What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-08-15 compared with 2022-05-13 · 415 added, 280 removed, 340 unchanged (67% of the section changed)

4 unchanged sentences

thousands, except for share and per share amounts)

and cash equivalents

receivable from New Jersey net operating loss

expenses and other current assets

Current assets:

Cash and cash

Marketable securities

Funds receivable from New

Jersey net operating loss

Prepaid expenses and other

current assets

held for sale

current assets

and equipment, net

of use asset, net

and trademark rights, net

AND STOCKHOLDERS’ EQUITY

Property and equipment, net

Right of use asset, net

Patent and trademark rights, net

LIABILITIES AND STOCKHOLDERS’

Current liabilities:

Accounts payable

Accrued expenses

portion of operating lease liability

current liabilities

lease liability

and contingencies (Notes 12, 13 and 14)

Stockholders’

B Convertible Preferred Stock, stated value $ 1,000 per share, 715 issued and outstanding

Common Stock, par

value $ 0.001 per share, authorized 350,000,000 shares;

47,994,672 issued and outstanding

paid-in capital

Long-term liabilities:

Operating lease liability

Redeemable warrants

Commitments and contingencies (Notes 12, 13

Stockholders’ equity:

Series B Convertible Preferred Stock, stated

value $ 1,000 per share, 713 and 715 issued and outstanding, respectively

Common Stock, par value $ 0.001 per share, authorized

350,000,000 shares;

48,048,822 and 47,994,672 , issued and outstanding, respectively

Additional paid-in capital

Accumulated deficit

stockholders’ equity

liabilities and stockholders’ equity

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thousands, except share and per share data)

months ended March 31,

treatment programs – US

months ended June 30,

Clinical treatment

programs - US

treatment programs - Europe

and Expenses:

and development

and administrative

Total Revenues

Costs and Expenses:

on investments

and other income

expense and other finance costs

warrants valuation adjustment

Production costs

Research and development

and administrative

Total Costs and Expenses

Operating loss

(Loss) on investments

Interest and other income

Interest expense and other

finance costs

Extinguishment of financing

obligation and note payable

Gain on sale of fixed assets

Redeemable warrants valuation

from sale of Income tax operating losses

comprehensive loss

Reclassification

adjustment for realized investment loss

Other comprehensive (loss)

Reclassification adjustment

for realized investment loss

in unrealized loss on marketable securities available for sale

Comprehensive loss

and diluted loss per share

average shares outstanding basic and diluted

Basic and diluted loss

Weighted average shares outstanding basic

accompanying notes to consolidated financial statements.

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Statements of Changes in Stockholders’ Equity

the Six Months Ended June 30, 2022 and 2021

thousands except share data)

Stock .001 Par Value

other Comprehensive Income (Loss)

Stockholders’ Equity

December 31, 2021

Comprehensive

Income (Loss)

Stockholders’

Balance December 31, 2021

$ ( 361,101 )

Shares issued for:

based compensation

comprehensive loss

March 31, 2022

Equity-based compensation

Net comprehensive loss

Balance March 31, 2022

$ ( 364,921 )

B Preferred Shares

Stock .001 Par Value

Paid-in Capital

other Comprehensive Income (Loss)

Stockholders’ Equity

December 31, 2020

Common stock issuance, net of costs

Equity-based compensation

Series B preferred shares converted to common

Net comprehensive loss

Balance June 30, 2022

$ ( 369,772 )

Shares issued for:

Stock issuance, net of costs

B preferred shares converted to Common shares

comprehensive loss

March 31, 2021

Comprehensive

Income (Loss)

Stockholders’

Balance December 31, 2020

$ ( 341,974 )

accompanying notes to consolidated financial statements.

Common stock issuance, net of costs

Equity-based compensation

Series B preferred shares converted to common

Net comprehensive loss

Balance March 31, 2021

$ ( 345,553 )

Equity-based compensation

Net Comprehensive loss

Balance June 30, 2021

$ ( 351,429 )

See accompanying notes to consolidated

financial statements.

IMMUNOTECH INC.

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Statements of Cash Flows

the Three Months Ended March 31, 2022 and 2021

flows from operating activities:

to reconcile net loss to net cash used in operating activities:

of property and equipment

warrants valuation adjustment

of patent, trademark rights

in ROU assets

on available for sale marketable securities

from sale of income tax operating losses

loss on marketable securities

of finance and debt issuance costs

in assets and liabilities:

expenses and other current assets and other non current assets

cash used in operating activities

flows from investing activities:

from sale of marketable securities

of marketable securities

the Six Months Ended June 30, 2022 and 2021

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash

used in operating activities:

Depreciation of property

and equipment

Redeemable warrants valuation

Extinguishment of financing

obligation and note payable

Amortization of patent,

trademark rights

Changes in ROU assets

Gain on sale of property

and equipment

Gain from sale of income

tax operating losses

Equity-based compensation

(Loss) on sale of marketable

Amortization of finance

and debt issuance costs

Change in assets and liabilities:

