IMMUNIC, INC. 10-K

Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures 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, 2024. 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 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, 2024, our Chief Executive Officer and Principal Financial Officer have concluded that, as of December 31, 2024, 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 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; (ii) provide reasonable assurance (a) that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, (b) that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and (c) regarding the prevention or timely detection of the unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. As of December 31, 2024, our management conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework (2013). Based on this evaluation, our management concluded that, as of December 31, 2024, our internal control over financial reporting was effective. Changes in Internal Control over Financial Reporting There was no change in our internal control over financial reporting that occurred during the quarter ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information. During the three months ended December 31, 2024, none of our directors or officers adopted, made certain modifications or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. 75 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not Applicable 76 PART III Item 10. 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 2025 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, 2024, 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. The Code of Business Conduct and Ethics is available on our Internet website at www.imux.com. A copy of the Code of Business Conduct and Ethics will be provided free of charge by making a written request and mailing it to our corporate headquarters offices to the attention of the Investor Relations Department. If any amendment to, or a waiver from, a provision of the Code of Business Conduct and Ethics that applies to the principal executive officer, principal financial officer and principal accounting officer is made, such information will be posted on our Internet website within four business days at www.imux.com. Item 11. Executive Compensation. Information required by this item will be found in our Definitive Proxy Statement under the heading "Executive Compensation" and is incorporated herein by reference. Item 12. 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 heading "Security Ownership" and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence. 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. Item 14. Principal Accounting Fees and Services. 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. 77 PART IV Item 15. Exhibits, Financial Statement Schedules. Page 1. Financial Statements . We have filed the following documents as part of this Annual Report: Report of Baker Tilly US, LLP, Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets F- 4 Consolidated Statements of Operations F- 5 Consolidated Statements of Comprehensive Loss F- 6 Consolidated Statements of Stockholders’ Equity F- 7 Consolidated Statements of Cash Flows F- 8 Notes to Consolidated Financial Statements F- 9 2. Financial Statement Schedules. None. 3. Exhibits. The following exhibits are filed herewith or are incorporated by reference to exhibits previously filed with the U.S. Securities and Exchange Commission. 78 EXHIBITS Incorporated by Reference Exhibit Number Exhibit Title Form Exhibit Filing Date 3.1 Amended and Restated Certificate of Incorporation. 8-K 3.1 July 17, 2019 3.2 Third Amended and Restated Bylaws. 8-K 3.1 July 17, 2019 3.3 Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Immunic, Inc. 8-K 3.1 March 8, 2024 4.1 2019 Omnibus Equity Incentive Plan, as amended , S-8 4.2 August 21, 2023 4.2+ Amended and Restated 2021 Employee Stock Purchase Plan. S-8 10.3 July 28, 2021 4.3* Description of Registrant’s Securities 4.4 Form of Pre-Funded Warrant 8-K 4.1 January 4, 2024 10.1+ Addendum No. 6, dated August 29, 2024, to Employment Agreement, dated April 17, 2020, between Immunic, Inc. and Duane Nash. 8-K 10.1 September 3, 2024 10.2+ Employment Agreement, dated December 18, 2023, between Immunic, Inc. and Dr. Andreas Muehler. 8-K 10.3 December 18, 2023 10.3 F ifth Addendum, dated December 18, 2023, to Service Agreement between Immunic AG and Dr. Daniel Vitt. 8-K 10.1 December 18, 2023 10.4 Fifth Addendum, dated December 18, 2023, to Service Agreement between Immunic AG and Dr. Andreas Muehler. 8-K 10.2 December 18, 2023 10.5 Fifth Addendum, dated December 18, 2023, to Service Agreement between Immunic AG and Dr. Hella Kohlhof. 8-K 10.4 December 18, 2023 10.6 Securities Purchase Agreement, dated January 4, 2024, by and among the Company and the Investors. 8-K 10.1 January 4, 2024 10.7 Form of Indemnification Agreement. 8-K 10.4 July 17, 2019 10.8 Service Agreement, dated August 22, 2016, between Immunic AG and Dr. Andreas Muehler. 10-K 10.5 February 23, 2023 10.9 Service Agreement, dated September 29, 2016, between Immunic AG and Daniel Vitt. 10-K 10.6 February 23, 2023 10.10+ Employment Agreement between Dr. Daniel Vitt and Immunic AG. 8-K 10.5 July 17, 2019 10.11+ Employment Agreement, dated September 4, 2019, between Immunic, Inc. and Dr. Andreas Muehler. 8-K 99.3 September 5, 2019 10.12+ Employment Agreement dated April 17, 2020, between Immunic, Inc. and Duane Nash. 8-K 10.2 April 20, 2020 10.13+ Employment Agreement, dated June 10, 2021 between Immunic, Inc. and Dr. Andreas Muehler 8-K 10.3 June 10, 2021 10.14+ Employment Agreement, dated June 10, 2021 between Immunic, Inc. and Glenn Whaley 8-K 10.4 June 10, 2021 10.15+ Employment Agreement, dated October 14, 2021, between Immunic, Inc. and Patrick Walsh 8-K 10.1 October 14, 2021 10.16+ Employee Agreement, dated July 9, 2024, between Immunic, Inc. and Jason Tardio 10.17 Employment agreement dated December 13, 2024, between Immunic, Inc. and Dr. Daniel Vitt 8-K 10.1 December 18, 2024 19.1* Immunic, Inc. Insider Trading Policy. 21.1 List of subsidiaries of the Registrant 23.1* Consent of Baker Tilly U.S. LLP, Independent Registered Public Accounting Firm. 24.1 Power of Attorney (included on the signature page). 79 31.1* Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1** Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2** Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97* Immunic, Inc. Clawback Policy. 101.INS* XBRL Instance Document 101.SCH* XBRL Taxonomy Extension Schema Document. 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF* XBRL Taxonomy Extension Definition Linkbase Database. 101.LAB* XBRL Taxonomy Extension Label Linkbase Document. 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document. 104* Cover Page Interactive Data File + 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. 33-8238 and 34-47986, Final Rule: Management’s Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. Item 16. Form 10-K Summary None. 80 IMMUNIC, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Baker Tilly US LLP, Independent Registered Public Accounting Firm (PCAOB ID 23 ) F-2 Consolidated Balance Sheets F-4 Consolidated Statements of Operations F-5 Consolidated Statements of Comprehensive Loss F-6 Consolidated Statements of Stockholders’ Equity F-7 Consolidated Statements of Cash Flows F-8 Notes to Consolidated Financial Statements F-9 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the board of directors of Immunic, Inc.: Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Immunic, Inc. (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, stockholders' equity, and cash flows, for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 of the consolidated financial statements, the Company has recurring losses from operations, expects to incur losses for the foreseeable future and needs additional working capital. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not contain any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. Baker Tilly US, LLP We have served as the Company's auditor since 2019. Minneapolis, MN March 31, 2025 F- 2 F- 3 IMMUNIC, INC. Consolidated Balance Sheets (In thousands, except share and per share amounts) December 31, 2024 2023 Assets Current assets: Cash and cash equivalents $ 35,668 $ 46,674 Prepaid expenses and other current assets 3,664 5,860 Total current assets 39,332 52,534 Property and equipment, net 545 466 Right of use asset, net 991 1,299 Total assets $ 40,868 $ 54,299 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 7,846 $ 5,099 Accrued expenses 12,913 18,664 Other current liabilities 1,416 966 Total current liabilities 22,175 24,729 Long-term liabilities: Operating lease liabilities 264 639 Total long-term liabilities 264 639 Total liabilities 22,439 25,368 Commitments and contingencies (note 9) Stockholders’ equity: Preferred stock, $ 0.0001 par value; 20,000,000 authorized and no shares issued or outstanding at December 31, 2024 and 2023 — — Common stock, $ 0.0001 par value; 500,000,000 and 130,000,000 shares authorized as of December 31, 2024 and December 31, 2023, respectively, and 90,150,869 and 45,177,730 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively. 8 4 Additional paid-in capital 525,611 436,060 Accumulated other comprehensive income 4,209 3,759 Accumulated deficit ( 511,399 ) ( 410,892 ) Total stockholders’ equity 18,429 28,931 Total liabilities and stockholders’ equity $ 40,868 $ 54,299 The accompanying notes are an integral part of these consolidated financial statements. F- 4 IMMUNIC, INC. Consolidated Statements of Operations (In thousands, except share and per share amounts) Years Ended December 31, 2024 2023 Operating expenses: Research and development $ 80,046 $ 83,215 General and administrative 18,006 16,008 Total operating expenses 98,052 99,223 Loss from operations ( 98,052 ) ( 99,223 ) Other income (expense): Interest income 3,390 3,075 Change in fair value of the tranche rights ( 4,796 ) — Other income (expense), net ( 1,049 ) 2,536 Total other income (expense), net ( 2,455 ) 5,611 Net loss $ ( 100,507 ) $ ( 93,612 ) Net loss per share, basic and diluted $ ( 1.00 ) $ ( 2.11 ) Weighted-average common shares outstanding, basic and diluted 100,174,766 44,320,050 The accompanying notes are an integral part of these consolidated financial statements. F- 5 IMMUNIC, INC. Consolidated Statements of Comprehensive Loss (In thousands) Years Ended December 31, 2024 2023 Net loss $ ( 100,507 ) $ ( 93,612 ) Other comprehensive income: Foreign currency translation 450 724 Total comprehensive loss $ ( 100,057 ) $ ( 92,888 ) The accompanying notes are an integral part of these consolidated financial statements. F- 6 IMMUNIC, INC. Consolidated Statements of Stockholders’ Equity (In thousands, except shares) Additional Paid-in Capital Accumulated Other Comprehensive Income Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at December 31, 2022 39,307,286 $ 4 $ 427,925 $ 3,035 $ ( 317,280 ) $ 113,684 Net loss — — — — ( 93,612 ) ( 93,612 ) Foreign exchange translation adjustment — — — 724 — 724 Stock-based compensation — — 7,102 — — 7,102 Shares issued from the exercise of pre-funded warrants 5,096,552 — 51 — — 51 Issuance of common stock - At The Market Sales Agreement net of issuance costs of $ 26 657,012 — 853 — — 853 Shares issued in connection with the Company's employee stock purchase plan 116,880 — 129 — — 129 Balance at December 31, 2023 45,177,730 4 $ 436,060 $ 3,759 $ ( 410,892 ) $ 28,931 Net loss — — — — ( 100,507 ) ( 100,507 ) Foreign exchange translation adjustment — — — 450 — 450 Stock-based compensation — — 8,527 — — 8,527 Issuance of common stock and pre-funded warrants - January 2024 Financing, net of issuance costs of $ 4,037 44,751,286 4 52,360 — — 52,364 Issuance of common stock - At The Market Sales Agreement net of issuance costs of $ 6 150,000 — 191 — — 191 Conversion of tranche rights liability to equity — — 28,396 — — 28,396 Shares issued in connection with the Company's employee stock purchase plan 71,853 — 77 — — 77 Balance at December 31, 2024 90,150,869 8 $ 525,611 $ 4,209 $ ( 511,399 ) $ 18,429 The accompanying notes are an integral part of these consolidated financial statements. F- 7 IMMUNIC, INC. Consolidated Statements of Cash Flows (In thousands) Years Ended December 31, 2024 2023 Cash flows from operating activities: Net loss $ ( 100,507 ) $ ( 93,612 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 134 111 Stock-based compensation 8,527 7,102 Change in fair value of tranche rights 4,796 — Fees expensed as part of January 2024 Financing 1,690 — Foreign currency loss 30 523 Changes in operating assets and liabilities: Other current assets and prepaid expenses 1,863 3,858 Accounts payable 3,145 817 Other liabilities 416 96 Accrued expenses ( 4,860 ) 10,277 Net cash used in operating activities ( 84,766 ) ( 70,828 ) Cash flows from investing activities: Sales of Investments-other — 9,796 Purchases of property and equipment ( 264 ) ( 334 ) Net cash provided by (used in) investing activities ( 264 ) 9,462 Cash flows from financing activities: Proceeds from January 2024 Financing, net of issuance costs 74,273 — Proceeds from public offering of common stock through At The Market offering, net of issuance costs 191 853 Proceeds from shares issued in connection with the Company's employee stock purchase plan 77 129 Proceeds from the exercise of pre-funded warrants — 51 Net cash provided by financing activities 74,541 1,033 Effect of exchange rate changes on cash and cash equivalents ( 517 ) 262 Net change in cash and cash equivalents ( 11,006 ) ( 60,071 ) Cash and cash equivalents, beginning of year 46,674 106,745 Cash and cash equivalents, end of year $ 35,668 $ 46,674 Supplemental disclosure of noncash investing and financing activities: Conversion of tranche rights liability to equity upon increase in authorized shares $ 28,396 $ — Operating lease right-of use asset obtained in exchange for lease obligation $ 448 $ 544 The accompanying notes are an integral part of these consolidated financial statements. F- 8 Notes to Consolidated Financial Statements 1. Description of Business and Basis of Financial Statements Description of Business Immunic, Inc. ("Immunic" or the "Company") is a biotechnology company developing a clinical 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 had 91 employees as of March 1, 2025. The Company is pursuing clinical development of 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 and Phase 2 clinical development for patients with relapsing and progressive multiple sclerosis (“MS”), respectively, and which has shown therapeutic activity in Phase 2 clinical trials in patients suffering from relapsing-remitting MS ("RRMS"), progressive MS and moderate-to-severe ulcerative colitis (“UC”); the IMU-856 program, which is targeted to regenerate bowel epithelium and restore intestinal barrier function, which could potentially be applicable in numerous gastrointestinal diseases, such as celiac disease, inflammatory bowel disease ("IBD"), Graft-versus-Host-Disease ("GvHD") and weight management; and the IMU-381 program, which is a next generation molecule being developed to specifically address the needs of gastrointestinal diseases. 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. Going Concern and Liquidity and Financial Condition Immunic has no products approved for commercial sale and has not generated any revenue from product sales. It has never been profitable and has incurred operating losses in each year since inception in 2016. The Company has an accumulated deficit of approximately $ 511.4 million as of December 31, 2024 and $ 410.9 million as of December 31, 2023. 