UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (date of earliest event reported): March 9, 2012

 

Synthetic Biologics, Inc.

(Exact name of registrant as specified in charter)

 

Nevada

(State or other jurisdiction of incorporation)

 

01-12584     13-3808303  
 (Commission File Number)    (IRS Employer Identification No.)

 

3985 Research Park Drive, Suite 200

Ann Arbor, MI 48108

(Address of principal executive offices and zip code) 

 

(734) 332-7800

(Registrant’s telephone number including area code) 

 

Adeona Pharmaceuticals, Inc.

(Former Name and Former Address) 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of registrant under any of the following provisions:

 

  o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  o Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12)

 

  o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 
 

 

Item 1.01. Entry into a Material Definitive Agreement 

 

In connection with the change in business focus of Synthetic Biologics, Inc. (the “Company”), on March 8, 2012, the Company entered into a Membership Interest Purchase Agreement and certain related agreements listed below as exhibits, pursuant to which the Company divested all of its interest in Adeona Clinical Laboratory, LLC (the “Lab”) to Hartlab, LLC, an entity controlled by the Lab’s former owner, in consideration for (i) the immediate assignment of the Lab’s outstanding accounts receivable up through the date of closing, plus (ii) Seven Hundred Thousand Dollars ($700,000) payable pursuant to the terms of a two-year non-recourse promissory note secured by all of the assets of the Lab.

 

The information contained in this Item 1.01 is qualified in its entirety by the copy of the agreements attached to this Current Report on Form 8-K and incorporated herein by this reference.

 

Item 2.01. Completion of Acquisition or Disposition of Assets

 

Reference is made to the information set forth in Item 1.01 above. 

 

Item 9.01. Financial Statements and Exhibits

 

(b)Pro Forma Financial Information.

 

The following unaudited pro forma condensed financial statements are required pursuant to Item 9.01(b) of the Current Report on Form 8-K and include adjustments to the Company’s Balance Sheet to reflect the sale of the Lab and to exclude the Lab results from the Company’s Statement of Operations.

 

The data are presented for informational purposes only and are not intended to represent or be indicative of the results of operations or financial condition of the Company that actually would have been reported had the disposition of the Lab been completed as of the dates presented, and should not be taken as representative of future results of operations or financial condition of the Company. The unaudited pro forma condensed financial information should be read in conjunction with the historical consolidated financial statements and the accompanying notes of the Company.

 

SYNTHETIC BIOLOGICS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
 

 

   As of December 31, 2010   As of December 31, 2009 
   Historical Synthetic Biologics   Disposition   Pro Forma Synthetic Biologics   Historical Synthetic Biologics   Disposition   Pro Forma Synthetic Biologics 
   (In thousands) 
Assets                              
Current Assets:                              
Cash and cash equivalents  $2,649   $-   $2,649   $2,715   $-   $2,715 
Accounts receivable, net   339    -    339    31    -    31 
Other current assets   343    -    343    9    -    9 
Total Current Assets   3,331    -    3,331    2,755    -    2,755 
                               
Property and equipment   511    (36)   475    1,052    (47)   1,005 
Goodwill   178    (178)   -    178    (178)   - 
Long term note receivable   -    700    700    -    700    700 
Deposits and other assets   91    -    91    91    -    91 
                               
Total Assets  $4,111   $486   $4,597   $4,076   $475   $4,551 
                               
Liabilities and Stockholders' Equity                              
Current Liabilities:                              
Accounts payable  $266   $-   $266   $401   $-   $401 
Accrued liabilities   210    -    210    8    -    8 
Current portion of capital lease   25    (25)   -    17    (17)   - 
Total Current Liabilities   501    (25)   476    426    (17)   409 
                               
Long Term Liabilities:                              
Accounts payable   32    -    32    93    -    93 
Capital lease   -    -    -    13    (13)   - 
Total Liabilities   533    (25)   508    532    (30)   502 
                               
