AIM ImmunoTech Inc. 10-Q

ITEM 1 : Financial Statements AIM IMMUNOTECH INC. AND SUBSIDIARIES Consolidated Balance Sheets (in thousands, except for share and per share amounts) (Unaudited) September 30, 2023 December 31, 2022 ASSETS Current assets: Cash and cash equivalents $ 15,264 $ 27,053 Marketable investments 7,167 7,137 Funds receivable from New Jersey net operating loss 48 1,676 Prepaid expenses and other current assets 263 455 Total current assets 22,742 36,321 Property and equipment, net 136 195 Right of use asset, net 727 829 Patent and trademark rights, net 2,154 1,941 Other assets 2,102 1,202 Total assets $ 27,861 $ 40,488 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 2,788 $ 377 Accrued expenses 1,721 806 Current portion of operating lease liability 207 178 Total current liabilities 4,716 1,361 Long-term liabilities: Operating lease liability 543 659 Commitments and contingencies (Notes 12 and 13) - - Stockholders’ equity: Preferred Stock, $ 0.01 par value, 5,000,000 authorized shares, inclusive of the following: Series A Junior Participating Preferred Stock, $ 0.001 par value, 4,000,000 and 250,000 shares authorized as of September 30, 2023, and December 31, 2022, respectively; issued and outstanding - none — — Series B Convertible Preferred Stock, stated value $ 1,000 per share, 10,000 shares authorized; 690 and 696 issued and outstanding as of September 30, 2023, and December 31, 2022, respectively 690 696 Preferred Stock, $0.01 par value, 5,000,000 authorized shares, inclusive of the following: - - Common Stock, $ 0.001 par value, authorized shares - 350,000,000 ; issued and outstanding shares 48,797,450 and 48,084,287 (including 133,333 and 561,104 of unvested stock awards) as of September 30, 2023 and December 31, 2022, respectively 48 48 Additional paid-in capital 418,796 418,270 Accumulated deficit ( 396,932 ) ( 380,546 ) Total stockholders’ equity 22,602 38,468 Total liabilities and stockholders’ equity $ 27,861 $ 40,488 See accompanying notes to consolidated financial statements. 2 AIM IMMUNOTECH INC. AND SUBSIDIARIES Consolidated Statements of Operations and Comprehensive Loss (in thousands, except share and per share data) (Unaudited) 2023 2022 2023 2022 Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Revenues: Clinical treatment programs - US $ 46 $ 21 $ 137 $ 85 Total Revenues 46 21 137 85 Costs and Expenses: Production costs 30 — 30 — Research and development 2,734 1,372 7,739 4,883 General and administrative 5,439 5,170 10,280 9,569 Total Costs and Expenses 8,203 6,542 18,049 14,452 Operating Loss ( 8,157 ) ( 6,521 ) ( 17,912 ) ( 14,367 ) Loss on investments ( 310 ) ( 365 ) ( 201 ) ( 1,769 ) Interest and other income 294 172 811 296 Gain on sale of fixed assets 39 — 16 — Redeemable warrants valuation adjustment — 1 — 35 Gain on sale of income tax operating losses 318 328 900 749 Net Loss $ ( 7,816 ) $ ( 6,385 ) $ ( 16,386 ) $ ( 15,056 ) Basic and diluted loss per share $ ( 0.16 ) $ ( 0.13 ) $ ( 0.34 ) $ ( 0.31 ) Weighted average shares outstanding basic and diluted 48,635,165 48,079,210 48,483,802 48,036,559 See accompanying notes to consolidated financial statements. 3 AIM IMMUNOTECH INC. AND SUBSIDIARIES Consolidated Statements of Changes in Stockholders’ Equity For the Nine months Ended September 30, 2023 (in thousands except share data) (Unaudited) For the Three Months Ended September 30, 2023 Series B Preferred Common Stock Shares Common Stock .001 Par Value Additional Paid-in Capital Accumulated other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity Balance June 30, 2023 $ 690 - 48,419,491 $ 48 $ 418,513 $ — $ ( 389,116 ) $ 30,135 Common stock issuance, net of costs — 377,959 — 233 — — 233 Equity-based compensation — — — 50 — — 50 Net comprehensive loss — - — — — — ( 7,816 ) ( 7,816 ) Balance September 30, 2023 $ 690 - 48,797,450 $ 48 $ 418,796 $ — $ ( 396,932 ) $ 22,602 For the Three Months Ended September 30, 2022 Series B Preferred Common Stock Shares Common Stock .001 Par Value Additional Paid-in Capital Accumulated other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity Balance June 30, 2022 $ 713 - 48,048,822 $ 48 $ 417,791 $ — $ ( 369,772 ) $ 48,780 Common stock issuance, net of costs — 32,895 — 25 — — 25 Equity-based compensation — — — 275 — — 275 Cashless warrant conversion — 558 — — — — — Net comprehensive loss — - — — — — ( 6,385 ) ( 6,385 ) Balance September 30, 2022 $ 713 - 48,082,275 $ 48 $ 418,091 $ — $ ( 376,157 ) $ 42,695 See accompanying notes to consolidated financial statements. 4 AIM IMMUNOTECH INC. AND SUBSIDIARIES Consolidated Statements of Changes in Stockholders’ Equity (in thousands except share data) (Unaudited) For the Nine Months Ended September 30, 2023 Series B Preferred Common Stock Shares Common Stock .001 Par Value Additional Paid-in Capital Accumulated other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity Balance December 31, 2022 $ 696 - 48,084,287 $ 48 $ 418,270 $ — $ ( 380,546 ) $ 38,468 Common stock issuance, net of costs — 712,479 — 338 — — 338 Equity-based compensation — — — 182 — — 182 Series B preferred shares converted to common shares ( 6 ) 684 — 6 — — — Net comprehensive loss — - — — — — ( 16,386 ) ( 16,386 ) Balance September 30, 2023 $ 690 - 48,797,450 $ 48 $ 418,796 $ — $ ( 396,932 ) $ 22,602 For the Nine Months Ended September 30, 2022 Series B Preferred Common Stock Shares Common Stock .001 Par Value Additional Paid-in Capital Accumulated other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity Balance December 31, 2021 $ 715 - 47,994,672 $ 48 $ 417,217 $ — $ ( 361,101 ) $ 56,879 Common stock issuance, net of costs — 86,817 — 80 — 80 Equity-based compensation — — — 792 — — 792 Cashless warrant conversion — 558 — — — — — Series B preferred shares converted to common shares ( 2 ) 228 — 2 — — — Net comprehensive loss — - — — — — ( 15,056 ) ( 15,056 ) Balance September 30, 2022 $ 713 - 48,082,275 $ 48 $ 418,091 $ — $ ( 376,157 ) $ 42,695 See accompanying notes to consolidated financial statements. 