Unaudited Pro Forma Condensed Consolidated Financial Information
Brachytherapy Asset Disposition
On December 7, 2023, Isoray Medical, Inc. (“Isoray”), a wholly-owned subsidiary of Perspective Therapeutics, Inc. (“Perspective”) entered into an Asset Purchase Agreement by and among Isoray, Perspective, and GT Medical Technologies, Inc. (“GT Medical” or the “Purchaser”), pursuant to which Isoray agreed to sell, and the Purchaser agreed to purchase, Isoray’s commercial Cesium-131 brachytherapy business and certain related assets including inventory and intellectual property (the “Transaction”). The assets to be sold consisted primarily of customer and supplier lists, production line equipment, intellectual property associated with the brachytherapy business, computer equipment and software used in the brachytherapy business, and the assignment of the brachytherapy manufacturing facility lease in Richland, WA along with the assignment of vendor contracts. Isoray retained most liabilities that existed as of the closing date including environmental, warranty, taxes, accrued payroll and vacation, and accounts payable.
Isoray closed the Transaction on April 12, 2024 and Isoray received 279,516 shares of GT Medical’s common stock representing one-half percent (0.5%) of the fully diluted capital stock of GT Medical as of the closing, excluding Series C-1 warrants which, if exercised, will reduce Isoray's ownership to 0.44% of GT Medical's issued and outstanding capital stock on a fully diluted basis. Isoray has the right to receive certain cash royalty payments during each of the first four years beginning upon the closing date as follows:
Viewpoint Merger
As disclosed in previous filings, on February 3, 2023, Perspective acquired 100% of the issued and outstanding equity and voting shares of Viewpoint Molecular Targeting, Inc. (“Viewpoint”), in exchange for 136,545,075 shares of Perspective's common stock with a fair value of $54.6 million based on the closing market price of $0.40 per share on the acquisition date (the “Merger”). At the closing of the Merger, Perspective forgave the note receivable entered into in November 2022 and the associated accrued interest with Viewpoint that was included in note receivable. The total amount forgiven was $6.2 million, representing the $6.0 million loan and $0.2 million accrued interest. Perspective also assumed all of Viewpoint’s outstanding stock options and warrants as of the Merger date.
Overview of Pro Forma Condensed Consolidated Financial Information
The following unaudited pro forma condensed consolidated balance sheet as of December 31, 2023 assumes that the Transaction occurred as of December 31, 2023. The historical balance sheet of Perspective at December 31, 2023 includes the consolidated balance sheet of Viewpoint with all necessary adjustments as required by accounting principles generally accepted in the United States (“GAAP”) as the Merger was accounted for using the acquisition method as prescribed by GAAP.
The following unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2023, for the six-month transition period ended December 31, 2022, and for the fiscal year ended June 30, 2022 reflect Perspective’s results of operations as if the Transaction and Merger had occurred on July 1, 2021.
The unaudited pro forma condensed consolidated financial information should be read together with Perspective’s historical consolidated financial statements and accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in its Annual Report on Form 10-K for the year ended December 31, 2023 that was filed with the SEC on March 28, 2024.
The unaudited pro forma condensed consolidated financial statements are presented based on information currently available, are intended for informational purposes only, are not intended to represent what Perspective’s consolidated statements of operations and balance sheet actually would have been had the Transaction or the Merger occurred on the dates indicated above and do not reflect all actions that may be undertaken by Perspective after the closing of the Transaction. In addition, the unaudited pro forma condensed consolidated financial statements are not necessarily indicative of Perspective’s results of operations and financial position for any future period.
The “Historical Perspective Therapeutics” column in the unaudited pro forma condensed consolidated financial statements reflects Perspective’s historical condensed consolidated financial statements for the periods presented and does not reflect any adjustments related to the Transaction or the Merger except that the assets and liabilities related to the Transaction have been classified as assets held for sale for all periods presented in accordance Accounting Standards Codification 205-20, Presentation of Financial Statements – Discontinued Operations.
