Interpace Diagnostics Group, Inc. | Sale of Assets and Liabilities of the Commercial Services Business (e), (f) | Adjustments | Pro Forma | ||||||||||||
ASSETS | |||||||||||||||
Current assets: | |||||||||||||||
Cash and cash equivalents | $ | 8,955 | $ | — | $ | 5,120 | (g) | $ | 14,075 | ||||||
Short-term investments | 108 | — | — | 108 | |||||||||||
Accounts receivable, net | 12,308 | (8,832 | ) | — | 3,476 | ||||||||||
Unbilled costs and accrued profits on contracts in progress | 5,216 | (5,123 | ) | — | 93 | ||||||||||
Other current assets | 5,512 | — | 160 | (o) | 5,672 | ||||||||||
Total current assets | 32,099 | (13,955 | ) | 5,280 | 23,424 | ||||||||||
Property and equipment, net | 2,818 | (1,362 | ) | — | 1,456 | ||||||||||
Goodwill | 15,666 | — | — | 15,666 | |||||||||||
Other intangible assets, net | 44,478 | — | — | 44,478 | |||||||||||
Other long-term assets | 4,226 | — | 4,279 | (h) | 8,505 | ||||||||||
Total assets | $ | 99,287 | $ | (15,317 | ) | $ | 9,559 | $ | 93,529 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||
Current liabilities: | |||||||||||||||
Accounts payable | $ | 4,508 | $ | — | $ | — | $ | 4,508 | |||||||
Unearned contract revenue | 5,112 | (5,112 | ) | — | 0 | ||||||||||
Accrued salary and bonus | 9,851 | (6,318 | ) | — | 3,533 | ||||||||||
Other accrued expenses | 12,055 | (3,558 | ) | (338 | ) | (i) | 8,159 | ||||||||
Total current liabilities | 31,526 | (14,988 | ) | (338 | ) | 16,200 | |||||||||
Contingent consideration | 25,909 | — | — | 25,909 | |||||||||||
Long-term debt, net of debt discount | 27,911 | — | (19,712 | ) | (j) | 8,199 | |||||||||
Other long-term liabilities | 8,080 | — | (63 | ) | (k) | 8,017 | |||||||||
Total liabilities | 93,426 | (14,988 | ) | (20,113 | ) | 58,325 | |||||||||
Commitments and contingencies | |||||||||||||||
Stockholders’ equity: | |||||||||||||||
Preferred stock, $0.01 par value; 5,000,000 shares authorized, no shares issued and outstanding | — | — | — | — |
Common stock, $0.01 par value; 40,000,000 shares authorized; 17,434,900 shares issued, 16,715,799 shares outstanding | 174 | — | — | 174 | |||||||||||
Additional paid-in capital | 129,569 | — | (3,709 | ) | (l) | 125,860 | |||||||||
Accumulated deficit | (115,637 | ) | (329 | ) | 26,592 | (m) | (89,374 | ) | |||||||
Accumulated other comprehensive income | 16 | — | — | 16 | |||||||||||
Treasury stock, at cost (719,101 shares) | (8,261 | ) | — | 6,789 | (n) | (1,472 | ) | ||||||||
Total stockholders' equity | 5,861 | (329 | ) | 29,672 | 35,204 | ||||||||||
Total liabilities and stockholders' equity | $ | 99,287 | $ | (15,317 | ) | $ | 9,559 | $ | 93,529 |
Pro Forma Nine Months Ended September 30, 2015 | |||||||||||||||
Interpace Diagnostics Group, Inc. | Sale of the Commercial Services Business (a) | Adjustments | Pro Forma | ||||||||||||
Revenue, net | |||||||||||||||
Commercial Services | $ | 104,408 | $ | (104,408 | ) | $ | — | $ | — | ||||||
Interpace Diagnostics | 6,876 | — | — | 6,876 | |||||||||||
Total revenue, net | 111,284 | (104,408 | ) | — | 6,876 | ||||||||||
Cost of revenue | |||||||||||||||
Commercial Services | 85,089 | (85,089 | ) | — | — | ||||||||||
Interpace Diagnostics | 5,224 | — | — | 5,224 | |||||||||||
Total cost of revenue | 90,313 | (85,089 | ) | — | 5,224 | ||||||||||
Gross profit | 20,971 | (19,319 | ) | — | 1,652 | ||||||||||
Sales and marketing | 8,387 | — | — | 8,387 | |||||||||||
Research and development | 1,646 | — | — | 1,646 | |||||||||||
General and administrative | 20,936 | (14,724 | ) | 67 | (b) | 6,279 | |||||||||
Acquisition related amortization expense | 2,825 | — | — | 2,825 | |||||||||||
