As filed with the Securities and Exchange Commission on November 13, 2024.
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
enGene Holdings Inc.
(Exact name of registrant as specified in its charter)
|
|
|
British Columbia, Canada |
|
Not Applicable |
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification Number) |
4868 Rue Levy, Suite 220
Saint-Laurent, QC H4R 2P1
(514) 332-4888
(Address, including zip code, and telephone number, including area code,
of registrant’s principal executive offices)
C T Corporation System
155 Federal Street
Suite 700
Boston, Massachusetts 02110
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
|
|
|
Howard A. Kenny, Esq. Julio E. Vega, Esq. Morgan, Lewis & Bockius LLP 101 Park Avenue New York, New York 10178 (212) 309-6000 |
|
Ronald Cooper Lee G. Giguere, Esq. enGene Holdings Inc. 4868 Rue Levy, Suite 220
Saint-Laurent, QC H4R 2P1 (514) 332-4888 |
Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
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 7(a)(2)(B) of the Securities Act. ☒
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
STATEMENT PURSUANT TO RULE 429
Pursuant to Rule 429 under the Securities Act of 1933, the prospectus included in this registration statement on Form S-3 (the “Registration Statement”) of enGene Holdings Inc. (the “Company” or “enGene”) is a combined prospectus relating to (i) offer and sale from time to time by certain selling securityholders named in this prospectus (the “October 2024 PIPE Selling Holders”) of 6,758,311 common shares, without par value (“Common Shares”) of the Company which are registered hereby (the “October 2024 PIPE Shares”) and (ii) the Existing Registered Securities (as defined below) which were previously registered on a registration statement on Form S-1 (File No. 333- 275700) filed with the Securities and Exchange Commission (the “SEC”) on November 22, 2023, as amended by Amendment No. 1 to Form S-1 filed with the SEC on December 15, 2023, as further amended by Amendment No. 2 to Form S-1 filed with the SEC on February 27, 2024, and as declared effective by the SEC on March 5, 2024 (as so amended and supplemented, the “Existing Registration Statement”).
The Existing Registration Statement registered the offer and sale from time to time by the selling securityholders named therein (the “Initial Selling Holders”) of (a) certain securities issued by the Company on October 31, 2023 in connection with the consummation of the business combination among the Company, enGene Inc. and Forbion European Acquisition Corp (the “Business Combination”), which securities consisted of:
(i) 6,462,016 Common Shares and 2,783,949 warrants to purchase Common Shares (“Warrants”) issued to certain Initial Selling Holders pursuant to a PIPE financing entered into in connection with the Business Combination;
(ii) 14,295,943 Common Shares and 3,602,640 Warrants issued to certain Initial Selling Holders party to a registration rights agreement entered into in connection with the Business Combination; and
(iii) 6,386,589 Common Shares that may be obtained by certain Initial Selling Holders upon the exercise of the Warrants at an exercise price of $11.50 described in (i) and (ii) of this paragraph (the foregoing securities described in (i)-(iii) being the “Business Combination Registered Resale Securities”); and
(b) 20,000,000 Common Shares issued pursuant to an additional PIPE financing consummated in February 2024 (the “February 2024 PIPE Financing Shares”, and collectively with the Business Combination Registered Resale Securities, the “Existing Registered Resale Securities”).
The Existing Registration Statement additionally initially registered up to an aggregate of 9,794,498 Common Shares upon the exercise of a like number of Warrants consisting of (i) the 6,386,589 Warrants described above following their public resale by the Initial Selling Holders and (ii) 3,407,909 additional outstanding Warrants (the foregoing Common Shares described in (i)-(ii) being the “Existing Registered Primary Securities”, and together with the Existing Registered Resale Securities, the “Existing Registered Securities”). The Warrants have an exercise price of $11.50 per share, subject to adjustment.
Pursuant to Rule 429 under the Securities Act of 1933, this Registration Statement also constitutes a post-effective amendment to the Existing Registration Statement (the “Post-Effective Amendment”), and such Post-Effective Amendment shall become effective concurrently with the effectiveness of this Registration Statement in accordance with Section 8(c) of the Securities Act. In addition to combining the prospectuses included in the Existing Registration Statement and this Registration Statement, the Post-Effective Amendment is being filed on Form S-3 by the Company to (i) convert the Existing Registration Statement into a registration statement on Form S-3, (ii) include updated information reflecting the exercise of certain Warrants on or before October 31, 2024, and (iii) include updated information regarding the Initial Selling Holders named in the Existing Registration Statement, including a reduction in the aggregate number of Common Shares and Warrants being offered by the Initial Selling Holders under the Existing Registration Statement to 40,218,872 Common Shares and 6,289,198 Warrants.
All applicable filing fees payable in connection with the October 2024 PIPE Shares are being paid concurrently with the filing of this Registration Statement. All applicable filing fees payable in connection with the Existing Registered Securities covered by the Existing Registration Statement were paid by us at the time of the filing of the Existing Registration Statement.
The information in this prospectus is not complete and may be changed or supplemented. No securities described in this prospectus can be sold until the registration statement that we filed to cover the securities has become effective under the rules of the Securities and Exchange Commission. This prospectus is not an offer to sell the securities, nor is it a solicitation of an offer to buy the securities in any state where an offer or sale of the securities is not permitted.
SUBJECT TO COMPLETION, DATED NOVEMBER 13, 2024
|
|
|
PROSPECTUS |
|
|
enGene Holdings Inc. |
Up to 46,977,183 Common Shares and 6,289,198 Warrants to be Offered and Sold by the Selling Holders
and
Up to 8,511,968 Common Shares Issuable Upon Exercise of Warrants
This prospectus relates to the offer and sale from time to time by the selling securityholders named in this prospectus (the “Selling Holders”) of up to: (i) 5,693,002 of the common shares, without par value (“Common Shares” or “enGene Common Shares”) of enGene Holdings Inc. (the “Company”, or “enGene” or “us”) and 2,686,558 warrants to purchase Common Shares (the “Warrants” or “enGene Warrants”) issued for the consideration described in the succeeding paragraph below in connection with the 2023 PIPE Financing (as defined herein) to certain investors (the “2023 PIPE Investors”) including Forbion Growth Sponsor FEAC I B.V., a private limited liability company incorporated in The Netherlands (“FEAC Sponsor”) or an affiliate thereof; (ii) 13,237,012 Common Shares and 3,602,640 Warrants held by certain Selling Holders party to the Registration Rights Agreement (as defined below), including FEAC Sponsor or an affiliate thereof, (iii) 6,289,198 Common Shares that may be obtained by the Selling Holders upon the exercise of the Warrants at an exercise price of $11.50 described in (i) and (ii) above, (iv) 14,902,269 of our Common Shares issued for the consideration described below in connection with the February 2024 PIPE Financing (as defined below) and (v) 6,758,311 of our Common Shares issued for the consideration described below in connection with the October 2024 PIPE Financing (as defined below). See “Selling Holders” for more information about the Selling Holders, including with respect to their acquisition of the securities offered hereby.
On May 16, 2023, certain investors entered into subscription agreements with us and Forbion European Acquisition Corp. (“FEAC”) pursuant to which they purchased a total of 6,435,441 Common Shares and 2,702,791 Warrants for an aggregate consideration of $56,891,682 (the “2023 PIPE Financing”). As a result, each investor in the 2023 PIPE Financing received approximately 1.1595 Common Shares and approximately 0.4870 Warrants for each $10.25 of subscription price.
Prior to the execution and delivery of the Business Combination Agreement (as defined below), enGene agreed to certain modifications of existing convertible indebtedness in an aggregate principal amount of $18,400,000 (the “Amended 2022 Convertible Notes” and, together with the enGene warrants to be issued by enGene as consideration for such modifications, the “Amended 2022 Financing”). Concurrently with the execution and delivery of the Business Combination Agreement, enGene entered into agreements pursuant to which it issued new convertible indebtedness and enGene warrants (i) for cash in an aggregate principal amount of $30,000,000 and (ii) in repayment of certain outstanding indebtedness in an aggregate principal amount of $8,000,000 (collectively, the “2023 Convertible Notes” and, together with the enGene warrants purchased concurrently, the “2023 Financing”; the 2023 Financing together with the Amended 2022 Financing, the “Convertible Bridge Financing”).
Selling Holders party to the Registration Rights Agreement, dated October 31, 2023, by and among the Company, FEAC and each of the Holders identified therein (the “Registration Rights Agreement”) hold securities registered for resale hereunder as follows: (i) 4,189,716 Common Shares and 2,204,355 Warrants obtained in the Business Combination in respect of the Convertible Bridge Financing of enGene Inc. for the same price per Common Share and Warrant as applicable to investors in the 2023 PIPE Financing described above, (ii) 1,373,496 Common Shares (the “FEAC Sponsor Shares”) corresponding to a like number of shares of FEAC Class B ordinary shares, $0.0001 par value (“FEAC Class B Shares) purchased by FEAC Sponsor for a nominal amount prior to FEAC’s initial public offering (the “FEAC IPO”), (iii) 731,619 Warrants (the “Private Warrants”) purchased by FEAC Sponsor at a price of $1.50 per Warrant, (iv) 2,000,000 Common Shares and 666,666 Warrants held by an affiliate of FEAC Sponsor and corresponding to a like number of securities purchased in FEAC’s IPO for a price of $10.00 for a unit consisting of one share and one-third of a Warrant, and (v) 5,673,800 Common Shares obtained in the Business Combination by certain former holders of the equity of enGene Inc. (the “Legacy enGene Investors”), based on the enGene Exchange Ratio (as defined herein) negotiated in connection with the Business Combination. As set out in more detail herein the enGene Exchange Ratio was based on a reference equity value of enGene Inc. of $90.0 million and a reference price per Common Share of $10.25. See “Information Related to Offered Securities”.
On February 20, 2024, we completed the private placement of 20,000,000 Common Shares, at a price of $10.00 per share (the “February 2024 PIPE Financing”) with certain institutional investors pursuant to subscription agreements entered into on February 13, 2024 (collectively, the “February 2024 Subscription Agreements”). Investors in the February 2024 PIPE Financing purchased a total of 20,000,000 Common Shares for an aggregate consideration of $200,000,000, or $10.00 per Common Share.
On October 29, 2024, we completed the private placement of 6,758,311 Common Shares, at a price of $8.90 per share (the “October 2024 PIPE Financing”) with certain institutional investors pursuant to subscription agreements entered into on October 25, 2024 (collectively, the “October 2024 Subscription Agreements”, and together with the February 2024 Subscription Agreements, the “2024 PIPE Subscription Agreements”). Investors in the October 2024 PIPE Financing purchased a total of 6,758,311 Common Shares for an aggregate consideration of $60,148,968, or $8.90 per Common Share.
Pursuant to the 2024 Subscription Agreements, we agreed to register for resale the Common Shares collectively issued pursuant thereto on the registration statement of which this prospectus is part, and to use commercially reasonable efforts to have such registration statement declared effective and kept effective for the periods set forth in the respective 2024 Subscription Agreements.
This prospectus also relates to the issuance by us of up to an aggregate of 8,511,968 Common Shares upon the exercise of a like number of Warrants consisting of (i) the 6,289,198 Warrants described above following their public resale by the Selling Holders and (ii) 2,222,770 additional outstanding Warrants. The Warrants have an exercise price of $11.50 per share.
We will not receive any of the proceeds from the sale of the securities by the Selling Holders. The aggregate proceeds to the Selling Holders will be the sale price of the securities less any discounts and commissions borne by the Selling Holders.
We will receive proceeds from Warrants exercised in the event that such Warrants are exercised for cash, which amount of aggregate proceeds could be up to approximately $97.9 million, assuming the exercise in full of all of the Warrants for cash. There is no assurance that Warrants will be and/or remain in the money prior to their expiration or that the holders of Warrants will elect to exercise any or all of their Warrants for cash. We believe the likelihood that these holders will exercise their Warrants, and therefore any cash proceeds that we may receive in relation to the exercise thereof, will depend on the trading price of our Common Shares. If the market price for our Common Shares is less than the exercise price of Warrants, we believe the holders of Warrants will be unlikely to exercise them. See “Risk Factors” and “Use of Proceeds.”
The Common Shares and Warrants being offered for resale in this prospectus represent approximately 92.2% of our total outstanding Common Shares and approximately 73.9% of our outstanding Warrants, respectively, as of the date of this prospectus. The sale of all the securities being offered in this prospectus could result in a significant decline in the public trading price of our Common Shares and Warrants. Despite such a decline in the public trading prices, the Selling Holders may still experience a positive rate of return on the securities they purchased due to the differences in the trading price and the purchase prices at which they purchased the securities as described above. See “Risk Factors.”
Our registration of the securities covered by this prospectus does not mean that either we or the Selling Holders will issue, offer or sell, as applicable, any of the securities. The Selling Holders may offer and sell the securities covered by this prospectus in a number of different ways and at varying prices. We provide more information in the section entitled “Plan of Distribution.”
Certain Selling Holders acquired their securities through more than one of the above. See “Selling Holders.” This prospectus provides you with a general description of such securities and the general manner in which the Selling Holders may offer or sell the securities. More specific terms of any securities that the Selling Holders may offer or sell may be provided in a prospectus supplement that describes, among other things, the specific amounts and prices of the securities being offered and the terms of the offering. The prospectus supplement may also add, update or change information contained in this prospectus.
You should read this prospectus and any prospectus supplement or amendment carefully before you invest in our securities.
Our Common Shares and Warrants are listed on the Nasdaq Capital Market (“Nasdaq”) under the symbols “ENGN” and “ENGNW,” respectively. On November 12, 2024, the closing price of our common shares was $8.52 and the closing price for our warrants was $1.35.
Investing in our securities involves significant risks. You should carefully read this prospectus, any applicable prospectus supplement and any related free writing prospectus, as well as the documents incorporated by reference herein and therein, before you invest in any of our securities. See “Risk Factors” beginning on page 9 of this prospectus.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2024
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we have filed with the Securities and Exchange Commission (the “SEC”) using a “shelf” registration process under the Securities Act of 1933, as amended (the “Securities Act”). Under this shelf registration process, we and the Selling Holders may, from time to time, issue, offer and sell, as applicable, any combination of the securities described in this prospectus in one or more offerings. The Selling Holders may use the shelf registration statement to sell up to (i) an aggregate of 46,977,183 Common Shares and up to 6,289,198 Warrants from time to time through any means described in the section entitled “Plan of Distribution.” We will not receive any proceeds from the sale by such Selling Holders of the securities offered by them described in this prospectus. More specific terms of any securities that the Selling Holders offer and sell may be provided in a prospectus supplement that describes, among other things, the specific amounts and prices of the Common Shares and/or Warrants being offered and the terms of the offering. We may use the shelf registration statement to issue up to an aggregate of 8,511,968 Common Shares upon exercise of the Warrants. We will receive proceeds from the exercise of any Warrants for cash.
We may also provide a prospectus supplement or post-effective amendment to the registration statement to add information to, or update or change information contained in or incorporated by reference into, this prospectus. You should read both this prospectus and any applicable prospectus supplement or post-effective amendment to the registration statement together with the additional information to which we refer you in the sections of this prospectus entitled “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference.”
Neither we nor the Selling Holders have authorized anyone to provide any information or to make any representations other than those contained in this prospectus, any accompanying prospectus supplement or any free writing prospectus we have prepared. We and the Selling Holders take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the securities offered hereby and only under circumstances and in jurisdictions where it is lawful to do so. No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus, any applicable prospectus supplement or any related free writing prospectus. This prospectus is not an offer to sell securities, and it is not soliciting an offer to buy securities, in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus or any prospectus supplement is accurate only as of the date on the front of those documents only, regardless of the time of delivery of this prospectus or any applicable prospectus supplement, or any sale of a security. Our business, financial condition, results of operations and prospects may have changed since those dates.
This prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described below under “Where You Can Find More Information.”
Unless stated otherwise or as the context otherwise requires, all references to dollar amounts in this prospectus and any prospectus supplement are references to United States dollars. References to “$” or “US$” are to United States dollars and references to “C$” are to Canadian dollars.
Unless the context indicates otherwise, references to the terms “enGene,” the “Company,” the “Registrant,” “we,” “us” and “our” refer to enGene Holdings Inc. and its subsidiaries. References to the terms “enGene Inc.” refer to enGene Inc. and its consolidated subsidiary prior to the Business Combination.
PROSPECTUS SUMMARY
This summary highlights selected information contained elsewhere in this prospectus or incorporated by reference into this prospectus. This summary does not contain all the information that you should consider before investing in our securities. Before investing in our securities, you should carefully read this entire prospectus, any applicable prospectus supplement and any related free writing prospectus, including the information under the caption “Risk Factors” herein and any applicable prospectus supplement and under similar headings in the other documents that are incorporated by reference into this prospectus, including our most recent Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q on file with the SEC and any amendments thereto. You should also carefully read the other information incorporated by reference into this prospectus, including our financial statements and the related notes, and the exhibits to the registration statement of which this prospectus is a part.
The Company
We are a clinical-stage biotechnology company focused on developing gene therapies to improve the lives of patients. We are developing non-viral gene therapies based on our novel and proprietary dually derived chitosan, or “DDX”, gene delivery platform, which allows localized delivery of multiple gene cargos directly to mucosal tissues and other organs. We believe our DDX platform, with its broad tissue and disease application, has the potential to take gene therapy beyond rare genetic diseases into oncology and other underserved therapeutic areas. We have established integrated capabilities with this platform to support the clinical development and potential commercialization of our gene therapies.
Our lead product candidate, detalimogene voraplasmid, (also known as detalimogene, and previously EG-70), which is comprised of three gene cargos delivered via our proprietary DDX platform, is a therapy designed to generate a local immune reaction in proximity to tumors. We believe this enables the immune system to reduce or clear the tumor and develop memory to resist recurrence. Because this treatment does not need to deliver the therapeutic gene directly into tumor cells, it is applicable to many tumor types. We are currently developing detalimogene as a monotherapy to treat non-muscle invasive bladder cancer (“NMIBC”) with carcinoma in situ (“Cis”) in patients that have been unresponsive to treatment with Bacillus Calmette-Guerin, or “BCG,” or what is referred to as “BCG-unresponsive NMIBC with Cis.”
In NMIBC, carcinoma in situ, or Cis, is a flat, high-grade, sessile tumor that has a high likelihood of invading the deeper layers of the bladder wall. A “high-” or “low-” tumor risk describes the degree to which the tumor pathology appears more likely to grow quickly and invade non-cancerous tissue. NMIBC with Cis is typically initially treated with a solution containing the bacterium BCG that is instilled into the bladder multiple times over the course of several months. Despite this treatment, many of these cancers recur and are unresponsive to additional BCG, allowing the cancer to spread throughout and deeper into the bladder and often requiring surgical removal of the bladder (radical cystectomy). We believe BCG-unresponsive NMIBC with Cis is currently an underserved therapeutic segment with limited treatment options, and that there is a market opportunity for detalimogene as a monotherapy for this condition. While the potential market for detalimogene may not be limited to these patients, that is our current initial focus in working to bring detalimogene to market.
Business Combination
On October 31, 2023 (the “Closing Date”), the Company consummated a business combination (the “Business Combination”) with Forbion European Acquisition Corp., a Cayman Islands exempted company and a special purpose acquisition corporation (“FEAC”), and enGene Inc., a corporation incorporated under the laws of Canada (“enGene Inc.”), pursuant to the Business Combination Agreement, dated as of May 16, 2023 (as amended, the “Business Combination Agreement”). As a result of the Business Combination, the Company became a publicly traded company, with enGene Inc. as its subsidiary continuing the existing business operations. The Business Combination was completed pursuant to the Business Combination Agreement, through a series of transactions as described in the Business Combination Agreement, which is included as an exhibit to the registration statement of which this prospectus forms a part.
Stock Exchange Listing
Our common shares and warrants are listed for trading on Nasdaq under the symbols “ENGN” and “ENGNW”, respectively.
Corporate Information
enGene’s principal executive offices are located at 4868 Rue Levy, Suite 220, Saint-Laurent, QC H4R 2P1, Canada, and the Company’s phone number is (514) 332-4888. Our website address is www.engene.com. The information found on, that can be accessed
from or that is hyperlinked to our website is not part of nor incorporated by reference into this prospectus or the registration statement of which it is a part.
Emerging Growth Company and Smaller Reporting Company
Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the U.S. Securities Act of 1933, as amended (the “Securities Act”) declared effective or do not have a class of securities registered under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected to opt out of such extended transition period.
We will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of FEAC’s IPO, which occurred on December 14, 2021, (b) in which we have total annual revenue of at least $1.23 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common shares held by non-affiliates exceeds $250 million as of the prior April 30, or (2) our annual revenues exceed $100 million during such completed fiscal year and the market value of our common shares held by non-affiliates exceeds $700 million as of the prior April 30. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial reporting with that of other public companies difficult or impossible.
Recent Developments
On October 29, 2024, we completed the private placement of 6,758,311 Common Shares (the “Subscribed Shares”), at a price of $8.90 per share (the “October 2024 PIPE Financing”) with certain institutional investors (the “October 2024 PIPE Investors”) pursuant to subscription agreements entered into on October 24, 2024 (collectively, the “October 2024 Subscription Agreements”).
We intend to use the net proceeds from the October 2024 PIPE Financing of $56.3 million, which reflects the gross proceeds of approximately $60.1 million less offering expenses, to fund the continued development of detalimogene, pre-commercial activities, the potential expansion of the DDX platform, and for working capital and general corporate purposes.
Pursuant to the October 2024 Subscription Agreements, we agreed to file a registration statement on Form S-3 with the SEC within 20 business days after the closing of the October 2024 PIPE Financing for purposes of registering for resale the Subscribed Shares, to use commercially reasonable efforts to have such registration statement declared effective and kept effective for the periods set forth in the October 2024 Subscription Agreements.
The following table sets forth our cash and cash equivalents and our capitalization as of July 31, 2024 (i) on an actual basis and (ii) on an as adjusted basis giving effect to proceeds from the October 2024 PIPE Financing. You should read this table together with information incorporated by reference in this prospectus, including Management's Discussion and Analysis and our unaudited Condensed Consolidated Financial Statements, included within our Quarterly Report on Form 10-Q for the quarter ended July 31, 2024. Our consolidated balance sheet as of our fiscal year ended October 31, 2024, when issued, will reflect the October 2024 PIPE Financing.
|
|
|
|
|
|
|
|
|
|
|
(in thousands except for shares) |
|
|
|
July 31, 2024 |
|
|
July 31, 2024 |
|
|
|
Actual |
|
|
As adjusted |
|
Cash and cash equivalents |
|
$ |
257,678 |
|
|
$ |
313,996 |
|
|
|
|
|
|
|
|
Operating lease liabilities, current and long term |
|
$ |
1,902 |
|
|
$ |
1,902 |
|
Note payable, current and long term |
|
|
22,953 |
|
|
|
22,953 |
|
|
|
|
|
|
|
|
Shareholders' equity (deficit) |
|
|
|
|
|
|
Common shares, no par value; unlimited shares authorized,
44,215,577 and 50,973,888 shares issued and
outstanding on an actual and as adjusted basis,
respectively. |
|
|
453,479 |
|
|
|
509,797 |
|
Additional paid-in capital |
|
|
17,297 |
|
|
|
17,297 |
|
Accumulated other comprehensive loss |
|
|
(1,016 |
) |
|
|
(1,016 |
) |
Accumulated deficit |
|
|
(239,431 |
) |
|
|
(239,431 |
) |
Total shareholders’ equity (deficit) |
|
|
230,329 |
|
|
|
286,647 |
|
Total Capitalization |
|
$ |
255,184 |
|
|
$ |
311,502 |
|
THE OFFERING
|
|
|
Issuer |
|
enGene Holdings Inc. |
|
|
|
Common Shares offered by the Selling Holders |
|
Up to 46,977,183 Common Shares |
|
|
|
Warrants Offered by the Selling Holders |
|
Up to 6,289,198 Warrants |
|
|
|
Common Shares offered by the Company |
|
Up to 8,511,968 Common Shares issuable upon exercise of the Warrants. |
|
|
|
Common Shares outstanding prior to the Offering |
|
50,976,676 Common Shares (as of October 31, 2024). |
|
|
|
Common Shares outstanding assuming exercise of |
|
|
all Warrants |
|
59,488,644 (based on 8,511,968 Warrants to purchase Common Shares outstanding as of October 31, 2024). |
|
|
|
Use of Proceeds |
|
We will not receive any proceeds from the sale of Common Shares by the Selling Holders. We will receive up to an aggregate of approximately $97,887,632 from the exercise of the Warrants, assuming the exercise in full of all of the Warrants for cash. We expect to use the net proceeds from the exercise of the Warrants for general corporate purposes. There is no assurance that Warrants will be and/or remain in the money prior to their expiration or that the holders of Warrants will elect to exercise any or all of their Warrants for cash. We believe the likelihood that these holders will exercise their Warrants, and therefore any cash proceeds that we may receive in relation to the exercise thereof, will depend on the trading price of our Common Shares. If the market price for our Common Shares is less than the exercise price of Warrants, we believe the holders of Warrants will be unlikely to exercise them. If the market price for our Common Shares exceeds the exercise price of Warrants, we believe the holders of Warrants will be more likely to exercise them. See “Risk Factors” and “Use of Proceeds.” |
|
|
|
Redemption |
|
The Warrants are redeemable in certain circumstances. See “Description of Securities — Redeemable Warrants” for further discussion. |
|
|
|
Lock-up Agreements |
|
None of the Selling Holders are currently subject to any lock-up agreements that generally restricted the transfer of securities. |
|
|
|
Market for Common Shares and Warrants |
|
Common Shares and Warrants are currently traded on Nasdaq under the symbols “ENGN” and “ENGNW,” respectively. |
|
|
|
Risk Factors |
|
See “Risk Factors” and other information included in this prospectus for a discussion of factors you should consider before investing in our securities. |
For additional information concerning the offering, see “Plan of Distribution.”
INFORMATION RELATED TO OFFERED SECURITIES
This prospectus relates to the offer and sale from time to time by the Selling Holders of up to: (i) 5,693,002 of our Common Shares and 2,686,558 Warrants issued for the consideration described in the succeeding paragraph below in connection with the 2023 PIPE Financing to the 2023 PIPE Investors including FEAC Sponsor or an affiliate thereof; (ii) 13,237,012 Common Shares and 3,602,640 Warrants held by certain Selling Holders party to the Registration Rights Agreement, including FEAC Sponsor or an affiliate thereof, (iii) 6,289,198 Common Shares that may be obtained by the Selling Holders upon the exercise of the Warrants at an exercise price of $11.50 described in (i) and (ii) above, (iv) 14,902,269 of our Common Shares issued in connection with the February 2024 PIPE Financing and (v) 6,758,311 of our Common Shares issued in connection with the October 2024 PIPE Financing.
Investors in the 2023 PIPE Financing purchased a total of 6,435,441 Common Shares and 2,702,791 Warrants for an aggregate consideration of $56,891,682. As a result, each investor in the 2023 PIPE Financing received approximately 1.1595 Common Shares and approximately 0.4870 Warrants for each $10.25 of subscription price.
Selling Holders party to the Registration Rights Agreement hold securities registered for resale hereunder as follows: (i) 4,189,716 Common Shares and 2,204,355 Warrants obtained in the Business Combination in respect of the Convertible Bridge Financing of enGene Inc. for the same price per Common Share and Warrant as applicable to investors in the 2023 PIPE Financing described above, (ii) 1,373,496 FEAC Sponsor Shares corresponding to a like number of shares of FEAC Class B Shares purchased by FEAC Sponsor for a nominal amount prior to FEAC’s IPO, (iii) 731,619 Private Warrants purchased by FEAC Sponsor at a price of $1.50 per Warrant, (iv) 2,000,000 Common Shares and 666,666 Warrants held by an affiliate of FEAC Sponsor and corresponding to a like number of securities purchased in FEAC’s IPO for a price of $10.00 for a unit consisting of one share and one-third of a Warrant, and (v) 5,673,800 Common Shares obtained in the Business Combination by Legacy enGene Investors, based on the enGene Exchange Ratio (0.1804799669, which was the “enGene Exchange Ratio”, calculated in accordance with the terms of the Business Combination Agreement as a quotient obtained by dividing (a) the enGene per share value of $1.84991967 ((i) $96,543,554, which is the reference value of $90,000,000 plus the exercise value of enGene Inc.’s outstanding share-based awards, divided by (ii) 52,187,971, which is the sum of enGene Inc.’s outstanding common shares immediately prior to the closing of the Business Combination and the number of common shares issued or issuable upon exercise or settlement of enGene Inc.’s outstanding share-based awards and excludes any shares issuable for the conversion of enGene Inc.’s convertible debt) by (b) the reference price per Common Share of $10.25).
Investors in the February 2024 PIPE Financing initially purchased a total of 20,000,000 Common Shares for an aggregate consideration of $200,000,000, or $10.00 per share, of which 14,902,269 remain registered for resale hereunder.
Investors in the October 2024 PIPE Financing purchased a total of 6,758,311 Common Shares for an aggregate consideration of $60,148,967.90, or $8.90 per share.
See “Selling Holders” for more information about each Selling Holder, including with respect to each Selling Holder’s acquisition of the securities offered hereby.
Certain Selling Holders acquired their securities through more than one of the above. See “Selling Holders”. On November 12, 2024, the closing price of our Common Shares was $8.52, and the closing price of our Warrants was $1.35.
Assuming a sale of the Selling Holders’ securities at these prices:
•Selling Holders who obtained their securities in the 2023 PIPE Financing, or in exchange for Convertible Bridge Financing would realize gross proceeds of approximately $10.52 compared to the effective cost reference price of $10.25 for 1.1595 Common Shares and 0.4870 Warrant. A sale by Selling Holders of all 9,882,718 Common Shares and 4,890,913 Warrants obtained in the 2023 PIPE Financing or in exchange for Convertible Bridge Financing would result in gross proceeds to such Selling Holders of approximately $90.8 million, compared to a deemed cash investment, based on the above formula, of approximately $93.8 million;
•Selling Holders who obtained their securities via an investment in Private Warrants would realize gross Proceeds of $1.35 per Warrant, compared to an initial investment at $1.50 per FEAC warrant. A sale by Selling Holders of all 731,619 such Warrants would result in gross proceeds to such Selling Holders of approximately $0.9 million, compared to an investment of approximately $1.1 million;
•Selling Holders who obtained their securities in respect of securities purchased in FEAC’s IPO ($10.00 for one share and one-third of warrant) would realize gross proceeds of $8.97 per Common Share and one-third of a Warrant. A sale by Selling Holders of all 2,000,000 such Common Shares and 666,666 Warrants obtained in respect of securities purchased in FEAC’s IPO would result in gross proceeds to such Selling Holders of approximately $17.9 million, compared to an initial investment of $20.0 million;
•FEAC Sponsor would realize gross proceeds of $8.52 per Common Share on the sale of Common Shares obtained in respect of the FEAC Sponsor Shares. A sale by FEAC Sponsor of all 1,373,496 such Common Shares would result in gross proceeds to FEAC Sponsor of $11.7 million;
•Legacy enGene Investors would realize gross proceeds of $8.52 per Common Share, compared to the $10.25 reference price used to compute the enGene Exchange Ratio in connection with the Business Combination. A sale by Selling Holders of all 5,673,800 Common Shares acquired as Legacy enGene Investors would result in gross proceeds to such Selling Holders of approximately $48.3 million, compared to the deemed value of such shares, at the $10.25 reference price, of approximately $58.2 million; and
•Selling Holders who obtained their securities in the February 2024 PIPE Financing would realize gross proceeds of $8.52 per Common Share, compared to an initial investment at $10.00 per Common Share. A sale by Selling Holders of all remaining 14,902,269 Common Shares obtained in the February 2024 PIPE Financing would result in gross proceeds to such Selling Holders of $127.0 million, compared to an initial investment on such Common Shares of $149.0 million.
•Selling Holders who obtained their securities in the October 2024 PIPE Financing would realize gross proceeds of $8.52 per Common Share, compared to an initial investment at $8.90 per Common Share. A sale by Selling Holders of all 6,758,311 Common Shares obtained in the October 2024 PIPE Financing would result in gross proceeds to such Selling Holders of $57.6 million, compared to of an initial investment of $60.1 million.
RISK FACTORS
Investing in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider these risks as well as other information we include or incorporate by reference in this prospectus. In particular, you should carefully consider the information under the heading “Risk Factors,” as well as the factors listed under the heading “Special Note Regarding Forward-Looking Statements,” in each case contained in our Annual Report on Form 10-K for our most recent fiscal year, in any Quarterly Reports on Form 10-Q that have been filed since our most recent Annual Report on Form 10-K and in any other documents that we file with the SEC which is incorporated by reference in this prospectus. New risks may emerge in the future at any time, and we cannot predict such risks or estimate the extent to which they may affect our financial condition or performance. Additionally, any prospectus supplement may contain a discussion of additional risks applicable to an investment in us and our securities we are offering under that prospectus supplement. Each of the risks described could result in a decrease in the value of the securities and your investment therein.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, any accompanying prospectus supplement or related free writing prospectus, and the documents incorporated by reference herein and therein may contain “forward-looking statements” within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995 and may contain “forward-looking information” within the meaning of Canadian securities laws (collectively, “forward-looking statements”).
enGene’s forward-looking statements include, but are not limited to, statements regarding enGene’s management teams’ expectations, hopes, beliefs, intentions, goals or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “appear,” “approximate,” “believe,” “continue,” “could,” “estimate,” “expect,” “foresee,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “would” and similar expressions (or the negative version of such words or expressions) may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements may include, for example, statements about:
•the ability of enGene to recognize the anticipated benefits of the business combination between Forbion European Acquisition Corporation, the Company and enGene, Inc. and related transactions (“Business Combination”), which may be affected by, among other things, competition and the ability of the combined business to grow and manage growth profitably;
•enGene’s financial performance following the Business Combination, including financial projections and business metrics and any underlying assumptions thereunder;
•the ability to maintain the listing of the Company’s common shares and warrants to purchase common shares on Nasdaq or another national securities exchange;
•enGene’s success in recruiting and retaining, or changes required in, officers, key personnel or directors following the completion of the Business Combination;
•enGene’s plans and ability to execute product development, manufacturing process development, preclinical and clinical development efforts successfully and on anticipated timelines;
•enGene’s ability to design, initiate and successfully complete clinical trials and other studies for its product candidates and its plans and expectations regarding its ongoing or planned clinical trials;
•enGene’s plans and ability to obtain and maintain marketing approval from the U.S. Food and Drug Administration and other regulatory authorities, including the European Medicines Agency, for its product candidates;
•enGene’s plans and ability to commercialize its product candidates, if approved by applicable regulatory authorities;
•the degree of market acceptance of enGene’s product candidates, if approved, and the availability of third-party coverage and reimbursement;
•the ability of enGene’s external contract manufacturers to support the manufacturing, release testing, stability analysis, clinical labeling and packaging of enGene’s products;
•enGene’s future financial performance and the sufficiency of enGene’s cash and cash equivalents to fund its operations;
•the outcome of any known and unknown litigation and regulatory proceedings, including any legal proceedings that may be instituted against enGene or any of its directors or officers following the Business Combination; and
•enGene’s ability to implement and maintain effective internal controls.
All forward-looking statements, including, without limitation, our examination of historical operating trends, are based upon our current expectations and various assumptions. Certain assumptions made in preparing the forward-looking statements include:
•enGene is able to recruit and retain qualified scientific and management personnel, establish clinical trial sites and patient registration for clinical trials and acquire technologies complementary to, or necessary for, its programs;
•enGene is able to enroll, in a timely manner, a sufficient number of patients in each cohort of the Phase 2 LEGEND trial to assess the efficacy and safety of detalimogene voraplasmid, or detalimogene, formerly referred to as EG-70, including, the pivotal cohort, the cohort with the BCG-naïve patient population, the BCG-exposed patient population and the BCG-unresponsive, papillary-only Ta/T1 disease;
•enGene is able to file a Biologics License Application mid-2026 with the FDA for approval to market detalimogene in the United States as a monotherapy to treat BCG-unresponsive NMIBC with Cis;
•detalimogene’s product profile can be integrated seamlessly into community urology clinics where the vast majority of NMIBC patients are treated;
•enGene is able to retain commercial rights to detalimogene in the United States and commercialize detalimogene independently, while selectively partnering outside of the United States;
•enGene is able to execute the “pipeline-in-a-product” development strategy for detalimogene; and
•enGene is able to utilize the DDX gene delivery platform to develop effective, new agents for the delivery of genetic medicines to mucosal tissues.
You should not place undue reliance on these forward-looking statements which speak only as of the date hereof. The forward-looking statements contained in this prospectus are based primarily on current expectations and projections about future events and trends that may affect our business, financial condition and operating results. The following uncertainties and factors, among other things (including those described in “Risk Factors” in our Annual Report on Form 10-K and elsewhere in our Quarterly Reports on Form 10-Q and in our other filings with the Securities and Exchange Commission (“SEC”)), could affect future performance and actual results to differ materially and adversely from those expressed in, anticipated or implied by forward-looking statements:
•the risk that the Business Combination disrupts current plans and operations of enGene as a result of consummation of the reverse recapitalization;
•the ability to recognize the anticipated benefits of the Business Combination;
•risks applicable to enGene’s business, including the extensive regulation of all aspects of enGene’s business, competition from other existing or newly developed products and treatments;
•risks associated with the protection of intellectual property, enGene’s ability to raise additional capital to fund its produce development activity, and its ability to maintain key relationships and to attract and retain talented personnel;
•the possibility that enGene may be adversely affected by changes in domestic and foreign business, market, financial, political, geopolitical, legal conditions and laws and regulations;
•the risk that any regulatory approvals are not obtained, are delayed or are subject to unanticipated conditions that could adversely affect enGene or the expected benefits of the Business Combination; or
•other risks and uncertainties set forth in the section entitled “Risk Factors” in our Annual Report on Form 10-K and elsewhere in our Quarterly Reports on Form 10-Q and in our other filings with the SEC.
In addition, statements that “we believe” and similar statements reflect beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this prospectus. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.
The forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this prospectus to reflect events or circumstances after the date of this prospectus or to reflect new information or the occurrence of unanticipated events, except as required by law. 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.
