Company: INMB
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001013762-25-003354
Chunk: 563

Company: Inmune Bio, Inc.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 4
Chunk 563
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The valuation process is very complex and requires significant input and judgment using internal and external sources with respect to
the Company’s future revenue and expense growth rates, changes in working capital use, the selection of an appropriate discount
rate, and other assumptions and estimates.

Stock-Based Compensation

We measure and recognize compensation
expense for all stock-based awards granted to service providers, employees, and directors based on the estimated fair value of the award
on the grant date. We calculate the estimated fair value of stock options on the date of grant using the Black-Scholes option-pricing
model, which is impacted by the fair value of our common stock, as well as changes in assumptions regarding a number of highly complex
and subjective variables. These variables include, but are not limited to, the market value of common stock on the grant date, the expected
dividend yield, the expected term of the awards, the risk-free interest rates and the expected common stock price volatility over the
term of the option awards. The expected volatility is based on the historical volatility of a few unrelated public companies within our
industry over the most recent period commensurate with the estimated expected term of our stock options as we have insufficient historical
information regarding the volatility of the share price of our common stock. We use the simplified approach to determine the expected
term as we do not have sufficient data related to stock option exercises. The risk-free interest rate for periods within the contractual
life of the option is based on the U.S. Treasury yield in effect at the time of grant. We have never declared or paid dividends and
have no plans to do so in the foreseeable future.

We recognize the fair value
of stock options on a straight-line basis over the period during which a service provider is required to provide services in exchange
for the award (generally the vesting period). We account for forfeitures as they occur.

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.

Xencor

In October 2017, we licensed
INB03 (also known as XPro) from Xencor. This exclusive, global, unrestricted