Accounts receivable

Funds Receivable from New

Jersey net operating loss

Prepaid expenses and other

current assets and other non-current assets

Lease liability

Accounts payable

Net cash used in operating

Cash flows from investing activities:

Proceeds from sale of marketable

Purchase of marketable

Purchase of property and

Proceeds from sale of property

and equipment

of patent and trademark rights

cash (used in) provided by investing activities

flows from financing activities:

obligation payments

Net cash provided by (used in) investing activities

Cash flows from financing activities:

Payment of financial obligation

Financing obligation payments

from sale of stock, net of issuance costs

cash provided by financing activities

(decrease) increase in cash and cash equivalents

and cash equivalents at beginning of period

and cash equivalents at end of period

disclosures of non-cash investing and financing cash flow information:

Net cash provided by financing

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents

at beginning of period

Cash and cash equivalents

at end of period

Supplemental disclosures of non-cash investing

and financing cash flow information:

lease-Right of Use Assets

loss on marketable securities

of Series B preferred

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

is approved for commercial sale in the Argentine Republic for the treatment of severe Chronic Fatigue Syndrome (“CFS”).

approved for commercial sale in the Argentine Republic for the treatment of severe Chronic Fatigue Syndrome (“CFS”).

primary present business focus involves Ampligen.

Ampligen represents a dsRNA being developed for globally important cancers, viral diseases

and disorders of the immune system.

Ampligen represents a double-stranded RNA being developed for globally important

cancers, viral diseases and disorders of the immune system.

Company is currently proceeding primarily in four areas:

randomized controlled study to evaluate efficacy and safety of Ampligen compared to a control group to treat locally advanced pancreatic

cancer patients.

Ampligen in other cancers, as a potential therapy that modifies the tumor microenvironment with the goal of increasing anti-tumor

responses to check point inhibitors.

Ampligen’s antiviral activities and potential use as a prophylactic or treatment for existing viruses, new viruses and mutated

viruses thereof.

as a treatment for myalgic encephalomyelitis/chronic fatigue syndrome (“ME/CFS”) and fatigue and/or difficulty thinking/concentrating

as the predominate Post-COVID conditions (as referenced on CDC website Sept.

Company is prioritizing activities in an order related to the stage of development, with those clinical activities such as pancreatic

cancer, ME/CFS and Post-COVID conditions having priority over antiviral experimentation.

The Company intends that priority clinical work

be conducted in FDA or EMA authorized trials which could support a potential future New Drug Application (“NDA”).

AIM’s antiviral experimentation is designed to accumulate additional preliminary data supporting their hypothesis that Ampligen

is a powerful, broad-spectrum prophylaxis and early-onset therapeutic that may confer enhanced immunity and cross-protection.

AIM will conduct antiviral programs in those venues most readily available and able to generate valid proof-of-concept data, including

randomized controlled study to evaluate efficacy and safety of Ampligen compared to a control

group to treat locally advanced pancreatic cancer patients.

Ampligen in other cancers, as a potential therapy that modifies the tumor microenvironment

with the goal of increasing anti-tumor responses to check point inhibitors.

Ampligen’s antiviral activities and potential use as a prophylactic or treatment for

existing viruses, new viruses and mutated viruses thereof.

as a treatment for myalgic encephalomyelitis/chronic fatigue syndrome (“ME/CFS”)

and fatigue and/or Post-COVID conditions of fatigue.

Company is prioritizing activities in an order related to the stage of development, with those clinical activities such as

pancreatic cancer, ME/CFS and Post-COVID conditions having priority over antiviral experimentation.

The Company intends that

priority clinical work be conducted in trials authorized by the FDA or European Medicines Agency (“EMA”),

which trials could support a potential future New Drug Application (“NDA”).

However, AIM’s antiviral

experimentation is designed to accumulate additional preliminary data supporting their hypothesis that Ampligen is a powerful,

broad-spectrum prophylaxis and early-onset therapeutic that may confer enhanced immunity and cross-protection.

Accordingly, AIM will

conduct antiviral programs in those venues most readily available and able to generate valid proof-of-concept data, including

foreign venues.

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and lease-back agreement.

The Company thereafter sold certain equipment and machinery that they determined to be obsolete and no longer

The Company thereafter sold certain equipment and machinery that it determined to be obsolete and no longer

needed for current or future manufacturing.

Then, on March 3, 2022, AIM entered into an Agreement of Sale and Purchase with Acellories,

as purchaser pursuant to which the Company will sell the property for $ 3.9

The buyer has a mortgage contingency,

with the clause expiring on June 1, 2022.

Assuming that condition is met, we would anticipate closing on or before July 1, 2022.

forward, AIM will require one or more Contract Manufacturing Organizations (“CMO”) to produce Ampligen API.

While AIM believes

they have sufficient Ampligen API to meet their current needs, they are also continually exploring new efficiencies so as to maximize

their ability to fulfill future obligations.

