<PAGE> 1
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) December 27, 1997
CN Biosciences, Inc.
(Exact name of registrant as specified in its charter)
Delaware 000-21281 33-0509785
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
10394 Pacific Center Court, San Diego, CA 92121
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (619) 450-5500
N/A
(Former name or former address, if changed since last report)
<PAGE> 2
Item 2. Acquisition or Disposition of Assets.
Effective as of December 27, 1997, CN Biosciences, Inc. (the "Registrant")
acquired all of the outstanding capital stock of Pel-Freez, Inc., an Arkansas
corporation ("Pel-Freez"), and all of the outstanding capital stock of
Pel-Freez's subsidiary Novagen, Inc., an Arkansas corporation ("Novagen"),
pursuant to a Stock Purchase Agreement, dated as of November 25, 1997, by and
among the Registrant, as Buyer, David W. Dubbell, Dennis Almond, Corrine
Fetherston, Lisa Johnson, Robert Mierendorf, Warren Kroeker, Barbara Morris,
Robert Novy and Tom Van Oosbree, as Sellers, and Pel-Freez for $10,500,000 cash.
On January 2, 1998, the Registrant paid the purchase price from cash on hand.
The purchase price was determined through arm's length negotiation between the
Registrant and the Sellers. Subsequent to the closing of the acquisition of
Pel-Freez and Novagen by the Registrant, Pel-Freez's Articles of Incorporation
were amended to change its name to Novagen Holdings, Inc.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
Report of Coopers & Lybrand, L.L.P., Independent Accountants
Consolidated Balance Sheet of Novagen Holdings, Inc. (formerly Pel-Freez, Inc.)
as of December 27, 1997
Consolidated Statement of Income of Novagen Holdings, Inc. (formerly Pel-Freez,
Inc.) for the Year Ended December 27, 1997
Consolidated Statement of Stockholder's Equity of Novagen Holdings, Inc.
(formerly Pel-Freez, Inc.) for the Year Ended December 27, 1997
Consolidated Statement of Cash Flows of Novagen Holdings, Inc. (formerly
Pel-Freez, Inc.) for the Year Ended December 27, 1997
Notes to Consolidated Financial Statements
(b) Pro forma financial information.
Pro Forma Condensed Combined Balance Sheet as of December 31, 1997 (unaudited)
Pro Forma Condensed Combined Statement of Operations for the Year Ended December
31, 1997 (unaudited)
Notes to the Unaudited Condensed Combined Pro Forma Financial Information
-2-
<PAGE> 3
(c) Exhibits.
Exhibit No. Description
2(b) Stock Purchase Agreement, dated as of November 25, 1997,
by and among CN Biosciences, Inc., as Buyer, David W.
Dubbell, Dennis Almond, Corrine Fetherston, Lisa Johnson,
Robert Mierendorf, Warren Kroeker, Barbara Morris, Robert
Novy and Tom Van Oosbree, as Sellers, and Pel-Freez,
Inc.*
23(a) Consent of Coopers & Lybrand, L.L.P.
- ----------
*Incorporated by reference to Amendment No. 1 to this Current Report on Form
8-K, filed by the Registrant on February 3, 1998.
-3-
<PAGE> 4
Item 7(a) Financial statements of business acquired.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Pel-Freez, Inc.
We have audited the accompanying consolidated balance sheet of
Pel-Freez, Inc. and Subsidiary (the "Company") as of December 27, 1997 and the
related consolidated statement of income, stockholder's equity, and cash flows
for the year 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 audit.
We conducted our audit in accordance with generally accepted auditing
standards. 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 examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Pel-Freez, Inc. and Subsidiary as of December 27, 1997, and the consolidated
results of their operations and their cash flows for the year then ended, in
conformity with generally accepted accounting principles.
As discussed in Note 1, on January 1, 1998, the Company was
restructured, resulting in a change in reporting entity, which has been
reflected in the accompanying financial statements.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma
February 19, 1998
-4-
<PAGE> 5
PEL-FREEZ, INC.
