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Bolder BioPATH, Inc.
Financial Statements (unaudited)
Bolder BioPATH, Inc.
Balance Sheets (unaudited)
March 31, 2021 and December 31, 2020
| March 31, 2021 | December 31, 2020 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash | $ | 747,391 | $ | 41,398 | ||
| Accounts receivable, net | 2,070,991 | 2,886,869 | ||||
| Right of use asset - operating | 1,785,070 | 1,845,438 | ||||
| Unbilled revenue | 1,778,690 | 1,456,126 | ||||
| Prepaid expenses | 47,834 | 45,326 | ||||
| Total current assets | 6,429,976 | 6,275,157 | ||||
| Property and equipment, net | 5,076,576 | 5,094,384 | ||||
| Security deposit | 69,637 | 69,637 | ||||
| Total long-term assets | 5,146,213 | 5,164,021 | ||||
| Total assets | $ | 11,576,189 | $ | 11,439,178 | ||
| Liabilities and Stockholders' Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 319,831 | $ | 147,113 | ||
| Accrued liabilities | 310,838 | 199,599 | ||||
| Deferred revenue | 633,104 | 777,775 | ||||
| Lease liability - operating, current portion | 319,060 | 328,984 | ||||
| Long-term debt - related party, current portion | 660,413 | 1,439,632 | ||||
| Long-term debt, current portion | 260,421 | 196,114 | ||||
| Total current liabilities | 2,503,667 | 3,089,217 | ||||
| Lease liability - operating, non-current portion | 2,237,576 | 2,307,174 | ||||
| Long-term debt, non-current portion | 97,768 | 173,672 | ||||
| Total liabilities | $ | 4,839,011 | $ | 5,570,063 | ||
| Common stock, $0.01 par value: 100,000 shares authorized, issued and outstanding | 1,000 | 1,000 | ||||
| Retained earnings | 6,736,178 | 5,868,115 | ||||
| Total stockholders' equity | 6,737,178 | 5,869,115 | ||||
| Total liabilities and stockholders' equity | $ | 11,576,189 | $ | 11,439,178 |
Bolder BioPATH, Inc.
Statement of Operations (unaudited)
For the Quarter Ended March 31, 2021
| For the Quarter Ended March 31, 2021 | |||
| Revenues, net | $ | 3,742,659 | |
| Cost of revenues | 1,134,327 | ||
| Gross profit | 2,608,332 | ||
| Operating expenses | |||
| General and administrative | 526,804 | ||
| Salaries, wages, and employee benefits | 937,996 | ||
| Depreciation expense | 253,400 | ||
| Total operating expenses | 1,718,200 | ||
| Income from operations | 890,132 | ||
| Other income (expense) | |||
| Other income | 143 | ||
| Interest (expense) | (22,212) | ||
| Total other (expense) | (22,069) | ||
| Net income | $ | 868,063 |
Bolder BioPATH, Inc.
Statement of Changes in Stockholders' Equity (unaudited)
For the Quarter Ended March 31, 2021
| Common Stock | |||||||||||
| Shares | Amount | Retained Earnings | Stockholders' Equity | ||||||||
| Balance at December 31, 2020 | 100,000 | $ | 1,000 | $ | 5,868,115 | $ | 5,869,115 | ||||
| Net income | 868,063 | 868,063 | |||||||||
| Balance at March 31, 2021 | 100,000 | $ | 1,000 | $ | 6,736,178 | $ | 6,737,178 |
Bolder BioPATH, Inc.
Statement of Cash Flows (unaudited)
For the Quarter Ended March 31, 2021
| March 31, 2021 | |||
| Cash flows from operating activities: | |||
| Net income | $ | 868,063 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||
| Bad debt expense | (14,998) | ||
| Depreciation expense | 253,400 | ||
| Changes in assets and liabilities: | |||
| Accounts receivable | 800,880 | ||
| Unbilled revenue | (322,564) | ||
| Prepaid expenses | (2,508) | ||
| Accounts payable | 172,718 | ||
| Accrued liabilities | 21,151 | ||
| Deferred revenue | (144,671) | ||
| Net cash provided by operating activities | 1,631,471 | ||
| Cash flows from investing activities: | |||
| Cash paid for the purchase of property and equipment | (146,259) | ||
| Net cash (used in) investing activities | (146,259) | ||
| Cash flows from financing activities: | |||
| Principal payments on long-term debt, related party | (779,219) | ||
| Net cash (used in) financing activities | (779,219) | ||
| Net change in cash during the quarter | 705,993 | ||
| Cash - beginning of year | 41,398 | ||
| Cash - end of quarter | $ | 747,391 | |
| Supplemental disclosure of cash flow information: | |||
| Cash paid for interest expense | $ | 21,549 |
Bolder BioPATH, Inc.
