UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
Exhibit 15.3
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
Introduction
On October 10, 2019, International General Insurance Holdings Limited, a company organized under the laws of the Dubai International Financial Center (“IGI”), entered into a Business Combination Agreement (as amended prior to the date hereof, the “Business Combination Agreement”) with Xxxxxxxx Acquisition Corporation, a Delaware corporation (“Tiberius”), Lagniappe Ventures LLC, a Delaware limited liability company (solely in the capacity as the Purchaser Representative), Xxxxx Xxxxxxx (solely in the capacity as the representative of the holders of IGI’s outstanding capital shares that have executed and delivered an exchange agreement (the “Sellers”)), and, pursuant to a joinder thereto, International General Insurance Holdings Ltd., a Bermuda exempted company (“Pubco”), and Xxxxxxxx Xxxxxx Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Pubco (“Merger Sub”). Pursuant to the Business Combination Agreement, on March 17, 2020 (the “Closing”), (1) Merger Sub merged with and into Xxxxxxxx, with Xxxxxxxx surviving the merger and each of the former security holders of Xxxxxxxx receiving securities of Pubco (the “Merger”) and (2) all of the outstanding share capital of IGI was exchanged by the Sellers for a combination of common shares of Pubco and aggregate cash consideration of $80.0 million (the “Share Exchange” and, together with the Merger and the other transactions contemplated by the Business Combination Agreement, the “Business Combination”).
The total consideration paid by Pubco to the Sellers (the “Transaction Consideration”) was equal to (i) the sum of (the “Adjusted Book Value”) (A) the total consolidated book equity value of IGI and its subsidiaries as of the most recent month end of IGI prior to the Closing (the “Book Value”), plus (B) the amount of IGI’s out-of-pocket transaction expenses which reduced the Book Value from what it would have been if such expenses had not been incurred, multiplied by (ii) 1.22, and multiplied by (iii) a fraction equal to (A) the total number of shares of IGI acquired by Pubco (the “Purchased Shares”) divided by (B) the total number of issued and outstanding IGI common shares as of the closing of the Business Combination.
$80.0 million of the Transaction Consideration was paid in cash (the “Cash Consideration”), with each Purchased Share acquired for cash paid based on a value equal to two times Adjusted Book Value per share. The Purchased Shares paid with the Cash Consideration were allocated among the Sellers based on an agreed upon formula, with Xxxxx Xxxxxxx receiving $65.0 million of the Cash Consideration, Xxxxx Xxxxxxx’x family members receiving no cash consideration and the remaining Sellers receiving the remaining $15.0 million pro rata based on the number of Purchased Shares owned by each such remaining Seller.
The remaining Transaction Consideration was paid by Pubco to the Sellers by delivery of newly issued common shares of Pubco equal in value to the total Transaction Consideration less $80.0 million of Cash Consideration (the “Exchange Shares”), with each Exchange Share valued at the price per share (the “Redemption Price”) at which each share of Tiberius common stock, par value $0.0001 per shares (“Tiberius Common Stock”), was redeemed pursuant to the redemption by Xxxxxxxx of shares held by its public stockholders in connection with the Business Combination, as required by its amended and restated certificate of incorporation and Xxxxxxxx’s initial public offering prospectus. A portion of the Pubco common shares, representing 2.5% of the total Transaction Consideration, were issued in the name of the Sellers but were set aside in escrow (the “Escrow Shares”) at the Closing to be used, along with any dividends, distributions or other earnings thereon, as the sole source of remedy available to Pubco for any post-closing negative adjustments to the total Transaction Consideration.