CONSOLIDATED BALANCE SHEET
December 27, 1997
<TABLE>
ASSETS
<S> <C>
Current assets:
Cash $64,702
Accounts receivable 512,994
Capital contribution receivable 107,700
Income tax receivable 650,000
Inventories 598,664
Prepaid expenses and other assets 81,632
Deferred income taxes 128,895
------------------
Total current assets 2,144,587
------------------
Property and equipment, net 469,430
------------------
Deferred income taxes and other assets 71,162
------------------
Total assets $2,685,179
------------------
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable 443,025
Accrued liabilities 601,786
Payable to shareholder 650,000
------------------
Total current liabilities 1,694,811
------------------
Other liabilities 250,000
Payable to affiliate 99,226
Minority interest 64,762
Commitments (Note 5)
Stockholder's equity:
Common stock, $.01 par value; authorized 4,272
1,000,000 shares; issued and outstanding 427,200
shares
Retained earnings 572,108
------------------
576,380
------------------
Total liabilities and stockholders' equity 2,685,179
==================
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
-5-
<PAGE> 6
PEL-FREEZ, INC.
CONSOLIDATED STATEMENT OF INCOME
For the Year Ended December 27, 1997
<TABLE>
<S> <C>
Net sales $ 4,213,932
Cost of sales 1,163,068
-----------
Gross profit 3,050,864
-----------
Operating expenses:
Selling 1,078,131
Research and development 418,801
General and administrative
1,519,632
-----------
3,016,564
-----------
Income from operations 34,300
-----------
Other income (expense):
Interest income 21
Interest expense (22,720)
Other (517,239)
-----------
(539,938)
-----------
Income before income taxes and minority interest (505,638)
Income tax benefit 212,578
Minority interest 27,875
-----------
Net loss $ (265,185)
-----------
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
-6-
<PAGE> 7
PEL-FREEZ, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
For the Year Ended December 27, 1997
<TABLE>
<CAPTION>
Common Stock Retained
Shares Amount Earnings Total
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance, December 28,
1996, as previously
reported 480,000 $ 4,800 $ 4,721,050 $ 4,725,850
Adjustment for change in
reporting entity and
recording of minority interest (52,800) $ (528) (4,053,457) (4,053,985)
----------- ----------- ----------- -----------
Balance, December 28,
1996, as restated 427,200 $ 4,272 667,593 671,865
Capital contribution -- -- 169,700 169,700
Net loss -- -- (265,185) (265,185)
----------- ----------- ----------- -----------
Balance, December 27,
1997 427,200 $ 4,272 $ 572,108 $ 576,380
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
-7-
<PAGE> 8
PEL-FREEZ, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended December 27, 1997
<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss $(265,185)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 146,409
Loss on sale of equipment 141
Minority interest (27,875)
Other non-cash expenses 117,098
Deferred income taxes (241,675)
Changes in:
Accounts receivable (42,222)
Inventories (154,111)
Prepaid expenses and other assets (30,632)
Accounts payable and accrued expenses 573,350
Other liabilities 250,000
Payable to affiliate (221,389)
---------
Net cash provided by operating activities 103,909
---------
Cash flows from investing activities:
Purchase of property and equipment (51,863)
---------
Cash flows from financing activities:
Purchase and retirement of stock of subsidiary (7,500)
---------
Increase (decrease) in cash 44,546
Cash, beginning of year 20,156
---------
Cash, end of year $ 64,702
=========
Non-cash activity:
Receivable for capital contribution $ 107,700
---------
Property and equipment acquired from affiliates $ 70,558
=========
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
-8-
<PAGE> 9
PEL-FREEZ, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. RESTRUCTURING
Prior to the restructuring described below the consolidated
financial statements of Pel-Freez, Inc. ("Pel-Freez") (a holding
company) included the financial position and results of operations of an
90%-owned subsidiary, Novagen, Inc. ("Novagen"), and the wholly-owned
subsidiaries Tri-State Industrials, Inc. ("Tri-State") and Pel-Freez
Rabbit Meat, Inc. ("PFRM"). On January 1, 1998, the stockholder of
Pel-Freez effected a restructuring whereby Pel-Freez acquired from its
sole stockholder 52,800 shares of its common stock in exchange for all
of the issued and outstanding common stock of Tri-State, thus
establishing two companies under common control. Immediately prior to
the redemption transaction, Pel-Freez contributed all of the issued and
outstanding common stock of PFRM to Tri-State, which resulted in PFRM
becoming a wholly-owned subsidiary of Tri-State. Novagen and
Tri-State/PFRM are in dissimilar businesses. Novagen is involved in the
research and development, manufacture and marketing of integrated
protein expression systems and reagents whose customers are primarily
involved in research and biotechnology. PFRM is a food processing
company specializing in rabbit meat processing and rabbit bi-products.
