What changed in this filing

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Item 1. Financial Statements

2022-10-25 compared with 2022-08-03 · 135 added, 88 removed, 324 unchanged (41% of the section changed)

2 unchanged sentences

(in thousands, except share and per share data)

September 30,

Current assets:

16 unchanged sentences

10,000,000 shares authorized;

issued or outstanding as of June 30, 2022;

issued or outstanding as of September 30, 2022;

no shares authorized, issued or

2 unchanged sentences

200,000,000 shares

authorized as of June 30, 2022 and December 31, 2021, respectively;

26,287,264 shares issued and outstanding as of June 30, 2022 and

authorized as of September 30, 2022 and December 31, 2021, respectively;

26,287,264 shares issued and outstanding as of September 30, 2022 and

December 31, 2021, respectively

8 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Operating expenses:

21 unchanged sentences

Balance at December 31, 2020

Stock-based compensation

Stock-based compensation expense

Exercise of stock options

Unrealized loss on

Unrealized loss on investments

Balance at March 31, 2021

Stock-based compensation

Issuance of common stock

under ATM offering, net of issuance

costs of $ 357

Stock-based compensation expense

Issuance of common stock under ATM offering, net of

issuance costs of $ 357

Exercise of stock options and issuance of stock under the

Employee Stock Purchase Plan

Unrealized loss on

Unrealized loss on investments

Balance at June 30, 2021

Stock-based compensation expense

Issuance of common stock under ATM and July 2021 offering,

net of issuance costs of $ 210

Exercise of stock options and issuance of stock under the

Employee Stock Purchase Plan

Unrealized loss on investments

Balance at September 30, 2021

COMPREHENSIVE

2 unchanged sentences

Balance at December 31, 2021

Stock-based compensation

Unrealized loss on

Stock-based compensation expense

Unrealized loss on investments

Balance at March 31, 2022

Stock-based compensation

Unrealized gain on

Stock-based compensation expense

Unrealized gain on investments

Balance at June 30, 2022

Stock-based compensation expense

Unrealized gain on investments

Balance at September 30, 2022

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

(in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

16 unchanged sentences

Cash flows from financing activities:

Proceeds from July 2021 offering, net of underwriting discounts and commissions

Proceeds from ATM offering, net of underwriting discounts and commissions

6 unchanged sentences

Supplemental disclosure of non-cash investing and financing activities:

Offering costs included in accounts payable and accrued expenses

Right of use asset obtained in exchange for lease liabilities

Property and equipment purchases included in accrued expenses

Unrealized loss on investments

The following table provides a reconciliation of the cash, cash equivalents, and restricted cash balances as of each of the periods shown above:

Six Months Ended

Nine Months Ended

September 30,

Cash and cash equivalents

6 unchanged sentences

The Company was incorporated in January 2016 under the laws of the State of Delaware, and its principal offices are in Boston, Massachusetts.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including but not limited to, risks associated with completing preclinical studies and clinical trials, receiving regulatory approvals for product candidates, development by competitors of new biopharmaceutical products, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations.

If the Company decides to pursue any future product development efforts, any product candidates will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval, prior to commercialization.

These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities.

Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize revenue from product sales.

On April 5, 2022, the Company announced the results from interim analyses of its Ardent Phase 2b clinical trial of tovinontrine (IMR-687) in patients with sickle cell disease (“SCD”) and Forte Phase 2b clinical trial of tovinontrine in patients with ß-thalassemia.

2 unchanged sentences

In connection with these events, the Company’s Board of Directors approved a reduction in workforce designed to substantially reduce the Company’s operating expenses while it undertakes a comprehensive assessment of its strategic options to maximize stockholder value.

The Company estimates that it will incur total expenses relating to the Workforce Reduction of approximately $ 2.1 million, which is comprised of notice and employee severance and retention payments.

To date, the Company has funded its operations primarily through the sale of common stock and the sale of convertible preferred stock.

The Workforce Reduction was completed as of September 30, 2022 and the Company incurred approximately $ 2.1 million of expenses comprised of notice and employee severance and retention payments.

On September 6, 2022, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Cardurion Pharmaceuticals, Inc.

