AIM ImmunoTech Inc
For the period ended Jun 30, 2024. Filed Aug 14, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 14, 2024
AIM$0.16+1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-15.
0001493152-24-019917
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001493152-24-032355
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 158 previous paragraphs and 192 current paragraphs.
126 unchanged; 27 reworded; 30 added; 3 removed; 2 previous and 9 current paragraphs rearranged.
Tables are not compared: 27 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
On May 31, 2024, we 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 we will issue to the Purchaser, (i) in a registered direct offering, 5,640,958 shares of our common stock (the “Shares”), par value $0.001 per share (“Common Stock”) and (ii) in a concurrent private placement, we 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. The 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.
Current report
We received aggregate gross proceeds from the Transactions of approximately $2,047,688, before deducting fees to the Placement Agent and other estimated offering expenses payable by us. The Shares are being offered by us 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”).
Current report
Pursuant to the terms of the Purchase Agreement, subject to certain exceptions, we cannot issue any equity securities for 60 days following the issuance date, provided that we will be able to utilize it’s at-the-market offering program with the Placement Agent after 30 days. Additionally, we 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, our executive officers and each of our directors have entered into lock-up agreements with us 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 our securities, subject to certain exceptions.
Current report
The 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 us, and may exercise every right and power that we 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, we have 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. We have 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.
Current report
Maxim 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 us 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.
Current report
Distinguishing Liabilities from Equity
Current report
The Company has adopted the guidance of ASC 480 in evaluating how it classifies and measures in its statement of financial position certain financial instruments with characteristics of both liabilities and equity. Under this guidance the Company evaluates free-standing financial instruments to determine whether the instruments are classified as liabilities or equity. The evaluation includes determining whether the instruments are mandatorily redeemable, whether redemption includes a transfer of assets, and whether the redemption feature is conditional.
Current report
Derivative Instruments
Current report
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives requiring bifurcation in accordance with ASC Topic 815, Derivatives and Hedging. Derivative instruments are measured at fair value at issuance and at each reporting date in accordance with ASC 820 with changes in fair value recognized in the period of change in the consolidated statements of operations and comprehensive loss.
Current report
Interest and Other Income
Current report
We recovered $2,500,000 in Director and Officer (D&O) insurance proceeds during the quarter ended June 30, 2024 related to legal costs expended during its successful defense in shareholder litigation matters in addition to $80,000 of interest earnings during the period. During the quarter ended June 30, 2023, interest earnings were $318,000. Interest earnings were higher during the second quarter of 2023 due to higher investment levels.
Current report
Six Months ended June 30, 2024 versus Six Months ended June 30, 2023
Current report
Net Loss
Current report
Our net loss was approximately $7,653,000 and $8,570,000 for the six months ended June 30, 2024, and 2023, respectively, representing a decrease in loss of approximately $917,000 or 11%. This decrease in loss was primarily due to the following:
Current report
Revenues
Current report
Interest and Other Income
Current report
We recovered $2,500,000 in Director and Officer (D&O) insurance proceeds during the six months ended June 30, 2024 related to legal costs expended during its successful defense in shareholder litigation matters in addition to $161,000 of interest earnings during the period. During the six months ended June 30, 2023, interest earnings were $517,000. Interest earnings were higher during the six months ended June 30, 2023 due to higher investment levels during the period.
Current report
Gain (loss) on Investments, net
Current report
Production Costs
Current report
Research and Development Costs
Current report
Overall Research and Development (“R&D”) costs for the six months ended June 30, 2024, were approximately $3,096,000, as compared to $5,005,000 for the same period a year ago, reflecting a decrease of approximately $1,909,000. The primary reason for the decrease in R&D costs was a decrease in outside contractors of $1,750,000, as well a decrease in software and IT expenses of $125,000 and a decrease in clinical expenses of $354,000 offset by an increase in salaries of $252,000, office expense of $18,000, maintenance expense of $14,000, manufacturing expenses of $14,000, rent expense of $14,000 and consulting expense of $14,000.
