UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 26, 2014
CELLULAR BIOMEDICINE GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware
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001-36498
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86-1032927
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(State or other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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530 University Avenue, #17
Palo Alto, California
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94301
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant’s telephone number, including area code: (650) 566-5064
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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EXPLANATORY NOTE
On October 2, 2014, Cellular Biomedicine Group, Inc. (the “Company”) filed a Current Report on Form 8-K to disclose its acquisition of Beijing Agreen Biotechnology Co., Ltd. By this Amendment No. 1 to such Form 8-K, the Company is amending and restating such Form 8-K for purposes of providing additional disclosure about the acquired business and including the required financial statements of the acquired business and pro forma information under Item 9.01.
Item 1.01. Entry into a Material Definitive Agreement
Item 2.01. Completion of Acquisition or Disposition of Assets
Item 3.02 Unregistered Sales of Equity Securities
As previously reported on a Current Report on Form 8-K filed on August 5, 2014 by Cellular Biomedicine Group Inc. (the “Company”), on August 2, 2014, the Company signed a framework agreement (“Framework Agreement”) with Beijing Agreen Biotechnology Co., Ltd. (“AG”) and its shareholders (the “AG Shareholders”) to acquire AG and its founder’s U.S. patent for a total cash and equity consideration of $3.28 million in cash and an aggregate of 828,522 restricted shares of Company common stock (the shares of Company common stock issued to AG and its founder, in the aggregate, the “Acquisition Shares”). A copy of the Framework Agreement is attached as Exhibit 10.1 hereto.
On September 26, 2014 (the “Closing”), the Company completed the acquisition of AG and its founder’s U.S. patent. The acquisition was structured as follows:
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Cellular Biomedicine Group (Shanghai) Ltd (“CBMG Shanghai”), the Company’s variable interest entity, acquired 100% of the equity interest of AG
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Cellular Biomedicine Group (HK) Ltd (“CBMG HK”) acquired 100% of the intellectual property of AG and the U.S. patent owned by AG’s founder
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Pursuant to the Framework Agreement and a technology transfer agreement dated September 1, 2014 (the “Technology Transfer Agreement”), as consideration for the acquisition of AG, CBMG agreed to pay the following: (i) $1,640,000 to the AG Shareholders (inclusive of the RMB2 million deposit already paid to the AG Shareholders at the signing of the Framework Agreement), to be paid at Closing; (ii) $1,640,000 to Cellular Immunity Tech Ltd., a British Virgin Islands company that held the intellectual property of AG and is owned by the AG shareholders, to be paid within one year and one day of the Closing, provided, however, that within one year of Closing, (x) AG will have signed cooperative agreements with at least two new hospitals for the provision of AG’s technical services and (y) AG’s cooperative relationship with General Hospital of Jilin Chemical Group Corporation (“Jilin Hospital”) has not been materially adversely affected, resulting in a suspension or termination of such relationship for 60 days or more; and (iii) 753,522 shares of the Company’s common stock, par value $0.001 per share, to be delivered to the AG Shareholders within five business days after Closing. Any cash consideration that is paid after the scheduled payment date is subject to a 0.1% penalty for each day that the payment is late. A copy of the Technology Transfer Agreement is attached as Exhibit 10.2 hereto.
In connection with the acquisition, on September 26, 2014 the Company also entered into a patent purchase agreement (the “U.S. Patent Purchase Agreement”) with Zhong Chen Kou, the founder of AG, to acquire Kou’s U.S. Patent No. 7,375,211, “Method for Detection and Qualification of T-Cell Receptor Vβ Repertoire.” As consideration for the patent, the Company agreed to issue 75,000 restricted shares of Company common stock. The patent will be held by CBMG’s subsidiary, CBMG HK. A copy of the Patent Purchase Agreement is attached as Exhibit 10.3 hereto.
The issuance of the Acquisition Shares was made in reliance on the exemption from registration provided by Rule 506(b) of Regulation D and Regulation S under the Securities Act of 1933, as amended.
The acquisition was subject to customary closing conditions, including, among other things, (a) approval by the AG Shareholders, (b) change in registration of AG’s business license and charter documents, (c) satisfaction of due diligence investigation on AG and its intellectual property, and (c) execution of certain ancillary agreements, including, but not limited to, retention agreements with AG’s employees and lock up agreements with AG’s shareholders.
The Acquisition Shares are subject to repurchase by the Company, in the event of a material breach of any of the following:
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Breach by certain AG Shareholders of their obligations in the retention agreements, in which case the Acquisition Shares will be repurchased at par value, for an aggregate repurchase price of $753.522; or
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Material adverse change to the intellectual property acquired from AG or any disruption or suspension of AG’s cooperative relationship with General Hospital of Jilin Chemical Group Corporation (“Jilin Hospital”) for at least 60 days that is not solely the fault of Jilin Hospital, in which case the Acquisition Shares will be repurchased at $6.70 per share.
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The acquisition may be unwound, and the Acquisition Shares repurchased at par value, in the event of any other material breach (subject to a 30-day cure period) of the acquisition terms by any party.
At Closing, each of the AG Shareholders entered into a lockup agreement with the Company. Under the agreement, the AG Shareholders agreed not to directly or indirectly offer, sell, transfer or otherwise dispose of any shares of the Company’s common stock beneficially owned by such AG Shareholders for a period of one year after Closing, without the prior written consent of the Company. A form of the lockup agreement is attached as Exhibit 10.4 hereto.
The Company also entered into employment agreements with all of AG’s employees. The employment agreements are commensurate with talent retention and market demand in China. At closing, AG’s founder Zhong Chen Kou entered into a two-year retention employment agreement and joined the Company as Chief Scientist, Immunology. The AG employees will be eligible to participate in the Company’s benefits and stock incentive programs.
The foregoing summaries of the terms of the acquisition are subject to, and qualified in their entirety by, such documents attached hereto as Exhibits 10.1 through 10.4, which are incorporated by reference herein.
Following the acquisition, the Company intends to maintain AG’s corporate name and run AG as a subsidiary of CBMG Shanghai.
The Company intends to file financial statements of the acquired company, AG, in addition to pro forma financial information, in an amendment to this Current Report on Form 8-K within 71 days of the date hereof.
ABOUT BEIJING AGREEN BIOTECHNOLOGY CO., LTD.
For purposes of this section, “AG”, “we”, “us” or “our” each refer to Beijing Agreen Biotechnology Co., Ltd., which is now an indirect wholly-owned subsidiary of the Company, together with its business, operations, subsidiaries and controlled entities).
AG Business Overview
AG is a biotech company with operations in China, engaged in the development of treatments for cancerous diseases utilizing proprietary cell technologies, which include without limitation, preparation of subset T Cell and clonality assay platform technology for treatment of a board range of cancers by AG’s served hospital, Jilin Hospital.
