Exhibit 99.2
UNAUDITED PRO FORMA COMBINED BALANCE SHEET INFORMATION
The following unaudited pro forma combined Balance Sheet information combines the consolidated historical Balance Sheet of MYnd Analytics, Inc., a Delaware corporation (“MYnd”) and the consolidated historical Balance Sheet of Emmaus Life Sciences, Inc., a Delaware corporation (“Emmaus”) as of September 30, 2018, following the completion of a proposed reverse merger transaction (the “Reverse Merger”), in which Athena Merger Sub, Inc., (“Merger Sub”) a Delaware corporation that was newly-created as a wholly-owned subsidiary of MYnd (the “Company”) merged with and into Emmaus, and Emmaus remained as the surviving corporation of the Reverse Merger, becoming a wholly-owned subsidiary of the Company. Subject to the terms of the Merger Agreement, at the effective time of the Merger, Emmaus stockholders will receive a number of newly issued shares of MYnd common stock determined using the exchange ratio described previously in exchange for their shares of Emmaus stock. Following the Reverse Merger, stockholders of Emmaus will become the majority owners of MYnd. The combined company, led by Emmaus’ management team, is expected to be named “Emmaus Life Sciences, Inc.” Prior to the closing of the Reverse Merger, MYnd will seek shareholder approval to conduct a reverse split of its outstanding shares to satisfy listing requirements of the Nasdaq Capital Market (the “NasdaqCM”). The pro forma combined Balance Sheet presented herein reflects the effects of the Reverse Merger and exchange of shares (collectively the “Transactions”) as if they had been consummated on September 30, 2018.
The following unaudited pro forma combined Balance Sheet information is presented to illustrate the estimated effects of the Transactions. The unaudited pro forma combined Balance Sheet was prepared using the historical financial statements of MYnd Analytics, Inc. and Emmaus Life Sciences, Inc, as of September 30, 2018.
The historical financial information has been adjusted to give effect to pro forma events that are directly attributable to the Transactions and factually supportable.
The following information should be read in conjunction with the pro forma combined Balance Sheet information.
| | • | | Accompanying notes to the unaudited pro forma combined Balance Sheet information, |
| | • | | Separate historical financial statements of MYnd Analytics Inc. for the year ended September 30, 2018 as filed in its annual report on Form 10-K with the Securities and Exchange Commission, and |
| | • | | Separate historical financial statements of Emmaus Life Sciences, Inc. for the three and nine months ended September 30, 2018 as filed in its quarterly report on Form 10-Q with the Securities and Exchange Commission including the Income Statements and footnotes thereto. |
The unaudited pro forma combined Balance Sheet information is presented for informational purposes only. The pro forma information is not necessarily indicative of what the financial position actually would have been had the Transactions been completed at the dates indicated. In addition, the unaudited pro forma combined Balance Sheet information does not purport to project the future financial position or operating results of the combined company.
The unaudited pro forma combined Balance Sheet was prepared using the reverse acquisition application of the acquisition method of accounting as described in ASC 805-40-05-2, with Emmaus treated as the acquiror for U.S. GAAP accounting and financial reporting purposes. Accordingly, the unaudited pro forma combined Balance Sheet is presented as a continuation of Emmaus financial statements with an adjustment to reflect the issued equity capital of the former MYnd Analytics, Inc., the legal parent.
The information contained herein is preliminary and is subject to change as the parties to the Reverse Merger seek to satisfy the condition to closing of the Reverse Merger.
Investors should be aware that the Reverse Merger may not close, that the terms may change, that the spin-off of the MYnd subsidiary may not be completed as planned and that other changes may occur prior to the Closing thereof (if any).
UNAUDITED PRO FORMA COMBINED BALANCE SHEET OF EMMAUS LIFE SCIENCES, INC.