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 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, 2024, Immunic has raised net cash of approximately $ 430.9 million from private and public offerings of preferred stock, common stock, pre-funded warrants and tranche rights. As of December 31, 2024, the Company had cash and cash equivalents of approximately $ 35.7 million.With these funds, the Company does not have adequate liquidity to fund its operations for at least twelve months from the issuance of these consolidated financial statements without raising additional capital, but such actions are not solely within the control of the Company. If the Company is unable to obtain additional capital, it would have a material adverse effect on the operations of the Company, its clinical development program, and the Company may have to cease operations altogether. These factors raise substantial doubt about the Company’s ability to continue as a going concern. 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 Australia Pty Ltd. All intercompany accounts and transactions have been eliminated in consolidation. Immunic manages its operations as a single reportable segment for the purposes of assessing performance and making operating decisions. F- 9 2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with U.S. 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 stock-based compensation and the valuation of the tranche rights. Management believes its estimates to be reasonable under the circumstances. Actual results could differ materially from those estimates and assumptions. Foreign Currency Translation and Presentation The Company’s reporting currency is United States (“U.S.”) dollars. Immunic AG is located in Germany with the Euro being its functional currency. Immunic Australia Pty Ltd.’s functional currency is the Australian dollar. All amounts in the financial statements where the functional currency is not the U.S. dollar are translated into U.S. dollar equivalents at exchange rates as follows: • assets and liabilities at reporting period-end rates; • income statement accounts at average exchange rates for the reporting period; and • components of equity at historical rates. Gains and losses from translation of the financial statements into U.S. dollars are recorded in stockholders’ equity as a component of accumulated other comprehensive income (loss). Realized and unrealized gains and losses resulting from foreign currency transactions denominated in currencies other than the functional currency are reflected as general and administrative expenses in the Consolidated Statements of Operations. Foreign currency transaction gains and losses related to long-term intercompany loans that are payable in the foreseeable future are recorded in Other Income (Expense). 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 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. of approximately $ 15.1 million, Germany of approximately $ 20.5 million and Australia of approximately $ 0.1 million as of December 31, 2024. The Company maintains cash and cash equivalent balances denominated in Euro and U.S. dollars with major financial institutions in the U.S. and Germany in excess of the deposit limits insured by the government. Management periodically reviews the credit standing of these financial institutions. The Company currently deposits its cash and cash equivalents with two large financial institutions. Cash and cash equivalents in the U.S. are held at JP Morgan and are primarily held in a U.S. Government money market fund account earning interest at a rate of 4.3 % as of December 31, 2024. Cash and cash equivalents in Germany are earning interest at a rate of 2.75 % to 3.25 % as of December 31, 2024. Fair Value Measurement Fair value is defined as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants on the measurement date. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 1 assets consisted of money market funds for the periods presented. The Company had no Level 1 liabilities for the periods presented. Level 2—Inputs other than observable quoted prices for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. The Company had no Level 2 assets or liabilities for the periods presented. F- 10 Level 3—Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets or liabilities. The Company had no Level 3 assets or liabilities for the periods presented. The Company did have tranche rights that were at level 3 during the first quarter of 2024. The carrying value of cash and cash equivalents, other current assets and prepaid expenses, accounts payable, accrued expenses, and other current liabilities approximates fair value due to the short period of time to maturity. Property and Equipment Property and equipment is stated at cost. Depreciation is computed using the straight-line method based on the estimated service lives of the assets which range from three years to thirteen years . Depreciation and amortization expense was $ 134,000 and $ 111,000 for the years ended December 31, 2024 and 2023, respectively. Impairment of Long-Lived Assets The Company records impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. Impaired assets are then recorded at their estimated fair value. There were no impairment losses during the years ended December 31, 2024 and 2023. Research and Development Expenses These costs primarily include external development expenses and internal personnel expenses for its development programs, vidofludimus calcium 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 MS and UC. 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. Research and development expenses are charged to operations as incurred. The Company enters into agreements with contract research organizations (“CROs”) to provide clinical trial services for individual studies and projects by executing individual work orders governed by a Master Service Arrangement (“MSA”). The MSAs and associated work orders provide for regular recurrent payments and payments upon the completion of certain milestones. The Company regularly assesses the timing of payments against actual costs incurred to ensure a proper accrual of related expenses in the appropriate accounting period. Collaboration Arrangements Certain collaboration and license agreements may include payments to or from the Company of one or more of the following: non-refundable or partially refundable upfront or license fees; development, regulatory and commercial milestone payments; payment for manufacturing supply services; partial or complete reimbursement of research and development costs; and royalties on net sales of licensed products. The Company assesses whether such contracts are within the scope of Financial Accounting Standards Board (FASB) Accounting Standards Update (“ASU”) 2014-09 “ Revenue from Contracts with Customers ” and ASU No. 2018-18, “ Collaborative Arrangements” ("ASU 2018-18"). ASU 2018-18, clarifies that certain elements of collaborative arrangements could qualify as transactions with customers in the scope of ASC 606. 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 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 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 U.S. 