In this regard, in April 2021, AIM approved a proposal from Polysciences Inc.

(“Polysciences”)

for the manufacture of Poly I and Poly C 12 U polynucleotides and associated test methods at Polysciences’ Warrington,

PA location to enhance their capacity to produce the polymer precursors to the drug Ampligen.

The Company is utilizing Polysciences’s

expertise to refine their approach to polymer production.

Additionally, AIM continues to be open to the possibility of agreements with

other CMOs, so as to create redundancy and to meet the potential need for larger quantities of API.

as purchaser pursuant to which the Company will sell the property for $ 3.9 million;

AIM will keep some space specifically for its

Alferon activity.

The Closing Date was extended to August 31, 2022, subject to AIM’s

right to further extend the Closing Date as set forth in Section 4(b) of the Purchase Agreement.

business plan requires one or more Contract Manufacturing Organizations (“CMO”) to produce Ampligen API.

This includes utilizing

Polysciences Inc.

(“Polysciences”) for the manufacture of our Poly I and Poly C12U polynucleotides and associated test methods.

While AIM believes it has sufficient Ampligen API to meet current needs, it is also continually exploring new efficiencies so as to maximize

its ability to fulfill future obligations.

the opinion of management, all adjustments necessary for a fair presentation of such consolidated financial statements have been included.

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ended December 31, 2021 and 2020, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed

on March 31, 2022.

with the SEC on March 31, 2022.

Net Loss Per Share

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Equivalent common shares, consisting of stock options and warrants which amounted to 2,447,924 and 1,621,928 , are excluded from the calculation

of diluted net loss per share for the three months ended March 31, 2022, and 2021, respectively, since their effect is antidilutive due

of diluted net loss per share for the six months ended June 30, 2022, and 2021, respectively, since their effect is antidilutive due

to the net loss.

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data to estimate expected dividend yield, expected life and forfeiture rates.

During the three months ended March 31, 2022 there were

300,000 options granted and no options granted in the three months ended March 31, 2021.

option for employees’ activity during the three months ended March 31, 2022, is as follows:

During the six months ended June 30, 2022 there were 300,000

options granted and no options granted in the six months ended June 30, 2021.

option for employees’ activity during the six months ended June 30, 2022, is as follows:

option activity for employees:

Schedule of Stock Option Activity

January 1, 2022

March 31, 2022

and expected to vest March 31, 2022

March 31, 2022

Outstanding January 1, 2022

Outstanding June 30, 2022

Vested and expected

to vest June 30, 2022

Exercisable June 30, 2022

stock option activity for employees:

Schedule of Unvested Stock Option Activity

January 1, 2022

March 31, 2022

Schedule of Unvested

Stock Option Activity

Unvested January 1, 2022

Unvested June 30, 2022

option activity for non-employees:

Schedule of Stock Option Activity

January 1, 2022

March 31, 2022

and expected to vest March 31, 2022

March 31, 2022

Outstanding January 1, 2022

Outstanding June 30, 2022

Vested and expected

to vest June 30, 2022

Exercisable June 30, 2022

stock option activity for non-employees:

Schedule of Unvested Stock Option Activity

January 1, 2022

March 31, 2022

compensation expense was approximately $ 242,000 and $ 526,000 for the three months ended March 31, 2022 and 2021, resulting in an increase

in general and administrative expenses, respectively.

March 31, 2022, and 2021, respectively, there was approximately $ 729,000 and $ 914,000 of unrecognized equity-based compensation cost

related to options granted under the Equity Incentive Plan.

Unvested January 1, 2022

Unvested June 30, 2022

compensation expense was approximately $ 517,000 and $ 1,006,000 for the six months ended June 30, 2022 and 2021.

June 30, 2022, and 2021, respectively, there was approximately $ 454,000 and $ 434,000 of unrecognized equity-based compensation cost related

to options granted under the Equity Incentive Plan.

Marketable Securities

securities consist of mutual funds.

At March 31, 2022 and December 31, 2021, it was determined that none of the marketable securities

As of June 30, 2022 and December 31, 2021, it was determined that none of the marketable securities

had an other-than-temporary impairment.

At March 31, 2022 and December 31, 2021, all securities were measured as Level 1 instruments

As of June 30, 2022 and December 31, 2021, all securities were measured as Level 1 instruments

of the fair value measurements standard (See Note 11:

As of March 31, 2022, and December 31, 2021 the Company held $ 15,554,000

As of June 30, 2022, and December 31, 2021 the Company held $ 7,320,000

and $ 16,175,000 in mutual funds.