Based on IGI’s book value as of June 30, 2019, the Redemption Price as of June 30, 2019, and assuming that 100% of IGI’s shareholders execute exchange agreements, the hypothetical transaction consideration would be calculated as follows:
| ($) in millions | ||||
| IGI Book Value as of June 30, 2019 | $ | 308.6 | ||
| Plus IGI Transaction Expenses that Reduced Book Value(1) | 0.0 | |||
| Adjusted Book Value | $ | 308.6 | ||
| Multiplied by 1.22 | $ | 376.5 | ||
| Multiplied by Percentage of IGI Shareholders Who Are Expected to Execute Exchange Agreements (assuming all of IGI’s shareholders sign) | 100 | % | ||
| Transaction Consideration | $ | 376.5 | ||
| Minus Cash Consideration | $ | 80.0 | ||
| Equity Consideration | $ | 296.5 | ||
| Divided by: Redemption Price as of June 30, 2019 | $ | 10.326 | ||
| Number of Exchange Shares | 28,713,754 |
| (1) | Transaction expenses incurred as of June 30, 2019 were $35,343. |
The following unaudited pro forma combined consolidated statement of financial position as of June 30, 2019 combines the unaudited consolidated statement of financial position of IGI as of June 30, 2019 and the unaudited balance sheet of Xxxxxxxx as of June 30, 2019 giving effect to the Business Combination as if it had been consummated as of that date.
The following unaudited pro forma combined consolidated statement of income for the six months ended June 30, 2019 combines the unaudited consolidated statement of income of IGI for the six months ended June 30, 2019 and the unaudited statement of operations of Xxxxxxxx for the six months ended June 30, 2019, giving effect to the Business Combination as if it had occurred as of the beginning of the earliest period presented.
The following unaudited pro forma combined consolidated statement of income for the year ended December 31, 2018 combines the audited consolidated statement of income of IGI for the year ended December 31, 2018 with the audited statement of operations of Xxxxxxxx for the year ended December 31, 2018, giving effect to the Business Combination as if it had occurred as of the beginning of the earliest period presented.
The unaudited combined pro forma financial information should be read in conjunction with the accompanying notes. In addition, the unaudited combined pro forma financial information was based on and should be read in conjunction with the following historical financial statements and the accompanying notes:
| ● | historical audited financial statements of IGI for the year ended December 31, 2018 |
| ● | historical audited financial statements of Xxxxxxxx for the year ended December 31, 2018 |
| ● | historical unaudited interim condensed financial statements of IGI for the six months ended and as of June 30, 2019 |
| ● | historical unaudited financial statements of Xxxxxxxx for the six months ended and as of June 30, 2019 |
The historical financial statements of IGI have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and in its functional and presentation currency of the United States dollar. The historical financial statements of Xxxxxxxx have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”) in its functional and presentation currency of United States dollars.
Accounting for the Business Combination
The transaction will be accounted for as a continuation of IGI in accordance with IFRS as issued by the IASB. Under this method of accounting, while Pubco is the legal acquirer of both IGI and Xxxxxxxx, XXX has been identified as the accounting acquirer of Xxxxxxxx for accounting purposes. This determination was primarily based on IGI comprising the ongoing operations of the combined company, IGI senior management comprising the senior management of the combined company, and the former owners and management of IGI having control of the board of directors following the consummation of the transaction by virtue of being able to appoint a majority of the directors of the combined company. As Xxxxxxxx does not meet the definition of a business as defined in IFRS 3 — Business Combinations (“IFRS 3”), the acquisition is not within the scope of IFRS 3 and is accounted for as a share-based payment transaction in accordance with IFRS 2 — Share-based Payments (“IFRS 2”). Hence, the transaction will be accounted for as the continuance of IGI with recognition of the identifiable assets acquired and the liabilities assumed of Xxxxxxxx at fair value. Operations prior to the transaction will be those of IGI from an accounting point of view.
Under IFRS 2, the transaction is measured at the fair value of the common shares deemed to have been issued by IGI for the ownership interest in Pubco to be the same as if the transaction had taken the legal form of IGI acquiring 100% of Xxxxxxxx. The difference between the fair value of the common shares/warrants deemed to have been issued by IGI and the fair value of Xxxxxxxx’s identifiable net assets acquired represents a transaction cost or a bargain purchase that will be recognized in the statement of income.
Basis of Pro Forma Presentation
The historical financial information has been adjusted to give pro forma effect to events that are related and/or directly attributable to the Business Combination, are factually supportable and are expected to have a continuing impact on the results of Pubco. The adjustments presented in the unaudited pro forma combined financial statements have been identified and presented to provide relevant information necessary for an understanding of Pubco upon consummation of the Transactions.