The information in the “Merger Pro Forma Adjustments” and the “Transaction Pro Forma Adjustments” columns in the unaudited pro forma condensed consolidated financial statements are based on available information and assumptions that Perspective management believes are reasonable, that reflect the impacts of events directly attributable to the Merger and the Transaction, respectively, that are factually supportable and, for purposes of the condensed consolidated statements of operations, are expected to have a continuing impact on Perspective. The pro forma adjustments may differ from those that have been or will be calculated to report the Cesium-131 brachytherapy asset sale as a discontinued operation in Perspective’s historical and future filings and do not reflect future events that may occur after the asset sale.
PERSPECTIVE THERAPEUTICS, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of December 31, 2023
(In thousands, except per share data)
(unaudited)
| Historical Perspective Therapeutics |
| Transaction |
| Notes | Pro Forma Combined |
| |||
ASSETS |
|
|
|
|
|
|
| |||
Current assets: |
|
|
|
|
|
|
| |||
Cash and cash equivalents | $ | 9,238 |
| $ | - |
|
| $ | 9,238 |
|
Accounts receivable, net |
| 1,165 |
|
| - |
| 3(a) |
| 1,165 |
|
Prepaid expenses and other current assets |
| 1,133 |
|
| - |
|
|
| 1,133 |
|
Current assets held for sale - discontinued operations |
| 5,301 |
|
| (5,301 | ) | 3(b) |
| - |
|
|
|
|
|
|
|
|
| |||
Total current assets |
| 16,837 |
|
| (5,301 | ) |
|
| 11,536 |
|
|
|
|
|
|
|
|
| |||
Non-current assets: |
|
|
|
|
|
|
| |||
Property and equipment, net |
| 5,576 |
|
| - |
|
|
| 5,576 |
|
Right of use asset, net |
| 747 |
|
| - |
|
|
| 747 |
|
Restricted cash |
| 182 |
|
| - |
|
|
| 182 |
|
Intangible assets, net |
| 50,000 |
|
| - |
|
|
| 50,000 |
|
Goodwill |
| 24,062 |
|
| - |
|
|
| 24,062 |
|
Other assets, net |
| 487 |
|
| 229 |
| 3(c) |
| 716 |
|
|
|
|
|
|
|
|
| |||
Total assets | $ | 97,891 |
| $ | (5,072 | ) |
| $ | 92,819 |
|
|
|
|
|
|
|
|
| |||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
| |||
Current liabilities: |
|
|
|
|
|
|
| |||
Accounts payable and accrued expenses | $ | 6,107 |
| $ | - |
|
| $ | 6,107 |
|
Lease liability |
| 46 |
|
| - |
|
|
| 46 |
|
Accrued protocol expense |
| 322 |
|
| - |
|
|
| 322 |
|
Accrued radioactive waste disposal |
| 480 |
|
| - |
|
|
| 480 |
|
Accrued payroll and related taxes |
| 3,128 |
|
| - |
|
|
| 3,128 |
|
Accrued vacation |
| 460 |
|
| - |
|
|
| 460 |
|
Notes payable, current |
| 49 |
|
| - |
|
|
| 49 |
|
Current liabilities of discontinued operations |
| 5,072 |
|
| (5,072 | ) | 3(b) |
| - |
|
|
|
|
|
|
|
|
| |||
Total current liabilities |
| 15,664 |
|
| (5,072 | ) |
|
| 10,592 |
|
|
|
|
|
|
|
|
| |||
Non-current liabilities: |
|
|
|
|
|
|
| |||
Lease liability, non-current |
| 780 |
|
| - |
|
|
| 780 |
|
Note payable |
| 1,676 |
|
| - |
|
|
| 1,676 |
|
Deferred tax liability |
| 4,592 |
|
| - |
|
|
| 4,592 |
|
|
|
|
|
|
|
|
| |||
Total liabilities |
| 22,712 |
|
| (5,072 | ) |
|
| 17,640 |
|
|
|
|
|
|
|
|
| |||
Commitments and contingencies |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
| |||
Stockholders' equity: |
|
|
|
|
|
|
| |||
Preferred stock |
| - |
|
| - |
|
|
| - |
|
