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Item 1. Business

2021-03-31 compared with 2020-03-30 · 769 added, 659 removed, 74 unchanged (95% of the section changed)

We are an immuno-pharma

company headquartered in Ocala, Florida and focused on the research and development of therapeutics to treat multiple types of

cancers, various viruses and immune-deficiency disorders.

We have established a strong foundation of laboratory, pre-clinical and

clinical data with respect to the development of nucleic acids and natural interferon to enhance the natural antiviral defense

system of the human body and to aid the development of therapeutic products for the treatment of certain cancers and chronic diseases.

AIM’s flagship products

include Ampligen®

(rintatolimod), a first-in-class drug of large macromolecular RNA (ribonucleic acid) molecules, and Alferon

N Injection®

ImmunoTech Inc.

and its subsidiaries (collectively, “AIM”, “Company”, “we”

or “us”)

are an immuno-pharma company headquartered in Ocala, Florida and focused on the research and development of therapeutics to treat

multiple types of cancers, various viruses and immune-deficiency disorders.

We have established a strong foundation of laboratory,

pre-clinical and clinical data with respect to the development of nucleic acids and natural interferon to enhance the natural

antiviral defense system of the human body and to aid the development of therapeutic products for the treatment of certain cancers

and chronic diseases.

flagship products include Ampligen®

(rintatolimod), a first-in-class drug of large macromolecular RNA (ribonucleic acid) molecules,

and Alferon N Injection®

(Interferon Alfa-N3).

A first-in-class drug is also known as a new molecular entity that contains an active moiety.

A first-in-class drug is also known as a new molecular entity that contains

an active moiety.

Ampligen has not been approved by the FDA or marketed in the US.

Since the outbreak of

SARS-CoV-2, we have been actively engaged in determining whether Ampligen could be an effective treatment for this virus.

that prior studies of Ampligen in SARS-CoV-1 animal experimentation may predict similar protective effects against the new virus.

Recently, we announced that the National Institute of Infectious Diseases (NIID) in Japan will begin in vitro testing of

Ampligen as a potential treatment for COVID-19, the new coronavirus infectious disease caused by SARS-CoV-2.

The experimental

program will be conducted at both the NIID and the University of Tokyo.

In addition, we have joined with ChinaGoAbroad (CGA) to

facilitate the entry of Ampligen into the People’s Republic of China (PRC) for use as a prophylactic/early-onset therapeutic

against COVID-19.

CGA is a member-based online information platform and offline advisory firm serving to facilitate two-way international

transactions relating to the PRC in collaboration with the China Overseas Development Association (CODA), which had up until recently

reported to the PRC National Development and Reform Commission (NDRC), which in turn reports to the State Council (China’s

In addition, AIM is in discussions with GP-Pharm in Argentina to advance Ampligen for potential use against COVID-19

(Ampligen is an approved drug in Argentina for use against myalgic encephalomyelitis/chronic fatigue syndrome).

AIM is also in

discussions in The Netherlands —

where Ampligen was recently used to treat pancreatic cancer patients —

expedited pre-clinical and clinical trials of Ampligen.

The active component of

Ampligen®

is a double stranded RNA being developed for globally important cancers, viral diseases and disorders of the immune

Ampligen®

the outbreak of SARS-CoV-2, the novel virus that causes COVID-19, we have been actively engaged in determining whether Ampligen

could be an effective treatment for this virus or could be part of a vaccine.

We believe that Ampligen has the potential to be

both an early-onset treatment for and prophylaxis against SARS-CoV-2.

Ampligen also has potential as a COVID-19 vaccine strategy

that combines Ampligen as an immune enhancer seeking to boost the efficacy of intranasal and other vaccines and, as to intranasal,

also convey cross-reactivity and cross-protection against future mutations.

We believe that prior studies of Ampligen in SARS-CoV-1

animal experimentation may predict similar protective effects against the new virus.

in April 2020, we entered into confidentiality and non-disclosure agreements with numerous companies for the potential outsourcing

of the production of polymer, enzyme, placebo as well as Ampligen and one Contract Research Organization which may also assist

with the planning, presentation and filing of documents with the FDA.

These confidentiality and non-disclosure agreements are

only the initial step in forging relationships with these entities to obtain contract manufacturers and research partners.

assurance can be given as to how many of these, initial explorations, if any, will result in definitive arrangements or, with

regard to potential research partners, what research arrangements will develop and thereafter prove fruitful.

represents a dsRNA being developed for globally important cancers, viral diseases and disorders of the immune system.

has in the clinic demonstrated the potential for standalone efficacy in a number of solid tumors.

also seen synergistic success in increasing survival rates and efficacy in the treatment of animal tumors when Ampligen®

used in combination with checkpoint blockade therapies.

This success in the field of immuno-oncology has guided our focus toward

the potential use of Ampligen®

as a combinational therapy for the treatment of a variety of solid tumor types.

There are currently

multiple Ampligen®

clinical trials —

We have also seen success in

increasing survival rates and efficacy in the treatment of animal tumors when Ampligen is used in combination with checkpoint

blockade therapies.

This success in the field of immuno-oncology has guided our focus toward the potential use of Ampligen as

a combinational therapy for the treatment of a variety of solid tumor types.

There are currently multiple Ampligen clinical trials

testing Ampligen in humans —

both underway and planned —

at major cancer research centers around the country.

Ampligen®

was used as a monotherapy to treat pancreatic cancer patients in an Early Access Program (EAP) approved by the Inspectorate

of Healthcare in the Netherlands at Erasmus Medical Center.

We currently are awaiting a report on the Netherland’s trials.

Ampligen®

is also being

evaluated for the treatment of myalgic encephalomyelitis/chronic fatigue syndrome (ME/CFS).

AIM is currently sponsoring an expanded

access program (EAP) for ME/CFS patients in the U.S.

In August 2016, we received approval of our NDA from Administracion Nacional

de Medicamentos, Alimentos y Tecnologia Medica (ANMAT) for commercial sale of Ampligen®

(trade name rintatolimod) in the Argentine

at major cancer research centers.

Ampligen was used as a

monotherapy to treat pancreatic cancer patients in an Early Access Program (EAP) approved by the Inspectorate of Healthcare in

the Netherlands at Erasmus Medical Center.

In September, we reported receipt of statistically significantly results of positive

survival benefit when using Ampligen in patients with locally advanced/metastatic pancreatic cancer after systemic chemotherapy.

We will work with our Contract Research Organization, Amarex Clinical Research LLC, to seek FDA “fast-track”

even FDA “breakthrough”

designations and to obtain authorization to conduct a follow-up pancreatic cancer Phase 2/3

clinical trial with sites in the Netherlands at Erasmus MC under Prof.

van Eijck, and also at major cancer research centers in

the United States.

is also being evaluated for the treatment of myalgic encephalomyelitis/chronic fatigue syndrome (ME/CFS).

We are currently sponsoring

an expanded access program for ME/CFS patients in the U.S.

In August 2016, we received approval of our New Drug Application (NDA)

from Administracion Nacional de Medicamentos, Alimentos y Tecnologia Medica (ANMAT) for commercial sale of Ampligen in the Argentine

Republic for the treatment of severe CFS.

With regulatory approval in Argentina, Ampligen®

is the world’s only approved

therapeutic for ME/CFS.

We continue to pursue our Ampligen New Drug Application, or NDA, for the treatment of CFS with the U.S.

Food and Drug Administration, or FDA.

Alferon N Injection®

is approved for a category of sexually transmitted diseases infection.

Alferon is the only natural-source, multi-species alpha

interferon currently approved for sale in the U.S.

for the intralesional treatment of refractory (resistant to other treatment)

or recurring external condylomata acuminata/genital warts (GW) in patients 18 years of age or older.

Certain types of human papilloma

viruses cause GW.

AIM also has approval from ANMAT for the treatment of refractory patients that failed or were intolerant to treatment

with recombinant interferon in Argentina.

We are in the process of developing and, with proper funding, will be seeking FDA Pre-Approval

Inspection of a high-volume, high-efficiency, upgraded manufacturing process to allow for the commercial viability of Alferon®.

We operate a 30,000 sq.

facility in New Brunswick, NJ with the objective of producing Ampligen®

and Alferon®.

We are committed to a focused

business plan oriented toward finding senior co-development partners with the capital and expertise needed to commercialize the

many potential therapeutic aspects of Ampligen®

and our FDA-approved drug Alferon®

N and continue to seek contract manufactures

to facilitate high volume production.

AVAILABLE INFORMATION

We are subject to the

information and periodic reporting requirements of the Exchange Act and, in accordance therewith, we file periodic reports, proxy

statements and other information with the SEC.

Such periodic reports, proxy statements and other information are available for

inspection and copying at the website of the SEC www.sec.com.

You also may obtain a free copy of our annual reports on Form 10-K,

quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and amendments to those reports on the day of filing

with the SEC on our website at http://www.aimimmuno.com under the Investor Relations tab for SEC Filings or by contacting the

Investor Relations Department by calling 888-557-6480 or (352) 448-7797 or sending an e-mail message to ir@aimimmuno.com .

With regulatory approval in Argentina, Ampligen is the world’s only approved therapeutic

On June 10, 2020, we received import clearance from ANMAT to import the first shipment of commercial grade vials of

Ampligen to Argentina.

The next steps in the commercial launch of Ampligen include ANMAT conducting a final inspection of the

product and release tests before granting final approval to begin commercial sales.

We have supplied GP Pharm with the Ampligen

required for testing and ANMAT release.

This testing and approval process is currently delayed due to the COVID-19 pandemic and

ANMAT’s internal processes.

Once final approval by ANMAT is obtained, GP Pharm will begin distributing Ampligen in Argentina.

We continue to pursue our Ampligen NDA, for the treatment of CFS with the FDA.

N Injection is approved for a category of sexually transmitted diseases infection and patients that are intolerant to recombinant

interferon in Argentina.

Alferon is the only natural-source, multi-species alpha interferon currently approved for sale in the

for the intralesional treatment of refractory (resistant to other treatment) or recurring external condylomata acuminata/genital

warts (GW) in patients 18 years of age or older.

Certain types of human papilloma viruses cause GW.

We also have approval from

ANMAT for the treatment of refractory patients that failed or were intolerant to treatment with recombinant interferon in Argentina.

operate a 30,000 sq.

facility in New Brunswick, NJ, where we conduct testing and have produced limited quantities of active

pharmaceutical ingredients (“API”) for our products.

We have reviewed our operations at the facility and believe that

some of the equipment most likely should be upgraded to realize greater efficiencies, when and if we require more API than is

currently in storage.

We are also exploring engaging a Contract Manufacturing Organization (“CMO”) to produce API.

While we believe we have sufficient API to meet our current needs, we are also continually exploring new efficiencies so as to

maximize our ability to fulfill future obligations.

are subject to the information and periodic reporting requirements of the Exchange Act and, in accordance therewith, we file periodic

reports, proxy statements and other information with the SEC.

Such periodic reports, proxy statements and other information are

available for inspection and copying at the website of the SEC www.sec.com.

You also may obtain a free copy of our annual reports

on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and amendments to those reports on

the day of filing with the SEC on our website at http://www.aimimmuno.com under the Investor Relations tab for SEC Filings or

by contacting the Investor Relations Department by calling 888-557-6480 or (352) 448-7797 or sending an e-mail message to ir@aimimmuno.com .

