Delaware (State or other jurisdiction of incorporation) | ||
001-37590 | 45-0705648 | |
(Commission File Number) | (IRS Employer Identification No.) |
☐ | 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)) |
23.1 |
99.1 |
99.2 |
99.3 |
Date: December 3, 2018 | CERECOR INC. /s/ Joseph M. Miller Joseph M. Miller Chief Financial Officer |
December 31, 2017 | |||||
Assets | |||||
Current assets: | |||||
Cash | $ | 1,899,072 | |||
Prepaid expenses | 92,000 | ||||
Total current assets | 1,991,072 | ||||
Other assets | 4,650 | ||||
Total assets | $ | 1,995,722 | |||
Liabilities and stockholders’ equity | |||||
Current liabilities: | |||||
Accounts payable | $ | 83,328 | |||
Accrued expenses and other current liabilities | 90,730 | ||||
Total current liabilities | 174,058 | ||||
Total liabilities | 174,058 | ||||
Stockholders’ equity: | |||||
Convertible preferred stock—$0.00001 par value; 864,582 shares authorized at December 31, 2017; 864,582 shares issued and outstanding at December 31, 2017 | 9 | ||||
Common stock—$0.00001 par value; 4,700,000 shares authorized at December 31, 2017; 2,104,124 shares issued and outstanding at December 31, 2017 | 21 | ||||
Additional paid-in capital | 2,709,400 | ||||
Accumulated deficit | (887,766 | ) | |||
Total stockholders’ equity | 1,821,664 | ||||
Total liabilities and stockholders’ equity | $ | 1,995,722 |
Period from July 7, 2017 (Inception) through December 31, 2017 | |||||
Revenue | $ | — | |||
Operating expenses: | |||||
Research and development | 592,711 | ||||
General and administrative | 295,234 | ||||
Total operating expenses | 887,945 | ||||
Loss from operations | (887,945 | ) | |||
Other income | 179 | ||||
Net loss and comprehensive loss | $ | (887,766 | ) |
Convertible Preferred | Additional | Total | ||||||||||||||||||||||||
Stock | Common stock | Paid‑In | Accumulated | Stockholders’ | ||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||
Issuance of common stock | — | — | 2,075,000 | 21 | — | — | 21 | |||||||||||||||||||
Issuance of convertible preferred stock, net of issuance costs | 864,582 | 9 | — | — | 2,484,012 | — | 2,484,021 | |||||||||||||||||||
Share-based compensation | — | — | — | — | 194,809 | — | 194,809 | |||||||||||||||||||
Issuance of common stock to 3rd party for services rendered | 29,124 | — | 30,579 | 30,579 | ||||||||||||||||||||||
Net loss | — | — | — | — | — | (887,766 | ) | (887,766 | ) | |||||||||||||||||
Balance, December 31, 2017 | 864,582 | $ | 9 | 2,104,124 | $ | 21 | $ | 2,709,400 | $ | (887,766 | ) | $ | 1,821,664 |
Period from July 7, 2017 (Inception) through December 31, | |||||
2017 | |||||
Operating activities | |||||
Net loss | $ | (887,766 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||
Share-based compensation expense and issuance of common stock for services rendered | 225,388 | ||||
Changes in assets and liabilities: | |||||
Prepaid expenses | (92,000 | ) | |||
Other assets | (4,650 | ) | |||
Accounts payable | 83,328 | ||||
Accrued expenses and other liabilities | 90,730 | ||||
Net cash used in operating activities | (584,970 | ) | |||
Financing activities | |||||
Proceeds from preferred stock equity offering, net | 2,484,021 | ||||
Proceeds from common stock equity offering | 21 | ||||
Net cash provided by financing activities | 2,484,042 | ||||
Net increase in cash | 1,899,072 | ||||
