Item
1.01 Entry into a Material Definitive Agreement.
Amendment
No. 1 to the Wilson Consulting Agreement
On
November 3, 2023, Immune Therapeutics, Inc. d/b/a Biostax Corp. (the “Company”) entered into an executive consulting agreement
with Ms. Wilson (the “Wilson Consulting Agreement”), as was disclosed in a Current Report on Form 8-K on November 9, 2023.
In
connection with Kelly O. Wilson’s appointment as Chief Executive Officer on April 12, 2023, the Company entered into an amendment
to Wilson Consulting Agreement with Ms. Wilson on April 13, 2023 (“Amendment No. 1 to the Wilson Consulting Agreement”).
Amendment No. 1 to the Wilson Consulting Agreement states that Ms. Wilson is now serving as the Company’s full time Chief Executive
Officer instead of as the Interim Chief Executive Officer and Interim President of the Company. Amendment No. 1 to the Wilson Consulting
Agreement does not change any fee amounts owed to Ms. Wilson, any authorized expense amounts, or otherwise change any terms in the Wilson
Consulting Agreement.
The
foregoing description of Amendment No. 1 to the Wilson Consulting Agreement and the Consulting Agreement does not purport to be complete
and is qualified in its entirety by reference to the full text of Amendment No. 1 to the Wilson Consulting Agreement filed as Exhibit
10.1 to this report, which is incorporated by reference herein.
The
information set forth under Item 5.02 of this report regarding the appointment of Kelly Wilson as Chief Executive Officer of the Company
is incorporated by reference herein.
Settlement
Agreement and Release with Statera Biopharma, Inc.
On
August 16, 2022, the Company was joined in filing a Chapter 11 involuntary bankruptcy lawsuit in the United States Bankruptcy Court in
the District of Colorado (Denver) (the “Court”), bankruptcy petition number 22-13051-JGR, against Statera Biopharma, Inc.,
a Delaware corporation (“Statera”). The Company is a shareholder of Statera.
On
March 21, 2023, the Company tentatively entered into a settlement agreement with Statera that was not effective until the Board and Court
approved the same (the “Settlement Agreement”).
On
April 17, 2023, the Board approved the Settlement Agreement. Pursuant to the Settlement Agreement, Statera will transfer all its interests
in TNI Biotech International, LTD, and the Company will own 100% of the outstanding common stock of TNI Biotech International, LTD and
the Company will waive all claims it may have of any kind against Statera, and Statera will waive all claims it may have of any kind
against the Company. The Settlement Agreement is still pending the Court’s approval.
This
description of the material terms of the Settlement Agreement is not complete and should be read in conjunction with the Settlement Agreement,
a copy of which is attached hereto as Exhibit 10.2.
Licensing
Agreement Amendment with Statera Biopharma, Inc.
As
a part of the Settlement Agreement, the Company also agreed to enter into Amendment No. 3 to a previous licensing agreement dated September
30, 2014, (the “License Amendment”) on April 15, 2023.
The
Board approved the License Amendment on April 5, 2023, through unanimous written consent. This License Amendment was made to restate,
amend and clarify the terms of the previous agreement between the Company and Statera (the “Parties”). Pursuant to the License
Amendment, the Company is granted an exclusive, worldwide royalty-bearing license, including the right to sublicense, commercialize,
manufacture, and sell the proprietary formulation of Naltrexone, immediate release low dose (IRNXT), and Meta-enkaphalin (“MENK”)
(collectively the “Products”) for all indications, except Crohn’s disease (Statera will retain the rights to IRNXT
for Crohn’s disease). The Company is also granted exclusive rights for IRNXT and MENK for all indications worldwide for IRNXT and
MENK for use in animals, for which the Company previously had non-exclusive rights. Further, the Company, which previously had non-exclusive
rights to products used in animals, will now receive exclusive rights to products used on animals and Statera will receive 5% of the
Class A Common Stock of Forte Animal Health, Inc. (“Forte”), a private company, from the Company’s current 15% percentage
ownership of Forte.
As
noted above, the Company may grant sublicenses under the License Amendment. Upon granting of any such sublicense, the Company will pay
Statera royalties based on the particular stage of development of the Products. The Company will pay a royalty of 30% of the cash proceeds
received from any sublicense if the sublicense occurs before completing a clinical trial, 10% if the sublicence occurs after completing
any trial, and 5% if sublicense occurs after any new drug application (“NDA”) submission. If the License Amendment itself
is terminated, then any existing sublicense agreement will also be subject to termination to the same extent as the License Amendment.
There is no sublicense fee if a sublicense is granted to a subsidiary of the Company or for a Product used in animals.
In
consideration of the ability to sublicense the Products, except for Products used in animals, the sublicense shall be on terms and conditions
in compliance with and not inconsistent with the terms of the License Amendment.
As
consideration for the License Amendment’s use in Emerging Markets (as such term is defined in the License Amendment), the Company
will pay 1% of the net sales of IRNTX Products in Emerging Markets. As consideration for the License Amendment’s grant for use
in the Territory (as such term is defined in the License Amendment), the Company will pay a percentage of net sales based on the annual
net sales of the licensed product. For annual net sales under $500,000,000 the royalty payment will be 2%, for annual net sales of $500,000,000
to $1,000,000,000 the royalty payment will be 4% and for annual net sales over $1,000,000,000 the royalty payment will be 6%.
In
addition to royalty payments the Company will be required to pay one-time payments for the achievement of each one of six milestones
in the commercialization and development of the Products (each a “Milestone Payment” and together the “Milestone Payments”).
The first developmental milestone will be after the first successful achievement of a primary endpoint (p<0.05) in a phase II pivotal
clinical trial (US and/or EU), the next milestone payment will be after the dosing of the first patient in the first phase II clinical
trial (US and/or Europe), and the third milestone payment will be after the Company receives approval by the FDA of an NDA. The fourth
milestone will become due as the sales of the Product reach $100,000,000, the fifth milestone payment will be when the sales of the Product
reach $500,000,000, and the sixth and final milestone payment will be when the sales of the Product reach $1,000,000,000.
Pursuant
to the License Amendment, the Company will be responsible for the preparation, filing and maintenance of all patent rights under the
License Amendment and Statera will be responsible for the prosecution, protection, and defense of all patent rights. Both the Company
and Statera are limited in liability to the total amounts paid under this Agreement for any damages arising from negligence, strict liability,
or any other equitable theory. Further, both the Company and Statera agree to indemnify and hold harmless each other, and their respective
agents, for any claims or costs arising from this License Amendment or any sublicenses for any cause of action relating to any product,
process, service made, used or sold pursuant to this License Amendment.
This
description of the material terms of the License Amendment is not complete and should be read in conjunction with the Agreement, a copy
of which is attached hereto as Exhibit 10.3.