Our Internet website and the information contained on that website, or accessible from our website, is not intended to be incorporated

into this Annual Report on Form 10-K or any other filings we make with the SEC.

Our primary pharmaceutical

product platform consists of Ampligen®, a first-in-class drug of large macromolecular double-stranded (ds) RNA (ribonucleic

acid) molecules, and our FDA-approved natural alpha-interferon product, Alferon N Injection®.

Ampligen®

primary pharmaceutical product platform consists of Ampligen®, a first-in-class drug of large macromolecular double-stranded

(ds) RNA (ribonucleic acid) molecules, and our FDA-approved natural alpha-interferon product, Alferon N Injection®.

Ampligen®

for sale in Argentina for severe Chronic Fatigue Syndrome (CFS) and is an experimental drug in the United States currently undergoing

clinical development for the treatment of certain cancers and ME/CFS.

Over its developmental history, Ampligen®

various designations, including Orphan Drug Product Designation (FDA and European Medicines Agency (“EMA”)), Treatment

protocol (e.g., “Expanded Access”

is approved for sale in Argentina for severe Chronic Fatigue Syndrome (CFS) and is an experimental drug in the United States

currently undergoing clinical development for the treatment of certain cancers and ME/CFS.

Over its developmental history,

Ampligen has received various designations, including Orphan Drug Product Designation (FDA and European Medicines Agency

(“EMA”)), Treatment protocol (e.g., “Expanded Access”

or “Compassionate”

use authorization) with Cost Recovery Authorization

(FDA) and “promising”

clinical outcome recognition based on the evaluation of certain summary clinical reports (“AHRQ”

authorization) with Cost Recovery Authorization (FDA) and “promising”

clinical outcome recognition based on the

evaluation of certain summary clinical reports (“AHRQ”

or Agency for Healthcare Research and Quality).

Ampligen®

represents the first drug in the class of large (macromolecular)

dsRNA molecules to apply for NDA review.

Based on the results of published, peer reviewed pre-clinical studies and clinical trials,

we believe that Ampligen®

may have broad-spectrum anti-viral and anti-cancer properties.

We believe that nucleic

acid compounds represent a potential new class of pharmaceutical products designed to act at the molecular level for treatment

of many human diseases.

There are two forms of nucleic acids, deoxyribonucleic acid (“DNA”) and ribonucleic acid (“RNA”).

DNA is a group of naturally occurring molecules found in chromosomes, the cell’s genetic machinery.

RNA is a group of naturally

occurring informational molecules which orchestrate a cell’s behavior which, in turn, regulates the action of groups of cells,

represents the first drug in the class of large (macromolecular) dsRNA molecules to apply for NDA review.

results of published, peer reviewed pre-clinical studies and clinical trials, we believe that Ampligen may have

broad-spectrum anti-viral and anti-cancer properties.

We believe that nucleic acid compounds represent a potential new class

of pharmaceutical products designed to act at the molecular level for treatment of many human diseases.

There are two forms

of nucleic acids, deoxyribonucleic acid (“DNA”) and ribonucleic acid (“RNA”).

DNA is a group of

naturally occurring molecules found in chromosomes, the cell’s genetic machinery.

RNA is a group of naturally occurring

informational molecules which orchestrate a cell’s behavior which, in turn, regulates the action of groups of cells,

including the cells which compromise the body’s immune system.

RNA directs the production of proteins and regulates certain

cell activities including the activation of an otherwise dormant cellular defense against viruses and tumors.

Our drug technology

utilizes specifically-configured RNA and is a selective TLR3 agonist that is administered intravenously.

Ampligen®

assigned the generic name rintatolimod by the United States Adopted Names Council (USANC) and has the chemical designation poly(I):poly(C 12 U).

EAP/clinical trials of

Ampligen®

that have been conducted or that are ongoing include studies of the potential treatment of patients with renal cell

carcinoma, malignant melanoma, non-small cell lung, ovarian, breast, colorectal, urothelial, prostate and pancreatic cancer, ME/CFS,

RNA directs the production of proteins and regulates

certain cell activities including the activation of an otherwise dormant cellular defense against viruses and tumors.

drug technology utilizes specifically-configured RNA and is a selective Toll-like Receptor 3 (TLR3) agonist that is

administered intravenously.

Ampligen has been assigned the generic name rintatolimod by the United States Adopted Names

Council (USANC) and has the chemical designation poly(I):poly(C 12 U).

trials of Ampligen that have been conducted or that are ongoing include studies of the potential treatment of patients with renal

cell carcinoma, malignant melanoma, non-small cell lung, ovarian, breast, colorectal, prostate and pancreatic cancer, ME/CFS,

Hepatitis B and HIV.

We have received approval

of our NDA from ANMAT for commercial sale of rintatolimod (U.S.

Ampligen®) in the Argentine Republic for the treatment

of severe CFS.

have received approval of our NDA from ANMAT for commercial sale of rintatolimod (U.S.

Ampligen) in the Argentine Republic

for the treatment of severe CFS.

The product will be marketed by GP Pharm, our commercial partner in Latin America.

On September 19, 2019, AIM received

clearance from the FDA to ship Ampligen to Argentina for the commercial launch and subsequent sales.

We are currently working with

GP Pharma on the commercial launch of Ampligen in Argentina.

Commercialization in Argentina will require, among other things, GP

Pharm to establish disease awareness, medical education, creation of an appropriate reimbursement level, design of marketing strategies

and completion of manufacturing preparations for launch.

The FDA has authorized

an open-label expanded access treatment protocol, (“AMP-511”), allowing patient access to Ampligen®

in an open-label

safety study under which severely debilitated CFS patients have the opportunity to be on Ampligen®

to treat this very serious

and chronic condition.

The data collected from the AMP-511 protocol through clinical sites provide safety information regarding

the use of Ampligen®

in patients with CFS.

We are establishing an enlarged data base of clinical safety information which we

believe will provide further documentation regarding the absence of autoimmune disease associated with Ampligen®

19, 2019, we received clearance from the FDA to ship Ampligen to Argentina for the commercial launch and subsequent sales.

are currently working with GP Pharm on the commercial launch of Ampligen in Argentina.

Commercialization in Argentina will require,

among other things, GP Pharm to establish disease awareness, medical education, creation of an appropriate reimbursement level,

design of marketing strategies and completion of manufacturing preparations for launch and ANMAT conducting a final inspection

of the product and release tests before granting final approval to begin commercial sales.

This testing and approval process is

currently delayed due to the COVID-19 pandemic and ANMAT’s internal processes.

Once final approval by ANMAT is obtained,

GP Pharm will begin distributing Ampligen in Argentina.

We continue to pursue our Ampligen NDA, for the treatment of CFS with

FDA has authorized an open-label expanded access treatment protocol, (“AMP-511”), allowing patient access to Ampligen

in an open-label safety study under which severely debilitated CFS patients have the opportunity to be on Ampligen to treat this

very serious and chronic condition.

The data collected from the AMP-511 protocol through clinical sites provide safety information

regarding the use of Ampligen in patients with CFS.

We are establishing an enlarged data base of clinical safety information which

we believe will provide further documentation regarding the absence of autoimmune disease associated with Ampligen treatment.

We believe that continued efforts to understand existing data, and to advance the development of new data and information, will

ultimately support our future filings for Ampligen®

and/or the design of future clinical studies that the FDA requested in

a complete response letter.

The FDA approved the increase reimbursement level from $200 to $345 per 200 mg vial of Ampligen, due

to increased production costs;

ultimately support our future filings for Ampligen and/or the design of future clinical studies that the FDA requested in a complete

response letter.

The FDA approved the increase reimbursement level from $200 to $345 per 200 mg vial of Ampligen, due to increased

production costs;

which was re-authorized in 2020.

At this time, we do not plan on passing this adjustment along to

the patients in this program.

As of December 31, 2019, there are 12 patients enrolled in this open-label expanded access treatment

In May 2016, we entered

into a five-year agreement with myTomorrows, a Netherlands based company, for the commencement and management of an Early Access

Program (“EAP”) in Europe and Turkey (the “Territory”) related to ME/CFS.

Pursuant to the agreement, as

amended, myTomorrows also will manage all Early Access Programs and Special Access Programs in Europe, Canada and Turkey to treat

pancreatic cancer and ME/CFS patients.

In April 2018, we completed

data analysis of an intranasal human safety study of Ampligen®

plus FluMist®

At this time, we do not plan on passing this adjustment along to the patients

in this program.

As of December 31, 2020, there are 10 patients enrolled in this open-label expanded access treatment protocol.

In October 2020, we received Institutional Review Board (IRB) approval for the expansion of the AMP-511 Expanded Access Program

(EAP) clinical trial for Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS) to include patients previously diagnosed

with SARS-CoV-2 following clearance of the virus, but who still demonstrate chronic fatigue-like symptoms.

May 2016, we entered into a five-year agreement with myTomorrows, a Netherlands based company, for the commencement and management

of an Early Access Program (“EAP”) in Europe and Turkey (the “Territory”) related to ME/CFS.

to the agreement, as amended, myTomorrows also will manage all Early Access Programs and Special Access Programs in Europe, Canada

and Turkey to treat pancreatic cancer and ME/CFS patients.

April 2018, we completed data analysis of an intranasal human safety study of Ampligen plus FluMist®

known as AMP-600.

The study was previously

closed after the US Centers for Disease Control and Prevention (“CDC”) recommended against the use of FluMist®.

Intranasal Ampligen®

in combination with FluMist®

study was previously closed after the US Centers for Disease Control and Prevention (“CDC”) recommended against the

use of FluMist®.

Intranasal Ampligen in combination with FluMist®

was generally well-tolerated in the study.

In June 2018, Ampligen®

was cited as outperforming two other TLR3 agonists, poly IC and natural double stranded RNA, in creating an enhanced tumor microenvironment

for checkpoint blockage therapy in the journal of Cancer Research ( http://cancerres.aacrjournals.org/content/early/2018/05/31/0008-5472.CAN-17-3985 ).

In a head-to-head study in explant culture models, Ampligen®

activated the TLR3 pathway and promoted an accumulation of killer

June 2018, Ampligen was cited as outperforming two other TLR3 agonists, poly IC and natural double stranded RNA, in creating an

enhanced tumor microenvironment for checkpoint blockage therapy in the journal of Cancer Research ( http://cancerres.aacrjournals.org/content/early/2018/05/31/0008-5472.CAN-17-3985 ).

In a head-to-head study in explant culture models, Ampligen activated the TLR3 pathway and promoted an accumulation of killer

T cells but, unlike the other two TLR3 agonists, it did so without causing regulatory T cell (Treg) attraction.

These findings

were considered important because they indicate that Ampligen®

selectively reprograms the tumor microenvironment by inducing

the beneficial aspects of tumor inflammation (attracting killer T cells), without amplifying immune suppressive elements such

as regulatory T cells.

The study was conducted at the University of Pittsburgh and Roswell Park Comprehensive Cancer Center (“RPCCC”),

as a part of the NIH-funded P01 CA132714 and Ovarian Cancer Specialized Program of Research Excellence (SPORE).

Based upon these

findings AIM and RPCCC expanded their existing scientific collaboration to advance the clinical development of Ampligen®

has shown promise in preclinical studies when combined with checkpoint inhibitors (CPIs).

