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Exhibit 99.4
Pro Forma Financial Statements
Background Information
On October 21, 1996 (the "Closing Date"), Nu-Tech Bio-Med, Inc., a Delaware
corporation (the "Company" or "Nu-Tech") acquired substantially all of the
operating assets of Prompt Medical Billing Services, Inc.("Prompt"), a medical
billing service business in Miami, Florida. The acquisition was in the form of
a purchase.
The Company acquired the assets for a total consideration of $675,000 consisting
of $100,000 in cash and 37,404 shares of common stock of Nu-Tech. The purchase
price is subject to the following adjustments:
1. A decrease in the purchase price equal to 50% of the accounts
receivable as of the Closing Date,
2. A decrease in the purchase price in the event that the average annual
revenues, as defined under the agreement is less than the greater of
(a) the pre-closing revenue, as defined under the agreement or (b)
$185,000, and
3. An increase in the purchase price based upon market value of the
Nu-Tech common stock at the completion of the escrow period.
All consideration paid by the Company has been placed in escrow for a period up
to two years, to be released in eight equal quarterly installments.
Additionally, the Company has entered into a two-year employment agreement and a
two-year consulting agreement with a former principal and executive officer of
Prompt and an affiliated company.
Basis of Accompanying Unaudited Pro Forma Combined Financial Statements
The results of Prompt's operations will be included in the Company's operating
results as of October 21, 1996, the closing date of the acquisition. The
Unaudited Pro Forma Combined Balance Sheet assumes that the acquisition of
Prompt occurred on June 30, 1996. The Unaudited Pro Forma Combined Statements
of Operations combines the historical results of operations of Prompt for the
year ended December 31, 1995 and the six months ended June 30, 1996 assuming
the acquisition occurred on January 1, 1995 and January 1, 1996, respectively.
The unaudited pro forma combined financial statements do not reflect cost
savings and synergies which might be achieved from the acquisition as well as
certain contingent purchase price adjustments.
The Unaudited Pro Forma Combined Balance Sheet includes direct transaction
costs associated with the acquisition. The actual allocation of the final
purchase price may be different from that reflected in the pro forma combined
condensed financial statements. The Company has not yet completed its
evaluation of the carrying value of the intangible assets acquired and the
appropriateness of the amortization period. Such evaluation is expected to be
completed prior to the filing of the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1996.
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Management believes that the assumptions used in preparing these unaudited pro
forma combined financial statements provide a reasonable basis for presenting
all of the significant effects of the acquisition. These unaudited pro forma
combined financial statements do not purport to be indicative of the results
which actually would have been obtained if the acquisition had been effected on
the date indicated or of those results which may be achieved in the future. The
pro forma combined financial statements should be read in conjunction with the
consolidated financial statements included in the Nu-Tech's Annual Report on
Form 10-KSB for the year ended December 31, 1995 and on Form 10-QSB for the six
month period ended June 30, 1996.
Pro Forma Adjustments
A summary of the Pro Forma Adjustments is set forth as follows:
(a) To record the cost of the acquired assets (cash and common shares issued)
and the excess of such costs over the fair value of assets acquired
(goodwill); and to reflect the elimination of assets and liabilities not
acquired or assumed in the acquisition.
(b) To record direct costs of the acquisition including legal and accounting
services.
(c) To record goodwill amortization expense.
(d) To record amounts payable under compensation and consulting agreements less
amounts previously recorded as compensation.