5 AIM IMMUNOTECH INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows For the Nine months Ended September 30, 2023 and 2022 (in thousands) (Unaudited) 2023 2022 Cash flows from operating activities: Net loss $ ( 16,386 ) $ ( 15,056 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation of property and equipment 30 29 Redeemable warrants valuation adjustment — ( 35 ) Abandonment of patent and trademark rights 14 — Amortization of patent, trademark rights 150 57 Non-cash lease expense 151 ( 717 ) Gain on sale of income tax operating losses ( 900 ) ( 749 ) Equity-based compensation 182 792 Loss on sale of investments 201 1,768 Change in assets and liabilities: Other receivables ( 9 ) — Funds receivable from New Jersey net operating loss 1,676 1,641 Prepaid expenses and other current assets and other non-current assets 192 ( 500 ) Lease liability ( 136 ) 717 Other assets — ( 73 ) Accounts payable 2,411 758 Accrued expenses 915 1,329 Net cash used in operating activities ( 11,509 ) ( 10,039 ) Cash flows from investing activities: Proceeds from sale of marketable investments 924 9,082 Purchase of marketable investments ( 1,155 ) ( 1,661 ) (Purchase of) Proceeds from sale of property and equipment ( 10 ) 300 Purchase of patent and trademark rights ( 377 ) ( 96 ) Net cash (used in) provided by investing activities ( 618 ) 7,625 Cash flows from financing activities: Proceeds from sale of stock, net of issuance costs 338 80 Net cash provided by financing activities 338 80 Net decrease in cash and cash equivalents ( 11,789 ) ( 2,334 ) Cash and cash equivalents at beginning of period 27,053 32,093 Cash and cash equivalents at end of period $ 15,264 $ 29,759 Supplemental disclosures of non-cash investing and financing cash flow information: Operating lease liability arising from obtaining right of use asset $ 49 $ 717 Unrealized loss on marketable investments $ ( 71 ) $ ( 1,170 ) Conversion of Series B preferred $ 6 $ 2 See accompanying notes to consolidated financial statements. 6 AIM IMMUNOTECH INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 1: Business and Basis of Presentation AIM ImmunoTech Inc. and its subsidiaries (collectively, “AIM”, “Company”, “we” or “us”) are an immuno-pharma company headquartered in Ocala, Florida, and focused on the research and development of therapeutics to treat multiple types of cancers, viral diseases and immune-deficiency disorders. We have established a strong foundation of laboratory, pre-clinical and clinical data with respect to the development of nucleic acids and natural interferon to enhance the natural antiviral defense system of the human body, and to aid the development of therapeutic products for the treatment of certain cancers and chronic diseases. AIM’s flagship products are Ampligen (rintatolimod), a first-in-class drug of large macromolecular RNA (ribonucleic acid) molecules, and Alferon N Injection (Interferon alfa). Ampligen has not been approved by the 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”). The Company’s primary business focus involves Ampligen. Ampligen is a double-stranded RNA (“dsRNA”) molecule being developed for globally important cancers, viral diseases and disorders of the immune system. The Company is currently proceeding primarily in four areas: ● Conducting a randomized, controlled study to evaluate efficacy and safety of Ampligen compared to a control group to treat locally advanced pancreatic cancer patients. ● Evaluating Ampligen in other cancers, as a potential therapy that modifies the tumor microenvironment with the goal of increasing anti-tumor responses to checkpoint inhibitors. ● Exploring Ampligen’s antiviral activities and potential use as a prophylactic or treatment for existing viruses, new viruses and mutated viruses thereof. ● Evaluating Ampligen as a treatment for myalgic encephalomyelitis/chronic fatigue syndrome (“ME/CFS”) and fatigue and/or Post-COVID conditions of fatigue. The 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 support a potential future 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. AIM’s business plan requires one or more Contract Manufacturing Organizations (“CMO”) to produce Ampligen and its Active Pharmaceutical Ingredients (APIs). This includes utilizing Jubilant HollisterStier and Sterling for the manufacture of Ampligen and our Poly I and Poly C12U polynucleotides, respectively. Additionally, our relationship with Polysciences Inc. (“Polysciences”) continues and R&D development of polymer manufacture is ongoing. In the opinion of management, all adjustments necessary for a fair presentation of its consolidated financial statements have been included. Such adjustments consist of normal recurring items. Interim results are not necessarily indicative of results for a full year. The interim consolidated financial statements and notes thereto are presented as permitted by the Securities and Exchange Commission (“SEC”), and do not contain certain information which will be included in the Company’s annual consolidated financial statements and notes thereto. These consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the years ended December 31, 2022, and 2021, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed on March 31, 2023. 7 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, equity-based compensation calculations, fair value of warrants, and contingency accruals. Note 2: Net Loss Per Share Basic and diluted net loss per share is computed using the weighted average number of shares of common stock outstanding during the period. Equivalent common shares, consisting of stock options and warrants which amounted to 2,763,020 and 2,445,805 are excluded from the calculation of diluted net loss per share for the nine months ended September 30, 2023, and 2022, respectively, since their effect is antidilutive due to the net losses recorded for the periods. Note 3: Equity-Based Compensation The 2018 Equity Incentive Plan, effective September 12, 2018, as amended and restated on August 19, 2019 (the “2018 Equity Incentive Plan”) authorizes the grant of (i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) Stock Appreciation Rights, (iv) Restricted Stock Awards, (v) Restricted Stock Unit Awards, (vi) Performance Stock Awards, (vii) Performance Cash Awards, and (viii) Other Stock Awards. Initially, a maximum of 7,000,000 shares of Common Stock were reserved for potential issuance pursuant to awards under the 2018 Equity Incentive Plan. When the plan was amended and restated, an additional 250,000 shares were reserved for potential issuance pursuant to awards under the 2018 Equity Incentive Plan. The number of shares of the Company’s common stock available for grant and issuance under the 2018 Equity Incentive Plan is subject to an annual increase on July 1 of each calendar year, by an amount equal to two percent (2%) of the then outstanding shares of the Company’s common stock (the “2018 Plan Evergreen Provision”). On July 1, 2019, 2020, 2021, 2022 and 2023, the number of shares of the Company’s common stock available for grant and issuance under the 2018 Equity Incentive Plan increased by 44,299 shares, 685,012 shares, 956,660 shares, 960,976 shares and 968,389 shares, respectively. As a result of the 2018 Plan Evergreen Provisions, a maximum of 10,865,336 shares of Common Stock is reserved for potential issuance pursuant to awards under the 2018 Equity Incentive Plan as of January 1, 2023. Unless sooner terminated, the 2018 Equity Incentive Plan will continue in effect for a period of 10 years from its effective date. On October 17, 2018, the Board of Directors (the “Board”) issued 26,324 options to the officers and directors at the exercise price of $ 9.68 expiring in 10 years, and on November 14, 2018, the Board issued 23 options to