What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2022-03-03 compared with 2021-03-04 · 15 added, 522 removed, 1 unchanged (100% of the section changed)

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

common stock trades under the symbol “INMB”

MARKET FOR REGISTRANT’S COMMON

EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock trades under the symbol “INMB”

on the Nasdaq and has been publicly traded since February 4, 2019.

to this time, there was no public market for our common stock.

of December 31, 2020, there were 35 holders of record of our common stock.

Because shares of our common stock are held by

depositories, brokers and other nominees, the number of beneficial holders of our shares is substantially larger than the number

of record holders.

of Equity Securities by the Issuer

January 2020, the Company purchased and cancelled 220,000 shares of its common stock from a shareholder in exchange for $1,012,000

Immediately following the purchase, the investor owned less than 10% of the outstanding common stock of the Company.

have not declared any cash dividends on our common stock since inception and do not anticipate paying such dividends in the foreseeable

We plan to retain any future earnings for use in our business operations.

Any decisions as to future payment of cash dividends

will depend on our earnings and financial position and such other factors as the Board of Directors deems relevant.

Selected Financial Data

a smaller reporting company, as defined in Rule 12b-2 promulgated under the Exchange Act, and in Item 10(f)91) of Regulation S-K,

we are electing scaled disclosure reporting obligations and therefore are not required to provide the information required by

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

should read the following discussion and analysis of our financial condition and results of operations in conjunction with our

financial statements and notes thereto appearing elsewhere in this Annual Report.

In addition to historical financial information,

the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions.

Our actual results could differ materially from those anticipated by these forward-looking statements as a result of many factors.

We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this Form 10-K, including

those set forth under “Risk Factors”

and “Forward-Looking Statements.”

are a clinical-stage immunotherapy company focused on developing drugs that may reprogram the patient’s innate immune system

to treat disease.

We believe this may be done by targeting cells of the innate immune system that cause acute and chronic inflammation

and are involved in the immune dysfunction associated with chronic diseases such as cancer, neurodegenerative, metabolic and infectious

The Company has two therapeutic platforms –

dominant-negative TNF platform (“DN-TNF”) and the Natural

Killer (“NK”) platform.

The DN-TNF platform neutralizes soluble TNF (“sTNF”) without affecting trans-membrane

TNF (“tmTNF”) or the receptors TNFR1 and TNFR2.

This unique biologic mechanism differentiates the DN-TNF drugs from

currently approved non-selective TNF inhibitors that inhibit the function of both sTNF and tmTNF.

Protecting the function of tmTNF

while neutralizing the function of sTNF is a potent anti-inflammatory drug that does not cause immunosuppression or demyelination.

Currently approved non-selective TNF inhibitors are approved to treat autoimmune disease, however they are contraindicated in

patients with infection, cancer and neurologic diseases because they increase the risk of infection, cancer and demyelinating

neurologic diseases, respectively, because of off-target effects on inhibiting tmTNF.

The NK platform targets the dysfunctional

natural killer cells (“NK cells”) in patients with cancer.

NK cells are part of the normal immunologic response to

cancer with important roles in immunosurveillance to prevent cancer and in preventing relapse by clearing residual disease.

disease is the cancer left behind, often undetected, that can grow and cause relapse.

The NK cells of cancer patients have the

ability to kill cancer cells but are not effective because cancer cells mutate to evade NK cell immune surveillance.

INKmune provides

the missing signals needed to prime NK cells to overcome the immune evasion mutation to allow NK cells to kill the cancer cell.

We believe INKmune is best used to eliminate residual disease after the patient has completed other cancer therapies.

DN-TNF platform and the INKmune platform can be used to treat multiple diseases.

The DN-TNF platform will be used as an immunotherapy

for the treatment of cancer, neurodegenerative, metabolic and infectious diseases.

INKmune is being developed to treat NK sensitive

hematologic malignancies and solid tumors.

believe our DN-TNF platform can be used to reverse resistance in immunotherapy, to target glial activation to prevent progression

of Alzheimer’s disease (“AD”), to target neuroinflammation in treatment resistant depression (“TRD”),

to target intestinal leak and inflammation to treat non-alcoholic steatohepatitis (“NASH”) and to treat complications

of the cytokine storm associated with COVID-19 infection.

