What changed in AIM ImmunoTech Inc.'s 10-K — 2023 vs 2024

On August 2, 2024, after the parties submitted the joint status report, the Court entered a stipulated scheduling order for the remaining briefing on the fee motions, which briefing was completed on September 24, 2024. On February 3, 2025, the Court entered a letter ruling denying the AIM Fee Motion and the Jorgl Fee Motion. The case is now concluded.

AIM ImmunoTech, Inc. v. Tudor, et al., in the United States District Court for the Middle District of Florida, Ocala Division, Case No. 5:2022cv00323. On April 22, 2024, the District Court issued an order granting-in-part Lautz and Jorgl’s Rule 59(e) and Rule 11 motions, respectively.

The court entered an order finding Jorgl and Lautz were entitled to recover attorney’s fees and costs and entered judgment on behalf of Jorgl for $216,936, and on behalf of Lautz for $76,473.

AIM has appealed these judgments to the United States Court of Appeals for the Eleventh Circuit, and secured a stay of the enforcement of the judgment spending the 11th Circuit Appeal. AIM’s appeal does not seek damages. AIM filed its initial brief on September 4, 2024. The parties attended mediation on November 5, 2024.

The parties did not reach an agreement, and mediation impassed. After mediation, Appellees filed answer briefs and Jorgl and Lautz filed motions for sanctions seeking reimbursement of appellants Attorney’s fees. The appeal and Appellees ‘motions are fully briefed. The appellate court has not yet issued a ruling.

On June 18, 2024, The Carlyle Appellate Law firm was engaged for the above referenced appeal. The Carlyle Appellate Law firm has since filed a notice of appearance in that matter.

AIM is exposed in this matter for the amount of those Judgments (which have been bonded by AIM), interest on those judgements, as well as potentially paying attorney’s fees in the event the appeal is unsuccessful. Kellner v. AIM ImmunoTech Inc. et al., in the Supreme Court of the State of Delaware, Case No. 3, 2024.

On January 16, 2024, the Delaware Supreme Court granted-in-part Kellner’s motion to expedite and scheduled oral argument before the en banc Delaware Supreme Court for April 10, 2024. On April 10, 2024, the en banc Delaware Supreme Court heard oral argument from AIM and Kellner in this matter and took the matter under consideration.

On July 11, 2024, the Delaware Supreme Court issued a decision affirming in part and reversing in part the Court of Chancery’s December 28, 2023 opinion, and not remanding the matter to the Court of Chancery. The Supreme Court held that certain of the bylaws adopted by the board were legally invalid and inequitable.

The board has subsequently revised the bylaws to address and correct said deficiencies. The Delaware Supreme Court also held that No further action was required with respect to Kellner’s rejected nominations.

On July 26, 2024, Kellner filed a Motion for Reargument, requesting the Supreme Court of the State of Delaware to reconsider certain aspects of its ruling and requesting clarification that the trial court retains jurisdiction for any fee applications.

By order dated July 29, 2024, the Supreme Court denied Kellner’s Motion for Reargument, directed that the case be closed, and specifically ruled that “The case is not remanded for an award of attorneys’ fees and costs” and deemed that the “this Case is Closed.” On August 27, 2024, counsel to Kellner delivered to us a demand for certain books and records under Section 220 of the DGCL, and a letter requesting that we reimburse him for his fees and expenses incurred in the Kellner litigation.

In the request for fee reimbursement letter, Kellner stated that he was prepared to file an action in the Delaware Court of Chancery to require AIM to pay his fees and expenses if the matter could not be resolved without court intervention.

By letter dated, November 8, 2024, AIM, through its counsel, denied the request, noting, among other things, that the Delaware Supreme Court issued an order on July 29, 2024, denying Kellner’s Motion for Reargument of the appeal in the Kellner litigation, directing that the case be closed, and specifically ruling that “[t]he case is not remanded for an award of attorneys’ fees and costs.” BioLife On September 6, 2024, the parties filed a Stipulation with the Court dismissing the counterclaims, without prejudice, in order to allow the Superior Court (appellate) to consider the Appeal issues without the need for duplicate trials.

The Stipulation was accepted by the Court on October 17, 2024 dismissing the counterclaims. On October 7 we perfected our Appeal in the Superior Court. On November 7, 2024, we served our Concise Statement of Matters Complained of on Appeal.

The Superior Court issued a briefing schedule that required that our opening brief is due on January 21, 2025 and Appellee’s response is due 30 days thereafter. We filed our Answer. Appellee requested and was granted a 30 day extension. The Appellee sought and was granted an extension to file its Appellee’s Brief until March 24, 2025.

