imra-10q_20200630.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________

Commission File Number: 001-39247

 

IMARA INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

81-1523849

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

116 Huntington Avenue, 6th Floor

Boston, Massachusetts

02116

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (617) 206-2020

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common stock, par value $0.001 per share

 

IMRA

 

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ☒    No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes  ☒    No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

  

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ☐    No  

As of July 31, 2020, the registrant had 17,324,736 shares of common stock, $0.001 par value per share, outstanding.

 



CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

The forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to those described under the “Risk Factors” section and include, among other things:

 

the impact of the ongoing COVID-19 pandemic and our response to it;

 

the initiation, timing, progress and results of our current and future preclinical studies and clinical trials, including our ongoing Phase 2a and OLE clinical trials of IMR-687 in SCD and our recently initiated Phase 2b clinical trials of IMR-687 in SCD and β-thalassemia;

 

our development plans regarding HFpEF;

 

our estimates regarding expenses, future revenue, timing of any future revenue, capital requirements and need for additional financing;

 

our plans to develop and, if approved, subsequently commercialize IMR-687 and any other product candidates, including in combination with other drugs and therapies;

 

the timing of and our ability to submit applications for, obtain and maintain regulatory approvals for IMR-687 and any other product candidates we may identify and pursue;

 

our expectations regarding our ability to fund our operating expenses and capital expenditure requirements with our cash, cash equivalents and investments;

 

the potential advantages or differentiating features of IMR-687 and any other product candidates we may identify and pursue;

 

the rate and degree of market acceptance and clinical utility of IMR-687 and any other product candidates we may identify and pursue;

 

our estimates regarding the potential market opportunity for IMR-687 and any other product candidates we may identify and pursue;

 

our commercialization, marketing and manufacturing capabilities and strategy;

 

our expectations regarding our ability to obtain and maintain intellectual property protection for IMR-687 and any other product candidates we may identify and pursue;

 

our ability to identify additional products, product candidates or technologies with significant commercial potential that are consistent with our commercial objectives;

 

the impact of government laws and regulations;

 

our competitive position and expectations regarding developments and projections relating to our competitors and any competing therapies that are or become available;

 

our ability to maintain and establish collaborations or obtain additional funding; and

 

our expectations regarding the time during which we will be an emerging growth company under the JOBS Act.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information.

We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q, particularly in the “Risk Factors” section, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures or investments we may make or enter into.

 

 


Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

1

Item 1.

Financial Statements (Unaudited)

1

 

Condensed Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019

1

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2020 and 2019

2

 

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Three and Six Months Ended June 30, 2020 and 2019

3

 

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2020 and 2019

5

 

Notes to Unaudited Condensed Consolidated Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

17

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

28

Item 4.

Controls and Procedures

28

PART II.

OTHER INFORMATION

29

Item 1A.

Risk Factors

29

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

73

Item 6.

Exhibits

74

Signatures

75

 

 

 

i


PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

IMARA INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)
(Unaudited)

 

 

 

June 30,

2020

 

 

December 31,

2019

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

54,651

 

 

$

4,936

 

Short-term investments

 

 

51,624

 

 

 

23,971

 

Prepaid expenses and other current assets

 

 

4,318

 

 

 

1,717

 

Total current assets

 

 

110,593

 

 

 

30,624

 

Property and equipment, net

 

400

 

 

 

442

 

Other assets

 

324

 

 

 

2,232

 

Total assets

 

$

111,317

 

 

$

33,298

 

LIABILITIES, CONVERTIBLE PREFERRED STOCK & STOCKHOLDERS’

   EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,669

 

 

$

1,658

 

Accrued expenses and other current liabilities

 

 

3,179

 

 

 

2,540

 

Total current liabilities

 

 

4,848

 

 

 

4,198

 

Deferred rent

 

173

 

 

 

184

 

Total liabilities

 

 

5,021

 

 

 

4,382

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

 

 

Convertible preferred stock, $0.001 par value per share; no shares authorized, issued

   or outstanding as of June 30, 2020; 70,378,661 shares authorized and 60,533,313

   shares issued and outstanding as of December 31, 2019

 

 

 

 

 

77,764

 

Stockholders’ equity (deficit):

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value per share; 10,000,000 shares authorized; no shares

   issued or outstanding as of June 30, 2020; no shares authorized, issued or

   outstanding as of December 31, 2019

 

 

 

 

 

 

Common stock, $0.001 par value per share; 200,000,000 and 100,000,000 shares

   authorized as of June 30, 2020 and December 31, 2019, respectively; 17,324,736

   and 702,510 shares issued and outstanding as of June 30, 2020 and December 31,

   2019, respectively

 

18

 

 

 

1

 

Additional paid-in capital

 

 

178,402

 

 

 

5,872

 

Accumulated other comprehensive income

 

 

48

 

 

 

32

 

