AIM ImmunoTech Inc. 10-Q

ITEM 1: Legal Proceedings Please see Part I, Item 3. Legal Proceedings in our Annual Report on Form 10-K for the year ended December 31, 2023 and Part II. Item 1: Legal Proceedings in our quarterly report on Form 10Q for the Quarter ended March 31, 2024. Since the filing of the March 31, 2024, Form 10-Q: AIM ImmunoTech, Inc. v. Tudor, et al., in the United States District Court for the Middle District of Florida, Ocala Division, Case No. 5:2022cv00323. On April 22, 2024, the District Court issued an order granting-in-part Lautz and Jorgl’s Rule 59(e) and Rule 11 motions, respectively. According to the District Court, when we filed our Amended Complaint, there was “no reasonable factual basis for [our] 13b claim against Lautz,” in light of his deposition testimony disclaiming ongoing participation in the group’s proxy fight. Furthermore, the District Court sanctioned us and our counsel, concluding that our argument regarding Jorgl’s voluntary cessation, and potential ongoing ownership, “was objectively frivolous and advanced for an improper argument” in light of Jorgl’s affidavit and redacted stock transfer form. The District Court limited Rule 11 sanctions to Jorgl’s reasonable attorneys’ fees and costs incurred after March 28, 2023 and ordered further briefing on fee applications and an appropriate PSLRA sanction, with Jorgl and Lautz’s initial briefs due on May 7, 2024. On April 29, 2024, Jorgl filed an unopposed motion to extend his filing deadline to May 17, 2024. We dispute the Court’s order and we are considering whether to appeal. On April 22, 2024,the court entered an order finding Jorgl and Lautz were entitled to recover attorney’s fees and costs and entered judgment on behalf of Jorgl for $216,936, and on behalf of Lautz for $76,473. AIM filed a motion to stay enforcement of the judgment pending the 11th Circuit Appeal, and the Court granted a stay on June 21, 2024. The appeal does not seek damages. AIM filed a notice of appeal of the order of dismissal and the order denying its motion for reconsideration that were entered in AIM ImmunoTech, Inc. v. Tudor, et al., Case 5:22-cv-00323 (M.D. Fla. 2022) (above). The initial brief by AIM is due on September 4, 2024. On June 18, 2024, The Carlyle Appelate Law firm was engaged for the above referenced appeal. It is anticipated that a Notice of appearance by Carlyle will be filed in that matter. AIM is exposed in this matter for the amount of those Judgments (which have been bonded by AIM), interest on those judgements, as well as potentially paying attorney’s fees in the event the appeal is unsuccessful. Kellner v. AIM ImmunoTech Inc. et al., in the Supreme Court of the State of Delaware, Case No. 3, 2024. On January 16, 2024, the Delaware Supreme Court granted-in-part Kellner’s motion to expedite and scheduled oral argument before the en banc Delaware Supreme Court for April 10, 2024. On April 10, 2024, the en banc Delaware Supreme Court heard oral argument from AIM and Kellner in this matter and took the matter under consideration. On July 11, 2024, the Delaware Supreme Court issued a decision affirming in part and reversing in part the Court of Chancery’s December 28, 2023 opinion, and not remanding the matter to the Court of Chancery. The Supreme Court held that certain of the bylaws adopted by the board were legally invalid and inequitable. The board has subsequently revised the bylaws to address and correct said deficiencies. The Delaware Supreme Court also held that no further action was required with respect to Kellner’s rejected nominations because Kellner and his nominees engaged in deceptive conduct during the nomination process, including by submitting false and misleading information in connection with their nominations. Prior to this appeal, the magistrate noted in her December 28, 2023 decision, that “[t]he context in which the Board received [the Kellner Notice] “cannot be ignored.” “The Kellner Notice followed a proxy contest where Jorgl became an AIM stockholder solely to front a nomination and shield undisclosed persons behind the scenes. Those persons included two white collar criminals—one of whom had become increasingly hostile to AIM and had misrepresented himself as an AIM representative to third parties. It would have been obvious to the Board that the new nomination behind Kellner carried over from the prior year. Chioini was a constant, Deutsch remained involved (now as a nominee), and Baker Hostetler continued to advise the effort. The threat to return ‘guns blazing’ in 2023 came to fruition.” On July 26, 2024, Kellner filed a Motion for Reargument, requesting the Supreme Court to reconsider certain aspects of its ruling and requesting clarification that the trial court retains jurisdiction for any fee applications. By order dated July 29, 2024, the Supreme Court denied Kellner’s Motion for Reargument, directed that the case be closed, and specifically ruled that “The case is not remanded for an award of attorneys’ fees and costs” and deemed that the “this Case is Closed.” BioLife The trial court, at the request of the parties, stayed the matter pending determination of the Petition. The Superior Court denied that Petition on July 30, 2024. On August 9, 2024, the parties notified the Court that they were conferring to avoid duplicate proceedings and would advise the trial court within 30 days. No estimate can be made at this time regarding the scheduling or ultimate determination of the matters set forth in the Petition and the underlying issues presented in the appeal. No judgement can be made at this time of the likelihood of the Company prevailing on its claims. 43