What changed in this filing

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Item 1. Financial Statements

2024-08-14 compared with 2024-05-15 · 714 added, 477 removed, 260 unchanged (82% of the section changed)

4 unchanged sentences

thousands, except for share and per share amounts)

March 31, 2024 and Audited December 31, 2023)

March 31, 2024

June 30, 2024 and Audited December 31, 2023)

June 30, 2024

December 31, 2023

Current assets:

Cash and cash equivalents

Marketable investments

Funds receivable from New Jersey net operating loss and Other Receivables

Prepaid expenses and other current assets

Total current assets

Cash and cash

Marketable securities

Funds receivable from New

Jersey net operating loss

expenses and other current assets

current assets

Property and equipment, net

1 unchanged sentence

Patent and trademark rights, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS’

Current liabilities:

1 unchanged sentence

Accrued expenses

Current portion of operating lease liability

Current portion of note payable, net

Total current liabilities

Current portion of operating

lease liability

portion of note payable, net

current liabilities

Long-term liabilities:

1 unchanged sentence

Note payable, net

Total liabilities

Commitments and contingencies (Notes 12 and

Stockholders’ equity:

Series A Junior Participating Preferred Stock, $ 0.001 par value, 4,000,000 and 250,000 shares authorized

as of March 31, 2024, and December 31, 2023, respectively;

issued and outstanding – none

Series B Convertible Preferred Stock, stated value $ 1,000 per share, 10,000 shares authorized;

689 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

Preferred Stock,

Common Stock, $ 0.001 par value, authorized shares - 350,000,000 ;

issued and outstanding shares 50,251,933 and 49,102,484 as of

March 31, 2024 and December 31, 2023, respectively

Series A Junior Participating Preferred

Stock, $ 0.001

par value, 4,000,000 and 250,000 shares authorized as of June 30, 2024, and December 31, 2023, respectively:

issued and outstanding

Series B Convertible Preferred Stock, stated

value $ 1,000 per share, 10,000 shares authorized;

no issued and outstanding as of June 30, 2024 and 689 issued and outstanding as

December 31, 2023

Common Stock, $ 0.001 par value, authorized

shares - 350,000,000 ;

issued and outstanding shares 57,136,680 and 49,102,484 as of June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

Accumulated deficit

Total stockholders’ equity

Total liabilities and stockholders’ equity

stockholders’ equity

liabilities and stockholders’ equity

accompanying notes to consolidated financial statements.

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thousands, except share and per share data)

Three months ended March 31,

Clinical treatment programs – US

months ended June 30,

treatment programs - US

Total Revenues

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Research and development

General and administrative

and administrative

Total Costs and Expenses

2 unchanged sentences

Interest and other income

Interest Expense and Other Finance Costs

(Loss) on sale of assets

Gain from sale of income tax operating losses

Interest expense and other

finance costs

(Loss) on sale of fixed

(Loss) on warrant issuance

from sale of income tax operating losses

Basic and diluted loss per share

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accompanying notes to consolidated financial statements.

AIM IMMUNOTECH INC.

IMMUNOTECH INC.

AND SUBSIDIARIES

Statements of Changes in Stockholders’ Equity

the Six Months Ended June 30, 2024 and 2023

thousands except share data)

Comprehensive

Preferred Shares

other Comprehensive

Income (Loss)

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$ ( 409,508 )

Shares issued for:

Common stock issuance, net of costs

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Equity-based compensation

Series B preferred shares converted to common

Committed shares

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$ ( 415,325 )

Common stock issuance, net of costs

Issuance of w arrants

Equity-based compensation

Series B preferred shares expired

Net comprehensive loss

Balance June 30, 2024

$ ( 417,161 )

Preferred Shares

Comprehensive

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$ ( 380,546 )

Balance ,value

$ ( 380,546 )

Shares issued for:

Common stock issuance, net of costs

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$ ( 384,207 )

Balance ,value

$ ( 384,207 )

Common stock issuance, net of costs

Equity-based compensation

Series B preferred shares converted to common

Net Comprehensive loss

Balance June 30, 2023

$ ( 389,116 )

accompanying notes to consolidated financial statements.

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Statements of Cash Flows

the Three Months Ended March 31, 2024 and 2023

the Six Months Ended June 30, 2024 and 2023

Cash flows from operating activities:

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

Depreciation of property and equipment

Amortization of patent, trademark rights

Amortization of Debt Discount and Other Expenses

Non-cash lease expense

Gain from sale of income tax operating losses

Adjustments to reconcile net loss to net cash

used in operating activities:

Depreciation of property

and equipment

Amortization of patent,

trademark rights

Changes in right of use assets

Gain from sale of income

tax operating losses

Equity-based compensation

Loss (gain) on sale of marketable investments

Loss (gain) on sale of

marketable securities

Loss on issuance of warrants

Amortization of financial

Change in assets and liabilities:

Funds receivable from New Jersey net operating loss

Prepaid expenses and other current assets and other non-current assets

Funds receivable from New

Jersey net operating loss

Prepaid expenses and other

current assets and other non-current assets

Lease liability

Accounts payable

Accrued expenses

Net cash used in operating activities

Net cash used in operating

Cash flows from investing activities:

Proceeds from sale of marketable investments

Purchase of marketable investments

(Purchase) abandonment of patent and trademark rights

Proceeds from sales of property and equipment

Net cash used in investing activities

Proceeds from sale of marketable

Purchase of marketable

Proceeds from sale of property

and equipment

of patent and trademark rights

Net cash provided by (used in) investing activities

Cash flows from financing activities:

Proceeds from sale of stock, net of issuance costs

Proceeds from note payable, net of issuance costs

Net cash provided by financing activities

Proceeds from sale of stock,

net of issuance costs

from note payable, net of issuance costs

Proceeds from issuance of equity warrants

Net cash provided by

financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

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

Conversion of Series B preferred

Cash and cash equivalents

at beginning of period

Cash and cash equivalents

at end of period

Supplemental disclosures of non-cash investing

and financing cash flow information:

lease-Right of Use Assets

gain on marketable securities

of Series B preferred

accompanying notes to consolidated financial statements.

