(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
(Address of principal executive offices) |
(Zip Code) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class |
Trading Symbol |
Name of each exchange on which registered | ||
Item 5.07 |
Submission of Matters to a Vote of Security Holders. |
Name of Director |
For |
Withheld |
Broker Non-Votes | |||||||
Richard Heyman, Ph.D. |
30,518,067 |
385,508 |
1,641,388 | |||||||
Samuel Kintz, M.B.A. |
30,900,278 |
3,297 |
1,641,388 |
For |
Against |
Abstain | ||
32,543,338 |
1,460 |
165 |
Item 8.01 |
Other Events. |
Item 9.01 |
Financial Statements and Exhibits. |
Exhibit Number |
Exhibit Description | |
23.1 |
||
99.1 |
||
99.2 |
||
104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
ENLIVEN THERAPEUTICS, INC. | ||
By: |
/s/ Samuel Kintz | |
Samuel Kintz | ||
President and Chief Executive Officer |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement No. 333-254978 on Form S-3 and Registration Statements Nos. 333-237117, 333-258538, 333-263554 on Form S-8 of Imara Inc. and Registration Statement No. 333-270188 on Form S-8 of Enliven Therapeutics, Inc. (formerly Imara Inc.) of our report dated March 21, 2023, (June 23, 2023, as to the effects of the exchange ratio described in Note 1) relating to the financial statements of Enliven Inc. (formerly Enliven Therapeutics, Inc.), appearing in this Current Report on Form 8-K of Enliven Therapeutics, Inc. dated June 23, 2023.
/s/ DELOITTE & TOUCHE LLP
San Jose, California
June 23, 2023
Page |
||||
Report of Independent Registered Public Accounting Firm |
F-2 |
|||
Financials Statements as of December 31, 2022 and 2021 and for the years ended December 31, 2022 and 2021 |
F-3 |
|||
Balance Sheets |
F-3 |
|||
Statements of Operations and Comprehensive Loss |
F-4 |
|||
Statements of Convertible Preferred Stock and Stockholders’ Deficit |
F-5 |
|||
Statements of Cash Flows |
F-6 |
|||
Notes to Financial Statements |
F-7 |
As of December 31, |
||||||||
2022 |
2021 |
|||||||
ASSETS |
||||||||
CURRENT ASSETS |
||||||||
Cash and cash equivalents |
$ |
$ |
||||||
Prepaid expenses and other current assets |
||||||||
Total current assets |
||||||||
Property and equipment, net |
||||||||
Right of use asset |
||||||||
Deferred offering costs |
||||||||
Restricted cash |
||||||||
TOTAL ASSETS |
$ |
$ |
||||||
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT |
||||||||
CURRENT LIABILITIES |
||||||||
Accounts payable, net |
$ |
$ |
||||||
Accrued expenses and other current liabilities |
||||||||
Total current liabilities |
||||||||
LONG TERM LIABILITIES |
||||||||
Other non-current liabilities |
||||||||
Total liabilities |
||||||||
COMMITMENTS AND CONTINGENCIES (Note 7) |
||||||||
Convertible preferred stock, $ 2022 and December 31, 2021, liquidation preference of $ |
||||||||
STOCKHOLDERS’ EQUITY |
||||||||
Common stock $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) |
( |
) | ||||
Total stockholders’ deficit |
( |
) |
( |
) | ||||
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT |
$ |
$ |
||||||
Year Ended December 31, |
||||||||
2022 |
2021 |
|||||||
Operating expenses: |
||||||||
Research and development |
$ |
$ |
||||||
General and administrative |
||||||||
|
|
|
|
|||||
Total operating expenses |
||||||||
|
|
|
|
|||||
Loss from operations |
( |
) |
( |
) | ||||
Other income (expense), net |
||||||||
Interest income |
||||||||
|
|
|
|
|||||
Total other income, net |
||||||||
|
|
|
|
|||||
Net loss and comprehensive loss |
$ |
( |
) |
$ |
( |
) | ||
|
|
|
|
|||||
Net loss per share attributable to common stockholders, basic and diluted |
$ |
( |
) |
$ |
( |
) | ||
|
|
|
|
|||||
Weighted-average number of shares outstanding used in computing net loss per common share, basic and diluted |
||||||||
|
|
|
|
Convertible |
Additional Paid-in Capital |
Accumulated Deficit |
Total Stockholders’ Deficit |
|||||||||||||||||||||||||||
Preferred Stock |
Common Stock |
|||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||
Balance - January 1, 2021 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||||
Exercise of common stock options |
— |
— |
— |
— |
||||||||||||||||||||||||||
Vesting of restricted stock and stock options |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||
Stock-based compensation |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
( |