(“Cardurion”), discussed further in Note 14, providing for the sale of tovinontrine and all other assets of the Company related to its PDE9 program (the “Asset Sale”).

On October 13, 2022, the Company, Iguana Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Merger Sub”), and Enliven Therapeutics, Inc., a Delaware corporation (“Enliven”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), discussed further in Note 15, pursuant to which, among other matters, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Enliven, with Enliven continuing as a wholly owned subsidiary of IMARA and the surviving corporation of the merger (the “Merger”).

If the Merger is completed, the business of Enliven will continue as the business of the combined organization.

The closing of the transactions contemplated by the Asset Purchase Agreement between IMARA and Cardurion is a condition to the closing of the transactions contemplated by the Merger Agreement.

Consummation of the Asset Sale and Merger Agreement is subject to customary closing conditions, including, without limitation, approval of the sale by the Company’s stockholders.

The Company has incurred recurring negative cash flows since inception and has funded its operations primarily from the sale of convertible preferred stock and proceeds from the IPO and subsequent common stock offerings.

As of September 30, 2022, the Company had cash, cash equivalents, and investments of $ 56.3 million and an accumulated deficit of approximately $ 178.2 million.

The Company expects its operating losses and negative operating cash flows to continue into the foreseeable future.

On April 1, 2021, the Company filed a Registration Statement on Form S-3 (the “Shelf”) with the SEC in relation to the registration and potential future issuance of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof in the aggregate amount of up to $ 200.0 million.

1 unchanged sentence

The Company also simultaneously entered into a sales agreement with Cantor Fitzgerald & Co, LLC, as sales agent, providing for the offering, issuance and sale by the Company of up to an aggregate $ 75.0 million of its common stock from time to time in “at-the-market” offerings under the Shelf.

As of June 30, 2022, the Company had issued and sold 231,291 shares of common stock under the sales agreement, resulting in net proceeds of $ 1.4 million after deducting commissions and offering expenses.

As of September 30, 2022, the Company had issued and sold 231,291 shares of common stock under the sales agreement, resulting in net proceeds of $ 1.4 million after deducting commissions and offering expenses.

On July 16, 2021, the Company completed a public offering of shares of its common stock.

In connection with the offering, the Company issued and sold 8,333,333 shares of common stock at a public offering price of $ 6.00 per share, resulting in net proceeds of $ 46.8 million after deducting underwriting discounts and commissions and offering expenses.

As of June 30, 2022, the Company had cash, cash equivalents, and investments of $ 60.3 million and an accumulated deficit of approximately $ 173.6 million.

The Company expects its operating losses and negative operating cash flows to continue into the foreseeable future.

The Company previously identified conditions and events that raise substantial doubt about its ability to continue as a going concern.

As described above, the Company made the decision to discontinue development of tovinontrine in sickle cell disease, β-thalassemia and heart failure with preserved ejection fraction, as well to discontinue its development plans with respect to IMR-261.

As a result, the Company believes its cash, cash equivalents and investments as of June 30, 2022 will be sufficient to fund its operating expense requirements for at least twelve months from the date of filing this Quarterly Report on Form 10-Q.

As a result and without giving effect to the Asset Sale, the Company believes its cash, cash equivalents and investments as of September 30, 2022 will be sufficient to fund its operating expense requirements for at least twelve months from the date of filing this Quarterly Report on Form 10-Q.

In the event that the Company does not complete the Asset Sale or the Merger, the Company (i) may elect to pursue a dissolution and liquidation of the Company, (ii) pursue another strategic transaction or (iii) may resume research and development

If the Company decides to pursue any future product development efforts, it will need additional funding to support its planned operating activities.

8 unchanged sentences

The unaudited condensed consolidated interim financial statements have been prepared on the same basis as the audited financial statements.

In the opinion of the Company’s management, the accompanying unaudited condensed consolidated interim financial statements contain all adjustments which are necessary to present fairly the Company’s financial position as of June 30, 2022, the results of its operations for the three and six months ended June 30, 2022 and 2021 and cash flows for the six months ended June 30, 2022 and 2021.

In the opinion of the Company’s management, the accompanying unaudited condensed consolidated interim financial statements contain all adjustments which are necessary to present fairly the Company’s financial position as of September 30, 2022, the results of its operations for the three and nine months ended September 30, 2022 and 2021 and cash flows for the nine months ended September 30, 2022 and 2021.

