246 --------------------------------------------------------------------------------------------- 1,969,312 90,943 194,000 2,254,255 850,000 --------------------------------------------------------------------------------------------- 3,257,753 4,009 3,261,762 --------------------------------------------------------------------------------------------- $ 5,227,065 $ 94,952 $ 194,000 $ 5,516,017 $ 850,000 ============================================================================================= Accounts payable and accrued expenses $ 724,391 $ 531,518 $ - $ 1,255,909 $ 223,192 (c) Notes payable 2,350,000 - - 2,350,000 (b) Deferred notes payable 850,000 (b) Other liabilities 49,001 - - 49,001 3,955,324 - (186,695) (a) 3,768,629 (3,768,629) (c) --------------------------------------------------------------------------------------------- 7,078,716 531,518 (186,695) 7,423,539 (2,695,437) --------------------------------------------------------------------------------------------- Common stock 13,335 13,335 39,992 (b,c) Additional paid-in capital 19,976,153 19,976,153 1,460,008 (b,c) Subscribed Stock - 194,000 194,000 - Less Subscription Receivable - (194,000) 194,000 (a) - - Accumulated deficit (21,841,139) (436,566) 186,695 (a) (22,091,010) 2,045,437 (c) --------------------------------------------------------------------------------------------- Total stockholders' equity (deficit) (1,851,651) (436,566) 380,695 (1,907,522) 3,545,437 --------------------------------------------------------------------------------------------- Total Liabilties and Stockholders' Equity (Deficit) $ 5,227,065 $ 94,952 $ 194,000 $ 5,516,017 $ 850,000 =============================================================================================
Mera Pharmaceuticals Fresh Reorganized Start July 31, 2002 Adjustments (Unaudited) ----------------------------------------- Cash and cash equivalents $ - $ 1,208,284 Accounts receivable, net 42,439 Tax receivable 208,955 Investment Receivable 850,000 Inventories 714,331 Prepaid expenses and other 80,246 ---------------------------------------- - 3,104,255 ---------------------------------------- (137,915) (d) 3,123,847 ---------------------------------------- $ (137,915) $ 6,228,102 ======================================== Accounts payable and accrued expenses $ - $ 1,479,101 Notes payable 2,350,000 Deferred notes payable 850,000 Other liabilities 49,001 - ---------------------------------------- - 4,728,102 ---------------------------------------- Common stock (13,335) (d) 39,992 Additional paid-in capital (19,976,153) (d) 1,460,008 Subscribed Stock (194,000) (d) - Less Subscription Receivable - - Accumulated deficit 20,045,573 (d) - ---------------------------------------- (137,915) 1,500,000 ---------------------------------------- $ (137,915) $ 6,228,102 ========================================
See accompanying notes to unaudited pro forma combined financial statements.
MERA PHARMACEUTICALS, INC. UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED JULY 31, 2002 Mera Aqua RM Pharmaceuticals February 4, 2002 Nine Months Ended (Inception) - Pro Forma Pro Forma July 31, 2002 July 31, 2002 Adjustments Combined -------------------------------------------------------------------------------------- Revenues Products $ 433,700 $ - $ - $ 433,700 Contract Services 224,464 - - 224,464 Royalties 45,179 - - 45,179 ----------------------------------------------------------------------------------- Total Revenues 703,343 - - 703,343 ------------------------------------------------------------------------------------ Costs and Expenses Cost of products sold 226,151 - - 226,151 Cost of subcontract services 385,117 - - 385,117 Research and development costs 506,811 30,410 - 537,221 General and administrative 926,413 219,643 - 1,146,056 ----------------------------------------------------------------------------------- Total costs and expenses 2,044,492 250,053 - 2,294,545 ------------------------------------------------------------------------------------ Net loss from operations $ (1,341,149) $ (250,053) $ - $ (1,591,202) ==================================================================================== Loss per share (0.01) (0.09) (0.00) Weighted average shares outstanding 122,131,641 2,639,923 388,798,818
See accompanying notes to unaudited pro forma combined financial statements. MERA PHARMACEUTICALS, INC. NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIALS STATEMENTS 1. Basis of Presentation The accompanying pro forma condensed combined financial statements and related explanatory notes of Mera are unaudited. However, in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. The unaudited pro forma condensed combined financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements and therefore should be read in conjunction with the audited financial statements and explanatory notes thereto for the fiscal year ended October 31, 2001 included in Mera's Annual Report on Form 10-KSB. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions that affect the recorded amounts reported in the unaudited condensed combined financial statements and accompanying notes. A change in the facts and circumstances surrounding these estimates could result in a change to the estimates and impact future operating results. The pro forma condensed combined financial statements are provided for informational purposes only and are not necessarily indicative of past or future results of operations or the financial position of the Company, nor are they necessarily indicative of future operating results or financial position. 