each employee, officer and director at the exercise price of $ 9.68 expiring in ten years . On January 28, 2019, 27,570 options were issued to each of these officers with an exercise price of $ 9.68 for a period of ten years with a vesting period of one year. In August 2020, 400,000 options were issued to each of these officers with an exercise price range of $ 2.77 to $ 3.07 for a period of ten years with a vesting period of one year. During the fiscal year ending December 31, 2021, 613,512 options were issued to officers, directors and consultants with an exercise price range of $ 1.11 to $ 1.71 for a period of ten years with a vesting period of one year. During the fiscal year ending December 31, 2022, 850,000 options were issued to officers, directors and consultants with an exercise price range of $ 0.31 to $ 0.71 for a period of ten years with a vesting period of one year. During the nine months ended September 30, 2023 there have been no options issued. The fair value of each option and equity warrant award is estimated on the date of grant using a Black-Scholes-Merton option pricing valuation model. Expected volatility is based on the historical volatility of the price of the Company’s stock. The risk-free interest rate is based on U.S. Treasury issues with a term equal to the expected life of the option and equity warrant. The Company uses historical data to estimate expected dividend yield, expected life and forfeiture rates. During the nine months ended September 30, 2023, there were no options granted and 300,000 options granted during the nine months ended September 30, 2022. Employee stock option activity during the three months ended September 30, 2023, was as follows: Stock option activity for employees: Schedule of Stock Option Activity Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding June 30, 2023 2,019,551 $ 3.01 8.36 $ — Granted — — — — Forfeited — — — — Expired ( 11,113 ) 2.90 8.41 — Outstanding September 30, 2023 2,008,438 $ 2.90 8.41 $ — Vested and expected to vest September 30, 2023 2,008,438 $ 2.90 8.41 $ — Exercisable September 30, 2023 1,941,772 $ 1.98 6.52 $ — 8 Unvested stock option activity for employees: Schedule of Unvested Stock Option Activity Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Unvested June 30, 2023 166,664 $ 9.17 6.41 $ — Granted — — — — Expired ( 11,111 ) 2.90 8.41 — Vested ( 88,887 ) 1.98 6.52 — Unvested September 30, 2023 66,666 $ 14.60 17.04 $ — Stock option activity for non-employees: Schedule of Stock Option Activity Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding June 30, 2023 579,032 $ 3.09 8.36 $ — Granted — — — — Forfeited — — — — Expired ( 53,977 ) 1.62 8.67 — Outstanding September 30, 2023 525,055 $ 1.62 8.67 $ — Vested and expected to vest September 30, 2023 525,055 $ 1.62 8.67 $ — Exercisable September 30, 2023 458,388 $ 2.99 10.16 $ — Unvested stock option activity for non-employees: Schedule of Unvested Stock Option Activity Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Unvested June 30, 2023 66,666 $ 9.45 4.59 $ — Granted — — — — Expired ( 54,100 ) 1.62 8.67 — Vested 54,101 2.99 10.16 — Unvested September 30, 2023 66,667 $ 6.75 4.28 $ — 9 Equity-based compensation expense was approximately $ 50,000 and $ 275,000 for the three months ended September 30, 2023 and 2022, respectively. Employee stock option activity during the nine months ended September 30, 2023, was as follows: Stock option activity for employees: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding January 1, 2023 2,020,214 $ 3.01 8.86 $ — Granted — — — — Forfeited — — — — Expired ( 11,776 ) 2.90 12.81 — Outstanding September 30, 2023 2,008,438 $ 2.90 8.41 $ — Vested and expected to vest September 30, 2023 2,008,438 $ 2.90 8.41 $ — Exercisable September 30, 2023 1,941,772 $ 1.98 6.52 $ — Unvested stock option activity for employees: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Unvested January 1, 2023 392,326 $ .80 8.86 $ — Granted — — — — Expired ( 11,776 ) 2.90 8.41 — Vested ( 313,884 ) 1.98 6.52 — Unvested September 30, 2023 66,666 $ 14.60 17.04 $ — Stock option activity for non-employees: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding January 1, 2023 579,155 $ 3.09 7.93 $ — Granted — — — — Forfeited — — — — Expired ( 54,100 ) 1.62 8.67 — Outstanding September 30, 2023 525,055 $ 1.62 8.67 $ — Vested and expected to vest September 30, 2023 525,055 $ 1.62 8.67 $ — Exercisable September 30, 2023 458,388 $ 2.99 10.16 $ — 10 Unvested stock option activity for non-employees: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Unvested January 1, 2023 166,789 $ 4.05 9.49 $ — Granted — — — — Expired ( 54,223 ) 1.62 8.67 — Vested ( 45,899 ) 2.99 10.16 — Unvested September 30, 2023 66,667 $ 6.75 4.28 $ — Equity-based compensation expense was approximately $ 182,000 and $ 792,000 for the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, and 2022, there was approximately $ 35,000 and $ 179,000 , respectively, of unrecognized equity-based compensation cost related to options granted under the Equity Incentive Plan. As of the fourth quarter 2023, there will be no unrecognized equity-based compensation. Note 4: Marketable Investments Marketable investments consist of mutual funds. As of September 30, 2023 and December 31, 2022, it was determined that none of the marketable investments had an other-than-temporary impairment. As of September 30, 2023 and December 31, 2022, all securities were measured as Level 1 instruments of the fair value measurements standard (See Note 11: Fair Value). As of September 30, 2023, and December 31, 2022 the Company held $ 7,167,000 and $ 7,137,000 in mutual funds, respectively. Mutual Funds classified as available for sale consisted of: Schedule of Available of Sale September 30, 2023 (in thousands) Securities Fair Value Short-Term Investments Mutual Funds $ 7,167 $ 7,167 Totals $ 7,167 $ 7,167 Schedule of Equity Securities For the Three months Ended September 30, 2023 (in thousands) Securities Net losses recognized during the period on equity securities $ ( 309 ) Less: Net gains and losses recognized during the period on equity securities sold during the period ( 42 ) Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date $ ( 267 ) For the Nine months Ended September 30, 2023 (in thousands) Securities Net losses recognized during the period on equity securities $ ( 201 ) Less: Net gains and losses recognized during the period on equity securities sold during the period ( 130 ) Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date $ ( 71 ) 11 Mutual Funds classified as available for sale consisted of: December 31, 2022 (in thousands) Securities Fair Value Short-Term Investments Mutual Funds $ 7,137 $ 7,137 Totals $ 7,137 $ 7,137 For the Three months Ended September 30, 2022 (in thousands) Securities Net losses recognized during the period on equity securities $ ( 365 ) Less: Net gains and