Cash, beginning of period | — | ||||
Cash, end of period | $ | 1,899,072 |
• | Level 1 - Defined as observable inputs such as quoted prices in active markets for identical assets. |
• | Level 2 - Defined as observable inputs other than Level 1 prices such as quoted prices for similar assets, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
• | Level 3 - Defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
As of | |||||
December 31, 2017 | |||||
Research and development expenses | $ | 74,131 | |||
General and administrative expenses | 6,579 | ||||
Legal expenses | 8,250 | ||||
Other | 1,770 | ||||
Total accrued expenses and other current liabilities | $ | 90,730 |
2017 | |||||
Net operating loss carryovers | $ | 172,378 | |||
Share-based compensation expense | 62,215 | ||||
Intangible assets | 10,352 | ||||
Total deferred tax assets | 244,945 | ||||
Valuation allowance | (244,945 | ) | |||
Total net deferred tax asset | $ | — |
June 30, 2018 (Unaudited) | December 31, 2017 | ||||||||
Assets | |||||||||
Current assets: | |||||||||
Cash | $ | 952,758 | $ | 1,899,072 | |||||
Prepaid expenses | 19,579 | 92,000 | |||||||
Total current assets | 972,337 | 1,991,072 | |||||||
Other assets | 4,650 | 4,650 | |||||||
Total assets | $ | 976,987 | $ | 1,995,722 | |||||
Liabilities and stockholders’ equity | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 134,657 | $ | 83,328 | |||||
Accrued expenses and other current liabilities | 133,973 | 90,730 | |||||||
Total current liabilities | 268,630 | 174,058 | |||||||
Total liabilities | 268,630 | 174,058 | |||||||
Stockholders’ equity: | |||||||||
Convertible preferred stock—$0.00001 par value; 864,582 shares authorized at June 30, 2018 and December 31, 2017; 864,582 shares issued and outstanding at June 30, 2018 and December 31, 2017 | 9 | 9 | |||||||
Common stock—$0.00001 par value; 4,700,000 shares authorized at June 30, 2018 and December 31, 2017; 2,215,824 shares issued and outstanding at June 30, 2018 and December 31, 2017 | 22 | 21 | |||||||
Additional paid-in capital | 3,061,216 | 2,709,400 | |||||||
Accumulated deficit | (2,352,890 | ) | (887,766 | ) | |||||
Total stockholders’ equity | 708,357 | 1,821,664 | |||||||
Total liabilities and stockholders’ equity | $ | 976,987 | $ | 1,995,722 |
Six Months Ended June 30, 2018 | |||||
Revenue | $ | — | |||
Operating expenses: | |||||
Research and development | 1,120,544 | ||||
General and administrative | 340,236 | ||||
Total operating expenses | 1,460,780 | ||||
Loss from operations | (1,460,780 | ) | |||
Other expense | (4,344 | ) | |||
Net loss and comprehensive loss | $ | (1,465,124 | ) |
Six Months Ended June 30, 2018 | |||||
Operating activities | |||||
Net loss | $ | (1,465,124 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||
Share-based compensation expense and issuance of common stock for services rendered | 351,817 | ||||
Changes in assets and liabilities: | |||||
Prepaid expenses | 72,421 | ||||
Accounts payable | 51,329 | ||||
Accrued expenses and other liabilities | 43,243 | ||||
Net cash used in operating activities | (946,314 | ) | |||
Net decrease in cash | (946,314 | ) | |||
Cash, beginning of period | 1,899,072 | ||||
Cash, end of period | $ | 952,758 |
• | Level 1 - Defined as observable inputs such as quoted prices in active markets for identical assets. |