On March 24, 2025, Appellee filed its brief. Now our Reply Brief is due two weeks thereafter. Although we requested oral argument, the Superior Court has not yet indicated whether oral argument would be granted or issued an argument schedule on the matters to be considered on appeal.

Rodino purchased 37,879 shares of our common stock at a purchase price of $0.33 per share; and Mr. Appelrouth purchased 90,910 shares of our common stock at a purchase price of $0.33 per share. On March 21, 2024, Ms. Bryan purchased 38,462 shares of our common stock at a purchase price of $0.39. On May 6, 2024, Mr.

Equels purchased 61,729 shares of our common stock at a purchase price of $0.405. On May 6, 2024, Mr. Rodino purchased 30,865 shares of our common stock at a purchase price of $0.405. One November 20, 2024, Mr. Equels purchased 60,110 shares of our common stock at a purchase price of $0,183.

Subsequent to December 31, 2024, on March 4, 2025, Mr. Equels purchased 83,334 shares of our common stock at a purchase price of $0.12 price per share. All purchases were under the Employee Stock Purchase Plan. No commissions were paid with regard to these sales.

The sales were made pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended.

Research and Development Costs For the year ended December 31, 2024, research and development (“R&D”) expenses totaled approximately $6,197,000, compared to $10,939,000 in the prior year, representing a decrease of approximately $4,742,000. This reduction was primarily driven by a $3,216,000 decrease in company sponsored clinical trial expenses and a $1,622,000 reduction in outside consultant costs.

This reduction was primarily driven by a $7,211,000 decrease in legal, financial and consulting fees, which were higher in the prior year due to expenses incurred in response to stockholder nomination litigation issues in 2023.

Net cash used in operating activities for the year ended December 31, 2024 was impacted by a net loss of approximately $17,320,000, an improvement from approximately $28,962,000 in 2023. However, since net loss includes significant non-cash expenses, actual cash from operations was influenced by several adjustments.

Non-cash adjustments comparing 2024 to 2023 included a decrease of $2,000 in depreciation of property, plant, and equipment, an increase of $10,000 in amortization of patents and trademarks, an increase of $301,000 in amortization of financial obligations. Other significant non-cash expenses included $17,000 in non-cash lease expenses and $443,000 in equity-based compensation.

Additionally, we recognized a $293,000 loss on the sale of marketable securities, a $458,000 loss related to the valuation of warrants, a $34,000 loss from patent abandonments. Proceeds from the sale of fixed assets were $0 in 2024, compared to $18,000 in 2023, reflecting a decrease in asset sales and related cash inflows year-over-year.

These were partially offset by a $692,000 gain from funds received under the New Jersey NOL program and a $50,000 reduction in prepaid expenses. Changes in working capital also impacted operating cash flows, with a $6,126,000 decrease in accounts payable, a $2,378,000 decrease in accrued expenses, a $1,062,000 increase in other assets, and a $35,000 decrease in lease liabilities.

Collectively, these factors contributed to the overall cash flow from operating activities during the period. 39 Cash provided by investing activities was $4,706,000 in 2024, a significant improvement from $(832,000) in 2023, reflecting a $5,538,000 year-over-year increase. The primary driver of this improvement was $5,623,000 in proceeds from the sale of marketable securities in 2024, compared to $1,299,000 in 2023.

Additionally, purchases of marketable securities declined to $361,000 in 2024 from $1,593,000 in the prior year, further contributing to the positive cash flow impact. The Company continued investing in intellectual property, with $538,000 spent on patents and trademarks in 2024, compared to $585,000 in 2023.

Capital expenditures included $18,000 in purchases of property, plant, and equipment (PP&E) in 2024, whereas 2023 included $47,000 in proceeds from the sale of PP&E. The overall increase in net investing cash flow was primarily attributable to higher proceeds from marketable securities and lower investment purchases, improving the company’s liquidity position.

Cash provided by financing activities totaled $6,444,000 in 2024, a significant increase compared to $485,000 in 2023, reflecting a $5,959,000 year-over-year improvement. This increase was primarily driven by $892,000 in net proceeds from the sale of stock in 2024, up from $485,000 in 2023.

Additionally, the company secured $2,500,000 in proceeds from the issuance of notes payable, compared to zero in the prior year. Another key factor was a $3,303,000 non-cash warrant valuation adjustment in 2024, which had no comparable entry in 2023. In 2024, we repaid $251,000 in debt, whereas no debt repayments were made in 2023.

These financing activities strengthened the company’s liquidity position and provided additional capital to support ongoing operations and strategic initiatives. Our principal source of liquidity is our cash and cash equivalents, marketable securities, and proceeds from financing activities to provide the necessary funding to meet our obligations as they become due.