SEPTEMBER 30, 2018
| | | Historical | | | | | | | | | | |
| Assets | | Emmaus | | | Mynd | | | Pro Forma Adjustments | | | Notes | | | Emmaus Combined | |
| Current Assets | | | | | | | | | | | | | | | | | | | | |
| Cash and cash equivalents | | $ | 16,662,211 | | | $ | 3,254,700 | | | $ | (3,254,700 | ) | | | (6) | | | $ | 16,662,211 | |
| Accounts receivable, net | | | 1,415,208 | | | | 63,300 | | | | (63,300 | ) | | | (6) | | | | 1,415,208 | |
| Inventories, net | | | 3,347,229 | | | | — | | | | | | | | | | | | 3,347,229 | |
| Investment in marketable securities | | | 61,585,792 | | | | — | | | | | | | | | | | | 61,585,792 | |
| Marketable securities, pledged to creditor | | | 345,510 | | | | — | | | | | | | | | | | | 345,510 | |
| Prepaid expenses and other current assets | | | 319,143 | | | | 192,600 | | | | (192,600 | ) | | | (6) | | | | 319,143 | |
| Total current assets | | | 83,675,093 | | | | 3,510,600 | | | | (3,510,600 | ) | | | | | | | 83,675,093 | |
| | | | | | | | | | | | | | | | | | | | | |
| Property and equipment, net | | | 152,490 | | | | 110,800 | | | | (110,800 | ) | | | (6) | | | | 152,490 | |
| Intangible assets | | | — | | | | 116,500 | | | | (116,500 | ) | | | (6) | | | | — | |
| Goodwill | | | — | | | | 1,386,800 | | | | 28,910,000 | | | | (4) | | | | 28,910,000 | |
| | | | | | | | | | | | (1,386,800 | ) | | | (6) | | | | | |
| Other noncurrent assets | | | 977,990 | | | | 27,100 | | | | (27,100 | ) | | | (6) | | | | 977,990 | |
| Total Assets | | $ | 84,805,573 | | | $ | 5,151,800 | | | $ | 23,758,200 | | | | | | | $ | 113,715,573 | |
| | | | | | | | | | | | | | | | | | | | | |
| Liabilities and Stockholders’ Equity | | | | | | | | | | | | | | | | | | | | |
| Current Liabilities | | | | | | | | | | | | | | | | | | | | |
| Accounts payable and accrued expenses | | $ | 7,542,026 | | | $ | 1,004,400 | | | $ | (1,004,400 | ) | | | (6) | | | $ | 7,542,026 | |
| Deferred revenue | | | — | | | | 159,700 | | | | (159,700 | ) | | | (6) | | | | — | |
| Deferred rent | | | 13,915 | | | | — | | | | | | | | | | | | 13,915 | |
| Notes payable, net | | | 4,384,241 | | | | — | | | | | | | | | | | | 4,384,241 | |
| Notes payable to related parties, net | | | 1,344,973 | | | | — | | | | | | | | | | | | 1,344,973 | |
| Convertible notes payable, net | | | 14,137,645 | | | | — | | | | (12,723,881 | ) | | | (3) | | | | 1,413,765 | |
| Convertible notes payable to related parties, net | | | 400,000 | | | | — | | | | (360,000 | ) | | | (3) | | | | 40,000 | |
| Other current liabilities | | | 2,138,562 | | | | 1,300 | | | | (1,300 | ) | | | (6) | | | | 2,138,562 | |
| Total current liabilities | | | 29,961,362 | | | | 1,165,400 | | | | (14,249,281 | ) | | | | | | | 16,877,482 | |
| | | | | | | | | | | | | | | | | | | | | |
| LONG-TERM LIABILITIES | | | | | | | | | | | | | | | | | | | | |
| Deferred rent | | | 273,150 | | | | — | | | | | | | | | | | | 273,150 | |
| Other long-term liabilities | | | 39,531,500 | | | | 112,200 | | | | (112,200 | ) | | | (6) | | | | 39,531,500 | |
| Warrant derivative liabilities | | | 1,722,000 | | | | — | | | | | | | | | | | | 1,722,000 | |
| Notes payable, net | | | 6,670,000 | | | | 587,700 | | | | (587,700 | ) | | | (6) | | | | 6,670,000 | |
| Convertible notes payable, net | | | 5,258,462 | | | | — | | | | (4,732,616 | ) | | | (3) | | | | 525,846 | |
| Convertible notes payable to related parties, net | | | 12,934,388 | | | | — | | | | (11,640,949 | ) | | | (3) | | | | 1,293,439 | |