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 F- 11 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. This government assistance is recognized at a rate of 43.5 % of the qualified research and development expenditures which are incurred. We also receive government assistance from the German Government for reimbursement of research and development expenses up to 3.5 million Euros per year. We recognized $ 0.7 million and $ 3.3 million of other income related to research activities performed during the years ended December 31, 2024 and 2023, respectively. General and Administrative Expenses General and administrative expenses consist primarily of salaries and related costs for personnel in executive, finance, business development and other support functions. Other general and administrative expenses include, but are not limited to, stock-based compensation, insurance costs, professional fees for legal, accounting and tax services, consulting, related facility costs and travel. Stock-Based Compensation The Company measures the cost of employee and non-employee services received in exchange for equity awards based on the grant-date fair value of the award recognized generally as an expense (i) on a straight-line basis over the requisite service period for those awards whose vesting is based upon a service condition, and (ii) on an accelerated method for awards whose vesting is based upon a performance condition, but only to the extent it is probable that the performance condition will be met. Stock-based compensation is (i) estimated at the date of grant based on the award’s fair value for equity classified awards and (ii) based on the final measurement date for liability classified awards. Forfeitures are recorded in the period in which they occur. 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. If factors change and different assumptions are used, the Company’s stock-based compensation expense could be materially different in the future. Leases The Company leases office space and office equipment. The underlying lease agreements have lease terms of less than 12 months and up to 60 months. Leases with terms of 12 months or less at inception are not included in the operating lease right of use asset and operating lease liability. The Company has three existing leases for office and laboratory space. At inception of a lease agreement, the Company determines whether an agreement represents a lease and at commencement each lease agreement is assessed as to classification as an operating or financing lease. The Company's leases have been classified as operating leases and an operating lease right-of-use asset and an operating lease liability have been recorded on the Company’s balance sheet. A right-of-use lease asset represents the Company’s right to use the underlying asset for the lease term and the lease obligation represents its commitment to make the lease payments arising from the lease. Right-of-use lease assets and obligations are recognized at the commencement date based on the present value of remaining lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company has used an estimated incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The right-of-use lease asset includes any lease payments made prior to commencement and excludes any lease incentives. 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. 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. F- 12 Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Accumulated other comprehensive income (loss) has been reflected as a separate component of stockholders’ equity in the accompanying Consolidated Balance Sheets and consists of foreign currency translation adjustments. Income Taxes The Company is subject to corporate income tax laws and regulations in the U.S., Germany and Australia. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment in their application. The Company utilizes the asset and liability method of accounting for income taxes which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the audited consolidated financial statements. Deferred income tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of changes in tax rates on deferred tax assets and liabilities is recognized in operations in the period that includes the enactment date. Deferred taxes are reduced by a valuation allowance when, in the opinion of management, it is more likely than not some portion or the entire deferred tax asset will not be realized. As of December 31, 2024 and 2023, the Company maintained a full valuation allowance against the balance of deferred tax assets. It is the Company’s policy to provide for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. The Company recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. The Company is subject to U.S. federal, New York, California, Texas, German and Australian income taxes. The Company is subject to U.S. federal or state income tax examination by tax authorities for tax returns filed for the years 2003 and forward due to the carryforward of NOLs. Tax years 2019 through 2023 are subject to audit by German and Australian tax authorities. The Company is not currently under examination by any tax jurisdictions. Warrants and Tranche Rights The Company accounts for issued financial instruments 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”). If financial instruments do not meet liability classification under ASC 480-10, the Company considers the requirements of ASC 815-40 to determine whether the financial instruments should be classified as a liability or as equity. Liability-classified financial instruments 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 financial instruments after the issuance date is recorded in the consolidated statements of operations as a gain or loss. If financial instruments do not require liability classification under ASC 815-40, the instrument is classified in permanent equity. Equity-classified financial instruments 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 Basic net loss per share attributable to common stockholders is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share attributable to common stockholders is computed by dividing the net loss by the weighted-average number of common shares and, if dilutive, common stock equivalents outstanding for the period determined using the treasury-stock method. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. The weighted average shares outstanding calculation for basic and diluted earnings per share for the year ended December 31, 2024 includes 11,193,564 pre-funded warrants that remain unexercised as of December 31, 2024. F- 13 Potentially dilutive securities, not included in the calculation of diluted net loss per share attributable to common stockholders because to do so would be anti-dilutive, are as follows: As of December 31, 2024 2023 Options to purchase common stock 16,136,045 6,196,140 Recently Adopted Accounting Standards During the year ended December 31, 2024, the Company adopted ASU 2023-07 which requires public companies with a single reportable segment to meet all existing disclosure requirements of Topic 280 and additional disclosures. Single reportable segment entities must now provide qualitative disclosures about factors used to identify reportable segments and types of products and services, as well as quantitative disclosures of profit or loss measures and significant expense categories. Retrospective application is required to all periods in financial statements unless impracticable, in which case companies must disclose this fact and the reasons why. Future Accounting Standards In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The new guidance is expected to improve income tax disclosures primarily related to the rate reconciliation and income taxes paid information by requiring 1) consistent categories and greater disaggregation of information in the rate reconciliation and 2) income taxes paid disaggregated by jurisdiction. The guidance is effective on a prospective basis, although retrospective application and early adoption is permitted. The standard will be adopted for the annual period starting January 1, 2025. F- 14 3. Balance Sheet Details Prepaid Expenses and Other Current Assets Prepaid Expense and Other Current Assets consist of (in thousands): December 31, 2024 2023 Prepaid clinical and related costs $ 1,871 $ 2,314 VAT receivable 647 703 Australian research and development tax incentive 37 670 Research grant — 1,104 Other 1,109 1,069 Total $ 3,664 $ 5,860 Accounts Payable Accounts Payable consist of (in thousands): December 31, 2024 2023 Clinical and related costs $ 7,561 $ 4,726 Legal and audit costs 31 160 Other 254 213 Total $ 7,846 $ 5,099 Accrued Expenses Accrued Expenses consist of (in thousands): December 31, 2024 2023 Accrued clinical and related costs $ 12,456 $ 16,863 Accrued legal and audit costs 72 216 Accrued compensation 354 1,460 Accrued other 31 125 Total $ 12,913 $ 18,664 Other Current Liabilities Other Current Liabilities consist of (in thousands): December 31, 2024 2023 Lease liabilities $ 740 $ 695 Other 676 271 Total $ 1,416 $ 966 F- 15 4. Leases Operating Leases The Company leases certain office space under non-cancelable operating leases. The leases terminate on July 31, 2026 for the New York City office, December 31, 2025 for the Gräfelfing, Germany office and November 30, 2028 for the research laboratory in Planegg, Germany. These agreements 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 was extended on November 8, 2024 for an additional 12 months resulting in the new lease termination date of July 31, 2026. 