Common stock |
| 282 |
|
| - |
|
|
| 282 |
|
Additional paid-in capital |
| 227,337 |
|
| - |
|
|
| 227,337 |
|
Accumulated deficit |
| (152,440 | ) |
| - |
|
|
| (152,440 | ) |
|
|
|
|
|
|
|
| |||
Total stockholders' equity |
| 75,179 |
|
| - |
|
|
| 75,179 |
|
|
|
|
|
|
|
|
| |||
Total liabilities and stockholders' equity | $ | 97,891 |
| $ | (5,072 | ) |
| $ | 92,819 |
|
PERSPECTIVE THERAPEUTICS, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2023
(In thousands, except per share data)
(unaudited)
| Historical Perspective Therapeutics |
| Historical Viewpoint (1/1/2023 to 2/3/2023) |
| Merger Pro Forma Adjustments |
| Notes | Transaction Pro Forma Adjustments |
| Notes | Pro Forma Combined |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Grant revenue | $ | 1,434 |
| $ | 84 |
| $ | - |
|
| $ | - |
|
| $ | 1,518 |
|
Gross profit |
| 1,434 |
|
| 84 |
|
| - |
|
|
| - |
|
|
| 1,518 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
| |||||
Research and development |
| 21,311 |
|
| 692 |
|
| - |
|
|
| - |
|
|
| 22,003 |
|
General and administrative |
| 21,064 |
|
| 5,627 |
|
| (9,479 | ) | 4(a) |
| - |
|
|
| 17,212 |
|
Loss on disposal of property and equipment |
| - |
|
| - |
|
| - |
|
|
| - |
|
|
| - |
|
Loss on impairment of intangible asset |
| - |
|
| - |
|
| - |
|
|
| - |
|
|
| - |
|
Total operating expenses |
| 42,375 |
|
| 6,319 |
|
| (9,479 | ) |
|
| - |
|
|
| 39,215 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Operating loss |
| (40,941 | ) |
| (6,235 | ) |
| 9,479 |
|
|
| - |
|
|
| (37,697 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Non-operating income (expense): |
|
|
|
|
|
|
|
|
|
|
|
| |||||
Interest income |
| 934 |
|
| 2 |
|
| - |
|
|
| - |
|
|
| 936 |
|
Interest expense |
| (84 | ) |
| (494 | ) |
| 354 |
| 4(c) |
| - |
|
|
| (224 | ) |
Extinguishment of debt |
| - |
|
| (21 | ) |
| - |
|
|
| - |
|
|
| (21 | ) |
Other income |
| 2 |
|
| - |
|
| - |
|
|
| - |
|
|
| 2 |
|
Equity in loss of affiliate |
| (17 | ) |
| - |
|
| - |
|
|
| - |
|
|
| (17 | ) |
Non-operating income, net |
| 835 |
|
| (513 | ) |
| 354 |
|
|
| - |
|
|
| 676 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net loss from continuing operations |
| (40,106 | ) |
| (6,748 | ) |
| 9,833 |
|
|
| - |
|
|
| (37,021 | ) |
Net loss from discontinued operations |
| (9,053 | ) |
| - |
|
| - |
|
|
| 9,053 |
| 3(d) |
| - |
|
Net loss before income taxes |
| (49,159 | ) |
| (6,748 | ) |
| 9,833 |
|
|
| 9,053 |
|
|
| (37,021 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Deferred income tax benefit |
| 2,651 |
|
| - |
|
| (2,651 | ) |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net loss | $ | (46,508 | ) | $ | (6,748 | ) | $ | 7,182 |
|
| $ | 9,053 |
|
| $ | (37,021 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Basic and diluted loss per share: |
|
|
|
|
|
|
|
|
|
|
|
| |||||
Loss from continuing operations | $ | (0.14 | ) |
|
|
|
|
|
|
|
| $ | (0.14 | ) | |||
Loss from discontinued operations |
| (0.03 | ) |
|
|
|
|
|
|
|
|
| - |
| |||
Basic and diluted loss per share | $ | (0.17 | ) |
|
|
|
|
|
|
|
| $ | (0.14 | ) | |||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Weighted average shares used in computing net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
| |||||
