Merger of Neoleukin Therapeutics, Inc. and Aquinox Pharmaceuticals, Inc.

12 Months Ended

Dec. 31, 2019

Merger of Neoleukin Therapeutics, Inc. and Aquinox Pharmaceuticals, Inc.

3. Merger of Neoleukin Therapeutics, Inc. and Aquinox Pharmaceuticals, Inc.

On August 8, 2019, Former Neoleukin and Aquinox completed a transaction pursuant to the Agreement and Plan of Merger dated August 5, 2019. Former Neoleukin became a wholly owned subsidiary of Aquinox and Aquinox subsequently changed its name to Neoleukin Therapeutics, Inc. All of the outstanding shares of common stock of the Former Neoleukin were exchanged for 4,589,771 shares of common stock of the Company and 101,927 shares of

non-voting

convertible preferred stock of the Company.

The total consideration paid was $51.6 million and

consisted

of:


(in thousands , except share data )
Fair value of 4,589,771 Aquinox common stock	$	15,055
Fair value of 101,927 Aquinox convertible preferred stock		33,432
Cash consideration for fractional shares		5
Transaction costs		3,086

Total consideration	$	51,578

The fair value of the Aquinox securities issued to stockholders of Former Neoleukin was based on the closing stock price on August 7, 2019, the last day of trading prior to the completion of the transaction.

The transaction was accounted for as an asset acquisition as Former Neoleukin did not meet the definition of a business as substantially all of the value was in the In

Process Research & Development (“IPR&D”) asset. The estimated fair value of the IPR&D asset of $47.7 million was expensed as the Company determined that the asset has no alternative future.

The following table summarizes the assets acquired and liabilities assumed:


(in thousands)
Assets acquired:
Cash and cash equivalents	$	3,282
Receivables, prepayments and deposits		560
Property and equipment		1,034
In - process research and development		47,716
Intangible asset		659

Total assets acquired		53,251

Liabilities assumed:
Accounts payable and other liabilities		1,472
Financing lease liability		201

Total liabilities assumed		1,673


Total consideration	$	51,578