enGene Holdings Inc. [ENGNW] Filings

10-Q 1 engn-20240731.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended July 31, 2024


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

For the transition period from _________________ to _________________

Commission File Number: 001-41854

enGene Holdings Inc.

(Exact Name of Registrant as Specified in its Charter)


British Columbia, Canada	N/A
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
4868 Rue Levy, Suite 220 Saint-Laurent, QC, Canada	H4R 2P1
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (514) 332-4888

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares	ENGN	The Nasdaq Stock Market LLC
Warrants, each exercisable for one Common Share, at an exercise price of $11.50 per share	ENGNW	The Nasdaq Stock Market LLC

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

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

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


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

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

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

As of September 6, 2024, the registrant had 44,215,577 Common Shares, with no par value per share, outstanding.

Table of Contents


		Page
	SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	2


PART I.	FINANCIAL INFORMATION	4

Item 1.	Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets as of July 31, 2024 and October 31, 2023	4
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended July 31, 2024 and 2023	5
	Condensed Consolidated Statements of Redeemable Convertible Preferred Shares and Shareholders’ Deficit for the Three and Nine Months Ended July 31, 2024 and 2023	6
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended July 31, 2024 and 2023	7
	Notes to the Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	45

PART II.	OTHER INFORMATION	47

Item 1.	Legal Proceedings	47
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 3.	Omitted	48
Item 4.	Omitted	48
Item 5.	Other Information	48
Item 6.	Exhibits	48
Signatures		50

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Quarterly Report on Form 10-Q may constitute “forward-looking statements” within the meaning of U.S. securities laws and “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 in this Quarterly Report on Form 10-Q may include, for example, statements about:

•

the ability of enGene to recognize the anticipated benefits of the business combination between FEAC, the Company and Old enGene 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 ("Common Shares") and warrants to purchase Common Shares ("Warrants") 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 Quarterly Report on Form 10-Q 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 this Quarterly Report 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 this Quarterly Report 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 Quarterly Report on Form 10-Q. 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 Quarterly Report on Form 10-Q 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 Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q 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.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

ENGENE HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN THOUSANDS OF USD, EXCEPT FOR SHARE AND PER SHARE DATA)

(Unaudited)


	July 31, 2024			October 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	257,678		$	81,521
Restricted certificate of deposit		75			76
Investment tax credits receivable		241			2,343
Prepaid and other current assets		4,700			1,500
Total current assets		262,694			85,440
Property and equipment, net		1,014			589
Operating lease right of use asset		1,790			—
Other assets		1,381			930
Total assets	$	266,879		$	86,959
Liabilities, redeemable convertible preferred shares and shareholders’ equity
Current liabilities:
Accounts payable	$	2,862		$	1,156
Accrued expenses and other current liabilities		8,833			3,539
Operating lease liabilities, current		422			—
Current portion of notes payable		1,341			562
Total current liabilities		13,458			5,257
Note payable, net of current portion		21,612			9,216
Operating lease liabilities, net of current portion		1,480			—
Total liabilities		36,550			14,473
Shareholders’ equity:
Preferred shares, no par value; unlimited shares authorized, no shares issued and outstanding as of July 31, 2024 and October 31, 2023.		—			—
Common shares, no par value; unlimited shares authorized, 44,215,577 and 23,197,976 shares issued and outstanding as of July 31, 2024 and October 31, 2023, respectively.		453,479			259,373
Additional paid-in capital		17,297			13,717
Accumulated other comprehensive loss		(1,016	)		(1,016	)
Accumulated deficit		(239,431	)		(199,588	)
Total shareholders’ equity		230,329			72,486
Total liabilities, redeemable convertible preferred shares and shareholders’ equity	$	266,879		$	86,959

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

ENGENE HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(AMOUNTS IN THOUSANDS OF USD, EXCEPT FOR SHARE AND PER SHARE DATA)

(Unaudited)


