ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You 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.”
57
Overview
INmune
Bio is a clinical-stage biotechnology company dedicated to developing and commercializing a pipeline of product candidates designed to
reprogram the innate immune system. Our mission is to address a broad range of diseases where chronic inflammation and immune dysfunction
are primary drivers of pathology.
Lead
Program: CORDStromTM for RDEB Our primary focus is the treatment of Recessive Dystrophic Epidermolysis Bullosa (“RDEB”)
using CORDStrom, our proprietary, pooled, human umbilical cord-derived mesenchymal stromal cell platform. RDEB is a devastating pediatric
orphan disease caused by mutations in the COL7A1 gene. This genetic deficiency leads to systemic complications, including highly
debilitating skin blistering, chronic non-healing wounds, dysphagia, and failure to thrive. Over time, the chronic inflammatory environment
associated with RDEB often progresses to fatal squamous cell carcinoma. RDEB is a systemic disease with no approved systemic treatments.
The only approved products to date are topical and do not address the systemic issues of the disease, which is the focus of CORDStrom.
CORDStrom
has recently completed a pivotal, blinded, randomized cross-over trial. Based on these data, the Company is transitioning toward regulatory
submission and commercialization. We intend to file a Marketing Authorization Application (“MAA”) in the United Kingdom and
the European Union, followed by a Biologics License Application (“BLA”) with the U.S. Food and Drug Administration (“FDA”)
targeted for 2026.
Neuroinflammation
and Oncology Pipelines In addition to our lead rare disease program, the Company is advancing two other clinical-stage platforms:
By
targeting the innate immune system across these distinct therapeutic areas, INmune Bio aims to deliver disease-modifying treatments for
patients with high unmet medical needs.
We continue to incur significant
development and other expenses related to our ongoing operations. As a result, we are not and have never been profitable and have incurred
losses in each period since our inception, resulting in substantial doubt in our ability to continue as a going concern. We reported a
net loss of $45.9 million and $42.1 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025 and
2024, we had cash and cash equivalents of $24.8 million and $20.9 million, respectively. We expect to continue to incur significant losses
for the foreseeable future, and we expect these losses to increase as we continue our research and development of, and seek regulatory
approvals for, our product candidates. The size of our future net losses will depend, in part, on the rate of future growth of our expenses
and our ability to generate revenues, if any.
58
Our recurring net losses and
negative cash flows from operations raise substantial doubt regarding our ability to continue as a going concern within one year after
the issuance of our consolidated financial statements for the year ended December 31, 2025. Until we can generate sufficient revenue from
the commercialization of our product candidates, we expect to finance our operations through the public or private sale of equity, debt
financings or other capital sources, such as government funding, collaborations, strategic alliances, divestment of non-core assets, or
licensing arrangements with third parties. To date, the Company has relied on equity and debt financing to fund its operations.
Components of Operating Results
Operating Expenses
Research and Development
Research 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:
● clinical trial and regulatory-related costs;
● manufacturing and testing costs and related supplies and materials; and
The following table summarizes
our research and development expenses by product candidate for the periods indicated (in thousands):
Year Ended December 31,
External Costs
INKmune (Prostate Cancer) and CORDStrom 5,547 4,589
Preclinical and other programs 141 611
Accrued research and development rebate (2,919 ) (1,823 )
We
typically use our employee resources across our development programs. We track outsourced development costs by product candidate or development
program, but we do not allocate internal personnel costs including salaries and stock-based compensation to specific product candidates
or development programs.
59
We
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.
We
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. The United 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.
The costs of clinical trials
may vary significantly over the life of a project owing to, but not limited to, the following:
● per patient trial costs;
● the number of sites included in the clinical trials;
● the countries in which the clinical trials are conducted;
● the length of time required to enroll eligible patients;
● the number of patients that participate in the clinical trials;
● the number of doses that patients receive;
● the cost of comparative agents used in clinical trials;
● the drop-out or discontinuation rates of patients;
● the duration of patient follow-up;
● the efficacy and safety profile of the product candidate; and
We intend to file an MAA for
CORDStrom in the United Kingdom and the European Union, followed by a BLA with the FDA targeted for 2026. There can be no assurance that
any such applications will be submitted on our anticipated timeline, accepted for review, approved within any particular timeframe, or
approved at all.
