INmune Bio agreed to raise $4.5 million in a stock sale to a single investor, alongside warrants that could add another 3 million shares to its share count if exercised. The offering is expected to close on October 29, subject to customary conditions.
The deal provides near-term cash in exchange for immediate share dilution, with the warrants creating the possibility of further dilution later. The company did not specify how it plans to use the proceeds.
Key details
- Stock sale: INmune Bio will sell 3 million common shares for $1.50 each, generating $4.5 million in gross proceeds before fees and expenses.
- Warrants: The investor will also receive warrants to buy up to 3 million additional shares at $1.65 per share. They become exercisable on April 27, 2027, and expire five years later.
- Potential additional proceeds: If all warrants are exercised for cash, they would bring in up to $4.95 million. That amount is not included in the $4.5 million expected from the offering, and cashless exercise may be available if resale registration is not effective or its prospectus is unavailable.
- Fees and expenses: Placement agent A.G.P./Alliance Global Partners will receive 7% of gross proceeds, or $315,000 based on the stated offering size, plus reimbursement of up to $100,000 in legal expenses and up to $25,000 in other expenses.
- Resale registration: The company agreed to seek registration for resale of the warrant shares within 30 days after closing and to use commercially reasonable efforts to have that registration effective within 90 days of filing, or 120 days if regulators review it.
- Ownership limit: The investor generally cannot exercise warrants if doing so would bring its beneficial ownership above 9.99% of the company’s outstanding shares. It may change that cap, up to 19.99%, with notice; an increase would take effect after 61 days.
- Other warrant terms: The exercise price and share count can be adjusted for events such as stock splits. In certain major transactions, the warrant holder may require the company or a successor to buy the unexercised warrants at a value calculated under a Black-Scholes method.
What changes for investors
The sale adds 3 million shares immediately, while full warrant exercise could add up to 3 million more. The potential cash proceeds from warrant exercise would depend on whether, and how, the warrants are exercised.