AG is focused on developing and marketing its technical service and test kits to hospitals that treat cancer patients who are undergoing immune cell therapy classified as 3rd Medical Technology by regulatory agencies in China. We have developed proprietary practical knowledge in the use of cell-based therapeutics that we believe could be used to help a great number of people suffering from cancer. Specifically, we provide technical services comprised of T Cells Receptor ("TCR") clonality analysis technology and T Central Memory Cell ("Tcm") and Dendritic Cell ("DC") preparation methodologies. The TCR clonality analysis technology is based on the use of the multiple sets of unique primers to amplify 22 regions of the TCR and thereby detect clonal expansions related to antigen stimulation of the immune system, which enables the assessment of tumor specific immunity with high accuracy and efficiency. Tcm cells are the subpopulation of T lymphocytes with key characteristics including high potency and long-term memory of specific immunity; and they are the key element of immunocellular fortification against tumors, infections and immune disorders. The Tcm cells are drawn from the cancer patient’s own blood and the therapy using these cells is classified in China as Medical Technology, which makes such therapy covered by medical insurance in more than ten provinces in China.
AG’s primary target market is China. Jilin Hospital, AG’s primary hospital partner, currently uses AG’s technical service and test kits to treat patients who are undergoing cancer immune cell therapy in China. Based on AG’s results to date, AG believes that its TCR and Tcm services are safe and effective treatment options for cancer patients. The Company believes that the results of AG’s proof-of-concept studies will support formal preclinical and clinical trials with prominent hospitals in China, which can then be carried out through the network of authorized treatment centers throughout China.
History and Development of AG
AG was founded by Zhong Chen Kou and a team of seasoned Chinese-American scientists and doctors. AG's headquarters are in Beijing, China. In 2012, AG began providing TCR and Tcm technical services to Jilin Hospital in Jilin province, China. AG had approximately $1.1 million in budding lab test kit sales and technical services revenue in 2013. AG's focus is to monetize the rapidly growing health care market in China by marketing and commercializing AG’s TCR and Tcm services as a cancer treatment option as well for use in cancer-related clinical trials.
AG’s primary hospital partner, Jilin Hospital, has conducted approximately 770 immune cell therapy treatments between March 2013 and September 2014 for 265 cancer patients, including but not limited to patients suffering from lung cancer, breast cancer, gastric cancer, colorectal cancer, renal cancer, ovarian cancer, bladder cancer, colon cancer, cervical cancer, liver cancer, malignant melanoma and pancreatic cancer. According to Jilin Hospital’s records, to date there have been no reports of any severe adverse effect from the therapy. Based on an observation of patients’ diet, sleep, physical strength, and pain level, Jilin Hospital saw improvement in 87% of the patients. In some cancers Jilin Hospital observed a significant reduction of recurrence and a significant increase in survival time in late stage cancer patients.
The Company also intends to monetize AG’s U.S. and Chinese intellectual property for immune cell therapy preparation methodologies and patient immunity assessment by engaging with prominent hospitals to conduct pre-clinical and clinical studies in specific cancer indications. The T Cell clonality analysis technology patent, together with AG’ other know-how for immunity analysis, will enable the Company to establish an immunoassay platform that is crucial for immunity evaluation of patients with immune disorders as well as cancerous diseases that are undergoing therapy. In an effort to alleviate the great emotional and economic burdens that cancer generates across China and globally, the Company will continue to seek to empower hospitals' existing and new immune cell cancer therapy development programs that may help patients improve their quality of life and improve their survival rate. CBMG’s acquisition of AG provides AG with an enlarged opportunity to expand the application of its cancer therapy-enabling technologies and to initiate clinical trials with leading cancer hospitals.
About Immune Cell Therapy, Adoptive T cell
According to the U.S. National Cancer Institute, despite years of undulating steps, excitement is growing for immunotherapy—therapies that harness the power of a patient’s immune system to combat their disease, or what some in the research community are calling the “fifth pillar” of cancer treatment.
One approach to immunotherapy involves engineering patients’ own immune cells to recognize and attack their tumors. And although this approach, called adoptive cell transfer ("ACT"), has been restricted to small clinical trials so far, treatments using these engineered immune cells have generated some remarkable responses in patients with advanced cancer. For example, in several early-stage trials testing ACT in patients with advanced acute lymphoblastic leukemia ("ALL") who had few if any remaining treatment options, many patients’ cancers have disappeared entirely. Several of these patients have remained cancer free for extended periods.
Equally promising results have been reported in several small clinical trials involving patients with lymphoma. Although the lead investigators cautioned that much more research is needed, the results from the trials performed thus far are proofs of principle that researchers can successfully alter patients’ T cells so that they attack their cancer cells.
ACT’s building blocks are T cells, a type of immune cell collected from the patient’s own blood. After collection, the T cells are genetically engineered to produce special receptors on their surface called chimeric antigen receptors ("CARs"). CARs are proteins that allow the T cells to recognize a specific protein (antigen) on tumor cells. These engineered CAR T cells are then grown in the laboratory until they number in the billions. The expanded population of CAR T cells is then infused into the patient. After the infusion, if all goes as planned, the T cells multiply in the patient’s body and, with guidance from their engineered receptor, recognize and kill cancer cells that harbor the antigen on their surfaces. This process builds on a similar form of ACT pioneered from NCI’s Surgery Branch for patients with advanced melanoma. NCI’s Pediatric Oncology Branch commented that the CAR T cells are much more potent than anything they can achieve with other immune-based treatments being studied. Although investigators working in this field caution that there is still much to learn about CAR T-cell therapy, the early results from trials like these have generated considerable optimism. Researchers opined that CAR T-cell therapy eventually may become a standard therapy for some B-cell malignancies like ALL and chronic lymphocytic leukemia.
Demand for Cell-Based Therapies
We believe that an increasing portion of healthcare spending both in China and worldwide will be directed to immune cell therapies, driven by an aging population, and because immune cell therapy treatments could become a safe, effective, and cost-effective method for treating millions of cancer patients.
Cancer diseases are major threats to public health and the solvency of health systems worldwide. Current treatments for these diseases cannot meet medical needs. Cell therapy is a new technology that has the potential to alleviate much of the burden of these chronic and degenerative diseases in a cost-effective manner.
The current data on CAR T-cell therapies, presented from various institutions including MSKCC, University of Pennsylvania, National Cancer Institute, and Fred Hutchinson Cancer Center, has been extremely positive. Recently, T cell checkpoint manipulation has brought hope to the struggling battle against cancer using immune cell therapy technologies. Merck has received fast approval for its PD-1 antibody therapy for Melanoma. Novartis CAR-T technology has made breakthroughs in treating B cell lymphoma using genetically modified T cell technology.