You should read carefully the risks described in the section entitled “Risk Factors” beginning on page 9 of this prospectus and those contained in our Annual Report on Form 10-K for our most recent fiscal year, in any Quarterly Reports on Form 10-Q that have been filed since our most recent Annual Report on Form 10-K and in any other documents that we file with the SEC under the Exchange Act, each of which is incorporated by reference in this prospectus. and in any accompanying prospectus supplement or related free writing prospectus, together with all information incorporated by reference herein and therein, to better understand the significant risks and uncertainties inherent in our business and underlying any forward-looking statements. As a result of these risks, actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements in this prospectus or in any accompanying prospectus supplement or related free writing prospectus, or incorporated by reference herein and therein, and you should not place undue reliance on any forward-looking statements.
USE OF PROCEEDS
All of the Common Shares and Warrants offered by the Selling Holders pursuant to this prospectus will be sold by the Selling Holders for their respective accounts. We will not receive any of the proceeds from these sales.
We will receive up to an aggregate of approximately $97,887,632 from the exercise of the Warrants, assuming the exercise in full of all of the Warrants for cash. There is no assurance that Warrants will be and/or remain in the money prior to their expiration or that the holders of Warrants will elect to exercise any or all of their Warrants for cash. We believe the likelihood that these holders will exercise their Warrants, and therefore any cash proceeds that we may receive in relation to the exercise thereof, will depend on the trading price of our Common Shares. If the market price for our Common Shares is less than the exercise price of Warrants, we believe the holders of Warrants will be unlikely to exercise them. If the market price for our Common Shares exceeds the exercise price of the Warrants, we believe the holders of the Warrants will be more likely to exercise them. See “Risk Factors.”
We expect to use the net proceeds from the exercise of the Warrants, if any, for general corporate purposes. We will have broad discretion over the use of proceeds from the exercise of the Warrants. There is no assurance that the holders of the Warrants will elect to exercise any or all of such Warrants. To the extent that the Warrants are exercised on a “cashless basis,” the amount of cash we would receive from the exercise of the Warrants will decrease.
The Selling Holders will pay any underwriting fees, discounts and selling commissions incurred by such Selling Holders in disposing of their Common Shares. Pursuant to a registration rights agreement entered into by the Company, FEAC Sponsor and certain other shareholders of the Company, the Company will bear all other costs, fees and expenses incurred in effecting the registration of Common Shares covered by this prospectus, including, without limitation, all registration and filing fees, Nasdaq listing fees and fees and expenses of counsel and independent registered public accountants.
SELLING HOLDERS
This prospectus relates to the possible resale by the Selling Holders of (i) up to 46,977,183 of our Common Shares (which includes 6,289,198 Common Shares that may be issued upon exercise of the enGene Warrants) and (ii) up to 6,289,198 of our Warrants.
The Selling Holders may from time to time offer and sell any or all of the Common Shares and Warrants set forth below pursuant to this prospectus and any accompanying prospectus supplement. When we refer to the “Selling Holders” in this prospectus, we mean the persons listed in the table below, and the pledgees, donees, transferees, assignees, successors, designees and others who later come to hold any of the Selling Holders’ interest in the Common Shares or Warrants after the date of this prospectus such that registration rights shall apply to those securities.
We cannot advise you as to whether the Selling Holders will in fact sell any or all of such Common Shares or warrants. In addition, the Selling Holders may sell, transfer or otherwise dispose of, at any time and from time to time, the Common Shares and Warrants in transactions exempt from the prospectus or registration requirements of the Securities Act or with respect to certain Selling Holders, applicable Canadian securities laws, after the date of this prospectus. For purposes of the following table, we have assumed that the Selling Holders will have sold all of the securities covered by this prospectus upon the completion of the offering.
The following table is prepared based on information provided to us by the Selling Holders. It sets forth the name and address of each of the Selling Holders, information with respect to each Selling Holder’s acquisition of the securities offered hereby, the aggregate number of Common Shares and Warrants that the Selling Holders may offer pursuant to this prospectus, and the beneficial ownership of the Selling Holders both before and after the offering. We have based the percentage ownership prior to this offering on 50,976,676
Common Shares and 8,511,968 Warrants outstanding, in each case as of October 31, 2024. In calculating percentages of Common Shares owned by a particular Selling Holder, we treated as outstanding the number of Common Shares issuable upon exercise of that particular Selling Holder’s warrants or options, if any, and did not assume the exercise of any other Selling Holder’s warrants or options. The following tables do not reflect the beneficial ownership of any Common Shares issuable upon exercise of warrants or options unless such securities were exercisable or convertible within 60 days of October 31, 2024.
We have determined beneficial ownership in accordance with the rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. We have included a separate column for the Common Shares issuable upon exercise of the Warrants. Unless otherwise indicated below, to our knowledge, the persons and entities named in the tables have sole voting and sole investment power with respect to all securities that they beneficially own, subject to community property laws where applicable.
Selling Holder information for each additional Selling Holder, if any, will be set forth by prospectus supplement to the extent required prior to the time of any offer or sale of such Selling Holder’s securities pursuant to this prospectus. Any prospectus supplement may add, update, substitute, or change the information contained in this prospectus, including the identity of each Selling Holder and the number of securities registered on its behalf. A Selling Holder may sell or otherwise transfer all, some or none of such securities in this offering. See “Plan of Distribution.” Unless otherwise indicated, the address of each person named below is c/o enGene Holdings Inc., 4868 Rue Levy, Suite 220, Saint-Laurent, QC H4R 2P1, Canada.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of |
|
Common Shares Beneficially Owned
Prior to this Offering |
|
|
Shares
Issuable
Upon
Exercise of |
|
|
Warrants Beneficially Owned prior to this Offering |
|
|
Number of
Common
Shares
Registered
for Sale |
|
|
Number of
Warrants
Registered
for Sale |
|
|
Common Shares Beneficially Owned After the Offered Common Shares are Sold |
|
|
Warrants Beneficially Owned After the Offered Warrants are Sold |
|
Selling Holders |
|
Securities |
|
Shares |
|
|
Percent |
|
|
Warrants |
|
|
Warrant |
|
|
Percent |
|
|
Hereby |
|
|
Hereby |
|
|
Shares |
|
|
Percent |
|
|
Warrant |
|
|
Percent |
|
Forbion Growth (1) |
|
2023 PIPE Financing; Convertible Bridge Financing; FEAC Sponsor Shares; Private Warrants; FEAC’s IPO; October 2024 PIPE Financing |
|
|
6,798,362 |
|
|
|
12.7 |
% |
|
|
2,403,072 |
|
|
|
2,403,072 |
|
|
|
17.2 |
% |
|
|
6,327,729 |
|
|
|
2,403,072 |
|
|
|
470,633 |
|
|
*% |
|
|
|
— |
|
|
─% |
|
Lumira Ventures III, L.P. and affiliates (2) |
|
Convertible Bridge Financing; Legacy enGene Investor; February 2024 PIPE Financing |
|
|
3,849,299 |
|
|
|
7.5 |
% |
|
|
332,554 |
|
|
|
332,554 |
|
|
|
8.2 |
% |
|
|
3,849,299 |
|
|
|
332,554 |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
Forbion Capital Fund III Coöperarief U.A. (3) |
|
Convertible Bridge Financing; Legacy enGene Investor |
|
|
2,894,199 |
|
|
|
5.6 |
% |
|
|
475,076 |
|
|
|
475,076 |
|
|
|
6.5 |
% |
|
|
2,894,199 |
|
|
|
475,076 |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
Fonds de solidarité des travailleurs du Québec (4) |
|
Convertible Bridge Financing; Legacy enGene Investor |
|
|
1,583,179 |
|
|
|
3.1 |
% |
|
|
446,572 |
|
|
|
446,572 |
|
|
|
3.9 |
% |
|
|
1,583,179 |
|
|
|
446,572 |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
Biotechnology Value Fund, L.P. and affiliates (5) |
|
2023 PIPE Financing |
|
|
2,251,037 |
|
|
|
4.3 |
% |
|
|
945,402 |
|
|
|
945,402 |
|
|
|
6.2 |
% |
|
|
2,251,037 |
|
|
|
945,402 |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
Omega Fund VII, L.P. (6) |
|
2023 PIPE Financing |
|
|
1,131,175 |
|
|
|
2 |
% |
|
|
475,077 |
|
|
|
475,077 |
|
|
|
3.1 |
% |
|
|
1,131,175 |
|
|
|
475,077 |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
Vivo Opportunity Fund Holdings, L.P. (7) |
|
2023 PIPE Financing |
|
- |
|
|
|
- |
% |
|
|
285,046 |
|
|
|
285,046 |
|
|
|
0.6 |
% |
|
|
— |
|
|
|
285,046 |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
Northleaf Growth Fund Collector Partnership (8) |
|
2023 PIPE Financing |
|
|
565,587 |
|
|
|
1.1 |
% |
|
|
237,538 |
|
|
|
237,538 |
|
|
|
1.6 |
% |
|
|
565,587 |
|
|
|
237,538 |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
CTI Life Sciences Funds (9) |
|
2023 PIPE Financing |
|
|
339,352 |
|
|
*% |
|
|
|
142,523 |
|
|
|
142,523 |
|
|
|
0.9 |
% |
|
|
339,352 |
|
|
|
142,523 |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
T. de Rooij (10) |
|
2023 PIPE Financing |
|
|
169,675 |
|
|
*% |
|
|
|
71,261 |
|
|
|
71,261 |
|
|
|
0.5 |
% |
|
|
169,675 |
|
|
|
71,261 |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
Anthony Cheung |
|
Legacy enGene Investor |
|
|
49,933 |
|
|
*% |
|
|
|
— |
|
|
|
— |
|
|
- |
|
|
|
49,933 |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
Richard Glickman |
|
Legacy enGene Investor |
|
|
24,555 |
|
|
*% |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
24,555 |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
Foresite Capital Fund VI LP (11) |
|
February 2024 PIPE Financing |
|
|
865,536 |
|
|
|
1.7 |
% |
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
865,536 |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
Venrock Healthcare Capital Partners EG, L.P. and affiliates (12) |
|
February 2024 PIPE Financing; October 2024 PIPE Financing |
|
|
4,150,915 |
|
|
|
8.1 |
% |
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
2,724,719 |
|
|
|
— |
|
|
|
1,426,196 |
|
|
|
2.8 |
% |
|
|
— |
|
|
─% |
|
Deep Track Biotechnology Master Fund, Ltd. (13) |
|
February 2024 PIPE Financing; October 2024 PIPE Financing |
|
|
4,607,633 |
|
|
|
9.0 |
% |
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
4,250,000 |
|
|
|
— |
|
|
|
357,633 |
|
|
*% |
|
|
|
— |
|
|
─% |
|
Blue Owl Healthcare Opportunities IV Public Investments LP (14) |
|
2023 PIPE Financing; February 2024 PIPE Financing |
|
|
3,108,985 |
|
|
|
6.0 |
% |
|
|
511,177 |
|
|
|
511,177 |
|
|
|
7.0 |
% |
|
|
2,406,091 |
|
|
|
475,077 |
|
|
|
702,894 |
|
|
|
1.4 |
% |
|
|
36,100 |
|
|
|
1.4 |
% |
Adage Capital Partners LP (15) |
|
February 2024 PIPE Financing |
|
|
2,004,109 |
|
|
|
3.9 |
% |
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
1,000,000 |
|
|
|
— |
|
|
|
1,004,109 |
|
|
|
2.0 |
% |
|
|
— |
|
|
─% |
|
Cormorant Global Healthcare Master Fund, LP (16) |
|
February 2024 PIPE Financing; October 2024 PIPE Financing |
|
|
2,123,595 |
|
|
|
4.2 |
% |
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
2,123,595 |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
Janus Henderson Biotech Innovation Master Fund Limited (17) |
|
February 2024 PIPE Financing |
|
|
1,000,000 |
|
|
|
2.0 |
% |
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
1,000,000 |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
Citadel CEMF Investments Ltd. (18) |
|
February 2024 PIPE Financing |
|
|
800,000 |
|
|
|
1.6 |
% |
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
800,000 |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
Perceptive Life Sciences Master Fund Ltd. (19) |
|
February 2024 PIPE Financing |
|
|
800,000 |
|
|
|
1.6 |
% |
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
800,000 |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
Soleus Private Equity Fund III, L.P. (20) |
|
February 2024 PIPE Financing |
|
|
381,464 |
|
|
*% |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
381,464 |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
Funds affiliated with Franklin Advisers, Inc. (21) |
|
February 2024 PIPE Financing |
|
|
1,189,900 |
|
|
|
2.3 |
% |
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
800,000 |
|
|
|
— |
|
|
|
389,900 |
|
|
*% |
|
|
|
— |
|
|
─% |
|
Boxer Capital, LLC and affiliates. (22) |
|
February 2024 PIPE Financing |
|
|
800,000 |
|
|
|
1.6 |
% |
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
800,000 |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
Marshall Wace Investment Strategies – Eureka Fund (23) |
|
February 2024 PIPE Financing |
|
|
261,341 |
|
|
*% |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
261,341 |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
MW XO Health Innovations Fund, LP (24) |
|
February 2024 PIPE Financing |
|
|
343,928 |
|
|
*% |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
343,928 |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
Entities affiliated with Vestal Point Capital, LP (25) |
|
October 2024 PIPE Financing |
|
|
350,000 |
|
|
*% |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
350,000 |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
Eric Maddix (26) |
|
October 2024 PIPE Financing |
|
|
28,089 |
|
|
*% |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
28,089 |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
Kalehua Capital Partners LP (27) |
|
October 2024 PIPE Financing |
|
|
228,970 |
|
|
*% |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
112,360 |
|
|
|
— |
|
|
|
116,610 |
|
|
*% |
|
|
|
— |
|
|
─% |
|
Kynam Global Healthcare Master Fund, LP (28) |
|
October 2024 PIPE Financing |
|
|
4,419,807 |
|
|
|
8.7 |
% |
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
674,157 |
|
|
|
— |
|
|
|
3,745,650 |
|
|
|
7.3 |
% |
|
|
— |
|
|
─% |
|
Entities affiliated with OrbiMed (29) |
|
October 2024 PIPE Financing |
|
|
561,797 |
|
|
|
1.1 |
% |
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
561,797 |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
Point72 Associates, LLC (30) |
|
October 2024 PIPE Financing |
|
|
1,224,799 |
|
|
|
2.4 |
% |
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
561,797 |
|
|
|
— |
|
|
|
663,002 |
|
|
|
1.3 |
% |
|
|
— |
|
|
─% |
|
Sphera Healthcare (31) |
|
October 2024 PIPE Financing |
|
|
560,000 |
|
|
|
1.1 |
% |
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
560,000 |
|
|
|
— |
|
|
|
— |
|
|
─% |
|
|
|
— |
|
|
─% |
|
* Denotes less than 1%.
(1)Pursuant to a Schedule 13D/A filed with the SEC November 1, 2024, Forbion Growth Sponsor FEAC I B.V., or FEAC Sponsor, is the record holder of 3,765,932 of the enGene Shares reported herein and which are registered herein. Forbion Growth Opportunities Fund I Cooperatief U.A. (“FGOF”) is the record holder of 3,032,430 enGene Common Shares reported herein, of which 2,561,797 are registered herein (comprised of 2,000,000 Common Shares acquired in connection with the Business Combination, and 561,797
Common Shares acquired in connection with the October 2024 PIPE). The enGene Warrants reported herein includes warrants held by FEAC Sponsor that may be exercised to acquire 1,736,406 enGene Common Shares, and warrants held by FGOF that may be exercised to acquire 666,666 enGene Common Shares. FGOF wholly owns the FEAC Sponsor and therefore the FEAC Sponsor and FGOF have shared voting and investment power over the enGene Common Shares held by the FEAC Sponsor. Forbion Growth Management B.V. (“Forbion Management”) is the sole director of FGOF and therefore shares voting and investment power (i) with FGOF over the enGene Common Shares that will be held by FGOF and (ii) with FGOF and, indirectly, the FEAC Sponsor, over the enGene Common Shares that will be held by the FEAC Sponsor. Forbion Management exercises voting and investment power through its investment committee (the “Investment Committee”) consisting of Sander Slootweg, Martien van Osch, Geert-Jan Mulder, Vincent van Houten, Dirk Kersten, Nanna Lüneborg, Wouter Joustra and Jasper Bos. None of the members of the Investment Committee has individual voting and investment power with respect to the FEAC Shares, and each such member disclaims beneficial ownership of the FEAC Shares except to the extent of his or her proportionate pecuniary interest therein. Jasper Bos, Cyril Lesser, Sander Slootweg and Wouter Joustra, who are directors of the FEAC Sponsor, have voting and investment discretion with respect to the enGene Common Shares owned by the FEAC Sponsor and may be deemed to have indirect shared beneficial ownership of the enGene Common Shares owned by the FEAC Sponsor. Jasper Bos, Cyril Lesser, Sander Slootweg and Wouter Joustra each disclaim beneficial ownership over the enGene Common Shares except to the extent of their pecuniary interest therein. FGOF, FEAC Sponsor, Forbion Management and such members of the Investment Committee each disclaims any affiliation with Forbion III and its directors, officers or other affiliates. The business address of the above-named Forbion persons is c/o Forbion, Gooimeer 2-35, 1411 DC Naarden, The Netherlands.
(2)Consists of 1,341,790 Common Shares held by Lumira Ventures III, L.P. (“Lumira III”), 44,647 Common Shares held by Lumira Ventures III (International), L.P. (“Lumira III Int’l”), 993,651 Common Shares held by Lumira Ventures IV, L.P. (“Lumira IV”), 238,851 Common Shares held by Lumira Ventures IV (International), L.P. (“Lumira IV Int’l”), 1,077,386 Common Shares held by Merck Lumira Biosciences Fund, L.P. (“Merck-Lumira”), and 152,974 Common Shares held by Merck Lumira Biosciences Fund (Québec), L.P. (“Merck-Lumira B” and, together with Lumira III, Lumira III Int’l, Lumira IV, Lumira IV Int’l, and Merck-Lumira, the “Lumira entities”). The number of enGene Warrants reported includes warrants held by Lumira III that may be exercised to acquire 114,945 enGene Common Shares, warrants held by Lumira III Int’l that may be exercised to acquire 3,825 enGene Common Shares, warrants held by Lumira IV that may be exercised to acquire 38,301 enGene Common Shares, warrants held by Lumira IV Int’l that may be exercised to acquire 9,207 enGene Common Shares, warrants held by Merck-Lumira that may be exercised to acquire 145,603 enGene Common Shares, and warrants held by Merck-Lumira B that may be exercised to acquire 20,673 enGene Common Shares. Lumira III and Lumira III Int’l are controlled by their general partner, Lumira Ventures III GP, L.P., and managed by Lumira Capital Investment Management Inc. (“Lumira Mgmt”). Lumira Ventures III GP, L.P. is controlled by its general partners, Lumira III GP Inc. and Lumira III GP Holdings Co. Lumira IV and Lumira IV Int’l are controlled by their general partner, Lumira IV GP 2020 Inc., and managed by Lumira Mgmt. Merck-Lumira and Merck-Lumira B are controlled by their general partner, Lumira Capital GP, L.P., and managed by Lumira Mgmt. Lumira Capital GP, L.P. is controlled by its general partners, Lumira GP Inc. and Lumira GP Holdings Co. Mr. Brunk is an executive officer of each of Lumira III GP Inc., Lumira III GP Holdings Co., Lumira IV GP 2020 Inc., Lumira GP Inc., Lumira GP Holdings Co. and Lumira Mgmt. Each of Lumira III GP Inc., Lumira III GP Holdings Co., Lumira IV GP 2020 Inc., Lumira GP Inc., Lumira GP Holdings Co., Lumira Mgmt and Mr. Brunk may be deemed to beneficially own the securities held by the respective Lumira entities, but each disclaims beneficial ownership except to the extent of their respective pecuniary interests therein, if any. The business address of the Lumira entities is 141 Adelaide Street West, Suite 770, Toronto, Ontario, Canada M5H 3L5.
(3)The number of enGene Warrants reported includes warrants that may be exercised to acquire 475,076 enGene Common Shares. Forbion III Management B.V. (“Forbion III”) is the director of Forbion Capital Fund III Coöperatief U.A. (“Forbion III COOP”) with voting and investment power over the shares held by Forbion III COOP. Such voting and investment power are exercised by Forbion III through its investment committee, consisting of H. A. Slootweg, M. A. van Osch, G. J. Mulder, H.N. Reithinger, Dr. M. Boorsma and S. J. H. van Deventer. None of the members of the investment committee have individual voting and investment power with respect to such shares, and the members of the investment committee, including Dr. Boorsma, who is a former director of enGene Inc., disclaim beneficial ownership of such shares except to the extent of their proportionate pecuniary interests therein. Forbion III COOP disclaims any affiliation with FEAC, FEAC Sponsor, or any of FEAC’s or FEAC Sponsor’s direct or indirect directors, officers or other affiliates. The business address of Forbion III COOP and Forbion III is Gooimeer 2-35, 1411 DC Naarden, The Netherlands.
(4)Pursuant to a Schedule 13G/A filed with the SEC October 21, 2024, the amount beneficially owned includes 1,583,179 Common Shares and 446,572 Warrants that may be exercised to acquire 446,572 enGene Common Shares. Fonds de solidarité des travailleurs du Québec (the “Fonds”) is managed by a 19-member board of directors, which is majority independent and includes Mr. Claude Séguin, the chair of the board, and Ms. Janie C. Béïque, who is also the President and Chief Executive Officer of the Fonds. Investment power over the enGene shares held by the Fonds is exercised either by its board of directors or by a 9-member investment committee of the Fonds’ board of directors, which is majority independent and includes Pierre-Maurice Vachon, who is the Second Vice-Chair of the board of the Fonds, and Magali Picard, who is also first
vice-chair of the board. None of the members of the Fonds’ board of directors or investment committee have individual voting or investment power over the enGene shares held by the Fonds. Mr. Séguin, Ms. Béïque, Mr. Vachon and Ms. Picard each disclaim beneficial ownership of such shares except to the extent of their pecuniary interests therein. The business address of the Fonds is 545 Crémazie Blvd. East, Suite 200, Montréal, Québec, Canada H2M 2W4.
(5)Consists of 1,204,412 enGene Common Shares held by Biotechnology Value Fund, L.P. (“BVF”), 912,776 enGene Common Shares held by Biotechnology Value Fund II, L.P. (“BVF2”), 104,257 enGene Common Shares held by Biotechnology Value Trading Fund OS LP (“Trading Fund OS”) and 29,592 enGene Common Shares held by MSI BVF SPV, LLC (“MSI BVF”). The number of enGene Warrants reported includes warrants held by BVF that may be exercised to acquire 505,835 enGene Common Shares, warrants held by BVF2 that may be exercised to acquire 383,352 enGene Common Shares, warrants held by Trading Fund OS that may be exercised to acquire 43,786 enGene Common Shares, and warrants held by MSI BVF that may be exercised to acquire 12,429 enGene Common Shares. BVF I GP LLC (“BVF GP”) is the general partner of BVF, and may be deemed to beneficially own the enGene Common Shares held by BVF; BVF II GP LLC (“BVF2 GP”) is the general partner of BVF2, and may be deemed to beneficially own the enGene Common Shares held by BVF2; BVF Partners OS Ltd. (“Partners OS”) is the general partner of Trading Fund OS, and may be deemed to beneficially own the enGene Common Shares held by Trading Fund OS. BVF GP Holdings LLC (“BVF GPH”) is the sole member of each of BVF GP and BVF2 GP, and may be deemed to beneficially own the enGene Common Shares beneficially owned by BVF and BVF2. BVF Partners L.P. (“Partners”) is the investment manager of BVF, BVF2, Trading Fund OS and MSI BVF and the sole member of Partners OS, and may be deemed to beneficially own the enGene Common Shares beneficially owned by BVF, BVF2, Trading Fund OS, and MSI BVF. BVF Inc. is the general partner of Partners, and may be deemed to beneficially own the enGene Common Shares beneficially owned by Partners. Mark N. Lampert is a director and officer of BVF Inc., and may be deemed to beneficially own the enGene Common Shares beneficially owned by BVF Inc. Each of BVF GP, BVF2 GP, Partners OS, BVF GPH, Partners, BVF Inc. and Mr. Lampert disclaims beneficial ownership of the shares beneficially owned by BVF, BVF2, Trading Fund OS and MSI BVF. The business address of BVF, BVF GP, BVF2, BVF2 GP, BVF GPH, MSI BVF, Partners, BVF Inc. and Mark N. Lampert is 44 Montgomery St., 40th Floor, San Francisco, California 94104. The business address of Trading Fund OS and Partners OS is PO Box 309 Ugland House, Grand Cayman, KY1-1104, Cayman Islands.
(6)The number of enGene Warrants reported includes warrants that may be exercised to acquire 475,077 enGene Common Shares. All of the securities are held by Omega Fund VII, L.P. (“Omega Fund”). Omega Fund VII GP Manager, Ltd. (“Omega Ltd.”) is the sole general partner of Omega Fund VII GP, L.P. (“Omega GP”), which is the sole general partner of Omega Fund; and each of Omega Ltd. and Omega GP may be deemed to own beneficially the shares held by Omega Fund. Claudio Nessi and Otello Stampacchia are the directors of Omega Ltd. and, as a result, may be deemed to share voting and investment power over the shares held directly by Omega Fund. Each of Dr. Stampacchia, Dr. Nessi, Omega Ltd. and Omega GP disclaim beneficial ownership of the shares held by Omega Fund except to the extent of their pecuniary interest therein. The business address of the Omega Fund and its affiliates is 888 Boylston Street, Suite 1111, Boston, MA 02199.
(7)The number of enGene Warrants reported includes warrants that may be exercised to acquire 285,046 enGene Common Shares. The securities are held of record by Vivo Opportunity Fund Holdings, L.P. Vivo Opportunity, LLC is the general partner of Vivo Opportunity Fund Holdings, L.P. The business address of Vivo Opportunity Fund Holdings, L.P. and its affiliates is C/O Vivo Capital LLC 192 Lytton Avenue, Palo Alto, CA 94301.
(8)The number of enGene Warrants reported includes warrants that may be exercised to acquire 237,538 enGene Common Shares. The business address of Northleaf Growth Fund Collector Partnership is 40 King Street West, Suite 5600, Toronto, Ontario, M5H 3S1, Canada.
(9)Consists of 284,547 Common Shares held by CTI Life Sciences Fund III L.P. (“CTI III”) and 54,805 Common Shares held by CTI Life Sciences Fund III International L.P. (“CTI III Int’l”, and, together with CTI III, the “CTI entities”). The number of enGene Warrants reported includes warrants held by CTI III that may be exercised to acquire 119,506 enGene Common Shares and warrants held by CTI III Int’l that may be exercised to acquire 23,017 enGene Common Shares. The business address of the CTI entities is 1 Place Ville- Marie, Suite 1068, Montreal, Quebec, H3B 4S6.
(10)The number of enGene Warrants reported includes warrants that may be exercised to acquire 71,261 enGene Common Shares. The business address of T. de Rooij is Hoflaan 40, 3062 JH Rotterdam, The Netherlands.
(11)The shares are owned directly by: Foresite Capital Fund VI LP (“Fund VI”). Foresite Capital Management VI LLC (“FCM VI”) is the general partner of Fund VI. FCM VI may be deemed to have sole voting and dispositive power over these shares. James B. Tananbaum (“Dr. Tananbaum”) is the sole managing member of FCM VI and may be deemed to have sole voting and dispositive power over these shares. Each reporting person disclaims the existence of a “group.” Each of FCM VI and Dr. Tananbaum disclaim beneficial ownership of these shares except to the extent of any pecuniary interest herein, and nothing herein shall be deemed an admission that FCM VI or Dr. Tananbaum is
the beneficial owner of these shares for purposes of Section 16 or any other purpose. The business address of Fund VI is 900 Larkspur Landing Circle, Suite 150, Larkspur, California 94939.
(12)Consists of 3,109,022 Common Shares held by Venrock Healthcare Capital Partners EG, L.P. (“VHCP EG”), of which 1,953,225 are registered herein, 947,173 Common Shares held by Venrock Healthcare Capital Partners III, L.P. (“VHCP III”), of which 701,340 are registered herein and 94,720 Common Shares held by VHCP Co-Investment Holdings III, LLC (“VHCP Co-Invest”), of which 70,154 are registered herein. VHCP Management III, LLC (“VHCPM”) is the sole general partner of VHCP III and the sole manager of VHCP Co-Invest. VHCP Management EG, LLC (“VHCPM EG”) is the sole general partner of VHC PEG. Dr. Bong Koh and Nimish Shah are the voting members of VHCPM and VHCPM EG. The address of each of these persons and entities is 7 Bryant Park, 23rd Floor, New York, NY 10018.
(13)David Kroin is the Managing Member of Deep Track Capital GP, LLC the General Partner for Deep Track Capital, LP. Deep Track Capital, LP is the investment manager of Deep Track Biotechnology Master Fund, Ltd. The business address of Deep Track Capital, LP is 200 Greenwich Avenue, 3rd Floor Greenwich, CT 06830; the business address of Deep Track Biotechnology Master Fund, Ltd. is c/o Walkers Corporate Limited, 190 Elgin Ave, George Town, KY1-9001, Cayman Islands, and the business address of Mr. Kroin is c/o Deep Track Capital, LP, 200 Greenwich Avenue, 3rd Floor Greenwich, CT 06830.
(14)Consists of (i) 3,108,985 Common Shares owned by Blue Owl Healthcare Opportunities IV Public Investments LP, of which 2,406,091 Common Shares are registered herein and (ii) 511,177 Warrants owned by Blue Owl Healthcare Opportunities IV Public Investments LP, of which 475,077 Warrants are registered herein. Blue Owl Healthcare Opportunities Advisors LLC is the investment manager of Blue Owl Healthcare Opportunities IV Public Investments LP and has voting and investment power over the securities held by Blue Owl Healthcare Opportunities IV Public Investments LP. Blue Owl Healthcare Opportunities Advisors LLC exercises voting and investment power through an investment committee comprised of Kevin Raidy, Timothy Anderson, Sandip Agarwala, and Brandyn Itzkowitz, who each disclaims beneficial ownership over these securities. The address for Blue Owl Healthcare Advisers LLC is c/o 399 Park Avenue, 38th Floor, New York, NY 10022.
(15)Bob Atchinson and Phillip Gross are the managing members of Adage Capital Advisors, L.L.C., which is the managing member of Adage Capital Partners GP, L.L.C., which is the general partner of Adage, and each such person or entity, as the case may be, has shared voting and/or investment power over the securities held by Adage Capital Partners, LP and may be deemed the beneficial owner of such shares, and each such person or entity, as the case may be, disclaims beneficial ownership of such securities except to the extent of their respective pecuniary interest therein. The business address of Adage Capital Partners LP is 200 Clarendon Street, 52nd Floor, Boston, MA 02116.
(16)Consists of 1,000,000 Common Shares purchased in the February 2024 PIPE Financing and 1,123,595 Common Shares purchased in the October 2024 PIPE Financing by Cormorant Global Healthcare Master Fund, LP or Cormorant Master Fund. Cormorant Global Healthcare GP, LLC, or Cormorant GP, serves as the general partner of Cormorant Master Fund. Cormorant Asset Management, LP, or Cormorant Asset Management, serves as the investment manager to Cormorant Master Fund. Bihua Chen serves as the managing member of Cormorant GP and the general partner of Cormorant Asset Management. Ms. Chen may be deemed to have voting and investment power over the shares held by Cormorant Master Fund. The business address of Cormorant Global Healthcare Master Fund, LP is 200 Clarendon Street, 52nd Floor, Boston, Massachusetts 02116.
(17)Such Common Shares may be deemed to be beneficially owned by Janus Henderson Investors US LLC (“Janus”), an investment adviser registered under the Investment Advisers Act of 1940, who acts as investment adviser for the fund and has the ability to make decisions with respect to the voting and deposition of the shares subject to the oversight of the board of directors of the fund. Under the terms of its management contract with the fund, Janus has overall responsibility for directing the investments of the fund in accordance with the fund’s investment objective, policies and limitations. The fund has one or more portfolio managers appointed by and serving at the pleasure of Janus whom makes decision with respect to the disposition of the Common Shares offered hereby. The address for Janus is 151 Detroit Street, Denver, CO 80206. The portfolio managers for this fund are: Andrew Acker, Daniel S. Lyons and Agustin Mohedas.
(18)Citadel Advisors LLC is the portfolio manager of Citadel CEMF Investments Ltd. Citadel Advisors Holdings LP, or CAH, is the sole member of Citadel Advisors LLC. Citadel GP LLC, or CGP, is the general partner of CAH. Kenneth Griffin owns a controlling interest in CGP. Mr. Griffin, as the owner of a controlling interest in CGP, may be deemed to have shared power to vote or direct the vote of, and/or shared power to dispose or to direct the disposition over, the registrable securities denoted herein. This response is not and shall not be construed as an admission that Mr. Griffin or any of the Citadel related entities listed above is the beneficial owner of any securities of the Company other than the securities actually owned by such person (if any). The address of Citadel CEMF Investments Ltd. is c/o Citadel Enterprise Americas LLC, Southeast Financial Center, 200 S. Biscayne Blvd., Suite 3300, Miami, FL 33131.
(19)Joseph Edelman is the managing member of the Perceptive Life Sciences Master Fund Ltd. and in his capacity as Chief Executive Officer and Portfolio Manager has sole voting power over the Common Shares. The business address of Perceptive Life Sciences Master Fund Ltd. is 51 Astor Place, 10th Floor, New York, NY 10003 Attn: James H. Mannix.
(20)Soleus Private Equity GP III, LLC is the sole general partner of Soleus Private Equity Fund III, L.P., Soleus PE GP Ill, LLC is the sole manager of Soleus Private Equity GP III, LLC and Soleus Capital Management, L.P. is the investment manager for Soleus Private Equity Fund III, L.P. Soleus GP, LLC is the sole general partner of Soleus Capital Management, L.P. Guy Levy is the sole managing member of Soleus PE GP III, LLC and Soleus GP, LLC. Each of Mr. Levy, Soleus PE GP III, LLC, Soleus Private Equity GP III, LLC, Soleus GP, LLC and Soleus Capital Management, L.P. disclaims beneficial ownership of the securities held by the Soleus Private Equity Fund III, L.P., except to the extent of their respective pecuniary interests therein. The business address of Soleus Private Equity Fund III, L.P. is 104 Field Point Road, 2nd Floor, Greenwich, Connecticut 06830.
(21)Consists of 775,641 Common Shares held by Franklin Templeton Investment Funds – Franklin Biotechnology Discovery Fund (“FTIF”), of which 527,641 are registered herein, and 414,259 Common Shares held by Franklin Strategic Series – Franklin Biotechnology Discovery Fund (“FSS”), of which 272,359 are registered herein. Franklin Advisers, Inc. is the investment adviser for FTIF and FSS. Evan McCulloch is the portfolio manager for FTIF and FSS, and may be deemed to have shared power to vote or direct the vote of, and/or shared power to dispose or to direct the disposition over, the registrable securities denoted herein. Mr. McCulloch disclaims any beneficial ownership of any securities held by FTIF and FSS. The address of the funds is One Franklin Parkway, San Mateo, California 94403, Attn: Evan McCulloch.
(22)Consists of 727,900 Common Shares held by Boxer Capital, LLC (“Boxer Capital”) and 72,100 Common Shares held by MVA Investors, LLC (“MVA”). Boxer Asset Management Inc. is the managing member of Boxer Capital. Joseph C. Lewis is the sole indirect owner of Boxer Asset Management Inc. Boxer Capital, Boxer Asset Management Inc. and Joseph C. Lewis have shared powers to vote (or direct the vote) and/or to dispose (or direct the disposition) of the shares held by Boxer Capital. Boxer Asset Management Inc. and Joseph C. Lewis disclaim beneficial ownership over the shares held by Boxer Capital except to the extent of their pecuniary interest therein. Aaron Davis is a Member and Chief Executive Officer of MVA. MVA and Mr. Davis have shared powers to vote (or direct the vote) and/or to dispose (or direct the disposition) of the shares held by MVA. Aaron Davis disclaims beneficial ownership over the shares held by MVA except to the extent of his pecuniary interest therein. The principal address for Boxer Capital, MVA and Aaron Davis is 12860 El Camino Real, Suite 300, San Diego, CA 92130. The principal address for Boxer Asset Management Inc. and Joseph C. Lewis is Cay House, EP Taylor Drive N7776, Lyford Cay, New Providence, Bahamas.
(23)Consists of 261,341 Common Shares issued to Marshall Wace Investment Strategies – Eureka Fund in the February 2024 PIPE Financing. The principal business address of Marshall Wace Investment Strategies – Eureka Fund is George House, 131 Sloane Street, London, SW1X 9AT, United Kingdom.
(24)Consists of 343,928 Common Shares issued to MW XO Health Innovations Fund, LP in the February 2024 PIPE Financing. The principal business address of MW XO Health Innovations Fund, LP is 350 Park Avenue, New York, New York 10022, United States.
(25)Consists of (i) 175,331 Common Shares held by Vestal Point Master Fund, LP and (ii) 174,669 shares held by an account separately managed by Vestal Point Capital, LP. The sole general partner of Vestal Point Master Fund, LP is Vestal Point Partners GP, LLC. The managing member of Vestal Point Partners GP, LLC is Ryan Wilder. The sole general partner of Vestal Point Capital, LP is Vestal Point Capital, LLC. The managing member of Vestal Point Capital, LLC is Mr. Wilder. As a result, Mr. Wilder may be deemed to have voting and investment power over the securities held by Vestal Point Master Fund, LP and the account separately managed by Vestal Point Capital, LP. Mr. Wilder disclaims beneficial ownership of such securities, except to the extent of his pecuniary interest therein. The address of these entities and Mr. Wilder is c/o Vestal Point Capital, LP, 632 Broadway, Suite 602, New York, NY 10012.
(26)The business address of Mr. Eric Maddix is 135 S. LaSalle St., Ste. 4200, Chicago, IL 60603.
(27)Dr. Tai-Li Chang is the sole member of Kalehua Capital Management LLC, which serves as the general partner of Kalehua Capital Partners LP (“Kalehua Capital”). The business address of Kalehua Capital is 3819 Maple Avenue, Dallas, TX 75219.
(28)Consists of 4,419,807 Common Shares held by Kynam Global Healthcare Master Fund, LP (“Kynam”), of which 674,157 Common Shares are registered herein. Yue Tang as the managing member of Kynam has the power to vote and dispose of the securities held by Kynam. The principal business address of the Kynam entities and persons is 221 Elm Rd., Princeton NJ, 08540.
