What changed in AIM ImmunoTech Inc.'s 10-K — 2022 vs 2023

We currently lease our principal executive office and finance for $2,780 per month, our human resource office for $2,850 per month and our manufacturing office for $16,100 per month.

ITEM 3. Legal Proceedings. We are, and from time to time may become, subject to litigation and various legal proceedings that involve claims for substantial amounts of money or for other relief or that might necessitate changes to our business or operations. Please see Note 16 “Contingencies” to the consolidated financial statements included in Part II, “Item 8.

Financial Statements and Supplementary Data” of this Annual Report. Because litigation is inherently unpredictable, assessing contingencies related to litigation is a complex process involving highly subjective judgment about potential outcomes of future events.

When evaluating litigation contingencies, we may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the availability of appellate remedies, insurance coverage related to the claim or claims in question, the presence of complex or novel legal theories, and the ongoing discovery and development of information important to the matter.

In addition, damage amounts claimed in litigation against us may be unsupported, exaggerated, or unrelated to possible outcomes, and as such are not meaningful indicators of our potential liability or financial exposure.

Accordingly, we review the adequacy of accruals and disclosures each quarter in consultation with legal counsel, and we assess the probability and range of possible losses associated with contingencies for potential accrual in the consolidated financial statements. However, the ultimate resolution of litigated claims may differ from our current estimates.

In the normal course of business, there are various claims in process, matters in litigation, and other contingencies, certain of which are covered by insurance policies.

While it is not possible to predict the outcome of these suits, legal proceedings, and claims with certainty, management is of the opinion that adequate provision for potential losses associated with these matters has been made in the financial statements and that the ultimate resolution of any one of these matters will not have a material adverse effect on our financial position and results of operations.

A significant increase in the number of these claims, or one or more successful claims resulting in greater liabilities than the we currently anticipate, could materially and adversely affect our business, financial condition, results of operations, and cash flows.

Hemispherx Biopharma, Inc (n/ka) AIM Immunotech vs BioLife Plasma Services, LP No 1711391858 ( Phila CCP) We commenced an action in the Philadelphia Court of Common Pleas in 2017 against Biolife Plasma Services, LP related to the defendants’ breach of a contract requiring the defendant to supply certain blood related products used by and necessary to us in the manufacture of our products, including the loss profits associated with the defendants’ breaches.

The Defendant asserted defenses, including a counterclaim asserting our failure to have paid invoices billed for the product in the amount of $96,676 following the Defendant’s notification that it would not be fulfilling the terms of the contract. 34 The trial court issued a ruling in March 2023 on cross Motions for Summary Judgment in which it denied all of our motions and granted defendant’s Motion to exclude evidence of future loss of profit damages.

The ruling specified that we had properly pled, and the Court was specifically allowing our damages theory to proceed on reliance damages. We sought reconsideration of the ruling based on its internal inconsistency with the contemporaneously issued Order which allowed only the counterclaims to proceed. In July 2023, we sought appellate review of the inconsistent lower Court pretrial rulings.

In September 2023, the Court issued an Order in response to our Motion for Reconsideration granting the Motion, vacating its prior Order on summary judgment, and issued a new Order and Opinion. The new Order and Opinion again denied our motion for summary judgment, and granted defendants’ motion for summary judgment.

The effect of the Order was to again allow only the defendant’s counterclaim to proceed. The Order mooted the pending appellate review. On December 6, 2023, we petitioned the Superior (appellate) Court to allow immediate appeal. The Superior Court has not ruled on the Petition. The parties have twice mediated the matter with no resolution achieved.

No estimate can be made of when the trial court and appellate court will address the pending matters. No estimate of the outcome can be made at this time pending determination of the Petition and the underlying issues presented in the appeal. AIM ImmunoTech, Inc. v.

Tudor., Case No. 2021-CA-393 (Marion County, FL) On August 13, 2021, the Marion County Circuit Court entered an Agreed Order Granting Joint Motion for Entry of Stipulated Injunction (“Injunction”), which precluded Tudor from contacting any of our business relations. We are currently pursuing enforcement of the Injunction against Tudor, who recently violated the Injunction.

We are not seeking damages against Tudor. We intend on filing a motion to enforce the Injunction and will seek to recover its attorney’s fees and costs, along with any other sanction necessary to preclude Tudor from violating the injunction again. Jorgl v. AIM Immunotech, Inc. et al., C.A. No. 2022-0669-LWW (Del.

Ch.) On July 29, 2022, Jonathan Jorgl (“Jorgl”) filed a complaint against us and the then-members of our Board of Directors in the Delaware Court of Chancery (the “Jorgl Action”).

The complaint challenged the decision of our Board of Directors to reject Jorgl’s notice of intent to nominate two candidates for election to the our Board of Directors on the basis that the notice failed to comply with our bylaws.

The Complaint sought a declaration that Jorgl’s nomination was valid and effective and complied with our bylaws and that the we must list Jorgl’s candidates in our proxy materials, as well as a temporary restraining order, preliminary injunction, and permanent injunction enjoining defendants from taking any action to prevent Jorgl from exercising his alleged nomination rights and from making any statements that disparage Jorgl’s candidates prior to or during our annual meeting of stockholders.

On November 1, 2022, Jorgl and the other participants in his nomination efforts and attempted proxy contest announced in a press release that they did not plan to proceed to trial or seek an appeal of the Court’s ruling denying the motion for preliminary injunction and that the proxies they solicited would not be voted at our annual meeting of stockholders.

We held our annual meeting of stockholders on November 3, 2022, and the stockholders re-elected Thomas Equels, William Mitchell, and Stewart Appelrouth as directors. On April 20, 2023, Jorgl filed a motion to dismiss the Jorgl Action. On June 20, 2023, the Court entered an order dismissing the Jorgl Action and retaining jurisdiction to adjudicate any related fee disputes.