) |
( |
) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - December 31, 2021 |
( |
) |
( |
) | ||||||||||||||||||||||||||
Exercise of common stock options |
— |
— |
— |
— |
||||||||||||||||||||||||||
Vesting of restricted stock and stock options |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||
Stock-based compensation |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
( |
) |
( |
) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - December 31, 2022 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
||||||||
December 31, |
||||||||
2022 |
2021 |
|||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ |
( |
) |
$ |
( |
) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation |
||||||||
Stock-based compensation |
||||||||
Write-off of deferred IPO costs |
— |
|||||||
Changes in operating assets and liabilities: |
||||||||
Prepaid expenses and other assets |
( |
) |
( |
) | ||||
Right-of-use |
||||||||
Accounts payable |
||||||||
Accrued expenses and other liabilities |
||||||||
|
|
|
|
|||||
Net cash used in operating activities |
( |
) |
( |
) | ||||
|
|
|
|
|||||
Cash flows from investing activities: |
||||||||
Purchases of property and equipment |
( |
) |
( |
) | ||||
|
|
|
|
|||||
Net cash used in investing activities |
( |
) |
( |
) | ||||
|
|
|
|
|||||
Cash flows from financing activities: |
||||||||
Issuance of convertible preferred stock, net of issuance costs |
— |
( |
) | |||||
Deferred issuance costs related to merger / initial public offering |
( |
) |
( |
) | ||||
Issuance of common stock |
||||||||
|
|
|
|
|||||
Net cash used in financing activities |
( |
) |
( |
) | ||||
|
|
|
|
|||||
Net decrease in cash, cash equivalents and restricted cash |
( |
) |
( |
) | ||||
Cash, cash equivalents and restricted cash at the beginning of the period |
||||||||
|
|
|
|
|||||
Cash, cash equivalents and restricted cash at the end of the period |
$ |
$ |
||||||
|
|
|
|
|||||
Components of cash, cash equivalents and restricted cash: |
||||||||
Cash and cash equivalents |
$ |
$ |
||||||
Restricted cash |
||||||||
|
|
|
|
|||||
Total cash, cash equivalents and restricted cash |
$ |
$ |
||||||
|
|
|
|
|||||
Supplemental disclosure of non-cash operating activities: |
||||||||
Deferred issuance costs related to initial public offering included in accounts payable |
$ |
— |
$ |
|||||
|
|
|
|
|||||
Deferred issuance costs related to initial public offering included in accrued liabilities |
$ |
— |
$ |
|||||
|
|
|
|
|||||
Deferred merger costs included in accounts payable |
$ |
$ |
— |
|||||
|
|
|
|
|||||
Deferred merger costs included in accrued liabilities |
$ |
$ |
— |
|||||
|
|
|
|
|||||
Lease liability obtained in exchange for right of use asset |
$ |
$ |
||||||
|
|
|
|
• | Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; |
• | Level 2—Quoted prices in markets that are not considered to be active or financial instrument valuations for which all significant inputs are observable, either directly or indirectly; and |
• | Level 3—Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. |
• | Fair Value of Common Stock—As there has been no public market for the Company’s common stock to date, the estimated fair value of the Company’s common stock has been determined by the board of directors as of the date of each option grant with input from management, considering the most recently available third-party valuation of common stock. |
• | Expected Term—The expected term represents the period that the Company’s options are expected to be outstanding and is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term). The Company has very limited historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior for its stock option grants. |
• | Expected Volatility—The expected stock price volatilities are estimated based on the historical and implied volatilities of comparable publicly traded companies as the Company does not have sufficient history of trading its common stock. |
• | Risk-Free Interest Rate—The risk-free interest rates are based on U.S. Treasury yields in effect at the grant date for notes with comparable terms as the awards. |
• | Expected Dividend Yield—The Company has never paid dividends on its common stock and has no plans to pay dividends on the Company’s common stock. Therefore, the Company used an expected dividend of |