The unaudited pro forma combined financial information is presented for illustrative purposes only. The financial results may have been different had the companies been combined for the referenced periods. You should not rely on the unaudited pro forma combined financial information as being indicative of the historical results that would have been achieved had the companies been combined for the referenced periods or the future results that Pubco will experience. IGI, Xxxxx and Xxxxxxxx have not had any historical relationship prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.
The historical financial information of Xxxxxxxx has been adjusted to give effect to the differences between US GAAP and IFRS as issued by the IASB for the purposes of the combined unaudited pro forma financial information. No adjustments were required to convert Xxxxxxxx’s financial statements from US GAAP to IFRS for purposes of the combined unaudited pro forma financial information, except to classify shares of Tiberius Common Stock subject to redemption as non-current liabilities under IFRS. The adjustments presented in the unaudited pro forma combined financial information have been identified and presented to provide relevant information necessary for an understanding of the combined company after giving effect to the Business Combination.
The unaudited pro forma combined financial information has been prepared based on the actual redemption of 7,910,076 shares of Tiberius Common Stock.
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Unaudited Pro Forma Combined Consolidated Statement of Financial Position as of June 30, 2019
| Reflecting
Actual Redemptions upon the Closing of the Business Combination on March 17, 2020 | ||||||||||||||||
IGI (A) |
Xxxxxxxx (B) | Pro Forma Adjustments | Pro Forma Balance Sheet | |||||||||||||
| ASSETS | ||||||||||||||||
| Marketable securities held in Trust Account | $ | — | $ | 178,122,646 | $ | (178,122,646 | )(1) | $ | — | |||||||
| Properties, premises and equipment | 13,227,513 | — | — | 13,227,513 | ||||||||||||
| Intangible assets | 3,267,321 | — | — | 3,267,321 | ||||||||||||
| Investments in associates | 13,547,122 | — | — | 13,547,122 | ||||||||||||
| Investment properties | 31,097,058 | — | — | 31,097,058 | ||||||||||||
| Deferred tax assets | 442,732 | — | — | 442,732 | ||||||||||||
| Investments | 220,601,261 | — | — | 220,601,261 | ||||||||||||
| Deferred policy acquisition costs | 40,860,644 | — | — | 40,860,644 | ||||||||||||
| Insurance receivables | 122,059,533 | — | — | 122,059,533 | ||||||||||||
| Other assets | 6,759,432 | — | — | 6,759,432 | ||||||||||||
| Reinsurance share of unearned premiums | 36,961,095 | — | — | 36,961,095 | ||||||||||||
| Reinsurance share of outstanding claims | 180,254,586 | — | — | 180,254,586 | ||||||||||||
| Deferred XOL premium | 4,116,514 | — | — | 4,116,514 | ||||||||||||
| Cash and cash equivalents and term deposits | 279,483,095 | 43,638 | 178,122,646 | (1) | ||||||||||||
| 23,611,809 | (2) | |||||||||||||||
| 25,000,000 | (3) | |||||||||||||||
| (20,850,000 | )(4) | |||||||||||||||
| (6,525,000 | )(5) | |||||||||||||||
| (1,790,000 | )(6) | |||||||||||||||
| (80,000,000 | )(8) | |||||||||||||||
| (81,679,445 | )(7) | 315,416,743 | ||||||||||||||
| Income tax receivable | — | 2,000 | — | 2,000 | ||||||||||||
| Prepaid expenses and other current assets | — | 114,535 | — | 114,535 | ||||||||||||
| Total Assets | $ | 952,677,906 | $ | 178,282,819 | $ | (142,232,636 | ) | $ | 988,728,089 | |||||||
| EQUITY AND LIABILITIES | ||||||||||||||||
| Equity: | ||||||||||||||||
| Issued share capital | $ | 143,375,678 | $ | — | $ | (143,375,678 | )(8) | $ | — | |||||||
| Common shares | — | 567 | 231 | (2) | ||||||||||||
