What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-14 compared with 2022-08-15 · 365 added, 388 removed, 367 unchanged (67% of the section changed)

3 unchanged sentences

Balance Sheets

thousands, except for share and per share amounts)

thousands, except for share and per share data)

September 30, 2022

December 31, 2021

Current assets:

Cash and cash

Cash and cash equivalents

Marketable securities

Funds receivable from New

Jersey net operating loss

Prepaid expenses and other

current assets

held for sale

current assets

Funds receivable from New Jersey net operating loss

Prepaid expenses and other current assets

Assets held for sale

Total current assets

Property and equipment, net

1 unchanged sentence

Patent and trademark rights, net

LIABILITIES AND STOCKHOLDERS’

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

1 unchanged sentence

Accrued expenses

portion of operating lease liability

current liabilities

Current portion of operating lease liability

Total current liabilities

Long-term liabilities:

1 unchanged sentence

Redeemable warrants

Commitments and contingencies (Notes 12, 13

Commitments and contingencies (Notes 12, 13, and 14)

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;

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:

48,082,275 , and 47,994,672 , issued and outstanding, respectively

1 unchanged sentence

Accumulated deficit

stockholders’ equity

liabilities and stockholders’ equity

Total stockholders’ equity

Total liabilities and stockholders’ equity

accompanying notes to consolidated financial statements.

1 unchanged sentence

AND SUBSIDIARIES

Statements of Comprehensive Loss

Statement of Operations and Comprehensive Loss

thousands, except share and per share data)

months ended June 30,

Clinical treatment

programs - US

treatment programs - Europe

Total Revenues

Three months ended September 30,

Nine months ended September 30,

Clinical treatment programs - US

Costs and Expenses:

1 unchanged sentence

Research and development

and administrative

General and administrative

Total Costs and Expenses

1 unchanged sentence

Loss on investments

Interest and other income

Interest expense and other

finance costs

Extinguishment of financing

obligation and note payable

Interest and other income, net

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

Other comprehensive (loss)

Reclassification adjustment

for realized investment loss

in unrealized loss on marketable securities available for sale

Redeemable warrants valuation adjustment

Gain from sale of income tax operating losses

Other comprehensive (loss), net of tax

Reclassification adjustment for realized investment loss

Change in unrealized loss on marketable securities available for sale

Comprehensive loss

Basic and diluted loss

Weighted average shares outstanding basic

Basic and diluted loss per share

Weighted average shares outstanding basic and diluted

accompanying notes to consolidated financial statements.

1 unchanged sentence

AND SUBSIDIARIES

Statements of Changes in Stockholders’ Equity

the Six Months Ended June 30, 2022 and 2021

Statement of Changes in Stockholders’ Equity

the Nine Months Ended September 30, 2022

thousands except share data)

Comprehensive

Income (Loss)

Stockholders’

Series B Preferred

Common Stock .001 Par Value

Additional Paid-in Capital

Accumulated other Comprehensive Income (Loss)

Accumulated Deficit

Stockholders’ Equity

Balance December 31, 2021

6 unchanged sentences

Equity-based compensation

Series B preferred shares converted to common

Series B preferred shares converted to common shares

Net comprehensive loss

1 unchanged sentence

$ ( 369,772 )

Comprehensive

Income (Loss)

Stockholders’

Balance December 31, 2020

$ ( 341,974 )

Common stock issuance, net of costs

Equity-based compensation

Series B preferred shares converted to common

Cashless Warrant Conversion

Net comprehensive loss

Balance September 30, 2022

accompanying notes to consolidated financial statements.

IMMUNOTECH INC.

AND SUBSIDIARIES

Statement of Changes in Stockholders’ Equity

the Nine Months Ended September 30, 2021

thousands except share data)

Series B Preferred

Common Stock Par Value

Additional Paid-in Capital

Accumulated other Comprehensive Income (Loss)

Accumulated Deficit

Stockholders’ Equity

Balance December 31, 2020

$ ( 341,974 )

Common stock issuances, net of costs

Equity-based compensation

Series B preferred shares converted to common shares

Comprehensive loss

Balance March 31, 2021

1 unchanged sentence

Equity-based compensation

Net Comprehensive loss

Comprehensive loss

Balance June 30, 2021

$ ( 351,429 )

See accompanying notes to consolidated

financial statements.