Accumulated deficit

 

 

(72,172

)

 

 

(54,753

)

Total stockholders’ equity (deficit)

 

 

106,296

 

 

 

(48,848

)

Total liabilities, convertible preferred stock and stockholders’ equity (deficit)

 

$

111,317

 

 

$

33,298

 

 

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

1


IMARA INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share data)
(Unaudited)

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

7,869

 

 

$

4,366

 

 

$

13,662

 

 

$

7,926

 

General and administrative

 

 

2,433

 

 

 

1,191

 

 

 

3,992

 

 

 

1,825

 

Total operating expenses

 

 

10,302

 

 

 

5,557

 

 

 

17,654

 

 

 

9,751

 

Loss from operations

 

 

(10,302

)

 

 

(5,557

)

 

 

(17,654

)

 

 

(9,751

)

Total other income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

110

 

 

 

160

 

 

 

242

 

 

 

160

 

Other expense

 

 

(12

)

 

 

 

 

 

(7

)

 

 

 

Total other income (net)

 

 

98

 

 

 

160

 

 

 

235

 

 

 

160

 

Net loss

 

$

(10,204

)

 

$

(5,397

)

 

$

(17,419

)

 

$

(9,591

)

Accretion of Series B convertible preferred stock

 

 

 

 

 

 

 

 

(7,858

)

 

 

 

Net loss attributable to common stockholders—basic and diluted

 

$

(10,204

)

 

$

(5,397

)

 

$

(25,277

)

 

$

(9,591

)

Weighted-average common shares outstanding—basic and diluted

 

 

17,194,795

 

 

 

702,510

 

 

 

10,344,077

 

 

 

702,510

 

Net loss per share attributable to common stockholders—basic and

   diluted

 

$

(0.59

)

 

$

(7.68

)

 

$

(2.44

)

 

$

(13.65

)

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(10,204

)

 

$

(5,397

)

 

$

(17,419

)

 

$

(9,591

)

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains on investments (net)

 

 

64

 

 

 

 

 

 

16

 

 

 

 

Comprehensive loss

 

$

(10,140

)

 

$

(5,397

)

 

$

(17,403

)

 

$

(9,591

)

 

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

 

2


 

IMARA INC.

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands, except share and per share data)
(Unaudited)

 

 

 

CONVERTIBLE PREFERRED STOCK

 

 

 

COMMON

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SERIES SEED

$0.001 PAR

VALUE

 

 

SERIES A

$0.001 PAR

VALUE

 

 

SERIES B $0.001

PAR VALUE

 

 

 

STOCK

$0.001 PAR

VALUE

 

 

ADDITIONAL

PAID-IN

 

 

ACCUMULATED

OTHER

COMPREHENSIVE

 

 

ACCUMULATED

 

 

TOTAL

STOCKHOLDERS’

EQUITY

 

 

 

SHARES

 

 

AMOUNT

 

 

SHARES

 

 

AMOUNT

 

 

SHARES

 

 

AMOUNT

 

 

 

SHARES

 

 

AMOUNT

 

 

CAPITAL

 

 

INCOME (LOSS)

 

 

DEFICIT

 

 

(DEFICIT)

 

Balance at December 31, 2018

 

 

2,712,960

 

 

$

1,460

 

 

 

31,499,040

 

 

$

30,729

 

 

 

 

 

$

 

 

 

 

702,510

 

 

$

1

 

 

$

4,973

 

 

$

 

 

$

(31,290

)

 

$

(26,316

)

Issuance of Series B convertible

   preferred stock, net of issuance

   costs of $274

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25,316,663

 

 

 

43,825

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

   expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

95

 

 

 

 

 

 

 

 

 

95

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,194

)

 

 

(4,194

)

Balance at March 31, 2019

 

 

2,712,960

 

 

$

1,460

 

 

 

31,499,040

 

 

$

30,729

 

 

 

25,316,663

 

 

$

43,825

 

 

 

 

702,510

 

 

$

1

 

 

$

5,068

 

 

$

 

 

$

(35,484

)

 

$

(30,415

)

Issuance of Series B convertible

   preferred stock, net of issuance

   costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,004,650

 

 

 

1,750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

   expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

197

 

 

 

 

 

 

 

 

 

197

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,397

)

 

 

(5,397

)

Balance at June 30, 2019

 

 

2,712,960

 

 

$

1,460

 

 

 

31,499,040

 

 

$

30,729

 

 

 

26,321,313

 

 

$

45,575

 

 

 

 

702,510

 

 

$

1

 

 

$

5,265

 

 

$

 

 

$

(40,881

)

 

$

(35,615

)

3


 

 

 

 

CONVERTIBLE PREFERRED STOCK

 

 

 

COMMON

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SERIES SEED

$0.001 PAR

VALUE

 

 

SERIES A

$0.001 PAR

VALUE

 