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Nu-Tech Bio-Med
Unaudited Pro Forma Combined Balance Sheet
Nu-Tech Prompt Medical
Historical Historical Pro Forma Pro Forma
June 30, 1996 June 30, 1996 Adjustments Combined
------------- ------------- ----------- --------
ASSETS
Current Assets:
Cash and cash equivalents $ 4,062,082 $ 37,272 $ (137,272) a $ 3,962,082
Accounts receivable, net 28,368 46,356 (46,356) a 28,368
Prepaid expenses 95,034 - - 95,034
Other current assets 30,517 - - 30,517
------------ ----------- ----------- -------------
Total current assets 4,216,001 83,628 (183,628) 4,116,001
Equipment and leasehold improvements, net 431,818 - - 431,818
Acquisition costs 322,110 - - 322,110
Patents, net 143,321 - - 143,321
Goodwill, net 271,316 - 715,000 a,b 986,316
Other assets 44,766 - - 44,766
------------ ----------- ----------- -------------
Total Assets $ 5,429,332 $ 83,628 $ 531,372 $ 6,044,332
============ =========== =========== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 171,543 $ 20,296 $ (20,296) a $ 171,543
Accrued expenses 568,686 16,125 23,875 a,b 608,686
Contract payable 65,571 - - 65,571
Current portion of long term debt 202,633 - - 202,633
Current portion of capitalized lease obligations 14,185 - - 14,185
------------ ----------- ----------- -------------
Total current liabilities 1,022,618 36,421 3,579 1,062,618
Debt 216,838 - - 216,838
Capitalized lease obligations 26,236 - - 26,236
Deferred income 5,540 - - 5,540
------------ ----------- ----------- -------------
Total liabilities 1,271,232 36,421 3,579 1,311,232
Stockholders' equity:
Preferred stock - - -
Common stock 19,921 1,000 (626) a 20,295
Capital in excess of par 20,194,991 17,916 556,710 a 20,769,617
Deferred consulting expense (123,750) - - (123,750)
Unvested stock grant (491,658) - - (491,658)
Retained Earnings - 28,291 (28,291) a -
Deficit accumulated during development stage (15,441,404) - - (15,441,404)
------------ ----------- ----------- -------------
Total stockholders' equity 4,158,100 47,207 527,793 4,733,100
============ =========== =========== =============
Total Liabilities and Stockholders' Equity $ 5,429,332 $ 83,628 $ 531,372 $ 6,044,332
============ =========== =========== =============
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Nu-Tech Bio-Med
Unaudited Pro Forma Combined Statement of Operations
Nu-Tech Prompt Medical
Historical Historical
For the year ended For the year ended Pro Forma Pro Forma
December 31, 1995 December 31, 1995 Adjustments Combined
------------------ ------------------ ----------- -----------
Revenues
Assay sales $ 161,701 $ - $ - $ 161,701
Investment and interest income 158,977 600 - 159,577
Fee income - 202,185 - 202,185
Other 2,100 - - 2,100
---------------- ----------- ----------- ------------
Total revenues 322,778 202,785 - 525,563
Expenses
General and administrative 1,430,354 141,637 18,400d 1,590,391
Laboratory expenses 186,405 - - 186,405
Research and development 77,066 - - 77,066
Interest 33,514 - - 33,514
Rent 24,972 - - 24,972
Depreciation and amortization 659,424 - 66,500c 725,924
---------------- ----------- ----------- ------------
Total expenses 2,411,735 141,637 84,900 2,638,272
================ =========== =========== ============
Net income (loss) $ (2,088,957) $ 61,148 $ (84,900) $(2,112,709)
================ =========== =========== ============
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Nu-Tech Bio-Med
Unaudited Pro Forma Combined Statement of Operations
Nu-Tech Prompt Medical
Historical Historical
For the six For the six
months ended months ended Pro Forma Pro Forma
June 30, 1996 June 30, 1996 Adjustments Combined
------------- -------------- ------------ ------------
Revenues
Assay sales $ 48,052 $ - $ - $ 48,052
Investment and interest income 79,573 259 - 79,832
Fee income - 120,192 - 120,192
Other - - - -
------------- --------------- --------- -------------
Total revenues 127,625 120,451 - 248,076
Expenses
General and administrative 895,885 42,285 40,000d 978,170
Laboratory expenses 79,419 - - 79,419
Research and development 46,704 - - 46,704
Interest 15,480 - - 15,480
Rent 41,096 - - 41,096
Depreciation and amortization 613,923 - 33,250c 647,173
------------- --------------- --------- -------------
Total expenses 1,692,507 42,285 73,250 1,808,042
============= =============== ========= =============
Net income (loss) $ (1,564,882) $ 78,166 $(73,250) $ (1,559,966)
============= =============== ========= =============