• | Level 2 - Defined as observable inputs other than Level 1 prices such as quoted prices for similar assets, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
• | Level 3 - Defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
As of | As of | ||||||||
June 30, 2018 | December 31, 2017 | ||||||||
Research and development expenses | $ | 90,443 | $ | 74,131 | |||||
General and administrative expenses | 14,626 | 6,579 | |||||||
Legal expenses | 28,402 | 8,250 | |||||||
Other | 502 | 1,770 | |||||||
Total accrued expenses and other current liabilities | $ | 133,973 | $ | 90,730 |
• | the accompanying notes to the unaudited pro forma condensed combined statements of operations; |
• | Cerecor’s audited financial statements and related notes contained within Cerecor’s Annual Report on Form 10-K for the year ended December 31, 2017; |
• | Cerecor’s financial statements and related notes contained within Cerecor’s Form 10-Q for the three and nine months ended September 30, 2018; |
• | the TRx Consolidated Financial Statements for the year ended December 31, 2016 included within Cerecor’s Form 8-K/A filed on January 24, 2018; |
• | the Avadel Pediatrics Business Consolidated Financial Statements for the year ended December 31, 2017 included within Cerecor’s Form 8-K/A filed on May 4, 2018; and |
• | the financial statements of Ichorion Therapeutics, Inc. included within this Form 8-K/A. |
Historical Cerecor (As Adjusted) | Historical TRx | TRx Pro Forma Adjustments | Historical Avadel Pediatric Business | Avadel Pediatric Business Pro Forma Adjustments | Historical Ichorion July 7, 2017 through December 31, 2017 | Ichorion Pro Forma Adjustments | Pro Forma Cerecor Combined | |||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||||||||
License and other revenue | $ | 25,000,000 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 25,000,000 | ||||||||||||||||||||
Product revenue, net | 1,910,403 | 15,789,075 | — | 7,686,000 | — | — | — | 25,385,478 | ||||||||||||||||||||||||||||
Salesforce revenue | 278,165 | — | — | — | — | — | — | 278,165 | ||||||||||||||||||||||||||||
Grant revenue | 624,569 | — | — | — | — | — | — | 624,569 | ||||||||||||||||||||||||||||
Total revenues, net | 27,813,137 | 15,789,075 | — | 7,686,000 | — | — | — | 51,288,212 | ||||||||||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||||||||||||
Cost of product sales | 635,648 | 3,345,200 | — | 3,595,000 | — | — | — | 7,575,848 | ||||||||||||||||||||||||||||
Research and development | 4,372,578 | — | — | — | — | 592,711 | 30,556 | 5a | 4,995,845 | |||||||||||||||||||||||||||
Acquired in-process research and development | — | — | — | — | — | — | 18,559,874 | 5b | 18,559,874 | |||||||||||||||||||||||||||
General and administrative | 7,941,584 | 6,891,084 | (230,484 | ) | 8k | 11,205,000 | — | 295,234 | 38,194 | 5a | 26,140,612 | |||||||||||||||||||||||||
Sales and marketing | 569,825 | — | — | — | — | — | — | 569,825 | ||||||||||||||||||||||||||||
Amortization expense | 403,520 | — | 2,922,179 | 8l | 1,245,000 | 677,786 | 7f | — | 75,000 | 5c | 5,323,485 | |||||||||||||||||||||||||
Total operating expenses | 13,923,155 | 10,236,284 | 2,691,695 | 16,045,000 | 677,786 | 887,945 | 18,703,624 | 63,165,489 | ||||||||||||||||||||||||||||
Income (loss) from operations | 13,889,982 | 5,552,791 | (2,691,695 | ) | (8,359,000 | ) | (677,786 | ) | (887,945 | ) | (18,703,624 | ) | (11,877,277 | ) | ||||||||||||||||||||||