Management believes the remaining risk in monetizing cancer immune cell therapies is concentrated in late stage clinical studies, speed-to-approval, manufacturing and process optimization.
Approved cell therapies have been appearing on the market in recent years. The number of cancer immune cell therapy companies that are currently in clinical trials has been gathering momentum, and we anticipate that new cancer cellular therapy products will appear on the market within the next several years.
Strategy
Our strategy is for CBMG to monetize AG’s U.S. and Chinese intellectual property for immune cell therapy preparation methodologies and patient immunity assessment by engaging with prominent hospitals to conduct pre-clinical and clinical studies in specific cancer indications. The T Cell clonality analysis technology patent, together with AG’ other know-how for immunity analysis, will enable the Company to establish an immunoassay platform that is crucial for immunity evaluation of patients with immune disorders as well as cancerous diseases that are undergoing therapy.
We believe that few competitors in China are as well-equipped as we are in the clinical trial development, diversified U.S. FDA protocol compliant manufacturing facilities, regulatory compliance and policy making participation, as well as a long-term presence in the United States with U.S.-trained executives and investor base.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibits |
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Description |
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10.1
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Framework Agreement, dated August 2, 2014 (with unofficial summary translation)**
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10.2
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Technology Transfer Agreement, dated September 1, 2014**
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10.3
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U.S. Patent Purchase Agreement, dated September 26, 2014**
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10.4
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Form of Lockup Agreement**
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Consent of Independent Registered Public Accountant*
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Audited financial statements of Beijing Agreen Biotechnology Co., Ltd. for the six months ended June 30, 2014 and fiscal years ended December 31, 2013 and 2012*
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Unaudited pro forma combined financial statements of the Company as of and for the nine months ended September 30, 2014 and for the fiscal year ended December 31, 2013*
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*Filed herewith
**Previously filed
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Cellular Biomedicine Group, Inc.
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By:
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/s/ Bizuo (Tony) Liu |
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Bizuo (Tony) Liu |
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Chief Financial Officer |
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Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
Cellular Biomedicine Group, Inc.
Palo Alto, California
We have issued our report dated October 31, 2014, with respect to the consolidated financial statements of Beijing Agreen Biotechnology Co., Ltd. included in this current report of Cellular Biomedicine Group, Inc. on Form 8-K. We hereby consent to the incorporation by reference of said report in the Registration Statements of Cellular Biomedicine Group, Inc. on Form S-8 (File No. 333-198692) effective September 11, 2014; (File No. 333-187799) effective April 8, 2013; (File No. 333-179974) effective March 7, 2012; and (File No. 333-158583) effective April 15, 2009.
/s/ BDO China Shu Lun Pan CPAs LLP
BDO China Shu Lun Pan CPAs LLP
Shanghai, China
December 8, 2014
Exhibit 99.1
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Beijing Agreen Biotechnology Co., Ltd.
Financial Statements
Period Ended June 30, 2014,
Years Ended December 31, 2013 and December 31, 2012
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Beijing Agreen Biotechnology Co., Ltd.
Financial Statements
Period Ended June 30, 2014, Years Ended December 31, 2013 and December 31, 2012
Beijing Agreen Biotechnology Co., Ltd.
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Independent Auditors’ Report
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4
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Financial Statements
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Balance Sheets
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5
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Statements of Operations
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6
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Statements of Stockholders’ Equity and Comprehensive Income
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7
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Statements of Cash Flows
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8
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Notes to Financial Statements
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9 – 15
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Independent Auditors’ Report
Board of Directors
Beijing Agreen Biotechnology Co., Ltd.
We have audited the accompanying balance sheets of Beijing Agreen Biotechnology Co., Ltd. as of June 30, 2014, December 31, 2013 and December 31, 2012, and the related statements of operations, stockholders’ equity and comprehensive loss, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes 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.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Beijing Agreen Biotechnology Co., Ltd. at June 30, 2014, December 31, 2013 and December 31, 2012, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, certain conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 1. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ BDO China Shu Lun Pan CPAs LLP
October 31, 2014
Beijing Agreen Biotechnology Co., Ltd.
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30 June 2014
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31 December 2013
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31 December 2012
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Assets
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Current assets:
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Cash and cash equivalents
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$ |
273,888 |
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$ |
35,244 |
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$ |
197,177 |
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Accounts receivable
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196,073 |
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126,710 |
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167,051 |
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Inventory (Note 3)
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206,369 |
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193,175 |
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171,469 |
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Prepaid expenses and other current assets (Note 4)
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129,249 |
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144,003 |
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178,501 |
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Total current assets
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805,579 |
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499,132 |
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714,198 |
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Non-current assets:
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Property and equipment, net (Note 5)
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603,428 |
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694,411 |
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253,935 |
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Total Non-current assets
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603,428 |
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694,411 |
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253,935 |
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Total Assets
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$ |
1,409,007 |
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$ |
1,193,543 |
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$ |
968,133 |
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Liabilities and Stockholders' Equity
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Current liabilities:
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Accounts payable
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$ |
84,126 |
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$ |
41,081 |
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$ |
68,270 |
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Accrued payroll and bonuses
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196,909 |
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169,237 |
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59,550 |
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Other payables (Note 6)
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1,110,813 |
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823,363 |
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967,107 |
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Other current liabilities
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1,560 |
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- |
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4,582 |
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Total current liabilities
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1,393,408 |
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1,033,681 |
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1,099,509 |
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Long-term debt (Note 6)
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422,572 |
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639,669 |
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- |
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Total liabilities
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1,815,980 |
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1,673,350 |
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1,099,509 |
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Commitments and Contingencies (Note 8)
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Stockholders' Equity (Note 7):
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Additional paid-in capital
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159,096 |
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159,096 |
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159,096 |
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Accumulated other comprehensive income
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(6,447 |
) |
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(10,626 |
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(999 |
) |
Accumulated deficit
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(559,622 |
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(628,277 |
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(289,473 |
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Total stockholders' equity
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(406,973 |
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(479,807 |
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(131,376 |
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Total Liabilities and Stockholders' Equity
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$ |
1,409,007 |
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$ |
1,193,543 |
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$ |
968,133 |
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See accompanying notes to consolidated financial statements.
Beijing Agreen Biotechnology Co., Ltd.
