What changed in this filing

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Item 1A. Risk Factors

2023-03-31 compared with 2022-03-31 · 273 added, 211 removed, 486 unchanged (50% of the section changed)

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Associated with Our Business

COVID-19 coronavirus could adversely impact our business, including our clinical trials.

We cannot predict the ultimate effects of the

Covid-19 pandemic on our business

December 2019, a novel strain of coronavirus, COVID-19, was first reported in China.

The coronavirus has since spread to six continents

and has been diagnosed in countries in which there are planned or active clinical trial sites studying Ampligen.

As COVID-19 continues

to spread, we could very well experience disruptions that could severely impact our business and clinical trials, including:

COVID-19 coronavirus or other global pandemics could adversely impact our business, including our clinical trials.

We cannot predict

the ultimate effects of the Covid-19 pandemic on our business.

COVID-19 pandemic had and continues to have a major disruptive effect in the US and worldwide, including in countries in which there

are planned or active clinical trial sites studying Ampligen.

The COVID-19 pandemic or a future major pandemic could severely impact

our business and clinical trials, including:

or difficulties in enrolling patients in our clinical trials;

or difficulties in clinical site initiation, including difficulties in recruiting clinical

site investigators and clinical site staff;

of healthcare resources away from the conduct of clinical trials, including the diversion

of hospitals serving as our clinical trial sites and hospital staff supporting the conduct

of our clinical trials;

● interruption

of key clinical trial activities, such as clinical trial site monitoring, due to limitations

on travel imposed or recommended by federal or state governments, employers and others;

● limitations

in employee resources that would otherwise be focused on the conduct of our clinical trials,

including because of sickness of employees or their families or the desire of employees to

avoid contact with large groups of people;

or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;

of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial

sites and hospital staff supporting the conduct of our clinical trials;

of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by

federal or state governments, employers and others;

in employee resources that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees

or their families or the desire of employees to avoid contact with large groups of people;

in issuing reports, results and publishing papers;

in receiving approval from local regulatory authorities to initiate our planned clinical

in receiving approval from local regulatory authorities to initiate our planned clinical trials;

in clinical sites receiving the supplies and materials needed to conduct our clinical trials;

● interruption

in global shipping that may affect the transport of clinical trial materials, such as investigational

drug product used in our clinical trials;

in local regulations as part of a response to the COVID-19 coronavirus outbreak which may

require us to change the ways in which our clinical trials are conducted, which may result

in unexpected costs, or to discontinue the clinical trials altogether;

in necessary interactions with local regulators, ethics committees and other important agencies

and contractors due to limitations in employee resources or forced furlough of government

of the FDA to accept data from clinical trials in affected geographies outside the United

in global shipping that may affect the transport of clinical trial materials, such as investigational drug product used in our clinical

in local regulations as part of a response to the COVID-19 coronavirus outbreak which may require us to change the ways in which

our clinical trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether;

in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations

in employee resources or forced furlough of government employees;

of the FDA to accept data from clinical trials in affected geographies outside the United States.

noted elsewhere in this Report, progress of our commercial launch in Argentina has been delayed due to pandemic factors.

impact of COVID-19 in Argentina is taxing the nation’s health care system and is, understandably, the main priority of its regulators.

global outbreak of the COVID-19 coronavirus continues to rapidly evolve.

The extent to which the COVID-19 coronavirus may impact our

business, clinical trials and financial condition will depend on future developments, which are highly uncertain and cannot be predicted

with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions and social

distancing in the United States and other countries, business closures or business disruptions, and the effectiveness of actions taken

in the United States and other countries to contain and treat the disease.

While we are not able to estimate the effects of the COVID-19

outbreak, the ongoing pandemic may have a material adverse effect on our results of future operations, financial position, and liquidity.

impact of COVID-19 in Argentina is taxing the nation’s health care system and is, understandably, a main priority of its regulators.

we are not able to estimate the effects of the COVID-19 outbreak or future pandemics, they may have a material adverse effect on our

results of future operations, financial position and liquidity.

may require additional financing which may not be available.

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We believe, based on our current financial condition, that we have adequate funds to meet our anticipated

operational cash needs and fund current clinical trials over approximately the next twenty-four months.