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of the human body, and to aid the development of therapeutic products for the treatment of certain cancers and chronic diseases.

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”).

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.

flagship products are Ampligen (rintatolimod) and Alferon N Injection (Interferon alfa).

Ampligen is a double-stranded RNA (“dsRNA”)

molecule being developed for globally important cancers, viral diseases and disorders of the immune system.

Ampligen has not been approved

by the FDA or marketed in the United States, but is approved for commercial sale in the Argentine Republic for the treatment of severe

Chronic Fatigue Syndrome (“CFS”).

Company is currently proceeding primarily in four areas:

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

control group to treat locally advanced pancreatic cancer patients.

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

clinical trials to evaluate the efficacy and safety of Ampligen for the treatment of pancreatic

Ampligen across multiple cancers as a potential therapy that modifies the tumor microenvironment

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

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

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

and fatigue and/or the Post-COVID condition of fatigue.

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

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ended December 31, 2023, and 2022, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023,

filed on March 29, 2024.

filed on April 1, 2024.

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

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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.

and trademark valuations, stock-based compensation calculations, fair value of warrants, and contingency accruals.

Cash and Cash Equivalents

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maturity of three months or less to be cash equivalents.

At various times throughout the three months ended March 31, 2024, some accounts

At various times throughout the six months ended June 30, 2024, some accounts

held at financial institutions were in excess of the federally insured limit of $ 250,000 .

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on these accounts and believes credit risk to be minimal.

Marketable Investments

investments consist of mutual funds.

At March 31, 2024 and December 31, 2023, it was determined that none of the marketable investments

Net Loss Per Share

and diluted net loss per share is computed using the weighted average number of shares of common stock outstanding during the

Equivalent common shares, consisting of stock options and warrants which amounted to 11,202,957 and 73,524 for the three months

ended June 30, 2024, and 2023, respectively;

and 14,589,746 and 2,595,914

shares for the six months ended June 30, 2024 and 2023, respectively, are excluded from the calculation of diluted net loss per

share since their effect is anti-dilutive.

Equity-Based Compensation

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 August 3, 2020 and July 1, 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 979,311

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,

Unless sooner terminated, the 2018 Equity Incentive Plan will continue in effect for a period of 10

years from its effective date.

During the fiscal year ending December 31, 2018 the Board of Directors (the “Board”)

issued 1,189,284

options to each employee, the officers and directors at the exercise price of $ 9.68

expiring in 10

During the fiscal year ending December 31, 2019, 1,727,756

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.

During the fiscal year ending December 31, 2020, 1,025,000

options were issued to each of these officers and directors with an exercise price range of $ 2.77

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

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

for a period of ten

years with a vesting period of one year.

During the fiscal year ending December 31, 2023, 400,000

options were issued to officers with an exercise price range of $ 0.47

for a period of ten

years with a vesting period of one year.

During the six months ended June 30, 2024 there were no

options issued.

fair value of each option and equity warrant award is estimated on the date of grant using a Black-Scholes-Merton option pricing valuation

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 six months ended June 30, 2024 and 2023, there

were no options granted.

options activity during the three months ended June 30, 2024, was as follows:

option activity for employees:

of Stock Option Activity

Outstanding March 31, 2024

Outstanding June 30, 2024

Vested and expected

to vest June 30, 2024

Exercisable June 30, 2024

stock option activity for employees:

of Unvested Stock Option Activity

Unvested March 31, 2024

Unvested June 30, 2024

option activity for non-employees:

of Stock Option Activity

Outstanding March 31, 2024

Outstanding June 30, 2024

Vested and expected

to vest June 30, 2024

Exercisable June 30, 2024

stock option activity for non-employees:

of Unvested Stock Option Activity

Unvested March 31, 2024

Unvested June 30, 2024

compensation expense was approximately $ 80,000 and $ 50,000 for the three months ended June 30, 2024 and 2023, resulting in a decrease

in general and administrative expenses, respectively.

stock option activity during the six months ended June 30, 2024, was as follows:

option activity for employees:

Outstanding January 1, 2024

Outstanding June 30, 2024

Vested and expected

to vest June 30, 2024

Exercisable June 30, 2024

stock option activity for employees:

Unvested January 1, 2024

Unvested June 30, 2024

option activity for non-employees:

Outstanding January 1, 2024

Outstanding June 30, 2024

Vested and expected

to vest June 30, 2024

Exercisable June 30, 2024

stock option activity for non-employees:

Unvested January 1, 2024

Unvested June 30, 2024

compensation expense was approximately $ 160,000 and $ 132,000 for the six months ended June 30, 2024 and 2023, respectively.

June 30, 2024, and 2023, respectively, there was approximately $ 134,000 and $ 85,000 of unrecognized equity-based compensation cost related

to options granted under the Equity Incentive Plan.

Marketable Securities

securities consist of mutual funds.

At June 30, 2024 and December 31, 2023, it was determined that none of the marketable securities

had an other-than-temporary impairment.

At March 31, 2024 and December 31, 2023, all securities were measured as Level 1 instruments

of the fair value measurements standard (See Note 7:

At March 31, 2024, and December 31, 2023 the Company held $ 7,647,000

and $ 7,631,000 , respectively, in mutual funds.

At June 30, 2024 and December 31, 2023, all securities were measured as Level 1 instruments of

the fair value measurements standard (See Note 11:

At June 30, 2024, and December 31, 2023 the Company held $ 6,507,000 and

$ 7,631,000 respectively, in mutual funds.

Funds classified as available for sale consisted of:

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Schedule of Equity Securities

March 31, 2024

(in thousands)

Net gains and losses recognized during the period on equity securities

sold during the period

Unrealized gains and losses recognized during the reporting period on equity

securities still held at the reporting date

Net gain recognized during the

period on equity securities

Net gains and

losses recognized during the period on equity securities sold during the period

Unrealized gains and

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

Funds classified as available for sale consisted of:

March 31, 2023

(in thousands)

Net losses recognized during the period on equity securities

Net gains and losses recognized during the period on equity securities

sold during the period

Unrealized gains and losses recognized during the reporting period on equity

securities still held at the reporting date

For the six months ended

Net losses recognized during the

period on equity securities

Net gains and

losses recognized during the period on equity securities sold during the period

Unrealized gains and

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

Accrued Expenses

expenses consist of the following:

of Accrued Expenses

Professional fees

Clinical trial expenses

Other expenses

Property and Equipment, net

of Property and Equipment

March 31, 2024

December 31, 2023

(in thousands)

March 31, 2024

December 31, 2023

Furniture, fixtures, and equipment

accumulated depreciation

Property and equipment, net

Property and equipment,

and equipment are recorded at cost.

