UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
June 2, 2021
Date of Report (Date of earliest event reported)
Immune Therapeutics, Inc.
(Exact name of registrant as specified in its charter)
| Florida | 000-54933 | 59-3226705 | ||
|
(State
or other jurisdiction
of incorporation) |
(Commission File Number) |
(IRS Employer Identification No. |
| 2431 Aloma Ave, Suite 124, Winter Park, FL | 32792 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code 888-613-8802
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| [ ] | Written communications pursuant to Rule 425 under Securities Act (17 CFR 230.425) |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of exchange on which registered | ||
| Common stock $0.0001 per share | IMUND | OTC Markets |
Smaller Reporting Company [X]
Indicate by a check mark whether the company is a shell company (as defined by Rule 12b-2 of the Exchange Act: Yes [ ] No [X]
Item 8.01. Other Events.
On May 25, 2021, Immune Therapeutics, Inc. (the “Company”) entered into a non-binding Letter of Intent with certain of the Company’s existing investors. Readers should refer to the Letter of Intent filed as an exhibit to this Form 8-K to review all of the terms and conditions of the Letter of Intent. The primary terms of this non-binding Letter of Intent are:
- The investors will lend a minimum of $700,000 and a maximum of $1,500,000 to the Company in exchange for non-convertible promissory notes bearing interest at 5%.
- Each lender will sign a 12-month lock-up agreement.
In connection with the transactions above, certain amounts owed to former employees, current management and directors, and other accounts payable will be renegotiated. Closing of the transactions contemplated by the Letter of Intent are subject to a number of conditions being satisfied, including the completion of due diligence.
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits |
| 10.1 | Letter of Intent, dated May 25, 2021 |
| 99.1 | Press Release, dated June 2, 2021 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| IMMUNE THERAPEUTICS, INC. | ||
| Date: June 2, 2021 | By: | /s/ Kevin J. Phelps |
| Kevin J. Phelps, Chief Executive Officer, Director | ||
Ex 10.1
TERM SHEET
Proposed Terms of Transaction
This term sheet (“Term Sheet”) sets forth certain material terms for the contribution of Lenders and Immune Therapeutics Inc (“IMUN”) (collectively, the “Transaction”).
Subject to the foregoing, the parties propose to negotiate in good faith to agree upon the terms of any required agreements for the Transaction that will provide for and/or incorporate the following:
| Proposed Transaction | Lenders will loan the Company a minimum of $700,000 and up to $1,500,000.00 (the “Loan”) in exchange for non-convertible promissory notes (each a “New Note” and collectively as, the “New Notes”) in favor of each Lender in the amount loaned by each Lender. The New Notes will bear simple interest at the rate of 5% per annum and mature twelve (12) months from the dates of their respective issuances. The Company, with Lender approval, will have the option to extend such maturity for an additional six (6) months. Each Lender will have the option to draw down and apply the balance of its New Note, or a portion thereof, to exercise the existing warrants held by the Lender (“Existing Warrants”) according to the terms of the Existing Warrants. As a condition to the Lenders making the Loan contemplated hereby (“Closing”), the Company will agree to attempt to resolve certain debt on its books in accordance with this term sheet. As a condition to the Company settling such debt, Forte Biotechnology Intl Corp. (“Forte”) and Cytocom, Inc. (“CYTO” or “Cytocom”) must complete the assumption of certain obligations, as herein detailed and previously agreed between the Company and Forte and CYTO, respectively. |
| Lenders | The Lenders and the amount of the Loan to be paid by each Lender are listed on Exhibit A hereto. Each Lender will execute a lock up agreement with the Company for a period of twelve (12) months. The Lenders will also file Forms 3, 4 and 5 and Schedules 13D with the SEC, as appropriate, indicating that they are acting as a group and collectively hold more than 10% of the Company’s securities and should be considered the company’s affiliates. |
| Existing Promissory Notes | The Company will offer certain existing note holders, as listed on Exhibit B hereto, (each an “Existing Note Holder,” and collectively as, the “Existing Note Holders”) the right to amend their notes (each an “Existing Promissory Note,” and collectively as, the “Existing Promissory Notes”) to (i) extend the maturity of each Existing Promissory Note to twelve (12) months from Closing, with the Company’s ability to extend such maturity on any given Existing Promissory Note an additional six (6) months with the approval of the applicable Existing Note Holder, (ii) provide for 5% interest per annum, and (iii) allow for the conversion of the principal and accrued interest of the Existing Promissory Notes at a rate of $0.05 per common share once the Company’s intended 1,000 to 1 reverse stock split is approved by FINRA (the “Reverse Split”), which conversion shall be automatic upon FINRA’s approval of the Reverse Split. In addition, upon approval of the Reverse Split by FINRA, all unexercised warrants held by Existing Note Holders will be automatically exercised either through a cash payment or by crediting the principal balance and/or accrued interest on their Existing Promissory Notes. The Existing Note Holders will agree to a six (6) month lock up of their conversion shares, excepting certain private transfers. |
