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): January 18, 2011

 

 

Arrowhead Research Corporation

(Exact name of registrant as specified in its charter)

 

 

0-21898

(Commission File Number)

 

Delaware		46-0408024
(State or other jurisdiction of incorporation)		(IRS Employer Identification No.)
201 South Lake Avenue, Suite 703, Pasadena, CA		91101
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (626) 304-3400

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

 

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

 

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

 

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

 

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

 

 

 

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Item 2.01.

Completion of Acquisition or Disposition of Assets

As previously disclosed in Arrowhead’s 8-K filing on January 21, 2011, Unidym, Inc. (“Unidym”), a majority-owned subsidiary of Arrowhead Research Corporation (“Arrowhead” or the “Company”) entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”) by and among Unidym, Wisepower Co., Ltd., a corporation of Republic of Korea, Unicycle Acquisition Corp., a Delaware corporation and wholly owned subsidiary of Wisepower, and, solely with respect to representations and warranties made in the Merger Agreement, Arrowhead. The transactions contemplated under the Merger Agreement closed on January 18, 2011 and, effective as of that date, Unidym was divested. In accordance with Rule 8-05 of Regulation S-X (17 CFR 210.8-05), the Company is filing herewith the attached pro forma financial statements showing the impact of the Unidym sale as of and for the year ended September 30, 2010.

The disclosures set forth under Item 1.01 of the Company’s Current Report on Form 8-K filed on January 21, 2011 is incorporated herein by reference

 

Item 9.01.

Financial Statements and Exhibits

(b) Pro forma Financial Information

The required pro forma financial information is filed herewith as Exhibit 99.1 and is incorporated by reference.

 

Exhibit No.		Description
99.1		Pro Forma Financial Information

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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 thereunto duly authorized.

Date: January 24, 2010

 

Exhibit 99.1

ARROWHEAD RESEARCH CORPORATION

INDEX TO (UNAUDITED) PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS

 

		Page
Pro Forma Financial Information			B-2
Pro Forma Combined Condensed Balance Sheet at September 30, 2010			B-3
Pro Forma Combined Condensed Statement of Operations for the year ended September 30, 2010			B-4
Notes to the Pro Forma Combined Condensed Financial Statements			B-5

B-1

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ARROWHEAD RESEARCH CORPORATION

(UNAUDITED) PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION

The accompanying (unaudited) pro forma combined condensed financial statements present the historical financial information of Arrowhead Research Corporation (“Arrowhead”), as adjusted for the disposition of Unidym, Inc. (“Unidym”).

The accompanying pro forma combined condensed balance sheet presents the historical financial information of Arrowhead as of September 30, 2010, as adjusted assuming the disposition of Unidym took place on September 30, 2010.

The accompanying pro forma combined condensed statement of operations for the year ended September 30, 2010, presents the historical financial information of Arrowhead with adjustments to reflect the exclusion of Unidym for the respective period, as if the disposition had occurred on October 1, 2009.

The pro forma combined condensed financial statements have been prepared by management, based on the historical financial statements of Arrowhead and Unidym. These pro forma combined condensed financial statements may not be indicative of the results that actually would have occurred if the disposition had taken place on the dates indicated. The pro forma combined condensed financial statements should be read in conjunction with the historical financial statements of Arrowhead for the year ended September 30, 2010.

B-2

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ARROWHEAD RESEARCH CORPORATION

PRO FORMA COMBINED CONDENSED BALANCE SHEET (UNAUDITED)

AS OF SEPTEMBER 30, 2010

 