(29)Consists of (i) 247,191 Common Shares held by The Biotech Growth Trust PLC (“BIOG”) and (ii) 314,606 Common Shares held by OrbiMed Genesis Master Fund, L.P. (“Genesis”). OrbiMed Genesis GP LLC (“Genesis GP”) is the general partner of Genesis. OrbiMed Advisors LLC (“OrbiMed Advisors”) is the managing member of Genesis GP. OrbiMed Capital LLC (“OrbiMed Capital”) is the portfolio manager of BIOG. OrbiMed Capital is a relying advisor of OrbiMed Advisors. OrbiMed Advisors and OrbiMed Capital exercise investment and voting power through a management committee comprised of Carl L. Gordon, Sven H. Borho and W. Carter Neild, each of whom disclaims beneficial ownership of the Common Shares held by BIOG and Genesis, except to the extent of its or his pecuniary interest therein if any. The business address of each of the foregoing is c/o OrbiMed Advisors LLC, 601 Lexington Avenue, 54th Floor, New York, NY 10022.
(30)Point72 Asset Management, L.P. maintains investment and voting power with respect to the securities held by certain investment funds it manages, including by Point72 Associates, LLC. Point72 Capital Advisors, Inc. is the general partner of Point72 Asset Management, L.P. Mr. Steven A. Cohen controls each of Point72 Asset Management, L.P. and Point72 Capital Advisors, Inc. By reason of the provisions of Rule 13d-3 of the Exchange Act, each of Point72 Asset Management, L.P., Point72 Capital Advisors, Inc., and Mr. Cohen may be deemed to beneficially own the securities directly held by Point72 Associates, LLC reflected herein. Each of Point72 Asset Management, L.P., Point72 Capital Advisors, Inc., and Mr. Cohen disclaims beneficial ownership of any such securities. The principal business address of Point72 Associates, LLC is c/o Point72 Asset Management, L.P., 72 Cummings Point Road, Stamford, CT 06902.
(31)Consists of (i) 112,000 Common Shares held by Sphera Global Healthcare Master Fund, which has delegated its investment management authority to Sphera Global Healthcare Management LP (the “Management Company”) and (ii) 448,000 Common Shares held directly by Sphera Biotech Master Fund, LP, which has delegated its investment management authority to the Management Company. The Management Company is managed, controlled, and operated by its general partner, Sphera Global Healthcare GP Ltd., the shares of which are owned 90% by Sphera Funds Management Ltd. The address of Sphera Global Healthcare GP Ltd. is 4 Itzak Sade, Building A, 29th Floor, Tel Aviv 6777504, Israel.
DESCRIPTION OF SHARE CAPITAL
enGene’s authorized share capital consists of an unlimited number of common shares and an unlimited number of blank cheque preferred shares, issuable in series. No preferred shares are designated, issued or outstanding.
Common Shares
We are authorized to issue an unlimited number of common shares, without par value. As of October 31, 2024, we had 50,976,676 common shares issued and outstanding, outstanding warrants to purchase an additional 8,511,968 common shares, outstanding stock options to purchase an additional 6,034,513 common shares and an agreement with a lender pursuant to which warrants for a maximum of 138,696 common shares may be issued.
Under the articles of enGene (the “Articles”), the holders of common shares are entitled to one vote for each share held on all matters submitted to a vote of the shareholders. Holders of common shares are entitled to receive ratably any dividends declared by our board of directors out of funds legally available for that purpose, subject to any preferential dividend rights of any outstanding preferred shares. Common shares have no preemptive rights, conversion rights or other subscription rights or redemption or sinking fund provisions.
In the event of enGene’s liquidation, dissolution or winding up, holders of common shares are entitled to share ratably in all assets remaining after payment of all debts and other liabilities and any liquidation preference of any outstanding preferred shares. The outstanding common shares are duly authorized, validly issued, fully paid and non-assessable.
The Articles provide that the enGene Board is staggered. While the staggered board provisions apply, at every annual general meeting and in every unanimous shareholder resolution in lieu thereof, all of the directors whose terms expire shall cease to hold office immediately before the election or appointment of directors, but are eligible for re-election or re-appointment. The shareholders entitled to vote at the annual general meeting for the election of directors may elect, or in a unanimous resolution appoint, the number of directors required to fill any vacancies created. The directors will hold office for the applicable terms contemplated in the staggered board provisions. Upon resignations of a director, the remaining directors may fill the casual vacancy resulting from such resignation for the remainder of the unexpired term.
The staggering of directors will make it more difficult for shareholders to change the composition of the enGene Board. The Articles provide that the number of directors shall be no less than three and no greater than 10, and may be fixed by the enGene Board from time to time, in accordance with the Articles.
enGene Warrants
Terms of the enGene Warrants
Each whole warrant entitles the registered holder to purchase one enGene Common Share at a price of $11.50 per share, subject to adjustment as discussed below. Pursuant to the terms of the Warrant Agreement, dated December 9, 2021, between FEAC and Continental Stock Transfer & Trust Company, as warrant agent (as subsequently amended, assigned to and assumed by the Company pursuant to the Warrant Assignment, Assumption and Amendment Agreement (as defined below), the “enGene Warrant Agreement”), a warrant holder may exercise its enGene Warrants only for a whole number of enGene Common Shares. This means only a whole enGene Warrant may be exercised at a given time by a warrant holder. The enGene Warrants will expire October 31, 2028, the date that is five years after the completion of the Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
enGene will not be obligated to deliver any enGene Common Shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the enGene Common Shares underlying the enGene Warrants is then effective and a prospectus relating thereto is current, subject to enGene satisfying its obligations described below with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable and enGene will not be obligated to issue an enGene Common Share upon exercise of a warrant unless the enGene Common Share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the jurisdiction of residence of the registered holder of the warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will enGene be required to net cash settle any warrant.
enGene has filed with the SEC this registration statement for the registration, under the Securities Act, of the enGene Common Shares issuable upon exercise of the warrants, and enGene will use its commercially reasonable efforts to maintain the effectiveness of
this registration statement and a current prospectus relating to those enGene Common Shares until the enGene Warrants expire or are redeemed, as specified in the enGene Warrant Agreement; provided that if the enGene Common Shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, enGene may, at its option, require holders of enGene Warrants who exercise their enGene Warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event enGene so elects, it will not be required to file or maintain in effect a registration statement, but enGene will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
During any period when enGene will have failed to maintain an effective registration statement covering the enGene Common Shares issuable upon exercise of the enGene Warrants, warrant holders may, until such time as there is an effective registration statement, exercise enGene Warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption, but enGene will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In such event, each holder would pay the exercise price by surrendering the enGene Warrants for that number of enGene Common Shares equal to the quotient obtained by dividing (x) the product of the number of enGene Common Shares underlying the enGene Warrants, multiplied by the excess of the “fair market value” (defined below) less the exercise price of the enGene Warrants by (y) the fair market value. The “fair market value” as used in this paragraph shall mean the volume weighted average price of the enGene Common Shares for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.
enGene also previously agreed that if a registration statement covering the enGene Common Shares issuable upon exercise of the enGene Warrants was not effective by the 60th day after the Closing of the Business Combination, warrant holders could, until such time as there was an effective registration statement, exercise enGene Warrants on a “cashless basis” on the same terms as set forth immediately above. During the period between the expiration of such 60-day window and the date of effectiveness of this registration statement, approximately 1,379,391 enGene Warrants were exercised on such “cashless basis”.
Redemption of enGene Warrants. Once the redeemable enGene Warrants become exercisable, enGene may redeem the outstanding enGene Warrants (except as described herein):
•in whole and not in part;
•at a price of $0.01 per enGene Warrant;
•upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and
•if, and only if, the closing price of the enGene Common Shares equals or exceeds $18.00 per share (as adjusted as described below) for any 20 trading days within a 30-trading day period ending three trading days before enGene send the notice of redemption to the warrant holders.
enGene will not redeem the enGene Warrants as described above unless a registration statement under the Securities Act covering the issuance of the enGene Common Shares issuable upon exercise of the enGene Warrants is then effective and a current prospectus relating to those enGene Common Shares is available throughout the 30-day redemption period. If and when the enGene Warrants become redeemable by enGene, enGene may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
The last of the redemption criterion discussed above is designed to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and enGene issues a notice of redemption of the enGene Warrants, each warrant holder will be entitled to exercise his, her or its warrant prior to the scheduled redemption date. However, the price of the enGene Common Shares may fall below the $18.00 redemption trigger price (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “enGene Warrants — Redemption Procedures — Anti-dilution Adjustments”) as well as the $11.50 (for whole shares) warrant exercise price after the redemption notice is issued.
If enGene calls the enGene Warrants for redemption as described above, enGene will have the option to require any holder that wishes to exercise its enGene Warrant to do so on a “cashless basis.” In determining whether to require all holders to exercise their enGene Warrants on a “cashless basis,” enGene will consider, among other factors, its cash position, the number of enGene Warrants that are outstanding and the dilutive effect on its shareholders of issuing the maximum number of enGene Common Shares issuable upon the exercise of its enGene Warrants. If enGene takes advantage of this option, all holders of enGene Warrants would pay the exercise price by surrendering their enGene Warrants for that number of enGene Common Shares equal to the quotient obtained by dividing (x) the product of the number of enGene Common Shares underlying the enGene Warrants, multiplied by the difference between the exercise price of the enGene Warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market
value” means the 10-day average closing price as of the date on which the notice of redemption is sent to the holders of the enGene Warrants. If enGene takes advantage of this option, the notice of redemption will contain the information necessary to calculate the number of enGene Common Shares to be received upon exercise of the enGene Warrants, including the “fair market value” in such case. Requiring a cashless exercise in this manner will reduce the number of enGene Common Shares to be issued and thereby lessen the dilutive effect of a warrant redemption. We believe this feature is an attractive option to enGene if it does not need the cash from the exercise of the enGene Warrants after the Business Combination. If enGene calls its enGene Warrants for redemption and does not take advantage of this option, the FEAC Sponsor and its permitted transferees would still be entitled to exercise their enGene Warrants for cash or on a cashless basis using the same formula described above that other warrant holders would have been required to use had all warrant holders been required to exercise their enGene Warrants on a cashless basis, as described in more detail below.
No fractional enGene Common Shares will be issued upon exercise. If, upon exercise, a holder would be entitled to receive a fractional interest in a share, enGene will round down to the nearest whole number of the number of enGene Common Shares to be issued to the holder.
Redemption Procedures
A holder of a warrant may notify enGene in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 9.8% (or such other amount as a holder may specify) of the enGene Common Shares issued and outstanding immediately after giving effect to such exercise.
Anti-dilution Adjustments. If the number of outstanding enGene Common Shares is increased by a capitalization or share dividend payable in enGene Common Shares, or by a sub-division of common shares or other similar event, then, on the effective date of such capitalization or share dividend, sub-division or similar event, the number of enGene Common Shares issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding common shares. A rights offering made to all or substantially all holders of common shares entitling holders to purchase enGene Common Shares at a price less than the “historical fair market value” (as defined below) will be deemed a share dividend of a number of enGene Common Shares equal to the product of (i) the number of enGene Common Shares actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for enGene Common Shares) and (ii) one minus the quotient of (x) the price per enGene Common Share paid in such rights offering and (y) the historical fair market value. For these purposes, (i) if the rights offering is for securities convertible into or exercisable for enGene Common Shares, in determining the price payable for enGene Common Shares, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) “historical fair market value” means the volume weighted average price of the enGene Common Shares as reported during the 10 trading day period ending on the trading day prior to the first date on which the enGene Common Shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
In addition, if enGene, at any time while the enGene Warrants are outstanding and unexpired, pays a dividend or makes a distribution in cash, securities or other assets to all or substantially all of the holders of enGene Common Shares on account of such enGene Common Shares (or other securities into which the enGene Warrants are convertible), other than (a) as described above, (b) any cash dividends or cash distributions which, when combined on a per share basis with all other cash dividends and cash distributions paid on the enGene Common Shares during the 365-day period ending on the date of declaration of such dividend or distribution does not exceed $0.50 (as adjusted to appropriately reflect any other adjustments and excluding cash dividends or cash distributions that resulted in an adjustment to the exercise price or to the number of enGene Common Shares issuable on exercise of each warrant) but only with respect to the amount of the aggregate cash dividends or cash distributions equal to or less than $0.50 per share, (c) to satisfy the redemption rights of the holders of enGene Common Shares in connection with the Business Combination, or (d) to satisfy the redemption rights of the holders of the enGene Common Shares in connection with a shareholder vote to amend enGene’s Articles (A) to modify the substance or timing of enGene’s obligation to provide holders of the enGene Shares the right to have their shares redeemed in connection with the Business Combination or (B) with respect to any other provision relating to the rights of holders of the enGene Common Shares.
If the number of enGene Common Shares is decreased by a consolidation, combination, reverse share sub-division or reclassification of the enGene Common Shares or other similar event, then, on the effective date of such consolidation, combination, reverse share sub-division, reclassification or similar event, the number of enGene Common Shares issuable on exercise of each warrant will be decreased in proportion to such decrease in outstanding enGene Common Shares.
Whenever the number of enGene Common Shares purchasable upon the exercise of the enGene Warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of enGene Common Shares purchasable upon the exercise of the enGene Warrants immediately prior to such adjustment and (y) the denominator of which will be the number of enGene Common Shares so purchasable
immediately thereafter. The enGene Warrant Agreement provides that no adjustment to the number of enGene Common Shares issuable upon exercise of a warrant will be required until cumulative adjustments amount to 1% or more of the number of enGene Common Shares issuable upon exercise of a warrant as last adjusted. Any such adjustments that are not made will be carried forward and taken into account in any subsequent adjustment. All such carried forward adjustments will be made (i) in connection with any subsequent adjustment that (taken together with such carried forward adjustments) would result in a change of at least 1% in the number of enGene Common Shares issuable upon exercise of a warrant and (ii) on the exercise date of any warrant.
In case of any reclassification or reorganization of the outstanding enGene Common Shares (other than those described above or that solely affects the par value of such enGene Common Shares), or in the case of any merger or consolidation of enGene with or into another corporation (other than a consolidation or merger in which enGene is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding enGene Common Shares), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of enGene as an entirety or substantially as an entirety in connection with which it is dissolved, the holders of the enGene Warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the enGene Warrants and in lieu of enGene Common Shares immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of enGene Common Shares or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the enGene Warrants would have received if such holder had exercised their enGene Warrants immediately prior to such event.
The enGene Warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and enGene. The enGene Warrant Agreement provides that the terms of the enGene Warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or correcting any mistake, including to conform the provisions of the enGene Warrant Agreement to the description of the terms of the EnGene Warrants and the EnGene Warrant Agreement set forth in the prospectus for FEAC’s IPO, or defective provision (ii) amending the provisions relating to cash dividends on common shares as contemplated by and in accordance with the enGene Warrant Agreement, (iii) providing for the delivery of certain alternative issuances in the case of certain reorganizations or other events or (iv) adding or changing any provisions with respect to matters or questions arising under the enGene Warrant Agreement as the parties to the enGene Warrant Agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the enGene Warrants, provided that the approval by the holders of at least 65% of the then-outstanding enGene Warrants is required to make any change that adversely affects the interests of the registered holders. You should review a copy of the enGene Warrant Agreement and the Warrant Assignment, Assumption and Amendment Agreement, dated as of October 30, 2023, among FEAC, enGene Inc., enGene and Continental Stock Transfer & Trust Company (the “Warrant Assignment, Assumption and Amendment Agreement”), which is filed as an exhibit to the Company’s Annual Report on Form 10-K that is incorporated by reference into the registration statement of which this prospectus is a part, for a complete description of the terms and conditions applicable to the enGene Warrants.
The warrant holders do not have the rights or privileges of holders of enGene Common Shares and any voting rights until they exercise their enGene Warrants and receive enGene Common Shares. After the issuance of enGene Common Shares upon exercise of the enGene Warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by shareholders.
If, upon exercise of the enGene Warrants, a holder would be entitled to receive a fractional interest in a share, enGene will, upon exercise, round down to the nearest whole number the number of enGene Common Shares to be issued to the warrant holder.
enGene has agreed that, subject to applicable law, any action, proceeding or claim against enGene arising out of or relating in any way to the enGene Warrant Agreement or the Warrant Assignment, Assumption and Amendment Agreement will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and enGene irrevocably submit to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim. This provision applies to claims under the Securities Act but does not apply to claims under the Exchange Act or any claim for which the federal district courts of the United States of America are the sole and exclusive forum.
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a summary of the material U.S. federal income tax considerations generally applicable to the ownership and disposition of our Common Shares and Warrants, which we refer to collectively as our securities, by U.S. Holders (as defined herein). This summary is based upon U.S. federal income tax law as of the date of this prospectus, which is subject to change or differing interpretations, possibly with retroactive effect. This summary does not discuss all aspects of U.S. federal income taxation that may be important to particular investors in light of their individual circumstances, including investors subject to special tax rules (e.g., financial institutions, insurance companies, broker-dealers, tax-exempt organizations (including private foundations), taxpayers subject to the rules of Section 451(b) due to their use of certain financial statements, taxpayers that have elected mark-to-market accounting, S corporations, regulated investment companies, real estate investment trusts, passive foreign investment companies, controlled foreign corporations, investors that will hold Common Shares or Warrants as part of a straddle, hedge, conversion, or other integrated transaction for U.S. federal income tax purposes, or investors that have a functional currency other than the U.S. dollar), all of whom may be subject to tax rules that differ materially from those summarized below. In addition, this summary does not discuss other U.S. federal non-income tax considerations (e.g., estate or gift tax), any state, local, or non-U.S. tax considerations or the Medicare tax or alternative minimum tax (including the corporate alternative minimum tax imposed with respect to financial statement income). In addition, this summary is limited to investors that will hold our securities as “capital assets” within the meaning of Section 1221 (generally, property held for investment) under the Internal Revenue Code of 1986, as amended, (the “Code”). No ruling from the Internal Revenue Service, (the “IRS”) has been or will be sought regarding any matter discussed herein. No assurance can be given that the IRS would not assert, or that a court would not sustain a position contrary to any of the tax aspects set forth below.
For purposes of this summary, a “U.S. Holder” is a beneficial holder of securities who or that, for U.S. federal income tax purposes is:
•an individual who is a United States citizen or resident of the United States;
•a corporation created in, or organized under the law of, the United States or any state or political subdivision thereof;
•an estate the income of which is includible in gross income for United States federal income tax purposes regardless of its source; or
•a trust (A) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons (within the meaning of the Code) who have the authority to control all substantial decisions of the trust or (B) that has in effect a valid election under applicable Treasury regulations to be treated as a United States person.
This discussion is based on the Code, proposed, temporary and final Treasury regulations promulgated under the Code, judicial and administrative interpretations thereof, the income tax treaty between the United States and Canada (the “Treaty”) and practices of the U.S. Internal Revenue Service (the “IRS”), all as of the date hereof and all of which are subject to differing interpretations. All of the foregoing is subject to change, which change could apply retroactively and could affect the tax considerations described herein.
If a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds our securities, the tax treatment of a partner, member or other beneficial owner in such partnership will generally depend upon the status of the partner, member or other beneficial owner, the activities of the partnership and certain determinations made at the partner, member or other beneficial owner level. If you are a partner, member or other beneficial owner of an entity or arrangement treated as a partnership for U.S. federal income tax purposes and that holds our securities, you are urged to consult your tax advisor regarding the tax consequences of the ownership and disposition of our securities.
THIS DISCUSSION OF U.S. FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION PURPOSES ONLY, DOES NOT PURPORT TO BE A COMPREHENSIVE ANALYSIS OR DESCRIPTION OF ALL POTENTIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS, AND IS NOT TAX ADVICE. PROSPECTIVE HOLDERS SHOULD CONSULT THEIR TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM OF OWNING AND DISPOSING OF OUR SECURITIES, AS WELL AS THE APPLICATION OF ANY STATE, LOCAL AND NON-U.S. INCOME, ESTATE AND OTHER TAX CONSIDERATIONS.
Taxation of Distributions
General
Subject to the passive foreign investment company (“PFIC”) and foreign currency rules discussed below, if we pay distributions to U.S. Holders of Common Shares, such distributions will generally constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of our current and accumulated earnings and profits as so determined will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. Holder’s adjusted tax basis in our Common Shares. Any remaining excess will be treated as gain realized on the sale or other disposition of the Common Shares and will be treated as described under “—Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Common Shares” below. Because enGene may not maintain calculations of earnings and profits as determined under U.S. federal income tax principles, it is expected that the full amount of distributions (if any) paid by enGene will be reported as dividends for U.S. federal income tax purposes.
With certain exceptions (including dividends treated as investment income for purposes of investment interest deduction limitations), and provided (i) the Common Shares are readily tradable on an established securities market in the United States or enGene is eligible for the benefits of the Treaty, (ii) enGene is not treated as a PFIC with respect to such U.S. Holder for the taxable year in which the dividend was paid nor for the preceding taxable year and (iii) certain holding period requirements are met, dividends we pay to a non-corporate U.S. Holder will generally constitute “qualified dividends” that will be subject to tax at the maximum tax rate accorded to long-term capital gains.
For purposes of the foreign tax credit rules, dividends will be treated as foreign-source income. As discussed below under “Certain Canadian Federal Income Tax Considerations — Dividends on Common Shares,” dividends paid by enGene will be subject to Canadian withholding tax. For U.S. federal income tax purposes, the amount of dividend income will include any amounts withheld in respect of Canadian taxes. Subject to applicable limitations that vary depending upon a U.S. Holder’s particular circumstances and the discussion below regarding certain Treasury regulations, Canadian taxes withheld from dividend payments (at a rate not exceeding the applicable rate provided in the Treaty with respect to a U.S. Holder eligible for the benefits of the Treaty) generally will be creditable against such U.S. Holder’s U.S. federal income tax liability. The rules governing foreign tax credits are complex. For example, Treasury regulations provide that, in the absence of an election to apply the benefits of an applicable income tax treaty, in order for non-U.S. income taxes to be creditable, the relevant non-U.S. income tax rules must be consistent with certain U.S. federal income tax principles, and we have not determined whether the Canadian income tax system meets these requirements. A recent IRS notice indicated the Treasury Department and the IRS are considering amendments to these Treasury regulations and provided some temporary relief from certain of their provisions, and such relief was recently extended. U.S. Holders should consult their tax advisors regarding the creditability of Canadian taxes in their particular circumstances. In lieu of claiming a credit, a U.S. Holder may be able to elect to deduct non-U.S. income taxes, including Canadian taxes, in computing such U.S. Holder’s taxable income, subject to applicable limitations. An election to deduct creditable non-U.S. taxes instead of claiming foreign tax credits applies to all creditable non-U.S. taxes paid or accrued in the taxable year.
Distributions in Non-U.S. Currency
Dividends paid in non-U.S. currency will be included in the gross income of a U.S. Holder in a U.S. dollar amount calculated by reference to a spot market exchange rate in effect on the date that the dividends are received by the U.S. Holder, regardless of whether such foreign currency is in fact converted into U.S. dollars on such date. Such U.S. Holder will have a tax basis for United States federal income tax purposes in the foreign currency received equal to that U.S. dollar value. If such dividends are converted into U.S. dollars on the date of receipt, a U.S. Holder generally should not be required to recognize foreign currency gain or loss in respect thereof. If the foreign currency so received is not converted into U.S. dollars on the date of receipt, such U.S. Holder will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Any gain or loss on a subsequent conversion or other disposition of the foreign currency generally will be treated as ordinary income or loss to such U.S. Holder and generally will be income or loss from sources within the United States for foreign tax credit limitation purposes. U.S. Holders should consult their own tax advisors regarding the treatment of foreign currency gain or loss, if any, on any foreign currency received by a U.S. Holder that are converted into U.S. dollars on a date subsequent to receipt.
Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Common Shares
Subject to the PFIC rules discussed below, a U.S. Holder will recognize gain or loss on the sale, taxable exchange or other taxable disposition of our Common Shares. Any such gain or loss will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder’s holding period for the Common Shares so disposed of exceeds one year. The amount of gain or loss recognized will generally be equal to the difference between (1) the sum of the amount of cash and the fair market value of any property received in such disposition and (2) the U.S. Holder’s adjusted tax basis in its Common Shares so disposed of. A U.S. Holder’s adjusted tax basis in its Common Shares will generally equal the U.S. Holder’s acquisition cost therefor (which, in the case of Common Shares received
upon exercise of a Warrant, will be the U.S. Holder’s initial basis in such Common Shares, as discussed below under the heading “—Exercise of a Warrant”) less any prior distributions in respect of such Common Shares treated as a return of capital, as discussed above. The deductibility of capital losses is subject to limitations. This gain or loss generally will be treated as U.S. source gain or loss.
Exercise of a Warrant
Subject to the PFIC rules discussed below and except as discussed below with respect to the cashless exercise of a Warrant, a U.S. Holder will not recognize gain or loss upon the exercise of a Warrant. The U.S. Holder’s tax basis in a Common Share received upon exercise of a Warrant will generally be an amount equal to the sum of the U.S. Holder’s initial investment in the Warrant and the exercise price of such Warrant. It is unclear whether a U.S. Holder’s holding period for the Common Share received upon exercise of the Warrant would commence on the date of exercise of the Warrant or the day following the date of exercise of the Warrant; however, in either case the holding period will not include the period during which the U.S. Holder held the Warrant.
The tax consequences of a cashless exercise of a Warrant are not clear under current tax law. Subject to the PFIC rules discussed below, such a cashless exercise may be nontaxable, either because the exercise is not a realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either situation, a U.S. Holder’s tax basis in the Common Shares received would generally equal the holder’s tax basis in the Warrant. If the cashless exercise were treated as not being a realization event, it is unclear whether a U.S. Holder’s holding period for the Common Shares would commence on the date of exercise of the Warrant or the day following the date of exercise of the Warrant. If, however, the cashless exercise were treated as a recapitalization, the holding period of the Common Shares would include the holding period of the Warrant.
It is also possible that a cashless exercise could be treated as a taxable exchange in which gain or loss is recognized. In such event, a U.S. Holder would be deemed to have surrendered a number of Warrants having a value equal to the exercise price. The U.S. Holder would recognize capital gain or loss in an amount equal to the difference between the fair market value of the Common Shares represented by the Warrants deemed surrendered and the U.S. Holder’s tax basis in the Warrants deemed surrendered. In this case, a U.S. Holder’s tax basis in the Common Shares received would equal the sum of the U.S. Holder’s initial investment in the Warrants exercised and the exercise price of such Warrants. It is unclear whether a U.S. Holder’s holding period for the Common Shares would commence on the date of exercise of the Warrant or the day following the date of exercise of the Warrant.
Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise, including when a U.S. Holder’s holding period would commence with respect to the Common Shares received, there can be no assurance which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. Holders are urged to consult their tax advisors regarding the tax consequences of a cashless exercise.
Subject to the PFIC rules discussed below, if Warrants are redeemed for cash or we purchase Warrants in an open-market transaction, such redemption or purchase generally will be treated as a taxable disposition to the U.S. Holder, taxed as described below.
Sale, Exchange, Redemption or Expiration of a Warrant
Subject to the PFIC rules discussed below, upon a sale, exchange (other than by exercise), redemption (other than a redemption for Common Shares), or expiration of a Warrant, a U.S. Holder will recognize taxable gain or loss in an amount equal to the difference between (1) the amount realized upon such sale, exchange, redemption or expiration and (2) the U.S. Holder’s tax basis in the Warrant. Such gain or loss will generally be treated as long-term capital gain or loss if the Warrant has been held by the U.S. Holder for more than one year at the time of such sale, exchange, redemption, or expiration. If a Warrant is allowed to lapse unexercised, a U.S. Holder generally will recognize a capital loss equal to such holder’s tax basis in the Warrant. The deductibility of capital losses is subject to certain limitations.
A redemption of Warrants for Common Shares described in this prospectus under “Description of Securities — enGene Warrants” is expected to be treated as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Code. Accordingly, a U.S. Holder should not recognize any gain or loss on the redemption of Warrants for Common Shares. A U.S. Holder’s aggregate tax basis in the Common Shares received in the redemption should equal such U.S. Holder’s aggregate tax basis in the Warrants redeemed and the U.S. Holder’s holding period for the Common Shares received in redemption of its Warrants should include such U.S. Holder’s holding period for the surrendered Warrants.
Possible Constructive Distributions
The terms of each Warrant provide for an adjustment to the number of Common Shares for which the Warrant may be exercised or to the exercise price of the Warrant in certain events, as discussed in the section of this prospectus captioned “Description of Securities
— enGene Warrants.” An adjustment which has the effect of preventing dilution is generally not a taxable event. Nevertheless, a U.S. Holder of Warrants would be treated as receiving a constructive distribution from us if, for example, the adjustment increases the holder’s proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of Common Shares that would be obtained upon exercise) as a result of a distribution of cash to the holders of Common Shares which is taxable to such holders as a distribution. Such constructive distribution would be subject to tax as described under “—Taxation of Distributions” in the same manner as if such U.S. Holder received a cash distribution from us in an amount equal to the fair market value of such increased interest.
Passive Foreign Investment Company Rules
The treatment of U.S. Holders of enGene Common Shares or enGene Warrants could be materially different from that described above due to the application of the PFIC rules.
In general and as relevant here, a non-U.S. corporation is a PFIC for U.S. federal income tax purposes for any taxable year in which (i) 50% or more of the value of its assets (generally determined on the basis of a weighted quarterly average) including its pro rata share of the assets of any corporation in which it is considered to own at least 25% of the shares by value, consists of assets that produce, or are held for the production of, passive income, or (ii) 75% or more of its gross income, including its pro rata share of the gross income of any corporation in which it is considered to own at least 25% of the shares by value, consists of passive income. Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets. Cash and cash equivalents are generally passive assets. The value of goodwill will generally be treated as an active or passive asset based on the nature of the income produced in the activity to which the goodwill is attributable.
enGene’s PFIC status for any taxable year is a factual annual determination that can be made only after the end of that year and will depend on the composition of enGene’s income and assets and the value of its assets from time to time and, for the taxable year in which the Business Combination occurred, the composition of the income and assets, and the value of the assets, of FEAC, its predecessor for this purpose. The value of enGene’s assets includes the value of its goodwill and other intangible assets not shown on its financial statements, which may be determined, in large part, by reference to the market price of the enGene Common Shares from time to time, which is subject to change and may be particularly volatile while the business is at the pre-commercialization stage. In addition, prior to the commercialization of any of enGene’s drug candidates its income may be primarily passive. Accordingly, there is a significant risk that enGene will be a PFIC for its current or any future taxable year.
If enGene is a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of enGene Common Shares and the U.S. Holder did not make any of the applicable PFIC elections discussed below, such U.S. Holder generally will be subject to special and adverse rules with respect to (i) any gain recognized by the U.S. Holder on the sale or other disposition of its enGene Common Shares and (ii) any “excess distribution” made to the U.S. Holder (generally, any distributions to such U.S. Holder during a taxable year of the U.S. Holder to the extent greater than 125% of the average annual distributions received by such U.S. Holder in respect of the enGene Common Shares during the three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder’s holding period for the enGene Common Shares).
Under these rules (the “interest charge rules”):
•the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the enGene Common Shares;
•the amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution, or to the period in the U.S. Holder’s holding period before the first day of enGene’s first taxable year in which enGene is a PFIC, will be taxed as ordinary income;
•the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in the U.S. Holder’s holding period will be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder; and
•an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the U.S. Holder with respect to the tax attributable to each taxable year described in the preceding bullet of the U.S. Holder.
It is not entirely clear how various aspects of the PFIC rules apply to the enGene Warrants. Under proposed Treasury regulations relating to PFICs (the “proposed Treasury regulations”), which have a retroactive effective date, the PFIC rules may apply to rights to acquire shares of a PFIC as if they were shares, and thus could apply to dispositions (other than exercises) of the enGene Warrants. As a result, under the proposed Treasury regulations, if a U.S. Holder sells or otherwise disposes of such enGene Warrants (other than upon exercise of such enGene Warrants) and enGene was a PFIC at any time during the U.S. Holder’s holding period of such enGene Warrants, any gain recognized generally would be treated as an excess distribution, taxed as described above.
PFIC Elections
In general, if enGene is a PFIC, a U.S. Holder may avoid the adverse PFIC tax consequences under the interest charge rules described above in respect of enGene Common Shares, but not enGene Warrants (a) by making or having made a qualified electing fund (“QEF”) election or a mark-to-market election for the first taxable year for which enGene is or was a PFIC and in which such U.S. Holder held (or was deemed to hold) such enGene Common Shares and maintain such election or (b) by making and maintaining a QEF election along with an applicable purging election (collectively, the “PFIC Elections”).
QEF and Purging Elections
As a result of making and maintaining a timely and valid QEF election (if eligible to do so), a U.S. Holder of enGene Common Shares must include in income such U.S. Holder’s pro rata share of enGene’s net capital gains (as long-term capital gain) and other earnings and profits (as ordinary income), on a current basis, whether or not distributed. A U.S. Holder generally may make a separate election to defer the payment of taxes on undistributed income inclusions under the QEF rules, but if deferred, any such taxes will be subject to an interest charge. A subsequent distribution of such earnings and profits that were previously included in income should generally not be taxable as a dividend to such U.S. Holder. The tax basis of a U.S. Holder’s shares in a PFIC with respect to which a QEF election has been made will be increased by amounts that are included in income, and decreased by amounts distributed but not taxed as dividends, under the above rules.
A U.S. Holder may not make a QEF election with respect to its enGene Warrants. If a U.S. Holder that exercises enGene Warrants properly makes and maintains a QEF election with respect to the newly acquired enGene Common Shares (or has previously made a QEF election with respect to its enGene Common Shares), the QEF election will apply to the newly acquired enGene Common Shares. Notwithstanding a QEF election, the adverse tax consequences relating to PFIC shares under the interest charge rules described above, adjusted to take into account the current income inclusions resulting from the QEF election, may continue to apply with respect to the enGene Common Shares (because under the proposed Treasury regulations, the enGene Common Shares generally would be deemed to have a holding period for purposes of the interest charge rules that includes the period the U.S. Holder held the corresponding enGene Warrants), unless the U.S. Holder made a purging election under the PFIC rules.
Under the type of purging election most likely relevant, the U.S. Holder will be deemed to have sold such shares at their fair market value and any gain recognized on such deemed sale will be treated as an excess distribution, as described above. As a result of this election, the U.S. Holder will have additional basis (to the extent of any gain recognized in the deemed sale) and, for purposes of the interest charge rules, a new holding period in such holder’s enGene Common Shares. Because after the purging election takes effect the QEF election will be in effect for the entirety of the new holding period, the interest charge rules will not apply with respect to the enGene Common Shares.
In the absence of a purging election, a U.S. Holder would be treated for purposes of the interest charge rules as if the U.S. Holder held such enGene Common Shares and enGene Warrants for a period that includes a period when the QEF election was not in effect. U.S. Holders are urged to consult their tax advisors regarding the application of the purging elections rules to their particular circumstances.
The QEF election is made on a shareholder-by-shareholder basis and, once made, can be revoked only with the consent of the IRS. A U.S. Holder generally makes a QEF election by attaching a completed IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund), including the information provided in a PFIC Annual Information Statement from enGene, to a timely filed U.S. federal income tax return for the tax year to which the election relates. In the event that enGene determines that enGene is a PFIC for U.S. federal income tax purposes for any taxable year, enGene will, upon request of a holder of enGene Shares, provide a PFIC Annual Information Statement to such holder. Retroactive QEF elections generally may be made only by filing a protective statement with such federal income tax return and if certain other conditions are met or with the consent of the IRS. U.S. Holders are urged to consult their tax advisors regarding the availability and tax consequences of a retroactive QEF election under their particular circumstances.
Mark-to-Market Election
As an alternative to a QEF election, if a U.S. Holder owns shares in a company that is a PFIC and the shares are “regularly traded” on a “qualified exchange,” such U.S. Holder could make a mark-to-market election that would result in tax treatment different from that under the interest charge rules described above. The enGene Common Shares will be treated as regularly traded for any calendar year in which more than a de minimis quantity of the enGene Common Shares are traded on a qualified exchange on at least 15 days during each calendar quarter. Nasdaq, where the enGene Common Shares are listed, is a qualified exchange for this purpose.
Such electing U.S. Holder generally will include for each of its taxable years as ordinary income the excess, if any, of the fair market value of its enGene Common Shares at the end of such year over its adjusted basis in its enGene Common Shares. The U.S. Holder also will recognize an ordinary loss in respect of the excess, if any, of its adjusted basis of its enGene Common Shares over the fair market value of its enGene Common Shares at the end of its taxable year (but only to the extent of the net amount of previously included in income as a result of the mark-to-market election). The U.S. Holder’s basis in its enGene Common Shares will be adjusted to reflect any such income or loss amounts. Any gain recognized on a sale or other taxable disposition of its enGene Common Shares will be treated as ordinary income, and any loss will be treated as an ordinary loss (but only to the extent of the net amount previously included in income as a result of the mark-to-market election, with any excess treated as a capital loss). If a U.S. Holder makes the mark-to-market election, distributions paid on enGene Common Shares will be treated as discussed under “— Taxation of Distributions” above. A mark-to-market election may not be made with respect to the enGene Warrants.
If made, a mark-to-market election will be effective for the taxable year for which the election is made and for all subsequent taxable years in which enGene is a PFIC, unless the enGene Common Shares cease to qualify as “regularly traded” on a “qualified exchange” for purposes of the PFIC rules or the IRS consents to the revocation of the election. U.S. Holders are urged to consult their tax advisors regarding the availability and tax consequences of a mark-to-market election with respect to enGene Common Shares under their particular circumstances (including the possible recognition of income or gain under the PFIC interest charge rules in the case that the mark-to-market election is not made for the first taxable year in which the U.S. Holders own (or are treated as owning) the enGene Common Shares).
Other PFIC Rules
If enGene is a PFIC and, at any time, has a non-U.S. subsidiary that is a PFIC, a U.S. Holder generally would be deemed to own a proportionate amount of the shares of such lower-tier PFIC and generally could incur liability for the deferred tax and interest charge under the interest charge rules described above if enGene receives an excess distribution from, or disposes of all or part of its interest in, the lower-tier PFIC, or the U.S. Holder otherwise was deemed to have disposed of an interest in the lower-tier PFIC, in each case as if the U.S. Holder held such shares directly, even though the U.S. Holder will not receive any proceeds of that distribution or disposition. A mark-to-market election cannot be made with respect to a lower-tier PFIC. U.S. Holders are urged to consult their tax advisors regarding the tax issues raised by lower-tier PFICs.
