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Item 3. Legal Proceedings

2024-04-01 compared with 2023-03-31 · 160 added, 46 removed, 0 unchanged (100% of the section changed)

commenced an action against BioLife in December of 2017 for Breach of Contract.

The amount of damages we are seeking in this matter have

yet to be determined.

Damages are not covered by insurance.

BioLife, the defendant, has filed its Answer, Affirmative Defenses and a

Counterclaim in the amount of $96,676 representing the invoices withheld after BioLife indicated that they were not intending to fulfill

the balance of the contract.

We have denied the allegations of the counterclaim.

We have conducted two mediation sessions, but have been

unable to resolve the matter.

The parties are still currently engaged in discovery, which we believe will now lead to a trial date in

the later part of 2023.

The scheduled dates for these events to transpire were extended several times as they were dependent on the safe

and full reopening of the Courts.

Although it cannot be reasonably determined at this time, we believe the likelihood of an unfavorable

outcome on the defendant’s counterclaim is remote.

July 8, 2022, we received a notice from Jonathan Jorgl (the “Jorgl Notice”), an AIM stockholder who first purchased 1,000

AIM shares on June 27, 2022, seeking to nominate a control slate of two individuals for election to the three-member AIM Board of Directors

(the “Board”) at the 2022 Annual Meeting of Stockholders.

The Board unanimously determined the Jorgl Notice to be invalid

due to numerous deficiencies, including failure to comply with the Company’s bylaws.

The rejection of the Jorgl Notice was announced

on July 18, 2022.

on July 18, 2022, we filed a complaint in the U.S.

District Court for the Middle District of Florida, Ocala Division, against individuals

we believe failed to register as a group pursuant to U.S.

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

attempt to effectuate a takeover of the Company’s Board.

The court granted the defendants’ motion to dismiss, but allowed

the filing of an amended complaint.

Defendants’ renewed motion to dismiss is pending, and AIM is in the process of obtaining discovery

from the defendants.

August 12, 2022, a hearing was held in the Delaware Court of Chancery concerning a motion for a temporary restraining order sought by

Jorgl to require the AIM Board of Directors to accept his director nominations and include his nominees on a universal proxy card for

the upcoming Annual Meeting of Stockholders.

The court denied the motion several days later and scheduled a hearing on Jorgl’s

motion for a preliminary injunction to be held on October 5, 2022.

Extensive discovery was conducted in advance of the hearing, which

was then held as scheduled.

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

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

of Stockholders.

On October 28, 2022, the court denied Jorgl’s motion, citing that he failed to meet the burden of proof in light

of the evidence showing that he was part of efforts by convicted securities law felons working toward taking control of the AIM Board.

The Jorgl Group announced on November 2, 2022, that it did not intend to appeal the decision.

Safety Disclosures.

Legal Proceedings.

are, and from time to time may become, subject to litigation and various legal proceedings that involve claims for substantial amounts

of money or for other relief or that might necessitate changes to our business or operations.

Please see Note 16 “Contingencies”

to the consolidated financial statements included in Part II, “Item 8.

Financial Statements and Supplementary Data” of this

Annual Report.

litigation is inherently unpredictable, assessing contingencies related to litigation is a complex process involving highly subjective

judgment about potential outcomes of future events.

When evaluating litigation contingencies, we may be unable to provide a meaningful

estimate due to a number of factors, including the procedural status of the matter in question, the availability of appellate remedies,

insurance coverage related to the claim or claims in question, the presence of complex or novel legal theories, and the ongoing discovery

and development of information important to the matter.

In addition, damage amounts claimed in litigation against us may be unsupported,

exaggerated, or unrelated to possible outcomes, and as such are not meaningful indicators of our potential liability or financial exposure.

Accordingly, we review the adequacy of accruals and disclosures each quarter in consultation with legal counsel, and we assess the probability

and range of possible losses associated with contingencies for potential accrual in the consolidated financial statements.

However, the ultimate resolution of litigated claims may differ from our current estimates.

In the normal course of business, there are various claims in process,

matters in litigation, and other contingencies, certain of which are covered by insurance policies.

While it is not possible to predict

the outcome of these suits, legal proceedings, and claims with certainty, management is of the opinion that adequate provision for potential

losses associated with these matters has been made in the financial statements and that the ultimate resolution of any one of these matters

will not have a material adverse effect on our financial position and results of operations.