Such adjustments are of a normal and recurring nature.

The results for the three and six months ended June 30, 2022 are not necessarily indicative of the results for the year ending December 31, 2022, or for any future period.

The results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results for the year ending December 31, 2022, or for any future period.

Principles of Consolidation

4 unchanged sentences

The significant accounting policies and estimates used in the preparation of the accompanying unaudited condensed consolidated financial statements are described in the Company’s audited consolidated financial statements for the year ended December 31, 2021 included in the Company’s Annual Report.

There have been no material changes in the Company’s significant accounting policies during the three and six months ended June 30, 2022.

There have been no material changes in the Company’s significant accounting policies during the three and nine months ended September 30, 2022.

Use of Estimates

8 unchanged sentences

Comprehensive loss includes net loss and certain changes in stockholders’ equity that are excluded from net loss.

The Company’s comprehensive loss includes unrealized gains and losses (net) on available-for-sale debt securities for the three and six months ended June 30, 2022 and 2021.

The Company’s comprehensive loss includes unrealized gains and losses (net) on available-for-sale debt securities for the three and nine months ended September 30, 2022 and 2021.

Recently Issued Accounting Pronouncements

6 unchanged sentences

The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values (in thousands):

June 30, 2022

September 30, 2022

Quoted Prices in

19 unchanged sentences

Total financial assets

As of June 30, 2022 and December 31, 2021, the Company’s Level 1 financial assets consisted of cash equivalents held in money market funds, which are valued using quoted market prices in active markets without any valuation adjustment.

As of September 30, 2022 and December 31, 2021, the Company’s Level 1 financial assets consisted of cash equivalents held in money market funds, which are valued using quoted market prices in active markets without any valuation adjustment.

The financial assets valued based on Level 2 inputs consist of corporate debt securities and commercial paper, which consist of investments in highly-rated investment-grade securities.

3 unchanged sentences

The Company validates the prices provided by its third-party pricing sources by understanding the models used, obtaining market values from other pricing sources and analyzing pricing data in certain instances.

During the three and six months ended June 30, 2022 and the year ended December 31, 2021, there were no transfers between fair value measurement levels.

During the three and nine months ended September 30, 2022 and the year ended December 31, 2021, there were no transfers between fair value measurement levels.

The carrying values of other current assets, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities.

As of June 30, 2022 and December 31, 2021, the Company had short-term investments consisting of corporate debt securities and commercial paper, which are considered to be available-for-sale investments.

These are included in short-term investments on the condensed consolidated balance sheets, even though the stated maturity date may be one year or more beyond the current balance sheet date, as the Company views those securities as available for use in current operations, if needed.

As of September 30, 2022 and December 31, 2021, the Company had short-term investments consisting of corporate debt securities and commercial paper, which are considered to be available-for-sale investments.

These are included in short-term investments on the condensed consolidated balance sheets.

The following table summarizes the Company’s investments (in thousands):

June 30, 2022

September 30, 2022

Amortized Cost

9 unchanged sentences

Corporate debt securities

As of June 30, 2022, the Company held five available-for-sale securities with an aggregate value of approximately $ 11.1 million in an unrealized loss position for less than twelve months.

As of September 30, 2022, the Company held one available-for-sale securities with an aggregate value of approximately $ 2.4 million in an unrealized loss position for less than twelve months.

As of December 31, 2021, the Company held seven available-for-sale securities in unrealized loss positions with an aggregate value of approximately $ 15.8 million in an unrealized loss position for less than twelve months.

1 unchanged sentence

The Company determined that there was no material change in the credit risk of these investments .

As a result, the Company determined it did not hold any investments with an other-than-temporary impairment as of June 30, 2022 and December 31, 2021.

As a result, the Company determined it did not hold any investments with an other-than-temporary impairment as of September 30, 2022 and December 31, 2021.

Accrued Expenses

Accrued expenses consisted of the following (in thousands):

September 30,

Accrued research and development expenses

4 unchanged sentences

Accrued Research and Development Expenses

The Company’s spend on tovinontrine and IMR-261 significantly declined in the second quarter of 2022 following the Company’s April 2022 decision to discontinue development of each program.

