Clinical Data 8K Financial Statements and Exhibits

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 15, 2010

CLINICAL DATA, INC.

(Exact name of registrant as specified in its charter)


Delaware (State of Incorporation)		000-12716 (Commission File Number)		04-2573920 (IRS Employer Identification No.)


One Gateway Center, Suite 702, Newton, Massachusetts (Address of Principal Executive Offices)		02458 (Zip Code)

Registrant’s telephone number, including area code: (617) 527-9933

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 9.01. Financial Statements and Exhibits.

Explanatory Note

Clinical Data, Inc. (“Clinical Data” or the “Company”) is currently considering the sale of its genetic testing and biomarker development business, including all assets associated with its proprietaryFAMILIONfamily of genetic tests for cardiac syndromes, and its CLIA laboratory located in New Haven, Connecticut (the “Business”). The sale would most likely include all of its tangible personal property, intellectual property rights, accounts receivable, and contractual rights owned or used by the Company in connection with the Business, including the assignment and/or sublease of certain leases for the facilities and equipment and outstanding debt related to its CLIA laboratory. The Company has not entered into a definitive agreement to sell the Business nor can it be certain that a transaction will be completed on acceptable terms.

(b)Pro forma financial information.

The following unaudited pro forma condensed financial statements include adjustments to reflect the assets and liabilities held for sale of the Business on the financial position and to exclude to results of operations of the Business. The unaudited pro forma condensed financial statements do not include any potential proceeds or other consideration to be received by the Company if the Business is sold.

The data are presented for informational purposes only and are not intended to represent or be indicative of the results of operations or financial condition of Clinical Data that would have been reported had the disposition of the Business been completed as of the dates presented, and should not be taken as representative of future results of operations or financial condition of Clinical Data. The unaudited pro forma condensed financial information should be read in conjunction with the historical consolidated financial statements and the accompanying notes of Clinical Data.

CLINICAL DATA, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS


	For the six months ended September 30, 2010									For the six months ended September 30, 2009
	Historical						Pro Forma			Historical						Pro Forma
	Clinical Data			Disposition⁽¹⁾			Clinical Data			Clinical Data			Disposition⁽¹⁾			Clinical Data
	(In thousands, except per share)

Revenues	$	8,873		$	(6,873	)	$	2,000		$	6,737		$	(6,737	)	$	—
Cost of revenues		3,238			(2,738	)		500			3,278			(3,278	)		—


Gross profit		5,635			(4,135	)		1,500			3,459			(3,459	)		—


OPERATING EXPENSES:
Research and development		20,503			(1,693	)		18,810			20,422			(1,704	)		18,718
Sales and marketing		2,845			(2,845	)		—			4,118			(4,118	)		—
General and administrative		11,113			(2,761	)⁽²⁾		8,352			10,511			(2,829	)⁽²⁾		7,682
Restructuring and lease exiting costs		—			—						1,783			—			1,783
Transaction costs incurred in connection with the Avalon ac		—			—			—			1,978			—			1,978


Total operating expenses		34,461			(7,299	)		27,162			38,812			(8,651	)		30,161


Operating loss		(28,826	)		3,164			(25,662	)		(35,353	)		5,192			(30,161	)

Interest expense		(516	)		43	⁽³⁾		(473	)		(750	)		78	⁽³⁾		(672	)
Interest expense (related party)		(3,185	)		—			(3,185	)		(4,700	)		—			(4,700	)
Interest income		15			—			15			54			—			54
Other income (expense)		1,978			—			1,978			1,841			—			1,841

Loss from continuing operations	$	(30,534	)	$	3,207		$	(27,327	)	$	(38,908	)	$	5,270		$	(33,638	)


Loss from continuing operations per basic and diluted share	$	(1.06	)				$	(0.95	)	$	(1.66	)				$	(1.44	)


Weighted average common shares outstanding		28,678						28,678			23,412						23,412