Other income (expense): | \ | |||||||||||||||||||||||||||||||||||
Change in fair value of warrant liability, purchase option liability, investor rights obligation and contingent consideration | (29,624 | ) | — | — | (355,000 | ) | 355,000 | 7g | — | — | (29,624 | ) | ||||||||||||||||||||||||
Other income | — | — | — | 18,000 | — | 179 | 18,179 | |||||||||||||||||||||||||||||
Interest expense, net | (24,016 | ) | 2,141 | — | (1,050,000 | ) | 121,384 | 7h | — | — | (950,491 | ) | ||||||||||||||||||||||||
Total other income (expense) | (53,640 | ) | 2,141 | — | (1,387,000 | ) | 476,384 | 179 | — | (961,936 | ) | |||||||||||||||||||||||||
Net income (loss) before taxes | 13,836,342 | 5,554,932 | (2,691,695 | ) | (9,746,000 | ) | (201,402 | ) | (887,766 | ) | (18,703,624 | ) | (12,839,213 | ) | ||||||||||||||||||||||
Income tax expense (benefit) | 1,966,519 | 35,523 | (942,093 | ) | 8m | — | (70,491 | ) | 7i | — | (50,312 | ) | 5d | 939,146 | ||||||||||||||||||||||
Net income (loss) after taxes | $ | 11,869,823 | $ | 5,519,409 | $ | (1,749,602 | ) | $ | (9,746,000 | ) | $ | (130,911 | ) | $ | (887,766 | ) | $ | (18,653,312 | ) | $ | (13,778,359 | ) | ||||||||||||||
Basic net income (loss) per share | $ | 0.42 | $ | (0.48 | ) | |||||||||||||||||||||||||||||||
Weighted-average number of common shares - basic | 18,410,005 | 4,559,886 | 8n | 5,798,735 | 5e | 28,768,626 | ||||||||||||||||||||||||||||||
Diluted net income (loss) per share | $ | 0.42 | $ | (0.48 | ) | |||||||||||||||||||||||||||||||
Weighted-average number of common shares - diluted | 18,754,799 | 4,559,886 | 8n | 5,453,941 | 5f | 28,768,626 |
Historical Cerecor | Historical Avadel Pediatric Business | Avadel Pediatric Business Pro Forma Adjustments | Historical Ichorion | Ichorion Pro Forma Adjustments | Pro Forma Cerecor Combined | |||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
License and other revenue | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
Product revenue, net | 13,045,824 | 1,705,000 | — | — | — | 14,750,824 | ||||||||||||||||||||
Salesforce revenue | 296,875 | — | — | — | — | 296,875 | ||||||||||||||||||||
Grant revenue | — | — | — | — | — | — | ||||||||||||||||||||
Total revenues, net | 13,342,699 | 1,705,000 | — | — | — | 15,047,699 | ||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||
Cost of product sales | 5,397,872 | 355,000 | — | — | — | 5,752,872 | ||||||||||||||||||||
Research and development | 3,780,352 | — | — | 2,323,535 | 18,333 | 5a | 6,122,220 | |||||||||||||||||||
Acquired in-process research and development | 18,723,952 | — | — | — | (18,723,952 | ) | 5b | — | ||||||||||||||||||
General and administrative | 7,833,612 | 1,995,000 | (149,206 | ) | 7j | 1,425,375 | 22,917 | 5a | 11,127,698 | |||||||||||||||||
Sales and marketing | 5,889,137 | — | — | — | — | 5,889,137 | ||||||||||||||||||||
Amortization expense | 3,315,843 | 180,000 | 65,662 | 7f | — | 56,250 | 5c | 3,617,755 | ||||||||||||||||||
Impairment of intangible assets | 1,861,562 | — | — | — | — | 1,861,562 | ||||||||||||||||||||
Total operating expenses | 46,802,330 | 2,530,000 | (83,544 | ) | 3,748,910 | (18,626,452 | ) | 34,371,244 | ||||||||||||||||||
Income (loss) from operations | (33,459,631 | ) | (825,000 | ) | 83,544 | (3,748,910 | ) | 18,626,452 | (19,323,545 | ) | ||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||
Change in fair value of warrant liability, purchase option liability, investor rights obligation and contingent consideration | (383,179 | ) | (256,000 | ) | 256,000 | 7g | — | — | (383,179 | ) | ||||||||||||||||
Other income | 18,655 | — | — | — | 18,655 | |||||||||||||||||||||
Interest expense, net | (577,664 | ) | (131,000 | ) | 6,251 | 7h | — | — | (702,413 | ) | ||||||||||||||||
Total other income (expense) | (942,188 | ) | (387,000 | ) | 262,251 | — | — | (1,066,937 | ) | |||||||||||||||||
Net income (loss) before taxes | (34,401,819 | ) | (1,212,000 | ) | 345,795 | (3,748,910 | ) | 18,626,452 | (20,390,482 | ) | ||||||||||||||||
Income tax expense | 92,076 | — | — | 7i | — | — | 5d | 92,076 | ||||||||||||||||||
Net income (loss) after taxes | $ | (34,493,895 | ) | $ | (1,212,000 | ) | $ | 345,795 | $ | (3,748,910 | ) | $ | 18,626,452 | $ | (20,482,558 | ) | ||||||||||
Basic net income (loss) per share | $ | (1.05 | ) | $ | (0.53 | ) | ||||||||||||||||||||
Weighted-average number of common shares - basic | 32,749,291 | 5,692,531 | 5e | 38,441,822 | ||||||||||||||||||||||
Diluted net income (loss) per share | $ | (1.05 | ) | $ | (0.53 | ) | ||||||||||||||||||||
Weighted-average number of common shares - diluted | 32,749,291 | 5,692,531 | 5f | 38,441,822 |
At February 16, 2018 (preliminary) | Measurement Period Adjustments | At February 16, 2018 (as adjusted) | ||||||||
Inventory | $ | 2,549,000 | $ | (1,831,000 | ) | $ | 718,000 | |||
Prepaid assets | — | 570,000 | 570,000 | |||||||
Intangible assets | 16,453,000 | 1,838,000 | 18,291,000 | |||||||
Accrued expenses | — | (362,000 | ) | (362,000 | ) | |||||
Fair value of debt assumed | (15,272,303 | ) | 197,303 | (15,075,000 | ) | |||||
Fair value of contingent consideration and deferred payments | (7,875,165 | ) | (44,835 | ) | (7,920,000 | ) | ||||
Total net liabilities assumed | (4,145,468 | ) | 367,468 | (3,778,000 | ) | |||||
Consideration exchanged | 241,000 | (240,999 | ) | 1 | ||||||
Goodwill | $ | 4,386,468 | $ | (608,467 | ) | $ | 3,778,001 |
At February 16, 2018 (preliminary) | Measurement Period Adjustments | At February 16, 2018 (as adjusted) | Useful Life | ||||||||
Acquired Product Marketing Rights - Karbinal | $ | 6,221,000 | $ | (21,000 | ) | $ | 6,200,000 | 16 years | |||
Acquired Product Marketing Rights - AcipHex | 2,520,000 | 283,000 | 2,803,000 | 10 years | |||||||
Acquired Product Marketing Rights - Cefaclor | 6,291,000 | 1,320,000 | 7,611,000 | 7 years | |||||||
Acquired Developed Technology - Flexichamber | 1,131,000 | 546,000 | 1,677,000 | 10 years | |||||||
Acquired IPR&D - LiquiTime formulations | 290,000 | (290,000 | ) | — | Indefinite | ||||||
Total | $ | 16,453,000 | $ | 1,838,000 | $ | 18,291,000 |
At November 17, 2017 (preliminary) | Measurement Period Adjustments | At November 17, 2017 (as adjusted) | ||||||||
Cash | $ | 18,900,000 | $ | — | $ | 18,900,000 | ||||
Common stock (including contingently issuable shares) | 8,514,419 | — | 8,514,419 | |||||||
Contingent payments | 2,576,633 | (1,210,000 | ) | 1,366,633 | ||||||
Total consideration transferred | $ | 29,991,052 | (1,210,000 | ) | 28,781,052 |
At November 17, 2017 (preliminary) | Measurement Period Adjustments | At November 17, 2017 (as adjusted) | ||||||||