Stockholders' Equity                              
   Series A, convertible preferred stock,  $0.001 par value; 5,000,000 shares authorized, none issued and outstanding   -    -    -         -    - 
   Preferred stock,  $0.001 par value; 10,000,000 shares authorized, none issued and outstanding   -    -    -    -    -    - 
   Common stock,  $0.001 par value; 100,000,000 shares authorized, 23,420,189 issued and 23,338,707 outstanding and 21,530,834 issued and 21,449,352 outstanding   23    -    23    21    -    21 
 Additional paid-in capital   47,279    -    47,279    45,553    -    45,553 
 Accumulated deficit   (43,724)   511    (43,213)   (42,013)   505    (41,508)
Subscription receivable   -    -    -    (17)   -    (17)
Total Stockholders' Equity   3,578    511    4,089    3,544    505    4,049 
                               
Total Liabilities and Stockholders' Equity  $4,111   $486   $4,597   $4,076   $475   $4,551 

 

 
 

 

SYNTHETIC BIOLOGICS, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET

 

   As of September 30, 2011   As of September 30, 2010 
   Historical Synthetic Biologics   Disposition   Pro Forma Synthetic Biologics   Historical Synthetic Biologics   Disposition   Pro Forma Synthetic Biologics 
Assets  (In thousands) 
Current Assets:                              
Cash and cash equivalents  $4,609   $-   $4,609   $3,305   $-   $3,305 
 Short-term investments   2,866         2,866    -    -    - 
Accounts receivable, net   495    -    495    387    -    387 
Other current assets   124    -    124    9    -    9 
Total Current Assets   8,094    -    8,094    3,701    -    3,701 
                               
Property and equipment   371    (26)   345    710    (39)   671 
Goodwill   178    (178)   -    178    (178)   - 
Long term note receivable   -    700    700    -    700    700 
Deposits and other assets   32    -    32    91    -    91 
                               
Total Assets  $8,675   $496   $9,171   $4,680   $483   $5,163 
                               
Liabilities and Stockholders' Equity                              
Current Liabilities:                              
Accounts payable  $193   $-   $193   $307   $-   $307 
Accrued liabilities   41    -    41    8    -    8 
Current portion of capital lease   -    -    -    17    (17)   - 
Total Current Liabilities   234    -    234    332    (17)   315 
                               
Long Term Liabilities:                              
Accounts payable   2    -    2    107    -    107 
Capital lease   -    -    -    2    (2)   - 
Total Liabilities   236    -    236    441    (19)   422 
                               
Stockholders' Equity                              
 Series A, convertible preferred stock,  $0.001 par value; 5,000,000                              
shares authorized, none issued and outstanding   -    -    -         -    - 
Preferred stock,  $0.001 par value; 10,000,000 shares authorized,                              
none issued and outstanding   -    -    -    -    -    - 
Common stock,  $0.001 par value; 100,000,000 shares authorized,                              
28,209,126 issued and 28,127,644 outstanding and                              
23,152,068 issued and 23,070,586 outstanding   28    -    28    23    -    23 
 Additional paid-in capital   57,099    -    57,099    47,070    -    47,070 
 Accumulated deficit   (48,688)   496    (48,192)   (42,854)   502    (42,352)
Subscription receivable   -    -    -    -    -    - 
Total Stockholders' Equity   8,439    496    8,935    4,239    502    4,741 
                               
Total Liabilities and Stockholders' Equity  $8,675   $496   $9,171   $4,680   $483   $5,163 

 

 

 
 

 

SYNTHETIC BIOLOGICS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS

 

   For the year ended December 31, 2010   For the year ended December 31, 2009 
   Historical Synthetic Biologics   Disposition   Pro Forma Synthetic Biologics   Historical Synthetic Biologics   Disposition   Pro Forma Synthetic Biologics 
    (In thousands, except per share) 
 Revenues:                              
License revenue, net  $2,125   $-   $2,125   $-   $-   $- 
Laboratory fees, net   551    (551)   -    103    (103)   - 
Grant revenue   489    -    489    -    -    - 
Total revenues, net   3,165    (551)   2,614    103    (103)   - 
                               
Operating Costs and Expenses:                              
General and administrative   2,701    (590)   2,111    2,709    (262)   2,447 
Research and development   1,580    -    1,580    949    -    949 
Costs of laboratory services   468    (468)   -    127    (127)   - 
Total Operating Costs and Expenses   4,749    (1,058)   3,691    3,785    (389)   3,396 
                               
Loss from Operations   (1,584)   507    (1,077)   (3,682)   286    (3,396)
                               