At present we do not generate

any material revenues from our operations and we do not anticipate doing so in the near future.

operational cash needs and fund current clinical trials over approximately the next sixteen months.

At present we do not generate any

material revenues from our operations and we do not anticipate doing so in the near future.

We may need to obtain additional funding

in the future for new studies and/or if current studies do not yield positive results, require unanticipated changes and/or additional

will need to allocate capital to eventually commercialize and sell Ampligen and/or recommence and increase sales of Alferon N Injection.

On March 3, 2022, we entered into an Agreement of Sale and Purchase with Acellories, Inc.

as purchaser pursuant to which we will sell

our New Brunswick facility for $3.9 million.

This strategic transaction should reduce our expenses and save over $1.0 million a year

in cash flow;

the cash and cash-flow savings will be used to advance our Ampligen oncology and long-COVID clinical programs.

the sale of the facility, we are also exploring Contract Manufacturing Organizations (“CMO”) to produce API.

While we believe

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

our ability to fulfill future obligations.

In February 2022, the SEC declared our universal shelf registration statement on Form S-3 effective.

Pursuant to that registration

statement, we can sell up to $100 million of our securities and raise additional capital as needed in the future.

No assurance can be

given as to the amount of funds that could be raised pursuant to this registration statement or the potential dilution to current stockholders.

will need to allocate capital to eventually commercialize and sell Ampligen and/or recommence sales of Alferon N Injection.

believe, based on our current financial condition, that we have adequate funds to meet our anticipated operational cash needs and fund

current clinical trials over approximately the next twenty-four months.

If our funds are not adequate, and we are subsequently unable

to obtain additional funding, through joint venturing, sales of securities and/or otherwise, our ability to develop our products, commercially

current clinical trials over approximately the next sixteen months.

If our funds are not adequate, and we are subsequently unable to

obtain additional funding, through joint venturing, sales of securities and/or otherwise, our ability to develop our products, commercially

produce inventory or continue our operations may be materially adversely affected.

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

Use of Alferon N Injection for other

indications will require regulatory approval in the U.S.

However, it is not at present available

for purchase on the market.

Use of Alferon N Injection for other indications will require regulatory approval in the United States and

products, including Ampligen, are subject to extensive regulation by numerous governmental authorities in the U.S.

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In September 2019, we received clearance from the FDA to ship Ampligen to Argentina for the commercial launch and subsequent

There are a number of additional actions that must occur before we would be able to commence commercial sales in Argentina.

example, Ampligen is still in the process of release testing the product that has already been sent.

However, there are a number of additional actions that must occur before we would be able to commence commercial sales in Argentina.

For example, Ampligen is still in the process of release testing the product that has already been sent.

FDA’s regulatory review and approval process is extensive, lengthy, expensive and inherently uncertain.

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most likely will be materially and/or adversely affected.

obtaining approval of a NDA by the FDA, or a comparable foreign regulatory authority, is inherently uncertain.

obtaining approval of an NDA by the FDA, or a comparable foreign regulatory authority, is inherently uncertain.

Even after completing

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data collected from clinical trials and other studies of a product candidate may not be sufficient

to support the submission of a NDA;

to support the submission of an NDA;

approval policies or regulations of the FDA may significantly change in a manner rendering

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security incidents, could harm our ability to operate our business effectively.

the implementation of security measures, our internal computer systems and those of third parties with which we contract are vulnerable

to damage from cyber-attacks, computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical

System failures, accidents or security breaches could cause interruptions in our operations, and could result in a material

disruption of our business operations, in addition to possibly requiring substantial expenditures of resources to remedy.

clinical trial data could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce

To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or

inappropriate public disclosure of confidential or proprietary information, we could incur liability and our product development and

commercialization efforts could be delayed.

operations could be disrupted if our information systems fail, if we are unsuccessful in implementing necessary upgrades or if we are

subject to cyber-attacks.

Our business depends on the efficient and uninterrupted operation of our computer and communications systems

and networks, hardware and software systems and our other information technology.

We collect and maintain information, which includes

confidential and proprietary information, as well as personal information regarding our customers and employees, in digital form.

maintained in digital form is subject to risk of cyber-attacks, which are increasing in frequency and sophistication.

Cyber-attacks could

include the deployment of harmful malware, viruses, worms, and other means to affect service reliability and threaten data confidentiality,

integrity and availability.

