On October 9, 2018 Immune Pharmaceuticals, Inc. (OTCQB: IMNP) ("Immune" or the "Company"), a biopharmaceutical company developing novel therapeutic agents for the treatment of immunologic and inflammatory diseases, reported that it has entered into a Securities Purchase Agreement with an institutional investor pursuant to which it has sold $5.5 million in principal amount of Senior Secured Redeemable Convertible Debentures (the "Debentures") for $2 million in cash, and a $3 million promissory note to be funded upon the earlier of the effectiveness of a registration statement covering the resale of the shares issuable or conversion of the Debentures (Press release, Immune Pharmaceuticals, OCT 9, 2018, View Source [SID1234530276]).

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Tony Fiorino MD, PhD, Immune’s interim Chief Executive Officer, said "This financing gives us the means to continue the recent forward momentum we have achieved with bertilimumab, with the goal of building what we believe will be substantial additional value. We expect the proceeds from this transaction to fund our operations into the second quarter of 2019. Over that time, we expect to achieve previously disclosed milestones that include the release of additional results from the BP-01 study, obtaining important regulatory feedback, advancing our new manufacturing process and unblinding the ulcerative colitis study, which has now completed recruiting subjects."

Dr. Fiorino went on to say, "I accepted the role of interim Chief Executive Officer because I believe that bertilimumab is a strategically attractive asset, and this funding provides us with runway to pursue that option. Given the challenging financing environment faced by the company, we have decided to accelerate our plan to seek a development partner for bertilimumab. We will initiate the bertilimumab partnering process this quarter, rather than waiting to complete these important milestones prior to formally launching a process."

The Debentures bear compounded interest at a rate of 10% per annum, subject to adjustment as specified in the Debentures, and mature five years from the issuance date. The debt is convertible into shares of Immune common stock at a conversion price of $0.075 per share, subject to certain adjustments in the event of future financings. The Company also issued to the investor 50 million three-year warrants exercisable at $0.10 per share, also subject to adjustment in the event of future financings. The Debentures are secured by the Company’s assets, other than those associated with Ceplene (histamine dihydrochloride).

The Company does not currently have sufficient common shares authorized if the Debentures are converted in full and the Warrants are exercised, and plans to call a special meeting of stockholders within 90 days to obtain approval for an increase in the authorized common stock to enable us to satisfy those obligations.

In connection with this financing, the holders of the Company’s Original Issue Discount Convertible Debentures agreed to waive the outstanding event of default resulting from the suspension of the trading of the Company’s common stock on the Nasdaq Capital Market (other than the required increase in the principal amount of the OID Debentures) and to amend the OID Debentures to enable the Company to consummate the financing, in exchange for an aggregate amendment fee of $49,220.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities in this offering, nor will there be any sale of these securities in any jurisdiction in which such offer solicitation or sale are unlawful prior to registration or qualification under securities laws of any such jurisdiction.