Current report
General and Administrative Expenses
Current report
General and Administrative (“G&A”) expenses for the six months ended June 30, 2024, and 2023, were approximately $6,406,000 and $4,841,000, respectively, reflecting an increase of approximately $1,565,000. The increase in G&A expenses for the six months ended June 30, 2024 was due primarily to an increase in legal professional fees of approximately $1,428,000, investment banker fees of $314,000 and salaries of $62,000 offset by a decrease in insurance expense of $153,000, taxes & licenses of $50,000 and travel expenses of $33,000.
Current report
Interest Expenses
Current report
In addition, we raised $2,500,000 in net proceeds from the sale of an unsecured Note and entered into an equity line of credit to raise up to 15,000,000 (seeOverview; The Atlas Equity Line of Credit above). Under the terms of the Atlas Equity Line of Credit, we, at our 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: $500,000, 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. In April 2024, we 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 us to Atlas and 338,600 shares that were issued to Atlas as Commitment Shares. The registration statement was declared effective and the final prospectus was filed on May 1, 2024. As of June 30, 2024, a total of 759,685 shares have been issued pursuant to this agreement for a total of approximately $128,000.
Current report
On May 31, 2024, we 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 we will issue to the Purchaser, (i) in a registered direct offering, 5,640,958 shares of our common stock (the “Shares”), par value $0.001 per share (“Common Stock”) and (ii) in a concurrent private placement, we 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. The 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.
Current report
We received aggregate gross proceeds from the Transactions of approximately $2,047,688, before deducting fees to the Placement Agent and other estimated offering expenses payable by us. The Shares are being offered by us 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”).
Current report
Pursuant to the terms of the Purchase Agreement, subject to certain exceptions, we cannot issue any equity securities for 60 days following the issuance date, provided that we will be able to utilize it’s at-the-market offering program with the Placement Agent after 30 days. Additionally, we 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, our executive officers and each of our directors have entered into lock-up agreements with us 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 our securities, subject to certain exceptions.
Current report
The 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 us, and may exercise every right and power that we 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, we have 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. We have 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.
Current report
Maxim 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 us 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.
Removed paragraphs (3)
Previous report
Ampligen®
Previous report
https://clinicaltrials.gov/study/NCT05756166
Previous report
In January 2023, we entered into an external sponsored collaborative clinical research agreement with Erasmus MC and AstraZeneca. Under the agreement, Erasmus MC is planning to perform an investigator-initiated clinical study, entitled “Combining anti-PD-L1 immune checkpoint inhibitor durvalumab with TLR-3 agonist rintatolimod in patients with metastatic pancreatic ductal adenocarcinoma for therapy effect. DURIPANC Study,” in which it will use study drugs provided by both AstraZeneca and us. In June 2023 we received the required approvals from the Central Committee on Research Involving Human Subjects, which is the Competent Authority for the review of clinical trials in the Netherlands, and the Medical Ethics Review Committee Erasmus MC, which is the governing ethics board. The study is open and is recruiting subjects.
Reworded paragraphs (27)
Previous wording
AIM ImmunoTech Inc. and its subsidiaries (collectively, “AIM”, “Company”, “we” or “us”) are an immuno-pharma company headquartered in Ocala, Florida, and focused on the research and development of therapeutics to treat multiple types of cancers, viral diseases and immune-deficiency disorders. We have established a strong foundation of laboratory, pre-clinical and clinical data with respect to the development of nucleic acids and natural interferon to enhance the natural antiviral defense system of the human body, and to aid the development of therapeutic products for the treatment of certain cancers and chronic diseases.
Current wording
AIM ImmunoTech Inc. and its subsidiaries (collectively, “AIM”, “Company”, “we”, “us” or “our”) are an immuno-pharma company headquartered in Ocala, Florida, and focused on the research and development of therapeutics to treat multiple types of cancers, viral diseases and immune-deficiency disorders. We have established a strong foundation of laboratory, pre-clinical and clinical data with respect to the development of nucleic acids and natural interferon to enhance the natural antiviral defense system of the human body, and to aid the development of therapeutic products for the treatment of certain cancers and chronic diseases.