The Company does not expect to incur material costs for these programs beyond the second quarter of 2022.

The Company’s accrued research and development expenses related to tovinontrine and IMR-261 significantly declined in the second and third quarters of 2022 following the Company’s April 2022 decision to discontinue development of each program.

Restructuring Costs

1 unchanged sentence

The Workforce Reduction followed the Company’s decision to discontinue development of tovinontrine, as well to discontinue its development plans with respect to IMR-261.

The Workforce Reduction was substantially completed during the three and six months ended June 30, 2022.

The Company currently estimates that it will incur total expenses relating to the Workforce Reduction of approximately $ 2.1 million, which is comprised of notice and employee severance and retention payments.

The Company records these charges in accordance with ASC 420, Exit or Disposal Cost Obligations , and have included them as operating expenses in the condensed

statements of operations and comprehensive loss .

During the three and six months ended June 30, 20 22 , the Company recorded severance and retention expense of approximately $ 1.9 million related to the Workforce Reduction .

The Company expects to record the remaining $ 0.2 million of severance and retention expense during the third quarter of 2022 .

Liabilities associated with restructuring activities were approximately $ 0.2 million as of June 30 , 202 2.

The Workforce Reduction was substantially completed during the three and nine months ended September 30, 2022.

The Company incurred total expenses relating to the Workforce Reduction of approximately $ 2.1 million, which was comprised of notice and employee severance and retention payments.

The Company recorded these charges in accordance with ASC 420, Exit or Disposal Cost Obligations, and have included them as operating expenses in the condensed statements of operations and comprehensive loss.

The Workforce Reduction was completed as of September 30, 2022.

License Agreements

9 unchanged sentences

To date, pursuant to the Lundbeck Agreement, the Company has made cash payments to Lundbeck of $ 1.8 million consisting of an upfront payment and ongoing milestone payments, which were recorded as research and development expenses.

No payments were made during the year ended December 31, 2021, or for the three and six months ended June 30, 2022.

No payments were made during the year ended December 31, 2021, or for the three and nine months ended September 30, 2022.

As partial consideration for the license, the Company issued 167,523 shares of common stock to Lundbeck, which represented 8.0 % of the Company’s then outstanding equity pursuant to a restricted stock agreement.

3 unchanged sentences

The Company or Lundbeck may terminate the agreement by written notice within a specified period of time in the event of a material breach.

In connection with the Asset Sale, the Lundbeck Agreement will be assigned to Cardurion.

Commitments and Contingencies

4 unchanged sentences

In addition to the base rent, the Company was also responsible for its share of operating expenses, electricity and real estate taxes, in accordance with the terms of the May 2019 Lease Agreement.

The Company provided a security deposit of approximately $ 0.1 million in May 2019, which is included as a component of other assets on the Company’s unaudited condensed consolidated balance sheets as of June 30, 2022 and consolidated balance sheet as of December 31, 2021.

The Company provided a security deposit of approximately $ 0.1 million in May 2019, which was included as a component of other assets on the Company’s consolidated balance sheet as of December 31, 2021.

The Company occupied the space in August 2019 and commenced recognition of rent expense.

6 unchanged sentences

In July 2022, the Company entered into a second amendment and termination of office lease agreement (the “Termination Agreement”) to terminate the lease under the May 2019 Lease Agreement, as amended by the June 2021 Amended Lease Agreement.

The termination of the lease becomes effective on August 7, 2022 as a result of the landlord entering into a new lease agreement with

a third-party tenant for the premises covered by the lease.

The termination of the lease became effective on August 7, 2022 as a result of the landlord entering into a new lease agreement with a third-party tenant for the premises covered by the lease.

As part of the Termination Agreement the Company paid a lease termination fee of $ 0.3 million, which was comprised of forfeiture of its $ 0.2 million security deposit and an additional fee of $ 0.1 million.

In connection with this termination the Company remeasured its right of use assets and operating lease liabilities and recorded a gain of less than $ 0.1 million.

T he Company revised the estimated useful lives of the existing leasehold improvements and furniture placed in service at its premises, which are included as component of property and equipment, net on its unaudited condensed consolidated balance sheets .