| 290 | (3) | |||||||||||||||
| 798 | (7) | |||||||||||||||
| 2,871 | (8) | 4,757 | ||||||||||||||
| Additional paid in capital | 2,773,000 | 2,031,533 | 23,611,578 | (2) | ||||||||||||
| 24,999,710 | (3) | |||||||||||||||
| (6,525,000 | )(5) | |||||||||||||||
| 82,375,325 | (7) | |||||||||||||||
| 46,238,208 | (8) | |||||||||||||||
| (2,655,456 | )(9) | 172,848,898 | ||||||||||||||
| Treasury shares | (20,102,500 | ) | — | 20,102,500 | (8) | — | ||||||||||
| Foreign currency translation reserve | (286,959 | ) | — | — | (286,959 | ) | ||||||||||
| Fair value reserve | 3,959,871 | — | — | 3,959,871 | ||||||||||||
| Retained earnings | 178,849,502 | 2,967,901 | (13,500,000 | )(4) | ||||||||||||
| (2,967,901 | )(8) | |||||||||||||||
| 2,655,456 | (9) | 168,004,958 | ||||||||||||||
| Total Equity | 308,568,592 | 5,000,001 | 30,962,932 | 344,531,525 | ||||||||||||
| Liabilities: | ||||||||||||||||
| Accounts payable and accrued expenses | — | 152,250 | — | (4) | ||||||||||||
| (65,000 | )(6) | 87,250 | ||||||||||||||
| Gross outstanding claims | 397,160,743 | — | — | 397,160,743 | ||||||||||||
| Gross unearned premiums | 206,463,986 | — | — | 206,463,986 | ||||||||||||
| Other liabilities | 7,404,044 | — | 7,404,044 | |||||||||||||
| Insurance payables | 25,070,947 | — | 25,070,947 | |||||||||||||
| Unearned commissions | 8,009,594 | — | 8,009,594 | |||||||||||||
| Sponsor loan payable | — | 1,725,000 | (1,725,000 | )(6) | — | |||||||||||
| Deferred underwriting commissions | — | 7,350,000 | (7,350,000 | )(4) | — | |||||||||||
| Common shares subject to redemption | — | 164,055,568 | (164,055,568 | )(7) | — | |||||||||||
| Total Liabilities | 644,109,314 | 173,282,818 | (173,195,568 | ) | 644,196,564 | |||||||||||
| Total Equity and Liabilities | $ | 952,677,906 | $ | 178,282,819 | $ | (142,232,636 | ) | $ | 988,728,089 | |||||||
| X. | Xxxxxxx from the unaudited consolidated statement of financial position of IGI as of June 30, 2019. |
| X. | Xxxxxxx from the unaudited balance sheet of Xxxxxxxx as of June 30, 2019. |
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Unaudited Pro Forma Combined Consolidated Statement of Income for the Six Months Ended June 30, 2019
| Reflecting Actual Redemptions upon the Closing of the Business Combination on March 17, 2020 | ||||||||||||||||
IGI (A) |
Xxxxxxxx (B) | Pro Forma Adjustments | Pro Forma Income Statement | |||||||||||||
| Gross written premiums | $ | 186,330,192 | $ | — | $ | — | $ | 186,330,192 | ||||||||
| Reinsurers’ share of insurance premiums | (49,039,789 | ) | — | — | (49,039,789 | ) | ||||||||||
| Net written premiums | 137,290,403 | — | — | 137,290,403 | ||||||||||||
| Net change in unearned premiums | (33,815,050 | ) | — | — | (33,815,050 | ) | ||||||||||
| Net premiums earned | 103,475,353 | — | — | 103,475,353 | ||||||||||||
| Net claims and claim adjustment expenses | (55,377,991 | ) | — | — | (55,377,991 | ) | ||||||||||
| Net policy acquisition expenses | (22,009,893 | ) | — | — | (22,009,893 | ) | ||||||||||
| Net underwriting results | 26,087,469 | — | — | 26,087,469 | ||||||||||||
| Total Investment income, net (C) | 5,972,135 | 2,071,647 | (2,071,647 | )(2) | 5,972,135 | |||||||||||
| Net realized gains/(losses) on investments | 445,459 | — | — | 445,459 | ||||||||||||
| Net unrealized gains/(losses) on investments | 984,002 | 89,468 | (89,468 | )(2) | 984,002 | |||||||||||
| General and administrative expenses | (18,503,774 | ) | (405,527 | ) | 35,343 | (1) | (18,873,958 | ) | ||||||||
| Other income/expenses | (315,270 | ) | — | — | (315,270 | ) | ||||||||||
| (Loss) gain on foreign exchange | 424,184 | — | — | 424,184 | ||||||||||||
| Income before income tax | 15,094,205 | 1,755,588 | (2,125,772 | ) | 14,724,021 | |||||||||||