A significant increase in the number of these

claims, or one or more successful claims resulting in greater liabilities than the we currently anticipate, could materially and adversely

affect our business, financial condition, results of operations, and cash flows.

Biopharma, Inc (n/ka) AIM Immunotech vs BioLife Plasma Services,

No 1711391858 ( Phila CCP)

commenced an action in the Philadelphia Court of Common Pleas in 2017 against Biolife Plasma Services, LP related to the defendants’

breach of a contract requiring the defendant to supply certain blood related products used by and necessary to us in the manufacture

of our products, including the loss profits associated with the defendants’ breaches.

The Defendant asserted defenses, including a counterclaim

asserting our failure to have paid invoices billed for the product in the amount of $96,676 following the Defendant’s notification that

it would not be fulfilling the terms of the contract.

trial court issued a ruling in March 2023 on cross Motions for Summary Judgment in which it denied all of our motions and granted defendant’s

Motion to exclude evidence of future loss of profit damages.

The ruling specified that we had properly pled, and the Court was specifically

allowing our damages theory to proceed on reliance damages.

We sought reconsideration of the ruling based on its internal inconsistency

with the contemporaneously issued Order which allowed only the counterclaims to proceed.

In July 2023, we sought appellate review of

the inconsistent lower Court pretrial rulings.

In September 2023, the Court issued an Order in response to our Motion for Reconsideration

granting the Motion, vacating its prior Order on summary judgment, and issued a new Order and Opinion.

new Order and Opinion again denied our motion for summary judgment, and granted defendants’ motion for summary judgment.

of the Order was to again allow only the defendant’s counterclaim to proceed.

The Order mooted the pending appellate review.

6, 2023, we petitioned the Superior (appellate) Court to allow immediate appeal.

The Superior Court has not ruled on the Petition.

parties have twice mediated the matter with no resolution achieved.

No estimate can be made of when the trial court and appellate court

will address the pending matters.

No estimate of the outcome can be made at this time pending determination of the Petition and the underlying

issues presented in the appeal.

ImmunoTech, Inc.

Tudor., Case No.

2021-CA-393 (Marion County, FL)

August 13, 2021, the Marion County Circuit Court entered an Agreed Order Granting Joint Motion for Entry of Stipulated Injunction (“Injunction”),

which precluded Tudor from contacting any of our business relations.

We are currently pursuing enforcement of the Injunction against

Tudor, who recently violated the Injunction.

We are not seeking damages against Tudor.

We intend on filing a motion to enforce the Injunction

and will seek to recover its attorney’s fees and costs, along with any other sanction necessary to preclude Tudor from violating

the injunction again.

AIM Immunotech, Inc.

2022-0669-LWW (Del.

On July 29, 2022, Jonathan Jorgl (“Jorgl”) filed a complaint

against us and the then-members of our Board of Directors in the Delaware Court of Chancery (the “Jorgl Action”).

The complaint

challenged the decision of our Board of Directors to reject Jorgl’s notice of intent to nominate two candidates for election to

the our Board of Directors on the basis that the notice failed to comply with our bylaws.

The Complaint sought a declaration that Jorgl’s

nomination was valid and effective and complied with our bylaws and that the we must list Jorgl’s candidates in our proxy materials,

as well as a temporary restraining order, preliminary injunction, and permanent injunction enjoining defendants from taking any action

to prevent Jorgl from exercising his alleged nomination rights and from making any statements that disparage Jorgl’s candidates

prior to or during our annual meeting of stockholders.

August 15, 2022, the Court denied Jorgl’s motion for temporary restraining order, granted the motion to expedite, and scheduled

a hearing on Jorgl’s preliminary injunction motion.

After expedited discovery and briefing, the Court issued an opinion on October

28, 2022, denying Jorgl’s motion for preliminary injunction.

On November 1, 2022, Jorgl and the other participants in his nomination

efforts and attempted proxy contest announced in a press release that they did not plan to proceed to trial or seek an appeal of the

Court’s ruling denying the motion for preliminary injunction and that the proxies they solicited would not be voted at our annual

meeting of stockholders.

We held our annual meeting of stockholders on November 3, 2022, and the stockholders re-elected Thomas Equels,

William Mitchell, and Stewart Appelrouth as directors.

April 20, 2023, Jorgl filed a motion to dismiss the Jorgl Action.