There are nominal sales between Novagen and PFRM. Novagen and
Tri-State/PFRM have been managed and financed historically as if they
were autonomous, including a separate management team, sales, accounting
and administrative staff. They have no common facilities and only share
limited corporate level costs. The two companies will continue to be
operated and financed autonomously after the restructuring and will not
have material financial commitments, guarantees or contingent
liabilities to each other after the restructuring. For financial
reporting purposes, the redemption transaction was effectively a
reorganization of entities under common control and has been reflected
as a change in reporting entity. Accordingly, the 1997 consolidated
financial statements include only the accounts of Pel-Freez and Novagen
and give affect to the restructuring as if it had occurred on December
28, 1996. In connection with the restructuring, the outstanding
long-term debt, certain other liabilities and notes receivable from
officers were effectively assigned to PFRM, which subsequently
extinguished substantially all of the debt. Retained earnings at
December 28, 1996, have also been reduced by $83,000 to reflect the
recording of the minority interest which had not previously been
recorded.
Effective December 27, 1997, the sole shareholder sold all of
the issued and outstanding common stock of Pel-Freez to CN Biosciences,
Inc. ("CNB").
2. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION - The consolidated financial statements
include the accounts of Pel-Freez and its 90%-owned subsidiary, Novagen
(collectively, the "Company").
-9-
<PAGE> 10
2. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES, Continued
NATURE OF OPERATIONS - Novagen, Inc. is involved in the research and
development, manufacturing and marketing of integrated protein
expression systems and reagents. Novagen, Inc. extends credit to
worldwide customers who are in the following fields: biotechnological
reagents and kits, biotechnological medical and life science research
and pharmaceuticals.
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent 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.
FISCAL YEAR - The Company's fiscal year ends on the Saturday closest to
December 31. The year ended December 27, 1997 consists of 52 weeks.
CASH EQUIVALENTS - The Company considers all highly liquid debt
instruments, with a maturity of three months or less when purchased, to
be cash equivalents.
INVENTORIES - Inventories are stated at the lower of cost or market. The
Company uses standard costing procedures which approximate the first-in,
first-out inventory method.
PROPERTY AND EQUIPMENT - Property and equipment are carried at cost and
are depreciated over their estimated useful lives (from 5 to 7 years)
using the straight-line method.
RESEARCH AND DEVELOPMENT COSTS - Expenditures relating to the
development of new processes and the advancement of medical testing are
expensed as incurred.
INCOME TAXES - The Company follows Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109"). SFAS
No. 109 requires the measurement of deferred tax assets for deductible
temporary differences and operating loss carryforwards, and of deferred
tax liabilities for taxable temporary differences. Measurement of
current and deferred tax liabilities and assets is based on provisions
of enacted tax law; the effects of future changes in tax laws or rates
are not included in the measurement. Valuation allowances are
established when necessary to reduce deferred tax
-10-
<PAGE> 11
2. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES, Continued
assets to the amount expected to be realized. Income tax expense
(benefit) is the tax payable (receivable) for the period and the change
during the period in deferred tax assets and liabilities.
3. INVENTORIES
Inventories consist of the following at December 27, 1997:
<TABLE>
<S> <C>
Raw materials $240,265
Finished goods 358,399
--------
$598,664
========
</TABLE>
4. PROPERTY AND EQUIPMENT
Property and equipment consist of the following at December 27,
1997:
<TABLE>
<S> <C>
Buildings and leasehold improvements $ 147,355
Machinery and equipment 708,151
Furniture and fixtures 335,678
----------
1,191,184
Less accumulated depreciation 721,754
----------
$ 469,430
==========
</TABLE>
5. OPERATING LEASES
Noncancelable operating leases for a laboratory and certain
production and administration facilities expire in various years through
2001. Rent expense for the year ended December 27, 1997, approximated
$272,424.
