Inmune Bio, Inc.: Form 10-Q for the period ended Jun 30, 2026

Forward-Looking Statements

This Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained in this Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate” or “continue” or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include but are not limited to economic conditions generally and in the industries in which we may participate; competition within our chosen industry, including competition from much larger competitors; technological advances and failure to successfully develop business relationships.

Description of Business

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: CORDStrom™ 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 by the end of Q3 or early Q4 of 2026 and the European Union in early 2027, followed by a Biologics License Application (“BLA”) with the U.S. Food and Drug Administration (“FDA”).

Neuroinflammation and Oncology Pipelines In addition to our lead rare disease program, the Company has two other clinical-stage platforms:

• XPro1595 (XPro): A next-generation protein therapeutic that targets neuroinflammation by selectively neutralizing soluble TNF. XPro has completed Phase I and Phase II clinical trials for the treatment of Alzheimer’s Disease (“AD”). The Company intends to pursue strategic partnership opportunities to support the further development of XPro in neurodegenerative and/or other indications. The Company does not currently plan to independently advance XPro into later-stage development.
• INKmune™: A novel natural killer (NK) cell-priming platform designed to harness the patient’s own innate immune system to eliminate cancer cells. The INKmune program is currently nearing the completion of an open-label Phase II trial for the treatment of metastatic castrate-resistant prostate cancer (“mCRPC”).

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 $6.7 million for the six months ended June 30, 2026. As of June 30, 2026 and December 31, 2025, we had cash and cash equivalents of $18.4 million and $24.8 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.

Our recurring net 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 unaudited condensed consolidated financial statements for the six months ended June 30, 2026. 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.

Amendment to Anthony Nolan License Agreement

On April 29, 2026, the Company entered into an amended and restated material transfer and license agreement with Anthony Nolan, a UK-based organization, which amends and restates a prior agreement originally entered into in 2017 by the Company’s wholly owned subsidiary. In connection with the amended agreement, the Company became a direct party and agreed to be jointly and severally liable for certain payment obligations thereunder. The amended agreement expands the Company’s collaboration with Anthony Nolan and is intended to secure a long-term supply of umbilical cord tissue to support the development of CORDStrom, which the Company expects will be the initial application of such materials, with potential use in additional product candidates in the future.

Under the amended agreement, the Company has obtained exclusive rights, with the ability to sublicense, to use specified donor materials for research, development and commercialization purposes. The Company is obligated to pay per-sample processing fees and, upon commercialization, royalties on net sales, each subject to certain adjustments and caps, and such fees may be subject to periodic increases tied to inflation indices. The agreement continues until terminated in accordance with its terms or for a period extending beyond the first commercial sale of applicable products.

The Company does not expect the amended agreement to have a material impact on its near-term results of operations or liquidity; however, it may result in future payment obligations and become material in the event of successful development and commercialization of product candidates utilizing such materials. The Company believes this agreement is consistent with its strategy to advance its product candidates through collaborations, strategic relationships and licensing arrangements.

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;
• expenses incurred under agreements with investigative sites and consultants that conduct our clinical trials;
• manufacturing and testing costs and related supplies and materials; and
• employee-related expenses, including salaries, benefits, travel and stock-based compensation.

The following table summarizes our research and development expenses by product candidate for the periods indicated (in thousands):

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 costs personnel costs including salaries and stock-based compensation to specific product candidates or development programs.

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 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;
• potential additional safety monitoring or other studies requested by regulatory agencies;
• the duration of patient follow-up;
• the efficacy and safety profile of the product candidate; and
• the cost of manufacturing, finishing, labelling and storage drug used in the clinical trial.

We do not expect any of our product candidates to be commercially available for at least the next several years, if ever. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future, which may fluctuate significantly from quarter-to-quarter and year-to-year. We anticipate that our expenses will increase substantially as we:

• continue research and development, including preclinical and clinical development of our existing product candidates;
• potentially seek regulatory approval for our product candidates;
• seek to discover and develop additional product candidates;
• establish a commercialization infrastructure and scale up our manufacturing and distribution capabilities to commercialize any of our product candidates for which we may obtain regulatory approval;
• seek to comply with regulatory standards and laws;
• maintain, leverage and expand our intellectual property portfolio;
• hire clinical, manufacturing, scientific and other personnel to support our product candidates development and future commercialization efforts;
• add operational, financial and management information systems and personnel; and
• incur additional legal, accounting and other expenses in operating as a public company.

