Business Acquisition (Tables)

9 Months Ended

Sep. 30, 2020

Summary of Fair Value of Purchase Price Consideration

The following table summarizes the fair value of purchase price consideration to acquire Anelixis (in thousands):

Description	Amount
Fair value of purchase consideration:
Common shares issued (1)	$	1,194
Preferred shares issued (2)		69,723
Options assumed (3)		3,278
Warrants assumed (3)		12,944
Total purchase consideration	$	87,139

(1)

The fair value of common shares issued in the merger is based on 175,488 shares issued on the September 14, 2020 acquisition date at the closing price of the Company's common stock of $6.80 per share.

(2)

The fair value of preferred shares issued in the merger is based on the amount per share of Series X¹ preferred stock in the September 2020 Purchase Agreement.

(3)

The fair value of the options and warrants assumed and replaced in the merger is based on applying the Black-Scholes valuation method using appropriate inputs of volatility rates ranging from 82% to 83%, expected terms of 5.0 to 5.9 years and risk-free rates of 0.27% to 0.45%.

Summary of Preliminary Estimate of Fair Value of Assets Acquired and Liabilities Assumed

The following is an allocation of purchase price as of the September 14, 2020 acquisition closing date based upon a preliminary estimate of the fair value of the assets acquired and the liabilities assumed by the Company in the acquisition (in thousands):

Description	Amount
Cash and cash equivalents	$	11,035
Prepaid expenses and other current assets		27
Other non-current assets		11
Accounts payable		(580	)
Accrued expenses and other liabilities		(206	)
Net identifiable assets acquired		10,287

Goodwill		44,466
Identifiable intangible assets		32,386
Net assets acquired	$	87,139

Schedule of Unaudited Pro Forma Combined Financial Information

The following unaudited pro forma combined financial information is presented to illustrate the estimated effects of the Merger based on the historical financial statements and accounting records of Novus and Anelixis after giving effect to the Merger and the Merger-related pro forma adjustments.

The unaudited pro forma combined statement of operations for the three and nine months ended September 30, 2020 combine the historical statements of operations of Novus and Anelixis, giving effect to the Merger as if it had occurred on January 1, 2019, the first day of the fiscal year ended December 31, 2019.

The unaudited pro forma combined financial information has been presented for informational purposes only. The unaudited pro forma combined financial information does not purport to represent the actual results of operations that Novus and Anelixis would have achieved had the companies been combined during the periods presented in the unaudited pro forma combined financial statements and is not intended to project the future results of operations that the combined company may achieve after the Merger. The unaudited pro forma combined financial information does not reflect any potential cost savings that may be realized as a result of the Merger and also does not reflect any restructuring or integration-related costs to achieve those potential cost savings. Additionally, the unaudited pro forma combined financial information does not reflect any merger-related expenses, which totaled approximately $2.2 million and were removed from general and administrative expenses in the pro forma calculations below.


	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Revenue	$	120		$	250		$	120		$	250

Operating expenses
Research and development		1,779			2,267			6,556			9,077
General and administrative		1,918			1,761			5,622			6,141
Restructuring expense		1,802			—			2,292			—
Total operating expenses		5,499			4,028			14,470			15,218
Loss from operations		(5,379	)		(3,778	)		(14,350	)		(14,968	)
Other income (expense), net		4			27			(4,790	)		17
Net loss and other comprehensive loss	$	(5,375	)	$	(3,751	)	$	(19,140	)	$	(14,951	)
Net loss per share, basic and diluted	$	(4.28	)	$	(4.18	)	$	(16.35	)	$	(18.49	)
Weighted-average shares outstanding, basic and diluted		1,257,194			896,318			1,170,608			808,675