	For the three months ended July 31,						For the nine months ended July 31,
	2024			2023			2024			2023
Operating expenses:
Research and development	$	11,549		$	3,901		$	27,042		$	10,787
General and administrative		5,210			2,347			17,800			4,831
Total operating expenses		16,759			6,248			44,842			15,618
Loss from operations		16,759			6,248			44,842			15,618
Other (income) expense, net:
Change in fair value of convertible debentures embedded derivative liabilities		—			(435	)		—			(753	)
Change in fair value of warrant liabilities		—			(5,521	)		—			(3,995	)
Change in fair value of convertible debentures		—			2,941			—			2,941
Interest income		(3,380	)		(394	)		(7,389	)		(710	)
Interest expense		751			1,442			2,042			3,794
Loss on extinguishment of debt		—			—			366			—
Other expense, net		47			439			20			525
Total other (income) expense, net		(2,582	)		(1,528	)		(4,961	)		1,802
Net loss before provision for income taxes		14,177			4,720			39,881			17,420
Provision for (benefit from) income taxes		(29	)		—			(38	)		—
Net loss and comprehensive loss	$	14,148		$	4,720		$	39,843		$	17,420
Deemed dividend attributable to redeemable convertible preferred shareholders		—			1,273			—			3,726
Net loss attributable to common shareholders, basic and diluted	$	14,148		$	5,993		$	39,843		$	21,146

Net loss per share of common shares, basic and diluted (retrospectively restated to reflect Reverse Recapitalization – see Note 1 and Note 3)	$	0.32		$	8.55		$	1.12		$	30.77
Weighted-average common shares outstanding, basic and diluted (retrospectively restated to reflect Reverse Recapitalization – see Note 1 and Note 3)		44,168,986			701,323			35,564,767			687,188

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

ENGENE HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY (DEFICIT)

(AMOUNTS IN THOUSANDS OF USD, EXCEPT FOR SHARE AND PER SHARE DATA)

(Unaudited)


	Class A Redeemable Convertible Preferred Shares*				Class B Redeemable Convertible Preferred Shares*				Class C Redeemable Convertible Preferred Shares*				Common Shares*				Additional Paid in			Accumulated Other Comprehensive			Accumulated			Total Shareholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital			Loss			Deficit			Deficit
Balance at October 31, 2022		266,696	$	1,899		156,036	$	1,554		5,560,607	$	49,665		665,767	$	16,390	$	7,683		$	(1,016	)	$	(99,671	)	$	(76,614	)
Exercise of stock options		—		—		—		—		—		—		1,804		6		(6	)		—			—			—
Share-based compensation expense		—		—		—		—		—		—		—		—		20			—			—			20
Net loss		—		—		—		—		—		—		—		—		—			—			(7,418	)		(7,418	)
Balance at January 31, 2023		266,696	$	1,899		156,036	$	1,554		5,560,607	$	49,665		667,571	$	16,396	$	7,697		$	(1,016	)	$	(107,089	)	$	(84,012	)
Exercise of stock options		—		—		—		—		—		—		18,258		27		(10	)		—			—			17
Issuance of common shares upon cashless exercise of options		—		—		—		—		—		—		15,494		11		(11	)		—			—			—
Stock-based compensation expense		—		—		—		—		—		—		—		—		39			—			—			39
Net loss		—		—		—		—		—		—		—		—		—			—			(5,282	)		(5,282	)
Balance at April 30, 2023		266,696	$	1,899		156,036	$	1,554		5,560,607	$	49,665		701,323	$	16,434	$	7,715		$	(1,016	)	$	(112,371	)	$	(89,238	)
Stock-based compensation expense		—		—		—		—		—		—		—		—		37			—			—			37
Net loss		—		—		—		—		—		—		—		—		—			—			(4,720	)		(4,720	)
Balance at July 31, 2023		266,696	$	1,899		156,036	$	1,554		5,560,607	$	49,665		701,323	$	16,434	$	7,752		$	(1,016	)	$	(117,091	)	$	(93,921	)


