What changed in this filing

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Item 9A. Controls and Procedures

2023-02-23 compared with 2022-02-24 · 224 added, 172 removed, 676 unchanged (37% of the section changed)

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Evaluation of Disclosure Controls and Procedures

Management, with the participation of our Chief Executive Officer and Principal Financial and Accounting Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2021.

Management, with the participation of our Chief Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2022.

The term “disclosure controls and procedures,” as defined in Rule 13a-15(e) of the Exchange Act, means controls and other procedures of a company that are designed to provide reasonable assurance that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed is accumulated and communicated to our management, including our Chief Executive Officer and Principal Financial and Accounting Officer, as appropriate, to allow timely decisions regarding required disclosure.

Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed is accumulated and communicated to our management, including our Chief Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on the evaluation of our disclosure controls and procedures as of December 31, 2021, our Chief Executive Officer and Principal Financial and Accounting Officer have concluded that, as of December 31, 2021, our disclosure controls and procedures were effective at the reasonable assurance level.

Based on the evaluation of our disclosure controls and procedures as of December 31, 2022, our Chief Executive Officer and Principal Financial Officer have concluded that, as of December 31, 2022, our disclosure controls and procedures were effective at the reasonable assurance level.

Management's Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rule 13a-15(f) under the Exchange Act.

Internal control over financial reporting is a process designed under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial and Accounting Officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Internal control over financial reporting is a process designed under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial Officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

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Other Information.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not Applicable

Directors, Executive Officers and Corporate Governance.

Information required by this item will be contained in our definitive proxy statement (the “Definitive Proxy Statement”), to be filed with the SEC in connection with our 2022 Annual Meeting of Stockholders, which is expected to be filed not later than 120 days after the end of our fiscal year ended December 31, 2021, under the headings “Election of Directors,” “Corporate Governance,” “Executive Officers,” and “Section 16(a) Beneficial Ownership Reporting Compliance,” and is incorporated herein by reference.

Information required by this item will be contained in our definitive proxy statement (the “Definitive Proxy Statement”), to be filed with the SEC in connection with our 2023 Annual Meeting of Stockholders, which is expected to be filed not later than 120 days after the end of our fiscal year ended December 31, 2022, under the headings “Election of Directors,” “Board of Directors and Corporate Governance,” “Executive Officers,” and “Section 16(a) Beneficial Ownership Reporting Compliance,” and is incorporated herein by reference.

We have a written Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer and our principal accounting officer and every other director, officer and employee of Immunic.

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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Information required by this item will be found in our Definitive Proxy Statement under the headings "Securities

Authorized for Issuance Under Equity Compensation Plans," "Security Ownership of Certain Beneficial Owners" and "Security Ownership of Directors and Executive Officers" and is incorporated herein by reference.

Information required by this item will be found in our Definitive Proxy Statement under the heading "Security Ownership" and is incorporated herein by reference.

Certain Relationships and Related Transactions, and Director Independence.

Information required by this item will be found in our Definitive Proxy Statement under the headings "The Board of Directors and Board Committees" and "Certain Relationships and Related-Party Transactions" and is incorporated herein by reference.

Information required by this item will be found in our Definitive Proxy Statement under the headings "Board of Directors and Corporate Governance" and "Related Person Transactions" and is incorporated herein by reference.

Principal Accounting Fees and Services.

Information required by this item will be found in our Definitive Proxy Statement under the heading "Proposal to Ratify the Appointment of Independent Registered Public Accounting Firm" and is incorporated herein by reference.

Information required by this item will be found in our Definitive Proxy Statement under the heading "Ratification of Appointment of Independent Registered Public Accounting Firm" and is incorporated herein by reference.

Exhibits, Financial Statement Schedules.

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We have filed the following documents as part of this Annual Report:

Report of Baker Tilly U.S, LLP, Independent Registered Public Accounting Firm F-2

Report of Baker Tilly US, LLP, Independent Registered Public Accounting Firm F-2

Consolidated Balance Sheets F- 4

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4.2* Description of Registrant's Securities

10-Q 4.2 February 26, 2020

8-K 4.2 February 26, 2020

4.3 Form of Pre-Funded Warrant

8-K 4.3 October 11, 2022

10.1 Sales Agreement, dated July 17, 2019, between Immunic, Inc.

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8-K 10.4 July 17, 2019

10.5+* Service Agreement dated August 22, 2016 between Immunic AG and Dr.

Andreas Muehler

10.6+* Service Agreement dated September 29, 2016 between Immunic AG and Daniel Vitt

10.7+ Employment Agreement between Dr.

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8-K 10.1 September 5, 2019

10.7+ Employment Agreement between Dr.

Manfred Groeppel and Immunic AG.

8-K 10.6 July 17, 2019

10.8+ Addendum to Service Agreement between Immunic AG and Dr.

Manfred Groeppel.

10.9+ Employment Agreement, dated September 4, 2019, between Immunic, Inc.

Andreas Muehler.

8-K 99.3 September 5, 2019

10.10+ Addendum, dated September 4, 2019, to Service Agreement between Immunic AG and Dr.

Andreas Muehler.

8-K 99.2 September 5, 2019

10.11+ Addendum, dated September 4, 2019, to Service Agreement between Immunic AG and Dr.

Hella Kohlhof.

8-K 99.4 September 5, 2019

10.12 Employment Agreement dated April 17, 2020, between Immunic, Inc.

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8-K 10.2 April 20, 2020

10.10+ Addendum to Employment Agreement dated October 15, 2020, between Immunic, Inc.

10.13 Second Addendum to Employment Agreement dated October 15, 2020, between Immunic, Inc.

and Duane Nash.

10-Q 10.12 November 6, 2020

8-K 10.1 April 19, 2021

10.14 Placement Agency Agreement, dated April 23, 2020, between Immunic, Inc.

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8-K 10.4 June 10, 2021

10.29+ Second Addendum, dated June 10, 2021, to Service Agreement between Immunic AG and Dr.

Hella Kohlhof

8-K 99.2 June 10, 2021

10.30+ Underwriting Agreement, dated July 15, 2021, by and between Immunic, Inc.

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8-K 10.1 October 14, 2021

10.32+ Third Addendum, dated January 5, 2022, to Service Agreement between Immunic AG and Dr.

8-K 10.1 January 10, 2022

10.33+ Third Addendum, dated January 5, 2022, to Service Agreement between Immunic AG and Dr.

Andreas Muehler

8-K 10.2 January 10, 2022

10.34+ Third Addendum, dated January 5, 2022, to Service Agreement between Immunic AG and Dr.

Hella Kohlhof

8-K 10.3 January 10, 2022

10.35+ Addendum No.