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Schedule of Available for Sale

(in thousands)

of Equity Securities

losses recognized during the period on equity securities

Net gains and losses recognized during the period on equity securities sold during the period

gains and losses recognized during the reporting period on equity securities still held at the reporting date

(in thousands)

recognized during the period on equity securities

Net gains and losses

recognized during the period on equity securities sold during the period

Unrealized gains and

losses recognized during the reporting period on equity securities still held at the reporting date

Funds classified as available for sale consisted of:

losses recognized during the period on equity securities

Net gains and losses recognized during the period on equity securities sold during the period

gains and losses recognized during the reporting period on equity securities still held at the reporting date

(in thousands)

Net losses recognized during the

period on equity securities

Net gains and losses

recognized during the period on equity securities sold during the period

Unrealized gains and

losses recognized during the reporting period on equity securities still held at the reporting date

Accrued Expenses

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of Accrued Expenses

trial expenses

(in thousands)

Professional fees

Clinical trial expenses

Other expenses

Property and Equipment, net

of Property and Equipment

buildings and improvements

fixtures, and equipment

property and equipment

(in thousands)

Land, buildings and improvements

Furniture, fixtures, and

Total property and equipment

accumulated depreciation

and equipment, net

Property and equipment,

and equipment are recorded at cost.

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lives of the respective assets, ranging from three to thirty-nine years.

Depreciation expense for the periods ending March 31,

2022 and March 31, 2021 was $ 10,000 and

respectively.

Depreciation expense for the six months ending June 30, 2022

and June 30, 2021 was $ 20,000 and $ 325,000 , respectively.

Company made a strategic shift on in-house manufacturing and recorded an impairment of the facility in the amount of $ 1,800,000 during

the year ended December 31, 2021.

During the period ending March 31, 2022, the Company reported assets held for sale related to the pending

sale of the manufacturing facility located at 783 Jersey Avenue, which is expected to close within 120 days of the effective date of

the Agreement of Sale and Purchase effective March 3, 2022.

(See Note 11 Fair Value).

During the period ending June 30, 2022, the Company reported assets held for sale related to the pending

sale of the manufacturing facility located at 783 Jersey Avenue (See Note 11 Fair Value).

of Patents, Trademark Rights

December 31, 2020

December 31, 2021

June 30, 2022

and trademarks are stated at cost and are amortized using the straight-line method of the estimated useful life of 17 years.

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of Amortization of Patents and Trademarks

Ending December 31,

Year Ending December 31,

Stockholders’ Equity

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Company is authorized to issue 8,000 Series B Convertible Preferred Stock, no par value, stated value $ 1,000 per share.

As of March 31,

As of June 30,

2022, and December 31, 2021, the Company had 713 and 715 shares of Series B Convertible Preferred Stock outstanding, respectively.

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The Series B Convertible

Preferred Stock shall no voting Rights.

Preferred Stock shall have no voting Rights.

to a registration statement relating to a rights offering declared effective by the SEC on February 14, 2019, AIM distributed to its

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were approximately $ 4,700,000 .

During the three months ending March 31, 2022, 0 shares of Series B Convertible Preferred Stock were converted

into common stock.

During the six months ending June 30, 2022 and June 30, 2021, 2 and 7 shares, respectively, of Series

B Convertible Preferred Stock were converted into common stock.

Company has authorized shares of 350,000,000 with specific limitations and restrictions on the usage of 8,000,000 of the 350,000,000

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The latest plan was approved by the board of directors on March 2, 2022.

the three months ended March 31, 2022, the Company issued a total of 0 shares of its common stock.

the six months ended June 30, 2022, the Company issued a total of 53,922 with shares of its common stock at price of $ 1.02 for a total

of $ 55,000 as part of the employee stock purchase plan, not from the 2018 Equity Incentive Plan.

the twelve months ended December 31, 2021, the Company issued a total of 132,238 shares of its common stock at prices ranging from $ 1.16

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$ 7,200,000 .

As of March 31, 2022, there are 15,000 Warrants outstanding.

As of June 30, 2022, there are 15,000 Warrants outstanding.

July 19, 2019, the Company entered into a new Equity Distribution Agreement (the “2019 EDA”) with Maxim Group LLC (“Maxim”),

pursuant to which it could sell, from time to time, shares of its Common Stock through Maxim, as agent (the “Offering”).

pursuant to which it could sell, from time to time, shares of its Common Stock through Maxim, as agent.

The 2019 EDA replaced a prior EDA with Maxim.

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613,512 options were issued to employees with an exercise price range of $ 1.11 to $ 1.71 for a period of ten years with a vesting period

During December 2020, 675,000 options were issued to employees with an exercise price range of $ 1.85 to $ 1.96 for a period

of ten years with a vesting period of one year.

of both periods March 31, 2022, and December 31, 2021, there were 47,994,672 shares outstanding.

of June 30, 2022, and December 31, 2021, there were 48,048,822 and 47,994,672 shares outstanding, respectively.

Cash and Cash Equivalents

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Recent Accounting Pronouncements

the first quarter of 2022 accounting pronouncements issued by the FASB did not or are not believed by management to have a material impact

on the Company’s present or future financial statements.

the second quarter of 2022 accounting pronouncements issued by the FASB did not or are not believed by management to have a material

impact on the Company’s present or future financial statements.