A U.S. Holder that owns (or is deemed to own) shares in a PFIC during any taxable year of the U.S. Holder may have to file an IRS Form 8621 (whether or not a QEF or mark-to-market election is made) and to provide such other information as may be required by the U.S. Treasury Department. Failure to do so, if required, will extend the statute of limitations applicable to such U.S. Holder until such required information is furnished to the IRS.
THE RULES DEALING WITH PFICS ARE VERY COMPLEX AND ARE IMPACTED BY VARIOUS FACTORS IN ADDITION TO THOSE DESCRIBED ABOVE. ALL U.S. HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE CONSEQUENCES TO THEM OF THE PFIC RULES, INCLUDING, WITHOUT LIMITATION, WHETHER A QEF ELECTION (OR A QEF ELECTION ALONG WITH A PURGING ELECTION), A MARK-TO-MARKET ELECTION, OR ANY OTHER ELECTION IS AVAILABLE AND THE CONSEQUENCES TO THEM OF ANY SUCH ELECTION, THE APPLICATION OF THE PFIC RULES TO WARRANTS, AND THE IMPACT OF ANY PROPOSED OR FINAL PFIC TREASURY REGULATIONS.
Information Reporting and Backup Withholding
Dividend payments (including constructive dividends) with respect to enGene Common Shares and proceeds from the sale, exchange or redemption of enGene Common Shares or enGene Warrants may be subject to information reporting to the IRS and possible United States backup withholding. Backup withholding (currently at a rate of 24 percent) will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number (generally on an IRS Form W-9 provided to the relevant paying agent) and makes other required certifications, or who is otherwise exempt from backup withholding and establishes such exempt status if required to do so. Any amounts withheld under the backup withholding rules may be allowed as a refund or credit against a holder’s U.S. federal income tax liability, if any, provided the required information is timely furnished to the IRS.
In addition, certain U.S. Holders holding specified foreign financial assets with an aggregate value in excess of the applicable dollar thresholds are required to report information to the IRS relating to enGene Common Shares or the non-U.S. financial accounts through which they are held, subject to certain exceptions (including an exception for enGene Common Shares held in accounts maintained by U.S. financial institutions), by attaching a complete IRS Form 8938 (Statement of Specified Foreign Financial Assets) with their tax return for each year in which they hold enGene Common Shares.
CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
The following is a general summary of certain Canadian federal income tax considerations under the Income Tax Act (Canada) and the regulations thereunder (collectively, the “Tax Act”) generally applicable to the holding and disposition of Common Shares and Warrants (collectively, the “Securities”).
Comment is restricted to beneficial owners (other than the Sponsor) of Securities each of whom, at all relevant times, for purposes of the Tax Act and any applicable income tax treaty or convention, (a) holds such Securities as capital property, (b) deals at arm’s length with the Company, (c) is not affiliated with the Company, (d) is neither resident in Canada nor deemed to be resident in Canada, (e) does not use or hold (and is not deemed to use or hold) the Securities in the course of carrying on, or otherwise in connection with, a business in Canada, (f) acquires the Securities pursuant to this prospectus, and (g) has not entered into a “derivative forward agreement” (as defined in the Tax Act) with respect to the Securities (a “Non-Canadian Resident Holder”).
Special rules, which are not discussed in this summary, may apply to a Non-Canadian Resident Holder that is an “authorized foreign bank” as defined in the Tax Act, or an insurer carrying on business in Canada and elsewhere. Such Non-Canadian Resident Holders should consult their own tax advisors with respect to an investment in the Securities.
Generally, a Non-Canadian Resident Holder’s Common Shares or Warrants will be considered to be capital property of such holder provided that the Non-Canadian Resident Holder of trading in or dealing in securities, did not acquire, hold, or dispose of the Common Shares or Warrants in one or more transactions considered to be an adventure or concern in the nature of trade (i.e., speculation) and does not hold the Common Shares or Warrants in the course of carrying on a business.
This summary assumes that, at all relevant times, enGene Holdings Inc. is a resident of Canada for purposes of the Tax Act and any applicable income tax treaty or convention.
This summary is based on the facts set out in this prospectus, the provisions of the Tax Act in force as of the date prior to the date hereof, the Canada-United States Tax Convention (1980) as amended (the “Treaty”) and counsel’s understanding of the current administrative policies and assessing practices of the Canada Revenue Agency (the “CRA”) published in writing by the CRA prior to the date hereof. This summary takes into account all specific proposals to amend the Tax Act publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Tax Proposals”) and assumes that the Tax Proposals will be enacted in the form proposed, although no assurance can be given that the Tax Proposals will be enacted in their current form or at all.
This summary does not otherwise take into account or anticipate any changes in law or in the administrative policies or assessing practices of the CRA, whether by way of judicial, legislative or governmental decision or action. This summary is not exhaustive of all possible Canadian federal income tax considerations and does not take into account other federal or any provincial, territorial or foreign income tax legislation or considerations, which may differ materially from those described in this summary.
This summary is of a general nature only and is not, and is not intended to be, and should not be construed to be, legal or tax advice to any particular Non-Canadian Resident Holder, and no representations concerning the tax consequences to any particular Non-Canadian Resident Holder are made. The tax consequences of acquiring, holding and disposing of the Securities will vary according to the Non-Canadian Resident Holder’s particular circumstances. Non-Canadian Resident Holders should consult their own tax advisors regarding the tax considerations applicable to them having regard to their particular circumstances.
Currency Conversion
In general, for purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition of Securities must be converted into Canadian dollars based on the relevant exchange rate as determined in accordance with the Tax Act.
Adjusted Cost Base of Common Shares
The adjusted cost base to a Non-Canadian Resident Holder of a Common Share acquired pursuant to this prospectus will be determined by averaging the cost of that Common Share with the adjusted cost base (determined immediately before the acquisition of the Common Share) of all other Common Shares held as capital property by the Non-Canadian Resident Holder immediately prior to such acquisition.
Exercise of Warrants
No gain or loss will be realized by a Non-Canadian Resident Holder of a Warrant upon the exercise of such Warrant. When a Warrant is exercised, the Non-Canadian Resident Holder’s cost of the Common Share acquired thereby will be equal to the adjusted cost base of the Warrant to such Non-Canadian Resident Holder, plus the amount paid on the exercise of the Warrant. The Non-Canadian Resident Holder’s adjusted cost base of the Common Share so acquired will be determined by averaging the cost of such Common Share with the adjusted cost base (determined immediately before the acquisition of the Common Share) of all other Common Shares held as capital property by the Non-Canadian Resident Holder immediately prior to such acquisition. A “cashless exercise” of a Warrant pursuant to its terms may result in a disposition of the Warrant, which will be subject to the tax treatment described below under “Disposition of Securities”. Non-Canadian Resident Holders should consult their own tax advisors with respect to the tax consequences to them of a “cashless exercise” of Warrants.
Dividends on Common Shares
Dividends paid or credited (or deemed to be paid or credited) on a Common Share to a Non-Canadian Resident Holder by enGene Holdings Inc. will generally be subject to Canadian withholding tax at the rate of 25%, subject to a reduction of such rate under the terms of an applicable income tax treaty or convention. For example, in the case of a Non-Canadian Resident Holder who is a resident of the United States for purposes of the Treaty, who is the beneficial owner of the dividend, and who qualifies for full benefits of the Treaty, the rate of such withholding tax will generally be reduced to 15% (or 5% if the beneficial owner of such dividend is a corporation that owns at least 10% of the voting stock of enGene Holdings Inc.). Non-Canadian Resident Holders are urged to consult their own tax advisors to determine their entitlement to relief under an applicable income tax treaty or convention.
Dispositions of Securities
A Non-Canadian Resident Holder generally will not be subject to tax under the Tax Act in respect of a capital gain, or entitled to deduct any capital loss, realized on the disposition or deemed disposition of a Security (other than a disposition of Common Shares to enGene Holdings Inc., which may result in a deemed dividend, unless purchased by enGene Holdings Inc. in the open market in the manner in which Common Shares are normally purchased by any member of the public in the open market, in which case other considerations may arise) unless the Security constitutes (or is deemed to constitute) “taxable Canadian property” of such Non-Canadian Resident Holder for purposes of the Tax Act at the time of disposition, and the gain is not exempt from tax pursuant to the terms of an applicable income tax treaty or convention.
Provided the Common Shares are listed on a “designated stock exchange” as defined in the Tax Act (which currently includes the Nasdaq) at the time of disposition, the Securities generally will not constitute taxable Canadian property of a Non-Canadian Resident Holder unless, at any time during the 60-month period immediately preceding the disposition the following two conditions are met concurrently: (i) 25% or more of the issued shares of any class or series of the capital stock of enGene Holdings Inc. were owned by or belonged to one or any combination of (a) the Non-Canadian Resident Holder, (b) persons with whom the Non-Canadian Resident Holder did not deal at arm’s length, and (c) partnerships in which the Non-Canadian Resident Holder or a person described in (b) holds a membership interest directly or indirectly through one or more partnerships; and (ii) more than 50% of the fair market value of the Common Shares was derived, directly or indirectly, from one or any combination of (a) real or immovable property situated in Canada, (b) “Canadian resource property” (as defined in the Tax Act), (c) “timber resource property” (as defined in the Tax Act), or (d) options in respect of, interests in, or for civil law rights in, such properties, whether or not such property exists. Notwithstanding the foregoing, a Security may be deemed to be taxable Canadian property in certain circumstances specified in the Tax Act.
If the Securities are taxable Canadian property of a Non-Canadian Resident Holder, any capital gain realized on the disposition or deemed disposition of such Security may not be subject to tax under the Tax Act pursuant to the terms of an applicable income tax treaty or convention. Non-Canadian Resident Holders whose Securities may constitute taxable Canadian property should consult their own tax advisors.
PLAN OF DISTRIBUTION
We are registering for the offer and sale from time to time by the Selling Holders of up to: (i) 5,693,002 of our Common Shares and 2,686,558 Warrants to purchase Common Shares issued in connection with the 2023 PIPE Financing to the 2023 PIPE Investors, including FEAC Sponsor and an affiliate; (ii) 13,237,012 Common Shares and 3,602,640 Warrants held by certain Selling Holders, including FEAC Sponsor, party to the Registration Rights Agreement, (iii) 6,289,198 Common Shares that may be obtained by the Selling Holders upon the exercise of the Warrants described in (i) and (ii) above, (iv) 14,902,269 of our Common Shares issued in connection with the February 2024 PIPE Financing and (v) 6,758,311 of our Common Shares issued in connection with the October 2024 PIPE Financing. Certain Selling Holders acquired their securities through more than one of the above.
We are also registering the issuance by us of up to an aggregate of 8,511,968 Common Shares upon the exercise of a like number of Warrants consisting of (i) the 6,289,198 Warrants described above following their public resale by the Selling Holders and (ii) 2,222,770 additional outstanding Warrants.
We will not receive any of the proceeds from the sale of the securities by the Selling Holders. We will receive proceeds from Warrants exercised in the event that such Warrants are exercised for cash. The aggregate proceeds to the Selling Holders will be the sale price of the securities less any discounts and commissions borne by the Selling Holders.
The Common Shares beneficially owned by the Selling Holders covered by this prospectus may be offered and sold from time to time by the Selling Holders. The term “Selling Holders” includes donees, pledgees, transferees or other successors in interest selling securities received after the date of this prospectus from a Selling Holder as a gift, pledge, partnership distribution or other transfer. The Selling Holders will act independently of us in making decisions with respect to the timing, manner and size of each sale. Such sales may be made on one or more exchanges or in the over-the-counter market or otherwise, at prices and under terms then prevailing or at prices related to the then current market price or in negotiated transactions. The Selling Holders may sell their Common Shares or Warrants by one or more of, or a combination of, the following methods:
•purchases by a broker-dealer as principal and resale by such broker-dealer for its own account pursuant to this prospectus;
•ordinary brokerage transactions and transactions in which the broker solicits purchasers;
•block trades (which may include crosses) in which the broker-dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
•an over-the-counter or exchange distribution in accordance with the rules of Nasdaq and/or secondary distributions;
•directly to purchasers, including through a specific bidding, auction or other process or in privately negotiated transactions;
•short sales effected after the date the registration statement of which this prospectus is a part is declared effective by the SEC;
•through the distribution of the shares of common stock by any Selling Holder to its employees, partners
•(including limited partners), members or stockholders;
•through delayed delivery requirements;
•by pledge to secure debts and other obligations;
•through trading plans entered into by a Selling Holder pursuant to Rule 10b5-1 under the Exchange Act, that are in place at the time of an offering pursuant to this prospectus and any applicable prospectus supplement hereto that provide for periodic sales of their securities on the basis of parameters described in such trading plans;
•to or through underwriters or broker-dealers, including that broker-dealers may agree with the Selling Holders to sell a specified number of such shares at a stipulated price per share;
•in “at the market” offerings, as defined in Rule 415 under the Securities Act, at negotiated prices, at prices prevailing at the time of sale or at prices related to such prevailing market prices, including sales made directly on a national securities exchange or sales made through a market maker other than on an exchange or other similar offerings through sales agents;
•in privately negotiated transactions;
•in options or other hedging transactions, whether through an options exchange or otherwise;
•through a combination of any of the above methods of sale; or
•any other method permitted pursuant to applicable law.
In addition, any shares that qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this prospectus.
To the extent required, this prospectus may be amended or supplemented from time to time to describe a specific plan of distribution. In connection with distributions of the shares or otherwise, the Selling Holders may enter into hedging transactions with broker-dealers or other financial institutions. In connection with such transactions, broker-dealers or other financial institutions may engage in short sales of Common Shares in the course of hedging transactions, and broker-dealers or other financial institutions may engage in short sales of Common Shares in the course of hedging the positions they assume with Selling Holders. The Selling Holders may also sell Common Shares short and redeliver the shares to close out such short positions. The Selling Holders may also enter into option or other transactions with broker-dealers or other financial institutions which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker- dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). The Selling Holders may also pledge shares to a broker-dealer or other financial institution, and, upon a default, such broker-dealer or other financial institution may effect sales of the pledged shares pursuant to this prospectus (as supplemented or amended to reflect such transaction).
A Selling Holder may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by any Selling Holder or borrowed from any Selling Holder or others to settle those sales or to close out any related open borrowings of stock, and may use securities received from any Selling Holder in settlement of those derivatives to close out any related open borrowings of stock. The third party in such sale transactions will be an underwriter and will be identified in the applicable prospectus supplement (or a post-effective amendment). In addition, any Selling Holder may otherwise loan or pledge securities to a financial institution or other third party that in turn may sell the securities short using this prospectus. Such financial institution or other third party may transfer its economic short position to investors in our securities or in connection with a concurrent offering of other securities.
In effecting sales, broker-dealers or agents engaged by the Selling Holders may arrange for other broker-dealers to participate. Broker-dealers or agents may receive commissions, discounts or concessions from the Selling Holders in amounts to be negotiated immediately prior to the sale.
In offering the shares covered by this prospectus, the Selling Holders and any broker-dealers who execute sales for the Selling Holders may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales (it being understood that the Selling Holders shall not be deemed to be underwriters solely as a result of their participation in this offering). Any profits realized by the Selling Holders and the compensation of any broker-dealer may be deemed to be underwriting discounts and commissions.
In order to comply with the securities laws of certain states, if applicable, the shares must be sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain states the shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.
We have advised the Selling Holders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the activities of the Selling Holders and their affiliates. In addition, we will make copies of this prospectus available to the Selling Holders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The Selling Holders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.
At the time a particular offer of shares is made, if required, a prospectus supplement will be distributed that will set forth the number of shares being offered and the terms of the offering, including the name of any underwriter, dealer or agent, the purchase price paid by any underwriter, any discount, commission and other item constituting compensation, any discount, commission or concession allowed or reallowed or paid to any dealer, and the proposed selling price to the public.
A holder of Warrants may exercise its Warrants in accordance with the Warrant Agreement on or before the expiration date set forth therein by surrendering, at the office of the warrant agent, Continental Stock Transfer & Trust Company, the certificate evidencing such Warrant, with the form of election to purchase set forth thereon, properly completed and duly executed, accompanied by full payment of the exercise price and any and all applicable taxes due in connection with the exercise of the Warrant, subject to any applicable provisions relating to cashless exercises in accordance with the Warrant Agreement.
Lock-Up Agreements
None of the Selling Holders are currently party to any lock-up agreements that generally restricted the transfer of securities.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a “shelf” registration statement on Form S-3 of which this prospectus is a part, including exhibits, schedules and amendments filed with, or incorporated by reference into, the registration statement. This prospectus and any prospectus supplement do not contain all of the information found in the registration statement and exhibits and schedules to the registration statement. For further information about us and the securities registered hereby, reference is made to the registration statement, including the exhibits to the registration statement. Statements contained in this prospectus or any prospectus supplement as to the contents of any contract or other document referred to in, or incorporated by reference into, this prospectus are not necessarily complete and, where that contract is an exhibit to the registration statement of which this prospectus is a part or to the annual, quarterly or other reports under the Securities Exchange Act of 1934, as amended (“Exchange Act”), which are incorporated by reference herein, each statement is qualified in all respects by the exhibit to which the reference relates.
We file annual, quarterly and other reports and other documents with the SEC. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including information we file. You may read any document we file with or furnish to the securities commissions and authorities of the provinces of Canada through SEDAR+ at https://www.sedarplus.com. We also maintain a website (www.engene.com). Information on our website is not a part of this prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to “incorporate by reference” information that we file with the SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus. Any statement contained in this prospectus, any prospectus supplement or in a document incorporated or deemed to be incorporated by reference herein will be deemed to be modified or superseded for purposes of this prospectus and any prospectus supplement to the extent that a statement in any subsequently filed document that also is or is deemed to be incorporated by reference herein modifies or supersedes that statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus or any prospectus supplement. We incorporate by reference the following documents we have filed with the SEC:
•our Current Reports on Form 8-K filed with the SEC on November 9, 2023, November 29, 2023, December 13, 2023, December 21, 2023, December 28, 2023, February 14, 2024, May 15, 2024, July 24, 2024, September 26, 2024, October 21, 2024 and October 25, 2024 (provided that any portions of such reports that are deemed furnished and not filed pursuant to instructions to Form 8-K shall not be incorporated by reference into this prospectus);
•the historical and pro forma financial information set forth in Exhibits 99.1, 99.2, and 99.3 to the Form S-3 of which this prospectus forms a part.
We also incorporate by reference into this prospectus additional documents that we may file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of the filing of the initial registration statement and prior to effectiveness of the registration statement and from the date of this prospectus (other than any documents, or portions of documents, not deemed to be filed) until all of the securities covered by this registration statement have been sold.
You may obtain copies of any of these filings without charge from our website www.engene.com, or by contacting the SEC or accessing its website as described above. The information found on, or otherwise accessible through, our website is not incorporated into, and does not form a part of, this prospectus or any other report or document we file with or furnish to the SEC. We will provide, upon written or oral request, at no cost, to each person, including any beneficial owner, to whom a prospectus is delivered, a copy of any or all of the information that has been incorporated by reference in the prospectus but not delivered with the prospectus. You may request a copy of these filings, at no cost to you, by writing us at enGene Holdings Inc., Attn: Corporate Secretary, 4868 Rue Levy, Suite 220, Saint-Laurent, QC, Canada H4R 2P1. Our telephone number is (514) 332-4888.
You should rely only on the information incorporated by reference or provided in this prospectus or any supplement. We have not authorized anyone else to provide you with different information. You should not assume that information in this prospectus or any supplement is accurate as of any date other than the date on the front of these documents.
ENFORCEMENT OF CIVIL LIABILITIES
We are a corporation existing under the laws of British Columbia, Canada and, as a result, the rights of the holders of our securities may be impacted by Canadian law and our amended organizational documents. All or substantially all of our assets are located outside the United States, and substantially all of our business, including our operations, is conducted outside the United States. In addition, some of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons’ assets may be located outside the United States. As a result, it could be difficult or impossible for you to effect service of process on these individuals in the United States in the event that you believe that your rights have been infringed under applicable securities laws or otherwise or to enforce in the United States judgments obtained in U.S. courts against us or those persons based on civil liability provisions of the U.S. securities laws. There can be no assurance that U.S. investors will be able to enforce against us, members of our board of directors, officers or certain experts named herein who are residents of Canada or other countries outside the United States, any judgments in civil and commercial matters, including judgments under the federal securities laws. There is uncertainty with respect to whether a Canadian court would take jurisdiction on a matter of liability predicated solely upon U.S. federal securities laws, and uncertainty with respect to whether a Canadian court would enforce a foreign judgement on liabilities predicated upon the securities laws of the United States.
TRANSFER AGENT AND REGISTRAR
Our transfer agent, warrant agent and registrar is Continental Stock Transfer & Trust Company, located at 1 State Street, 30th Floor, New York, New York, 10004.
LEGAL MATTERS
The validity of the enGene Common Shares offered by this prospectus has been passed upon for us by Blake, Cassels & Graydon LLP. The validity of the enGene Warrants offered by this prospectus has been passed upon for us by Morgan, Lewis & Bockius LLP. If the validity of any securities is also passed upon by counsel for the underwriters, dealers or agents of an offering of those securities, that counsel will be named in the applicable prospectus supplement.
EXPERTS
The consolidated financial statements of enGene Holdings Inc. as of October 31, 2023 and 2022, and for the years ended October 31, 2023 and 2022, have been incorporated by reference herein in this registration statement in reliance upon the report of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The audit report covering the October 31, 2023 consolidated financial statements contains an explanatory paragraph that states that the Company has incurred a net loss and negative cash flows from operating activities for the year ended October 31, 2023, has an accumulated deficit at October 31, 2023, and will require additional financing in order to fund its future expected negative cash flows, that raise substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
The financial statements of Forbion European Acquisition Corp. for the year ended December 31, 2022 and the period from August 9, 2021 (inception) through December 31, 2021, and as of December 31, 2022 and December 31, 2021, included in this registration statement have been audited by Marcum LLP, independent registered public accounting firm, as stated in their report appearing herein which contains an explanatory paragraph relating to substantial doubt about the ability of Forbion European Acquisition Corp. to continue as a going concern as described in Note 1 to the financial statements. Such financial statements have been so included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
enGene Holdings Inc.
Up to 46,977,183 Common Shares and 6,289,198 Warrants to be Offered and Sold by the Selling Holders
and
Up to 8,511,968 Common Shares Issuable Upon Exercise of Warrants
PROSPECTUS
, 2024
You should rely only on the information contained or incorporated by reference in this prospectus. We have not authorized anyone to provide you with different information. You should not assume that the information contained or incorporated by reference in this prospectus is accurate as of any date other than the date of this prospectus. We are not making an offer of these securities in any state where the offer is not permitted.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth an estimate of the costs and expenses payable by enGene in connection with the issuance and distribution of the securities being registered hereby:
|
|
|
|
|
|
|
Expense |
|
Estimated
Amount |
|
|
Securities and Exchange Commission Registration Fee |
|
US$ |
|
103,805.91 |
|
(1) |
Financial Industry Regulatory Authority filing fee |
|
|
|
106,164.01 |
|
(2) |
Accounting Fees and Expenses |
|
|
|
257,000 |
|
|
Legal Fees and Expenses |
|
|
|
330,500 |
|
|
Financial printing and miscellaneous expenses |
|
|
|
106,500 |
|
|
Total |
|
US$ |
|
903,969.92 |
|
|
(1)Of this amount, US$94,773 was previously paid in connection with the Existing Registration Statement, and US$9,032.91 is being paid concurrently with the filing of this Registration Statement for the registration fee associated with the Common Shares issued in connection with the October 2024 PIPE Financing.
(2)Of this amount, US$96,814 was previously paid in connection with the Existing Registration Statement, and US$9,350.01 is being paid concurrently with the filing of this Registration Statement for the fee associated with the Common Shares issued in connection with the October 2024 PIPE Financing.
We will bear all costs, expenses and fees in connection with the registration of the securities, including with regard to compliance with state securities or “blue sky” laws. The Selling Holders, however, will bear all underwriting commissions and discounts, if any, attributable to their sale of the securities. All amounts are estimates except the SEC registration fee.
Item 15. Indemnification of Directors and Officers
enGene is governed by the Business Corporations Act (British Columbia), or BCBCA. Under the BCBCA, and our Articles, enGene may (or must, pursuant to the Articles) indemnify all eligible parties against all eligible penalties to which such person is or may be liable, and we must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in respect of that proceeding. Each director of the Company is deemed to have contracted with enGene on the terms of indemnity contained in the Articles.
For the purposes of such an indemnification:
“eligible party,” means an individual who
•is or was a director or officer of enGene;
•is or was a director or officer of another corporation
•at a time when the corporation is or was an affiliate of enGene, or
•at the request of enGene; or
•at the request of enGene, is or was, or holds or held a position equivalent to that of, a director or officer of a partnership, trust, joint venture or other unincorporated entity and includes the heirs and personal or other legal representatives of that individual;
“eligible penalty” means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding;
“eligible proceeding” means a proceeding in which an eligible party or any of the heirs and personal or other legal representatives of the eligible party, by reason of the eligible party being or having been a director or officer of, or holding or having held a position equivalent to that of a director or officer of, enGene or an associated corporation:
•is or may be joined as a party, or
•is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding;
“expenses” includes costs, charges and expenses, including legal and other fees, but does not include judgments, penalties, fines or amounts paid in settlement of a proceeding; and
“proceeding” includes any legal proceeding or investigative action, whether current, threatened, pending or completed.
In addition, under the BCBCA, enGene may pay, as they are incurred in advance of the final disposition of an eligible proceeding, the expenses actually and reasonably incurred by an eligible party in respect of that proceeding, provided that enGene first receives from the eligible party a written undertaking that, if it is ultimately determined that the payment of expenses is prohibited by the restrictions noted below, the eligible party will repay the amounts advanced.
Notwithstanding the provisions of enGene’s Articles noted above, enGene must not indemnify an eligible party or pay the expenses of an eligible party, if any of the following circumstances apply:
•if the indemnity or payment is made under an earlier agreement to indemnify or pay expenses and, at the time that the agreement to indemnify or pay expenses was made, enGene was prohibited from giving the indemnity or paying the expenses by its articles;
•if the indemnity or payment is made otherwise than under an earlier agreement to indemnify or pay expenses and, at the time that the indemnity or payment is made, enGene is prohibited from giving the indemnity or paying the expenses by its articles;
•if, in relation to the subject matter of the eligible proceeding, the eligible party did not act honestly and in good faith with a view to the best interests of enGene or the associated corporation, as the case may be; or
•in the case of an eligible proceeding other than a civil proceeding, if the eligible party did not have reasonable grounds for believing that the eligible party’s conduct in respect of which the proceeding was brought was lawful.
In addition, if an eligible proceeding is brought against an eligible party by or on behalf of enGene or by or on behalf of an associated corporation, enGene must not do either of the following:
•indemnify the eligible party in respect of the proceeding; or
•pay the expenses of the eligible party in respect of the proceeding.
Notwithstanding any of the foregoing, and whether or not payment of expenses or indemnification has been sought, authorized or declined under the BCBCA or the Articles of enGene, on the application of enGene or an eligible party, the Supreme Court of British Columbia may do one or more of the following:
•order enGene to indemnify an eligible party against any liability incurred by the eligible party in respect of an eligible proceeding;
•order enGene to pay some or all of the expenses incurred by an eligible party in respect of an eligible proceeding;
•order the enforcement of, or any payment under, an agreement of indemnification entered into by enGene;
•order enGene to pay some or all of the expenses actually and reasonably incurred by any person in obtaining an order under this section; or
•make any other order the court considers appropriate.
The BCBCA and enGene’s Articles authorize us to purchase and maintain insurance for the benefit of an eligible party against any liability that may be incurred by reason of the eligible party being or having been a director or officer of, or holding or having held a position equivalent to that of a director or officer of, enGene, a current or former affiliate of enGene or a corporation, partnership, trust, joint venture or other unincorporated entity at the request of enGene.
In addition, enGene has entered, or will enter, into separate indemnity agreements with each its directors and officers pursuant to which enGene has or will agree to indemnify and hold harmless its directors and officers against any and all liability, loss, damage, cost or expense in accordance with the terms and conditions of the BCBCA and the Articles.
Item 16. Exhibits
The exhibits to this Registration Statement are listed in the Exhibit Index to this Registration Statement, which Exhibit Index is hereby incorporated by reference.
INDEX TO EXHIBITS
|
|
|
Exhibit
Number |
|
Description |
2.1† |
|
Business Combination Agreement, dated May 16, 2023, by and among FEAC, enGene Inc. and enGene (incorporated by reference to Exhibit 2.1 to enGene’s Form S-4/A Registration Statement Registration No.: 333-273851 filed with the SEC on September 26, 2023). |
3.1 |
|
Articles of enGene Holdings Inc. (incorporated by reference to Exhibit 3.1 to enGene’s Form S-4/A Registration Statement Registration No.: 333-273851 filed with the SEC on September 26, 2023) |
4.1 |
|
Specimen Common Share certificate of enGene (incorporated by reference to Exhibit 4.1 to enGene’s Form S-4/A Registration Statement Registration No.: 333-273851 filed with the SEC on September 26, 2023) |
4.2 |
|
Specimen Warrant Certificate of enGene (incorporated by reference to Exhibit 4.3 to enGene’s Form S-4/A Registration Statement Registration No.: 333-273851 filed with the SEC on September 26, 2023). |
4.3 |
|
Warrant Assignment, Assumption and Amendment Agreement, dated as of October 30, 2023, among FEAC, enGene Inc., enGene and Continental Stock Transfer & Trust Company (incorporated herein by reference to Exhibit 4.3 of enGene’s Current Report on Form 8-K filed with the SEC on October 31, 2023). |
4.4 |
|
Warrant Agreement, dated December 9, 2021, between FEAC and Continental Stock Transfer & Trust Company, as warrant agent (incorporated herein by reference to Exhibit 4.1 of FEAC’s Current Report on Form 8-K filed with the SEC on December 14, 2021). |
4.5 |
|
Form of Closing Date Warrant to Purchase Common Shares of enGene Holdings Inc., pursuant to the Amended and Restated Loan and Security Agreement dated December 22, 2023 (incorporated herein by reference to Exhibit 4.1 of enGene’s Current Report on Form 8-K filed with the SEC on December 28, 2023). |
4.6 |
|
Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (incorporated by reference to Exhibit 4.6 to enGene’s Annual Report on Form 10-K filed with the SEC on January 29, 2024). |
5.1 |
|
Opinion of Blake, Cassels & Graydon LLP* |
23.1 |
|
Consent of KPMG LLP* |
23.2 |
|
Consent of Marcum LLP* |
23.3 |
|
Consent of Blake, Cassels & Graydon LLP (included in Exhibit 5.1) |
24.1 |
|
Powers of Attorney (included on signature page to this Registration Statement) |
99.1 |
|
Audited financial statements of Forbion European Acquisition Corp. as of December 31, 2022 and 2021 and for the year ended December 31, 2022 and for the period from August 9, 2021 (inception) through December 31, 2021, including the notes related thereto and the report of independent public accounting firm thereon* |
99.2 |
|
Unaudited condensed consolidated interim financial statements of Forbion European Acquisition Corp., including (i) condensed balance sheets as of September 30, 2023 (unaudited) and December 31, 2022, (ii) condensed statements of operations and statements of changes in shareholders’ deficit for the three and nine months ended September 30, 2023 and 2022 (unaudited) and (iii) condensed statements of cash flows for the nine months ended June 30, 2023 and 2022 (unaudited), including the notes related thereto* |
99.3 |
|
Unaudited Pro Forma Condensed Combined Financial Information for the year ended October 31, 2023 of Forbion European Acquisition Corp., enGene Inc. and its consolidated subsidiary, and enGene Holdings, Inc., including the notes related thereto* |
107 |
|
Filing Fee Table* |
† Certain of the exhibits and schedules to these exhibits have been omitted in accordance with Regulation S-K Item 601(a)(5). The registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.
* Filed herewith.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1)To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i)To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii)To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii)To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii) of this section do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Securities and Exchange Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2)That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3)To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4)That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i)Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(ii)Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(5)That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii)Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii)The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv)Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(6)That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(7)If and when applicable, to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Securities and Exchange Commission under Section 305(b)2 of the Trust Indenture Act
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in City of Saint-Laurent, Quebec, Canada, on November 13, 2024.
|
|
|
|
ENGENE HOLDINGS INC. |
|
|
|
|
By: |
/s/ Ronald H.W. Cooper |
|
|
Ronald H. W. Cooper |
|
|
Chief Executive Officer |
|
|
|
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints each of Ronald H. W. Cooper, Ryan Daws or Lee Giguere, acting alone or together with another attorney-in-fact, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for such person and in his or her name, place and stead, in any and all capacities, to sign any or all further amendments (including post-effective amendments) to this registration statement (and any additional registration statement related hereto permitted by Rule 462(b) promulgated under the Securities Act (and all further amendments, including post-effective amendments, thereto)), and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1933, as amended, this registration statement has been signed below by the following persons on behalf of the registrant and in the capacities indicated on the date listed below.
|
|
|
|
Signature |
|
Title |
Date |
|
|
|
|
/s/ Ronald H.W. Cooper |
|
Chief Executive Officer (Principal Executive Officer) and Director |
November 13, 2024 |
Ronald H. W. Cooper |
|
|
|
|
|
|
|
/s/ Ryan Daws |
|
Chief Financial Officer (Principal Financial and Accounting Officer) |
November 13, 2024 |
Ryan Daws |
|
|
|
|
|
|
|
/s/ Jasper Bos |
|
Director |
November 13, 2024 |
Jasper Bos |
|
|
|
|
|
|
|
/s/ Gerald Brunk |
|
Director |
November 13, 2024 |
Gerald Brunk |
|
|
|
|
|
|
|
/s/ Richard Glickman |
|
Director |
November 13, 2024 |
Dr. Richard Glickman |
|
|
|
|
|
|
|
/s/ Paul Hastings |
|
Director |
November 13, 2024 |
Paul Hastings |
|
|
|
|
|
|
|
/s/ Wouter Joustra |
|
Director |
November 13, 2024 |
Wouter Joustra |
|
|
|
|
|
|
|
/s/ Lota S. Zoth |
|
Director |
November 13, 2024 |
Lota S. Zoth |
|
|
|
EXHIBIT 5.1
|
|
|
Blake, Cassels & Graydon LLP
Barristers & Solicitors
Patent & Trade-mark Agents
1133 Melville Street
Suite 3500, The Stack
Vancouver, BC V6E 4E5 Canada
Tel: 604-631-3300 Fax: 604-631-3309 |
|
|
|
|
November 13, 2024 |
|
|
|
enGene Holdings Inc. 4868 Rue Levy, Suite 220 Saint-Laurent, QC H4R 2P1 |
|
RE: enGene Holdings Inc. - Registration Statement on Form S-3
Dear Sirs and Mesdames:
We have acted as Canadian counsel to enGene Holdings Inc., a corporation governed by the Business Corporations Act (British Columbia) (the “Corporation”), in connection with the preparation and filing with the United States Securities and Exchange Commission (the “SEC”) of a Registration Statement (the “Registration Statement”) on Form S-3 under the United States Securities Act of 1933, as amended (the “Act”) relating to the registration for resale by the Selling Holders named in the Registration Statement (the “Selling Holders”) of up to: (i) 46,977,183 common shares without par value, in the capital of the Corporation (“Common Shares”); (ii) up to 6,289,198 warrants to purchase Common Shares (“Warrants”) to be offered and sold by the Selling Holders; and (iii) up to 8,511,968 Common Shares issuable upon exercise of Warrants. Of the 46,977,183 Common Shares registered for resale, 6,758,311 Common Shares were issued pursuant to the Corporation’s private placement (the “October PIPE”), which closed on October 29, 2024 (the “October PIPE Shares”).
Materials Reviewed
In connection with this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of each of the following documents:
(a)the Registration Statement and such matters of fact and questions of law as we have considered appropriate for the purposes of this letter;
(b)the subscription agreements entered into pursuant to the October PIPE (the “Subscription Agreements”);
(c)resolutions of the directors of the Corporation approving, among other things, the October PIPE and the issuance of the October PIPE Shares; and
(d)the notice of articles and the articles of the Corporation.
We have also examined originals or copies, certified or otherwise identified to our satisfaction, of such public and corporate records, certificates, instruments and other documents.
Assumptions and Fact Reliance
We have assumed that:
(a)all information contained in all documents reviewed by us is true and correct;
(b)the genuineness of all signatures on all documents reviewed by us;
(c)the authenticity and completeness of all documents submitted to us as originals;
Page 2
(d)the conformity to authentic originals of all documents submitted to us as certified or photostatic copies, whether facsimile, electronic, photostatic, certified or otherwise, and the authenticity of the originals of such copies;
(e)the accuracy, currency and completeness of the indices and filing systems maintained at the public offices, registries and websites where we have searched or made inquiries or have caused searches or enquiries to be made and of the information and advice provided to us by appropriate government, regulatory and other like officials with respect to those matters referred to herein;
(f)each natural person signing any document reviewed by us had the legal capacity to do so, none of which facts we have independently verified;
(g)the due authorization, execution and delivery of all documents in drafts previously reviewed where authorization, execution and delivery are prerequisites to the effectiveness of such documents;
(h)the Subscription Agreements have been duly authorized, executed and delivered by, and constitute, valid and legally binding obligations of, each of the parties thereto enforceable against each of them in accordance with its terms under the laws of the State of Delaware;
(i)that insofar as any obligation under any of the Subscription Agreements is to be performed in any jurisdiction outside of the Province of British Columbia, its performance will not be illegal or unenforceable by virtue of the laws of that other jurisdiction;
(j)the terms used in any of the Subscription Agreements have the same meanings under the laws of the Province of British Columbia as they do under the laws of the State of Delaware and would be interpreted and understood under the laws of the Province of British Columbia in the same way as they are interpreted and understood under the laws of the State of Delaware; and
(k)the Registration Statement will be effective and comply with all applicable laws.
We have not undertaken any special or independent investigation to determine the existence or absence of any facts or circumstances relating to the Common Shares or the Subscription Agreements. No inference as to our knowledge as to such facts and circumstances should be drawn merely from our specific representation of the Corporation.
Whenever our opinion refers to the Corporation’s Common Shares as being “fully paid and non-assessable”, such opinion indicates that the holder of such Common Shares cannot be required to contribute any further amounts to the Corporation by virtue of its status as holder of such Common Shares of the Corporation, either in order to complete payment for such Common Shares, to satisfy claims of creditors of the Corporation, or otherwise. No opinion is expressed as to the actual receipt by the Corporation of the consideration for the issuance of such Common Shares or as to the adequacy of any consideration received.
