Full Press Release Details
THERAPEUTICS, INC. AND CANTERBURY LABORATORIES, llc
COMBINED FINANCIAL STATEMENTS
THERAPEUTICS, INC. AND CANTERBURY LABORATORIES, llc
FINANCIAL STATEMENTS
| FINANCIAL STATEMENTS | ||
| Report of Independent Registered Public Accounting Firm | 3 | |
| Balance Sheets | 4 | |
| Statements of Operations | 5 | |
| Statements of Changes in Stockholders' Equity | 6 | |
| Statements of Cash Flows | 7 | |
| Notes to Financial Statement | 8-16 |
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and
Stockholders of Hygeia Therapeutics, Inc. and Canterbury Laboratories, LLC
have audited the accompanying combined balance sheets of Hygeia Therapeutics, Inc. and Canterbury Laboratories, LLC (the "Company")
as of December 31, 2012 and 2011, and the related statements of operations, changes in stockholders' equity, and cash flows
for each of the years in the two-year period ended December, 2012. The Company's management is responsible for these financial
statements. Our responsibility is to express an opinion on these financial statements based on our audits.
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the
Company as of December, 2012 and 2011, and the results of its operations and its cash flows for each of the years in the two-year
period ended December 31, 2012 in conformity with U.S. generally accepted accounting principles.
accompanying financial statements were prepared assuming the Company will continue as a going concern. As discussed in Note 2 to
the financial statements, the Company has suffered recurring losses from operations and as of December 31, 2012 had negative working
capital, accumulated deficit and stockholders and members deficit. These matters raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans concerning these matters are described in Note 2. The accompanying
financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Goldman, Kurland and
HYGEIA THERAPEUTICS, INC. AND CANTERBURY
COMBINED BALANCE SHEETS
| December 31, | September 30, | |||||||||||
| 2012 | 2011 | 2013 | ||||||||||
| (unaudited) | ||||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash | $ | 6,673 | $ | 48,090 | $ | 129,672 | ||||||
| Accounts receivable | - | - | 23,655 | |||||||||
| Prepaid expenses | - | 7,255 | - | |||||||||
| Total current assets | 6,673 | 55,345 | 153,327 | |||||||||
| Property and equipment, net | 5,112 | 5,095 | 7,446 | |||||||||
| Intangible assets, net | 155,821 | 171,685 | 132,571 | |||||||||
| Total assets | $ | 167,606 | $ | 232,125 | $ | 293,344 | ||||||
| LIABILITIES, STOCKHOLDERS' AND MEMBERS' DEFICIT | ||||||||||||
| Current liabilities | ||||||||||||
| Advances from stockholder/member | 62,814 | 64,856 | 62,814 | |||||||||
| Payables and accrued expenses | 414,374 | 360,488 | 412,790 | |||||||||
| Total current liabilities | 477,188 | 425,344 | 475,604 | |||||||||
| Long-term liabilities - convertible notes payable | - | - | 715,000 | |||||||||
| Commitments and contingencies | ||||||||||||
| Stockholders' and members' deficit | ||||||||||||
| Hygeia Series A convertible preferred stock, par value $0.0001 Authorized 42,000,000 shares: 20,000,064 shares issued and outstanding | 2,000 | 2,000 | 2,000 | |||||||||
| Canterbury Series A convertible preferred units Authorized 91,000,000 shares: 53,745,298, 0 and 53,745,298 units issued and outstanding | - | - | - | |||||||||
| Canterbury common units Authorized 106,000,000 units: 7,774,260 units issued and outstanding | - | - | - | |||||||||
| Canterbury profit units. Authorized 7,341,880 units: 2,349,965, 0 and 2,349,965 units issued and outstanding | - | - | - | |||||||||
| Hygeia common stock, par value $0.0001. Authorized 27,000,000 shares, issued and outstanding 10,124,225 shares | 1,012 | 1,012 | 1,012 | |||||||||
| Additional paid-in-capital and member's equity | 2,106,790 | 1,927,088 | 2,086,416 | |||||||||
| Accumulated deficit | (2,419,384 | ) | (2,123,319 | ) | (2,986,688 | ) | ||||||
| Total shareholders' and members' deficit | (309,582 | ) | (193,219 | ) | (897,260 | ) | ||||||
| Total liabilities and shareholders' and members' deficit | $ | 167,606 | $ | 232,125 | $ | 293,344 |
See accompanying notes to financial statements.
