aibioIN8bio expects about $1.9 million from reduced-price warrant exercises and exchanges
Tickers INAB
Holders agreed to exercise Series A and Series B warrants for cash at $0.1784 to $0.1844 per share by May 2, 2025. Two holders will swap warrants for pre-funded warrants, and IN8bio will cut the price of certain other Series B warrants to $0.45.
Key facts
- Company
- IN8bio, Inc. (NASDAQ: INAB)
- News type
- Financings
- Primary source
- IN8BIO, INC. Form 8-K filed April 28, 2025 (SEC EDGAR)
IN8bio, Inc. (Nasdaq: INAB) has agreed with certain warrant holders to exercise warrants for cash at sharply reduced prices and to swap other warrants for pre-funded warrants. The company expects aggregate gross proceeds of approximately $1.9 million from the transactions, according to a Form 8-K filed April 28, 2025. The letter agreements are dated April 27, 2025, and the cash exercises must be completed by May 2, 2025.
The cash exercises
Participating holders agreed to exercise Series A warrants for 7,178,934 shares of common stock and Series B warrants for 2,142,147 shares. The exercise price is $0.1844 per share for directors and executive officers and $0.1784 per share for all other holders. The offer lapses at 4:00 p.m. Eastern Time on May 2, 2025, which the filing calls the Termination Date. Warrants not exercised by then terminate.
The prices are far below the original terms. The Series B warrants were amended to lower their exercise price from $1.50 to $0.45 per share, but only for Series B warrants that are not exercised or exchanged under the deal. Cash exercises of Series B warrants that carried a $1.50 exercise price will be priced between $0.1784 and $0.1844 a share.
Exchanges, the amendment and the cap
IN8bio also signed letter agreements with Bios Clinical Opportunity Fund, LP and William Ho, an individual holder. In exchange for pre-funded warrants to buy 1,230,449 shares of common stock, they will surrender Series A warrants for 656,208 shares and Series B warrants for 574,241 shares. They must also make a cash payment of $0.1783 per share, or $0.1843 for Ho, by the Termination Date. The pre-funded warrants have an exercise price of $0.0001 per share and are exercisable immediately.
Holders can limit ownership. Each pre-funded warrant caps beneficial ownership at 4.99% or 9.99% of outstanding common stock after an exercise, as applicable. A holder may raise the cap to as much as 19.99%, but the change takes effect only 61 days after notice to the company.
The price cut for Series B warrants is consideration for Amendment No. 1, dated as of April 27, 2025, to the securities purchase agreement dated September 30, 2024. The amendment needed approval from holders of at least 85% in interest of the securities. It restates the definition of "Exempt Issuance," which now lists sales under the company's at-the-market offering facility, and the issuance of amended Series A warrants at closing, among the exempt issuances.
The filing says the company will issue the pre-funded warrants without registration, relying on Section 4(a)(2) of the Securities Act. The company's own risk language says there is no assurance that it will complete the transactions on the anticipated terms, or at all.
Who is involved and the going-concern backdrop
The 8-K names no underwriter, placement agent or financial advisor for the transactions, and it names no outside law firm for them. The holders it identifies are Bios Clinical Opportunity Fund, LP and William Ho. The exhibit forms describe the Series A and Series B warrants as dated December 13, 2023. The 8-K does not state the company's cash balance or how long the $1.9 million would fund operations.
IN8bio's annual report for 2024 fills in the picture. The company develops gamma-delta T cell product candidates and T cell engagers for cancer and autoimmune diseases. It reported a net loss of $30.4 million for 2024 and $30.0 million for 2023. Its existing cash of $11.1 million at December 31, 2024, plus net proceeds of $3.7 million from at-the-market sales in February 2025 and $0.4 million from exercises of Series C warrants, was not expected to fund operating expenses and capital needs for at least 12 months. The report states there is substantial doubt about the company's ability to continue as a going concern, and its auditor's opinion carries an explanatory paragraph to the same effect. In September 2024 the company suspended patient enrollment in its INB-400 Phase 2 trial in newly diagnosed glioblastoma while it explores partnership opportunities.