The parties executed a Memorandum of

Understanding (“MOU”) designed to further assess the clinical potential of Ampligen®

in treating certain cancers.

This phase I/II study will evaluate the potential of Ampligen®

to enhance the immune mediated effects of CPIs in patients

with advanced solid tumors including bladder, melanoma and renal cell carcinoma.

In 2018, we completed

production of two commercial-size batches of more than 16,000 vials of Ampligen®, following its “Fill & Finish”

at the Contract Manufacturing Organization.

These lots passed all required testing for regulatory release for human use and are

being used for multiple programs including the product launch in Argentina, for the treatment of ME/CFS, the pancreatic cancer

EAP in the Netherlands, ongoing and future clinical studies in oncology, and our ME/CFS EAP in the U.S.

Alferon N Injection®

is the registered trademark for our injectable formulation of natural alpha interferon.

is the only natural-source,

were considered important because they indicate that Ampligen selectively reprograms the tumor microenvironment by inducing the

beneficial aspects of tumor inflammation (attracting killer T cells), without amplifying immune suppressive elements such as regulatory

The study was conducted at the University of Pittsburgh and Roswell Park as a part of the NIH-funded P01 CA132714 and

Ovarian Cancer Specialized Program of Research Excellence (SPORE).

Based upon these findings we and Roswell Park expanded our

existing scientific collaboration to advance the clinical development of Ampligen which has shown promise in preclinical studies

when combined with checkpoint inhibitors (CPIs).

The parties executed a Memorandum of Understanding (“MOU”) designed

to further assess the clinical potential of Ampligen in treating certain cancers.

This phase I/II study will evaluate the potential

of Ampligen to enhance the immune mediated effects of CPIs in patients with advanced solid tumors including bladder, melanoma

and renal cell carcinoma.

At the moment, this study is on hold as we await updates and next steps from Roswell Park.

2018, we completed production of two commercial-size batches of more than 16,000 vials of Ampligen, following its “Fill

& Finish”

at Jubilant HollisterStier, the Contract Manufacturing Organization.

These lots passed all required testing

for regulatory release for human use and are being used for multiple programs including the treatment of ME/CFS, the pancreatic

cancer EAP in the Netherlands, and will continue to be used for ongoing and future clinical studies in oncology.

Additionally,

two lots of Ampligen were manufactured in December 2019 and January 2020 at Jubilant.

The current manufactured lots of Ampligen

have been fully tested and released for commercial product launch in Argentina and for clinical trials.

Additionally, in December

2020, we added Pharmaceutics International Inc.

(“Pii”) as a “Fill & Finish”

provider to enhance our

capacity to produce Ampligen.

This addition amplifies our manufacturing capability by providing redundancy and cost savings.

contracts augment our existing fill and finish capacity.

N Injection®

N Injection is the registered trademark for our injectable formulation of natural alpha interferon.

Alferon is the only natural-source,

multi-species alpha interferon currently approved for sale in the U.S.

2 unchanged sentences

is also approved in Argentina for the treatment of refractory patients that failed or were intolerant to treatment with recombinant

Certain types of human papilloma viruses (“HPV”) cause genital warts, a sexually transmitted disease (“STD”).

According to the CDC, HPV is the most common sexually transmitted infection, with approximately 79 million Americans —

in their late teens and early 20s —

Certain types of human papilloma viruses (“HPV”) cause genital warts, a sexually transmitted disease

(“STD”).

According to the CDC, HPV is the most common sexually transmitted infection, with approximately 79 million

Americans —

most in their late teens and early 20s —

infected with HPV.

In fact, the CDC states that “HPV is so common that nearly all

sexually active men and women get the virus at some point in their lives.”

Although they do not usually result in death,

genital warts commonly recur, causing significant morbidity and entail substantial health care costs.

Interferons are a group

of proteins produced and secreted by cells to combat diseases.

Researchers have identified four major classes of human interferon:

In fact, the CDC states that “HPV is

so common that nearly all sexually active men and women get the virus at some point in their lives.”

Although they do not

usually result in death, genital warts commonly recur, causing significant morbidity and entail substantial health care costs.

are a group of proteins produced and secreted by cells to combat diseases.

Researchers have identified four major classes of human

alpha, beta, gamma and omega.

Alferon N Injection®

contains a multi-species form of alpha interferon.

The world-wide market

for injectable alpha interferon-based products has experienced rapid growth and various alpha interferon injectable products are

approved for many major medical uses worldwide.

Alferon N Injection contains a multi-species form of alpha interferon.

The world-wide

market for injectable alpha interferon-based products has experienced rapid growth and various alpha interferon injectable products

are approved for many major medical uses worldwide.

Alpha interferons are manufactured commercially in three ways:

by genetic engineering,

by cell culture, and from human white blood cells.

All three of these types of alpha interferon are or were approved for commercial

sale in the U.S.

engineering, by cell culture, and from human white blood cells.

All three of these types of alpha interferon are or were approved

for commercial sale in the U.S.

Our natural alpha interferon is produced from human white blood cells.

The potential advantages

of natural alpha interferon over recombinant (synthetic) interferon produced and marketed by other pharmaceutical firms may be

based upon their respective molecular compositions.

Natural alpha interferon is composed of a family of proteins containing many

molecular species of interferon.

In contrast, commercial recombinant alpha interferon products each contain only a single species.

Researchers have reported that the various species of interferons may have differing antiviral activity depending upon the type

Natural alpha interferon presents a broad complement of species, which we believe may account for its higher activity

in laboratory studies.

potential advantages of natural alpha interferon over recombinant (synthetic) interferon produced and marketed by other pharmaceutical

firms may be based upon their respective molecular compositions.

Natural alpha interferon is composed of a family of proteins

containing many molecular species of interferon.

In contrast, commercial recombinant alpha interferon products each contain only

a single species.

Researchers have reported that the various species of interferons may have differing antiviral activity depending

upon the type of virus.

Natural alpha interferon presents a broad complement of species, which we believe may account for its

higher activity in laboratory studies.

Natural alpha interferon is also glycosylated (partially covered with sugar molecules).

Such glycosylation

is not present on the currently U.S.

Such glycosylation is not present on the currently U.S.

marketed recombinant alpha interferons.

We believe that the absence of glycosylation may be,

in part, responsible for the production of interferon-neutralizing antibodies seen in patients treated with recombinant alpha interferon.

Although cell culture-derived interferon is also composed of multiple glycosylated alpha interferon species, the types and relative

quantity of these species are different from our natural alpha interferon.

Alferon N Injection®

[Interferon alfa-n3 (human leukocyte derived)] is a highly purified, natural-source, glycosylated, multi-species alpha interferon

There are essentially no neutralizing antibodies observed against Alferon N Injection®

to date and the product has

a relatively low side-effect profile.

The recombinant DNA derived alpha interferon formulations have been reported to have decreased

effectiveness after one year of treatment, probably due to neutralizing antibody formation.

See “Manufacturing”

We believe that the absence of

glycosylation may be, in part, responsible for the production of interferon-neutralizing antibodies seen in patients treated with

recombinant alpha interferon.

Although cell culture-derived interferon is also composed of multiple glycosylated alpha interferon

species, the types and relative quantity of these species are different from our natural alpha interferon.

N Injection [Interferon alfa-n3 (human leukocyte derived)] is a highly purified, natural-source, glycosylated, multi-species alpha

interferon product.

There are essentially no neutralizing antibodies observed against Alferon N Injection to date and the product

has a relatively low side-effect profile.

The recombinant DNA derived alpha interferon formulations have been reported to have

decreased effectiveness after one year of treatment, probably due to neutralizing antibody formation.

“Manufacturing”

and “Marketing/Distribution”

sections below for more details on the manufacture and marketing/distribution of Alferon

N Injection®.

PATENTS AND NON-PATENT EXCLUSIVITY RIGHTS

As of December 31, 2019,

we had 48 patents worldwide with 11 additional pending patent applications comprising our intellectual property.

sections below for more details on the manufacture and marketing/distribution

of Alferon N Injection.

AND NON-PATENT EXCLUSIVITY RIGHTS

of December 31, 2020, we had 43 patents worldwide with 10 additional pending patent applications comprising our intellectual property.

Please see “Note 5:

3 unchanged sentences

rights to determine whether they have continuing value.

In February 2020, we filed

three provisional patent applications related to Ampligen in our efforts toward joining the global health community in the fight

against SARS-CoV-2.

February 2020, we filed three provisional patent applications related to Ampligen in our efforts toward joining the global health

community in the fight against SARS-CoV-2.

These include:

1) Ampligen as a therapy for the Wuhan coronavirus;

2) Ampligen as part of a proposed intranasal

universal coronavirus vaccine;

1) Ampligen as a therapy and prophylaxis for COVID-19;

as part of a proposed intranasal universal coronavirus vaccine;

and 3) a high-volume manufacturing process for Ampligen.

In 2016, we received a

new Ampligen®

composition of matter patent in the US (#9,315,538).

In 2015, we were granted a new composition of matter patent

(#2340307) by the European Patent Office and we received twenty-eight new patents in various EU countries.

In 2014, we were granted

a new composition of matter patent in the United States (#8722874) covering Ampligen®

formulations.

The Ampligen®

CFS treatment patent (#6130206) expired October 10, 2017 (we believe that the expiration of this patent will have minimal impact

2016, we received a new Ampligen composition of matter patent in the US (#9,315,538).

In 2015, we were granted a new composition

of matter patent (#2340307) by the European Patent Office and we received twenty-eight new patents in various EU countries.

2014, we were granted a new composition of matter patent in the United States (#8722874) covering Ampligen formulations.

Ampligen U.S.

CFS treatment patent (#6130206) expired October 10, 2017 (we believe that the expiration of this patent will have

minimal impact on us;

see details on U.S.

3 unchanged sentences

to the drug for CFS below).

Ampligen®

Trademark (#73617687) has been renewed through December 6, 2028.

New therapeutic use patent applications are pending.

Ampligen Trademark (#73617687) has been renewed through December 6, 2028.

therapeutic use patent applications are pending.

On May 13, 2014, the United States Patent Office issued patent U.S.

titled “Double-Stranded Ribonucleic Acids with Rugged Physiochemical Structure and Highly Specific Biologic Activity,”

with all rights assigned to AIM.

with all rights assigned to us.

The patent claims a novel form of rugged dsRNA.

Rugged dsRNA are nucleic acids with a unique

composition and physical characteristic identified with high specificity of binding to Toll-Like Receptor 3 (TLR3), thereby conveying

an important range of therapeutic opportunities.

The newly discovered form of dsRNA has increased bioactivity and binding affinity

to the TLR 3 receptor because of its reduced tendency to form branched dsRNA which can inhibit receptor binding.

Pharmaceutical

formulations containing the newly discovered nucleic acid as active ingredients and methods of treatment with those formulations

are also described in the issued patent.

AIM believes that the issuance of U.S.

Patents #9315538 and #8722874 will help ensure

that AIM retains patent protection for novel formulations of Ampligen®

products until at least 2029.

In September 2015, the

European Patent Office granted the European version of U.S.

Patent #9315538, with all rights assigned to AIM.

In addition to our patent

rights relating to Ampligen®, the FDA has granted “orphan drug status”

to the drug for CFS, HIV/AIDS, renal cell

carcinoma and malignant melanoma.