Future minimum lease payments at December 27, 1997 were:
<TABLE>
<S> <C>
1998 $ 214,050
1999 222,612
2000 231,516
2001 220,712
----------
$ 888,890
==========
</TABLE>
-11-
<PAGE> 12
6. INCOME TAXES
The Company files a consolidated federal income tax return which
includes Novagen, Tri-State and PFRM. As a result of the consolidated
group incurring a pre-tax loss in 1997, Pel-Freez has recorded an income
tax receivable, resulting from the carryback of the loss . In accordance
with the terms of the stock purchase agreement between the stockholder
and CNB, the income tax refund, when received by Pel-Freez, will be
distributed to the stockholder.
The provision for income taxes includes these components at
December 27, 1997:
<TABLE>
<S> <C>
Current income taxes $ 29,097
Deferred income benefit (241,675)
---------
$(212,578)
=========
</TABLE>
The tax effects of temporary differences related to deferred taxes shown
on the balance sheets were:
<TABLE>
<S> <C>
Deferred tax asset - current:
Inventory overhead cost capitalized for
tax purposes $ 16,819
Accrued compensated absences 8,897
Accrued pension liability 5,144
Accrued litigation settlement 98,035
---------
Deferred tax asset - current $ 128,895
=========
Deferred tax asset - noncurrent:
Accrued litigation settlement $ 98,035
Accumulated depreciation
(47,601)
---------
Deferred tax asset - noncurrent $ 50,434
=========
</TABLE>
A reconciliation of income tax expense at the statutory rate to the Company's
actual income tax expense at December 27, 1997:
<TABLE>
<S> <C>
Computed at the statutory rate (34%) $(171,917)
Increase (decrease) resulting from:
Research and development tax credit (23,995)
State income taxes - net of federal tax
(26,364)
Other 9,698
---------
Actual tax benefit $(212,578)
=========
</TABLE>
-12-
<PAGE> 13
7. PENSION AND PROFIT SHARING PLANS
PENSION PLAN - Through fiscal year 1997, the Company was the sponsor of
a defined benefit pension plan covering substantially all employees. On
January 1, 1998, the plan sponsorship and all of the related obligations
were transferred to PFRM. Effective December 27, 1997, and concurrent
with the transfer of plan sponsorship, the future benefits of all
employees of the Company were frozen, as the Company will no longer
participate in this defined benefit plan. For 1997, the Company accrued
approximately $13,000 for this pension liability, which has been
recorded as a payable to affiliate.
PROFIT SHARING PLAN - The Company has a defined contribution retirement
plan, established under the regulations of Internal Revenue Code Section
401(k), covering substantially all employees. The Company contributes an
amount equal to 50% of the first 6% of elective deferrals made by
employees. In addition, the Company may contribute additional amounts,
as determined by the Board of Directors, not to exceed the maximum
amount deductible for income tax purposes. Participants vest in Company
contributions over a period from 2 to 6 years of service. Contributions
to the Plan were approximately $27,000 for the year ended December 27,
1997. As part of the reorganization of the Company, plan sponsorship for
the profit sharing plan was assumed by PFRM.
8. OTHER EMPLOYEE BENEFIT PLANS
The Company had a stock option plan whereby ten percent of the
presently authorized common shares were reserved for issuance upon
exercise of options granted to certain employees. The Plan provided that
the option price be no less than the estimated fair value of the stock
at the date of grant. Options granted vested over five years and became
exercisable immediately upon vesting. Options expired 15 years after the
date of grant. Under the terms of the Company's Shareholders' Agreement,
shareholders could not sell, exchange, assign or otherwise encumber any
shares owned, except under certain circumstances. Additionally, the
Company had right of first refusal to purchase any shares placed for
sale at a price that approximated fair value. In connection with the
restructuring, all outstanding options were terminated. In connection
with the restructuring, the cost of terminating the options was recorded
by PFRM for all option holders most of whom were employees of PFRM. The
cost, net of related income taxes, of terminating options held by an
employee of Novagen was recorded by Novagen as a capital contribution.