This revision resulted in additional depreciation expense of $ 0.4 million recognized during the three months ended June 30, 2022 .

The Company recorded rent expense of approximately $ 0.2 million and $ 0.3 million during the three months and six months ended June 30, 2022, respectively.

The following table summarizes the future lease payments due under the June 2021 Amended Lease Agreement following termination (in thousands):

Total Lease Payments

Less Imputed Interest

Present value of operating lease liabilities

Operating cash flows used for operating leases

Weighted-average remaining lease term (years)

Weighted-average discount rate

In connection with this termination the Company remeasured its right of use assets and operating lease liabilities and recorded a gain of

less than $ 0.1 million.

The Company recorded rent expense of approximately $ 0.1 million and $ 0.5 million during the three months and nine months ended September 30, 2022, respectively.

There are no future lease payments due under the June 2021 Amended Lease Agreement following termination.

Legal Proceedings

The Company may from time to time be party to litigation arising in the ordinary course of business.

The Company was not subject to any material legal proceedings during the three and six months ended June 30, 2022 and year ended December 31, 2021, and no material legal proceedings are currently pending or, to the best of its knowledge, threatened.

The Company was not subject to any material legal proceedings during the three and nine months ended September 30, 2022 and year ended December 31, 2021, and no material legal proceedings are currently pending or, to the best of its knowledge, threatened.

Indemnification Obligations

8 unchanged sentences

Common stockholders are entitled to receive dividends, as may be declared by the Board, if any, subject to the preferential dividend rights of any preferred stock then outstanding.

Through June 30, 2022, no cash dividends have been declared or paid.

As of June 30, 2022, 10,000,000 shares of preferred stock were authorized and no shares of preferred stock were issued or outstanding.

As of June 30, 2022 and December 31, 2021, the Company has reserved for future issuance the following shares of common stock:

Through September 30, 2022, no cash dividends have been declared or paid.

As of September 30, 2022, 10,000,000 shares of preferred stock were authorized and no shares of preferred stock were issued or outstanding.

As of September 30, 2022 and December 31, 2021, the Company has reserved for future issuance the following shares of common stock:

September 30,

Shares reserved for future issuance under the 2020 Equity Incentive Plan

3 unchanged sentences

The Company’s 2016 Stock Incentive Plan, (the “2016 Plan”) provided for the grant of restricted stock, restricted stock units, stock appreciation rights, incentive stock options, non-statutory stock options and other stock-based awards to employees, officers, members of the Board, consultants and advisors of the Company.

As of the effective date of the 2020 Equity Incentive Plan (the “2020 Plan”) on March 11, 2020, and as of June 30, 2022, no shares remained available for future issuance under the 2016 Plan.

As of the effective date of the 2020 Equity Incentive Plan (the “2020 Plan”) on March 11, 2020, and as of September 30, 2022, no shares remained available for future issuance under the 2016 Plan.

Any options or awards outstanding under the 2016 Plan remain outstanding and effective

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The shares of common stock underlying any awards that expire, terminate, or are otherwise surrendered, cancelled, forfeited or repurchased by the Company under the 2016 Plan or the 2020 Plan will be added back to the shares of common stock available for issuance under the 2020 Plan

As of June 30, 2022, there were 2,316,236 shares available for future issuance under the 2020 Plan.

As of September 30, 2022, there were 2,593,338 shares available for future issuance under the 2020 Plan.

The following table summarizes the Company’s stock option activity:

3 unchanged sentences

Outstanding as of December 31, 2021

Outstanding as of June 30, 2022

Options vested and exercisable as of June 30, 2022

Outstanding as of September 30, 2022

Options vested and exercisable as of September 30, 2022

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the common stock as of the end of the period.

The weighted-average grant date fair value of the Company’s stock options granted during the three and six months ended June 30, 2022 was $ 0.87 and $ 1.02 , respectively.

The weighted-average grant date fair value of the Company’s stock options granted during each of the three and six months ended June 30, 2021 was $ 5.32 and $ 8.36 , respectively.

The weighted-average grant date fair value of the Company’s stock options granted during the nine months ended September 30, 2022 was $ 1.02 .

There were no options granted during the three months ended September 30, 2022.