Orphan drug status grants us protection against the potential subsequent approval of other sponsors’

versions of the drug for these uses for a period of seven years following FDA approval of Ampligen®

for each of these designated

The first NDA approval for Ampligen®

as a new chemical entity will also qualify for four or five years of non-patent

exclusivity during which abbreviated new drug applications seeking approval to market generic versions of the drug cannot be submitted

Rugged dsRNA are nucleic acids with a unique composition

and physical characteristic identified with high specificity of binding to Toll-Like Receptor 3 (TLR3), thereby conveying an important

range of therapeutic opportunities.

The newly discovered form of dsRNA has increased bioactivity and binding affinity to the TLR

3 receptor because of its reduced tendency to form branched dsRNA which can inhibit receptor binding.

Pharmaceutical formulations

containing the newly discovered nucleic acid as active ingredients and methods of treatment with those formulations are also described

in the issued patent.

We believe that the issuance of U.S.

Patents #9315538 and #8722874 will help ensure that we retain patent

protection for novel formulations of Ampligen products until at least 2029.

September 2015, the European Patent Office granted the European version of U.S.

Patent #9315538, with all rights assigned to us.

addition to our patent rights relating to Ampligen, the FDA has granted “orphan drug status”

to the drug for CFS,

HIV/AIDS, renal cell carcinoma, pancreatic cancer, and malignant melanoma.

Orphan drug status grants us protection against the

potential subsequent approval of other sponsors’

versions of the drug for these uses for a period of seven years following

FDA approval of Ampligen for each of these designated uses.

The first NDA approval for Ampligen as a new chemical entity will

also qualify for four or five years of non-patent exclusivity during which abbreviated new drug applications seeking approval

to market generic versions of the drug cannot be submitted to the FDA.

(See “Government Regulation”

In May 2011, a new United

States Patent #7943147 was granted for the use of Ampligen®

as a vaccine adjuvant for use with seasonal influenza vaccine to

induce an enhanced immune response against H5N1 avian influenza.

With respect to Alferon®,

the composition is a complex mixture of natural interferon species that is manufactured from human leukocytes obtained from human

blood donors.

In addition, while it is the current standard by the FDA to treat biological drug products like interferon as “Well

Characterized”

biologics, a process for which chemical entities can have their identity, purity, impurities, potency, and

quality controlled by chemical testing, Alferon®, as a natural interferon, does not lend itself well to such testing.

FDA continues to require that each lot of Alferon®

we produce be tested and released by the FDA before it can be distributed

for commercial sales.

Because of the complexity of the Alferon®

manufacturing process and these additional regulatory requirements,

we believe that potential manufacturers of generic, or so-called “bio-similar,”

drug products are focused on developing

recombinant interferon products, rather than natural interferon products.

For these reasons, we believe that not having patent

protection should have no or little impact on the Company.

Additionally, at the receipt of the FDA certification for the revised

manufacturing process and techniques in New Brunswick, NJ, it is our intention to file for additional patent protection.

RESEARCH AND DEVELOPMENT (“R&D”)

Our general focus during

the past two fiscal years has been on the clinical development of new drug therapies based on natural immune system enhancing technologies

for the treatment of immune-based disorders including cancer and CFS.

While we have previously estimated milestone dates when significant

progress could be reported, the reality of the growing SARS-CoV-2 pandemic could mean the re-direction of resources away from ongoing

clinical trials and toward the research and development of potential cures and vaccines for the coronavirus.

We have been working with

the University of Pittsburgh’s chemokine modulation research initiative which includes the use of Ampligen®

as a potential

adjuvant to modify the tumor microenvironment (TME) with the goal of increasing anti-tumor responses to check point inhibitors

As part of this collaboration, AIM has supplied Ampligen®

(rintatolimod) to the University.

The study, under the leadership

Edwards, MD, chair of gynecologic services at Magee-Women’s Hospital of the University of Pittsburgh School

of Medicine, and Professor of Surgery Pawel Kalinski, M.D., Ph.D., at RPCCC, Buffalo, N.Y., involved the chemokine modulatory regimen

developed by Dr.

Kalinski’s group and successfully completed the Phase 1 dose escalation in patients with resectable colorectal

May 2011, a new United States Patent #7943147 was granted for the use of Ampligen as a vaccine adjuvant for use with seasonal

influenza vaccine to induce an enhanced immune response against H5N1 avian influenza.

respect to Alferon, the composition is a complex mixture of natural interferon species that is manufactured from human leukocytes

obtained from human blood donors.

In addition, while it is the current standard by the FDA to treat biological drug products like

interferon as “Well Characterized”

biologics, a process for which chemical entities can have their identity, purity,

impurities, potency, and quality controlled by chemical testing, Alferon, as a natural interferon, does not lend itself well to

such testing.

Moreover, FDA continues to require that each lot of Alferon we produce be tested and released by the FDA before

it can be distributed for commercial sales.

Because of the complexity of the Alferon manufacturing process and these additional

regulatory requirements, we believe that potential manufacturers of generic, or so-called “bio-similar,”

drug products

are focused on developing recombinant interferon products, rather than natural interferon products.

For these reasons, we believe

that not having patent protection should have no or little impact on us.

Additionally, at the receipt of the FDA certification

for the revised Alferon manufacturing process and techniques in New Brunswick, NJ, it is our intention to file for additional

patent protection.

AND DEVELOPMENT (“R&D”)

general focus during the past several fiscal years has been on the clinical development of new drug therapies based on natural

immune system enhancing technologies for the treatment of immune-based disorders including cancer and CFS.

While we have previously

estimated milestone dates when significant progress could be reported, the reality of the ongoing SARS-CoV-2 pandemic could mean

the re-direction of resources away from ongoing clinical trials and toward the research and development of potential treatments

for the coronavirus.

In this regard, we have widened our focus to include research and development of potential therapeutic

applications for the treatment of COVID-19, including the long-term effects of COVID-19.

have been working with the University of Pittsburgh’s chemokine modulation research initiative which includes the use of

Ampligen as a potential adjuvant to modify the tumor microenvironment (TME) with the goal of increasing anti-tumor responses to

check point inhibitors (CPI).

As part of this collaboration, we haves supplied Ampligen (rintatolimod) to the University.

study, under the leadership of Robert P.

Edwards, MD, chair of gynecologic services at Magee-Women’s Hospital of the University

of Pittsburgh School of Medicine, and Professor of Surgery Pawel Kalinski, M.D., Ph.D., at Roswell Park, Buffalo, N.Y., involved

the chemokine modulatory regimen developed by Dr.

Kalinski’s group and successfully completed the Phase 1 dose escalation

in patients with resectable colorectal cancer.

In the 1st quarter of 2017, Dr.

Kalinski relocated to RPCCC in Buffalo, NY and has established a cancer program which will

continue to require a supply of Ampligen®.

In October 2018, we signed

a clinical trial agreement with RPCCC to evaluate Ampligen®

in combination with checkpoint inhibitors (CPIs).

The Phase IIa

clinical trial will evaluate the immune-mediated effects of cytokine modulation in combination with CPIs in patients with primary

resistance to CPI therapy.

The protocol will seek to evaluate the combination of Ampligen®

and CPIs in patients with advanced

urothelial carcinoma, renal cell carcinoma and melanoma.

Ampligen®

is our investigational immune-enhancing TLR3 agonist that

has demonstrated a robust anti-cancer effect in preclinical models when combined with CPIs.

This new agreement expands the extensive

prior clinical and preclinical work into the clinical checkpoint blockade arena and offers the opportunity to begin evaluation

of this combination therapy in patients with a variety of solid tumors where large numbers of patients do not respond or progress

following treatment with standard CPI-based therapy.

Currently, six Ampligen®

clinical trials are underway at university cancer centers testing whether tumor microenvironments can be reprogrammed to increase

the effectiveness of cancer immunotherapy, including checkpoint inhibitors:

Advanced Recurrent Ovarian Cancer -

Phase 1 / 2 study of intraperitoneal chemo-immunotherapy in recurrent ovarian cancer at University of Pittsburgh Medical Center.

Phase 1 portion established intraperitoneal safety of Ampligen plus Intron A with positive survival data.

Robert Edwards, world renowned expert in ovarian cancer is the lead investigator.

An interim report from Dr.

Edwards’

team was received and a summary of same was disclosed.

Kalinski relocated to Roswell Park in Buffalo,

NY and has established a cancer program which will continue to require a supply of Ampligen.

October 2018, we signed a clinical trial agreement with Roswell Park to evaluate Ampligen in combination with checkpoint inhibitors

The Phase IIa clinical trial will evaluate the immune-mediated effects of cytokine modulation in combination with CPIs

in patients with primary resistance to CPI therapy.

The protocol will seek to evaluate the combination of Ampligen and CPIs in

patients with advanced urothelial carcinoma, renal cell carcinoma and melanoma.

Ampligen is our investigational immune-enhancing

TLR3 agonist that has demonstrated a robust anti-cancer effect in preclinical models when combined with CPIs.

This new agreement

expands the extensive prior clinical and preclinical work into the clinical checkpoint blockade arena and offers the opportunity

to begin evaluation of this combination therapy in patients with a variety of solid tumors where large numbers of patients do

not respond or progress following treatment with standard CPI-based therapy.

At the moment, this study is on hold as we

await updates and next steps from Roswell Park.

six Ampligen clinical trials are underway at university cancer centers testing whether tumor microenvironments can be reprogrammed

to increase the effectiveness of cancer immunotherapy, including checkpoint inhibitors:

Recurrent Ovarian Cancer - Phase 1 / 2 study of intraperitoneal chemo-immunotherapy in advanced recurrent ovarian cancer;

Phase 1 portion establishes intraperitoneal safety.

Awaiting publication of Phase I results.

https://clinicaltrials.gov/ct2/show/NCT02432378

Stage 4 Colorectal Cancer Metastatic to

the Liver - Phase 2a study of Ampligen as component of chemokine modulatory regimen on colorectal cancer metastatic to liver

Mukherjee, PI.

Patient enrollment has been initiated in this study designed for 12 patients.

Recurrent Ovarian Cancer - A follow-up Phase 2 study of advanced recurrent ovarian cancer using cisplatin, pembrolizumab,

plus Ampligen;

up to 45 patients to be enrolled;

enrollment has commenced, and numerous patients have commenced treatment.

https://clinicaltrials.gov/ct2/show/NCT03734692

Stage 4 Metastatic Triple Negative

Breast Cancer –

Phase 2 open label study of metastatic triple-negative breast cancer using chemokine

modulation therapy, including Ampligen and pembrolizumab, at RPCCC.

Opyrchal, PI.

Patient enrollment has been

initiated in this study designed for 6 patients.

4 Metastatic Triple Negative Breast Cancer - Phase 2 study of metastatic triple-negative breast cancer using chemokine

modulation therapy, including Ampligen and pembrolizumab.

All patients have been treated or are in treatment.

https://www.clinicaltrials.gov/ct2/show/NCT03599453

Advanced Recurrent Ovarian Cancer –

This is a Phase 2 trial being conducted in advanced recurrent ovarian cancer at the University of Pittsburgh Medical Center that

will evaluate Ampligen in combination with pembrolizumab.

Patient enrollment has been initiated in this study designed for 45

Robert Edwards, world renowned expert in ovarian cancer is the lead investigator.