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Six months ended
June 30,
2014
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Year ended
December 31,
2013
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Year ended
December 31,
2012
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Revenue
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$ |
778,669 |
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$ |
1,075,692 |
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$ |
265,654 |
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Cost of revenues
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486,161 |
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872,937 |
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81,573 |
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Gross profit
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292,508 |
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202,755 |
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184,081 |
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Operating Expenses:
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Selling and administrative
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155,938 |
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313,736 |
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293,026 |
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Research and development
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67,960 |
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214,752 |
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90,841 |
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Total Operating Expenses
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223,898 |
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528,488 |
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383,867 |
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Operating income /(loss)
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68,610 |
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(325,733 |
) |
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(199,786 |
) |
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Other income/(expenses):
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|
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Interest income
|
|
|
143 |
|
|
|
310 |
|
|
|
180 |
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Foreign exchange gain
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|
|
- |
|
|
|
503 |
|
|
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- |
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Other operating expense
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- |
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(11,296 |
) |
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|
- |
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Total other operating income /(expenses)
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|
|
143 |
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|
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(10,483 |
) |
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|
180 |
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|
|
|
|
|
|
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Non-operating expense
|
|
|
98 |
|
|
|
2,588 |
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|
|
- |
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|
|
|
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|
|
Profit /(loss) from continuing operations before taxes
|
|
|
68,655 |
|
|
|
(338,804 |
) |
|
|
(199,606 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net profit /(loss)
|
|
|
68,655 |
|
|
|
(338,804 |
) |
|
|
(199,606 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income /(loss)
|
|
|
4,179 |
|
|
|
(9,627 |
) |
|
|
(999 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income /(loss)
|
|
$ |
72,834 |
|
|
$ |
(348,431 |
) |
|
$ |
(200,605 |
) |
See accompanying notes to consolidated financial statements.
Beijing Agreen Biotechnology Co., Ltd.
Statements of Stockholders' Equity and Comprehensive Income
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
Total
|
|
|
|
Additional paid-in
|
|
|
Comprehensive
|
|
|
Accumulated
|
|
|
Stockholders’
|
|
|
|
Capital
|
|
|
Income
|
|
|
Deficit
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2012
|
|
$ |
159,096 |
|
|
$ |
- |
|
|
$ |
(89,867 |
) |
|
|
69,229 |
|
Currency translation adjustment
|
|
|
- |
|
|
|
(999 |
) |
|
|
- |
|
|
|
(999 |
) |
Net loss
|
|
|
- |
|
|
|
- |
|
|
|
(199,606 |
) |
|
|
(199,606 |
) |
Balance at December 31, 2012
|
|
|
159,096 |
|
|
|
(999 |
) |
|
|
(289,473 |
) |
|
|
(131,376 |
) |
Currency translation adjustment
|
|
|
- |
|
|
|
(9,627 |
) |
|
|
- |
|
|
|
(9,627 |
) |
Net loss
|
|
|
- |
|
|
|
- |
|
|
|
(338,804 |
) |
|
|
(338,804 |
) |
Balance at December 31, 2013
|
|
$ |
159,096 |
|
|
$ |
(10,626 |
) |
|
$ |
(628,277 |
) |
|
$ |
(479,807 |
) |
Currency translation adjustment
|
|
|
- |
|
|
|
4,179 |
|
|
|
- |
|
|
|
4,179 |
|
Net profit
|
|
|
- |
|
|
|
- |
|
|
|
68,655 |
|
|
|
68,655 |
|
Balance at June 30, 2014
|
|
$ |
159,096 |
|
|
$ |
(6,447 |
) |
|
$ |
(559,622 |
) |
|
$ |
(406,973 |
) |
See accompanying notes to consolidated financial statements.
Beijing Agreen Biotechnology Co., Ltd.
|
|
Six months ended
June 30,
2014
|
|
|
Year ended
December 31,
2013
|
|
|
Year ended
December 31,
2012
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
|
Net profit /(loss)
|
|
$ |
68,655 |
|
|
$ |
(338,804 |
) |
|
$ |
(199,606 |
) |
Depreciation
|
|
|
85,903 |
|
|
|
143,037 |
|
|
|
5,293 |
|
Changes to operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(69,363 |
) |
|
|
40,341 |
|
|
|
(104,105 |
) |
Prepaid expenses and other current assets
|
|
|
14,754 |
|
|
|
34,498 |
|
|
|
(54,202 |
) |
Inventory
|
|
|
(13,194 |
) |
|
|
(21,706 |
) |
|
|
(170,273 |
) |
Accounts payable
|
|
|
43,045 |
|
|
|
(27,189 |
) |
|
|
64,135 |
|
Accrued payroll and bonuses
|
|
|
27,672 |
|
|
|
109,687 |
|
|
|
46,423 |
|
Other payables
|
|
|
287,450 |
|
|
|
(143,744 |
) |
|
|
806,724 |
|
Long-term payables
|
|
|
(217,097 |
) |
|
|
639,669 |
|
|
|
- |
|
Other current liabilities
|
|
|
1,560 |
|
|
|
(4,582 |
) |
|
|
4,582 |
|
Net Cash Provided by Operating Activities
|
|
|
229,385 |
|
|
|
431,207 |
|
|
|
398,971 |
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(1,003 |
) |
|
|
(568,321 |
) |
|
|
(248,710 |
) |
Net Cash Used in Investing Activities
|
|
|
(1,003 |
) |
|
|
(568,321 |
) |
|
|
(248,710 |
) |
Net increase /(decrease) in cash and cash equivalents
|
|
|
228,382 |
|
|
|
(137,114 |
) |
|
|
150,261 |
|
Effect of exchange rates on cash
|
|
|
10,262 |
|
|
|
(24,819 |
) |
|
|
(1,581 |
) |
Cash and Cash Equivalents at Beginning of Period /Years
|
|
|
35,244 |
|
|
|
197,177 |
|
|
|
48,497 |
|
Cash and Cash Equivalents at End of Period /Years
|
|
$ |
273,888 |
|
|
$ |
35,244 |
|
|
$ |
197,177 |
|
Supplemental Schedule of Cash Flow Information
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Supplemental Schedule of Non-Cash Financing and Investing Activity
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification of forward contract liability due to settlement
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Issuance of warrants to landlord for lease extension
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Beijing Agreen Biotechnology Co., Ltd.
Notes to Financial Statements
1.
|
Description of Business
|
The Company
Beijing Agreen Biotechnology Co., Ltd. (the Company) was founded and incorporated in Beijing, China on April 27, 2011. The Company’s business license number is 110108013815147; registered address is Room 607,608B, Building 5, Yard 1, South Nongda Road, Beijing. The Company’s main business scope includes: technological development, transfer, advisory, service; import, export and sales of instruments and meters. The words “Company” “we,” “us” and “our” refer to Beijing Agreen Biotechnology Co., Ltd.
Since inception, the Company has devoted substantially all of its efforts to research and development (R&D), business planning, recruiting management and technical staff, acquiring operating assets, protecting its technology and product candidates, and raising capital. The Company began to generate revenues from the collaboration agreement during the year ended December 31, 2012.