Applicable Laws
We are qualified to carry on the practice of law in the Province of British Columbia. Our opinion below is expressed only with respect to the laws of the Province of British Columbia and the federal laws of Canada applicable therein, in each case, in effect on the date hereof. We express no opinion with respect to the laws of any other jurisdiction.
Opinions
Based upon the foregoing, and subject to the qualifications, assumptions and limitations stated herein, we are of the opinion that the October PIPE Shares registered under the Registration Statement have been validly issued as fully paid and non-assessable shares in the capital of the Corporation.
Qualifications and Liabilities
Page 3
This opinion letter has been prepared for your use in connection with the Registration Statement and is expressed as of the date hereof. Our opinion is expressly limited to the matters set forth above and we render no opinion, whether by implication or otherwise, as to any other matters relating to the Corporation, the Registration Statement or the Common Shares and does not take into account any proposed rules, policies or legislative changes that may come into force following the date hereof.
We hereby consent to the filing of this opinion letter as an exhibit to the Registration Statement and to the reference to this firm under the caption “Legal Matters” in the Registration Statement. In giving this consent, we do not hereby agree that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the SEC promulgated thereunder.
Yours very truly,
/s/ Blake, Cassels & Graydon LLP
EXHIBIT 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the use of our report dated January 29, 2024, with respect to the consolidated balance sheets as of October 31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, redeemable convertible preferred shares and shareholders’ equity (deficit) and cash flows for the years then ended, and the related notes, of enGene Holdings Inc. incorporated herein by reference and to the reference to our firm under the heading “Experts” in the prospectus.
/s/ KPMG LLP
November 13, 2024
Montréal, Canada
EXHIBIT 23.2
Independent Registered Public Accounting Firm's Consent
We consent to the inclusion in this Registration Statement of enGene Holdings Inc. on Form S-3 of our report dated March 30, 2023, which includes an explanatory paragraph as to Forbion European Acquisition Corp.’s ability to continue as a going concern with respect to our audits of the financial statements of Forbion European Holdings Acquisition Corp.as of December 31, 2022 and 2021and for the year ended December 31, 2022 and for the period from August 9, 2021 (inception) through December 31, 2021, which report appears in the Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading “Experts” in such Prospectus. We were dismissed as auditors on November 13, 2023 and, accordingly, we have not performed any audit or review procedures with respect to any financial statements appearing in such Prospectus for the periods after the date of our dismissal.
/s/ Marcum llp
Marcum llp
New York, NY
November 13, 2024
EXHIBIT 99.1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
Forbion European Acquisition Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Forbion European Acquisition Corp. (the “Company”) as of December 31, 2022 and 2021, the related statements of operations, changes in shareholders’ deficit and cash flows for the year ended December 31, 2022, and for the period from August 9, 2021 (inception) through December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the year ended December 31, 2022 , and for the period from August 9, 2021 (inception) through December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
Explanatory Paragraph - Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1 to the financial statements, the Company’s ability to execute its business plan is dependent upon the consummation of a business combination and it lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. Further, if the Company does not complete a business combination by June 14, 2023, or obtain approval for an extension of this deadline, it will be required to cease all operations except for the purpose of liquidating. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans with regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Marcum LLP
Marcum LLP
We have served as the Company’s auditor since 2021.
New York, NY
March 30, 2023
FORBION EUROPEAN ACQUISITION CORP.
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
December 31,
2022 |
|
December 31,
2021 |
Assets: |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash |
|
$ |
314,151 |
|
|
$ |
1,069,298 |
|
Prepaid expense |
|
|
197,653 |
|
|
|
498,591 |
|
Total current assets |
|
|
511,804 |
|
|
|
1,567,889 |
|
Prepaid expenses- non-current portion |
|
|
— |
|
|
|
209,052 |
|
Cash and securities held in trust account |
|
|
131,531,334 |
|
|
|
129,669,409 |
|
Total assets |
|
$ |
132,043,138 |
|
|
$ |
131,446,350 |
|
Liabilities, Shares Subject to Redemption and Shareholders’ Deficit: |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accrued offering costs and expenses |
|
$ |
844,605 |
|
|
$ |
316,651 |
|
Due to related party |
|
|
48,904 |
|
|
|
10,796 |
|
Total current liabilities |
|
|
893,509 |
|
|
|
327,447 |
|
Deferred underwriting commissions |
|
|
3,727,500 |
|
|
|
3,727,500 |
|
Total liabilities |
|
|
4,621,009 |
|
|
|
4,054,947 |
|
Commitments and Contingencies (Note 6) |
|
|
|
|
|
|
|
|
Class A ordinary shares subject to possible redemption, 12,650,000 shares at redemption value of approximately $10.40 and $10.25 at December 31, 2022 and 2021, respectively |
|
|
131,531,334 |
|
|
|
129,669,409 |
|
Shareholders’ Deficit: |
|
|
|
|
|
|
|
|
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding |
|
|
— |
|
|
|
— |
|
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none outstanding (excluding 12,650,000 shares subject to possible redemption issued) at December 31, 2022 and 2021 |
|
|
— |
|
|
|
— |
|
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 3,162,500 shares issued and outstanding at December 31, 2022 and 2021 |
|
|
316 |
|
|
|
316 |
|
Additional paid-in capital |
|
|
— |
|
|
|
— |
|
Accumulated deficit |
|
|
(4,109,521 |
) |
|
|
(2,278,322 |
) |
Total shareholders’ deficit |
|
|
(4,109,205 |
) |
|
|
(2,278,006 |
) |
Total Liabilities, Shares Subject to Redemption and Shareholders’ Deficit |
|
$ |
132,043,138 |
|
|
$ |
131,446,350 |
|
The accompanying notes are an integral part of these financial statements.
FORBION EUROPEAN ACQUISITION CORP.
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, 2022 |
|
|
For the Period
from
August 9, 2021
(Inception) through December 31, 2021 |
Formation and operating costs |
|
$ |
1,831,421 |
|
|
$ |
232,346 |
|
Loss from operations |
|
$ |
(1,831,421 |
) |
|
$ |
(232,346 |
) |
Other income |
|
|
|
|
|
|
|
|
Bank Interest Income |
|
|
222 |
|
|
|
— |
|
Interest earned from Trust Account |
|
|
1,861,925 |
|
|
|
6,909 |
|
Total other income |
|
|
1,862,147 |
|
|
|
6,909 |
|
Net income (loss) |
|
$ |
30,726 |
|
|
$ |
(225,437 |
) |
Basic and diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption |
|
|
12,650,000 |
|
|
|
1,558,966 |
|
Basic and diluted net income (loss) per share, Class A ordinary shares subject to possible redemption |
|
$ |
0.00 |
|
|
$ |
(0.05 |
) |
Basic and diluted, weighted average shares outstanding - Class B ordinary shares |
|
|
3,162,500 |
|
|
|
3,162,500 |
|
Basic and diluted net income (loss) per share, Class B ordinary shares |
|
$ |
0.00 |
|
|
$ |
(0.05 |
) |
The accompanying notes are an integral part of these financial statements.
FORBION EUROPEAN ACQUISITION CORP.
STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 2022 AND
FOR THE PERIOD FROM AUGUST 9, 2021 (INCEPTION) THROUGH DECEMBER 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A
Ordinary Share |
|
Class B
Ordinary Share |
|
Additional Paid-In |
|
Accumulated |
|
Shareholders' |
|
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Capital |
|
Deficit |
|
Deficit |
|
Balance as of August 9, 2021 (Inception) |
|
— |
|
$ |
— |
|
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Class B ordinary share issued to initial shareholder |
|
— |
|
|
— |
|
3,162,500 |
|
|
316 |
|
|
24,684 |
|
|
|
— |
|
|
|
25,000 |
|
Sale of 5,195,000 Private Placement Warrants, net of fair value of warrant |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
7,792,500 |
|
|
|
— |
|
|
|
7,792,500 |
|
Allocated proceeds to public warrants |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
3,493,159 |
|
|
|
— |
|
|
|
3,493,159 |
|
Underwriters’ discount and deferred underwriter discount allocated to warrants |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
(161,749 |
) |
|
|
— |
|
|
|
(161,749 |
) |
Other offering expenses |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
(23,283 |
) |
|
|
— |
|
|
|
(23,283 |
) |
Net loss |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
|
(225,437 |
) |
|
|
(225,437 |
) |
Remeasurement of Class A ordinary shares subject to possible redemption to redemption amount |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
(11,125,311 |
) |
|
|
(2,052,885 |
) |
|
|
(13,178,196 |
) |
Balance as of December 31, 2021 |
|
— |
|
|
— |
|
3,162,500 |
|
|
316 |
|
|
— |
|
|
|
(2,278,322 |
) |
|
|
(2,278,006 |
) |
Net income |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
|
30,726 |
|
|
|
30,726 |
|
Remeasurement of Class A ordinary shares subject to possible redemption to redemption amount |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
|
(1,861,925 |
) |
|
|
(1,861,925 |
) |
Balance as of December 31, 2022 |
|
— |
|
$ |
— |
|
3,162,500 |
|
$ |
316 |
|
$ |
— |
|
|
$ |
(4,109,521 |
) |
|
$ |
(4,109,205 |
) |
The accompanying notes are an integral part of these financial statements.
FORBION EUROPEAN ACQUISITION CORP.
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, 2022 |
|
For the Period from August 9, 2021 (Inception) through December 31, 2021 |
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
30,726 |
|
|
$ |
(225,437 |
) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Formation cost paid by Sponsor |
|
|
— |
|
|
|
6,941 |
|
Interest earned on cash and marketable securities held in Trust Account |
|
|
(1,861,925) |
|
|
|
(6,909 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Prepaid expenses |
|
|
509,990 |
|
|
|
(707,643 |
) |
Accrued offering costs and expenses |
|
|
527,954 |
|
|
|
126,004 |
|
Due from related party |
|
|
38,108 |
|
|
|
10,796 |
|
Net cash used in operating activities |
|
$ |
(755,147 |
) |
|
$ |
(796,248 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Principal deposited in Trust Account |
|
$ |
— |
|
|
$ |
(129,662,500) |
|
Net cash used in investing activities |
|
$ |
— |
|
|
$ |
(129,662,500 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Proceeds from initial public offering, net of costs |
|
$ |
— |
|
|
$ |
123,735,546 |
|
Proceeds from private placement |
|
|
— |
|
|
|
7,792,500 |
|
Proceeds from issuance of promissory note to related party |
|
|
— |
|
|
|
124,577 |
|
Payment of promissory note to related party |
|
|
— |
|
|
|
(124,577 |
) |
Net cash provided by financing activities |
|
$ |
— |
|
|
$ |
131,528,046 |
|
Net change in cash |
|
|
(755,147 |
) |
|
|
1,069,298 |
|
Cash, beginning of the period |
|
|
1,069,298 |
|
|
|
— |
|
Cash, end of the period |
|
$ |
314,151 |
|
|
$ |
1,069,298 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
Deferred offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares |
|
$ |
— |
|
|
$ |
18,059 |
|
Deferred underwriters’ discount payable charged to additional paid in capital |
|
$ |
— |
|
|
$ |
3,727,500 |
|
Remeasurement Adjustment of Class A ordinary shares subject to possible redemption |
|
$ |
1,861,925 |
|
|
$ |
13,178,196 |
|
Accrued offering costs |
|
$ |
— |
|
|
$ |
190,647 |
|
The accompanying notes are an integral part of these financial statements.
FORBION EUROPEAN ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2022 and 2021
Note 1 — Organization, Business Operation and Going Concern
Forbion European Acquisition Corp. (the “Company”) was incorporated as a Cayman Islands exempted company on August 9, 2021. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar Business Combination with one or more businesses or entities (the “Business Combination”).
As of December 31, 2022, the Company had not commenced any operations. All activity through December 31, 2022 relates to the Company’s formation and the Initial Public Offering (the “IPO” or “Public Offering”) which is described below, and the Company’s completion of a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Public Offering. The Company has selected December 31 as its fiscal year end.
The Company’s Sponsor is Forbion Growth Sponsor FEAC I B.V., a Cayman Islands limited liability company (the “Sponsor”).
The registration statement for the Company’s IPO was declared effective on December 9, 2021 (the “Effective Date”). On December 14, 2021, the Company consummated the IPO of 11,000,000 units (or 12,650,000 units if the underwriters’ over-allotment option is exercised in full) at $10.00 per unit (the “Units”), which is discussed in Note 3. Each Unit consists of one Class A ordinary share and one-third of one redeemable warrant (the “Public Warrants”). Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share. On December 15, 2021, the underwriters exercised their full over-allotment option and purchased the additional Units available to them. The aggregate Units sold in the IPO and subsequent over-allotment option exercise were 12,650,000 and generated gross proceeds of $126,500,000.
Simultaneously with the consummation of the IPO, the Company consummated the private placement of 4,700,000 warrants (or 5,195,000 warrants when the underwriters’ over-allotment option was fully exercised on December 15, 2021) (the “Private Placement Warrants”) to the Sponsor, at a price of $1.50 per Private Placement Warrant. The sale of the Private Placement Warrants in connection with the IPO and subsequent over-allotment option exercise generated gross proceeds of $7,792,500.
Transaction costs related to the IPO amounted to $5,793,160 consisting of $1,800,000 of underwriting commissions, $3,150,000 of deferred underwriting commissions, and $843,160 of other offering costs. The underwriters’ exercise of their full over-allotment option generated an additional $907,500 in transaction costs for aggregate transaction costs of $6,700,660 consisting of $2,130,000 of underwriting commissions, $3,727,500 of deferred underwriting commissions and $843,160 of other offering costs. In addition, $1,641,236 of cash was held outside of the Trust Account (as defined below) and is available for working capital purposes.
On December 15, 2021, the underwriter fully exercised the over-allotment option and purchased an additional 1,650,000 Units for additional gross proceeds of $16,500,000. Simultaneously with the exercise of the over-allotment option, the Sponsor purchased an addition 495,000 Private Placement Warrants for additional gross proceeds of $742,500, which was already included in the Trust Account and shown as a Deposit in Advance in this financial statement.
Following the closing of the exercise of the underwriters’ full over-allotment option, an additional $16,170,000 was placed in the Trust Account for aggregate proceeds in the Trust Account of $129,662,500 ($10.25 per Unit). As a result of the underwriters’ over-allotment option exercise, 412,500 Founder Shares are no longer subject to forfeiture.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination.
The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (as defined below) (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of signing a definitive agreement in connection with the initial Business Combination. However, the Company will complete the initial Business Combination only if the post-Business Combination company in which its public shareholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or is otherwise not required to register as an investment company under the Investment Company Act (the “Investment Company Act”). There is no assurance that the Company will be able to complete a Business Combination successfully.
Following the closing of the IPO on December 14, 2021, $113,492,500 from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was deposited into a trust account (the “Trust Account”). This amount was comprised of $10.25 per Unit for the 11,000,000 Units sold in the IPO in addition to a $742,500 Deposit in Advance from the Sponsor related to the underwriters’ exercise of the full over-allotment option which took place the following day on December 15, 2021. Following the closing of the IPO and the exercise of the underwriters’ full over-allotment option, $129,662,500 ($10.25 per Unit) was held in the Trust Account and will only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its income taxes, if any, the Company’s amended and restated memorandum and articles of association, as discussed below and subject to the requirements of law and regulation, will provide that the proceeds from the Public Offering and the sale of the Private Placement Warrants held in the Trust Account will not be released from the Trust Account (1) to the Company, until the completion of the initial Business Combination, or (2) to its public shareholders, until the earliest of (a) the completion of the initial Business Combination, and then only in connection with those Class A ordinary shares that such shareholders properly elected to redeem, subject to the limitations described herein, (b) the redemption of any public shares properly tendered in connection with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with the initial Business Combination or to redeem 100% of the public shares if the Company does not complete the initial Business Combination within Combination Period or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares, and (c) the redemption of the public shares if the Company has not consummated the Company’s Business Combination within Combination Period, subject to applicable law. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (b) in the preceding sentence shall not be entitled to funds from the Trust Account upon the subsequent completion of an initial Business Combination or liquidation if the Company has not consummated an initial Business Combination within Combination Period, with respect to such Class A ordinary shares so redeemed. The funds held in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of its public shareholders. As it is expected that we are and will continuously be considered a Dutch tax resident, any redemption proceeds (including interest income on the trust account) distributed to our shareholders in excess of the paid-up capital for Dutch tax purposes may be subject to 15% Dutch dividend withholding tax.
The Company will provide holders (the “Public Shareholders”) of its Class A ordinary shares, par value $0.0001, sold in the IPO (the “Public Shares”), with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of a Business Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a proposed Business Combination or conduct a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require the Company to seek shareholder approval under applicable law or stock exchange listing requirements.
The Company will provide its Public Shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of the initial Business Combination, regardless of whether such shareholder votes on such proposed Business Combination, and if they do vote, regardless of whether they vote for or against such proposed Business Combination, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its income taxes, if any, divided by the number of then-outstanding Public Shares, subject to the limitations described herein. The amount in the Trust Account is initially anticipated to be $10.25 per public share.
The per share amount that the Company will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of the initial Business Combination with respect to the Company’s warrants. Further, the Company will not proceed with redeeming the Public Shares, even if a Public Shareholder has properly elected to redeem its Public Shares if a Business Combination does not close.
The ordinary shares subject to redemption were recorded at a redemption value and classified as temporary equity upon the completion of the Public Offering, in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks shareholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination.
The Company’s amended and restated memorandum and articles of association provides that the Company will have only 18 months from the closing of the Public Offering (or up to 24 months from the closing of the IPO if the Company extends the period of time to consummate a Business Combination, subject to the Sponsor depositing additional funds in the Trust Account) (the “Combination Period”) to consummate its initial Business Combination. If the Company has not consummated an initial Business Combination within Combination Period, the Company will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its income taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and its board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to consummate an initial Business Combination within Combination Period.
The Sponsor and each member of its management team have entered into an agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their Founder Shares (ii) waive their redemption rights with respect to their Founder Shares and public shares in connection with a shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association (A) that would modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with the initial Business Combination or to redeem 100% of the public shares if the Company does not complete the initial Business Combination within Combination Period or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares and (iii) waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if the Company fails to consummate an initial Business Combination within Combination Period (although they will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares they hold if the Company fails to complete the initial Business Combination within the prescribed time frame).
The Company has until 18 months from the closing of the Public Offering to complete a Business Combination. However, if the Company anticipates that it may not be able to consummate a Business Combination within 18 months, the Company may extend the period of time to consummate a Business Combination by up to two additional three-month periods for a total of 24 months to complete a Business Combination (the “Combination Period”). In order to extend the time available for the Company to consummate a Business Combination, the Sponsor or its affiliate or designees must deposit into the Trust Account, for each additional three-month period, $1,265,000 ($0.10 per Public Share in either case), on or prior to the date of the applicable deadline.
The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent auditors) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.25 per public share or (2) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Public Offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company has not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believes that the Sponsor’s only assets are securities of the Company and, therefore, the Sponsor may not be able to satisfy those obligations. The Company has not asked the Sponsor to reserve for such obligations.
Going Concern, Liquidity and Capital Resources
The Company’s liquidity needs up to December 14, 2021 had been satisfied through a payment from the Sponsor of $25,000 (see Note 5 of the Financial Statements) for the Founder Shares to cover certain offering costs and the loan under an unsecured promissory note from the Sponsor of up to $500,000. At December 31, 2022, the Company had approximately $0.3 million in its operating bank account and a working capital deficit of approximately $0.4 million.
In addition, in order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, provide the Company Working Capital Loans, as defined below (see Note 5 of the Financial Statements). As of December 31, 2022 and, 2021, there were no amounts outstanding under any Working Capital Loans.
In connection with the Company’s assessment of going concern considerations in accordance with FASB ASC205-40, Presentation of Financial Statements—Going Concern”, management has determined that the Company has and will continue to incur significant costs in pursuit of its acquisition plans which raises substantial doubt about the Company’s ability to continue as a going concern. Moreover, we may need to obtain additional financing either to complete our initial Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of our initial Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination.
Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of the Company’s initial Business Combination. If the Company is unable to complete its initial Business Combination because it does not have sufficient funds available to it, the Company will be forced to cease operations and liquidate the Trust Accounts. In addition, following the Company’s initial Business Combination, if cash on hand is insufficient, the Company may need to obtain additional financing in order to meet its obligations.
Further, management has determined that if the Company is unable to complete a Business Combination by June 14, 2023 (the “Combination Period”), then the Company will cease all operations except for the purpose of liquidating. However, the Company may, by resolution of its board of directors if requested by the Company’s sponsor, extend the Combination Period two times by an additional three months each time (for a total of up to 24 months to complete a Business Combination), subject to the sponsor depositing additional funds into the trust account as further described herein. The date for mandatory liquidation and subsequent dissolution as well as the Company’s liquidity condition raise substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after the Combination Period.
Risks and Uncertainties
Management is currently evaluating the impact of the current global economic uncertainty, the COVID-19 pandemic, rising interest rates, rising inflation, increases in energy prices, supply chain disruptions and the Russia-Ukraine armed conflict (including the impact of any sanctions imposed in response thereto) and has concluded that while it is reasonably possible that any of these could have a negative effect on the Company’s financial position, results of operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact the Company’s business and its ability to complete an initial Business Combination.
Note 2 — Significant Accounting Policies
Basis of Presentation
The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”).
Emerging Growth Company Status
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with those of another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of the financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2022 and 2021.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheets, primarily due to its short-term nature.
The Company follows the guidance in ASC 820, “Fair Value Measurement,” for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).
The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
|
|
|
Level 1 — |
|
Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. |
|
|
|
Level 2 — |
|
Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means. |
|
|
|
Level 3 — |
|
Valuations based on inputs that are unobservable and significant to the overall fair value measurement. |
Cash and Securities Held in Trust Account
As of December 31, 2022, investment in the Company’s Trust Account consisted of $1,375 in cash and $131,529,959 in U.S. Treasury Securities. As of December 31, 2021, investment in the Company’s Trust Account consisted of $1,485 cash and $129,667,924 in U.S. Treasury Securities. All of the U.S. Treasury Securities will mature on June 15, 2023. The Company classified its U.S. Treasury Securities as held-to-maturity in accordance with FASB ASC Topic 320 “Investments—Debt and Equity Securities”. Held-to—maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums of discounts. The carrying value
approximates the fair value due to its short-term maturity. The carrying value, excluding gross unrealized holding loss and fair value of held to maturity securities at December 31, 2022 and 2021 are as follows:
|
|
|
|
|
|
|
|
|
|
|
Carrying Value as of December 31, 2022 |
|
|
Quoted Prices in Active Markets (Level 1) |
|
|
Gross Unrealized Losses |
U.S. Treasury Securities |
$ |
131,529,959 |
|
$ |
130,537,313 |
|
$ |
(992,646) |
Cash |
|
1,375 |
|
|
— |
|
|
— |
|
$ |
131,531,334 |
|
$ |
130,537,313 |
|
$ |
(992,646) |
|
|
|
|
|
|
|
|
|
|
|
Carrying Value as of December 30, 2021 |
|
|
Quoted Prices in Active Markets (Level 1) |
|
|
Gross Unrealized Losses |
U.S. Treasury Securities |
|
129,667,924 |
|
|
129,665,154 |
|
|
(2,770) |
Cash |
|
1,485 |
|
|
— |
|
|
— |
|
$ |
129,669,409 |
|
$ |
129,665,154 |
|
$ |
(2,770) |
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts.
Class A Ordinary Shares Subject to Possible Redemption
The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) are classified as a liability instrument and measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ deficit. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, 12,650,000 Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ deficit section of the Company’s balance sheets.
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of Class A ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.
The Class A ordinary shares subject to possible redemption reflected on the balance sheets as of December 31, 2022 and 2021 is reconciled in the following table:
|
|
|
Gross Proceeds from IPO |
$ |
129,662,500 |
Less: |
|
|
Proceeds allocated to Public Warrants |
|
(3,493,159) |
Class A ordinary shares issuance costs |
|
(9,678,128) |
Plus: |
|
|
Remeasurement of carrying value to redemption value |
|
13,171,287 |
Interest income |
|
6,909 |
Class A ordinary shares subject to possible redemption, December 31, 2021 |
$ |
129,669,409 |
Remeasurement of carrying value to redemption value |
|
1,861,925 |
Class A ordinary shares subject to possible redemption, December 31, 2022 |
|
131,531,334 |
Offering Costs associated with the Initial Public Offering
Offering costs consist of underwriting, legal, accounting and other expenses incurred through the balance sheet date that are directly related to the IPO. The Company complies with the requirements of the ASC 340-10-S99-1. Offering costs are allocated ratably with the redeemable and non-redeemable shares they are allocated to. Offering costs associated with warrant liabilities are expensed, and offering costs associated with the Class A ordinary shares are charged to shareholders’ deficit. The Company incurred offering costs amounting to $5,793,160 consisting of $1,800,000 of underwriting commissions, $3,150,000 of deferred underwriting commissions, and $843,160 of other offering costs. The underwriters’ exercise of their full over-allotment option generated an additional $907,500 in transaction costs for aggregate transaction costs of $6,700,660 consisting of $2,130,000 of underwriting commissions, $3,727,500 of deferred underwriting commissions and $843,160 of other offering costs.
Net Income (Loss) Per Share
The Company complies with accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share.” The statements of operations include a presentation of income (loss) per Class A ordinary share and income (loss) per Class B ordinary share following the two-class method of income (loss) per share. At December 31, 2022 and 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted income (loss) per share is the same as basic income (loss) per share for the periods presented.
The tables below present a reconciliation of the numerator and denominator used to compute basic and diluted income (loss) per share for each category for the year ended December 31, 2022 and for the period from August 9, 2021 (inception) through December 31, 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, 2022 |
|
|
For the period from August 9, 2021 (inception) through December 31, 2021 |
|
|
Class A |
|
|
Class B |
|
|
Class A |
|
|
Class B |
Basic and diluted net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
Allocation of net income (loss) |
$ |
24,581 |
|
$ |
6,145 |
|
$ |
(74,394) |
|
$ |
(151,043) |
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding including ordinary shares subject to redemption |
|
12,650,000 |
|
|
3,162,500 |
|
|
1,558,966 |
|
|
3,162,500 |
Basic and diluted net income (loss) per share |
$ |
0.00 |
|
$ |
0.00 |
|
$ |
(0.05) |
|
$ |
(0.05) |
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under Financial Accounting Standards Board (“FASB”) ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statements recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of December 31, 2022 and 2021, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented.
Business Combination Costs
Costs incurred in relation to a potential Business Combination may include legal, accounting, and other expenses. Any such costs are expensed as incurred.
Recent Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The guidance was adopted starting January 1, 2022. Adoption of the ASU did not impact the Company’s financial position, results of operations or cash flows.
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
Note 3 — Initial Public Offering
On December 14, 2021, the Company consummated its IPO of 11,000,000 Units at a purchase price of $10.00 per Unit. Each Unit that the Company is offering has a price of $10.00 and consists of one Class A ordinary share and one-third of one redeemable warrant. Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 7). On December 15, 2021, the underwriters exercised their full over-allotment option and purchased the additional Units available to them. The aggregate Units sold in the IPO and subsequent over-allotment option exercise were 12,650,000 and generated gross proceeds of $126,500,000.
Following the closing of the IPO on December 14, 2021, $113,492,500 from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants were deposited into a trust account (the “Trust Account”). This amount was comprised of $10.25 per Unit for the 11,000,000 Units sold in the IPO in addition to a $742,500 Deposit in Advance from the Sponsor related to the underwriters’ exercise of the full over-allotment option which took place the following day on December 15, 2021. Following the closing of the IPO and the exercise of the underwriters’ full over¬allotment option, $129,662,500 ($10.25 per Unit) was placed in a Trust Account and will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations.
Note 4 — Private Placement
Simultaneously with the closing of the IPO, the Company’s Sponsor purchased an aggregate of 4,700,000 Private Placement Warrants (5,195,000 Private Placement Warrants when the underwriters’ over-allotment option was fully exercised on December 15, 2021), each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.50 per Unit. The sale of the Private Placement warrants in connection with the IPO and subsequent over-allotment option exercise generated gross proceeds of $7,792,500.
The Private Placement Warrants are not transferable, assignable or salable (and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants are not transferable, assignable or salable until 30 days after the completion of the initial Business Combination), except as described herein under “Principal Shareholders—Transfers of Founder Shares and Private Placement Warrants.”
Any amendment to the terms of the Private Placement Warrants or any provision of the warrant agreement with respect to the Private Placement Warrants require a vote of holders of at least 50% of the number of the then outstanding Private Placement Warrants.
Note 5 — Related Party Transactions
Founder Shares
On August 12, 2021, Forbion European Sponsor LLP paid $25,000, or approximately $0.009 per share, to cover certain offering costs in consideration for 2,875,000 Class B ordinary shares (the “Founder Shares”), par value $0.0001. On November 23, 2021, Forbion European Sponsor LLP transferred 2,875,000 Class B ordinary shares to the Sponsor in exchange for $25,000, or approximately $0.009 per share. On December 9, 2021, the Company issued 287,500 Class B ordinary shares to the Sponsor resulting from a 1.1 for 1 share dividend. Up to 412,500 Founder Shares are subject to forfeiture by the Sponsor depending on the extent to which the underwriters’ over-allotment option is exercised. Prior to the Business Combination, only holders of Class B ordinary shares will be able to vote on the appointment of directors and to continue the Company in a jurisdiction outside the Cayman Islands.
On December 15, 2021, the underwriters fully exercised their over-allotment and as a result, 412,500 Founder Shares are no longer subject to forfeiture.
Promissory Note — Related Party
On August 12, 2021, Forbion European Sponsor LLP agreed to loan the Company up to $500,000 to be used for a portion of the expenses of the Public Offering. These loans are non-interest bearing, unsecured and were due at the earlier of December 31, 2021 or the closing of the Public Offering. The Company had outstanding borrowings of $0 under the promissory note as of December 31, 2022 and 2021.
Working Capital Loans
In order to finance transaction costs in connection with an intended Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes the initial Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released
to the Company. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans. Up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants. As of December 31, 2022 and 2021, the Company had no borrowings under the Working Capital Loans.
Related Party Extension Loans
The Company may extend the period of time to consummate a Business Combination by up to two additional three-month periods (for a total of 24 months to complete a Business Combination). In order to extend the time available for the Company to consummate a Business Combination, the Sponsor or its affiliates or designees must deposit into the trust account, for each additional three-month period, $1,265,000, ($0.10 per Public Share in either case), on or prior to the date of the applicable deadline. Any such payments would be made in the form of a non-interest bearing, unsecured promissory note. Such notes would either be paid upon consummation of a Business Combination, or, at the relevant insider’s discretion, converted upon consummation of a Business Combination into additional Private Placement Warrants at a price of $1.50 per Private Warrant. The Sponsor and its affiliates or designees are not obligated to fund the trust account to extend the time for the Company to complete a Business Combination.
Office Space, Secretarial and Administrative Services
Commencing on the date that the Company’s securities are first listed on the NASDAQ through the earlier of consummation of the initial Business Combination and the liquidation, the Company agreed to pay the Sponsor a total of $10,000 per month for office space, utilities, secretarial and administrative support and to reimburse the Sponsor for any out-of-pocket expenses related to identifying, investigating and completing an initial Business Combination. For the year ended December 31, 2022, the Company expensed $120,000 in administrative support services. For the period from August 9, 2021 (inception) through December 31, 2021, the Company expensed $7,097 in administrative support services. At December 31, 2022 and 2021, the Company had accrued $30,000 and $7,097, respectively, in administrative fees payable to the Sponsor which are included in due to related party on the balance sheets.
Additionally, the Sponsor has agreed to pay an annual salary of $25,000 to each of the independent Board Members for services rendered prior to or in connection with the completion of the Business Combination. Board members are entitled to reimbursement for any out-of-pocket expenses related to identifying, investigating, negotiating and completing the Business Combination as well. For the year ended December 31, 2022, the Company expensed $75,000 for services rendered by the independent Board Members. For the period from August 9, 2021 (inception) through December 31, 2021, the Company expensed $3,699 for the services rendered by the independent Board Members. At December 31, 2022 and 2021, the Company had accrued approximately $18,904 and $3,699, respectively, in compensation expense to the independent board members which are included in due to related party on the balance sheets.
Note 6 — Commitments & Contingencies
Registration and Shareholder Rights
The holders of the Founder Shares, Private Placement Warrants, Class A ordinary shares underlying the Private Placement Warrants and any warrants that may be issued upon conversion of Working Capital Loans and extension loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and extension loans) will be entitled to registration rights pursuant to a registration and shareholder rights agreement to be signed prior to or on the effective date of the Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of the initial Business Combination. However, the registration and shareholder rights agreement provide that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable
lock-up period, which occurs (i) in the case of the Founder Shares, as described in the following paragraph, and (ii) in the case of the Private Placement Warrants and the respective Class A ordinary shares underlying such warrants, 30 days after the completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Except as described herein, the Sponsor and the Company’s directors and executive officers have agreed not to transfer, assign or sell (i) their Founder Shares until the earliest of (A) one year after the completion of the initial Business Combination and (B) subsequent to the initial Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination, or (y) the date on which the Company complete a liquidation, merger, share exchange or other similar transaction that results in all of its public shareholders having the right to exchange their ordinary shares for cash, securities or other property, and (ii) any of their Private Placement Warrants and Class A ordinary shares issued upon conversion or exercise thereof until 30 days after the completion of the initial Business Combination. Any permitted transferees will be subject to the same restrictions and other agreements of the Sponsor with respect to any Founder Shares, Private Placement Warrants and Class A ordinary shares issued upon conversion or exercise thereof. The Company refers to such transfer restrictions herein as the lock-up.
In addition, pursuant to the registration and shareholder rights agreement, the Sponsor, upon and following consummation of an initial Business Combination, will be entitled to nominate three individuals for appointment to the Company’s board of directors, as long as the Sponsor holds any securities covered by the registration and shareholder rights agreement. Prior to the Business Combination, only holders of Class B ordinary shares will be able to vote on the appointment of directors and to continue the Company in a jurisdiction outside the Cayman Islands.
Underwriting Agreement
The underwriters had a 45-day option from the date of the IPO to purchase up to an additional 1,650,000 Units to cover over-allotments, if any. On December 15, 2021, the underwriters fully exercised the over-allotment option.
The underwriters were paid underwriting commission of $0.20 per Unit sold in the IPO, excluding Units sold to Forbion Cooperatief, or $1,800,000, upon the closing of the IPO. Following the exercise of the underwriters’ over-allotment option on December 15, 2021, the underwriters earned an additional $330,000 for an aggregate of $2,130,000 in underwriting commissions related to the IPO and over-allotment.
In addition, $3,150,000 is payable to the underwriters for deferred underwriting commissions related to the Units sold in the IPO, excluding those Units sold to Forbion Cooperatief. Following the exercise of the underwriters’ over-allotment option on December 15, 2021, the underwriters earned an additional $577,500 for an aggregate of $3,727,500 in deferred underwriting commissions related to the IPO and over-allotment. The deferred underwriting commission will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
Forward Purchase Agreements
The Company has entered into two forward purchase agreements with an affiliate of the Sponsor (the “FPA Purchaser”), pursuant to which the FPA Purchaser has agreed to purchase (1) an aggregate of 1,000,000 Class A ordinary shares for $10.00 per share (the “firm forward purchase shares”), or an aggregate amount of $10,000,000 and (2) in addition, an aggregate of up to 1,000,000 Class A ordinary shares for $10.00 per share (the “additional forward purchase shares”), or an aggregate maximum amount of up to $10,000,000, in each case in a private placement that may close simultaneously with the closing of the Company’s initial Business Combination.
Deferred Legal Fees
The Company has incurred $581,265 in legal fees associated with the Company’s Initial Public Offering. These fees are deferred and will become payable upon the consummation of the Business Combination and are included in accrued offering costs and expenses on the Company’s balance sheets.
Note 7 — Shareholders’ Deficit
Preference shares — The Company is authorized to issue 5,000,000 preference shares with a par value of $0.0001 and with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of December 31, 2022 and 2021, there were no preference shares issued or outstanding.
Class A ordinary shares — The Company is authorized to issue 500,000,000 Class A ordinary shares with a par value of $0.0001 per share. As of December 31, 2022 and 2021, there were no Class A ordinary shares outstanding, excluding 12,650,000 Class A ordinary shares subject to possible redemption issued.
Class B ordinary shares — The Company is authorized to issue 50,000,000 Class B ordinary shares with a par value of $0.0001 per share. Holders are entitled to one vote for each share of Class B ordinary shares. As of August 13, 2021, there were 2,875,000 Class B ordinary shares issued and outstanding. Of the 2,875,000 Class B ordinary shares, an aggregate of up to 375,000 shares are subject to forfeiture to the Company for no consideration to the extent that the underwriters’ over-allotment option is not exercised in full or in part. On December 9, 2021, the Company effected a stock dividend of 1.1 shares for each outstanding share, resulting in there being an aggregate of 3,162,500 Founder Shares outstanding, of which 412,500 are subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full or in part. All share and per share amounts have been retroactively restated to reflect the share dividend. The forfeiture amounts were determined such that the initial shareholders will collectively own 20% of the Company’s issued and outstanding ordinary shares after the Public Offering. As of December 31, 2022 and 2021, there were 3,162,500 shares of class B ordinary shares issued and outstanding.
Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the Company’s shareholders except as required by law. Unless specified in the Company’s amended and restated memorandum and articles of association, or as required by applicable provisions of the Companies Act or applicable stock exchange rules, the affirmative vote of a majority of the Company’s ordinary shares that are voted is required to approve any such matter voted on by the Company’s shareholders. Approval of certain actions will require a special resolution under Cayman Islands law, being the affirmative vote of at least two—thirds of the Company’s ordinary shares that are voted, and pursuant to the Company’s amended and restated memorandum and articles of association; such actions include amending the Company’s amended and restated memorandum and articles of association and approving a statutory merger or consolidation with another company. The Company’s board of directors is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being appointed in each year. There is no cumulative voting with respect to the appointment of directors, with the result that the holders of more than 50% of the shares voted for the appointment of directors can appoint all of the directors. Prior to the Business Combination, only holders of Class B ordinary shares will be able to vote on the appointment of directors and to continue the Company in a jurisdiction outside the Cayman Islands. The Company’s shareholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor.