On June 20, 2023, the Court entered an order dismissing the Jorgl Action

and retaining jurisdiction to adjudicate any related fee disputes.

July 20, 2023, defendants filed a motion to shift all litigation fees they incurred in connection with the Jorgl 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 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

ruled on certain discovery motions in October 2023 pertaining to the AIM Fee Motion, and on March 25, 2024, ordered the parties to provide

a joint status report regarding the AIM Fee Motion and the Jorgl Fee Motion within 30 days.

We anticipate that the parties will negotiate

a schedule to complete briefing on the motions.

ImmunoTech, Inc.

Tudor, et al., Case 5:22-cv-00323 (M.D.

Florida 2022)

On July 15, 2022, we filed suit against Franz Tudor, Todd Deutsch, Ted

Kellner, Jonathan Jorgl, Walter Lautz, Robert Chioini, and Michael Rice (collectively, the “Tudor Group”) for injunctive relief

arising from the Tudor Group’s alleged violations of the Securities Exchange Act for failing to register as a group and provide

required disclosures.

On July 8, 2022, Jorgl served a notice of intent to nominate two director candidates from the Tudor Group for election

at our 2022 annual meeting.

We rejected the notice because we believed the notice did not comply with the bylaws, federal law, or Delaware

We allege the notice is missing critical information required by the bylaws and made material misrepresentations and omissions.

believe the Tudor Group was acting in concert to appoint the nominees and sued these individuals to enjoin them from violating our bylaws

and federal law.

On July 10, 2023, the court dismissed the complaint.

We filed a motion for reconsideration, which the trial court denied.

We filed an appeal of the dismissal, which is pending and referenced below.

The defendants have filed motions for sanctions seeking to

recover their legal costs from the inception of the case, which total hundreds of thousands of dollars, according to the defendants, and

additional sums, also not quantified, to act as a deterrent.

On December 19, 2023, the court heard oral argument on the motions.

submitted post-hearing briefs, and the matter is pending before the Court.

ImmunoTech, Inc.

Tudor, et al., Case No.

0:2023prici13576 (11th Cir.

filed a notice of appeal of the order of dismissal and the order denying its motion for reconsideration that were entered in AIM ImmunoTech,

Tudor, et al., Case 5:22-cv-00323 (M.D.

2022) (above).

The appellate deadlines are stayed until the lower court rules on

the pending motions.

AIM Immunotech, Inc.

2023-0879-LWW (Del.

August 25, 2023, Ted D.

Kellner (“Kellner”) filed a complaint against us and the four current members of our Board of Directors

in the Delaware Court of Chancery (the “Kellner Action”).

The complaint challenged (1) our adoption of amendments to the

advance notice provision of our bylaws;

and (2) the decision of our Board of Directors to reject Kellner’s notice of intent to

nominate himself and two other candidates’ election to our Board of Directors at our 2023 annual meeting of stockholders on the

basis that the nomination notice failed to comply with our amended bylaws.

The complaint seeks, among other things, a declaration that

(1) the amendments to our 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, defendants in the Kellner Action filed an answer responding to

Kellner’s complaint and we filed a counterclaim.

Our counterclaim seeks a declaration that (1) our bylaw amendments are lawful

and (2) Kellner’s nomination notice did not comply with our bylaws.

completion of expedited discovery and briefing, the Court held trial in the Kellner Action from October 30, 2023, to November 1, 2023.

Court of Chancery issued an opinion on December 28, 2023, that declared (1) the Board’s rejection of Kellner’s nomination

notice was lawful and equitable, (2) certain of our bylaw amendments were valid, and (3) certain of the our bylaw amendments were invalid.

Kellner has appealed the court’s ruling concerning the Board’s rejection of his nomination notice, and the bylaw amendments

the court ruled were valid.

The Defendants have appealed the court’s ruling as to the bylaw amendments the court ruled were invalid.

The parties agreed to, and the Delaware Supreme Court ordered, expedited briefing, which is now complete.

Oral argument is scheduled

for April 10, 2024.

Kellner is not presently seeking monetary relief from us in the Kellner Action, he has reserved the right to seek reimbursement of certain

legal fees and expenses from us if the Delaware Supreme Court upholds the invalidation of certain bylaws.

Mine Safety Disclosures.

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 3. Legal Proceedings