3 to Employment Agreement, dated March 15, 2022, between Immunic, Inc.

and Duane Nash

8-K 10.1 March 15, 2022

10.36 Sales Agreement dated as of May 2, 2022, between SVB Securities LLC and Immunic, Inc.

8-K 10.1 May 2, 2022

10.37 Securities Purchase Agreement, dated October 10, 2022, by and among the Company and the Purchasers

8-K 10.1 October 11, 2022

10.38+ Addendum No.

4 dated December 28, 2022 to Employment Agreement, between Immunic, Inc.

and Duane Nash

8-K 10.1 December 30, 2022

10.39+ Fourth Addendum dated January 16, 2023 to the Service Agreement, between Immunic AG and Dr.

8-K 10.1 January 16, 2023

10.40+ Fourth Addendum dated January 16, 2023 to the Service Agreement, between Immunic AG and Dr.

Andreas Muehler

8-K 10.2 January 16, 2023

10.41+ Fourth Addendum dated January 16, 2023 to the Service Agreement, between Immunic AG and Dr.

Hella Kohlhof

8-K 10.3 January 16, 2023

21.1* List of subsidiaries of the Registrant

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.1+ Employment Agreement, dated September 4, 2019, between Immunic, Inc.

Andreas Muehler.

8-K 99.3 September 5, 2019

99.2+ Addendum, dated September 4, 2019, to Service Agreement between Immunic AG and Dr.

Andreas Muehler.

8-K 99.2 September 5, 2019

99.3+ Addendum, dated September 4, 2019, to Service Agreement between Immunic AG and Dr.

Hella Kohlhof.

8-K 99.4 September 5, 2019

99.4+ Second Addendum, dated June 10, 2021, to Service Agreement between Immunic AG and Dr.

Hella Kohlhof

8-K 99.2 June 10, 2021

101.INS* XBRL Instance Document.

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+ Indicates a management contract or compensatory plan or arrangement.

* Filed herewith.

* In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Baker Tilly U.S.

LLP, Independent Registered Public Accounting Firm (PCAOB ID 23 )

Report of Baker Tilly U S LLP, Independent Registered Public Accounting Firm (PCAOB ID 23 )

Consolidated Balance Sheets

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which it relates.

Assessment of accrual for research and development costs related to clinical trial activities

Critical Audit Matter Description

As described in Notes 2 and 3 to the consolidated financial statements, the Company records expenses and accruals for estimated costs of research and development activities, including third party contract services costs for clinical research.

As described in Note 2 and 3 to the consolidated financial statements, the Company records expenses and accruals for estimated costs of research and development activities, including third party contract services costs for clinical research.

Clinical trial activities performed by third parties are expensed based upon estimates of work completed in accordance with agreements with the respective Clinical Research Organization.

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Cash and cash equivalents $ 106,745 $ 86,863

Investments - other 9,629 —

Other current assets and prepaid expenses 9,490 18,125

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Property and equipment, net 294 152

Goodwill 32,970 32,970

Goodwill (note 2) — 32,970

Right of use asset, net 1,552 948

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Additional paid-in capital 427,925 324,237

Accumulated other comprehensive loss ( 252 ) ( 4,112 )

Accumulated other comprehensive income (loss) 3,035 ( 252 )

Accumulated deficit ( 317,280 ) ( 196,873 )

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General and administrative 15,263 13,300

Goodwill impairment (see Note 2) 32,970 —

4SC Royalty Settlement (See Note 4) — 17,250

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Interest income 1,041 66

Other income (expense), net ( 1,346 ) 4,896

Total other income (expense) ( 1,280 ) 4,954

Other expense, net ( 1,960 ) ( 1,346 )

Total other expense, net ( 919 ) ( 1,280 )

Net loss $ ( 120,407 ) $ ( 92,945 )

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Net loss $ ( 120,407 ) $ ( 92,945 )

Other comprehensive income (loss):

Foreign currency translation income (loss), net of tax 3,860 ( 2,739 )

Other comprehensive income:

Foreign currency translation income, net of tax 3,287 3,860

Total comprehensive loss $ ( 117,120 ) $ ( 89,085 )

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Comprehensive

Loss Accumulated

Income (Loss) Accumulated

Deficit Total

Stockholders’

Equity (Deficit)

Shares Amount

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Stock-based compensation — — 5,949 — — 5,949

Issuance of common stock - At The Market Sales Agreement net of issuance costs of $ 339

733,728 — 10,925 — — 10,925

Issuance of common stock - April registered direct equity offering net of issuance costs of $ 1,082

1,764,706 — 13,918 — — 13,918

Issuance of common stock - June public equity offering net of issuance costs of $ 1,752

Issuance of common stock - July 2021 equity offering net of issuance costs of $ 2,980

4,500,000 1 42,019 — — 42,020

Issuance of common stock - August public equity offering net of issuance costs of $ 6,960

Issuance of common stock - At The Market Sales Agreement net of issuance costs of $ 23

73,221 — 729 — — 729

Shares issued in connection with the Company's employee stock purchase plan 12,758 — 92 — — 92

Issuance of common stock in connection with the 4SC royalty settlement (see note 4) 581,199 — 8,625 — — 8,625

Balance at December 31, 2021 26,335,418 3 $ 324,237 $ ( 252 ) $ ( 196,873 ) $ 127,115

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Stock-based compensation — — 7,929 — — 7,929

Issuance of common stock - July 2021 equity offering net of issuance costs of $ 2,980

Issuance of common stock and Pre-funded Warrants - October 2022 PIPE transaction, net of issuance costs of $ 4,012

8,696,552 1 55,988 — — 55,989

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Shares issued in connection with the Company's employee stock purchase plan 70,351 — 182 — — 182

Issuance of common stock in connection with the 4SC royalty settlement (see note 4) 581,199 — 8,625 — — 8,625

Shares issued in connection with the Company's stock option plan 852 — 5 — — 5

Balance at December 31, 2022 39,307,286 4 $ 427,925 $ 3,035 $ ( 317,280 ) $ 113,684

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Depreciation and amortization 77 85

Goodwill impairment (see Note 2) 32,970 —

Stock-based compensation 7,929 5,949

Unrealized foreign currency (gain) loss 4,332 ( 2,528 )

Foreign currency loss 4,757 4,332

Common stock issued in connection with the 4SC royalty settlement (see Note 4) — 8,625

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Cash flows from investing activities:

Purchases of Investments-other ( 9,629 ) —

Purchases of property and equipment ( 112 ) ( 67 )

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Proceeds from shares issued in connection with the Company's employee stock purchase plan 182 92

Proceeds from April 2020 registered direct equity offering, net of issuance costs of $ 1,082

Proceeds from June 2020 public equity offering, net of issuance costs of $ 1,752

Proceeds from August 2020 public equity offering, net of issuance costs of $ 6,960

Issuance of common stock and Pre-funded Warrants - October 2022 PIPE transaction, net of issuance costs of $ 4,012 and $ 0 , respectively

Proceeds from the exercise of stock options 5 —

Proceeds from July 2021 public equity offering, net of issuance costs of $ 2,980

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Operating lease right-of use asset obtained in exchange for lease obligation $ 974 $ 435

Offering costs in accrued expenses $ — $ 114

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

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Immunic, Inc.