The Class B ordinary shares will automatically convert into Class A ordinary shares, which such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions, if the Company does not consummate an initial Business Combination, at the time of the initial Business Combination or earlier at the option of the holders thereof at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the Public Offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities (as defined herein) or rights issued or deemed issued, by the company in connection with or in relation to the consummation of the initial Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any
seller in the initial Business Combination and any Private Placement Warrants issued to the Sponsor, its affiliates or any member of its management team upon conversion of Working Capital Loans and extension loans. Any conversion of Class B ordinary shares described herein will take effect as a compulsory redemption of Class B ordinary shares and an issuance of Class A ordinary shares as a matter of Cayman Islands law. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one.
Public Warrants — Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment as discussed herein. In addition, if (x) the Company will issue additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates,as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds,and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummate the initial Business Combination (such price, the “Market Value”) is below$9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described adjacent to “Redemption of public warrants” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
The warrants will become exercisable on the later of 30 days after the completion of the Company’s initial Business Combination and will expire five years after the completion of the Company’s initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
The Company has agreed that as soon as practicable, but in no event later than twenty business days after the closing of the initial Business Combination, the Company will use its commercially reasonable efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the initial Business Combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement; provided that if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect, the Company will not be required to file or maintain in effect a registration statement, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption, but the Company will use its commercially reasonable efforts to register or qualify the shares under applicable blue-sky laws to the extent an exemption is not available. In such event, each holder would pay the exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” (defined below) less the exercise price of the warrants by (y) the fair market value.
Redemption of public warrants. Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the Private Placement Warrants):
•in whole and not in part;
•at a price of $0.01 per warrant;
•upon a minimum of 30 days’ prior written notice of redemption, which the Company refer to as the “30-day redemption period”; and
•if, and only if, the last reported sale price (the “closing price”) of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Warrants—Public Shareholders’ Warrants—Redemption Procedures—Anti-dilution Adjustments”) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company send the notice of redemption to the warrant holders.
The Company will not redeem the Warrants as described above unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating to those Class A ordinary shares is available throughout the 30-day redemption period. If and when the warrants become redeemable by the Company, it may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
The Company has established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and the Company issues a notice of redemption of the warrants, each warrant holder will be entitled to exercise his, her or its warrant prior to the scheduled redemption date. However, the price of the Class A ordinary shares may fall below the $18.00 redemption trigger price (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Warrants —Public Shareholders’ Warrants—Redemption Procedures—Anti-dilution Adjustments”) as well as the $11.50 (for whole shares) warrant exercise price after the redemption notice is issued.
If the Company calls the Public Warrants for redemption as described above, it will have the option to require any holder that wishes to exercise its public warrant to do so on a “cashless basis.” In determining whether to require all holders to exercise their public warrants on a “cashless basis,” the Company will consider, among other factors, its cash position, the number of public warrants that are outstanding and the dilutive effect on shareholders of issuing the maximum number of Class A ordinary shares issuable upon the exercise of the Public Warrants. If the Company takes advantage of this option, all holders of Public Warrants would pay the exercise price by surrendering their public warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” means the 10-day average closing price as of the date on which the notice of redemption is sent to the holders of the warrants. If the Company takes advantage of this option, the notice of redemption will contain the information necessary to calculate the number of Class A ordinary shares to be received upon exercise of the warrants, including the “fair market value” in such case. Requiring a cashless exercise in this manner will reduce the number of shares to be issued and thereby lessen the dilutive effect of a warrant redemption. The Company believes this feature is an attractive option if it does not need the cash from the exercise of the warrants after the Business Combination. If the Company calls the warrants for redemption and does not take advantage of this option, the Sponsor and its permitted transferees would still be entitled to exercise their private placement warrants for cash or on a cashless basis using the same formula described above that other warrant holders would have been required to use had all warrant holders been required to exercise their warrants on a cashless basis, as described in more detail below.
No fractional Class A ordinary shares will be issued upon exercise. If, upon exercise, a holder would be entitled to receive a fractional interest in a share, the Company will round down to the nearest whole number of the number of Class A ordinary shares to be issued to the holder. If, at the time of redemption, the warrants are exercisable for a security other than the Class A ordinary shares pursuant to the warrant agreement (for instance, if the Company is not the surviving company in the Business Combination), the warrants may be exercised for such security. At such time as the warrants become exercisable for a security other than the Class A ordinary shares, the Company (or surviving company) will use its commercially reasonable efforts to register under the Securities Act the security issuable upon the exercise of the warrants.
Note 8 — Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the financial statements were issued. Based on this, other than as disclosed below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
On March 24, 2023, the Sponsor and the Company entered into an unsecured promissory note (the “Note”) under which the Sponsor agreed to extend to the Company a Working Capital Loan of up to $900,000, to be used for the Company’s general working capital purposes. The Sponsor funded the initial principal amount of $450,000 under the Note on March 24, 2023.
The Note bears no interest and will be due and payable on the earlier of (i) the date of consummation of a Business Combination and (ii) December 14, 2023. If the Company completes a Business Combination, the Company may repay the Note out of the proceeds of the Trust Account released to the Company. Otherwise, no proceeds from the Trust Account can be used to repay the Note.
Concurrently with the consummation of a Business Combination, the Sponsor will have the option, but not the obligation, to convert up to the total principal amount of the Note, in whole or in part, into additional warrants of the post-Business Combination entity at a price of $1.50 per warrant. The warrants will be identical to the Private Placement Warrants.
Exhibit 99.2
FORBION EUROPEAN ACQUISITION CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2023 |
|
|
|
December 31, 2022 |
|
|
|
|
(Unaudited) |
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash |
|
$ |
85,659 |
|
|
$ |
314,151 |
|
Prepaid expense |
|
|
20,168 |
|
|
|
197,653 |
|
Total current assets |
|
|
105,827 |
|
|
|
511,804 |
|
Cash and securities held in trust account |
|
|
138,839,480 |
|
|
|
131,531,334 |
|
Total assets |
|
$ |
138,945,307 |
|
|
$ |
132,043,138 |
|
Liabilities, Shares Subject to Redemption and Shareholders’ Deficit: |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accrued offering costs and expenses |
|
$ |
7,412,974 |
|
|
|
$844,605 |
|
Due to Related Party |
|
|
48,699 |
|
|
|
48,904 |
|
Promissory Note - Related Party |
|
|
2,680,000 |
|
|
|
- |
|
Convertible Note - Related Party |
|
|
1,500,000 |
|
|
|
- |
|
Total current liabilities |
|
|
11,641,673 |
|
|
|
893,509 |
|
Deferred underwriting commissions |
|
|
3,727,500 |
|
|
|
3,727,500 |
|
Total liabilities |
|
|
15,369,173 |
|
|
|
4,621,009 |
|
Commitments and Contingencies (Note 6) |
|
|
|
|
|
|
|
|
Class A ordinary shares subject to possible redemption, 12,650,000 shares at redemption value of approximately $10.98 and $10.40 at September 30, 2023 and December 31, 2022, respectively |
|
|
138,839,480 |
|
|
|
131,531,334 |
|
Shareholders’ Deficit: |
|
|
|
|
|
|
|
|
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding |
|
|
- |
|
|
|
- |
|
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none outstanding (excluding 12,650,000 shares subject to possible redemption issued) at September 30, 2023 and December 31, 2022 |
|
|
- |
|
|
|
- |
|
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 3,162,500 shares issued and outstanding at September 30, 2023 and December 31, 2022 |
|
|
316 |
|
|
|
316 |
|
Additional paid-in capital |
|
|
- |
|
|
|
- |
|
Accumulated deficit |
|
|
(15,263,662 |
) |
|
|
(4,109,521 |
) |
Total shareholders’ deficit |
|
|
(15,263,346 |
) |
|
|
(4,109,205 |
) |
Total Liabilities, Shares Subject to Redemption and Shareholders’ Deficit |
|
$ |
138,945,307 |
|
|
$ |
132,043,138 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
FORBION EUROPEAN ACQUISITION CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30, |
|
|
|
For the Nine Months Ended September 30, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Operating costs |
|
$ |
2,573,757 |
|
|
$ |
523,264 |
|
|
$ |
8,624,262 |
|
|
$ |
1,339,615 |
|
Loss from operations |
|
|
(2,573,757 |
) |
|
|
(523,264 |
) |
|
|
(8,624,262 |
) |
|
|
(1,339,615 |
) |
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest earned from Trust Account |
|
|
1,788,310 |
|
|
|
595,872 |
|
|
|
4,778,146 |
|
|
|
750,354 |
|
Bank interest income |
|
|
27 |
|
|
|
63 |
|
|
|
121 |
|
|
|
119 |
|
Total other income |
|
|
1,788,337 |
|
|
|
595,935 |
|
|
|
4,778,267 |
|
|
|
750,473 |
|
Net (loss) income |
|
$ |
(785,420 |
) |
|
$ |
72,671 |
|
|
$ |
(3,845,995 |
) |
|
$ |
(589,142 |
) |
Basic and diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption |
|
|
12,650,000 |
|
|
|
12,650,000 |
|
|
|
12,650,000 |
|
|
|
12,650,000 |
|
Basic and diluted net (loss) income per share, Class A ordinary shares subject to possible redemption |
|
$ |
(0.05 |
) |
|
$ |
0.00 |
|
|
$ |
(0.24 |
) |
|
$ |
(0.04 |
) |
Basic and diluted, weighted average shares outstanding - Class B ordinary shares |
|
|
3,162,500 |
|
|
|
3,162,500 |
|
|
|
3,162,500 |
|
|
|
3,162,500 |
|
Basic and diluted net (loss) income per share, Class B ordinary shares |
|
$ |
(0.05 |
) |
|
$ |
0.00 |
|
|
$ |
(0.24 |
) |
|
$ |
(0.04 |
) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
FORBION EUROPEAN ACQUISITION CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A
Ordinary Share |
|
|
Class B
Ordinary Share |
|
|
Additional Paid-In |
|
|
Accumulated |
|
|
Shareholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Deficit |
|
Balance as of January 1, 2023 |
|
|
- |
|
|
$ |
- |
|
|
|
3,162,500 |
|
|
$ |
316 |
|
|
$ |
- |
|
|
$ |
(4,109,521 |
) |
|
$ |
(4,109,205 |
) |
Re-measurement of Class A ordinary shares subject to possible redemption to redemption amount |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,414,567 |
) |
|
|
(1,414,567 |
) |
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(352,190 |
) |
|
|
(352,190 |
) |
Balance as of March 31, 2023 (unaudited) |
|
|
- |
|
|
|
- |
|
|
|
3,162,500 |
|
|
|
316 |
|
|
|
- |
|
|
|
(5,876,278 |
) |
|
|
(5,875,962 |
) |
Re-measurement of Class A ordinary shares subject to possible redemption to redemption amount |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(2,840,269 |
) |
|
|
(2,840,269 |
) |
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(2,708,385 |
) |
|
|
(2,708,385 |
) |
Balance as of June 30, 2023 (unaudited) |
|
|
- |
|
|
$ |
- |
|
|
|
3,162,500 |
|
|
$ |
316 |
|
|
$ |
- |
|
|
$ |
(11,424,932 |
) |
|
$ |
(11,424,616 |
) |
Re-measurement of Class A ordinary shares subject to possible redemption to redemption amount |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(3,053,310 |
) |
|
|
(3,053,310 |
) |
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(785,420 |
) |
|
|
(785,420 |
) |
Balance as of September 30, 2023 (unaudited) |
|
|
- |
|
|
$ |
- |
|
|
|
3,162,500 |
|
|
$ |
316 |
|
|
$ |
- |
|
|
$ |
(15,263,662 |
) |
|
$ |
(15,263,346 |
) |
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A
Ordinary Share |
|
|
Class B
Ordinary Share |
|
|
Additional Paid-In |
|
|
Accumulated |
|
|
Shareholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Deficit |
|
Balance as December 31, 2021 (audited) |
|
|
- |
|
|
$ |
- |
|
|
|
3,162,500 |
|
|
$ |
316 |
|
|
$ |
- |
|
|
$ |
(2,278,322 |
) |
|
$ |
(2,278,006 |
) |
Re-measurement of Class A ordinary shares subject to possible redemption to redemption amount |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(41,453 |
) |
|
|
(41,453 |
) |
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(403,532 |
) |
|
|
(403,532 |
) |
Balance as of March 31, 2022 (unaudited) |
|
|
- |
|
|
|
- |
|
|
|
3,162,500 |
|
|
|
316 |
|
|
|
- |
|
|
|
(2,723,307 |
) |
|
|
(2,722,991 |
) |
Re-measurement of Class A ordinary shares subject to possible redemption to redemption amount |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(113,029 |
) |
|
|
(113,029 |
) |
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(258,281 |
) |
|
|
(258,281 |
) |
Balance as of June 30, 2022 (unaudited) |
|
|
- |
|
|
$ |
- |
|
|
|
3,162,500 |
|
|
$ |
316 |
|
|
$ |
- |
|
|
$ |
(3,094,617 |
) |
|
$ |
(3,094,301 |
) |
Re-measurement of Class A ordinary shares subject to possible redemption to redemption amount |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(595,872 |
) |
|
|
(595,872 |
) |
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
72,671 |
|
|
|
72,671 |
|
Balance as of September 30, 2022 (unaudited) |
|
|
- |
|
|
$ |
- |
|
|
|
3,162,500 |
|
|
$ |
316 |
|
|
$ |
- |
|
|
$ |
(3,617,818 |
) |
|
$ |
(3,617,502 |
) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
FORBION EUROPEAN ACQUISITION CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
Net loss |
|
$ |
(3,845,995 |
) |
|
$ |
(589,142 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
Interest earned on cash and marketable securities held in Trust Account |
|
|
(4,778,146 |
) |
|
|
(750,354 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Prepaid expenses |
|
|
177,485 |
|
|
|
379,189 |
|
Accrued offering costs and expenses |
|
|
6,568,369 |
|
|
|
309,690 |
|
Due to related party |
|
|
(205 |
) |
|
|
38,314 |
|
Net cash used in operating activities |
|
|
(1,878,492 |
) |
|
|
(612,303 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
Principal deposited in Trust Account |
|
|
(2,530,000 |
) |
|
|
- |
|
Net cash used in investing activities |
|
|
(2,530,000 |
) |
|
|
- |
|
Cash flows from financing activities: |
|
|
|
|
|
|
Proceeds from issuance of promissory note to related party |
|
|
2,680,000 |
|
|
|
- |
|
Proceeds from issuance of convertible note to related party |
|
|
1,500,000 |
|
|
|
- |
|
Net cash provided by financing activities |
|
|
4,180,000 |
|
|
|
- |
|
Net change in cash |
|
|
(228,492 |
) |
|
|
(612,303 |
) |
Cash, beginning of the period |
|
|
314,151 |
|
|
|
1,069,298 |
|
Cash, end of the period |
|
$ |
85,659 |
|
|
$ |
456,995 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
Remeasurement Adjustment of Class A ordinary shares subject to possible redemption |
|
$ |
7,308,146 |
|
|
$ |
- |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
FORBION EUROPEAN ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1 — Organization, Business Operation, Going Concern and Liquidity
Forbion European Acquisition Corp. (the “Company”) was incorporated as a Cayman Islands exempted company on August 9, 2021. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar Business Combination with one or more businesses or entities (the “Business Combination”).
The Company has one wholly owned subsidiary, 15333881 Canada Inc, a Canadian private limited liability company incorporated on September 5, 2023 in anticipation of the consummation of the contemplated business combination between the Company, enGene, Inc. and enGene Holdings Inc. announced on May 16, 2023.
As of September 30, 2023, the Company had not commenced any operations. All activity through September 30, 2023 relates to the Company’s formation and the Initial Public Offering (the “IPO” or “Public Offering”) which is described below, and the Company’s completion of a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income the form of interest income on cash and cash equivalents from the proceeds derived from the Public Offering.
The Company’s Sponsor is Forbion Growth Sponsor FEAC I B.V., a Dutch private limited liability company (the “Sponsor”).
The registration statement for the Company’s IPO was declared effective on December 9, 2021 (the “Effective Date”). On December 14, 2021, the Company’s commenced the IPO of 11,000,000 units (or 12,650,000 units if the underwriters’ over-allotment option is exercised in full) at $10.00 per unit (the “Units”), which is discussed in Note 3. Each Unit consists of one Class A ordinary share and one-third of one redeemable warrant (the “Public Warrants”). Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share. On December 15, 2021, the underwriters exercised their full over-allotment option and purchased the additional Units available to them. The aggregate Units sold in the IPO and subsequent over-allotment were 12,650,000 and generated gross proceeds of $126,500,000.
Simultaneously with the consummation of the IPO, the Company consummated the private placement of 4,700,000 warrants (or 5,195,000 warrants when the underwriters’ over-allotment option was fully exercised on December 15, 2021) (the “Private Placement Warrants”) to the Sponsor, at a price of $1.50 per Private Placement Warrant. The sale of the Private Placement Warrants in connection with the IPO and subsequent over-allotment option exercise generated gross proceeds of $7,792,500.
Transaction costs related to the IPO amounted to $5,793,160 consisting of $1,800,000 of underwriting commissions, $3,150,000 of deferred underwriting commissions, and $843,160 of other offering costs. The underwriters’ exercise of their full over-allotment option generated an additional $907,500 in transaction costs for aggregate transaction costs of $6,700,660 consisting of $2,130,000 of underwriting commissions, $3,727,500 of deferred underwriting commissions and $843,160 of other offering costs. In addition, $1,641,236 of cash was held outside of the Trust Account (as defined below) and is available for working capital purposes.
On December 15, 2021, the underwriter fully exercised the over-allotment option and purchased an additional 1,650,000 Units for additional gross proceeds of $16,500,000. Simultaneously with the exercise of the over-allotment option, the Sponsor purchased an additional 495,000 Private Placement Warrants for additional gross proceeds of $742,500.
The underwriters’ exercise of their full over-allotment option generated an additional $907,500 in transaction costs for aggregate transaction costs of $6,700,660 consisting of $2,130,000 of underwriting commissions, $3,727,500 of deferred underwriting commissions and $843,160 of other offering costs.
Following the closing of the exercise of the underwriters’ full over-allotment option, an additional $16,170,000 was placed in the Trust Account for aggregate proceeds in the Trust Account of $129,662,500 ($10.25 per Unit). As a result of the underwriters’ over-allotment option exercise, 412,500 Founder Shares are no longer subject to forfeiture.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination.
The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (as defined below) (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of signing a definitive agreement in connection with the initial Business Combination. However, the Company will complete the initial Business Combination only if the post-Business Combination company in which its public shareholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or is otherwise not required to register as an investment company under the Investment Company Act (the “Investment Company Act”). There is no assurance that the Company will be able to complete a Business Combination successfully.
Following the closing of the IPO on December 14, 2021, $113,492,500 from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was deposited into a trust account (the “Trust Account”). This amount was comprised of $10.25 per Unit for the 11,000,000 Units sold in the IPO in addition to a $742,500 Deposit in Advance from the Sponsor related to the underwriters’ exercise of the full over-allotment option which took place the following day on December 15, 2021. Following the closing of the IPO and the exercise of the underwriters’ full over-allotment option, $129,662,500 ($10.25 per Unit) was held in the Trust Account and will only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its income taxes, if any, the Company’s amended and restated memorandum and articles of association, as discussed below and subject to the requirements of law and regulation, will provide that the proceeds from the Public Offering and the sale of the Private Placement Warrants held in the Trust Account will not be released from the Trust Account (1) to the Company, until the completion of the initial Business Combination, or (2) to its public shareholders, until the earliest of (a) the completion of the initial Business Combination, and then only in connection with those Class A ordinary shares that such shareholders properly elected to redeem, subject to the limitations described herein, (b) the redemption of any public shares properly tendered in connection with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with the initial Business Combination or to redeem 100% of the public shares if the Company does not complete the initial Business Combination within Combination Period or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares, and (c) the redemption of the public shares if the Company has not consummated the Company’s Business Combination within Combination Period, subject to applicable law. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (b) in the preceding sentence shall not be entitled to funds from the Trust Account upon the subsequent completion of an initial Business Combination or liquidation if the Company has not consummated an initial Business Combination within Combination Period, with respect to such Class A ordinary shares so redeemed. The funds held in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of its public shareholders. As it is expected that we are and will continuously be considered a Dutch tax resident, any redemption proceeds (including interest income on the trust account) distributed to our shareholders in excess of the paid-up capital for Dutch tax purposes may be subject to 15% Dutch dividend withholding tax.
The Company will provide holders (the “Public Shareholders”) of its Class A ordinary shares, par value $0.0001, sold in the IPO (the “Public Shares”), with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of a Business Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a proposed Business Combination or conduct a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require the Company to seek shareholder approval under applicable law or stock exchange listing requirement.
The Company will provide its Public Shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of the initial Business Combination, regardless of whether such shareholder votes on such proposed Business Combination, and if they do vote, regardless of whether they vote for or against such proposed Business Combination, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its income taxes, if any, divided by the number of then- outstanding Public Shares, subject to the limitations described herein. The amount in the Trust Account is initially anticipated to be $10.25 per public share.
The per share amount that the Company will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of the initial Business Combination with respect to the Company’s warrants. Further, the Company will not proceed with redeeming the Public Shares, even if a Public Shareholder has properly elected to redeem its Public Shares if a Business Combination does not close.
The ordinary shares subject to redemption were recorded at a redemption value and classified as temporary equity upon the completion of the Public Offering, in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks shareholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination.
The Company’s amended and restated memorandum and articles of association provides that the Company will have only 18 months from the closing of the Public Offering (or up to 24 months from the closing of the IPO if the Company extends the period of time to consummate a Business Combination, subject to the Sponsor depositing additional funds in the Trust Account) (the “Combination Period”) to consummate its initial Business Combination. On June 6, 2023 and September 13, 2023, the Company extended the period of time to consummate a Business Combination from June 14, 2023 to September 14, 2023 and from September 14, 2023 to December 14, 2023 by having the Sponsor deposit, on the date of each extension, an additional $1,265,000, or $0.10 per unit, into the Trust Account, in accordance with the Company’s amended and restated memorandum and articles of association and the Investment Management Trust Agreement by and between the Company and Continental Stock Transfer & Trust Company, dated as of December 9, 2021.
If the Company has not consummated an initial Business Combination within Combination Period, the Company will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its income taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and its board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to consummate an initial Business Combination within Combination Period.
The Sponsor and each member of its management team have entered into an agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their Founder Shares (ii) waive their redemption rights with respect to their Founder Shares and public shares in connection with a shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association (A) that would modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with the initial Business Combination or to redeem 100% of the public shares if the Company does not complete the initial Business Combination within Combination Period or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares and (iii) waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if the Company fails to consummate an initial Business Combination within Combination Period (although they will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares they hold if the Company fails to complete the initial Business Combination within the prescribed time frame).
The Company’s amended and restated memorandum and articles of association provides that the Company will have only until 18 months from the closing of the Public Offering to complete a Business Combination. However, if the Company anticipates that it may not be able to consummate a Business Combination within 18 months, the Company may extend the period of time to consummate a Business Combination by up to two additional three-month periods for a total of 24 months to complete a Business Combination (the “Combination Period”). In order to extend the time available for the Company to consummate a Business Combination, the Sponsor or its affiliate or designees must deposit into the Trust Account, for each additional three-month period, $1,265,000 ($0.10 per Public Share in either case), on or prior to the date of the applicable deadline. On June 6, 2023 and September 13, 2023, the Company extended the period of time to consummate a Business Combination from June 14, 2023 to September 14, 2023 and from September 14, 2023 to December 14, 2023 by having the Sponsor deposit, on the date of each extension, an additional $1,265,000, or $0.10 per unit, into the Trust Account, in accordance with the Company’s amended and restated memorandum and articles of association and the Investment Management Trust Agreement by and between the Company and Continental Stock Transfer & Trust Company, dated as of December 9, 2021.
The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent auditors) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.25 per public share or (2) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Public Offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company has not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believes that the Sponsor’s only assets are securities of the Company and, therefore, the Sponsor may not be able to satisfy those obligations. The Company has not asked the Sponsor to reserve for such obligations.
On May 16, 2023, the Company entered into a Business Combination Agreement (as it may be amended and/or restated from time to time, the “Business Combination Agreement”) with enGene, Inc., a corporation incorporated under the laws of Canada (“enGene”) and enGene Holdings Inc., a corporation incorporated under the laws of Canada (“Newco”), contemplating the proposed business combination among the Company, enGene and Newco (the “Business Combination”). See Note 6 for further information relating to the Business Combination Agreement and the Business Combination.
On August 9, 2023, Newco filed a registration statement on Form S-4 with the U.S. Securities and Exchange Commission (“SEC”) in connection with the contemplated Business Combination with the Company and enGene (as amended from time to time, the “Registration Statement”). The Registration Statement was declared effective by the SEC on September 29, 2023.
On October 24, 2023, the Company held an Extraordinary General Meeting in connection with the Business Combination. Based upon the submission of proxies and ballots, a majority of the shares of the Company’s ordinary shares issued and outstanding and entitled to vote at the close of business on the record date were present at the Extraordinary General Meeting by proxy or by attendance via the virtual meeting website, which constituted a quorum. All proposals submitted to a vote of the shareholders of the Company at the Extraordinary General Meeting, including the proposal to approve the Business Combination, were approved by the required vote.
In connection with the shareholder vote at the Extraordinary General Meeting, the Company’s public shareholders had the right to elect to redeem all or a portion of their Class A ordinary shares for a per share price calculated in accordance with the Company’s organizational documents. The Company’s public shareholders holding 10,379,144 Class A ordinary shares validly elected to redeem their public shares for a pro rata portion of the funds in the Company’s Trust Account for $114,292,161 (approximately $11.01 per share).
The Closing is expected to occur on or about October 31, 2023, subject to the satisfaction or waiver of the conditions with respect to the Business Combination.
Liquidity, Capital Resource and Going Concern
At September 30, 2023, the Company had $85,659 in its operating bank account and working capital deficit of $11,535,846.
In addition, in order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, provide the Company Working Capital Loans. As of September 30, 2023 and December 31, 2022, there was $1,650,000 and $0 outstanding under the Working Capital Loans, respectively, of which $750,000 is recorded as promissory note - related party and $900,000 is recorded as convertible note - related party on the condensed consolidated balance sheets.
In connection with the Company’s assessment of going concern considerations in accordance with FASB ASC 205-40, Presentation of Financial Statements-Going Concern”, management has determined that the Company has and will continue to incur significant costs in pursuit of its acquisition plans which raises substantial doubt about the Company’s ability to continue as a going concern. Moreover, the Company may need to obtain additional financing either to complete the initial Business Combination or because the Company becomes obligated to redeem a significant number of the Company’s Public Shares upon consummation of the initial Business Combination, in which case the Company may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, the Company would only complete such financing simultaneously with the completion of the initial Business Combination. If the Company is unable to complete the initial Business Combination because the Company does not have sufficient funds available, the Company will be forced to cease operations and liquidate the Trust Account. In addition, following the initial Business Combination, if cash on hand is insufficient, the Company may need to obtain additional financing in order to meet certain obligations.
Further, management has determined that if the Company is unable to complete a Business Combination by December 14, 2023, then the Company will cease all operations except for the purpose of liquidating. The date for mandatory liquidation and subsequent dissolution as well as the Company’s liquidity condition raise substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after the Combination Period.
Risks and Uncertainties
Management is currently evaluating the impact of the current global economic uncertainty, rising interest rates, rising inflation, increases in energy prices, supply chain disruptions and the Russia-Ukraine armed conflict (including the impact of any sanctions imposed in response thereto) and has concluded that while it is reasonably possible that any of these could have a negative effect on the Company’s financial position, results of operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The
Company cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact the Company’s business and its ability to complete an initial Business Combination.
Note 2 — Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and in accordance with the instructions on Form 10-Q and Article 8 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. The interim results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any future interim periods. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 30, 2023.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, 15333881 Canada Inc. There has been no intercompany activity since inception.
Emerging Growth Company Status
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s unaudited condensed consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the unaudited condensed consolidated financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2023 and December 31, 2022.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheets, primarily due to its short-term nature.
The Company follows the guidance in ASC 820, “Fair Value Measurement,” for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
|
|
|
Level 1 |
— |
Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. |
Level 2 |
— |
Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means. |
Level 3 |
— |
Valuations based on inputs that are unobservable and significant to the overall fair value measurement. |
Cash and Securities Held in Trust Account
As of September 30, 2023, investment in the Company’s Trust Account consisted of $3,776 in cash and $138,835,704 in U.S. Treasury Securities. As of December 31, 2022, investment in the Company’s Trust Account consisted of $1,375 in cash and $131,529,959 in U.S. Treasury Securities. All of the U.S. Treasury Securities will mature on October 3, 2023. The Company classified its U.S. Treasury Securities as held-to-maturity in accordance with FASB ASC Topic 320 “Investments-Debt and Equity Securities”. Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts. The carrying value approximates the fair value due to its short-term maturity. The carrying value, excluding gross unrealized holding loss and fair value of held to maturity securities at September 30, 2023 and December 31, 2022 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying
Value as of
September 30,
2023 |
|
|
Quoted Prices
in Active
Markets
(Level 1) |
|
|
Gross
Unrealized
Losses |
|
U.S. Treasury Securities |
|
$ |
138,835,704 |
|
|
$ |
138,873,166 |
|
|
$ |
(37,462 |
) |
Cash |
|
|
3,776 |
|
|
|
- |
|
|
|
- |
|
|
|
$ |
138,839,480 |
|
|
$ |
138,873,166 |
|
|
$ |
(37,462 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying
Value as of
December 31,
2022 |
|
|
Quoted Prices
in Active
Markets
(Level 1) |
|
|
Gross
Unrealized
Losses |
|
U.S. Treasury Securities |
|
$ |
131,529,959 |
|
|
$ |
130,537,313 |
|
|
$ |
(992,646 |
) |
Cash |
|
|
1,375 |
|
|
|
- |
|
|
|
- |
|
|
|
$ |
130,531,334 |
|
|
$ |
130,537,313 |
|
|
$ |
(992,646 |
) |
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts.
Class A Ordinary Shares Subject to Possible Redemption
The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) are classified as a liability instrument and measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ deficit. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, 12,650,000 Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ deficit section of the Company’s balance sheets.
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of Class A ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.
The Class A ordinary shares subject to possible redemption reflected on the balance sheets as of September 30, 2023 and December 31, 2022 is reconciled in the following table:
|
|
|
|
|
Class A ordinary shares subject to possible redemption, December 31, 2022 |
|
$ |
131,531,334 |
|
Deposit in connection with Extension Funding |
|
|
2,530,000 |
|
Remeasurement of carrying value to redemption value |
|
|
4,778,146 |
|
Class A ordinary shares subject to possible redemption, September 30, 2023 |
|
$ |
138,839,480 |
|
In connection with the shareholder vote at the Extraordinary General Meeting, the Company’s public shareholders had the right to elect to redeem all or a portion of their Class A ordinary shares for a per share price calculated in accordance with the Company’s organizational documents. The Company’s public shareholders holding 10,379,144 Class A ordinary shares validly elected to redeem their public shares for a pro rata portion of the funds in the Company’s Trust Account for $114,292,161 (approximately $11.01 per share).
Offering Costs associated with the Initial Public Offering
Offering costs consist of underwriting, legal, accounting and other expenses incurred through the balance sheet date that are directly related to the IPO. The Company complies with the requirements of the ASC 340-10-S99-1. Offering costs are allocated ratably with the redeemable and non-redeemable shares they are allocated to. Offering costs associated with warrant liabilities are expensed, and offering costs associated with the Class A ordinary shares are charged to shareholders’ equity. The Company incurred offering costs amounting to $5,793,160 consisting of $1,800,000 of underwriting commissions, $3,150,000 of deferred underwriting commissions, and $843,160 of other offering costs. The underwriters’ exercise of their full over- allotment option generated an additional $907,500 in transaction costs for aggregate transaction costs of $6,700,660 consisting of $2,130,000 of underwriting commissions, $3,727,500 of deferred underwriting commissions and $843,160 of other offering costs.
Net Loss Per Share
The Company complies with accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share.” The statements of operations include a presentation of loss per Class A ordinary share and loss per Class B ordinary share following the two-class method of income per share. At September 30, 2023 and 2022, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the losses of the Company. As a result, diluted loss per share is the same as basic loss per share for the periods presented.
The tables below presents a reconciliation of the numerator and denominator used to compute basic and diluted loss per share for each category for the three and nine months ended September 30, 2023 and for 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30, |
|
|
For the Nine Months Ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
Class A |
|
|
Class B |
|
|
Class A |
|
|
Class B |
|
|
Class A |
|
|
Class B |
|
|
Class A |
|
|
Class B |
|
Basic and diluted net (loss) income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of net (loss) income |
|
$ |
(628,336 |
) |
|
$ |
(157,084 |
) |
|
$ |
58,137 |
|
|
$ |
14,534 |
|
|
$ |
(3,076,796 |
) |
|
$ |
(769,199 |
) |
|
$ |
(471,314 |
) |
|
$ |
(117,828 |
) |
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding including ordinary shares subject to redemption |
|
|
12,650,000 |
|
|
|
3,162,500 |
|
|
|
12,650,000 |
|
|
|
3,162,500 |
|
|
|
12,650,000 |
|
|
|
3,162,500 |
|
|
|
12,650,000 |
|
|
|
3,162,500 |
|
Basic and diluted net (loss) income per share |
|
$ |
(0.05 |
) |
|
$ |
(0.05 |
) |
|
$ |
0.00 |
|
|
$ |
0.00 |
|
|
$ |
(0.24 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.04 |
) |
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under Financial Accounting Standards Board (“FASB”) ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statements recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of September 30, 2023 and December 31, 2022, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
The Company’s tax provision was zero for all periods presented.
Business Combination Costs
Costs incurred in relation to a potential Business Combination may include legal, accounting, and other expenses. Any such costs are expensed as incurred.
Recent Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1,2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The guidance was adopted starting January 1, 2022. Adoption of the ASU did not impact the Company’s financial position, results of operations or cash flows.
Management does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated financial statements.
Note 3 — Initial Public Offering
On December 14, 2021, the Company consummated its IPO of 11,000,000 Units at a purchase price of $10.00 per Unit. Each Unit was sold at a price of $10.00 and consists of one Class A ordinary share and one-third of one redeemable warrant. Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 7). On December 15, 2021, the underwriters exercised their full over-allotment option and purchased the additional Units available to them. The aggregate Units sold in the IPO and subsequent over-allotment were 12,650,000 and generated gross proceeds of $126,500,000.
Following the closing of the IPO on December 14, 2021, $113,492,500 from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was deposited into a trust account (the “Trust Account”). This amount was comprised of $10.25 per Unit for the 11,000,000 Units sold in the IPO in addition to a $742,500 Deposit in Advance from the Sponsor related to the underwriters’ exercise of the full over-allotment option which took place the following day on December 15, 2021. Following the closing of the IPO and the exercise of the underwriters’ full over- allotment option, $129,662,500 ($10.25 per Unit) was placed in a Trust Account and will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invests only in direct U.S. government treasury obligations.
Note 4 — Private Placement
Simultaneously with the closing of the IPO, the Company’s Sponsor purchased an aggregate of 4,700,000 Private Placement Warrants (5,195,000 Private Placement Warrants when the underwriters’ over-allotment option was fully exercised on December 15, 2021), each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.50 per Unit. The sale of the Private Placement Warrants in connection with the IPO and subsequent over-allotment option exercise generated gross proceeds of $7,792,500.
The Private Placement Warrants are not transferable, assignable or salable (and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants are not transferable, assignable or salable until 30 days after the completion of the initial Business Combination), except as described herein under “Principal Shareholders-Transfers of Founder Shares and Private Placement Warrants.”
Any amendment to the terms of the Private Placement Warrants or any provision of the warrant agreement with respect to the Private Placement Warrants require a vote of holders of at least 50% of the number of the then outstanding Private Placement Warrants.
Note 5 — Related Party Transactions
Founder Shares
On August 12, 2021, Forbion European Sponsor LLP paid $25,000, or approximately $0.009 per share, to cover certain offering costs in consideration for 2,875,000 Class B ordinary shares (the “Founder Shares”), par value $0.0001. On November 23, 2021, Forbion European Sponsor LLP transferred 2,875,000 Class B ordinary shares to the Sponsor in exchange for $25,000, or approximately $0.009 per share. On December 9, 2021, the Company issued 287,500 Class B ordinary shares to the Sponsor resulting from a 1.1 for 1 share dividend. Up to 412,500 Founder Shares are subject to forfeiture by the Sponsor depending on the extent to which the underwriters’ over-allotment option is exercised. Prior to the Business Combination, only holders of Class B ordinary shares will be able to vote on the appointment of directors and to continue the Company in a jurisdiction outside the Cayman Islands.
On December 15, 2021, the underwriters fully exercised their over-allotment and as a result, 412,500 Founder Shares are no longer subject to forfeiture.
Convertible Note - Related Party
In order to finance transaction costs in connection with an intended Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes the initial Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. In the event that the initial Business Combination does not close. The Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans. Up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants. The Company has evaluated the accounting treatment of convertible note under ASC 815. The Company has determined that due to the convertible loan meeting the derivative scope exception provided in ASC 815, this note did not require a bifurcation of proceeds. Thus, the proceeds in connection to the convertible note are reported at par on the condensed balance sheets.
On March 24, 2023, the Sponsor and the Company entered into an unsecured convertible promissory note (the “Note”) under which the Sponsor agreed to extend to the Company a Working Capital Loan of up to $900,000, to be used for the Company’s general working capital purposes. The Sponsor funded the initial principal amount of $450,000 under the Note on March 24, 2023. On April 26, 2023, the Company made an additional drawdown on the Note for aggregate $450,000. The Note bears no interest and will be due and payable on the earlier of (i) the date of consummation of a Business Combination and (ii) December 14, 2023 (the “Maturity Date”). If the Company completes a Business Combination, the Company may repay the Note out of the proceeds of the Trust Account
released to the Company. Otherwise, no proceeds from the Trust Account can be used to repay the Note. Concurrently with the consummation of a Business Combination, the Sponsor will have the option, but not the obligation, to convert up to the total principal amount of the Note, in whole or in part, into additional warrants of the post-Business Combination entity at a price of $1.50 per warrant. The warrants will be identical to the Private Placement Warrants. As of September 30, 2023, the Company had $900,000 and $600,000 outstanding under the Note and Extension Note (as defined below), respectively, totaling $1,500,000 in borrowings which are recorded as convertible note - related party on the condensed balance sheets. As of December 31, 2022, there were no borrowings outstanding.
