Apricus Biosciences, Inc.
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(Exact name of registrant as specified in its charter)
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Nevada
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0-22245
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87-0449967
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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11975 El Camino Real, Suite 300, San Diego, CA
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92130
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(Address of principal executive offices)
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(Zip Code)
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T |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c))
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Exhibit No. |
Description
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2.1 |
Amendment No. 3 to Agreement and Plan of Merger, dated January 16, 2019, by and among Apricus Biosciences, Inc., Arch Merger Sub, Inc. and Seelos Therapeutics, Inc..
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10.1 |
Form of Third Amendment Agreement.
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99.1 |
Unaudited Pro Forma Condensed Combined Financial Information of the Company for the nine months ended September 30, 2018 and for the year ended December 31, 2017, which
gives effect to the Merger, the Purchase Agreement, the First Amendment, the Second Amendment and the Third Amendment.
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Apricus Biosciences, Inc.
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Date: January 16, 2019
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By:
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/s/ Richard W. Pascoe
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Name: Richard W. Pascoe
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Title: Chief Executive Officer and Secretary
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Apricus Biosciences, Inc.
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By:
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/s/ Richard W. Pascoe
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Name:
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Richard W. Pascoe
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Title:
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Chief Executive Officer
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Arch Merger Sub, Inc.
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By:
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/s/ Richard W. Pascoe
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Name:
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Richard W. Pascoe
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Title:
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Chief Executive Officer
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Seelos Therapeutics, Inc.
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By:
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/s/ Raj Mehra, Ph.D.
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Name:
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Raj Mehra, Ph.D.
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Title:
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Chief Executive Officer
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APRICUS BIOSCIENCES, INC.
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By:
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Name: Richard W. Pascoe
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Title: Chief Executive Officer
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SEELOS THERAPEUTICS, INC.
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By:
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Name: Raj Mehra, Ph.D.
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Title: Chief Executive Officer
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Seelos
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Apricus
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Pro Forma
Adjustments
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Note 4
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Pro Forma
Combined
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|||||||||||||
ASSETS
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|||||||||||||||||
Current assets
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|||||||||||||||||
Cash and cash equivalents
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$
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339
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$
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5,283
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$
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18,000
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(f)
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$
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23,622
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||||||||
(1,150
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)
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(d)
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$
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(1,150
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)
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||||||||||||
(4,000
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)
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(y)
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$
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(4,000
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)
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||||||||||||
Due from related party
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2
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—
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—
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2
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|||||||||||||
Prepaid expense and other current assets
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183
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198
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—
|
381
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|||||||||||||
Total current assets
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524
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5,481
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12,850
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18,855
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|||||||||||||
Property and equipment
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—
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46
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—
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46
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|||||||||||||
Other long-term assets
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—
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37
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—
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37
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|||||||||||||
Total assets
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$
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524
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$
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5,564
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$
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12,850
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$
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18,938
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|||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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|||||||||||||||||
Current liabilities
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|||||||||||||||||
Accounts payable
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$
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1,686
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$
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322
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$
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1,250
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(e)
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$
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3,258
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||||||||
Other payables and accrued expenses
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145
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1,103
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3,075
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(d)
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4,323
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||||||||||||
Convertible notes payable, at fair value
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2,180
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—
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(2,180
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)
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(c)
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—
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|||||||||||
Warrant liability, at fair value
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2,052
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(f)
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2,052
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||||||||||||||
Total current liabilities
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4,011
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1,425
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4,197
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9,633
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|||||||||||||
Non-current liabilities
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|||||||||||||||||
Other long-term liabilities
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—
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26
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—
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26
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|||||||||||||
Total liabilities
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4,011
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1,451
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4,197
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9,659
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|||||||||||||
Commitments and contingencies
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|||||||||||||||||
Stockholders’ equity (deficit)
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|||||||||||||||||
Common Stock, $.001 par value
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—
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28
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(28
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)
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(b)
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10
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|||||||||||
—
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—
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10
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(a)
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—
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|||||||||||||
Additional paid-in-capital
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100
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327,458
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(10
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)
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(a)
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22,485
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|||||||||||
—
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—
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2,180
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(c)
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—
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|||||||||||||
—
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—
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(327,458
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)
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(b)
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—
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||||||||||||
113
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(b)
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—
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|||||||||||||||
4,154
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(d)
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—
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|||||||||||||||
15,948
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(f)
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—
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|||||||||||||||
Accumulated deficit
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(3,587
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)
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(323,373
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)
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323,373
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(b)
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(13,216
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)
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|||||||||
—
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—
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(8,379
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)
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(d)
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—
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||||||||||||
—
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—
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(1,250
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)
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(e)
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—
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||||||||||||
Total stockholders’ equity (deficit)
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(3,487
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)
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4,113
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8,653
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9,279
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||||||||||||
Total liabilities and stockholders’ equity
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$
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524
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$
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5,564
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$
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12,850
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$
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18,938
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Seelos
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Apricus
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Pro Forma
Adjustments
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Note 4
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Pro Forma
Combined
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|||||||||||||
Research and development
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$
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422
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$
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1,148
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$
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—
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$
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1,570
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|||||||||
General and administrative
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1,722
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6,144
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—