Previous wording
Our 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”).
Current wording
Our 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”).
Previous wording
The FDA authorized an open-label treatment protocol (“AMP-511”) allowing patient access to Ampligen for treatment in a study under which severely debilitated CFS patients have the opportunity to be on Ampligen to treat this very serious and chronic condition. The data collected from the AMP-511 protocol through a consortium group of clinical sites provide safety information regarding the use of Ampligen in patients with CFS. The AMP-511 protocol is ongoing. In October 2020, we received IRB approval for the expansion of the AMP-511 protocol to include patients previously diagnosed with SARS-CoV-2 following clearance of the virus, but who still demonstrate chronic fatigue-like symptoms that we refer to as Post-COVID conditions. As of March 31, 2024, there were 10 patients enrolled in this open-label, expanded access treatment protocol (including three patients with Post-COVID Conditions). To date, there have been eight such Post-COVID patients treated in the study. AIM previously reported positive preliminary results based on data from the first four Post-COVID Condition patients enrolled in the study. The data show that, by week 12, compared to baseline, there was what the investigators considered a clinically significant decrease in fatigue-related measures.
Current wording
The FDA authorized an open-label treatment protocol (“AMP-511”) allowing patient access to Ampligen for treatment in a study under which severely debilitated CFS patients have the opportunity to be on Ampligen to treat this very serious and chronic condition. The data collected from the AMP-511 protocol through a consortium group of clinical sites provide safety information regarding the use of Ampligen in patients with CFS. The AMP-511 protocol is ongoing. In October 2020, we received IRB approval for the expansion of the AMP-511 protocol to include patients previously diagnosed with SARS-CoV-2 following clearance of the virus, but who still demonstrate chronic fatigue-like symptoms that we refer to as Post-COVID conditions. As of June 30, 2024, there were 8 patients enrolled in this open-label, expanded access treatment protocol (including two patients with Post-COVID Conditions). To date, there have been eight such Post-COVID patients treated in the study. AIM previously reported positive preliminary results based on data from the first four Post-COVID Condition patients enrolled in the study. The data show that, by week 12, compared to baseline, there was what the investigators considered a clinically significant decrease in fatigue-related measures.
Previous wording
Under the terms and subject to the conditions of the Purchase Agreement, we have the right, but not the obligation, to sell to Atlas, and Atlas is obligated to purchase up to $15 million of our Common Stock (the “Commitment Amount”). Such sales by us, if any, will be subject to certain limitations, and may occur from time to time, at our sole discretion, over the 24-month period commencing on the date that a registration statement covering the resale of shares that have been and may be issued under the Purchase Agreement. We agreed to file the registration statement with the SEC pursuant to the Registration Rights Agreement. Sales cannot commence until the registration statement is declared effective by the SEC and a final prospectus in connection therewith is filed and the other conditions set forth in the Purchase Agreement are satisfied.
Current wording
Under the terms and subject to the conditions of the Purchase Agreement, we have the right, but not the obligation, to sell to Atlas, and Atlas is obligated to purchase up to $15 million of our Common Stock (the “Commitment Amount”). Such sales by us, if any, will be subject to certain limitations, and may occur from time to time, at our sole discretion, over the 24-month period commencing on the date that a registration statement covering the resale of shares that have been and may be issued under the Purchase Agreement. We agreed to file the registration statement with the SEC pursuant to the Registration Rights Agreement. Sales could not commence until the registration statement is declared effective by the SEC and a final prospectus in connection therewith is filed and the other conditions set forth in the Purchase Agreement are satisfied. The registration statement was declared effective and the final prospectus was filed on May 1, 2024.