HYGEIA THERAPEUTICS, INC. AND CANTERBURY
COMBINED STATEMENTS OF OPERATIONS
| Years Ended December 31, | Nine Months Ended September 30, | |||||||||||||||
| 2012 | 2011 | 2013 | 2012 | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Contract revenues | $ | 246,731 | $ | 318,146 | $ | 127,167 | $ | 80,245 | ||||||||
| Cost of revenues | 123,374 | 25,325 | 89,387 | 38,505 | ||||||||||||
| Gross profit | 123,357 | 292,821 | 37,780 | 41,740 | ||||||||||||
| Operating expenses | ||||||||||||||||
| General and administrative | 324,261 | 354,316 | 210,359 | 147,422 | ||||||||||||
| Legal and professional services | 77,965 | 95,105 | 329,224 | 39,920 | ||||||||||||
| Research and development | - | 83,000 | 20,668 | - | ||||||||||||
| Depreciation and amortization | 17,196 | 4,449 | 24,566 | 8,728 | ||||||||||||
| Total operating expenses | 419,422 | 536,870 | 584,817 | 196,070 | ||||||||||||
| Loss from operations | (296,065 | ) | (244,049 | ) | (547,037 | ) | (154,330 | ) | ||||||||
| Interest expense | - | - | 20,267 | - | ||||||||||||
| Net loss | $ | (296,065 | ) | $ | (244,049 | ) | $ | (567,304 | ) | $ | (154,330 | ) |
See accompanying notes to financial statements.
HYGEIA THERAPEUTICS, INC. AND CANTERBURY
COMBINED STATEMENTS OF STOCKHOLDERS'/MEMBERS'
| Number of Canterbury Units | ||||||||||||||||||||||||||||||||||||||||
| Hygeia Series A Convertible Preferred Stock | Hygeia Common Stock | Series A | Additional Paid-in Capital and Members' | Accumulated | ||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Preferred | Common | Profit | Equity | Deficit | Total | |||||||||||||||||||||||||||||||
| Balance - December 31, 2010 | 18,394,029 | $ | 1,839 | 10,124,225 | $ | 1,012 | - | - | - | $ | 1,752,249 | $ | (1,879,270 | ) | $ | (124,170 | ) | |||||||||||||||||||||||
| Capitalized license for issuance of shares to Yale University | 1,606,035 | 161 | - | - | - | - | - | 174,839 | - | 175,000 | ||||||||||||||||||||||||||||||
| Net loss | (244,049 | ) | (244,049 | ) | ||||||||||||||||||||||||||||||||||||
| Balance - December 31, 2011 | 20,000,064 | 2,000 | 10,124,225 | 1,012 | - | - | - | 1,927,088 | (2,123,319 | ) | (193,219 | ) | ||||||||||||||||||||||||||||
| Units issued due to reorganization | - | - | - | - | 20,000,064 | 7,774,260 | 2,349,965 | - | - | - | ||||||||||||||||||||||||||||||
| Units issued in 2012, net | - | - | - | - | 33,745,234 | - | - | 179,702 | - | 179,702 | ||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | (296,065 | ) | (296,065 | ) | ||||||||||||||||||||||||||||
| Balance - December 31, 2012 | 20,000,064 | $ | 2,000 | 10,124,225 | $ | 1,012 | 53,745,298 | 7,774,260 | 2,349,965 | $ | 2,106,790 | $ | (2,419,384 | ) | $ | (309,582 | ) | |||||||||||||||||||||||
| Offering cost for member's units | - | - | - | - | - | - | - | (20,374 | ) | - | (20,374 | ) | ||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | (567,304 | ) | (567,304 | ) | ||||||||||||||||||||||||||||
| Balance - September 30, 2013 (unaudited) | 20,000,064 | $ | 2,000 | 10,124,225 | $ | 1,012 | 53,745,298 | 7,774,260 | 2,349,965 | $ | 2,086,416 | $ | (2,986,688 | ) | $ | (897,260 | ) |
See accompanying notes to financial statements.
HYGEIA THERAPEUTICS, INC. AND CANTERBURY
COMBINED STATEMENTS OF CASH FLOWS
| Years Ended December 31, | Nine Months Ended September 30, | |||||||||||||||
| 2012 | 2011 | 2013 | 2012 | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||
| Net loss | $ | (296,065 | ) | $ | (244,049 | ) | $ | (567,304 | ) | $ | (154,330 | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities. | ||||||||||||||||
| Depreciation and amortization | 17,196 | 4,449 | 24,566 | 8,728 | ||||||||||||
| Decrease/(Increase) in assets | ||||||||||||||||
| Accounts receivable | - | - | (23,655 | ) | - | |||||||||||
| Prepaid expenses | 7,255 | 43,915 | - | - | ||||||||||||
| Increase in liabilities: | ||||||||||||||||
| Accrued expenses | 53,886 | 217,115 | (1,584 | ) | 27,102 | |||||||||||
| Net cash provided by (used in) operating activities | (217,728 | ) | 21,430 | (567,977 | ) | (118,500 | ) | |||||||||
| Cash flows from investing activities: | ||||||||||||||||
| Purchase of fixed assets | (1,349 | ) | (2,418 | ) | (3,650 | ) | (922 | ) | ||||||||
| Net cash used in investing activities | (1,349 | ) | (2,418 | ) | (3,650 | ) | (922 | ) | ||||||||
| Cash flows from financing activities: | ||||||||||||||||
| Due from/(payments to) related party | - | 912 | - | (16,600 | ) | |||||||||||
| Advances from/(payments to) shareholder/member | (2,042 | ) | 5,000 | - | - | |||||||||||
| Proceeds from Series A convertible preferred stock, net | 179,702 | - | - | 171,883 | ||||||||||||
| Proceeds from notes | - | - | 715,000 | - | ||||||||||||
| Offering costs for issuance of ownership units | - | - | (20,374 | ) | (12,181 | ) | ||||||||||
| Net cash provided by (used in) financing activities | 177,660 | 5,912 | 694,626 | 143,102 | ||||||||||||
| Net increase/(decrease) in cash and equivalents | (41,417 | ) | 24,924 | 122,999 | 23,680 | |||||||||||
| Cash and equivalents, beginning of period | 48,090 | 23,166 | 6,673 | - | ||||||||||||
| Cash and equivalents, end of period | $ | 6,673 | $ | 48,090 | $ | 129,672 | $ | 23,680 | ||||||||
| Supplemental disclosure of cash flow information: | ||||||||||||||||
| Cash paid during the period for interest | $ | - | $ | - | $ | - | $ | - | ||||||||
| Cash paid during the period for income taxes | $ | - | $ | - | $ | - | $ | - |
See accompanying notes to financial statements.
