8-K/A 1 v045681.htm
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
______________
 
FORM 8-K/A
 (Amendment No. 2)
______________
 
CURRENT REPORT
 
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
Date of report (Date of earliest event reported):  April 11, 2006
 
______________
 
Cellegy Pharmaceuticals, Inc.
(Exact Name of Registrant as Specified in Charter)
 
Delaware
 
0-26372
 
82-0429727
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)
 
 
 
 
 
1800 Byberry Road, Bldg 13
Huntingdon Valley, Pa
 
19006
(Address of Principal Executive Offices)
 
(Zip Code)
 
 
 
 
 
 
 
 
Registrant’s telephone number, including area code: (215) 914-0900
 
Same
(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 (see General Instruction A.2. below):
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

Explanatory Note

On April 17, 2006 Cellegy Pharmaceuticals, Inc. (the “Company” or “Cellegy”) filed a Report on Form 8-K (the “Form 8-K”) relating to the sale of all of the outstanding shares of its Australian subsidiary, Cellegy Australia PTY LTD (“Australia”), to Epsilon Pharmaceuticals (“Epsilon”), a company located in Australia. On May 15, 2006 Cellegy filed Amendment No. 1 to include unaudited pro forma financial information concerning the transaction.
The purpose of this Amendment No. 2 is to update our previous filing for additional monies received in conjunction with the sale of Australia and to correct the unaudited pro-forma financial information concerning the transaction.

Item 9.01 Financial Statements and Exhibits.

(a) The following unaudited consolidated balance sheet as March 31, 2006 and the unaudited consolidated statements of operations for the years ended December 31, 2003 through December 31, 2005, respectively, and the three months ended March 31, 2005 and March 31, 2006, respectively, have been prepared to present the consolidated financial position and the consolidated results of operations of Cellegy as if the sale of Australia had occurred on March 31, 2006 for the unaudited consolidated balance sheet, and on January 1, 2003 for the unaudited consolidated statements of operations. The unaudited pro forma financial information is for information purposes only and does not purport to present what the company’s results would actually have been had these transactions actually occurred on the dates presented, and the information is not necessarily indicative of future results of operations that might have been achieved if the foregoing transaction had been consummated as of the indicated dates, nor is the information indicative of what Cellegy’s financial position would have been on those dates. The unaudited pro forma consolidated financial information has been derived from, and should be read in conjunction with, Cellegy’s historical financial statements, together with the related notes thereto, included in Cellegy’s annual report on Form 10-K for the year ended December 31, 2005, and quarterly report on Form 10-Q (filed on May 15, 2006) for the period ended March 31, 2006. The unaudited pro forma adjustments are based upon currently available information that Cellegy believes is reasonable.

(b)
Pro-Forma Financial Exhibits

Unaudited pro-forma condensed consolidated statement of operations for the year ended December 31, 2003.

Unaudited pro-forma condensed consolidated statement of operations for the year ended December 31, 2004.

Unaudited pro-forma condensed consolidated statement of operations for the year ended December 31, 2005.

Unaudited pro-forma condensed consolidated statement of operations for the three months ended March 31, 2005.

Unaudited pro-forma condensed consolidated statement of operations for the three months ended March 31, 2006.

Unaudited pro-forma condensed consolidated balance sheet as of March 31, 2006.

Notes to unaudited pro-forma condensed consolidated financial statements.
 
 
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.

   
CELLEGY PHARMACEUTICALS, INC.
       