losses recognized during the period on equity securities sold during the period ( 15 ) Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date $ ( 350 ) For the Nine months Ended September 30, 2022 (in thousands) Securities Net losses recognized during the period on equity securities $ ( 1,768 ) Less: Net gains and losses recognized during the period on equity securities sold during the period ( 598 ) Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date $ ( 1,170 ) Note 5: Accrued Expenses Accrued expenses consist of the following: Schedule of Accrued Expenses September 30, 2023 December 31, 2022 (in thousands) September 30, 2023 December 31, 2022 Compensation $ 29 $ 1 Professional fees 1,459 492 Clinical trial expenses 127 110 Other expenses 106 203 Accrued expenses $ 1,721 $ 806 Note 6: Property and Equipment, net Schedule of Property and Equipment September 30, 2023 December 31, 2022 (in thousands) September 30, 2023 December 31, 2022 Furniture, fixtures, and equipment 1,555 2,233 Less: accumulated depreciation ( 1,419 ) ( 2,038 ) Property and equipment, net $ 136 $ 195 12 Property 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 ten years. Depreciation expense for the nine months ending September 30, 2023 and September 30, 2022 was $ 30,000 and $ 29,000 , respectively. Note 7: Patents, and Trademark Rights, Net The table below presents the changes in patent and trademark rights (in thousands): Schedule of Patents, Trademark Rights December 31, 2022 $ 1,941 Acquisitions 377 Abandonments and expirations ( 14 ) Amortization ( 150 ) September 30, 2023 $ 2,154 Patents and trademarks are stated at cost. Patents and trademarks are amortized using the straight-line method over an estimated useful life of 17 years and 10 years, respectively. Amortization of patents and trademarks for each of the next five years and thereafter is as follows (in thousands): Schedule of Amortization of Patents and Trademarks Year Ending December 31, 2023 $ 58 2024 225 2025 217 2026 215 2027 194 Thereafter 1,245 Total $ 2,154 Note 8: Stockholders’ Equity (a) Preferred Stock The Company is authorized to issue 5,000,000 shares of $ 0.01 par value preferred stock with such designations, rights and preferences as may be determined by the Board. Of our authorized preferred stock, 4,000,000 shares have been designated as Series A Junior Participating Preferred Stock and 10,000 shares have been designated as Series B Convertible Preferred Stock. Series A Junior Participating Preferred Stock On May 10, 2023, the Company filed a Certificate of Increase in Delaware, increasing the number of preferred stock designated as Series A Junior Participating Preferred Stock to 4,000,000 from 250,000 shares. Series B Convertible Preferred Stock The series of preferred stock shall be designated as its Series B Convertible Preferred Stock (the “Preferred Stock”) and the number of shares so designated shall be up to 10,000 . Each share of Preferred Stock shall have a par value of $ 0.01 per share and a stated value equal to $ 1,000 (the “Stated Value”). The shares of Preferred Stock shall initially be issued and maintained in the form of securities held in book-entry form and the Depository Trust Company or its nominee (“DTC”) shall initially be the sole registered holder of the shares of Preferred Stock. Each share of Preferred Stock shall be convertible, at any time and from time to time from and after the Original Issue Date at the option of the Holder thereof or at any time and from time to time on or after the second anniversary of the Original Issue Date at the option of the Corporation, into that number of shares of Common Stock (subject in each case to the limitations determined by dividing the Stated Value of such share of Preferred Stock by the Conversion Price). The conversion price for the Preferred Stock shall be equal to $ 0.20 , subject to adjustment herein (the “Conversion Price”). 13 Pursuant to a registration statement relating to a rights offering declared effective by the SEC on February 14, 2019, AIM distributed to its holders of common stock and to holders of certain options and redeemable warrants as of February 14, 2019, at no charge, one non-transferable subscription right for each share of common stock held or deemed held on the record date. Each right entitled the holder to purchase one unit, at a subscription price of $ 1,000 per unit, consisting of one share of Series B Convertible Preferred Stock with a face value of $ 1,000 (and immediately convertible into common stock at an assumed conversion price of $ 8.80 ) and 114 warrants with an assumed exercise price of $ 8.80 . The redeemable warrants are exercisable for five years after the date of issuance. The net proceeds realized from the rights offering were approximately $ 4,700,000 . During the nine months ending September 30, 2023, 6 shares of Series B Convertible Preferred Stock were converted into common stock. As of September 30, 2023, and December 31, 2022, the Company had 690 and 696 shares of Series B Convertible Preferred Stock outstanding, respectively. 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 the Common Stock. Each such Preferred Share is convertible into 114 shares of common stock. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the Holders shall be entitled to receive out of the assets, whether capital or surplus of the Company the same amount that a holder of Common Stock would receive if the Preferred Stock was fully converted. The Series B Convertible Preferred Stock does not carry voting Rights. (b) Common Stock and Equity Finances The 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 authorized shares. As of September 30, 2023, and December 31, 2022, there were 48,797,450 and 48,084,287 shares of Common Stock issued and outstanding, respectively. Employee Stock Purchase Plan (Not equity compensation) On July 7, 2020, the Board approved a plan pursuant to which all directors, officers, and employees could purchase from the Company up to an aggregate of $ 500,000 worth of shares at the market price (including subsequent plans, the “Employee Stock Purchase Plan”). Pursuant to NYSE American rules, this plan was effective for a sixty-day period commencing upon the date that the NYSE American approved the Company’s Supplemental Listing Application. The Company created successive new plans following the expiration of the July 7, 2020 plan. The latest plan was approved by the Board in October 2023 and expires January 2,2024. During the nine months ended September 30, 2023, the Company issued a total of 385,424 shares of its common stock at a price ranging from $ 0.31 to $ 0.67 for total proceeds of $ 135,000 as part of the employee stock purchase plan. During the nine months ended September 30, 2022, the Company issued a total of 87,045 shares of its common stock at prices ranging from $ 0.72 to $ 1.02 for total proceeds of $ 