The drug is named differently for each indication;

INB03, XPro1595,

LIVNate and Quellor, respectively, but it is the same drug product.

In each case, we believe neutralizing sTNF is a cornerstone

to the treatment of each of these diseases.

As an immunotherapy for cancer, we are using INB03 to neutralize sTNF produced by

HER2+ trastuzumab resistant breast cancers to reverse resistance to therapy.

sTNF causes an up-regulation of MUC4 expression that

causes steric hindrance of trastuzumab binding to the HER2/Neu receptor on HER2+ breast cancer cells.

Without binding, trastuzumab

is not effective.

In addition, INB03 changes the immunobiology of the tumor microenvironment by decreasing the number of immunosuppressive

myeloid cells, both myeloid derived suppressor cells and tumor active macrophages, and increasing the number of cytotoxic lymphocytes

The Company has completed an open label dose escalation trial in cancer patients with metastatic solid tumors that

have failed multiple lines of therapy.

The trial informs the design of the Phase II trial by demonstrating that INB03 was safe

and well tolerated, defined the dose of INB03 to carry into Phase II trials, and demonstrated a pharmacodynamic end-point.

II trial is planned in women with advanced HER2+ breast cancer with metastasis.

we believe the DN-TNF platform can be used to treat selected neurodegenerative diseases.

XPro1595 is being used to treat patients

with Alzheimer’s disease in a Phase I trial partially funded by a Part-the-Clouds Award from the Alzheimer’s Association.

XPro1595 targets activated microglia and astrocytes of the brain that produce sTNF that promotes nerve cell loss and synaptic

dysfunction, key elements in the development of dementia.

In animal models, elimination of sTNF prevents nerve cell dysfunction

and reverses synaptic pruning.

The Phase I trial in patients with biomarkers of inflammation with AD is enrolling patients.

open label, dose escalation trial is designed to demonstrate that XPro1595 decreases neuroinflammation in patients with AD.

end-points of the trial are measures of neuroinflammation and neurodegeneration in blood and cerebral spinal fluid, measures of

neuroinflammation by MRI by measuring white matter free water and breath by measuring volatile organic compounds in exhaled breath

and by monitoring neuropsychiatric symptoms known to be associated with neuroinflammation including depression, apathy, aggression,

hallucinations and sleep disorders.

addition, we believe the DN-TNF platform can be used to treat selected metabolic diseases.

LIVNate is being developed to treat

NASH is a pleiotropic disease caused by a complex mix of metabolic, inflammatory and fibrotic pathophysiology.

targeting inflammation caused by intestinal leak, mesenteric and peripheral fat will prevent lipotoxicity, hepatic stellate cell

activation and hepatocyte death that causes fibrosis and liver dysfunction associated with advanced disease.

sTNF is elevated

in obesity and is believed to cause intestinal leak.

Intestinal leak combined with cytokines coming from mesenteric fat may dramatically

increase the concentration of inflammatory cytokines in portal blood destined for the liver.

The cytokine load contributes to

the development of non-alcoholic fatty liver disease (“NAFLD”) and progression to NASH.

LIVNate, by neutralizing sTNF

improves insulin sensitivity, decreases the inflammation in peripheral and mesenteric fat and may also seal the intestinal leak.

This combination prevents development of NAFLD or NASH in animal models.

The Company is planning a Phase II open label randomized

study using non-invasive measures to enroll patients with NASH in a study using a fixed dose of LIVNate delivered as a once a

week sub-cutaneous injection.

also believe the DN-TNF platform may be used to treat the complications associated with the cytokine storm caused by coronavirus

disease 2019 (“COVID-19”).

Three inflammatory cytokines make up the cytokine storm associated with COVID19 infection

sTNF, IL-6 and IL-1β.

Targeting sTNF with Quellor may have advantages because IL-6 and IL-1 expression occur after

sTNF expression;

sTNF promotes endothelial activation causing expression of proteins that promote trafficking of immune cells

from the blood vessel to the tissue and expression of Tissue Factor that stimulates the coagulopathy that is a prominent pathology

of COVID-19 infection.