Promissory Note - Related Party
On June 6, 2023, the Company issued an unsecured promissory note (the “Working Capital Note”) in the total principal amount of $300,000 to the Sponsor. The proceeds of the Working Capital Note will be used by the Company for general working capital purposes. The Sponsor funded the principal amount of $300,000 on June 6, 2023.
On September 13, 2023, the Company issued an additional Working Capital Note in the total principal amount of $450,000 to the Sponsor. The proceeds of the additional Working Capital Note will be used by the Company for general working capital purposes. The Sponsor funded the principal amount of $450,000 on September 13, 2023.
The Working Capital Notes bears no interest and shall be due and payable on the Maturity Date. In the event that the Company does not consummate a Business Combination, the Working Capital Notes will be repaid only from amounts remaining outside of the Trust Account, if any.
A failure to pay the principal outstanding amount of the Working Capital Notes within five business days following the date when due or the commencement of a voluntary or involuntary bankruptcy action of the Company shall be deemed an event of default, in which case the Sponsor may declare the Working Capital Note due and payable immediately.
As of September 30, 2023, the Company had $750,000 and $1,930,000 outstanding under the Working Capital Note and Extension Note, respectively, totaling $2,680,000 in borrowings which are recorded as promissory note - related party on the condensed balance sheets. As of December 31, 2022, there were no borrowings outstanding.
Extension Note - Related Party
The Company may extend the period of time to consummate a Business Combination by up to two additional three-month periods (for a total of 24 months to complete a Business Combination). In order to extend the time available for the Company to consummate a Business Combination, the Sponsor or its affiliates or designees must deposit into the Trust Account, for each additional three-month period, $1,265,000, ($0.10 per Public Share in either case), on or prior to the date of the applicable deadline (the “Extension Funding”). Any such payments would be made in the form of a non-interest bearing, unsecured promissory note. Such note would either be paid upon consummation of a Business Combination or, at the relevant insider’s discretion, converted upon consummation of a Business Combination into additional Private Placement Warrants at a price of $1.50 per Private Placement Warrant. The Sponsor and its affiliates or designees are not obligated to fund the Trust Account to extend the time for the Company to complete a Business Combination.
In connection with the Extension Funding, the Sponsor funded the principal amount of $1,265,000 by depositing such amount into the Trust Account on June 6, 2023 and September 13, 2023 and extended the period of time to consummate a Business Combination from June 14, 2023 to September 14, 2023 and from September 14, 2023 to December 14, 2023, in accordance with the Company’s Amended and Restated Memorandum and Articles of Association and the Investment Management Trust Agreement by and between the Company and Continental Stock Transfer & Trust Company, dated as of December 9, 2021. On June 6, 2023, the Company issued an unsecured promissory note (the “First Extension Note”) in the total principal amount of $1,265,000 to the Sponsor. On September 13, 2023, the Company issued an additional unsecured promissory note in the total principal amount of $1,265,000 to the Sponsor (together with the First Extension Note, the “Extension Notes” and each, an “Extension Note”). The Extension Note bears no interest and shall be due and payable on the earlier of (i) the date of consummation of the Business Combination and (ii) the Maturity Date. In the event that the Company does not consummate a Business
Combination, the Extension Note will be repaid only from amounts remaining outside of the Trust Account, if any. Up to $600,000 of the total principal amount under such Extension Note can be converted, at the Sponsor’s discretion, in whole or in part, into additional warrants of the Company at a price of $1.50 per warrant, each warrant exercisable for one Class A ordinary share, $0.0001 par value per share, of the Company. The warrants will be identical to the Private Placement Warrants.
At September 30, 2023, the convertible portion of the Extension Note, or $600,000, has been included in convertible note - related party on the condensed balance sheets. The nonconvertible portion, or $1,930,000 of the Extension Note, has been included in promissory note - related party on the condensed balance sheets.
Office Space, Secretarial and Administrative Services
Commencing on the date that the Company’s securities are first listed on the NASDAQ through the earlier of consummation of the initial Business Combination and the liquidation, the Company agreed to pay the Sponsor a total of $10,000 per month for office space, utilities, secretarial and administrative support and to reimburse the Sponsor for any out-of-pocket expenses related to identifying, investigating and completing an initial Business Combination. For the three and nine months ended September 30, 2023 and 2022, the Company expensed $30,000 and $90,000 in administrative support services, respectively. As of September 30, 2023 and December 31, 2022, the Company had accrued $30,000 and $30,000, respectively, in administrative fees payable to the Sponsor which are included in due to related party on the condensed balance sheets.
Additionally, the Sponsor has agreed to pay an annual salary of $25,000 to each of the independent Board Members for services rendered prior to or in connection with the completion of the Business Combination. Board members are entitled to reimbursement for any out-of-pocket expenses related to identifying, investigating, negotiating and completing the Business Combination as well. For the three and nine months ended September 30, 2023, the Company expensed $18,904 and $56,096, respectively, for services rendered by the independent Board Members. For the three and nine months ended September 30, 2022, the Company expensed $18,904 and $56,096 for services rendered by the independent Board Members. At September 30, 2023 and December 31, 2022, the Company had accrued approximately $18,699 and $18,904, respectively, in compensation expense to the independent board members which are included in due to related party on the condensed balance sheets.
Note 6 — Commitments & Contingencies
Registration and Shareholder Rights
The holders of the Founder Shares, Private Placement Warrants, Class A ordinary shares underlying the Private Placement Warrants and any warrants that may be issued upon conversion of Working Capital Loans and extension loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and extension loans) will be entitled to registration rights pursuant to a registration and shareholder rights agreement to be signed prior to or on the effective date of the Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of the initial Business Combination. However, the registration and shareholder rights agreement provide that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period, which occurs (i) in the case of the Founder Shares, as described in the following paragraph, and (ii) in the case of the Private Placement Warrants and the respective Class A ordinary shares underlying such warrants, 30 days after the completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Except as described herein, the Sponsor and the Company’s directors and executive officers have agreed not to transfer, assign or sell (i) their Founder Shares until the earliest of (A) one year after the completion of the initial Business Combination and (B) subsequent to the initial Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination, or (y) the date on which the Company complete a liquidation, merger, share exchange or other similar transaction that results in all of its public shareholders having the right to exchange their ordinary shares for cash, securities or other property, and (ii) any of their Private Placement Warrants and Class A ordinary shares issued upon conversion or exercise thereof until 30 days after the completion of the initial Business Combination. Any permitted transferees will be subject to the same restrictions and other agreements of the Sponsor with respect to any Founder Shares, Private Placement Warrants and Class A ordinary shares issued upon conversion or exercise thereof. The Company refers to such transfer restriction herein as the lock-up.
In addition, pursuant to the registration and shareholder rights agreement, the Sponsor, upon and following consummation of an initial Business Combination, will be entitled to nominate three individuals for appointment to the Company’s board of directors, as long as the Sponsor holds any securities covered by the registration and shareholder rights agreement. Prior to the Business Combination, only holders of Class B ordinary shares will be able to vote on the appointment of directors and to continue the Company in a jurisdiction outside the Cayman Islands.
Underwriting Agreement
The underwriters had a 45-day option from the date of the IPO to purchase up to an additional 1,650,000 Units to cover over-allotments, if any. On December 15, 2021, the underwriters fully exercised the over-allotment option.
The underwriters were paid underwriting commission of $0.20 per Unit sold in the IPO, excluding Units sold to Forbion Cooperatief, or $1,800,000, upon the closing of the IPO. Following the exercise of the underwriters’ over-allotment option on December 15, 2021, the underwriters earned an additional $330,000 for an aggregate of $2,130,000 in underwriting commissions related to the IPO and over-allotment.
In addition, $3,150,000 is payable to the underwriters for deferred underwriting commissions related to the Units sold in the IPO, excluding those Units sold to Forbion Cooperatief. Following the exercise of the underwriters’ over-allotment option on December 15, 2021, the underwriters earned an additional $577,500 for an aggregate of $3,727,500 in deferred underwriting commissions related to the IPO and over-allotment. The deferred underwriting commission will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
Forward Purchase Agreements
The Company has entered into two forward purchase agreements (the “Forward Purchase Agreements”) with the Sponsor, pursuant to which the Sponsor has agreed to purchase (1) an aggregate of 1,000,000 Class A ordinary shares for $10.00 per share (the “firm forward purchase shares”), or an aggregate amount of $10,000,000 and (2) in addition, an aggregate of up to 1,000,000 Class A ordinary shares for $10.00 per share (the “additional forward purchase shares”), or an aggregate maximum amount of up to $10,000,000, in each case in a private placement that may close simultaneously with the closing of the Company’s initial Business Combination. The Sponsor’s obligations under the Forward Purchase Agreements were satisfied by virtue of the Sponsor’s investment in the Convertible Bridge Financing (as defined below).
Deferred Legal Fees
The Company has incurred $4,700,271 in legal fees with one of its legal providers, of which $125,000 are deferred and contingent upon the consummation of the Business Combination. Deferred legal fees are included in accrued offering costs and expenses on the Company’s condensed balance sheets.
Business Combination Agreement
On May 16, 2023, the Company entered into the Business Combination Agreement with enGene and Newco. The Business Combination Agreement contemplates that the proposed Business Combination among the Company, enGene and Newco will be completed through, among others, the following series of transactions:
•the Company shall incorporate or cause to be incorporated Can Merger Sub as a corporation under the laws of Canada and a direct wholly owned subsidiary of the Company (“Can Merger Sub”) and Newco shall incorporate or cause to be incorporated Cayman Merger Sub as a Cayman Islands exempted company and a direct wholly-owned subsidiary of Newco (“Cayman Merger Sub”);
•pursuant to a Sponsor and Insiders Letter Agreement entered into concurrently with the execution and delivery of the Business Combination Agreement (the “Sponsor and Insiders Letter Agreement”), the Sponsor has agreed to surrender, after giving effect to the conversion of all or part of the principal amount outstanding under loans made by the Sponsor to the Company into Private Placement Warrants, 1,789,004 Founder Shares and 5,463,381 Private Placement Warrants, as a contribution to the capital of the Company and for no consideration (the “Surrender”), effective immediately prior to the Class B Conversion (as defined below) on the day which is two (2) business days prior to the Closing Date (as defined below);
•on the day which is two (2) business days prior to the Closing Date, each Founder Share that remains outstanding following the Surrender shall be exchanged for one Class A ordinary share of the Company (the “Class B Conversion”);
•on the day which is one (1) business day prior to the Closing Date, Cayman Merger Sub will merge with and into the Company with the Company as the surviving entity pursuant to a plan of merger under the laws of the Cayman Islands (the “Cayman Merger”);
•concurrently with the Cayman Merger, and effective at the same time the Cayman Merger becomes effective under Cayman Islands law, (i) Newco will assume the warrants of the Company to purchase one Class A ordinary share of the Company at an exercise price of $11.50 per share (as so assumed, “Newco Warrants”) pursuant to a warrant assignment, assumption and amendment agreement to be entered into on or around the Closing Date, and (ii) Newco will redeem the initial Class A common shares of Newco (the “Newco Shares”) held by the sole shareholder of Newco for an amount equal to the amount of capital that the sole shareholder of Newco contributed for purposes of the incorporation of Newco (such transactions, together with the Cayman Merger, the “Cayman Reorganization”);
•following the Cayman Reorganization, the Company will file an election to change its classification for U.S. federal income tax purposes from a corporation to an entity disregarded as separate from its owner Newco, to be effective as of the beginning of the Closing Date (the “U.S. Entity Classification Election” and, together with the Cayman Reorganization, the “FEAC Reorganization”);
•on the Closing Date, subsequent to the FEAC Reorganization becoming effective, the Company will sell to Newco, and Newco will purchase, all of the outstanding common shares of Can Merger Sub (the “Can Merger Sub Share Sale”);
•subsequent to the Can Merger Sub Share Sale, Can Merger Sub and the Company will amalgamate under Section 192 of the Canada Business Corporations Act pursuant to a plan of arrangement (the “Amalgamation”; the date of the Amalgamation being the “Closing Date”), and pursuant to the Amalgamation, (i) each enGene share outstanding immediately prior to the Amalgamation shall be exchanged for Newco Shares at an agreed upon exchange ratio set out in the Amalgamation plan of arrangement (the “Company Exchange Ratio”) and each enGene warrant outstanding immediately prior to the Amalgamation shall be exchanged for Newco Warrants per the Company Exchange Ratio; (ii) each Can Merger Sub share outstanding immediately prior to the Amalgamation shall be exchanged for one common share in the authorized share capital of the amalgamated entity; (iii) in consideration for the issuance of Newco Shares, the amalgamated entity shall issue its common shares to Newco; and
•following the Amalgamation, Newco will continue from being a corporation incorporated under and governed by the Canada Business Corporations Act to a company continued to and governed by the Business Corporations Act (British Columbia).
The transactions described above, together with the other transactions contemplated by the Business Combination Agreement, are hereinafter referred to as the “Transactions”.
Concurrently with the execution and delivery of the Business Combination Agreement, the Company, Newco and enGene, among other parties, entered into the enGene Voting Agreement (the “enGene Voting Agreement”), the enGene Lock-Up Agreement (the “enGene Lock-Up Agreement”), and the FEAC Voting Agreement (the “FEAC Voting Agreement”) pursuant to which certain shareholders of enGene and the Company, respectively, agreed to vote in favor of the Transactions and to certain transfer restrictions in respect of such shareholders’ shares of the Company and of Newco, as applicable.
The Business Combination Agreement contains customary representations and warranties and covenants. The Business Combination is expected to close in the second half of 2023, subject to the satisfaction of customary closing conditions.
The Business Combination Agreement and the Transactions were approved by the boards of directors of each of the Company and enGene.
Waiver and Consent Letter
On September 13, 2023, the Company, enGene and Newco entered into a Waiver and Consent Letter (the “Waiver and Consent Letter”), pursuant to which the parties agreed as follows: (a) the requirement in the Business Combination Agreement for each party to mail a letter of transmittal to their respective equity holders at least three business days prior to the Closing Date will be waived, (b) enGene and Newco agreed to the Company entering into, and performing its obligations under the Working Capital Note dated September 13, 2023 and (c) enGene and Newco agreed to the Company entering into a contract for certain marketing and consulting services in connection with the Transactions.
Further, the Company, enGene and Newco agreed to waive the requirements relating to the identification of members of the members of the board of directors of Newco by the date set forth in the Business Combination Agreement, and agreed to satisfy such requirements as soon as reasonably practicable after the Closing Date and no later than or immediately following Newco’s first annual meeting of shareholders following the Closing Date.
Sponsor and Insiders Letter Agreement
On May 16, 2023, the Sponsor and Insiders Letter Agreement was entered into between the Company, the Sponsor, Forbion Growth Opportunities Fund I Cooperatief U.A., enGene, Newco and the other parties named therein (collectively, other than enGene and Newco, the “Sponsor Parties”), pursuant to which the Sponsor has agreed to surrender, after giving effect to the conversion of all or part of the principal amount outstanding under loans made by the Sponsor to the Company into Private Placement Warrants, 1,789,004 of Founder Shares and 5,463,381 of Private Placement Warrants, as a contribution to the capital of the Company and for no consideration, effective immediately prior to the Class B Conversion (as defined therein) on the day which is two (2) business days prior to the Closing Date (as defined therein).
In addition, the Sponsor Parties agreed to (i) be bound by certain other covenants and agreements related to the Business Combination, (ii) waive the anti-dilution protection with respect to the Founder Shares (whether resulting from the PIPE Financing or otherwise) and (iii) be bound by certain transfer restrictions with respect to the shares of the Company and the Private Placement Warrants held by it (including the Newco Shares (as defined therein) and Newco Warrants (as defined therein) received in exchange therefore in connection with the Business Combination and the Transactions), in each case, on the terms and subject to the conditions set forth in Sponsor and Insiders Letter Agreement.
Transaction Support Agreements
Concurrently with the execution and delivery of the Business Combination Agreement, the Company, Newco, enGene, the directors of enGene and certain shareholders of enGene (collectively, other than the Company, the
“enGene Parties”) entered into voting agreements (the “enGene Voting Agreements”) and lock-up agreements (the “enGene Lock-Up Agreements”) pursuant to which the enGene Parties agreed to, among other things, (i) vote or cause to be voted all of its Company Shares (as defined therein) in favor of the Company Arrangement Resolution (as defined therein) and the Transactions; (ii) be bound by certain other covenants and agreements related to the Business Combination; and (iii) be bound by certain transfer restrictions with respect to the Company Shares and Newco Shares, as applicable, in each case, on the terms and subject to the conditions set forth in the enGene Voting Agreements and the enGene Lock-Up Agreements.
In addition, concurrently with the execution and delivery of the Business Combination Agreement, enGene, Newco and the Sponsor Parties entered into a lock-up agreement (the “FEAC Voting Agreement”) pursuant to which the Sponsor Parties agreed to, among other things, (i) vote or cause to be voted all of their shares of the Company (the “FEAC Shares”) in favor of the Transaction Proposals (as defined therein); (ii) be bound by certain other covenants and agreements related to the Business Combination and (iii) be bound by certain transfer restrictions with respect to the FEAC Shares, in each case, on the terms and subject to the conditions set forth in the FEAC Voting Agreement.
Subscription Agreements and Side Letter Agreements
On May 16, 2023, the Company, Newco and certain investors (the “PIPE Investors”) entered into subscription agreements (the “Subscription Agreements” and each a “Subscription Agreement”) pursuant to which, among other things, the PIPE Investors have agreed, subject to the completion of each element of the Transactions (other than those Transactions that are scheduled to be completed following the Closing Date (as defined therein)), to subscribe for and purchase, and the Company has agreed that it will issue and sell to the PIPE Investors (which obligation will be assumed (the “Assumption”) by Newco after the completion of the FEAC Reorganization and prior to the consummation of the PIPE Financing (as defined below)) the number of Class A ordinary shares of the Company (or after the Assumption, Newco Shares) provided for in the applicable Subscription Agreement in exchange for the purchase price of $10.25 per Class A ordinary shares of the Company (or after the Assumption, Newco Share) (as amended by the Side Letter Agreements (as defined below, the “PIPE Financing”). Pursuant to the Subscription Agreements, the PIPE Investors have collectively subscribed for 5,550,408 Class A ordinary shares of the Company (or after the Assumption, Newco Shares) for an aggregate purchase price equal to $56,891,682.
Immediately following the execution and delivery of the Subscription Agreements, the Company and Newco entered into a side letter with each PIPE Investor (the “Side Letter Agreement” and collectively, the “Side Letter Agreements”) to amend the relevant Subscription Agreement and which, together with the relevant Subscription Agreement, reflects the total number of the Class A ordinary shares of the Company and the warrants of the Company to be issued by the Company (or after the Assumption, the total number of Newco Shares and Newco Warrants to be issued by Newco) pursuant to the PIPE Financing in consideration of the purchase price set forth in the relevant Subscription Agreement.
Non-Redemption Agreement
On May 16, 2023, Newco, the Company and a shareholder of the Company that is the beneficial owner of 166,665 Class A ordinary shares of the Company entered into a non-redemption agreement (the “Non-Redemption Agreement”), pursuant to which, among others, the Company will issue additional Class A ordinary shares of the Company and warrants of the Company (or after the Assumption, Newco will issue additional Newco Shares and Newco Warrants) to such shareholder of the Company in consideration of such shareholder’s commitment not to redeem its Class A ordinary shares of the Company in connection with the approval of the Business Combination by the shareholders of the Company (the “Non-Redemption Transaction”).
Registration Rights Agreement
On or around the Closing Date, Newco, the Company, the Sponsor Holders (as defined in the Registration Rights Agreement) and the enGene Holders (as defined in the Registration Rights Agreement) will enter into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which, among other things, the
Sponsor Holders and the enGene Holders will be granted certain customary registration rights with respect to their respective Equity Securities (as defined therein) of Newco, in each case, on the terms and subject to the conditions therein.
Certain enGene Indebtedness
Prior to the execution and delivery of the Business Combination Agreement, enGene agreed to certain modifications of existing convertible indebtedness in an aggregate principal amount of $18,400,000 (the “Amended 2022 Convertible Notes” and, together with the enGene warrants to be issued by enGene as consideration for such modifications, the “Amended 2022 Financing”). Concurrently with the execution and delivery of the Business Combination Agreement, enGene entered into agreements pursuant to which it will issue new convertible indebtedness and enGene warrants (i) for cash in an aggregate principal amount of $30,000,000 and (ii) in repayment of certain outstanding indebtedness in an aggregate principal amount of $8,000,000 (collectively, the “2023 Convertible Notes” and, together with the enGene warrants purchased concurrently, the “2023 Financing”; the 2023 Financing together with the Amended 2022 Financing, the “Convertible Bridge Financing”). The Convertible Bridge Financing indebtedness will be converted in the Transactions into that number of common shares of enGene that, when exchanged at the Company Exchange Ratio, shall equal that number of Class A ordinary shares of the Company (or after the Assumption, Newco Shares) that the holders of such indebtedness would have received if they subscribed for Class A ordinary shares of the Company (or after the Assumption, Newco Shares) on the same terms as the PIPE Financing.
Business Combination Deadline Extension and Extension Loan Notes
On June 6, 2023 and September 13, 2023, the Company extended the time available to consummate its Business Combination from June 14, 2023 to September 14, 2023 and from September 14, 2023 to December 14, 2023 by having the Sponsor deposit, on the date of each extension, an additional $1,265,000, or $0.10 per unit, for each three month extension, into the Trust Account (the “Extension Funding”), in accordance with the Company’s Amended and Restated Memorandum and Articles of Association and the Investment Management Trust Agreement by and between the Company and Continental Stock Transfer & Trust Company, dated as of December 9, 2021.
In connection with the Extension Funding, on June 6, 2023 and September 13, 2023, the Company issued an unsecured promissory note (the “Extension Note”) in the aggregate total principal amount of $2,530,000 to the Sponsor. The Sponsor funded the principal amount of $1,265,000 under the Extension Note by depositing such amount into the Trust Account on June 6, 2023 and September 13, 2023.
The Extension Note bears no interest and shall be due and payable on the earlier of (i) the date of consummation of the Business Combination and (ii) the Maturity Date. In the event that the Company does not consummate a Business Combination, the Extension Note will be repaid only from amounts remaining outside of the Trust Account, if any.
Concurrently with the consummation of a Business Combination, the Sponsor will have the option, but not the obligation, to convert up to $600,000 total principal amount of the Extension Note, in whole or in part, into additional warrants of the Company at a price of $1.50 per warrant, each warrant exercisable for one Class A ordinary share, $0.0001 par value per share, of the Company. The warrants will be identical to the private placement warrants issued by the Company to the Sponsor at the time of the Company’s IPO. A failure to pay the principal outstanding amount of the Extension Note within five business days following the date when due or the commencement of a voluntary or involuntary bankruptcy action of the Company shall be deemed an event of default, in which case the Sponsor may declare the Extension Note due and payable immediately.
Note 7 — Shareholders’ Deficit
Preference shares - The Company is authorized to issue 5,000,000 preference shares with a par value of $0.0001 and with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of September 30, 2023 and December 31, 2022, there were no preference shares issued or outstanding.
Class A ordinary shares - The Company is authorized to issue 500,000,000 Class A ordinary shares with a par value of $0.0001 per share. As of September 30, 2023 and December 31, 2022, there were no Class A ordinary shares outstanding, excluding 12,650,000 Class A ordinary shares subject to possible redemption issued.
Class B ordinary shares - The Company is authorized to issue 50,000,000 Class B ordinary shares with a par value of $0.0001 per share. Holders are entitled to one vote for each share of Class B ordinary shares. As of August 13, 2021, there were 2,875,000 Class B ordinary shares issued and outstanding. Of the 2,875,000 Class B ordinary shares, an aggregate of up to 375,000 shares are subject to forfeiture to the Company for no consideration to the extent that the underwriters’ over-allotment option is not exercised in full or in part. On December 9, 2021, the Company effected a stock dividend of 1.1 shares for each outstanding share, resulting in there being an aggregate of 3,162,500 Founder Shares outstanding, of which 412,500 are subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full or in part. All share and per share amounts have been retroactively restated to reflect the share dividend. The forfeiture amounts were determined such that the initial shareholders will collectively own 20% of the Company’s issued and outstanding ordinary shares after the Public Offering. At September 30, 2023 and December 31, 2022, there were 3,162,500 shares of Class B ordinary shares issued and outstanding.
Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the Company’s shareholders except as required by law. Unless specified in the Company’s amended and restated memorandum and articles of association, or as required by applicable provisions of the Companies Act or applicable stock exchange rules, the affirmative vote of a majority of the Company’s ordinary shares that are voted is required to approve any such matter voted on by the Company’s shareholders. Approval of certain actions will require a special resolution under Cayman Islands law, being the affirmative vote of at least two-thirds of the Company’s ordinary shares that are voted, and pursuant to the Company’s amended and restated memorandum and articles of association; such actions include amending the Company’s amended and restated memorandum and articles of association and approving a statutory merger or consolidation with another company. The Company’s board of directors is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being appointed in each year. There is no cumulative voting with respect to the appointment of directors, with the result that the holders of more than 50% of the shares voted for the appointment of directors can appoint all of the directors. Prior to the Business Combination, only holders of Class B ordinary shares will be able to vote on the appointment of directors and to continue the Company in a jurisdiction outside the Cayman Islands. The Company’s shareholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor.
The Class B ordinary shares will automatically convert into Class A ordinary shares, which such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions, if the Company does not consummate an initial Business Combination, at the time of the initial Business Combination or earlier at the option of the holders thereof at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the Public Offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities (as defined herein) or rights issued or deemed issued, by the company in connection with or in relation to the consummation of the initial Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial Business Combination and any Private Placement Warrants issued to the Sponsor, its affiliates or any member of its management team upon conversion of Working Capital Loans and extension loans. Any conversion of Class B ordinary shares described herein will take effect as a compulsory redemption of Class B ordinary shares and an issuance of Class A ordinary shares as a matter of Cayman Islands law. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one.
Public Warrants - Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment as discussed herein. In addition, if (x) the Company will issue additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates,as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds
from such issuances represent more than 60% of the total equity proceeds,and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummate the initial Business Combination (such price, the “Market Value”) is below$9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described adjacent to “Redemption of public warrants” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
The warrants will become exercisable on the later of 30 days after the completion of the Company’s initial Business Combination and will expire five years after the completion of the Company’s initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
The Company has agreed that as soon as practicable, but in no event later than twenty business days after the closing of the initial Business Combination, the Company will use its commercially reasonable efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the initial Business Combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement; provided that if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect, the Company will not be required to file or maintain in effect a registration statement, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption, but the Company will use its commercially reasonable efforts to register or qualify the shares under applicable blue-sky laws to the extent an exemption is not available. In such event, each holder would pay the exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” (defined below) less the exercise price of the warrants by (y) the fair market value.
Redemption of public warrants. Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the Private Placement Warrants):
•in whole and not in part;
•at a price of $0.01 per warrant;
•upon a minimum of 30 days’ prior written notice of redemption, which the Company refer to as the “30-day redemption period”; and
•if, and only if, the last reported sale price (the “closing price”) of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities-Warrants-Public Shareholders’ Warrants-Redemption Procedures-Anti-dilution Adjustments”) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company send the notice of redemption to the warrant holders.
The Company will not redeem the warrants as described above unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating to those Class A ordinary shares is available throughout the 30-day redemption period. If and when the warrants become redeemable by the Company, it may exercise its redemption
right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
The Company has established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and the Company issues a notice of redemption of the warrants, each warrant holder will be entitled to exercise his, her or its warrant prior to the scheduled redemption date. However, the price of the Class A ordinary shares may fall below the $18.00 redemption trigger price (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities-Warrants -Public Shareholders’ Warrants-Redemption Procedures-Anti-dilution Adjustments”) as well as the $11.50 (for whole shares) warrant exercise price after the redemption notice is issued.
If the Company calls the Public Warrants for redemption as described above, it will have the option to require any holder that wishes to exercise its public warrant to do so on a “cashless basis.” In determining whether to require all holders to exercise their public warrants on a “cashless basis,” the Company will consider, among other factors, its cash position, the number of public warrants that are outstanding and the dilutive effect on shareholders of issuing the maximum number of Class A ordinary shares issuable upon the exercise of the Public Warrants. If the Company takes advantage of this option, all holders of Public Warrants would pay the exercise price by surrendering their public warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” means the 10-day average closing price as of the date on which the notice of redemption is sent to the holders of the warrants. If the Company takes advantage of this option, the notice of redemption will contain the information necessary to calculate the number of Class A ordinary shares to be received upon exercise of the warrants, including the “fair market value” in such case. Requiring a cashless exercise in this manner will reduce the number of shares to be issued and thereby lessen the dilutive effect of a warrant redemption. The Company believes this feature is an attractive option if it does not need the cash from the exercise of the warrants after the Business Combination. If the Company calls the warrants for redemption and does not take advantage of this option, the Sponsor and its permitted transferees would still be entitled to exercise their private placement warrants for cash or on a cashless basis using the same formula described above that other warrant holders would have been required to use had all warrant holders been required to exercise their warrants on a cashless basis, as described in more detail below.
No fractional Class A ordinary shares will be issued upon exercise. If, upon exercise, a holder would be entitled to receive a fractional interest in a share, the Company will round down to the nearest whole number of the number of Class A ordinary shares to be issued to the holder. If, at the time of redemption, the warrants are exercisable for a security other than the Class A ordinary shares pursuant to the warrant agreement (for instance, if the Company is not the surviving company in the Business Combination), the warrants may be exercised for such security. At such time as the warrants become exercisable for a security other than the Class A ordinary shares, the Company (or surviving company) will use its commercially reasonable efforts to register under the Securities Act the security issuable upon the exercise of the warrants.
Note 8 — Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the unaudited condensed consolidated financial statements were issued. Based on this, besides the below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements.
On October 24, 2023, the Company held an Extraordinary General Meeting in connection with the Business Combination. Based upon the submission of proxies and ballots, a majority of the shares of the Company’s ordinary shares issued and outstanding and entitled to vote at the close of business on the record date were present at the Extraordinary General Meeting by proxy or by attendance via the virtual meeting website, which constituted a quorum. All proposals submitted to a vote of the shareholders of the Company at the Extraordinary General Meeting, including the proposal to approve the Business Combination, were approved by the required vote.
In connection with the shareholder vote at the Extraordinary General Meeting, the Company’s public shareholders had the right to elect to redeem all or a portion of their Class A ordinary shares for a per share price calculated in accordance with the Company’s organizational documents. The Company’s public shareholders holding 10,379,144 Class A ordinary shares validly elected to redeem their public shares for a pro rata portion of the funds in the Company’s Trust Account for $114,292,161 (approximately $11.01 per share).
The Closing is expected to occur on or about October 31, 2023, subject to the satisfaction or waiver of the conditions with respect to the Business Combination.
Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
This document is being filed as an exhibit to a registration statement on Form S-3 (the “Registration Statement”) of enGene Holdings Inc. and incorporated by reference into the prospectus contained in such Registration Statement (the “Prospectus”).
Unless the context indicates otherwise, references to the terms “New enGene,” and the “Company,” refer to enGene Holdings Inc. and its subsidiaries at and after the consummation of the Business Combination (as defined below) on the Closing Date (as defined below) and giving effect to the consummation of the transactions contemplated by the Business Combination Agreement (as defined below). The terms “Old enGene” or “enGene Inc.” refer to enGene Inc. and its consolidated subsidiary prior to the Business Combination.
Background and Business Combination
On October 31, 2023 (the “Closing Date”), the Company consummated a business combination (the “Business Combination”) with Forbion European Acquisition Corp., a Cayman Islands exempted company and a special purpose acquisition corporation (“FEAC”), and enGene Inc., a corporation incorporated under the laws of Canada (“enGene Inc.”), pursuant to the Business Combination Agreement, dated as of May 16, 2023 (as amended, the “Business Combination Agreement”). As a result of the Business Combination, the Company became a publicly traded company, with enGene Inc. as its subsidiary continuing the existing business operations. The Company’s common shares, without par value (“New enGene Shares”) and warrants to purchase New enGene Shares of the Company at a price of $11.50 per share, subject to adjustment (“New enGene Warrants”), commenced trading on the Nasdaq Capital Market under the symbols “ENGN” and “ENGNW,” respectively, on November 1, 2023.
The Business Combination was completed pursuant to the Business Combination Agreement through, among other things, the following series of transactions:
•on September 5, 2023, FEAC incorporated 15333881 Canada Inc., a corporation incorporated under the laws of Canada and a direct wholly owned subsidiary of FEAC (“Can Merger Sub”) and on September 6, 2023, New enGene incorporated enGene Cayman Inc., a Cayman Islands exempted company and a direct wholly owned subsidiary of New enGene (“Cayman Merger Sub”);
•pursuant to a Sponsor and Insiders Letter Agreement entered into concurrently with the execution and delivery of the Business Combination Agreement (the “Sponsor and Insiders Letter Agreement”), on October 27, 2023, Forbion Growth Sponsor FEAC I B.V., a private limited liability company incorporated in The Netherlands (the “FEAC Sponsor”), surrendered, after giving effect to the conversion of all or part of the principal amount outstanding under loans made by the FEAC Sponsor to FEAC into private placement warrants of FEAC (“FEAC Private Placement Warrants”), 1,789,004 FEAC Class B Shares (as defined below) and 5,463,381 FEAC Private Placement Warrants, as a contribution to the capital of FEAC and for no consideration (the “Surrender”), effective immediately prior to the Class B Conversion (as defined below);
•on October 27, 2023, each FEAC Class B Share that remained outstanding following the Surrender was exchanged for one FEAC Class A ordinary share, $0.0001 par value (“FEAC Class A Share”) (the “Class B Conversion”);
•on October 30, 2023, Cayman Merger Sub merged with and into FEAC with FEAC as the surviving entity pursuant to a plan of merger under the laws of the Cayman Islands (the “Cayman Merger”), and pursuant thereto: (i) New enGene issued to the holders of FEAC Shares (as defined below) (including the FEAC Sponsor) New enGene Shares in exchange for such holders’ FEAC Shares and such FEAC Shares were not cancelled but were transferred to New enGene, (ii) FEAC thereby became a wholly owned subsidiary of New enGene, and (iii) each issued share of Cayman Merger Sub was exchanged for a FEAC Class A Share as the surviving entity, and Cayman Merger Sub (having merged into FEAC) ceased to exist as a separate entity by virtue of the Cayman Merger;
•concurrently with the Cayman Merger, and effective at the same time the Cayman Merger became effective under Cayman Islands law, (i) New enGene assumed the warrants of FEAC to purchase one FEAC Class A Share at an exercise price of $11.50 per share (the “FEAC Warrants”), subject to adjustment (and, as so assumed, became New enGene Warrants) pursuant to a warrant assignment, assumption and amendment agreement, (ii) FEAC as the entity surviving the Cayman Merger issued to New enGene a non-interest bearing demand promissory note payable denominated in Canadian dollars (“C$”) having a principal amount equal to the fair market value of the FEAC Warrants assumed by New enGene (“Note 3”) in consideration of the assumption by New enGene of obligations under the FEAC Warrants (as so assumed, New enGene Warrants), and (iii) New enGene redeemed certain initial common shares of New enGene held by the sole shareholder of New enGene for an amount equal to the amount of capital that the sole shareholder of New enGene contributed for purposes of the incorporation of New enGene (such transactions, together with the Cayman Merger, the “Cayman Reorganization”);
•following the Cayman Reorganization, FEAC filed an election to change its classification for U.S. federal income tax purposes from a corporation to an entity disregarded as separate from its owner New enGene, to be effective as of the beginning of the Closing Date (the “U.S. Entity Classification Election” and, together with the Cayman Reorganization, the “FEAC Reorganization”);
•on the Closing Date and pursuant to the Plan of Arrangement (as defined below), subsequent to the FEAC Reorganization becoming effective and prior to the consummation of the 2023 PIPE Financing (as defined below), FEAC loaned to New enGene an amount equal to the total funds held in its Trust Account (as defined below) (subject to certain deductions described in the Business Combination Agreement), less the principal amount of Note 3 (together, the “Loan Amount”) in consideration for which New enGene issued a C$ denominated non-interest bearing demand promissory note to FEAC having a principal amount equal to the Loan Amount converted into its Canadian dollar equivalent based on 1.3833 (the C$:U.S.$ Bank of Canada daily exchange rate on the business day immediately prior to the Closing Date), following which FEAC sold to New enGene, and New enGene purchased, all of the outstanding common shares of Can Merger Sub for a purchase price of C$10 (the “Can Merger Sub Share Sale”);
•following the Can Merger Sub Share Sale but prior to the Amalgamation, the 2023 PIPE Financing was consummated;
•subsequent to the Can Merger Sub Share Sale and 2023 PIPE Financing, Can Merger Sub and Old enGene amalgamated pursuant to the Plan of Arrangement (such transaction being the “Amalgamation”, and the date of the Amalgamation being the Closing Date), and pursuant to the Amalgamation, (i) each Old enGene Share (as defined below) outstanding immediately prior to the Amalgamation was exchanged for New enGene Shares at the enGene Exchange Ratio (as defined below) and each Old enGene Warrant (as defined below) outstanding immediately prior to the Amalgamation was exchanged for New enGene Warrants per the enGene Exchange Ratio; (ii) each Can Merger Sub share outstanding immediately prior to the Amalgamation was exchanged for one common share in the authorized share capital of the amalgamated entity; and (iii) in consideration for the issuance of New enGene Shares, the amalgamated entity issued its common shares to New enGene; and
•following the Amalgamation, New enGene continued from being a corporation incorporated under and governed by the Canada Business Corporations Act to a company continued to and governed by the Business Corporations Act (British Columbia).
The transactions described above, together with the other transactions contemplated by the Business Combination Agreement, are hereinafter referred to as the “Transactions.”
Certain Additional Defined Terms
•“2022 Convertible Notes” has the meaning set forth under “Note 1. Description of the Transactions—Convertible Bridge Financing” below.
•“2023 Convertible Notes” has the meaning set forth under “Note 1. Description of the Transactions—Convertible Bridge Financing” below.
•“2023 Financing” has the meaning set forth under “Note 1. Description of the Transactions—Convertible Bridge Financing” below.