Company is required under U.S.

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The fair value of the redeemable warrants (“Warrants”) related to the Company’s

February 2017, June 2017, April 2018, and March 2019 common stock and warrant issuance, are calculated using a Monte Carlo Simulation.

While the Monte Carlo Simulation is one of a number of possible pricing models, the Company has determined it to be industry accepted

and fairly presented the fair value of the Warrants.

As an additional factor to determine the fair value of the Put’s liability,

the occurrence probability of a Fundamental Transaction event was factored into the valuation.

February 2017, April 2018, and March 2019 common stock and warrant issuance, are calculated using a Monte Carlo Simulation.

Monte Carlo Simulation is one of a number of possible pricing models, the Company has determined it to be industry accepted and fairly

presented the fair value of the Warrants.

As an additional factor to determine the fair value of the Put’s liability, the occurrence

probability of a Fundamental Transaction event was factored into the valuation.

Company recomputes the fair value of the Warrants at the issuance date and the end of each quarterly reporting period.

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of Assumptions to Estimate Fair Value of Warrants

price per share

Exercise price per

Underlying price per share

Exercise price per share

$ 30.25 -$ 33.00

interest rate

Risk-free interest rate

1.29 %- 1.32 %

0.22 %- 0.23 %

Expected holding

dividend yield

Company utilized the following assumptions to estimate the fair value of the June 2017 Warrants:

price per share

Exercise price per

interest rate

Expected holding

dividend yield

Expected holding period

Expected volatility

Expected dividend yield

Company utilized the following assumptions to estimate the fair value of the April 2018 Warrants:

price per share

Exercise price per

interest rate

Expected holding

dividend yield

Underlying price per share

Exercise price per share

Risk-free interest rate

Expected holding period

Expected volatility

Expected dividend yield

Company utilized the following assumptions to estimate the fair value of the March 2019 Warrants:

price per share

Exercise price per

interest rate

Expected holding

dividend yield

Underlying price per share

Exercise price per share

Risk-free interest rate

Expected holding period

Expected volatility

Expected dividend yield

Measurement input

significant assumptions using the Monte Carlo Simulation approach for valuation of the Warrants are:

(i) Risk-Free

Interest Rate .

The risk-free interest rates for the Warrants are based on U.S.

Treasury constant maturities for periods commensurate

with the remaining expected holding periods of the warrants.

constant maturities for periods commensurate with the remaining expected holding periods

of the warrants.

(ii) Expected

Holding Period .

The expected holding period represents the period of time that the Warrants are expected to be outstanding until

they are exercised.

The Company utilizes the remaining contractual term of the Warrants at each valuation date as the expected holding

Expected stock volatility is based on daily observations of the Company’s historical stock values for a period

commensurate with the remaining expected holding period on the last day of the period for which the computation is made.

The expected holding period represents the period of time that the Warrants

are expected to be outstanding until they are exercised.

The Company utilizes the remaining

contractual term of the Warrants at each valuation date as the expected holding period.

(iii) Expected

Expected stock volatility is based on daily observations of the Company’s

historical stock values for a period commensurate with the remaining expected holding period

on the last day of the period for which the computation is made.

(iv) Expected

Dividend Yield .

Expected dividend yield is based on the Company’s anticipated dividend payments over the remaining expected

holding period.

As the Company has never issued dividends, the expected dividend yield is 0 % and this assumption will be continued

in future calculations unless the Company changes its dividend policy.

Expected dividend yield is based on the Company’s anticipated dividend

payments over the remaining expected holding period.

As the Company has never issued dividends,

the expected dividend yield is 0 % and this assumption will be continued in future calculations

unless the Company changes its dividend policy.

Probability of a Fundamental Transaction.

The possibility of the occurrence of a Fundamental Transaction triggering a Put right

is extremely remote.

As discussed above, a Put right would only arise if a Fundamental Transaction 1) is an all cash transaction;

(2) results in the Company going private;

or (3) is a transaction involving a person or entity not traded on a national securities

The Company believes such an occurrence is highly unlikely because:

Company only has one product that is FDA approved but is currently not available for commercial sales.

Company will have to perform additional clinical trials for FDA approval of its flagship product.

The possibility of the occurrence of a Fundamental

Transaction triggering a Put right is extremely remote.

As discussed above, a Put right would

only arise if a Fundamental Transaction 1) is an all cash transaction;

(2) results in the

Company going private;

or (3) is a transaction involving a person or entity not traded on

a national securities exchange.

The Company believes such an occurrence is highly unlikely

Company only has one product that is FDA approved but is currently not available for commercial

Company will have to perform additional clinical trials for FDA approval of its flagship

and market conditions continue to include uncertainty, adding risk to any transaction.

capital for a potential buyer in a cash transaction continues to be limited.

nature of a life sciences company is heavily dependent on future funding and high fixed costs, including Research & Development.