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 and August 1, 2022 the Company added additional lease space at the Gräfelfing, Germany office. The lease term has expired, however, the Company is currently operating on a one-year monthly rolling lease and the Company needs to provide one-years notice to terminate the lease. Renewal options were not included in calculating the right of use asset and liabilities for this facility. In February 2023, the Company leased space in Germany for a research laboratory. The leases do not have concessions, leasehold improvement incentives or other build-out clauses. Further, the leases do not contain contingent rent provisions. There were net additions of $ 448,000 related to the extension of the New York City lease and Gräfelfing offices during the year ended December 31, 2024. There were net additions of $ 544,000 related to the addition of new laboratory space in Planegg, Germany during the year ended December, 31 2023. 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 % for the original leases and 8 % for the New York City extension and German laboratory, 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. Immunic’s operating lease costs and variable lease costs were $ 1.1 million and $ 0.9 million for the years ended December 31, 2024 and 2023, respectively. Variable lease costs consist primarily of common area maintenance costs, insurance and taxes which are paid based upon actual costs incurred by the lessor. The non-cash lease expense for the years ended December 31, 2024 and 2023 was approximately $0.4 million and $0.7 million respectively. Maturities of the operating lease obligation are as follows as of December 31, 2024 (in thousands): 2025 $ 740 2026 $ 167 2027 $ 78 2028 $ 75 2029 $ — Thereafter $ — Total lease payments $ 1,060 Less: interest portion $ ( 56 ) Present value of lease obligation $ 1,004 5. Fair Value The following fair value hierarchy table present information about each major category of the Company’s financial assets and liabilities measured at fair value on a recurring basis (in thousands): F- 16 Fair Value Measurement at December 31, 2024 Fair Value Level 1 Level 2 Level 3 Assets Money market funds $ 14,751 $ 14,751 $ — $ — Total assets at fair value $ 14,751 $ 14,751 $ — $ — Fair Value Measurement at December 31, 2023 Fair Value Level 1 Level 2 Level 3 Assets Money market funds $ 34,087 $ 34,087 $ — $ — Total assets at fair value $ 34,087 $ 34,087 $ — $ — There were no transfers between Level 1, Level 2 or Level 3 assets during the periods presented. 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 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, 2024. The Company has not historically experienced any credit losses with balances in excess of FDIC limits. The Company recorded tranche rights of $ 23.6 million at January 8, 2024 as a result of the January 2024 Financing (see note 6). The fair value measurement of the tranche rights associated with the January 2024 Financing was classified as Level 3 under the fair value hierarchy. The fair value of the tranche rights was determined using a Black Scholes Option Pricing Model. The inputs to this model included a risk-free rate range of 3.93 %- 4.36 %, a stock price volatility range of 105 - 115 %, an expected dividend rate of — % and remaining term of 1.81 - 4.81 years. This liability was revalued on March 4, 2024, upon stockholder approval to increase its authorized shares of common stock from 130 million to 500 million, which resulted in the reclassification of the tranche rights from a liability to equity. This revaluation resulted in an increase in the tranche rights liability of $ 4.8 million using a Black Scholes Option Pricing Model. The inputs to this model as of the date of the reclassification included a risk-free rate range of 4.16 %- 4.63 %, a stock price volatility range of 90 - 105 %, an expected dividend rate of — % and remaining term of 1.66 - 4.66 years. The inputs used in the determination of fair value of the liability are level 3 inputs. A rollforward of the fair value of the tranche rights is as follows (in thousands): December 31, 2023 $ — Fair value as of January 8, 2024 $ 23,600 Change in fair value through March 4, 2024 $ 4,796 Reclassification to equity in March 2024 $ ( 28,396 ) December 31, 2024 $ — 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. 6. Common Stock Shelf Registration Statements F- 17 In December 2020, the Company filed a Prospectus Supplement to the shelf registration statement on Form S-3 filed on November 13, 2020 and declared effective on November 24, 2020 (the "2020 Shelf Registration Statement") 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 with SVB Leerink LLC (now Leerink Partners LLC) as agent ("December 2020 ATM"). The Company used the net proceeds from the December 2020 ATM to fund the ongoing clinical development of our product candidates and for other general corporate purposes, including funding existing and potential new clinical programs and product candidates. The December 2020 ATM terminated in May 2024. In May 2022, the Company filed a Prospectus Supplement to the 2020 Shelf Registration Statement for the offering, issuance and sale of up to a maximum aggregate offering price of $ 80.0 million of common stock to be issued and sold under another at-the-market sales agreement ("May 2022 ATM") with Leerink Partners LLC (formerly SVB Leerink LLC) as agent. The 2020 Shelf Registration Statement expired in November 2023. In November 2023, we filed a shelf registration statement on Form S-3 (the "2023 Shelf Registration Statement"). The 2023 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. This registration statement was declared effective on May 31, 2024. Unsold securities from the expired 2020 shelf registration statement can continue to be sold under the 2023 Shelf Registration Statement resulting in a total S-3 shelf availability of $ 412.3 million as of December 31, 2024. In May 2024, we filed a Prospectus Supplement to the 2023 Shelf Registration Statement 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 an at-the-market sales agreement with Leerink Partners LLC as agent ("May 2024 ATM"), which rolls over the $ 80.0 million of unsold common stock from the May 2022 ATM. We intend to use the net proceeds from the May 2024 ATM to continue to fund the ongoing clinical development of our product candidates and for other general corporate purposes, including funding existing and potential new clinical programs and product candidates. The May 2024 ATM will terminate upon the earlier of (i) the issuance and sale of all of the shares through Leerink Partners LLC on the terms and subject to the conditions set forth in the May 2024 ATM or (ii) termination of the May 2024 ATM as otherwise permitted thereby. The May 2024 ATM may be terminated at any time by either party