("Immunic" or the "Company") is a clinical-stage biopharmaceutical company with a pipeline of selective oral immunology therapies focused on treating chronic inflammatory and autoimmune diseases, including relapsing multiple sclerosis (“RMS”), ulcerative colitis (“UC”), Crohn’s disease (“CD”) and psoriasis.

("Immunic" or the "Company") is a clinical-stage biopharmaceutical company with a pipeline of selective oral immunology therapies focused on treating chronic inflammatory and autoimmune diseases.

The Company is headquartered in New York City with its main operations in Gräfelfing near Munich, Germany.

The Company currently has approximately 66 employees.

The Company is currently pursuing three development programs.

These include the vidofludimus calcium (IMU-838) program, which is focused on the development of oral formulations of a small molecule inhibitor of the enzyme dihydroorotate dehydrogenase (“DHODH”);

the IMU-935 program, which is focused on an inverse agonist of retinoic acid receptor-related orphan nuclear receptor gamma truncated (“RORγt”), an immune cell-specific isoform of RORγ;

and the IMU-856 program, which involves the development of a drug targeting the restoration of intestinal barrier function and regeneration of bowel epithelium.

These product candidates are being developed to address diseases such as RMS, UC, CD, and psoriasis.

In addition to these large markets, these products are also being developed to address certain rare diseases with high unmet medical needs, such as primary sclerosing cholangitis (“PSC”), as well as metastatic castration-resistant prostate cancer (“mCRPC”).

The Company is currently pursuing clinical development of three orally administered, small molecule programs, each of which has unique features intended to directly address the unmet needs of patients with serious chronic inflammatory and autoimmune diseases.

These include the vidofludimus calcium (IMU-838) program, which is in Phase 3 clinical development for patients with multiple sclerosis (“MS”);

the izumerogant (proposed International Nonproprietary Name (“INN”) for IMU-935) program, which is an inverse agonist of retinoic acid receptor-related orphan nuclear receptor gamma truncated (“RORγt”) that inhibits the interleukin-17 (“IL-17”) pathway in diseases such as psoriasis;

and the IMU-856 program, which is targeted to restore intestinal barrier function and regenerate bowel epithelium.

The Company’s business, operating results, financial condition and growth prospects are subject to significant risks and uncertainties, including the failure of its clinical trials to meet their endpoints, failure to obtain regulatory approval and needing additional funding to complete the development and commercialization of the Company's three development programs.

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Substantially all of Immunic’s operating losses resulted from expenses incurred in connection with its research and development programs and from general and administrative costs associated with its operations.

Immunic expects to incur significant expenses and increasing operating losses for the foreseeable future as it initiates and continues the preclinical and clinical development of its product candidates and adds personnel necessary to advance its clinical pipeline of product candidates.

Immunic expects that its operating losses will fluctuate significantly from quarter-to-quarter and year-to-year due to timing of clinical development programs.

Immunic expects to incur significant expenses and increasing operating losses for the foreseeable future as it initiates and continues the development of its product candidates and adds personnel necessary to advance its pipeline of product candidates.

Immunic expects that its operating losses will fluctuate significantly from quarter-to-quarter and year-to-year due to timing of development programs.

From inception through December 31, 2022, Immunic has raised net cash of approximately $ 355.5 million from private and public offerings of preferred and common stock.

As of December 31, 2021, the Company had cash and cash equivalents of approximately $ 86.9 million.

The Company is dependent on financing activities to fund ongoing operations and due to the inherent uncertainties in successfully completing financing transactions, and with our forecasted cash reach through the first quarter of 2023, these are indicators of an inability to continue as a going concern.

However, the Company has the ability to manage the amount and timing of expenditures to reduce costs, has limited required fixed spend, and can manage working capital as needed.

These factors coupled with the $ 16.2 million of cash raised so far in 2022 under it's At The Market ("ATM") facility alleviates any uncertainty that the Company will have adequate liquidity to meet its obligations for at least the next 12 months from the financial statement release date.

As of December 31, 2022, the Company had cash and cash equivalents of approximately $ 106.7 million and investments - other of $ 9.6 million.

With these funds the Company expects to be able to fund its operations beyond twelve months from the date of the issuance of the accompanying financial statements.

Basis of Presentation and Consolidation

The accompanying consolidated financial statements have been prepared in conformity with United States generally accepted accounting principles, ("U.S.

GAAP") and include the accounts of Immunic and its wholly-owned subsidiaries, Immunic AG and Immunic Research GmbH (which both began operations in 2016) and Immunic Australia Pty Ltd.

GAAP") and include the accounts of Immunic and its wholly-owned subsidiaries, Immunic AG (which began operations in 2016) and Immunic Australia Pty Ltd.

(which began operations in 2018).

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Immunic manages its operations as a single reportable segment for the purposes of assessing performance and making operating decisions.

Certain prior period amounts have been reclassified to conform to the current basis of presentation.

Summary of Significant Accounting Policies

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GAAP requires the Company to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, expenses and the disclosure of contingent assets and liabilities in the Company’s consolidated financial statements.

The most significant estimates in the Company’s financial statements and accompanying notes relate to clinical trial expenses and share-based compensation.

The most significant estimates in the Company’s financial statements and accompanying notes relate to recoverability of goodwill, clinical trial expenses and share-based compensation.

Management believes its estimates to be reasonable under the circumstances.

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The Company’s reporting currency is United States (“U.S.”) dollars.

Immunic AG and Immunic Research GmbH’s operations are located in Germany with the euro being their functional currency.

Immunic AG is located in Germany with the euro being its functional currency.

Immunic Australia Pty Ltd.’s functional currency is the Australian dollar.

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The Consolidated Statements of Cash Flows were prepared by using the average exchange rate in effect during the reporting period which reasonably approximates the timing of the cash flows.

Cash and Cash Equivalents

Cash and Cash Equivalents and Investments- other

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Cash and cash equivalents consist of cash on hand and deposits in banks located in the U.S., Germany and Australia.