	Class A Redeemable Convertible Preferred Shares*				Class B Redeemable Convertible Preferred Shares*				Class C Redeemable Convertible Preferred Shares*						Common Shares*				Additional Paid in			Accumulated Other Comprehensive			Accumulated			Total Shareholders’
	Shares		Amount		Shares		Amount		Shares		Amount				Shares		Amount		Capital			Loss			Deficit			Equity
Balance at October 31, 2023		—		—		—		—		—		—				23,197,976	$	259,373	$	13,717		$	(1,016	)	$	(199,588	)	$	72,486
Share-based compensation		—		—		—		—		—		—				—		—		291			—			—			291
Issuance of warrants in connection with Amended Term Loan		—		—		—		—		—		—				—		—		319			—			—			319
Net loss		—		—		—		—		—		—				—		—		—			—			(10,711	)		(10,711	)
Balance at January 31, 2024		—	$	—		—	$	—		—	$	—				23,197,976	$	259,373	$	14,327		$	(1,016	)	$	(210,299	)	$	62,385
Exercise of stock options		—		—		—		—		—		—				56,974		207		(156	)		—			—			51
Stock-based compensation expense		—		—		—		—		—		—				—		—		1,917			—			—			1,917
Issuance of common shares in connection with PIPE Financing, net of issuance costs		—		—		—		—		—		—				20,000,000		187,614		—			—			—			187,614
Issuance of common shares upon exercise of warrants		—		—		—		—		—		—				520,282		6,114		(131	)		—			—			5,983
Issuance of common shares upon cashless exercise of warrants		—		—		—		—		—		—				383,355		97		(97	)		—			—			-
Net loss		—		—		—		—		—		—				—		—		—			—			(14,984	)		(14,984	)
Balance at April 30, 2024		—	$	—		—	$	—		—	$	—				44,158,587	$	453,405	$	15,860		$	(1,016	)	$	(225,283	)	$	242,966
Exercise of stock options		—		—		—		—		—		—				56,990		74		(23	)		—			—			51
Stock-based compensation expense		—		—		—		—		—		—				—		—		1,460			—			—			1,460
Net loss		—		—		—		—		—		—				—		—		—			—			(14,148	)		(14,148	)
Balance at July 31, 2024		—	$	—		—	$	—		—	$	—	$	-		44,215,577	$	453,479	$	17,297		$	(1,016	)	$	(239,431	)	$	230,329

*- The shares have been retrospectively restated to reflect exchange of shares upon the close of the Reverse Recapitalization. See Notes 1 and 3.

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

ENGENE HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(AMOUNTS IN THOUSANDS OF USD, EXCEPT FOR SHARE AND PER SHARE DATA)

(Unaudited)


	For the nine months ended July 31,
	2024			2023
Cash flows from operating activities:
Net loss	$	(39,843	)	$	(17,420	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash interest expense		588			2,712
Loss on extinguishment of debt		366			—
Loss on the disposal of property and equipment		22			—
Change in fair value of warrant liabilities		—			(3,995	)
Change in fair value of convertible debenture embedded derivative liabilities		—			(753	)
Change in fair value of convertible debentures		—			2,941
Debt issuance costs expensed upon issuance of debt recorded at the fair value option		—			924
Non-cash lease expense		114			—
Unrealized foreign currency losses		4			545
Share-based compensation expense		3,668			96
Depreciation of property and equipment		240			126
Changes in operating assets and liabilities:
Investment tax credit receivable		2,101			(1,212	)
Prepaid expenses and other assets		(3,651	)		(800	)
Accounts payable		1,919			968
Accrued expenses and other liabilities		5,765			(2,099	)
Lease liabilities		(6	)		—
Net cash used in operating activities		(28,713	)		(17,967	)
Investing activities
Purchases of property and equipment		(687	)		(180	)
Net cash used in investing activities		(687	)		(180	)
Financing activities
Proceeds from the 2024 PIPE Financing		200,000			—
Payments of issuance costs associated with the 2024 PIPE Financing		(12,386	)		—
Proceeds from exercise of stock options		102			17
Proceeds from exercise of common share warrants		5,983			—
Proceeds from issuance of term loan		22,500			—
Repayments of term loan principal		(9,445	)		(384	)
Payments of debt issuance costs associated with term loan		(585	)		—
Proceeds from issuance of April 2023 Notes		—			38,000
Payment of issuance costs associated with April 2023 Notes		—			(313	)
Payment of Reverse Recapitalization and PIPE Financing costs		(613	)		(2,014	)
Net cash provided by financing activities		205,556			35,306
Effect of exchange rate changes on cash and cash equivalents		1			1
Net increase in cash and cash equivalents		176,157			17,160
Cash and cash equivalents at beginning of period		81,521			20,434
Cash and cash equivalents at end of period	$	257,678		$	37,594
Supplemental cash flow information:
Cash paid for interest	$	1,393		$	941
Supplemental non-cash investing and financing activities
Warrant value issued as part of Amended Term Loan		319			1,420
Right of Use Assets obtained in exchange for lease liabilities		1,904			—
Reverse Recapitalization and PIPE Financing transaction costs included within accrued expenses and accounts payable		—			1,129

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

ENGENE HOLDINGS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN THOUSANDS OF USD, EXCEPT FOR SHARE AND PER SHARE DATA)

(Unaudited)

Description of Business

enGene Holdings Inc. (together with its consolidated subsidiaries “enGene” or the “Company”) formed in connection with the Merger Agreement (as defined below) was incorporated as 14963148 Canada Inc. under the federal laws of Canada on April 24, 2023 and changed its name to enGene Holdings Inc. on May 9, 2023. On October 31, 2023, enGene Holdings Inc. 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). enGene Inc., its wholly owned subsidiary since October 31, 2023 (now known as “enGene Inc.” or “Old enGene”), is a biopharmaceutical company located in Montreal, Quebec, Canada, and incorporated pursuant to the Canada Business Corporations Act on November 9, 1999.