upon ten days’ prior notice, or by Leerink Partners LLC at any time in certain circumstances, including the occurrence of a material adverse effect on us. As of December 31, 2024, $ 80.0 million in capacity remains under the May 2024 ATM. The Company has agreed to pay Leerink Partners LLC a commission equal to 3.0 % of the gross proceeds from the sales of common stock pursuant to the May 2024 ATM and has agreed to provide Leerink Partners LLC with customary indemnification and contribution rights. For the year ended December 31, 2024, the Company raised gross proceeds of $ 0.2 million pursuant to the December 2020 ATM through the sale of 150,000 shares of common stock at a weighted average price of $ 1.31 per share. The net proceeds from the December 2020 ATM were $ 0.2 million after deducting sales agent commissions of $ 6,000 . For the year ended December 31, 2023, we raised gross proceeds of $ 0.9 million pursuant to the December 2020 ATM through the sale of 657,012 shares of common stock at a weighted average price of $ 1.34 per share. The net proceeds from the December 2020 ATM were $ 0.9 million after deducting underwriter commissions of $ 26,000 . Equity Offerings Private Placement of up to $ 240 million (the "January 2024 Financing") On January 4, 2024, Immunic entered into a Securities Purchase Agreement with select accredited investors, pursuant to which the Company agreed to issue and sell to the Investors in a three -tranche private placement shares of the Company’s common stock, $ 0.0001 par value per share, or in lieu thereof, pre-funded warrants to purchase shares of Common Stock. The Pre-Funded Warrants are exercisable immediately for $ 0.0001 per share and until exercised in full. • The first tranche, which closed on January 8, 2024, resulted in the purchase by the Investors of an aggregate of $ 80 million of Common Stock (or pre-funded warrants) from the Company at a price of $ 1.43 per share; • The second tranche is a conditional mandatory purchase by the Investors of an additional $ 80 million of Common Stock (or pre-funded warrants) from the Company at a price of $ 1.716 per share, equal to 120 % of the price paid in the first tranche and is subject to the satisfaction of three conditions: F- 18 ◦ release by the Company of topline data from its Phase 2b clinical trial of vidofludimus calcium (IMU-838) in progressive multiple sclerosis, which data is currently expected in or around April 2025; ◦ the 10-day volume-weighted average price of the Common Stock is at least $ 8.00 per share during the 6 months following the data release; and ◦ aggregate trading volume during the same 10-day period is at least $ 100 million. • The third tranche must occur no later than three years after the second tranche and is conditioned on the same volume-weighted average share price and minimum trading volumes as the second tranche. The third tranche provides for the issuance of $ 80 million of shares of common stock (or pre-funded warrants) at the same price per share as the second tranche, but permits investors to fund their purchase obligations on a “cashless” or net settlement basis, which would reduce the cash proceeds to be raised by the Company in the January 2024 Financing. Any of the conditions in the second or third tranches can be waived by holders of a majority of the outstanding securities (including the lead investor). The fair value methodology used by the Company assumed the conditions will be waived if the trading price of the stock exceeds the purchase price. The January 2024 Financing resulted in gross proceeds to the Company of approximately $ 80 million in the first tranche, and an additional $ 80 million if and when the second tranche occurs. If the second tranche is completed and conditions for the third tranche are satisfied or waived, the Company could receive up to an additional $ 80 million in the third tranche. As of the closing date of the transaction of January 8, 2024, the Company did not have enough authorized shares to be able to issue the potential shares for tranche 2 and tranche 3 (collectively referred to hereafter as "the tranche rights"). Therefore, the Company recorded the value associated to the tranche rights as a liability of $ 23.6 million and allocated the remainder of the $ 80 million received (or $ 56.4 million) with the common stock and pre-funded warrants to equity. On March 4, 2024, the stockholders voted to increase the Company's authorized common stock from 130 million to 500 million shares. As a result of the ability to issue shares in satisfaction of the tranche rights, the instrument was reclassified to stockholders' equity. The Company allocated the transaction costs across the instruments on a relative fair value basis at the grant date. As a result $ 4.0 million was netted against the equity proceeds and $ 1.7 million was recorded in other expense in the Consolidated Statements of Operations for year ended December 31, 2024. The Company registered for resale by the investors in the January 2024 Financing up to 55,944,850 shares of common stock issued (or issuable upon exercise of pre-funded warrants) in the first tranche. The Company will not receive any proceeds from the sale of these shares of common stock. These shares are registered on a registration statement on Form S-3 (registration No. 333-277040). Common Stock On March 4, 2024, the stockholders of the Company voted to increase the authorized shares of the Company from 130,000,000 shares of common stock to 500,000,000 shares of common stock, par value of $ 0.0001 per share. The voting, dividend and liquidation rights of the holders of the Company’s common stock are subject to and qualified by the rights, powers and preferences of any holders of preferred stock. Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the Board of Directors, if any. Through December 31, 2024, no cash dividends had been declared or paid. Pre-funded Warrants The Company issued 11,193,564 pre-funded warrants in connection with the January 2024 Financing, which all remain outstanding as of December 31, 2024. Preferred Stock The Company’s certificate of incorporation, as amended and restated, authorizes the Company to issue 20 million shares of $ 0.0001 par value preferred stock, with such voting powers (if any), designations, powers, preferences, and relative, participating, optional or other rights, if any, and any qualifications, limitations or restrictions thereof, as shall be set by the Board of Directors. No preferred shares were outstanding as of December 31, 2024. F- 19 Stock Reserved for Future Issuance Shares reserved for future issuance as of December 31, 2024 are as follows: Number of Shares Common stock reserved for issuance for: 2021 Employee stock purchase plan 928,158 Prefunded stock warrants 11,193,564 Outstanding stock options 16,136,045 Common shares reserved for tranche 2 rights 46,620,046 Maximum common shares reserved for tranche 3 rights 46,620,046 Common stock options available for future grant: 2017 Inducement Equity Incentive Plan 46,250 2019 Omnibus Equity Incentive Plan, as amended on June 28, 2023 3,313,784 Total common shares reserved for future issuance 124,857,893 7. Stock-based Compensation Plans 2021 Employee Stock Purchase Plan 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 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. The purchase price of the stock is the lesser of (i) 85 % of the closing market price on the date of purchase and (ii) the closing market price at the beginning of the bi-annual offering period. The maximum number of shares initially reserved for delivery under the plan was 200,000 shares. An increase of 1 million shares to 1.2 million shares was approved by stockholders of the Company at the Company's Special Meeting of stockholders held on March 4, 2024. The first enrollment period under the plan commenced on August 1, 2021 and the Company has issued 271,842 shares life-to-date under the ESPP. The Company recognized $ 50,000 and $ 120,000 of expense related to the plan in the years ended December 31, 2024 and 2023, respectively. Stock Option Programs In July 2019, the Company’s stockholders approved the 2019 Omnibus Equity Incentive Plan, (as amended, the “2019 Plan”), which was adopted by the Board of Directors (the "Board") with an effective date of June 14, 2019. 