Total operating expenses | 33,794 | (14,724 | ) | 67 | 19,137 | ||||||||||
Operating loss | (12,823 | ) | (4,595 | ) | (67 | ) | (17,485 | ) | |||||||
Interest expense | (2,807 | ) | — | 2,238 | (b) | (569 | ) | ||||||||
Other expense, net | (76 | ) | — | — | (76 | ) | |||||||||
Loss from continuing operations before income tax | (15,706 | ) | (4,595 | ) | 2,171 | (18,130 | ) | ||||||||
(Benefit) provision for income tax | (430 | ) | (204 | ) | — | (c) | (634 | ) | |||||||
Loss from continuing operations | $ | (15,276 | ) | $ | (4,391 | ) | $ | 2,171 | $ | (17,496 | ) | ||||
Basic and diluted loss per share of common stock from: | |||||||||||||||
Continuing operations | $ | (1.00 | ) | $ | (1.00 | ) | |||||||||
Weighted average number of common shares and common share equivalents outstanding: | |||||||||||||||
Basic | 15,301 | 2,247 | (d) | 17,548 | |||||||||||
Diluted | 15,301 | 2,247 | (d) | 17,548 |
Pro Forma Year Ended December 31, 2014 | |||||||||||||||
Interpace Diagnostics Group, Inc. | Sale of the Commercial Services Business (a) | Adjustments | Pro Forma | ||||||||||||
Revenue, net | |||||||||||||||
Commercial Services | $ | 118,461 | $ | (118,461 | ) | $ | — | $ | — | ||||||
Interpace Diagnostics | 1,474 | — | — | 1,474 | |||||||||||
Total revenue, net | 119,935 | (118,461 | ) | — | 1,474 | ||||||||||
Cost of revenue | |||||||||||||||
Commercial Services | 100,126 | (100,126 | ) | — | — | ||||||||||
Interpace Diagnostics | 1,268 | — | — | 1,268 | |||||||||||
Total cost of revenue | 101,394 | (100,126 | ) | — | 1,268 | ||||||||||
Gross profit | 18,541 | (18,335 | ) | — | 206 | ||||||||||
Sales and marketing | 336 | — | — | 336 | |||||||||||
Research and development | 92 | — | — | 92 | |||||||||||
General and administrative | 28,724 | (18,646 | ) | (21 | ) | (b) | 10,057 | ||||||||
Acquisition related amortization expense | 773 | — | — | 773 | |||||||||||
Asset impairments | 2,086 | — | — | 2,086 | |||||||||||
Total operating expenses | 32,011 | (18,646 | ) | (21 | ) | 13,344 | |||||||||
Operating (loss) income | (13,470 | ) | 311 | 21 | (13,138 | ) | |||||||||
Interest expense | (602 | ) | — | 487 | (b) | (115 | ) | ||||||||
Other expense, net | (68 | ) | — | — | (68 | ) | |||||||||
(Loss) income from continuing operations before income tax | (14,140 | ) | 311 | 508 | (13,321 | ) | |||||||||
Benefit for income tax | (4,738 | ) | (292 | ) | — | (c) | (5,030 | ) | |||||||
(Loss) income from continuing operations | $ | (9,402 | ) | $ | 603 | $ | 508 | $ | (8,291 | ) | |||||
Basic and diluted loss per share of common stock from: | |||||||||||||||
Continuing operations | $ | (0.63 | ) | $ | (0.48 | ) | |||||||||
Weighted average number of common shares and common share equivalents outstanding: | |||||||||||||||
Basic | 14,901 | 2,247 | (d) | 17,148 | |||||||||||
Diluted | 14,901 | 2,247 | (d) | 17,148 |
Pro Forma Year Ended December 31, 2013 | |||||||||||||||
Interpace Diagnostics Group, Inc. | Sale of Commercial Services Business (a) | Adjustments | Pro Forma | ||||||||||||
Revenue, net | |||||||||||||||
Commercial Services | $ | 146,534 | $ | (146,534 | ) | $ | — | $ | — | ||||||
Interpace Diagnostics | — | — | — | — | |||||||||||
Total revenue, net | 146,534 | (146,534 | ) | — | — | ||||||||||
Cost of revenue | |||||||||||||||
Commercial Services | 122,737 | (122,737 | ) | — | — | ||||||||||
Interpace Diagnostics | 292 | — | — | 292 | |||||||||||
Total cost of revenue | 123,029 | (122,737 | ) | — | 292 | ||||||||||
Gross profit | 23,505 | (23,797 | ) | — | (292 | ) | |||||||||