CLINICAL DATA, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS


		For the year ended March 31, 2010									For the year ended March 31, 2009									For the year ended March 31, 2008
		Historical						Pro Forma			Historical						Pro Forma			Historical						Pro Forma
		Clinical Data			Disposition⁽¹⁾			Clinical Data			Clinical Data			Disposition⁽¹⁾			Clinical Data			Clinical Data			Disposition⁽¹⁾			Clinical Data
	(In thousands, except per share)
Consolidated Statements of Operations
Revenues		$	13,085		$	(13,085	)	$	—		$	10,442		$	(10,442	)	$	—		$	5,107		$	(5,107	)	$	—
Cost of revenues			6,244			(6,244	)		—			6,489			(6,489	)		—			2,627			(2,627	)		—


Gross profit			6,841			(6,841	)		—			3,953			(3,953	)		—			2,480			(2,480	)		—


OPERATING EXPENSES:
Research and development			56,785			(3,159	)		53,626			44,134			(1,048	)⁽⁴⁾		43,086			16,889			(349	)⁽⁴⁾		16,540
Sales and marketing			8,155			(8,155	)		—			7,764			(7,764	)		—			3,612			(3,612	)		—
General and administrative			23,699			(5,122	)⁽²⁾		18,577			19,730			(4,100	)⁽²⁾		15,630			16,806			(1,224	)⁽²⁾		15,582
Restructuring and lease exiting costs			2,447			—			2,447			—			—			—			—			—			—
Purchased in-process research and development			—			—			—			55,100			—			55,100			—			—			—
Transaction costs incurred in connection with the Avalon acquisition			1,978			—			1,978			—			—			—			—			—			—


Total operating expenses			93,064			(16,436	)		76,628			126,728			(12,912	)		113,816			37,307			(5,185	)		32,122


Operating loss			(86,223	)		9,595			(76,628	)		(122,775	)		8,959			(113,816	)		(34,827	)		2,705			(32,122	)

Interest expense			(1,367	)		126	⁽³⁾		(1,241	)		(1,257	)		191	⁽³⁾		(1,066	)		(76	)		73	⁽³⁾		(3	)
Interest expense (related party)			(7,761	)		—			(7,761	)		(545	)		—			(545	)		—			—			—
Interest income			80			—			80			716			—			716			2,020			—			2,020
Other income (expense)			1,771			—			1,771			179			—			179			305			—			305

Loss from continuing operations before taxes			(93,500	)		9,721			(83,779	)		(123,682	)		9,150			(114,532	)		(32,578	)		2,778			(29,800	)
Benefit from (provision for) income taxes			—			—			—			—			—			—			230			—			230


Net (loss) income from continuing operations		$	(93,500	)	$	9,721		$	(83,779	)	$	(123,682	)	$	9,150		$	(114,532	)	$	(32,348	)	$	2,778		$	(29,570	)


Loss per basic and diluted share		$	(3.77	)				$	(3.38	)	$	(5.63	)				$	(5.22	)	$	(1.69	)				$	(1.55	)


Weighted average shares outstanding, basic and diluted			24,769						24,769			21,962						21,962			19,081						19,081

CLINICAL DATA, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED
CONDENSED BALANCE SHEETS


	As of September 30, 2010									As of March 31, 2010
	Historical						Pro Forma			Historical						Pro Forma
	Clinical Data			Disposition⁽¹⁾			Clinical Data			Clinical Data			Disposition⁽¹⁾			Clinical Data
	(In thousands)

ASSETS
Current Assets:
Cash and cash equivalents	$	47,027		$	—		$	47,027		$	49,245		$	—		$	49,245
Accounts receivable, net		2,972			(2,972	)		—			2,851			(2,851	)		—
Prepaid expenses and other current assets		1,543			(730	)		813			1,488			(639	)		849
Assets held for sale		—			8,809			8,809			—			9,304			9,304

