PROSPECTUS SUPPLEMENT No. 3 Filed Pursuant to Rule 424(b)(3)
(to Prospectus dated August 12, 2021) Registration No. 333-258600

 

Up to 22,874,999 Shares of Class A Common Stock Issuable Upon Exercise of Warrants
Up to 129,858,855 Shares of Class A Common Stock
Up to 8,499,999 Warrants to Purchase Class A Common Stock

 

 

This prospectus supplement supplements the prospectus, dated August 12, 2021 (the “Prospectus”), which forms a part of our registration statement on Form S-1 (No.333-258600). This prospectus supplement is being filed to update and supplement the information in the Prospectus with the information contained in our Current Report on Form 8-K/A filed with the Securities and Exchange Commission on August 19, 2021 (the “Current Report”). Accordingly, we have attached the Current Report to this prospectus supplement.

The Prospectus and this prospectus supplement relates to the issuance by us of an aggregate of up to 22,874,999 shares of our Class A common stock, $0.0001 par value per share (the “Class A Common Stock”), which consists of (i) the issuance by us and resale of up to 8,499,999 shares of Class A Common Stock that are issuable upon the exercise of (A) 7,000,000 warrants issued in a private placement to GX Sponsor LLC (the “Sponsor”), in connection with the GX IPO and (B) 1,499,999 warrants issued to certain members of the Sponsor as repayment for certain working capital loans made to GX (the warrants in (A) and (B) collectively, the “Private Placement Warrants”), and (ii) up to 14,375,000 shares of Class A Common Stock that are issuable upon the exercise of 14,375,000 warrants (the “Public Warrants,” and, together with the Private Placement Warrants, the “Warrants”) issued in the GX IPO. We will receive the proceeds from the exercise of any Warrants for cash.

The Prospectus and this prospectus supplement also relates to the offer and sale from time to time by the selling securityholders named in the Prospectus or their permitted transferees (the “selling securityholders”) of (i) up to 129,858,855 shares of Class A Common Stock consisting of (a) up to 8,340,000 shares of Class A Common Stock issued in a private placement pursuant to subscription agreements (“Subscription Agreements”) entered into on January 8, 2021 (b) up to 2,000,000 shares of Class A Common Stock issued in a private placement pursuant to a subscription agreement entered into on May 5, 2021 with Palantir Technologies Inc. (“Palantir Technologies”), (c) up to 976,943 shares of Class A Common Stock issued in private placements on July 21, 2021 to certain advisors of Legacy Celularity and GX, (d) up to 7,187,500 shares of Class A Common Stock previously held by the Sponsor following a private placement in connection with the initial public offering of GX, (e) up to 8,499,999 shares of Class A Common Stock issuable upon exercise of the Private Placement Warrants, (f) up to 19,811,204 shares of Class A Common Stock issuable upon exercise of the Converted Legacy Warrants, (g) up to 11,744,882 shares of Class A Common Stock issuable upon exercise of options and awards and (h) up to 71,298,327 shares of Class A Common Stock pursuant to that certain Registration Rights Agreement (the “Registration Rights Agreement”), dated July 16, 2021, between us and certain selling securityholders granting such holders registration rights with respect to such shares, and (ii) up to 8,499,999 Private Placement Warrants.

 

The Class A Common Stock and Public Warrants are listed on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “CELU” and “CELUW”, respectively. On August 16, 2021, the last reported sales price of Class A Common Stock was $6.15 per share and the last reported sales price of our Public Warrants was $1.04 per warrant.

 

This prospectus supplement should be read in conjunction with the Prospectus, including any amendments or supplements thereto, which is to be delivered with this prospectus supplement. This prospectus supplement is qualified by reference to the Prospectus, including any amendments or supplements thereto, except to the extent that the information in this prospectus supplement updates and supersedes the information contained therein.

This prospectus supplement is not complete without, and may not be delivered or utilized except in connection with, the Prospectus, including any amendments or supplements thereto.