Despite our efforts to monitor and safeguard our systems to prevent data compromise, the possibility of a

future data compromise cannot be eliminated entirely, and risks associated with intrusion, tampering, and theft remain.

we do not have insurance coverage with respect to system failures or cyber- attacks.

A failure of our systems, or an inability to successfully

expand the capacity of these systems, or an inability to successfully integrate new technologies into our existing systems could have

a material adverse effect on our business, results of operations, financial condition, and cash flows.

Company and its vendors’ sophisticated information technology operations are spread across multiple, sometimes inconsistent, platforms,

which pose difficulties in maintaining data integrity across systems.

The ever-increasing use and evolution of technology, including

cloud-based computing, creates opportunities for the unintentional or improper dissemination or destruction of confidential information

stored in the Company’s systems.

breach of our security measures or the accidental loss, inadvertent disclosure, unapproved dissemination, misappropriation or misuse

of trade secrets, proprietary information or other confidential information, whether as a result of theft, hacking, fraud, trickery or

other forms of deception, or for any other cause, could enable others to produce competing products, use our proprietary technology or

information and/or adversely affect our business position.

Further, any such interruption, security breach, loss or disclosure of confidential

information could result in financial, legal, business and reputational harm to our company and could have a material adverse effect

on our business, financial condition, results of operations, cash flows and stock price.

loss of services of key personnel could hurt our chances for success.

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failure to recruit additional personnel as needed could have a materially adverse effect on our ability to achieve our objectives.

requires estimates, judgements and assumptions which inherently contain uncertainties.

are inherent uncertainties involved in estimates, judgments and assumptions used in the preparation of financial statements in accordance

Any future changes in estimates, judgments and assumptions used or necessary revisions to prior estimates, judgments or assumptions

could lead to a restatement of our results.

financial statements included in this Annual Report on Form 10-K are prepared in accordance with GAAP.

This involves making estimates,

judgments and assumptions that affect reported amounts of assets (including intangible assets), liabilities, mezzanine equity, stockholders’

equity, operating revenues, costs of sales, operating expenses, other income, and other expenses.

Estimates, judgments, and assumptions

are inherently subject to change in the future and any necessary revisions to prior estimates, judgments or assumptions could lead to

a restatement.

Any such changes could result in corresponding changes to the amounts of assets (including goodwill and other intangible

assets), liabilities, mezzanine equity, stockholders’ equity, operating revenues, costs of sales, operating expenses, other income

and other expenses.

currently, and may in the future, have assets held at financial institutions that may exceed the insurance coverage offered by the Federal

Deposit Insurance Corporation (“FDIC”), and the loss of such assets would have a severe negative affect on our operations

and liquidity.

March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation,

which appointed the FDIC as receiver.

Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp.

were each swept into

receivership.

A statement by the Department of the Treasury, the Federal Reserve and the FDIC stated that all depositors of SVB would

have access to all of their money after only one business day of closure, including funds held in uninsured deposit accounts.

we do not have any funds deposited with SVB and Signature Bank, We currently have deposits with Bank of America and Truist Bank, each

exceeding $250,000.

In the future, we may maintain our cash assets at these and other financial institutions in the United States in

amounts that may be in excess of the FDIC insurance limit of $250,000.

In the event of a failure of any of these financial institutions

where we maintain our deposits or other assets, we may incur a loss to the extent such loss exceeds the FDIC insurance limitation, which

could have a material adverse effect upon our liquidity, financial condition and our results of operations.

Associated with Our Products

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found in the future for this use or other potential uses of Alferon N Injection which could threaten or limit such product’s usefulness.

Related to our activities associated with Ampligen’s potential effectiveness as a treatment for SARS-CoV-2

Related to our activities associated with Ampligen’s potential effectiveness as a treatment for COVID-19

is not possible to predict the future of the ongoing SARS-CoV-2 global pandemic or the development of potential treatments.

can be given that Ampligen will aid in or be applied to the treatment of this virus.

additional testing and trials will be required to determine whether Ampligen will be effective in the treatment of SARS-CoV-2 in humans

and no assurance can be given that it will be the case.

We base our belief that Ampligen may be effective in the treatment of SARS-CoV-2

on the result of studies that we reviewed and referenced.