Basis of Presentation
The accompanying financial statements, which include the accounts of the Company and its wholly-owned subsidiary, Beijing Agreen Investment Consultancy Co., Ltd. have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Liquidity
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred operating losses since inception. Positive cash flows from operations of $229,385, $431,207 and $398,971 for the period /years ended June 30, 2014, December 31, 2013 and December 31, 2012 results primarily from advances under our collaborative agreements. The Company plans to finance its operations with proceeds from the related parties and the expected cash to be received from collaborative agreements with the Company’s strategic partner and, ultimately, with revenues from product sales. If the Company is not able to raise additional financing or generate additional cash through collaborative agreement, the Company will need to preserve cash through a combination of cost reduction measures. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Beijing Agreen Biotechnology Co., Ltd.
Notes to Financial Statements
2.
|
Summary of Significant Accounting Policies
|
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include provision for doubtful debts and useful lives of assets.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.
Allowance for Doubtful Accounts
The Company evaluates the collectability of accounts receivable based on a combination of factors to determine if any receivables will potentially be uncollectible. Should any accounts receivable balances be determined to be uncollectible, the Company establishes an allowance for doubtful accounts. If all attempts to collect a receivable fail, the receivable is written off against the allowance.
As at June 30, 2014 and December 31, 2013, the allowance for doubtful accounts is $11,296 and $11,296, respectively.
Property and Equipment
Property and equipment are stated at cost, less accumulated depreciation. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the underlying assets, which range from 3 to 10 years. Leasehold improvements are depreciated over the shorter of their estimated useful lives or the related lease term. When assets are retired or disposed of, the cost and accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is reflected in operations in the period realized. Maintenance and repairs are charged to expense when incurred.
Impairment of Long-Lived Assets
The Company reviews its long-lived assets and certain identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of by sale are reflected at the lower of their carrying amount or fair value less cost to sell.
Beijing Agreen Biotechnology Co., Ltd.
Notes to Financial Statements
Currency Translation
The functional currency of the Company is the RMB. Accordingly, asset and liability accounts of those operations are translated into United States dollars using the current exchange rate in effect at the balance sheet date and equity accounts are translated into United States dollars using historical rates. The revenues and expenses are translated using the average exchange rates in effect during the period, and gains and losses from foreign currency translation adjustments are included as a component of accumulated comprehensive income in the balance sheets. Transaction gains or losses arising in the ordinary course of business are included with other income (expense), net, in the statements of operations.
Revenue Recognition
The Company recognizes revenue when persuasive evidence of an arrangement exists; delivery has occurred or services have been performed; the fee is fixed and determinable; and ability to collect is reasonably assured.
Research and Development
Research and development costs, including the expenses for research under collaborative agreement, are expensed as the related goods are delivered or the services are performed. Research and development costs include, but are not limited to, salaries and benefits, lab supplies, specialized equipment and professional service fees.
Income Taxes
The Company uses the asset and liability method to account for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax expense or benefit is the result of changes in the deferred tax asset and liability. Valuation allowances are established when necessary to reduce deferred tax assets where it is more likely than not that the deferred tax assets will not be realized.
ASC 740 clarifies the accounting for uncertainty in income taxes recognized in the financial statements. ASC 740 provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon audit, including resolutions of any related appeals or litigation processes, based on the technical merits of the position. ASC 740 also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.
Beijing Agreen Biotechnology Co., Ltd.
Notes to Financial Statements
Inventory consisted of the following:
|
|
June 30,
2014
|
|
|
December 31,
2013
|
|
|
December 31,
2012
|
|
Raw materials
|
|
$ |
139,102 |
|
|
$ |
107,962 |
|
|
$ |
170,951 |
|
Work in progress
|
|
|
67,267 |
|
|
|
85,213 |
|
|
|
--- |
|
Finished goods
|
|
|
--- |
|
|
|
--- |
|
|
|
518 |
|
Total
|
|
$ |
206,369 |
|
|
$ |
193,175 |
|
|
$ |
171,469 |
|
4.
|
Property and Equipment
|
Property and equipment consisted of the following:
|
|
June 30,
2014
|
|
|
December 31,
2013
|
|
|
December 31,
2012
|
|
Office equipment
|
|
$ |
--- |
|
|
$ |
--- |
|
|
$ |
1,260 |
|
Manufacturing equipment
|
|
|
488,341 |
|
|
|
491,809 |
|
|
|
185,228 |
|
Computer equipment
|
|
|
26,320 |
|
|
|
26,562 |
|
|
|
10,586 |
|
Leasehold improvement
|
|
|
324,434 |
|
|
|
327,408 |
|
|
|
--- |
|
Construction work in process
|
|
|
--- |
|
|
|
--- |
|
|
|
63,008 |
|
|
|
|
839,095 |
|
|
|
845,779 |
|
|
|
260,082 |
|
Less: accumulated depreciation
|
|
|
(235,667 |
) |
|
|
(151,368 |
) |
|
|
(6,147 |
) |
Property and equipment, net
|
|
$ |
603,428 |
|
|
$ |
694,411 |
|
|
$ |
253,935 |
|
Depreciation expense was $85,903, $143,037 and $5,293 for the period /years ended June 30, 2014, December 31, 2013 and December 31, 2012, respectively.
Beijing Agreen Biotechnology Co., Ltd.
Notes to Financial Statements
5.
|
Other Payables and Long-term payables
|
Other payables consisted of the following:
|
|
June 30,
2014
|
|
|
December 31,
2013
|
|
|
December 31,
2012
|
|
Jilin Luhong Real Estate Development Co., Ltd. (“Luhong”)
|
|
$ |
747,153 |
|
|
$ |
632,021 |
|
|
$ |
954,578 |
|
Advances from shareholders
|
|
|
363,660 |
|
|
|
191,342 |
|
|
|
12,529 |
|
Total
|
|
$ |
1,110,813 |
|
|
$ |
823,363 |
|
|
$ |
967,107 |
|
Long-term payables consisted of the following:
|
|
June 30,
2014
|
|
|
December 31,
2013
|
|
|
December 31,
2012
|
|
Jilin Luhong Real Estate Development Co., Ltd.
|
|
$ |
422,572 |
|
|
$ |
639,669 |
|
|
$ |
--- |
|
Total
|
|
$ |
422,572 |
|
|
$ |
639,669 |
|
|
$ |
--- |
|
The balances with Luhong could be further analyzed as follows:
|
|
June 30,
2014
|
|
|
December 31,
2013
|
|
|
December 31,
2012
|
|
Advances under collaborative agreements
|
|
$ |
845,144 |
|
|
$ |
852,892 |
|
|
$ |
827,301 |
|
Profit appropriation
|
|
|
172,886 |
|
|
|
134,497 |
|
|
|
--- |
|
Additional advances
|
|
|
151,695 |
|
|
|
284,301 |
|
|
|
127,277 |
|
Total
|
|
$ |
1,169,725 |
|
|
$ |
1,271,690 |
|
|
$ |
954,578 |
|
Beijing Agreen Biotechnology Co., Ltd.