80,000 as part of the employee stock purchase plan. Warrants (Rights offering) On September 27, 2019, the Company closed a public offering underwritten by A.G.P./Alliance Global Partners, LLC (the “Offering”) of (i) 1,740,550 shares of Common Stock; (ii) pre-funded warrants exercisable for 7,148,310 shares of Common Stock (the “Pre-funded Warrants”), and (iii) warrants to purchase up to an aggregate of 8,888,860 shares of Common Stock (the “Warrants”). In conjunction with the Offering, we issued a Representative’s Warrant to purchase up to an aggregate of 266,665 shares of common stock (the “Representative’s Warrant”) . The shares of Common Stock and Warrants were sold at a combined Offering price of $ 0.90 , less underwriting discounts and commissions. Each Warrant sold with the shares of Common Stock represents the right to purchase one share of Common Stock at an exercise price of $ 0.99 per share. The Pre-Funded Warrants and Warrants were sold at a combined Offering price of $ 0.899 , less underwriting discounts and commissions. The Pre-Funded Warrants were sold to purchasers whose purchase of shares of Common Stock in the Offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99 % of the Company’s outstanding Common Stock immediately following the consummation of the Offering, in lieu of shares of Common Stock. Each Pre-Funded Warrant represents the right to purchase one share of Common Stock at an exercise price of $ 0.001 per share. The Pre-Funded Warrants are exercisable immediately and may be exercised at any time until the Pre-Funded Warrants are exercised in full. A registration statement on Form S-1, relating to the Offering was filed with the SEC and was declared effective on September 25, 2019, the net proceeds were approximately $ 7,200,000 . During the year ending December 31 , 2020, 1,870,000 of the Pre-funded Warrants were exercised and 8,873,960 Warrants were exercised. In addition, on March 25, 2020, the Representative’s Warrant was amended to permit exercise of such warrant to commence on March 30, 2020. These warrants were exercised on March 31, 2020 and an aggregate of 266,665 shares were issued upon exercise of this warrant for gross proceeds of approximately $ 264,000 and a $ 46,000 expense for the warrant modification. As of September 30, 2023, there are 15,000 Warrants outstanding. 14 Equity Distribution Agreement On April 19, 2023, the Company entered into an Equity Distribution Agreement (the “EDA”) with Maxim Group LLC (“Maxim”), pursuant to which the Company may sell, from time to time, shares of its common stock having an aggregate offering price of up to $ 8.5 million through Maxim, as agent (the “Offering”). Sales under the EDA were registered under the S-3 Shelf Registration Statement. Under the terms of the EDA, Maxim will be entitled to a transaction fee at a fixed rate of 3.0 % of the gross sales price of shares sold under the EDA. For the nine months ended September 30, 2023, the Company sold 327,055 shares under the EDA for total gross proceeds of approximately $ 209,000 , which includes a 3.0 % fee to Maxim of $ 6,271 . Rights Plan On May 12, 2023, the Company amended and restated its November 14, 2017 Rights Plan with American Stock Transfer & Trust Company as Rights Agent (the “Rights Plan”). Note 9 : Cash and Cash Equivalents AIM considers all highly liquid interest-earning investments with an original maturity of three months or less at the date of purchase to be cash equivalents. Note 10: Recent Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. Accounting pronouncements issued by the FASB since filing the Annual Report on Form 10-K for the year ended December 31, 2022 did not or are not believed by management to have a material impact on the Company’s present or future financial statements. 15 Note 11: Fair Value Fair Value The Company complies with the provisions of FASB ASC 820 “Fair Value Measurements” for its financial and non-financial assets and liabilities. ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. The Company accounts for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. AIM categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: 1. Level 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. Level 2 – Observable inputs other than Level 1 prices such as quote prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Generally, this includes debt and equity securities that are not traded in an active market. 3. 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, 2023, the Company has classified the warrants with cash settlement features as Level 3. Management evaluates a variety of inputs and then estimates fair value based on those inputs. As discussed above, the Company utilized the Monte Carlo Simulation Model in valuing the warrants. The table below presents the balances of assets and liabilities measured at fair value on a recurring basis by level within the hierarchy as (in thousands): Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis As of September 30, 2023 Total Level 1 Level 2 Level 3 Assets: Cash equivalent $ 14,110 $ 14,110 $ — $ — Marketable investments $ 7,167 $ 7,167 $ — $ — As of December 31, 2022 Total Level 1 Level 2 Level 3 Assets: Cash equivalent $ 25,180 $ 25,180 $ — $ — Marketable investments $ 7,137 $ 7,137 $ — $ — The Company’s cash balances are representative of their fair values as these balances are comprised of deposits available on demand. For certain instruments, including funds receivable from New Jersey net operating loss, accounts payable and accrued expenses, it was estimated that the carrying values approximated the fair value due to the short-term maturities of these instruments (Level 1). 16 The Company also has certain redeemable warrants with a cash settlement feature in the occurrence of a Fundamental Transaction. The fair value of the redeemable warrants (“Redeemable Warrants”) related to the Company’s April 2018 and March 2019 common stock and warrant issuance, are calculated using a Monte Carlo Simulation (Level 3). The Company recomputes the fair value of the Redeemable Warrants at the issuance date and the end of each quarterly reporting period. Such value computation includes subjective input assumptions that are consistently applied each period. If the Company were to alter its assumptions or the numbers input based on such assumptions, the resulting fair value could be materially different. The Company utilized the following assumptions to estimate the fair value of the April 2018 Redeemable Warrants: Schedule of Assumptions to Estimate Fair Value of Warrants September 30, 2023 December 31, 2022 Underlying price per share $ 0.46 $ 0.31 Exercise price per share $ 17.16 $ 17.16 Risk-free interest rate 5.55 % 4.74 % Expected holding period 0.07 0.81 Expected volatility 85 % 75 % Expected dividend yield — — Warrants measurement input — — The Company utilized the following