1
T CELL SCIENCES, INC.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited financial statements have been derived from statements
previously presented in the Company's Annual Report on Form 10-K for the year
ended December 31, 1994, and the Company's Quarterly Report on Form 10-Q for the
Quarter and Nine Months Ended September 30, 1995, and should be read in
conjunction with the financial statements and notes thereto included in such
reports. The unaudited balance sheet presents the financial position of the
Company as of September 30, 1995 assuming the sale of certain of the assets of
the research products and operations (the "Assets") of its wholly-owned
subsidiary T Cell Diagnostics, Inc. to Endogen, Inc. ("Endogen") had occurred on
that date. In addition, the unaudited statements of operations for the year
ended December 31, 1994 and the nine months ended September 30, 1995 present the
results of operations of the Company for the periods then ended assuming the
sale of the Assets had occurred immediately prior to commencement of the
statement of operations period.
The unaudited pro forma adjustments are based upon available information and
certain assumptions that management believes are reasonable in the
circumstances. The unaudited pro forma consolidated financial information
neither purports to represent what the Company's financial position or results
of operations would actually have been if the sale of the Assets to Endogen had
occurred on January 1, 1994, January 1, 1995 or September 30, 1995 nor to
project the Company's financial position or results of operations for any future
date or period.
2
T CELL SCIENCES, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)
September 30, 1995
As Reported Adjustments(1) Pro Forma
========================================================================================
ASSETS
Current Assets:
Cash and cash equivalents $ 6,230,896 $ (452,153)(b)(c) $ 5,778,743
Accounts receivable, net 299,630 (286,997) 12,633
Inventories, net 521,969 (521,969) --
Notes receivable, including current
portion of long-term note -- 832,153 (a)(b) 832,153
Prepaid and other current assets 682,995 (210,738) 472,257
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Total Current Assets 7,735,490 (639,704) 7,095,786
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Property and equipment, net 1,295,781 (587,733)(b)(c) 708,048
Note receivable -- 1,520,000 (a) 1,520,000
Other noncurrent assets 2,641,288 (80,897) 2,560,391
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Total Assets $ 11,672,559 $ 211,666 $ 11,884,225
========================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 833,579 $ (267,920) $ 565,659
Accrued Expense 994,752 99,156 (d) 1,093,908
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Total Current Liabilities 1,828,331 (168,764) 1,659,567
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Collaborator Advance 181,573 -- 181,573
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Stockholders' Equity
Preferred stocks at par value -- -- --
Common stock at par value 17,112 -- 17,112
Additional paid-in capital 55,866,408 -- 55,866,408
Common treasury stock at cost (39,830) -- (39,830)
Accumulated deficit (46,181,035) 380,430(2) (45,800,605)
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Total Stockholders' Equity 9,662,655 380,430 10,043,085
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Total Liabilities and
Stockholders' Equity $ 11,672,559 $ 211,666 $ 11,884,225
========================================================================================
See notes to Consolidated Pro Forma Financial Statements
3
T CELL SCIENCES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Twelve Months Ended
December 31, 1994
As Reported Adjustments(2) Pro Forma
========================================================================================
OPERATING REVENUE:
Product development and
licensing agreements $ 3,737,143 $ -- $ 3,737,143
Product sales 3,230,815 (3,032,231) 198,584
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Total Operating Revenue 6,967,958 (3,032,231) 3,935,727
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OPERATING EXPENSE:
Cost of product sales 2,008,279 (1,884,839) 123,440
Research and development 8,697,174 (945,989) 7,751,185
General and administrative 4,345,972 (1,103,896) 3,242,076
Marketing and sales 1,411,420 (936,206) 475,214
Facility relocation 1,598,609 -- (3) 1,598,609
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Total Operating Expense 18,061,454 (4,870,930) 13,190,524
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Operating Loss (11,093,496) 1,838,699 (9,254,797)
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Other non-operating expenses, net (490,055) -- (490,055)
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Net Loss $(11,583,551) $ 1,838,699 $(9,744,852)
========================================================================================
Net Loss per Common Share $ (0.68) $ (0.57)
========================================================================================
Weighted Average Common Shares
Outstanding 17,053,443 17,053,443
========================================================================================
See notes to Consolidated Pro Forma Financial Statements
4
T CELL SCIENCES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Nine Months Ended
September 30, 1995
As Reported Adjustments(2) Pro Forma
========================================================================================
OPERATING REVENUE:
Product development and
licensing agreements $ 1,329,428 $ -- $ 1,329,428
Product sales 1,820,043 (1,793,029) 27,014
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Total Operating Revenue 3,149,471 (1,793,029) 1,356,442
- ----------------------------------------------------------------------------------------
OPERATING EXPENSE:
Cost of product sales 1,448,529 (1,426,863) 21,666
Research and development 5,994,478 (615,157) 5,379,321
General and administrative 2,999,578 (987,304) 2,012,274
Marketing and sales 1,208,218 (504,044) 704,174
Facility relocation 85,132 -- (3) 85,132
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Total Operating Expense 11,735,935 (3,533,368) 8,202,567
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Operating Loss (8,586,464) 1,740,339 (6,846,125)
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Other non-operating income, net 486,016 -- 486,016
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Net Loss $(8,100,448) $ 1,740,339 $(6,360,109)
========================================================================================
Net Loss per Common Share $ (0.47) $ (0.37)
========================================================================================
Weighted Average Common Shares
Outstanding 17,066,026 17,066,026
========================================================================================
See notes to Consolidated Pro Forma Financial Statements
5
T CELL SCIENCES, INC.
Notes to Consolidated Pro Forma Financial Statements
(1) The pro forma balance sheet has been prepared to reflect the sale of
certain assets to Endogen for a total purchase price of $2,880,494 net of
transaction fees of approximately $160,000. Pro forma adjustments assume
the transactions giving rise to the adjustments were consummated on the
balance sheet date and include the following:
(a) Receipt of a $1,900,000 convertible subordinated note receivable,
with payment due in ten semi-annual installments commencing
September 1, 1996 with interest receivable thereon at the rate of
7% per annum. The oustanding principal amount of the note is
convertible at any time at the option of the Company into shares
of common stock of Endogen.
(b) Receipt of a promissory note in the amount of $452,153, payable in
full on March 28, 1996 for payment of property and equipment. The
Company purchased certain property and equipment outstanding under
an operating lease, and simultaneously sold this property and
equipment to Endogen, at no gain or loss, in conjunction with this
transaction.
(c) Receipt of $528,341 in cash from Endogen to purchase certain
property and equipment also outstanding under an operating lease.
This property and equipment was simultaneously purchased from a
leasing company prior to selling to Endogen at, no gain or loss.
(d) Total proceeds for the sale of assets were reduced by transaction
costs, approximating $160,000.
(2) All summary income statement pro forma adjustments assume the transactions
giving rise to the adjustments were consummated immediately prior to the
first day of the period presented. The anticipated gain of $300,000 from
the transaction is not reflected in the income statement of the period
presented.
(3) No portion of the costs relating to the Company's evacuation of its
former headquarters in 1994 are reflected as pro forma adjustments,
as the costs are not recurring in nature.