Time Deposits with an original maturity greater than three months are classified as Investments-other

Cash and cash equivalents consist of cash on hand and deposits in banks located in the U.S of approximately $ 85.7 million, Germany of approximately $ 19.1 million and Australia of approximately $ 1.9 million.

The Company maintains cash and cash equivalent balances denominated in Euro and U.S.

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The Company currently deposits its cash and cash equivalents with two large financial institutions.

Our Cash and Cash equivalents in the U.S.

is primarily held in a U.S.

Government money market fund account and was earning interest at a rate of 4.3 %.

Our cash and cash equivalents in Germany and Australia were earning interest at a rate of — % to 0.87 %

Investments - other consists of the following as of (in thousands):

December 31, 2022 December 31, 2021

Time Deposits $ 9,629 $ 0

The time deposit accounts are held in our bank in Germany and are held in Euros and are earning interest at a rate of 0.61 % to 0.87 % and have a remaining maturity 3 - 4 months.

Fair Value Measurement

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Impaired assets are then recorded at their estimated fair value.

There were no impairment losses during the years ended December 31, 2021 and 2020.

There were no impairment losses during the years ended December 31, 2022 and 2021 other than goodwill which is described below.

Business combinations are accounted for under the acquisition method.

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Goodwill is tested for impairment at the reporting unit level annually in the fourth quarter, or more frequently when events or changes in circumstances indicate that the asset might be impaired.

Examples of such events or circumstances include, but are not limited to, a significant adverse change in legal or business climate, an adverse regulatory action or unanticipated competition.

The Company assesses qualitative factors to determine whether the existence of events or circumstances would indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying amount.

If after assessing the totality of events or circumstances, the Company were to determine that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, then the Company would perform a quantitative test that compares the fair value to its carrying value to determine the amount of any impairment.

Impairment testing for goodwill is done at the reporting unit level.

The Company has determined that it operates in a single operating segment and has a single reporting unit.

The Company has determined there was no goodwill impairment as of December 31, 2021.

Examples of such events or circumstances include, but are not limited to, an unfavorable clinical trial result, a significant adverse change in legal or business climate, industry market conditions, an adverse regulatory action, sustained decrease in stock price or unanticipated competition.

On October 20, 2022, the Company announced the outcome of a significant interim analysis of its Phase 1b clinical trial of izumerogant in patients with moderate-to-severe psoriasis that were not deemed positive progress.

On October 21, 2022, the Company experienced a significant decrease in the Company's market capitalization.

The Company considered this to be a triggering event indicating that it is more likely than not that goodwill was impaired.

The Company performed an analysis of the fair value compared to the Company's book value, utilizing the Company's traded stock price (a level 1 fair value input).

As a result of that analysis, the Company recorded an approximately $ 33.0 million non-cash goodwill impairment charge in the fourth quarter of 2022, which represents a full write down of its previous goodwill balance.

The Company did not have any goodwill impairment during the year ended December 31, 2021.

The changes in the carrying amount of goodwill for the years presented are as follows (amounts in thousands):

Carrying amount of goodwill at December 31, 2021 $ 32,970

Impairment of goodwill during the year ended December 31, 2022 ( 32,970 )

Carrying amount of goodwill at December 31, 2022 $ —

Research and Development Expenses

These costs primarily include external development expenses and internal personnel expenses for the three development programs, vidofludimus calcium, IMU-935 and IMU-856.

Immunic has spent the majority of its research and development resources on vidofludimus calcium, the Company's lead development program for clinical trials in RRMS, UC, COVID-19, and PSC.

These costs primarily include external development expenses and internal personnel expenses for the three development programs, vidofludimus calcium, izumerogant and IMU-856.

Immunic has spent the majority of its research and development resources on vidofludimus calcium, the Company's lead development program for clinical trials in RRMS, UC and COVID-19.

Research and development expenses consist of expenses incurred in research and development activities, which include clinical trials, contract research services, certain milestone payments, salaries and related employee benefits, allocated facility costs and other outsourced services.

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In October 2018, the Company entered into an option and license agreement (the "Daiichi Sankyo Agreement") with Daiichi Sankyo Co., Ltd.

("Daiichi Sankyo") which granted the Company the right to license a group of compounds, designated by the Company as IMU-856, as a potential new oral treatment option for diseases such as inflammatory bowel disease, irritable bowel syndrome with diarrhea, immune checkpoint inhibitor induced colitis and other barrier function associated diseases.

("Daiichi Sankyo") which granted the Company the right to license a group of compounds, designated by the Company as IMU-856, as a potential new oral treatment option for gastrointestinal diseases such as celiac disease, inflammatory bowel disease, irritable bowel syndrome with diarrhea and other barrier function associated diseases.

During the option period, the Company performed agreed upon research and development activities for which it was reimbursed by Daiichi Sankyo up to a maximum agreed-upon limit.

Such reimbursement was recorded as other income.

There are no more research and development reimbursements expected under this agreement.

There are no additional research and development reimbursements expected under this agreement.

On January 5, 2020, the Company exercised its option to obtain the exclusive worldwide right to commercialization of IMU-856.

Among other things, the option exercise grants Immunic AG the rights to Daiichi Sankyo’s patent application related to IMU-856, for which the Company received a notice of allowance from the US Patent & Trademark Office in August 2022.

In connection with the option exercise, the Company paid a one-time upfront licensing fee to Daiichi Sankyo.

Under the Daiichi Sankyo Agreement, Daiichi Sankyo is also eligible to receive future development, regulatory and sales milestone payments, as well as royalties related to IMU-856.

Government assistance

Government assistance relating to research and development performed by Immunic Australia is recorded as a component of other (income) expense.

Government assistance is recognized at a rate of 43.5 % of the qualified research and development expenditures which are incurred.

We recognized $ 2.3 million and $ 1.7 million of other income related to research activities performed during the years ended December 31, 2022 and 2021, respectively.

General and Administrative Expenses

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The Company estimates the fair value of stock options using the Black-Scholes-Merton option-pricing model ("BSM"), which requires the use of estimates and subjective assumptions, including the risk-free interest rate, the fair value of the underlying common stock, the expected dividend yield of the Company’s common stock, the expected volatility of the price of the Company’s common stock, and the expected term of the option.

These estimates involve inherent uncertainties and the application of management’s judgment.

These estimates involve inherent uncertainties and the

application of management’s judgment.

If factors change and different assumptions are used, the Company’s stock-based compensation expense could be materially different in the future.

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The lease term used in estimating future lease payments may include options to extend when it is reasonably certain that the Company will exercise that option.

lease expense is recognized on a straight-line basis over the lease term, subject to any changes in the lease or changes in expectations regarding the lease term.

Operating lease expense is recognized on a straight-line basis over the lease term, subject to any changes in the lease or changes in expectations regarding the lease term.