		Arrowhead Research Corp. (consolidated)				Unidym, Inc.				Pro Forma Adjustments				Footnote Reference				Proforma Combined
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	6,847,162			$	302,613				302,613				(1	)		$	6,847,162
Trade receivable, net of allowances			58,864				58,555												309
Other receivables			871,819				—				622,823				(1	)			1,494,642
Prepaid expenses			239,097				125,635												113,462
Other current assets			114,833				—				2,500,000				(3	)			2,614,833
TOTAL CURRENT ASSETS			8,131,775				486,803												11,070,408
PROPERTY AND EQUIPMENT
Computers, office equipment and furniture			335,784				60,191												275,593
Research equipment			752,850				749,336												3,514
Software			150,445				73,425												77,020
Leasehold improvements			78,594				12,146												66,448
			1,317,673				895,098												422,575
Less: Accumulated depreciation and amortization			(1,176,404	)			(795,762	)											(380,642	)
NET PROPERTY AND EQUIPMENT			141,269				99,336												41,933
OTHER ASSETS
Rent deposit			34,735				34,735												—
Patents			2,046,836				73,816												1,973,020
Investments and other noncurrent assets			1,999,927				—				2,757,644				(3	)			4,757,571
TOTAL OTHER ASSETS			4,081,498				108,551												6,730,591
TOTAL ASSETS		$	12,354,542			$	694,690											$	17,842,932
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable		$	681,563			$	257,867											$	423,696
Accrued expenses			371,236				119,564												251,672
Accrued payroll and benefits			191,425				35,027												156,398
Accrued severance			23,500				—												23,500
Intercompany liability			—				925,436				925,436				(1	)			—
Derivative liability			2,408,522				—												2,408,522
Note payable			500,000				—												500,000
TOTAL CURRENT LIABILITIES			4,176,246				1,337,894												3,763,788
TOTAL STOCKHOLDERS’ EQUITY			8,178,296				(643,204	)			5,257,644				(3	)			14,079,144
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	12,354,542			$	694,690											$	17,842,932

 

B-3

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ARROWHEAD RESEARCH CORPORATION

PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS (UNAUDITED)

FOR THE YEAR ENDED SEPTEMBER 30, 2010

 

		Arrowhead Research Corp. (consolidated)				Unidym, Inc.				Pro Forma Adjustments				Footnote Reference				Proforma Combined
REVENUE		$	620,097			$	620,097											$	—
OPERATING EXPENSES
Salaries			4,297,930				1,727,244				534,801				(2	)			3,105,487
Consulting			514,041				102,463												411,578
General and administrative expenses			3,183,077				748,360												2,434,717
Research and development			1,111,473				863,677												247,796
Patent amortization			315,625				73,817												241,808
TOTAL OPERATING EXPENSES			9,422,146				3,515,561												6,441,386
OPERATING LOSS			(8,802,049	)			(2,895,464	)											(6,441,386	)
OTHER INCOME (EXPENSE)
Loss on equity of investments - Nanotope			(219,540	)			—												(219,540	)
Gain on sale of subsidiary			—				—				4,002,455				(4	)			4,002,455
Gain/(loss) on sale of fixed assets, net			10,881				10,881												—
Interest income (expense), net			(48,025	)			(25,242	)											(22,783	)
Change in value of derivative liability			1,761,385				—												1,761,385
Other income			(87,032	)			(88,804	)											1,772
TOTAL OTHER INCOME			1,417,669				(103,165	)											5,523,289
LOSS FROM CONTINUING OPERATIONS			(7,384,380	)			(2,998,629	)											(918,097	)
Earnings per share - basic and diluted:
Loss from continuing operations		$	(0.10	)														$	(0.01	)
Weighted average shares outstanding - basic and diluted			64,342,448																64,342,448

 

B-4

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Note 1 - Basis of presentation

The accompanying pro forma combined financial statements are presented to reflect the disposition of Unidym Inc. (“Unidym”) by Arrowhead Research, Inc. (“Arrowhead”).

The accompanying pro forma combined condensed balance sheet has been prepared to give effect to the disposition of Unidym by Arrowhead as if the disposition occurred on September 30, 2010. The accompanying pro forma combined condensed statements of operations include the historical operations of Arrowhead and exclude the operations of Unidym as if the disposition had occurred on October 1, 2009

Note 2 - Pro forma adjustments

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates.

The unaudited pro forma combined condensed financial statements reflect the following pro forma adjustments:

Adjustment (1) - This adjustment reflects the repayment of intercompany debt between Arrowhead and Unidym, which is assumed to be settled in cash prior to the disposition. The cash settlement is reflected at $302,613, Unidym’s cash balance at the transaction date. The balance is reflected as an other receivable.

Adjustment (2) - This adjustment reflects charges from Arrowhead to Unidym for a portion of certain Arrowhead employees costs related to management and administrative services, which amounts would be absorbed by Arrowhead in the absence of Unidym.

Adjustment (3) - This adjustment reflects the proceeds from the disposal, the gain on the transaction, and the related entries to equity and noncontrolling interest, as if the transaction occurred on September 30, 2010.

Adjustment (4) - This adjustment reflects the gain on the transaction, as if the transaction occurred on October 1, 2009.

 

B-5