Notes to Financial Statements
Stockholders’ equity consisted of the following:
|
|
June 30,
2014
|
|
|
December 31,
2013
|
|
|
December 31,
2012
|
|
Additional paid-in capital
|
|
$ |
159,096 |
|
|
$ |
159,096 |
|
|
$ |
159,096 |
|
Accumulated other comprehensive income
|
|
|
(6,447 |
) |
|
|
(10,626 |
) |
|
|
(999 |
) |
Accumulated deficit
|
|
|
(559,622 |
) |
|
|
(628,277 |
) |
|
|
(289,473 |
) |
Total
|
|
$ |
(406,973 |
) |
|
$ |
(479,807 |
) |
|
$ |
(131,376 |
) |
Revenue consisted of the following:
|
|
Six months ended
June 30,
2014
|
|
|
Year ended
December 31,
2013
|
|
|
Year ended
December 31,
2012
|
|
Collaboration revenue
|
|
$ |
755,419 |
|
|
$ |
1,039,920 |
|
|
$ |
--- |
|
Others
|
|
|
23,250 |
|
|
|
35,772 |
|
|
|
265,654 |
|
Total
|
|
$ |
778,669 |
|
|
$ |
1,075,692 |
|
|
$ |
265,654 |
|
Beijing Agreen Biotechnology Co., Ltd.
Notes to Financial Statements
8.
|
Commitments and Contingencies
|
Operating Lease Commitments
The Company leases office and laboratory space under non-cancelable operating lease agreements. The Company recognizes rent expense on a straight-line basis over the office non-cancellable lease term and records the difference between cash rent payments and the recognition of rent expense as a deferred rent liability. Rent expense for the period /years ended June 30, 2014, December 31, 2013 and December 31, 2012 was $20,458, $66,883 and $33,925, respectively.
At June 30, 2014, future minimum lease payments under all non-cancelable operating leases were as follows:
Years ending June 30,
|
|
|
|
2015
|
|
$ |
61,523 |
|
2016
|
|
|
37,342 |
|
Total lease payments
|
|
$ |
98,865 |
|
9.
|
Collaboration Agreements
|
The Company has entered into the separate collaboration agreement (“Agreement”) with strategic partner Jilin Luhong Real Estate Development Co., Ltd on 10 December 2012. The Agreement is for 8 years and provides for cash payments in consideration of the performance of certain research, development and operational activities.
The Company has recognized approximately $755,419 and $1,039,920 in revenue for the period /year ended June 30, 2014 and December 31, 2013, respectively. Total collaborative assistance financing from inception through the amended term is $1,440,587.
On September 26, 2014, CBMG Biotech (Shanghai) Co., Ltd. acquired the Company’s 100% shares and relative know-how by totally Rmb 20,000,000 (equivalent to $3,251,610) and 753,522 common stock of CBMG US (NASDAQ: CBMG).
The Company has evaluated subsequent events through October 31, 2014, the date the financial statements were available to be issued.
Exhibit 99.2
UNAUDITED PRO FORMA
CONDENSED FINANCIAL STATEMENTS
The following unaudited condensed pro forma balance sheet as of September 30, 2014 and December 31, 2013 was prepared as if the merger was effective as of such date. The unaudited pro forma condensed statements of operations for the nine months ended September 30, 2014 gives effect to the Transaction as if it had been completed on January 1, 2014. The unaudited pro forma combined statements of operations for the year ended December 31, 2013 gives effect to the Transaction as if the acquisition had been completed on January 1, 2013. The unaudited pro forma condensed balance sheets and statements of operations include adjustments that give effect to factually supportable events that are directly attributable to the Transaction and expected to have a continuing impact.
Unaudited Pro Forma Condensed Balance Sheet as of September 30, 2014
CELLULAR BIOMEDICINE GROUP INC.
UNAUDTIED PROFORMA CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
CELLULAR BIOMEDICINE GROUP INC.
|
|
|
BEIJING AGREEN BIOTECHNOLOGY CO., LTD.
|
|
|
|
|
CELLULAR BIOMEDICINE GROUP INC.
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
Pro Forma Adjusting Entries
|
|
|
|
September 30,
|
|
|
|
2014
|
|
|
2014
|
|
|
|
|
|
|
|
2014
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$ |
9,995,422 |
|
|
$ |
145,611 |
|
|
$ |
(325,071 |
) |
a |
|
|
$ |
9,815,962 |
|
Accounts Receivable
|
|
|
24,000 |
|
|
|
151,093 |
|
|
|
|
|
|
|
|
|
175,093 |
|
Other receivable
|
|
|
131,853 |
|
|
|
31,798 |
|
|
|
|
|
|
|
|
|
163,651 |
|
Amount due from related parties
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
- |
|
Inventory
|
|
|
172,976 |
|
|
|
174,820 |
|
|
|
|
|
|
|
|
|
347,796 |
|
Prepaid expenses
|
|
|
496,348 |
|
|
|
14,331 |
|
|
|
|
|
|
|
|
|
510,679 |
|
Other current assets
|
|
|
111,882 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
111,882 |
|
Total current assets
|
|
|
10,932,481 |
|
|
|
517,653 |
|
|
|
|
|
|
|
|
|
11,125,063 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
734,095 |
|
|
|
561,113 |
|
|
|
|
|
|
|
|
|
1,295,208 |
|
Intangibles
|
|
|
1,773,281 |
|
|
|
- |
|
|
|
9,942,000 |
|
e |
|
|
|
11,715,281 |
|
Goodwill
|
|
|
- |
|
|
|
- |
|
|
|
7,678,789 |
|
b,c,d,e |
|
|
|
7,678,789 |
|
Investments
|
|
|
9,218,722 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
9,218,722 |
|
Long-term prepaid expenses and other assets
|
|
|
458,058 |
|
|
|
83,051 |
|
|
|
|
|
|
|
|
|
541,109 |
|
Total assets
|
|
$ |
23,116,637 |
|
|
$ |
1,161,817 |
|
|
|
|
|
|
|
|
$ |
41,574,172 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
176,903 |
|
|
|
47,509 |
|
|
|
|
|
|
|
|
$ |
224,412 |
|
Accrued expenses
|
|
|
520,680 |
|
|
|
42,013 |
|
|
|
1,300,284 |
|
a |
|
|
|
1,862,977 |
|
Advances payable to related party
|
|
|
34,531 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
34,531 |
|
Other current liabilities
|
|
|
624,422 |
|
|
|
523,077 |
|
|
|
1,625,804 |
|
a |
|
|
|
2,773,303 |
|
Total current liabilities
|
|
|
1,356,536 |
|
|
|
612,599 |
|
|
|
|
|
|
|
|
|
4,895,223 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-current liabilities
|
|
|
- |
|
|
|
422,592 |
|
|
|
|
|
|
|
|
|
422,592 |
|
Total liabilities
|
|
|
1,356,536 |
|
|
|
1,035,191 |
|
|
|
|
|
|
|
|
|
5,317,815 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock series B, no par value, 50,000,000 shares
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, par value $0.001, 300,000,000 shares authorized;
|
|
|
9,182 |
|
|
|
- |
|
|
|
754 |
|
b, c |
|
|
|
9,936 |
|
Additional paid in capital
|
|
|
51,661,674 |
|
|
|
812,675 |
|
|
|
13,682,828 |
|
b, c |
|
|
|
66,157,177 |
|
Accumulated deficit
|
|
|
(32,360,053 |
) |
|
|
(676,386 |
) |
|
|
676,386 |
|
d |
|
|
|
(32,360,053 |
) |
Accumulated other comprehensive income (loss)
|
|
|
2,449,297 |
|
|
|
(9,663 |
) |
|
|
9,663 |
|
e |
|
|
|
2,449,297 |
|
Total stockholders' equity
|
|
|
21,760,101 |
|
|
|
126,626 |
|
|
|
|
|
|
|
|
|
36,256,357 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholder's equity
|
|
$ |
23,116,637 |
|
|
$ |
1,161,817 |
|
|
|
|
|
|
|
|
$ |
41,574,172 |
|
a
|
To record the proforma adjustment to cash payment required under the purchase.