Total current assets		51,542			5,107			56,649			53,584			5,814			59,398


Property, plant and equipment, net		2,317			(1,670	)		647			2,795			(2,061	)		734
Goodwill		31,849			—			31,849			31,849			—			31,849
Intangibles assets, net		9,791			(3,437	)		6,354			10,665			(3,753	)		6,912
Other assets, net		61			—			61			62			—			62


TOTAL ASSETS	$	95,560		$	—		$	95,560		$	98,955		$	—		$	98,955


LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Current portion of long-term debt	$	6,115		$	(1,015	)	$	5,100		$	6,635		$	(1,035	)	$	5,600
Current portion of capital lease obligations		143			(96	)		47			138			(93	)		45
Accounts payable		2,355			—			2,355			5,550			—			5,550
Accrued expenses and other current liabilities		9,864			(1,122	)		8,742			25,065			(1,336	)		23,729
Liabilities held for sale		—			2,255			2,255			—			2,764			2,764

Total current liabilities		18,477			22			18,499			37,388			300			37,688


Long-Term Liabilities:
Long-term debt, net of current portion		8,800						8,800			11,329			(229	)		11,100
Convertible note payable (related-party), net of unamortized discount		30,878			—			30,878			30,129			—			30,129
Capital lease obligations, net of current portion		84			(22	)		62			157			(71	)		86
Contingent acquisition costs		15,372			—			15,372			16,039			—			16,039
Other long-term liabilities		15						15			20						20

Total long-term liabilities		55,149			(22	)		55,127			57,674			(300	)		57,374


Stockholders’ equity:
Common stock		299						299			265						265
Additional paid-in capital		391,886			—			391,886			343,345			—			343,345
Accumulated deficit		(370,251	)					(370,251	)		(339,717	)					(339,717	)

Total stockholders’ equity		21,934			—			21,934			3,893			—			3,893


TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	95,560		$	—		$	95,560		$	98,955		$	—		$	98,955

Notes to Unaudited Pro Forma Condensed Financial Statements

	(1)		Clinical Data, Inc. is currently considering the sale of its genetic testing and biomarker development business, including all assets associated with its proprietaryFAMILION family of genetic tests for cardiac syndromes, and its CLIA laboratory located in New Haven, Connecticut; (the “Business”). The sale would most likely include all of its tangible personal property, intellectual property rights, accounts receivable, and contractual rights owned or used by the Company in connection with the Business, including the assignment and/or sublease of certain leases for the facilities and equipment and outstanding debt related to its CLIA laboratory. The unaudited pro forma condensed financial statements include adjustments to reflect the assets and liabilities held for sale related to the Business on the financial position and to exclude to results of operations of the Business. The unaudited pro forma condensed financial statements do not include any potential proceeds or other consideration to be received by the Company if the Business is sold.

	(2)		Includes amortization of intangible assets related to the clinical laboratory and biomarkers for the six months ended September 30, 2010 and 2009 of $445,000 and $592,000, respectively, and for the years ended March 31, 2010, 2009 and 2008 of $865,000, $600,000 and $446,000 respectively. This does not include any allocation of corporate overhead costs such as legal, accounting, human resources and information technology.

	(3)		To adjust interest expense to reflect the pro forma effects of the elimination of the long-term debt and capital leases related to the Business.

	(4)		The Company did not segregate research and development expenses related to the biomarkers prior to fiscal year 2010. The biomarkers largely consist of the biomarkers PGxHealth, LLC acquired from Epidauros Biotechnologie AG in December 2008. The Company does not believe that research and development expenses related to biomarkers during the fiscal year ended March 31, 2009 and 2008 were material. The Company did not segregate research and development expenses related to the development of new genetic tests prior to fiscal year 2009. The Company does not believe that research and development expenses related to the development of new genetic tests during the fiscal year ended March 31, 2008 were material.

SIGNATURES

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


	Clinical Data, Inc.
	By:	/s/ C. Evan Ballantyne
		C. Evan Ballantyne
		Executive Vice President and Chief Financial Officer

DATE: November 15, 2010

Clinical Data (CLDA) Inactive 8-KFinancial Statements and Exhibits