| Income tax | (196,109 | ) | (350,000 | ) | 350,000 | (3) | (196,109 | ) | ||||||||
| Net Income | $ | 14,898,096 | $ | 1,405,588 | $ | (1,775,772 | ) | $ | 14,527,912 | |||||||
| Shares outstanding, diluted | 136,323,456 | 5,653,614 | 38,734,947 | (4) | 44,388,561 | |||||||||||
| Diluted net income (loss) per share | $ | 0.11 | $ | (0.04 | ) | $ | (0.05 | ) | $ | 0.33 | ||||||
| X. | Xxxxxxx from the unaudited consolidated statement of income of IGI for the six months ended June 30, 2019. |
| X. | Xxxxxxx from the unaudited statement of operations of Xxxxxxxx for the six months ended June 30, 2019. |
| C. | Represents net investment income and share of profit or loss from associates, net of (1) net realized gains/(losses) on investments, and (2) unrealized gains/(losses) on investments. |
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Unaudited Pro Forma Combined Consolidated Statement of Income for the Year Ended December 31, 2018
| Reflecting Actual Redemptions upon the Closing of the Business Combination on March 17, 2020 | ||||||||||||||||
IGI (A) |
Xxxxxxxx (B) | Pro Forma Adjustments | Pro Forma Income Statement | |||||||||||||
| Gross written premiums | $ | 301,618,486 | $ | — | $ | — | $ | 301,618,486 | ||||||||
| Reinsurers’ share of insurance premiums | (98,188,088 | ) | — | — | (98,188,088 | ) | ||||||||||
| Net written premiums | 203,430,398 | — | — | 203,430,398 | ||||||||||||
| Net change in unearned premiums | (20,120,779 | ) | — | — | (20,120,779 | ) | ||||||||||
| Net premiums earned | 183,309,619 | — | — | 183,309,619 | ||||||||||||
| Net claims and claim adjustment expenses | (85,287,501 | ) | — | — | (85,287,501 | ) | ||||||||||
| Net policy acquisition expenses | (41,963,522 | ) | — | — | (41,963,522 | ) | ||||||||||
| Net underwriting results | 56,058,596 | — | — | 56,058,596 | ||||||||||||
| Total Investment income, net (C) | 9,088,086 | 2,687,003 | (2,687,003 | )(2) | 9,088,086 | |||||||||||
| Net realized gains/(losses) on investments | 1,285,339 | — | — | 1,285,339 | ||||||||||||
| Unrealized gains/(losses) on investments | (948,802 | ) | (17,374 | ) | 17,374 | (2) | (948,802 | ) | ||||||||
| General and administrative expenses | (34,626,799 | ) | (668,087 | ) | — | (35,294,886 | ) | |||||||||
| Corporate expenses | (724,880 | ) | — | — | (724,880 | ) | ||||||||||
| Other income/expenses | (1,155,655 | ) | — | — | (1,155,655 | ) | ||||||||||
| (Loss) gain on foreign exchange | (3,371,941 | ) | — | — | (3,371,941 | ) | ||||||||||
| Income before income tax | 25,603,944 | 2,001,542 | (2,669,629 | ) | 24,935,857 | |||||||||||
| Income tax | (62,241 | ) | (420,000 | ) | 420,000 | (3) | (62,241 | ) | ||||||||
| Net Income | $ | 25,541,703 | $ | 1,581,542 | $ | (2,249,629 | ) | 24,873,616 | ||||||||
| Shares outstanding, diluted | 138,320,733 | 5,205,676 | 39,182,885 | (4) | 44,388,561 | |||||||||||
| Diluted net income (loss) per share | $ | 0.18 | $ | (0.06 | ) | $ | (0.06 | ) | $ | 0.56 | ||||||
| X. | Xxxxxxx from the audited consolidated statement of income of IGI for the year ended December 31, 2018. |
| X. | Xxxxxxx from the audited statement of operations of Xxxxxxxx for the year ended December 31, 2018. |
| C. | Represents net investment income and share of profit or loss from associates, net of (1) net realized gains/(losses) on investments, and (2) unrealized gains/(losses) on investments. |
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Notes to Unaudited Pro Forma Combined Consolidated Statement of Financial Position
| 1. | Represents $178,122,646 of the cash and securities in Xxxxxxxx’s trust account that were liquidated upon consummation of the Business Combination. |