As of December 31, 2022 |
||||||||||||||||
Total |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
Assets: |
||||||||||||||||
US Treasury backed money market funds |
$ |
$ |
$ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total financial assets measured at fair value |
$ |
$ |
$ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2021 |
||||||||||||||||
Total |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
Assets: |
||||||||||||||||
US Treasury backed money market funds |
$ |
$ |
$ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total financial assets measured at fair value |
$ |
$ |
$ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2022 |
||||
Year ending December 31, |
||||
2023 |
$ |
|||
2024 |
||||
|
|
|||
Total minimum lease payments |
||||
Less: amount representing interest |
||||
|
|
|||
Present value of lease liabilities |
||||
Less: current portion of lease liabilities |
||||
|
|
|||
Lease liabilities, noncurrent |
$ |
|||
|
|
Estimated Useful Life |
As of December 31, |
|||||||||||
in Years |
2022 |
2021 |
||||||||||
Laboratory equipment |
$ |
$ |
||||||||||
Computer equipment |
||||||||||||
|
|
|
|
|||||||||
Less: accumulated depreciation |
( |
) |
( |
) | ||||||||
|
|
|
|
|||||||||
Property and equipment, net |
$ |
$ |
||||||||||
|
|
|
|
As of December 31, |
||||||||
2022 |
2021 |
|||||||
Accrued employee compensation costs |
$ |
$ |
||||||
Accrued research and development costs |
||||||||
Accrued deferred offering costs |
||||||||
Lease liabilities |
||||||||
Accrued legal and professional fees |
||||||||
Other |
||||||||
|
|
|
|
|||||
Accrued expenses and other current liabilities |
$ |
$ |
||||||
|
|
|
|
|
|
|
|
|
As of December 31, |
||||||||
2022 |
2021 |
|||||||
Conversion of preferred stock |
||||||||
Issuance of common stock upon exercise of stock options |
||||||||
Options available for grant under stock plan |
||||||||
|
|
|
|
|||||
Total common stock reserved for future issuance |
||||||||
|
|
|
|
Aggregate |
Proceeds Net |
|||||||||||||||||||
Shares |
Per Share |
Liquidation |
of Issuance |
|||||||||||||||||
Authorized |
Issued and |
Liquidation |
Amount |
Costs |
||||||||||||||||
Shares |
Outstanding |
Preference |
(in thousands) |
(in thousands) |
||||||||||||||||
Series Seed convertible preferred stock |
$ |
$ |
$ |
|||||||||||||||||
Series A convertible preferred stock |
$ |
|||||||||||||||||||
Series B convertible preferred stock |
$ |
|||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total convertible preferred stock |
$ |
$ |
||||||||||||||||||
|
|
|
|
|
|
|
|
Available for Grant |
Stock Options Outstanding |
Weighted- Average Exercise Price |
Weighted- Average Contractual Term (in years) |
Aggregate Intrinsic Value (in thousands) |
||||||||||||||||
Outstanding - January 1, 2021 |
$ |
$ |
||||||||||||||||||
Options granted |
( |
) |
$ |
|||||||||||||||||
Options exercised and vested |
— |
( |
) |
$ |
||||||||||||||||
|
|
|
|
|||||||||||||||||
Outstanding - December 31, 2021 |
$ |
$ |
||||||||||||||||||
Increase in option pool |
||||||||||||||||||||
Options granted |
( |
) |
$ |
|||||||||||||||||
Options exercised and vested |
— |
( |
) |
$ |
||||||||||||||||
Options cancelled and forfeited |
( |
) |
$ |
|||||||||||||||||
|
|
|
|
|||||||||||||||||
Outstanding - December 31, 2022 |
$ |
$ |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable - December 31, 2022 |
$ |
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vested and expected to vest - December 31, 2022 |
$ |
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares |
Weighted- Average Grant Date Fair Value |
|||||||
Unvested—December 31, 2020 |
$ |
|||||||
Granted |
— |
— |
||||||
Vested |
( |
) |
||||||
Forfeited |
— |
— |
||||||
|
|
|||||||
Unvested—December 31, 2021 |
||||||||
Granted |
— |
— |
||||||
Vested |
( |
) |
||||||
Forfeited |
— |
— |
||||||
|
|
|||||||
Unvested—December 31, 2022 |
$ |
|||||||
|
|
Year Ended December 31, |
||||||||
2022 |
2021 |
|||||||
Research and development |
$ |
$ |
||||||
General and administrative |
||||||||
|
|
|
|
|||||
Total stock-based compensation expense |
$ |
$ |
||||||
|
|
|
|
|
|
|
|
|
Year Ended December 31, | ||||
2022 |
2021 | |||
Stock price |
$ |
$ | ||
Expected term (years) |
||||
Expected volatility |
||||
Risk-free interest rate |
||||
Expected dividend yield |
— |
— |
Year Ended |
||||||||
December 31, |
||||||||
2022 |
2021 |
|||||||
Federal income tax |
( |
)% |
( |
)% | ||||
State income tax, less federal benefits |
( |
)% |
( |
)% | ||||
Permanent differences |
% |
% | ||||||
Change in valuation allowance |
% |
% | ||||||
Credits |
( |
)% |
( |
)% | ||||
Other |
% |
% | ||||||
|
|
|
|
|
|
|
|
|
Effective tax rate |
% |
% | ||||||
|
|
|
|
|
|
|
|
|
As of December 31, |
||||||||
2022 |
2021 |
|||||||
Deferred Tax Assets: |
||||||||
Intangible asset basis differences |
$ |
$ |
||||||
Net operating loss carryforwards |
||||||||
Tax credit carryforwards |
||||||||
Capitalized research and development costs |
||||||||
Other |
||||||||
|
|
|
|
|||||
Total deferred tax assets |
||||||||
Deferred Tax Liabilities: |
||||||||
Fixed asset basis difference |
( |
) |
( |
) | ||||
Goodwill differences |
( |
) |
( |
) | ||||
|
|
|
|
|||||
Total deferred tax liabilities |
( |
) |
( |
) | ||||
Valuation allowance |
( |
) |
( |
) | ||||
|
|
|
|
|||||
Net deferred tax assets |
$ |
$ |
||||||
|
|
|
|
As of |
||||||||
December 31, |
||||||||
2022 |
2021 |
|||||||
Balance, beginning of the period |
$ |
$ |
||||||
Increase related to prior year positions |
||||||||
Increase related to current year positions |
||||||||
|
|
|
|
|||||
Balance, end of the period |
$ |
$ |
||||||
|
|
|
|
Year Ended December 31, |
||||||||
2022 |
2021 |
|||||||
Numerator: |
||||||||
Net loss |
$ |
( |
) |
$ |
( |
) | ||
|
|
|
|
|
|
|
|
|
Denominator: |
||||||||
Weighted-average common shares outstanding |
||||||||
Less: weighted-average unvested common stock issued upon early exercise of common stock options |
( |
) |
( |
) | ||||
Less: weighted-average unvested restricted shares of common stock |
( |
) |
( |
) | ||||
|
|
|
|
|||||
Weighted-average shares used to compute net loss per common share, basic and diluted |
||||||||
|
|
|
|
|
|
|
|
|
Net loss per share, basic and diluted |
$ |
( |
) |
$ |
( |
) | ||
|
|
|
|
|
|
|
|
|
Year Ended |
||||||||
December 31, |
||||||||
2022 |
2021 |
|||||||
Convertible preferred stock (as converted) |
||||||||
Stock options outstanding |
||||||||
Unvested restricted stock |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
Exhibit 99.2
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
Explanatory Note
On October 13, 2022, Imara Inc. (Imara or the Company), Enliven Therapeutics, Inc. (Enliven), and a wholly owned subsidiary of Imara, Iguana Merger Sub, Inc. (Merger Sub) entered into an agreement and plan of merger (the Merger Agreement). Pursuant to the Merger Agreement, among other matters, Merger Sub merged with and into Enliven, with Enliven becoming a wholly-owned subsidiary of Imara and the surviving corporation of the merger, which transaction is referred to as the Merger. Following the closing of the Merger, Imara changed its name to Enliven Therapeutics, Inc. and Enliven Therapeutics, Inc. changed its name to Enliven Inc.
As previously disclosed, on February 23, 2023, Imara and Enliven completed the Merger, pursuant to the Merger Agreement.
At the effective time of the Merger, each share of Enlivens common stock outstanding immediately prior to the effective time of the Merger, including shares of Enlivens common stock that were issued pursuant to the Enliven pre-closing financing (as defined below), were converted into the right to receive a number of shares of the Companys common stock based on the exchange ratio. The final exchange ratio is approximately 0.2951 shares of Imaras common stock for each share of Enlivens common stock, which gives effect to the Reverse Stock Split (as defined below). Each share of Enlivens convertible preferred stock outstanding immediately prior to the effective time of the Merger was converted into shares of Enlivens common stock in accordance with its terms, which then converted into the right to receive shares of the Companys common stock along with all other shares of Enlivens common stock as described above. Under the exchange ratio formula in the Merger Agreement, the Enliven equity holders immediately before the effective time of the Merger owned approximately 84% of the outstanding capital stock of Imara on a fully-diluted basis, and the stockholders of Imara immediately before the effective time of the Merger owned approximately 16% of the outstanding capital stock of Imara on a fully-diluted basis.
The Merger
On February 23, 2023, the Company filed an amendment to its Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the reverse stock split of its common stock, such that approximately every 4 shares of the Companys common stock held by a stockholder immediately prior to the reverse stock split were combined and reclassified into 1 share of the Companys common stock (the Reverse Stock Split). Except where otherwise indicated in these pro forma financial statements, all share and per share amounts of Imara have been adjusted retroactively to reflect the Reverse Stock Split as if it had occurred at the beginning of the earliest period presented for pro forma purposes only.
The Merger closed on February 23, 2023 pursuant to the Merger Agreement. At the closing of the Merger, the Company issued an aggregate of 34,426,351 shares of its common stock to the former Enliven stockholders, in exchange for all of the shares of Enliven common stock issued and outstanding immediately prior to the Merger, based on an exchange ratio of approximately 0.2951 with Enliven surviving as a wholly-owned subsidiary of the Company. In connection with the closing of the Merger, and in accordance with the terms of the Merger Agreement, the Company acquired net cash and cash equivalents from Imara of approximately $80.5 million. In addition, each outstanding and unexercised option to purchase shares of Enliven common stock granted to an individual who continued as a service provider to Enliven at the effective time of the Merger was assumed by the Company and converted into an option to purchase shares of the Companys common stock, with necessary adjustments to reflect the exchange ratio.
The issuance of the shares of the Companys common stock to the former stockholders of Enliven was registered with the SEC on the Companys Registration Statement on Form S-4, as amended (File No. 333-268300).
Enliven Pre-closing Financing
On October 13, 2022, immediately prior to the execution and delivery of the Merger Agreement, Enliven entered into a common stock purchase agreement with certain investors, pursuant to which the investors agreed to purchase approximately 42.8 million shares of Enlivens common stock, par value $0.0001 per share (the Enliven pre-closing financing).
On February 23, 2023, Enliven completed the pre-closing financing, in which Enliven issued approximately 42.8 million shares of Enliven common stock at a price of $3.84 per share, for aggregate gross proceeds of approximately $164.5 million, net of issuance costs of $4.7 million.
Unaudited Pro Forma Combined Financial Information
The following unaudited pro forma combined financial information gives effect to the Transaction Accounting Adjustments, which consist of the (i) Merger, (ii) the Enliven pre-closing financing, and (iii) the Reverse Stock Split.
In the unaudited pro forma combined financial statements, the Merger has been accounted for as a reverse recapitalization under U.S. generally accepted accounting principles (U.S. GAAP) because the assets of Imara as of the effective date of the Merger are primarily cash and other non-operating assets. Enliven was determined to be the accounting acquirer based upon the terms of the Merger and other factors including: (1) Enliven stockholders will own a substantial majority of the voting rights in the combined company; (2) Enliven will designate a majority (eight of nine) of the initial members of the board of directors of the combined company; and (3) Enlivens senior management will hold all positions in senior management of the combined company.
As a result of Enliven being treated as the accounting acquirer, Enlivens assets and liabilities are recorded at their pre-combination carrying amounts and the historical operations that are reflected in the unaudited pro forma combined financial information of Imara will be those of Enliven. Imaras assets and liabilities will be measured and recognized at their fair values as of the effective date of the Merger, and combined with the assets, liabilities, and results of operations of Enliven after the consummation of the Merger. As a result, upon consummation of the Merger, the historical financial statements of Enliven will become the historical consolidated financial statements of the combined company.
The unaudited pro forma combined balance sheet data as of March 31, 2023 assumes that the Merger took place on March 31, 2023 and combines the Imara and Enliven historical balance sheets as of March 31, 2023. The unaudited pro forma combined statement of operations data for the three-month period ended March 31, 2023 and for the year ended December 31, 2022 gives effect to the Merger as if it took place on January 1, 2022 and combines the Imara and Enliven historical statement of operations for the periods presented.