On July 20, 2023, defendants filed a motion to shift all litigation fees they incurred in connection with the Jorgl Action to Jorgl on the basis that he brought the litigation in bad faith (the “AIM Fee Motion”).

Also on July 20, 2023, Jorgl filed a motion to shift certain legal fees to defendants that he incurred in connection with contesting a subpoena defendants served on the legal counsel that advised Jorgl in his nomination efforts, Baker & Hostetler LLP (the “Jorgl Fee Motion”).

The Delaware Court of Chancery ruled on certain discovery motions in October 2023 pertaining to the AIM Fee Motion, and on March 25, 2024, ordered the parties to provide a joint status report regarding the AIM Fee Motion and the Jorgl Fee Motion within 30 days.

We anticipate that the parties will negotiate a schedule to complete briefing on the motions. 35 AIM ImmunoTech, Inc. v. Tudor, et al., Case 5:22-cv-00323 (M.D.

Florida 2022) On July 15, 2022, we filed suit against Franz Tudor, Todd Deutsch, Ted Kellner, Jonathan Jorgl, Walter Lautz, Robert Chioini, and Michael Rice (collectively, the “Tudor Group”) for injunctive relief arising from the Tudor Group’s alleged violations of the Securities Exchange Act for failing to register as a group and provide required disclosures.

On July 8, 2022, Jorgl served a notice of intent to nominate two director candidates from the Tudor Group for election at our 2022 annual meeting. We rejected the notice because we believed the notice did not comply with the bylaws, federal law, or Delaware law.

We allege the notice is missing critical information required by the bylaws and made material misrepresentations and omissions. We believe the Tudor Group was acting in concert to appoint the nominees and sued these individuals to enjoin them from violating our bylaws and federal law. On July 10, 2023, the court dismissed the complaint.

We filed a motion for reconsideration, which the trial court denied. We filed an appeal of the dismissal, which is pending and referenced below.

The defendants have filed motions for sanctions seeking to recover their legal costs from the inception of the case, which total hundreds of thousands of dollars, according to the defendants, and additional sums, also not quantified, to act as a deterrent. On December 19, 2023, the court heard oral argument on the motions.

The parties submitted post-hearing briefs, and the matter is pending before the Court. AIM ImmunoTech, Inc. v. Tudor, et al., Case No. 0:2023prici13576 (11th Cir. 2023) We filed a notice of appeal of the order of dismissal and the order denying its motion for reconsideration that were entered in AIM ImmunoTech, Inc. v. Tudor, et al., Case 5:22-cv-00323 (M.D.

Fla. 2022) (above). The appellate deadlines are stayed until the lower court rules on the pending motions. Kellner v. AIM Immunotech, Inc. et al. , C.A. No. 2023-0879-LWW (Del. Ch.) On August 25, 2023, Ted D.

Kellner (“Kellner”) filed a complaint against us and the four current members of our Board of Directors in the Delaware Court of Chancery (the “Kellner Action”).

The complaint challenged (1) our adoption of amendments to the advance notice provision of our bylaws; and (2) the decision of our Board of Directors to reject Kellner’s notice of intent to nominate himself and two other candidates’ election to our Board of Directors at our 2023 annual meeting of stockholders on the basis that the nomination notice failed to comply with our amended bylaws.

The complaint seeks, among other things, a declaration that (1) the amendments to our Bylaws were unlawful; and/or (2) the Board’s application of the amended bylaws to reject Kellner’s nomination notice was unlawful or inequitable. On September 11, 2023, defendants in the Kellner Action filed an answer responding to Kellner’s complaint and we filed a counterclaim.

Our counterclaim seeks a declaration that (1) our bylaw amendments are lawful and valid; and (2) Kellner’s nomination notice did not comply with our bylaws. Upon completion of expedited discovery and briefing, the Court held trial in the Kellner Action from October 30, 2023, to November 1, 2023.

The Court of Chancery issued an opinion on December 28, 2023, that declared (1) the Board’s rejection of Kellner’s nomination notice was lawful and equitable, (2) certain of our bylaw amendments were valid, and (3) certain of the our bylaw amendments were invalid.

Kellner has appealed the court’s ruling concerning the Board’s rejection of his nomination notice, and the bylaw amendments the court ruled were valid. The Defendants have appealed the court’s ruling as to the bylaw amendments the court ruled were invalid. The parties agreed to, and the Delaware Supreme Court ordered, expedited briefing, which is now complete.

Oral argument is scheduled for April 10, 2024. Although Kellner is not presently seeking monetary relief from us in the Kellner Action, he has reserved the right to seek reimbursement of certain legal fees and expenses from us if the Delaware Supreme Court upholds the invalidation of certain bylaws.

During the year ended December 31, 2023, we issued a total of 400,000 options under the 2018 Equity Incentive Plan, effective September 12, 2018, which will continue in effect for a period of 10 years from its effective date.

Employees and Directors Purchase Plan On July 7, 2020, the board of directors approved a plan pursuant to which all directors, officers, and employees could purchase from us up to an aggregate of $500,000 worth of shares at the market price.

Azenova On December 6, 2023, the Company issued to Azenova, LLC, an option to purchase up to three hundred and sixty thousand (360,000) shares of our “Common Stock” at a price equal to $0.46 per share. This Option was awarded pursuant to the Consulting Agreement dated October 16, 2023 between the Company and Azenova, LLC.

On December 6, 2023, 180,000 options were transferred to Jeffrey Southerton and 180,000 options were transferred to Stacy J. Evans; both transfers with an exercise price of $0.46.