SEC Filings

8-K
PERNIX THERAPEUTICS HOLDINGS, INC. filed this Form 8-K on 11/13/2018
Entire Document
 

Reconciliation of GAAP reported net loss to adjusted EBITDA is as follows (in thousands):

      Three Months Ended     Nine Months Ended
      September 30,     September 30,
      2018     2017     2018     2017
Net income (loss) attributable to common stockholders   $ (11,845)   $ 6,360    $ (43,942)   $ (44,718)
Add: Net loss attributable to noncontrolling interests     (9,504)         (9,504)    
Adjustments:                        
     Interest expense     10,073      9,323      29,063      27,491 
     Depreciation and amortization      2,422      18,243      13,773      55,064 
     Income tax expense     61      27      109      122 
EBITDA     (8,793)     33,953      (10,501)     37,959 
     Inventory step-up amortization(1)     2,239          2,239     
     Selling, general and administrative adjustments (2)     5,059      1,985      8,190      3,720 
     Gain from sale of non-core asset (3)             (446)    
     Change in fair value of contingent consideration (4)         884      143      344 
     Loss from disposal and impairment of assets (5)     75      25      75      25 
     Gain from exchange of debt (6)     (137)     (14,650)     (137)     (14,650)
     Change in fair value of derivative liability (7)     (18)     (46)     (39)     38 
     Restructuring costs (8)     (2)     (97)     1,212      34 
     Gain from legal settlement (9)         (10,476)         (10,476)
     Foreign currency transaction (gain) loss (10)     843          864     
Adjusted EBITDA   $ (734)   $ 11,578    $ 1,600    $ 16,994 

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(1)

Excludes inventory step-up amortization recorded as part of Nalpropion's acquisition of Orexigen.

(2)

Excludes deal costs of $4.6 million and $1.3 million; stock compensation expense of $0.4 million and $0.5 million; severance expense of $16,000 and $0.2 million; and litigation settlement expenses of $25,000 and $20,000 for the three months ended September 30, 2018 and 2017, respectively. Also excludes deal costs of $5.4 million and $1.5 million; stock compensation expense of $1.3 million and $1.9 million; severance expense of $0.1 million and $0.2 million; and arbitration and litigation settlement expenses of $1.3 million and $38,000 for the nine months ended September 30, 2018 and 2017, respectively.

(3)

Excludes the gain from the sale of certain obsolete equipment.

(4)

Excludes loss from change in fair value of contingent consideration related to the 2015 acquisition of Zohydro ER and is linked to the achievement of certain net sales targets. Any change in fair values between the reporting dates is recognized in the condensed consolidated statements of operations.

(5)

Excludes loss from impairment of other assets.

(6)

Excludes $0.1 million gain related to the Exchange Transaction and the Equitization Transaction in the three and nine months ended September 2018. For the three and nine months ended September 30, 2017, excludes a $14.7 million gain related to the July 2017 financing transactions in which certain holders of the 4.25% Convertible Notes exchanged $51.8 million in principal notes for $36.2 million in Exchangeable Notes.

(7)

Excludes changes in fair value of derivative liability consideration. We are required to separate the conversion option in the 4.25% Convertible Notes under ASC 815, Derivatives and Hedging. We recorded the bifurcated conversion option valued at $28.5 million at issuance, as a derivative liability, which created additional discount on the debt. The derivative liability is marked to market through the other income (expense) section on the condensed consolidated statements of operations for each reporting period.

(8)

Excludes the cost related to the initiative to restructure our sales force and operations for the three and nine months ended September 30, 2018 and 2017.

(9)

Excludes $10.5 million gain from Pernix and GSK amended settlement agreement resulting from Amendment NO. 2 to the Interim Settlement Agreement with GSK under which Pernix paid approximately $6.7 million to GSK (potentially up to $8.7 million), which is a reduction of up to approximately $14.5 million from the initial settlement agreement.

(10)

Excludes losses on foreign currency transactions primarily related to Nalpropion's operations.