Ernexa Therapeutics Inc 8-K/A, filed Apr 30, 2021

Ernexa Therapeutics Inc. (ERNA)

8-K/A 2021-04-30 For: 2021-03-25

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Added on April 06, 2026

About this 8-K/A

Ernexa Therapeutics Inc filed this 8-K/A on April 30, 2021, reporting on events of March 25, 2021.

Items reported

Item 9.01: Financial statements and exhibits

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Delaware	001-11460	31-1103425
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

140 58^th Street, Building A, Suite 2100
Brooklyn, New York		11220
(Address of Principal Executive Offices)		(Zip Code)

Title of each class		Trading symbol		Name of each exchange on which registered
Common Stock		BTX		NYSE American

Exhibit No.		Description

23.1		Consent of Marcum LLP

99.1		Audited financial statements of Brooklyn ImmunoTherapeutics LLC as of, and for the fiscal years ended, December 31, 2020 and 2019.

99.2		Audited financial statements of Brooklyn ImmunoTherapeutics LLC as of December 31, 2019 and 2018 and for the fiscal year ended December 31, 2019, the period from November 6, 2018 through December 31, 2018, and the period from January 1, 2018 through November 5, 2018

99.3		Unaudited pro forma condensed combined financial statements of Brooklyn ImmunoTherapeutics, Inc. for the year ended December 31, 2020, including notes thereto

	BROOKLYN IMMUNOTHERAPEUTICS, INC.

Dated: April 29, 2021	By:	/s/ Howard J. Federoff
		Howard J. Federoff
		Chief Executive Officer and President

	Page

Report of Independent Registered Public Accounting Firm	1

Financial Statements

Balance Sheets	2

Statements of Operations	3

Statements of Changes in Members’ Equity	4

Statements of Cash Flows	5

Notes to Financial Statements	6

	December 31,
	2020			2019
Assets
Current Assets:
Cash	$	1,630,455		$	5,014,819
Prepaid expenses and other current assets		102,322			86,668
Total Current Assets		1,732,777			5,101,487

Long-Term Assets:
Restricted cash		-			86,000
Property and equipment, net		594,106			653,763
Right of use assets - operating leases		2,092,878			-
Goodwill		2,043,747			2,043,747
In process research and development		6,860,000			6,860,000
Security deposits and other assets		453,252			363,621
Total Assets	$	13,776,760		$	15,108,618

Liabilities and Members’ Equity
Current Liabilities:
Accounts payable	$	1,275,223		$	1,735,610
Accrued expenses		1,051,020			1,520,841
Investor deposits		-			665,563
Loans payable		410,000			410,000
Current portion of lease liability		273,217			4,026
Current portion of PPP loan		115,972			-
Total Current Liabilities		3,125,432			4,336,040

Long-Term Liabilities:
Contingent consideration		20,110,000			870,000
Lease liability, non-current		1,905,395			99,030
PPP loan, non-current		193,933			-
Other liabilities		22,863			60,445
Total Liabilities		25,357,623			5,365,515

Commitments and contingencies

Members’ Equity:
Class A membership units		23,202,005			18,177,692
Class B membership units		1,400,000			1,400,000
Class C membership units		1,000,000			1,000,000
Common units		197,873			106,937
Accumulated deficit		(37,380,741	)		(10,941,526	)
Total Members’ Equity		(11,580,863	)		9,743,103
Total Liabilities and Members’ Equity	$	13,776,760		$	15,108,618

	Year ended December 31,
	2020			2019

Operating Expenses
General and administrative	$	3,296,851		$	3,721,490
Research and development		3,951,253			5,156,266
Change in fair value of contingent consideration		19,240,000			-
Total operating expenses		26,488,104			8,877,756
Loss from operations		(26,488,104	)		(8,877,756	)
Other Expenses
Interest expense, net		(42,957	)		(59,298	)
Total other expenses		(42,957	)		(59,298	)
Net loss	$	(26,531,061	)	$	(8,937,054	)