The weighted-average grant date fair value of the Company’s stock options granted during each of the three and nine months ended September 30, 2021 was $ 3.66 and $ 7.44 , respectively.

Restricted Stock Units

3 unchanged sentences

Unvested as of December 31, 2021

Unvested as of June 30, 2022

Unvested as of September 30, 2022

Stock-Based Compensation

Stock-based compensation expense included in the Company’s unaudited condensed consolidated statements of operations and comprehensive loss is as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

Research and development

1 unchanged sentence

Total stock-based compensation expense

As of June 30, 2022 and December 31, 2021, total unrecognized compensation cost related to the unvested stock-based awards was $ 3.7 million and $ 9.4 million, respectively, which is expected to be recognized over a weighted-average period of 2.20 and 2.65 years, respectively.

As of September 30, 2022 and December 31, 2021, total unrecognized compensation cost related to the unvested stock-based awards was $ 3.0 million and $ 9.4 million, respectively, which is expected to be recognized over a weighted-average period of 1.94 and 2.65 years, respectively.

Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using statutory rates.

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In late December 2020 Congress expanded and amended the CARES Act by enacting Public Law 116-260.

Per the amendment to the CARES Act, eligible employers are entitled to a refundable tax credit equal to 70 % of the qualified wages paid to employees between January 1, 2021, and June 30, 2021, up to a maximum of $ 10,000 of wages per employee per quarter, with a maximum of $ 7,000 per employee per calendar quarter.

Per the amendment to the CARES Act, eligible employers are entitled to a refundable tax credit equal to 70 % of the qualified wages paid to employees between January 1, 2021, and September 30, 2021, up to a maximum of $ 10,000 of wages per employee per quarter, with a maximum of $ 7,000 per employee per calendar quarter.

Congress further extended the credit with the American Rescue Plan signed into law on March 11, 2021;

2 unchanged sentences

Qualified Wages must be paid on or after March 13, 2020 and before October 1, 2021, and may include wages paid to employees, as well as so much of the employer’s qualified health plan expenses as are properly allocable to such wages, not to exceed $ 10,000 per employee for calendar year 2020 or $ 10,000 per employee per calendar quarter in quarter 1, 2, or 3 of 2021 (“2021 Eligible Quarter”).

The Retention Credit may be claimed for up to $5,000 per employee for calendar year 2020 (i.e., 50% of the $10,000 maximum in Qualified Wages for calendar year 2020) or $ 7,000 per employee per 2021 Eligible Quarter (i.e., 70% of the $10,000 maximum in Qualified Wages per 2021 Eligible Quarter).

The Retention Credit may be claimed for up to

$5,000 per employee for calendar year 2020 (i.e., 50% of the $10,000 maximum in Qualified Wages for calendar year 2020) or $ 7,000 per employee per 2021 Eligible Quarter (i.e., 70% of the $10,000 maximum in Qualified Wages per 2021 Eligible Quarter).

Therefore, the maximum Retention Credit per employee in 2020 is $ 5,000 and in 2021 is $ 21,000 .

1 unchanged sentence

The Company recognized an ERC of approximately $ 1.0 million as an offset to payroll tax expenses for the year ended December 31, 2021.

The Company did no t recognize an ERC for the three and six months ended June 30, 2022.

The Company did no t recognize an ERC for the three and nine months ended September 30, 2022.

Net Loss Per Share

4 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Options to purchase common stock

7 unchanged sentences

Lundbeckfond Invest A/S also purchased 187,500 shares of common stock in the IPO.

This reflects a 5.0 % ownership interest on a fully diluted basis as of June 30, 2022 and December 31, 2021.

This reflects a 5.1 % ownership interest on a fully diluted basis as of September 30, 2022 and December 31, 2021.

Mette Kirstine Agger, who was a member of our board of directors until June 29, 2021, is a Managing Partner at Lundbeckfonden Ventures, which is an affiliate of Lundbeckfond Invest A/S.

2 unchanged sentences

All shares of preferred stock converted into shares of common stock upon closing of the IPO.

This reflects a 1.8 % ownership interest on a fully diluted basis as of June 30, 2022 and December 31, 2021.

This reflects a 1.9 % ownership interest on a fully diluted basis as of September 30, 2022 and December 31, 2021.