assumptions to estimate the fair value of the March 2019 Redeemable Warrants: September 30, 2023 December 31, 2022 Underlying price per share $ 0.46 $ 0.31 Exercise price per share $ 8.80 $ 8.80 Risk-free interest rate 5.53 % 4.67 % Expected holding period 0.44 1.19 Expected volatility 80 % 70 % Expected dividend yield — — Warrants measurement input — — The significant assumptions using the Monte Carlo Simulation approach for valuation of the Warrants are: (i) Risk-Free Interest Rate . The risk-free interest rates for the Warrants are based on U.S. Treasury constant maturities for periods commensurate with the remaining expected holding periods of the warrants. (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 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. (iv) Expected Dividend Yield . The expected dividend yield is based on the Company’s anticipated dividend payments over the remaining expected holding period. As the Company has never issued dividends, the expected dividend yield is 0% and this assumption will be continued in future calculations unless the Company changes its dividend policy. (v) Expected Probability of a Fundamental Transaction. Put rights 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 unlikely because: 17 1. The Company only has one product that is FDA approved but is currently not available for commercial sales. 2. The Company will have to perform additional clinical trials for FDA approval of its flagship product. 3. Industry and market conditions continue to include uncertainty, adding risk to any transaction. 4. The nature of a life sciences company is heavily dependent on future funding and high fixed costs, including Research & Development. 5. The Company has minimal revenues streams which are insufficient to meet the funding needs for the cost of operations or construction at their manufacturing facility; and 6. The Company’s Rights Agreement and Executive Agreements make it less attractive to a potential buyer. With the above factors utilized in analysis of the likelihood of the Put’s potential Liability, the Company estimated the range of probabilities related to a Put right being triggered as: Schedule of Range of Probabilities Range of Probability Probability Low 0.5 % Medium 1.0 % High 5.0 % The 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 100 Day Volatility at Announcement of a Fundamental Transaction . An estimate of future volatility is necessary as there is no mechanism for directly measuring future stock price movements. Daily observations of the Company’s historical stock values for the 100 days immediately prior to the Redeemable Warrants’ grant dates, with a floor of 100 %, were utilized as a proxy for future volatility estimates. (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 Redeemable Warrant expiration date for each simulation. (ix) Expected Time Between Announcement and Consummation of a Fundamental Transaction. The expected time between the announcement and the consummation of a Fundamental Transaction is based on the Company’s experience with the due diligence process performed by acquirers and is estimated to be nine 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. While the assumptions remain consistent from period to period (e.g., utilizing historical stock prices), the actual historical prices input for the relevant period input change. As of September 30, 2023 and December 31, 2022 there was no carrying amount and estimated fair value of the above Redeemable Warrants. 18 Note 12: Leases The Company leases office and storage space, and other equipment under non-cancellable operating leases with initial terms typically ranging from 1 to 5 years. At contract inception, utilizing the guidance of ASC 842 “ Leases ” the Company reviews the facts and circumstances of each contract to determine its proper treatment and classification in accordance with U.S. GAAP. The Company has elected to include both lease and non-lease components in the determination of lease payments. Payments made to a lessor for items such as taxes, insurance, common area maintenance, or other costs commonly referred to as executory costs, are also included in lease payments if they are fixed. The fixed portion of these payments are included in the calculation of the lease liability, while any variable portion is recognized as variable lease expenses as incurred. At lease inception, lease-related assets and liabilities are measured at the present value of future lease payments over the lease term. For leases that do not provide an implicit rate, the Company utilizes an estimated incremental borrowing rate based on market observations existing at lease inception to calculate the present value of future payments. Leased assets are disclosed as Right of Use assets on the Company’s consolidated balance sheet and are amortized over the expected useful life of the lease. Lease liabilities are separately disclosed as a current and non-current portion on the Company’s consolidated balance sheet. Short term leases with an initial term of 12 months or less are not presented on the balance sheet with expense recognized as incurred. The Company entered into a Lease Agreement for a term of five years commencing on September 14, 2020 pursuant to which the Company agreed to lease two Sharp copiers. The base rent under the agreement is $ 1,415 per month. On June 13, 2018, the Company entered into a Lease Agreement for a term of six years commencing on July 1, 2018 pursuant to which the Company agreed to lease approximately 3,000 rentable square feet. The base rent increases by 3 % each year, and ranges from $ 2,100 per month for the first year to $ 2,785 per month for the sixth year. On 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 at a base rent of $ 2,500 per month. The Company renewed the lease for a one-year term extending the rental period to April 2023. On October 5, 2022, the Company renewed the lease for an additional one-year term at a monthly cost of $ 2,850 that commenced on May 1, 2023 . On October 6, 2023, the Company renewed the lease for an additional one-year term at a monthly cost of $ 3,000 that commences on May 1, 2024 , extending the lease through April 30, 2025. On February 17, 2022, the Company entered into a Lease Agreement for a term of two years commencing on March 1, 2022 , pursuant to which the Company agreed to lease a Canon copier. The base rent is $ 322 per month for the term of the lease. On June 16, 2022, the Company entered into a Lease Agreement for a term of five years commencing on July 1, 2022 pursuant to which the Company agreed to lease approximately 5,210 rentable square feet. The base rent increases by 3 % each year, and ranges from $ 15,630 per month for the first year to $ 18,118 per month for the fifth year. On December 9, 2022, the Company entered into a Lease Agreement for a term of two years commencing on April 1, 2023 , pursuant to which the Company agreed to lease approximately 470 square feet of wet laboratory space. The base rent increases by 6 % each year and ranges from $ 1,645 per month for the first year to $ 1,744 per month for the second year. The expected lease term includes both contractual lease periods and, when applicable, cancelable option periods when it is reasonably certain that the Company would exercise such options. The Company’s leases have remaining lease terms between 9 and 50 months. As of September 30, 2023, and December 31, 2022, the weighted-average remaining term was 43 and 42 months, respectively. The Company’s weighted average incremental borrowing rate for its leases was 10 % as of September 30, 2023, and December 31, 2022, respectively. 