 

SERIES B $0.001

PAR VALUE

 

 

 

STOCK

$0.001 PAR

VALUE

 

 

ADDITIONAL

PAID-IN

 

 

ACCUMULATED

OTHER

COMPREHENSIVE

 

 

ACCUMULATED

 

 

TOTAL

STOCKHOLDERS’

EQUITY

 

 

 

SHARES

 

 

AMOUNT

 

 

SHARES

 

 

AMOUNT

 

 

SHARES

 

 

AMOUNT

 

 

 

SHARES

 

 

AMOUNT

 

 

CAPITAL

 

 

INCOME (LOSS)

 

 

DEFICIT

 

 

(DEFICIT)

 

Balance at December 31, 2019

 

 

2,712,960

 

 

$

1,460

 

 

 

31,499,040

 

 

$

30,729

 

 

 

26,321,313

 

 

$

45,575

 

 

 

 

702,510

 

 

$

1

 

 

$

5,872

 

 

$

32

 

 

$

(54,753

)

 

$

(48,848

)

Issuance of Series B

   convertible preferred

   stock, net of issuance

   costs of $20 and beneficial

   conversion charge

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,845,348

 

 

 

9,271

 

 

 

 

 

 

 

 

 

 

7,858

 

 

 

 

 

 

 

 

 

7,858

 

Accretion of Series B

   converted preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,858

 

 

 

 

 

 

 

 

 

 

(7,858

)

 

 

 

 

 

 

 

 

(7,858

)

Conversion of convertible

   preferred stock into

   common stock

 

 

(2,712,960

)

 

 

(1,460

)

 

 

(31,499,040

)

 

 

(30,729

)

 

 

(36,166,661

)

 

 

(62,704

)

 

 

 

11,172,955

 

 

 

11

 

 

 

94,882

 

 

 

 

 

 

 

 

 

94,893

 

Initial public offering, net of

   underwriting discounts,

   commissions and offering

   costs of $3,885

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,700,000

 

 

 

5

 

 

 

66,047

 

 

 

 

 

 

 

 

 

66,052

 

Stock-based compensation

   expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

360

 

 

 

 

 

 

 

 

 

360

 

Unrealized loss on

   investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(48

)

 

 

 

 

 

(48

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,215

)

 

 

(7,215

)

Balance at March 31, 2020

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

16,575,465

 

 

$

17

 

 

$

167,161

 

 

$

(16

)

 

$

(61,968

)

 

$

105,194

 

Initial public offering, net of

   underwriting discounts,

   commissions and offering

   costs of $17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

705,000

 

 

 

1

 

 

 

10,473

 

 

 

 

 

 

 

 

 

10,474

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

44,271

 

 

 

 

 

 

218

 

 

 

 

 

 

 

 

 

218

 

Stock-based compensation

   expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

550

 

 

 

 

 

 

 

 

 

550

 

Unrealized gain on

   investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

64

 

 

 

 

 

 

64

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,204

)

 

 

(10,204

)

Balance at June 30, 2020

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

17,324,736

 

 

$

18

 

 

$

178,402

 

 

$

48

 

 

$

(72,172

)

 

$

106,296

 

 

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

 

4


 

IMARA INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

 

 

 

Six Months Ended

June 30,

 

 

 

2020

 

 

2019

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(17,419

)

 

$

(9,591

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

910

 

 

 

292

 

Depreciation expense

 

 

49

 

 

 

 

Amortization and accretion on investments

 

 

(8

)

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

(2,601

)

 

 

(114

)

Accounts payable

 

 

(112

)

 

 

764

 

Accrued expenses and other current liabilities

 

 

469

 

 

 

1,062

 

Deferred rent

 

 

(11

)

 

 

32

 

Other assets

 

 

(60

)

 

 

 

Net cash used in operating activities

 

 

(18,783

)

 

 

(7,555

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Proceeds from maturities and sales of short-term investments

 

 

14,200

 

 

 

 

Purchases of short-term investments

 

 

(41,829

)

 

 

 

Purchases of property and equipment

 

 

(22

)

 

 

(81

)

Net cash used in investing activities

 

 

(27,651

)

 

 

(81

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of Series B convertible preferred stock, net of issuance costs

 

 

17,150

 

 

 

45,575

 

Proceeds from initial public offering, net of underwriting discounts and commissions

 

 

80,427

 

 

 

 

Payment of issuance costs

 

 

(1,646

)

 

 

 

Proceeds from exercise of options

 

 

218

 

 

 

 

Net cash provided by financing activities

 

 

96,149

 

 

 

45,575

 

Net increase in cash, cash equivalents and restricted cash

 

$

49,715

 

 

$

37,939

 

Cash, cash equivalents and restricted cash, beginning of period

 

$

5,024

 

 

$

7,382

 

Cash, cash equivalents and restricted cash, end of period

 