Other Income (Expense):                              
Gain on sale of Adeona Clinical Laboratory   -    511    511    -    505    505 
Interest income   -    -    -    3    -    3 
Impairment loss on equipment   (121)   -    (121)   -    -    - 
Other income (expense)   (6)   10    4    (52)   -    (52)
Total Other Expenses, net   (127)   521    394    (49)   505    456 
                               
Net Loss from Continuing Operations  $(1,711)  $1,028   $(683)  $(3,731)  $791   $(2,940)
                               
Net Loss from Continuing Operations Per Share  - Basic and Dilutive  $(0.08)       $(0.03)  $(0.18)       $(0.14)
                               
Weighted average number of shares outstanding during the period - Basic and Dilutive   22,393,568         22,393,568    21,318,906         21,318,906 

 

 
 

SYNTHETIC BIOLOGICS, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS

 

 

  For the nine months ended September 30, 2011   For the nine months ended September 30, 2010 
  Historical Synthetic Biologics   Disposition   Pro Forma Synthetic Biologics   Historical Synthetic Biologics   Disposition   Pro Forma Synthetic Biologics 
                         
License revenue, net  $-   $-   $-   $2,125   $-   $2,125 
Laboratory fees, net   972    (972)   -    420    (420)   - 
Total revenues, net   972    (972)   -    2,545    (420)   2,125 
                               
Operating Costs and Expenses:                              
General and administrative   2,649    (311)   2,338    2,000    (223)   1,777 
Research and development   801    -    801    963    -    963 
Costs of laboratory services   806    (806)   -    430    (430)   - 
Total Operating Costs and Expenses   4,256    (1,117)   3,139    3,393    (653)   2,740 
                               
Loss from Operations   (3,284)   145    (3,139)   (848)   233    (615)
                               
Other Income (Expense):                              
Warrant expense   (1,492)   -    (1,492)   -    -    - 
Change in fair value of stock warrants   (242)   -    (242)   -    -    - 
Gain on sale of Adeona Clinical Laboratory   -    496    496    -    502    502 
Interest income   7    -    7    -    -    - 
Impairment loss on equipment   -    -    -    -    -    - 
Impairment loss on goodwill   -    -    -    -    -    - 
Other income (expense)   47    -    47    7    3    10 
Total Other Expenses, net   (1,680)   496    (1,184)   7    505    512 
                               
Net Loss from Continuing Operations  $(4,964)  $641   $(4,323)  $(841)  $738   $(103)
                               
Net Loss from Continuing Operations Per Share  - Basic and Dilutive  $(0.18)       $(0.16)  $(0.04)       $(0.00)
                               
Weighted average number of shares outstanding during the period - Basic and Dilutive   27,075,730         27,075,730    22,095,349         22,095,349 
                               

 

 

 
 

   

(d)Exhibits

 

The following exhibits are being filed as part of this Report.

 

Exhibit

Number

 

Description

   
10.1 Membership Interest Purchase Agreement by and among Synthetic Biologics, Inc., Hartlab LLC, and Adeona Clinical Laboratory, LLC, dated as of March 7, 2012.
   
10.2 Pledge and Security Agreement between Synthetic Biologics, Inc. and Hartlab, LLC dated as of March 7, 2012.
   
10.3 Non-Recourse Promissory Note between Synthetic Biologics, Inc. and Hartlab, LLC dated as of March 7, 2012
   
   

 

 

 
 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated March 12, 2012 SYNTHETIC BIOLOGICS, INC.
  (Registrant)
   
  By: /s/ Jeffrey Riley
  Name: Jeffrey Riley
  Title: Chairman, President and Chief Executive Officer

 

 
 

 

 
 

 

 

EXHIBIT INDEX

 

 

Exhibit

Number

 

Description

   
10.1 Membership Interest Purchase Agreement by and among Synthetic Biologics, Inc., Hartlab LLC, and Adeona Clinical Laboratory, LLC, dated as of March 7, 2012
   
10.2 Pledge and Security Agreement between Synthetic Biologics, Inc. and Hartlab, LLC dated as of March 7, 2012
   
10.3 Non-Recourse Promissory Note between Synthetic Biologics, Inc. and Hartlab, LLC dated as of March 7, 2012