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7,866
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|||||||||||||
Total operating expenses
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2,144
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7,292
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—
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9,436
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|||||||||||||
Loss from operations
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(2,144
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)
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(7,292
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)
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—
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(9,436
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)
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||||||||||
Interest expense
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(113
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)
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—
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—
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(113
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)
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|||||||||||
Change in fair value of convertible notes payable
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2
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—
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—
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2
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|||||||||||||
Change in fair value of warrant liability
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—
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222
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—
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222
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|||||||||||||
Amendment of equity classified warrants
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—
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(293
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)
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—
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(293
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)
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|||||||||||
Other income
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—
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1
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—
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1
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|||||||||||||
Total other expense
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(111
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)
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(70
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)
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—
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(181
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)
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||||||||||
Loss from continuing operations
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$
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(2,255
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)
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$
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(7,362
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)
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$
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—
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$
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(9,617
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)
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||||||
Loss from continuing operations per share:
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|||||||||||||||||
Basic and diluted
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$
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(11.24
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)
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$
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(1.08
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)
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|||||||||||
Weighted average number of shares
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654,933
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8,224,822
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(g)
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8,879,755
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Seelos
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Apricus
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Pro Forma
Adjustments
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Note 4
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Pro Forma
Combined
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|||||||||||||
Research and development
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$
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400
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$
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3,463
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$
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8,379
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(d)
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$
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12,242
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||||||||
General and administrative
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654
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7,210
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—
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7,864
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|||||||||||||
Loss on disposal of assets
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—
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2
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—
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2
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|||||||||||||
Total operating expenses
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1,054
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10,675
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8,379
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20,108
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|||||||||||||
Loss from operations
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(1,054
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)
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(10,675
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)
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(8,379
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)
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(20,108
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)
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|||||||||
Interest expense
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(21
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)
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(83
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)
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—
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(104
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)
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||||||||||
Change in fair value of convertible notes payable
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(2
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)
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—
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—
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(2
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)
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|||||||||||
Change in fair value of warrant liability
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(646
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)
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—
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(646
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)
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||||||||||||
Gain on extinguishment of debt
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—
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(422
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)
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—
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(422
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)
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|||||||||||
Other income
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—
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77
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—
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77
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|||||||||||||
Total other expenses
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(23
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)
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(1,074
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)
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—
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(1,097
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)
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||||||||||
Loss from continuing operations
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$
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(1,077
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)
|
$
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(11,749
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)
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$
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(8,379
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)
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$
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(21,205
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)
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|||||
Loss from continuing operations per share
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|||||||||||||||||
Basic and diluted
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$
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(29.64
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)
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$
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(2.46
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)
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|||||||||||
Weighted average number of shares
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396,400
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8,224,822
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(g)
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8,621,222
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Dr (Cr.)
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||||
Cash and cash equivalents
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$
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5,283
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||
Prepaid expense and other current assets
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198
|
|||
Property and Equipment
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46
|
|||
Other long-term assets
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37
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|||
Accounts payable
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(322
|
)
|
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Other payables and accrued expenses
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(5,103
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)
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Other long-term liabilities
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(26
|
)
|
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Net assets acquired
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$
|
113
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(a) |
Represents the issuance of 8,224,822 shares of common stock of Apricus and its effect on the shares of common stock and additional paid in capital accounts (in
thousands).
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Common Stock
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Additional Paid
in Capital
|
|||||||
Issuance of 8,224,822 shares
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$
|
8
|
$
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(8
|
)
|
|||
Adjustments due to reverse merger
|
2
|
(2
|
)
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|||||
$
|
10
|
$
|
(10
|
)
|
(b) |
Represents the elimination of the historical equity of Apricus and recognizes the change in control obligation payments as follows (in thousands):
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Cash
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$
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4,000
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(y)
|
|
Common Stock, $.001 par value
|
(28
|
)
|
||
Additional paid-in-capital
|
(327,458
|
)
|
||
Accumulated deficit
|
323,373
|
|||
Recapitalization adjustment
|
$
|
(113
|
)
|
(y) |
Represents the payment of change of control obligations for Apricus employees and other obligations that will become due at the closing of the Merger.
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(c) |
Reflects a conversion of $2.2 million in Seelos convertible notes payable into 214,366 shares of Seelos common stock pursuant to the terms of that certain Conversion
Agreement effective as of October 15, 2018, by and among Seelos and the holders set forth on the Schedule of Holders attached thereto, entered into in connection with the Merger.
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(d) |
Reflects the fair value of the issuance of 439,737 shares of Seelos common stock valued at approximately $4.1 million, the recording of a $3.1 million liability, and the
payment of $1.15 million in cash to purchase certain in process research and development (“IPR&D”) assets from Ligand and Vyera. These transactions will be accounted for as asset acquisitions pursuant to ASU 2017-01 as the
majority of the fair value of the assets acquired was concentrated in a group of similar assets, and the acquired assets did not have outputs or employees. Because the underlying development programs have not yet received regulatory
approval, the purchase price paid to date for these assets will be expensed in Seelos’ statement of operations. In addition, the potential milestone payments are not yet considered probable, and no milestone payments have been accrued
at September 30, 2018.
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(e) |
Reflects an adjustment of approximately $1.25 million for the estimated transaction costs for both Seelos and Apricus, such as adviser fees, legal and accounting expenses
that were not incurred as of September 30, 2018.
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(f) |
Represents the issuance of 1,187,336 shares of Seelos common stock and warrants equal to 80% of such shares of Seelos common stock for an aggregate purchase price of
$18.0 million. The warrants have a 5-year term and the exercise price is equal to 125% of the final purchase price, subject to adjustment for anti-dilution events. Seelos has preliminarily determined that the exercise features of
certain of these warrants are not indexed to Seelos’ own stock and is therefore not afforded equity treatment. In accordance with ASC 815, Seelos has presented the pro-forma effect of the issuance of the liability classified warrants
based upon the preliminary determination of the fair value of $2.1 million as a warrant liability. ASC 815 requires Seelos to assess the fair value of warrant liabilities at each reporting period and recognize any change in the fair
value as items of other income or expense.
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(g) |
Represents the increase in the weighted average shares due to the issuance of 8,224,822 shares of Apricus common stock in connection with the Merger.
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