The Company is a clinical-stage biotechnology company focused on developing genetic medicines to improve the lives of patients, and its head office is located in Montreal, Quebec, Canada. The Company is developing non-viral genetic medicines based on its 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.

Merger with Forbion European Acquisition Corp.

Forbion European Acquisition Corporation (“FEAC”) was a special purpose acquisition company (“SPAC”), incorporated as a Cayman Island exempted company on August 9, 2021 and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more business or entities. On October 31, 2023 (the “Closing Date”), the Company, FEAC, and enGene Inc., consummated the merger (the “Reverse Recapitalization”) pursuant to a business combination agreement, dated as of May 16, 2023 (the “Merger Agreement”).

The transaction was accounted for as a “reverse recapitalization” in accordance with accounting principles generally accepted in the United States (“GAAP”). Under this method of accounting, FEAC was treated as the “acquired” company for financial reporting purposes. This determination is primarily based on the fact that subsequent to the Reverse Recapitalization, senior management of Old enGene continued as senior management of the combined company; Old enGene identified 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 utilized Old enGene’s current headquarters, and Old enGene’s operations comprise the ongoing operations of the combined company. Accordingly, for accounting purposes, the Company 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, with no goodwill or intangible assets recorded. The number of redeemable convertible preferred shares, number of common shares, net loss per common share, the number of warrants to purchase common shares, and the number of stock options and the related exercise prices of the stock options issued and outstanding prior to the Reverse Recapitalization, have been retrospectively restated to reflect an exchange ratio of approximately 0.18048 (the “Exchange Ratio”) established in the Merger Agreement. Operations prior to the Reverse Recapitalization are those of Old enGene.

As a result of the Reverse Recapitalization, the Company became a publicly traded company, and listed its ordinary shares and warrants on the Nasdaq Global Market under the symbols “ENGN” and “ENGNW,” respectively, commencing trading on November 1, 2023, with Old enGene, a subsidiary of the Company, continuing the existing business operations.

Liquidity and Going Concern

In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern, the Company has evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date these consolidated financial statements are issued.

The Company’s interim condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which presumes the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the ordinary course of business.

As an emerging growth entity, the Company has devoted substantially all of its resources since inception to organizing and staffing the Company, raising capital, establishing its intellectual property portfolio, acquiring or discovering product candidates, research and development activities for developing non-viral genetic medicines and other compounds, establishing arrangements with third parties for the manufacture of its product candidates and component materials, and providing general and administrative support for these operations. As a result, the Company has incurred significant operating losses and negative cash flows from operations since its inception and anticipates such losses and negative cash flows will continue for the foreseeable future. The Company has not yet commercialized

ENGENE HOLDINGS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN THOUSANDS OF USD, EXCEPT FOR SHARE AND PER SHARE DATA)

any product candidates and does not expect to generate revenue from sales of any product candidates or from other sources for several years, if at all. The Company will need substantial additional funding to support its continuing operations and pursue its development strategy.

The Company has incurred a net loss of $14.1 million and $39.8 million for the three and nine months ended July 31, 2024, respectively, and negative cash flows from operating activities of $28.7 million for the nine months ended July 31, 2024, and, as of that date, has an accumulated deficit of $239.4 million. To date, the Company has not generated any revenues and has financed its liquidity needs primarily through the 2024 PIPE financing, the Reverse Recapitalization and the PIPE financing conducted by the Company as part of the Reverse Recapitalization (the "PIPE Financing"), debt and convertible debentures, and issuance of redeemable convertible preferred shares and warrants.

The Company’s ability to continue as a going concern depends on its ability to successfully develop and commercialize its products, achieve and maintain profitable operations, as well as the adherence to conditions of outstanding loans. The Company expects that its existing cash and cash equivalents as of July 31, 2024 will be sufficient to fund its operating expenses and debt obligations requirements for at least the next 12 months from the issuance date of these condensed consolidated financial statements. Effective from the first quarter interim condensed consolidated financial statements, the Company has ceased its disclosure of the existence of a material uncertainty that raised substantial doubt about the Company’s ability to continue as a going concern due to the proceeds received from the 2024 PIPE Financing.