	Membership Equity								Accumulated Deficit			Total Members’ Equity
	Class A		Class B		Class C		Common		Accumulated Deficit			Total Members’ Equity
Balance - January 1, 2019	$	9,958,930	$	1,400,000	$	1,000,000	$	15,248	$	(2,004,472	)	$	10,369,706
Stock based compensation:
Amortization of restricted common units		-		-		-		91,689		-			91,689
Sale of members’ equity		8,218,762		-		-		-		-			8,218,762
Net loss		-		-		-		-		(8,937,054	)		(8,937,054	)
Balance - December 31, 2019		18,177,692		1,400,000		1,000,000		106,937		(10,941,526	)		9,743,103
Implementation of new accounting principle		-		-		-		-		91,846			91,846
Stock based compensation:
Amortization of restricted common units		-		-		-		90,936		-			90,936
Sale of members’ equity		5,024,313		-		-		-		-			5,024,313
Net loss		-		-		-		-		(26,531,061	)		(26,531,061	)
Balance - December 31, 2020	$	23,202,005	$	1,400,000	$	1,000,000	$	197,873	$	(37,380,741	)	$	(11,580,863	)

	December 31, 2020
Description	Level 1		Level 2		Level 3
Liabilities:
Contigent consideration		-		-		20,110,000
Total	$	-	$	-	$	20,110,000

	December 31, 2019
Description	Level 1		Level 2		Level 3
Liabilities:
Contigent consideration		-		-		870,000
Total	$	-	$	-	$	870,000

	Other Liabilities: Contingent Consideration
Balance at December 31, 2019	$	870,000
Fair value adjustments included in operating expenses		19,240,000
Balance at December 31, 2020	$	20,110,000

	Year ended December 31, 2020
Operating lease expense	$	591,272
Sublease income		(77,164	)
Variable lease expense		20,945
Total	$	535,053

	Year ended December 31, 2020
Cash paid within operating cash flow	$	584,690
Weighted average remaining lease term (years)		5.5
Weighted average discount rate		14.5	%

For the years ending December 31,	Amount
2021	$	571,470
2022		588,918
2023		621,793
2024		624,172
2025		641,981
Thereafter		105,674
Future lease payments		3,154,008
Less: Imputed interest		960,468
Total operating lease liabilities	$	2,193,540

	Number of Options			Weighted Average Exercise Price ($)		Weighted Average Remaining Contractual Life (in months)
Outstanding at January 1, 2020		2,932			88.75		35
Granted		-			-		-
Vested		(1,025	)		88.75		-
Forfeited		-			-		-
Outstanding at December 31, 2020		1,907			88.75		23
Vested and exercisable as at December 31, 2020		2,230			88.75

	December 31,
	2019			2018
Assets
Current Assets:
Cash	$	5,014,819		$	6,325,431
Subscriptions receivable		-			850,000
Prepaid expenses and other current assets		86,668			19,998
Total Current Assets		5,101,487			7,195,429

Restricted cash		86,000			86,000
Property and equipment, net		653,763			68,099
Goodwill		2,043,747			2,043,747
In process research and development		6,860,000			6,860,000
Security deposits and other assets		363,621			379,331
Total Assets	$	15,108,618		$	16,632,606
Liabilities and Members’ Equity
Current Liabilities:
Accounts payable	$	1,735,610		$	2,647,532
Accrued expenses		1,520,841			1,696,793
Investor deposits		665,563			638,575
Loans payable		410,000			410,000
Current portion of lease liability		4,026			-
Total Current Liabilities		4,336,040			5,392,900

Lease liability, non-current		99,030			-
Other liabilities		930,445			870,000
Total Liabilities		5,365,515			6,262,900
Commitments and Contingencies
Members’ Equity:
Class A membership units		18,177,692			9,958,930
Class B membership units		1,400,000			1,400,000
Class C membership units		1,000,000			1,000,000
Common units		106,937			15,248
Accumulated deficit		(10,941,526	)		(2,004,472	)
Total Members’ Equity		9,743,103			10,369,706
Total Liabilities and Members’ Equity	$	15,108,618		$	16,632,606

