Print Page     Close Window     

SEC Filings

DEFM14A
ASTERIAS BIOTHERAPEUTICS, INC. filed this Form DEFM14A on 02/04/2019
Entire Document
 
 

 

Fair value of BioTime Common Shares held by Asterias: As of September 30, 2018, Asterias holds 2,621,811 BioTime Common Shares as marketable securities on its standalone financial statements. For purposes of the Pro Forma Financial Statements and ASC 805, the fair value of those shares acquired by BioTime from Asterias is determined based on the $1.42 per share closing price of BioTime Common Shares on January 30, 2019, the assumed Merger date, as quoted on the NYSE American. Although treasury shares are not considered an asset and are assumed to be immediately retired upon acquisition by BioTime, the fair value of those shares is a part of the preliminary estimated purchase price. Changes in the closing price of BioTime Common Shares will result in changes to the fair value and could materially impact the fair value of the BioTime Common Shares acquired from Asterias at the time of the Merger.

 

Goodwill: Goodwill is calculated as the difference between the acquisition date fair value of the consideration expected to be transferred and the values assigned to the assets acquired and liabilities assumed. Goodwill is not amortized but is tested for impairment at least annually, or more frequently if circumstances indicate potential impairment.

 

Note 4. Adjustments to the Pro Forma Balance Sheet

 

  (a) To record the elimination of the fair value of BioTime Common Shares held by Asterias as of September 30, 2018 (see Note 3).
     
  (b) To record the elimination of BioTime’s approximate 39% equity method investment in Asterias, at fair value, as of September 30, 2018.
     
  (c) To record the preliminary estimate of goodwill recognized as a result of the Merger, which represents the amount by which the estimated consideration transferred exceeds the fair value of Asterias’ assets acquired and the liabilities assumed, including the fair value of BioTime Common Shares acquired held by Asterias, on the Merger date.
     
  (d) To record the preliminary estimate of identifiable acquired IPR&D intangible assets consisting of $28.3 million in fair value pertaining to the AST-OPC1 program and $14.8 million pertaining to the AST-VAC2 program (see Note 3). BioTime considered the AST-VAC1 program to have de minimis value.
     
  (e) To record estimated transaction costs of $3.0 million to be incurred by BioTime and Asterias directly attributable to the Merger. The costs that BioTime and Asterias may ultimately incur could differ materially from this amount. Transaction costs include fees for investment banking, advisory, legal, valuation, and other professional fees. As the transaction costs will not have a continuing impact, BioTime has not shown the estimated transaction costs in the Pro Forma Statements of Operations. No material transaction costs were incurred by BioTime or Asterias during the periods covered by the historical financial statements (see Note 4 (m)).
     
    To accrue an estimated $2.0 million of change in control payment obligation to executives expected to be paid at the time of the Merger. Asterias has previously entered into employment contracts with certain executive officers in which Asterias may be required to incur severance obligations for matters relating to changes in control, as defined, and involuntary terminations. The Merger, if completed, will be considered a change in control of Asterias. For the severance payment to be made, there must be a change in control and a termination event of the executive, as defined in the employment agreements, referred to as a “double trigger” contingent payment. Since the Pro Forma Balance Sheet assumes the Merger has occurred and it is probable that the payments will be made to those executives, the estimated obligation has been accrued in the Pro Forma Balance Sheet as of September 30, 2018. Dual trigger contingent payments are accounted for outside of the business combination and not included in the preliminary estimated purchase price, instead, recorded as compensation expense in the post-acquisition financial statements of the combined entity. As the change in control payment will not have a continuing impact, BioTime has not shown this amount in the Pro Forma Statements of Operations (see Note 4 (m)).

 

134

© Copyright BioTime, Inc.