Depreciation is 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 three months ending March 31, 2024 and March 31, 2023 was $ 9,000

and $ 11,000 , respectively.

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 six months ending June 30, 2024 and June

30, 2023 was $ 18,000 and $ 21,000 , respectively.

Patents, and Trademark Rights, Net

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of Patent and Trademark Rights

March 31, 2024

December 31, 2023

Gross Carrying Value

Accumulated Amortization

Net Carrying Value

Gross Carrying Value

Accumulated Amortization

Net Carrying Value

Net amortizable patents and trademarks rights

of Changes in Patents, Trademark Rights

Carrying Value

Net amortizable patents

and trademarks rights

and trademark rights acquisitions, abandonments and amortization:

Schedule of Changes in

Patents, Trademark Rights

December 31, 2023

March 31, 2024

June 30, 2024

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

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Year Ending December 31,

Company leases office and lab facilities and other equipment under non-cancellable operating leases with initial terms typically ranging

from 1 to 5 years, expiring at various dates during 2024 through 2027, and requiring monthly payments ranging from less than $ 1,000 to

Certain leases include additional renewal options ranging from 1 to 5 years.

AIM has classified all of its leases as operating

March 31, 2024 and December 31, 2023, the balance of the right of use assets was $ 763,000 and $ 697,000 , respectively, and the corresponding

operating lease liability balance was $ 777,000 and $ 718,000 , respectively.

Right of use assets are recorded net of accumulated amortization

of $ 296,000 and $ 363,000 as of March 31, 2024 and December 31, 2023, respectively.

recognized rent expense associated with these leases are follows:

Schedule of AIM

Recognized Rent Expense Associated with Operating Lease

March 31, 2024

December 31, 2023

(in thousands)

March 31, 2024

March 31, 2023

Operating lease costs

Short-term and variable lease costs

Total lease costs

Classification of lease costs

Research & development

General and administrative

Total lease costs

Company’s leases have remaining lease terms between 11

As of March 31, 2024, the weighted-average

remaining term was 39

At December 31, 2023, the weighted-average remaining term was 41

The Company’s weighted average

incremental borrowing rate for its leases was 10 %

at March 31, 2024 and December 31, 2023.

minimum payments as of March 31, 2024, are as follows:

Schedule of Operating Lease Future Payments

Year Ending December 31, (in thousands)

Less imputed interest

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.

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.

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

at the reporting date.

Generally, this includes debt and equity securities that are traded

in an active market.

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

or liabilities;

quoted prices in markets that are not active;

or other inputs that are observable

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

or liabilities.

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

an active market.

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

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

Level 3 assets and liabilities

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

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

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

of March 31, 2024, the Company has classified the warrants with cash settlement features

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

on those inputs.

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

in valuing the warrants.

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 March 31, 2024

Cash equivalents

Marketable investments

As of December 31, 2023

Cash equivalents

Marketable investments

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).

Company also had certain redeemable warrants in the Rights Offering with a cash settlement feature in the occurrence of a Fundamental

No Fundamental Transaction occurred.

During the first quarter 2024, 205,000

of these Warrants converted on a cashless basis

and the balance expired.

Accrued Expenses

expenses consist of the following:

of Accrued Expenses

March 31, 2024

December 31, 2023

(in thousands)

March 31, 2024

December 31, 2023

Professional fees

Clinical trial expenses

Other expenses

Unsecured Promissory Note

February 16, 2024, the Company (“Borrower”) entered into a Note Purchase Agreement with Streeterville Capital LLC (“Streeterville”or

the “Lender”).

Under the terms of the agreement, Streeterville paid the Company $ 2,500,000 in exchange for an unsecured promissory

Note with an Original Issue Discount of $ 781,250 .

The Company will pay $ 3,301,250 consisting of the principal amount of the Note, together

with the original issue discount and $ 20,000 of lender transaction fees, no later than February 16, 2026.

The stated interest rate of

the note is 10 %.

The following table summarizes our debt at March

31, 2024 and December 31, 2023:

(in thousands)

Schedule of Long Term Debt

March 31, 2024

December 31, 2023

Long-term debt

Unamortized Original issue discount

Unamortized Financing fees

Unamortized discount

and debt issuance costs

Less current portion of long-term debt, net (1)

Long-term debt (2)

costs expensed and capitalized related to long-term debt were as follows:

Schedule of Long Term Debt Interest Costs

Expense and Capital

March 31, 2024

December 31, 2023

Interest expense

Interest capitalized

expenses related to long-term debt were as follows:

Schedule of Long Term Debt Amortization

March 31, 2024

December 31, 2023

Original issue discount

Loan fee amortization

maturities of long-term debt as of March 31, 2024 were as follows:

Schedule of Future Maturities of Long

Fiscal years ending December 31:

portion of long-term debt of approximately $ 2,000,000 is net of the current portion of debt discount of approximately $ 367,000 and

the current portion of debt origination costs of approximately $ 10,000 as

of March 31, 2024.

(2) Long-term

portion of debt of approximately $ 1,330,000 is net of the long-term portion of debt discount

of approximately $ 371,000 and the unamortized debt origination costs of approximately $ 9,000 as

of March 31, 2024.

agreement allows the Lender to redeem up to $250,000 per calendar month beginning in August 2024, upon providing written notice to Borrower.

The Note further contains triggering events which can be remedied by the Lender requiring the Borrower to correct the triggering event,

increasing the outstanding balance by applying the triggering effect, or making the Note immediately due and payable.