60
The regulatory review process
in each jurisdiction is lengthy, complex, and inherently unpredictable. Regulatory authorities may require additional information, analyses,
or clinical data, which could result in delays or prevent approval. Even if approval is obtained in one or more jurisdictions, we may
experience delays in commercial launch, pricing and reimbursement approvals, manufacturing scale-up, distribution, or market acceptance.
Accordingly, we may not generate
any product revenue for the foreseeable future, if ever. We expect to continue to incur significant operating expenses and substantial
losses as we pursue regulatory approvals, prepare for potential commercialization, and continue development of our product candidates.
Our operating results are likely to fluctuate significantly from quarter to quarter and year to year due to the timing and outcome of
regulatory submissions, regulatory review processes in multiple jurisdictions, potential approval decisions, and commercial preparation
activities.
We anticipate that our expenses will increase
substantially as we:
● potentially seek regulatory approval for our product candidates;
● seek to discover and develop additional product candidates;
● seek to comply with regulatory standards and laws;
● maintain, leverage and expand our intellectual property portfolio;
General and Administrative Expenses
General and administrative
expenses consist principally of payroll and personnel expenses, including stock-based compensation; professional fees for legal, consulting,
accounting and tax services; insurance, overhead, including rent and utilities; and other general operating expenses not otherwise classified
as research and development expenses.
61
Other income, net
Other expense consists primarily
of interest income on money market investments. In addition, other income includes interest expense incurred on debt, if any, and other
items such as gain on forgiveness of payables.
Critical Accounting Estimates
This 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 sources. Actual results may differ from these estimates under different assumptions or conditions.
The Company does not have any critical accounting estimates that are
likely to have a material impact on our financial condition or results of operation.
Off-Balance Sheet Arrangements
During the periods presented,
we did not have any off-balance sheet arrangements as defined under SEC rules.
Licensing and Collaboration Agreements
We 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.
CORDStrom Clinical Data 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. In addition, the Company owns intellectual property and maintains trade secret protections covering
the manufacturing of CORDStrom. With 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.
Xencor
In October 2017, we licensed
INB03 (also known as XPro) 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 using this asset in a neurological indication.
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.
62
Results of Operations
Comparison of the Years Ended December 31,
2025 and 2024
Year Ended
Revenues
During 2025 the Company recognized
$50,000 of revenue in connection with a license agreement. In 2024, the Company sold MSC’s to one customer in the United Kingdom
and recognized $14,000 of revenues.
General and Administrative
General and administrative
expenses were $10.3 million for the year ended December 31, 2025, compared to $9.5 million for the year ended December 31, 2024. The increase
in general and administrative expenses is mainly due to higher stock-based compensation ($1.3 million higher), partially offset by lower
investor relations expense ($0.2 million lower) and lower payroll expense ($0.2 million lower) compared to the prior year.
Research and Development
Research and development expenses decreased to $20.7 million for the
year ended December 31, 2025 from $33.2 million for the year ended December 31, 2024. The decrease in research and development expenses
during the year ended December 31, 2025 compared to 2024 is mainly due to the Company incurring $13.7 million lower costs with our Alzheimer’s
clinical trial as a result of completing the Phase 2 trial in 2025, $1.1 million higher accrued rebate and $0.5 million lower preclinical
and other expenses, partially offset by $1.8 million of higher internal costs, and $1.0 million higher costs in connection with our INKmune/CORDStrom
products under development.