Investing in our securities involves a high degree of risk.    You should review carefully the risks and uncertainties described in the section titled “Risk Factors” beginning on page 8 of the Prospectus, and under similar headings in any amendments or supplements to the Prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or passed upon the accuracy or adequacy of the Prospectus or this prospectus supplement. Any representation to the contrary is a criminal offense.

Prospectus supplement dated August 19, 2021.

 

 

 

 

united states

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K/A

(Amendment No. 2)

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): July 16, 2021

 

CELULARITY INC.

(Exact name of registrant as specified in its charter)

 

Delaware   001-38914   83-1702591
(State or Other Jurisdiction
of Incorporation)
  (Commission File Number)   (I.R.S. Employer
Identification No.)

 

170 Park Ave

Florham Park, New Jersey

  07932
(Address of principal executive offices)   (Zip Code)

 

(609) 235-1010

(Registrant’s telephone number, including area code)

 

(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 obligations of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading symbol(s)   Name of each exchange on which registered
Class A Common Stock, $0.0001 par value per share   CELU   The NASDAQ Stock Market LLC
Warrants, each exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share   CELUW   The NASDAQ Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b–2 of the Securities Exchange Act of 1934 (§240.12b–2 of this chapter).

 

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

EXPLANATORY NOTE

 

This Amendment No. 2 on Form 8-K/A (“Amendment No. 2”) amends Item 9.01 of the Current Report on Form 8-K filed by Celularity Inc. (the “Company”) on July 22, 2021 (the “Original Report”) as amended on August 16, 2021 by Amendment No. 1 on Form 8-K/A (“Amendment No. 1”), in which the Company reported, among other events, the completion of the Business Combination (as defined in the Original Report).

 

This Amendment No. 2 amends (i) Item 9.01(b) to include the unaudited pro forma condensed combined financial information of the Company as of and for the period ended June 30, 2021 and (ii) Item 9.01(d) to include Exhibit No. 99.5 containing certain unaudited pro forma condensed combined financial information of the Company.

 

This Amendment No. 2 does not amend any other item of the Original Report or Amendment No. 1 or purport to provide an update or a discussion of any developments at the Company or its subsidiaries subsequent to the filing date of the Original Report. The information previously reported in or filed with the Original Report is hereby incorporated by reference to this Form 8-K/A.

 

Capitalized terms used but not defined herein have the meanings given in the Original Report.

 

Item 9.01 Financial Statements and Exhibits.

 

(b) Pro Forma Financial Information.

 

Certain unaudited pro forma condensed combined financial information of the Company is set forth in Exhibit 99.5 hereto and is incorporated herein by reference.

 

(d) Exhibits.

 

Exhibit    
number   Description of document
99.5*   Unaudited pro forma condensed combined financial information of the Company as of and for the six months ended June 30, 2021 and for the year ended December 31, 2020
104   Cover Page Interactive File

 

  * Filed herewith

 

1

 

  

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: August 19, 2021

 

  CELULARITY INC.
     
  By: /s/ Robert J. Hariri
    Robert J. Hariri M.D., Ph.D.
    Chief Executive Officer

 

2

 

 

Exhibit 99.5

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

Introduction

 

On July 16, 2021, Legacy Celularity, GX, First Merger Sub and Second Merger Sub, consummated the Business Combination. In connection with the closing of the Business Combination, GX changed its name from GX Acquisition Corp. to Celularity Inc.

 

The following unaudited pro forma condensed combined balance sheet as of June 30, 2021 and the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020 and for the six months ended June 30, 2021 present the combination of the financial information of GX and Legacy Celularity after giving effect to the Business Combination, Palantir Technologies Investment and PIPE Financing and related adjustments described in the accompanying notes.

 

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020 and for the six months ended June 30, 2021 gives pro forma effect to the Business Combination, Palantir Technologies Investment and PIPE Financing as if they had occurred on January 1, 2020. The unaudited pro forma condensed combined balance sheet as of June 30, 2021 gives pro forma effect to the Business Combination, Palantir Technologies Investment, and PIPE Financing as if they were completed on June 30, 2021.