Previous wording
The FDA has authorized an open-label expanded access treatment protocol (AMP-511) allowing patient access to Ampligen in a study under which severely debilitated CFS patients have the opportunity to be on Ampligen to treat this serious and chronic condition. The AMP-511 protocol started in the 1990s and is ongoing. The data collected from the AMP-511 protocol through clinical sites provide safety information regarding the use of Ampligen in patients with CFS. We are establishing an enlarged database of clinical safety information which we believe will provide further documentation regarding the absence of autoimmune disease associated with Ampligen treatment. We believe that continued efforts to understand existing data, and to advance the development of new data and information, will ultimately support our future filings for Ampligen and/or the design of future clinical studies that the FDA requested in a CRL. The FDA approved an increased reimbursement level from $200 to $345 per 200 mg vial of Ampligen, due to increased production costs; which was re-authorized in 2021, 2022 and 2023. At this time, we do not plan on passing this adjustment along to the patients in this program. In October 2020, we received IRB approval for the expansion of the AMP-511 Expanded Access Program clinical trial for ME/CFS to include patients previously diagnosed with SARS-CoV-2 following clearance of the virus, but who still demonstrate chronic fatigue-like symptoms that we refer to as Post-COVID conditions. As of March 31, 2024, there are 10 patients enrolled in this open-label expanded access treatment protocol. In July 2022, AIM reported positive preliminary results based on data from the first four Post-COVID Condition patients enrolled in the study. The data show that, by week 12, compared to baseline, the investigators observed what they considered a clinically significant decrease in fatigue-related measures. To date, there have been eight such Post-COVID patients treated in this study.
Current wording
The FDA has authorized an open-label expanded access treatment protocol (AMP-511) allowing patient access to Ampligen in a study under which severely debilitated CFS patients have the opportunity to be on Ampligen to treat this serious and chronic condition. The AMP-511 protocol started in the 1990s and is ongoing. The data collected from the AMP-511 protocol through clinical sites provide safety information regarding the use of Ampligen in patients with CFS. We are establishing an enlarged database of clinical safety information which we believe will provide further documentation regarding the absence of autoimmune disease associated with Ampligen treatment. We believe that continued efforts to understand existing data, and to advance the development of new data and information, will ultimately support our future filings for Ampligen and/or the design of future clinical studies that the FDA requested in a CRL. The FDA approved an increased reimbursement level from $200 to $345 per 200 mg vial of Ampligen, due to increased production costs; which was re-authorized in 2021, 2022, 2023 and 2024. At this time, we do not plan on passing this adjustment along to the patients in this program. In October 2020, we received IRB approval for the expansion of the AMP-511 Expanded Access Program clinical trial for ME/CFS to include patients previously diagnosed with SARS-CoV-2 following clearance of the virus, but who still demonstrate chronic fatigue-like symptoms that we refer to as Post-COVID conditions. As of June 30, 2024, there are 8 patients enrolled in this open-label expanded access treatment protocol. In July 2022, AIM reported positive preliminary results based on data from the first four Post-COVID Condition patients enrolled in the study. The data show that, by week 12, compared to baseline, the investigators observed what they considered a clinically significant decrease in fatigue-related measures. To date, there have been eight such Post-COVID patients treated in this study.
Previous wording
In 2018, we completed production of two commercial-size batches of more than 16,000 vials of Ampligen, following its “Fill & Finish” at Jubilant HollisterStier, the Contract Manufacturing Organization. These lots passed all required testing for regulatory release for human use and are being used for multiple programs, including: the treatment of ME/CFS; the pancreatic cancer EAP in the Netherlands; and will continue to be used for ongoing and future clinical studies in oncology. Additionally, two lots of Ampligen were manufactured in December 2019 and January 2020 at Jubilant HollisterStier and we recently issued a purchase order for a total of $1,432,257 to manufacture additional lots of Ampligen at Jubilant. The current manufactured lots of Ampligen have been fully tested and released for commercial product launch in Argentina and for clinical trials. Additionally, in December 2020, we added Pii as a “Fill & Finish” provider to enhance our capacity to produce Ampligen. This addition amplifies our manufacturing capability by providing redundancy and cost savings. The contracts augment our active and in-process fill and finish capacity.