Date: June 20, 2006
  
By:
/s/ Robert J. Caso
     
Robert J. Caso
     
Chief Financial Officer
     
(Duly Authorized Officer)

 

Cellegy Pharmaceuticals, Inc.
(a development stage company)
Pro-forma Statements of Operations
(unaudited)
(Amounts in thousands, except per share data)
 
   
 
  
   
Year Ended December 31, 2003
  
   
 
 
Pro-forma
       
   
Consolidated
  
adjustments (a)
 
 Pro-forma
  
Revenues:
               
Licensing, milestone and development funding
  
$
833
  
$
-
  
$
833
  
 Grants
    
19
    
-
    
19
  
 Product sales
    
768
    
(385
)
  
383
  
Total revenue
    
1,620
    
(385
)
  
1,235
  
Costs and expenses:
                    
 Cost of product sales
    
186
    
(59
)
  
127
  
 Research and development
    
10,558
    
-
    
10,558
  
 Selling, general and administrative
    
4,768
    
(256
)
  
4,512
  
Total costs and expense
    
15,512
    
(315
)
  
15,197
  
Operation loss/gain
    
(13,892
)
  
(70
)
  
(13,962
)
 Interest and other income
    
360
    
(2
)
  
358
  
                     
Net income (loss)
  
$
(13,532
)
$
(72
)
$
(13,604
)
                     
Basic and diluted net loss per common share
  
$
(0.68
)
      
$
(0.68
)
                     
Weighed average common shares used in computing
    
19,964
          
19,964
  
basic and diluted net loss per common share
                    


 Cellegy Pharmaceuticals, Inc.
  
(a development stage company)
  
Pro-forma Statements of Operations
  
(unaudited)
  
(Amounts in thousands, except per share data)
  
 
  
 
 
 
       
   
Year Ended December 31, 2004
  
       
Pro-forma
      
 
  
Consolidated
  
adjustments (a)
 
Pro-forma
  
               
Revenues:
                 
                     
 Licensing, milestone and development funding
  
$
844
  
$
-
  
$
844
  
 Grants
    
1,007
    
-
    
1,007
  
 Product sales
    
745
    
(563
)
  
182
  
Total revenue
    
2,596
    
(563
)
  
2,033
  
Costs and expenses:
                    
 Cost of product sales
    
148
    
(84
)
  
64
  
 Research and development
    
9,599
    
-
    
9,599
  
 Selling, general and administrative
    
6,641
    
(271
)
  
6,370
  
 Acquired in-process technology
    
14,982
    
-
    
14,982
  
Total costs and expense
    
31,370
    
(355
)
  
31,015
  
Operation loss/gain
    
(28,774
)
  
(208
)
  
(28,982
)
 Interest and other income
    
259
    
(8
)
  
251
  
 Interest and other expense
    
(29
)
  
-
    
(29
)
 Derivative revaluation
    
390
    
-
    
390
  
                     
Net income (loss)
  
$
(28,154
)
$
(216
)
$
(28,370
)
                     
Basic and diluted net loss per common share
  
$
(1.28
)
      
$
(1.29
)
                     
Weighed average common shares used in computing
    
22,021
          
22,021
  
basic and diluted net loss per common share
                    
 

Cellegy Pharmaceuticals, Inc.
(a development stage company)
Pro-forma Statements of Operations
(unaudited)
(Amounts in thousands, except per share data)
 
   
 Year Ended December 31, 2005
  
       
 Pro-forma
      
   
Consolidated
  
adjustments (a)
 
Pro-forma
  
               
Revenues:
              
 Licensing, milestone and development funding
  
$
7,268
  
$
-
  
$
7,268
  
 Grants
    
4,410
    
-
    
4,410
  
 Product sales
    
1,157
    
(637
)
  
520
  
Total revenue
    
12,835
    
(637
)
  
12,198
  
Costs and expenses:
                    
 Cost of product sales
    
385
    
(135
)
  
250
  
 Research and development
    
8,481
    
-
    
8,481
  
 Selling, general and administrative
    
9,249
    
(424
)
  
8,825
  
Total costs and expense
    
18,115
    
(559
)
  
17,556
  
Operation loss/gain
    
(5,280
)
  
(78
)
  
(5,358
)
 Interest and other income
    
208
    
(12
)
  
196
  
 Interest and other expense
    
(626
)
  
-
    
(626
)
 Derivative revaluation
    
690
    
-
    
690
  
                     
Net income (loss)
  