| Total Liabilities | | | 96,350,862 | | | | 1,865,300 | | | | (31,322,746 | ) | | | | | | | 66,893,417 | |
| | | | | | | | | | | | | | | | | | | | | |
| STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | | |
| Preferred stock — par value $0.001 per share, 20,000,000 shares authorized, none issued and outstanding | | | — | | | | 1,100 | | | | (1,100 | ) | | | (1) | | | | — | |
| Common stock — par value $0.001 per share, 100,000,000 shares authorized, 35,952,805 shares issued and outstanding at September 30, 2018 | | | 35,953 | | | | 7,400 | | | | 1,100 | | | | (1) | | | | 38,074 | |
| | | | | | | | | | | | 2,121 | | | | (2) | | | | | |
| | | | | | | | | | | | (8,500 | ) | | | (5) | | | | | |
| Additional paid-in capital | | | 126,137,862 | | | | 89,257,700 | | | | 29,457,446 | | | | (3) | | | | 184,503,187 | |
| | | | | | | | | | | | (2,121 | ) | | | (2) | | | | | |
| | | | | | | | | | | | 8,500 | | | | (5) | | | | | |
| | | | | | | | | | | | 28,910,000 | | | | (4) | | | | | |
| | | | | | | | | | | | (85,979,700 | ) | | | (5) | | | | | |
| | | | | | | | | | | | (3,286,500 | ) | | | (6) | | | | | |
| Accumulated other comprehensive income (loss) | | | (75,428 | ) | | | — | | | | | | | | | | | | (75,428 | ) |
| Accumulated deficit | | | (137,643,676 | ) | | | (85,245,300 | ) | | | 85,245,300 | | | | (5) | | | | (137,643,676 | ) |
| Non-controlling interest | | | — | | | | (734,400 | ) | | | 734,400 | | | | (5) | | | | — | |
| Total stockholders’ equity (deficit) | | | (11,545,289 | ) | | | 3,286,500 | | | | 55,080,946 | | | | | | | | 46,822,157 | |
| Total liabilities & stockholders’ equity | | $ | 84,805,573 | | | $ | 5,151,800 | | | $ | 23,758,200 | | | | | | | $ | 113,715,573 | |
NOTES TO UNAUDITED PRO FORMA
COMBINED BALANCE SHEET INFORMATION
| | Description of Transaction and Basis of Presentation |
On January 4, 2019, MYnd entered into a Definitive Merger Agreement relating to a proposed reverse merger transaction pursuant to an agreement and plan of merger, in which Merger Sub, a Delaware corporation that was newly-created as a wholly-owned subsidiary of Mynd, will merge with and into Emmaus, and Emmaus will remain as the surviving corporation of the Reverse Merger, becoming a wholly-owned subsidiary of Mynd. As a result, the historical financial statements of Emmaus would constitute the historical financial statements of the merged companies.
There were no inter-company balances and transactions between MYnd and Emmaus as of the dates and for the periods of these pro forma combined financial statements.
The pro forma adjustments included in the unaudited pro forma combined Balance Sheet is as follows:
| 1) | To record the conversion of MYnd preferred stock into common stock concurrent with the Reverse Merger. |
| 2) | To record the issuance of 94.1% of MYnd fully diluted shares in exchange for 100% of Emmaus Life Sciences, Inc. shares. |
| 3) | To record the conversion of 90% of the convertible debt held by Emmaus concurrent with the Reverse Merger which amount is subject to change and which amount has been proposed by Emmaus, but is not assured and is subject to change. |
| 4) | To record goodwill associated with the fair value of the shares received by the MYnd shareholders. |
| 5) | To eliminate the equity accounts of MYnd outstanding concurrent with the Reverse Merger. |
| 6) | To eliminate the asset and liabilities of MYnd outstanding concurrent with the Reverse Merger. The spin-off is subject to various conditions outside the control of MYnd and may not be completed in its entirety, if at all. |