As noted above, as of December 31, 2024, we had approximately $3,977,000 in cash, cash equivalents and marketable securities, inclusive of approximately $2,276,000 in marketable securities, representing a decrease of approximately $9,093,000 from December 31, 2023. In addition, we have suffered losses from operations as of December 31, 2024, and have a working capital deficit.

These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year from the date of the issuance of these consolidated financial statements. See Note 1 to our audited Consolidated Financial Statements.

Please see “Risk Factors - We have a history of losses, expect to continue to incur losses in the near term and may not achieve or sustain profitability in the future, and as a result, there is a substantial doubt about our ability to continue as a going concern.” The accompanying audited consolidated financial statements have been prepared assuming that we will continue as a going concern.

On December 31, 2024, our current liabilities exceeded our current assets by $5,359,000 which raised doubt about our ability to continue as a going concern. Additionally, at December 31, 2024, our stockholders’ equity was below the minimum requirements for continued listing on the NYSE American.

Management evaluated the conditions, and their significance of those conditions related to our ability to meet our obligations and determined that the primary cause of the working capital deficit was related to an accounts payable balance of approximately $6,400,000. This balance includes approximately $4,900,000 of legal fees related to litigation.

We are currently negotiating with the law firm to reduce prior billings. These negotiations are ongoing and could, if resolved favorably to us, partially alleviate the working capital deficit. On September 6, 2024, an amendment to an agreement dated April 7, 2022, was executed by us and Amarex clarifying and changing the nature of the remaining execution fee of $725,437.

The amendment allowed that the remainder would not be exclusive to the agreement dated on April 7, 2022, that the nature of the payment changed from an execution fee to a fully refundable deposit, and that it could be applied to any invoice upon mutual agreement of the parties, removed the threshold contingencies, and if such invoices were not sufficient to exhaust the balance, that the refund would be refunded in cash.

Due to the changes brought about by the amendment, the nature of the payment changed to deposit status. At December 31, 2024, we had an outstanding deposit of $653,000 which may be used to offset future clinical research expenditures.

This deposit is listed as a non-current asset on the balance sheet but could provide working capital if the timing of expenditures are realized within the next 12 months. As a research and development company, we are conducting research necessary to bring our product, Ampligen, to market.

As such, we primarily rely on financing activities to provide the necessary funding to meet our obligations as they become due. AIM has a long and demonstrated history of success in these efforts, however, there is no assurance that we will be successful in attaining the necessary funding in the future. 40 Potential Delisting from the NYSE American .

The closing price of our common stock on the NYSE American on March 24, 2025 was $0.14 per share. On December 11, 2024, we received an official notice of noncompliance with the NYSE American’s continued listing requirements. This includes the need for us to have stockholders’ equity of $6.0 million or more.

The NYSE American’s review showed that we were not in compliance with that requirement. As required, we submitted a plan (the “Plan”) to the NYSE American illustrating how we can regain compliance by June 11, 2026. The Plan includes a number of ways to raise capital. The NYSE American accepted our Plan on February 26, 2025.

If we are not able to regain compliance by June 11, 2026, our common stock may be delisted from the NYSE American. As of December 31, 2024, our stockholders’ deficit was ($1.3) million. We must increase our stockholders’ equity to be at least $6 million to regain compliance with this rule.

If we are not able to raise sufficient capital as set forth in the Plan or by other means, we may be unable to regain compliance with the NYSE American’s listing standards and our securities could be subject to delisting.

In the event that the price of our Common Stock drops to $0.10 per share, our Common Stock will automatically be delisted from the NYSE American. As part of the Plan, we will be holding a special meeting of stockholders solely for the purpose of authorizing a reverse split of our outstanding shares.

The proxy statement for that meeting has been filed with the SEC and is available on the SEC’s website. We believe that effecting a reverse split will assist us with raising capital we need to continue our business and avoiding an automatic delisting if the stock price drops to $0.10 per share.

Today, some four years after COVID-19 first appeared, the world has a number of vaccines and some promising therapeutics. Our quest to prove the antiviral activities of Ampligen continues.

However, we estimate and accrue costs related to clinical trials, third-party contract research organizations (CRO’s), manufacturing development, and preclinical studies based on services performed. Material changes in assumptions could significantly impact R&D expenses in any given period. 42 Stock-Based Compensation We grant stock options, the valuation of which requires significant judgement.

To estimate their fair value, we use the Black-Scholes model, which involves assumptions about stock volatility, expected option life, and risk-free interest rates. Changes in estimated volatility or expected option life could have a material impact stock-based compensation expenses.