Impairment of acquired in-process research
and development intangible assets
During the year ended December
31, 2025, the Company released the Phase 2 clinical trial results for our Alzheimer’s drug candidate, XPro, which failed to meet
the primary endpoint, though a subgroup showed potential benefits. Due to insufficient resources to fund further trials, the Company has
halted immediate plans to develop XPro for Alzheimer’s or other indications and are instead seeking a partner to continue these
studies. As part of preparing its consolidated financial statements, the Company determined that the intangible asset’s fair value
was likely below its carrying value. Following a quantitative impairment assessment, the Company estimated the asset’s fair value
at $0, resulting in a recorded impairment of $16.5 million during the second quarter of 2025.
Other Income, net
During 2025, the Company recognized
$0.6 million of gain on the forgiveness of payables compared to $0 in 2024. Also, in 2025 the Company recognized $0.9 million of interest
income compared to $1.3 million in 2024. During 2024, the Company recognized $0.7 million of interest expense related to debt that was
paid off during 2024.
63
Liquidity and Capital Resources
Liquidity 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.
We incurred a net loss of
$45,933,000 and $42,082,000 for the years ended December 31, 2025 and 2024, respectively. Net cash used in operating activities was $22,582,000
and $33,361,000 for the years ended December 31, 2025 and 2024, respectively. Since inception, we have funded our operations primarily
with proceeds from the sales of our common stock. As of December 31, 2025, we had cash and cash equivalents of $24,751,000.
We anticipate
that we will continue to incur net losses for the foreseeable future as we continue the research and development of our product candidates,
expand our clinical activities, hire additional personnel, and incur expenses associated with operating as a public company. We expect
to incur significant expenses and operating losses as we advance our clinical development programs, pursue regulatory submissions, and,
if approved, prepare for the potential commercialization of CORDStrom. As a result, we expect that we will require additional capital
to fund our operations, which we may seek to obtain through equity or debt financings, collaborations, licensing arrangements, or other
strategic transactions. There can be no assurance that such financing will be available on acceptable terms, or at all.
The Company incurs significant
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, 2025, the cash balance held by our foreign subsidiaries with currencies other than the United States dollar was approximately
$0.2 million.
Our recurring net losses and negative cash flows from operations, as
well as forecast of continued losses and negative cash flows from operations, raised substantial doubt regarding our ability to continue
as a going concern within one year after the issuance of our consolidated financial statements for the year ended December 31, 2025. Until
we can generate sufficient revenue from the commercialization of our product candidates, we expect to finance our operations through the
public or private sale of equity, debt financing or other capital sources, such as government funding, collaborations, strategic alliances,
divestment of non-core assets, or licensing arrangements with third parties. Our cash and cash equivalents were $24.8 million and total
current assets were $29.9 million at December 31, 2025, which the Company is projecting will be insufficient to sustain its operations
through one year following the date that the financial statements are issued.
Additional capital may not
be available on reasonable terms, if at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable
to us, we may have to significantly delay, scale back or discontinue the development of one or more of our product candidates or cease
operations. If we raise additional funds through the issuance of additional debt or equity securities it could result in dilution to our
existing stockholders, increased fixed payment obligations and these securities may have rights senior to those of our common stock and
could contain covenants that would restrict our operations and potentially impair our competitiveness, such as limitations on our ability
to incur additional debt, limitations on our ability to acquire, sell or license our intellectual property rights and other operating
restrictions that could adversely impact our ability to conduct our business. Any of these events could significantly harm our business,
financial condition and prospects.
Financing strategies we may
pursue include, but are not limited to, the public or private sale of equity, debt financing or funds from other capital sources, such
as government or grant funding, collaborations, strategic alliances, divestment of non-core assets, or licensing arrangements with third
parties. There can be no assurances additional capital will be available to secure additional financing, or if available, that it will
be sufficient to meet our needs on favorable terms. If we are unable to raise additional capital in sufficient amounts or on terms acceptable
to us, we may have to significantly delay, scale back or discontinue the development of one or more of our product candidates. If we raise
additional funds through the public or private sale of equity or debt financings, it could result in dilution to our existing stockholders
or increased fixed payment obligations and these securities may have rights senior to those of our common stock and could contain covenants
that would restrict our operations and potentially impair our competitiveness, such as limitations on our ability to incur additional
debt, limitations on our ability to acquire, sell or license our intellectual property rights and other operating restrictions that could
adversely impact our ability to conduct our business. Any of these events could significantly harm our business, financial condition and
prospects.