2. Reorganization and Fresh-Start Reporting On October 30, 2001, certain creditors of the Company filed an involuntary petition under Chapter 11 of the United States Bankruptcy Code, in the United States Bankruptcy Court, District of Hawaii against Aquasearch, Inc. (predecessor to Mera). On November 30, 2001, the Company stipulated to an entry of an Order for Relief, agreeing to the jurisdiction of the Bankruptcy Court for purposes of resolving the petition that had been filed. On December 3, 2001, the Company's motion to the Bankruptcy Court to incur indebtedness was granted, and Aquasearch, Inc. entered into a Debtor-in-Possession financing arrangement with certain parties. On June 17, 2002, the Bankruptcy Court confirmed the Plan. Under Chapter 11, certain claims against the Debtor accruing prior to the filing of the petition for relief under the federal bankruptcy laws were stayed while the Debtor continued to operate. These claims are identified on the balance sheet as "liabilities subject to compromise." Pursuant to the Plan, Aqua RM merged with and into Mera on September 16, 2002. A total of 263,992,029 shares of the Company's common stock were issued to Aqua RM Co., Inc. shareholders in consummation of the Merger. In addition, 2,656,850 shares of the Company's common stock were issued pursuant to the Plan to holders of Aquasearch, Inc. warrants that were validly issued and outstanding as of October 31, 2001. Total shares of common stock of Mera issued and outstanding following the Merger are 388,798,818. The Merger was the final outstanding material event to achieve compliance with the requirements of the Plan, and, as such, the effective date of the Plan was September 16, 2002, the date of the Merger. In accordance with Statement of Financial Accounting Standards ("SFAS") No. 141, the Merger will be accounted for using the purchase method of accounting. MERA PHARMACEUTICALS, INC. NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIALS STATEMENTS In accounting for the effects of the reorganization, the Company adopted "fresh start" accounting principles contained in the American Institute of Certified Public Accountants Statement of Position 90-7 ("SOP 90-7"). The Company applied principles contained in SOP 90-7 because post-Merger, existing Mera shareholders owned less than 50% of Mera's total issued and outstanding common stock and the reorganization value of Mera's assets upon completion of the Plan was less than the sum of total pre-petition liabilities allowed plus post-petition liabilities. Fresh start accounting principles require that the Company establish a reorganization value. Mera's reorganization value was calculated to be $4,700,000 (see calculation in Note 3(b) below). The Company's tangible assets were recorded at their assumed fair value and the reorganization value was allocated to such assets in accordance with SFAS No. 141. 3. Pro Forma Balance Sheet The enclosed pro forma condensed combined balance sheet reflects adjustments made in conjunction with the discharge of debt, fresh start accounting and accounting for the Merger. The following notes provide detail on adjustments made: (a) The following pro forma adjustments have been made to the historical balance sheets of Mera and Aqua RM: 1.) Elimination of an $186,695 charge on the books of Aqua RM. This amount is to be paid by Mera post-Merger to settle liabilities of Aqua RM creditors. 2.) Receipt of $194,000 by Aqua RM as payment for Aqua RM stock subscriptions. This transaction occurred upon completion of the Merger. (b) Management calculated the reorganization value of the Company to be $4,700,000. The reorganization value is allocated as follows: ------------------------------------------------------------- Loans received $ 2,350,000 Commitment for additional loans 850,000 New common stock issued ($.0001 par value) 39,992 Additional paid in capital 1,460,008 ------------------------------------------------------------- Total reorganization value $ 4,700,000 ------------------------------------------------------------- MERA PHARMACEUTICALS, INC. NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIALS STATEMENTS (c) Pro forma liabilities subject to compromise totaled $3,768,629 at July 31, 2002. Of such amount, $223,192 remained to be paid at July 31, 2002. The remaining amount of $3,545,437 was discharged. In accordance with SOP 90-7, the discharge of debt was allocated first to the new equity of Mera and then as a gain from the forgiveness of debt. The allocation of the discharge of debt is as follows: ---------------------------------------------------------- New common stock issued ($.0001 par value) $ 39,992 Additional paid in capital 1,460,008 Gain on the forgiveness of debt 2,045,437 ---------------------------------------------------------- Total debt discharged $ 3,545,437 ---------------------------------------------------------- (d) In accordance with SOP 90-7, fresh start adjustments were made to eliminate equity account balances prior to confirmation of the Plan, the accumulated deficit and to adjust the fair value of assets. 4. Pro Forma Statement of Operations The unaudited pro forma condensed combined statement of operations gives effect to the combined income and expenses of Mera and Aqua RM. Certain transactions related to the settlement of liabilities subject to compromise have been excluded because they did not occur in the normal course of business. Details regarding such transactions are contained in Note 3(a). No other pro forma adjustments were required. 5. Loss Per Share Pro forma loss per share amounts were calculated pursuant to Statement of Financial Accounting Standard No.128, "Earnings Per Share." The assumed effects of the exercise of any potential dilutive securities would be anti-dilutive. Accordingly dilutive per share amounts have not been presented. Because the Merger involves the issuance of securities, pro forma combined loss per share amounts are presented based on the weighted average number of shares outstanding as if such securities were issued at the beginning of the period (November 1, 2001). -----END PRIVACY-ENHANCED MESSAGE-----