The Company plans a Phase II trial in patients with symptomatic COVID-19 infection and hypoxia.

of the study is to prevent the catastrophic complications of advanced COVID-19 infection including one or more of the need for

mechanical ventilation, new onset of cardiovascular, neurologic or thromboembolic disease, admission to an intensive care unit

The randomized trial will treat patients requiring hospitalization because of their disease.

therapy for treatment resistant depression (TRD) is a large unmet need.

Twenty percent of patients with a Major Depressive Disorder

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,

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 for 6 weeks.

Primary end-points include both clinical and neuroimaging measures.

The final trial design

has is ongoing and discussions with the FDA are not complete.

The Company anticipates receiving authorization to initiate the

clinical trial in the second half of 2021.

believe that INKmune improves the ability of the patient’s own NK cells to attack their tumor.

INKmune interacts with the

patient’s NK cells to convert them from inert resting NK cells that ignores the cancer into primed NK cells that kill the

INKmune is a replication incompetent proprietary cell line we have named INB16 that is given to the patient after

determining that i) the patient has adequate NK cells in their circulation and ii) those NK cells are functional when exposed

to INKmune in vitro.

INKmune is designed to be given to patients after their immune system has recovered after cytotoxic chemotherapy

to target the residual disease the remains after treatment with cytotoxic therapy.

INKmune can be used to treat numerous

hematologic malignancies and solid tumors including leukemia, multiple myeloma, lymphoma, lung, ovary, breast, renal and prostate

The Company plans Phase I trials using INKmune to treat patients with high risk MDS, a form of leukemia and women with

relapsed refractory ovarian.

a company with less than $1.07 billion in revenue during our last fiscal year, we qualify as an “emerging growth company”

under the JOBS Act.

As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements

that are otherwise applicable generally to public companies.

These provisions include:

only two years of

audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced

“Management’s Discussion and Analysis of Financial Condition and Results of Operations”

reduced disclosure

about our executive compensation arrangements;

no non-binding advisory

votes on executive compensation or golden parachute arrangements;

exemption from the

auditor attestation requirement in the assessment of our internal control over financial reporting;

delaying the adoption

of new or revised accounting standards that have different effective dates for public and private companies until those standards

apply to private companies.

have elected to take advantage of the above-referenced exemptions and we may take advantage of these exemptions for up to five

years or such earlier time that we are no longer an emerging growth company.

We would cease to be an emerging growth company if

we have more than $1.07 billion in annual revenues, we have more than $700 million in market value of our stock held by non-affiliates,

or we issue more than $1 billion of non-convertible debt over a three-year period.

We may choose to take advantage of some but

not all of these reduced burdens.

of Operating Results

and Development

and development expense consists of expenses incurred while performing research and development activities to discover and develop

our product candidates.

This includes conducting preclinical studies and clinical trials, manufacturing development efforts and

activities related to regulatory filings for product candidates.

We recognize research and development expenses as they are incurred.

Our research and development expense primarily consist of:

trial and regulatory-related costs;

incurred under agreements with investigative sites and consultants that conduct our clinical trials;

manufacturing

and testing costs and related supplies and materials;

employee-related

expenses, including salaries, benefits, travel and stock-based compensation

typically use our employee, consultant and infrastructure resources across our development programs.

We track outsourced development

costs by product candidate or development program, but we do not allocate personnel costs, other internal costs or external consultant

costs to specific product candidates or development programs.

participate, through our wholly-owned subsidiary in Australia, in the Australian research and development tax incentive program,

such that a percentage of our qualifying research and development expenditures are reimbursed by the Australian government, and

such incentives are reflected as a reduction of research and development expense.

The Australian research and development tax

incentive is recognized when there is reasonable assurance that the incentive will be received, the relevant expenditure has been

incurred and the amount of the consideration can be reliably measured.

participate, through our wholly-owned subsidiary in the United Kingdom, in the research and development program provided by the

United Kingdom tax relief program, such that a percentage of our qualifying research and development expenditures are reimbursed

by the United Kingdom government, and such incentives are reflected as a reduction of research and development expense.

Kingdom research and development tax incentive is recognized when there is reasonable assurance that the incentive will be received,

the relevant expenditure has been incurred and the amount of the consideration can be reliably measured.

Substantially

all of our research and development expenses to date have been incurred in connection with our current and future product candidates.

We expect our research and development expenses to increase significantly for the foreseeable future as we advance an increased

number of our product candidates through clinical development, including the conduct of our planned clinical trials and manufacturing

drug to be used in those clinical trials.

The process of conducting clinical trials necessary to obtain regulatory approval is

costly and time consuming.

The successful development of product candidates is highly uncertain.

At this time, we cannot reasonably

estimate the nature, timing or costs required to complete the remaining development of any product candidates.

This is due to

the numerous risks and uncertainties associated with the development of product candidates.

costs of clinical trials may vary significantly over the life of a project owing to, but not limited to, the following:

patient trial costs;

number of sites included in the clinical trials;

countries in which the clinical trials are conducted;

length of time required to enroll eligible patients;

number of patients that participate in the clinical trials;

number of doses that patients receive;

cost of comparative agents used in clinical trials;

drop-out or discontinuation rates of patients;

additional safety monitoring or other studies requested by regulatory agencies;

duration of patient follow-up;

efficacy and safety profile of the product candidate;

cost of manufacturing, finishing, labeling and storage drug used in the clinical trial

do not expect any of our product candidates to be commercially available for at least the next several years, if ever.

to continue to incur significant expenses and increasing operating losses for the foreseeable future, which may fluctuate significantly

from quarter-to-quarter and year-to-year.

We anticipate that our expenses will increase substantially as we:

research and development, including preclinical and clinical development of our existing product candidates;

seek regulatory approval for our product candidates;

to discover and develop additional product candidates;

a commercialization infrastructure and scale up our manufacturing and distribution capabilities to commercialize any of our

product candidates for which we may obtain regulatory approval;

to comply with regulatory standards and laws;

leverage and expand our intellectual property portfolio;

clinical, manufacturing, scientific and other personnel to support our product candidates development and future commercialization

operational, financial and management information systems and personnel;

additional legal, accounting and other expenses in operating as a public company.

and Administrative Expenses

and administrative expenses consist principally of payroll and personnel expenses, including stock-based compensation;

fees for legal, consulting, accounting and tax services;

overhead, including rent and utilities;

and other general operating expenses

not otherwise classified as research and development expenses.

of Common Stock Issuable

of common stock issuable consists of a reversal of stock-based compensation for a consultant that permanently waived the Company

issuing 200,000 shares owed to the consultant which were expensed in a prior period.

income primarily consists of income from a settlement in 2020.

In addition, other income includes interest income on money market

accounts during 2020 and 2019.

Accounting Policies and Significant Judgments and Estimates

management’s discussion and analysis of our financial condition and results of operations is based on our financial statements,

which we have prepared in accordance with accounting principles generally accepted in the United States.

The preparation of our

financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities

and the disclosure of contingent assets and liabilities at the date of our financial statements, as well as the reported revenues

and expenses during the reported periods.

We evaluate these estimates and judgments on an ongoing basis.

We base our estimates

on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which

form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other

Actual results may differ from these estimates under different assumptions or conditions.

Research and Development

Company evaluates the carrying value of indefinite-lived intangible assets, which consists of in-process research and development

(“IPR&D”), on an annual basis or more frequently when indicators of impairment exist.

An impairment of indefinite-lived

intangible assets would occur if the fair value of the intangible asset is less than the carrying value.

Intangible assets with

finite lives are tested for impairment when events or changes in circumstances indicate that the carrying amount of such assets

may not be recoverable.

If these facts and circumstances exist, the Company assesses for recovery by comparing the carrying values

of the assets with their future undiscounted net cash flows.

Significant management judgment is required in the forecast of future

operating results that are used in the preparation of expected undiscounted cash flows.

assets are considered to be indefinite-lived until the completion or abandonment of the associated research and development projects.

During the period the assets are considered indefinite-lived, they are tested for impairment.

If the related project is terminated

or abandoned, the Company may have a full or partial impairment related to the IPR&D assets, calculated as the excess of their

carrying value over fair value.

The valuation process is very complex and requires significant input and judgment using internal

and external sources with respect to the Company’s future revenue and expense growth rates, changes in working capital use,

the selection of an appropriate discount rate, and other assumptions and estimates.

and Development (“R&D”)

expenses consist primarily of costs related to clinical studies and outside services, personnel expenses, and other R&D expenses.

Clinical studies and outside services costs relate primarily to services performed by clinical research organizations and related

clinical or development manufacturing costs, materials and supplies, filing fees, regulatory support, and other third-party fees.

Personnel expenses relate primarily to salaries, benefits and share-based compensation.

R&D expenditures are charged to operations

recognize R&D tax credits receivable from the United Kingdom and Australian government for spending on R&D as an offset

of R&D expenses.

measure and recognize compensation expense for all stock-based awards granted to service providers.

employees, and directors based

on the estimated fair value of the award on the grant date.

We calculate the estimated fair value of stock options on the date

of grant using the Black-Scholes option-pricing model, which is impacted by the fair value of our common stock, as well as changes

in assumptions regarding a number of highly complex and subjective variables.

These variables include, but are not limited to,

the market value of common stock on the grant date, the expected dividend yield, the expected term of the awards, the risk-free

interest rates and the expected common stock price volatility over the term of the option awards.

The expected volatility is based

on the historical volatility of a few unrelated public companies within our industry over the most recent period commensurate

with the estimated expected term of our stock options as we have insufficient historical information regarding the volatility

of the share price of our common stock.

The risk-free interest rate for periods within the contractual life of the option is based

Treasury yield in effect at the time of grant.

We have never declared or paid dividends and have no plans to

do so in the foreseeable future.

recognize the fair value of stock options on a straight-line basis over the period during which a service provider is required

to provide services in exchange for the award (generally the vesting period).

We account for forfeitures as they occur.

Sheet Arrangements

the periods presented, we did not have any off-balance sheet arrangements as defined under SEC rules.

and Collaboration Agreements

anticipate that in-licensing, out-licensing and strategic collaborations will become an integral part of our operations, providing

the company with opportunities to leverage our partners’

expertise and capabilities to further expand the potential of our

technologies, product candidates and revenue streams.

October 2017, we licensed INB03 (also known as XPro1595, Quellor, and LIVNate) from Xencor.

This exclusive, global, unrestricted

license came with considerable know-how, intellectual property, pre-clinical data, regulatory documentation and product stocks.

Currently, we are focused on the immune-oncology uses of this unique asset.

In the future, we may develop the asset in a wide

variety of therapeutic areas, with a variety of delivery techniques by ourselves or in conjunction with partners.

of Operations

of the Years Ended December 31, 2020 and December 31, 2019

General and Administrative

Research and Development

Waiver of common stock issuable

$ (12,099,159 )

$ (7,678,313 )

2020, the Company sold MSC’s to one third-party and recognized $10,916 of revenues.

There were no sales during 2019.

and Administrative

and administrative expenses were $6.3 million for the year ended December 31, 2020, compared to $6.0 million for the year ended

December 31, 2019.

The increase was primarily attributable to higher stock-compensation ($0.2 million higher in 2020), higher

insurance expense ($0.2 million higher in 2020) and higher wages and benefits ($0.2 million higher in 2020) partially offset by

lower professional fees ($0.4 million lower in 2020).

and Development

and development expenses increased to $5.9 million for the year ended December 31, 2020 from $3.3 million for the year ended December

During the years ended December 31, 2020 and 2019, the Company recorded stock-based compensation of $0.6 million and

$1.8 million, respectively, within research and development expenses.

The increase in research and development expenses during

the year ending December 31, 2020 compared to December 31, 2019 is due to additional amounts incurred for the advancement

of our drug platform and due to the Company incurring manufacturing costs in connection with producing its DN-TNF product.

of Common Stock Issuable

the year ended December 31, 2019, the Company reversed $1.5 million of expense as a result of a consultant permanently waiving

the Company’s obligation to issue 200,000 shares owed to the consultant which were expensed in a prior period.

transaction occurred during the year ended December 31, 2020.

income increased during the year ended December 31, 2020 compared to 2019 as a result of the Company receiving a refund from a

third-party vendor pursuant to a release and settlement agreement of approximately $0.1 million for services provided in a previous

year, partially offset by earning lower interest in 2020 compared to 2019.

and Capital Resources

is the ability of a company to generate funds to support its current and future operations, satisfy its obligations and otherwise

operate on an ongoing basis.

incurred a net loss of $12,099,159 and $7,678,313 for the years ended December 31, 2020 and 2019, respectively.

Net cash used

in operating activities was $8,943,646 and $5,384,656 for the years ended December 31, 2020 and 2019, respectively.

Since inception,

we have funded our operations primarily with proceeds from the sales of our common stock and from the receipts of grants.

December 31, 2020, we had cash and cash equivalents of $22.0 million.

We anticipate that operating losses and net cash used in

operating activities will increase over the next few years as we advance our products under development.

primary uses of capital are, and we expect will continue to be, third-party clinical and preclinical research and development

services, costs incurred to manufacture our drugs under development, compensation and related expenses, legal, patent and other

regulatory expenses and general overhead costs.

We believe our use of CROs provides us with flexibility in managing our spending.

Company incurs the majority of its research and development expenses in Australia and the United Kingdom.

Fluctuations in the

rate of exchange between the United States dollar and the pound sterling as well as the Australian dollar could adversely

affect our financial results, including our expenses as well as assets and liabilities.

We currently do not hedge foreign currencies

but will continue to assess whether that strategy is appropriate.

As of December 31, 2020, the cash balance held by our foreign

subsidiaries with currencies other than the United States dollar was approximately $0.6 million.

We do not have any material financial

exposure to one customer or one country that would significantly hinder our liquidity.

of December 31, 2020, the Company had an accumulated deficit of $33,375,340 and working capital of $22,209,460.

Losses have principally

occurred as a result of stock-based compensation expense as well as the substantial resources required for research and development

of the Company’s products which included the general and administrative expenses associated with its organization and product

development, as well as the lack of sources of material revenues until such time as the Company’s products are commercialized.

As of December 31, 2020, we had cash and cash equivalents of $22.0 million.

In addition, during January and February 2021, we

raised an additional $29.0 million in gross proceeds through sales of common stock under the ATM program.

As such, we believe

our cash and cash equivalents, including the proceeds received in January and February 2021, will be sufficient to fund our operations

for at least the next 12 months following the filing date of this Annual Report on Form 10-K.

Public Offering

the year ended December 31, 2019, the Company completed its initial public offering in which the Company sold 1,020,820 shares

of its common stock for gross proceeds of $8.2 million (net proceeds of $7.3 million).

and May sale of common stock

April and May 2019, the Company sold 522,212 shares of its common stock to certain investors for cash proceeds of $4.7 million,

of which the Company’s CEO purchased 11,100 shares for $0.1 million of cash and the Company’s CFO purchased 5,000

shares for $0.1 million of cash.

Lincoln Park Transaction

May 15, 2019, the Company entered into the Lincoln Park Purchase Agreement pursuant to which Lincoln Park has agreed to purchase

from us up to an aggregate of $20.0 million of the Company’s common stock (subject to certain limitations) from time to

time over the 24-month term of the agreement.

The Company also entered into a registration rights agreement with Lincoln Park

pursuant to which the Company filed with the Securities and Exchange Commission (the “SEC”) the registration statement

to register for resale under the Securities Act of 1933, as amended, or the Securities Act, the shares of common stock that have

been or may be issued to Lincoln Park under the Purchase Agreement.

The registration statement was effective as of July 2, 2019.

a result, on May 15, 2019, 70,000 newly issued shares of the Company’s common stock were issued to Lincoln Park as consideration

for Lincoln Park’s commitment to purchase shares of the Company’s common stock under the agreement, and 30,000 newly

issued shares of common stock, valued at $10.00 per share, were sold to Lincoln Park in an initial purchase for an aggregate gross

purchase price of $0.3 million ($0.2 million net of offering costs).

During the year ended December 31, 2020, the Company issued

196,000 shares of the Company’s common stock to Lincoln Park for gross proceeds of $1,002,644.

the terms and subject to the conditions of the Lincoln Park Purchase Agreement, the Company has the right, but not the obligation,

to sell to Lincoln Park, and Lincoln Park is obligated to purchase up to, an additional $18.7 million worth of shares of the Company’s

common stock.

Such future sales of common stock by the Company, if any, will be subject to certain limitations, and may occur

from time to time, at the Company’s option, over the 24-month term of the agreement.

contemplated by the Lincoln Park Purchase Agreement, and so long as the closing price of the Company’s common stock exceeds

$3.50 per share, then the Company may direct Lincoln Park, at its sole discretion to purchase up to 20,000 shares of its common

stock on any business day.

The price per share for such purchases will be equal to the lower of:

(i) the lowest sale price on

the applicable purchase date and (ii) the arithmetic average of the three (3) lowest closing sale prices for the Company’s

common stock during the twelve (12) consecutive business days ending on the business day immediately preceding such purchase date

(in each case, to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split or other

similar transaction that occurs on or after the date of the purchase agreement).

The maximum amount of shares subject to any single

regular purchase increases as the Company’s share price increases, subject to a maximum of $1.0 million.

addition to regular purchases, the Company may also direct Lincoln Park to purchase other amounts as accelerated purchases or

as additional purchases if the closing sale price of the common stock exceeds certain threshold prices as set forth in the purchase

There are no trading volume requirements or restrictions under the purchase agreement nor any upper limits on the price

per share that Lincoln Park must pay for shares of common stock.

Lincoln Park Purchase Agreement and the registration rights agreement contain customary representations, warranties, agreements

and conditions to completing future sale transactions, indemnification rights and obligations of the parties.

The Company has

the right to terminate the purchase agreement at any time, at no cost or penalty.

During any “event of default”

the purchase agreement, all of which are outside of Lincoln Park’s control, Lincoln Park does not have the right to terminate

the purchase agreement;

however, the Company may not initiate any regular or other purchase of shares by Lincoln Park, until such

event of default is cured.

In addition, in the event of bankruptcy proceedings by or against the Company, the purchase agreement

will automatically terminate.

sales of shares of common stock to Lincoln Park under the purchase agreement will depend on a variety of factors to be determined

by the Company from time to time, including, among others, market conditions, the trading price of the common stock and determinations

by the Company as to the appropriate sources of funding for the Company and its operations.

Lincoln Park has no right to require

any sales by the Company, but is obligated to make purchases from the Company as it directs in accordance with the purchase agreement.

Lincoln Park has covenanted not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of

the Company’s shares.

Sales Agreement

April 16, 2020, we entered into a sales agreement with BTIG, as sales agent, to establish an ATM offering program.

We were required

to pay BTIG a commission of 3% of the gross proceeds from the sale of shares.

During the year ended December 31, 2020, we issued

and sold 178,600 shares of common stock at an average price of $5.45 per share under the ATM program.

The aggregate net proceeds

were approximately $0.8 million after BTIG’s commission and other offering expenses.

January and February 2021, we issued and sold 1,439,480 shares of common stock at an average price of $20.17 per share under the

The aggregate net proceeds were approximately $28.4 million after offering expenses.

July 2020, the Company completed an underwritten public offering in which it sold 2,500,000 shares of common stock at a public

offering price of $10.00 per share.

The 2,500,000 shares sold included the full exercise of the underwriters’

purchase 326,086 shares at a price of $10.00 per share.

Aggregate net proceeds from the underwritten public offering were approximately

$23.1 million, net of approximately $1.9 million in underwriting discounts and commissions and offering expenses.

2019, the Company was awarded a $1.0 million grant from the Alzheimer’s Association to advance XPro1595, a novel therapy

targeting neuroinflammation as a cause of Alzheimer’s disease.

The endowment was awarded under the Part the Cloud to RESCUE

During the years ended December 31, 2020 and 2019, the Company received $0.1 million and $0.9 million, respectively, related

to the grant, which the Company recorded as a reduction of research and development expense.