No assurance can be given that future studies will not result in findings that

are different from those in the studies that we have relied upon.

We are one of many companies working to develop a treatment for this

virus, most of whom have far greater resources than us.

additional testing and trials will be required to determine whether Ampligen will be effective in the treatment of COVID-19 and no assurance

can be given that it will be the case.

We base our belief that Ampligen may be effective in the treatment of COVID-19 on the result of

studies that we reviewed and referenced.

No assurance can be given that future studies will not result in findings that are different

from those in the studies that we have relied upon.

We are one of many companies working to develop a treatment for this virus, most

of whom have far greater resources than us.

This includes research into a range of COVID-19-related circumstances, from prophylactic

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same lines as a therapy being developed by AIM, the development of Ampligen for this virus most likely will be adversely affected.

there already are available treatments.

in foreign countries carries with it many risks.

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may be required by the FDA.

Accordingly, we are unable to estimate the nature, timing, costs and necessary efforts to complete these

projects nor the anticipated completion dates.

In addition, most of our studies to date have involved only a small group of participants and positive results

in such a small group does not mean that such results will prove true in studies with a much larger group of participants.

we are unable to estimate the nature, timing, costs and necessary efforts to complete these projects nor the anticipated completion dates.

In addition, we have no basis for estimating when material net cash inflows may commence.

We have yet to generate significant revenues from the sale of these developmental products.

As of December 31, 2021, we had approximately

$48,268,000 in Cash, Cash Equivalents.

Please see “ We may require additional financing which may not be available ”

We have yet to generate significant revenues

from the sale of these developmental products.

As of December 31, 2022, we had approximately $34,190,000 in Cash, Cash Equivalents.

see “ We may require additional financing which may not be available ” above.

Associated with Our Manufacturing

Injection commercial sales were halted due to lack of finished goods inventory.

If we are unable to gain the necessary

FDA approvals related to Alferon N Injection, our operations most likely will be materially and/or adversely affected.

If we are unable to gain the necessary FDA

approvals related to Alferon N Injection, our operations most likely will be materially and/or adversely affected.

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

At present, we do not

have a supply of Alferon N Injection or the requisite API.

Additionally, although our New Brunswick facility has FDA approval under

the BLA for Alferon N Injection and we intend to maintain a certain amount of space at the to-be-sold facility, the pending sale of the

building means this status will need to be reapproved when a CMO or new facility is identified for the production of the drug.

provide any guarantee that a CMO or other future facility will pass an FDA pre-approval inspection for Ampligen or Alferon N Injection

At present, we do not have a

supply of Alferon N Injection or the requisite API.

Additionally, although our old New Brunswick facility was FDA approval under the

BLA for Alferon N Injection and we intend to maintain a certain amount of space at that facility, this status will need to be reapproved

when a CMO or a new facility is identified for the production of the drug.

We cannot provide any guarantee that a CMO or other future

facility will pass an FDA pre-approval inspection for Ampligen or Alferon N Injection manufacture.

we are unable to gain the necessary FDA approvals related to the manufacturing process and/or final product of new Alferon N Injection

inventory or contract with a CMO, our operations most likely will be materially and/or adversely affected.

For more information on Alferon

N Injection regarding potential commercial sales, please see PART I, Item 1 - “Business;

inventory or contract with a CMO, our operations most likely will be materially adversely affected.

For more information on Alferon N

Injection regarding potential commercial sales, please see PART I, Item 1 - “Business;

Manufacturing”.

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HollisterStier LLC has manufactured batches of Ampligen for us pursuant to purchase orders.

We anticipate that additional orders will

be placed upon approved quotes and purchase orders provided by us to Jubilant.

On December 22, 2020, we added Pharmaceutics International

We anticipate, but cannot assure, that additional

orders will be placed upon approved quotes and purchase orders provided by us to Jubilant.

On December 22, 2020, we added Pharmaceutics

International Inc.

(“Pii”) as a “Fill & Finish” provider to enhance our capacity to produce the drug Ampligen.

This addition

amplifies our manufacturing capability by providing redundancy and cost savings.

The contracts augment our existing fill and finish capacity.

If we are unable to place adequate acceptable purchase orders with Jubilant or Pii in the future at acceptable prices upon acceptable

terms, we will need to find another manufacturer.

