Aurora Biosciences (ABSC) 8-K/A Current report (amended)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
March 1, 2001
Date of Report (date of earliest event reported)

AURORA BIOSCIENCES CORPORATION

(Exact name of Registrant as specified in charter)

Delaware	0-22669	33-0669859
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

11010 Torreyana Road
San Diego, California 92121
(Address of principal executive offices)
Registrant’s telephone number, including area code:(858) 404-6600

N/A

(Former name or former address, if changed since last report)

TABLE OF CONTENTS

ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS.
	ITEM 7.(a)  Financial statements of businesses acquired.
		Balance Sheet
		Statements of Operations
		Statements of Cash Flows
		Notes to Financial Statements
	ITEM 7.(b) Pro forma financial information.
		PRO FORMA CONDENSED COMBINED BALANCE SHEET
		PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
		PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
		PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
	ITEM 7.(c) Exhibits.
SIGNATURE
INDEX TO EXHIBITS
EXHIBIT 23.1
EXHIBIT 23.2

ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS.

ITEM 7.(a)  Financial statements of businesses acquired.

The audited financial statements of PanVera Corporation for the years ended September 30, 2000, 1999 and 1998, as required by this item, are incorporated by reference to the Registration Statement on Form S-4 of Aurora Biosciences Corporation filed on February 6, 2001 (Registration No. 333-54638).

The unaudited financial statements of PanVera Corporation for the three months ended December 31, 2000, as required by this item, are set forth at the pages indicated below:

	Page
Balance Sheets — December 31, 2000 (Unaudited) and September 30, 2000		3
Statements of Operations (Unaudited) — Three months ended December 31, 2000 and December 31, 1999		4
Statements of Cash Flows (Unaudited) — Three months ended December 31, 2000 and December 31, 1999		5
Notes to Financial Statements (Unaudited)		6

PANVERA CORPORATION

Balance Sheet

				December 31,			September 30,
				2000			2000
				(Unaudited)
Assets
Current assets:
	Cash and cash equivalents			$	1,475,619		$	1,200,249
	Investments				0			200,000
	Accounts receivable				1,346,947			1,763,077
	Inventories				970,205			921,533
	Prepaid expenses				314,000			227,070
	Deferred taxes				56,768			56,768
		Total current assets			4,163,539			4,368,697
Equipment and leasehold improvements, net					2,701,589			1,346,036
Industrial revenue bond funds					4,592,084			5,624,178
Deferred taxes					140,768			140,768
Note issuance costs, net					185,600			188,214
Intellectual property, net					169,582			166,400
Investment in affiliate					200			200
			Total assets	$	11,953,362		$	11,834,493
Liabilities and stockholders’ equity
Current liabilities:
	Accounts payable			$	2,143,497		$	1,414,365
	Accrued compensation				179,007			294,916
	Other current liabilities				134,047			179,248
	Unearned revenue				152,947			131,569
	Current portion of long-term notes payable				318,116			303,518
		Total current liabilities			2,927,614			2,323,616
Long-term notes payable, less current portion					6,574,482			6,663,765
Commitments
Stockholders’ equity:
	Common stock, $.025 par value; 2,500,000 shares authorized; 1,421,652 shares issued and 1,221,652 shares outstanding at each December 31, 2000 and September 30, 2000				35,541			35,541
	Additional paid-in capital				4,051,496			4,051,496
	Retained earnings (accumulated deficit)				(174,030	)		221,816
	Less: Treasury stock, at cost: 200,000 shares				(1,461,741	)		(1,461,741	)
			Total stockholders’ equity		2,451,266			2,847,112
			Total liabilities and stockholders’ equity	$	11,953,362		$	11,834,493

See accompanying notes.

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PANVERA CORPORATION

Statements of Operations

(Unaudited)

			Three Months Ended December 31,
			2000			1999
Revenue			$	3,004,843		$	2,480,905
Operating expenses:
	Cost of revenue			1,467,990			1,156,468
	Research and development			634,001			336,541
	Selling, general and administrative			1,422,540			731,739
		Total operating expenses		3,524,531			2,224,748
Income (loss) from operations				(519,688	)		256,157
Interest income				103,534			90,274
Interest expense				(92,692	)		(95,868	)
Income (loss) before income taxes				(508,846	)		250,563
Benefit from (provision for) income taxes				113,000			(57,379	)
Net income (loss)			$	(395,846	)	$	193,184

See accompanying notes.