As of December 31, 2020, the Company

has received $1.0 million of cash proceeds from the Alzheimer’s Association and no additional amounts are available to the

Company pursuant to this grant.

the year ended December 31, 2020, the Company was awarded a $0.5 million grant from the Amyotrophic Lateral Sclerosis (“ALS”)

Association to fund a study of the efficacy of XPro1595 to reverse ALS in vitro and to fund a study of the efficacy of XPro1595

to protect against ALS model phenotypes in vivo.

During the year ended December 31, 2020, the Company received $0.3 million

of cash proceeds pursuant to this grant which the Company recorded as deferred liabilities.

During the year ended December 31,

2020, the Company recorded $0.2 million as a reduction of research and development expense related to the ALS grant.

As of December

31, 2020, the Company recorded $0.1 million as deferred liabilities in the consolidated balance sheet related to the ALS grant.

September 2020, the Company was awarded a grant of up to $2.9 million from the National Institutes of Health (“NIH”).

As of December 31, 2020, the Company has not received any proceeds pursuant to this grant.

following table provides information regarding our cash flows for the years ended December 31, 2020 and 2019:

Net cash used in operating activities

$ (8,943,646 )

$ (5,384,656 )

Net cash provided by financing activities

Impact on cash from foreign currency translation

Net increase in cash and cash equivalents

Cash Used in Operating Activities

cash used in operating activities was primarily driven by our net loss.

activities used $8.9 million of cash for the year ended December 31, 2020, primarily resulting from our net loss of $12.1 million,

partially offset by non-cash stock-based compensation charges of $3.1 million.

activities used $5.4 million of cash for the year ended December 31, 2019, primarily resulting from our net loss of $7.7 million,

a net cash outflow of $0.3 million for changes in our net operating assets and liabilities, offset by non-cash stock-based compensation

charges of $4.1 million, partially offset by a waiver of common stock issuable of $1.5 million.

The change in our net operating

assets and liabilities was primarily due to a decrease in accounts payable and accrued liabilities of $0.2 million and a $0.1

million increase in prepaid expenses.

Cash Provided by Financing Activities

July 2020, the Company completed an underwritten public offering in which it sold 2,500,000 shares of common stock at a public

offering price of $10.00 per share.

Aggregate net proceeds from the underwritten public offering were approximately $23.1 million,

net of approximately $1.9 million in underwriting discounts and commissions and offering expenses.

the year ended December 31, 2020, the Company purchased 220,000 shares from an investor for approximately $1.0 million.

the Company sold 196,000 shares of its common stock to Lincoln Park for cash proceeds of approximately $1.0 million.

the year ended December 31, 2020, the Company issued and sold 178,600 shares of common stock at an average price of $5.45 per

share under the ATM program for net cash proceeds of approximately $0.8 million.

February 2019, the Company completed its initial public offering in which the Company sold 1,020,820 shares of its common stock

for gross proceeds of approximately $8.2 million (net proceeds of approximately $7.3 million).

April and May 2019, the Company sold 522,212 shares of its common stock to certain investors for cash proceeds of approximately

$4.7 million of which the Company’s CEO purchased 11,100 shares for $119,325 of cash and the Company’s CFO purchased

5,000 shares for $53,550 of cash.

May 15, 2019, the Company sold 30,000 shares of its common stock to Lincoln Park for $300,000 in gross cash proceeds (net cash

proceeds of $230,000) and issued 70,000 shares of its common stock to Lincoln Park pursuant to the terms of the purchase agreement

as consideration for its commitment to purchase shares under the purchase agreement.

Quantitative and Qualitative Disclosures about Market Risk

are exposed to market risk from changes in foreign currency rates.

Prior to this time, there was no public market for our common stock.

As of December 31, 2021, there were 26 holders

of record of our common stock.

Because shares of our common stock are held by depositories, brokers and other nominees, the number of

beneficial holders of our shares is substantially larger than the number of record holders.

Dividend Policy

We have not declared any cash dividends on our

common stock since inception and do not anticipate paying such dividends in the foreseeable future.

We plan to retain any future earnings

for use in our business operations.

Any decisions as to future payment of cash dividends will depend on our earnings and financial position

and such other factors as the Board of Directors deems relevant.

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

What changed 10-K

Item 5. Market for Registrant’s Common Equity