64
ATM Sales Agreement
During
the year ending December 31, 2025, the Company sold 1,304,707 shares of common stock at an average price of $8.01 for gross proceeds of
approximately $10.4 million under the at-the-market offerings.
Registered Direct Offering
During June 2025, the Company
entered into securities purchase agreements with investors whereby the Company sold 3,000,000 shares of the common stock in a registered
direct offering in exchange for gross proceeds of $18.9 million (net proceeds of approximately $17.4 million).
Cash Flows
The following table provides
information regarding our cash flows for the years ended December 31, 2025 and 2024:
Year Ended December 31,
Net cash used in operating activities $ (22,582 ) $ (33,361 )
Net cash used in investing activities (1,042 ) -
Net cash provided by financing activities 27,612 18,211
Impact on cash from foreign currency translation (159 ) 224
Net increase (decrease) in cash and cash equivalents $ 3,829 $ (14,926 )
Net Cash Used in Operating Activities
Our cash used in operating
activities was primarily driven by our net loss.
Operating activities used
$22.6 million of cash for the year ended December 31, 2025, primarily resulting from our net loss of $45.9 million, $2.5 million of changes
in our net operating assets and liabilities and $0.6 million of gain on payables, partially offset by $16.5 million of intangible impairment
expense, and $9.9 million of non-cash stock-based compensation expense. The change in our net operating assets and liabilities was primarily
due to an increase in research and development tax rebate receivable of $3.1 million, a decrease in deferred liabilities of $0.5 million
and a decrease in other assets of $0.5 million, partially offset by a decrease of $1.9 million in accounts payable and accrued liabilities.
Operating activities used
$33.4 million of cash for the year ended December 31, 2024, primarily resulting from our net loss of $42.1 million, partially offset by
a net cash inflow of $1.0 million for changes in our net operating assets and liabilities, and non-cash stock-based compensation charges
of $7.6 million. The change in our net operating assets and liabilities was primarily due to a decrease in prepaid expenses of $1.2 million,
a decrease in research and development tax rebate receivable of $0.7 million and a decrease in other tax receivable of $0.3 million, partially
offset by a decrease of $1.4 million in accounts payable and accrued liabilities.
65
Net Used in Investing Activities
During the year ended December
31, 2025, the Company purchased $1.0 million of equipment to be used in connection with its CORDStrom clinical program.
Net Cash Provided by Financing Activities
During the year ended December
31, 2025, the Company sold 1,304,707 shares of common stock under its ATM program for net proceeds of $10.1 million.
During June 2025, the Company
sold 3,000,000 shares of its common stock in a registered direct offering in exchange for gross proceeds of $18.9 million (net proceeds
of $17.4 million).
During December 2025, the
Company amended warrants for certain warrant holders in exchange for $67,000.
During
the year ended December 31, 2024, the Company paid off $10.0 million of its debt.
During
the year ended December 31, 2024, the Company sold 247,126 shares of its common stock for net proceeds of $2.4 million under the Company’s
ATM program.
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).
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 gross proceeds of approximately $9.7 million (net proceeds of approximately $8.9 million).
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 $4.8 million (net proceeds of approximately $4.5 million).
During the year ended December
31, 2024, the Company received $0.4 million in exchange for the exercise of 108,000 stock options.
Item 7A. Quantitative and Qualitative Disclosures
about Market Risk
We are exposed to market risk
from changes in foreign currency rates.
66
Item 8. Financial Statements and Supplementary
Data
The audited consolidated financial statements of the Company, together
with the reports thereon of Marcum LLP and CBIZ CPAs P.C., independent registered public accounting firms, are included in this Annual
Report on Form 10-K beginning on page F-1.
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our
Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December
31, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed
to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the
reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its
principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management
recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving
their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and
procedures. Based on the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and
procedures were effective at the reasonable assurance level as of December 31, 2025.