 

The unaudited pro forma condensed combined financial information is based on and should be read in conjunction with the audited annual historical financial statements and unaudited interim historical financial statements of each of GX and Legacy Celularity and the notes thereto, as well as the disclosures contained in the sections entitled “GX’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Celularity’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus.

 

The unaudited pro forma condensed combined financial statements have been presented for illustrative purposes only and do not necessarily reflect what Legacy Celularity’s financial condition or results of operations would have been had the Business Combination, Palantir Technologies Investment and PIPE Financing occurred on the dates indicated. Further, the unaudited pro forma condensed combined financial information also may not be useful in predicting the future financial condition and results of operations of Celularity. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of these unaudited pro forma condensed combined financial statements and are subject to change as additional information becomes available and analyses are performed.

 

Description of the Business Combination

 

On the Closing Date, First Merger Sub merged with and into Legacy Celularity, with Legacy Celularity surviving the First Merger as a wholly owned subsidiary of GX. Immediately following the First Merger, and as part of the same overall transaction as the First Merger, Legacy Celularity merged with and into the Second Merger Sub with Second Merger Sub being the surviving entity of the Second Merger. Upon the consummation of the Business Combination, all holders of Legacy Celularity Capital Stock, Legacy Celularity Warrants, and Legacy Celularity Options received or had the right to receive shares of the Class A Common Stock at a deemed value of approximately $10.20 per share after giving effect to the Exchange Ratio of 0.7686 resulting in 122,487,170 shares of the Class A Common Stock immediately issued and outstanding and 41,534,480 shares to be reserved for the potential future issuance of the Class A Common Stock upon the exercise of the Company’s stock options and upon the exercise of the Warrants, based on the following transactions that occurred on the Closing Date:

 

the conversion of all outstanding shares of Legacy Celularity Preferred Stock into shares of Legacy Celularity Common Stock at the then-effective conversion rate pursuant to the Legacy Celularity Charter;

 

the cancellation of each issued and outstanding share of Legacy Celularity Common Stock (including shares of Legacy Celularity Common Stock resulting from the conversion of shares of Legacy Celularity Preferred Stock described above) and the conversion into the right to receive a number of shares of Class A Common Stock equal to the Exchange Ratio;

 

 

 

 

the cancellation of each share of Legacy Celularity Capital Stock held in treasury without any conversion or payment.

 

the conversion of each outstanding and unexercised Legacy Celularity Warrant into a right to purchase shares of GX Class A Common Stock (a “Converted Warrant”) on the same terms and conditions as were applicable to the Legacy Celularity Warrant immediately prior to the Mergers, except that the Converted Warrants will be adjusted by the Exchange Ratio; and

 

the conversion of all outstanding and unexercised vested and unvested Legacy Celularity Options into options exercisable for shares of the Class A Common Stock with the same terms except for the number of shares exercisable and the exercise price, each of which will be affected by the Exchange Ratio.

 

Accounting for the Business Combination

 

The Business Combination is accounted for as a reverse recapitalization in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Under this method of accounting, GX is treated as the “acquired” company for financial reporting purposes. This determination was primarily based on Legacy Celularity stockholders comprising a relative majority of the voting power of the Company, Legacy Celularity’s operations prior to the acquisition comprising the only ongoing operations of the Company, the majority of Legacy Celularity’s board of directors being appointed by the Company, and Legacy Celularity’s senior management comprising a majority of the senior management of the Company. Accordingly, for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of Legacy Celularity with the Business Combination being treated as the equivalent of Celularity issuing stock for the net assets of GX, accompanied by a recapitalization. The net assets of GX will be stated at historical costs, with no goodwill or other intangible assets recorded.

 

Other Events in Connection with the Business Combination

 

GX was required to complete its initial Business Combination by May 23, 2021. On May 14, 2021, at a special meeting of GX stockholders, a vote to extend the time to consummate the initial Business Combination from May 23, 2021 to July 31, 2021 was approved (the “Extension”). In connection with this vote, shareholders exercised their right to redeem 16,169,996 shares of GX Class A Common Stock at a price of approximately $10.15 per share. Approximately $164.1 million was removed from the Trust Account to pay the stockholders, leaving a balance in the Trust Account of approximately $127.7 million. In connection with the Extension, GX agreed to deposit into the Trust Account $0.025 per share for each month of the Extension period, pro-rated for partial months during the Extension period, resulting in a maximum contribution of $0.0565 per share of GX Class A Common Stock that was not redeemed.