If we need to find another contract manufacturer to produce Ampligen, it would create

a significant delay and expense to get the manufacturer up and running.

The costs and availability of products and materials we would

need for the production of Ampligen are subject to fluctuation depending on a variety of factors beyond our control, including competitive

factors, changes in technology, ownership of intellectual property, FDA and other governmental regulations.

There can be no assurance

that we will be able to obtain such products and materials on terms acceptable to us or at all.

we have produced limited quantities of active pharmaceutical ingredients (“API”) for our products in our New Brunswick, NJ

facility, the sale of this facility necessitates our exploring the engagement of a Contract Manufacturing Organization (“CMO”)

to produce API for both Ampligen and Alferon.

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

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

Currently, the Alferon N Injection

manufacturing process is on hold and there is no definitive timetable for its restart.

If we are unable to acquire FDA approvals related

to the manufacturing process and/or final product of new Alferon N Injection inventory or contract with a CMO, our operations most likely

will be materially and/or adversely affected.

In light of these contingencies, there can be no assurances that the approved Alferon N

Injection product will be returned to production on a timely basis, if at all, or that if and when it is again made commercially available,

it will return to prior sales levels.

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

The contracts augment our existing fill

and finish capacity.

If we are unable to place adequate acceptable purchase orders with Jubilant or Pii in the future at acceptable prices

upon acceptable terms, we will need to find another manufacturer.

If we need to find another contract manufacturer to produce Ampligen,

it would create a significant delay and expense to get the manufacturer up and running.

The costs and availability of products and materials

we would need for the production of Ampligen are subject to fluctuation depending on a variety of factors beyond our control, including

competitive factors, changes in technology, ownership of intellectual property, FDA and other governmental regulations.

no assurance that we will be able to obtain such products and materials on terms acceptable to us or at all.

we have produced limited quantities of active pharmaceutical ingredients (“API”) for our products in our old New Brunswick,

NJ facility, the sale of this facility necessitates our exploring the engagement of a CMO to produce API for both Ampligen and Alferon.

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

to maximize our ability to fulfill future obligations.

Currently, the Alferon N Injection manufacturing process is on hold and there

is no definitive timetable for its restart.

Please see “ Our Alferon N.

Injection commercial sales were halted due to lack of

finished goods inventory.

If we are unable to gain the necessary FDA approvals related to Alferon N Injection, our operations most likely

will be materially and/or adversely affected ” above.

we are unable to obtain or manufacture the required materials/reagents, and/or procure services needed in the final steps in the manufacturing

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batches of Ampligen for us.

We anticipate that additional orders will be placed upon approved quotes and purchase orders provided by

us to Jubilant.

If we are unable to place adequate acceptable purchase orders with Jubilant in the future at acceptable prices upon acceptable

terms our business would be materially and adversely affected.

We anticipate, but cannot assure, that additional orders will be placed upon approved quotes and purchase

orders provided by us to Jubilant.

If we are unable to place adequate acceptable purchase orders with Jubilant in the future at acceptable

prices upon acceptable terms our business would be materially and adversely affected.

Please see the prior risk factor.

December 2020, we added Pharmaceutics International Inc.

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

our capacity to produce the drug Ampligen.

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

The contracts augment our existing fill and finish capacity.

December 2020, we added Pii as a “Fill & Finish” provider to enhance our capacity to produce the drug Ampligen.

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

The contracts augment our existing fill and

finish capacity.

there be an unanticipated delay in receiving new product or should we experience an unexpected demand for Ampligen, our ability to supply

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technical personnel and capital.

While we intend to identify a CMO (or CMOs) with a state-of-the-art facility capable of meeting

potential increased demand for Ampligen, there can be no assurance that our manufacturing will be successful or that any given product

will be determined to be safe and effective, or capable of being manufactured under applicable quality standards, economically, and in

commercial quantities, or successfully marketed.

While we intend to identify a CMO (or CMOs) with a state-of-the-art facility capable of meeting potential

increased demand for Ampligen, there can be no assurance that our manufacturing will be successful or that any given product will be

determined to be safe and effective, or capable of being manufactured under applicable quality standards, economically, and in commercial

quantities, or successfully marketed.

have limited manufacturing experience for Ampligen and Alferon N Injection.