Equity Purchase Agreement

March 28, 2024, the Company entered into a purchase agreement and a registration rights agreement (collectively, the “Atlas Agreements”)

with Atlas Sciences, LLC (“Atlas”), pursuant to which Atlas committed to purchase up to $ 15,000,000 of common stock of the

Company for a period of 24 months from the date of the agreement.

the terms of the agreement, the Company, at its sole discretion, shall have the right to issue Put shares to the Investor at 95% of the

Market Price of the shares on the day of trade.

Sales under the agreement are limited to a daily maximum of the lessor of:

the Median Daily Trading volume, and a beneficial ownership limitation of 4.99 % and a maximum of 19.99 % of the outstanding shares at

the time of the agreement.

As of March 31, 2024, no sales or purchases had been made pursuant to this agreement.

In April 2024, the Company

filed a registration statement with the SEC on Form S-1 registering a total of 9,975,000 shares for resale pursuant to the Atlas Agreements,

consisting of 9,636,400 shares that can be sold by the Company to Atlas and 338,600 shares that were issued to Atlas as Commitment Shares.

Stockholders’ Equity

6 unchanged sentences

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

As of March 31, 2024, there were no Series A Junior Participating Preferred Stock outstanding.

A Junior Participating Preferred Stock to 4,000,000 from 250,000 shares.

As of June 30, 2024, there were no Series A Junior Participating

Preferred Stock outstanding.

B Convertible Preferred Stock

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subject to adjustment herein (the “Conversion Price”).

to a registration statement relating to a rights offering (the “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.

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

to a registration statement relating to a rights offering (the “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

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 )

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 three months ended March 31, 2024, no shares

of Series B Convertible Preferred Stock were converted into common stock.

March 31, 2024 and December 31, 2023, the Company had 689 shares of Series B Convertible Preferred Stock outstanding.

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.

Subsequent to March 31, 2024, 689 shares of Series B Convertible Preferred Stock expired,

and none were converted prior to expiration.

The net proceeds realized from the rights

offering were approximately $ 4,700,000 .

As of June 30, 2024, 689

shares of Series B Convertible Preferred Stock expired, and none were converted prior to expiration.

Common Stock and Equity Finances

1 unchanged sentence

authorized shares.

As of March 31, 2024 and December 31, 2023, there were 50,251,933 and 49,102,484 shares of Common Stock issued and

As of June 30, 2024, and December 31, 2023, there were 57,136,680 and 49,102,484 shares of Common Stock issued and

outstanding, respectively.

5 unchanged sentences

The Company created successive new plans following the expiration of the July 7,

The latest plan was approved by the Board on May 10, 2024 and expires in July 2024.

the three months ended March 31, 2024, the Company issued a total of 243,009 shares of its Common Stock at a price ranging from $ 0.33

to $ 0.39 for total proceeds of approximately $ 82,500 as part of the employee stock purchase plan.

the three months ended March 31, 2023, the Company issued a total of 322,583

shares of its Common Stock at a price of $ 0.31

for total proceeds of approximately $ 100,000

The latest plan was approved by the Board on June 26, 2024 and expires in August 2024.

During the three months ended

June 30, 2024, the Company issued a total of 92,594 shares of its Common Stock at a price of $ 0.41 for total proceeds of approximately

$ 37,500 as part of the employee stock purchase plan.

the six months ended June 30, 2024, the Company issued a total of 335,603 shares of its Common Stock at a price ranging from $ 0.33 to

$ 0.41 for total proceeds of approximately $ 120,000 as part of the employee stock purchase plan.

During the three months ended

June 30, 2023, the Company did no t issue any shares of its Common Stock as part of the employee stock purchase plan.

the six months ended June 30, 2023, the Company issued a total of 322,583 shares of its Common Stock at a price of $ 0.31 for total proceeds

of approximately $ 100,000 as part of the employee stock purchase plan.

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”).

(Rights offering)

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

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

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

The Pre-Funded Warrants are exercisable immediately and may be exercised at any time until the Pre-Funded Warrants are

exercised in full.

$ 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 ended 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.

During the three months ended March 31, 2024, 205,000

During the year ended 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.

the three months ended June 30, 2024, there were no warrants exercised.

During the six months ended June 30, 2024, 205,000

warrants were exercised, and 5,830,028

warrants expired unexercised.

During the three months ended March 31, 2023, there were no Warrants exercised.

As of March 31, 2024 and

December 31, 2023 there were 15,000

and 152,160 post split Warrants outstanding, respectively.

As of June 30,

2024 and December 31, 2023 there were 15,000

post-split warrants outstanding, respectively.

Distribution Agreement

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 $ 8,500

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 $ 8,500,000

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 %

Sales under the EDA were registered under the S-3 Shelf Registration

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 three months ended March 31, 2024, the Company sold 564,568

shares under the EDA for total gross proceeds

of approximately $ 253,870 ,

For the three months ended June 30, 2024, the Company sold 730,110 shares

under the EDA for total gross proceeds of approximately $ 372,223 , which includes a 3.0 % fee to Maxim of $ 11,167 .

For the six months

ended June 30, 2024, the Company sold 1,294,678

shares under the EDA for total gross proceeds of approximately $ 626,094 ,

which includes a 3.0 %

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During the year ended December 31, 2023, the Company sold 598,114

shares under the EDA for total gross proceeds

of approximately $ 344,000 ,

which includes a 3.0 %

fee to Maxim of $ 10,326 .

Subsequent to March 31, 2024, the Company sold 730,110

shares under the EDA for total gross proceeds

of $ 372,223 ,

shares under the EDA for total gross proceeds of approximately $ 344,000 ,

which includes a 3.0 %

fee to Maxim of $ 10,326 .

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”).

Net Loss Per Share

and diluted net loss per share is computed using the weighted average number of shares of common stock outstanding during the

Equivalent common shares, consisting of stock options and warrants which amounted to 3,386,789

and 2,522,390 ,

are excluded from the calculation of diluted net loss per share for the three months ended March 31, 2024, and 2023, respectively,

since their effect is antidilutive due to the net losses recorded for the periods.

Equity-Based Compensation

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 August 3, 2020 and July 1, 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 979,311 shares , 956,660 shares, 960,976 shares and 968,389 shares, respectively.