 

On July 14, 2021, at a special meeting of GX stockholders, the Business Combination was approved. In connection with this vote, shareholders exercised their rights to redeem 9,174,705 shares of GX Class A Common Stock at a price of approximately $10.20 per share. Approximately $93.6 million from the Trust Account was used to pay the stockholders, leaving a balance in the Trust Account of approximately $34.0 million.

 

In connection with the Business Combination, GX issued and sold 8,340,000 shares of its Class A Common Stock at a purchase price of $10.00 per share pursuant to the PIPE Financing and Palantir Technologies purchased 2,000,000 shares of Class A Common Stock at $10.00 per share.

 

Basis of Pro Forma Presentation

 

The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X, Pro Forma Financial Information, as amended by the final rule, Amendments to Financial Disclosures about Acquired and Disposed Businesses, as adopted by the SEC in May 2020 (“Article 11”). The amended Article 11 is effective on January 1, 2021. The unaudited pro forma condensed combined financial information is provided for illustrative purposes only, does not necessarily reflect what the actual consolidated results of operations would have been had the acquisition occurred on the dates assumed and may not be useful in predicting the future consolidated results of operations or financial position. The Company’s results of operations and actual financial position may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The Company will incur additional costs after the Closing in order to satisfy its obligations as an SEC-reporting public company. In addition, the Company has adopted the Celularity Inc. 2021 Equity Incentive Plan and the Celularity Inc. 2021 Employee Stock Purchase Plan. No adjustment to the unaudited pro forma statement of operations has been made for these items as the amounts are not yet known.

 

2

 

 

Unaudited Pro Forma Condensed Combined Balance Sheet
June 30, 2021
(in thousands)

 

    GX
(Historical)
    Legacy
Celularity
(Historical)
    Transaction
Accounting
Adjustments
        Pro Form 
Combined
 
ASSETS                            
Current assets:                            
Cash and cash equivalents   $     $ 8,197     $ 80,400     A   $ 106,182  
                      20,000     B        
                      34,775     C        
                      (10,813 )   D        
                      (5,972 )   E        
                      (604 )   F        
                      (15,046 )   G        
                      391     H        
                      (5,146 )   I        
Accounts receivable, net of allowance           930                 930  
Note receivable           2,065                 2,065  
Inventory           4,472                 4,472  
Prepaid expenses     58       7,794                 7,852  
Other current assets           1,506                 1,506  
Total current assets     58       24,964       97,985           123,007  
Property and equipment           90,337                 90,337  
Goodwill           123,304                 123,304  
Intangible assets, net           124,292                 124,292  
Restricted cash           14,722                 14,722  
Marketable securities held in trust account     128,357             (93,582 )   K      
                    (34,775 )   C        
Inventory, net of current portion           3,064                 3,064  
Other long-term assets           7,202       (6,848 )   F     354  
Total Assets   $ 128,415     $ 387,885     $ (37,220 )       $ 479,080  
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY (DEFICIT)                                    
Current liabilities:                                    
Accounts payable   $ 134     $ 6,682     $ (301 )   F   $ 6,515  
Accrued expenses and other current liabilities     6,048       13,394       (5,972 )   E     13,167  
                      (303 )   F        
Current portion of financing obligation           8,039       (5,000 )   I     3,039  
Deferred revenue           5,100                 5,100  
Promissory notes – related party     1,109             (1,109 )   H      
Total current liabilities     7,291       33,215       (12,685 )         27,821  

 

3

 

 

Unaudited Pro Forma Condensed Combined Balance Sheet — (continued)
June 30, 2021
(in thousands)

 

    GX
(Historical)
    Legacy
Celularity
(Historical)
    Transaction
Accounting
Adjustments
      Pro Form 
Combined
 