Basic and diluted |
| 267,643 |
|
|
|
|
|
|
|
|
|
| 267,643 |
|
PERSPECTIVE THERAPEUTICS, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Six-Months Ended December 31, 2022
(In thousands, except per share data)
(unaudited)
| Historical Perspective Therapeutics |
| Historical Viewpoint |
| Merger Pro Forma Adjustments |
| Notes | Transaction Pro Forma Adjustments |
| Notes | Pro Forma Combined |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Grant revenue | $ | - |
| $ | 783 |
| $ | - |
|
| $ | - |
|
| $ | 783 |
|
Gross profit |
| - |
|
| 783 |
|
| - |
|
|
| - |
|
|
| 783 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
| |||||
Research and development |
| 468 |
|
| 6,066 |
|
| - |
|
|
| - |
|
|
| 6,534 |
|
General and administrative |
| 4,848 |
|
| 3,621 |
|
| (1,308 | ) | 4(a) |
| - |
|
|
| 7,161 |
|
Loss on disposal of property and equipment |
| 305 |
|
| - |
|
| - |
|
|
| - |
|
|
| 305 |
|
Loss on impairment of intangible asset |
| - |
|
| - |
|
| - |
|
|
| - |
|
|
| - |
|
Total operating expenses |
| 5,621 |
|
| 9,687 |
|
| (1,308 | ) |
|
| - |
|
|
| 14,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Operating loss |
| (5,621 | ) |
| (8,904 | ) |
| 1,308 |
|
|
| - |
|
|
| (13,217 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Non-operating income (expense): |
|
|
|
|
|
|
|
|
|
|
|
| |||||
Interest income |
| 561 |
|
| 8 |
|
| (109 | ) | 4(b) |
| - |
|
|
| 460 |
|
Interest expense |
| - |
|
| (523 | ) |
| 265 |
| 4(b),4(c) |
| - |
|
|
| (258 | ) |
Extinguishment of debt |
| - |
|
| (318 | ) |
| 318 |
| 4(d) |
| - |
|
|
| - |
|
Other income |
| - |
|
| 23 |
|
| - |
|
|
| - |
|
|
| 23 |
|
Equity in loss of affiliate |
| - |
|
| - |
|
| - |
|
|
| - |
|
|
| - |
|
Non-operating income, net |
| 561 |
|
| (810 | ) |
| 474 |
|
|
| - |
|
|
| 225 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net loss from continuing operations |
| (5,060 | ) |
| (9,714 | ) |
| 1,782 |
|
|
| - |
|
|
| (12,992 | ) |
Net loss from discontinued operations |
| (2,275 | ) |
| - |
|
| - |
|
|
| 2,275 |
| 3(d) |
| - |
|
Net loss before income taxes |
| (7,335 | ) |
| (9,714 | ) |
| 1,782 |
|
|
| 2,275 |
|
|
| (12,992 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Deferred income tax benefit |
| - |
|
| - |
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net loss | $ | (7,335 | ) | $ | (9,714 | ) | $ | 1,782 |
|
| $ | 2,275 |
|
| $ | (12,992 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Basic and diluted loss per share: |
|
|
|
|
|
|
|
|
|
|
|
| |||||
Loss from continuing operations | $ | (0.04 | ) |
|
|
|
|
|
|
|
| $ | (0.05 | ) | |||
Loss from discontinued operations |
| (0.01 | ) |
|
|
|
|
|
|
|
|
| - |
| |||
Basic and diluted loss per share | $ | (0.05 | ) |
|
|
|
| 4(e) |
|
|
| $ | (0.05 | ) | |||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Weighted average shares used in computing net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
| |||||
Basic and diluted |
| 142,103 |
|
|
|
|
| 4(e) |
|
|
|
| 278,648 |
|
PERSPECTIVE THERAPEUTICS, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year-Ended June 30, 2022
(In thousands, except per share data)
(unaudited)
| Historical Perspective Therapeutics |
| Historical Viewpoint |
| Merger Pro Forma Adjustments |