Company has minimal revenues streams which are insufficient to meet the funding needs for the cost of operations or construction

at their manufacturing facility;

Company’s Rights Agreement and Executive Agreements make it less attractive to a potential buyer.

nature of a life sciences company is heavily dependent on future funding and high fixed costs,

including Research & Development.

Company has minimal revenues streams which are insufficient to meet the funding needs for

the cost of operations or construction at their manufacturing facility;

Company’s Rights Agreement and Executive Agreements make it less attractive to a potential

the above factors utilized in analysis of the likelihood of the Put’s potential Liability, the Company estimated the range of probabilities

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of Range of Probabilities

of Probability

Monte Carlo Simulation has incorporated a 5.0% probability of a Fundamental Transaction to date for the life of the securities.

(vi) Expected

Timing of Announcement of a Fundamental Transaction.

As the Company has no specific expectation of a Fundamental Transaction,

for reasons elucidated above, the Company utilized a discrete uniform probability distribution over the Expected Holding Period to

model in the potential announcement of a Fundamental Transaction occurring during the Expected Holding Period.

As the Company has no specific expectation

of a Fundamental Transaction, for reasons elucidated above, the Company utilized a discrete

uniform probability distribution over the Expected Holding Period to model in the potential

announcement of a Fundamental Transaction occurring during the Expected Holding Period.

(vii) Expected

100 Day Volatility at Announcement of a Fundamental Transaction .

An estimate of future volatility is necessary as there is no

mechanism for directly measuring future stock price movements.

Daily observations of the Company’s historical stock values

for the 100 days immediately prior to the Warrants’ grant dates, with a floor of 100 %, were utilized as a proxy for the future

An estimate of future

volatility is necessary as there is no mechanism for directly measuring future stock price

Daily observations of the Company’s historical stock values for the 100

days immediately prior to the Warrants’ grant dates, with a floor of 100 %, were utilized

as a proxy for the future volatility.

(viii) Expected

Risk-Free Interest Rate at Announcement of a Fundamental Transaction .

The Company utilized a risk-free interest rate corresponding

to the forward U.S.

Treasury rate for the period equal to the time between the date forecast for the public announcement of a Fundamental

The Company utilized

a risk-free interest rate corresponding to the forward U.S.

Treasury rate for the period

equal to the time between the date forecast for the public announcement of a Fundamental

Transaction and the Warrant expiration date for each simulation.

(ix) Expected

Time Between Announcement and Consummation of a Fundamental Transaction.

The expected time between the announcement and the consummation

of a Fundamental Transaction is based on the Company’s experience with the due diligence process performed by acquirers and

time between the announcement and the consummation of a Fundamental Transaction is based

on the Company’s experience with the due diligence process performed by acquirers and

is estimated to be six months.

The Monte Carlo Simulation approach incorporates this additional period to reflect the delay Warrant

Holders would experience in receiving the proceeds of the Put.

The Monte Carlo Simulation approach incorporates this additional

period to reflect the delay Warrant Holders would experience in receiving the proceeds of

the assumptions remain consistent from period to period (e.g., utilizing historical stock prices), the numbers input change from period

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The carrying amount and estimated fair value of the above

Warrants was approximately $ 4,000 and $ 35,000 at March 31, 2022 and December 31, 2021, respectively.

Warrants was approximately $ 1,000 and $ 35,000 as of June 30, 2022 and December 31, 2021, respectively.

Company applies FASB ASC 820 (formerly Statement No.

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valuation hierarchy contains three levels:

1 – Quoted prices are available in active markets for identical assets or liabilities at the reporting date.

Generally, this

includes debt and equity securities that are traded in an active market.

2 – Observable inputs other than Level 1 prices such as quote prices for similar assets or liabilities;

quoted prices in markets

that are not active;

or other inputs that are observable or can be corroborated by observable market data for substantially the full

term of the assets or liabilities.

Generally, this includes debt and equity securities that are not traded in an active market.

3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the

assets or liabilities.

Level 3 assets and liabilities include financial instruments whose value is determined using pricing models,

discounted cash flow methodologies, or other valuation techniques, as well as instruments for which the determination of fair value

requires significant management judgment or estimation.

As of March 31, 2022, the Company has classified the warrants with cash settlement

features as Level 3.

Management evaluates a variety of inputs and then estimates fair value based on those inputs.

As discussed above,

the Company utilized the Monte Carlo Simulation Model in valuing the warrants.

1 – Quoted prices are available in active markets for identical assets or liabilities

at the reporting date.

Generally, this includes debt and equity securities that are traded

in an active market.

2 – Observable inputs other than Level 1 prices such as quote prices for similar assets

or liabilities;

quoted prices in markets that are not active;

or other inputs that are observable

or can be corroborated by observable market data for substantially the full term of the assets

or liabilities.

Generally, this includes debt and equity securities that are not traded in

an active market.

3 – Unobservable inputs that are supported by little or no market activity and that

are significant to the fair value of the assets or liabilities.