Deferred revenue, net of current portion           6,062               6,062  
Acquisition-related contingent consideration           304,071                 304,071  
Financing obligations           27,961                 27,961  
Warrant liabilities     29,350       114,319       (114,319 )   L     31,450  
                      2,100     H        
Deferred income tax liabilities           7                 7  
Deferred underwriting fees     10,813             (10,813 )   D      
Other liabilities           342                 342  
Total liabilities     47,454       485,977       (135,717 )         397,714  
Redeemable convertible preferred stock                                    
Series A           184,247       (184,247 )   N      
Series B           290,866       (290,866 )   N      
Series X           75,000       (75,000 )   N      
Common stock subject to possible redemption     128,365             (93,582 )   K      
                      (34,783 )   O        
Stockholder’s equity (deficit)                                    
Class A common stock                            
Class B common stock     1             (1 )   M      
Common stock           1       1     A     12  
                      8     N        
                      2     M        
Treasury stock, at cost           (256 )     256     P      
Additional paid-in capital           61,629       80,399     A     791,679  
                      20,000     B        
                      (6,848 )   F        
                      (15,046 )   G        
                                     
                                     
                      114,319     L        
                      550,105     N        
                      34,783     O        
                      (256 )   P        
                      (47,405 )   Q        
                      (1 )   M        
Retained earnings (accumulated deficit)     (47,405 )     (709,579 )     (600 )   H     (710,325 )
              47,405     Q        
                  (146 )   I    
Total stockholders’ equity (deficit)     (47,404 )     (648,205 )     776,975           81,366  
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)   $ 128,415     $ 387,885     $ (37,220 )       $ 479,080  

 

4

 

 

Unaudited Pro Forma Condensed Combined
Statement of Operations for the Six Months Ended
June 30, 2021
(in thousands, except share and per share amounts)

 

    GX (Historical)     Legacy
Celularity (Historical)
    Transaction Accounting Adjustments       Pro Form
Combined
 
Net revenues                                    
Product sales and rentals   $     $ 1,885     $       $ 1,885  
Services           2,861                 2,861  
License, royalty and other           1,111                 1,111  
Total revenues           5,857                 5,857  
                                     
Operating expenses:                                    
Cost of goods sold (excluding amortization of acquired intangible assets)                                    
Product sales and rentals           1,387                 1,387  
Services           1,295                 1,295  
License, royalty and other                              
Research and development           39,901                 39,901  
Selling, general and administrative           36,489                 36,489  
Operation costs     3,589                       3,589  
Change in the fair value of contingent consideration liability           30,704                 30,704  
Amortization of acquired intangible assets           1,087                 1,087  
Total operating expenses     3,589       110,863                 114,452  
Loss from operations     (3,589 )     (105,006 )               (108,595 )
Other (expense) income                                    
Interest income     37       269                 306  
Interest expense           (1,569 )               (1,569 )
Income (expense) related to warrant liabilities     34,450       (37,679 )     37,679     AA     34,450  
Other (expense) income, net     1       (2,031 )               (2,030 )
Total other income (expense)     34,488       (41,010 )     37,679           31,157  
Income (loss) before income taxes     30,899       (146,016 )     37,679           (77,438 )
Income tax benefit (expense)                            
Net income (loss)   $ 30,899     $ (146,016 )   $ 37,679         $ (77,438 )
Income (loss) per share                                    
Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption     20,502,385                              
Basic and diluted net income per share, Class A common stock subject to possible redemption   $                              
Basic and diluted weighted average shares outstanding, Non-redeemable common stock     11,236,276                              
Basic and diluted net loss (income) per share, Non-redeemable common stock   $ 2.75                              
Weighted average shares outstanding, basic and diluted             23,991,129                   123,464,113  
Basic and diluted net loss per share           $ (6.09 )               $ (0.63 )

 

5

 

 

Unaudited Pro Forma Condensed Combined
Statement of Operations for the Year Ended
December 31, 2020
(in thousands, except share and per share amounts)

 