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, 2024.

Unless sooner terminated, the 2018 Equity Incentive Plan will continue

in effect for a period of 10 years from its effective date.

During the fiscal year ending December 31, 2018 the Board of Directors (the

“Board”) issued 1,189,284 options to each employee, the officers and directors at the exercise price of $ 9.68 expiring in

During the fiscal year ending December 31, 2019, 1,727,756 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.

During the fiscal year ending December 31, 2020, 1,025,000 options

were issued to each of these officers and directors 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 fiscal year ending December 31, 2023, 400,000 options were issued

to officers with an exercise price range of $ 0.47 for a period of ten years with a vesting period of one year.

During the three months

ended March 31, 2024 there were no options issued.

fair value of each option and equity warrant award is estimated on the date of grant using a Black-Scholes-Merton option pricing valuation

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 three months ended March 31, 2023 and 2024,

there were no options granted.

options activity during the three months ended March 31, 2024, was as follows:

option activity for employees:

of Stock Option Activity

Outstanding January 1, 2024

Outstanding March 31, 2024

Vested and expected to vest March 31, 2024

Exercisable March 31, 2024

stock option activity for employees:

of Unvested Stock Option Activity

Unvested January 1, 2024

Unvested March 31, 2024

option activity for non-employees:

of Stock Option Activity

Outstanding January 1, 2024

Outstanding March 31, 2024

Vested and expected to vest March 31, 2024

Exercisable March 31, 2024

stock option activity for non-employees:

of Unvested Stock Option Activity

Unvested January 1, 2024

Unvested March 31, 2024

compensation expense was approximately $ 80,000 and $ 82,000 for the three months ended March 31, 2024 and 2023, resulting in a decrease

in general and administrative expenses, respectively.

of March 31, 2024, and 2023, respectively, there was approximately $ 214,000 and $ 134,000 of unrecognized equity-based compensation cost

related to options granted under the Equity Incentive Plan.

Purchase Agreement

March 28, 2024, the Company entered into a purchase agreement and a registration rights agreement with Atlas Sciences, LLC (“Atlas”), pursuant to which Atlas committed to purchase up to $ 15,000,000 of common stock of the

Company for a period of 24 months from the date of the purchase agreement.

the terms of the purchase agreement, the Company, at its sole discretion, shall have the right to issue Put shares to the Investor

of the Market Price of the shares on the day of trade.

Sales under the purchase agreement are limited to a daily maximum of the

the Median Daily Trading volume, and a beneficial ownership limitation of 4.99 %

and a maximum of 19.99 %

of the outstanding shares at the time of the purchase agreement.

In April 2024, the Company filed a registration statement with the

SEC on Form S-1 registering a total of 9,975,000

shares for resale pursuant to the Atlas Agreements, consisting of 9,636,400

shares that can be sold by the Company to Atlas and 338,600

shares that were issued to Atlas as Commitment Shares.

As of June 30, 2024, a total of 759,685

shares have been issued pursuant to the purchase agreement for a total of approximately $ 128,000 .

Purchase Agreement

May 31, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) to complete an offering

(the “Transactions”) with a single accredited investor (the “Purchaser”), pursuant to which the Company will

issue to the Purchaser, (i) in a registered direct offering, 5,640,958 shares of the Company’s common stock (the “Shares”),

par value $ 0.001 per share (“Common Stock”) and (ii) in a concurrent private placement, the Company will issue to the Purchaser

Class A common warrants to purchase an aggregate of up to 5,640,958 shares of its common stock (the “A Warrants”) at an exercise

price of $ 0.363 per share and Class B common warrants to purchase an aggregate of up to 5,640,958 shares of its common stock (the “B

“Warrants” and, along with the A Warrants, the “Common Warrants”) at an exercise price of $ 0.363 per share.

A Warrants and B Warrants will not be exercisable for six months after the issuance date and will expire, respectively, 24 months and

five years and six months after the issuance date.

The Common Warrants and the shares of common stock issuable upon the exercise of such

warrants are offered pursuant to an exemption from the registration requirements of the Securities Act provided in Section 4(a)(2) of

the Securities Act and Rule 506(b) promulgated thereunder.

Shares are being offered by the Company pursuant to a shelf registration statement on Form S-3 (File No.

333-262280), which was declared

effective on February 4, 2022 (as amended from time to time, the “Registration Statement”).

to the terms of the Purchase Agreement, subject to certain exceptions, the Company cannot issue any equity securities for 60 days following

the issuance date, provided that the Company will be able to utilize its at-the-market offering program with the Placement Agent

after 30 days.

Additionally, the Company cannot enter into a variable rate transaction (other than the ATM program with the Placement

Agent) for 120 days after the issuance date.

In addition, the Company’s executive officers and each of the Company’s directors

have entered into lock-up agreements with the Company pursuant to which each of them has agreed not to, for a period of 90 days from

the closing of the Transactions, offer, sell, transfer or otherwise dispose of the Company’s securities, subject to certain exceptions.

exercise price of the Common Warrants, and the number of Common Warrant Shares, will be subject to adjustment in the event of any stock

dividend or split, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Common Warrants.

If a Fundamental Transaction (as defined in the Common Warrants) occurs, then the successor entity will succeed to, and be substituted

for the Company, and may exercise every right and power that the Company may exercise and will assume all of its obligations under the

Common Warrants with the same effect as if such successor entity had been named in the warrant itself.

Common Warrant Holders will have

additional rights defined in the Common Warrants.

The Common Warrants will be exercisable on a “cashless” basis only if there

is not a current registration statement permitting public resale.

In this regard, the Company has agreed to file a registration statement

to register the resale of the Common Warrant Shares as soon as practicable (and in any event within 45 calendar days) providing for the

resale of the Shares issued and issuable upon exercise of the Common Warrants.

The Company has agreed to use commercially reasonable

efforts to cause such registration statement to become effective within 181 days following the issuance date and to keep such registration

statement effective at all times until no Purchaser owns any Warrants or Warrant Shares issuable upon exercise thereof.