Notes to the Financial Statements
1 - Description of the Business and Basis of Presentation
Bolder BioPATH, Inc. (the "Company") , incorporated on May 14, 2002, is headquartered in Boulder, Colorado and provides contract pharmacology, toxicology, and pathology services specializing in In Vivo models of rheumatoid arthritis, osteoarthritis, and cancer as well as other autoimmune and inflammation models with the goal of providing pre-clinical data to support advancing proteins and small molecules to investigational new drug or new drug application ("IND/NDA") stage.
The Company has prepared the accompanying unaudited interim condensed financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles ("GAAP"), and therefore should be read in conjunction with the Company's audited financial statements, and the notes thereto, included in the Company's annual financial statements for the year ended December 31, 2020. In the opinion of management, the condensed financial statements as of and for the three months ended March 31, 2021 include all adjustments which are necessary for a fair presentation of the results of the interim periods and of the Company's financial position as of March 31, 2021.
The Company regularly purchases vehicles through promissory notes in the ordinary course of operations. As of March 31, 2021, the notes bear interest at fixed rates ranging from 1.90% to 3.74%. The notes require monthly principal and interest payments of $956 to $2,374 with maturity dates ranging from May 2020 to September 2023 as of March 31, 2021. The notes are secured by the underlying asset, as defined in each respective note agreement. The principal amounts due on the vehicle loans were $133,725 as of March 31, 2021.
On April 20, 2020, the Organization entered into a Paycheck Protection Program ("PPP") loan agreement with an original principal balance of $224,464 and a fixed interest rate of 1.00%. Once released, the Company will reduce the liability by the amount forgiven and record a gain extinguishment in accordance with ASC 450-30, "Gain contingencies." As of March 31, 2021, the outstanding principal balance was $224,464.
The Company has a revolving line of credit with a maximum amount available of $1,000,000. The line of credit bears interest at variable rate equal to the annual prime rate plus an applicable percentage of 2.00%. The effective interest rate was 5.25% as of March 31, 2021. The line of credit calls for monthly interest only payments with all unpaid principal and interest due at maturity on April 16, 2021. The line is secured by substantially all assets of the Company. The Company had no principal amounts outstanding as of March 31, 2021 and through the date of issuance of these financial statements.
Related Party Note Payable
On August 1, 2019 the Company entered into an unsecured note payable agreement with the owners of the Company with an original principal amount not to exceed $2,000,000 to assist with the expansion cost of the Company's facility. The Company borrowed $1,000,000 on the effective date of the agreement and an additional $1,000,000 on November 1, 2019. The related party note payable bore interest at a fixed rate of 8.00% per annum through December 31, 2019 and decreased to 5.00% on January 1, 2020. The fixed rate is subject to change at the demand of the owners, however, will not exceed 8.00% per annum, as defined in the agreement. The related party note payable requires, at minimum, monthly interest
payments in addition to an undefined amount of principal. All unpaid amount of principal and interest are due at maturity on August 1, 2021. The principal amounts due on the related party note payable was $660,413 as of March 31, 2021.
Related Party Transaction
The Company receives report writing services from Report Right, LLC ("Report Right"), a related entity owned by a direct relative of a stockholder. Amounts paid to Report Right totaled $87,341 for the quarter ended March 31, 2021. There were no amounts due to Report Right as of March 31, 2021.
4 - Subsequent Events
On April 15, 2021, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Inotiv, Inc., an Indiana corporation (the "Inotiv"). On April 30, 2021, the Company closed the transaction contemplated by the Merger Agreement, and the merger under the Merger Agreement was consummated on May 3, 2021 (the "Merger"). Following the Merger, Inotiv Boulder, as the surviving wholly owned subsidiary of Inotiv, serves as a contract pharmacology and pathology company specializing in in vivo models of rheumatoid arthritis, osteoarthritis, and inflammatory bowel disease as well as other autoimmune and inflammation models. Consideration for the merger consisted of $18.5 million in cash, $1.5 million in seller notes and $34.5 million in Inotiv shares.