Summary of Significant Accounting Policies

The Company’s significant accounting policies are disclosed in the audited consolidated annual financial statements for the years ended October 31, 2023 and 2022 and notes thereto, as found in our Annual Report on Form 10-K for the year ended October 31, 2023. These interim condensed consolidated financial statements should be read in conjunction with the consolidated annual financial statements. Since the date of those annual financial statements, there have been no changes to the Company’s significant accounting policies, except as noted below.

Unaudited Interim Financial Information

The accompanying unaudited interim condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting and accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The condensed consolidated balance sheet at October 31, 2023 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. These interim financial statements include the accounts of the Company and its wholly owned subsidiaries, enGene, Inc. and enGene USA, Inc. All intercompany accounts and transactions have been eliminated in consolidation. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated annual financial statements as of October, 31 2023 and 2022 and for the years ended October 31, 2023, and 2022 and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the Company’s condensed consolidated balance sheet as of July 31, 2024, the condensed consolidated statements of operations for the three and nine months ended July 31, 2024 and 2023, the condensed consolidated statement of redeemable convertible preferred shares and shareholders' equity (deficit) for the three and nine months ended July 31, 2024 and 2023, and condensed consolidated statements of cash flows for the nine months ended July 31, 2024 and 2023. The financial data and other information disclosed in these notes related to the three and nine months ended July 31, 2024 and 2023 are unaudited. The results for the three and nine months ended July 31, 2024 and 2023, are not necessarily indicative of results to be expected for the year ending October 31, 2024, any other interim periods, or any future year or period.

Recently Adopted Accounting Pronouncements

There have been no changes from the financial statements for the year ended October 31, 2023.

Reverse Recapitalization

On October 31, 2023 (the "Closing Date”), FEAC, Old enGene, and the Company consummated the merger pursuant to the Merger Agreement, dated as of May 16, 2023. As a result of the Reverse Recapitalization, the Company became a publicly traded company, with Old enGene, a subsidiary of the Company, continuing the existing business operations.

At the effective time of the Reverse Recapitalization:

ENGENE HOLDINGS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN THOUSANDS OF USD, EXCEPT FOR SHARE AND PER SHARE DATA)

•

each outstanding common share of Old enGene was exchanged for common shares of the Company at the Exchange Ratio;

•

each of Old enGene’s redeemable convertible preferred shares outstanding immediately prior to the close of the Reverse Recapitalization was exchanged for shares of the Company’s common shares based on the same Exchange Ratio, with no dividends or distributions being declared or paid on Old enGene’s redeemable convertible preferred shares;

•

the 2022 Notes and May 2023 Notes (each as defined in Note 9) of Old enGene’s existing convertible notes outstanding immediately prior to the close of the Reverse Recapitalization were converted to Old enGene common shares at the conversion ratio in place at the time of conversion and were exchanged for shares of the Company at the Exchange Ratio;

•

each outstanding option to purchase old enGene common shares became fully vested and converted into an option to purchase a number of common shares of the Company equal to the number of common shares of old enGene subject to such option multiplied by the Exchange Ratio, rounded down to the nearest whole share, at an exercise price per share equal to the current exercise price per share for such option divided by the Exchange Ratio, rounded up to the nearest whole cent;

•

all of Old enGene’s outstanding warrants exercisable for common shares of Old enGene were exchanged for warrants exercisable for the Company’s common shares using the Exchange Ratio, with the warrants maintaining the same terms and conditions;

•

all of Old enGene’s existing outstanding Class C warrants outstanding at the time of the Reverse Recapitalization were terminated; and

•

all outstanding shares of FEAC being 3,670,927 shares, held by Forbion Growth Sponsor FEAC I B.V. ("FEAC Sponsor") and shareholders were converted into the same number of the Company’s common shares, and outstanding FEAC warrants of 5,029,444 held by FEAC warrant holders were converted into the same number of warrants to purchase one of the Company’s common shares.

Upon the close of the Reverse Recapitalization, 13,091,608 common shares of the Company were issued to Old enGene’s equity and convertible note holders, 2,679,432 common share warrants of the Company were issued to Old enGene’s warrant holders, and 2,706,941 common share options of the Company were issued to Old enGene’s share option holders.