Group LLC acted as the placement agent (the “Placement Agent”) on a “commercially reasonable best efforts” basis,

in connection with the Transactions pursuant to the Placement Agency Agreement, dated May 31, 2024 (the “Placement Agency Agreement”),

by and between the Company and the Placement Agent.

Pursuant to the Placement Agency Agreement, the Placement Agent will be entitled

to a cash fee of 8 % of the aggregate gross proceeds paid to the Company for the securities sold in the Transactions and reimbursement

of certain out-of-pocket expenses.

The Company evaluated

the Common Warrants under the guidance of ASC 480 – Distinguishing Liabilities from Equity and determined that they were in

scope under the guidance as freestanding financial instruments but did not meet the criteria for liability classification and are

classified as equity within the condensed consolidated financial statements.

Proceeds allocated to such warrants totaled approximately $ 2.5 million .

For the six months ended June 30,2024, no Common Warrants were exercised, and all remain outstanding on June 30,

Recent Accounting Pronouncements

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, 2023

did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

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.

fair values of cash and cash equivalents, other assets, accounts payable and accrued expenses approximate their carrying values due to

the short-term maturities of these items and are considered a Level 1 instrument of the fair value measurements standard.

also has certain warrants with a cash settlement feature in the occurrence of a Fundamental Transaction.

The fair value of the warrants

(“June 2024 Warrants”) related to the Company’s June 2024 common stock and warrant issuance, are calculated using a

Monte Carlo Simulation.

Company also had certain redeemable warrants in the Rights Offering with a cash settlement feature in the occurrence of a Fundamental

No Fundamental Transaction occurred.

In March 2024, 205,000 of these warrants converted on a cashless basis and 5,830,028

Company estimated the fair value of the June 2024 Warrants using the Black-Scholes Model, which uses multiple inputs including the Company’s

stock price, the exercise price of the warrant, volatility of the Company’s stock price, the risk-free interest rate and the expected

term of the warrants.

Company utilized the following assumptions to estimate the fair value of the Class A Warrants:

Schedule of Assumptions to

Estimate the Fair Value

Underlying price per share

Exercise price per share

Risk-free interest rate

Expected holding period

Expected volatility

Expected dividend yield

Company utilized the following assumptions to estimate the fair value of the Class B Warrants:

Underlying price per share

Exercise price per share

Risk-free interest rate

Expected holding period

Expected volatility

Expected dividend yield

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

(i) Risk-Free

Interest Rate .

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

constant maturities for periods commensurate with the remaining expected holding periods

of the warrants.

(ii) Expected

Holding Period .

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

are expected to be outstanding until they are exercised.

The Company utilizes the remaining

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

(iii) Expected

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

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

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

(iv) Expected

Dividend Yield .

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.

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:

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

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

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

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

including Research & Development.

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

the cost of operations or construction at their manufacturing facility;

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

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

related to a Put right being triggered as:

Schedule of Potential

Range of Probability

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

(vi) Expected

Timing of Announcement of a Fundamental Transaction.

As the Company has no specific expectation

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

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

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

(vii) Expected

100 Day Volatility at Announcement of a Fundamental Transaction .

An estimate of future

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

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

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

as a proxy for 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 Warrant expiration date for each simulation.

(ix) Expected

Time Between Announcement and Consummation of a Fundamental Transaction.

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

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

is estimated to be six months.

The Monte Carlo Simulation approach incorporates this additional

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

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

for the relevant period input change.

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.

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

at the reporting date.

Generally, this includes debt and equity securities that are traded

in an active market.

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

or liabilities;

quoted prices in markets that are not active;

or other inputs that are observable

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

or liabilities.

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

an active market.

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

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

Level 3 assets and liabilities

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

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

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

of June 30, 2024, the Company has classified the warrants with cash settlement features as

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

those inputs.

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

valuing the warrants.

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

as (in thousands):

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

of June 30, 2024

of December 31, 2023

Unsecured Promissory Note

February 16, 2024, the Company (“Borrower”) entered into a Note Purchase Agreement with Streeterville Capital LLC

(“Streeterville” or the “Lender”).

Under the terms of the agreement, Streeterville paid the Company $ 2,500,000

in exchange for an unsecured promissory Note with an Original Issue Discount of $ 781,250 .

The Company will pay $ 3,301,250

consisting of the principal amount of the Note, together with the original issue discount and $ 20,000

of lender transaction fees, no later than February 16, 2026.

The stated interest rate of the note is 10 %.

Debt schedule at June 30, 2024 and December 31, 2023

Schedule of Long Term Debt

Long-term debt

Unamortized Original issue discount

Unamortized Financing

Unamortized discount and debt issuance costs

Less current portion

of long-term debt, net (1)

Long-term debt,

costs expensed and capitalized related to long-term debt were as follows:

Schedule of Long Term Debt Interest Costs Expense and Capital

Interest expense

Interest capitalized

expenses related to long-term debt were as follows:

Schedule of Long Term Debt Amortization Expenses

Original issue discount

Loan fee amortization

maturities of long-term debt as of June 30, 2024 were as follows:

Schedule of Future Maturities of Long Term Debt

years ending December 31:

portion of long-term debt of approximately $ 2,750,000 is net of the current portion of debt

discount of approximately $ 386,000 and the current portion of debt origination costs of approximately

$ 10,000 as of June 30, 2024.

(2) Long-term

portion of debt of approximately $ 551,000 is net of the long-term portion of debt discount

of approximately $ 262,000 and the unamortized debt origination costs of approximately $ 6,000

as of June 30, 2024.

agreement allows the Lender to redeem up to $250,000 per calendar month beginning in August 2024, upon providing written notice to Borrower.

The Note further contains triggering events which can be remedied by the Lender requiring the Borrower to correct the triggering event,

increasing the outstanding balance by applying the triggering effect, or making the Note immediately due and payable.

Company leases office and lab facilities and other equipment under non-cancellable operating leases with initial terms typically ranging

from 1 to 5 years, expiring at various dates during 2024 through 2027, and requiring monthly payments ranging from less than $ 1,000 to

Certain leases include additional renewal options ranging from 1 to 5 years.