4

PANVERA CORPORATION

Statements of Cash Flows

(Unaudited)

			Three Months Ended
			December 31,
			2000			1999
Operating activities:
Net income (loss)			$	(395,846	)	$	193,184
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
	Depreciation and amortization			57,275			53,791
	Loss on disposal of assets			2,854			—
	Changes in operating assets and liabilities:
		Accounts receivable		416,130			(260,227	)
		Inventories		(48,672	)		(138,895	)
		Prepaid expenses		(86,930	)		(87,800	)
		Accounts payable		729,132			30,793
		Accrued compensation		(115,909	)		13,677
		Other current liabilities		(45,201	)		(43,866	)
		Unearned revenue		21,378			89,463
Net cash provided by (used in) operating activities				534,211			(149,880	)
Investing activities:
	Sale of investments — industrial revenue bond funds			1,032,094			43,810
	Sale of investments			200,000			—
	Construction in progress			(1,393,626	)		(1,180	)
	Purchases of equipment and leasehold improvements			(4,399	)		(4,914	)
	Technology license fees and patent costs			(18,225	)		(24,975	)
Net cash provided by (used in) investing activities				(184,156	)		12,741
Financing activities:
	Principal payments on indebtedness			(74,685	)		(72,666	)
Net cash used in financing activities				(74,685	)		(72,666	)
Net increase (decrease) in cash and cash equivalents				275,370			(209,805	)
Cash and cash equivalents at beginning of period				1,200,249			419,732
Cash and cash equivalents at end of period			$	1,475,619		$	209,927
Supplemental disclosure of cash flow information:
	Interest paid		$	79,813		$	169,992
	Income taxes paid		$	47,542		$	56,772

See accompanying notes.

5

PANVERA CORPORATION
Notes to Financial Statements (Unaudited)
December 31, 2000

1. Basis of Presentation

The accompanying unaudited financial statements of PanVera Corporation (“PanVera”) have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of results for a full year.

The balance sheet at September 30, 2000 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These financial statements should be read in conjunction with the audited financial statements and footnotes thereto included in the Registration Statement on Form S-4 of Aurora Biosciences Corporation, filed on February 6, 2001. (Registration No. 333-54638)

2. Inventories

Inventories consist of the following:

		December 31,		September 30,
		2000		2000
Raw materials		$	37,397	$	55,899
Work in process			120,568		98,250
Finished goods			812,240		767,384
	Total inventories	$	970,205	$	921,533

3. Subsequent Event

In March 2001, PanVera completed a merger with Aurora Biosciences Corporation (“Aurora”), a biotechnology company based in San Diego, California. Pursuant to the merger, Aurora acquired all of PanVera’s outstanding common stock in a tax-free, stock for stock transaction, for approximately 1,900,000 shares of Aurora common stock. The transaction will be accounted for using the pooling-of-interests method.

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ITEM 7.(b) Pro forma financial information.

On March 1, 2001, Aurora Biosciences Corporation (“Aurora”) completed a merger with PanVera Corporation (“PanVera”), a biotechnology company based in Madison, Wisconsin. The merger was based upon Aurora issuing or reserving for issuance an aggregate of 1,900,000 shares of its common stock to PanVera. Each share of PanVera issued and outstanding prior to the merger was exchanged for approximately 1.3422 shares of Aurora common stock. In addition, outstanding PanVera stock options were converted at the same exchange ratio into options to purchase 260,222 shares of Aurora common stock.