Attestation Report of the Registered Public
Accounting Firm
This annual
report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities
and Exchange Commission that permit smaller reporting companies to provide only management’s report in this annual report.
Management’s Report on Internal Control
Over Financial Reporting
Our CEO and our CFO are responsible for establishing
and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Management
conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this
assessment, management used the criteria described in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (“COSO”). Our management concluded that our internal controls over financial reporting
were effective based on those criteria, as of December 31, 2025.
Changes in Internal Control over Financial
Reporting
None.
Item 9B. Other Information
(b) Director and Officer
Trading Arrangements
None of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K) during the three months ended December 31, 2025.
Item 9C. Disclosure Regarding Foreign Jurisdictions
that Prevent Inspections
Not applicable.
67
PART III
Certain information required by Part III
is omitted from this Annual Report because the Company will file a definitive proxy statement within 120 days after the end of its
fiscal year pursuant to Regulation 14A (the Proxy Statement) for its annual meeting of stockholders, and certain information included
in the Proxy Statement is incorporated herein by reference.
Item 10. Directors, Executive Officers and
Corporate Governance
The information required by this Item 10
will be set forth in the Proxy Statement and is incorporated in this Annual Report by reference.
Item 11. Executive Compensation
The information required by this item will be
set forth in the Proxy Statement and is incorporated in this Annual Report by reference.
Item 12. Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters
Equity Compensation Plan Information
The following table provides certain information
with respect to all of our compensation plans in effect as of December 31, 2025:
Equity Compensation Plans not approved by stockholders — — —
Other
The other information required by this item will
be set forth in the Proxy Statement and is incorporated in this Annual Report by reference.
Item 13. Certain Relationships and Related
Transactions, and Director Independence
The information required by this item will be
set forth in the Proxy Statement and is incorporated in this Annal Report by reference.
Item 14. Principal Accounting Fees and Services
The information required by this item will be
set forth in the Proxy Statement and is incorporated in this Annual Report by reference.
68
PART IV
Item 15. Exhibits.
Exhibit No. Description of Exhibit
69
70
71
72
19.1 Insider Trading Policy.*
21.1 Subsidiaries.*
23.1 Consent of CBIZ CPAs P.C., independent registered public accounting firm.*
23.2 Consent of Marcum LLP, independent registered public accounting firm.*
101.INS Inline XBRL Instance Document
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
* Filed herewith.
** Furnished herewith.
Item 16. Form 10-K Summary
None.
73
SIGNATURES
Pursuant to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
INMUNE BIO INC.
/s/ David J. Moss
Dated: March 30, 2026 David J. Moss
Chief Executive Officer
(Principal Executive Officer)
/s/ Cory Ellspermann
Dated: March 30, 2026 Cory Ellspermann
Chief Financial Officer
(Principal Financial and Accounting Officer)
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
Signature Title Date
David J. Moss (Principal Executive Officer)
/s/ Cory Ellspermann Chief Financial Officer March 30, 2026
Cory Ellspermann (Principal Financial and Accounting Officer)
/s/ Timothy Schroeder Director March 30, 2026
Timothy Schroeder
/s/ J. Kelly Ganjei Director March 30, 2026
J. Kelly Ganjei
/s/ Scott Juda, JD Director March 30, 2026
Scott Juda, JD
/s/ Marcia Allen Director March 30, 2026
Marcia Allen
74
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
AUDITED FINANCIAL STATEMENTS:
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNING FIRM (PCAOB ID Number 688) F-3
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2025 AND 2024 F-4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F-8
F-1
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors of
INmune Bio Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of INmune Bio Inc. (the “Company”) as of December 31, 2025, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, , the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States.
Explanatory Paragraph – Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 2, the Company has incurred significant losses and negative cash flows from its operating activities and is projecting insufficient liquidity to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/ CBIZ CPAs P.C.
CBIZ CPAs P.C.