Common stock issuances, net of costs

Equity-based compensation

Comprehensive loss

Net Comprehensive loss

Balance September 30, 2021

$ ( 355,255 )

accompanying notes to consolidated financial statements.

IMMUNOTECH INC.

1 unchanged sentence

Statements of Cash Flows

the Six Months Ended June 30, 2022 and 2021

the Nine Months Ended September 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

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

Depreciation of property and equipment

Redeemable warrants valuation adjustment

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

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

Gain (Loss) on sale of marketable securities

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

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

Accrued expenses

Net cash used in operating activities

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

Proceeds from sale of marketable securities

Purchase of marketable securities

Purchase of property and equipment

Proceeds from sale of property and equipment

Purchase of patent and trademark rights

Net cash provided by (used in) investing activities

Cash flows from financing activities:

Payment of financial obligation

Payment of financing obligation

Financing obligation payments

from sale of stock, net of issuance costs

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

Proceeds from sale of stock, net of issuance costs

Net cash provided by financing activities

Net decrease 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:

Operating lease-Right of Use Assets

Unrealized loss on marketable securities

Conversion of Series B preferred

accompanying notes to consolidated financial statements.

12 unchanged sentences

Alferon N Injection® (Interferon alfa-n3).

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

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

Ampligen has not been approved by the U.S.

Food and Drug Administration (“FDA”)

or marketed in the United States.

Ampligen is 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 double-stranded RNA 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 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.

May 2021, AIM exercised the option to re-purchase the New Brunswick manufacturing facility, pursuant to the terms of the March 2018 sale

and lease-back agreement.

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 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.

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 and other immuno oncology therapies.

Ampligen’s antiviral activities and potential use as a prophylactic or early onset 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

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

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 support commercial

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 including foreign venues

and able to generate valid proof-of-concept data,.

May 2021, AIM exercised the option to re-purchase the New Brunswick manufacturing facility, pursuant to the terms of the March 2018

sale and lease-back agreement.

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

longer needed for current or future manufacturing.

On March 3, 2022, AIM entered into an Agreement of Sale and Purchase with

Acellories, Inc.

to purchase the property for an estimated $ 3.9 million,

with AIM’s intention to keep some space specifically for its Alferon activity.

The sale closed on November 1, 2022 for $ 3.7

million net of normal closing

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

4 unchanged sentences

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.

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

Such adjustments consist of normal recurring items.

5 unchanged sentences

with the SEC on March 31, 2022.

Use of Estimates

The preparation of

financial statements in conformity with accounting principles generally accepted in the United States of America requires management to

make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure (“GAAP”) of contingent

assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the reporting period.

Actual results could differ from those estimates, and those differences may be material.

Accounts requiring the use of significant estimates

include determination of other-than-temporary impairment on securities, valuation of deferred taxes, patent and trademark valuations,

stock-based compensation calculations, building valuation, fair value of warrants, and contingency accruals.

Net Loss Per Share

1 unchanged sentence

Equivalent common shares, consisting of stock options and warrants which amounted to 2,445,805 and 1,617,145 , are excluded from the calculation

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.

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

due to the net loss.

Equity-Based Compensation

6 unchanged sentences

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

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:

There were 300,000 options granted in the nine months ended

September 30, 2022, and no options granted in the nine months ended September 30, 2021.

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

option activity for employees:

1 unchanged sentence

Outstanding January 1, 2021

Outstanding June 30, 2022

Vested and expected

to vest June 30, 2022

Exercisable June 30, 2022

Outstanding September 30, 2022

Vested and expected to vest September 30, 2022

Exercisable September 30, 2022

stock option activity for employees:

2 unchanged sentences

Unvested January 1, 2022

Unvested June 30, 2022

Unvested September 30, 2022

option activity for non-employees:

Schedule of Stock Option Activity

of Stock Option Activity

Outstanding January 1, 2022

Outstanding June 30, 2022

Vested and expected

to vest June 30, 2022

Exercisable June 30, 2022

Outstanding September 30, 2022

Vested and expected to vest September 30, 2022

Exercisable September 30, 2022

stock option activity for non-employees:

1 unchanged sentence

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.