The following unaudited pro forma condensed combined balance sheet is based on the individual balance sheets of Aurora and PanVera as of December 31, 2000 and has been prepared to reflect the acquisition by Aurora of PanVera as if the acquisition had occurred as of December 31, 2000. The unaudited pro forma condensed combined statements of operations are provided for the fiscal years ended December 31, 2000, 1999 and 1998 giving effect to the merger as though it had occurred at the beginning of the earliest period presented. For purposes of the pro forma operating data, Aurora’s financial statements for the three years ended December 31, 2000 have been combined with PanVera’s financial statements for the three years ended September 30, 2000. In accordance with Accounting Principles Board Opinion No. 16 (“APB No. 16”), PanVera’s results of operations for the three month period ended December 31, 2000 have been added directly to PanVera’s retained earnings at December 31, 2000 and are excluded from the following pro forma condensed combined statements of operations for the year ended December 31, 2000.

The unaudited pro forma condensed combined financial statements should be read in conjunction with the historical financial statements of Aurora Biosciences Corporation and PanVera Corporation. The pro forma condensed combined financial statements are presented for comparative purposes only and do not purport to be indicative of what the actual results of operations or financial position would have been for the periods presented had the transactions occurred on the dates indicated and do not purport to indicate the results of future operations.

The pro forma financial information required by this item is set forth at the pages indicated below:

	Page
Unaudited Pro Forma Condensed Combined Balance Sheet as of December 31, 2000		8
Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 2000		9
Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 1999		10
Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 1998		11

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AURORA BIOSCIENCES CORPORATION
PRO FORMA CONDENSED COMBINED BALANCE SHEET
December 31, 2000
(Unaudited)

			Aurora		PanVera		Pro Forma		Pro Forma
			Biosciences		Corporation		Adjustments		Combined
Assets
Current assets:
	Cash and cash equivalents		$	23,093,206	$	1,475,619	$	—	$	24,568,825
	Investment securities, available-for-sale			82,067,909		—		—		82,067,909
	Accounts receivable			20,296,917		1,346,947		—		21,643,864
	Prepaid expenses and other current assets			5,798,731		1,340,973		—		7,139,704
		Total current assets		131,256,763		4,163,539		—		135,420,302
Equipment, furniture and leaseholds, net				13,110,123		2,701,589		—		15,811,712
Other assets				11,935,036		5,088,234		—		17,023,270
			$	156,301,922	$	11,953,362	$	—	$	168,255,284
Liabilities and Stockholders’ Equity
Current liabilities:
	Accounts payable and accrued compensation		$	7,984,831	$	2,322,504	$	—	$	10,307,335
	Unearned revenue			15,603,201		152,947		—		15,756,148
	Other current liabilities			4,669,905		452,163		—		5,122,068
		Total current liabilities		28,257,937		2,927,614		—		31,185,551
Noncurrent liabilities				3,381,484		6,574,482		—		9,955,966
Stockholders’ equity				124,662,501		2,451,266		—		127,113,767
			$	156,301,922	$	11,953,362	$	—	$	168,255,284

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AURORA BIOSCIENCES CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
Year ended December 31, 2000
(Unaudited)

			Aurora			PanVera			Pro Forma		Pro Forma
			Biosciences			Corporation(A)			Adjustments		Combined
Revenue			$	63,790,611		$	11,364,900		$	—	$	75,155,511
Operating expenses:
	Cost of revenue			34,110,155			5,453,157			—		39,563,312
	Research and development			14,368,497			1,803,666			—		16,172,163
	Selling, general and administrative			14,923,327			3,257,582			—		18,180,909
		Total operating expenses		63,401,979			10,514,405			—		73,916,384
Income from operations				388,632			850,495			—		1,239,127
Interest and other income				6,571,332			430,790			—		7,002,122
Interest expense				(658,402	)		(425,535	)		—		(1,083,937	)
Loss on investment due to decline in value deemed other-than-temporary				(1,369,136	)		—			—		(1,369,136	)
Income before taxes				4,932,426			855,750			—		5,788,176
Provision for income taxes				(579,000)			(291,260)			—		(870,260)
Net income			$	4,353,426		$	564,490		$	—	$	4,917,916
Basic net income per share			$	0.22							$	0.23
Diluted net income per share			$	0.20							$	0.20
Shares used in computing:
	Basic net income per share			19,911,001								21,548,495
	Diluted net income per share			22,206,792								24,093,750

(A) PanVera results of operations are for the twelve months ended September 30, 2000.