| Former Employees | The Company will offer former employees who hold deferred compensation on the books of the Company the opportunity to settle a portion of the amounts owed them for common shares of the Company, as detailed in Exhibit C. The remaining deferred compensation held by such former employees will be transferred to Forte. The former employees will be required to execute settlement agreements with the Company at Closing, which settlement and the issuance of shares will be conditioned upon approval of the Reverse Split by FINRA. If the Reverse Split is not approved by FINRA, the former employees and Company will work together to reach a new settlement. |
| CEO/Board Members | The Company will offer its current CEO and board of director members who hold deferred compensation on the books of the Company the opportunity to settle the amounts owed them for common shares of the Company, as detailed in Exhibit D. The CEO and board members will be required to execute settlement agreements with the Company at Closing, which settlement and the issuance of shares will be conditioned upon approval of the Reverse Split by FINRA. If the Reverse Split is not approved by FINRA, the CEO, board members and Company will work together to reach a new settlement. |
| Accounts Payable and Accruals |
The Company will offer certain persons who hold accounts payable and accruals with the Company the right to convert their amounts due into common stock of the Company, as detailed on Exhibit E hereto.
Each recipient will execute a settlement agreement with the Company at Closing. |
| Cytocom Assignments and License/Forte Assignments |
As a condition to the Company’s obligations to settle existing debt on the terms herein provided, (i) Cytocom will assume certain obligations of the Company as detailed on Exhibit F, (ii) Cytocom must formally rescind its default notice to the Company of the license from Cytocom to the Company and restore the license to the Company in full force and effect, (iii) Forte must complete its assumption of debt as previously agreed between Forte and the Company, as detailed on Exhibit G hereto, and (iv) Forte must issue the Company 15% of Forte’s issued and outstanding stock, as previously agreed between Forte and the Company.
Each of Cytocom and Forte will be required to execute a separate assignment and assumption agreement approved by their respective boards and the obligation holders. Each holder of an obligation transferred to Forte or CYTO will be required to execute a settlement agreement with the Company at Closing for the amount of the obligation being transferred. |
| FINRA | The Company will diligently pursue approval of the Reverse Split by FINRA. |
| Taxes | Each person and the Company will be responsible for reporting and paying their tax obligations resulting from the transactions contemplated hereby. Tax obligations shall be based on the value of consideration received (e.g. all shares distributed as part of a settlement will be valued at $.05 per share rather than the designated conversion rate). |
| Management | Roscoe Moore and Kevin Phelps will be invited to remain as board members and Kevin Phelps will remain as chief executive officer at least until such time as new members are elected to the board of directors under the same financial compensation terms from January 1, 2021 as contained in his existing employment contract dated July 22, 2020. Until such time as new Board Members are elected as noted below, the Lenders will appoint two individuals to act as board advisors with such responsibilities as agreed between Lenders and the Company. Mr. Phelps will be granted a $100,000 promissory note as severance, including any required employment tax payments due from the Company. The Note will bear simple interest at the rate of 5% per annum and mature twelve (12) months from the dates of their respective issuances. The Company will hold its annual meeting for the appointment of new board members and management promptly following Closing of the Loan and shall file a Proxy Statement on Schedule 14A within 45 days of the closing of this transaction. |
| Registration of Shares | The Company will provide customary demand and piggyback registration rights relating to the registration of the Lenders’ shares resulting from exercise of their warrants, on a pro rata basis, up to the amount permitted by law. |
| Confidentiality & Disclosures |
This term sheet, the terms hereof and the Proposed Transaction contemplated hereby are highly confidential and comprise material non-public information with respect to the Company, and therefore the parties shall not trade in securities of the Company until all such information has been publicly disclosed.