	Successor						Predecessor
	For the Year Ended December 31, 2019			For the period from November 6, 2018 through December 31, 2018			For the period from January 1, 2018 through November 5, 2018
Operating Expenses
General and administrative	$	3,721,490		$	374,267		$	5,351,698
Research and development		5,156,266			1,621,084			9,078,193
Total Operating Expenses		8,877,756			1,995,351			14,429,891
Loss From Operations		(8,877,756	)		(1,995,351	)		(14,429,891	)
Other Expenses
Interest expense, net		(59,298	)		(9,121	)		(1,668,711	)
Total Expenses		(59,298	)		(9,121	)		(1,668,711	)
Net Loss	$	(8,937,054	)	$	(2,004,472	)		(16,098,602	)
Deemed dividends on preferred stock								(685,892	)
Gain on extinguishment of preferred stock.								106,560,811
Net income attributable to common stockholders							$	89,776,317

Predecessor	Preferred Stock																										Additional Paid-In Capital			Subscriptions Receivable, Related Parties			Accumulated Deficit			Total Stockholders’ Deficiency
	Series D				Series C						Series B						Series A						Common Stock
	Shares		Amount		Shares			Amount			Shares			Amount			Shares			Amount			Shares		Amount
Balance - January 1, 2018		35,400,669	$	35,400		40,460,713		$	40,461			35,016		$	35			140,639		$	141			7,968,224	$	7,968	$	179,148,961		$	(88,663	)	$	(187,130,857	)	$	(7,986,554	)
Issuance of common stock upon exchange of preferred stock		-		-		(40,460,713	)		(40,461	)		(35,016	)		(35	)		(140,639	)		(141	)		16,771,866		16,772		(106,536,946	)		-			106,560,811			-
Net loss		-		-		-			-			-			-			-			-			-		-		-			-			(16,098,602	)		(16,098,602	)
Balance - November 5, 2018		35,400,669	$	35,400		-		$	-			-		$	-			-		$	-			24,740,090	$	24,740	$	72,612,015		$	(88,663	)	$	(96,668,648	)	$	(24,085,156	)

	Successor						Predecessor
	For the Year Ended December 31, 2019			For the Period from November 6, 2018 through December 31, 2018			For the Period from January 1, 2018 through November 5, 2018
Cash Flows from Operating Activities
Net loss	$	(8,937,054	)	$	(2,004,472	)	$	(16,098,602	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		20,407			1,498			136,314
Equity compensation		91,689			20,248			-
Loss on operating sublease		103,350			-			-
Change in operating assets and liabilities:
Prepaid expenses and other current assets		(66,670	)		-			(69,099	)
Security deposits		76,155			-			8,001
Accounts payable and accrued expenses		(1,087,874	)		(168,298	)		(300,034	)
Lease liability		(294	)
Other liabilities		-			-			37,727
Total adjustments		(863,237	)		(146,552	)		(187,091	)
Net Cash Used in Operating Activities		(9,800,291	)		(2,151,024	)		(16,285,693	)
Cash Flows from Investing Activities
Patent costs		-			-			(172,196	)
Purchase of property and equipment		(606,071	)		-			(76,485	)
Purchase of IRX - cash and restricted cash acquired		-			336,296			-
Net Cash Provided by (Used in) Investing Activities		(606,071	)		336,296			(248,681	)
Cash Flows from Financing Activities
Proceeds from loans payable		-			-			3,394,226
Proceeds from loans payable, related parties		-			-			1,500,000
Proceeds from convertible debt		-			-			11,803,321
Proceeds from investor deposits		437,500			-			-
Proceeds from the collection of subscriptions receivable		850,000			-			-
Proceeds from sale of members’ equity		7,808,250			1,744,154			-
Net Cash Provided by Financing Activities		9,095,750			1,744,154			16,697,547
Net (Decrease) Increase in Cash		(1,310,612	)		(70,574	)		163,173
Cash and Restricted Cash - Beginning of Period		6,411,431			6,482,005			173,123
Cash and Restricted Cash - End of Period	$	5,100,819		$	6,411,431		$	336,296
Cash and Restricted Cash consisted of the following:
Cash	$	5,014,819		$	6,325,431		$	250,296
Restricted cash		86,000			86,000			86,000
	$	5,100,819		$	6,411,431		$	336,296
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest	$	-		$	-		$	-
Income taxes	$	-		$	-		$	-
Non-cash investing and financing activities:
Investor deposits for sale of members’ equity	$	410,512		$	-		$	-
Conversion of loans payable and interest into members’ equity	$	-		$	1,516,346		$	-
Exchange of Series A, B and C preferred stock for common stock	$	-		$	-		$	106,560,811
Purchase of the assets and liabilities of IRX:
Assets acquired and liabilities assumed:
Cash acquired	$	-		$	336,296		$	-
Prepaid expenses and other current assets		-			19,998			-
Security deposits and other assets		-			379,331			-
Goodwill		-			2,043,747			-
In-process R&D		-			6,860,000			-
Property and equipment		-			69,597			-
Accounts payable and accrued expenses		-			(4,528,969	)		-
Loans payable, related parties		-			(1,500,000	)		-
Loans payable		-			(410,000	)		-
Total purchase price	$	-		$	3,270,000		$	-
Purchase price consisted of:
Members’ equity issued to acquire the asset and liabilities of IRX		-			2,400,000			-
Contingent consideration		-			870,000			-
Total purchase price	$	-		$	3,270,000		$	-