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AURORA BIOSCIENCES CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
Year ended December 31, 1999
(Unaudited)

			Aurora			PanVera			Pro Forma		Pro Forma
			Biosciences			Corporation(A)			Adjustments		Combined
Revenue			$	50,521,461		$	7,805,610		$	—	$	58,327,071
Operating expenses:
	Cost of revenue			27,941,512			3,714,964			—		31,656,476
	Research and development			11,593,538			1,255,506			—		12,849,044
	Selling, general and administrative			11,932,950			2,853,766			—		14,786,716
		Total operating expenses		51,468,000			7,824,236			—		59,292,236
Loss from operations				(946,539	)		(18,626	)		—		(965,165	)
Interest and other income				1,545,091			320,851			—		1,865,942
Interest expense				(690,869	)		(359,142	)		—		(1,050,011	)
Loss before taxes				(92,317	)		(56,917	)		—		(149,234	)
Benefit from (provision for) income taxes				(117,000	)		78,065			—		(38,935	)
Net income (loss)			$	(209,317	)	$	21,148		$	—	$	(188,169	)
Basic net loss per share			$	(0.01	)						$	(0.01	)
Diluted net loss per share			$	(0.01	)						$	(0.01	)
Shares used in computing:
	Basic net loss per share			17,019,195								18,654,898
	Diluted net loss per share			17,019,195								18,654,898

(A) PanVera results of operations are for the twelve months ended September 30, 1999.

10

AURORA BIOSCIENCES CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
Year ended December 31, 1998
(Unaudited)

			Aurora			PanVera			Pro Forma		Pro Forma
			Biosciences			Corporation(A)			Adjustments		Combined
Revenue			$	26,557,888		$	6,952,916		$	—	$	33,510,804
Operating expenses:
	Cost of revenue			23,814,409			3,295,440			—		27,109,849
	Research and development			17,145,787			1,058,176			—		18,203,963
	Selling, general and administrative			6,103,808			1,996,151			—		8,099,959
		Total operating expenses		47,064,004			6,349,767			—		53,413,771
Income (loss) from operations				(20,506,116	)		603,149			—		(19,902,967	)
Interest and other income				2,444,836			65,113			—		2,509,949
Interest expense				(645,395	)		(94,649	)		—		(740,044	)
Income (loss) before taxes				(18,706,675	)		573,613			—		(18,133,062	)
Benefit from income taxes				—			212,118			—		212,118
Net income (loss)			$	(18,706,675	)	$	785,731		$	—	$	(17,920,944	)
Basic net loss per share			$	(1.15	)						$	(1.00	)
Diluted net loss per share			$	(1.15	)						$	(1.00	)
Shares used in computing:
	Basic net loss per share			16,336,286								17,971,831
	Diluted net loss per share			16,336,286								17,971,831

(A) PanVera results of operations are for the twelve months ended September 30, 1998.

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ITEM 7.(c) Exhibits.

23.1	Consent of Arthur Andersen LLP, Independent Public Accountants.
23.2	Consent of KPMG LLP, Independent Auditors.
99.1	Proxy Statement/Prospectus dated February 6, 2001 (incorporated by reference to the Corporation’s Registration Statement on Form S-4, Registration Statement No. 333-54638 previously filed on February 6, 2001).

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SIGNATURE

      Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

AURORA BIOSCIENCES CORPORATION
By:	/s/ Stuart J.M. Collinson
	Stuart J.M. Collinson, President, Chief Executive Officer and Chairman of the Board of Directors

Date: May 4, 2001

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INDEX TO EXHIBITS

23.1	Consent of Arthur Andersen LLP, Independent Public Accountants.
23.2	Consent of KPMG LLP, Independent Auditors.
99.1	Proxy Statement/Prospectus dated February 6, 2001 (incorporated by reference to the Corporation’s Registration Statement on Form S-4, Registration Statement No. 333-54638 previously filed on February 6, 2001).

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