Results of Operations

Comparison of the Three Months Ended June 30, 2026 and 2025

The following table summarizes our results of operations for the periods indicated:

(in thousands)

Research and Development

Research and development benefit was approximately $0.8 million during the three months ended June 30, 2026, compared to research and development expense of approximately $5.8 million during the three months ended June 30, 2025. The Company recorded $4.2 million of additional R&D rebate during the three months ended June 30, 2026 primarily as a result of the completion of the Australian government's review of the Company’s 2025 R&D claim. In addition, the Company incurred $3.3 million less expenses related to our Alzheimer’s clinical program due to the Company completing its Phase 2 trial during 2025, and $0.5 million lower expenses due to the Company incurring lower internal costs, partially offset by the Company incurring $1.4 million of higher CORDStrom/INKmune costs related to preparations to submit CORDStrom for marketing authorization in the United Kingdom, Europe and the United States.

General and Administrative

General and administrative expenses were approximately $2.3 million during the three months ended June 30, 2026 and 2025.

Other Expense, net

During the three months ended June 30, 2026 and June 30, 2025, the Company recorded $0.2 million and $0.1 million of other income, respectively, mainly from interest income on investments. The increase in other income is mainly due to higher interest income as a result of higher amounts invested.

Comparison of the Six Months Ended June 30, 2026 and 2025

The following table summarizes our results of operations for the periods indicated:

(in thousands)

Revenues

During the six months ended June 30, 2025, the Company recognized revenue from a license agreement that was terminated during 2025.

Research and Development

Research and development expenses were approximately $2.8 million and $13.4 million during the six months ended June 30, 2026 and 2025, respectively. The change in research and development expenses during the six months ending June 30, 2026 compared to the six months ending June 30, 2025 is mainly due to the Company incurring $7.8 million less Alzheimer’s clinical program expenses due to the trial being completed in 2025, $4.1 million higher rebate mainly due to additional amounts recorded in connection with the completion of a review of the 2025 rebate claim in Australia and $1.0 million lower internal costs, partially offset by the Company recording $2.3 million higher expenses for CORDStrom/INKmune related to preparations to submit CORDStrom for marketing authorization in the United Kingdom, Europe and the United States.

General and Administrative

General and administrative expenses were approximately $4.5 million and $4.6 million during the six months ended June 30, 2026 and 2025, respectively. The decrease in general and administrative expenses was mainly due to incurring lower professional fees in 2026.

Impairment of acquired in-process research and development intangible assets

During the six months ended June 30, 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 is instead seeking a partner to continue these studies. As part of preparing its interim unaudited condensed 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 as of June 30, 2025, resulting in a recorded impairment of $16.5 million.

Other Income, net

During the six months ended June 30, 2026 and 2025, the Company recorded $0.6 million and $0.3 million, respectively, of other income primarily from earning interest income on its cash investments. The increase in other income in 2026 was due to higher interest income from cash on its investments and also due to a foreign exchange gain on the settlement of a payable.

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 $6.7 million and $34.2 million for the six months ended June 30, 2026 and 2025, respectively. Net cash used in operating activities was $6.6 million and $14.2 million for the six months ended June 30, 2026 and 2025, respectively. Since inception, we have funded our operations primarily with proceeds from the sales of our common stock. As of June 30, 2026, we had cash and cash equivalents of $18.4 million. We anticipate that operating losses and net cash used in operating activities will increase over the next few years as we advance our products under development.

Our primary uses of capital are, and we expect will continue to be, third-party clinical and preclinical research and development services, costs incurred to manufacture our drugs under development, compensation and related expenses, legal, patent and other regulatory expenses and general overhead costs. We believe our use of CROs provides us with flexibility in managing our spending.