Lundbeck did not participate in the Series B Preferred Stock financing.

To date, pursuant to the Lundbeck Agreement, the Company has made cash payments to Lundbeck of $ 1.8 million consisting of an upfront payment and ongoing milestone payments which are recorded as research and development expense.

In connection with the Asset Sale, the Lundbeck Agreement will be assigned to Cardurion.

Benefit Plans

2 unchanged sentences

Matching contributions to the plan may be made at the discretion of the Board.

The Company made $ 0.1 million of contributions for the three and six months ended June 30, 2022 and has made $ 0.3 million of contributions to the plan to date.

The Company made less than $ 0.1 million and $ 0.1 million of contributions for the three and nine months ended September 30, 2022, respectively, and has made $ 0.3 million of contributions to the plan to date.

Asset Purchase Agreement

On September 6, 2022, the Company entered into an Asset Purchase Agreement with Cardurion, providing for the sale of tovinontrine and all other assets of the Company related to its PDE9 program.

Pursuant to the terms of the Asset Purchase Agreement, in addition to $ 250,000 previously paid by Cardurion to the Company upon execution of a non-binding term sheet, the aggregate purchase price consists of an upfront cash payment of $ 34,750,000 upon closing of the transaction and a $ 10,000,000 potential future payment that may become payable if Cardurion achieves a proof of concept milestone or other specified clinical milestones and a $ 50,000,000 potential future payment that may become payable if Cardurion achieves specified regulatory and/or commercial milestone events, in each case as described in the Asset Purchase Agreement and subject to the terms of the Asset Purchase Agreement.

Consummation of the Asset Sale is subject to customary closing conditions, including, without limitation, approval of the sale by the Company’s stockholders.

Subsequent Events

Merger Agreement

On October 13, 2022, the Company, Merger Sub and Enliven entered into the Merger Agreement, pursuant to which, among other matters, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Enliven, with Enliven continuing as the Company's wholly owned subsidiary and the surviving corporation of the Merger.

If the Merger is completed, the business of Enliven will continue as the business of the combined organization.

Consummation of the transactions contemplated by the Merger Agreement is subject to certain closing conditions, including, among other things, (1) approval by our stockholders of the Required Voting Proposal, (2) approval by the Enliven stockholders of the adoption of the Merger Agreement, (3) Nasdaq’s approval of the listing of the shares of our common stock to be issued in connection with the Merger, (4) the effectiveness of the Registration Statement, (5) our net cash as determined in accordance with the Merger Agreement being between $ 75 million and $ 95 million, (6) the waiting period under the HSR Act having expired or been terminated and (7) our closing of the previously announced Asset Sale.

Each party’s obligation to consummate the Merger is also subject to other specified customary conditions, including the representations and warranties of the other party being true and correct as of the date of the Merger Agreement and as of the closing date of the Merger, generally subject to an overall material adverse effect qualification, and the performance in all material respects by the other party of its obligations under the Merger Agreement required to be performed on or prior to the date of the closing of the Merger.

Enliven’s obligation to consummate the Merger is also subject to the completion of the Financing Transaction such that Enliven receives gross proceeds of at least $ 131.6 million and our obligation to consummate the Merger is subject to the completion of the Financing Transaction such that Enliven receives gross proceeds of at least $ 75.0 million.

Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), (a) each then-outstanding share of Enliven common stock (including shares of Enliven common stock issued upon conversion of Enliven preferred stock, which conversion will occur immediately prior to the Effective Time and shares of Enliven common stock issued in the Financing Transaction (as defined below)) will be converted into the right to receive a number of shares of IMARA common stock ( subject to the payment of cash in lieu of fractional shares and after giving effect to the IMARA Reverse Stock Split (as defined below)) calculated in accordance with the Merger Agreement (the ratio of such conversion, the “Exchange Ratio”);

and (b) each then-outstanding Enliven stock option to purchase Enliven common stock will be assumed by IMARA, subject to adjustment as set forth in the Merger Agreement.

The provisions for calculating the Exchange Ratio are set forth in the Merger Agreement, and assume a valuation for Enliven equal to $ 324.6 million, plus the proceeds of the Financing Transaction (as defined below), and a valuation for IMARA equal to its net cash as of the business day immediately prior to the closing date of the Merger, plus $ 10 million, in each case as further described in the Merger Agreement.