The historical financial statements of Imara and Enliven have been adjusted to give pro forma effect to reflect the Transaction Accounting Adjustments in accordance with U.S. GAAP. The adjustments presented on the unaudited pro forma combined financial statements have been identified and presented to provide relevant information necessary for an accurate understanding of the combined company upon consummation of the Merger.
The unaudited pro forma combined financial information is based on assumptions and adjustments that are described in the accompanying notes, and is for illustrative purposes only. The unaudited pro forma combined financial information should not be relied upon as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined company will experience. The actual amounts recorded as of the completion of the Merger may differ materially from the information presented in these unaudited pro forma combined financial information as a result, if any, of the amount of cash used by Imaras operations between the signing and closing of the Merger Agreement, and other changes in Imaras assets and liabilities that occur prior to the completion of the Merger.
The unaudited pro forma combined financial information, including the notes thereto, should be read in conjunction with the separate historical consolidated financial statements of Imara and Enliven incorporated by reference in this information statement.
Unaudited Pro Forma Combined Balance Sheet
As of March 31, 2023
(in thousands)
Enliven | IMARA | Transaction Accounting Adjustments |
Note 4 | Pro Forma Combined Total |
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Assets | ||||||||||||||||||||
Current assets: |
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Cash and cash equivalents |
$ | 292,102 | $ | | | $ | 292,102 | |||||||||||||
Prepaid expense and other current assets |
5,901 | | | 5,901 | ||||||||||||||||
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Total current assets |
298,003 | | | 298,003 | ||||||||||||||||
Property and equipment, net |
853 | | | 853 | ||||||||||||||||
Right-of-use asset |
551 | | | 551 | ||||||||||||||||
Restricted cash |
54 | | | 54 | ||||||||||||||||
Other assets |
3,405 | | | 3,405 | ||||||||||||||||
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Total assets |
$ | 302,866 | $ | | | $ | 302,866 | |||||||||||||
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Liabilities and stockholders equity | ||||||||||||||||||||
Current liabilities: |
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Accounts payable |
$ | 5,860 | $ | | $ | | $ | 5,860 | ||||||||||||
Accrued expense and other current liabilities |
5,082 | | | 5,082 | ||||||||||||||||
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Total current liabilities |
10,942 | | | 10,942 | ||||||||||||||||
Long-term liabilities |
508 | | | 508 | ||||||||||||||||
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Total liabilities |
11,450 | | | 11,450 | ||||||||||||||||
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Stockholders equity (deficit): |
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Preferred stock |
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Common stock |
41 | | | 41 | ||||||||||||||||
Additional paid-in capital |
388,963 | | | 388,963 | ||||||||||||||||
Accumulated deficit |
(97,588 | ) | | | (97,588 | ) | ||||||||||||||
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Total stockholders equity |
291,416 | | | 291,416 | ||||||||||||||||
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Total liabilities and stockholders equity |
$ | 302,866 | $ | | $ | | $ | 302,866 | ||||||||||||
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Unaudited Pro Forma Combined Statement of Operations
For the Three Months Ended March 31, 2023
(in thousands, except for share and per share amounts)
Enliven | IMARA | Transaction Accounting Adjustments |
Note 4 | Pro Forma Combined Total |
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Operating expenses |
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Research and development |
$ | 11,880 | $ | 104 | $ | | $ | 11,984 | ||||||||||||
General and administrative |
4,538 | 12,094 | | 16,632 | ||||||||||||||||
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Total operating expenses |
16,418 | 12,198 | | 28,616 | ||||||||||||||||
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Loss from operations |
(16,418 | ) | (12,198 | ) | | (28,616 | ) | |||||||||||||
Interest income |
1,694 | 602 | | 2,296 | ||||||||||||||||
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Total other income (expense), net |
1,694 | 602 | | 2,296 | ||||||||||||||||
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Net loss and comrehensive loss |
(14,724 | ) | (11,596 | ) | | (26,320 | ) | |||||||||||||
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Net loss per share, basic and diluted |