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 June 30, 2026, the cash balance held by our foreign subsidiaries with currencies other than the United States dollar was approximately $0.6 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 unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2026. 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 $18.4 million and total current assets were $23.8 million at June 30, 2026, 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.

ATM Sales Agreement

On December 19, 2025, the Company entered into a sales agreement with A.G.P./Alliance Global Partners (“AGP”), as sales agent, pursuant to which the Company may offer and sell, from time to time, up to $65,000,000 of shares of its common stock through AGP in exchange for a 3% commission on gross proceeds. During the six months ended June 30, 2026, the Company sold 370,417 shares of common stock at an average price of $1.63 per share under the ATM program. The aggregate net proceeds were approximately $0.6 million after expenses.

Subsequent to the quarter ending June 30, 2026, the Company sold 100,000 shares of common stock at an average price of $2.09 per share for aggregate net proceeds of approximately $0.2 million.

Warrants Inducement

On June 30, 2026, the Company entered into a warrant inducement agreement with certain holders of its April 2024 common stock purchase warrants. Under the agreements, the holders exercised an aggregate of 674,155 warrants, representing 50% of their holdings, at a reduced exercise price of $1.40 per share (original exercise price of $1.95), resulting in gross proceeds to the Company of approximately $0.9 million, of which approximately $0.1 million was received on June 30, 2026 and $0.8 million was received on July 1, 2026.

In consideration for the exercise, the expiration date of the holders' remaining 674,160 April 2024 warrants was extended from June 30, 2026 to December 31, 2027. All other terms of the remaining warrants, including the $1.95 exercise price, remained unchanged. The aggregate intrinsic value of these warrants was $0 at June 30, 2026.

Research and Development Tax Rebates

The Company participates in government-sponsored research and development incentive programs in Australia and the United Kingdom, which provide cash rebates for qualifying research and development expenditures. These programs represent a source of non-dilutive funding that supports the Company's research and development activities, although the timing and amount of future rebates is dependent upon eligible expenditures, applicable program requirements, and governmental review and payment processes.

During the six months ended June 30, 2026, the Company received approximately $4.4 million of cash rebates under these programs, consisting of approximately $3.6 million from Australia and approximately $0.8 million from the United Kingdom. In addition, the Company received a further approximately $4.2 million research and development rebate from Australia on July 30, 2026. These cash receipts have strengthened the Company's liquidity and supported the funding of its ongoing operations.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

(in thousands)

Operating Activities

Operating activities used approximately $6.6 million of cash during the six months ended June 30, 2026, primarily reflecting our net loss of $6.7 million and approximately $2.8 million of cash used from changes in operating assets and liabilities, principally a $2.6 million decrease in accounts payable and accrued liabilities. These uses were partially offset by approximately $2.9 million of non-cash stock-based compensation expense.

Operating activities used approximately $14.2 million of cash during the six months ended June 30, 2025, resulting mainly from our loss of $34.2 million, partially offset by an intangibles impairment expense of $16.5 million and non-cash stock-based compensation of $3.6 million.

Investing Activities

During the six months ended June 30, 2026 and 2025, the Company acquired $0.4 million and $0.7 million, respectively, of equipment to be used in its CORDStrom clinical program.

Financing Activities

During the six months ended June 30, 2026, the Company sold 370,417 shares of common stock under its ATM program for net proceeds of $0.6 million.

During June 2026, holders exercised 674,155 warrants for aggregate gross proceeds of approximately $0.9 million. The Company received approximately $0.1 million by June 30, 2026, and recorded the remaining $0.8 million as a subscription receivable, which was collected on July 1, 2026.

During the six months ended June 30, 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).

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses. Actual results may differ from these estimates. Our critical accounting estimates are discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and there have been no material changes during the six months ended June 30, 2026.

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

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 defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) at the end of the period covered by this quarterly report.

Based on this evaluation, we concluded that, as of such date, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

We recognize that any controls system, no matter how well designed and operated, can provide only reasonable assurance of achieving its objectives, and our management necessarily applies its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the period covered by this quarterly report that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).