    GX (Historical)     Legacy
Celularity (Historical)
    Transaction Accounting Adjustments         Pro Form
Combined
 
Net revenues                            
Product sales and rentals   $     $ 6,854     $         $ 6,854  
Services           5,556                 5,556  
License, royalty and other           1,868                 1,868  
Total revenues           14,278                 14,278  
                                     
Operating expenses:                                    
Cost of goods sold (excluding amortization of acquired intangible assets)                                    
Product sales and rentals           2,247                 2,247  
Services           2,294                 2,294  
License, royalty and other           391                   391  
Research and development           52,707                 52,707  
Selling, general and administrative           31,336                 31,336  
Operation costs     4,220                       4,220  
Change in the fair value of contingent consideration liability           (55,566 )               (55,566 )
Amortization of acquired intangible assets           3,394                 3,394  
Impairment of acquired intangible assets           129,400                 129,400  
Total operating expenses     4,220       166,203                 170,423  
Loss from operations     (4,220 )     (151,925 )               (156,145 )
Other (expense) income                                    
Interest income     1,779       370                 2,149  
Interest expense           (2,354 )               (2,354 )
Loss on the sale of business           (4,434 )               (4,434 )
Expenses related to warrant liabilities     (46,630 )     (58,686 )     58,686     AA     (46,630 )
Other income, net     2       4,096                 4,098  
Total other (expense) income     (44,849 )     (61,008 )     58,686           (47,171 )
Loss before income taxes     (49,069 )     (212,933 )     58,686           (203,316 )
Income tax (expense) benefit     (192 )     4,700                 4,508  
Net income (loss)   $ (49,261 )   $ (208,233 )   $ 58,686         $ (198,808 )
Loss per share                                    
Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption     25,105,895                              
Basic and diluted net income per share, Class A common stock subject to possible redemption   $ 0.04                              
Basic and diluted weighted average shares outstanding, Non-redeemable common stock     10,831,605                              
Basic and diluted net loss (income) per share, Non-redeemable common stock   $ (4.64 )                            
Weighted average shares outstanding, basic and diluted             23,963,119                   120,652,412  
Basic and diluted net loss per share           $ (8.69 )               $ (1.65 )

 

6

 

 

Notes to Unaudited Pro forma Condensed Combined Financial Statements
(in thousands except share and per share amounts)

 

1. Basis of Presentation

 

The Business Combination is being accounted for as a reverse recapitalization in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Under this method of accounting, GX has been treated as the “acquired” company for financial reporting purposes. This determination was primarily based on Legacy Celularity stockholders comprising a relative majority of the voting power of the Company, Legacy Celularity’s operations prior to the acquisition comprising the only ongoing operations of the Company, the majority of the Company’s board of directors being appointed by Legacy Celularity and Legacy Celularity’s senior management comprising a majority of the senior management of the Company. Accordingly, for accounting purposes, the financial statements of the Company are represented a continuation of the financial statements of Legacy Celularity with the Business Combination being treated as the equivalent of Legacy Celularity issuing stock for the net assets of GX, accompanied by a recapitalization. The net assets of GX will be stated at historical costs, with no goodwill or other intangible assets recorded.

 

The Company management has made significant estimates and assumptions in its determination of the pro forma adjustments based on information available as of the date of this proxy statement/prospectus. As the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented as additional information becomes available. Management considers this basis of presentation to be reasonable under the circumstances.

 

2. Adjustments to Unaudited Pro Forma Condensed Combined Financial Information

 

Balance sheet

 

A. Reflects the proceeds of $83,400 from the issuance and sale of 8,340,000 shares of Class A Common Stock at $10.00 per share pursuant to the PIPE Subscription Agreements entered into in connection with the PIPE Financing, net of $3,000 of issuance costs.

 

B. Reflects the Palantir Technologies purchase of 2,000,000 shares of Class A Common Stock at $10.00 per share for proceeds of $20,000.

 

C. Reflects the liquidation and reclassification of $34,775 of marketable securities held in the GX Trust Account to cash and cash equivalents that becomes available for general corporate use by the Company following the Closing.