| Notes | Transaction Pro Forma Adjustments |
| Notes | Pro Forma Combined |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Grant revenue | $ | - |
| $ | 2,013 |
| $ | - |
|
| $ | - |
|
| $ | 2,013 |
|
Gross profit |
| - |
|
| 2,013 |
|
| - |
|
|
| - |
|
|
| 2,013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
| |||||
Research and development |
| 850 |
|
| 6,731 |
|
| - |
|
|
| - |
|
|
| 7,581 |
|
General and administrative |
| 5,569 |
|
| 7,454 |
|
| 10,787 |
| 4(a) |
| - |
|
|
| 23,810 |
|
Loss on disposal of property and equipment |
| - |
|
| - |
|
| - |
|
|
| - |
|
|
| - |
|
Loss on impairment of intangible asset |
| - |
|
| 249 |
|
| - |
|
|
| - |
|
|
| 249 |
|
Total operating expenses |
| 6,419 |
|
| 14,434 |
|
| 10,787 |
|
|
| - |
|
|
| 31,640 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Operating loss |
| (6,419 | ) |
| (12,421 | ) |
| (10,787 | ) |
|
| - |
|
|
| (29,627 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Non-operating income (expense): |
|
|
|
|
|
|
|
|
|
|
|
| |||||
Interest income |
| 119 |
|
| 14 |
|
| - |
|
|
| - |
|
|
| 133 |
|
Interest expense |
| - |
|
| (84 | ) |
| 78 |
| 4(c) |
| - |
|
|
| (6 | ) |
Extinguishment of debt |
| - |
|
| - |
|
| - |
|
|
| - |
|
|
| - |
|
Other income |
| - |
|
| 1 |
|
| - |
|
|
| - |
|
|
| 1 |
|
Equity in loss of affiliate |
| - |
|
| - |
|
| - |
|
|
| - |
|
|
| - |
|
Non-operating income, net |
| 119 |
|
| (69 | ) |
| 78 |
|
|
| - |
|
|
| 128 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net loss from continuing operations |
| (6,300 | ) |
| (12,490 | ) |
| (10,709 | ) |
|
| - |
|
|
| (29,499 | ) |
Net loss from discontinued operations |
| (972 | ) |
| - |
|
| - |
|
|
| 972 |
| 3(d) |
| - |
|
Net loss before income taxes |
| (7,272 | ) |
| (12,490 | ) |
| (10,709 | ) |
|
| 972 |
|
|
| (29,499 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Deferred income tax benefit |
| - |
|
| - |
|
| 2,651 |
|
|
| - |
|
|
| 2,651 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net loss | $ | (7,272 | ) | $ | (12,490 | ) | $ | (8,058 | ) |
| $ | 972 |
|
| $ | (26,848 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Basic and diluted loss per share: |
|
|
|
|
|
|
|
|
|
|
|
| |||||
Loss from continuing operations | $ | (0.04 | ) |
|
|
|
|
|
|
|
| $ | (0.10 | ) | |||
Loss from discontinued operations |
| (0.01 | ) |
|
|
|
|
|
|
|
|
| - |
| |||
Basic and diluted loss per share | $ | (0.05 | ) |
|
|
|
| 4(e) |
|
|
| $ | (0.10 | ) | |||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Weighted average shares used in computing net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
| |||||
Basic and diluted |
| 141,987 |
|
|
|
|
| 4(e) |
|
|
|
| 278,532 |
|
Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements
On December 7, 2023, Isoray entered into a definitive Asset Purchase Agreement (“GT Medical APA”) to sell substantially all of the assets related to Isoray’s commercial Cesium-131 business (the “Business”) including certain equipment, certain contracts, inventory, and intellectual property to GT Medical Technologies, Inc. (“GT Medical”). Isoray retained most liabilities that existed as of the closing date including environmental, warranty, taxes, accrued payroll and vacation, and accounts payable.
