What changed in this filing

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Item 1. Financial Statements

2024-08-01 compared with 2024-05-09 · 160 added, 91 removed, 526 unchanged (32% of the section changed)

18 unchanged sentences

Current portion of long-term debt

Operating lease, current liabilities

Operating lease, current liability

TOTAL CURRENT LIABILITIES

3 unchanged sentences

Redeemable common stock, $ 0.001 par value;

75,697 issued and outstanding, respectively (Note 9)

75,697 shares issued and outstanding (Note 9)

STOCKHOLDERS’ EQUITY

Preferred stock, $ 0.001 par value, 10,000,000 shares authorized, 0 shares issued and outstanding

Common stock, $ 0.001 par value, 200,000,000 shares authorized, 17,950,776 shares issued and outstanding, respectively

Common stock, $ 0.001 par value, 200,000,000 shares authorized, and 19,706,732 and 17,950,776 shares issued and outstanding, respectively

Additional paid-in capital

10 unchanged sentences

For the Three Months Ended

For the Six Months Ended

OPERATING EXPENSES

3 unchanged sentences

LOSS FROM OPERATIONS

OTHER EXPENSE, NET

OTHER INCOME (EXPENSE), NET

Net loss per common share – basic and diluted

5 unchanged sentences

notes are an integral part of these unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

THE THREE MONTHS ENDED MARCH 31, 2024

INMUNE BIO INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN STOCKHOLDERS’ EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30,

(In thousands, except share amounts)

7 unchanged sentences

Balance as of March 31, 2024

Stock-based compensation

Common stock issued for cash

Common stock and warrants issued for cash

Loss on foreign currency translation

Balance as of June 30, 2024

$ ( 141,793 )

2 unchanged sentences

INMUNE BIO INC.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2023

FOR THE THREE AND SIX MONTHS ENDED JUNE 30,

(In thousands, except share amounts)

5 unchanged sentences

Balance as of March 31, 2023

Stock-based compensation

Loss on foreign currency translation

Balance as of June 30, 2023

$ ( 104,051 )

The accompanying

3 unchanged sentences

(In thousands)

For the Three Months Ended

For the Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

14 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES:

Net proceeds from sale of common stock and warrants

Repayments of debt

Net used in financing activities

Net cash provided by financing activities

Impact on cash from foreign currency translation

26 unchanged sentences

approach for the treatment of a wide variety of hematologic malignancies, solid tumors and chronic inflammation.

NOTE 2 – GOING

NOTE 2 – GOING CONCERN

These unaudited condensed consolidated financial

4 unchanged sentences

revenue from the commercialization of its product candidates.

During the three months ended March 31, 2024, the Company incurred a net

loss of $ 11.0 million and had net cash flows used in operating activities of $ 7.5 million.

Given the Company’s projected

operating requirements and its existing cash and cash equivalents, the Company is projecting insufficient liquidity to sustain its operations

through one year following the date that the financial statements are issued.

These conditions and events raise substantial doubt about

the Company’s ability to continue as a going concern.

During the six months ended June 30, 2024, the Company incurred a net loss

of $ 20.8 million and had net cash flows used in operating activities of $ 15.4 million.

Given the Company’s projected operating

requirements and its existing cash and cash equivalents, the Company is projecting insufficient liquidity to sustain its operations through

one year following the date that the financial statements are issued.

These conditions and events raise substantial doubt about the Company’s

ability to continue as a going concern.

In response to these conditions, management is

74 unchanged sentences

The carrying amounts of financial instruments

such as cash and cash equivalents, research and development tax credit receivable, other tax receivable, prepaid expenses, and accounts

payable and accrued liabilities approximate the related fair values due to the short-term maturities of these instruments.

such as cash and cash equivalents, research and development tax credit receivable, other receivable, prepaid expenses, and accounts payable

and accrued liabilities approximate the related fair values due to the short-term maturities of these instruments.

Cash and Cash Equivalents

2 unchanged sentences

The Company maintains its cash deposits with major financial institutions.

Accounts Receivable

Accounts receivable are presented net of

allowances for credit losses.

The Company maintains an allowance for credit losses resulting from the inability of its

customers to make required payments.

At June 30, 2024, the Company has a $ 590,000 note receivable from a vendor payable quarterly over 2 years including interest payable at prime plus 2 % ( 10.5 % at June 30, 2024).

The Company has

recorded a full valuation allowance of $ 590,000 for the receivable based on the financial condition of the vendor.

and Development Tax Incentive Receivable

41 unchanged sentences

basic and diluted shares outstanding due to the Company’s net loss position.

At March 31, 2024 and 2023, the Company had potentially

At June 30, 2024 and 2023, the Company had potentially

issuable shares as follows:

53 unchanged sentences

of foreign currency transactions and balances are reflected in the statement of operations and comprehensive income (loss).

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU No.

Recently Adopted Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board “FASB”, issued Accounting Standards Update “ASU”, No.

2023-09, Income

6 unchanged sentences

Subsequent Events

evaluates events that have occurred after the balance sheet date of March 31, 2024, through the date which the financial statements are

evaluates events that have occurred after the balance sheet date of June 30, 2024, through the date which the financial statements are

NOTE 4 – RESEARCH AND DEVELOPMENT

2 unchanged sentences

The Company’s Australian subsidiary submits R&D tax credit requests annually for research and development expenses incurred.

At March 31, 2024 and December 31, 2023, the Company recorded a research and development tax credit receivable of $ 2,133,000 and $ 1,905,000 ,

At June 30, 2024 and December 31, 2023, the Company recorded a research and development tax credit receivable of $ 3,143,000 and $ 1,905,000 ,

respectively, for R&D expenses incurred in Australia.

During the three months ended March 31, 2024 and 2023, the Company received

During the six months ended June 30, 2024 and 2023, the Company received $ 0

and $ 3,763,000 , respectively, of R&D tax credit reimbursements from Australia.

During July 2024 the Company received a $ 2,475,000

R&D tax credit reimbursement from Australia.

License Agreement

37 unchanged sentences

Company initiated a Phase I trial with INKmune in patients with metastatic castration-resistant prostate cancer and has recorded a $ 25,000 payable

to Immune Ventures as of March 31, 2024 and December 31, 2023.

to Immune Ventures as of June 30, 2024 and December 31, 2023.

The term of the agreement began on October 29,

36 unchanged sentences

The Company had no amounts owed pursuant to the

PITT Agreement as of March 31, 2024.

PITT Agreement as of June 30, 2024.

The PITT Agreement expires upon the earlier of:

13 unchanged sentences

(in thousands)

March 31, 2024:

June 30, 2024:

Cash equivalents

Treasury bills

Money market funds

9 unchanged sentences

a third party.

The lease agreement has a 64-month term and commenced during the fourth quarter of 2021.

The lease agreement has a 64-month term and commenced during 2021.

Below is a summary of the Company’s right-of-use

assets and liabilities:

(in thousands, except years and rate)

(in thousands, except years and rate) June 30,

2024 December 31,

Right-of-use asset $ 363 $ 414

2 unchanged sentences

Total lease liability $ 452 $ 516

Weighted-average remaining lease term

Weighted-average remaining lease term 2.7 years 3.3 years

Weighted-average discount rate 12.0 % 12.0 %

NOTE 7 – RELATED PARTY TRANSACTIONS

31, 2024 and December 31, 2023, the Company recorded $ 23,000 and $ 112,000 , respectively, of prepaid expenses – related

party for payments made to UCL in advance of services to be provided.

During the three months ended March 31, 2024 and 2023, the Company

paid UCL $ 0 and $ 104,000 , respectively, for medical research performed on behalf of the Company.

UCL is a wholly owned subsidiary of the

University of London.

The Company’s Chief Scientific and Manufacturing Officer is a professor at the University of London.

At March 31, 2024 and December

31, 2023, the Company owed AmplifyBio $ 31,000 and $ 10,000 , respectively, in connection with medical research performed on behalf

of the Company.

30, 2024 and December 31, 2023, the Company recorded $0 and $ 112,000 , respectively, of prepaid expenses – related party

for payments made to UCL in advance of medical research to be provided.

At June 30, 2024 and December 31, 2023, the Company recorded $ 84,000

and $ 0 , respectively, of accrued expenses – related party owed to UCL for medical research performed on behalf of the Company.

the six months ended June 30, 2024 and 2023, the Company paid UCL $ 0 and $ 209,000 , respectively.

UCL is a wholly owned subsidiary of the University of London.

The Company’s Chief Scientific and Manufacturing Officer is a professor

at the University of London.

30, 2024 and December 31, 2023, the Company owed AmplifyBio $ 30,000 and $ 10,000 , respectively, in connection with medical research

performed on behalf of the Company.

The CEO of AmplifyBio is on the Board of Directors of the Company.

During the three months ended March 31, 2024 and

2023, the Company paid AmplifyBio $ 142,000 and $ 6,000 , respectively, for services performed on behalf of the Company.

During the six months ended

June 30, 2024 and 2023, the Company paid AmplifyBio $ 233,000 and $ 6,000 , respectively.

NOTE 8 – DEBT

3 unchanged sentences

10, 2021, and is secured by the Company’s assets.

loan and debt discount are as follows as of March 31, 2024:

loan and debt discount are as follows as of June 30, 2024:

(in thousands)

1 unchanged sentence

Current portion of debt

three months ended March 31, 2024 and 2023, the Company recognized interest expense of $ 357,000 and $ 612,000 , respectively, related to

the Term Loan.

three and six months ended June 30, 2024, the Company recognized interest expense of $ 250,000 and $ 607,000 , respectively, related to the

For the three and six months ended June 30, 2023, the Company recognized interest expense of $ 631,000 and $ 1,243,000 , respectively,

related to the Term Loan.

is required to make interest and principal payments monthly through the maturity date of January 1, 2025.

13 unchanged sentences

NOTE 9 – STOCKHOLDERS’ EQUITY

Registered Direct Offerings

During April 2024, the Company entered into a

securities purchase agreement with an investor whereby the Company sold 986,000 shares of the Company’s common stock and warrants

to purchase an additional 986,000 shares of the Company’s common stock in a registered direct offering in exchange for gross proceeds

of approximately $ 9.7 million (net proceeds of approximately $ 8.9 million).

The exercise price of the warrants is $ 9.84 and the term of

the warrants is the earlier of (1) April 29, 2026 or (2) thirty trading days following the reporting of positive top line data in the

Phase 2 Alzheimer’s program of XPro1595.

The Company determined that the warrants were equity classified.

The fair value of

the warrants was approximately $ 5.8 million and was calculated using the Black-Scholes option-pricing model.

Variables used in the

Black-Scholes option-pricing model include:

(1) discount rate of 4.97 % based on the applicable US Treasury bill rate (2) expected

life of 2.0 years, (3) expected volatility of approximately 77 % based on the trading history of the Company, and (4) zero expected

During April 2024, the Company entered into securities

purchase agreements with investors whereby the Company sold 571,592 shares of the Company’s common stock and warrants to purchase

an additional 571,592 shares of the Company’s common stock in a registered direct offering in exchange for gross proceeds of approximately

$ 4.8 million (net proceeds of approximately $ 4.5 million).

Directors and officers that participated

in the offering paid a combined offering price of $ 8.445 per share and warrant, and other investors paid $ 8.32 per share and warrant.

The exercise price of the warrants is $ 9.152 , and the term is the earlier of two years from the issuance of the warrants and thirty trading

days following the release of top line data in the Phase 2 Alzheimer’s program, provided that directors and officers of the Company

that are subject to a blackout with respect to trading in the Company’s stock will have an additional 60 days from the termination

of the blackout date to exercise the warrant.

The Company determined the warrants were equity classified.

The fair value of the warrants

was approximately $ 3.0 million and was calculated using the Black-Scholes option-pricing model.

Variables used in the Black-Scholes

option-pricing model include:

(1) discount rate of 4.89 % based on the applicable US Treasury bill rate (2) expected life of 2.0 years,

(3) expected volatility of approximately 78 % based on the trading history of the Company, and (4) zero expected dividends.

Common Stock – At the Market Offering

22 unchanged sentences

being brought, or the amount of any such potential penalties or fines.

As of March 31, 2024, there have been no claims or demands to exercise

As of June 30, 2024, there have been no claims or demands to exercise

As a result of these potential rescission rights, the Company reclassified 75,697 shares, with an aggregate purchase

4 unchanged sentences

reporting purposes.

six months ended June 30, 2024, the Company issued and sold 198,364 shares of common stock at an average price of $ 10.56 per

share under the ATM program.

The aggregate net proceeds were approximately $ 2.0 million after BTIG’s commission expenses.

30, 2024, the Company had $ 26.7 million of common stock available under the ATM program.

Stock options

The following

table summarizes stock option activity during the three months ended March 31, 2024:

(in thousands, except share and per share amounts)

During the six months

ended June 30, 2024, the Company granted certain employees, directors and consultants, options to purchase 795,807 shares of

its common stock pursuant to the 2021 Amended and Restated Incentive Stock Plan.

The stock options had a fair value of approximately $ 6.5 million

that was calculated using the Black-Scholes option-pricing model.

Variables used in the Black-Scholes option-pricing model include:

discount rate of 4.45 % – 4.48 % based on the applicable US Treasury bill rate (2) expected life of 5.0 – 10.0 years,

(3) expected volatility of approximately 101 % - 106 % based on the trading history of similar companies, and (4) zero expected dividends.

following table summarizes stock option activity during the six months ended June 30, 2024:

(in thousands, except share and per share amounts) Number of

Shares Weighted-

Price Weighted-

(years) Aggregate

Outstanding at January 1, 2024 5,496,000 $ 8.73 6.18 $ 21,509

2 unchanged sentences

Options cancelled - $ - - -

Outstanding at March 31, 2024

Exercisable at March 31, 2024

During the three months ended March 31, 2024 and 2023, the Company

recognized stock-based compensation expense of approximately $ 1.8 million and $ 1.7 million, respectively, related to the vesting of stock

As of March 31, 2024, there was approximately $ 7.0 million of total unrecognized compensation cost related to non-vested stock

options which is expected to be recognized over a weighted-average period of 1.31 years.

Outstanding at June 30, 2024 6,291,807 $ 8.87 6.29 $ 10,655

Exercisable at June 30, 2024 4,890,811 $ 8.54 5.51 $ 10,469

During the three and six months ended June 30,

2024, the Company recognized stock-based compensation expense of approximately $ 2.3 million and $ 4.1 million, respectively,

related to the vesting of stock options.

During the three and six months ended June 30, 2023, the Company recognized stock-based compensation

expense of approximately $ 1.9 million and $ 3.6 million, respectively, related to the vesting of stock options.

30, 2024, there was approximately $ 11.0 million of total unrecognized compensation cost related to non-vested stock options which is expected

to be recognized over a weighted-average period of 2.19 years.

issued warrants to the Company’s lenders upon obtaining its loan in June 2021.

1 unchanged sentence

price of $ 14.05 .

At March 31, 2024, 45,386 of these warrants are outstanding and the intrinsic value of these warrants is $ 0 .

At June 30, 2024, 45,386 of these warrants are outstanding and the intrinsic value of these warrants is $ 0 .

2024, the Company issued 1,557,592 warrants to investors in connection with the sale of common stock.

At June 30, 2024, 1,557,592 of these

warrants are outstanding and are exercisable for cash at a weighted average price of $ 9.59 per share.

The intrinsic value of these warrants

was $ 0 as of June 30, 2024.

Stock-based Compensation by Class of Expense

The following summarizes the components of stock-based

compensation expense in the consolidated statements of operations for the three months ended March 31, 2024 and 2023 respectively:

compensation expense in the consolidated statements of operations for the six months ended June 30, 2024 and 2023 respectively:

(in thousands)

4 unchanged sentences

“Board”) of the Company approved and adopted a Rights Agreement, dated as of December 30, 2020, by and between the Company

and VStock Transfer, LLC, as rights agent, pursuant to which the Board declared a dividend of one preferred share purchase right

(each, a “Right”) for each outstanding share of the Company’s common stock held by stockholders as of the close of business

and VStock Transfer, LLC, as rights agent, pursuant to which the Board declared a dividend of one preferred share purchase right (each,

a “Right”) for each outstanding share of the Company’s common stock held by stockholders as of the close of business

on January 11, 2021.

1 unchanged sentence

of a share of a newly designated series of preferred stock, Series A Junior Participating Preferred Stock, par value $ 0.001 per share,

of the Company, at an exercise price of $ 300.00 per one one-thousandth of a Series A Junior Participating Preferred Share, subject

to adjustment.

of the Company, at an exercise price of $ 300.00 per one one-thousandth of a Series A Junior Participating Preferred Share, subject to

Subject to various exceptions, the Rights become exercisable in the event any person (excluding certain exempted or grandfathered

persons) becomes the beneficial owner of twenty percent or more of the Company’s common stock without the approval of the Board.

The Rights Agreement was amended in 2021, 2022 and 2023 to extend the expiration date and shall expire on December 30, 2024.

On December 20, 2021, the Company entered into Amendment No.

1 to the Rights Agreement (“Amendment No.

1”) to extend the expiration

of the Rights Agreement to December 30, 2022.

On December 9, 2022, the Company and VStock Transfer, LLC entered into Amendment No.

2 to Rights Agreement (“Amendment No.

Pursuant to Amendment No.

2, the Rights Agreement extended the expiration of the

Rights Agreement to December 30, 2023.

The Rights are in all respects subject to and governed by the provisions of the Rights Agreement,

as amended by the Amendment No.1 and Amendment No.

NOTE 10 – COLLABORATIVE AGREEMENTS

3 unchanged sentences

in patients with treatment resistant depression.

As of March 31, 2024, the Company has not received any proceeds pursuant to this grant.

As of June 30, 2024, the Company has not received any proceeds pursuant to this grant.

NOTE 11 – COMMITMENTS

During September

2021, the Company signed a lease agreement with a third party for office space in Boca Raton, Florida.

The lease agreement has a 64-month

term and commenced during the fourth quarter of 2021.

the Company signed a 64-month term lease agreement with a third party for office space in Boca Raton, Florida.

Future minimum payments pursuant

4 unchanged sentences

Present value of future lease payments

operating lease, current liabilities

Long-term operating lease liabilities

During the three months ended March 31, 2024 and

operating lease, current liability

Long-term operating lease liability

During the three and six months ended June 30,

2024, the Company recognized $ 41,000 and $ 80,000 , respectively, in operating lease expense, which is included in general and administrative

expenses in the Company’s consolidated statement of operations.

During the three and six months ended June 30,

2023, the Company recognized $ 39,000 and $ 82,000 , respectively, in operating lease expense, which is included in general and administrative

expenses in the Company’s consolidated statement of operations

is subject to claims and suits that arise from time to time in the ordinary course of our business.

3 unchanged sentences

change in the future.

NOTE 12 – SUBSEQUENT EVENTS

During the period from April 4, 2024 through May

6, 2024, the Company sold 198,364 shares of common stock at an average price of $ 10.56 for gross proceeds of approximately $ 2,095,000

under the ATM offering.

On April 19, 2024, the

Company entered into securities purchase agreements with purchasers in which the Company sold 571,592 shares of common stock and warrants

to purchase 571,592 shares of common stock for aggregate gross proceeds of approximately $ 4,771,000 .

The exercise price of the warrants

is $ 9.152 and the term is the earlier of two years from the issuance of the warrants and thirty trading days following the release of

top line data in the Phase 2 Alzheimer’s program, provided that directors and officers of the Company that are subject to a blackout

with respect to trading in the Company’s stock will have an additional 60 days from the termination of the blackout date to exercise

Directors and officers that participated in the offering paid a combined offering

price of $ 8.445 per share and warrant, and other investors paid $ 8.32 per share and warrant.

On April 24, 2024, the Company entered into a

securities purchase agreement with an investor in which the Company sold 986,000 shares of common stock and warrants to purchase 986,000

shares of common stock for aggregate gross proceeds of approximately $ 9,702,000 .

The exercise price of the warrants is $ 9.84 and the term

is the earlier of two years from the issuance of the warrants and thirty trading days following the release of top line data in the Phase

2 Alzheimer’s program.

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-Q

Item 1. Financial Statements