$ | (0.80 | ) | $ | | $ | | $ | (1.42 | ) | ||||||||||
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Weighted-average shares outstanding, basic and diluted |
18,514,644 | | | 18,514,644 | ||||||||||||||||
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Unaudited Pro Forma Combined Statement of Operations
For the Year Ended December 31, 2022
(in thousands, except for share and per share amounts)
Enliven | IMARA | Transaction Accounting Adjustments |
Note 4 |
Pro Forma Combined Total |
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Operating expenses |
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Research and development |
$ | 31,022 | $ | 18,940 | $ | (17,692 | ) | (d) | $ | 32,270 | ||||||||
General and administrative |
7,769 | 15,330 | 3,564 | (b)(c) | 26,663 | |||||||||||||
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Total operating expenses |
38,791 | 34,270 | (14,128 | ) | 58,933 | |||||||||||||
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Gain on sale of asset |
| 35,000 | | 35,000 | ||||||||||||||
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Loss from operations |
(38,791 | ) | 730 | 14,128 | (23,933 | ) | ||||||||||||
Other expense |
| (97 | ) | | (97 | ) | ||||||||||||
Interest income |
1,129 | 943 | | 2,072 | ||||||||||||||
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Total other income (expense), net |
1,129 | 846 | | 1,975 | ||||||||||||||
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Net loss (income) before income tax provision |
(37,662 | ) | 1,576 | 14,128 | (21,958 | ) | ||||||||||||
Income tax provision |
| (88 | ) | | (88 | ) | ||||||||||||
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Net loss (income) |
$ | (37,662 | ) | $ | 1,488 | $ | 14,128 | $ | (22,046 | ) | ||||||||
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Net loss (income) share attributable to common stockholders, basic and diluted |
$ | (3.56 | ) | $ | 0.06 | $ | | $ | (0.54 | ) | ||||||||
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Weighted average common shares outstanding, basic and diluted |
10,586,983 | 26,385,567 | 3,632,417 | (a) | 40,604,967 | |||||||||||||
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NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
1. Basis of Presentation
The unaudited pro forma combined financial information was prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of Article 11 of Regulation S-X. The unaudited pro forma combined balance sheet as of March 31, 2023 was prepared using the historical consolidated balance sheets of Imara and Enliven as of March 31, 2023. The unaudited pro forma combined statement of operations for the three months ended March 31, 2023 and for the year ended December 31, 2022 were prepared using the historical statements of operations and comprehensive loss of Imara and Enliven for the three months ended March 31, 2023 and for the year ended December 31, 2022, respectively, and gives effect to the Merger as if it occurred on January 1, 2022.
For accounting purposes, Enliven is considered to be the acquirer, and the Merger was accounted for as a reverse recapitalization of Imara by Enliven because upon the closing of the Merger, the pre-combination assets of Imara were primarily cash.
Under reverse recapitalization accounting, the assets and liabilities of Imara were recorded, as of the date of the Merger, at their fair value. No goodwill or intangible assets were recognized and any excess consideration transferred over the fair value of the net assets of Imara, following determination of the actual purchase consideration for Imara are reflected as a reduction to additional paid-in capital. Consequently, the financial statements of Enliven reflect the operations of the acquirer for accounting purposes together with a deemed issuance of shares, equivalent to the shares held by the former stockholders of the legal acquirer and a recapitalization of the equity of the accounting acquirer. The accompanying unaudited pro forma combined financial information is derived from the historical financial statements of Imara and Enliven, and includes adjustments to give pro forma effect to reflect the accounting for the transaction in accordance with U.S. GAAP. The historical financial statements of Enliven shall become the historical financial statements of the combined company.
To the extent there are significant changes to the business following completion of the Merger, the assumptions and estimates set forth in the unaudited pro forma consolidated financial information could change significantly. Accordingly, the pro forma adjustments are subject to further adjustment as additional information becomes available and as additional analyses are conducted following the completion of the Merger. There can be no assurances that these additional analyses will not result in material changes to the estimates of fair value.