-13-
<PAGE> 14
8. OTHER EMPLOYEE BENEFIT PLANS, Continued
The Company is self-insured through an affiliate for medical
benefits provided to employees. The Company funds medical claims by
periodic contributions, through payments to an affiliate, to a Voluntary
Employee's Beneficiary Association Trust which approximates the
liability for claims currently payable and incurred but not reported.
The Company accrued $67,557 in 1997 for medical claims which are
included in the payable to affiliate.
9. SETTLEMENT OF LITIGATION
In 1996, certain litigation was instituted against Novagen
claiming patent infringement. On March 20, 1997, the court found that
the claims related to the patents that covered Novagen's product were
invalid and, accordingly management and legal counsel determined that it
was remote that Novagen would incur any liability relating to this
litigation. Upon appeal by the plaintiff, this verdict was reversed in
1997. In January 1998, Novagen entered into a settlement agreement with
the plaintiff whereby it agreed to pay $500,000, which has been included
in other expense and accrued liabilities in the accompanying financial
statements.
-14-
<PAGE> 15
Item 7(b) Pro forma financial information.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following unaudited pro forma condensed combined financial information has
been prepared giving effect to the Company's acquisition of Novagen Holdings,
Inc. ("Holdings"), and its subsidiary Novagen, Inc. ("Novagen"), as if the
transaction had taken place at December 31, 1997 for the pro forma condensed
combined balance sheet and January 1, 1997 for the pro forma condensed combined
statement of operations.
The acquisition was accomplished through the purchase of all outstanding common
stock of Holdings, which owned 90% of the outstanding common stock of Novagen,
and the purchase of the remaining 10% of the outstanding common stock of
Novagen, from their respective shareholders. Prior to its acquisition by the
Company, Holdings operated two other businesses through separate subsidiaries.
As a condition of the stock purchase agreement pursuant to which the Company
acquired Holdings and Novagen, Holdings divested itself of these subsidiaries.
Consequently, upon the consummation of the Company's acquisition of Holdings,
its assets consisted only of its stock of Novagen and certain tax assets, while
its liabilities consisted only of certain related tax liabilities.
The unaudited pro forma condensed combined financial information has been
derived from the audited consolidated financial statements of the Company and
Holdings and should be read in conjunction with such audited financial
statements and the notes thereto. The pro forma financial information is not
necessarily indicative of the results of operations or the financial position
which would have been attained had the acquisition been consummated on either of
the foregoing dates or that which may be attained in the future.
-15-
<PAGE> 16
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
DECEMBER 31, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS
CN PRO FORMA
BIOSCIENCES, INC. ADJUSTMENTS COMBINED
----------------- ----------------- -----------------
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 15,646 $ (10,500) $ 5,146
Short-term investments 2,046 -- 2,046
Accounts receivable 5,914 -- 5,914
Inventories 18,309 -- 18,309
Other current assets 2,800 -- 2,800
----------------- ----------------- -----------------
Total current assets 44,715 -- 34,215
Property and equipment, net 4,528 -- 4,528
Intangible assets, net 10,330 -- 10,330
Other assets 838 -- 838
----------------- ----------------- -----------------
Total assets $ 60,411 $ (10,500) $ 49,911
================= ================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade $ 2,505 -- $ 2,505
Liability for purchase of
business 10,500 (10,500) --
Accrued expenses 3,898 -- 3,898
Other current liabilities 837 -- 837
----------------- ----------------- -----------------
Total current liabilities 17,740 (10,500) 7,240
Other liabilities 857 -- 857
Deferred tax liabilities 2,708 -- 2,708
Stockholders' equity:
Preferred stock -- -- --
Common stock 56 -- 56
Additional paid-in capital 42,481 -- 42,481
Accumulated deficit (3,043) -- (3,043)
Foreign currency translation (388) -- (388)
----------------- ----------------- -----------------
Total stockholders' equity 39,106 -- 39,106
----------------- ----------------- -----------------
Total liabilities and stockholders' equity $ 60,411 $ (10,500) $ 49,911
================= ================= =================
</TABLE>
See accompanying notes.