Level 3 assets and liabilities

include financial instruments whose value is determined using pricing models, discounted

cash flow methodologies, or other valuation techniques, as well as instruments for which

the determination of fair value requires significant management judgment or estimation.

of June 30, 2022, the Company has classified the warrants with cash settlement features as

Management evaluates a variety of inputs and then estimates fair value based on

those inputs.

As discussed above, the Company utilized the Monte Carlo Simulation Model in

valuing the warrants.

table below presents the balances of assets and liabilities measured at fair value on a recurring basis by level within the hierarchy

of Assets and Liabilities Measured at Fair Value on a Recurring Basis

thousands) As of March 31, 2022

thousands) As of December 31, 2021

As of June 30, 2022

As of December 31, 2021

changes in Level 3 Liabilities measured at fair value on a recurring basis are summarized as follows (in thousands):

of Changes in Level 3 Liabilities Measured at Fair Value on a Recurring Basis

at December 31, 2021

value adjustments

at March 31, 2022

Redeemable warrants:

Balance at December 31, 2021

Fair value adjustments

Balance at June 30, 2022

table below presents the balances of assets and liabilities measured at fair value on a nonrecurring basis by level within the hierarchy

1 unchanged sentence

As of December 31, 2021

Gains (Losses)

lived assets held and used (a)

accordance with Subtopic 360-10, long-lived assets held and used with a carrying amount of $ 5,700,000 were written down to their fair

value of $ 3,900,000 , resulting in an impairment charge of $ 1,800,000 , which was included in earnings for the period ending December

accordance with Subtopic 360-10, long-lived assets held and used with a carrying amount of

$ 5,700,000 were written down to their fair value of $ 3,900,000 , resulting in an impairment

charge of $ 1,800,000 , which was included in earnings for the period ending December 31, 2021.

Financing Obligation Arising from Sale Leaseback Transaction

18 unchanged sentences

between the carrying value of the financing obligation including unamortized debt discount and the amount exchanged to extinguish the

expense relating to this financing agreement was $ 0 for the period ended March 31, 2022 and $ 14,000 for the period ended March 31, 2021.

expense relating to this financing agreement was $ 0 for the period ended June 30, 2022 and $ 67,000 for the six months ended June 30,

Company leases office and storage space, and other equipment under non-cancellable operating leases with initial terms typically ranging

48 unchanged sentences

and the one-year term commenced on April 30, 2022.

February 17, 2022, the Company entered into a Lease Agreement for a term of two years commencing on March 1, 2022, pursuant to

which the Company agreed to lease a Canon copier.

The base rent is $ 322

per month for the term of the lease.

February 17, 2022, the Company entered into a Lease Agreement for a term of two years commencing on March 1, 2022 , pursuant to which

the Company agreed to lease a Canon copier.

The base rent is $ 322 per month for the term of the lease.

June 16, 2022, the Company entered into a Lease Agreement for a term of five years commencing on July 1, 2022 pursuant to which the Company

agreed to lease approximately 5,210 rentable square feet.

The base rent increases by 3 % each year, and ranges from $ 15,630 per month

for the first year to $ 18,118 per month for the fifth year.

expected lease term includes both contractual lease periods and, when applicable, cancelable option periods when it is reasonably certain

1 unchanged sentence

The Company’s leases have remaining lease terms between 11 months and 5 years.

of March 31, 2022, and December 31, 2021, the weighted-average remaining term is 3.7 and 2.72 years, respectively.

Company has determined that the incremental borrowing rate is 10 % as of March 31, 2022, and December 31, 2021, respectively, based upon

of June 30, 2022, and December 31, 2021, the weighted-average remaining term is 2.67 and 2.72 years, respectively.

Company has determined that the incremental borrowing rate is 10 % as of June 30, 2022, and December 31, 2021, respectively, based upon

the recently completed financing transaction in December 2019.

minimum payments as of March 31, 2022, are as follows:

minimum payments as of June 30, 2022, are as follows:

of Operating lease Future Payments

Ending December 31,

imputed interest

of March 31, 2022, and December 31, 2021, the balance of the right of use assets was $ 144,000 and $ 149,000 , respectively, and the corresponding

Year Ending December 31,

Less imputed interest

of June 30, 2022, and December 31, 2021, the balance of the right of use assets was $ 889,000 and $ 149,000 , respectively, and the corresponding

lease liability balance was $ 889,000 and $ 149,000 , respectively.

The total rent expense for the period ended March 31, 2022, and December

The total rent expense for the six months ended June 30, 2022, and June

30, 2021 amounted to approximately $ 34,000 and $ 22,000 , respectively.

Total rent expense for short term leases for the period ended March

31, 2022 and December 31, 2021 amounted to approximately $ 3,000 and $ 12,000 , respectively.

Total rent expense for short term leases for the six months ended

June 30, 2022 and June 30, 2021 amounted to approximately $ 10,000 for both periods.

Research, Consulting and Supply Agreements

2 unchanged sentences

has paid CHDR approximately $ 1,066,000 .

