EX-99.2 5 a2050618zex-99_2.txt EXHIBIT 99.2 Exhibit 99.2 TABLE OF CONTENTS PAGE Notes to unaudited pro forma combined condensed financial statements..........1 Pro forma combined condensed balance sheet as of December 31, 2000............2 Notes to pro forma combined condensed balance sheet as of December 31, 2000...3 Pro forma combined condensed statement of operations for the year ended December 31, 2000.....................................................4 Notes to pro forma combined condensed statement of operations for the year ended December 31, 2000................................................5 INVERNESS MEDICAL TECHNOLOGY, INC. AND SUBSIDIARIES NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS On March 28, 2001, Inverness Medical Technology, Inc. ("Inverness") acquired LXN Corporation ("LXN"). The aggregate purchase price was approximately $27,615,000, which consisted of $6,133,000 in cash advanced to LXN to fund LXN's pre-merger cash requirements, 795,069 shares of Inverness' common stock with a fair value of $19,495,000, an option to purchase up to 83,333 shares of Inverness' common stock with a fair value of $1,483,000, $302,000 in costs to exit certain activities of LXN and $202,000 in direct acquisition costs. The acquisition is accounted for as a purchase. Accordingly, the operating results of LXN will be included in Inverness' financial results from the date of acquisition. The allocation of the purchase price to the fair value of the assets acquired is based upon the tentative results of an independent appraisal of the fair value of the assets of LXN. The unaudited pro forma combined condensed financial statements combine (i) the historical consolidated balance sheets of Inverness and LXN as of December 31, 2000 and (ii) the historical statements of operations for the year ended December 31, 2000 as if the acquisition was consummated on January 1, 2000. The pro forma information is not necessarily indicative of either the results which would have actually been reported if the acquisition of LXN occurred on January 1, 2000 or results which may be reported in the future. INVERNESS MEDICAL TECHNOLOGY, INC. AND SUBSIDIARIES PRO FORMA COMBINED CONDENSED BALANCE SHEET AS OF DECEMBER 31, 2000 (UNAUDITED)

2 INVERNESS MEDICAL TECHNOLOGY, INC. AND SUBSIDIARIES NOTES TO PRO FORMA COMBINED CONDENSED BALANCE SHEET AS OF DECEMBER 31, 2000 (UNAUDITED) The accompanying unaudited pro forma condensed balance sheet has been prepared by combining the historical results of Inverness and LXN as of December 31, 2000 and reflects the following pro forma adjustments: (1) Represents cash Inverness advanced to LXN to fund LXN's pre-merger cash requirements. (2) Represents the portion of the purchase price allocated to goodwill and other intangible assets. (3) Represents the portion of the purchase price allocated to in-process research and development projects and the related charge to operations for the value assigned to in-process research and development projects that had not reached technological feasibility and did not have a future alternative use. (4) Represents the accrual for direct acquisition and related severance costs. (5) Represents the elimination of the LXN equity accounts. (6) Represents the issuance of 795,069 shares of Inverness common stock in exchange for all of the outstanding LXN capital stock and the fair value of an option to purchase up to 83,333 shares of Inverness common stock issued in connection with the acquisition. 3 INVERNESS MEDICAL TECHNOLOGY, INC. AND SUBSIDIARIES PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2000 (UNAUDITED)

4 INVERNESS MEDICAL TECHNOLOGY, INC. AND SUBSIDIARIES NOTES TO PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2000 (UNAUDITED) The accompanying unaudited pro forma condensed statement of operations has been prepared by combining the historical results of Inverness and LXN for the year ended December 31, 2000 and reflects the following pro forma adjustments: (1) Represents the charge to operations for the estimated fair values of certain in-process research and development projects. (2) Represents the reversal of nonrecurring charges in accordance with Securities and Exchange Commission regulations. (3) Reflects the amortization expense on acquired intangible assets based on their estimated useful lives ranging from 3 to 10 years. (4) Represents the reversal of stock-based compensation expense of LXN. (5) Represents the increase in LXN shares to reflect the equivalent number of Inverness shares issued upon consummation of the acquisition. (6) Represents the increase in LXN shares to reflect the equivalent number of Inverness shares issued upon consummation of the acquisition, net of the reduction by Inverness potential common stock equivalents that would have been antidilutive to the combined diluted net loss per common share. 5

INVERNESS MEDICAL TECHNOLOGY INC/DE 8-K/A