-16-
<PAGE> 17
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
CN NOVAGEN
BIOSCIENCES, HOLDINGS, PRO FORMA
INC. INC. ADJUSTMENTS COMBINED
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Sales $ 39,445 $ 4,214 $ -- $ 43,659
Cost of sales 17,883 1,163 -- 19,046
----------- ----------- ----------- -----------
Gross profit 21,562 3,051 -- 24,613
Operating expenses:
Selling, general and
administrative 13,871 3,115 (354) 17,340
Research and development 2,567 419 -- 2,986
Write off of in-process technology 6,800 -- 6,800 --
----------- ----------- ----------- -----------
Total operating expenses 23,238 3,534 6,446 20,326
----------- ----------- ----------- -----------
Income (loss) from operations (1,676) (483) 6,446 4,287
Interest income (expense), net 594 (23) -- 571
----------- ----------- ----------- -----------
Income (loss) before income taxes (1,082) (506) 6,446 4,858
Income tax expense (benefit) (1,898) 213 -- (1,685)
Minority interest -- 28 (28) --
----------- ----------- ----------- -----------
Net income (loss) $ (2,980) $ (265) $ 6,418 $ 3,173
=========== =========== =========== ===========
Net income (loss) per share:
Basic $ (.55) $ -- $ -- $ .58
=========== =========== =========== ===========
Diluted $ (.55) $ -- $ -- $ .55
=========== =========== =========== ===========
Shares used in per share
computations:
Basic 5,436,000 5,436,000
=========== ===========
Diluted 5,436,000 5,737,000
=========== ===========
</TABLE>
See accompanying notes.
-17-
<PAGE> 18
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
1. On December 27, 1997, CN Biosciences, Inc. (the "Company") purchased all of
the outstanding capital stock of Novagen, Inc., and its parent holding company
Novagen Holdings, Inc., (formerly Pel Freez, Inc.)(hereinafter collectively
"Holdings") in a transaction accounted for as a purchase. The $10.5 million
purchase price was funded on January 2, 1998 from cash on hand. Accordingly, the
Company's audited balance sheet as of December 31, 1997 already gives effect to
the acquisition of Holdings except for the funding of the purchase price. The
assets acquired include identified intangible assets and goodwill of $5.9
million with an assumed amortization period of approximately 17 years, and in
process technology of $6.8 million which was written off effective with the
purchase.
2. The pro forma condensed combined balance sheet has been adjusted to reflect
the funding of the purchase price of $10.5 million in January 1998.
3. The pro forma condensed combined statement of operations combines the
Company's historical results for the year ended December 31, 1997 with Holdings'
historical results for the fiscal year ended December 27, 1997. The pro forma
condensed combined statement of operations has been adjusted to reflect (a)
additional amortization expense related to the intangible assets and goodwill
acquired; (b) exclusion of the charge for the write off of in-process technology
which was directly attributable to the transaction; and (c) exclusion of the
minority interest in Holdings' net loss for the fiscal year ended December 27,
1997.
-18-
<PAGE> 19
SIGNATURES
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.
CN Biosciences, Inc.
By: /s/ James G. Stewart
---------------------------------
James G. Stewart
Chief Financial Officer, Vice
President-Administration and
Secretary
Dated: March 12, 1998
-19-
<PAGE> 20
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
2(b) Stock Purchase Agreement, dated as of November 25, 1997,
by and among CN Biosciences, Inc., as Buyer, David W.
Dubbell, Dennis Almond, Corrine Fetherston, Lisa Johnson,
Robert Mierendorf, Warren Kroeker, Barbara Morris, Robert
Novy and Tom Van Oosbree, as Sellers, and Pel-Freez, Inc.*
23(a) Consent of Coopers & Lybrand, L.L.P.
- ----------
*Incorporated by reference to Amendment No. 1 to this Current Report on Form
8-K, filed by the Registrant on February 3, 1998.
-20-
<PAGE> 1
Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the inclusion in CN Biosciences, Inc.'s Form 8K/A, Amendment No. 2
(to be filed on or about March 12, 1998), which is incorporated by reference in
Forms S-8 (file numbers 333-32891 and 333-16527), of our report dated February
19, 1998, on our audit of the consolidated financial statements of Pel-Freez,
Inc. and Subsidiary as of and for the year ended December 27, 1997.
Coopers & Lybrand, L.L.P.
Tulsa, Oklahoma
March 10, 1998
