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Business Combination
12 Months Ended
Dec. 31, 2022
Business Combination  
Business Combination

Note 6 – Business Combination

BioArkive Acquisition

On December 22, 2021, the Company completed the acquisition of all outstanding shares of capital stock of BioArkive, Inc., a California corporation, for a market value of $8.75 million.

BioArkive is a San Diego based contract research organization that has previously provided preclinical research services and biosample storage to the Company and other biotechnology companies. BioArkive has been fully integrated into the Company to exclusively support the Company's internal preclinical research activities for its oncology pipeline.

In connection with the acquisition, the Company has assumed the obligations under BioArkive’s three lease agreements.

The purchase price was paid by Immuneering through the issuance of an aggregate of 379,635 shares of Immuneering’s Class A common stock. The number of shares of common stock issued was calculated using a value based on the average of the daily volume weighted average prices of the common stock on the Nasdaq Stock Exchange for the 30-trading day period ending on and including the trading day immediately prior to the closing date. The sellers of BioArkive were restricted from selling these shares for a six-month period from the date of the acquisition. As such, we estimated that there was an approximate 10% discount for the lack of marketability of the shares. The fair value of the purchase price in the acquisition was $7,875,000.

Prior to the acquisition, Brett Hall, Chief Scientific Officer of Immuneering and the Founder and Chairman of the board of directors of BioArkive, held the majority of the outstanding shares of BioArkive capital stock. BioArkive provided contract services to the Company. Research and development expenses in the consolidated statement of operations include the cost of services provided by BioArkive to the Company which amounted to $4,548,780 in 2021 through the date of the acquisition. The results of BioArkive’s operations are included in the consolidated balance sheets.

Assets Acquired and Liabilities Assumed at Fair Value

The BioArkive acquisition has been accounted for using the acquisition method of accounting. This method requires that assets acquired and liabilities assumed in a business combination to be recognized at their fair values as of the acquisition date. As of March 31, 2022, the purchase accounting had been finalized, and there was an immaterial measurement period adjustment related to accrued expenses and goodwill. No other adjustments were identified.

Intangible Assets

The estimated fair value of the intangible assets was determined using the relief from royalty approach.

Goodwill

Goodwill is the excess of the consideration transferred over the net assets recognized and represents the expected cost savings of the combined company and assembled workforce. One of the key factors that contributes to the recognition of goodwill, and a driver for the Company's acquisition of BioArkive, is the planned investment in the internal preclinical research activities for our oncology pipeline. Goodwill recognized as a result of this acquisition is non-deductible for income tax purposes.

Pro forma results are not presented for this acquisition as they are not material to the consolidated results of the Company’s operations.

    

Preliminary Valuation

    

Measurement
Period
Adjustment

    

Final Valuation

    

Weighted Average Life

Cash

$

70,348

$

-

$

70,348

Other currents assets

225,790

-

225,790

Other long term assets

87,796

-

87,796

Property, plant and equipment, net

727,539

-

727,539

Right of use assets

4,824,700

-

4,824,700

Intangible asset

Technology

439,000

-

439,000

15 years

Goodwill

6,701,726

11,295

6,690,431

Total assets acquired

13,076,899

11,295

13,065,604

Accounts payable, accrued expenses and other liabilities

69,714

(11,295)

58,419

Deferred tax liabilities

307,485

-

307,485

Lease liabilities

4,824,700

-

4,824,700

Net assets acquired

$

7,875,000

$

-

$

7,875,000