 

D. Represents the payment of GX’s deferred underwriting fees of $10,813 that becomes payable upon the Closing.

 

E. Represents the payment of $5,972 of transaction costs accrued by GX at June 30, 2021.

 

F. Reflects the elimination of $6,848 of transaction costs incurred by Legacy Celularity, and payment of $301 which were in accounts payable, and $303 which were accrued at June 30, 2021 and $6,244 were paid at June 30, 2021. The transaction costs are recorded as a reduction of the net assets of GX received upon the Business Combination and offset against additional paid-in capital.

 

G. Represents additional estimated direct and incremental transaction costs of $25,351 incurred by GX and Legacy Celularity and paid upon the Closing of the Business Combination of the total incremental transaction costs, $15,046 were paid in cash and $10,305 were paid through the issuance of common stock. The transaction costs are recorded as a reduction of the net assets of GX received upon the Business Combination and offset against additional paid-in capital.

 

7

 

 

H. Reflects additional borrowings of $391 from related parties for amounts due monthly for extension of the period of time for which GX was required to consummate a Business Combination and other borrowings by GX from related parties and settlement of the total related party borrowings of $1,500 ($1,109 borrowed at June 30, 2021, plus $391 borrowed in July 2021 prior to closing) through the issuance of 1,499,999 warrants to purchase Class A Common Stock at an initial exercise price of $11.50 per share. The fair value of the warrants issued is $2,100, resulting in a charge to equity of $600.

 

I. Reflects payment of short-term borrowings of Celularity of $5,146, which consisted of a repayment of $5,000 in principal plus $146 in interest and other fees.

 

J. [Intentionally left blank]

 

K. Represents the redemption of 9,174,705 GX Class A common stock shares at a redemption price of $10.20 per share at closing for a total amount of $93,582.

 

L. Represents the reclassification of the Legacy Celularity warrant liabilities to equity.

 

M. To eliminate GX Class B Common stock and to adjust par value for shares outstanding.

 

N. Reflects the conversion of Legacy Celularity’s outstanding redeemable convertible preferred stock into Class A Common Stock.

 

O. Reflects the reclassification of GX Class A common stock no longer subject to possible redemption to permanent equity.

 

P. Reflects the elimination of Legacy Celularity’s treasury stock.

 

Q. Reflects the elimination of GX’s historical accumulated deficit.

 

Statement of operations

 

AA. Represents the elimination of the expense associated with the Legacy Celularity warrant liabilities as the warrants are being reclassified to equity as a result of the Business Combination (see Balance Sheet — note L).

 

3. Loss per share

 

Represents the net loss per share calculated using the basic and diluted weighted average shares of common stock outstanding as a result of the pro forma adjustments. As the Business Combination, Palantir Technologies Investment and PIPE Financing are being reflected as if they had occurred as of January 1, 2020, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes the shares to be issued and outstanding upon the Closing have been outstanding for the entire periods presented. The shares of Class A Common Stock redeemed by GX public stockholders are eliminated as of January 1, 2020.

 

The unaudited pro forma condensed combined financial information are based on historical GX weighted averages shares outstanding:

 

    Year Ended December 31,
2020
    Six Months Ended June 30,
2021
 
Pro forma net loss   $ (198,808 )   $ (77,438 )
Weighted average shares outstanding, basic and diluted     120,652,412       123,464,113  
Basic and diluted net loss per share(1)   $ (1.65 )   $ (0.63 )
Weighted average shares outstanding, basic and diluted                
Legacy Celularity stockholders     98,742,670       101,554,371  
Palantir Technologies     2,000,000       2,000,000  
PIPE Investors     8,340,000       8,340,000  
GX Public Common     3,405,299       3,405,299  
Transactions fees paid in stock     976,943       976,943  
GX Sponsor     7,187,500       7,187,500  
      120,652,412       123,464,113  

 

 

(1) Outstanding options and warrants are anti-dilutive due to the reported net losses and are not included in the calculation of diluted net loss per share.

 

 

8

 

 

 

 

 

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