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our products must be manufactured in commercial quantities in compliance with regulatory requirements and at acceptable costs.

that it will not be necessary to increase our current product plans to meet our production obligations.

We believe, but cannot assure,

that our enhancements to our manufacturing facilities will be adequate for our future needs for the production of our proposed products

for large-scale commercialization.

We intend to utilize third-party facilities if and when the need arises.

We will need to comply with

regulatory requirements for such facilities, including those of the FDA pertaining to cGMP requirements or maintaining our BLA status.

There can be no assurance that such facilities can be used, built, or acquired on commercially acceptable terms, or that such facilities,

if used, built, or acquired, will be adequate for the production of our proposed products for large-scale commercialization or our long-term

but cannot assure, that it will not be necessary to increase our current product plans to meet our production obligations.

to utilize third-party facilities if and when the need arises.

We will need to comply with regulatory requirements for such facilities,

including those of the FDA pertaining to cGMP requirements or maintaining our BLA status.

There can be no assurance that such facilities

can be used, built, or acquired on commercially acceptable terms, or that such facilities, if used, built, or acquired, will be adequate

for the production of our proposed products for large-scale commercialization or our long-term needs.

have never produced Ampligen, Alferon N Injection or any other products in large commercial quantities.

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in compliance with regulatory requirements in large commercial quantities and at acceptable costs in order for us to be profitable.

intend to utilize third-party manufacturers and/or facilities if and when the need arises or, if we are unable to do so, to build

or acquire commercial-scale manufacturing facilities.

intend to utilize third-party manufacturers and/or facilities if and when the need arises or, if we are unable to do so, to build or

acquire commercial-scale manufacturing facilities.

If we cannot manufacture commercial quantities of Ampligen and/or Alferon N Injection,

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multiple global companies are actively working to develop therapies for COVID-19, including several companies which have successfully

developed vaccines.

It is possible that these or other companies may be developing therapies that are similar to that which we are attempting

to develop, and could therefore develop them first.

Some of these potential products may have an entirely different approach or means

of accomplishing similar therapeutic effects to products being developed by us.

These competing products may be more effective and less

costly than our products.

In addition, conventional drug therapy, surgery and other more familiar treatments may offer competition to

our products.

Furthermore, many of our competitors have significantly greater experience than we do in preclinical testing and human

clinical trials of pharmaceutical products and in obtaining FDA, The Health Protection Branch of the Canada Department of National Health

and Welfare (HPB) and other regulatory approvals of products.

Accordingly, our competitors may succeed in obtaining FDA, HPB or other

regulatory product approvals more rapidly than us.

There are no drugs approved for commercial sale with respect to treating CFS in the

United States.

The dominant competitors with drugs to treat disease indications which we plan to address include Pfizer, GlaxoSmithKline,

Merck & Co., Novartis and AstraZeneca.

Biotech competitors include Baxter International, Fletcher/CSI, AVANT Immunotherapeutics,

AVI BioPharma and Genta.

These potential competitors are among the largest pharmaceutical companies in the world, are well known to the

public and the medical community, and have substantially greater financial resources, product development, and manufacturing and marketing

capabilities than we have.

Although we believe our principal advantage is the unique mechanism of action of Ampligen on the immune system,

we cannot assure that we will be able to compete.

developed vaccines and treatments.

It is possible that these or other companies may be developing therapies that are similar to that

which we are attempting to develop, and could therefore develop them first.

Some of these potential products may have an entirely different

approach or means of accomplishing similar therapeutic effects to products being developed by us.

These competing products may be more

effective and less costly than our products.

In addition, conventional drug therapy, surgery and other more familiar treatments may offer

competition to our products.

Furthermore, many of our competitors have significantly greater experience than we do in preclinical testing

and human clinical trials of pharmaceutical products and in obtaining FDA, The Health Protection Branch of the Canada Department of National

Health and Welfare (HPB) and other regulatory approvals of products.

Accordingly, our competitors may succeed in obtaining FDA, HPB or

other regulatory product approvals more rapidly than us.

There are no drugs approved for commercial sale with respect to treating CFS

in the United States, and standard of care is to focus on symptom relief, such as addressing pain specifically or depression specifically

The dominant competitors with drugs to treat disease indications which we plan to address include Pfizer, GlaxoSmithKline, Merck &

Co., Novartis and AstraZeneca.