$
(5,008
)
$
(90
)
$
(5,098
)
                     
Basic and diluted net loss per common share
  
$
(0.18
)
      
$
(0.18
)
                     
Weighed average common shares used in computing
    
28,497
          
28,497
  
 basic and diluted net loss per common share
                    

Cellegy Pharmaceuticals, Inc.
(a development stage company)
Pro-forma Statements of Operations
(unaudited)
(Amounts in thousands, except per share data)
 
 
   
Three Months Ended March 31, 2005
   
 
 
Pro-forma
      
   
Consolidated
  
adjustments (a)
 
Pro-forma
  
Revenues:
              
 Licensing, milestone and development funding
  
$
240
  
$
-
  
$
240
  
 Grants
    
1,213
    
-
    
1,213
  
 Product sales
    
153
    
(153
)
  
-
  
Total revenue
    
1,606
    
(153
)
  
1,453
  
Costs and expenses:
                    
 Cost of product sales
    
21
    
(21
)
  
-
  
 Research and development
    
2,777
    
-
    
2,777
  
 Selling, general and administrative
    
4,018
    
(122
)
  
3,896
  
Total costs and expense
    
6,816
    
(143
)
  
6,673
  
Operation loss/gain
    
(5,210
)
  
(10
)
  
(5,220
)
 Interest and other income
    
87
    
(2
)
  
85
  
 Interest and other expense
    
(20
)
  
-
    
(20
)
 Derivative revaluation
    
57
    
-
    
57
  
                     
Net income (loss)
  
$
(5,086
)
$
(12
)
$
(5,098
)
                     
Basic and diluted net loss per common share
  
$
(0.19
)
      
$
(0.20
)
                     
Weighed average common shares used in computing
    
26,136
          
26,136
  
 basic and diluted net loss per common share
                    

 Cellegy Pharmaceuticals, Inc.
(a development stage company)
Pro-forma Statements of Operations
(unaudited)
(Amounts in thousands, except per share data)
 
   
 Three Months Ended March 31, 2006
       
Pro-forma
      
   
Consolidated
  
adjustments (a)
 
Pro-forma
  
               
Revenues:
              
 Licensing, milestone and development funding
  
$
65
  
$
-
  
$
65
  
 Grants
    
914
    
-
    
914
  
 Product sales
    
423
    
(166
)
  
257
  
Total revenue
    
1,402
    
(166
)
  
1,236
  
Costs and expenses:
                    
 Cost of product sales
    
284
    
(27
)
  
257
  
 Research and development
    
1,106
    
-
    
1,106
  
 Selling, general and administrative
    
2,104
    
(64
)
  
2,040
  
Total costs and expense
    
3,494
    
(91
)
  
3,403
  
Operation loss/gain
    
(2,092
)
  
(75
)
  
(2,167
)
 Interest and other income
    
9
    
(1
)
  
8
  
 Interest and other expense
    
(214
)
  
-
    
(214
)
 Derivative revaluation
    
(54
)
  
-
    
(54
)
                     
Net income (loss)
  
$
(2,351
)
$
(76
)
$
(2,427
)
                     
Basic and diluted net loss per common share
  
$
(0.08
)
      
$
(0.08
)
                     
Weighed average common shares used in computing
    
29,832
          
29,832
  
 basic and diluted net loss per common share
                    

Cellegy Pharmaceuticals, Inc.
(a development stage company)
Pro-forma Balance Sheet
(unaudited)
(Amounts in thousands)
 
 
   
 March 31, 2006
  
       
Pro-forma
           
   
Consolidated
  
adjustments
      
 Pro-forma
  
Assets
  
 
  
 
      
  
  
Current assets:
                   
Cash and cash equivalents
  
$
1,143
  
$
1,145
    
(b)
 
$
2,288
  
Accounts receivable
    
439
    
(53
)
  
(c)
 
  
386
  
Inventory
    
69
    
(69
)
  