Unvested September 30, 2022

compensation expense was approximately $ 792,000 and $ 1,320,000 for the nine months ended September 30, 2022, and 2021, resulting in an

increase in general and administrative expenses, respectively.

of September 30, 2022, and 2021, respectively, there was approximately $ 179,000 and $ 279,000 of unrecognized equity-based compensation

cost related to options granted under the Equity Incentive Plan.

Marketable Securities

securities consist of mutual funds.

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

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

had an other-than-temporary impairment.

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

and $ 16,175,000 in mutual funds.

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

under the fair value measurements standard (See Note 11:

As of September 30, 2022, and December 31, 2021, the Company held

approximately $ 6,986,000 and $ 16,175,000 in mutual funds.

Funds classified as available for sale consisted of:

Schedule of Available for Sale

(in thousands)

of Equity Securities

(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

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

Funds classified as available for sale consisted of:

(in thousands)

December 31, 2021

(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

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

2 unchanged sentences

(in thousands)

September 30, 2022

December 31, 2021

Professional fees

4 unchanged sentences

(in thousands)

September 30, 2022

December 31, 2021

Land, buildings and improvements

Furniture, fixtures, and

Furniture, fixtures, and equipment

Total property and equipment

accumulated depreciation

Property and equipment,

Property and equipment, net

and equipment are recorded at cost.

Depreciation and amortization are computed using the straight-line method over the estimated useful

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

Depreciation expense for the six months ending June 30, 2022

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

Depreciation is computed using the straight-line method over the estimated useful lives of the respective

assets, ranging from three to thirty-nine years.

Depreciation expense for the nine months ending September 30, 2022 and September 30,

2021 was $ 29,000 and $ 484,000 .

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 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).

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

the pending sale of the manufacturing facility located at 783 Jersey Avenue.

On November 1, 2022, AIM completed the sale of its

facility at 783 Jersey Avenue, New Brunswick, N.J., for $ 3.7

million net of normal closing cost.

of Patents, Trademark Rights

(in thousands)

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.

of patents and trademarks for each of the next five years and thereafter is as follows:

September 30, 2022

and trademarks are stated at cost (primarily legal fees) and are amortized using the straight-line method of the estimated useful life

of patents and trademarks for each of the next five years is as follows:

of Amortization of Patents and Trademarks

Year Ending December 31,

Period Ending December 31,

(in thousands)

Stockholders’ Equity

7 unchanged sentences

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

As of June 30,

As of September

30, 2022, and December 31, 2021, the Company had 713 and 715 shares of Series B Convertible Preferred Stock outstanding, respectively.

shall be entitled to receive, and the Company shall pay, dividends on shares of Series B Preferred Stock equal (on an as-if-converted-to-Common-Stock

Holders shall be entitled to receive, and the Company shall pay, dividends on shares of Series B Preferred Stock equal (on an as-if-converted-to-Common-Stock

basis) to and in the same form as dividend actually paid on shares of Common Stock when as and if such dividends are paid on shares of

15 unchanged sentences

were approximately $ 4,700,000 .

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.

During the nine months ending September 30, 2022 and September 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

9 unchanged sentences

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

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 nine months ended September 30, 2022, the Company issued a total of 87,045 shares of its common stock at prices ranging from $ 0.76

to $ 1.02 for a total of $ 80,000 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

20 unchanged sentences

$ 7,200,000 .

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

As of September 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 2019 EDA replaced a prior EDA with Maxim.

For the year ended December 31, 2020, the Company sold 20,444,807 shares under the 2019

EDA for total gross proceeds of $ 53,936,615 , which includes a 3.5 % fee to Maxim of $ 1,888,727 .

During the period ended December 31, 2021,

the Company sold 5,665,731 shares under the 2019 EDA for total gross proceeds of $ 13,301,526 , which includes a 3.5 % fee to Maxim of $ 465,533 .

The 2019 EDA was terminated in early February 2021.

The 2019 EDA replaced a prior

EDA with Maxim.

For the year ended December 31, 2020, the Company sold 20,444,807 shares under the 2019 EDA for total gross proceeds

of $ 53,936,615 , which includes a 3.5 % fee to Maxim of $ 1,888,727 .

During the period ended December 31, 2021, the Company sold 5,665,731

shares under the 2019 EDA for total gross proceeds of $ 13,301,526 , which includes a 3.5 % fee to Maxim of $ 465,533 .

The 2019 EDA was terminated

in early February 2021.

2018 Equity Incentive Plan, effective September 12, 2018, authorizes the grant of (i) Incentive Stock Options, (ii) Nonstatutory Stock

9 unchanged sentences

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

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

of September 30, 2022, and December 31, 2021, there were 48,082,275 and 47,994,672 shares outstanding, respectively.

Cash and Cash Equivalents

1 unchanged sentence

Recent Accounting Pronouncements

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.

the third 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.

3 unchanged sentences

their carrying values due to the short-term maturities of these items.

The Company also has certain warrants with a cash settlement feature

in the occurrence of a Fundamental Transaction.

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

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.

The Company also has certain warrants with a cash settlement

feature in the occurrence of a Fundamental Transaction.

The fair value of the redeemable warrants (“Warrants”) related

to the Company’s 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.

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

3 unchanged sentences

numbers input based on such assumptions, the resulting fair value could be materially different.

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

of Assumptions to Estimate Fair Value of Warrants

Underlying price per share

Exercise price per share

$ 30.25 -$ 33.00

Risk-free interest rate

1.29 %- 1.32 %

0.22 %- 0.23 %

Expected holding period

Expected volatility

Expected dividend yield

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

of Assumptions to Estimate Fair Value of Warrants

September 30, 2022

December 31, 2021

Underlying price per share

5 unchanged sentences

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

September 30, 2022

December 31, 2021

Underlying price per share

6 unchanged sentences

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.

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 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

Treasury constant maturities for periods commensurate

with the remaining expected holding periods of the warrants.

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 period.

Expected Volatility .

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.

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 $ 0.00 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 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

Expected Probability

of a Fundamental Transaction.

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

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

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 because:

only has one product that is FDA approved but which will not be available for commercial sales for 18 months at the earliest;

The Company flagship product

is approved only in Argentina for Severely Debilitated Chronic Fatigue Syndrome patients;

The Company may have to

perform additional clinical trials for FDA approval of its flagship product;

Industry and global market

conditions continue to include uncertainty, adding risk to any transaction;

Available capital for a

potential buyer in a cash transaction continues to be limited;

The nature of a life science

company is heavily dependent on future funding and high costs, including research & development;

The Company has minimal

revenue streams which could be insufficient to meet the funding needs for the cost of operations or construction at their manufacturing

The Company’s Rights

Agreement and Executive Agreements make it less attractive to a potential buyer.

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

1 unchanged sentence

of Range of Probabilities

Range 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.

(vii) Expected

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

for reasons stated above, the Company used a discrete uniform probability distribution over the Expected Holding Period to model

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

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

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

Transaction and the Warrant expiration date for each simulation.

(ix) Expected

Time Between Announcement and Consummation of a Fundamental Transaction.

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

to period (e.g., the actual historical prices input for the relevant period).

The carrying amount and estimated fair value of the above

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.

157 Fair Value Measurements ) that defines fair value, establishes a framework

for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements.

does not impose any new requirements around which assets and liabilities are to be measured at fair value, and instead applies to asset

and liability balances required or permitted to be measured at fair value under existing accounting pronouncements.

The Company measures

its warrant liability for those warrants with a cash settlement feature at fair value.

ASC 820-10-35-37 (formerly SFAS No.

157) establishes a valuation hierarchy based on the transparency of inputs used in the valuation

of an asset or liability.

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

Expected Risk-Free Interest

Rate at Announcement of a Fundamental Transaction .

The Company utilized a risk-free interest rate corresponding to the forward

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.

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

period (e.g., the actual historical prices input for the relevant period).

Company applies FASB ASC 820 that defines fair value, establishes a framework for measuring fair value in U.S.

GAAP, and expands disclosures

about fair value measurements.

The guidance does not impose any new requirements around which assets and liabilities are to be measured

at fair value, and instead applies to asset and liability balances required or permitted to be measured at fair value under existing

accounting pronouncements.

The Company measures its warrant liability for those warrants with a cash settlement feature at fair value.

ASC 820-10-35-37 establishes a valuation hierarchy based on the transparency of inputs used in the valuation of an asset or liability.

Classification is based on the lowest level of inputs that is significant to the fair value measurement.

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;

The valuation hierarchy contains

three levels:

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

Generally, this includes

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

Level 2 – Observable

inputs other than Level 1 prices such as quoted 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 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.