|
b
|
To record the proforma adjustment to eliminate the Additional paid in capital of Agreen.
|
c
|
To record the proforma adjustment to issue $.001 par value common stock issued to Agreen.
|
d
|
To record the proforma adjustment to eliminate the retained earnings of Agreen in the merger.
|
e
|
To record the proforma adjustment to eliminate the accumulated other comprehensive loss of Agreen in the merger.
|
Unaudited Pro Forma Condensed Balance Sheet as of December 31, 2013
CELLULAR BIOMEDICINE GROUP INC.
UNAUDTIED PROFORMA CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
CELLULAR BIOMEDICINE GROUP INC.
|
|
|
Beijing Agreen Biotechnology Co., Ltd.
|
|
|
|
|
Consolidated
CELLULAR BIOMEDICINE GROUP INC.
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
Pro Forma Adjusting Entries
|
|
|
December 31,
|
|
|
|
2013
|
|
|
2013
|
|
|
Dr
|
|
|
|
|
|
2013
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$ |
7,175,215 |
|
|
$ |
35,244 |
|
|
$ |
(325,071 |
) |
|
|
a |
|
|
$ |
6,885,388 |
|
Accounts Receivable
|
|
|
10,581 |
|
|
|
126,710 |
|
|
|
|
|
|
|
|
|
|
|
137,291 |
|
Other receivable
|
|
|
78,521 |
|
|
|
12,395 |
|
|
|
|
|
|
|
|
|
|
|
90,916 |
|
Amount due from related parties
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
- |
|
Inventory
|
|
|
119,119 |
|
|
|
193,175 |
|
|
|
|
|
|
|
|
|
|
|
312,294 |
|
Prepaid expenses
|
|
|
56,911 |
|
|
|
31,284 |
|
|
|
|
|
|
|
|
|
|
|
88,195 |
|
Other current assets
|
|
|
134,661 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
134,661 |
|
Total current assets
|
|
|
7,575,008 |
|
|
|
398,808 |
|
|
|
|
|
|
|
|
|
|
|
7,648,745 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
1,014,805 |
|
|
|
694,411 |
|
|
|
|
|
|
|
|
|
|
|
1,709,216 |
|
Intangibles
|
|
|
601,456 |
|
|
|
- |
|
|
|
6,568,873 |
|
|
|
b, c, d, e |
|
|
|
7,170,329 |
|
Goodwill
|
|
|
3,299,566 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
3,299,566 |
|
Investments
|
|
|
5,105,891 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
5,105,891 |
|
Long-term prepaid expenses and other assets
|
|
|
- |
|
|
|
100,324 |
|
|
|
|
|
|
|
|
|
|
|
100,324.00 |
|
Total assets
|
|
$ |
17,596,726 |
|
|
$ |
1,193,543 |
|
|
|
|
|
|
|
|
|
|
$ |
25,034,071 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
213,891 |
|
|
|
41,081 |
|
|
|
|
|
|
|
|
|
|
$ |
254,972 |
|
Accrued expenses
|
|
|
503,717 |
|
|
|
169,237 |
|
|
|
1,300,284 |
|
|
|
|
|
|
|
1,973,238 |
|
Advances payable to related party
|
|
|
67,999 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
67,999 |
|
Other current liabilities
|
|
|
1,416,046 |
|
|
|
823,363 |
|
|
|
1,625,804 |
|
|
|
|
|
|
|
3,865,213 |
|
Total current liabilities
|
|
|
2,201,653 |
|
|
|
1,033,681 |
|
|
|
|
|
|
|
|
|
|
|
6,161,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-current liabilities
|
|
|
- |
|
|
|
639,669 |
|
|
|
|
|
|
|
|
|
|
|
- |
|
Total liabilities
|
|
|
2,201,653 |
|
|
|
1,673,350 |
|
|
|
|
|
|
|
|
|
|
|
6,161,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock series B, no par value, 50,000,000 shares
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
- |
|
authorized; none issued and outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
as of December 31, 2012 and December 31, 2011, respectively
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
Common stock, par value $0.001, 300,000,000 shares authorized;
|
|
|
7,383 |
|
|
|
- |
|
|
|
148 |
|
|
|
b, c |
|
|
|
7,531 |
|
Additional paid in capital
|
|
|
37,861,593 |
|
|
|
159,096 |
|
|
|
2,678,664 |
|
|
|
b, c |
|
|
|
40,699,353 |
|
Accumulated deficit
|
|
|
(22,415,979 |
) |
|
|
(628,277 |
) |
|
|
628,277 |
|
|
|
d |
|
|
|
(22,415,979 |
) |
Accumulated other comprehensive loss
|
|
|
(57,924 |
) |
|
|
(10,626 |
) |
|
|
10,626 |
|
|
|
e |
|
|
|
(57,924 |
) |
Total stockholders' equity
|
|
|
15,395,073 |
|
|
|
(479,807 |
) |
|
|
|
|
|
|
|
|
|
|
18,232,980 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholder's equity
|
|
$ |
17,596,726 |
|
|
$ |
1,193,543 |
|
|
|
|
|
|
|
|
|
|
$ |
24,394,402 |
|
a
|
To record the proforma adjustment to cash payment required under the purchase.
|
b
|
To record the proforma adjustment to eliminate the Additional paid in capital of Agreen.
|
c
|
To record the proforma adjustment to issue $.001 par value common stock issued to Agreen.
|
d
|
To record the proforma adjustment to eliminate the retained earnings of Agreen in the merger.
|
e
|
To record the proforma adjustment to eliminate the accumulated other comprehensive loss of Agreen in the merger.
|
Unaudited Pro Forma Condensed Statements of Operations for the nine months ended September 30, 2014
CELLULAR BIOMEDICINE GROUP INC.