The Exchange Ratio is also based on the relative capitalizations of the companies.

For purposes of calculating the Exchange Ratio, shares of IMARA common stock underlying IMARA stock options outstanding immediately prior to the Effective Time with an exercise price per share of less than or equal to $ 10.00 (as adjusted for the IMARA Reverse Stock Split) will be deemed to be outstanding, and all shares of Enliven common stock underlying outstanding Enliven stock options, warrants and other derivative securities will be deemed to be outstanding.

In connection with the Merger, IMARA will seek the approval of its stockholders to, among other things, (a) issue the shares of IMARA common stock issuable in connection with the Merger under the rules of The Nasdaq Stock Market LLC ("Nasdaq") pursuant to the terms of the Merger Agreement (the "Required IMARA Voting Proposal"), (b) amend its certificate of incorporation to effect a reverse split of IMARA common stock, at a ratio to be determined prior to the Effective Time in accordance with the Merger Agreement (the "Reverse Stock Split"), which is intended to ensure that Nasdaq listing requirements are satisfied and (c) amend certain terms of IMARA’s equity incentive plans as described in the Merger Agreement.

Each of IMARA and Enliven has made customary representations, warranties and has agreed to customary covenants in the Merger Agreement.

Consummation of the Merger is subject to specified closing conditions.

The Merger Agreement contains certain termination rights of each of IMARA and Enliven, including, subject to compliance with the applicable terms of the Merger Agreement, the right of each party to terminate the Merger Agreement to enter into a definitive agreement for a superior proposal.

Upon termination of the Merger Agreement under specified circumstances, IMARA may be required to pay Enliven a termination fee of $ 3.0 million and Enliven may be required to pay IMARA a termination fee of $ 9.75 million.

In certain specified circumstances, Enliven may be required to pay IMARA a termination fee of $ 3.0 million.

Concurrently with the execution and delivery of the Merger Agreement, Enliven entered into a common stock purchase agreement (the "Purchase Agreement") with certain new and existing Enliven investors, pursuant to which Enliven agreed to issue and sell to such investors, and such investors agreed to purchase from Enliven, shares of Enliven common stock for an aggregate purchase price of approximately $ 164.5 million (the "Financing Transaction").

The closing of the Financing Transaction is conditioned on the satisfaction or waiver of the closing conditions to the Merger as set forth in the Merger Agreement and other customary closing conditions, and is expected to occur immediately prior to the closing of the Merger, in accordance with the terms of the Purchase Agreement.

The shares of Enliven common stock to be issued in connection with the Financing Transaction will be converted into the right to receive a number of shares of IMARA common stock in the Merger in accordance with the Exchange Ratio (the "Converted Financing Stock") (subject to the payment of cash in lieu of fractional shares and after giving effect to the Reverse Stock Split).

At or prior to the Effective Time, IMARA will enter into a Contingent Value Rights Agreement (the "CVR Agreement") with a rights agent ("Rights Agent") pursuant to which IMARA’s preMerger common stockholders will receive one contingent value right ( each, a "CVR") for each outstanding share of IMARA common stock held by such stockholder on such date.

Each CVR will represent the contractual right to receive payments upon the occurrence of certain events related to the Asset Sale or a potential sale or license involving IMR-261, in each case as set forth in, and subject to and in accordance with the terms and conditions of, the CVR Agreement.

The contingent payments under the CVR Agreement, if they become payable, will become payable to the Rights Agent for subsequent distribution to the holders of the CVRs.

In the event that no such proceeds are received, holders of the CVRs will not receive any payment pursuant to the CVR Agreement.

There can be no assurance that holders of CVRs will receive any amounts with respect thereto.

The right to the contingent payments contemplated by the CVR Agreement is a contractual right only and will not be transferable, except in the limited circumstances specified in the CVR Agreement.

The CVRs will not be evidenced by a certificate or any other instrument and will not be registered with the SEC.

The CVRs will not have any voting or dividend rights and will not represent any equity or ownership interest in IMARA or any of its affiliates.

No interest will accrue on any amounts payable in respect of the CVRs.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements