What changed in this filing

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Item 1. Financial Statements

2025-05-08 compared with 2024-10-31 · 174 added, 259 removed, 464 unchanged (48% of the section changed)

3 unchanged sentences

(In thousands, except share and per share amounts)

September 30,

CURRENT ASSETS

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Prepaid expenses and other current assets

Prepaid expenses – related party

TOTAL CURRENT ASSETS

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Acquired in-process research and development intangible assets

LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES

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Deferred liabilities

Current portion of long-term debt

Operating lease, current liability

Operating lease, current liabilities

TOTAL CURRENT LIABILITIES

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COMMITMENTS AND CONTINGENCIES

Redeemable common stock, $ 0.001 par value;

no shares and 75,697 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively (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, and 22,172,451 and 17,950,776 shares issued and outstanding, respectively

Common stock, $ 0.001 par value, 200,000,000 shares authorized, 22,930,411 and 22,280,451 shares issued and outstanding, respectively

Additional paid-in capital

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TOTAL STOCKHOLDERS’ EQUITY

TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ EQUITY

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

The accompanying notes are an integral part of

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For the Three Months Ended

September 30,

For the Nine Months Ended

September 30,

OPERATING EXPENSES

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COMPREHENSIVE LOSS

Other comprehensive loss – foreign currency translation

Other comprehensive income (loss) – foreign currency translation

Total comprehensive loss

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INMUNE BIO INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES

IN STOCKHOLDERS’ EQUITY

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

FOR THE THREE MONTHS ENDED MARCH 31, 2025

(In thousands, except share amounts)

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Stockholders’

Income (Loss)

Balance as of December 31, 2024

1 unchanged sentence

Stock-based compensation

Gain on foreign currency translation

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

Stock-based compensation

Common stock and warrants issued for cash

Reclassification from redeemable common stock

Sale of common stock for cash

Exercise of warrants for cash

Loss on foreign currency translation

Balance as of September 30, 2024

Balance as of March 31, 2025

$ ( 172,843 )

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INMUNE BIO INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES

IN STOCKHOLDERS’ EQUITY

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

FOR THE THREE MONTHS ENDED MARCH 31, 2024

(In thousands, except share amounts)

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Stockholders’

Income (Loss)

Balance as of December 31, 2023

$ ( 121,022 )

Stock-based compensation

Loss on foreign currency translation

Gain on foreign currency translation

Balance as of March 31, 2024

Stock-based compensation

Loss on foreign currency translation

Balance as of June 30, 2023

Issuance of common stock for cash, net

Reclassification to redeemable common stock

Stock-based compensation

Loss on foreign currency translation

Balance as of September 30, 2023

$ ( 132,047 )

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(In thousands)

For the Nine Months Ended

September 30,

For the Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

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Deferred liabilities

Accrued liability – long-term

Operating lease liabilities

1 unchanged sentence

CASH FLOWS FROM FINANCING ACTIVITIES:

Net proceeds from sale of common stock and warrants

Sale of common stock for cash

Exercise of warrants for cash

Repayments of debt

Net cash provided by financing activities

Net provided by (used in) financing activities

Impact on cash from foreign currency translation

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normally and contributing to the patient’s disease.

INmune Bio has two product platforms.

INmune Bio has three product platforms.

The DN-TNF product platform utilizes

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many diseases.

DN-TNF is currently being developed for Alzheimer’s and treatment resistant depression (“XPro”) and cancer

(“INB03”) and an out-licensing strategy.

The Natural Killer Cell Priming Platform includes INKmune aimed at priming the patient’s

NK cells to eliminate minimal residual disease in patients with cancer.

INmune Bio’s product platforms utilize a precision medicine

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

DN-TNF is currently being developed for Alzheimer’s and treatment resistant depression (“XPro”).

The CORDStrom product platform is a pooled, human umbilical cord mesenchymal stem

cell product currently being developed to treat recessive dystrophic epidermolysis bullosa (“RDEB”).

The Natural Killer Cell

Priming Platform includes INKmune aimed at priming the patient’s NK cells to eliminate minimal residual disease in patients with

INmune Bio’s product platforms utilize a precision medicine approach for the treatment of a wide variety of hematologic

malignancies, solid tumors and chronic inflammation.

NOTE 2 – GOING CONCERN

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revenue from the commercialization of its product candidates.

During the nine months ended September 30, 2024, the Company incurred a

net loss of $ 32.9 million and had net cash flows used in operating activities of $ 22.3 million.

During the three months ended March 31, 2025, the Company incurred a net

loss of $ 9.7 million and had net cash flows used in operating activities of $ 6.8 million.

Given the Company’s projected

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These efforts require significant amounts of additional resources, adequate personnel, infrastructure and extensive compliance and reporting.

The Company’s product candidates are still

in development and, to date, none of the Company’s product candidates have been approved for sale.

There can be no assurance that the Company’s

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The carrying amounts of financial 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.

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.

Cash and Cash Equivalents

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The Company maintains its cash deposits with major financial institutions.

Accounts Receivable and Notes 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 September 30, 2024, the Company has a $ 545,000 note receivable from a vendor payable quarterly over 2 years including

interest payable at prime plus 2 % ( 10.0 % at September 30, 2024).

The Company has recorded a full valuation allowance of $ 545,000 for

the receivable based on the financial condition of the vendor.

and Development Tax Incentive Receivable

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

At September 30, 2024 and 2023, the Company had

potentially issuable shares as follows:

September 30,

At March 31, 2025 and 2024, the Company had potentially

issuable shares as follows:

Stock options

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

Recently Adopted Accounting Pronouncements

In December 2023, the Financial Accounting Standards

Board “FASB”, issued Accounting Standards Update “ASU”, No.

2023-09, Income Taxes (Topic 740):

to Income Tax Disclosures (“ASU 2023-09”).

The guidance in ASU 2023-09 improves the transparency of income tax disclosures

by greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction.

is effective for public companies for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently

evaluating the impact that the adoption of ASU 2023-09 may have on its consolidated financial statements and related disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280).

The amendments in this update expand segment disclosure

requirements, including new segment disclosure requirements for entities with a single reportable segment among other disclosure requirements.

This update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December

The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.

Segment Information

We have one primary business activity and operate

in one reportable segment.

Our chief operating decision maker (“CODM”)

is our Chief Financial Officer who evaluates performance and makes operating decisions about allocating resources based on financial data

presented on a consolidated basis.

The measures of profitability and the significant segment expenses reviewed by the CODM are consistent

with these financial statements and footnotes.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes

Improvements to Income Tax Disclosures (“ASU 2023-09”).

The guidance in ASU 2023-09 improves the transparency

of income tax disclosures by greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction.

The standard is effective for public companies for fiscal years beginning after December 15, 2024 and for interim periods for fiscal years

beginning after December 15, 2025, with early adoption permitted.

The Company is currently evaluating the impact that the adoption of

ASU 2023-09 may have on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income

Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income

Statement Expenses (“ASU 2024-03”).

ASU 2024-03 requires additional disclosure of specific types of expenses included

in the expense captions presented on the face of the income statement as well as disclosures about selling expenses.

ASU 2024-03 is effective

for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted.

ASU 2024-03 may be applied prospectively with the option for retrospective application for all prior periods presented.

The Company is

currently evaluating the impact of adopting this guidance on the Company’s current financial position, results of operations or

financial statement disclosures.

Subsequent Events

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

evaluates events that have occurred after the balance sheet date of March 31, 2025, through the date which the financial statements are

NOTE 4 – RESEARCH AND DEVELOPMENT

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

At September 30, 2024 and December 31, 2023, the Company recorded a research and development tax credit receivable of $ 1,109,000 and $ 1,905,000 ,

At March 31, 2025 and December 31, 2024, the Company recorded a research and development tax credit receivable of $ 1,283,000 and $ 1,181,000 ,

respectively, for R&D expenses incurred in Australia.

During the nine months ended September 30, 2024 and 2023, the Company received

$ 2,475,000 and $ 3,763,000 , respectively, of R&D tax credit reimbursements from Australia.

License Agreement

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in such country.

Cordstrom License Agreement

On February 6, 2025, the Company and Great Ormond Street Hospital for

Children NHS Foundation Trust (“GOSH”) entered into a license agreement for the exclusive commercial use to clinical trial

data associated with a GOSH study investigating the potential of CORDStrom to treat RDEB in pediatric patients (the ”MissionEB study”).

The Company owns the intellectual property covering CORDStrom, the investigational medicinal product used in the Mission EB study.

addition, the Company owns intellectual property and maintains trade secret protections covering the manufacturing of CORDStrom.

this license to the clinical trial data, the Company intends to prepare applications seeking marketing authorization of CORDStrom for

treatment of pediatric RDEB in each of the FDA, EMA, and MHRA.

Terms of the license agreement include an upfront payment of £ 250,000

(approximately $ 0.3 million at March 31, 2025) and a single milestone payment of up to £ 6,000,000 (approximately $ 7.8 million

as of March 31, 2025) due on the first to occur marketing authorization to be granted by the FDA, EMA or MHRA, which had not occurred

as of March 31, 2025.

At March 31, 2025 and December 31, 2024, the Company recorded $ 0.3 million and $ 0 , respectively, payable to GOSH

within accounts payable and accrued liabilities in the consolidated balance sheets.

Pursuant to the GOSH license agreement, the Company has an obligation

to provide CORDStrom to the MissionEB study at no cost.

While Part 1 of the study is completed, Part 2 of the MissionEB study is currently

uninitiated due to a lack of funding by the National Health Services England (“NHSE”).

It is unknown whether funding for the

study will be allocated by NHSE or its successor agency in the United Kingdom.

The Company has not recorded an estimated obligation for

the supply of the MissionEB trial with CORDStrom as it is unknown if the MissionEB trial will resume.

INKmune License Agreement

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During December 2023, the

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 September 30, 2024 and December 31, 2023.

Company initiated a Phase I trial with INKmune in patients with metastatic castration-resistant prostate cancer.

At December 31, 2024

and March 31, 2025, the Company recorded $ 25,000 payable to Immune Ventures within accounts payable and accrued liabilities –

related parties in the consolidated balance sheet.

The term of the agreement began on October 29,

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(i) annual maintenance fees, (ii) royalty payments based on the sale of products making use of the licensed technology, and (iii) milestone

Beginning on June 26, 2025, the Company has annual

maintenance fees under the PITT Agreement of $ 25,000 until first commercial sale.

Upon first commercial sale of a product making use

of the licensed technology under the PITT agreement, the Licensee is required to pay royalties equal to 2.5 % of net sales each calendar

Annual maintenance fees under the PITT Agreement

include $ 25,000 due on June 26, 2025 and thereafter until first commercial sale.

The Company had no amounts owed pursuant to the PITT

Agreement as of March 31, 2025.

Upon first commercial sale of a product making

use of the licensed technology under the PITT Agreement, the Licensee is required to pay royalties equal to 2.5 % of Net Sales each calendar

Moreover, under the PITT Agreement the Licensee

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The Company had no amounts owed pursuant to the

PITT Agreement as of September 30, 2024.

PITT Agreement as of March 31, 2025.

The PITT Agreement expires upon the earlier of:

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(in thousands)

September 30, 2024:

March 31, 2025:

Cash equivalents

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Cash equivalents

Treasury Bills

Money market fund

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a third party.

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

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

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

assets and liabilities:

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

(in thousands, except years and rate) March 31,

2025 December 31,

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NOTE 7 – RELATED PARTY TRANSACTIONS

At September 30, 2024 and December

31, 2023, the Company recorded $ 15,000 and $ 112,000 , respectively, of prepaid expenses – related party for payments made

to UCL in advance of medical research to be provided.

During the nine months ended September 30, 2024 and 2023, the Company paid UCL $ 252,000

and $ 334,000 , 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.

31, 2025 and December 31, 2024, the Company recorded a payable to UCL of $ 52,000 and $ 0 , respectively, for medical research performed

on behalf of the Company.

During the three months ended March 31, 2025 and 2024, the Company made no payments to UCL.

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

31, 2025 and December 31, 2024, the Company recorded a payable to AmplifyBio of $ 26,000 and $ 0 , respectively, for medical research performed

on behalf of the Company.

During the three months ended March 31, 2025 and 2024, the Company paid AmplifyBio $ 41,000 and $ 142,000 ,

respectively.

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

During the nine months ended

September 30, 2024 and 2023, the Company paid AmplifyBio $ 324,000 and $ 7,000 , respectively.

NOTE 8 – DEBT

2021, the Company entered into a Loan and Security Agreement (the “Term Loan”) with Silicon Valley Bank and SVB Innovation

Credit Fund VIII, L.P.

The Term Loan provided for a $ 15.0 million term loan, of which the Company borrowed the entire amount during

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

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

(in thousands)

debt discount and financing costs, net

Current portion of debt

three and nine months ended September 30, 2024, the Company recognized interest expense of $ 145,000 and $ 752,000 , respectively, related

to the Term Loan.

For the three and nine months ended September 30, 2023, the Company recognized interest expense of $ 568,000 and $ 1,811,000 ,

respectively, related to the Term Loan.

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

All outstanding principal and

accrued and unpaid interest will be due and payable on the maturity date.

The Term Loan provides for an annual interest rate equal to

the greater of (i) the prime rate then in effect as reported in The Wall Street Journal plus 4.50% and (ii) 7.75% .

30, 2024, the interest rate was 12.5 %.

Loan includes a final payment fee equal to 6.5 % of the original principal amount borrowed payable on the earlier of the repayment

of the loan in full and the maturity date.

The Company has the option to prepay the outstanding balance of the term loan in full, subject

to a prepayment premium of 1 % of the original principal amount borrowed for any prepayment before the maturity date.

occurrence of certain events, including but not limited to the Company’s failure to satisfy its payment obligations under the Term

Loan, the breach of certain of its other covenants under the Term Loan, or the occurrence of a material adverse change, the Lenders will

have the right, among other remedies, to declare all principal and interest immediately due and payable, and will have the right to receive

the final payment fee and, if the payment of principal and interest is due prior to maturity, the applicable prepayment fee.

the Company entered into a Loan and Security Agreement (the “Term Loan”) with Silicon Valley Bank and SVB Innovation Credit

Fund VIII, L.P., together (the “Lenders”) in which the Company borrowed $ 15 million.

The Term Loan was secured by the Company’s

During December 2024, the Company paid off the Term Loan in full.

During February 2025, the Company entered into a letter agreement

with the Lenders whereby the Term Loan was terminated.

three months ended March 31, 2025 and 2024, the Company recognized interest expense of $ 0 and $ 357,000 , respectively, related to the Term

NOTE 9 – STOCKHOLDERS’ EQUITY

Registered Direct Offerings

During September 2024, the Company entered into

securities purchase agreements with investors whereby the Company sold 2,341,260 shares of the Company’s common stock and warrants

to purchase an additional 2,341,260 shares of the Company’s common stock exercisable six months from the issuance date in a registered

direct offering in exchange for gross proceeds of $ 13.0 million (net proceeds of approximately $ 12.0 million).

and officers that participated in the offering paid a combined offering price of $ 6.50 per share and warrant, and other investors paid

$ 5.50 per share and warrant.

The exercise price of the warrants is $ 6.40 , and are exercisable beginning on March 16, 2025 and will terminate

on March 16, 2030 unless accelerated pursuant to the terms of the warrant agreements.

The Company determined the warrants were equity

The fair value of the warrants was approximately $ 9.1 million and was calculated using the Black-Scholes option-pricing

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

(1) discount rate of 3.41 % based on the applicable US Treasury

bill rate (2) expected life of 5.5 years, (3) expected volatility of approximately 92 % based on the trading history of

the Company, and (4) zero expected dividends.

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 similar companies, and (4) zero expected dividends.

Common Stock – At the Market Offering

During March 2021, the Company entered into a

sales agreement (“Sales Agreement”) with BTIG, LLC (“BTIG”), as sales agent, to establish an At-The-Market (“ATM”)

offering program of up to $ 45 million of common stock, which the Company amended in August 2023.

The Company was required to pay BTIG

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

During the nine months ended September 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.

During August 2024, the Company entered into an

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to the offer and sale of shares of our common stock with an aggregate offering price of up to $ 75.0 million.

This amended and restated

at-the-market sales agreement replaced the Sales Agreement entered into with BTIG in March 2021, as amended in August 2023.

is required to pay the Sales Agents a commission of 3 % of the gross proceeds from the sale of shares.

the nine months ended September 30, 2024, the Company issued and sold 48,762 shares of common stock at an average price of $ 6.96 per

The Company is required

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

the three months ended March 31, 2025, the Company issued and sold 649,860 shares of common stock at an average price of $ 8.37 per

share under the ATM program.

The aggregate net proceeds were approximately $ 5.3 million after commission expenses.

At September 30,

At March 31, 2025,

the Company had $ 69.4 million of common stock available under the amended and restated at-the-market agreement.

During July 2023, the Company

sold 75,697 shares of its common stock at an average price of $ 10.56 per share under the ATM program.

The aggregate net

proceeds were approximately $ 775,000 after offering expenses.

These shares were inadvertently sold under a registration statement filed

with the SEC that had in fact expired prior to the time the shares were sold.

As of December 31, 2023, the Company reclassified 75,697 shares,

with an aggregate purchase price of $ 799,000 of its common stock as temporary equity presented outside stockholders’ equity

as a result of potential rescission rights.

There have been no claims or demands to exercise such rights.

As of September 30,

2024, the rescission rights for these shares have lapsed and the shares were reclassified to permanent equity.

Stock options

During the nine months

ended September 30, 2024, the Company granted certain employees, directors and consultants, options to purchase 832,307 shares

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

The stock options had a fair value of approximately

$ 6.8 million that was calculated using the Black-Scholes option-pricing model.

Variables used in the Black-Scholes option-pricing

model include:

(1) discount rate of 3.90 % – 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.

The following

table summarizes stock option activity during the nine months ended September 30, 2024:

table summarizes stock option activity during the three months ended March 31, 2025:

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

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Options cancelled -

Outstanding at September 30, 2024 6,296,807 $ 8.87 5.90 $ 2,531

Exercisable at September 30, 2024 5,032,843 $ 8.62 5.19 $ 2,531

During the three and nine months ended September

30, 2024, the Company recognized stock-based compensation expense of approximately $ 1.7 million and $ 5.8 million, respectively,

related to the vesting of stock options.

During the three and nine months ended September 30, 2023, the Company recognized stock-based

compensation expense of approximately $ 1.9 million and $ 5.5 million, respectively, related to the vesting of stock options.

of September 30, 2024, there was approximately $ 9.1 million of total unrecognized compensation cost related to non-vested stock options

which is expected to be recognized over a weighted-average period of 2.33 years.

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

The warrants have a 10 -year term and an exercise

price of $ 14.05 .

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

Outstanding at March 31, 2025 7,303,307 $ 8.28 6.29 $ 9,372

Exercisable at March 31, 2025 5,124,039 $ 8.71 5.01 $ 6,248

During the three months ended March 31, 2025 and

2024, the Company recognized stock-based compensation expense of approximately $ 2.1 million and $ 1.8 million, respectively, related to

the vesting of stock options.

As of March 31, 2025, there was approximately $ 10.8 million of total unrecognized compensation cost related

to non-vested stock options which is expected to be recognized over a weighted-average period of 2.59 years.

The Company issued warrants to the Company’s

lenders upon obtaining a loan in June 2021.