Variable lease costs such as common area costs and property taxes are expensed as incurred.

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The Company is not currently under examination by any tax jurisdictions.

The Company accounts for issued warrants either as a liability or equity in accordance with ASC 480-10, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (“ASC 480-10”) or ASC 815-40, Accounting

for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock (“ASC 815-40”).

Under ASC 480-10, warrants are considered a liability if they are mandatorily redeemable and they require settlement in cash, other assets, or a variable number of shares.

If warrants do not meet liability classification under ASC 480-10, the Company considers the requirements of ASC 815-40 to determine whether the warrants should be classified as a liability or as equity.

Under ASC 815-40, contracts that may require settlement for cash are liabilities, regardless of the probability of the occurrence of the triggering event.

Liability-classified warrants are measured at fair value on the issuance date and at the end of each reporting period.

Any change in the fair value of the warrants after the issuance date is recorded in the consolidated statements of operations as a gain or loss.

If warrants do not require liability classification under ASC 815-40, in order to conclude warrants should be classified as equity, the Company assesses whether the warrants are indexed to its common stock and whether the warrants are classified as equity under ASC 815-40 or other applicable GAAP standard.

Equity-classified warrants are accounted for at fair value on the issuance date with no changes in fair value recognized after the issuance date.

Net Loss Per Share

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Options to purchase common stock 3,791,688 2,157,460

Prefunded stock warrants 5,096,552 —

8,888,240 2,157,460

Recently Adopted Accounting Standards

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Lease liabilities $ 571 $ 408

Other 239 177

Total $ 810 $ 585

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The Company leases certain office space under non-cancelable operating leases.

The leases terminate on April 30, 2023 for the New York City office and June 30, 2025 for the Gräfelfing, Germany office.

The Company formerly leased office space

in Planegg-Martinsried, Germany pursuant to a modified lease that terminated on August 31, 2020.

The leases terminate on July 31, 2025 for the New York City office and June 30, 2025 for the Gräfelfing, Germany office.

The Company formerly leased office space in

Planegg-Martinsried, Germany pursuant to a modified lease that terminated on August 31, 2020.

These leases include both lease (e.g., fixed rent) and non-lease components (e.g., common-area and other maintenance costs).

The non-lease components are deemed to be executory costs and are therefore excluded from the minimum lease payments used to determine the present value of the operating lease obligation and related right-of-use asset.

The New York City lease has renewal options, but they were not included in calculating the right of use asset and liabilities.

The New York City lease was extended on December 22, 2022 for an additional 27 months resulting in the new lease termination date of July 31, 2025.

The New York City lease has a renewal option, but this was not included in calculating the right of use asset and liabilities.

On April 7, 2020, the Company signed a five year lease for its facility in Gräfelfing, Germany.

On March 1, 2021, the Company added additional lease space at the Gräfelfing, Germany office.

On March 1, 2021 and August 1, 2022 the Company added additional lease space at the Gräfelfing, Germany office.

Renewal options were not included in calculating the right of use asset and liabilities for this facility.

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Further, the leases do not contain contingent rent provisions.

The New York City lease had a six month rent holiday at the beginning of the lease.

There were net additions to right of use assets of $ 427,000 as a result of signing the Gräfelfing, Germany lease and shortening the term of the Planegg-Martinsried, Germany lease during the year ended December 31, 2020 and net additions of $ 435,000 with the signing of additional lease space in March 2021.

The New York City lease had a six month rent holiday at the beginning of the lease as well as a three month rent holiday upon the 27 month extension starting May 2023.

There were net additions to right of use assets of $ 435,000 and $ 642,000 as a result of signing for additional lease space at the Gräfelfing, Germany office in March 2021 and August 2022, respectively.

There were net additions to right of use assets of $ 332,000 as a result of extending the New York City lease in December 2022.

The leases do not provide an implicit rate and, due to the lack of a commercially salable product, the Company is generally considered unable to obtain commercial credit.

Therefore, the Company estimated its incremental interest rate to be 6 %, considering the quoted rates for the lowest investment-grade debt and the interest rates implicit in recent financing leases.

Therefore, the Company estimated its incremental interest rate to be 6 % for the original leases and 8 % for the New York City extension, considering the quoted rates for the lowest investment-grade debt and the interest rates implicit in recent financing leases.

Immunic used its estimated incremental borrowing rate and other information available at the lease commencement date in determining the present value of the lease payments.

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Contractual Obligations

As of December 31, 2021, the Company has non-cancelable contractual obligations under certain agreements related to its development programs in vidofludimus calcium, IMU-935 and IMU-856 totaling approximately $ 2.8 million, all of which is expected to be paid in 2022.

As of December 31, 2022, the Company has non-cancelable contractual obligations under certain agreements related to its development programs in vidofludimus calcium, izumerogant and IMU-856 totaling approximately $ 4.5 million, all of which is expected to be paid in 2023.

Other Commitments and Obligations

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Approximately $ 1.5 million of expense was recorded as a result of the issuance of these shares on April 12, 2019.

On March 31, 2021, Immunic AG, a wholly-owned subsidiary of the Company, and 4SC AG entered into a Settlement Agreement, pursuant to which Immunic AG settled its remaining obligation of the 4.4 % royalty on net sales for $ 17.25 million (Tranche III of the Agreement).

The payment was made 50 % in cash and 50 % in shares of Immunic’s common stock (the

(Tranche III of the Agreement).

The payment was made 50 % in cash and 50 % in shares of Immunic’s common stock (the “Shares”).

Pursuant to the Agreement, the Company filed a resale shelf registration statement on Form S-3 covering the resale of the Shares.

With the execution of the Agreement, no further payment obligations remain between Immunic AG and 4SC AG.

Daiichi Sankyo Agreement

On January 5, 2020, the Company exercised its option to obtain the exclusive worldwide right to commercialization of IMU-856.

Among other things, the option exercise grants Immunic AG the rights to Daiichi Sankyo’s patent application related to IMU-856.

In connection with the option exercise, the Company paid a one-time upfront licensing fee to Daiichi Sankyo.

Under the Daiichi Sankyo Agreement, Daiichi Sankyo is also eligible to receive future development, regulatory and sales milestone payments, as well as royalties related to IMU-856.

Legal Proceedings

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For the Company’s money market funds which are included as a component of cash and cash equivalents on the consolidated balance sheet, realized gains and losses are included in interest income (expense) on the consolidated statements of operations.

Our money market fund account is held in our bank in the U.S.

and was earning interest at a rate of 4.3 % in a U.S.

Government money market fund.

The Company has cash balances in banks in excess of the maximum amount insured by the FDIC and other international agencies as of December 31, 2022.