Current wording
In 2018, we completed production of two commercial-size batches of more than 16,000 vials of Ampligen, following its “Fill & Finish” at Jubilant HollisterStier, the Contract Manufacturing Organization. These lots passed all required testing for regulatory release for human use and are being used for multiple programs, including: the treatment of ME/CFS; the pancreatic cancer EAP in the Netherlands; and will continue to be used for ongoing and future clinical studies in oncology. Lots of Ampligen were manufactured in December 2019, January 2020 and March 2024. Additionally, in December 2020, we added Pharmaceutics International Inc. (“Pii”) as a “Fill & Finish” provider to enhance our capacity to produce Ampligen. This addition amplifies our manufacturing capability by providing redundancy and cost savings. The contracts augment our active and in-process fill and finish capacity.
Previous wording
Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS), also known as Chronic Fatigue Immune Dysfunction Syndrome (“CFIDS”) and Chronic Fatigue Syndrome (CFS), is a serious and debilitating chronic illness and a major public health problem. ME/CFS is recognized by both the government and private sector as a significant unmet medical need, including the U.S. National Institutes of Health (“NIH”), FDA and the CDC. The CDC states on its website athttps://www.cdc.gov/me-cfs/ that “Myalgic encephalomyelitis/chronic fatigue syndrome (ME/CFS) is a serious, long-term illness that affects many body systems. People with ME/CFS are often not able to do their usual activities. At times, ME/CFS may confine them to bed. People with ME/CFS have severe fatigue and sleep problems. ME/CFS may get worse after people with the illness try to do as much as they want or need to do. This symptom is called post-exertional malaise (PEM). Other symptoms can include problems with thinking and concentrating, pain, and dizziness.”
Current wording
Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS), also known as Chronic Fatigue Immune Dysfunction Syndrome (“CFIDS”) and Chronic Fatigue Syndrome (CFS), is a serious and debilitating chronic illness and a major public health problem. ME/CFS is recognized by both the government and private sector as a significant unmet medical need, including the U.S. National Institutes of Health (“NIH”), FDA and the CDC.
Previous wording
Following our approval in Argentina, in 2017 we engaged Jubilant HollisterStier (“Jubilant”) to be our authorized CMO for Ampligen. Two lots of Ampligen consisting of more than 16,000 units were manufactured and released in 2018; these lots have been designated for human use in the United States in the cost recovery CFS program and for expanded oncology clinical trials. The production of additional polymer (Ampligen intermediates) took place in 2019 at our New Brunswick facility. Additionally, Jubilant manufactured two more lots of Ampligen in December 2019 and January 2020. The current manufactured lots of Ampligen have been fully tested and released for commercial product launch in Argentina and for clinical trials. In addition, we have supplied GP Pharm with the Ampligen required for testing and ANMAT release. Once final approval by ANMAT is obtained, we anticipate that GP Pharm will begin distributing Ampligen in Argentina.
Current wording
Following our approval in Argentina, in 2017 we engaged Jubilant HollisterStier (“Jubilant”) to be our authorized CMO for Ampligen. Two lots of Ampligen consisting of more than 16,000 units were manufactured and released in 2018; these lots have been designated for human use in the United States in the cost recovery CFS program and for expanded oncology clinical trials. The production of additional polymer (Ampligen intermediates) took place in 2019 at our New Brunswick facility. Additionally, Jubilant manufactured three more lots of Ampligen in December 2019, January 2020 and March 2024. In addition, we have supplied GP Pharm with the Ampligen required for testing and ANMAT release. Once final approval by ANMAT is obtained, we anticipate that GP Pharm will begin distributing Ampligen in Argentina.