We have served as the Company’s auditor since 2017 (such date takes into account the acquisition of the attest business of Marcum LLP by CBIZ CPAs P.C. effective November 1, 2024).
Houston, Texas
March 30, 2026
F-2
Report of Independent Registered Public Accounting
Firm
To the Stockholders and Board of Directors of
INmune Bio Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated
balance sheet of INmune Bio Inc. (the “Company”) as of December 31, 2024, the related consolidated statements of operations
and comprehensive loss, changes in stockholders’ equity and cash flows for the year ended December 31, 2024, and the related notes
(collectively referred to as the “financial statements”) In our opinion, the financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 2024 and the results of its operations and its cash flows for the year
ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
Explanatory Paragraph – Going Concern
The accompanying financial statements have been
prepared assuming that the Company will continue as a going concern. As more fully described in Note 2, the Company has incurred significant
losses and negative cash flows from its operating activities and is projecting insufficient liquidity to meet its obligations and sustain
its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ Marcum LLP
Marcum LLP
We served as the Company’s auditor from 2017 through 2025.
Houston, Texas
March 27, 2025
F-3
INMUNE BIO INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
ASSETS
CURRENT ASSETS
Research and development tax credit receivable 4,284 1,181
Prepaid expenses and other current assets 595 331
Equipment, net 955 -
Operating lease – right of use asset 914 307
Acquired in-process research and development intangible assets - 16,514
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 7,768 $ 6,539
Accounts payable and accrued liabilities – related parties 25 25
Deferred liabilities - 517
Operating lease, current liability 623 140
Long-term operating lease liability 411 244
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Accumulated other comprehensive loss (737 ) (575 )
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 32,351 $ 39,562
See accompanying notes to these consolidated financial
statements.
F-4
INMUNE BIO INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In
thousands, except share and per share amounts)
OPERATING EXPENSES
Net loss per common share – basic and diluted $ (1.86 ) $ (2.11 )
COMPREHENSIVE LOSS
Other comprehensive income (loss) – foreign currency translation (162 ) 224
See accompanying notes to these consolidated financial
statements.
F-5
INMUNE BIO INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’
EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In thousands, except share amounts)
Shares Amount Capital Income (loss) Deficit Equity
Reclassification from redeemable common stock 75,697 - 799 - - 799
Stock-based compensation - - 7,605 - - 7,605
Gain on foreign currency translation - - - 224 - 224
Exercise of warrants for cash 100 - 1 - - 1
Amendment of warrants for cash - - 67 - - 67
Stock-based compensation - - 9,910 - - 9,910
Loss on foreign currency translation - - - (162 ) - (162 )
See accompanying notes to these consolidated financial
statements.
F-6
INMUNE BIO INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Adjustments to reconcile net loss to net cash used in operating activities:
Accretion of debt discount - 79
Gain on settlement of accounts payable (626 ) -
Depreciation expense 84 -
Changes in operating assets and liabilities:
Research and development tax credit receivable (3,103 ) 724
Other tax receivable (29 ) 309
Prepaid expenses and other current assets (264 ) 1,179
Prepaid expenses – related party - 142
Accounts payable and accrued liabilities 1,855 (1,362 )
Accounts payable and accrued liabilities – related parties - (10 )
Deferred liabilities (517 ) 28
Operating lease liability 43 (25 )
Net cash used in operating activities (22,582 ) (33,361 )
CASH FROM INVESTING ACTIVITIES
Purchase of fixed assets (1,042 ) -
Net cash used in investing activities (1,042 ) -
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from sale of common stock and warrants 27,544 27,789
Cash proceeds for amendment of warrants 67 -
Exercise of warrants for cash 1 -
Repayment of debt - (10,000 )
Net proceeds from the exercise of stock options - 422
Net cash provided by financing activities 27,612 18,211
Impact on cash from foreign currency translation (159 ) 224
NET INCREASE (DECREASE) IN CASH 3,829 (14,926 )
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid for income taxes $ - $ -
Cash paid for interest expense $ - $ 1,690