The Company has not historically experienced any credit losses with balances in excess of FDIC limits.

The carrying amounts of other current assets and prepaid expenses, accounts payable, accrued expenses, and other current liabilities approximate their fair values due to their short-term nature.

The fair value and book value of the money market funds presented in the table above are the same.

For the assessment of the fair value of goodwill and the related impairment of goodwill we used a level one assessment in our testing of goodwill.

See Note 2, Summary of significant accounting policies "Goodwill".

Shelf Registration Statements

In May 2018, Vital Therapies filed a shelf registration statement on Form S-3 (the “2018 Shelf Registration Statement”), which became effective in June 2018.

The 2018 Shelf Registration Statement permitted the offering, issuance and sale of up to $ 200.0 million of common stock, preferred stock, warrants, debt securities, and/or units in one or more offerings and in any combination.

This registration statement expired in June 2021 and is no longer effective.

In November 2020, Immunic filed a shelf registration statement on Form S-3.

The 2020 Shelf Registration Statement permits the offering, issuance and sale of up to $ 250.0 million of common stock, preferred stock, warrants, debt securities, and/or units in one or more offerings and in any combination of the foregoing.

In July 2019, the Company filed a Prospectus Supplement for the offering, issuance and sale of up to a maximum aggregate offering price of $ 40.0 million of common stock that may be issued and sold under an at-the-market sales agreement ("July 2019 ATM") with SVB Leerink LLC (“SVB Leerink”) as agent.

The Company used the net proceeds from the offering to continue to fund the ongoing clinical development of its product candidates and for other general corporate purposes, including funding existing and potential new clinical programs and product candidates.

The July 2019 ATM was effectively terminated in June 2021 when the 2018 Shelf Registration Statement expired.

In December 2020, the Company filed another Prospectus Supplement for the offering, issuance and sale of up to a maximum aggregate offering price of $ 50.0 million of common stock that may be issued and sold under another at-the-market sales agreement ("December 2020 ATM") with SVB Leerink as agent.

The Company intends to use the net proceeds from the offering to continue to fund the ongoing clinical development of its product candidates and for other general corporate purposes, including funding existing and potential new clinical programs and product candidates.

As of February 17, 2023, there is $ 75.0 million remaining on this shelf registration statement

In December 2020, the Company filed a Prospectus Supplement for the offering, issuance and sale of up to a maximum aggregate offering price of $ 50.0 million of common stock that may be issued and sold under an at-the-market sales agreement ("December 2020 ATM") with SVB Leerink as agent.

The Company has used, and intends to continue to use the net proceeds from the offering to continue to fund the ongoing clinical development of its product candidates and for other general corporate purposes, including funding existing and potential new clinical programs and product candidates.

The December 2020 ATM will terminate upon the earlier of (i) the issuance and sale of all of the shares through SVB Leerink on the terms and subject to the conditions set forth in the December 2020 ATM or (ii) termination of the December 2020 ATM as otherwise permitted thereby.

The December 2020 ATM may be terminated at any time by either party upon ten days’ prior notice, or by SVB Leerink at any time in certain circumstances, including the occurrence of a material adverse effect on the Company.

The Company has agreed to pay SVB Leerink a commission equal to 3.0 % of the gross proceeds from the sales of common shares pursuant to the ATM and has agreed to provide SVB Leerink with customary indemnification and contribution rights.

As of February 17, 2023, $ 8.4 million in capacity remains under the December 2020 ATM.

In May 2022, the Company filed a Prospectus Supplement for the offering, issuance and sale of up to a maximum aggregate offering price of $ 80.0 million of common stock that may be issued and sold under another at-the-market sales agreement ("May 2022 ATM") with SVB Leerink as agent.

The May 2022 ATM will terminate upon the earlier of (i) the issuance and sale of all of the shares through SVB Leerink on the terms and subject to the conditions set forth in the May 2022 ATM or (ii) termination of the May 2022 ATM as otherwise permitted thereby.

The May 2022 ATM may be terminated at any time by either party upon ten days’ prior notice, or by SVB Leerink at any time in certain circumstances, including the occurrence of a material adverse effect on the Company.

As of February 17, 2023, $ 80.0 million in capacity remains under the May 2022 ATM.

The Company has agreed to pay SVB Leerink a commission equal to 3.0 % of the gross proceeds from the sales of common shares pursuant to both ATM's and has agreed to provide SVB Leerink with customary indemnification and contribution rights.

For the year ended December 31, 2022, the Company raised gross proceeds of $ 40.9 million pursuant to the December 2020 ATM through the sale of 4,204,113 shares of common stock at a weighted average price of $ 9.72 per share.

The net proceeds from the December 2020 ATM were $ 39.6 million after deducting underwriter commissions of $ 1.2 million.

For the year ended December 31, 2021, the Company raised gross proceeds of $ 0.8 million pursuant to the December 2020 ATM through the sale of 73,221 shares of common stock at a weighted average price of $ 10.27 per share.

The net proceeds from the December 2020 ATM were $ 0.7 million after deducting underwriter commissions of $ 22,555 .

During 2022, we raised gross proceeds of $ 16.7 million pursuant to the December 2020 ATM through the sale of 1,568,487 shares of common stock at a weighted average price of $ 10.62 per shared.

The net proceeds were $ 16.2 million after deducting underwriter commissions of $ 0.5 million.

As of February 18, 2022, $ 32.6 million in capacity remains under the December 2020 ATM.

For the year ended December 31, 2020, the Company raised gross proceeds of $ 11.3 million pursuant to the July 2019 ATM through the sale of 733,728 shares of common stock at a weighted average price of $ 15.42 per share.

The net proceeds from the July 2019 ATM were $ 11.0 million after deducting underwriter commissions of $ 339,356 .

Public Equity Offerings

Equity Offerings

$60 Million Private Placement Equity Financing

On October 10, 2022, Immunic entered into a Securities Purchase Agreement (the “Purchase Agreement”) for a private placement (the “Private Placement”) with select accredited investors and certain existing investors (each, a “Purchaser” and collectively, the “Purchasers”).

Pursuant to the Purchase Agreement, the Company agreed to sell to the Purchasers (i) 8,696,552 shares of the Company’s common stock, par value $ 0.0001 per share (the “Shares”), at a purchase price of $ 4.35 per Share, and (ii) 5,096,552 pre-funded warrants (the “Pre-Funded Warrants”) to purchase Common Stock (the “Warrant Shares” and together with the Shares and the Pre-Funded Warrants, the “Securities”), at a purchase price of $ 4.34 per Pre-Funded Warrant.