2. Purchase Price
The accompanying unaudited pro forma combined financial information reflects a purchase price of approximately $168.8 million, which consists of the following (in thousands, except share and per share amounts):
Estimated number of common shares of the combined company to be owned by IMARA stockholders (1) |
6,625,176 | |||
Multiplied by the fair value per share of IMARA common stock (2) |
$ | 25.28 | ||
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Estimated fair value of IMARA common stock issued |
167,484 | |||
Estimated fair value of stock options and restricted stock units attributable to precombination services (3) |
1,350 | |||
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Estimated purchase price |
$ | 168,834 | ||
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(1) | Reflects the number of shares of the combined company that Imara equity holders owned as of the closing pursuant to the Merger Agreement. This amount is calculated for purposes of the unaudited pro forma combined financial information, based on the shares of Imaras common stock outstanding as of February 23, 2023. |
(2) | Reflects the assumed purchase price per share of Imara common stock, which is the closing price of Imaras common stock on February 23, 2023. |
(3) | Reflects the estimated acquisition-date fair value of the assumed Imara equity awards attributable to pre-combination services. |
3. Shares of Imara Common Stock Issued to Enlivens Stockholders upon Closing of the Merger
Prior to the Merger, all outstanding convertible preferred stock of Enliven were converted into common stock of Enliven. At the effective time of the Merger, all outstanding shares of Enlivens common stock were converted into the right to receive shares of Imara common stock as consideration for the Merger, based on the exchange ratio. The final exchange ratio for purposes of the unaudited pro forma combined financial information was derived on a fully-diluted basis as of February 23, 2023 using a stipulated value of Enliven of approximately $489.1 million (including the Enliven pre-closing financing discussed above) and of Imara of approximately $90.5 million. Based on the exchange ratio of approximately 0.2951 determined in accordance with the terms of the Merger Agreement, Imara issued 34,426,394 shares of common stock to the stockholders of Enliven in the Merger, determined as follows:
Shares | ||||
Enliven: |
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Enliven common shareholders |
54,927,965 | |||
Enliven convertible preferred stock |
61,730,064 | |||
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Total Enliven common equivalent shares pre-close |
116,658,029 | |||
Exchange ratio |
0.2951 | |||
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Total Enliven merger common shares |
34,426,394 | |||
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The exchange ratio is calculated based on the Reverse Stock Split of Imara common stock.
4. Pro Forma Adjustments
The unaudited pro forma combined financial information includes pro forma adjustments that reflect Transaction Accounting Adjustments, as well as other adjustments deemed to be directly related to the Merger, irrespective of whether or not such adjustments are deemed to be recurring.
Based on Enliven managements review of Imaras summary of significant accounting policies, the nature and amount of any adjustments to the historical financial statements of Imara to conform to the accounting policies of Enliven are not expected to be significant.
The pro forma adjustments, based on preliminary estimates that may change significantly as additional information is obtained, are as follows:
(a) | The pro forma combined basic and diluted earnings per share have been adjusted to reflect the pro forma net loss for the year ended December 31, 2022. In addition, the number of shares used in calculating the pro forma combined basic and diluted net loss per share has been adjusted to reflect the total number of shares of common stock of the combined company outstanding as of the Merger closing date, including the shares to be issued in the Enliven pre-closing financing. The following table presents the calculation of the pro forma weighted average number of common stock outstanding after giving effect to the Reverse Stock Split for Imara shares and application of the exchange ratio for Enliven shares: |
December 31, 2022 | ||||
Historical Enliven weighted-average shares of common stock outstanding |
10,586,983 | |||
Impact of Enlivens convertible preferred stock assuming conversion as of January 1, 2022 |
61,730,064 | |||
Impact of Enlivens common stock purchase agreement (Financing Transaction) assuming issuance as of January 1, 2022 |
42,827,612 | |||
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Subtotal |
115,144,659 | |||
Application of exchange ratio to historical Enliven weighted-average shares outstanding |
0.2951 | |||
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Adjusted Enliven weighted-average shares outstanding (after giving effect to the Exchange Ratio) |
33,979,790 | |||
Historical IMARA weighted-average shares of common stock outstanding |
6,571,816 | |||
Impact of IMARA common stock related to stock units that accelerated vesting, reflected as having occurred January 1, 2022 |
53,361 | |||
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Total weighted average shares outstanding |
40,604,967 | |||
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(b) | To reflect the post combination stock-based compensation expense of $1.2 million, as a result of the accelerated vesting of certain Imara options, as a result of the Merger under the original award terms, as general and administrative expense on the unaudited pro forma combined statement of operations, and an increase in additional paid-in capital and accumulated deficit on the unaudited pro forma balance sheet. |
(c) | To reflect Imaras compensation expense of $2.4 million related to change-in-control severance payments resulting from pre-existing employment agreements that will be payable in cash in connection with the Merger but were not incurred as of December 31, 2022, as an increase to accrued expense and other current liabilities and accumulated deficit in the unaudited pro forma combined balance sheet. Imaras compensation costs of $2.4 million are reflected as general and administrative expense in the unaudited pro forma combined statement of operations for the year ended December 31, 2022. |
(d) | To reflect the elimination of direct external R&D expenses related to the IMR-687 program which were sold by Imara in an asset sale. Such R&D expenses were incurred and included in the Imara historical consolidated statement of operations for the year ended December 31, 2022. |