3.BUSINESS COMBINATIONS AND ACQUISITIONS

Pro Forma Impact of Business Combinations

The following supplemental unaudited pro forma information presents Aralez’s financial results as if the acquisitions of Tribute, which was completed on February 5, 2016, Zontivity, which was completed on September 6, 2016, and Toprol-XL and the AG, which was completed on October 31, 2016, had each occurred on January 1, 2016:


	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
		Actual		Pro forma		Actual		Pro forma

Total revenues, net	$	27,618	$	45,500	$	53,587	$	78,343
Net loss	$	(27,520)	$	(10,758)	$	(54,997)	$	(27,294)
Diluted net loss per share	$	(0.42)	$	(0.17)	$	(0.83)	$	(0.47)

The above unaudited pro forma information was determined based on the historical GAAP results of Aralez, Tribute, Zontivity and Toprol-XL and the AG. The unaudited pro forma consolidated results are provided for informational purposes only and are not necessarily indicative of what Aralez’s consolidated results of operations actually would have been had the acquisition been completed on the dates indicated or what the consolidated results of operations will be in the future. The pro forma consolidated net loss includes pro forma adjustments relating to the following significant recurring and non-recurring items directly attributable to the business combinations, net of the pro forma tax impact utilizing applicable statutory tax rates, as follows:

(i)

elimination of $0.0 million and $12.0 million of expense for excise tax equalization payments for the three and six months ended June 30, 2016, respectively;

(ii)

elimination of $0.4 million and $4.0 million of severance charges for the three and six months ended June 30, 2016, respectively;

(iii)

elimination of $0.8 million and $1.5 million of the inventory fair value step-up for the three and six months ended June 30, 2016, respectively;

(iv)

elimination of $0.0 million and $0.5 million of stock based compensation expense for the three and six months ended June 30, 2016, respectively;

(v)

elimination of $0.3 million and $12.7 million of transaction costs incurred by the combined Company for the three and six months ended June 30, 2016, respectively;

(vi)

elimination of $0.6 million and $1.4 million of amortization for the three and six months ended June 30, 2016, respectively, and the addition of amortization of finite-lived intangible assets acquired of $6.5 million and $13.7 million for the three and six months ended June 30, 2016, respectively; and

(vii)

elimination of $0.0 million and $0.3 million of interest expense related to the Tribute acquisition for the three and six months ended June 30, 2016, respectively, and the addition of $6.2 million and $12.4 in interest expense related to the financing of the Zontivity and Toprol-XL acquisitions for the three and six months ended June 30, 2016, respectively.