The Pre-Funded Warrants have an exercise price of $ 0.01 per share of Common Stock, be immediately exercisable and remain exercisable until exercised in full.

The holders of Pre-Funded Warrants may not exercise a Pre-Funded Warrant if the holder, together with its affiliates, would beneficially own more than 9.99 % of the number of shares of Common Stock outstanding immediately after giving effect to such exercise.

The holders of Pre-Funded Warrants may increase or decrease such percentages not in excess of 19.99 % by providing at least 61 days’ prior notice to the Company.

The Pre-Funded Warrants are classified as a component of permanent equity because they are freestanding financial instruments that are legally detachable and separately exercisable from the shares of common stock with which they were issued, are immediately exercisable, do not embody an obligation for the Company to repurchase its shares, and permit the holders to receive a fixed number of shares of common stock upon exercise.

In addition, the Pre-Funded Warrants do not provide any guarantee of value or return.

All of the pre-funded warrants were exercised in January of 2023.

The Private Placement closed on October 12, 2022.

The gross proceeds of the Private Placement were approximately $ 60.0 million, before deducting offering expenses payable by the Company of approximately $4.0 million.

The Company intends to use the net proceeds from the Private Placement to fund the ongoing clinical development of its three lead product candidates, vidofludimus calcium (IMU-838), izumerogant (IMU-935) and IMU-856, and for other general corporate purposes.

The registration statement for these securities was deemed effective by Securities and Exchange Commission on December 20, 2022.

July 2021 Public Equity Offering

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The net proceeds to the Company from the Offering was approximately $ 42.0 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.

August 2020 Offering

On August 4, 2020, the Company entered into an underwriting agreement with SVB Leerink LLC, as representative of the several underwriters in connection with the Company’s public offering of 5,000,000 shares of common stock, at a public offering price of $ 18.00 per share.

Under the terms of the Underwriting Agreement, the Company granted the Underwriters an option, exercisable for 30 days, to purchase up to an additional 750,000 shares of Common Stock at the public offering price, less underwriting discounts and commissions, which was exercised in full on August 6, 2020.

On August 7, 2020, the Company closed the Offering.

The net proceeds to the Company from the Offering, after giving effect to the exercise in full by the Underwriters of their option to purchase the Option Shares, was approximately $ 96.5 million, after deducting underwriting discounts and commissions and offering expenses payable by the Company.

June 2020 Offering

On June 10, 2020, the Company entered into a placement agency agreement with ROTH Capital Partners, LLC ("RCP") and Ladenburg Thalmann & Co.

relating to the Company’s public offering of 2,175,000 shares of common stock.

Pursuant to this agreement, the Company agreed to pay the placement agents a cash fee of 6.5 % of the gross proceeds from the offering raised from investors and to reimburse the placement agents for certain costs incurred in connection therewith.

In addition, on June 10, 2020, the Company and certain institutional investors entered into securities purchase agreements relating to the issuance and sale of an aggregate of 2,175,000 shares of the Company’s common stock.

The purchase price per share in the Offering was $ 11.40 for aggregate gross proceeds to the Company of approximately $ 25.0 million.

The net proceeds to the Company from this offering, after deducting the Company’s offering expenses, were approximately $ 23.0 million.

April 2020 Registered Direct Offering

On April 23, 2020, the Company entered into an engagement letter with RCP relating to the Company’s registered direct offering of common stock to select institutional investors.

Pursuant to this agreement, the Company agreed to pay RCP a cash fee of 6.5 % of the gross proceeds from the offering raised from investors and to reimburse RCP for certain costs incurred in connection therewith.

In addition, on April 23, 2020, the Company and the investors entered into a securities purchase agreement relating to the issuance and sale of an aggregate of 1,764,706 shares of the Company’s common stock.

The purchase price per share was $ 8.50 for aggregate gross proceeds to the Company of approximately $ 15.0 million.

This securities purchase agreement restricted the Company from issuing additional common stock for a period of 75 days from April 27, 2020, subject to certain exceptions.

The net proceeds to the Company from this offering, after deducting the Company’s offering expenses, were approximately $ 13.9 million.

As of December 31, 2022, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue 130,000,000 shares of common stock, par value of $ 0.0001 .

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2021 Employee stock purchase plan 116,891

Prefunded stock warrants 5,096,552

Outstanding stock options 3,791,688

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On April 25, 2021, the Company adopted the 2021 Employee Stock Purchase Plan ("ESPP"), which was approved by stockholder vote at the 2021 Annual Meeting of Stockholders held on June 10, 2021.

The plan provides eligible employees of the Company with an opportunity to purchase common stock of the Company through accumulated payroll deductions, which are included in other current liabilities until they are used to purchase Company shares.

The ESPP provides eligible employees of the Company with an opportunity to purchase common stock of the Company through accumulated payroll deductions, which are included in other current liabilities until they are used to purchase Company shares.

Eligible employees participating in the bi-annual offering period can choose to have up to the lesser of 15 % of their annual base earnings or the IRS annual share purchase limit of $25,000 in aggregate market value to purchase shares of the Company’s common stock.

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The maximum number of shares reserved for delivery under the plan is 200,000 shares.

The first enrollment period under the plan commenced on August 1, 2021 and the Company recognized $ 46,000 of expense related to the plan in the twelve months ended December 31, 2021.

The Company has issued 12,758 shares under the ESPP for the twelve months ended December 31, 2021.

The Company has issued 70,351 and 12,758 shares under the ESPP for the twelve months ended December 31, 2022 and 2021, respectively.

The Company recognized $ 96,000 and $ 46,000 of expense related to the plan in the twelve months ended December 31, 2022 and 2021, respectively.

Stock Option Programs

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The 2019 Plan allows for the grant of equity awards to employees, consultants and non-employee directors.

An initial maximum of 1,500,000 shares of the Company’s common stock are available for grant under the 2019 Plan.

An initial maximum of 1,500,000 shares of the Company’s common stock were available for grant under the 2019 Plan.

The 2019 Plan includes an evergreen provision that allows for the annual addition of up to 4 % of the Company’s fully-diluted outstanding stock, with a maximum allowable increase of 4,900,000 shares over the term of the 2019 Plan.

In accordance with this provision, the shares available for grant were increased in 2020 and 2021 by a total of 1,340,050 shares.

In accordance with this provision, the shares available for grant were increased in 2020 through 2023 by a total of 4,408,871 shares.

The 2019 Plan is currently administered by the Board, or, at the discretion of the Board, by a committee of the Board, which determines the exercise prices, vesting schedules and other restrictions of awards under the 2019 Plan at its discretion.

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Expected Volatility

Due to the Company’s limited operating history and a lack of company specific historical and implied volatility data, the Company estimates expected volatility based on the historical volatility of a group of comparable companies that are publicly traded.