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

Level 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 September 30, 2022, the Company has classified the warrants with cash settlement features

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 these 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

As of June 30, 2022

(in thousands)

As of September 30, 2022

Marketable securities

Redeemable warrants

(in thousands)

As of December 31, 2021

Marketable securities

Redeemable warrants

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

2 unchanged sentences

Balance at December 31, 2021

Fair value adjustments

Balance at June 30, 2022

Fair value adjustment

Balance at September 30, 2022

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

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

(in thousands)

As of December 31, 2021

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 31, 2021.

Total Gains (Losses)

Long 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

A $ 300,000 deposit was received in the third quarter 2022 related

to the asset.

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 June 30, 2022 and $ 67,000 for the six months ended June 30,

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

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

38 unchanged sentences

the first year to $ 2,785 per month for the sixth year.

May 1, 2019, the Company entered into a Lease Agreement for a term of three

years commencing on May

1, 2019 , pursuant to which the Company agreed

to lease approximately 3,000

rentable square feet.

The base rent is $ 2,500

per month for the term of the lease.

May 1, 2019, the Company entered into a Lease Agreement for a term of three years commencing on May 1, 2019 , pursuant to which the Company

agreed to lease approximately 3,000 rentable square feet.

The base rent is $ 2,500 per month for the term of the lease.

On October 4,

2021, the Company executed a request to renew the lease for a one-year term as defined in the Lease Agreement.

1 unchanged sentence

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

On October 5, 2022, the Company executed a request to renew the lease for an additional

one-year term at a monthly cost of $ 2,850 .

The request was accepted and the one-year term commences on May 1, 2023 .

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

8 unchanged sentences

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

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 June 30, 2022, are as follows:

of September 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 September 30, 2022, and December 31, 2021, respectively, based

upon the recently completed financing transaction in December 2019.

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

of Operating lease Future Payments

Year Ending December 31,

Period December 31,

(in thousands)

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 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 six months ended

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

of September 30, 2022, and December 31, 2021, the balance of the right of use assets was $ 866,000 and $ 149,000 , respectively, and the

corresponding lease liability balance was $ 866,000 and $ 149,000 , respectively.

Total rent expense for the nine months ended September

30, 2022, and September 30, 2021, amounted to approximately $ 75,000 and $ 39,000 , respectively.

Total rent expense for short term leases

for the nine months ended September 30, 2022, and September 30, 2021, amounted to approximately $ 8,000 for both periods.

Research, Consulting and Supply Agreements

2 unchanged sentences

has paid CHDR approximately $ 1,066,000 .

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

the polymer precursors to the drug Ampligen.

The Company is working with Polysciences to negotiate and finalize both a Service Agreement

and a Quality Agreement.

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

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

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 the polymer precursors to the drug Ampligen.

The Company is working with Polysciences to negotiate and finalize both a Service Agreement and a Quality Agreement.

For the year ended

December 31, 2021, the Company has incurred an expense and paid Polysciences approximately $ 250,000 .

For the nine months ended September

30, 2022, the Company paid Polysciences $ 103,000 .

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

5 unchanged sentences

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

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

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

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 escalations.

December 2020, AIM added Pharmaceutics International Inc.

5 unchanged sentences

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 .

For the nine months ended September 30, 2022, the Company incurred an expense and paid

Pii approximately $ 259,000 .

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.

October 5, 2022, the Delaware Court of Chancery held a hearing regarding a motion to require the AIM Board of Directors to accept the

Jorgl Group’s director nominations and include the group’s nominees on a universal proxy card for the 2022 Annual Meeting

of Stockholders.

On October 28, 2022, the court denied Jorgl’s motion.

The Jorgl Group announced on November 2, 2022, that it did

not intend to appeal the decision.

October 12, 2022, the Company announced that its Investigational New Drug (IND) application filed with the FDA was granted clearance

to proceed and therefore the Company could initiate a Phase 2 study evaluating Ampligen as a therapeutic for patients with post-COVID

conditions (“AMP-518”).

November 1, 2022, AIM completed the sale of its facility at 783 Jersey Avenue, New Brunswick, N.J., for $ 3.7

million net of normal closing cost .

In November 2022, AIM received notice that the FDA had granted Orphan

Drug Designation to Ampligen for the treatment of Ebola virus disease.

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