Biotech competitors include Baxter International, Fletcher/CSI, AVANT Immunotherapeutics, AVI BioPharma

These potential competitors are among the largest pharmaceutical companies in the world, are well known to the public and

the medical community, and have substantially greater financial resources, product development, and manufacturing and marketing capabilities

than we have.

Although we believe our principal advantage is the unique mechanism of action of Ampligen on the immune system, we cannot

assure that we will be able to compete.

Our competitors are among the largest pharmaceutical companies in the world, are well known to the public and the medical

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In addition, other pharmaceutical firms offer self-administered topical cream, for the treatment of external

genital and perianal warts such as Graceway Pharmaceuticals (Aldara®), Perrigo Company (Imiquimod Cream - Generic Equivalent to Aldara®),

Watson Pharma (Condylox®) and MediGene (Veregen®).

Alferon N Injection also competes with surgical, chemical, and other methods

of treating genital warts.

We cannot assess the impact products developed by our competitors, or advances in other methods of the treatment

of genital warts, will have on the commercial viability of Alferon N Injection.

If and when we obtain additional approvals of uses of

this product, we expect to compete primarily on the basis of product performance.

Our competitors have developed or may develop products

(containing either alpha or beta interferon or other therapeutic compounds) or other treatment modalities for those uses.

no assurance that, if we are able to obtain regulatory approval of Alferon N Injection for the treatment of new indications, we will

be able to achieve any significant penetration into those markets.

In addition, because certain competitive products are not dependent

on a source of human blood cells, such products may be able to be produced in greater volume and at a lower cost than Alferon N Injection.

Currently, our wholesale price on a per unit basis of Alferon N Injection is higher than that of the competitive recombinant alpha and

beta interferon products.

Please see risk factor “We may not be profitable unless we can protect our patents and/or receive approval

for additional pending patents” above for additional information.

genital and perianal warts such as Graceway Pharmaceuticals (Aldara®), Perrigo Company (Imiquimod

Cream - Generic Equivalent to Aldara®), Watson Pharma (Condylox®) and MediGene (Veregen®).

Alferon N Injection also

competes with surgical, chemical, and other methods of treating genital warts.

We cannot assess the impact products developed by our

competitors, or advances in other methods of the treatment of genital warts, will have on the commercial viability of Alferon N Injection.

If and when we obtain additional approvals of uses of this product, we expect to compete primarily on the basis of product performance.

Our competitors have developed or may develop products (containing either alpha or beta interferon or other therapeutic compounds) or

other treatment modalities for those uses.

There can be no assurance that, if we are able to obtain regulatory approval of Alferon N

Injection for the treatment of new indications, we will be able to achieve any significant penetration into those markets.

because certain competitive products are not dependent on a source of human blood cells, such products may be able to be produced in

greater volume and at a lower cost than Alferon N Injection.

Currently, our wholesale price on a per unit basis of Alferon N Injection

is higher than that of the competitive recombinant alpha and beta interferon products.

Please see risk factor “We may not be profitable

unless we can protect our patents and/or receive approval for additional pending patents” above for additional information.

companies may succeed in developing products earlier than we do, obtaining approvals for such products from the FDA more rapidly than

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in the financial markets, in part caused by the COVID-19 coronavirus and the major adverse effects it has had and will continue to have

and worldwide economies and markets.

Should our progress slow or results of testing or activities by others negatively impact

our efforts, it is just as likely that our stock price will be significantly adversely affected, and in such case, investors could sustain

substantial losses.

In addition to the foregoing and, general economic, political and market conditions, the price and trading volume

of our stock could fluctuate widely in response to many factors, including:

and worldwide economies and markets as well as the adverse effects and disruptions caused by the war in the Ukraine.

progress slow or results of testing or activities by others negatively impact our efforts, it is just as likely that our stock price

will be significantly adversely affected, and in such case, investors could sustain substantial losses.