Due to the Company’s limited operating history and a lack of company specific historical and implied volatility data, the Company estimates expected volatility based on the historical volatility of its own stock combined with a group of comparable companies that are publicly traded.

The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards.

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Summary of Equity Incentive Plans Assumed from Vital

Upon completion of the Transaction with Vital on April 12, 2019, Vital’s 2012 Stock Option Plan (the “2012 Plan”), Vital’s 2014 Equity Incentive Plan (the “2014 Plan”) and Vital’s 2017 Inducement Equity Incentive Plan (the “Inducement Plan”), were assumed by the Company.

Upon completion of the Transaction with Vital Therapies ("Vital") on April 12, 2019, Vital’s 2012 Stock Option Plan (the “2012 Plan”), Vital’s 2014 Equity Incentive Plan (the “2014 Plan”) and Vital’s 2017 Inducement Equity Incentive Plan (the “Inducement Plan”), were assumed by the Company.

All awards granted under these plans have either been forfeited or expired.

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Tax effect of rate change 0.0 % 0.0 %

Goodwill impairment ( 5.7 ) % 0.0 %

Other ( 0.7 ) % ( 0.4 ) %

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There were no such interest or penalties for any of the years presented.

On October 19, 2020, the Company and Immunic AG, its wholly-owned subsidiary, entered into a Finance Contract (the “Loan Agreement”) with the European Investment Bank (“EIB”), pursuant to which EIB agreed to provide Immunic AG with a

term loan in an aggregate amount of up to € 24.5 million to support the development of Immunic’s lead asset, vidofludimus calcium, in moderate coronavirus disease 2019 (“COVID-19”), to be made available to be drawn in three tranches, with the second and third tranches subject to the completion of certain pre-defined milestones.

Effective October 20, 2021 the Company terminated this agreement with the EIB and no funds were drawn under this arrangement.

Related Party Transactions

Executive Chairman Agreement with Duane Nash

On April 15, 2020, the compensation committee of the Board of Directors of the Company independently reviewed and approved entering into an employment agreement with the current Chairman of the Board, Duane Nash, MD, JD, MBA (the “Executive Chairman Agreement”) and pursuant to such approval, on April 17, 2020, the Company and Dr.

On April 15, 2020, the compensation committee of the Board of Directors of the Company independently reviewed and approved entering into an employment agreement with the Executive Chairman of the Board, Duane Nash, MD, JD, MBA (the “Executive Chairman Agreement”) and pursuant to such approval, on April 17, 2020, the Company and Dr.

Nash entered into the Executive Chairman Agreement.

The Executive Chairman Agreement establishes an “at will” employment relationship pursuant to which Dr.

Nash serves as Executive Chairman and contemplated a term that ends on October 15, 2020, which was subsequently extended to April 15, 2021.

The Executive Chairman Agreement establishes an “at will” employment relationship with a base salary of $ 25,417 per month pursuant to which Dr.

Nash serves as Executive Chairman and contemplated a term that ends on October 15, 2020.

On October 15, 2020, the Company and Dr.

Nash entered into an addendum (the “First Addendum”) to extend the term of the Executive Chairman Agreement to April 15, 2021.

In connection with the First Addendum, the Company made a one-time award to Dr.

Nash of an option to purchase 120,000 shares of Company common stock, which vests monthly over six months commencing on November 15, 2020.

On April 15, 2021, the Company and Dr.

Nash entered into an addendum (the “Agreement”) to extend the term of the Executive Chairman Agreement to April 15, 2022.

In connection with the Agreement, the Company made a one-time award to Dr.

Nash of an option to purchase 90,000 shares of Company common stock, which will vest monthly commencing on May 15, 2021, and to increase Dr.

Nash entered into Addendum No.

Two (the “Second Addendum”) to extend the term of the Executive Chairman Agreement to April 15, 2022.

In connection with the Second Addendum, the Company made a one-time award to Dr.

Nash of an option to purchase 90,000 shares of Company common stock, which vests monthly over 12 months commencing on May 15, 2021, and to increase Dr.

Nash’s monthly base salary to $ 27,960 from $ 25,417 .

Selected Quarterly Data (unaudited)

The following financial information reflects all normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods.

Summarized quarterly data for 2021 and 2020 are as follows (in thousands, except per share data):

For the Quarters Ended

March 31 June 30 September 30 December 31 Total Year

Operating expenses $ 32,387 $ 19,170 $ 18,387 $ 21,721 $ 91,665

Net loss $ ( 34,534 ) $ ( 17,934 ) $ ( 19,292 ) $ ( 21,185 ) $ ( 92,945 )

Basic and diluted net loss per share (1) $ ( 1.63 ) $ ( 0.82 ) $ ( 0.76 ) $ ( 0.81 ) $ ( 3.93 )

Operating expenses $ 9,014 $ 12,222 $ 13,545 $ 14,190 $ 48,971

Net loss $ ( 8,487 ) $ ( 11,458 ) $ ( 12,913 ) $ ( 11,159 ) $ ( 44,017 )

Basic and diluted net loss per share (1) $ ( 0.79 ) $ ( 0.90 ) $ ( 0.70 ) $ ( 0.53 ) $ ( 2.81 )

(1) Net loss per share is computed independently for each of the quarters presented.

Therefore, the sum of the quarterly per share calculations will not necessarily equal the annual per share calculation.

On March 15, 2022, the Company and Dr.

Nash entered into Addendum No.

Three (the “Third Addendum”), which extended the term of employment from April 15, 2022 to December 31, 2022 with a base salary of $ 29,358 per month.

In connection with the Third Addendum, the Company made a one-time award to Dr.

Nash of an option to purchase 75,000 shares of the Company’s common stock, which vests monthly over 12 months commencing on April 10, 2022.

On December 28, 2022, the Company and Dr.

Nash entered into Addendum No.

Four, which extended the term of employment from December 31, 2022 to December 31, 2023 with a base salary of $ 30,250 per month (which includes the cash retainer payable for serving on the Company’s Board or for acting as the Chairman of the Board).

All other terms of the Executive Chairman Agreement remain the same.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

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/s/ DANIEL VITT Director, Chief Executive Officer and President February 23, 2023

/s/ GLENN WHALEY Principal Financial and Accounting Officer February 24, 2022

/s/ GLENN WHALEY Chief Financial Officer February 23, 2023

NASH Executive Chairman February 23, 2023

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PHILLIPS Director February 23, 2023

/s/ JAN VAN DEN BOSSCHE Director February 24, 2022

Jan Van den Bossche

/s/ MARIA TORNSEN Director February 23, 2023

Maria Tornsen

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures