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Item 1. Business

2021-03-04 compared with 2020-03-11 · 1622 added, 1558 removed, 533 unchanged (86% of the section changed)

Our objective is

to develop and commercialize our product candidates to treat diseases where the innate immune system is not functioning normally

and contributing to the patient’s disease.

This can be in cancer where Natural Killer (“NK”) cells are inactive

and contribute to a tumor’s evasion of the immune system and/or disease progression while expression of MUC4 and cells of

the tumor microenvironment such as Myeloid Derived Suppressor Cells (“MDSC”) proliferate to protect the tumor from

attack by the patient’s immune system or this can be other diseases such as neurologic and metabolic diseases where chronic

inflammation results in innate immune system dysfunction and disease progression.

Our initial focus will be the treatment of cancer,

treatment of Alzheimer’s Disease (“AD”) and non-alcoholic steatohepatitis (“NASH”).

In cancer, we

plan to pursue two parallel development programs:

objective is to develop and commercialize our product candidates to treat diseases where the innate immune system is not functioning

normally and contributing to the patient’s disease.

This can be in cancer where Natural Killer (“NK”) cells

are inactive and contribute to a tumor’s evasion of the immune system and/or disease progression while expression of MUC4

and cells of the tumor microenvironment such as Myeloid Derived Suppressor Cells (“MDSC”) proliferate to protect the

tumor from attack by the patient’s immune system or this can be other diseases such as neurologic and metabolic diseases

where chronic inflammation results in innate immune system dysfunction and disease progression or infectious disease where cytokine

storm causes a hypermetabolic state that causes the need to seek medical attention.

Our initial focus will be the treatment of

cancer, treatment of Alzheimer’s Disease (“AD”), treatment of Treatment Resistant Depression (“TRD”),

treatment of immune mediated complications due to COVID-19 and non-alcoholic steatohepatitis (“NASH”).

we plan to pursue two parallel development programs:

(1) with INKmune we will initially focus on treating resistant disease women

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we will treat patients with advanced cancers with elevated biomarkers of inflammation in their blood and evidence of disease that

is resistant to immunotherapy including women with metastatic HER2+ breast cancer.

Our third drug candidate XPro1595, targets Alzheimer’s

Disease which we initiated once we received a non-dilutive funding from the Alzheimer’s Association as a $1 million US dollar

Part-the-Cloud Award (as described below).

is progressing through Phase I trials.

Our fourth drug candidate, LivNate, will be used

to treat patients with NASH.

The principal components of our strategy to achieve this objective are to:

pursue development strategies and regulatory

approval pathways that allow the treatment of oncology patients with our lead product candidates, INKmune and INB03;

pursue development strategies and regulatory approval pathways that allow the treatment of neurodegenerative diseases in patients with our lead product candidates, XPro1595;

pursue development strategies and regulatory approval pathways that allow the treatment of NASH in patients with our lead product candidates, LivNate;

adopt a product development strategy that solidifies our existing intellectual property (“IP”) to prevent competition and expand our IP suite into related immunotherapeutic areas;

provide clear value propositions to third-party payers, such as managed care companies or government programs like Medicare, to merit reimbursement for our product candidates;

Collaborate with other pharmaceutical companies with respect to, among other things, our INKmune and the DN-TNF platform that includes INB03, XPro 1595 and LivNate product candidates and other products that will benefit from development or marketing beyond our current resources.

is resistant to immunotherapy including women with MUC4 expressing HER2+ breast cancer.

Our third drug candidate XPro1595, targets

Alzheimer’s Disease and TRD.

XPro1595 for AD is progressing through Phase I trials and is being prepared for Phase II trials.

XPro1595 for TRD is being prepared for Phase II trials.

Our fourth drug candidate, LIVNate, will be used to treat patients with

Our final drug, Quellor is in Phase II trials for the treatment of pulmonary complications due to COVID-19 infection.

principal components of our strategy to achieve this objective are to:

development strategies and regulatory approval pathways that allow the treatment of oncology patients with our lead product

candidates, INKmune and INB03;

pursue development

and regulatory approval pathways.

We believe INKmune, INB03 and XPro1595 may be approvable under pathways that are potentially

shorter than those typically available for drug products based on novel active ingredients, including as an orphan drug under the

Orphan Drug Act and approval under the Food and Drug Administration (the “FDA”) Accelerated Approval Program (see “Government

Regulation”).

We have not yet had a discussion with the Medicines and Healthcare Products Regulatory Agency (“MHRA”)

and/or FDA regarding such designation, but plan to do so in 2020.

We believe both our INB03 HER2+ metastatic breast cancer program,

high risk MDS and ovarian carcinoma treatment programs fit the criteria used by the FDA to grant these regulatory designations.

We believe that it would take a minimum of six months to receive Orphan Drug status once we submit an application and a minimum

of 12 months to receive a designation once we submit an application.

We might never have these discussions, submit applications

under the Orphan Drug Act as the FDA Accelerated Approval Program or have these applications approved if we do.

Adopt a two-pronged

patent strategy.

We are pursuing a two-pronged product development strategy that will seek to solidify our existing IP to prevent

competition and expand our IP suite into related immunotherapeutic areas.

We are confident that our core in-licensed IP (see “Intellectual

Property”) will allow us both freedom-to-operate and provide robust protection from outside competition.

We will continue

to invest in expanding our patent suite.

We will also seek to further to strengthen our IP position by looking to in-license IP

related to immunotherapeutic strategies focused on the innate immune system.

Provide clear

value propositions to third-party payors to merit reimbursement for our product candidates .

We are designing our clinical development

programs to demonstrate compelling, competitive advantages to patients and prescribers, and to demonstrate value propositions to

third-party payors.

We believe the use of INKmune and/or INB03 in patients with a high risk of tumor progression and death from

tumor should prolong survival, improve the patient’s quality of life and decrease the total cost of care for patients with

these lethal malignancies.

strategies and regulatory approval pathways that allow the treatment of neurodegenerative diseases in patients with our lead

product candidates, XPro1595;

pursue development

strategies and regulatory approval pathways that allow the treatment of pulmonary complications from COVID-19 infection patients

with our lead product candidate, Quellor;

development strategies and regulatory approval pathways that allow the treatment of NASH in patients with our lead product candidates,

a product development strategy that solidifies our existing intellectual property (“IP”) to prevent competition

and expand our IP suite into related immunotherapeutic areas;

clear value propositions to third-party payers, such as managed care companies or government programs like Medicare, to merit

reimbursement for our product candidates;

with other pharmaceutical companies with respect to, among other things, our INKmune and the DN-TNF platform that includes

INB03, XPro1595, Quellor and LIVNate product candidates and other products that will benefit from development or marketing

beyond our current resources.

development and regulatory approval pathways.

We believe Quellor, INKmune, INB03 and XPro1595 may be approvable under pathways

that are potentially shorter than those typically available for drug products based on novel active ingredients, including as

an orphan drug under the Orphan Drug Act and approval under the Food and Drug Administration (the “FDA”) Accelerated

Approval Program (see “Government Regulation”).

We have not yet had a discussion with the Medicines and Healthcare

Products Regulatory Agency (“MHRA”) and/or FDA regarding such designation, but plan to do so in the future.

both our INB03 HER2+ metastatic breast cancer program, high risk MDS and ovarian carcinoma treatment programs and our program

Quellor to treat respiratory complications due to COVID19 infection fit the criteria used by the FDA to grant these regulatory

designations.

We believe that it would take a minimum of six months to receive Orphan Drug status once we submit an application

and a minimum of 12 months to receive a designation once we submit an application.

We might never have these discussions, submit

applications under the Orphan Drug Act as the FDA Accelerated Approval Program or have these applications approved if we do.

a two-pronged patent strategy.

We are pursuing a two-pronged product development strategy that will seek to solidify our existing

IP to prevent competition and expand our IP suite into related therapeutic areas.

We are confident that our core in-licensed IP

(see “Intellectual Property”) will allow us both freedom-to-operate and provide robust protection from outside competition.

We will continue to invest in expanding our patent suite.

We will also seek to further to strengthen our IP position by looking

to in-license IP related to our focus on the innate immune system.

clear value propositions to third-party payors to merit reimbursement for our product candidates .

We are designing our clinical

development programs to demonstrate compelling, competitive advantages to patients and prescribers, and to demonstrate value propositions

to third-party payors.

We believe the use of INKmune and/or INB03 in patients with a high risk of tumor progression and death

from tumor should prolong survival, improve the patient’s quality of life and decrease the total cost of care for patients

with these lethal malignancies.

For example, ovarian cancer patients relapse frequently.

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treatment regimen that has decreasing benefits.

Treatment with INKmune as an out-patient may provide a more durable remission and

limit the need for treatment-associated hospitalizations.

At the patient level, we believe INKmune and INB03 therapy, once approved,

should improve survival and quality of life.

At the payor level, we believe INKmune, once approved, should provide more predictable

costs and outcomes.

Treatment with INKmune as an out-patient may provide a more durable remission

and limit the need for treatment-associated hospitalizations.

At the patient level, we believe INKmune and INB03 therapy, once

approved, should improve survival and quality of life.

At the payor level, we believe INKmune, once approved, should provide more

predictable costs and outcomes.

Therapies for Alzheimer’s disease are needed for medical, social and economic reasons.

The cost of Alzheimer’s

disease to the government is large and growing.

cost of Alzheimer’s disease to the government is large and growing.

The cost to families and care givers is real and burdensome.

We believe treatment

of patients with dementia, including Alzheimer’s disease, may provide a strategy to alter the costly dynamic of this disease

in society today.

NASH, a silent epidemic in the US due to the high incidence of obesity, is expected to be the most common cause

of liver transplant 2030.

We believe treatment of patients with dementia, including Alzheimer’s disease, may provide a strategy to alter the costly

dynamic of this disease in society today.

NASH, a silent epidemic in the US due to the high incidence of obesity, is expected

to be the most common cause of liver transplant 2030.

There are no approved therapies for the NASH at this time.

Collaborate to

maximize the value of our technology .

We believe treatment

of patients requiring hospitalization due to medical complications of COVID-19 infection may alter the arc of the pandemic.

effective, Quellor should allow patients to be discharged from the hospital more quickly and decrease the risk of respiratory

failure requiring mechanical ventilation.

to maximize the value of our technology .

We believe there are two reasons for us to enter collaborations with other companies.

The first is the further development of INKmune, INB03, LivNate and XPro1595 by either providing additional innovations to the

product, including combination therapy strategies, and/or providing resources to improve the speed and breadth of the development

The first is the further development of INKmune, INB03, Quellor, LIVNate and XPro1595 by either providing additional innovations

to the product, including combination therapy strategies, and/or providing resources to improve the speed and breadth of the development

The second is to optimize the commercialization of our products either globally or regionally.

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benefit us in both ways.

We continue to look

for ways to utilize our unique capabilities to optimize clinical application of cell therapies.

We believe that we have identified

a way to manufacture human mesenchymal stem cells for the medical research and biotech community that offers large volumes of high-quality,

low passage human umbilical cord mesenchymal stem cells with minimal batch-to-batch variability.

We believe this may solve the

problem associated with supplying an adequate supply of human mesenchymal stem cells for clinical applications.

The process to

produce pooled, human umbilical cord mesenchymal stem cells was developed at University College London.

We have established a reliable

supply of human umbilical cords based on our agreement with the Anthony Nolan Cord Blood Bank in the United Kingdom.

We have developed

a validated manufacturing process that reliably produces contract manufacturer of the clinical grade (“cGMP”) quality

mesenchymal stem cells.

The manufacturing process can be performed at a contract manufacturing site under the direction of Mark

Lowdell, the Company’s CSO.

We have negotiated an exclusive 10-year license to the manufacturing process from University

College London Business, the licensing organization of University College London.

We will seek academic laboratories and biopharma

companies who need a reliable source of high quality pooled human umbilical cord mesenchymal stem cells for research of and development

of clinical products.

Once identified, we plan to act as a cGMP for the development of therapeutic products by utilizing contract

manufacturers.

Because the production of the product is not continuous, we do not expect to engage a contract manufacturer until

we have a customer identified.

We have identified several contract manufacturers in the UK that have the capability to produce

cGMP stem cells.

We expect the commercial arrangement with academic laboratories or biopharma companies to be a combination of

fee-for-service and licensing that does not require additional investment by us.

We will be opportunistic in pursuing therapeutic

opportunities for our own portfolio with this platform in the future if resources become available.

The regulatory path for therapeutic

applications of the mesenchymal stem cell products is well established and similar to the regulatory approval process for other

cell therapies.

We will only be responsible for regulatory compliance related to manufacturing of the mesenchymal stem cells when

the product is being developed by a third party.

When developing a therapeutic product for the Company’s commercial portfolio,

the Company will be responsible for all aspects of the regulatory process.

Overview of Immunotherapy for Cancer

The immune system

has two parts, innate and adaptive.

The innate immune system is the body’s first line of defense against an infection, providing

immediate, non-specific responses to eliminate harmful cells in the body.

Components of the innate immune system include cytokines,

chemokines, macrophages, neutrophils and NK cells, among others.

The adaptive immune

system is often initially triggered by the innate immune system, mounts a delayed response against diseased cells and plays a role

protecting against re-infection.

An adaptive immune response is highly specific to a pathogen or antigen and is developed or learned

from prior exposure.

Key components of the adaptive immune system include antibodies which bind to antigens and mark them for destruction

by other immune cells, B-cells which produce these antibodies upon exposure to antigens, and T-cells which attack and eliminate

the diseased cells.

The biopharmaceutical

industry has made significant advances in harnessing specific components of innate and adaptive immune systems for therapeutic

continue to look for ways to utilize our unique capabilities to optimize clinical application of cell therapies.

We believe that

we have identified a way to manufacture human mesenchymal stem cells for the medical research and biotech community that offers

large volumes of high-quality, low passage human umbilical cord mesenchymal stem cells with minimal batch-to-batch variability.

We believe this may solve the problem associated with supplying an adequate supply of human mesenchymal stem cells for clinical

applications.

The process to produce pooled, human umbilical cord mesenchymal stem cells was developed at University College London.

We have established a reliable supply of human umbilical cords based on our agreement with the Anthony Nolan Cord Blood Bank in

the United Kingdom.

We have developed a validated manufacturing process that reliably produces contract manufacturer of the clinical

grade (“cGMP”) quality mesenchymal stem cells.

The manufacturing process can be performed at a contract manufacturing

site under the direction of Mark Lowdell, the Company’s CSO.

We have negotiated an exclusive 10-year license to the manufacturing

process from University College London Business, the licensing organization of University College London.

We will seek academic

laboratories and biopharma companies who need a reliable source of high quality pooled human umbilical cord mesenchymal stem cells

for research of and development of clinical products.

Once identified, we plan to act as a cGMP for the development of therapeutic

products by utilizing contract manufacturers.

Because the production of the product is not continuous, we do not expect to engage

a contract manufacturer until we have a customer identified.

We have identified several contract manufacturers in the UK that

have the capability to produce cGMP stem cells.

We expect the commercial arrangement with academic laboratories or biopharma companies

to be a combination of fee-for-service and licensing that does not require additional investment by us.

We will be opportunistic

in pursuing therapeutic opportunities for our own portfolio with this platform in the future if resources become available.

regulatory path for therapeutic applications of the mesenchymal stem cell products is well established and similar to the regulatory

approval process for other cell therapies.

We will only be responsible for regulatory compliance related to manufacturing of the

mesenchymal stem cells when the product is being developed by a third party.

When developing a therapeutic product for the Company’s

commercial portfolio, the Company will be responsible for all aspects of the regulatory process.

of Immunotherapy for Cancer

immune system has two parts, innate and adaptive.

The innate immune system is the body’s first line of defense against an

infection, providing immediate, non-specific responses to eliminate harmful cells in the body.

Components of the innate immune

system include cytokines, chemokines, macrophages, neutrophils and NK cells, among others.

adaptive immune system is often initially triggered by the innate immune system, mounts a delayed response against diseased cells

and plays a role protecting against re-infection.

An adaptive immune response is highly specific to a pathogen or antigen and

is developed or learned from prior exposure.

Key components of the adaptive immune system include antibodies which bind to antigens

and mark them for destruction by other immune cells, B-cells which produce these antibodies upon exposure to antigens, and T-cells

which attack and eliminate the diseased cells.

biopharmaceutical industry has made significant advances in harnessing specific components of innate and adaptive immune systems

for therapeutic use.

Some of these approaches are summarized below.

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for certain cancers, including chronic myeloid leukemia, cutaneous T-cell lymphoma, myeloma and non-Hodgkin’s lymphoma.

the use of interferons has generally decreased over the years due to serious adverse events ( e.g.

, flu-like symptoms and

dramatic weight loss) and introduction of new therapies with higher efficacy, better safety profiles and more convenient administration

However, the use of interferons has generally decreased over the years due to serious adverse events ( e.g.

, flu-like symptoms

and dramatic weight loss) and introduction of new therapies with higher efficacy, better safety profiles and more convenient administration

although Alpha-interferon remains the treatment of choice for some hematological conditions such as polycythemia.

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sTNF binding to

TNFR1 is responsible for inflammation and cell death while sTNF binding to TNFR2 promotes proliferation of regulatory T cells (“Treg”).

In patients with advanced cancers, increased sTNF is not favorable to long-term survival.

tmTNF can bind either TNFR to improve

the immune response, promote cell survival and stimulate remyelination.

TNFR1 is responsible for inflammation and cell death while sTNF binding to TNFR2 promotes proliferation of regulatory T cells

(“Treg”).

In patients with advanced cancers, increased sTNF is not favorable to long-term survival because it promotes

epithelial-mesenchymal transformation and metastasis while making the tumor microenvironment more immunosuppressive promoting

resistance to therapy.

In the CNS, sTNF promotes neuronal cell death, demyelination and synaptic pruning while tmTNF promotes

nerve cell survival, improves synaptic function and stimulates remyelination.

In brief, sTNF is the “bad”

TNF and tmTNF is

the “good”

In patients with cancer, infection or neurologic disease, blockade of tmTNF function has negative consequences

such as immunosuppression, increased infection and demyelination.

Antibody therapy.

tmTNF is the “good”

In patients with cancer, infection or neurologic disease, blockade of tmTNF function has

negative consequences such as immunosuppression, increased infection, synaptic dysfunction and demyelination.

Antibodies exist in three formats:

monoclonal (“mAbs”), oligo/polyclonal and antibody-drug conjugates.

mAbs represent

an effective therapeutic modality and are important to the treatment paradigm of various diseases.

Drug manufacturers have leveraged

ability to induce an antibody-dependent cell-mediated cytotoxicity, or ADCC effect to develop better treatments that

prolong survival and quality of life of patients.

In addition, mAbs designed to inhibit specific checkpoints in the immune system

have overcome in vivo immune suppression and the resulting immune responses have led to profound therapeutic benefit in some patients.

However, the degree of efficacy of these therapies is heavily reliant on the immune system of patients, many of whom are severely

immuno-compromised.

For example, despite over $1.0 billion of sales generated by recently launched PD-1 and PDL1 checkpoint inhibitors,

they are reported to be generally only effective in approximately 10% to 25% of the addressable patient population.

mAbs are manufactured through a complex process that requires purification of cell products created from a cell line.

antibodies, for example bi-specific antibodies, are able to target more than one antigen.

These are often used to bring and effector

T cell in contact with a target cell.

Antibody drug conjugates are mAbs attached to a toxin, chemotherapy or radio therapy that

delivers the cancer killing payload directly to the cancer.

Dendritic Cell

This approach is designed to indirectly stimulate a patient’s T-cells by leveraging the role of dendritic

cells in presenting antigens to T-cells.

monoclonals (“mAbs”), oligo/polyclonal and antibody-drug conjugates.

mAbs represent an effective therapeutic modality and are important to the treatment paradigm of various diseases.

Drug manufacturers

have leveraged mAbs’

ability to induce an antibody-dependent cell-mediated cytotoxicity, or ADCC effect to develop better

treatments that prolong survival and quality of life of patients.

In addition, mAbs designed to inhibit specific checkpoints in

the immune system have overcome in vivo immune suppression and the resulting immune responses have led to profound therapeutic

benefit in some patients.

However, the degree of efficacy of these therapies is heavily reliant on the immune system of patients,

many of whom are severely immuno-compromised.

For example, despite over $1.0 billion of sales generated by recently launched PD-1

and PDL1 checkpoint inhibitors, they are reported to be generally only effective in approximately 10% to 25% of the addressable

patient population.

In addition, mAbs are manufactured through a complex process that requires purification of cell products created

from a cell line.

Polyspecific antibodies, for example bi-specific antibodies, are able to target more than one antigen.

are often used to bring and effector T cell in contact with a target cell.

Antibody drug conjugates are mAbs attached to a toxin,

chemotherapy or radio therapy that delivers the cancer killing payload directly to the cancer.

Cell Therapies.

This approach is designed to indirectly stimulate a patient’s T-cells by leveraging the role of

dendritic cells in presenting antigens to T-cells.

Cancer vaccines are the most common application of dendritic cells.

The only FDA-approved

dendritic cell therapy is PROVENGE, which entails collecting monocytes from the patient, maturing them into dendritic cells, “loading”

FDA-approved dendritic cell therapy is PROVENGE, which entails collecting monocytes from the patient, maturing them into dendritic

cells, “loading”

ex vivo with the patient’s cancer antigens, and then re-infusing in the patient.

Currently, this process is cumbersome

and expensive, and again, relies on an intact and effective immune system of the patient.

There are additional ongoing preclinical

studies and clinical trials being conducted by our competitors aimed at addressing certain of the limitations associated with this

this process is cumbersome and expensive, and again, relies on an intact and effective immune system of the patient.

additional ongoing preclinical studies and clinical trials being conducted by our competitors aimed at addressing certain of the

limitations associated with this approach.

To date, current clinical results of dendritic cell therapies have been mixed.

CAR-T and TCR

T-cells recognize diseased cells by receptors engaging with antigens that are present on or inside the diseased

CAR-T therapy entails genetically engineering T-cells to express synthetic CARs that direct T-cells to antigens on the surface

of cancer cells.

TCR therapy modifies T-cells to express high-affinity tumor specific TCRs that recognize intra-cellular antigens

that must be presented on the surface of target cells.

In early clinical trials, CAR-T and TCR therapies have demonstrated impressive

anti-tumor activity in a narrow spectrum of hematologic cancers and garnered significant attention by research institutions and

biopharmaceutical companies.

and TCR Therapies.

T-cells recognize diseased cells by receptors engaging with antigens that are present on or inside

the diseased cells.

CAR-T therapy entails genetically engineering T-cells to express synthetic CARs that direct T-cells to antigens

on the surface of cancer cells.

TCR therapy modifies T-cells to express high-affinity tumor specific TCRs that recognize intra-cellular

antigens that must be presented on the surface of target cells.

In early clinical trials, CAR-T and TCR therapies have demonstrated

impressive anti-tumor activity in a narrow spectrum of hematologic cancers and garnered significant attention by research institutions

and biopharmaceutical companies.

We believe a key limitation of adaptive autologous immunotherapy is the need to retrieve non-compromised

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The cost of a single therapy is many hundreds of thousands of dollars.

As a consequence of this need to harvest active T-cells, current Phase I clinical trials for autologous CAR-T cell therapy in large

part enroll patients from highly selected, often relatively early-stage disease in a narrow spectrum of cancers, including bulky

hematological cancers.

As a consequence of this need to harvest active T-cells, current Phase I clinical trials for autologous CAR-T cell therapy in

large part enroll patients from highly selected, often relatively early-stage disease in a narrow spectrum of cancers, including

bulky hematological cancers.

In addition, Phase I clinical trials of CAR-T cell immunotherapy have reported severe adverse toxicities

of cytokine release syndrome and neurotoxicity, requiring hospitalization, pre-conditioning and, in some instances, intensive care

unit admission following side effects associated with cytokine release syndrome.

As a result, though our competitors continue to

develop their CAR-T and TCR product candidates with the goal of addressing certain of the limitations associated with these approaches,

we believe these serious challenges may limit their potential and use in a variety of indications, including solid tumors.

of cytokine release syndrome and neurotoxicity, requiring hospitalization, pre-conditioning and, in some instances, intensive

care unit admission following side effects associated with cytokine release syndrome.

As a result, though our competitors continue

to develop their CAR-T and TCR product candidates with the goal of addressing certain of the limitations associated with these

approaches, we believe these serious challenges may limit their potential and use in a variety of indications, including solid

Immune cells express proteins that are immune checkpoints that control and down-regulate the immune response.

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CPI have become the backbone of cancer therapy and are expected to be the best -selling class of drugs

cells typically represent approximately 2% to 13% of circulating lymphocytes and are a critical component of the immune system

responsible for innate immunity.

Unlike adaptive immune cells, they are ever present and ready to attack, having the inherent ability

to detect and eliminate diseased cells without the need for antigen presentation, which is why they are called “natural killers.”

NK cells bind to

stress ligands expressed by the diseased cells and directly eliminate them.

This binding induces NK cells to release cytokines,

including, interferons and GM-CSF, which are integral in recruiting additional innate and adaptive immune responses by the host.

NK cells also represent a critical effector cell for ADCC, whereby target cells bound with human antibodies, whether made by the

patient’s body or administered, are selectively destroyed by the NK cells.

NK cells typically represent approximately 2% to 13% of circulating lymphocytes and are a critical component of

the immune system responsible for innate immunity.

Unlike adaptive immune cells, they are ever present and ready to attack, having

the inherent ability to detect and eliminate diseased cells without the need for antigen presentation, which is why they are called

“natural killers.”

cells bind to stress ligands expressed by the diseased cells and directly eliminate them.

This binding induces NK cells to release

cytokines, including, interferons and GM-CSF, which are integral in recruiting additional innate and adaptive immune responses

NK cells also represent a critical effector cell for ADCC, whereby target cells bound with human antibodies, whether

made by the patient’s body or administered, are selectively destroyed by the NK cells.

MDSC are present in very low quantities in healthy patients.

MDSC develop and proliferate in patients with chronic infection and

MDSC develop and proliferate in patients with chronic

infection and with cancer.

In cancer, MDSC are a unique and well-defined cell population that home to the cancer and secrete immunosuppressive

cytokines that provide a protective, immunosuppressive shield to the tumor.

This protective immunosuppressive shield prevents the

patient’s immune system from attacking the tumor.

The presence of MDSC in the tumor microenvironment and/or circulating in

the patient’s blood predict for more advanced disease, resistance to immunotherapy and a worse patient survival.

Our NK cell Directed Product

INKmune is our lead

product candidate that converts resting NK cells into primed NK cells, an essential step in them becoming activated cancer-killing

We have shown this works ex vivo in human tissue cell cultures, and we believe that this will work in vivo which is the

purpose of our planned clinical trials.

Cancers grow and relapse because they evade the immune system.

NK cells are the most important cell for the elimination of residual disease that causes cancer relapse.

NK cells target cells based on a series of complex antigens on the cancer cell surface that signal the NK cells to activate and kill the cancer cell.

This protective immunosuppressive shield prevents

the patient’s immune system from attacking the tumor.

The presence of MDSC in the tumor microenvironment and/or circulating

in the patient’s blood predict for more advanced disease, resistance to immunotherapy and a worse patient survival.

Innate Immune Dominant-Negative TNF product candidate

renamed XPro1595, which we license from Xencor, to INB03 when it is used for cancer related indications.

We will continue

to call the drug XPro1595 when used for treatment of neuropsychiatric diseases, including Alzheimer’s disease and TRD discussed

We call the drug Quellor and LIVNate respectively for treatment of pulmonary complications of COVID-19 and NASH respectively.

Quellor, LIVNate, INB03 and XPro1595 are the same drug with different names for marketing purposes.

INB03 is a novel innate immune

system check-point inhibitor that we believe decreases expression of MUC4 by the tumor, an important resistance mechanism to immunotherapy,

decreases proliferation of MDSC and decreases the secretion of immunosuppressive cytokines that protect the tumor from the patient’s

immunologic attack and help make the tumor resistant to immunotherapy.

INB03, by inhibiting soluble TNF without inhibiting trans-membrane

TNF or TNF receptors (“tmTNF”

and “TNFR”

respectively), decreases expression of MUC4, alters the immunoregulatory

cell and cytokine profile of the tumor microenvironment to decrease the population of MDSC, decrease immunosuppressive cytokines

and increase immunoregulatory cytokines that changes the patient’s immune response to their tumor with improved NK/DC crosstalk

that causes expansion of the immune response including recruitment of the adaptive immune system with an increase in effector

and cytotoxic T cells that attack the cancer allowing for decreased resistance to immunotherapy including immune checkpoint inhibitors

(CPR), anti-HER2 immunotherapy such as Herceptin and kinase inhibitors such as lapatinib.

By using INB03 as part of combination

therapy for cancer, we believe the patient’s dysregulated immune response, a hallmark of cancer progression and resistance

to therapy, to be converted to a coordinated immune response that can overcome resistance mechanisms to immunotherapy.

responses have been studied in two animal models.

In a murine model of an inflammatory cancer, where 3-methylcholanthrese is given

to mice in a subcutaneous injection that causes the development of multiple cutaneous fibrosarcoma.

This model was developed by

Y Akamatsu in 1967 while working at the National Cancer Institute of the NIH.

In research published by Professor Nikola Vujanovic

in Cancer Immunology Research in 2016, treatment with INB03 resulted in smaller and fewer cancers with increased

INB03 is an engineered PEGylated protein that neutralizes human soluble TNF, a human inflammatory cytokine that is increased

in patients with advanced cancer.

By specifically neutralizing the cytokine, there is decreased phosphorylation of STAT3, an essential

step required for the proliferation of the MDSC population, and secretion of the immunosuppressive cytokines.

The combination

of decreased MDSC proliferation and decreased immunosuppressive cytokines allows the immune system to respond to the tumor.

data was published in an article entitled Inhibition of Soluble Tumor Necrosis Factor Prevents Chemically Induced Carcinogenesis

in Mice in Cancer Immunology Research in Cancer Immunology Research 2016.

In summary, INB03 functions as an innate

immune system checkpoint inhibitor by eliminating the population of MDSC that provides an immunosuppressive shield protecting

the tumor, the patient’s immune system is able to function normally to the benefit of the patient –

it can attack

TNF plays an important role in breast cancer (Schillaci R, Front.

Oncol., 22 April 2020 | https://doi.org/10.3389/fonc.2020.00584 ).

In a murine model of trastuzumab resistant breast cancer using JMIT-1 cells, a human cell line of HER2 positive breast cancer

resistant to trastuzumab placed into immunocompromised mice, INB03 downregulates MUC4 from the surface of the JMIT-1 HER2+ breast

cancer cells to allow the trastuzumab resistant cells to become trastuzumab sensitive (Figure A from Bruni, NYAS 2020) to decrease

tumor growth (from Schillaci SABCS 2018, Figure B).

JMIT-1 cells are also resistant to lapatinib, a TKI inhibitor used as a second

line therapy in women with trastuzumab resistant HER2+ breast cancer.

The addition of INB03 to lapatinib in the animal model reverses

lapatinib resistance in part by decreasing expression of MUC4 (from Bruni NYAS 2020, Figure C).

In addition to decreasing resistance

to trastuzumab by decreasing MUC4 expression, INB03 decreases the immunosuppressive tumor microenvironment (Schillaci SABCS 2018,

Bruni NYAS 2020).

These data are relevant to all tumors that express HER2 and MUC4 including upper gastrointestinal malignancies

such as gastric and pancreatic cancer.

INB03 targets the patient’s immune system and not the tumor, we believe INB03 is an immunotherapy that can be used to treat

many types of hematologic malignancies and solid tumors as part of combination therapy.

The decision to use INB03 in a patient

will be based on biomarkers that should predict that a patient will benefit from treatment with the drug.

MDSC rarely exist in

patients without cancer or chronic inflammation.

Because MDSC can be measured in the tumor and/or blood of patients with immune

dysregulation and chronic inflammation caused by their cancer, MDSC blood levels i) have prognostic value predicting cancer stage

and risk of dying from cancer;

ii) may be used as a biomarker to target patients who will benefit from INB03 therapy and iii)

should be biomarkers demonstrating a pharmacodynamic effect of INB03.

Other biomarkers of inflammation may be useful in predicting

if a patient will benefit from therapy with INB03 such as Our Phase I clinical trial focused on using INB03 as monotherapy.

is a typical Phase I clinical trial design for first-in-man trials in cancer.

We expect to use INB03 as part of combination therapy

with approved cancer therapies as part of Phase II development.

We do not expect to need to modify INB03 therapy to treat each

different type of cancer, because INB03 therapy targets the immune system, not the cancer.

We do expect to develop the INB03 beyond

Phase II to target a specific type of cancer to meet the current system of regulatory approval.

For instance, INB03 may be approved

to treat patients with elevated MDSC who have lung cancer.

To get subsequent approval for the treatment of patients with renal

cell cancer who have increased MDSC, we will need to perform a pivotal trial in patients with renal cancer.

Likewise, if we want

to get approval of treatment of women with HER2 positive breast cancer who express MUC4, we will need to perform a trial in those

patients and the results of that trial may be independent of MDSC levels.

After the first regulatory approval, if and when achieved,

we believe the difficulty and cost of achieving these labels extensions will decline with each successive approval.

At this time,

we cannot predict if patients without biomarkers of inflammation, elevated MDSC or cytokines, or increased expression of MUC4

will benefit from treatment with INB03.

Those studies may be performed in the future, but they are not a priority.

neutralizes soluble TNF in the brain in exactly the same way INB03 neutralizes soluble TNF in the tumor microenvironment but the

effects of soluble TNF neutralization in the brain are different.

The cause of the destructive neuroinflammation in the brain

are microglial and astroglial cells.

The glial cell are two of four cells in the neural unit that also includes oligodentrocytes

and nerve cells.

Activated microglial cells are considered the resident macrophages of the brain.

The primary role of microglial

cells is to protect the neural unit from infection.

When innate immune dysfunction causes chronic inflammation, activated microglial

cells produce soluble TNF that activates astrocytes.

Activated glial cells cause nerve cell and oligodrocyte dysfunction that

results in synaptic pruning, nerve cell death and demyelination of neurons.

These pathologies contribute, in part, to neurodegenerative

diseases such as AD, Parkinson’s disease, ALS, MS, Huntington’s disease, glaucoma and TBI (traumatic brain injury)

may contribute to neuropsychiatric diseases such as depression, bi-polar disease, sleep disorders, autism, schizophrenia and PTSD.

In the setting of AD, microglial activation causes dendritic pruning, synaptic dysfunction and nerve cell death that contributes

to cognitive decline and the behavioral manifestations of AD including depression, aggressiveness, sleep disorders, hallucinations

and anhedonia.

Elimination of microglial activation should reverse these symptoms.

Because soluble TNF is the apex cytokine in

the inflammatory cytokine cascade, neutralization of soluble TNF with XPro1595 should prevent glial activation and normalizes

function of the neural unit.

Company has an on-going Phase I trial using XPro1595 to reverse neuroinflammation in patients with Alzheimer’s disease.

The trial is being performed in Australia and is partially funded by a $1M USD Part-the-Cloud Award from the Alzheimer’s

The clinical trial is the first in the Company’s development program for the treatment of dementia.

label, dose escalation trial in patients with Alzheimer’s disease with biomarkers of peripheral inflammation (one of CRP>1.5mg/L,

HgbA1c>6.0, ESR>10sec or have ApoE4) treats the patients with XPro1595 as a once-a-week subcutaneous injection for 3 months.

Patients have multiple biomarkers of neuroinflammation tested before and during therapy including soluble biomarkers in blood

and cerebral spinal fluid, volatile biomarkers in breath, behavioral biomarkers (neuropsychiatric symptoms of AD) and neuroimaging

biomarkers using MRI.

The primary goal of this short, open label study is to demonstrate that treatment with XPro1595 decreases

neuroinflammation safely and to define the dose of XPro1595 to use in the Phase II trial.

Studies of cognitive function are performed

on the patients but are not expected to show significant change because of the short duration of the trial and the wide range

of disability in patients enrolled in the clinical trial (MMSE range:

The goal of the planned Phase II trial will be to

demonstrate the prolonged control of neuroinflammation in patients with dementia will help control cognitive decline.

the trial has not been designed, we expect the trial be of a longer duration than the Phase I trial.

trial continues to enroll patients.

More than half of the expected 18 patients have been enrolled.

Preliminary data was presented

in a webinar on 13 July 2020.

Neuroimaging data from six patients were presented in the figure below.

In summary, treatment with

XPro1595 at either 0.3 or 1.0mg/kg once-a-week as a subcutaneous injection (low and high dose respectively) decreased white matter

free water (WMFW) as measured by MRI.

WMFW is a validated biomarker of neuroinflammation.

Although the number of patients is low,

there was a dose response with a greater decrease in WMFW in the high dose compared to the low dose group.

An analysis of inflammation

in white matter tracts demonstrated a significant decrease in WMFW (40%;

range 20-52%) in the arcute fasciculus, a white matter

tract important in the control of language and short-term memory (Figure D).

These data suggest XPro1595 is decreasing neuroinflammation

in patients with Alzheimer’s disease who have biomarkers of peripheral inflammation.

data was presented on January 21, 2021.

The goal of the January 21 data release was to show a correlation between the white matter

free water, a novel biomarker of inflammation with cerebral spinal fluid (“CSF”) cytokines and chemokine levels, a

traditional measure neuroinflammation.

CSF cytokine/chemokines were measure in 9 patients before and after 12 weeks of weekly

therapy with XPro1595 using a panel from OLINK Target 48 Cytokine ( https://www.olink.com/products/olink-target-48-cytokine/ ),

that measures 45 (Figure AD1).

the 6 patients in the 1mg/kg per week dose, only one cytokine and chemokine, interferon gamma (INFg) did not change in the CSF

of patients, the remainder all decreased on average of 15%.

Using data from all patients treated for 12 weeks (3 low dose, 6 high

dose), a high correlation (R 2 =.7561) between the white matter free water safe mase and the inflammation composite score

is shown in figure AD2.

The data analyzed provides evidence that XPro1595 decreases neuroinflammation in patients with Alzheimer’s

We believe these data

support the use of XPro1595 to treat other diseases where neuroinflammation is a part of the pathophysiology of the disease.

company studied the consequences of decreasing neuroinflammation in the 6 patients from high dose group (XPro1595 1mg/kg for 12

weeks) be looking at the CSF proteome using technology for Proteome Sciences using their TMT Calibrator™

platform ( https://www.proteomics.com/services/tmtcalibrator-workflow ).

A large data set of proteins were identified.

Early analysis of the data focusing on 26 AD related proteins demonstrated changes

in inflammation, neuronal and synaptic proteins caused by decreasing neuroinflammation after treatment with XPro1595 (Figure AD3).

The proteome also demonstrated a clear dose response with a greater number of proteins being affected by the high dose compared

to low dose XPro1595 therapy (0.3 vs 1.0 mg/kg/week for 12 weeks) (Figure AD4).

The CSF proteome data is only partially analyzed.

Additional data may result from these ongoing analytics.

In summary, these data allow the Company to commit to initiating a blinded

randomized Phase II trial in Alzheimer’s disease patients with peripheral biomarkers of inflammation in the second half of

The design of the trial has not been finalized nor has the Company had discussions with the FDA.

Hence the precise start

date depends on gaining regulatory approval for trial initiation by the FDA and resolution of the COVID19 pandemic.

infection causes a cytokine storm in many patients.

The cytokine storm includes elevated levels of TNF, IL6, IL1 and other pro-inflammatory

cytokines in the patient’s blood.

The cytokine storm correlates with symptoms of COVID19 of one or more organ systems -

neurologic, gastrointestinal, pulmonary, cardiovascular and renal.

In 20% of patients, the cytokine storm causes severe enough

symptoms to require hospitalization.

Targeting soluble TNF may have benefit in hospitalized patients with cytokine storm for two

TNF may be the “master cytokine”.

Up-regulation of TNF is required for expression of IL6 and IL1, the two

other prominent cytokines of the cytokine storm.

TNF activates endothelial cells to upregulate Tissue Factor that cause the formation

of blood clots.

Aberant blood clots contribute to the pathology in patients with COVID-19 infection.

Company initiated a blinded randomized trial using Quellor to treat hospitalized patients with respiratory symptoms due to a COVID-19

The 366-patient trial is being perform under an FDA IND#151,834 in multiple centers in the US.

The trial includes a

Go/NoGo decision by the Data Safety Monitoring Board (“DSMB”) after the first 100 patients.

No data will be released

by the DSMB other than the trial should continue or be closed.

The trial enrolls patients admitted to the hospital who are considered

high risk for developing the need for mechanical respiratory support.

Patients are randomized to receive a single dose of Quellor,

1mg/kg as a subcutaneous injection or placebo.

If patients remain in the hospital for one week, they may get a second dose of

the investigational product.

The primary end-point is the need for mechanical ventilation or death by 28 days.

The final safety

visit is at or about day 40.

Quellor is identical to XPro1595, INB03 and LIVNate.

The trial is listed on www.clinicaltrials.gov .

therapy for TRD is a large unmet need.

Twenty percent of patients with a Major Depressive Disorder have TRD.

Once third of TRD

patients have peripheral biomarkers to inflammation (elevated CRP).

This is a large patient population.

The role of TNF and anti-TNF

therapeutics was explored in a small open label clinical trial by Prof.

Andrew Miller, MD of Emory University demonstrated the

patients have elevated TNF levels and treatment with infliximab treated their depression (Miller, 2011).

The Company received

a $2.9M USD award from the National Institute of Mental Health (“NIMH”) to treat TRD with XPro1595.

The blinded, randomized

Phase II trial will use a biomarkers of peripheral inflammation to select patients with TRD for enrollment.

Patients will be treated

Primary end-points include both clinical and neuroimaging measures.

The final trial design is ongoing and discussions

with the FDA are not complete.

The Company anticipates receiving authorization to initiate the clinical trial in the second half

neutralizes soluble TNF in the treatment of NASH the same way that INB03 and XPro1595 neutralize soluble TNF for the treatment

of cancer and neurodegenerative diseases respectively.

NASH is a complex disease with inflammatory, metabolic and fibrotic components

that contribute to disease progression.

The effects of LIVNate on NASH are diverse.

Based on murine data, we believe there are

3 major pathologic cycles that contribute to NASH.

The peripheral pathologic cycle is metabolic with obesity and insulin resistance

contributing to the inflammatory and metabolic process that drives NASH.

The regional pathologic cycle includes intestinal inflammation

with resulting leaky gut that drives the development mesenteric fat.

All three elements contribute to a highly inflammatory mileau

delivered directly to the liver via the portal vein.

The local pathologic loop includes lipotoxicity and innate immune dysfunction

caused by activated hepatic stellate cell, natural killer cells and hepatocytes.

These pathologic cycles cause hepatocyte death,

inflammation and fibrosis –

the pathologic hallmarks of NASH.

In murine models of NASH, LIVNate has effects on each pathologic

cycle decreasing insulin resistance, intestinal inflammation and leak, hepatic inflammation, hepatocyte death and fibrosis.

results must be confirmed in humans.

XPro1595, Quellor and LIVNate, are delivered as a subcutaneous injection, similar to an insulin treatment, given one to three

times per week.

Because this is a simple subcutaneous injection similar to an insulin injection (the therapy patients give themselves

for treatment of Type 1 diabetes mellitus), we expect patients to administer the therapy to themselves and not require expensive

or logistically challenging clinic visits to receive the therapy.

step process to preparation for INB03, XPro1595, Quellor and LIVNate for human clinical trials:

of INB03, XPro1595, Quellor and LIVNate drug supply

DN-TNF product (INB03, XPro1595, Quellor and LIVNate) are available for clinical development after completion of release testing.

The annual process for release testing was completed in February 2018, January 2019, December 2019 and November 2020.

of DN-TNF product is limited, but enough to complete the planned Phase I study in Alzheimer’s disease and Phase II studies

in hospitalized patients with COVID-19.

The re-release dossier has been submitted to the regulatory authorities in Australia and

the US (the FDA).

We received notification on May 2018 that the INB03 can be used for oncology clinical trials and in May 2019

that XPro1595 can be used in Alzheimer’s disease clinical trials in AUS and in August 2020 that Quellor can be used for

the COVID-19 clinical trial in the US.

For future trials, new batches of INB03, XPro1595, Quellor and LIVNate will need to be

We plan to use a two-step approach to production of the new drug supply.

We hope to improve the yield of the drug product

using the existing E.coli based system.

Once the new process is validated and functional, we will perform a manufacturing

campaign drug for future clinical trials.

This process has started at our manufacturing vendor KBI.

The company expects the first

batches of new drug to be available 4Q21 assuming that manufacturing materials remain available and are not consumed by COVID-19

vaccine manufacturers.

We expect the existing drug supply to support clinical development program until mid-2021.

New drug supply

may not be available before the existing drug supply has been exhausted.

with Regulatory Authorities Regarding INB03, XPro1595 and LIVNate Development

We have completed a

Phase I trial with INB03 in oncology.

We are enrolling patients in a Phase I trial with XPro1595 in patients with Alzheimer’s

disease and a Phase II trial with Quellor to treat hospitalized patients with respiratory complications from COVID-19.

II program with Alzheimer’s disease will start after completion of the on-going Phase I program.

The Phase I trial with XPro1595

in patients with Alzheimer’s disease is performed in Australia under the regulatory authority of the TGA using the Clinical

Trials Exemption (“CTX”) scheme.

Our first interaction with the regulatory body occurred in March 2018.

received approval to initiate the Phase I trial with INB03 in patients with advanced solid tumors on May 21, 2018.

interaction with the regulatory body occurred in March 2019.

The Company received approval to initiate the Phase I trial with

XPro1595 in patients with Alzheimer’s disease in May 2019.

Our first interaction with the FDA occurred in July 2020.

We received authorization to begin enrolling patients in the COVID19 trial late August 2020.

We plan to discuss the Phase II Alzheimer’s

disease and Phase II TRD clinical trials with the FDA during the first half of 2021.

Product Development Path:

Proposed Phase II Studies in patients with cancer

I open label study in patients with advance solid tumors has been completed.

All future studies cancer will use INB03 as part

of combination therapy.

Based on the results of the Phase I study and work performed and reported by Prof.

Roxana Schillaci, we

are planning a study of INB03 in combination with currently approved second line therapy for treatment of tumors that express

This may include a study in women with trastuzumab resistant HER2+ metastatic breast cancer where primary or secondary resistance

to trastuzumab is common and may include women with brain metastasis.

Alternatively, a combination therapy trial in MUC4 expressing

tumors of the upper gastrointestinal tract such as gastric or pancreatic cancer may be performed.

These trials will not be initiated

until the COVID-19 pandemic has run its course.

We do not expect to treat patients in a Phase II trial with INB03 before 2022.

Registration Studies and/or Partnering

plan to pursue an efficient registration strategy using INB03 to improve the lives of patients with cancer and biomarkers of inflammation.

We believe that this strategy has use across many types of solid tumors including patients who have failed CPI, tyrosine kinase

inhibitors (“TKI”) and anti-cancer antibody therapy We have an active partnering position as it relates to INB03 development

in cancer, although no partnering discussion are underway at this time.

We do not expect partnering discussions to begin until

Phase II data demonstrating efficacy of INB03 as part of combination therapy for cancer are available.

INB03 platform can be used in cancer patients in many ways.

The Phase I trial suggests the drug should not be used alone to treat

cancer but used in combination with, but not limited to, other cancer therapies including cytotoxic chemotherapy, immunotherapy,

radiation and surgery.

We believe that INB03 can also be used to treat many types of hematologic and epithelial cancers.

XPro1595, Quellor and LIVNate Regulatory Strategy

from the DN-TNF platform will be developed using adequately powered, well designed studies with the goal to demonstrate a meaningful

clinical benefit to patients.

In general, these will be blinded, randomized clinical trials using validated end-points that have

been authorized by a regulatory authority –

the FDA, TGA, MHRA, EMA, etc.

Currently, all planned studies will be performed

in North America, AUS and/or the UK.

Studies will be expanded to Europe and beyond as resources permit and development needs expand.

Because there are no therapies similar to INB03, XPro1595, Quellor or LIVNate approved in any market and no therapies approved

for the treatment of the diseases we are pursuing, we plan to take advantage of the regulatory opportunities afforded to therapies

that treat markets with a high unmet need.

In the U.S., this includes Orphan Drug Designation and expedited programs for approval

including Accelerated Approval, Breakthrough Therapy Designation, Fast Track Designation, and priority review (see “Government

Regulation”), and in the setting of COVID-19, Emergency Use Authorization.

We cannot predict which, if any, of these programs

we will benefit from without further discussions with the FDA.

Similar programs exist in the EU with the EMA.

We will engage the

EMA once we have initiated Phase II trials in the United States and Australia.

Immunotherapy

for Treatment of Alzheimer’s Disease

is being developed for the treatment of Alzheimer’s disease.

XPro1595 is identical to INB03, Quellor and LIVNate in every

way but name.

The name XPro1595 will be used as the drug name in the Alzheimer’s disease development program.

activation and neuroinflammation are important causes of the synaptic dysfunction and nerve cell death that causes cognitive decline

in patient with dementia and Alzheimer’s disease.

The relationship between β

amyloid plaques and tau neurofibrillary

tangles, the traditional targets in AD drug development and neuroinflammation is complex.

We believe targeting plaques and tangles

is not an effective treatment strategy, but that targeting neuroinflammation, the final common pathway of synaptic dysfunction

and nerve cell death is.

Substantial direct pre-clinical data supports the use of XPro1595 in murine models of AD.

indirect data supports use of XPro1595 in humans including a decreased risk of AD in patients treated with non-selective TNF inhibitors

for rheumatoid arthritis and treatment using direct injection into paraspinous venous plexus.

Because of different mechanism of

action of XPro1595 compared to the non-selective TNF inhibitors, we expect a lower risk of immunosuppression and demyelinating

diseases such as MS.

The Company reported preliminary data on July 13, 2020 and January 21, 2021 supporting the use of XPro1595

to decrease neuroinflammation in patients with Alzheimer’s disease and biomarkers of peripheral inflammation (see above)

continue to enroll patients into an open label, biomarker directed, Phase I clinical trial in AUS that approaches AD as an immunologic

Patients with dementia who have the diagnosis of AD with biomarkers of chronic inflammation that includes at least one

of a hs-CRP>1.5 mg/L, a ESR>10 mm/h, a HbgA1C>6.0% or are ApoE4 positive will be treated with XPro1595 for 12 weeks.

Three dosing cohorts were planned –

0.3, 1.0 and 3 mg per week as a subcutaneous injection.

Patients will have 5 groups

of inflammatory biomarkers test before therapy, at 6 weeks and at 12 weeks.

Biomarkers will be tested in blood and cerebral spinal

fluid, white matter free water will be determined by MRI and a “breath test”

measuring exhaled volatile organ compounds

will be used to determine a signature of inflammation in AD patients.

Finally, behavioral biomarkers of fatigue, depression aggression,

anhedonia and sleep disorders, behaviors that are very sensitive to neuroinflammation, will be cataloged using validated scales

to determine if these behaviors improve as neuroinflammation is brought under control.

The first patient was enrolled in the low

dose 0.3mg/kg/week cohort in the last week of November 2019.

The Safety Review Committee met by teleconference on January 7, 2020

to review the course of the patients in the first cohort and voted to open the second cohort, 1.0mg/kg/week, to enrollment.

first patients were enrolled in the cohort the second week of February 2020.

Based on preliminary data released on July 13, 2020

and January 21, 2021, we are confident that the clinical trial will be closed after completion of a 0.6mg/kg treatment group.

We have canceled plans to treat patients with 3.0mg/kg.

If safety is confirmed, the data from the Phase I trial will allow the

Company to choose a dose to bring forward into the Phase II trial and select biomarkers for that trial.

We plan to meet with the

FDA to present our plans for the Phase II study in patients with AD in the first half of 2021.

If those meetings and subsequent

regulatory filings are successful, we plan to start treating patients in the Phase II trial in the second half of 2021.

Registration Studies and/or Partnering

plan to aggressively pursue an efficient registration strategy using XPro1595 to improve the lives of patients with AD with biomarkers

of inflammation.

We believe AD is not the only indication for XPro1595 in neurodegenerative and neuropsychiatric diseases.

plan to pursue other indications in neurodegenerative diseases as resources become available.

We have received NIMH funding to

support a Phase II TRD program that hopes to start patient enrollment in the second half of 2021.

We have an active partnering

position as it relates to XPro1595 development in neurodegenerative and neuropshyciatric diseases, although no partnering discussion

are underway at this time.

There are two partnering opportunities with this novel immunotherapy for the treatment of neurologic

and psychiatric diseases.

The first is a traditional partnership focused on the developing the drug for all neurodegenerative

and neuropsychiatric applications.

The second is a more focused partnership developing XPro1595 as part of a combination therapy

for a company’s existing therapy.

After completion of proof-of-concept Phase II studies, we will decide what the most efficient

registration strategy is available to the company with XPro1595.

We may to have biopharma partners participate in this decision

We may also seek to be acquired at this stage.

Immunotherapy

for the treatment of NASH

is being developed for the treatment of NASH.

LIVNate is identical to INB03, Quellor and XPro1595 in every way but name.

LIVNate will be used as the drug name in the NASH development program.

NASH is a pleiotropic disease with elements of metabolic,

immunologic and fibrotic pathophysiology contributing to disease development and progression.

The Company believes targeting the

metabolic and immunologic pathology is the best way to treat NASH.

Furthermore, we believe there are three pathologic drivers

of NASH, two which originate beyond the liver (refer to Figure 7 below).

The peripheral pathologic loop includes obesity and insulin

The regional pathologic loop includes intestinal inflammation, intestinal leak and mesenteric fat, a source of inflammatory

factors that are concentrated in portal blood.

Finally, the local pathologic loop is caused by lipotoxicity and innate immune

activation in the liver that results in hepatocyte death, hepatitis and fibrosis, the hallmarks of NASH.

In murine studies of

NASH, LIVNate reverses insulin resistance, intestinal inflammation and decreases the NAS (“NAFLD Activity Score”)

and Fibrosis score suggesting that LIVNate may be an effective therapy for the treatment of NASH.

are planning an open label Phase II study of patients with NASH.

The study is planned as a proof-of-concept study in patients

with F3/F3 disease defined by non-invasive laboratory and imaging studies.

Patients will be treated with LIVNate for 6 months

by once a week subcutaneous injection.

We do not plan to perform liver biopsies as any part of the study.

If the study is positive,

further development of LIVNate in NASH will be considered.

Further development may include additional clinical trials alone or

with a partner or divesting the program.

This clinical trial has been delayed due to the COVID-19 pandemic.

We do not expect to

enroll patients into a NASH Phase II clinical trial until 2022 at the earliest.

Registration Studies and/or Partnering Programs

NASH is an exceptionally dynamic area of drug development, the Company will decide on a development and/or partnering program

after the completion of the Phase II study.

At this time, it is impossible to predict the development and commercial landscape

or to know if LIVNate can be used to treat NASH as a stand-alone drug or as part of combination therapy.

Finally, the market for

treatments of metabolic and inflammatory liver diseases may expand to include non-alcoholic fatty liver disease (“NAFLD”)

in the near future.

This market expansion may impact the Company’s development plans for LIVNate.

Our NK cell Directed Product Candidate

is our lead product candidate that converts resting NK cells into primed NK cells, an essential step in them becoming activated

cancer-killing NK cells.

We have shown this works ex vivo in human tissue cell cultures, and we believe that this will work in

vivo which is the purpose of our planned clinical trials.

grow and relapse because they evade the immune system.

NK cells are the most important cell for the elimination of residual

disease that causes cancer relapse.

NK cells target cells based on a series of complex antigens on the cancer cell surface

that signal the NK cells to activate and kill the cancer cell.

We call these cancer antigens “priming signals”

1 unchanged sentence

respectively.

An NK cell must receive a series of multiple signals through a network of cell surface receptors constituting of both priming and triggering signals.

Crucially, we have shown that the priming signals can be delivered independent of the triggering such that one cell, such as INKmune, may deliver priming signals and the patient cancer cell deliver the second set and induce killing.

Cancer cells defective in priming signals evade NK killing so the cancer cell survives and grows.

Both priming and triggering signals are not a single surface molecule on the NK cell, but a complex combination of signals from multiple cell surface ligands which lead to NK priming and triggering respectively.

Cancer cells also express molecules which can inhibit NK cell priming and triggering and the final outcome of the NK-cancer cell conjugation is a balance of all of these signals.

In summary, INKmune shifts that balance of stimulating and inhibitory signals to enhance the ability of resting NK cells to kill a wide range of patient cancers.

[Sabry Lowdell Frontiers, North et al JI and Sabry et al JI and Tsirogianni et al AmJ Hematol].

An NK cell must receive a series of multiple signals through a network

of cell surface receptors constituting of both priming and triggering signals.

Crucially, we have shown that the priming signals

can be delivered independent of the triggering such that one cell, such as INKmune, may deliver priming signals and the patient

cancer cell deliver the second set and induce killing.

Cancer cells defective in priming signals evade NK killing so the cancer

cell survives and grows.

Both priming and triggering signals are not a single surface molecule on the NK cell, but a complex

combination of signals from multiple cell surface ligands which lead to NK priming and triggering respectively.

also express molecules which can inhibit NK cell priming and triggering and the final outcome of the NK-cancer cell conjugation

is a balance of all of these signals.

In summary, INKmune shifts that balance of stimulating and inhibitory signals to enhance

the ability of resting NK cells to kill a wide range of patient cancers.

[Sabry Lowdell Frontiers, North et al JI and Sabry

et al JI and Tsirogianni et al AmJ Hematol].

This concept is shown in the schematic form in Figure 1 below.

The main “job”

main “job”

of a cancer cell is to survive and grow.

Unfortunately, the “successful”

cancer cell ultimately kills the host.

cancer cell ultimately

kills the host.

The first priority for survival is to evade NK cell killing.

The vast majority, >98%, of cancer cells do this by downregulating expression of priming ligands.

When an NK cell interrogates a cancer cell lacking sufficient priming signals the NK cell is unable to trigger lysis.

This allows the cancer to evade NK cell killing to grow, and, we believe, is one of the causes of cancer relapse.

We have described the functional biology underlying the interaction of NK cells and cancer cells.

We believe that we have learned to counteract the loss of the priming signals by artificially providing these signaling ligands to the resting NK cell by exposure to a proprietary tumor cell line which constitutively expresses them.

The vast majority, >98%, of cancer cells do

this by downregulating expression of priming ligands.

When an NK cell interrogates a cancer cell lacking sufficient priming

signals the NK cell is unable to trigger lysis.

This allows the cancer to evade NK cell killing to grow, and, we believe,

is one of the causes of cancer relapse.

have described the functional biology underlying the interaction of NK cells and cancer cells.

We believe that we have learned

to counteract the loss of the priming signals by artificially providing these signaling ligands to the resting NK cell by

exposure to a proprietary tumor cell line which constitutively expresses them.

We call this product candidate INKmune.

When we deliver INKmune to a resting NK cell, it provides priming signals to convert the resting NK cell into a tumor primed NK cell (“TpNK”).

we deliver INKmune to a resting NK cell, it provides priming signals to convert the resting NK cell into a tumor primed NK

cell (“TpNK”).

TpNK are poised to kill any cancer cell that expresses adequate triggering ligands.

Based on our extensive pre-clinical testing, we believe this covers a large and heterogenous array of primary human cancers including hematologic malignancies such as acute myelogenous leukemia, multiple myeloma, lymphoma, and solid tumors such as breast, prostate, renal, lung, and ovarian cancer.

The TpNK binds to the cancer cell, becomes an activated NK cell that will kill the cancer cell that was previously resistant to NK cell killing.

Based on the pre-clinical data, we believe INKmune will convert the patient’s resting NK cells to primed NK cells will allow the patient’s NK cells to kill their tumor.

We believe there are advantages of NK cells primed with INKmune (TpNK) compared to cytokine primed NK cells (“LAK”) or monoclonal antibody targeted NK cells (“MabNK”).

Both LAK and MabNK require the priming/targeting agent to be present at all times for the NK cell to be a cancer killing cell.

As soon as the cytokine or Mab are removed, the NK cell becomes a resting NK cell that cannot kill the cancer cell.

extensive pre-clinical testing, we believe this covers a large and heterogenous array of primary human cancers including hematologic

malignancies such as acute myelogenous leukemia, multiple myeloma, lymphoma, and solid tumors such as breast, prostate, renal,

lung, and ovarian cancer.

The TpNK binds to the cancer cell, becomes an activated NK cell that will kill the cancer cell that

was previously resistant to NK cell killing.

Based on the pre-clinical data, we believe INKmune will convert the patient’s

resting NK cells to primed NK cells will allow the patient’s NK cells to kill their tumor.

believe there are advantages of NK cells primed with INKmune (“TpNK”) compared to cytokine primed NK cells (“LAK”)

or monoclonal antibody targeted NK cells (“MabNK”).

Both LAK and MabNK require the priming/targeting agent to

be present at all times for the NK cell to be a cancer killing cell.

As soon as the cytokine or Mab are removed, the NK cell

becomes a resting NK cell that cannot kill the cancer cell.

INKmune provides a sustained “on”

switch even after the INKmune reagent has been removed.

Once INKmune causes the resting NK cell to become a TpNK, the NK cell remains primed and ready to kill until its lytic capacity has been exhausted by lysis of tumor cells.

The second advantage is that TpNK can prime resting NK cells by contact-dependent activation and thus enhance the initial INKmune-mediated priming.

Third, TpNK do not require a specific target compared to MabNK.

Trastuzumab (Herceptin™), a Mab targeting HER2 on breast cancer is an illustrative example.

Women with HER2 positive breast cancer, 20% of all women with breast cancer, can be treated with and benefit from Herceptin immunotherapy.

Unfortunately, the other 80% who are HER2 negative, have a worse survival rate because they can not avail themselves to Trastuzumab immunotherapy.

switch even after

the INKmune reagent has been removed.

Once INKmune causes the resting NK cell to become a TpNK, the NK cell remains primed

and ready to kill until its lytic capacity has been exhausted by lysis of tumor cells.

The second advantage is that TpNK can

prime resting NK cells by contact-dependent activation and thus enhance the initial INKmune-mediated priming.

do not require a specific target compared to MabNK.

Trastuzumab (Herceptin™), a Mab targeting HER2 on breast cancer

is an illustrative example.

Women with HER2 positive breast cancer, 20% of all women with breast cancer, can be treated with

and benefit from Herceptin immunotherapy.

Unfortunately, the other 80% who are HER2 negative, have a worse survival rate because

they can not avail themselves to Trastuzumab immunotherapy.

INKmune may benefit the women with HER2 negative breast cancer.

We believe the pre-clinical and clinical data using tumor primed NK cells indicates that signals delivered by cancer cells are adequate to provide priming and activation of NK cells to kill the cancer and possibly eliminate the need for MabNK.

We have demonstrated TpNK killing of many tumor types in laboratory studies.

Tumor priming is effective regardless of the source of the NK cells and in many types of tumors –

We believe the pre-clinical and clinical data using tumor primed NK cells indicates that signals delivered by cancer cells

are adequate to provide priming and activation of NK cells to kill the cancer and possibly eliminate the need for MabNK.

have demonstrated TpNK killing of many tumor types in laboratory studies.

Tumor priming is effective regardless of the source

of the NK cells and in many types of tumors –

both cell lines and primary tumors from patients.

The principle of TpNK killing has also been demonstrated in two Phase I trials in patient with acute myelogenous leukemia (“AML”).

These trials were not supported by us and used a first-generation personalized cell therapy product.

In these trials, haplo-identical NK cells obtained from a first degree relative by leukapheresis were primed ex-vivo using a lysate of the parent cell line from which we derived INB16 - INKMune.

Once the TpNK therapy has been produced and passed quality testing, the patient received conditioning therapy with chemotherapy (cyclophosphamide and fludarabine), the primed haplo-identical NK cells were given to patients by intravenous infusion.

Two Phase I clinical trials have been performed using the first-generation treatment strategy.

The principle of TpNK

killing has also been demonstrated in two Phase I trials in patient with acute myelogenous leukemia (“AML”).

trials were not supported by us and used a first-generation personalized cell therapy product.

In these trials, haplo-identical

NK cells obtained from a first degree relative by leukapheresis were primed ex-vivo using a lysate of the parent cell line

from which we derived INB16 - INKmune.

Once the TpNK therapy has been produced and passed quality testing, the patient received

conditioning therapy with chemotherapy (cyclophosphamide and fludarabine), the primed haplo-identical NK cells were given

to patients by intravenous infusion.

Two Phase I clinical trials have been performed using the first-generation treatment

An investigator initiated trial performed at the Royal Free Hospital in London 2009 was funded by a UK charity.

Fifteen patients with relapsed, high-risk AML were enrolled in the trial.

Because of drop-out due to disease progression, delays in product production and complications of conditioning therapy, only 7 of the fifteen patients were treated with the TpNK cell product.

Four of seven patients showed clear benefit from the treatment with the TpNK product with prolonged relapse free remission and, in one patient, conversion of a partial remission to full remission.

Because of drop-out due to disease progression,

delays in product production and complications of conditioning therapy, only 7 of the fifteen patients were treated with the

TpNK cell product.

Four of seven patients showed clear benefit from the treatment with the TpNK product with prolonged relapse

free remission and, in one patient, conversion of a partial remission to full remission.

None of the remissions were durable;

all patients ultimately died from disease progression.

The safety of the product was found to be a combination of toxicity from the chemotherapy conditioning regimen and the TpNK therapy.

In general, the complications were well tolerated although did require medical intervention including prolonged periods of aplasia in two heavily pretreated patients that resolved with supportive care.

The safety of the product was found to be a combination of toxicity

from the chemotherapy conditioning regimen and the TpNK therapy.

In general, the complications were well tolerated although

did require medical intervention including prolonged periods of aplasia in two heavily pretreated patients that resolved with

supportive care.

The results of this study have been published in a medical journal (PLoS One.

2 unchanged sentences

eCollection 2015).

In 2013, a second open label, multi-center trial was performed in the US using virtually the same product and procedures but targeting a slightly different patient population.

In the second trial, 12 patients in first remission with AML were treated with the haplo-identical TpNK product produced using the first generation ex-vivo priming process.

In 2013, a second open label, multi-center trial was performed in the

US using virtually the same product and procedures but targeting a slightly different patient population.

In the second trial,

12 patients in first remission with AML were treated with the haplo-identical TpNK product produced using the first generation

ex-vivo priming process.

After conditioning with chemotherapy, the patients received TpNK in three dosing cohorts –

1 unchanged sentence

Patients were followed for safety and relapse free survival.

This trial confirmed the safety of the TpNK treatment in patients with AML and reinforced many of the efficacy findings seen in the first trial with none of the previously experienced side effects.

Patients benefited from haplo-identical TpNK therapy with prolonged relapse free survival including two patients that remain in remission more than 42 months after treatment.

This trial has been published.

This trial confirmed

the safety of the TpNK treatment in patients with AML and reinforced many of the efficacy findings seen in the first trial

with none of the previously experienced side effects.

Patients benefited from haplo-identical TpNK therapy with prolonged

relapse free survival including two patients that remain in remission more than 42 months after treatment.

This trial has

been published.

(Biol Blood Marrow Transplant.

S1083-8791(18)30132-0.

10.1016/j.bbmt.2018.03.019.) The results of the laboratory and Phase I studies provide evidence that our strategy for treating residual disease is sensible but unproven.

Because INKmune primes NK cells to target naturally occurring antigens, we believe INKmune can be used in to treat a wide variety of cancers including hematologic malignancy (AML, MM, CML, high risk MDS) and solid tumors (renal, prostate, breast, ovarian, pancreas and lung).

10.1016/j.bbmt.2018.03.019.)

The results of the laboratory and Phase I studies provide evidence that our strategy for treating residual disease is sensible

but unproven.

Because INKmune

primes NK cells to target naturally occurring antigens, we believe INKmune can be used in to treat a wide variety of cancers

including hematologic malignancy (AML, MM, CML, high risk MDS) and solid tumors (renal, prostate, breast, ovarian, pancreas

We expect the list of INKmune sensitive tumors to continue to expand.

The primary role for INKmune will be an immunotherapy targeting residual disease in patients after debulking cancer therapies such as cytotoxic chemotherapy and surgery.

The primary role

for INKmune will be an immunotherapy targeting residual disease in patients after debulking cancer therapies such as cytotoxic

chemotherapy and surgery.

At this time, we plan to give INKmune as monotherapy.

We do not rule out the possibility of using INKmune as part of combination therapy in the future.

We do not expect to need to modify INKmune to treat these additional types of cancer, because we believe INKmune is a universal cancer therapy where “one size fits all”.

We believe for INKmune to receive regulatory approval for each cancer indication, clinical trials will need to be performed which demonstrate its safety and effectiveness as a treatment for each such cancer.

We believe the difficulty and cost of achieving these labels extensions will decline with each successive approval, if and when achieved.

For example, if INKmune is proven to be effective therapy in patients with ovarian cancer and high-risk MDS, we will need to perform separate pivotal trials for approval in lung, prostate or renal cancer.

Three step process to preparation for

INKmune human clinical trials:

INKmune GMP scale-up for Phase I/II

clinical material

We contracted with

Advent Bioservices, a contract manufacturing organization, to produce the master cell bank for INKmune using good manufacturing

practice, or GMP, clinical material.

Advent Bioservices used GMP manufacturing facilities leased from the Centre of Cell, Gene

and Tissue Therapeutics (“CCGTT”) at the Royal Free Hospital.

The working cell banks and individual INKmune product

to be used in the patients for the clinical trial will be produced at the Royal Free Hospital in the CCGTT to full cGMP (MHRA MIA(IMP)11149).

All manufacturing has been under the direction of Professor Mark Lowdell.

The Company is able to produce enough INKmune to complete

both Phase I clinical trials in women with ovarian cancer and in patients with high-risk MDS as required and in advance.

validated storage of INKmune for up to 12 months in vapour phase nitrogen and have a fully scalable, closed system manufacturing

process which can produce up to 6 patient doses per week during phase I and II trials.

At intermediate scale we can manufacture

40 doses per week in a single 80 litre bioreactor.

Importantly, we have validated the storage of INKMune at -80oC for up to three

months which greatly facilitates the delivery and local storage of the drug for clinical trials and post commercialization.

contrast, all other NK cell therapies and T cell therapies require complex shipping of drug products in vapor phase nitrogen below

-150oC and specialized arrangements for ongoing storage at the clinical sites.

We may need additional INKmune for future clinical

Planning for site of manufacture and the financing for that manufacturing has not been made at this point.

INKmune Biomarker Development Program

We have discovered

two biomarker strategies that we believe can be used to demonstrate:

We do not rule out the possibility of using

INKmune as part of combination therapy in the future.

We do not expect to need to modify INKmune to treat these additional

types of cancer, because we believe INKmune is a universal cancer therapy where “one size fits all”.

for INKmune to receive regulatory approval for each cancer indication, clinical trials will need to be performed which demonstrate

its safety and effectiveness as a treatment for each such cancer.

We believe the difficulty and cost of achieving these labels

extensions will decline with each successive approval, if and when achieved.

For example, if INKmune is proven to be effective

therapy in patients with ovarian cancer and high-risk MDS, we will need to perform separate pivotal trials for approval in

lung, prostate or renal cancer.

step process to preparation for INKmune human clinical trials:

GMP scale-up for Phase I/II clinical material

working cell banks and individual INKmune product to be used in the patients for the clinical trial have been produced at the

Royal Free Hospital in the CCGTT to full cGMP (MHRA MIA(IMP)11149).

All manufacturing has been under the direction of Professor

Mark Lowdell.

The Company can produce enough INKmune to complete both Phase I clinical trials in women with ovarian cancer and

in patients with high-risk MDS.

We have validated storage of INKmune for up to 12 months in vapor phase nitrogen and have a fully

scalable, closed system manufacturing process which can produce up to 6 patient doses per week during phase I and II trials.

intermediate scale we can manufacture 40 doses per week in a single 80 liter bioreactor.

Importantly, we have validated the storage

of INKmune at -80oC for up to three months which greatly facilitates the delivery and local storage of the drug for clinical trials

and post commercialization.

In contrast, as far as we know all other NK cell therapies and T cell therapies require complex shipping

of drug products in vapor phase nitrogen below -150 o C and specialized arrangements for ongoing storage at the clinical

We may need additional INKmune for future clinical trials.

Biomarker Development Program

have discovered two biomarker strategies that we believe can be used to demonstrate:

i) who should receive INKmune therapy;

ii) if the INKmune

therapy is working;

if the INKmune therapy is working;

and iii) when INKmune therapy should be repeated.

For the initial Phase I/II trials in patients with ovarian

cancer, we expect the biomarker testing will be performed in a single laboratory under our direction.

In the near future, we will

develop assay systems with standard operating procedures to ensure uniform testing of the biomarker across clinical sites.

will facilitate expansion of the clinical programs to multiple sites.

We anticipate that, in the future, the biomarker program

may be a surrogate marker for both clinical effectiveness and marketing purposes.

Interaction with Regulatory Authorities

Regarding INKmune Development

We met with the Medicines

and Healthcare Products Regulatory Agency (“MHRA”), the UK version of the FDA as part of a Scientific Advice Meeting

in September 2017.

The purpose of the meeting was to explain to the MHRA our manufacturing process and clinical plan for the development

of INKmune in a Phase I/II trial in relapse/refractory ovarian cancer.

We submitted a Clinical Trial Authorization (“CTA”)

in the fourth quarter of 2018 to support the ovarian cancer Phase I/II trial in the United Kingdom, which was accepted on December

We are in the process of completing the steps to open two clinical sites to perform the Phase I portion of the clinical

trial and the protocol modification for the phase I-only trial will be submitted to MHRA for approval in Q1 2020.

We have not chosen

sites for the Phase II portion of the clinical trial.

INKmune Product Development Path Proposed

Phase I Study in patients with ovarian cancer

During 2020, we plan

to initiate an open label Phase I cancer study in patients with ovarian carcinoma.

Patients will be enrolled who have a low burden

of relapse refractory disease and have peripheral blood or ascites NK cells which can respond to INKmune in a laboratory test on

The study design agreed upon after discussion with the MHRA on September 12, 2017 was for a two-step Phase I/II study

but this has been modified to an classic Phase I study followed by a randomized phase II.

At present we anticipate the Phase I

to be performed under the modified CTA at a single UK site, Sheffield University Hospital.

We expect to initiate trial by the third

quarter of 2020.In the Phase I trial, women with relapse refractory ovarian cancer will be treated with INKmune, given as an intra-peritoneal

infusion through an indwelling peritoneal catheter in a traditional open label study to demonstrate safety and determine the dose

of INKmune to be carried into the larger Phase II portion of the study.

Based on pre-clinical studies that indicate that women

with relapsed/refractory ovarian cancer have NK cells in their peritoneal cavity that response to INKmune to kill SKOV3, an NK-resistant

ovarian cell line, we believe intra-peritoneal delivery of INKmune will be therapeutically effective.

Three clinical trials support

this observation.

Two clinical trials have been performed using the first generation haplo-identical TpNK product in patients with

Both of those studies have been published (PLoS One.

For the initial Phase I/II trials in patients

with ovarian cancer and high-risk MDS, we expect the biomarker testing will be performed in a single laboratory under our direction.

In the near future, we will develop assay systems with standard operating procedures to ensure uniform testing of the biomarker

across clinical sites.

This will facilitate expansion of the clinical programs to multiple sites.

We anticipate that, in the future,

the biomarker program may be a surrogate marker for both clinical effectiveness and marketing purposes.

with Regulatory Authorities Regarding INKmune Development

INKmune Phase I studies in high-risk MDS and ovarian cancer will be performed in the UK.

We met with the Medicines and Healthcare

Products Regulatory Agency (“MHRA”), the UK version of the FDA as part of a Scientific Advice Meetings in preparation

for submitting the CTA for each program.

The purpose of the meeting was to explain to the MHRA our manufacturing process and clinical

plan for the development of INKmune in a Phase I relapse/refractory ovarian cancer and high risk MDS respectively.

Product Development Path Proposed Phase I Study in patients with ovarian cancer

the evolution of the COVID-19 pandemic in 2021, we plan to initiate an open label Phase I cancer study in patients with ovarian

Patients will be enrolled who have a low burden of relapse refractory disease and have peripheral blood or ascites

NK cells which can respond to INKmune in a laboratory test on NK function.

The study design agreed upon after discussion with

the MHRA on September 12, 2017 was for a two-step Phase I/II study but this has been modified to an classic Phase I study followed

by a randomized phase II.

At present we anticipate the Phase I to be performed under the modified CTA at a single UK site, Sheffield

University Hospital.

We expect to initiate trial by the third quarter of 2021.

In the Phase I trial, women with relapse refractory

ovarian cancer will be treated with INKmune, given as an intra-peritoneal infusion through an indwelling peritoneal catheter in

a traditional open label study to demonstrate safety and determine the dose of INKmune to be carried into the larger Phase II

portion of the study.

Based on pre-clinical studies that indicate that women with relapsed/refractory ovarian cancer have NK cells

in their peritoneal cavity that response to INKmune to kill SKOV3, an NK-resistant ovarian cell line, we believe intra-peritoneal

delivery of INKmune will be therapeutically effective.

Three clinical trials support this observation.

Two clinical trials have

been performed using the first generation haplo-identical TpNK product in patients with AML.

Both of those studies have been published

2015 Jun 10;10(6):e0123416.

10.1371/journal.pone.0123416.

2015) and (Biol Blood Marrow Transplant.

eCollection 2015) and (Biol Blood Marrow Transplant.

S1083-8791(18)30132-0.

10.1016/j.bbmt.2018.03.019.).

the studies showed that TpNK therapy, when delivered by intravenous infusion after conditioning therapy, was effective in providing

prolong remissions with a toxicity profile that was manageable.

TpNK therapy has not been delivered via intraperitoneal infusion,

but a similar treatment strategy is used for the delivery of TALL-104 cells.

TALL-104 is a replication incompetent human MHC non-restricted

cytotoxic T-cell leukemic cell line that has been extensively studied and used to treat a number of cancers.

Currently, Galileo

Research, an Italian biotech company, has used TALL-104 in a Phase II clinical trial to treat women with ovarian cancer (http://www.galileoresearch.it/en/pipeline/TALL-104.html).

In summary, the studies showed that TpNK therapy,

when delivered by intravenous infusion after conditioning therapy, was effective in providing prolong remissions with a toxicity

profile that was manageable.

TpNK therapy has not been delivered via intraperitoneal infusion, but a similar treatment strategy

is used for the delivery of TALL-104 cells.

TALL-104 is a replication incompetent human MHC non-restricted cytotoxic T-cell leukemic

cell line that has been extensively studied and used to treat a number of cancers.

Currently, Galileo Research, an Italian biotech

company, has used TALL-104 in a Phase II clinical trial to treat women with ovarian cancer (http://www.galileoresearch.it/en/pipeline/TALL-104.html).

In that study, TALL-104 is delivered via intraperitoneal infusion.

Although the efficacy of the therapy is not yet known, the therapy

is well tolerated with toxicities mainly related to the infusion catheter, not related to the TALL-104 infusion.

The primary end

points of the INKmune Phase I trial are safety and determining the dose of INKmune to take into the Phase II portion of the clinical

The key secondary efficacy end-points to be studied are i) increased NK cell priming as determined by multicolor flow cytometry

of NK cells from the patient;

Although the efficacy of the therapy is not yet known, the

therapy is well tolerated with toxicities mainly related to the infusion catheter, not related to the TALL-104 infusion.

end points of the INKmune Phase I trial are safety and determining the dose of INKmune to take into the Phase II portion of the

clinical trial.

The key secondary efficacy end-points to be studied are i) increased NK cell priming as determined by multicolor

flow cytometry of NK cells from the patient;

ii) increased NK cell killing of SKOV3 tumor in a bioassay as shown in Figure 2 below;

decrease in tumor burden as measured by CA125 levels in the blood.

Once safety and the optimal INKmune dose have been determined,

a randomized study of women treated with INKmune will be compared to a group of control patients who receive only standard of care.

We expect to treat six patients in the Phase I portion of the trial, but this number can increase by as many as 18.

INKmune Product Development Path Proposed

Phase I Study in patients with high risk MDS

During 2020, we plan

to initiate an open label Phase I cancer study in patients with high risk myelodysplastic syndrome (MDS).

Patients will be enrolled

who have a low burden of disease after completion of conventional therapy and have peripheral blood NK cells which can respond

to INKmune in a laboratory test of NK function.

At present we anticipate the Phase I to be performed at a single UK site, University

Hospital Southampton.

A UK contract research organization has been appointed and we expect to initiate trial by the second quarter

of 2020.In the Phase I trial, patients with detectable residual disease in bone marrow and/or peripheral blood (<15% blasts

by conventional tests) will be treated with intravenous infusions of INKmune and monitored for changes in peripheral blood NK activation,

NK function and changes in residual blast counts in blood and bone marrow.

We and others have previously shown that MDS patients

with inadequate NK function have statistically significantly poorer prognosis than matched patients with normal levels of NK function

(Tsirogianni et al 2019) and we have shown in laboratory experiments that the functional activity of NK cells from MDS patients

can be enhanced by exposure to INKmune.

Moreover, INKmune-primed NK cells are not inhibited by the hypoxic conditions of the diseased

bone marrow microenvironment.

INKmune Registration Studies and/or

After completion of

proof-of-concept Phase II studies with INKmune, we will decide whether to continue to develop INKmune as a treatment for ovarian

carcinoma indication and/or high risk MDS.

Other solid cancers are of interest including nasopharyngeal cancer (“NPC”) which is a

known target for NK cells and an important unmet clinical need in emerging markets such as mainland China.

We expect to have biopharma

partners participate in this decision.

and iii) a decrease in tumor burden as measured by CA125 levels in the blood.

Once safety and the optimal INKmune dose have been

determined, a randomized study of women treated with INKmune will be compared to a group of control patients who receive only

standard of care.

We expect to treat six patients in the Phase I portion of the trial, but this number can increase by as many

Product Development Path Proposed Phase I Study in patients with high-risk MDS

2021, we plan to initiate an open label Phase I cancer study in patients with high-risk myelodysplastic syndrome (“MDS”).

Patients will be enrolled who have a low burden of disease after completion of conventional therapy and have peripheral blood

NK cells which can respond to INKmune in a laboratory test of NK function.

At present we anticipate the Phase I to be performed

at a single UK site, University Hospital Southampton.

A UK contract research organization has been appointed and we expect to

initiate trial by the third quarter of 2021.

In the Phase I trial, patients with detectable residual disease in bone marrow and/or

peripheral blood (<15% blasts by conventional tests) will be treated with intravenous infusions of INKmune and monitored for

changes in peripheral blood NK activation, NK function and changes in residual blast counts in blood and bone marrow.

We and others

have previously shown that MDS patients with inadequate NK function have statistically significantly poorer prognosis than matched

patients with normal levels of NK function (Tsirogianni et al 2019) and we have shown in laboratory experiments that the functional

activity of NK cells from MDS patients can be enhanced by exposure to INKmune.

Moreover, INKmune-primed NK cells are not inhibited

by the hypoxic conditions of the diseased bone marrow microenvironment.

Because both INKmune programs are being run in the UK,

delays due to the COVID-19 pandemic may delay initiation of the clinical trial.

Registration Studies and/or Partnering

completion of proof-of-concept Phase II studies with INKmune, we will decide whether to continue to develop INKmune as a treatment

for ovarian carcinoma indication and/or high risk MDS.

Other solid cancers are of interest including nasopharyngeal cancer (“NPC”)

which is a known target for NK cells and an important unmet clinical need in emerging markets such as mainland China.

to have biopharma partners participate in this decision.

We may also seek to be acquired at this stage or partner INKmune.

Although our development

strategy is focused on North America and Europe, we believe INKmune will also be attractive for markets on the Pacific Rim, South

Asia and South America, but will wait for partners to help with the development in those regions, however, at this time, we are

not negotiating with any potential partners.

Importantly, we have

published data demonstrating INKmune efficacy at priming allogeneic NK cells ex-vivo (described above) and this includes priming

of NK cells differentiated from cord-blood derived hematopoietic stem cells (Domogala et al Cytotherapy 2017:

our development strategy is focused on North America and Europe, we believe INKmune will also be attractive for markets on the

Pacific Rim, South Asia and South America, but will wait for partners to help with the development in those regions, however,

at this time, we are not negotiating with any potential partners.

we have published data demonstrating INKmune efficacy at priming allogeneic NK cells ex-vivo (described above) and this includes

priming of NK cells differentiated from cord-blood derived hematopoietic stem cells (Domogala et al Cytotherapy 2017:

Numerous companies are developing therapeutic strategies using cord blood derived NK cell products and one or more may wish to

partner with us to potentiate their product by co-incubation or co-administration with INKmune.

INKmune Regulatory Strategy

INKmune is a new therapy

for the treatment of cancer that will need to be proven safe and effective by well-designed clinical trials that show a meaningful

clinical benefit to patients.

We believe that registration trials will need to be designed as randomized trials in patients with

cancer where one group of patients received INKmune and another receive best available care.

We received advice from the MHRA on

September 12, 2017 on the design clinical trial for ovarian cancer.

And have used that advice to plan both current phase I trials.

We plan to perform the Phase I trials with INKmune in the United Kingdom under two clinical trials authorizations (“CTA”)

Regulatory Strategy

is a new therapy for the treatment of cancer that will need to be proven safe and effective by well-designed clinical trials that

show a meaningful clinical benefit to patients.

We believe that registration trials will need to be designed as randomized trials

in patients with cancer where one group of patients received INKmune and another receive best available care.

We received advice

from the MHRA on September 12, 2017 on the design clinical trial for ovarian cancer.

And have used that advice to plan both current

phase I trials.

We plan to perform the Phase I trials with INKmune in the United Kingdom under two clinical trials authorizations

(“CTA”) –

one for each indication.

If either phase I elicits “positive”

data we plan to open one or more Phase II programs

to additional sites in the United Kingdom and the US.

We will meet with the FDA once we have data from the Phase I trials.

there are no therapies similar to INKmune approved in any market, we plan to take advantage of the regulatory opportunities afforded

to therapies that treat small markets with a high unmet need.

In the U.S., this includes Orphan Drug Designation and expedited

programs for approval including Accelerated Approval, Breakthrough Therapy Designation, Fast Track Designation, and priority review

(see “Government Regulation”).

We cannot predict which of these programs we will benefit from, if any at all, without

further discussions with the FDA.

Similar programs exist in the EU with the European Medicines Agencies (“EMA”).

Emerging Market Opportunity

The cancer therapy

market is large, diverse and competitive.

Although the concept of immunotherapy with monoclonal antibodies has been around for

more than 20 years, the concept that patient derived immunosuppressive factors was a barrier to effective cancer treatment was

recently recognized and had its first therapy approved just four years ago (ipilimumab, Yervoy, BMS, March 2011).

Since then, five

additional “check point”

data we plan to open one

or more Phase II programs to additional sites in the United Kingdom and the US.

We will meet with the FDA once we have data from

the Phase I trials.

Because there are no therapies similar to INKmune approved in any market, we plan to take advantage of the

regulatory opportunities afforded to therapies that treat small markets with a high unmet need.

In the U.S., this includes Orphan

Drug Designation and expedited programs for approval including Accelerated Approval, Breakthrough Therapy Designation, Fast Track

Designation, and priority review (see “Government Regulation”).

We cannot predict which of these programs we will

benefit from, if any at all, without further discussions with the FDA.

Similar programs exist in the EU with the European Medicines

Agencies (“EMA”).

Market Opportunity

cancer therapy market is large, diverse and competitive.

Although the concept of immunotherapy with monoclonal antibodies has

been around for more than 20 years, the concept that patient derived immunosuppressive factors was a barrier to effective cancer

treatment was recently recognized and had its first therapy approved just four years ago (ipilimumab, Yervoy, BMS, March 2011).

Since then, five additional “check point”

inhibitors have been approved, but the market is in its infancy.

Most of the focus on strategies

for modulating tumor-based immunosuppression focus is on the adaptive immune system (“T-cells”).

The role of, and the

importance of manipulating the innate immune system has more recently become a target of therapeutic development.

part of the innate immune system and are critical in both tumor surveillance (prevention) and treatment (killing).

MDSCs are part

of the innate immune system that only appear once the patient has chronic inflammation, a common occurrence in patients with cancer.

the focus on strategies for modulating tumor-based immunosuppression focus is on the adaptive immune system (“T-cells”).

The role of, and the importance of manipulating the innate immune system has more recently become a target of therapeutic development.

NK cells are part of the innate immune system and are critical in both tumor surveillance (prevention) and treatment (killing).

MDSCs are part of the innate immune system that only appear once the patient has chronic inflammation, a common occurrence in

patients with cancer.

The main role of the MDSC is to protect the tumor from attack by the patient’s immune system.

Because T-cell focused strategies

do not have an effect on the innate immune system, patient’s receiving such treatments may fail to recruit half of the patient’s

immune system, the innate immune system, to attack the patient’s cancer.

Clinicians increasingly recognize that durable responses

to cancer require a coordinated attack by the patient’s adaptive and innate immune system.

Normalizing the response of the

innate immune system requires eliminating the dysregulated innate immune response that decreases the patient’s ability to

see and attack the cancer as well as mechanisms the protect the cancer from immunologic attack (effector and protector function

respectively).

T-cell focused strategies do not have an effect on the innate immune system, patient’s receiving such treatments may fail

to recruit half of the patient’s immune system, the innate immune system, to attack the patient’s cancer.

increasingly recognize that durable responses to cancer require a coordinated attack by the patient’s adaptive and innate

immune system.

Normalizing the response of the innate immune system requires eliminating the dysregulated innate immune response

that decreases the patient’s ability to see and attack the cancer as well as mechanisms the protect the cancer from immunologic

attack (effector and protector function respectively).

INKmune primes NK cells to enable them to attack the tumor.

INB03, by decreasing the proliferation and function

of MDSC, will lessen the immunosuppressive shield that protects the tumor from immunologic attack and, through NK/DC crosstalk,

recruit the adaptive immune system to the fight.

Challenges in the Market for Our Product

The market for new

oncology therapies is busy, complicated and rapidly evolving.

We will be competing with companies that are older, larger, better

financed and have greater experience.

INB03, by decreasing

the proliferation and function of MDSC, will lessen the immunosuppressive shield that protects the tumor from immunologic attack

and, through NK/DC crosstalk, recruit the adaptive immune system to the fight.

in the Market for Our Product Candidates

market for new oncology therapies is busy, complicated, and rapidly evolving.

We will be competing with companies that are older,

larger, better financed and have greater experience.

There are two types of drug companies –

development companies and commercial companies.

development companies and commercial

Development companies take the risk of developing new products to proof-of-concept.

Once proof-of-concept has been achieved, if

the drug provides clinical benefit, the product is usually acquired by a commercial company, which completes the drug’s clinical

development and markets the product.

We are a development company which will seek to develop products such as INKmune from the

bench to the bedside to demonstrate proof-of-concept.

The goal for us is to successfully develop such products to the point where

they are attractive targets for potential partners/acquirers.

According to a recent

Markets and Markets report, the immunotherapy market is growing rapidly at an annual rate of over 13%.

Recently, the market is

biased towards T cell-based immunotherapies including bi-specific antibody therapies, checkpoint inhibitors and CAR-T cell-based

There are substantial numbers of clinical trials that are focused on the adaptive immune system versus clinical trials

that are focused on the innate immune system for the treatment of cancer.

Our challenge will be to educate partners on the value

of NK cell-based therapeutic strategies.

Once proof-of-concept has been

achieved, if the drug provides clinical benefit, the product is usually acquired by a commercial company, which completes the

drug’s clinical development and markets the product.

We are a development company which will seek to develop products such

as INKmune from the bench to the bedside to demonstrate proof-of-concept.

The goal for us is to successfully develop such products

to the point where they are attractive targets for potential partners/acquirers.

to a recent Markets and Markets report, the immunotherapy market is growing rapidly at an annual rate of over 13%.

Recently, the

market is biased towards T cell-based immunotherapies including bi-specific antibody therapies, checkpoint inhibitors and CAR-T

cell-based therapies.

There are substantial numbers of clinical trials that are focused on the adaptive immune system versus clinical

trials that are focused on the innate immune system for the treatment of cancer.

Our challenge will be to educate partners on

the value of NK cell-based therapeutic strategies.

The need to educate people of the importance of INB03 is equally challenging.

At the academic

level, there is recognition that therapies targeting MDSC are needed to improve the results of immunotherapies.

Investors and potential

partners are only now learning about MDSC.

We will be responsible for educating them on the importance of MDSC and why INB03 may

be an important addition to the oncologist’s armamentarium.

We believe educating investors and partners about new therapeutic

opportunities is an easier task than trying to differentiate our company from the many other cancer immunotherapy companies.

plan to use a combination of publication, presentation and investor relations to promote INKmune and INB03 and to educate the clinical,

biopharma and investor community on the value of these novel therapeutic approaches.

INKmune Competition

Our industry is highly

competitive and subject to rapid and significant technological change.

Our potential competitors include large pharmaceutical and

biotechnology companies, specialty pharmaceutical and generic drug companies, academic institutions, government agencies and research

institutions.

We believe that key competitive factors that will affect the development and commercial success of our product candidates

are efficacy, safety, tolerability, reliability, price and reimbursement level.

Many of our potential competitors, including many

of the organizations named below, have substantially greater financial, technical and human resources than we do and significantly

greater experience in the discovery and development of product candidates, obtaining FDA and other regulatory approvals of products

and the commercialization of those products.

Accordingly, our competitors may be more successful than us in obtaining FDA approval

for and achieving widespread market acceptance of their drugs.

At the academic level, there is recognition that therapies targeting MDSC are needed to improve the results of immunotherapies.

Investors and potential partners are only now learning about MDSC.

We will be responsible for educating them on the importance

of MDSC and why INB03 may be an important addition to the oncologist’s armamentarium.

We believe educating investors and

partners about new therapeutic opportunities is an easier task than trying to differentiate our company from the many other cancer

immunotherapy companies.

We plan to use a combination of publication, presentation and investor relations to promote INKmune and

INB03 and to educate the clinical, biopharma and investor community on the value of these novel therapeutic approaches.

our knowledge, there are no other innate immune system check-point inhibitors in development that combine the characteristics

of neutralizing soluble TNF, decreasing the population and function of MDSC while promoting NK/DC crosstalk that expands, decreases

expression of MUC4 and recruits the adaptive immune response to attack the patient’s tumor.

Lilly is developing LY3022855,

a human IgG1 monoclonal antibody designed to target the CSF1R that should inhibit MDSC from receiving CSF1 signals, decreasing

their survival and relieving the effect of MDSC in the tumor.

Daiichi Sankyo Inc., in collaboration with Bristol Myers Squibb,

is testing DS-8273a, a TRIAL-R2 agonistic antibody in combination with a PDL1 inhibitor to decrease the number of MDSC in patients

with colorectal cancer.

Rgenix Inc., is developing RGX-104, an orally bioavailable small molecule immunotherapy that targets LXR

(liver X Receptor).

RGX-104 reportedly depletes MDSC.

Syntrix Biosystems is developing SX-682.

SX-682 is a small-molecule dual-inhibitor

of CXCR1 and CXCR2, the chemokine receptors pivotal to tumor metastasis, therapy-resistance, and myeloid cell suppression of cancer

surveillance by the adaptive immune system.

By blocking the CXCR1/2 pathway, SX-682 may prevent recruitment of MDSC to the tumor

microenvironment.

The University of Minnesota has a trivalent antibody program aimed at treating patients with advanced hematologic

malignancies.

This CD16/IL-15/CD33 (161533) Tri-Specific Killer Engagers (TriKes) product may target CD33+ MDSC.

Siamab Therapeutics

is developing an anti-sialyl-Tn monoclonal antibody that targets MDSC in some tumor types.

Clathera Biosciences, in collaboration

with Incyte, a US based biotech, is developing CB-1158 (INCB01158), an arginase inhibitor to decreases MDSC.

A Phase II clinical

trial is open that combines CB-1158 with nivolumab, an anti-PD1 CPI marketed by Bristol Myers Squib.

Reata Pharmaceuticals is

testing omaveloxolone (RTA 408) in the phase Ib/II REVEAL trial in combination with either ipilimumab (Yervoy) or nivolumab (Opdivoo)

in patients with advanced unresectable or metastatic melanoma.

Currently approved non-selective TNF inhibitors, infliximab, etanercept,

adalimumab and others, are not considered direct competitors of INB03 in the treatment of cancer because of their mechanism of

action and safety side effects.

Non- selective TNF inhibitors block the function of both sTNF and tmTNF.

Blockade of tmTNF is

immunosuppressive increasing the risk of infection and cancer in patients.

This is shown in Figure 3 below where maintaining function

to tmTNF by genetic or pharmacologic means results in an immunocompetent animal that can protect itself against infection.

or knock-out of both sTNF and tmTNF results in death from infection.

industry is highly competitive and subject to rapid and significant technological change.

Our potential competitors include large

pharmaceutical and biotechnology companies, specialty pharmaceutical and generic drug companies, academic institutions, government

agencies and research institutions.

We believe that key competitive factors that will affect the development and commercial success

of our product candidates are efficacy, safety, tolerability, reliability, price, and reimbursement level.

Many of our potential

competitors, including many of the organizations named below, have substantially greater financial, technical, and human resources

than we do and significantly greater experience in the discovery and development of product candidates, obtaining FDA and other

regulatory approvals of products and the commercialization of those products.

Accordingly, our competitors may be more successful

than us in obtaining FDA approval for and achieving widespread market acceptance of their drugs.

Our competitors’

drugs may be more effective, or more effectively

marketed and sold, than any drug we may commercialize and may render our product candidates obsolete or non-competitive before

we can recover the expenses of developing and commercializing any of our product candidates.

We anticipate that we will face intense

and increasing competition as new drugs enter the market and advanced technologies become available.

Further, the development of

new treatment methods for the conditions we are targeting could render our drugs non-competitive or obsolete.

INKmune is an immunotherapy

that harnesses the biology of NK cells for the treatment of cancer.

There is a long list of immunotherapy strategies for the treatment

of cancer and the immunotherapy for cancer market is growing rapidly.

There are at least three ways to classify immunotherapy for

The list below classifies immunotherapy strategies beginning with those that are most closely related to INKmune:

Companies in the NK cell therapy business;

Companies in the personalized immune-oncology business;

Companies in the precision immuno-oncology business.

We are not aware

of any approved treatments that are classified as NK cell therapies.

We are aware of three public companies in the NK cell therapy

NantKwest, Fate Therapeutics and Glycostem.

These companies are developing products that involve replacing or supplementing

NK cells of the patient for the treatment cancer.

Their product requires extensive ex-vivo cell manipulations which, with respect

to NantKwest and Fate Therapeutics, may include gene therapy.

The next larger group of companies are in the personalized immuno-oncology

business with products focused on T cell activation strategies.

The most popular are the CAR-T cell therapies which are a patient

specific ex-vivo gene therapy approach to a single disease (for example:

pediatric ALL).

CAR-T therapy has become wildly popular

of late and includes many private companies, newer public companies such as Bluebird, Juno Therapeutics and Mustang Bio as well

as established companies such as Novartis and Gilead.

For many of the companies, CAR-T cell therapies is their only business.

the latter two, CAR-T cell therapies is a newly in-licensed program with marketing authorization in the US.

Finally, the precision

immune-oncology category also includes companies with anti-cancer antibody products and the newer “check-point”

may be more effective, or more effectively marketed and sold, than any drug we may commercialize and may render our product candidates

obsolete or non-competitive before we can recover the expenses of developing and commercializing any of our product candidates.

We anticipate that we will face intense and increasing competition as new drugs enter the market and advanced technologies become

Further, the development of new treatment methods for the conditions we are targeting could render our drugs non-competitive

is an immunotherapy that harnesses the biology of NK cells for the treatment of cancer.

There is a long list of immunotherapy

strategies for the treatment of cancer and the immunotherapy for cancer market is growing rapidly.

There are at least three ways

to classify immunotherapy for cancer.

The list below classifies immunotherapy strategies beginning with those that are most closely

related to INKmune:

Companies in the

NK cell therapy business;

Companies in the

personalized immune-oncology business;

Companies in the

precision immuno-oncology business.

are not aware of any approved treatments that are classified as NK cell therapies.

We are aware of public companies in the NK

cell therapy business such as NantKwest, Nkarta, Fate Therapeutics and Glycostem.

These companies are developing products that

involve replacing or supplementing NK cells of the patient for the treatment cancer.

Their product requires extensive ex-vivo

cell manipulations which, with respect to NantKwest and Fate Therapeutics, may include gene therapy.

The next larger group of

companies are in the personalized immuno-oncology business with products focused on T cell activation strategies.

The most popular

are the CAR-T cell therapies which are a patient specific ex-vivo gene therapy approach to a single disease (for example:

CAR-T therapy has become wildly popular of late and includes many private companies, newer public companies such as Bluebird,

Juno Therapeutics and Mustang Bio as well as established companies such as Novartis and Gilead.

For many of the companies, CAR-T

cell therapies is their only business.

For the latter two, CAR-T cell therapies is a newly in-licensed program with marketing

authorization in the US.

Finally, the precision immune-oncology category also includes companies with anti-cancer antibody products

and the newer “check-point”

Antibody therapies are all about “illuminating”

the cancer to the innate immune system (NK cells).

Monoclonal antibodies

were the original immunotherapy that drove the growth of well-known biopharma companies including Genentech/Roche, Amgen, Merck

the cancer to

the innate immune system (NK cells).

Monoclonal antibodies were the original immunotherapy that drove the growth of well-known

biopharma companies including Genentech/Roche, Amgen, Merck and others.

Each of these products is disease specific (ie:

treat only HER2+ breast cancer).

Modern therapeutic antibodies are

much more complicated bi-specific and tri-specific antibodies that attempt to connect the cancer with activated T-cells of the

adaptive immune system.

Check-point inhibitors are currently the most rapidly expanding product category in immuno-oncology.

CTLA-4 (ipilimumab) and PD-1 inhibitors (pembrolizumab and nivolumab) specifically block a mechanism that shields cancers from

T-cell killing.

The two companies in this business are Merck (pembrolizumab) and GSK (ipilimumab and nivolumab).

There are many

others trying to join this promising therapeutic area including large companies such as BMS and Roche.

There are a number

of FDA approved drugs that improve the ability of the innate immune system (NK-cells) to treat cancer including mono-clonal antibody

therapies (for example:

only HER2+ breast cancer).

Modern therapeutic antibodies are much more complicated bi-specific and tri-specific antibodies that

attempt to connect the cancer with activated T-cells of the adaptive immune system.

Check-point inhibitors are currently the most

rapidly expanding product category in immuno-oncology.

These CTLA-4 (ipilimumab) and PD-1 inhibitors (pembrolizumab and nivolumab)

specifically block a mechanism that shields cancers from T-cell killing.

The two companies in this business are Merck (pembrolizumab)

and GSK (ipilimumab and nivolumab).

There are many others trying to join this promising therapeutic area including large companies

such as BMS and Roche.

are several FDA approved drugs that improve the ability of the innate immune system (NK-cells) to treat cancer including mono-clonal

antibody therapies (for example:

Rituximab®;

5 unchanged sentences

There is a large amount of development activity

in the immune checkpoint inhibitor field from both pharmaceutical giants including AstraZeneca, Merck & Co, Pfizer, Merck KGaA,

Roche, GSK, Novartis and Amgen and many start-ups, small companies and university spin-offs which have emerged in the past two

Examples (in alphabetical order) include Agenus, Alligator Bioscience, Ambrx, AnaptysBio, argenx, Bioceros, BioNovion, Cellerant

Therapeutics, Checkpoint Therapeutics, Compugen, CureTech, Enumeral, Five Prime Therapeutics, Genmab, GITR, ImmuNext, IOmet Pharma,

iTeos Therapeutics, Jounce Therapeutics, KAHR Medical, Multimeric Biotherapeutics, Nativis, Orega Biotech, Pelican Therapeutics,

Pieris Pharmaceuticals, Prima BioMed, Redx Pharma, Sorrento Therapeutics, Tesaro, TG Therapeutics, Theravectys and ToleroTech active

in the field.

The list of companies with poly-specific antibodies that attempt to link the cancer with a cytotoxic T cell is long,

includes both private and public companies (Amgen, Xencor, F-Star, Merus and many others).

Finally, two CAR-T cell therapies were

just approved for the treatment of ALL –

in the immune checkpoint inhibitor field from both pharmaceutical giants including AstraZeneca, Merck & Co, Pfizer, Merck

KGaA, Roche, GSK, Novartis and Amgen and many start-ups, small companies and university spin-offs which have emerged in the past

Examples (in alphabetical order) include Agenus, Alligator Bioscience, Ambrx, AnaptysBio, argenx, Bioceros, BioNovion,

Cellerant Therapeutics, Checkpoint Therapeutics, Compugen, CureTech, Enumeral, Five Prime Therapeutics, Genmab, GITR, ImmuNext,

IOmet Pharma, iTeos Therapeutics, Jounce Therapeutics, KAHR Medical, Multimeric Biotherapeutics, Nativis, Orega Biotech, Pelican

Therapeutics, Pieris Pharmaceuticals, Prima BioMed, Redx Pharma, Sorrento Therapeutics, Tesaro, TG Therapeutics, Theravectys and

ToleroTech active in the field.

The list of companies with poly-specific antibodies that attempt to link the cancer with a cytotoxic

T cell is long, includes both private and public companies (Amgen, Xencor, F-Star, Merus and many others).

Finally, two CAR-T

cell therapies were just approved for the treatment of ALL –

Kymriah™

(Novartis) and Yescarta™

We expect additional drugs

to gain marketing authorization in the immune-oncology space.

To our knowledge,

there are three companies with NK cell immunotherapies in development.

NantKwest, (NASDAQ Global Select Market) is an early

stage biotech company that is using a genetically engineering strategy of a NK cell line to produce a live, off-the-shelf NK

cell product to treat a variety of cancers.

The clinical data for this product is sparse at this time.

Fate-NK 100 and

Engineered hnCD16iNK from Fate Therapeutics are product candidates designed to replace or supplement NK cells in patients

Glycostem is a biotech company with proprietary technology for the differentiation and expansion of allogeneic

NK cells from CD34+ hematopoietic stem cells from unused umbilical cord blood units.

It has conducted a single trial in AML

in a center in the Netherlands.

The company has perfected its manufacturing process and expects to open clinical trials in

myeloma in 2021.

To our knowledge,

there are no innate immune check-point inhibitors in development that have the unique characteristics of INB03 that neutralize

expect additional drugs to gain marketing authorization in the immune-oncology space.

our knowledge, there are no innate immune check-point inhibitors in development that have the unique characteristics of INB03

that neutralize sTNF to:

i) decreases the proliferation of MDSC;

ii) decreasing local and systemic immunosuppression caused by MDSC by stopping

production of immunosuppressive cytokines and;

iii) improving NK/DC cross-talk to recruit the adaptive immune system to fight the

INB03 Competition

To our knowledge,

there are no other innate immune system check-point inhibitors in development that combine the characteristics of decreasing the

population and function of MDSC while promoting NK/DC crosstalk that expands and recruits the adaptive immune response to attack

the patient’s tumor.

Lilly is developing LY3022855, a human IgG1 monoclonal antibody designed to target the CSF1R that should

inhibit MDSC from receiving CSF1 signals, decreasing their survival and relieving the effect of MDSC in the tumor.

Daiichi Sankyo

Inc., in collaboration with Bristol Myers Squibb, is testing DS-8273a, a TRIAL-R2 agonistic antibody in combination with a PDL1

inhibitor to decrease the number of MDSC in patients with colorectal cancer.

Rgenix Inc., is developing RGX-104, an orally bioavailable

small molecule immunotherapy that targets LXR (liver X Receptor).

RGX-104 reportedly depletes MDSC.

Syntrix Biosystems is developing

SX-682 is a small-molecule dual-inhibitor of CXCR1 and CXCR2, the chemokine receptors pivotal to tumor metastasis, therapy-resistance,

and myeloid cell suppression of cancer surveillance by the adaptive immune system.

By blocking the CXCR1/2 pathway, SX-682 may

prevent recruitment of MDSC to the tumor microenvironment.

The University of Minnesota has a trivalent antibody program aimed at

treating patients with advanced hematologic malignancies.

This CD16/IL-15/CD33 (161533) Tri-Specific Killer Engagers (TriKes) product

may target CD33+ MDSC.

Siamab Therapeutics is developing an anti-sialyl-Tn monoclonal antibody that targets MDSC in some tumor

Clathera Biosciences, in collaboration with Incyte, a US based biotech, is developing CB-1158 (INCB01158), an arginase inhibitor

to decreases MDSC.

A Phase II clinical trial is open that combines CB-1158 with nivolumab, an anti-PD1 CPI marketed by Bristol

Reata Pharmaceuticals is testing omaveloxolone (RTA 408) in the phase Ib/II REVEAL trial in combination with either

ipilimumab (Yervoy) or nivolumab (Opdivoo) in patients with advanced unresectable or metastatic melanoma.

Currently approved non-selective

TNF inhibitors, infliximab, etanercept, adalimumab and others, are not considered direct competitors of INB03 in the treatment

of cancer because of their mechanism of action and safety side effects.

Non- selective TNF inhibitors block the function of both

sTNF and tmTNF.

Blockade of tmTNF is immunosuppressive increasing the risk of infection and cancer in patients.

This is shown in

Figure 3 below where maintaining function to tmTNF by genetic or pharmacologic means results in an immunocompetent animal that

can protect itself against infection.

Blockade or knock-out of both sTNF and tmTNF results in death from infection.

Intellectual Property

The INKmune product

candidate is protected by a family of patents pending in the United States Patent & Trademark Office (the “USPTO”),

in the International Bureau of the World Intellectual Property Organization (“WIPO”) under the Patent Cooperation Treaty

(“PCT”), and in patent offices for various foreign jurisdictions.

We generally enter national stage under the PCT in

Australia, Canada, Europe, and Japan, sometimes in China and/or Korea.

The following table summarizes our pending and granted patent

positions at the time of preparing this document:

INKmune (Cancer)

The INKmune product

candidate is protected by a family of patents pending in the United States Patent & Trademark Office (“USPTO”),

in the International Bureau of the World Intellectual Property Organization (“WIPO”) under the Patent Cooperation Treaty

(“PCT”), and in patent offices for various foreign jurisdictions.

We generally enter national stage under the PCT in

Australia, Canada, Europe, and Japan, sometimes in China and/or Korea.

The following table summarizes our pending and granted patent

positions at the time of preparing this document:

“IN VIVO PRIMING OF NATURAL KILLER CELLS”

PCT/US2016/061835

“IN VIVO PRIMING OF NATURAL KILLER CELLS”

ii) decreasing local and systemic immunosuppression caused by

MDSC by stopping production of immunosuppressive cytokines and;

iii) improving NK/DC cross-talk to recruit the adaptive immune

system to fight the cancer.

seek to protect our therapeutic programs by continuously developing patent properties covering novel compositions, formulations,

purpose-limited compositions, combination treatments, methods of medical treatment, and other inventions in the United States

Patent & Trademark Office (the “USPTO”), the World Intellectual Property Organization (“WIPO”) under

the Patent Cooperation Treaty (“PCT”), and in patent offices for various foreign jurisdictions.

While each invention

is unique and territories for protection are decided on a case by case basis, we generally pursue patents in Australia, Canada,

Europe, Japan, and the United States, and sometimes in Brazil, China and/or Korea.

The following sections and corresponding tables

summarize, for each of our current therapeutic programs, our pending and granted patent positions, to the extent publicly available,

as of the time of preparing this document:

Platform Technology (Cancer, Neurologic Diseases, Metabolic Diseases, COVID-19)

The DN-TNF Platform

Technology covers a variety of dominant negative tumor necrosis factor (“DN-TNF”) variant proteins, including the pegylated

DN-TNF protein variants known as XPro1595, INB03, LIVNate, and Quellor.

These DN-TNF protein variants can be considered a platform

technology for treating the underlying immune dysfunction associated with many disease manifestations.

The following table summarizes

current IP covering our DN-TNF Platform Technology:

PROTEIN BASED TNF-ALPHA

VARIANTS FOR THE TREATMENT OF TNF-ALPHA RELATED DISORDERS

PROTEIN BASED TNF-ALPHA

VARIANTS FOR THE TREATMENT OF TNF-ALPHA RELATED DISORDERS

METHODS FOR RATIONAL

PEGYLATION OF PROTEINS

PEGYLATED TNF-a VARIANT

(Neurologic Diseases)

The patent suite for

XPro1595 includes the DN-TNF patents (above) and other patents and patent applications directed to methods of treatment of disease.

This patent suite continues to expand with active prosecution on use of XPro1595 (a DN-TNF variant) in neurologic diseases.

following table summarizes current IP expanding our DN-TNF Platform Technology for CNS-related methods of treatment:

EP 2892547 B1

A DOMINANT NEGATIVE

TNF-ALPHA INHIBITOR FOR USE IN TREATING NEUROLOGICAL DISORDERS OF THE CNS

EP 20178121 A

METHODS OF TREATING

NEUROLOGICAL DISEASES

METHODS OF TREATING

NEUROLOGICAL DISEASES

METHODS OF TREATING

NEUROLOGICAL DISEASES

patent suite for INB03 includes the DN-TNF patents (above) and other patents and patent applications directed to methods of treatment

This patent suite continues to expand with active prosecution on use of INB03 (a DN-TNF variant) in oncology.

following table summarizes current IP expanding our DN-TNF Platform Technology for oncology-related methods of treatment:

US 10,543,264

“CANCER PREVENTION

AND THERAPY BY INHIBITING SOLUBLE TUMOR NECROSIS FACTOR”

“CANCER PREVENTION

AND THERAPY BY INHIBITING SOLUBLE TUMOR NECROSIS FACTOR”

“CANCER PREVENTION

AND THERAPY BY INHIBITING SOLUBLE TUMOR NECROSIS FACTOR”

“CANCER PREVENTION

AND THERAPY BY INHIBITING SOLUBLE TUMOR NECROSIS FACTOR”

“CANCER PREVENTION

AND THERAPY BY INHIBITING SOLUBLE TUMOR NECROSIS FACTOR”

“CANCER PREVENTION

AND THERAPY BY INHIBITING SOLUBLE TUMOR NECROSIS FACTOR”

“CANCER PREVENTION

AND THERAPY BY INHIBITING SOLUBLE TUMOR NECROSIS FACTOR”

“CANCER PREVENTION

AND THERAPY BY INHIBITING SOLUBLE TUMOR NECROSIS FACTOR”

(Metabolic Diseases)

patent suite for LIVNate includes the DN-TNF patents (above) and other patents and patent applications directed to methods of

treatment of disease.

This patent suite continues to expand with active prosecution on use of LIVNate (a DN-TNF variant) for treating

metabolic diseases.

The following table summarizes current IP expanding our DN-TNF Platform Technology for metabolic disease -related

methods of treatment:

TREATMENT OF COMPLICATIONS

RELATED TO ACUTE OR CHRONIC HYPERGLYCEMIA

Jointly-Owned

PCT/US20/32649

“IN VIVO PRIMING OF NATURAL KILLER CELLS”

AU2018203469A

“IN VIVO PRIMING OF NATURAL KILLER CELLS”

TREATMENT OF NON-ALCOHOLIC

STEATOHEPATITIS

(CRS and COVID-19)

patent suite for Quellor includes the DN-TNF patents (above) and other patents and patent applications directed to methods of

treatment of disease.

This patent suite continues to expand with active prosecution on use of Quellor (a DN-TNF variant) for treating

cytokine release syndrome (CRS) and complications of COVID-19.

We have two patent properties pending as of the date of this document.

INKmune program is directed to compositions and methods of treating cancer.

INKmune comprises cells and/or membrane portions of

cells derived from a cancer cell line expressing a unique biological signature (that is often downregulated in many cancers),

which cells/membrane portions are inactivated to prevent proliferation, and which are administered to a patient.

Once administered,

the inactivated cells/membranes (INKmune) are presented in vivo to the patient’s own resting NK cells, thereby providing

the unique biological signature, and resulting in what we call “NK cell priming,”

that is, the change of a resting

NK cell to a non-naturally occurring state, or “primed NK cell,”

wherein the primed NK cell has received the signals

often downregulated by cancer cells.

Now having the often-downregulated signals, a primed NK cell can subsequently contact, adhere

and commence killing of the patient’s cancer cells.

The following table summarizes current IP covering INKmune:

“IN VIVO PRIMING

OF NATURAL KILLER CELLS”

“IN VIVO PRIMING

OF NATURAL KILLER CELLS”

“IN VIVO PRIMING

OF NATURAL KILLER CELLS”

“IN VIVO PRIMING

OF NATURAL KILLER CELLS”

“IN VIVO PRIMING

OF NATURAL KILLER CELLS”

“IN VIVO PRIMING

OF NATURAL KILLER CELLS”

CN201880028522A

“IN VIVO PRIMING OF NATURAL KILLER CELLS”

“IN VIVO PRIMING

OF NATURAL KILLER CELLS”

KR20197030017A

“IN VIVO PRIMING OF NATURAL KILLER CELLS”

INB03 (Cancer) & XPro1595 (Neurologic

The patent suite

for INB03 covers patents related to DN-TNF technology, including XPro1595.

This patent suite continues to expand with active prosecution

on use of INB03 in cancer and neurologic diseases.

We will continue to expand the use of this therapy to other areas.

PHARMACEUTICAL COMPOSITIONS FOR THE TREATMENT OF TNF-ALPHA RELATED DISORDERS

PROTEIN BASED TNF-ALPHA VARIANTS FOR THE TREATMENT OF TNF-ALPHA RELATED DISORDERS

TREATMENT OF TNF-ALPHA RELATED DISORDERS WITH TNF-ALPHA VARIANT PROTEINS

TNF-ALPHA VARIANTS PROTEINS FOR THE TREATMENT OF TNF-ALPHA RELATED DISORDERS

NOVEL TNF-a VARIANTS

METHODS OF TREATING NEUROLOGICAL DISEASES

PCT/US2018/053227

TREATMENT OF COMPLICATIONS RELATED TO ACUTE OR CHRONIC HYPERGLYCEMIA

Jointly-Owned

METHODS FOR TREATING NEURO INFLAMMATION

US 10,543,264

“CANCER PREVENTION AND THERAPY BY INHIBITING SOLUBLE TUMOR NECROSIS FACTOR”

Our commercial success

depends in part on obtaining and maintaining patent protection and trade secret protection of our current and future product candidates

and the methods used to manufacture them, as well as successfully defending these patents against third-party challenges.

to stop third parties from making, using, selling, offering to sell or importing our products depends on the extent to which we

have rights under valid and enforceable patents or trade secrets that cover these activities.

We cannot assure you that our pending

patent applications will result in issued patents.

“IN VIVO PRIMING

OF NATURAL KILLER CELLS”

“IN VIVO PRIMING

OF NATURAL KILLER CELLS”

“IN VIVO PRIMING

OF NATURAL KILLER CELLS”

“IN VIVO PRIMING

OF NATURAL KILLER CELLS”

commercial success depends in part on obtaining and maintaining patent protection and trade secret protection of our current and

future product candidates and the methods used to manufacture them, as well as successfully defending these patents against third-party

Our ability to stop third parties from making, using, selling, offering to sell or importing our products depends

on the extent to which we have rights under valid and enforceable patents or trade secrets that cover these activities.

assure you that our pending patent applications will result in issued patents.

“N/A”

is used above with respect to provisional patent applications and international PCT patent applications, each of which is only temporary in nature, and does not mature into a valid enforceable patent by itself, but instead serves to establish a chain of priority rights for subsequently filed patent applications.

when used above with respect to provisional patent applications and international PCT patent applications, each of which is

only temporary in nature, and does not mature into a valid enforceable patent by itself, but instead serves to establish a

chain of priority rights for subsequently filed patent applications.

“TBD”

is used above with respect to pending patent applications which are undergoing ordinary patent prosecution and may eventually issue as a valid enforceable patent.

International PCT

patent applications cover all 152 nations which are signatories of the PCT.

However, our IP strategy generally recognizes the United

States, United Kingdom, European Union, Canada, Japan, Australia and China as targets for extending patent protection under the

Decisions regarding which countries to extend patent coverage under the PCT is taken on a case by case basis, subject to normal

business considerations such as value and return on investment

On July 04, 2017,

the USPTO allowed U.S.

Trademark Serial No.

87/124,324 for the mark “INB16”

We intend to complete

registration upon use of the mark in commerce.

On February 21, 2017,

the USPTO allowed U.S.

Trademark Serial No.

87/124,324 for the mark “INKMUNE”

We intend to complete

registration upon use of the mark in commerce.

On February 03, 2020,

we filed U.S.

Trademark Application Serial No.

88/783,595 for the mark “INmune Bio”

The Application remains

pending and awaiting examination by a USPTO examining attorney.

Immune Ventures, LLC License Agreement

On October 29, 2015,

we entered into an exclusive license agreement with Immune Ventures, LLC, the owner of all the rights related to our principal

patent (the “Immune Ventures Agreement”).

Pursuant to the Immune Ventures Agreement, we were granted exclusive worldwide,

when used above with respect to pending patent applications which are undergoing ordinary patent prosecution and may eventually

issue as a valid enforceable patent.

International

PCT patent applications cover all 152 nations which are signatories of the PCT.

However, our IP strategy generally recognizes

the United States, United Kingdom, European Union, Canada, Japan, Australia and China as targets for extending patent protection

under the PCT.

Decisions regarding which countries to extend patent coverage under the PCT is taken on a case by case basis, subject

to normal business considerations such as value and return on investment.

of the above-identified patents and patent applications is subject to change based on strategic patent portfolio building decisions,

which may include refiling and reissue, certain abandonments, including those in favor of continuing patent applications, maturations

from provisional to non-provisional filings, and other regular patent prosecution activities.

following table summarizes trademark applications and registrations used or intended for use in connection with products in our

/ Registration

of the above-identified trademark applications is subject to change as the trademark portfolio develops and we begin to perfect

these registrations with actual use after receiving marketing authorization.

Ventures, LLC License Agreement

October 29, 2015, the Company entered into an exclusive license agreement (the “INKmune License Agreement”) with Immune

Ventures, LLC (“Immune Ventures”).

Pursuant to the INKmune License Agreement, we were granted exclusive worldwide,

sub-licensable, royalty-bearing licenses (collectively “Patent Rights”) as well as all applications (the “Field”)

1 unchanged sentence

future to the following patents and patent applications:

Patent Applications:

Patent Application Serial No.

Applications:

Application Serial No.

US 62/219,652

IN VIVO ACTIVATION OF NATURAL KILLER CELLS

IN VIVO ACTIVATION

OF NATURAL KILLER CELLS

US 62/263,951

IN VIVO ACTIVATION OF NATURAL KILLER CELLS

IN VIVO ACTIVATION

OF NATURAL KILLER CELLS

US 15/268,399