(c)
 
  
-
  
Prepaid expenses and other current assets
    
493
    
-
          
493
  
 Total current assets
    
2,145
    
1,023
          
3,167
  
                           
Property and equipment, net
    
419
    
-
          
419
  
Goodwill
    
955
    
(955
)
  
(c)
 
  
-
  
Intangible assets, net
    
109
    
-
          
109
  
 Total assets
  
$
3,628
  
$
68
        
$
3,696
  

Liabilities and Stockholders’ Deficit
                   
Current liabilities:
                   
Accounts payable
  
$
1,629
  
$
1
    
(c)
 
$
1,630
  
Accrued expenses and other current liabilities
    
1,930
    
(21
)
  
(c)
 
  
1,909
  
Current portion of notes payable
    
5,081
    
-
          
5,081
  
Current portion of deferred revenue
    
258
    
-
          
258
  
 Total current liabilities
    
8,898
    
(20
)
        
8,878
  
                           
Notes payable
    
237
    
-
          
237
  
Derivative instruments
    
247
    
-
          
247
  
Deferred revenue
    
3,065
    
-
          
3,065
  
                           
 Total liabilities
    
12,447
    
(20
)
        
12,427
  
                           
Stockholders’ deficit:
                          
Common stock
    
3
    
-
          
3
  
Additional Paid-in Capital
    
125,591
    
-
          
125,591
  
Accumulated other comprehensive income
    
250
    
157
    
(d)
 
  
407
  
Deficit accumulated during the development stage
    
(134,663
)
  
(69
)
  
(e)
 
  
(134,732
)
 Total stockholders’ deficit
    
(8,819
)
  
88
          
(8,731
)
 Total liabilities and stockholders’ deficit
  
$
3,628
  
$
68
        
$
3,696
  




Cellegy Pharmaceuticals, Inc.
(a development stage company)
Notes to Pro-forma Financial Statements
                       
                       
                       
                       
1.)
Description of Transaction
                       
     
Pursuant to a Share Purchase Agreement (SPA) between Cellegy Pharmaceuticals, Inc.(Cellegy) of Huntingdon Valley, PA 19006 and Epsilon Pharmaceuticals Pty Ltd (Epsilon), an Australian company with an address of 203 New South Head Road, Edgecliff, New South Wales 2027, Epsilon purchased all of the shares of Cellegy Australia PTY LTD (Cellegy Australia), a wholly-owned subsidiary of Cellegy. The purchase price for the shares was $1,000,000 plus amounts equal to the liquidated value of Cellegy Australia's cash, accounts receivable and inventory. The total amount received was approximately $1.331 million. The purchase price reflects the liquidated value of Cellegy Australia's cash, accounts receivable and inventory for each pro forma period presented.
                       
                       
                       
2.)
Corporate Taxes
                       
     
The company recorded no income tax effect relative to this transaction as the company has a full valuation on its deferred taxes and more than likely will not pay any taxes on the transaction.
                       
                       
                       
3.)
Pro forma Adjustments
                       
   
(a)
The adjustment column on the pro forma Income Statements is to show the sale of the Company's Australian
     
subsidiary to Epsilon as discontinued operations.
   
(b)
To recognize proceeds from Epsilon. Included in this figure is the removal of subsidiary's cash balance of
     
approximately $185,000.
                
   
(c)
To record removal of net assets and net liabilities held for sale, including goodwill allocated to this subsidiary.
   
(d)
To recognize subsidiary's foreign currency translation (FCT) balance as a loss in the current period pursuant to
     
FAS 52.
   
(e)
To record estimated loss on disposition (amounts in thousands):
 
       
 
                
       
Cash proceeds
     $ 
 1,331
   
       
Less net book value of subsidiary
      
(1,001)
    
       
Less repayment of inter-co. debt pursuant to Sec 5.7 of SPA
      
(242)
    
       
Less FCT loss
      
(157)
    
       
Pro forma loss
     $ 
 (69)