Previous wording
Our business plan calls for the utilization of one or more CMOs to produce Ampligen API. While we believe we have sufficient Ampligen API to meet our current needs, we are also continually exploring new efficiencies so as to maximize our ability to fulfill future obligations. In this regard, on December 5, 2022, we entered into a Master Service Agreement and a Quality Agreement with Sterling Pharma Solutions (“Sterling”) for the manufacture of our Poly I and Poly C12U polynucleotides and transfer of associated test methods at Sterling’s Dudley, UK location to produce the polymer precursors to manufacture the drug Ampligen. We are utilizing Sterling’s expertise to refine our approach to polymer production. While we believe we have sufficient Ampligen API to meet current needs, we are also continually exploring new efficiencies in order to maximize its ability to fulfill future obligations. In March 2023, we submitted a work order for a total of $1,432,257 to manufacture additional lots of Ampligen at Jubilant.
Current wording
Our business plan calls for the utilization of one or more CMOs to produce Ampligen API. While we believe we have sufficient Ampligen API to meet our current needs, we are also continually exploring new efficiencies so as to maximize our ability to fulfill future obligations. In this regard, on December 5, 2022, we entered into a Master Service Agreement and a Quality Agreement with Sterling Pharma Solutions (“Sterling”) for the manufacture of our Poly I and Poly C12U polynucleotides and transfer of associated test methods at Sterling’s Dudley, UK location to produce the polymer precursors to manufacture the drug Ampligen. We are utilizing Sterling’s expertise to refine our approach to polymer production. In March 2023, we submitted a purchase order for a total of $1,432,257 to manufacture additional lots of Ampligen at Jubilant. An additional lot was manufactured by Jubilant in December 2023.
Previous wording
In May 2016, we entered into a five-year, exclusive Renewed Sales, Marketing, Distribution and Supply Agreement (the “Agreement”) with GP Pharm. Under this Agreement, GP Pharm was responsible for gaining regulatory approval in Argentina for Ampligen to treat severe CFS in Argentina and for commercializing Ampligen for this indication in Argentina. We granted GP Pharm the right to expand rights to sell this experimental therapeutic into other Latin America countries based upon GP Pharm achieving certain performance milestones. We also granted GP Pharm an option to market Alferon N Injection in Argentina and other Latin America countries (See “Our Products; Ampligen” above). The GP Pharm contract was extended in May 2021, and will now end on May 24, 2024. In August 2021, ANMAT granted a five-year extension to a previous approval to sell and distribute Ampligen to treat severe CFS in Argentina. This extends the approval until 2026.
Current wording
In May 2016, we entered into a five-year, exclusive Renewed Sales, Marketing, Distribution and Supply Agreement (the “Agreement”) with GP Pharm. Under this Agreement, GP Pharm was responsible for gaining regulatory approval in Argentina for Ampligen to treat severe CFS in Argentina and for commercializing Ampligen for this indication in Argentina. We granted GP Pharm the right to expand rights to sell this experimental therapeutic into other Latin America countries based upon GP Pharm achieving certain performance milestones. We also granted GP Pharm an option to market Alferon N Injection in Argentina and other Latin America countries (See “Our Products; Ampligen” above). The GP Pharm contract was extended in May 2021 with an end date of May 24, 2024; we are in discussions with GP Pharm to extend the agreement. In August 2021, ANMAT granted a five-year extension to a previous approval to sell and distribute Ampligen to treat severe CFS in Argentina. This extends the approval until 2026.
Previous wording
Each participant immediately vests in his or her deferred salary contributions as well as the Company’s safe harbor contributions. A 6% safe harbor matching contribution by us was reinstated effective January 1, 2021. For the three months ending March 31, 2024 we made approximately $43,800 in contributions, and for the year ending December 31, 2023 approximately $162,000 in contributions were made.
Current wording
Each participant immediately vests in his or her deferred salary contributions as well as our safe harbor contributions. A 6% safe harbor matching contribution by us was reinstated effective January 1, 2021. For the six months ending June 30, 2024 we made approximately $90,000 in contributions, and for the year ending December 31, 2023 approximately $162,000 in contributions were made.
