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BUSINESS COMBINATION (Tables)

6 Months Ended

Jun. 30, 2021

Schedule of Merger Consideration to be Transferred

The following is the Merger Consideration (as defined in the Merger Agreement) was transferred to effect the Merger:


(in thousands)	Total
Deemed (for accounting purposes only) issuance of Foamix shares to Menlo stockholders	$	123,757
Deemed (for accounting purposes only) conversion of Menlo equity awards	7,322
Total consideration*	$	131,079

* This amount reflects total consideration prior to reduction in respect of the CSRs (which had a fair value of $19.6 million as of the Merger Date) that were issued to Foamix shareholders and that reduced the Menlo stockholders’ relative ownership in the combined company. If the effect of the CSRs is included, the total consideration deemed paid by Foamix, as the accounting acquirer, to Menlo stockholders and equity award holders in the Merger would be reduced to approximately $111.4 million, as shown in the purchase price allocation table below.

Schedule of Allocation of the Purchase Price to the Fair Values of Assets Acquired and Liabilities Assumed

The Company completed its analysis of the allocation of the purchase price to the fair values of assets acquired and liabilities assumed as follows:


(in thousands)	March 9, 2020
Cash and cash equivalents	$	38,641
Investment in marketable securities	22,703
Prepaid expenses and other current assets	1,581
In-process research and development	49,800
Goodwill	4,545
Total assets	117,270
Current liabilities	(5,827)
Total liabilities	(5,827)
Purchase price*	$	111,443

* Reflects reduction in the purchase price deemed paid to Menlo stockholders in the Merger on the assumption that the CSRs, in an aggregate value of $19.6 million, convert into additional shares of the combined company for the Foamix shareholders, thereby resulting in a lower percentage of the combined company’s outstanding shares being owned by Menlo stockholders following the Merger.

Schedule of the Calculation for Goodwill of Merger

The purchase price of the transaction and the excess purchase price over the fair value of the identifiable net assets acquired, are calculated as follows:


(in thousands)	March 9, 2020
Purchase price	$	111,443
Less: fair value of net assets acquired, including other identifiable intangibles	(106,898)
Goodwill	$	4,545

Schedule of In Process Research and Development Assets Acquired Through Business Combination

The IPR&D recognized relates to Menlo’s once-daily oral serlopitant for the treatment of pruritus (itch) associated with PN that has not reached technological feasibility as follows:


(in thousands)
Intangible asset	Estimated Fair Value
Acquired indefinite life intangible assets*	$	49,800
Fair value of identified intangible assets	$	49,800

* Represents acquired IPR&D assets which are initially recognized at fair value and are classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. Accordingly, during the research and development period, these assets will not be amortized into earnings; instead these assets will be subject to periodic impairment testing.

Schedule of Pro Forma Information

Actual Menlo results of operations included in the condensed consolidated statement of operation for the three and six months ended June 30, 2020:


(in thousands)	Three months ended June 30, 2020		Six months ended June 30, 2020
	(Unaudited)
Revenues	$	—	$	—
Loss attributable to Menlo	$	7,594	$	19,637


	Three months ended June 30, 2020		Six months ended June 30, 2020

(in thousands, except per share data)	(Unaudited)		(Unaudited)
SUPPLEMENTAL PRO FORMA COMBINED RESULTS OF OPERATIONS:
Revenues	$	11,688	$	13,438
Net loss	$	167,441	$	205,082
Loss per share - basic and diluted	$	1.21	$	1.23

Adjustments to the supplemental pro forma combined results of operations, included in the above, are as follows:
Transaction costs	$	—	$	(14,931)
Acceleration of stock based compensation	—		(7,199)
Total Adjustments	$	—	$	(22,130)