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Life in Years		Aggregate Intrinsic Value
Outstanding, January 1, 2018		1,165		$	208		1.5	$	-
Granted		-			-		-		-
Exercised
Forfeited		(80	)	$	300		-		-
Outstanding, November 5, 2018		1,085		$	201		0.7	$	-

Exercisable, November 5, 2018		1,085		$	201		0.7	$	-

Options Outstanding				Options Exercisable
Exercise Price		Outstanding Number of Options		Weighted Average Remaining Life In Years		Exercisable Number of Options
$	200		1,075		0.7		1,075
$	300		10		0.2		10
			1,085		0.7		1,085

	Successor						Predecessor
	For the Year Ended December 31, 2019			For the period from November 6, 2018 through December 31, 2018			For the period from January 1, 2018 through November 5, 2018
Federal:
Current	$	-		$	-		$	-
Deferred		-			-			8,266,417
State and local:
Current					-
Deferred		357,482			80,179			5,438,948
		357,482			80,179			13,705,365
Change in valuation allowance		(357,482	)		(80,179	)		(13,705,365	)
Income tax benefit (provision)	$	-		$	-		$	-

	Historical
	Brooklyn Immunotherapeutics, LLC		NTN Buzztime, Inc.		Pro Forma Adjustments – Merger			Notes to Pro Forma Adjustments	Pro Forma Adjustments – Merger (Combined)		Pro Forma Adjustments – Sale of Assets			Notes to Pro Forma Adjustments	Pro Forma Combined
Assets
Current Assets:
Cash and cash equivalents	$	1,630,455	$	777,383	$	10,500,000		A	$	12,907,838	$	(213,566	)	E	$	12,694,272
Accounts receivable, net		-		115,680		-				115,680		836		E		116,516
Site equipment to be installed		-		654,602		(654,602	)	C		-		-				-
Prepaid expenses and other current assets		102,322		176,830		-				279,152		(75,435	)	E		203,717
Total Current Assets		1,732,777		1,724,495		9,845,398				13,302,670		(288,165	)			13,014,505

Long Term Assets:
Property and equipment, net		594,106		501,804		654,602		C		1,750,512		(1,156,405	)	E		594,107
Customers		-		-		548,000		C		548,000		(548,000	)	E		-
Trade name		-		-		299,000		C		299,000		(299,000	)	E		-
Right of use assets - operating leases		2,092,878		35,616		-				2,128,494		(35,616	)	E		2,092,878
Software development costs, net of accumulated amortization		-		1,360,915		(432,915	)	C		928,000		(928,000	)	E		-
Goodwill		2,043,747		-		6,868,944		C		8,912,691		(6,868,944	)	E		2,043,747
In process research and development		6,860,000		-		-				6,860,000		-				6,860,000
Security deposits and other assets		453,252		-		-				453,252		-				453,252
Other assets		-		122,291		-				122,291		(88,028	)	E		34,263
Total Assets	$	13,776,760	$	3,745,121	$	17,783,029			$	35,304,910	$	(10,212,158	)		$	25,092,752