Isoray closed the Transaction on April 12, 2024 and Isoray received 279,516 shares of GT Medical’s common stock representing one-half percent (0.5%) of the fully diluted capital stock of GT Medical as of the closing, excluding Series C-1 warrants which, if exercised, will reduce Isoray's ownership to 0.44% of GT Medical's issued and outstanding capital stock on a fully diluted basis. Isoray has the right to receive certain cash royalty payments during each of the first four years beginning upon the closing date as follows:
On February 3, 2023, Perspective acquired 100% of the issued and outstanding equity and voting shares of Viewpoint, in exchange for 136,545,075 shares of Perspective's common stock with a fair value of $54.6 million based on the closing market price of $0.40 per share on the acquisition date (the “Merger”). At the closing of the Merger, Perspective forgave the note receivable entered into in November 2022 and the associated accrued interest with Viewpoint that was included in note receivable. The total amount forgiven was $6.2 million, representing the $6.0 million loan and $0.2 million accrued interest. Perspective also assumed all of Viewpoint’s outstanding stock options and warrants as of the Merger date.
The accompanying unaudited pro forma condensed combined financial information and related notes were prepared in accordance with Article 11 of Regulation S-X. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2023, the six months ended December 31, 2022, and the year ended June 30, 2022 combines the historical consolidated statement of operations of Perspective and the historical statements of operations of Viewpoint, giving effect to the transaction as if it had been completed on July 1, 2021. The accompanying unaudited pro forma condensed combined balance sheet as of December 31, 2022 combines the historical consolidated balance sheet of Perspective and the historical combined balance sheet of Viewpoint, giving effect to the transaction as if it had been completed on December 31, 2022. Perspective previously had a fiscal year end of June 30 and Viewpoint has a fiscal year end of December 31. On February 6, 2023, Perspective announced the Board had approved a change in the fiscal year end from June 30 to December 31. Perspective filed a Form 10-KT reflecting this change on May 1, 2023.
The unaudited pro forma condensed combined financial statements do not include any additional charges related to restructuring or other integration activities resulting from the transaction, the timing, nature, and amount of which management cannot currently identify, and thus, such charges are not reflected in the unaudited pro forma condensed combined financial statements.
The unaudited pro forma condensed combined financial information and explanatory notes have been prepared to illustrate the effects of the transaction involving Perspective and Viewpoint under the acquisition method of accounting with Perspective as the acquirer. The unaudited pro forma condensed combined financial information is presented for informational purposes only and does not necessarily indicate the financial results of the combined company had the companies been combined at the beginning of the period presented, nor does it necessarily indicate the results of operations in future periods or the future financial position of the combined company. Under the acquisition method of accounting, the assets and liabilities of Viewpoint, as of the acquisition date, were recorded by Perspective at their respective fair values and the excess of the purchase consideration over the fair value of Viewpoint’s net assets was allocated to goodwill.
The unaudited pro forma condensed consolidated balance sheet as of December 31, 2023 and the unaudited pro forma consolidated statements of operations for the year ended December 31, 2023, the six-month transition period ended December 31, 2022, and the fiscal year ended June 30, 2022, include the following adjustments:
(in thousands) | December 31, 2023 | December 31, 2022 | ||||||
Assets held for sale of discontinued operations, current | ||||||||
Inventory | $ | 3,148 | $ | 1,409 | ||||
Prepaid expenses and other current assets | 169 | 134 | ||||||
Property and equipment, net | 1,263 | - | ||||||
Right of use asset, net | 676 | - | ||||||
Other assets, net | 45 | - | ||||||
Total current assets held for sale of discontinued operations | $ | 5,301 | $ | 1,543 | ||||
Assets held for sale of discontinued operations, non-current | ||||||||
Property and equipment, net | $ | - | $ | 1,313 | ||||
Right of use asset, net | - | 378 | ||||||
Inventory, non-current | - | 2,396 | ||||||
Other assets, net | - | 61 | ||||||
Total non-current assets of discontinued operations | $ | - | $ | 4,148 | ||||