The balance of the agreement is approximately $ 61,000 , to be paid in the second quarter of 2022.

April 2021, the Company approved a proposal from Polysciences Inc.

(“Polysciences”) for the manufacture of our Poly I and

April 2021, the Company approved a proposal from Polysciences for the manufacture of our Poly I and

Poly C12U polynucleotides and associated test methods at Polysciences’ Warrington, PA location to enhance our capacity to produce

3 unchanged sentences

For the year ended December 31, 2021 the Company has incurred an expense and paid Polysciences approximately

For the period ended March 31, 2022, the Company paid Polysciences $ 51,390 .

April 2022, AIM executed a work order with Amarex Clinical Research LLC, our contract research organization, pursuant to which Amarex

will manage a Phase 2 clinical trial in advanced pancreatic cancer patients designated AMP-270.

Per the work order, AIM anticipates that

the study will cost approximately $ 8.2 million, which includes pass through costs of approximately $ 1.0 million and excludes certain

third-party costs and escalations.

For the period ended June 30, 2022, the Company paid Polysciences $ 102,780 .

April 2022, AIM executed a work order with Amarex Clinical Research LLC (“Amarex”), our contract research organization, pursuant

to which Amarex will manage a Phase 2 clinical trial in advanced pancreatic cancer patients designated AMP-270.

Per the work order, AIM

anticipates that the study will cost approximately $ 8.2 million, which includes pass through costs of approximately $ 1.0 million and

excludes certain third-party costs and escalations.

AIM anticipates that the study will take approximately 4.6 years to complete.

June 13, 2022, AIM executed a work order with Amarex, pursuant to which Amarex will manage a Phase 2 trial in patients with Post-COVID

Conditions, once FDA authorization to proceed is received.

It is planned that the study will be conducted at up to 10 sites in the United

AIM is sponsoring the study.

AIM anticipates that the study will cost approximately $ 4.4 million, which includes pass through

costs of approximately $ 125,470 , investigator costs estimated at about $ 2.4 million and excludes certain other third-party costs and

December 2020, AIM added Pharmaceutics International Inc.

(“Pii”) as a “Fill & Finish” provider to enhance

its capacity to produce Ampligen.

This addition amplifies AIM’s manufacturing capability by providing redundancy and cost savings.

The contracts augment our active and in-process fill and finish capacity.

For the period ended December 31, 2021, the Company has incurred

an expense and paid Pii approximately $ 89,000 .

For the six months ended June 30, 2022, the Company incurred an expense and paid Pii approximately $ 243,000 .

Subsequent Events

AIM received a notice of nominations, dated July 8,

2022 (the “Purported Nomination Notice”), from Jonathan Thomas Jorgl, purporting to give notice of his intent, as a holder

of 1,000 shares of AIM common stock, to nominate two director candidates for election to AIM’s board of directors (the “Board”)

at AIM’s 2022 annual meeting of stockholders (the “Annual Meeting”).

As the Board currently comprises three members,

Jorgl is seeking to change control of the Board.

On July 14, 2022, the Board unanimously determined that the Purported Nomination

Notice was defective for noncompliance with the advance notice provisions of AIM’s Amended and Restated Bylaws (the “Bylaws”)

and should be rejected and disregarded.

The Board also determined that AIM should institute legal action against Mr.

Jorgl and those believed

to be acting in concert with him as an activist group to prevent further harm to the Company.

On July 15, 2022, the Company filed a lawsuit

in the United States District Court for the Middle District of Florida, Ocala Division, against Mr.

Jorgl and six other defendants (his

nominees Robert Chioini and Michael Rice as well as Franz Tudor, Todd Deutsch, Ted Kellner and Walter Lautz), seeking to enjoin the seven

defendants from committing any further violations of various federal securities laws.

AIM’s lawsuit alleges that these seven individuals

have failed to register as a group pursuant to U.S.

securities laws and have committed other unlawful actions in the context of their

attempt to effectuate a takeover of the Board.

On July 19, 2022, AIM notified Mr.

Jorgl that the Board had determined the Purported Nomination

Notice was invalid and failed to satisfy the Bylaws and that any purported nominations thereunder would be disregarded at the Annual Meeting.

On July 29, 2022, Mr.

Jorgl sued AIM and each of

its three directors in the Court of Chancery of the State of Delaware, seeking a declaratory judgement that the Purported Nomination

Notice was valid and that AIM must include Mr.

Jorgl’s two purported nominees in AIM’s proxy materials to be distributed

in connection with the Annual Meeting.

In his lawsuit, Mr.

Jorgl also seeks certain injunctive relief against AIM.

On August 12, 2022,

a hearing was held in the Court of Chancery concerning a motion for a temporary restraining order (“TRO”) sought by Mr.

Absent a stipulation of the parties resolving certain issues, the Vice Chancellor expects to rule on the motion for a TRO on Monday,

August 15, 2022.

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-Q

Item 1. Financial Statements