Fair value of assets acquired: | ||||||||||
Cash and cash equivalents | $ | 11,068 | $ | — | $ | 11,068 | ||||
Accounts receivable, net | 2,872,545 | — | 2,872,545 | |||||||
Inventory | 495,777 | — | 495,777 | |||||||
Prepaid expenses and other current assets | 134,281 | — | 134,281 | |||||||
Other receivables | — | 2,764,515 | 2,764,515 | |||||||
Identifiable Intangible Assets: | — | |||||||||
Acquired product marketing rights - Metafolin | 10,465,000 | 1,522,000 | 11,987,000 | |||||||
PAI sales and marketing agreement | 2,334,000 | 219,000 | 2,553,000 | |||||||
Acquired product marketing rights - Millipred | 4,714,000 | 342,000 | 5,056,000 | |||||||
Acquired product marketing rights - Ulesfia | 555,000 | (555,000 | ) | — | ||||||
Total assets acquired | 21,581,671 | 4,292,515 | 25,874,186 | |||||||
Fair value of liabilities assumed: | ||||||||||
Accounts payable | 192,706 | — | 192,706 | |||||||
Accrued expenses and other current liabilities | 4,850,422 | 3,764,515 | 8,614,937 | |||||||
Deferred tax liability | 839,773 | 78,840 | 918,613 | |||||||
Total liabilities assumed | 5,882,901 | 3,843,355 | 9,726,256 | |||||||
Total identifiable net assets | 15,698,770 | 449,160 | 16,147,930 | |||||||
Fair value of consideration transferred | 29,991,052 | (1,210,000 | ) | 28,781,052 | ||||||
Goodwill | $ | 14,292,282 | $ | (1,659,160 | ) | $ | 12,633,122 |
At November 17, 2017 (preliminary) | Measurement Period Adjustments | At November 17, 2017 (as adjusted) | Useful Life | ||||||||
Acquired product marketing rights - Metafolin | $ | 10,465,000 | $ | 1,522,000 | $ | 11,987,000 | 15 years | ||||
PAI sales and marketing agreement | 2,334,000 | 219,000 | 2,553,000 | 2 years | |||||||
Acquired product marketing rights - Millipred | 4,714,000 | 342,000 | 5,056,000 | 4 years | |||||||
Acquired product marketing rights - Ulesfia | 555,000 | (555,000 | ) | — | |||||||
Total | $ | 18,068,000 | $ | 1,528,000 | $ | 19,596,000 |
At February 16, 2018 (as adjusted) | Amortization Expense for the year ended December 31, 2017 | Amortization Expense for the nine months ended September 30, 2018 | Useful Life | ||||||||
Acquired Product Marketing Rights - Karbinal | $ | 6,200,000 | $ | 387,500 | $ | 299,509 | 16 years | ||||
Acquired Product Marketing Rights - AcipHex | 2,803,000 | 280,300 | 213,158 | 10 years | |||||||
Acquired Product Marketing Rights - Cefaclor | 7,611,000 | 1,087,286 | 831,290 | 7 years | |||||||
Acquired Developed Technology - Flexichamber | 1,677,000 | 167,700 | 124,390 | 10 years | |||||||
Total | $ | 18,291,000 | $ | 1,922,786 | $ | 1,468,347 | |||||
Less Avadel Historic Intangible Amortization | (1,245,000 | ) | (180,000 | ) | |||||||
Less Cerecor Historic Intangible Amortization | — | (1,222,685 | ) | ||||||||
Net Pro Forma Amortization Expense Adjustment | $ | 677,786 | $ | 65,662 |
Fair Value At November 17, 2017 (as adjusted) | Intangible Amortization Expense for the Period January 1, 2017 through November 16, 2017 | Useful Life | ||||||
Acquired product marketing rights - Metafolin | $ | 11,987,000 | $ | 699,242 | 15 years | |||
PAI sales and marketing agreement | 2,553,000 | 1,116,938 | 2 years | |||||
Acquired product marketing rights - Millipred | 5,056,000 | 1,106,000 | 4 years | |||||
Acquired product marketing rights - Ulesfia | — | — | ||||||
Total | $ | 19,596,000 | $ | 2,922,180 |