Number of shares of the Common Stock owned by NTN stockholders (i)		1,506,271
Multiplied by the fair value per share of Common Stock (ii)		5.40
Total purchase price	$	8,133,863

	Historical Balance Sheet of NTN at December 31, 2020			Pro Forma Fair Value Adjustment to NTN Assets			Preliminary Purchase Price Allocation Pro Forma Adjustment
Cash and cash equivalents	$	777,383		$	-		$	777,383
Accounts receivable		115,680			-			115,680
Prepaid expense and other current assets		299,121			-			299,121
Right of use assets - operating leases		35,616			-			35,616
Property and equipment, net		1,156,406			-			1,156,406
Software development costs		1,360,915			(432,915	)		928,000
Customers		-			548,000			548,000
Trade name		-			299,000			299,000
Accounts payable, accrued liabilities and other current liabilities		(2,894,287	)		-			(2,894,287	)
Net assets acquired, excluding goodwill	$	850,834		$	414,085		$	1,264,919


Total consideration	$	8,133,863
Net assets acquired, excluding goodwill		1,264,919
Goodwill	$	6,868,944

Proceeds from sale:
Cash	$	132,055
Escrow		100,000
Assume advance/loans		1,700,000
Interest on advance/loans		67,945

Carrying value of assets sold:
Cash and cash equivalents		(13,642	)
Accounts receivable		(99,164	)
Prepaids and other current assets		(75,435	)
Property and equipment, net		(1,156,405	)
Software development costs		(928,000	)
Customers		(548,000	)
Trade name		(299,000	)
Right of use assets - operating leases		(35,616	)
Goodwill		(6,868,944	)
Other assets		(88,028	)

Liabilities transferred upon sale:
Accounts payable and accrued expenses		94,519
Obligations under finance leases		21,885
Lease liability		35,616
Deferred revenue		77,925
Other current liabilities		121,691

Transaction costs		(265,000	)

Total loss on sale of assets	$	(8,025,598	)

Total transaction costs	$	6,815,461
Issuance of Common Stock to the Financial Adviser upon consummation of Merger		(5,766,546	)
Accrued transaction costs	$	1,048,915

				Common stock						Series A preferred stock
	Membership units			Shares			Amount			Shares			Amount			Treasury stock		Additional paid-in capital			Accumulated deficit			Accumulated other comprehensive income			Total stockholders’ equity
Elimination of NTN’s historical equity carrying value⁽¹⁾	$	-			(2,962,866	)	$	(14,832	)		(156,112	)	$	(781	)	$	456,450	$	(136,933,763	)	$	135,887,313		$	(245,221	)	$	(850,834	)
Brooklyn rights offerings membership units		10,500,000			-			-			-			-			-		-			-			-			10,500,000
Elimination of Brooklyn’s historical members’ equity		(36,299,878	)		-			-			-			-			-		36,299,878			-			-			-
Common Stock to be retained by NTN stockholders		-			1,506,271			7,531			-			-			-		8,126,332			-			-			8,133,863
Issuance of Series A preferred stock retained by NTN stockholders		-			-			-			156,112			781			-		(781	)		-			-			-
Issuance of Common Stock to Brooklyn members		-			38,931,881			194,659			-			-			-		(194,659	)		-			-			-
Issuance of Common Stock to Financial Adviser upon consummation of Merger		-			1,067,879			5,339			-			-			-		5,761,207			(5,766,546	)		-			-
Transaction costs (to be paid in cash)		-			-			-			-			-			-		-			(1,048,915	)		-			(1,048,915	)
Pro forma adjustment	$	(25,799,878	)		38,543,165		$	192,697			-		$	-		$	456,450	$	(86,941,786	)	$	129,071,852		$	(245,221	)	$	16,734,114

	Year Ended December 31, 2020

Effect of applying the 1-for-2 Reverse Stock Split exchange ratio to historical NTN weighted average Common Stock outstanding, 2,928,160		1,464,080
Shares of Common Stock issued to Brooklyn LLC members in the Merger		38,931,881
Shares of Common Stock issued to the Financial Adviser upon consummation of Merger		1,067,879
Pro forma weighted average number of shares of Common Stock outstanding		41,463,840