4 Colorectal Cancer Metastatic to the Liver - Phase 2a study of Ampligen as component of chemokine modulatory regimen

on colorectal cancer metastatic to liver;

the majority of the 12 planned patients enrolled and treated.

https://clinicaltrials.gov/ct2/show/NCT03403634

Early-Stage Prostate Cancer

Phase 2 study investigating the effectiveness and safety of aspirin and Ampligen with or without interferon-alpha 2b

(Intron A) compared to no drug treatments in a randomized three-arm study of patients with prostate cancer before undergoing

radical prostatectomy at RPCCC.

Patient enrollment has been initiated in this study designed for up to 60

Prostate Cancer - Phase 2 study investigating the effectiveness and safety of aspirin and Ampligen with or without interferon-alpha

2b (Intron A) compared to no drug treatments in a randomized three-arm study of patients with prostate cancer before undergoing

radical prostatectomy.

Patient enrollment has been initiated in this study designed for up to 45 patients.

https://clinicaltrials.gov/ct2/show/NCT03899987

Early-Stage Triple Negative Breast

Cancer —

Phase 1 study of chemokine modulation plus neoadjuvant chemotherapy in patients with early-stage triple

negative breast cancer has received FDA authorization at RPCCC.

The objective of this study is to evaluate the safety and

tolerability of a combination of Ampligen, celecoxib with or without Intron A, when given along with chemotherapy.

of this approach is to increase survival.

Triple Negative Breast Cancer - Phase 1 study of chemokine modulation plus neoadjuvant chemotherapy in patients with early-stage

triple negative breast cancer has received FDA authorization;

the objective of this study is to evaluate the safety and tolerability

of a combination of Ampligen, celecoxib with or without Intron A, when given along with chemotherapy;

the goal of this approach

is to increase survival.

This study is recruiting patients designed for up to 24 patients.

https://www.clinicaltrials.gov/ct2/show/NCT04081389 .

In addition, six Ampligen clinical trials are

planned for initiation in 2020, subject to funding:

https://clinicaltrials.gov/ct2/show/NCT04081389

Ampligen clinical trials are planned for initiation in 2021:

Brain-Metastatic

Breast Cancer —

Phase 2 study to assess the effectiveness of a three-pronged strategy combining distinct

immunotherapy approaches, including Ampligen.

RPCCC and Moffitt Cancer Center have both received “Breakthrough Awards”

Phase 2 study to assess the effectiveness of a three-pronged strategy combining distinct immunotherapy

approaches, including Ampligen.

Roswell Park and Moffitt Cancer Center have both received “Breakthrough Awards”

from the U.S.

Department of Defense.

Department of Defense (DOD).

Together, these separate but parallel proposed clinical trials are receiving approximately

$15 million in DOD funding to study Ampligen.

Stage 4 Refractory

Metastatic Colorectal Carcinoma —

Roswell Park is currently working on its draft of the IND, which its study and

Moffitt’s study require before next steps can be taken.

4 Refractory Metastatic Colorectal Carcinoma —

Phase 2 study that will evaluate Ampligen in combination with pembrolizumab

in refractory metastatic colorectal carcinoma at RPCCC.

Fountzilas, PI.

in refractory metastatic colorectal carcinoma at Roswell Park.

Up to 25 patients to be enrolled.

This is expected

to be funded by grants, testing Ampligen and pembrolizumab.

https://www.clinicaltrials.gov/ct2/results?cond=&term=NCT04119830&cntry=&state=&city=&dist.=

Refractory Melanoma

This is expected to be funded

by grants, testing Ampligen and pembrolizumab.

https://www.clinicaltrials.gov/show/NCT04119830

Melanoma —

Phase 2 study that will evaluate polarized dendritic cell vaccine, interferon alpha-2, Ampligen and celecoxib

for the treatment of HLA-A2+ refractory melanoma at RPCCC.

for the treatment of HLA-A2+ refractory melanoma at Roswell Park.

Up to 24 patients to be enrolled.

https://www.clinicaltrials.gov/ct2/results?cond=&term=NCT04093323&cntry=&state=&city=&dist=.

Stage 4 Urothelial,

Melanoma and Renal Cell Carcinoma —

Phase 2 study of advanced urothelial (bladder), melanoma and renal cell carcinoma,

resistant to checkpoint blockade, that will evaluate Ampligen in combination with a checkpoint blockade therapy at RPCCC.

Opyrchal, PI.

https://www.clinicaltrials.gov/show/NCT04093323

4 Urothelial, Melanoma and Renal Cell Carcinoma —

Phase 2 study of advanced urothelial (bladder), melanoma and renal

cell carcinoma, resistant to checkpoint blockade, that will evaluate Ampligen in combination with a checkpoint blockade therapy

at Roswell Park.

Protocol design and funding currently being finalized.

Non-Small Cell

Lung Cancer —

First-line therapy for non-small cell lung cancer with SOC chemotherapy that will evaluate

Ampligen in combination with pembrolizumab at University of Nebraska Medical Center.

Study design and budget

being developed.

However, we now anticipate an extended delay, as other studies with funding have moved ahead of the Ampligen

RPCCC is exploring a pilot study to establish proof of concept.

Advanced Pancreatic

Cancer —

Cell Lung Cancer —

First-line therapy for non-small cell lung cancer with SOC chemotherapy that will evaluate Ampligen

in combination with pembrolizumab at University of Nebraska Medical Center.

Study design and budget being

However, we now anticipate an extended delay, as other studies with funding have moved ahead of the Ampligen project.

Roswell Park is exploring a pilot study to establish proof of concept.

Pancreatic Cancer —

Phase 2 study in advanced pancreatic cancer using checkpoint blockade plus Ampligen at University

of Nebraska Medical Center.

of Nebraska Medical Center and Erasmus University.

Protocol and budget being developed.

This proposed study will be driven by the

data from our Dutch EAP (see below) and UNMC animal experiments showing synergy between Ampligen and checkpoint therapy.

addition, we are seeking to confirm the initial round of successful animal experiments with a second round of experiments

In January 2017, the EAP

through our agreement with myTomorrows designed to enable access of Ampligen®

to ME/CFS patients was extended to pancreatic

cancer patients beginning in the Netherlands.

myTomorrows is our exclusive service provider in Europe and Turkey and will manage

all EAP activities relating to the pancreatic cancer extension of the program.

In February 2018, the agreement with myTomorrows

was extended to cover Canada to treat pancreatic cancer patients, pending government approval.

As of December 31, 2019,

42 pancreatic cancer patients have received treatment with Ampligen®

immuno-oncology therapy under the EAP program at Erasmus

University in the Netherlands.

This proposed study may be based on

data from our Dutch EAP (see below) and UNMC animal experiment showing synergy between Ampligen and checkpoint therapy.

second confirmatory animal trial has been completed;

while it did not replicate the previous survival results, it did demonstrate

a significant anti-tumor effect.

addition, the National Cancer Institute awarded $14.5 million to Roswell Park to study Ampligen as part of five Roswell Park-led

chemokine modulation clinical trials in melanoma, colorectal and ovarian cancers.

January 2017, the EAP through our agreement with myTomorrows designed to enable access of Ampligen to ME/CFS patients was extended

to pancreatic cancer patients beginning in the Netherlands.

myTomorrows is our exclusive service provider in Europe and Turkey

and will manage all EAP activities relating to the pancreatic cancer extension of the program.

In February 2018, the agreement

with myTomorrows was extended to cover Canada to treat pancreatic cancer patients, pending government approval.

There have been

no physician requests to date that would cause the program to move forward with the approval process.

of the date of this Report, 42 pancreatic cancer patients have received treatment with Ampligen immuno-oncology therapy under

the EAP program at Erasmus MC in the Netherlands.

Supervised by Prof.

van Eijck, MD, a world-renowned specialist in this dread malignancy, and Diba Latifi, MD, the team at Erasmus is making progress.

Early progress

was reported in a published abstract from Erasmus, and a copy of the abstract can be found at http://ir.aimimmuno.com/Events_Presentations .

The abstract was part of a larger original report covering a variety of medical topics, which can be found at https://www.pancreasclub.com/wp-content/uploads/2018/06/Poster-Abstracts.pdf .

All patients have completed

treatment and we expect within the next few months a comprehensive update from the Erasmus team on the immunological response

in relation to survival (while again recognizing the SARS-CoV-2 pandemic could very well re-direct the focus of clinicians and

the health care community).

AIM hopes to work with Dr.

Van Eijck, Dr.

Latifi, and Erasmus M.C.

to initiate a combination therapy

program to extend the results seen thus far in the Netherlands by combining Ampligen with checkpoint blockade therapy.

Myalgic Encephalomyelitis/Chronic Fatigue

Syndrome (“ME/CFS”)

Myalgic Encephalomyelitis/Chronic

Fatigue Syndrome (“ME/CFS”), also known as Chronic Fatigue Immune Dysfunction Syndrome (“CFIDS”) and Chronic

Fatigue Syndrome (“CFS”), is a serious and debilitating chronic illness and a major public health problem.

is recognized by both the government and private sector as a significant unmet medical need, including the U.S.

National Institutes

of Health (“NIH”), FDA and the CDC.

The CDC states on its website at https://www.cdc.gov/me-cfs/ that “

encephalomyelitis/chronic fatigue syndrome (ME/CFS) is a serious, long-term illness that affects many body systems.

ME/CFS are often not able to do their usual activities.

Casper van Eijck, MD, the team at Erasmus MC found a statistically

significantly positive survival benefit when using Ampligen in patients with locally advanced/metastatic pancreatic cancer after

systemic chemotherapy.

We will work with our Contract Research Organization, Amarex Clinical Research LLC, to seek FDA “fast-track”

and possibly even FDA “breakthrough”

designations and to obtain IND authorizations to conduct a follow-up pancreatic

cancer Phase 2/3 clinical trial with sites in the Netherlands at Erasmus MC under Prof.

van Eijck, and also at major cancer research

centers in the United States.

Additionally:

December 2020, the FDA granted Ampligen Orphan Drug Designation status for the treatment of pancreatic cancer.

Drug Designation program provides orphan status to drugs and biologics which are defined as those intended for the treatment,

prevention or diagnosis of a rare disease or condition, which is one that affects less than 200,000 persons in the United

States or meets cost recovery provisions of the act.

The status helps incentivize the treatment of therapies to treat unmet

medical needs by providing a company with seven years of exclusivity rights once a drug reaches market.

February 2021, our subsidiary, NV Hemispherx Biopharma Europe, received formal notification from the European Commission (EC)

approving the Orphan Medicinal Product Application for Ampligen as a treatment for pancreatic cancer.

Orphan products, once

commercially approved in the European Union (EU), receive benefits including up to ten years of protection from market competition

from similar medicines with similar active component and indication for use that are not shown to be clinically superior.

September, we reported receipt of statistically significant results of positive survival benefit when using Ampligen in patients

with locally advanced/metastatic pancreatic cancer after systemic chemotherapy versus matched historical controls.

Encephalomyelitis/Chronic Fatigue Syndrome (“ME/CFS”)

Encephalomyelitis/Chronic Fatigue Syndrome (“ME/CFS”), also known as Chronic Fatigue Immune Dysfunction Syndrome (“CFIDS”)

and Chronic Fatigue Syndrome (“CFS”), is a serious and debilitating chronic illness and a major public health problem.

ME/CFS is recognized by both the government and private sector as a significant unmet medical need, including the U.S.

Institutes of Health (“NIH”), FDA and the CDC.