| 2. | Represents the $23,611,809 that certain accredited investors who entered into subscription agreements with Xxxxxxxx (the “PIPE Investors”) contributed in exchange for the issuance of 2,314,883 shares of Tiberius Common Stock immediately prior to, and subject to, the Closing, which became Pubco common shares upon consummation of the Business Combination. $231 represents the aggregate par value of such shares of Tiberius Common Stock, and $23,611,578 represents additional paid-in capital for such shares. |
| 3. | Represents the $25,000,000 that Church Mutual Insurance Company (“Church”), Xxxxx Xxxxxxx, Imua T Capital Investments and The Gray Insurance Company, pursuant to certain forward purchase contracts (the “forward purchase contracts”), contributed to Xxxxxxxx in exchange for the issuance of 2,900,000 shares of Tiberius Common Stock concurrently with the Closing, which became Pubco common shares upon consummation of the Business Combination. $290 represents the aggregate par value of such shares of Tiberius Common Stock, and $24,999,710 represents additional paid-in capital for such shares. |
| 4. | Represents $13,500,000 of estimated expenses incurred in connection with the Business Combination, including legal, financial advisory, accounting, printing and other professional fees and expenses, and $7,350,000 of deferred underwriting fees. |
| 5. | Represents the aggregate payment of (1) $2,250,000 that Church, simultaneously with and subject to the Closing, received in exchange for the cancellation of 3,000,000 Tiberius warrants pursuant to the Warrant Purchase Agreement between Church and Xxxxxxxx (the “Warrant Purchase Agreement”) and (2) $4,275,000 that another warrant holder, simultaneously with and subject to the Closing, received in exchange for the cancellation of 3,000,000 Tiberius warrants pursuant to a warrant purchase agreement between Xxxxxxxx and such warrant holder. |
| 6. | Represents the repayment of advances from and loans extended by Lagniappe Ventures LLC (the “Sponsor”) upon consummation of the Business Combination in the aggregate amount of $1,790,000. The advances were in the amount of $65,000 and the loans were in the amount of $1,725,000, inclusive of $225,000 as a result of the exercise of the underwriter’s over-allotment option, which is non-interest bearing. |
| 7. | The aggregate value of the shares of Xxxxxxxx Common Stock subject to redemption recorded on Xxxxxxxx’s balance sheet was $164,055,568. Of this amount, (i) the aggregate value of shares of Tiberius Common Stock redeemed in connection with the Business Combination was $81,679,445, (ii) $798 represents the aggregate par value of the nonredeemed shares and (iii) $82,375,325 represents the aggregate additional paid-in capital of the nonredeemed shares. |
| 8. | Represents the recapitalization of IGI through the issuance of Pubco common shares and payment of the $80,000,000 cash consideration and the elimination of Xxxxxxxx’s historical accumulated deficit. Adjustments were made with respect to (i) the elimination of the existing IGI common shares in the amount of $143,375,678 that ceased to exist upon consummation of the Business Combination, (ii) the elimination of IGI treasury shares in the amount of $20,102,500, (iii) the elimination of Xxxxxxxx’s retained earnings of $2,967,901 and (iv) the issuance of Pubco common shares in the amount of $46,241,079 that were issued upon consummation of the Business Combination, of which $2,871 represents the aggregate par value of such shares and $46,238,208 represents the aggregate additional paid-in capital of such shares. |
| 9. | Under IFRS 2, the transaction is measured at the fair value of the common shares deemed to have been issued by IGI for the ownership interest in Pubco to be the same as if the transaction had taken the legal form of IGI acquiring 100% of Xxxxxxxx. |