AIM has classified all of its leases as operating

of June 30, 2024 and December 31, 2023, the balance of the right of use assets was $ 700,000 and $ 697,000 , respectively, and the corresponding

operating lease liability balance was $ 722,000 and $ 718,000 , respectively.

Right of use assets are recorded net of accumulated amortization

of $ 352,000 and $ 363,000 as of June 30, 2024 and December 31, 2023, respectively.

recognized rent expense associated with these leases are follows:

Schedule of AIM Recognized Rent Expense Associated with Operating Lease

Operating lease

and variable lease costs

Total lease costs

Classification of lease costs

Research & development

General and administrative

Total lease costs

Company’s leases have remaining lease terms between 9 and 37 months.

As of June 30, 2024, the weighted-average remaining term was

As of December 31, 2023, the weighted-average remaining term was 41 months.

The Company’s weighted average incremental

borrowing rate for its leases was 10 % at June 30, 2024 and December 31, 2023.

minimum payments as of June 30, 2024, are as follows:

Schedule of Operating Lease Future Payments

Ending December 31,

Less imputed interest

Research, Consulting and Supply Agreements

6 unchanged sentences

The Company expenses these research and development costs when incurred.

the three months ended March 31, 2024, research and development expenses were comprised of:

During the three months ended

June 30, 2024, research and development expenses were comprised of:

clinical studies ($ 350,000 ),

manufacturing and engineering ($ 330,000 ), quality control ($ 284,000 )

and regulatory ($ 180,000 ).

During the three months ended

June 30, 2023 , research and development expenses were comprised of:

clinical studies ($ 777,000 ),

manufacturing and engineering ($ 321,000 ), quality control ($ 253,000 ) and regulatory ($ 1,601,000 ).

During the six months ended June 30, 2024, research and development expenses were comprised of:

clinical studies ($ 1,298,000 ), manufacturing

and engineering ($576,000), quality control ($834,000) and regulatory ($389,000).

During the six months ended June

30, 2023, research and development expenses were comprised of:

clinical studies ($ 1,929,000 ),

manufacturing and engineering ($ 955,000 ), quality control ($ 501,000 )

and regulatory ($ 1,621,000 ).

following summarizes the most substantial of our contracts relating to research, consulting, and supply costs for AIM as they related

to research and development costs for the three months ended March 31, 2024.

to research and development costs for the six months ended June 30, 2024.

Clinical Research LLC

2 unchanged sentences

LLC (“Amarex”).

During the three months ended March 31, 2024 and 2023, the Company incurred approximately $ 521,000 and $ 455,000 ,

During the three months

ended June 30, 2024 and 2023, the Company incurred approximately $ 125,200 and $ 377,300 , respectively, related to these ongoing agreements.

During the six months ended June 30, 2024 and 2023, the Company incurred approximately $ 607,000

and $ 849,400 ,

respectively, related to these ongoing agreements:

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AIM anticipates that the study will take approximately 4.6 years to

the three months ended March 31, 2024, the Company incurred approximately $ 86,000 related

to this agreement.

the three months ended March 31, 2023, the Company incurred approximately $ 174,000 related

to this agreement.

○ During the three months ended June 30, 2024, the Company

incurred approximately $ 66,500 related to this agreement.

○ During the three months

ended June 30, 2023, the Company incurred approximately $ 198,900 related to

this agreement.

the six months ended June 30, 2024, the Company incurred approximately $ 153,700 related to

this agreement.

the six months ended June 30, 2023, the Company incurred approximately $ 233,400 related to

this agreement.

Conditions - In September 2022, AIM executed a work order with Amarex, pursuant to which

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This study was completed in 2023, although certain activities are still ongoing.

the three months ended March 31, 2024, the Company incurred approximately $ 435,000 related

to this agreement.

the three months ended March 31, 2023, the Company incurred approximately $ 281,000 related

the three months ended June 30, 2024, the Company incurred approximately $ 59,000 related

to this agreement.

the three months ended June 30, 2023, the Company incurred approximately $ 61,000 related to this agreement.

the six months ended June 30, 2024, the Company incurred approximately $ 352,000 related to

this agreement.

the six months ended June 30, 2023, the Company incurred approximately $ 341,500 related to

this agreement.

HollisterStier

6 unchanged sentences

manufactured additional two lots of Ampligen in December 2019 and January 2020.

In March 2023, the Company ordered an additional 27,900

vials from Jubilant at a cost of approximately $ 1,432,000 .

the three months ended March 31, 2024, the Company incurred approximately $ 1,000 related

to this agreement.

the three months ended March 31, 2023, the Company did not incur any expense related to this

In December 2023, Jubilant completed manufacturing of

9,042 vials of Ampligen for clinical use.

○ During the three months ended June 30, 2024,

the Company incurred approximately $ 1,000 related to this agreement.

the three months ended June 30, 2023, the Company incurred approximately $ 1,432,000 related to this agreement.

the six months ended June 30, 2024, the Company incurred approximately $ 1,000 related to

this agreement.

the six months ended June 30, 2023, the Company incurred approximately $ 1,432,000 related to this agreement.

Pharma Solutions

2 unchanged sentences

Dudley, UK location to produce the polymer precursors to manufacture the drug Ampligen.

the three months ended March 31, 2024, the Company incurred approximately $ 129,000 related

to this agreement.

the three months ended March 31, 2023, the Company incurred approximately $ 357,000 related

○ During the three months ended June 30, 2024,

the Company did not incur any expense r elated

to this agreement.

○ During the three months ended June 30, 2023, the Company

incurred approximately $ 357,000 related to this agreement.

the six months ended June 30, 2024, the Company incurred approximately $ 129,000 related to

this agreement.

the six months ended June 30, 2023, the Company incurred approximately $ 357,000 related to

this agreement.

December 2022, the Company entered into a joint clinical study agreement with Erasmus University Medical Center Rotterdam to conduct

a Phase II study:

Combining anti-PD-L1 immune checkpoint inhibitor durvalumab with TLR-3 agonist rintatolimod in patients with

metastatic pancreatic ductal adenocarcinoma for therapy efficacy.