The CDC states on its website at https://www.cdc.gov/me-cfs/

Myalgic encephalomyelitis/chronic fatigue syndrome (ME/CFS) is a serious, long-term illness that affects many body

People with ME/CFS are often not able to do their usual activities.

At times, ME/CFS may confine them to bed.

People with ME/CFS have severe

fatigue and sleep problems.

ME/CFS may get worse after people with the illness try to do as much as they want or need to do.

symptom is known as post-exertional malaise (PEM).

Other symptoms can include problems with thinking and concentrating, pain,

and dizziness.

Many severe ME/CFS patients

become completely disabled or totally bedridden and are afflicted with severe pain and mental confusion even at rest.

characterized by incapacitating fatigue with profound exhaustion and extremely poor stamina, sleep difficulties and problems with

concentration and short-term memory.

It is also accompanied by flu-like symptoms, pain in the joints and muscles, tender lymph

nodes, sore throat and new headaches.

A distinctive characteristic of the illness is a worsening of symptoms following physical

or mental exertion, which do not subside with rest.

In October 2016, an analysis

of a subset of CFS patients from the AMP-516 Phase 3 study was performed and presented at the IACFS/ME annual meeting in Fort Lauderdale,

The ITT Population (n=208) was separated into two subsets based primarily on baseline CFS symptom duration (2-8 years (n=75)

and <2 years plus >8 years (n=133)).

Responder analyses of the ITT Population and both subsets were performed.

analyses of rintatolimod vs.

placebo patients improving ET duration from baseline by ≥25% shows over twice the % of patients

with clinical enhancement in ET effect in the rintatolimod cohort compared to placebo for the 2-8-year subset vs.

with ME/CFS have severe fatigue and sleep problems.

ME/CFS may get worse after people with the illness try to do as much as they

want or need to do.

This symptom is known as post-exertional malaise (PEM).

Other symptoms can include problems with thinking

and concentrating, pain, and dizziness.

severe ME/CFS patients become completely disabled or totally bedridden and are afflicted with severe pain and mental confusion

even at rest.

ME/CFS is characterized by incapacitating fatigue with profound exhaustion and extremely poor stamina, sleep difficulties

and problems with concentration and short-term memory.

It is also accompanied by flu-like symptoms, pain in the joints and muscles,

tender lymph nodes, sore throat and new headaches.

A distinctive characteristic of the illness is a worsening of symptoms following

physical or mental exertion, which do not subside with rest.

October 2016, an analysis of a subset of CFS patients from the AMP-516 Phase 3 study was performed and presented at the IACFS/ME

annual meeting in Fort Lauderdale, FL.

The ITT Population (n=208) was separated into two subsets based primarily on baseline CFS

symptom duration (2-8 years (n=75) and <2 years plus >8 years (n=133)).

Responder analyses of the ITT Population and both

subsets were performed.

Responder analyses of Ampligen vs.

placebo patients improving ET duration from baseline by ≥25% shows

over twice the percentage of patients with clinical enhancement in ET effect in the Ampligen cohort compared to placebo for the

2-8-year subset vs.

the ITT population.

This subset may assist in the design of future clinical studies of Ampligen®

in the treatment for ME/CFS patients.

Other Diseases

In Europe, the EMA has

approved the Orphan Medicinal Products Designation for rintatolimod (Ampligen®) as a potential treatment of Ebola virus disease

and for Alferon®

N Injection, also known as interferon alfa-n3, as a potential treatment of MERS.

We concluded our series

of collaborations designed to determine the potential effectiveness of Ampligen®

and Alferon®

N as potential preventative

and/or therapeutic treatments for Ebola related disorders.

Although we believe that the threat of both MERS and Ebola globally

may reemerge in the future, it appears that the spread of these disorders has somewhat diminished.

As a result, we have elected

to focus our research and development efforts on other areas at this time.

This subset may assist in the design of future clinical studies of Ampligen in the treatment

for ME/CFS patients.

high number of younger people being hospitalized for COVID-19 suggests considerable numbers of people in the prime of their lives

may have a COVID-induced ME/CFS-like illness in their future.

Individuals with CFS lost an estimated $20,000 in 2002, implying

a total societal loss of $9.1 billion.

Twenty-five percent ($2.3 billion) resulted from lost household productivity, and the remaining

75% ($6.8 billion) from lost labor force productivity.

June of 2020, we filed a provisional patent application for, among other discoveries, the use of Ampligen as a potential early-onset

therapy for the treatment of COVID-19 induced chronic fatigue.

survivors of the first SARS-CoV-1 epidemic in 2003 continued to report chronic fatigue, difficulty sleeping and shortness of breath

months after recovering from the acute illness.

“After one year, 17% of patients had not returned to work and 9% more had

not returned to their pre-SARS work levels”

( Simmaron Research ).

Now there is increasing evidence that patients with

COVID-19 can develop a similar, ME/CFS-like illness.

These patients are commonly referred to as “Long Haulers.”

http://simmaronresearch.com/2020/04/will-covid-19-leave-an-explosion-of-me-cfs-cases-in-its-wake/

October 2020, we received Institutional Review Board (IRB) approval for the expansion of the AMP-511 Expanded Access Program (EAP)

clinical trial for Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS) to include patients previously diagnosed with SARS-CoV-2

following clearance of the virus, but who still demonstrate chronic fatigue-like symptoms.

November 2, 2020, we announced the publication of statistically significant data detailing how Ampligen could have a considerable

positive impact on people living with ME/CFS when administered in the early stages of the disease.

The data were published in

PLOS ONE , a peer-reviewed open access scientific journal published by the Public Library of Science.

AIM researchers found

that the TLR3 agonist Ampligen substantially improved physical performance in a subset of ME/CFS patients.

the SARS-CoV-1 outbreak in 2002-03, Ampligen exhibited excellent antiviral properties and protective survival effect in NIH-contracted

studies of SARS-infected mice, which is very similar to SARS-CoV-2, the novel virus that causes COVID-19.

Barnard 2006 study ( https://journals.sagepub.com/doi/abs/10.1177/095632020601700505 ) found that Ampligen reduced virus

lung levels to below detectable limits.

Day 2009 study ( https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2787736/ ) found that, instead of 100% mortality, there

was 100% protective survival.

compared key transcription regulatory sequences of SARS-CoV-1 to SARS-CoV-2 and found significant similarities, suggesting highly

probable extension of the antiviral effects of Ampligen in the earlier NIH-contracted SARS experiments to COVID-19.

SARS-CoV-2 virus –

which causes COVID-19 –

shares important genomic and pathogenic similarities with SARS-CoV-1 (hence

Since Ampligen has shown antiviral activity against more distantly related coronaviruses, there was a reasonable probability

that the antiviral effects of Ampligen against SARS-CoV-1 will likely extend to SARS-CoV-2, as discussed below, recently, Ampligen

has demonstrated in vitro antiviral activity against SARS-CoV-2.

We believe that this creates a compelling case for clinical trials

to evaluate Ampligen as a potential tool in the fight against COVID-19.

the late 2019 outbreak of SARS-CoV-2, we have been actively engaged in determining whether Ampligen could be an effective treatment

for this virus or could be part of a vaccine.

We believe that Ampligen has the potential to be both an early-onset treatment for

and prophylaxis against SARS-Cov-2.

We believe that prior studies of Ampligen in SARS-CoV-1 animal experimentation may predict similar protective

effects against the new virus.

February 2020, we filed three provisional patent applications related to Ampligen in our efforts toward joining the global health

community in the fight against the deadly coronavirus (See:

https://aimimmuno.com/press-release/aim-immunotech-files-provisional-patent-application-for-the-use-of-ampligenr-as-a-potential-therapy-for-covid-19-induced-chronic-

Our three provisional patent applications include:

1) Ampligen as a therapy for the coronavirus;

2) Ampligen as part

of a proposed intranasal universal coronavirus vaccine that combines Ampligen with inactivated coronavirus, conveying immunity

and cross-protection and;

3) a high-volume manufacturing process for Ampligen.

Under the Patent Cooperation Treaty of 1970, which

provides international protections for patents, these three provisional patent applications were converted in to two international

patent applications based on the date of their filings.

early April 2020, we entered into a Material Transfer Agreement (MTA) with Shenzhen Smoore Technologies located in Shenzhen China,

the world’s largest manufacturer of inhalation devices.

Pursuant to this agreement, Smoore has agreed to run preliminary

tests in China to the efficacy of Smoore’s inhalation delivery device using Ampligen.

Initial testing will include evaluation

of Ampligen with regards to safety and characterization of the inhaler vapor properties.

Additional testing will study the particle

size of various Ampligen concentrations in aqueous solutions obtainable using Smoore’s technology.

The goal of these studies

is to establish a reproducible method to obtain an Ampligen-containing atomized mist that can deliver biologically active Ampligen

deep into the lung airways of humans.

There have been delays related to importing Ampligen to China.

We are working with Smoore

to alleviate these issues and to identify a mutually beneficial course of action that would allow us to move forward with the

proposed testing of Ampligen.

We will announce when the shipment for testing purposes has been completed.

The MTA with Smoore

expires on April 1, 2021, with the possibility of continued cooperation between us and Smoore under ongoing consideration.

August 6, 2020, we contracted Amarex Clinical Research LLC (“Amarex”) to act as our Clinical Research Organization

and provide regulatory support with regard to a clinical trial testing Ampligen’s potential as a COVID-19 prophylaxis via

intranasal delivery.

We anticipate conducting the Phase I study using the Centre for Human Drug Research (CHDR) in The Netherlands.

Amarex is expected to help provide monitoring support.

For the subsequent Phase II/III studies we expected to incur clinical

trial costs of up to $4-5 million.

We expect that Phase I will consist of 40 test subjects and cost about $1 million.

In March 2020, the

Japanese National Institute of Infectious Diseases (“NIID”) initiated preliminary laboratory testing of Ampligen as

a potential treatment for COVID-19.

On July 1, 2020, we entered into a trilateral material transfer and research agreement with

the NIID and Shionogi & Co., Ltd.

(“Shionogi”), one of Japan’s premier pharma companies, to test the Company’s

drug Ampligen as a potential vaccine adjuvant for COVID-19.

Per this agreement, the details of all preclinical and clinical results

will remain confidential until released by NIID and Shionogi.

The Company was notified by Shionogi on November 17, 2020 that Shionogi

intends to utilize a TLR agonist other than AIM’s Ampligen as Shionogi’s designated adjuvant in its ongoing efforts

to develop a potential Shionogi vaccine for COVID-19.

in April 2020, we entered into confidentiality and non-disclosure agreements with numerous companies for the potential outsourcing

of the production of polymer, enzyme, placebo as well as Ampligen, and one Contract Research Organization, Amarex, which will

provide regulatory support related to a clinical trial testing Ampligen’s potential as a COVID-19 prophylaxis via intranasal

addition, we joined with ChinaGoAbroad (CGA) to facilitate the entry of Ampligen into the People’s Republic of China (PRC)

for use as a prophylactic/early-onset therapeutic against COVID-19.

CGA is a member-based online information platform and offline

advisory firm serving to facilitate two-way international transactions relating to the PRC in collaboration with the China Overseas

Development Association (CODA).

The relationship with ChinaGoAbroad is ongoing.