In connection with the Merger Agreement, FEAC, the Company, and investors under the PIPE Financing (the "PIPE Investors") entered into Subscription Agreements pursuant to which, the PIPE Investors agreed to purchase the Company’s shares and warrants for an aggregate commitment amount of $56.9 million. As part of the PIPE Financing, the Company issued 6,435,441 of the Company’s common shares and 2,702,791 warrants to purchase the Company’s common shares for an aggregate purchase price equal to $56.9 million on October 31, 2023. The common shares and warrants issued as part of the PIPE Financing were determined to be equity classified. The proceeds were allocated between the common shares and warrants on a relative fair value basis, taking into consideration the quoted market price of the FEAC common shares and warrants on the close of the market on October 31, 2023, resulting in $56.1 million being allocated to the common shares and $0.8 million being allocated to the warrants. In connection with the Merger Agreement, FEAC, the FEAC Sponsor, Forbion Growth Opportunities Fund I Cooperatief U.A. and the other holders of Class B shares in the capital of FEAC ("FEAC Class B Shares"), Old enGene, the Company and the other parties named therein entered into the side letter agreements, pursuant to which the FEAC Sponsor agreed to surrender and in effect issue to PIPE Investors FEAC Class B Shares and FEAC private placement warrants, immediately prior to the closing of the Reverse Recapitalization. Immediately following the Reverse Recapitalization and the PIPE Financing, the Company had 23,197,976 common shares and 10,411,641 warrants outstanding.

On October 31, 2023, as part of the close of the Reverse Recapitalization, the Company received proceeds of $7.4 million from the FEAC trust account, net of the redemption payment to FEAC’s public shareholders and cash paid from the trust for FEAC expenses. Additionally, the Company received proceeds of approximately $56.9 million from the PIPE Financing. Upon the closing of the Reverse Recapitalization and PIPE Financing, the Company incurred $6.0 million in transaction costs, which was withheld from the proceeds received. The Company incurred a total of $11.1 million of transaction costs associated with the Reverse Recapitalization and PIPE Financing, of which $5.1 million was previously deferred by the Company and netted against the proceeds upon close. The transaction costs were allocated to the common shares and warrants on a relative fair value basis and netted against the proceeds upon close.

ENGENE HOLDINGS INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN THOUSANDS OF USD, EXCEPT FOR SHARE AND PER SHARE DATA)

The following table summarizes the elements of the net proceeds from the Reverse Recapitalization and PIPE Financing transaction as of October 31, 2023:


	Recapitalization
Cash – FEAC’s Trust Account and Cash (net of redemptions and cash paid for FEAC expenses prior to close)	$	7,363
Cash – PIPE Financing		56,892
Less transaction costs withheld from cash proceeds on Closing Date		(6,024	)
Cash proceeds received from the Reverse Recapitalization and PIPE Financing on Closing Date	$	58,231
Less transaction costs previously deferred and netted against proceeds		(5,086	)
Net cash proceeds from the Reverse Recapitalization and PIPE Financing	$	53,145

The total transaction costs of $11.1 million were related to third-party legal, accounting services and other professional services used to consummate the Reverse Recapitalization and the PIPE Financing incurred by Old enGene. These transaction costs are allocated between common shares and additional paid-in capital, based on the relative fair value of the common shares and warrants issued upon the close of the Reverse Recapitalization, on the Company’s consolidated balance sheet as the Company’s common shares have no par value.

The following table summarizes the number of common shares outstanding immediately following the consummation of the Reverse Recapitalization and PIPE Financing transaction:


	Number of Shares
Old enGene Shareholders (Excluding Convertible Notes)		6,711,786
FEAC Shareholders, including sponsor's and shareholder with non-redemption agreement		3,670,927
Convertible Notes - Common Shares issued		6,379,822
Common Shares issued to PIPE Investors		6,435,441
Total Common Shares outstanding immediately after the Reverse Recapitalization and PIPE Financing		23,197,976

Fair Value Measurements

The Company did not have any financial assets or liabilities that required fair value measurement on a recurring basis as of July 31, 2024 or October 31, 2023.

During the three and nine months ended July 31, 2024 and during the year ended October 31, 2023, there were no transfers or reclassifications between fair value measure levels of liabilities. The carrying values of all financial current assets, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities.

During the three and nine months ended July 31, 202

enGene Holdings Inc. [ENGNW] Filings
enGene Holdings Inc. [ENGN] Filings
10-Q	[2024-09-10]
10-Q	[2024-06-14]
10-Q	[2024-03-11]
10-K	[2024-01-29]
S-1	[2023-11-22]

enGene Holdings Inc. [ENGNW] Filings

enGene Holdings Inc. [ENGN] Filings