The Company will disclose the existence of this term sheet upon agreement by the parties to the extent determined necessary by Company’s legal counsel. The Company will also disclose the definitive agreements at the completion of the Proposed Transactions to the extent determined necessary by Company’s legal counsel. |
| Definitive Agreements and Closing | Upon acceptance by the Lenders, the Company will instruct its counsel to prepare the definitive documents required to complete the Proposed Transactions as soon as possible. The definitive agreements will contain standard representations and warranties, including securities representations and warranties, including that each recipient is acquiring the securities for his/her/its own account and not with a view towards distribution. |
Ex. 99.1
Immune Therapeutics announces financing and debt restructuring plan.
Orlando, Florida June 2, 2021, Immune Therapeutics Inc. (OTC-PINK: IMUND) (the “Company”) announced today that the Company has received and signed a non-binding term sheet to enter into an agreement that would provide working capital and wipe out a significant portion of its long-standing Debt.
The Company received the term sheet from existing Immune Shareholders to provide the funds necessary to complete the restructuring of Immune. According to the agreement, the investors will lend a minimum of $700,000 and a maximum of $1,500,000 to the Company in exchange for non-convertible promissory notes bearing interest at 5%.
In connection with the transactions above, to the extent a noteholder holds any warrants to purchase shares of common stock of Borrower (“Warrants”), Lender shall have the right to apply all or any portion of the Debt under this Note toward exercising such Warrants, upon the terms and subject to the conditions provided in the Warrants. Upon converting the warrants, the lenders have a one-year lock-up agreement with leak-out provisions.
In addition, the Company is negotiating with former employees, current management, directors, and other accounts payable and hopes to settle shortly. Closing the transactions contemplated by the Letter of Intent is subject to several conditions being satisfied, including completing due diligence.,
Earlier this year, the Company successfully restructured its toxic convertible promissory Note in default since May of 2018 issued by Iliad Research & Trading, L.P., for $425,000.00 on October 20, 2017. The Note carried 22% percent interest default interest and was convertible into common shares of Immune stock at a 60% discount to market.
The Note was purchased by Global Reverb Corp and a shareholder in November of 2020. The parties agreed to restructure the balance of $697,000 (reflecting the total principal, interest, and penalties) associated with the instrument. Under the terms of the restructuring, the lenders canceled the existing Iliad Note. Two new notes were issued; one to Global Reverb and one to the shareholder. The notes are for one year with a one-year extension bearing 5% interest. There is no conversion feature on the restructured balance.
The agreement provides for filing a 14A Proxy within 30 days of closing the agreement and funding. The 14A will provide for a new slate of five (5) Directors and corporate Officers, appoint Turner & Stone LLP as auditors of the Company to hold office until the conclusion of the next general meeting at which accounts are laid before the Company, and conduct any other business properly brought before the Annual Meeting. The lenders will appoint two (2) advisors to the Board until the shareholders meeting during the transaction.
“The restructuring of the notes and funding is a significant achievement for the Company, and we are thankful that our existing lenders agreed that a restructuring would benefit the Company and its growth initiatives. The restructuring improved our balance sheet and was one of the critical next steps in our strategic plan as we are continually working and uplifting. We believe that the amendment of these notes and additional funding is a key accomplishment and that our current market cap does not accurately reflect the value of the Company and the emerging opportunity in biotech,” stated Kevin Phelps, Company CEO.
“On behalf of the Board of Directors of Immune - many of whom are investing alongside you - thank you for your investment and continued shareholder support. We look forward to sharing our progress with you in the coming weeks,” Mr. Phelps concluded.
This news release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, statements about the reverse stock split, authorized shares reduction and the related timing of implementation and effects thereof. Forward-looking statements are statements other than statements of historical fact. These forward-looking statements are generally identified by the words “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “may,” “should,” “could,” “will,” “would,” and “will be,” and variations of such words and similar expressions, although not all forward-looking statements contain these identifying words. Although we believe the expectations and forecasts reflected in the forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate or changed assumptions or by known or unknown risks and uncertainties.
Immune Therapeutics:
(888) 613-8802
www.immunetherapeutics.com