UNAUDITED PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014
|
|
CELLULAR BIOMEDICINE GROUP INC.
|
|
|
BEIJING AGREEN BIOTECHNOLOGY CO., LTD.
|
|
Pro Forma Adjustment
|
|
Consolidated
CELLULAR BIOMEDICINE GROUP INC.
|
|
Net sales and revenue
|
|
|
|
|
|
|
|
|
|
|
Biomedical
|
|
$ |
179,120 |
|
|
$ |
1,198,414 |
|
|
|
$ |
1,377,534 |
|
Total sales and revenue
|
|
|
179,120 |
|
|
|
1,198,414 |
|
|
|
|
1,377,534 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
92,553 |
|
|
|
880,797 |
|
|
|
|
973,350 |
|
General and administrative
|
|
|
5,123,210 |
|
|
|
245,911 |
|
|
|
|
5,369,121 |
|
Selling and marketing
|
|
|
86,806 |
|
|
|
6,351 |
|
|
|
|
93,157 |
|
Research and development
|
|
|
1,878,731 |
|
|
|
113,635 |
|
|
|
|
1,992,366 |
|
Impairment expense
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
Total operating expenses
|
|
|
7,181,300 |
|
|
|
1,246,694 |
|
|
|
|
8,427,994 |
|
Operating loss
|
|
|
(7,002,180 |
) |
|
|
(48,280 |
) |
|
|
|
(7,050,460 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
1,263 |
|
|
|
318 |
|
|
|
|
1,581 |
|
Other income (expense)
|
|
|
94,357 |
|
|
|
(147 |
) |
|
|
|
94,210 |
|
Total other income (expense)
|
|
|
95,620 |
|
|
|
171 |
|
|
|
|
95,791 |
|
Loss from continuing operations before taxes
|
|
|
(6,906,560 |
) |
|
|
(48,109 |
) |
|
|
|
(6,954,669 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
Loss from Continuing operations
|
|
|
(6,906,560 |
) |
|
|
(48,109 |
) |
|
|
|
(6,954,669 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued Consulting segement
|
|
|
(3,037,514 |
) |
|
|
- |
|
|
|
|
(3,037,514 |
) |
Income tax benefit
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
Loss on discontiued operations
|
|
|
(3,037,514 |
) |
|
|
- |
|
|
|
|
(3,037,514 |
) |
Net income (loss)
|
|
$ |
(9,944,074 |
) |
|
$ |
(48,109 |
) |
|
|
$ |
(9,992,183 |
) |
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative translation adjustment
|
|
|
(8,673 |
) |
|
|
963 |
|
|
|
|
(7,710 |
) |
Unrecognized loss on investments
|
|
|
2,515,894 |
|
|
|
- |
|
|
|
|
2,515,894 |
|
Comprehensive net income (loss)
|
|
$ |
(7,436,853 |
) |
|
$ |
(47,146 |
) |
|
|
$ |
(7,483,999 |
) |
Unaudited Pro Forma Condensed Statements of Operations for the year ended December 31, 2013
CELLULAR BIOMEDICINE GROUP INC.
UNAUDITED PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2013
|
|
CELLULAR BIOMEDICINE GROUP INC.
|
|
|
BEIJING AGREEN BIOTECHNOLOGY CO., LTD.
|
|
Pro Forma Adjustment
|
|
Consolidated
CELLULAR BIOMEDICINE GROUP INC.
|
|
Net sales and revenue
|
|
|
|
|
|
|
|
|
|
|
Biomedical
|
|
$ |
204,914 |
|
|
$ |
1,075,692 |
|
|
|
$ |
1,280,606 |
|
Total sales and revenue
|
|
|
204,914 |
|
|
|
1,075,692 |
|
|
|
|
1,280,606 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
296,212 |
|
|
|
872,937 |
|
|
|
|
1,169,149 |
|
General and administrative
|
|
|
9,314,143 |
|
|
|
304,027 |
|
|
|
|
9,618,170 |
|
Selling and marketing
|
|
|
57,670 |
|
|
|
9,709 |
|
|
|
|
67,379 |
|
Research and development
|
|
|
1,890,506 |
|
|
|
214,752 |
|
|
|
|
2,105,258 |
|
Total operating expenses
|
|
|
11,558,531 |
|
|
|
1,401,425 |
|
|
|
|
12,959,956 |
|
Operating loss
|
|
|
(11,353,617 |
) |
|
|
(325,733 |
) |
|
|
|
(11,679,350 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
1,294 |
|
|
|
310 |
|
|
|
|
1,604 |
|
Other expense
|
|
|
(6,196 |
) |
|
|
(13,381 |
) |
|
|
|
(19,577 |
) |
Total other income (expense)
|
|
|
(4,902 |
) |
|
|
(13,071 |
) |
|
|
|
(17,973 |
) |
Loss from continuing operations before taxes
|
|
|
(11,358,519 |
) |
|
|
(338,804 |
) |
|
|
|
(11,697,323 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
Loss from Continuing operations
|
|
|
(11,358,519 |
) |
|
|
(338,804 |
) |
|
|
|
(11,697,323 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued Consulting segement
|
|
|
(2,094,068 |
) |
|
|
- |
|
|
|
|
(2,094,068 |
) |
Income tax provision
|
|
|
(344,446 |
) |
|
|
- |
|
|
|
|
(344,446 |
) |
Loss on discontiued operations
|
|
|
(2,438,514 |
) |
|
|
- |
|
|
|
|
(2,438,514 |
) |
Net income (loss)
|
|
$ |
(13,797,033 |
) |
|
$ |
(338,804 |
) |
|
|
$ |
(14,135,837 |
) |
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative translation adjustment
|
|
|
78,650 |
|
|
|
(9,627 |
) |
|
|
|
69,023 |
|
Unrecognized loss on investments
|
|
|
(198,200 |
) |
|
|
- |
|
|
|
|
(198,200 |
) |
Comprehensive net income (loss)
|
|
$ |
(13,916,583 |
) |
|
$ |
(348,431 |
) |
|
|
$ |
(14,265,014 |
) |
Cellular Biomedicine (NASDAQ:CBMG)
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Cellular Biomedicine (NASDAQ:CBMG)
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From Apr 2023 to Apr 2024