May 11, 2020, the FDA authorized an IND for Roswell Park to conduct a Phase 1/2a study of a regimen of Ampligen and interferon

alpha in cancer patients with mild or moderate COVID-19 infections.

This new clinical trial, sponsored by the Roswell Park in

collaboration with us, will test the safety of this combination regimen in patients with cancer and mild to moderate COVID-19,

and the extent to which this therapy will promote clearance of the SARS-CoV-2 virus from the upper airway.

It is planned that

the phase 1/2a study will enroll up to 44 patients in two stages.

Phase 1 will see 12-24 patients receiving both Ampligen and

interferon alfa-2b at escalating doses.

Once that initial phase is complete, further study participants will be randomized to

one receiving the two-drug combination and a control group who will not receive Ampligen or interferon alfa but will

receive best available care.

We intend to be a financial sponsor of the study and will provide Ampligen at no charge for this

July 6, 2020, we entered into a clinical trial agreement with Roswell Park pursuant to which Roswell Park will conduct a Phase

1/2a trial of Ampligen (rintatolimod) in combination with interferon alfa, in cancer patients with COVID-19, the disease caused

by the SARS-CoV-2 coronavirus.

We and the National Cancer Institute are supporting this trial.

We reported in September 2020 that

recruitment in the trial had begun.

clinicaltrials.gov/NCT04379518.

On November 25, 2020, the first patient in the study

had been enrolled and treated.

also entered into a material transfer agreement with the University of Rochester for a series of in vitro experiments to test

the direct antiviral activity of Ampligen on SARS-CoV-2, as well as the mechanism of action.

They are currently engaged in experiments

with multiple cell lines as they work to establish the study model system.

We also entered into a specialized services agreement

with Utah State University and have supplied Ampligen to support the University’s Institute for Viral Research in its research

into SARS-CoV-2.

The Utah State results show that Ampligen was able to decrease SARS-CoV-2 infectious viral yields by 90% at clinically

achievable intranasal Ampligen dosage levels.

October 6, 2020, we received Institutional Review Board (IRB) approval for the expansion of the AMP-511 Expanded Access Program

(EAP) clinical trial for Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS) to include patients previously diagnosed

with SARS-CoV-2, but who still demonstrate chronic fatigue-like symptoms.

Patients in the trial are treated with our flagship

pipeline drug Ampligen.

On January 6, 2021, we commenced with the treatment of the first previously diagnosed COVID-19

patient with long-COVID symptoms in the AMP-511 study.

November 29, 2020, we entered into a Material Transfer and Research Agreement with Leyden Laboratories, B.V., (“Leyden Lab”)

to facilitate two proposed studies/research projects:

assessment of protective potential of intranasal administration of Ampligen in SARS-CoV-2 Syrian hamster challenge model;

assessment of protective potential of intranasal Ampligen in lethal influenza mouse challenge model.

January 11, 2021, we entered into a Sponsor Agreement with the Centre for Human Drug Research (CHDR), a foundation located in

the Leiden in the Netherlands, to manage a proposed Phase 1 randomized, double-blind study to evaluate the safety and activity

of repeated intranasal administration of Ampligen.

In February 2021, the Ethics Committee in the Netherlands issued its approval

for commencement of the study.

The current study plans call for the enrollment of eight healthy subjects in each of four Ampligen

treatment groups and eight placebo subjects, for a total of 40 healthy subjects.

This will assess the safety, tolerability and

biological activity of repeated administration of Ampligen intranasally.

The subjects will receive intranasal dosing every other

day for 13 days, for a total of seven doses each.

We are funding the clinical study.

We consider such a study to be an important

part of our ongoing efforts to develop an intranasal COVID-19 treatment.

Europe, the EMA has approved the Orphan Medicinal Products Designation for rintatolimod (Ampligen) as a potential treatment of

Ebola virus disease and for Alferon N Injection, also known as interferon alfa-n3, as a potential treatment of MERS.

concluded our series of collaborations designed to determine the potential effectiveness of Ampligen and Alferon N as potential

preventative and/or therapeutic treatments for Ebola related disorders.

Although we believe that the threat of both MERS and Ebola

globally may reemerge in the future, it appears that the spread of these disorders has somewhat diminished.

As a result, we have

elected to focus our research and development efforts on other areas at this time.

MANUFACTURING

In January 2017, AIM approved

a quote and provided a purchase order commitment with Jubilant Hollister-Stier LLC (“Jubilant”) pursuant to which

Jubilant will manufacture commercial size batches of Ampligen®.

Additional orders will be placed upon approved quotes and

purchase orders provided by AIM to Jubilant.

Jubilant was approved by the FDA as a manufacture of Ampligen by the successful completion

of a previous preapproval inspection by the agency.

The Administracion Nacional de Medicamentos, Alimentos y Tecnologia Medica

(ANMAT) in Argentina has approved Ampligen for commercial distribution for the treatment of Chronic Fatigue Syndrome (CFS).

Shipment of the drug product to Argentina was initiated in 2018 to complete the release testing by ANMAT needed for commercial

distribution.

On September 19, 2019, AIM received clearance from the FDA to ship Ampligen to Argentina for the commercial launch

and subsequent sales.

We are currently working with GP Pharma on the commercial launch of Ampligen in Argentina.

Jubilant HollisterStier

(Jubilant) is AIM’s authorized CMO for Ampligen for our approval in Argentina.

Since the 2017 engagement of Jubilant to manufacture

Ampligen, two lots of Ampligen consisting of more than 16,000 units have been manufactured and released in year 2018.

lot was designated for human use in the US in the cost recovery CFS program and for expanded oncology clinical trials.

lot has been designated for these programs in addition to commercial distribution in Argentina for the treatment of CFS.

The production

of additional polymer (Ampligen intermediates) took place in 2019 at our New Brunswick facility.

Additionally, two lots of Ampligen

were manufactured in December 2019 and January 2020 at Jubilant.

The current manufactured lots of Ampligen are undergoing release

testing and inspection prior to be used commercially and for clinical trials.

by the FDA for commercial sales in the US for the treatment of genital warts.

Administracion Nacional de Medicamentos, Alimentos y Tecnologia Medica (ANMAT) in Argentina approved Ampligen for commercial distribution

for the treatment of Chronic Fatigue Syndrome (CFS) in 2016.

Shipment of the drug product to Argentina was initiated in 2018 to

complete the release testing by ANMAT needed for commercial distribution.

On September 19, 2019, we received clearance from the

FDA to ship Ampligen to Argentina for the commercial launch and subsequent sales.

We are currently working with GP Pharma on the

commercial launch of Ampligen in Argentina See “Our Products;

Ampligen”

HollisterStier (Jubilant) is our authorized CMO for Ampligen for our approval in Argentina.

Since the 2017 engagement of Jubilant

to manufacture Ampligen, two lots of Ampligen consisting of more than 16,000 units have been manufactured and released in year

The first lot was designated for human use in the US in the cost recovery CFS program and for expanded oncology clinical

The second lot has been designated for these programs in addition to commercial distribution in Argentina for the treatment

The production of additional polymer (Ampligen intermediates) took place in 2019 at our New Brunswick facility.

Additionally,

two lots of Ampligen were manufactured in December 2019 and January 2020 at Jubilant.

The current manufactured lots of Ampligen

have been fully tested and released for commercial product launch in Argentina and for clinical trials.

December 2020, we added Pharmaceutics International Inc.

(“Pii”) as a “Fill & Finish”

enhance our capacity to produce the drug Ampligen.

This addition amplifies our manufacturing capability by providing redundancy

and cost savings.

The contracts augment our existing fill and finish capacity.

is approved by the FDA for commercial sales in the US for the treatment of genital warts.

It is also approved by ANMAT in Argentina

for commercial sales for the treatment of genital warts and in patients who are refractory to treatment with recombinant

While the AIM facility in New Brunswick is approved by the FDA under the Biologic License Application (BLA) for Alferon®,

this status will need to be reaffirmed by an FDA pre-approval inspection which will not occur until new batches of commercial

filled and finished product are produced and released by the FDA.

Currently, the manufacturing process is on hold and there is

no definitive timetable to have the facility back online until additional funding is obtained.

for commercial sales for the treatment of genital warts and in patients who are refractory to treatment with recombinant interferons.

sales of Alferon in the United States will not resume until new batches of commercial filled and finished product are produced

and released by the FDA.

While our facility is approved by the FDA under the Biologics License Application (“BLA”)

for Alferon, this status will need to be reaffirmed by an FDA pre-approval inspection.

We will also need the FDA’s approval

to release commercial product once we have submitted satisfactory stability and quality release data.

Currently, the manufacturing

process is on hold and there is no definitive timetable to have the facility back online.

have reviewed our operations at the facility and believe that some of the equipment most likely should be upgraded to realize

greater efficiencies, when and if we require more API than is currently in storage.

We are also exploring engaging a Contract

Manufacturing Organization (“CMO”) to produce API.

While we believe we have sufficient API to meet our current needs,

we are also continually exploring new efficiencies so as to maximize our ability to fulfill future obligations.

Licensing/Collaborations/Joint

To maximize the availability

of Ampligen®

to patients on a worldwide basis, we have embarked on a strategy to license the product and/or to collaborate

and/or create a joint venture with companies that have the demonstrated capabilities and commitment to successfully gain approval

and commercialize Ampligen®

in their respective territories of the world.

Ideal partners would have the following characteristics:

well established global and regional experience and coverage, robust commercial infrastructure, strong track record of successful

development and registration of in-licensed products, as well as a therapeutic area fit (ME/CFS, immuno-oncology, etc.).

maximize the availability of Ampligen to patients on a worldwide basis, we have embarked on a strategy to license the product

and/or to collaborate and/or create a joint venture with companies that have the demonstrated capabilities and commitment to successfully

gain approval and commercialize Ampligen in their respective territories of the world.

Ideal partners would have the following

characteristics:

well established global and regional experience and coverage, robust commercial infrastructure, strong track

record of successful development and registration of in-licensed products, as well as a therapeutic area fit (ME/CFS, immuno-oncology,

MARKETING/DISTRIBUTION

In May 2016, we entered

into a five-year exclusive Renewed Sales, Marketing, Distribution and Supply Agreement (the “Agreement”) with GP Pharm.

Under this Agreement, GP Pharm was responsible for gaining regulatory approval in Argentina for Ampligen®

to treat severe CFS

in Argentina and for commercializing Ampligen®

for this indication in Argentina.

We granted GP Pharm the right to expand rights

to sell this experimental therapeutic into other Latin America countries based upon GP Pharm achieving certain performance milestones.

We also granted GP Pharm an option to market Alferon N Injection®

in Argentina and other Latin America countries.

In January 2017, the ANMAT

granted a five-year extension to a previous approval to sell and distribute Alferon N Injection®

(under the brand name “Naturaferon”)

in Argentina.

May 2016, we entered into a five-year exclusive Renewed Sales, Marketing, Distribution and Supply Agreement (the “Agreement”)

with GP Pharm.

Under this Agreement, GP Pharm was responsible for gaining regulatory approval in Argentina for Ampligen to treat

severe CFS in Argentina and for commercializing Ampligen for this indication in Argentina.

We granted GP Pharm the right to expand

rights to sell this experimental therapeutic into other Latin America countries based upon GP Pharm achieving certain performance

We also granted GP Pharm an option to market Alferon N Injection in Argentina and other Latin America countries.