For purposes of determining the fair value of the common shares issued to the Tiberius stockholders, we have considered the closing quoted market price of Tiberius Common Stock on Nasdaq as of March 17, 2020 as representative of the fair value of the share-based consideration paid to Xxxxxxxx’s stockholders. This was the market price at which any existing or new investor could trade during the period after the expiration of the redemption deadline for Tiberius stockholders. In addition, for valuation purposes, we have also considered outstanding public warrants owned by Xxxxxxxx’s public stockholders (such warrants will be exercisable until March 17, 2025) using the most recent quoted price of these warrants on Nasdaq of $ 0.55 per warrant. We consider this price as an appropriate reflection of fair value per warrant as of the closing date.
In accordance with the calculation described below, fair value of Xxxxxxxx’s identifiable net assets acquired exceeds the fair value of the common shares (IPO shares) deemed to have been issued by IGI. This difference represents a ‘bargain purchase’ and shall be recognized in Pubco’s income statement. The below computation reflects in the money shares/options and the value of the outstanding public warrants owned by Xxxxxxxx’s public stockholders.
6
| Description | Amount | Number of shares/warrants | ||||||
| (a) Public shares of Tiberius Common Stock net of actual redemptions | - | 9,339,924 | ||||||
| (b) Quoted unadjusted closing price of Tiberius Common Stock on Nasdaq as of March 17, 2020 | $ | 8.32 | - | |||||
| (c) Fair value of common shares issued to Tiberius stockholders net of actual redemptions (a * b) | $ | 77,708,168 | - | |||||
| (d) Outstanding public warrants owned by Xxxxxxxx’s public stockholders | 12,750,000 | |||||||
| (e) Quoted price per warrant | $ | 0.55 | ||||||
| (f) Fair value of outstanding public warrants available to Xxxxxxxx (d * e) | $ | 7,012,500 | ||||||
| Total fair value of common shares and warrants (c + f) | $ | 84,720,668 | ||||||
| Xxxxxxxx’s assets based on actual redemptions | $ | 96,603,374 | - | |||||
| Less: Liabilities on Xxxxxxxx’s balance sheet (primarily sponsor loan and deferred underwriting commission) | $ | (9,227,250 | ) | - | ||||
| Xxxxxxxx’s net assets acquired | $ | 87,376,124 | - | |||||
| Bargain purchase on the closing date | $ | 2,655,456 | - | |||||
Notes to Unaudited Pro Forma Combined Consolidated Statements of Income
| 1. | Represents the expenses incurred by IGI in connection with the Business Combination recorded in IGI’s income statement. |
| 2. | Represents the elimination of unrealized gain and interest income on securities held in the Trust Account which will be liquidated after the consummation of the Business Combination. |
| 3. | Represents the tax effect of pro forma adjustments applied at IGI’s blended federal and state income tax rate. IGI’s statutory tax rate was 0% during the six months ended June 30, 2019 and year ended December 31, 2018. |
| 4. | Assuming that the Tiberius stockholders exercise redemption rights with respect to 7,910,076 shares of Tiberius Common Stock, the weighted average shares is calculated assuming that 9,339,924 Pubco common shares will be issued to the public holders of Tiberius Common Stock, 4,020,000 (Basic & Diluted) Pubco common shares will be issued in exchange for the Founder Shares and the shares issued pursuant to the forward purchase contracts, 2,314,883 (Basic & Diluted) Pubco common shares will be issued to the PIPE Investors, and 28,713,754 (Basic & Diluted) Pubco common shares will be issued in exchange for IGI common shares. |
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