Annual report pursuant to Section 13 and 15(d)

Acquisition of Ohr Pharmaceutical, Inc.

v3.19.3.a.u2
Acquisition of Ohr Pharmaceutical, Inc.
12 Months Ended
Sep. 30, 2019
Acquisition of Ohr Pharmaceutical, Inc.  
Acquisition of Ohr Pharmaceutical, Inc.

3. Acquisition of Ohr Pharmaceutical, Inc.

As described in Note 1, on July 12, 2019, the Company completed the acquisition of Ohr in accordance with the terms of the Acquisition Agreement. The acquisition was accounted for as a reverse asset acquisition.

Pursuant to the Acquisition Agreement, the Company issued to Private NeuBase stockholders, optionholders, warrantholders and noteholders of Private NeuBase a number of shares of Ohr common stock representing approximately 85% of the fully diluted common stock of Ohr. The cost of the Ohr acquisiton, which represents the consideration transferred to Ohr’s stockholders in the Ohr Acquisition, was calculated based on the fair value of common stock of the combined company that Ohr stockholders own as of the closing of the Ohr Acquisition on July 12, 2019. With no active trading market for shares of Private NeuBase common stock, fair value of the Ohr common stock represents a more reliable measure of the fair value of consideration transferred in the acquisition. The cost of the Ohr acquisiton of $12.7 million consists of the following:

 

 

 

 

 

Number of shares of the combined company to be owned by Ohr security holders

    

 

2,829,248

Fair value per share of Ohr common stock as of July 11, 2019

 

$

4.14

Fair value of Ohr shares outstanding

 

 

11,713,087

Fair value of options assumed

 

 

63,840

Fair value of common stock and options issued

 

 

11,776,927

 

 

 

 

Transaction costs

 

 

884,981

Total cost of the Ohr acquisiton

 

$

12,661,908

 

The total cost of the Ohr Acquisition was allocated to the net assets acquired as follows:

 

 

 

 

 

Cash and cash equivalents

    

$

752,419

Prepaid expenses and other current assets

 

 

115,769

Investment in DepYmed

 

 

586,418

Intangible assets

 

 

250,000

Warrant liability

 

 

(470,093)

Accounts payable and accrued expenses

 

 

(493,055)

Fair value of net assets acquired

 

 

741,458

Research and development expense- License acquired

 

 

11,920,450

Total cost of Ohr Acquisition

 

$

12,661,908

 

The Company identified an intangible asset related to Ohr’s clinical trial data with an estimated fair value of $250,000. This intangible asset is being amortized on a straight-line basis over its estimated useful life of six months.

As of the asset acquisition date, Ohr’s SKS sustained release ocular drug delivery platform technology (“SKS Technology”) acquired had not yet attained regulatory approval. Accordingly, this intangible asset represents an in-process research and development asset with no future alternative use and was immediately expensed under the guidance of Accounting Standard Codification (“ASC”) 730, Research and Development, upon the asset acquisition.