Combining anti-PD-L1 immune checkpoint inhibitor durvalumab with TLR-3 agonist rintatolimod in patients with metastatic

pancreatic ductal adenocarcinoma for therapy efficacy.

This is a study in collaboration with AstraZeneca.

limited responsibilities are limited to providing Ampligen.

Additionally, in April 2023 AIM agreed to provide to Erasmus MC an unrestricted grant

AIM’s limited responsibilities

are limited to providing Ampligen.

Additionally, in April 2023 AIM agreed to provide to Erasmus MC an unrestricted grant of $ 200,000

for immune monitoring in pancreatic cancer patients.

the three months ended March 31, 2024, the Company incurred approximately $ 4,000 related

to this agreement.

the three months ended March 31, 2023, the Company did not incur any expense related to this

○ During the three

months ended June 30, 2024, the Company incurred approximately $ 75,000 related to this agreement.

○ During the three months ended June 30, 2023, the Company incurred approximately $ 100,000 related to this agreement.

the six months ended June 30, 2024, the Company incurred approximately $ 79,000 related to

this agreement.

the six months ended June 30, 2023, the Company incurred approximately $ 100,000 related to this

Sales International

2 unchanged sentences

for its services, Azenova will receive a fixed monthly retainer of $ 30,000 per month in addition to 360,000 stock options that vest monthly.

the three months ended March 31, 2024, the Company incurred approximately $ 90,000 related

to this agreement.

the three months ended March 31, 2023, the Company did not incur any expense related to this

○ During the three

months ended June 30, 2024, the Company incurred approximately $ 90,000 related to this agreement.

○ During the three months ended June 30, 2023, the Company did not incur

any expense related to this agreement.

the six months ended June 30, 2024, the Company incurred approximately $ 180,000 related to

this agreement.

the six months ended June 30, 2023, the Company did no t incur any expense related to this

September 2023, the Company entered into an agreement with Alcami Corporation to perform an extractables study for a primary packaging

3 unchanged sentences

in December 2023.

the three months ended March 31, 2024, the Company incurred approximately $ 10,000 of lab

services from Alcami.

the three months ended March 31, 2023, the Company incurred approximately $ 8,000 of lab services

Recent Accounting Pronouncements

the first quarter of 2024 accounting pronouncements issued by the FASB did not or are not believed by management to have a material impact

on the Company’s present or future financial statements.

○ During the three

months ended June 30, 2024, the Company incurred approximately $ 3,500 of lab services from Alcami.

○ During the three months ended June 30, 2023, the Company incurred

approximately $ 8,300

of lab services from Alcami.

the six months ended June 30, 2024, the Company incurred approximately $ 14,000 of lab services

the six months ended June 30, 2023, the Company incurred approximately $ 16,000 of lab services

Subsequent Events

April 2024, the Company filed a registration statement with the SEC on Form S-1 registering a total of 9,975,000

shares for resale pursuant to the Atlas Agreements as of March 28, 2024, the Effective Date, consisting of 9,636,400

shares that can be sold by the Company to Atlas and 338,600

shares that were issued to Atlas as Commitment Shares.

In May 2024, Put Notices were issued to Atlas, under the Equity Purchase

Agreement, requiring Atlas to purchase a total of 206,800

shares pursuant to the agreement.

April and May of 2024, the Company sold 730,110

shares under the EDA for total gross proceeds of $ 372,223 ,

which includes a 3.0 %

fee to Maxim of $ 11,167 .

April 2024, 689 shares of Series B Convertible Preferred Stock expired and none were converted prior to expiration.

Deferred 2023 bonuses of $ 500,000

were paid in May 2024 to Thomas Equels for $ 350,000 and Peter Rodino for $ 150,000 .

Amended and Restated 2018 Equity Incentive Plan

July 1, 2024, the Company filed a Registration Statement registering additional shares of common stock under the Company’s Amended

and Restated 2018 Equity Incentive Plan.

The number of shares of the Company’s common stock available for grant and issuance under

the 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.

On July 1, 2024, the number of shares of the Company’s common stock available for grant

and issuance under the 2018 Plan increased by 1,142,733 shares.

adopted Restated and Amended Bylaws

July 31, 2024, the Company adopted Restated and Amended Bylaws.

The Restated and Amended Bylaws revise the prior Bylaws by (i) removing

or revising provisions in Section 1.4 of the prior Bylaws (the advance notice portion of the Bylaws) deemed unenforceable or invalid

by the Delaware Supreme Court, (ii) revising other portions of Section 1.4 to ensure that the advance notice bylaws are otherwise appropriately

tailored to further the intended procedural and informational functions of the advance notice bylaws, including in view of guidance from

the Delaware Court of Chancery and Delaware Supreme Court in their opinions in the Kellner litigation, and (iii) making other conforming

and clarifying changes to the prior Bylaws.

addition, the Restated and Amended Bylaws add that, in the case of the Company’s 2024 annual meeting of stockholders, a Noticing

Stockholder’s notice of nominations or proposed business shall also be considered timely if it is delivered to the Company’s

Secretary at the principal executive offices of the Company not later than the Close of Business on September 13, 2024.

Amendment to Employment Agreements:

Equels’ employment agreement was amended

by adding the following to the end of Section 3(a):

(a)(i) Notwithstanding the provisions

of Section 3(a), during the one year period ending November 9, 2024, the Employee’s Short term compensation shall be revised and

shall consist of a base salary of $ 750,000 and shares of the Company’s common stock, $ .001 par value, valued at $ 100,000 , such value

equal to 100% of the closing price of the Company’s common stock on the NYSE American on the trading date immediately preceding

the date of this Agreement.

Rodino’s employment agreement was amended

by adding the following to the end of Section 3(a):

(a)(i) Notwithstanding the provisions

of Section 3(a), during the one year period ending March 23, 2025, the Employee’s Short term compensation shall be revised and shall

consist of a base salary of $ 375,000 and shares of the Company’s common stock, $ .001 par value, valued at $ 50,000 , such value equal

to 100% of the closing price of the Company’s common stock on the NYSE American on the trading date immediately preceding the date

of this Agreement.

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

What changed 10-Q

Item 1. Financial Statements