HYGEIA THERAPEUTICS, INC.
AND CANTERBURY LABORATORIES, LLC
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 2012 and 2011
SEPTEMBER 30, 2013 and 2012 (UNAUDITED)
Hygeia Therapeutics,
Inc. ("Hygeia"), a Delaware Corporation, based in Holden, Massachusetts was formerly known as Orcas Therapeutics, Inc.
It was incorporated on November 14, 2005 to acquire and develop biodegradable hormone receptor modulators for topical indications.
Hygeia is focused on developing topical therapies for conditions where localized treatments offer advantages over systemic therapies.
It also conducts testing on drugs including topical synthetic estrogen and anti-androgen.
has signed an Exclusive License Agreement (the "Yale License") with Yale University ("Yale") under U.S.
Patent 7,015,211"15.alpha.-Substituted Estradiol Carboxylic Acid Esters as Locally Active Estrogens,"
U.S. Patent 6,476,012 "Estradiol-16.alpha Carboxylic Acid Esters
as Locally Active Estrogens" and U.S. Patent 8,552,061
"Locally active "soft" antiandrogens" ("Yale Patents").
Hygeia agreed to pay royalty fees to Yale quarterly beginning in the first calendar quarter in which net sales occur.
Canterbury Laboratories,
LLC ("Canterbury"), is a Delaware Limited Liability Company that was formed on October 14, 2011 and began operations
on February 22, 2012. Initially, the Company was a wholly owned subsidiary of Hygeia. Canterbury is engaged in the premium cosmeceutical
business. Cosmeceuticals are the latest addition to the health industry and are sometimes described as cosmetic products with "drug-like
benefits." Generally, cosmeceuticals are products sold over-the-counter, without the regulatory requirement of approval from
the U.S. Food and Drug Authority ("FDA").
A reorganization and
separation agreement was signed on October 20, 2011 between Canterbury and Hygeia under which Hygeia received 100% of all issued
and outstanding units of all classes of limited liability company membership interests of Canterbury. Hygeia distributed these
profit units to holders of its common and preferred stock, with each holder of 1 share of common or preferred stock in Hygeia given
1 profit unit in Canterbury. Further, 720,821 shares were issued to the Hygeia's non-qualifying stock option ("NSO")
holders to liquidate the 720,821 shares of outstanding NSO's. Holders of Hygeia stock purchase warrants for 1,782,901 shares
were issued in exchange an equal number of units of Canterbury stock purchase warrants. Pursuant to the license agreement 1,606,035
shares of Series A convertible preferred stock was issued to Yale University for the Yale License. In February 2012, Hygeia assigned
its rights and obligations related to non-prescription products under the Yale License to Canterbury.
2013, equity holders of Hygeia held 94% of the membership units of Canterbury. Accordingly, the financial results of Hygeia and
Canterbury are presented herein on a combined basis and the combination of Hygeia and Canterbury will be referred to herein as
the "Company" or "Canterbury Group."
The Company has suffered
losses from operations and, without additional capital, currently lacks liquidity to meet its current obligations. The Company
had a net loss for the years ended December 31, 2012 and 2011 of $296,065 and $244,049, respectively and a loss of $567,304 for
the nine months ended September 30, 2013. As of December 31, 2012 the Company had negative working capital of $470,515 and an accumulated
deficit of $2,419,384 and as of September 30, 2013, the Company had negative working capital of $322,277 and an accumulated deficit
of $2,986,688. Unless additional financing is obtained, the Company may not be able to continue as a going concern.
In 2011, the Company
raised $912 through an advance from a related party and $5,000 through an advance from a shareholder. In 2012, the Company raised
$179,702 through the issuance of Series A convertible preferred stock for Canterbury and used $2,042 to repay an advance from a
shareholder. In the nine months ended September 30, 2013, the Company raised a net of $659,547 through the issuance of convertible
promissory notes. The Company is seeking additional capital to continue and expand its operation. However, due to the current economic
environment and the Company's current financial condition, we cannot assure current and future stockholders there will be
adequate capital available when needed and on acceptable terms. The financial statements were prepared on a going concern basis
which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The financial
statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount
and classification of liabilities that might result if the Company is unable to continue as a going concern.
Basis of Presentation
The financial statements
were prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"),
pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The balance sheets at December