“Our Products;

Ampligen”

January 2017, the ANMAT granted a five-year extension to a previous approval to sell and distribute Alferon N Injection (under

the brand name “Naturaferon”) in Argentina.

This extends the approval until 2022.

In February 2013, we received the ANMAT approval for the treatment of refractory

patients that failed or were intolerant to treatment with recombinant interferon, with Naturaferon®

in Argentina.

In May 2016, we entered

into a five-year agreement (the “Impatients Agreement”) with Impatients, N.V.

(“myTomorrows”), a Netherlands

based company, for the commencement and management of an EAP in Europe and Turkey (the “Territory”) related to ME/CFS.

Pursuant to the agreement, myTomorrows, as our exclusive service provider and distributor in the Territory, is performing EAP activities.

These activities will be directed to (a) the education of physicians and patients regarding the possibility of early access to

innovative medical treatments not yet the subject of a Marketing Authorization (regulatory approval) through named-patient use,

compassionate use, expanded access and hospital exemption, (b) patient and physician outreach related to a patient-physician platform,

(c) the securing of Early Access Approvals (exemptions and/or waivers required by regulatory authorities for medical treatments

prior to Marketing Authorization) for the use of such treatments, (d) the distribution and sale of such treatments pursuant to

such Early Access Approvals, (e) pharmacovigilance (drug safety) activities and/or (f) the collection of data such as patient-reported

outcomes, doctor-reported experiences and registry data.

We are supporting these efforts and supplying Ampligen®

to myTomorrows

at a predetermined transfer price.

In the event that we receive Marketing Authorization in any country in the Territory, we will

pay myTomorrows a royalty on products sold.

Pursuant to the Impatients Agreement, the royalty would be a percentage of Net Sales

(as defined in the Impatients Agreement) of Ampligen®

sold in the Territory where Marketing Authorization was obtained, and

the maximum royalty would be a percentage of Net Sales.

The formula to determine the percentage of Net Sales will be based on the

number of patients that are entered into the EAP.

The Company believes that disclosure of the exact maximum royalty rate and royalty

termination date could cause competitive harm.

However, to assist the public in gauging these terms, the actual maximum royalty

rate is somewhere between 2% and 10% and the royalty termination date is somewhere between five and fifteen years from the First

Commercial Sale of a product within a specific country.

The parties established a Joint Steering Committee comprised of representatives

of both parties to oversee the EAP.

No assurance can be given that activities under the EAP will result in Marketing Authorization

or the sale of substantial amounts of Ampligen®

in the Territory.

In January 2017, the EAP

through our agreement with myTomorrows designed to enable access of Ampligen®

to ME/CFS patients has been extended to pancreatic

cancer patients beginning in the Netherlands.

myTomorrows is our exclusive service provider in the Territory and will manage all

EAP activities relating to the pancreatic cancer extension of the program.

In February 2018, we signed

an amendment to the EAP with myTomorrows.

This amendment extended the territory to cover Canada to treat pancreatic cancer patients,

pending government approval.

In March 2018, we signed

an amendment to the EAP with myTomorrows, pursuant to which myTomorrows will be our exclusive service provider for special access

activities in Canada for the supply of Ampligen®

for the treatment of ME/CFS.

In August 2017, we extended

our agreement with Asembia, formerly Armada Healthcare, LLC, to undertake the marketing, education and sales of Alferon N Injection®

throughout the United States.

The major pharmaceutical

competitors for Ampligen include Pfizer, GlaxoSmithKline, Merck & Co., Novartis and AstraZeneca.

Biotech competitors include

Baxter International, Fletcher/CSI, AVANT Immunotherapeutics, AVI BioPharma and Genta.

When we recommence sales of Alferon N Injection®,

it will compete with Intron®

In February 2013, we received the

ANMAT approval for the treatment of refractory patients that failed or were intolerant to treatment with recombinant interferon,

with Naturaferon in Argentina.

May 2016, we entered into a five-year agreement (the “Impatients Agreement”) with Impatients, N.V.

(“myTomorrows”),

a Netherlands based company, for the commencement and management of an EAP in Europe and Turkey (the “Territory”)

related to ME/CFS.

Pursuant to the agreement, myTomorrows, as our exclusive service provider and distributor in the Territory,

is performing EAP activities.

These activities will be directed to (a) the education of physicians and patients regarding the

possibility of early access to innovative medical treatments not yet the subject of a Marketing Authorization (regulatory approval)

through named-patient use, compassionate use, expanded access and hospital exemption, (b) patient and physician outreach related

to a patient-physician platform, (c) the securing of Early Access Approvals (exemptions and/or waivers required by regulatory

authorities for medical treatments prior to Marketing Authorization) for the use of such treatments, (d) the distribution and

sale of such treatments pursuant to such Early Access Approvals, (e) pharmacovigilance (drug safety) activities and/or (f) the

collection of data such as patient-reported outcomes, doctor-reported experiences and registry data.

We are supporting these efforts

and supplying Ampligen to myTomorrows at a predetermined transfer price.

In the event that we receive Marketing Authorization

in any country in the Territory, we will pay myTomorrows a royalty on products sold.

Pursuant to the Impatients Agreement, the

royalty would be a percentage of Net Sales (as defined in the Impatients Agreement) of Ampligen sold in the Territory where Marketing

Authorization was obtained, and the maximum royalty would be a percentage of Net Sales.

The formula to determine the percentage

of Net Sales will be based on the number of patients that are entered into the EAP.

We believe that disclosure of the exact maximum

royalty rate and royalty termination date could cause competitive harm.

However, to assist the public in gauging these terms,

the actual maximum royalty rate is somewhere between 2% and 10% and the royalty termination date is somewhere between five and

fifteen years from the First Commercial Sale of a product within a specific country.

The parties established a Joint Steering

Committee comprised of representatives of both parties to oversee the EAP.

No assurance can be given that activities under the

EAP will result in Marketing Authorization or the sale of substantial amounts of Ampligen in the Territory.

January 2017, the EAP through our agreement with myTomorrows designed to enable access of Ampligen to ME/CFS patients has been

extended to pancreatic cancer patients beginning in the Netherlands.

myTomorrows is our exclusive service provider in the Territory

and will manage all EAP activities relating to the pancreatic cancer extension of the program.

February 2018, we signed an amendment to the EAP with myTomorrows.

This amendment extended the territory to cover Canada to treat

pancreatic cancer patients, pending government approval.

March 2018, we signed an amendment to the EAP with myTomorrows, pursuant to which myTomorrows will be our exclusive service provider

for special access activities in Canada for the supply of Ampligen for the treatment of ME/CFS.

December 2020, we entered into a signed Letter of Agreement with myTomorrows for the delivery of Ampligen for the treatment of

up to 16 pancreatic cancer patients.

August 2017, we extended our agreement with Asembia LLC, formerly Armada Healthcare, LLC, to undertake the marketing, education

and sales of Alferon N Injection throughout the United States.

We are currently exploring an expansion of this relationship.

major pharmaceutical competitors for Ampligen include Pfizer, GlaxoSmithKline, Merck & Co., Novartis and AstraZeneca.

competitors include Baxter International, Fletcher/CSI, AVANT Immunotherapeutics, AVI BioPharma and Genta.

When we recommence

sales of Alferon N Injection, it will compete with Intron®

A, an injectable from Merck & Co.

GOVERNMENT REGULATION

Regulation by governmental

authorities in the U.S.

and foreign countries is and will be a significant factor in the manufacture and marketing of Alferon®

products and our ongoing research and product development activities.

Ampligen®

and other products developed from the ongoing

research and product development activities will require regulatory clearances prior to commercialization.

In particular, new drug

products for humans are subject to rigorous pre-clinical and clinical testing as a condition for clearance by the FDA and by similar

authorities in foreign countries.

The process of seeking these approvals, and the ongoing process of compliance with applicable

statutes and regulations, has and will continue to require the expenditure of substantial resources.

Any failure by us or our collaborators

or licensees to obtain, or any delay in obtaining, regulatory approvals could materially adversely affect the marketing of any

products developed by us and our ability to receive product or royalty revenue.

We have received Orphan Drug designation for certain

therapeutic indications, which we believe might under certain conditions help to accelerate the process of drug development and

commercialization.

Alferon N Injection®

is only approved for use in intralesional treatment of refractory or recurring external

genital warts in patients 18 years of age or older.

Use of Alferon N Injection®

for other applications requires regulatory

We are subject to various

federal, state and local laws, regulations and recommendations relating to such matters as safe working conditions, laboratory

and manufacturing practices, the experimental use of animals and the use of and disposal of hazardous or potentially hazardous

substances, including infectious disease agents, used in connection with our research work.

Prior to our construction phase, our

laboratory and production facility in New Brunswick, New Jersey was approved for the manufacture of Alferon N Injection®.

our facility had been granted approval of its BLA by the FDA for the manufacture of Alferon®, this status will need to be reaffirmed

as we have completed the facility’s enhancements and believe, with adequate funding, it will again be able to obtain FDA

For more information about

the current status of Alferon N Injection®

and Ampligen®

please see “Our Products”

HUMAN RESOURCES

As of February 25, 2020,

we had personnel consisting of twenty-four (24) full-time employees and two (2) part-time employees.

Thirteen (13) of the combined

personnel are engaged in our research, development, clinical, and manufacturing effort with thirteen (13) performing regulatory,

general administration, data processing, including bio-statistics, financial and investor relations functions.

We have no union

While we have been successful

in attracting skilled and experienced scientific personnel, there can be no assurance that we will be able to attract or retain

the necessary qualified employees and/or consultants in the future.

by governmental authorities in the U.S.

and foreign countries is and will be a significant factor in the manufacture and marketing

of Alferon products and our ongoing research and product development activities.

Ampligen and other products developed from the

ongoing research and product development activities will require regulatory clearances prior to commercialization.

In particular,

new drug products for humans are subject to rigorous pre-clinical and clinical testing as a condition for clearance by the FDA

and by similar authorities in foreign countries.

The process of seeking these approvals, and the ongoing process of compliance

with applicable statutes and regulations, has and will continue to require the expenditure of substantial resources.

by us or our collaborators or licensees to obtain, or any delay in obtaining, regulatory approvals could materially adversely

affect the marketing of any products developed by us and our ability to receive product or royalty revenue.

We have received Orphan

Drug designation for certain therapeutic indications, which we believe might under certain conditions help to accelerate the process

of drug development and commercialization.

Alferon N Injection is only approved for use in intralesional treatment of refractory

or recurring external genital warts in patients 18 years of age or older.

Use of Alferon N Injection for other applications requires

regulatory approval.

are subject to various federal, state and local laws, regulations and recommendations relating to such matters as safe working

conditions, laboratory and manufacturing practices, the experimental use of animals and the use of and disposal of hazardous or

potentially hazardous substances, including infectious disease agents, used in connection with our research work.

more information about the current status of Alferon N Injection and Ampligen, please see “Our Products”

of December 31, 2020, we had personnel consisting of twenty-one (21) full-time employees and two (2) part-time employees.

(5) of the combined personnel are engaged in our research, development, clinical, and manufacturing effort with eighteen (18)

performing regulatory, general administration, data processing, including bio-statistics, financial and investor relations functions.

We have no union employees.

we have been successful in attracting skilled and experienced scientific personnel, there can be no assurance that we will be

able to attract or retain the necessary qualified employees and/or consultants in the future.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business