The warrants have a 10 -year term and an exercise price of $ 14.05 .

At March 31, 2025,

respectively, 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 September 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.

At March 31, 2025, 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 September 30, 2024.

these warrants was $ 0 as of March 31, 2025.

During September

2024, the Company issued 2,341,260 warrants to investors in connection with the sale of common stock.

At September 30, 2024, 2,341,260

of these warrants are outstanding and are exercisable for cash at a weighted average price of $ 6.40 per share.

At March 31, 2025, 2,341,160 of

these warrants are outstanding and are exercisable for cash at a weighted average price of $ 6.40 per share.

The intrinsic value of

these warrants was $ 0 as of September 30, 2024.

these warrants was $ 3,301,036 as of March 31, 2025.

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 and nine months ended September 30, 2024 and 2023,

respectively:

compensation expense in the consolidated statements of operations for the three months ended March 31, 2025 and 2024 respectively:

(in thousands)

September 30,

Research and development

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“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.

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NOTE 10 – COLLABORATIVE AGREEMENTS

During September 2020, the Company was awarded

a grant of up to $ 2.9 million from the National Institutes of Health (“NIH”).

The grant will support a Phase 2 study of XPro1595

in patients with treatment resistant depression.

As of September 30, 2024, the Company has not received any proceeds pursuant to this

The Company has a grant awarded by the National

Institutes of Health for approximately $ 2.0 million which will support a Phase 2 study of XPro in patients with treatment resistant depression.

As of March 31, 2025, the Company has not received any proceeds pursuant to this grant.

NOTE 11 – COMMITMENTS

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

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.

Future minimum payments pursuant

4 unchanged sentences

Present value of future lease payments

operating lease, current liability

Long-term operating lease liability

During the three and nine months ended September

30, 2024, the Company recognized $ 40,000 and $ 120,000 , 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 nine months ended September

30, 2023, the Company recognized $ 41,000 and $ 123,000 , respectively, in operating lease expense, which is included in general and administrative

expenses in the Company’s consolidated statement of operations

operating lease, current liabilities

Long-term operating lease liabilities

During the three months ended March 31, 2025 and 2024, the Company recognized

$ 40,000 and $ 39,000 , respectively, in operating lease expense, which is included in general and administrative expenses in the Company’s

consolidated statement of operations.

has an ongoing dispute with a vendor in which the Company believes that the vendor did not properly provide services for which they have

invoiced the Company.

As of September 30, 2024, the Company has outstanding invoices with the vendor which aggregate approximately $ 1.2

million, of which the Company has recorded approximately $ 0.2 million, which is the Company’s estimate of the obligation incurred,

and the remaining $ 1.0 million has not been recorded by the Company as the Company believes the invoices were sent erroneously.

As of March 31, 2025, the Company has outstanding invoices with the vendor which aggregate approximately $ 1.6 million,

of which the Company has recorded approximately $ 0.2 million, which is the Company’s estimate of the obligation incurred, and

the remaining $ 1.4 million has not been recorded by the Company as the Company believes the invoices were sent erroneously.

and the vendor are still attempting to resolve the dispute and legal proceedings have not been threatened.

4 unchanged sentences

change in the future.

The Company’s long-lived assets consist

primarily of acquired in-process research and development intangible assets which are located in the United States.

NOTE 12 – SUBSEQUENT EVENTS

Sales of Common Stock

During the period from April 1, 2025 through May

8, 2025, the Company sold 279,966 shares of its common stock through its ATM program for net proceeds of $ 2.1 million.

Collaboration Agreement

During April 2025, INmune Bio International Limited,

a wholly-owned subsidiary of the Company and a vendor entered into a collaboration agreement pursuant to which we were granted a two year

lease for manufacturing space in the United Kingdom.

The collaboration agreement requires a deposit of approximately $ 0.5 million, an

upfront payment of approximately $ 0.2 million and additional minimum payments of approximately $ 1.3 million in the first year and approximately

$ 2.6 million in the second year in addition to certain variable payments based on facility usage.

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