General and administrative | 24,942 | (22,180 | ) | — | 2,762 | ||||||||||
Total operating expenses | 24,942 | (22,180 | ) | — | 2,762 | ||||||||||
Operating loss | (1,437 | ) | (1,617 | ) | — | (3,054 | ) | ||||||||
Interest expense | — | — | — | — | |||||||||||
Other expense, net | (59 | ) | — | — | (59 | ) | |||||||||
Loss from continuing operations before income tax | (1,496 | ) | (1,617 | ) | — | (3,113 | ) | ||||||||
Provision for income tax | 180 | (180 | ) | — | — | ||||||||||
Loss from continuing operations | $ | (1,676 | ) | $ | (1,437 | ) | $ | — | $ | (3,113 | ) | ||||
Basic and diluted loss per share of common stock from: | |||||||||||||||
Continuing operations | (0.11 | ) | (0.18 | ) | |||||||||||
Weighted average number of common shares and common share equivalents outstanding: | |||||||||||||||
Basic | 14,718 | 2,247 | (d) | 16,965 | |||||||||||
Diluted | 14,718 | 2,247 | (d) | 16,965 |
1. | ASSET SALE |
2. | UNAUDITED PRO FORMA ADJUSTMENTS |
Commercial Services Business assets to be sold | $ | 15,317 | |
Commercial Services Business liabilities to be assumed | (14,988 | ) | |
Net book value of Commercial Services Business | $ | 329 |
Cash proceeds | $ | 25,467 | |
Working capital adjustment | 3,067 | ||
Receivable from Buyer on withholding of NJ Bulk Sales Tax | (160 | ) | |
Transaction costs to be incurred at closing (bank fees, legal, accounting, investment banking) | (1,643 | ) | |
Sales proceeds at closing, net | $ | 26,731 | |
Less: repayment of outstanding borrowing under Credit Agreement | (20,000 | ) | |
Less: payment of exit and prepayment fees due under Credit Agreement | (1,611 | ) | |
Net cash from Sale of Commercial Services Business | $ | 5,120 |
Contingent consideration from the Asset Sale. Represents the present value of the portion of the sale price subject to an earn-out arrangement related to the revenues generated by the Commercial Services Business in 2016. | $ | 4,452 | |
Accelerated amortization of deferred financing costs capitalized under Credit Agreement | (173 | ) | |
$ | 4,279 |
Reversal of interest payable under Credit Agreement | (338 | ) | |
$ | (338 | ) |
Repayment of outstanding borrowing under Credit Agreement | $ | (20,000 | ) |
Accelerated amortization of loan origination fees capitalized under Credit Agreement | 288 | ||
$ | (19,712 | ) |
Bank fee relating to contingent consideration | $ | 122 | |
Reversal of accretion of exit fees under Credit Agreement | (185 | ) | |
$ | (63 | ) |
Stock compensation expense resulting from accelerated vesting | $ | 3,080 | |
Issuance of 500,000 shares to former RedPath Equityholders resulting from accelerated vesting due to change in control | (6,789 | ) | |
$ | (3,709 | ) |
Cash proceeds, excluding net liabilities disposed of | $ | 25,467 | |
Transaction costs, exit and prepayment fees due under Credit agreement | (3,254 | ) | |
Contingent consideration and accelerated amortization of fees capitalized under Credit Agreement | 4,279 | ||
Working capital adjustment and reversal of interest payable under Credit Agreement | 3,405 | ||
Accelerated amortization of deferred financing costs capitalized under Credit Agreement | (288 | ) | |
Bank fee relating to contingent consideration | (122 | ) | |
To reverse accretion of exit fees under Credit Agreement | 185 | ||
Stock compensation expense resulting from accelerated vesting | (3,080 | ) | |
$ | 26,592 |
Issuance of 500,000 shares to former RedPath Equityholders resulting from accelerated vesting due to change in control | $ | 6,789 |
Receivable from Buyer on withholding of NJ Bulk Sales Tax | $ | 160 |