In addition to the foregoing

and, general economic, political and market conditions, the price and trading volume of our stock could fluctuate widely in response

to many factors, including:

announcements

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may issue shares to be used to meet our capital requirements or use shares to compensate employees, consultants and/or Directors.

this regard, we completed a rights offering to our stockholders and certain option and warrant holders in March 2019, pursuant to which

we issued Preferred stock convertible into an aggregate of 26,560,000 shares of common stock and warrants exercisable for up to an additional

26,560,000 shares of common stock.

In September 2019 we sold 1,740,550 shares of our common stock and warrant exercisable for 16,037,170

shares of common stock.

All of these shares of common stock, including shares issuable upon exercise of warrants, have been registered

for public sale.

In addition, we have registered securities for public sale pursuant to a universal shelf registration statement and

we had been selling shares under this shelf registration statement.

Since December 31, 2021, we have sold an aggregate of 5,655,731 shares

under our equity distribution agreement with Maxim.

As of the date of this report, we no longer have any equity distribution agreements.

However, in February 2022, the SEC declared our new S-3 shelf Registration Statement effective which will allow us to raise additional

capital as needed in the future.

have registered securities for public sale pursuant to a universal shelf registration statement which will allow us to raise additional

capital as needed in the future from the sale of our securities.

are unable to estimate the amount, timing or nature of future sales of outstanding common stock or instruments convertible into or exercisable

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Series A Junior Participating Preferred Stock, par value $0.01 per share at a Purchase Price of $21.00 per Unit, subject to adjustment.

While our Rights Agreement was scheduled to expire in late 2022, we have extended it for a short period of time and expect to again extend

it for a longer period of time.

associated with Stockholder activism.

business, financial condition and operating results could be negatively affected as a result of actions by activist investors.

activist stockholder (the “Activist”) submitted a notice to our Board, purporting to nominate two nominees to our three-member

Board at the 2022 Annual Meeting of Stockholders.

We informed the Activist that our Board determined its purported notice of nomination

was invalid, as it did not comply with our Amended and Restated Bylaws.

We initiated a lawsuit against the Activist, the Activist’s

two nominees, and four additional individuals–all of whom we believe to be acting as a group, orchestrated and funded by two convicted

securities law felons, to attempt to effectuate a takeover of our Board without registering as a group pursuant to U.S.

securities laws

and some of whom we believe have committed other unlawful actions.

The Activist subsequently sued AIM and each of our board members in

the Court of Chancery of the State of Delaware, seeking a declaratory judgment that the purported notice of nominations was valid and

certain injunctive relief.

The Delaware Chancery Court denied the Activist’s motion on October 28, 2022, and the Activist announced

on November 2, 2022, that it did not intend to appeal the decision.

Had the Activist prevailed in its lawsuit, we most likely would have

been involved in a proxy contest for control of our Board, despite the deficiencies in the Activist’s purported notice of nominations.

Certain members of this group also persistently disparaged the stock using alias names on message boards.

Even though we prevailed in

the Delaware litigation, the litigation and the campaign by the Activist and those with whom the Activist is acting in concert against

us (which includes two convicted securities law felons) has, and will have, likely diverted the time and energies of management and required

us to incur substantial expense, possibly causing a decrease in stockholder value.

proxy contest and related litigation, along the lines discussed above, could have a material adverse effect on us for the following reasons:

investors may attempt to effect changes in our governance and strategic direction or to acquire

control over the Board or AIM.

In particular, if the Activist is successful in its litigation

and subsequent proxy contest, it may gain control of the Board.

we welcome the opinions of all stockholders, responding to proxy contests and related litigation

by activist investors is likely to be costly and time-consuming, disrupt our operations,

and potentially divert the attention of our Board, management team and other employees away

from their regular duties and the pursuit of business opportunities to enhance stockholder

uncertainties as to our future direction as a result of potential changes to the composition

of the Board may lead to the perception of a change in the strategic direction of the business,

instability or lack of continuity, which may cause concern to our existing or potential strategic

partners, customers, employees and stockholders;

may be exploited by our competitors;

result in the loss of potential business opportunities or limit our ability to timely initiate

or advance clinical trials;

and may make it more difficult to attract and retain qualified

personnel and business partners.

contests and related litigation by activist investors could cause significant fluctuations

in our stock price based on temporary or speculative market perceptions or other factors

that do not necessarily reflect the underlying fundamentals and prospects of our business.

Staff Comments.

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

What changed 10-K

Item 1A. Risk Factors