•“2023 PIPE Financing” refers to the transactions pursuant to which the 2023 PIPE Investors entered into the 2023 Subscription Agreements, as modified by a side letter agreement, pursuant to which the Company ultimately issued 6,435,441 New enGene Shares and 2,702,791 New enGene Warrants to purchase New enGene Shares for an aggregate purchase price equal to $56.9 million.
• “2023 PIPE Investors” means the investors party to the 2023 Subscription Agreements.
•“2023 Subordinated Notes” has the meaning set forth under “Note 1. Description of the Transactions—Convertible Bridge Financing” below.
•“2023 Subscription Agreements” refers to the Subscription Agreements entered into by the 2023 PIPE Investors on May 16, 2023, pursuant to which the 2023 PIPE Investors agreed to purchase securities of FEAC, or securities of the Company following the Company’s assumption of such obligations, for an aggregate commitment amount of $56.9 million, and pursuant to which the Company ultimately issued 6,435,441 New enGene Shares and 2,702,791 New enGene Warrants to purchase New enGene Shares for an aggregate purchase price equal to $56.9 million.
•“Amended 2022 Financing” has the meaning set forth under “Note 1. Description of the Transactions—Convertible Bridge Financing” below.
•“Assumption” has the meaning set forth under “Note 1. Description of the Transactions—2023 PIPE Financing” below.
•“Convertible Bridge Financing” has the meaning set forth under “Note 1. Description of the Transactions—Convertible Bridge Financing” below.
•“Combined Company” has the meaning set forth under paragraph 1 of the “Unaudited Pro Forma Condensed Statement of Operations” below.
•D&O has the meaning set forth under “Note 5. Adjustments to Unaudited Pro Forma Condensed Combined Statement of Operations” below.
•“DDX” means dually derivatized chitosan, enGene’s proprietary carrier for genetic medicines to mucosal tissues and is the foundation for enGene’s nanoparticle formulations.
•“DNA” means deoxyribonucleic acid.
•“enGene Exchange Ratio” means 0.1804799669, which was the exchange ratio used in the Business Combination, calculated in accordance with the terms of the Business Combination Agreement as a quotient obtained by dividing (a) the enGene Per Share Value of $1.84991967 ((i) $96,543,554, which is the reference value of $90,000,000 plus the exercise value of enGene Inc.’s outstanding share-based awards, divided by (ii) 52,187,971, which is the sum of enGene Inc.’s outstanding common shares immediately prior to the closing of the Business Combination and the number of common shares issued or issuable upon exercise or settlement of enGene Inc.’s outstanding share-based awards and excludes any shares issuable for the conversion of enGene Inc.’s convertible debt) by (b) the Reference Price of $10.25.
•“enGene Per Share Value” has the meaning set forth in “enGene Exchange Ratio”.
•“Extension Loans” has the meaning set forth under “Note 1. Description of the Transactions—Extension Loans” below.
•“Extension Notes” has the meaning set forth under “Note 1. Description of the Transactions—Extension Loans” below.
•“FEAC Class A Shares” means FEAC’s Class A ordinary shares, $0.0001 par value.
•“FEAC Class B Shares” means FEAC’s Class B ordinary shares, $0.0001 par value.
•“FEAC Shares” means (a) prior to the Class B Conversion, collectively, the FEAC Class A Shares and the FEAC Class B Shares, and (b) from and after the Class B Conversion, the FEAC Class A Shares after giving effect to the Class B Conversion. Any reference to the FEAC Shares is deemed to refer to clause (a) and/or clause (b) of this definition as the context so requires.
•“FEAC Sponsor Parties” has the meaning set forth under “Note 1. Description of the Transactions—FEAC Sponsor Parties” below.
•“FEAC Warrant Agreement” means the warrant agreement, dated as of December 9, 2021, by and between FEAC and Continental Stock Transfer & Trust Company, as warrant agent.
•“FEAC Warrant” means each warrant to purchase one FEAC Class A Share at an exercise price of $11.50 per share, subject to adjustment, upon the terms and conditions in the FEAC Warrant Agreement.
•“First Extension Loan Note” has the meaning set forth under “Note 1. Description of the Transactions—Extension Loans” below.
•“First Loan Note” has the meaning set forth under “Note 1. Description of the Transactions—Working Capital Loans” below.
•“FGOF” means Forbion Growth Opportunities Fund I Cooperatief U.A.
•“IPO” means initial public offering.
•“Management” has the meaning set forth under “Note 2. Basis of Pro Forma Presentation” below.
•“Management’s Adjustments” has the meaning set forth under “Note 2. Basis of Pro Forma Presentation” below.
•“New enGene Shares” means the common shares, without par value, of enGene Holdings, Inc., as further described in paragraph 1 of the “Background and Business Combination” section, above.
•“New enGene Warrants” means the warrants to purchase New enGene Shares, at a price of $11.50 per share, subject to adjustment, as further described in paragraph 1 of the “Background and Business Combination” section, above.
•“Non-Redemption Agreement” has the meaning set forth under “Note 1. Description of the Transactions—Non-Redemption Agreement” below.
•“Old enGene Class A Preferred Shares” means Class A Preferred shares in the capital of enGene Inc.
•“Old enGene Class B Preferred Shares” means Class B Preferred shares in the capital of enGene Inc.
•“Old enGene Class C Preferred Shares” means Class C Preferred shares in the capital of enGene Inc. issuable in series, one series being designated Series 1 Class C Preferred Shares, one series being designated Series 2 Class C Preferred Shares, one series designated Series 3 Class C Preferred Shares and one series being designated Series 4 Class C Preferred Shares.
•“Old enGene Common Shares” means the common shares of enGene Inc.
•“Old enGene Non-Voting Common Shares” means the non-voting common shares in the capital of Old enGene.
•“Old enGene Preferred Shares” means the Old enGene Class A Preferred Shares, old enGene Class B Preferred shares and old enGene Class C Preferred shares.
•“Old enGene Shares” means the Old enGene Common Shares, Old enGene Non-Voting Common Shares, Old enGene Class A Preferred Shares, Old enGene Class B Preferred Shares, and Old enGene Class C Preferred Shares.
•“Old enGene Warrant” means any warrant to purchase Old enGene securities that was ultimately exchanged for a New enGene Warrant to purchase New enGene Shares as a result of the Business Combination.
•“Plan of Arrangement” means the agreement pursuant to which the “Amalgamation” was consummated, with the date of the Amalgamation being the Closing Date.
•“Reference Price” has the meaning set forth in “enGene Exchange Ratio”.
•“RNA” means ribonucleic acid.
•“Second Extension Loan Note” has the meaning set forth under “Note 1. Description of the Transactions—Extension Loans” below.
•“Second Loan Note” has the meaning set forth under “Note 1. Description of the Transactions—Working Capital Loans” below.
•“Third Loan Note” has the meaning set forth under “Note 1. Description of the Transactions—Working Capital Loans” below.
•“Transaction Accounting Adjustments” has the meaning set forth under “Note 2. Basis of Pro Forma Presentation” below.
•“Transaction Proposals” refers to the matters voted upon by FEAC’s stockholders at the extraordinary general meeting of stockholders held on October 24, 2023, as set forth in FEAC’s definitive Proxy Statement filed with the Securities and Exchange Commission October 2, 2023.
•“Trust Account” refers to the trust account established by FEAC in accordance with, that certain Investment Management Trust Agreement, dated as of December 9, 2021, between FEAC and Continental Stock Transfer & Trust Company, as trustee.
•“US GAAP” refers to accounting principles generally accepted in the United States of America.
•“Working Capital Loans” has the meaning set forth under “Note 1. Description of the Transactions—Working Capital Loans” below.
•“Working Capital Loan Notes” has the meaning set forth under “Note 1. Description of the Transactions—Working Capital Loans” below.
Unaudited Pro Forma Condensed Statement of Operations
The following unaudited pro forma condensed combined statement of operations for the year ended October 31, 2023 presents the combination of the financial information of FEAC and New enGene, after giving effect to the Transactions, including the Business Combination, 2023 PIPE Financing, the Non-Redemption Agreement, the Convertible Bridge Financing, the Working Capital Loans, the Sponsor and Insiders Letter Agreement, and the Extension Loans and related adjustments described in the accompanying notes. Subsequent to the Business Combination, FEAC, New enGene and Old enGene are collectively referred to herein as the “Combined Company.” The Transactions are reflected in the Combined Company’s consolidated balance sheet as of October 31, 2023. Therefore, the unaudited pro forma condensed combined balance sheet is not presented in the following unaudited pro forma condensed combined financial information.
The unaudited pro forma condensed combined statement of operations for the year ended October 31, 2023 does not include any financing transactions that took place in fiscal 2024.
FEAC was a blank check company incorporated on August 9, 2021, as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. Prior to executing the Business Combination Agreement, FEAC’s efforts were limited to organizational activities, completion of its IPO and the evaluation of possible business combinations. As of September 30, 2023, there was $138.8 million in investments and cash held in the Trust Account and $86,000 of cash held outside the Trust Account available for general corporate purposes.
enGene Inc. (and, following the Business Combination, enGene Holdings Inc.), is a clinical-stage biotechnology company developing non-viral gene therapies based on localized delivery of nucleic acid payloads to mucosal tissues. enGene Inc.’s (and, following the Business Combination, enGene Holdings Inc.’s) proprietary DDX platform has a high degree of payload flexibility, including DNA and various forms of RNA with broad tissue and disease application.
The unaudited pro forma condensed combined statement of operations for the year ended October 31, 2023 gives pro forma effect to the Transactions as if they had occurred on November 1, 2022, which is the beginning of the fiscal year in which the Transactions occurred.
The unaudited pro forma condensed combined financial information are based on and should be read in conjunction with the historical financial statements and the related notes thereto as described under “Note 2. Basis of Pro Forma Presentation” below.
The unaudited pro forma condensed combined financial information has been presented for illustrative purposes only and does not necessarily reflect what the Combined Company’s results of operations would have been had the Transactions occurred on the date indicated, nor are they indicative of the future consolidated results of operations of the Combined Company. The actual results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of these unaudited pro forma condensed combined financial information and are subject to change as additional information becomes available and analyses are performed.
The Business Combination results in the combination of Old enGene and New enGene, with a fiscal year end of October 31, with FEAC, with a fiscal year end of December 31. The pro forma statement of operations for the year ended October 31, 2023 presents the combination of financial information of New enGene and FEAC, after giving effect to the Transactions described in the accompanying notes. The unaudited pro forma statement of operations for the year ended October 31, 2023 includes New enGene’s consolidated results of operations for the year ended October 31, 2023 and FEAC’s results of operations for the twelve months ended September 30, 2023. New enGene’s consolidated results of operations for the year ended October 31, 2023 include the results of operations of Old enGene for the year ended October 31, 2023 and the results of operations of New enGene for the period from April 24, 2023 (inception) to October 31, 2023.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 2023
(In thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical |
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) |
|
|
|
(B) |
|
|
|
|
|
|
|
|
|
|
|
|
|
enGene
Holdings Inc. |
|
|
|
FEAC |
|
|
|
Transaction
Accounting
Adjustments |
|
|
|
|
Pro Forma
Statement of
Operations |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
$ |
16,458 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
$ |
16,458 |
|
General and administrative |
|
|
9,602 |
|
|
|
— |
|
|
|
(120 |
) |
5(d) |
|
|
20,740 |
|
|
|
|
|
|
|
|
|
|
|
|
1,058 |
|
5(f) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,085 |
|
5(g) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,115 |
|
5(h) |
|
|
|
|
Operating costs |
|
|
— |
|
|
|
9,115 |
|
|
|
(9,115 |
) |
5(h) |
|
|
— |
|
Total operating expenses |
|
|
26,060 |
|
|
|
9,115 |
|
|
|
2,023 |
|
|
|
|
37,198 |
|
Loss from operations |
|
|
(26,060 |
) |
|
|
(9,115 |
) |
|
|
(2,023 |
) |
|
|
|
(37,198 |
) |
Other income (expense), net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
(1,117 |
) |
|
|
— |
|
|
|
— |
|
|
|
|
(1,117 |
) |
Interest expense |
|
|
4,953 |
|
|
|
— |
|
|
|
(2,865 |
) |
5(a) |
|
|
1,802 |
|
|
|
|
|
|
|
|
|
|
|
|
(286 |
) |
5(c) |
|
|
|
|
Interest earned from trust account |
|
|
— |
|
|
|
5,890 |
|
|
|
5,890 |
|
5(e) |
|
|
— |
|
Change in fair value of convertible debentures embedded derivative liabilities |
|
|
21,421 |
|
|
|
— |
|
|
|
(21,284 |
) |
5(a) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
(137 |
) |
5(c) |
|
|
|
|
Change in fair value of warrant liabilities |
|
|
(10,849 |
) |
|
|
— |
|
|
|
(563 |
) |
5(a) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
11,412 |
|
5(b) |
|
|
|
|
Change in fair value of convertible debentures |
|
|
56,212 |
|
|
|
— |
|
|
|
(56,212 |
) |
5(a) |
|
|
— |
|
Loss on extinguishment of convertible debentures |
|
|
3,091 |
|
|
|
— |
|
|
|
— |
|
|
|
|
3,091 |
|
Other expense, net |
|
|
129 |
|
|
|
— |
|
|
|
— |
|
|
|
|
129 |
|
Total other income (expense), net |
|
|
(73,840 |
) |
|
|
5,890 |
|
|
|
(64,045 |
) |
|
|
|
3,905 |
|
Net loss before provision for income taxes |
|
|
(99,900 |
) |
|
|
(3,225 |
) |
|
|
(62,022 |
) |
|
|
|
(41,103 |
) |
Provision for income taxes |
|
|
(17 |
) |
|
|
— |
|
|
|
— |
|
|
|
|
(17 |
) |
Net loss |
|
$ |
(99,917 |
) |
|
$ |
(3,225 |
) |
|
$ |
(62,022 |
) |
|
|
$ |
(41,120 |
) |
Net loss for the period attributable to equity holders — basic and diluted |
|
$ |
(104,739 |
) |
|
$ |
(3,225) |
|
|
$ |
(62,022 |
|
|
|
$ |
(41,120 |
) |
Weighted average common shares outstanding used in basic and diluted net loss per share |
|
|
692,609 |
|
|
|
3,162,500 |
|
|
|
19,342,867 |
|
|
|
|
23,197,976 |
5(i) |
Net loss per share of Combined Company — basic and diluted |
|
$ |
(151.22 |
) |
|
$ |
(0.20 |
) |
|
|
|
|
|
|
$ |
(1.77 |
) |
See accompanying notes to the unaudited pro forma condensed combined financial information.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
1.Description of the Transactions
On May 16, 2023, FEAC, Old enGene and New enGene entered into the Business Combination Agreement. Under the terms of the Business Combination Agreement, the business combination of FEAC, Old enGene, and New enGene was completed through a series of transactions including the Business Combination, the 2023 PIPE Financing, the Non-Redemption Agreement, the Convertible Bridge Financing, the Working Capital Loans, the Sponsor and Insiders Letter Agreement, and the Extension Loans. The principal steps of the Transactions are described above.
Pursuant to the Business Combination Agreement, two entities were incorporated to effect the Transactions, Can Merger Sub, a Canadian corporation and a wholly owned subsidiary of FEAC and Cayman Merger Sub, a Cayman Islands exempt company and a direct wholly owned subsidiary of New enGene.
2023 PIPE Financing
In connection with the Business Combination Agreement, FEAC and New enGene entered into the 2023 Subscription Agreements with the 2023 PIPE Investors, as modified by a side letter agreement, pursuant to which the 2023 PIPE Investors agreed to purchase FEAC Class A Shares and FEAC Warrants (or New enGene Shares and New enGene Warrants when such obligation was assumed (the “Assumption”) by New enGene) for an aggregate commitment amount of $56.9 million. The 2023 Subscription Agreements are subject to certain conditions, including, among other things, completing the steps of the Transactions. The purpose of the 2023 PIPE Financing is to fund general corporate expenses of New enGene.
Sponsor and Insiders Letter Agreement
Concurrent with the execution of the Business Combination Agreement, FEAC, the FEAC Sponsor, Forbion Growth Opportunities Fund I Cooperatief U.A. and the other holders of FEAC Class B Shares, Old enGene, New enGene and the other parties named therein (collectively, other than Old enGene and New enGene, the “FEAC Sponsor Parties”) entered into the Sponsor and Insiders Letter Agreement, pursuant to which the FEAC Sponsor agreed to surrender and in effect issue to 2023 PIPE Investors, after giving effect to the conversion of all or part of the principal amount outstanding under loans made by the FEAC Sponsor to FEAC into FEAC Private Placement Warrants, 1,789,004 FEAC Class B Shares and 5,463,381 FEAC Private Placement Warrants, effective immediately prior to the Class B Conversion on the day which is two business days prior to the Closing Date.
Non-Redemption Agreement
In connection with the execution of the Business Combination Agreement, FEAC and a FEAC shareholder that is the beneficial owner of 166,665 FEAC Class A Shares entered into a non-redemption agreement (the “Non-Redemption Agreement”), pursuant to which, FEAC agreed to issue additional FEAC Class A Shares and FEAC Warrants (which commitment was assumed by New enGene as part of the Transactions such that New enGene issued additional New enGene Shares and New enGene Warrants) to such FEAC shareholder in consideration of such FEAC shareholder’s commitment (i) to vote or cause to be voted all of its FEAC Shares in favor of the Transaction Proposals and (ii) not to redeem its FEAC Class A Shares in connection with the approval of the Business Combination by the shareholders of FEAC.
Convertible Bridge Financing
Prior to the execution and delivery of the Business Combination Agreement, Old enGene agreed to certain modifications of existing convertible indebtedness in an aggregate principal amount of $18.4 million (the “2022 Convertible Notes” and, together with the Old enGene Warrants to be issued by Old enGene as consideration for such modifications, the “Amended 2022 Financing”). On April 4, 2023, Old enGene entered into an interest-free debt agreement for aggregate cash proceeds of $8.0 million (the “2023 Subordinated Notes”). Concurrently with the execution and delivery of the Business Combination Agreement, Old enGene entered into agreements pursuant to which it issued new convertible indebtedness and warrants (i) for cash in an aggregate principal amount of $30.0 million, which amount was funded in two tranches, comprising an initial $20.0 million on May 17, 2023 by Forbion Growth
Sponsor FEAC I B.V. and a subsequent $10.0 million on June 15, 2023, and (ii) in repayment of the 2023 Subordinated Notes (such convertible notes, the “2023 Convertible Notes” and, together with the Old enGene Warrants purchased concurrently, the “2023 Financing”; the 2023 Financing together with the Amended 2022 Financing, the “Convertible Bridge Financing”). The Convertible Bridge Financing indebtedness was converted in the Transactions into that number of Old enGene Common Shares that, when exchanged at the enGene Exchange Ratio, equal that number of FEAC Class A Shares (or after the Assumption, New enGene Shares) that the holders of such indebtedness would have received if they subscribed for FEAC Class A Shares (or after the Assumption, New enGene Shares) on the same terms as the 2023 PIPE Financing.
In relation to the Amended 2022 Financing, the holders of the 2022 Convertible Notes received warrants to purchase Old enGene Common Shares and the holders of the 2023 Convertible Notes were issued warrants in connection with the issuance of the 2023 Convertible Notes. These warrants converted through the Transactions to New enGene Warrants to purchase common shares of the Combined Company. These warrants have substantially similar terms as the warrants received by the 2023 PIPE Investors and were equity classified upon the execution of the 2023 PIPE Financing at the close of the Business Combination.
Working Capital Loans
On March 24, 2023, the FEAC Sponsor and FEAC entered into an unsecured promissory note (the “First Loan Note”) under which the FEAC Sponsor agreed to extend to FEAC a loan of up to $900,000, to be used for FEAC’s general corporate purposes. The FEAC Sponsor funded the initial principal amount of $450,000 on March 24, 2023, and additionally funded $450,000 on April 26, 2023. On June 6, 2023, the FEAC Sponsor and FEAC entered into an additional unsecured promissory note (the “Second Loan Note”) under which the FEAC Sponsor agreed to extend to FEAC a loan of up to $300,000, to be used for FEAC’s general corporate purposes. The FEAC Sponsor funded the principal amount of $300,000 under the Second Loan Note on June 6, 2023. Also, on September 13, 2023, the FEAC Sponsor and FEAC entered into an additional unsecured promissory note (the “Third Loan Note” and, together with the First Loan Note and the Second Loan Note, the “Working Capital Loan Notes”, and the loans evidenced by such Working Capital Loan Notes, the “Working Capital Loans”) under which the FEAC Sponsor agreed to extend to FEAC a loan of up to $450,000, to be used for FEAC’s general corporate purposes. The FEAC Sponsor funded the principal amount of $450,000 under the Third Loan Note on September 13, 2023. The Working Capital Loan Notes bore no interest and were due and payable on the earlier of (i) the date of consummation of a business combination and (ii) December 14, 2023. Upon consummation of the Business Combination, the FEAC Sponsor elected to convert the outstanding principal amount under the First Loan Note into 600,000 additional FEAC Private Placement Warrants at a price of $1.50 per warrant, and the remaining principal amount outstanding under the Second Loan Note and the Third Loan Note was repaid by FEAC out of the proceeds of the Trust Account released to FEAC.
Extension Loans
On June 6, 2023, FEAC extended the period of time to consummate a business combination which required the FEAC Sponsor or its affiliates or designees to deposit into the Trust Account, $1.3 million ($0.10 per FEAC Class A Shares in either case) (the “First Extension Loan Note”).
On September 13, 2023, FEAC further extended the period of time to consummate a business combination which required the FEAC Sponsor to deposit into the Trust Account $1.3 million ($0.10 per FEAC Class A Share). The payment was made in the form of a non-interest bearing, unsecured promissory note (the “Second Extension Loan Note” and, together with the First Extension Loan Note, the “Extension Notes”, and the loans evidenced by such Extension Notes, the “Extension Loans”). The Extension Notes bear no interest and were due and payable on the earlier of (i) the date of consummation of a business combination and (ii) December 14, 2023. Upon consummation of the Business Combination, the FEAC Sponsor elected to convert $600,000 of the principal amount outstanding under the First Extension Loan Note into 400,000 additional FEAC Private Placement Warrants at a price of $1.50 per warrant, and the remaining principal amount outstanding under the First Extension Loan Note and the amount outstanding under the Second Extension Loan Note were repaid by FEAC out of the proceeds of the Trust Account released to FEAC.
These additional FEAC Private Placement Warrants were issued by FEAC to the FEAC Sponsor immediately prior to the Surrender on the day which was two business days prior to the Closing Date, in accordance with the FEAC Warrant Agreement and the relevant promissory note governing the First Loan Note and/or the First Extension Loan Note, as applicable.
2.Basis of Pro Forma Presentation
The unaudited pro forma condensed combined financial information were prepared in accordance with Article 11 of SEC Regulation S-X, as amended by the final rule, Release No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses. Release No. 33-10786 replaced the previous pro forma adjustment criteria with simplified requirements to depict the accounting for business combinations (“Transaction Accounting Adjustments”) and permitted the presentation of reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). Management of New enGene and FEAC (collectively “Management”) has elected not to present Management’s Adjustments and only presents Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information. The transaction accounting adjustments presented in the pro forma financial information are made to provide relevant information necessary for an understanding of the Combined Company reflecting the accounting for the Business Combination, the 2023 PIPE Financing, the Non-Redemption Agreement, the Convertible Bridge Financing, the Working Capital Loans, the Sponsor and Insiders Letter Agreement, and the Extension Loans.
The unaudited pro forma condensed combined financial information is based on the FEAC historical financial statements and the New enGene historical consolidated financial statements as adjusted to give effect to the Transactions. The unaudited pro forma condensed combined statement of operations for the year ended October 31, 2023 gives effect to the Transactions as if they had occurred on November 1, 2022.
The Business Combination results in the combination of Old enGene and New enGene, with a fiscal year end of October 31, with FEAC, with a fiscal year end of December 31. The pro forma statement of operations for the year ended October 31, 2023 present the combination of financial information of New enGene and FEAC, after giving effect to the Business Combination and related adjustments described in the accompanying notes. The unaudited pro forma statement of operations for the year ended October 31, 2023 includes New enGene’s statement of operations for the year ended October 31, 2023 and FEAC’s results of operations for the twelve months ended September 30, 2023. New enGene’s consolidated statement of operations for the year ended October 31, 2023 includes the results of operations of Old enGene for the year ended October 31, 2023 and the results of operations of New enGene for the period from April 24, 2023 (inception) to October 31, 2023.
Management has made significant estimates and assumptions in its determination of the pro forma adjustments. The pro forma adjustments reflecting the Transactions are based on certain currently available information and certain assumptions and methodologies that Management believes are reasonable under the circumstances. The pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Therefore, it is possible that the actual adjustments will differ from the pro forma adjustments, and it is possible the difference may be material. Management believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the Transactions based on information available at this time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial statements.
The unaudited pro forma condensed combined financial information do not give effect to any operating efficiencies or cost savings that may be associated with the Business Combination. FEAC and Old enGene have not had any historical relationship prior to the Business Combination, with the exception of a shareholder investment in Old enGene by Forbion Capital Fund III, an affiliate of the FEAC Sponsor. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.
As a result of the Transactions, Old enGene shareholders (including shares owned by Forbion Capital Fund III, an existing Old enGene shareholder) own approximately 42% of the New enGene Shares, FEAC public shareholders (excluding FEAC Sponsor shares) own approximately 1% of the New enGene Shares, the FEAC Sponsor and FGOF together own approximately 25% of the New enGene Shares, and the 2023 PIPE Investors (excluding FEAC Sponsor portion) own approximately 32% of the New enGene Shares. At Closing, shares outstanding of New enGene as presented in the unaudited pro forma condensed combined financial information include the following:
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares Owned |
|
|
|
% Ownership |
|
Old enGene shareholders |
|
|
9,698,082 |
|
|
|
42 |
% |
FEAC public shareholders |
|
|
270,856 |
|
|
|
1 |
% |
Sponsor and FGOF |
|
|
5,765,932 |
|
|
|
25 |
% |
2023 PIPE Investors |
|
|
7,463,106 |
|
|
|
32 |
% |
Total New enGene shares (1) |
|
|
23,197,976 |
|
|
|
100 |
% |
(1)Represents the total number of outstanding New enGene Shares that New enGene issued upon the consummation of the Transactions. This total does not include New enGene Shares that may be received upon exercise of (i) 10,411,641 outstanding New enGene Warrants or (ii) 5,314,884 New enGene share options to be issued or available to be issued upon the consummation of the Transactions.
The Business Combination Agreement and the Plan of Arrangement together provide that all outstanding Old enGene Shares were exchanged directly for New enGene Shares in the Business Combination (without prior conversion into Old enGene Common Shares) at the enGene Exchange Ratio. Solely for ease of presentation and understanding, the unaudited pro forma adjustments presented below assumes that all Old enGene Non-Voting Common Shares and the Old enGene Preferred Shares are first converted into Old enGene Common Shares prior to the exchange of such shares in the Business Combination for New enGene Shares, which assumption has no impact on the Unaudited Pro Forma Condensed Combined Statement of Operations.
These unaudited pro forma condensed combined financial information and related notes have been derived from and should be read in conjunction with:
•the accompanying notes to the unaudited pro forma condensed combined financial information;
•the historical consolidated financial statements of enGene Holdings Inc. as of and for the year ended October 31, 2023, and the related notes included or incorporated by reference into the Prospectus;
•the historical unaudited condensed consolidated financial statements of FEAC as of and for the nine months ended September 30, 2023 and September 30, 2022, and the related notes included or incorporated by reference into the Prospectus; and
•the historical audited financial statements of FEAC as of and for the year ended December 31, 2022 and the related notes included or incorporated by reference into the Prospectus (used to determine the results of operations of FEAC for the twelve months ended September 30, 2023);
The unaudited pro forma condensed combined financial information are provided for illustrative purposes only and are not necessarily indicative of what the actual results of operations would have been had the Transactions taken place on the dates indicated, nor are they indicative of the future consolidated results of operations of the Combined Company.
3.Accounting for the Business Combination
Notwithstanding the legal form, the Business Combination is accounted for as a reverse recapitalization in accordance with US GAAP. Under this method of accounting, FEAC is treated as the acquired company for financial reporting purposes, whereas Old enGene is treated as the accounting acquirer. In accordance with this accounting method, New enGene is considered to be a continuation of Old enGene, with the net identifiable assets of FEAC deemed to have been acquired by Old enGene in exchange for Old enGene Common Shares accompanied by a recapitalization. The net assets of FEAC are stated at historical cost, with no goodwill or other intangible assets recorded, and operations
prior to the Business Combination are those of Old enGene. Old enGene has been determined to be the accounting acquirer based on an evaluation of the following facts and circumstances, and accordingly the Business Combination is treated as an equivalent to an acquisition of FEAC accompanied by a recapitalization.
•Senior management of Old enGene continues as senior management of the Combined Company;
•Old enGene identifies a majority of the members of the board of directors of the Combined Company;
•The name of the Combined Company is enGene Holdings Inc. and it utilizes Old enGene’s current headquarters; and
•Old enGene’s operations comprise the ongoing operations of the Combined Company.
4.Common shares of enGene Inc.
The enGene Exchange Ratio is calculated in accordance with the terms of the Business Combination Agreement as a quotient obtained by dividing the enGene Per Share Value by the Reference Price of $10.25. The enGene Per Share Value is determined as (i) $96,543,554, which is the reference value of $90,000,000 plus the exercise value of enGene Inc.’s outstanding share-based awards, divided by (ii) 52,187,971, which is the sum of enGene Inc.’s outstanding common shares immediately prior to the closing of the Business Combination and the number of common shares issued or issuable upon exercise or settlement of enGene Inc.’s outstanding share based awards and excludes any shares issuable for the conversion of enGene Inc.’s convertible debt.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Old enGene
shares prior
to the closing of
the Business
Combination |
|
|
|
Number of shares
issued on conversion
of Old enGene 2022 and 2023 Convertible
Notes (2) |
|
|
|
Number of Old enGene common
shares outstanding
prior to the closing of
the Business
Combination |
|
Common shares |
|
|
4,036,656 |
|
|
|
35,349,238 |
|
|
|
39,385,894 |
|
Preferred shares (1) |
|
|
33,152,399 |
|
|
|
— |
|
|
|
33,152,399 |
|
Total |
|
|
37,189,055 |
|
|
|
35,349,238 |
|
|
|
72,538,293 |
|
enGene Inc. common shares outstanding prior to the closing of the Business Combination |
|
|
|
|
|
|
|
|
|
|
72,538,293 |
|
enGene Exchange Ratio |
|
|
|
|
|
|
|
|
|
|
0.1804799669 |
|
New enGene common shares issued to enGene shareholders upon closing of the Transactions |
|
|
|
|
|
|
|
|
|
|
13,091,608 |
|
(1)Presentation assumes that enGene Inc.’s outstanding classes of preferred shares convert to enGene Inc.’s common shares at a ratio of 1:1 immediately prior to the close of the Business Combination. Old enGene Preferred Shares outstanding at the close of the Business Combination were comprised of the following:
|
|
|
|
Preferred Shares Classes Shares |
|
|
|
Class A preferred shares |
|
1,477,715 |
|
Class B preferred shares |
|
864,570 |
|
Class C preferred shares |
|
30,810,114 |
|
Total Old enGene Preferred Shares issued and outstanding converted to Old enGene Common Shares |
|
33,152,399 |
|
(2)The number of shares that were issued on conversion of the outstanding principal balance of $18.4 million of Old enGene’s 2022 Convertible Notes and $38.0 million of the 2023 Convertible Notes, was calculated as follows:
|
|
|
|
|
|
|
|
|
|
|
|
2022 Convertible
Notes |
|
|
|
2023 Convertible
Notes |
|
|
|
|
(in thousands, except share amounts and ratios) |
|
Principal balance of the convertible notes |
|
$ |
18,400 |
|
|
$ |
38,000 |
|
Purchase price paid for the warrants |
|
|
— |
|
|
|
1,805 |
|
Purchase price allocated to the convertible notes (A) |
|
$ |
18,400 |
|
|
$ |
36,195 |
|
enGene Inc. common shares issued at redemption price of $10.25 |
|
|
1,795,122 |
|
|
|
3,707,317 |
|
Additional enGene Inc. common shares issued in connection with PIPE financing |
|
|
286,238 |
|
|
|
591,145 |
|
Total enGene Inc. shares issued upon conversion of the convertible notes prior to reflecting the conversion ratio (B) |
|
|
2,081,360 |
|
|
|
4,298,462 |
|
Conversion ratio (C=A*1000/B) |
|
|
8.84 |
|
|
|
8.42 |
|
enGene Exchange Ratio (D) |
|
|
0.1804799669 |
|
|
|
0.1804799669 |
|
enGene Inc. common shares issued to enGene Inc. convertible note holders upon conversion of the 2022 Convertible Notes and 2023 Convertible Notes (E=A*1000/(C*D)) |
|
|
11,532,375 |
|
|
|
23,816,863 |
|
5.Adjustments to Unaudited Pro Forma Condensed Combined Statement of Operations
The pro forma notes and adjustments, based on preliminary estimates that could change materially as additional information is obtained, are as follows:
Pro forma notes:
5(A) Derived from the consolidated statement of operations and comprehensive loss of enGene Holdings Inc. for the year ended October 31, 2023.
5(B) The results of operations of FEAC for the twelve months ended September 30, 2023 are derived from the unaudited condensed statement of operations for the nine months ended September 30, 2023 and the results of operations for the three months ended December 31, 2022, calculated using the statement of operations for the year ended December 31, 2022 and unaudited condensed statement of operations for the nine months ended September 30, 2022.
enGene Inc. and FEAC are both non-taxable entities and no pro forma adjustments have an impact on associated income tax.
Pro forma Transaction Accounting Adjustments:
5(a) To eliminate the interest expense and to reflect the derecognition of change in fair value of the 2023 Convertible Notes and the change in fair value of the embedded derivative liability and warrant liability associated with the 2022 and 2023 Convertible Notes, as it is assumed that the 2022 and 2023 Convertible Notes were converted to equity as if the Business Combination had occurred on November 1, 2022. The conversion of the 2022 Convertible Notes was accounted for as an extinguishment and a loss of $2.8 million, relating to the difference between the fair value of the common shares issued and the carrying value of the 2022 Convertible Notes and related embedded derivative liability, is reflected in the historical consolidated financial statements of enGene Holdings Inc. for the year ended October 31, 2023. The interest adjustment was based on the total interest expense on the 2022 Convertible Notes recorded for the year ended October 31, 2023. These transactions are not expected to have a recurring impact.
5(b) To eliminate the change in fair value of Old enGene Warrants to purchase Class C preferred shares as the warrants were cancelled as part of the Transactions, as if the Business Combination had occurred on November 1, 2022. The transaction is not expected to have a recurring impact.
5(c) To eliminate the interest expense recognized on the convertible debenture to the Business Development Bank of Canada and the associated change in fair value of the embedded derivative liability, given the convertible debenture to the Business Development Bank of Canada was repaid at the time of closing of the Business Combination. The transaction is not expected to have a recurring impact.
5(d) To reflect an adjustment to eliminate FEAC’s administrative support fees of $10,000 per month as if the Business Combination had occurred on November 1, 2022. The transaction is not expected to have a recurring impact.
5(e) To reflect the derecognition of investment income related to the investments held in the Trust Account in as if the Business Combination had occurred on November 1, 2022. The transaction is not expected to have a recurring impact.
5(f) To reflect an adjustment to recognize $1.1 million of general and administrative expense in the pro forma statement of operations for the year ended October 31, 2023 related to the Director and Officer (“D&O”) insurance tail policy of FEAC that was required to be purchased pursuant to the Business Combination Agreement. The D&O policy does not cover any claims incurred after the consummation of the Business Combination. The transaction is not expected to have a recurring impact.
5(g) To reflect FEAC’s estimated incremental advisory, legal, accounting, and other professional fees related to the Business Combination that are not recorded in its historical financial statements as an increase to general and administrative expense in the pro forma statement of operations for the year ended October 31, 2023 as if the transactions had occurred on November 1, 2022. The transaction is not expected to have a recurring impact.
5(h) To reflect the reclassification of FEAC’s operating costs to general and administrative expenses to align with New enGene’s presentation.
5(i) The pro forma basic and diluted net loss per share amounts presented in the unaudited pro forma condensed combined statement of operations are based upon the number of New enGene Shares outstanding at the closing of the Transactions, assuming the Transactions occurred on November 1, 2022. The calculation of weighted-average shares outstanding for pro forma basic and diluted net loss per share assumes that the shares issuable in connection with the Transactions have been outstanding for the entirety of the period presented. Pro forma basic and diluted net loss per share is calculated as follows for the year ended October 31, 2023 (in thousands, except share and per share amounts):
|
|
|
|
|
Numerator: |
|
|
|
|
Net loss — basic and diluted |
|
$ |
(41,120 |
) |
Denominator: |
|
|
|
|
New enGene common shares owned by public shareholders that were subject to redemption upon closing |
|
|
104,191 |
|
New enGene common shares owned by public shareholders that were not subject to redemption upon closing |
|
|
3,373,496 |
|
New enGene common shares owned by Old enGene shareholders (excluding the conversion of the 2022 Convertible Notes and the 2023 Convertible Notes) |
|
|
6,711,786 |
|
New enGene common shares owned by Old enGene shareholders derived from the conversion of the 2022 Convertible Notes and the 2023 Convertible Notes |
|
|
6,379,822 |
|
New enGene common shares owned by PIPE Investors |
|
|
6,435,441 |
|
New enGene common shares owned by shareholders that were subject to Non-Redemption Agreement (1) |
|
|
193,240 |
|
Weighted average common shares outstanding used in basic and diluted net loss per share (2) |
|
|
23,197,976 |
|
Net loss per share of Combined Company — basic and diluted |
|
$ |
(1.77 |
) |
(1)Represents 166,665 FEAC Class A Shares associated with the Non-Redemption Agreement and 26,575 additional FEAC Class A Shares that were issued to the same FEAC shareholder in consideration for such shareholder’s entering into the Non-Redemption Agreement.
(2)Represents the total number of outstanding New enGene Shares that New enGene issued as of the consummation of the Transactions. The number of New enGene Shares that may be received upon exercise of (i) 10,411,641 outstanding New enGene Warrants or (ii) 5,314,884 New enGene share options to be issued or available to be issued, respectively, upon the consummation of the Transactions have been excluded from the computation of diluted net loss per share attributable to common shareholders for the year ended October 31, 2023 because including them would have been antidilutive.
