Item 1.01 Entry into a Material Definitive
Agreement.
Transaction between INmune Bio Inc. and Xencor
Inc.
As previously reported by
INmune Bio, Inc. (the “Company”) a Nevada corporation, the Company and Xencor, Inc. (“Xencor”) entered into a
Stock Issuance agreement dated as of October 3, 2017, as amended (the “Stock Issuance Agreement”), pursuant to which Xencor
was entitled to, among other things, certain registration rights , (ii) that certain Voting Agreement, dated as of October 3, 2017 (the
“Voting Agreement”), pursuant to which Xencor was afforded, among other things, representation on the Company’s board
of directors and (iii) that certain License Agreement dated of October 3, 2017 (as amended as of the date hereof, the “License Agreement”),
pursuant to which Xencor granted the Company a license to certain intellectual property rights of Xencor as more fully set forth therein
(the “Licensed Rights”). Pursuant to the Stock Issuance Agreement, as partial consideration for the Licensed Rights, the Company
granted Xencor the option to purchase up to an additional number of shares of Common Stock that equals 10.0% of the then Fully Diluted
Company Shares (as defined in the Stock Issuance Agreement) for an aggregate purchase price of $10,000,000 (the “Option”).
On June 10, 2021, the Company
and Xencor entered into an Option Cancellation Agreement (the “Option Cancellation Agreement”). Pursuant to the Option Cancellation
Agreement, the Company and Xencor agreed that the Option would be cancelled in exchange for the payment of $15,000,000 in cash and the
issuance of to Xencor of such number of shares of the Company’s Common Stock as shall equal $3,300,000 divided by the last sale
price of the Company’s Common Stock as reported by the Nasdaq Stock Market on the Closing Date, which resulted in the issuance
of 192,533 shares of the Company’s common stock to Xencor. The Closing for the Option cancellation occurred on June 10, 2021 and
at that time the Option was cancelled, and the Voting Agreement and Stock Issuance Agreement were deemed terminated.
On June 10, 2021, the Company
and Xencor entered into a First Amendment to License Agreement pursuant to which, among other things, Section 3.2 of the License Agreement
was amended to change the due diligence milestones. The Option Cancellation agreement contains a mutual release between the Company and
Xencor. Pursuant to the Option Cancellation Agreement the Company agreed to file a registration statement agreement to register the shares
of common stock issuable to Xencor pursuant to the Option Cancellation Agreement.
Transaction with Silicon Valley Bank
On June 10, 2021, the Company
entered into a Loan and Security Agreement with Silicon Valley Bank a California corporation (“SVB”), in its capacity as administrative
agent and collateral agent (“Agent”), (b) SVB, as a lender, (c) SVB Innovation Credit Fund VIII, L.P., a Delaware limited
partnership (“SVB Capital”), as a lender (SVB and SVB Capital are referred to herein collectively as the “Lenders”).
Pursuant to the Loan and Security Agreement on June 10, 2021 the Lenders made a term loan advice to the Company in the amount of $15,000,000
(the “Initial Loan Amount”). Additionally, under the Loan and Security Agreement at any time during the term of the Loan and
Security Agreement the Company may request that the Lenders make one additional term loan advance to the Company in the amount of $5,000,000.
The Company shall repay the
aggregate outstanding term loan advances in thirty consecutive equal monthly installments of principal plus monthly payments of accrued
interest rate provided however if the Company achieves the Equity Event (as defined in the Loan and Security Agreement) the Company shall
repay the outstanding loan advances in eighteen consecutive equal monthly installments of principal plus monthly payments of accrued interest.
The outstanding principal
amount of any term loan advance shall accrue interest at a floating rate per annum equal to greater of (A) seven and three-quarters percent
(7.75%) and (B) the Prime Rate plus the Prime Rate Margin (as defined in the Loan and Security Agreement”). An additional payment
of 6.50% of the Advanced Amount shall be due upon the earlier of the termination of the facility or the maturity date. The maturity date
for the term loan is January 1, 2025.
Pursuant to the Loan and Security
Agreement the Company granted the Agent for the benefit of the Lenders a security interest in the assets of the Company.
The Initial Loan Amount was
used to fund the consideration for the cash portion of the cancellation of the Option.
The Loan and Security
Agreement includes certain covenants and customary events of default including in the event that the Company does not timely make
payments of interest and principal or fails to perform its any obligations under the Loan and Security Agreement. If there is an
event of default the Lenders may, among other things, declare all of the Obligations (as defined in the Loan and Security Agreement)
under the Loan and Security Agreement immediately due and payable.
The Company may prepay all
but not less than all of the Term Loan Advances by paying all outstanding principal plus accrued and unpaid interest and paying the Prepayment
Premium (as defined in the Loan and Security Agreement).
In connection with the execution
of the Loan and Security Agreement the Company issued the Lenders. warrants to purchase 45,386 shares of the Company’s common
stock at an exercise price of $14.05 per share. The warrants terminate on June 10, 2031.
The foregoing descriptions
of the Option Cancellation Agreement, the First Amendment to the License Agreement, the Loan and Security Agreement, and the Warrants do
not purport to be complete and are qualified in their entirety by reference of the complete text thereof, forms of which are filed as
exhibits to this Current Report on Form 8-K.