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 were available for grant under the 2019 Plan. The 2019 Plan included an evergreen provision that allowed 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 through 2023 by a total of 4,408,871 shares. At the Company's Annual Stockholders meeting on June 28, 2023, stockholders voted to increase the allowable shares under the 2019 plan by 4,440,000 shares as well as to eliminate the evergreen provision. On March 4, 2024, the stockholders voted at the Company's Special Meeting to increase the allowable shares under the 2019 plan by 9,100,000 . The 2019 Plan (as amended on June 28, 2023 and March 4, 2024) 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. Options to purchase stock may not have an exercise price that is less than the fair market value of underlying shares on the date of grant, and may not have a term greater than ten years . Incentive stock options granted to employees typically vest over four years . Non-statutory options granted to employees, officers, members of the Board, advisors, and consultants of the Company typically vest over three or four years . Shares that are expired, terminated, surrendered or canceled under the 2019 Plan without having been fully exercised will be available for future awards. F- 20 Stock Option Repricing On March 4, 2024, the Company's stockholders voted to approve the repricing of outstanding stock options having an exercise price above $ 3.00 per share to $ 1.72 per share. All other terms of the grant remained the same. There were 3,317,596 stock options that were repriced to $ 1.72 per share. The repricing will result in $ 1.2 million of stock compensation being recognized by the Company over the remaining term of the repriced grants and $ 1.1 million of this amount was recognized in the year ended December 31, 2024. Movements during the year The following table summarizes stock option activity for the year ended December 31, 2024 and 2023 under the 2019 Plan: Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding as of January 1, 2024 6,196,140 $ 7.15 Granted 10,345,598 $ 1.24 Exercised — $ — Repricing modification — $ 9.55 Forfeited or expired ( 405,693 ) $ 2.05 Outstanding as of December 31, 2024 16,136,045 $ 1.52 8.61 $ — Options vested and expected to vest as of December 31, 2024 16,136,045 $ 1.52 8.61 $ — Options exercisable as of December 31, 2024 4,657,611 $ 2.03 7.00 $ — Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding as of January 1, 2023 3,791,688 $ 11.33 Granted 2,810,564 $ 1.70 Exercised — $ — Forfeited or expired ( 406,112 ) $ 8.52 Outstanding as of December 31, 2023 6,196,140 $ 7.15 8.14 $ 185,169 Options vested and expected to vest as of December 31, 2023 6,196,140 $ 7.15 8.14 $ 185,169 Options exercisable as of December 31, 2023 2,534,017 $ 11.33 7.19 $ 12,381 Measurement The weighted-average assumptions used in the BSM option pricing model to determine the fair value of the employee and non-employee stock option grants relating to the 2019 Plan were as follows: Risk-Free Interest Rate The risk-free rate assumption is based on U.S. Treasury instruments with maturities similar to the expected term of the stock options. Expected Dividend Yield The Company has not issued any dividends and does not expect to issue dividends over the life of the options. As a result, the Company has estimated the dividend yield to be zero . F- 21 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 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. Expected Term The expected term of options is estimated considering the vesting period at the grant date, the life of the option and the average length of time similar grants have remained outstanding in the past. The weighted-average grant date fair value of stock options granted under the 2019 Plan during the years ended December 31, 2024 and 2023 was $ 1.00 and $ 1.31 respectively. The following are the underlying assumptions used in the Black-Scholes-Merton option pricing model to determine the fair value of stock options granted to employees and to non-employees under this stock plan: 2024 2023 Risk-free interest rate 4.11 % 3.98 % Expected dividend yield 0 % 0 % Expected volatility 101.0 % 96.1 % Expected term of options (years) 6.0 6.0 Stock-Based Compensation Expense Total stock-based compensation expense for all stock awards recognized in the accompanying audited consolidated statements of operations is as follows (in thousands): Year Ended December 31, 2024 2023 Research and development $ 3,635 $ 3,398 General and administrative 4,892 3,704 Total $ 8,527 $ 7,102 As of December 31, 2024 there was $ 13.5 million in total unrecognized compensation expense relating to the 2019 Plan to be recognized over a weighted average period of 3.1 years. Summary of Equity Incentive Plans Assumed from Vital 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. There are no longer any shares available for grant under the 2014 Plan as of December 31, 2024. On September 2017, Vital’s board of directors approved the Inducement Plan, which was amended and restated in November 2017. Under the Inducement Plan 46,250 shares of Vital’s common stock were reserved to be used exclusively for non-qualified grants to individuals who were not previously employees or directors as an inducement material to a grantee's entry into employment within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. No expense was recorded for the plans assumed from Vital during the year ended December 31, 2024 and 2023, respectively. F- 22 8. Income Taxes Net loss before income tax was subject to tax in the following jurisdictions for the following periods (in thousands): Years Ended December 31, 2024 2023 United States $ ( 21,382 ) $ ( 12,859 ) Germany ( 78,914 ) ( 76,970 ) Foreign ( 211 ) ( 3,783 ) $ ( 100,507 ) $ ( 93,612 ) The rate reconciliation consists of the following: Years Ended December 31, 2024 2023 Federal statutory rate 21.0 % 21.0 % Foreign rate differential 2.8 % 3.1 % Stock options ( 1.4 ) % ( 1.2 ) % Deferred tax true-up ( 2.5 ) % 0.0 % Stock and warrant issuance cost ( 1.4 ) % 0.0 % Other ( 0.9 ) % 1.2 % Change in valuation allowance ( 17.6 ) % ( 24.1 ) % Effective tax rate 0.0 % 0.0 % Deferred income taxes result from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in years in which those temporary differences are expected to be recovered or settled. As tax laws and rates change, deferred tax assets and liabilities are adjusted through income tax expense. There is no current or deferred income tax expense in the years ended December 31, 2024 and 2023, respectively. Significant components of the Company's net deferred tax assets are shown below. A valuation allowance has been established as realization of such net deferred tax assets has not met the more likely-than-not threshold requirement. If the Company's judgment changes and it is determined that the Company will be able to realize these net deferred tax assets, the tax benefits relating to any reversal of the valuation allowance on the net deferred tax assets will be accounted for as a reduction to income tax expense. F- 23 December 31, 2024 2023 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 22,192 $ 20,768 Stock-based compensation 2,198 1,344 Intangible assets 2,630 2,743 Foreign net operating loss carryforwards 90,020 71,398 Unrealized gain or loss — 1,784 Other, net 38 1,014 Total deferred tax assets 117,078 99,051 Deferred tax liabilities: Total