Exhibit 99.1 Pro Forma Financial Statements
Introduction
On April 14, 2003 the Company sold to Niche Marketing the assets and
worldwide ownership rights to the REALM(R) Women, REALM(R) Men and inner
REALM(R) product lines. Included in the sale were all trademarks, trade names,
trade dress, goodwill and inventory. The following pro forma balance sheet and
income statement presents the effect that the sale of REALM(R) Women, REALM(R)
Men and inner REALM(R) product line would have had on the Company's 2002
operating results and on the year-end balance sheet.
Human Pheromone Sciences, Inc.
Consolidated Balance Sheet - Pro Forma
Previously Pro Forma
(in thousands except share data) reported Adjustments balance
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Assets
Current assets:
Cash and cash equivalents $ 1,394 $ 1,429 $ 2,823
Accounts receivable, net of allowances of $70 249 70 319
Inventory, net 529 (379) 150
Other current assets 26 -- 26
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Total current assets 2,198 1,120 3,318
Property and equipment, net 5 -- 5
Product licenses 149 (99) 50
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$ 2,352 $ 1,021 $ 3,373
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Liabilities, Convertible Redeemable Preferred Stock and
Shareholders' Deficiency
Current liabilities:
Accounts payable $ 201 $ (72) $ 129
Deferred income 315 (315) --
Accrued income taxes -- 111 111
Accrued professional fees 57 -- 57
Accrued vacation 34 -- 34
Other accrued expenses 19 -- 19
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Total current liabilities 626 (276) 350
Commitments and Contingencies
Convertible redeemable preferred stock:
Preferred stock, issuable in series, no par value,
10,000,000 shares authorized:
Series AA 1,433,333 convertible shares issued
and outstanding, total liquidation value $2,150; 2,146 -- 2,146
Series BB 17,448 convertible shares issued and
outstanding, total liquidation value $1,745 1,560 -- 1,560
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Total convertible redeemable preferred stock 3,706 -- 3,706
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Shareholders' deficiency:
Common stock, no par value, 13,333,333 shares
authorized, 3,429,839 shares issued and outstanding 17,667 -- 17,667
Foreign currency translation (66) -- (66)
Accumulated deficit (19,581) 1,297 (18,284)
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Total shareholders' deficiency (1,980) 1,297 (683)
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$ 2,352 $ 1,021 $ 3,373
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Human Pheromone Sciences, Inc.
Consolidated Statements of Operations and Comprehensive Loss - Pro Forma
Year ending December 31, 2002
Previously Pro Forma
(in thousands except per share data) reported Adjustments balance
- ------------------------------------------------------ -------- ----------- -------
Net revenue, including license fees of $463 $ 1,956 $(1,403) $ 553
Cost of goods sold 693 (542) 151
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Gross profit 1,263 (861) 402
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Operating expenses:
Research and development 296 -- 296
Selling, general and administrative 1,140 (94) 1,046
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Total operating expenses 1,436 (94) 1,342
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Loss from operations (173) (767) (940)
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Other (expense) income
Interest income (expense) 21 -- 21
Other (expense) (61) 61 --
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Total other income (expense) (40) 61 21
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Net loss from continuing operations (213) (706) (919)
Net income and net gain on assets to be sold -- 2,003 2,003
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Net income (loss) available to common shareholders (213) 1,297 1,084
Other comprehensive income (loss) - translation adjustment 2 -- 2
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Comprehensive income (loss) $ (211) $ 1,297 $ 1,086
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Net (loss) per common share-basic
From continuing operations $ (0.06) $ (0.20) $ (0.26)
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Net income (loss) $ (0.06) $ 0.37 $ 0.31
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Net (loss) per common share-fully diluted
From continuing operations $ (0.06) $ (0.20) $ (0.26)
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Net income (loss) (0.06) 0.25 0.19
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Weighted average common shares outstanding - basic 3,430 3,430
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Weighted average common shares outstanding - fully diluted 3,430 5,695
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Human Pheromone Sciences, Inc.
Notes to Pro Forma Financial Statements
December 31, 2002
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Net Earnings (Loss) Per Share
The Company follows the provisions of SFAS No. 128, Earnings Per Share.
SFAS No. 128 provides for the calculation of "Basic" and Diluted" earning per
share. Basic earnings (loss) per share is computed using the weighted-average
number of common shares outstanding. Diluted earnings (loss) per share are
computed using the weighted-average number of common shares and dilutive common
shares outstanding during the period. For the years ended December 31, 2002
options to purchase 482,000 shares of common stock, respectively, were excluded
from the computation of diluted earnings per share since their effect would be
antidilutive.