Liabilities of discontinued operations, current | ||||||||
Lease liability | $ | 677 | $ | 276 | ||||
Asset retirement obligation | 225 | - | ||||||
Loss recognized on classification as held for sale | 4,170 | - | ||||||
Total current liabilities of discontinued operations | $ | 5,072 | $ | 276 | ||||
Liabilities of discontinued operations, non-current | ||||||||
Lease liability, non-current | $ | - | $ | 116 | ||||
Asset retirement obligation | - | 215 | ||||||
Total non-current liabilities of discontinued operations | $ | - | $ | 331 |
Year ended December 31, 2023 | Six months ended December 31, 2022 | Year ended June 30, 2022 | ||||||||||
Sales, net | $ | 6,936 | $ | 3,552 | $ | 10,795 | ||||||
Cost of sales | 6,473 | 2,735 | 6,179 | |||||||||
Gross profit | 463 | 817 | 4,616 | |||||||||
Operating expenses: | ||||||||||||
Research and development | 1,015 | 833 | 1,732 | |||||||||
Sales and marketing | 2,989 | 1,614 | 2,804 | |||||||||
General and administrative | 1,342 | 645 | 1,052 | |||||||||
Total operating expenses | 5,346 | 3,092 | 5,588 | |||||||||
Net loss from discontinued operations | (4,883 | ) | (2,275 | ) | (972 | ) | ||||||
Loss recognized on classification as held for sale | (4,170 | ) | - | - | ||||||||
Total loss from discontinued operations | $ | (9,053 | ) | $ | (2,275 | ) | $ | (972 | ) |
Perspective determined the loss recognized on classification as held for sale by identifying the assets and liabilities that are included in the GT Medical APA and are included in the table above. Additionally, the loss recognized on classification as held for sale was determined using the estimated fair value of the GT Medical stock of $229 thousand to be received less than the carrying value of the net assets to be sold. The fair value of the stock to be received was determined based on information provided to Perspective by GT Medical from a current valuation study that was prepared for them. Excluded from the calculation of the loss are contingent royalties that could be received from future sales.
Certain amounts included in the consolidated statement of cash flows related to the discontinued operations and are as follows:
Year ended December 31, | Six months ended December 31, | Year ended June 30, | ||||||||||
2023 | 2022 | 2022 | ||||||||||
Depreciation | $ | 232 | $ | 109 | $ | 204 | ||||||
Amortization | 33 | 17 | 34 | |||||||||
Write-off of inventory associated with discontinued product | 298 | - | - | |||||||||
Share-based compensation | 595 | 176 | 312 | |||||||||
Additions to property and equipment | 283 | 142 | 246 |
For the year ended December 31, 2023, the transition period ended December 31, 2022, and the year ended June 30, 2022, there was no provision (benefit) for income taxes recorded related to the discontinued operations. Additionally, Perspective is in loss position and has recorded a full valuation allowance for the deferred tax assets associated with the discontinued operations.
The merger pro forma adjustments were originally reported on Perspective’s Form 8-K/A filed on April 21, 2023. The pro forma adjustments are based on management’s current estimates and assumptions that are subject to change. The historical balance sheet of Perspective at December 31, 2023 includes the consolidated balance sheet of Viewpoint with all necessary adjustments as required by accounting principles generally accepted in the United States (“GAAP”) as the Merger was accounted for using the acquisition method as prescribed by GAAP. The following adjustments have been reflected in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2023, six months ended December 31, 2022 and for the 12 months ended June 30, 2022:
(in thousands except per share data) | Six Months Ended December 31, 2022 | Year Ended June 30, 2022 | ||||||
Pro forma basic and diluted weighted average shares | ||||||||
Historical Perspective Therapeutics weighted average shares outstanding | 142,103 | 141,987 | ||||||
Shares of Perspective Therapeutics common stock issued to Viewpoint stockholders pursuant to the purchase agreement | 136,545 | 136,545 | ||||||
Pro forma weighted average shares - basic and diluted (1) | 278,648 | 278,532 | ||||||
Pro forma basic and diluted net loss per share | ||||||||
Pro forma net loss | $ | (12,357 | ) | $ | (20,296 | ) | ||
Pro forma weighted average shares - basic and diluted (1) | 278,648 | 278,532 | ||||||
Pro forma basic and diluted net loss per share | $ | (0.04 | ) | $ | (0.07 | ) |
(1) Because the combined entity is in a net loss position, any additional shares included in the denominator of the diluted earnings per share calculation would have had an anti-dilutive effect. Therefore, weighted average shares outstanding is equal for both basic and diluted earnings per share.