deferred tax liability — — Net deferred tax assets 117,078 99,051 Less valuation allowance ( 117,078 ) ( 99,051 ) $ — $ — The Company has incurred net operating losses each year since inception due to its history as a development stage company with no realized revenues from its planned principal operations. These cumulative operating losses provide significant negative evidence in the determination of whether or not the Company will be able to realize deferred tax assets such as net operating losses and other favorable temporary differences. There can be no assurance that it will ever generate taxable income. As a result, the Company has maintained a full valuation allowance against the entire balance of its net deferred tax assets since the date of inception. The valuation allowance has increased by $ 18.0 million and $ 26.0 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, Immunic had available NOLs of approximately $ 360.6 million in Germany and $ 5.6 million in Australia, respectively. These NOLs do not expire. The U.S. federal NOL carryforwards of $ 15.6 million were generated prior to 2018 and expire over 20 years beginning in 2023. The $ 89.9 million of post 2017 federal NOL carryforwards do not expire. Sections 382 of the Internal Revenue Code of 1986 subject the future utilization of net operating losses, to an annual limitation in the event of certain ownership changes, as defined. The Company may have undergone ownership changes and therefore may be limited in the amount of net operating losses available for utilization in the future. The Company did no t have any uncertain tax positions for the years ended December 31, 2024 and 2023, respectively. Due to the full valuation allowance that the Company has on its net deferred tax asset balance, there are no uncertain tax positions that would impact the effective tax rate if recognized. The Company is subject to U.S. federal, New York, California, Texas, German and Australian income taxes. The Company is subject to U.S. federal or state income tax examination by tax authorities for tax returns filed for the years 2003 and forward due to the carryforward of NOLs. Tax years 2019 through 2023 are subject to audit by German and Australian tax authorities. The Company is not currently under examination by any tax jurisdictions. Immunic, Inc. recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheet. There were no such interest or penalties for any of the years presented. 9. Commitments and Contingencies Contractual Obligations F- 24 As of December 31, 2024, the Company has non-cancelable contractual obligations under certain agreements related to its development programs in vidofludimus calcium and IMU-856 totaling approximately $ 2.4 million, the majority of which is expected to be paid by the end of 2026. Other Commitments and Obligations 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, for which the Company received a notice of allowance from the U.S. 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. Legal Proceedings The Company is not currently a party to any litigation, nor is it aware of any pending or threatened litigation, that it believes would materially affect its business, operating results, financial condition or cash flows. However, its industry is characterized by frequent claims and litigation including securities litigation, claims regarding patent and other intellectual property rights and claims for product liability. As a result, in the future, the Company may be involved in various legal proceedings from time to time. 10. Related Party Transactions Executive 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 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. 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. On October 17, 2023, Immunic, Inc. and Dr. Duane Nash entered into Addendum Number 5 to the Executive Chairman Agreement to extend the term of Dr. Nash’s employment as Executive Chairman of the Board of Directors of the Company to December 31, 2024. In connection with Addendum Number 5, the Company increased Dr. Nash’s monthly base salary to $ 32,368 from $ 30,250 (which includes the cash retainer payable for serving on the Company’s Board or for acting as the Chairman of the Board). On August 29, 2024, Immunic, Inc. and Dr. Duane Nash entered into Addendum Number 6 to the Executive Chairman Agreement to extend the term of Dr. Nash’s employment as Executive Chairman of the Board of Directors of the Company to December 31, 2025. In connection with Addendum Number 6, the Company will increase Dr. Nash’s monthly base salary in 2025 to $ 33,986 from $ 32,368 (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. F- 25 11. Segment disclosures Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision making group, in deciding how to allocate resources in assessing performance. The Company has one reportable segment: life science. The life science segment consists of the development of clinical and preclinical product candidates for the development of the Company’s proprietary new therapies. The Company’s chief operating decision maker (“CODM”) is the chief executive officer. The accounting policies of the life science segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for the life science segment based on net loss. The measure of segment assets is reported on the balance sheet as total consolidated assets. The CODM allocates resources and assesses performance on a consolidated basis, focused on the Company’s cash resources and an assessment of the probability of success of its ongoing research and development activities. Resource allocation decisions are informed by forecasted cash expenditures and actual expenses incurred to date. To date, the Company has not generated any product revenue. The Company expects to continue to incur significant expenses and operating losses for the foreseeable future as it advances product candidates through all stages of development and clinical trials and, ultimately, seek regulatory approval. The table below summarizes the significant expense categories regularly reviewed by the CODM for the years ended December 31: Years ended December 31 2024 2023 Operating expenses: Clinical product candidates $ 65,285 $ 68,999 Pre-clinical product candidates 979 1,995 Employee costs- research and development 7,854 6,917 Employee costs-general and administrative 5,315 4,478 Non-cash stock compensation 8,527 7,102 Depreciation expense 134 111 Professional fees and other segment expenses 9,958 9,621 Total operating expenses 98,052 99,223 Loss from operations ( 98,052 ) ( 99,223 ) Interest Income 3,390 3,075 Change in fair value of the tranche rights ( 4,796 ) — Other income (expense) ( 1,049 ) 2,536 Net loss $ ( 100,507 ) $ ( 93,612 ) F- 26 SIGNATURES 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. Immunic, Inc. Date: March 31, 2025 By: /s/ DANIEL VITT Daniel Vitt Chief Executive Officer and President POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Daniel Vitt and Glenn Whaley, and each of them, his or her true and lawful attorneys-in-fact, each with full power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact or their substitute or substitutes may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ DANIEL VITT Director, Chief Executive Officer (principal executive officer) March 31, 2025 Daniel Vitt /s/ GLENN WHALEY Chief Financial Officer (principal financial officer and principal accounting officer) March 31, 2025 Glenn Whaley /s/ DUANE D. NASH Executive Chairman March 31, 2025 Duane D. Nash /s/ TAMAR HOWSON Director March 31, 2025 Tamar Howson /s/ JOERG NEERMANN Director March 31, 2025 Joerg Neermann /s/ RICHARD RUDICK Director March 31, 2025 Richard Rudick /s/ BARCLAY A. PHILLIPS Director March 31, 2025 Barclay A. Phillips /s/ SIMONA SKERJANEC Director March 31, 2025 Maria Tornsen /s/ MARIA TORNSEN Director March 31, 2025 Maria Tornsen 28