$

54,739

 

 

$

45,321

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Conversion of convertible preferred stock into common stock

 

$

94,893

 

 

$

 

Accretion of redeemable convertible preferred stock to redemption value

 

$

7,858

 

 

$

 

Reclassification of deferred offering costs from other assets to additional paid-in capital

 

$

2,144

 

 

$

 

Deferred offering costs included in accounts payable and accrued expenses

 

$

369

 

 

$

55

 

Property and equipment purchases included in accrued expenses

 

$

15

 

 

$

 

Unrealized gain on investments

 

$

16

 

 

$

 

 

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

June 30,

 

 

 

2020

 

 

2019

 

Cash and cash equivalents

 

$

54,651

 

 

$

45,233

 

Restricted cash (included in other assets)

 

 

88

 

 

 

88

 

Total cash, cash equivalents and restricted cash

 

$

54,739

 

 

$

45,321

 

 

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

5


 

IMARA INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Nature of the Business

IMARA Inc. (“IMARA” or the “Company”) is a clinical-stage biopharmaceutical company dedicated to developing and commercializing novel therapeutics to treat patients suffering from rare inherited genetic disorders of hemoglobin, known as hemoglobinopathies, which have significant unmet medical need. 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. Such risks and uncertainties may be amplified by the COVID-19 pandemic and its impact on the Company’s business and the global economy. The Company’s sole product candidate currently under development, IMR-687, as well as any other product candidates the Company may develop, 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.

In February 2020, the Company effected a 1-for-6.299 reverse stock split of the Company’s issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each of the Company’s outstanding series of preferred stock. All share and per share amounts in the unaudited condensed consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to the reverse stock split, including reclassifying an amount equal to the change in par value of common stock to additional paid-in capital.

On February 25, 2020, the Company issued and sold 1,562,994‬ shares of Series B convertible preferred stock (“Series B Preferred Stock”), at a price of $10.9722 per share, upon a waiver of specified milestone conditions from the holders of a majority of the shares then held by holders of Series B Preferred Stock, and raised approximately $17.1 million in net proceeds after deducting less than $0.1 million of issuance costs.

On March 16, 2020, the Company completed an initial public offering (“IPO”) of its common stock and issued and sold 4,700,000 shares of common stock at a public offering price of $16.00 per share, resulting in gross proceeds of $75.2 million. On April 13, 2020, the Company issued and sold an additional 705,000 shares of common stock pursuant to the exercise of the underwriters’ option to purchase additional shares for aggregate gross proceeds of $11.3 million. Inclusive of the exercise by the underwriters of their option to purchase additional shares, the Company received approximately $76.5 million in net proceeds from the IPO after deducting $10.0 million of underwriting discounts and commissions and offering expenses.

Upon the closing of the IPO, all 70,378,661 shares of outstanding preferred stock automatically converted into 11,172,955 shares of common stock. Upon conversion of the convertible preferred stock, the Company reclassified the carrying value of the convertible preferred stock to common stock and additional paid-in capital.

Liquidity

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. As of June 30, 2020, the Company had cash, cash equivalents, and investments of $106.3 million and an accumulated deficit of approximately $72.2 million. The Company expects its operating losses and negative operating cash flows to continue into the foreseeable future as it continues to expand its research and development efforts.

The Company believes its cash, cash equivalents and investments as of June 30, 2020 will be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the date of filing this Quarterly Report on Form 10-Q. The Company will need additional funding to support its planned operating activities. There can be no assurances, however, that the current operating plan will be achieved or that additional funding will be available on terms acceptable to the Company, or at all. If the Company is unable to obtain sufficient funding, it could be required to delay its development efforts, limit activities and reduce research and development costs, which could adversely affect its business prospects.

6


 

2. Summary of Significant Accounting Policies

Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and as amended by Accounting Standards Updates of the Financial Accounting Standards Board (“FASB”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2019 and notes thereto, included in the Company’s Registration Statement on Form S-1/A, filed with the Securities Exchange Commission (“SEC”) on March 10, 2020. 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, 2020, the results of its operations for the three and six months ended June 30, 2020 and 2019 and cash flows for the six months ended June 30, 2020 and 2019. Such adjustments are of a normal and recurring nature. The results for the three and six months ended June 30, 2020 are not necessarily indicative of the results for the year ending December 31, 2020, or for any future period.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements of the Company include the accounts of its wholly owned subsidiaries, IMARA Security Corporation and IMARA E.U. Limited. All intercompany transactions and balances have been eliminated in consolidation.

Summary of Significant Accounting Policies

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, 2019 included in the Company’s Registration Statement on Form S-1/A filed with the SEC on March 10, 2020. There have been no material changes in the Company’s significant accounting policies during the three and six months ended June 30, 2020.

Use of Estimates

The preparation of unaudited condensed consolidated fi