19 Future minimum lease payments as of September 30, 2023, are as follows (in thousands): Schedule of Operating Lease Future Payments Year Ending December 31, 2023 $ 73 2024 264 2025 221 2026 200 2027 133 Less imputed interest ( 141 ) Total $ 750 As of September 30, 2023, and December 31, 2022, the balance of the right of use assets was $ 727,000 and $ 829,000 , respectively, and the corresponding lease liability balance was $ 750,000 and $ 837,000 , respectively. Total rent expense for the nine months ended September 30, 2023, and September 30, 2022, was $ 230,000 and 75,000 , respectively. Total rent expense for short term leases for the nine months ended September 30, 2023, and September 30, 2022, was $ 198,000 , and $ 8,000 , respectively, included as general and administrative expense. Note 13: Research, Consulting and Supply Agreements The following represent companies with which AIM has active contracts that it paid toward during the nine months ended September 30, 2023. Amarex Clinical Research LLC AIM has multiple contracts with Amarex Clinical Research LLC (“Amarex”). During the nine months ended September 30, 2023, the Company paid $ 1,266,800 related to these ongoing agreements: ● Pancreatic Cancer - In April 2022, AIM executed a work order with Amarex pursuant to which Amarex is managing a Phase 2 clinical trial in locally advanced pancreatic cancer patients designated AMP-270. Per the work order, AIM anticipates that Amarex’s management of the study will cost approximately $ 8.4 million. This estimate includes pass-through costs of approximately $ 1.0 million and excludes certain third-party and investigator costs and escalations necessary for study completion. AIM anticipates that the study will take approximately 4.6 years to complete. ○ During the nine months ended September 30, 2023, the Company paid approximately $ 350,600 related to this agreement. ● Post-COVID Conditions - On September 13, 2022, AIM executed a work order with Amarex, pursuant to which Amarex is managing a Phase 2 trial in patients with Post-COVID Conditions. AIM is sponsoring the study. AIM anticipates that the study will cost approximately $ 6.4 million, which includes pass through costs of approximately $ 125,470 , investigator costs estimated at about $ 4.4 million, and excludes certain other third-party costs and escalations. ○ During the nine months ended September 30, 2023, the Company paid approximately $ 916,200 related to this agreement. hVIVO Services Limited In July 2021, the Company executed a Reservation and Start-Up Agreement (the “Agreement”) with hVIVO Services Limited (“hVIVO”), and subsequently signed a clinical trial agreement (“CTA”) in September. For the year ended December 31, 2021, the Company incurred an expense and paid hVIVO approximately $ 2,340,000 for services incurred in 2021. In March 2022, the Company announced that it had officially withdrawn its application from the Medicines and Healthcare Regulatory Agency and terminated its agreement with hVIVO and incurred a cancelation fee of $ 60,000 which was paid in the first quarter 2022. 20 Impatients N.V. In 2016, the Company entered into a five-year agreement (the “Impatients Agreement”) with Impatients, N.V. (“myTomorrows”), a Netherlands-based company, for the commencement and management of an EAP in Europe and Turkey (the “Territory”) related to ME/CFS. Pursuant to the agreement, myTomorrows, as exclusive service provider and distributor in the Territory, is performing EAP activities. The agreement was automatically extended for a period of 12 months on May 20, 2021; has been automatically extended for 12 months on each subsequent May 20; and will continue to be automatically extended for periods of 12 months every May 20 until terminated or the terms of the agreement are met. ○ During the nine months ended September 30, 2023, the Company paid approximately $ 31,100 related to this agreement. Jubilant HollisterStier Jubilant HollisterStier (“Jubilant”) is AIM’s authorized CMO for Ampligen for the approval in Argentina. In 2017, the Company entered into an agreement with Jubilant pursuant to which Jubilant will manufacture batches of Ampligen® for the Company. Since the 2017 engagement of Jubilant, two lots of Ampligen consisting of more than 16,000 units were manufactured and released in the year 2018. The first lot was designated for human use in the United States in the cost recovery CFS program and for expanded oncology clinical trials. The second lot has been designated for these programs in addition to commercial distribution in Argentina for the treatment of CFS. Jubilant manufactured additional two lots of Ampligen in December 2019 and January 2020. In March 2023, the Company submitted a purchase order for a total of $ 1,432,257 to manufacture additional lots of Ampligen at Jubilant. ○ During the nine months ended September 30, 2023, the Company paid approximately $ 1,432,300 related to this agreement. Pharmaceutics International Inc. In December 2020, AIM added Pharmaceutics International Inc. (“Pii”) as a “Fill & Finish” provider to enhance AIM’s capacity to produce the drug Ampligen. This addition amplifies AIM’s manufacturing capability by providing redundancy and cost savings. The contracts augment AIM’s existing fill and finish capacity. As agreed to in the Master Services Agreement, the terms of each of AIM’s projects with Pii will be negotiated separately and defined in individual Service Contracts. For the year ended December 31, 2022, the Company had incurred an expense and paid Pii approximately $ 278,000 . ○ During the nine months ended September 30, 2023, the Company paid approximately $ 55,400 related to this agreement. Polysciences Inc. In April 2021, AIM approved a proposal from Polysciences Inc. (“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 incurred an expense and paid Polysciences approximately $ 250,000 . ○ During the nine months ended September 30, 2023, there were no payments related to this agreement. Yamasa Corporation AIM also utilizes Yamasa Corporation (“Yamasa”) for the production of raw materials required to create polymer precursors to manufacture the drug Ampligen. In March 2023, the Company submitted a work order for $ 327,730 related to the purchase of raw materials from Yamasa. These raw materials will be used in the manufacture of polymer precursors at Sterling. ○ During the nine months ended September 30, 2023, there were no payments related to this agreement. Sterling Pharma Solutions On December 5, 2022, the Company entered into a Master Service Agreement and a Quality Agreement with Sterling Pharma Solutions (“Sterling”) for the manufacture of the Company’s Poly I and Poly C12U polynucleotides and transfer of associated test methods at Sterling’s Dudley, UK location to produce the polymer precursors to manufacture the drug Ampligen. ○ During the nine months ended September 30, 2023, the Company paid approximately $ 357,000 related to this agreement. 21 Note 14: Subsequent Events In the Company’s lawsuit against BioLife Plasma Services, LP, the trial court issued a ruling in March 2023 on cross Motions for Summary Judgment in which it denied all of the Company’s motions and granted defendant’s Motion to exclude evidence of future loss of profit damages. The ruling specified that AIM had properly pled and the Court was specifically allowing AIM’s damages theory to proceed on reliance damages. The Company sought reconsideration of the ruling based on its internal inconsistency with the contemporaneously issued Order which allowed only the counterclaims to proceed. In July, the Company sought appellate review of the inconsistent lower Court pretrial rulings. On September 8, 2023, the Court issued an Order in response to the Motion for Reconsideration. The Court granted the Motion, vacated its prior Order on summary judgment, and issued a new Order and Opinion. The new Order and Opinion again denied the motion for summary judgment in total, and granted the motion for summary judgment of defendants. The effect of the Order was to once again allow only the defendant’s counterclaim to proceed. On October 6, 2023, the Company sought a certification of the Court to allow immediate appeal. The Court has not ruled on the Motion. On August 8, 2023, the Company filed a motion to reconsider its lawsuit against Robert Chioini, Todd Deutsch, Jonathan Jorgl, Ted D. Kellner, Walter Lautz, Michael Rice and Franz Tudor in the Federal District Court for the Middle District of Florida (the “Federal Securities Action”). The court had dismissed the Federal Securities Action on July 10, 2023 on mootness grounds because the 2022 Annual Meeting, including the election of directors, had already occurred. The Company filed a motion for the district court to reconsider the dismissal of the Federal Securities Action. The district court denied its motion to reconsider on September 27, 2023. Separately, Mr. Lautz moved for reconsideration of the district court’s order pursuant to the Private Securities Litigation Reform Act of 1995 on August 7, 2023, and Mr. Jorgl moved for attorneys’ fees under Rule 11 on September 12, 2023. On October 10, 2023, the district court granted-in-part Mr. Lautz’s motion, postponed ruling on Mr. Jorgl’s motion and scheduled a hearing on November 2, 2023. However, after the Company filed a notice of appeal on October 27, 2023, the district court canceled the November 2, 2023 hearing and ordered the parties to meet and confer on preparing a joint statement addressing whether (1) the district court retained subject matter jurisdiction over Messrs. Lautz and Jorgl’s motions and (2) judicial economy counsels in favor of postponing a ruling on Messrs. Lautz and Jorgl’s motions pending our appeal. On August 25, 2023, Ted D. Kellner filed suit against the Company and the members of its Board in the Delaware Court of Chancery (the “2023 Delaware Litigation”). The complaint challenged (1) the Company’s adoption of amendments to the advance notice provision of its bylaws; and (2) the decision of the Board to reject Kellner’s notice of intent to nominate himself and two other candidates for election to the Board at the Company’s 2023 annual meeting of stockholders on the basis that the nomination notice failed to comply with the Company’s amended bylaws. The complaint seeks, among other things, a declaration that (1) the amendments to the Company’s bylaws were unlawful; and/or (2) the Board’s application of the amended bylaws to reject Kellner’s nomination notice was unlawful or inequitable. On September 11, 2023, the Company and the members of the Board filed an answer responding to Kellner’s complaint and filed a counterclaim. The counterclaim seeks a declaration that (1) the Company’s bylaw amendments are lawful and valid; and (2) Kellner’s nomination notice did not comply with the Company’s bylaws. Upon completion of expedited discovery and briefing, the Delaware Court of Chancery held trial from October 30, 2023 to November 1, 2023. Post-trial briefs from both parties are due on November 16, 2023, and post-trial argument is scheduled for November 21, 2023. An opinion is expected before the Company’s 2023 annual meeting of stockholders, scheduled to convene on December 1, 2023. Although Kellner is not presently seeking monetary relief of legal fees from the Company in the 2023 Delaware Litigation, if elected, his slate of purported director nominees intends to seek to reimburse Kellner and related parties’ legal fees and expenses incurred during their 2022 and 2023 proxy contests. On July 20, 2023, the Company and the Board, as the defendants, filed a motion to shift all litigation fees they incurred in connection with the Jorgl v. AIM Immunotech, Inc. et al. action to Jorgl on the basis that he brought the litigation in bad faith (the “AIM Fee Motion”). Also on July 20, 2023, Jorgl filed a motion to shift certain legal fees to the defendants that he incurred in connection with contesting a subpoena defendants served on the legal counsel that advised Jorgl in his nomination efforts, Baker & Hostetler LLP (the “Jorgl Fee Motion”). The Delaware Court of Chancery recently ruled on certain discovery motions pertaining to the AIM Fee Motion, and the parties will be negotiating a briefing schedule to complete briefing on the AIM Fee Motion and the Jorgl Fee Motion. On October 16, 2023, AIM entered into an agreement with Azenova, LLC (“Azenova”), a professional business development (BD) consulting firm, to assist AIM with its BD efforts with the goal of entering into a partnership, out-license or other transaction whereby a biopharmaceutical company takes on the further development and commercialization of Ampligen with the goal of maximizing value to AIM. On October 26, 2023, by unanimous consent, the Board approved the latest Employee Stock Purchase Plan pursuant to which all directors, officers, and employees could purchase from the Company up to an aggregate of $ 500,000 worth of shares at the market price. 22