Previous wording
Critical Accounting Policies and Estimates
Current wording
Critical Accounting Policies and Use of Estimates
Previous wording
There have been no material changes in our critical accounting policies and estimates from those disclosed in Part II; Item 7: “Management’s Discussion and Analysis of Financial Condition and Results of Operations; Critical Accounting Policies” contained in our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
There have been no material changes in our critical accounting policies and estimates from those disclosed in Part II; Item 7: “Management’s Discussion and Analysis of Financial Condition and Results of Operations; Critical Accounting Policies” contained in our Annual Report on Form 10-K for the year ended December 31, 2023 except for the policies regarding “Distinguishing Liabilities from Equity” and “Derivative Instruments”.
Previous wording
Our net loss was approximately $5,817,000 and $3,661,000 for the three months ended March 31, 2024, and 2023, respectively, representing an increase in loss of approximately $2,156,000 or 59%. This increase in loss was primarily due to the following:
Current wording
Our net loss was approximately $1,836,000 and $4,909,000 for the three months ended June 30, 2024, and 2023, respectively, representing a decrease in loss of approximately $3,073,000 or 63%. This decrease in loss was primarily due to the following:
Previous wording
Net loss per share was $ (0.12) and $(0.08) for the three months ended March 31, 2024, and 2023, respectively. The weighted average number of shares of our common stock outstanding as of March 31, 2024, was 49,458,023 as compared to 48,399,950 as of March 31, 2023.
Current wording
Net loss per share was $ (0.03) and $(0.10) for the three months ended June 30, 2024, and 2023, respectively. The weighted average number of shares of our common stock outstanding as of June 30, 2024, was 52,837,477 as compared to 48,411,251 as of June 30, 2023.
Previous wording
Production costs were approximately $8,000 and $0, respectively, for the three months ended March 31, 2024, and 2023, representing an increase of $8,000 in production costs in the current period. The increase was due primarily to the sale of the New Brunswick facility and there was no production for the three months ended March 31, 2023 whereas there was production costs in the three months ended March 31, 2024.
Current wording
Production costs were approximately $8,000 and $0, respectively, for the three months ended June 30, 2024, and 2023, representing an increase of $8,000 in production costs in the current period. There was no production for the three months ended June 30, 2023 whereas there was production costs in the three months ended June 30, 2024.
Previous wording
The quarterly income tax benefit for the three months ended March 31, 2024, was $0 compared to a gain of $255,000 for the three months ended March 31, 2023. This was due to the lifetime limit of $20,000,000 for the sale of the New Jersey NOL being reached and therefore no tax provision was calculated in 2024.
Current wording
The quarterly income tax benefit for the three months ended June 30, 2024, was $0 compared to a gain of $328,000 for the three months ended June 30, 2023. This was due to the lifetime limit of $20,000,000 for the sale of the New Jersey NOL being reached and therefore no tax provision was calculated in 2024.
Previous wording
Overall Research and Development (“R&D”) costs for the three months ended March 31, 2024, were approximately $1,951,000, as compared to $2,052,000 for the same period a year ago, reflecting a decrease of approximately $101,000. The primary reason for the decrease in R&D costs was a decrease in outside contractors of $229,000, as well a decrease in clinical expenses of $63,000 offset by an increase in consultant fees of $112,000, salaries of $61,000, manufacturing expenses of $9,000, and insurance of $9,000.
Current wording
Overall Research and Development (“R&D”) costs for the three months ended June 30, 2024, were approximately $1,145,000, as compared to $2,953,000 for the same period a year ago, reflecting a decrease of approximately $1,808,000. The primary reason for the decrease in R&D costs was a decrease in outside contractors of $1,521,000, as well as a decrease in clinical expenses of $291,000, consulting expenses of $98,000 offset by an increase in salaries of $100,000.
Previous wording
General and Administrative (“G&A”) expenses for the three months ended March 31, 2024, and 2023, were approximately $3,815,000 and $2,292,000, respectively, reflecting an increase of approximately $1,523,000. The increase in G&A expenses during the current period was due primarily to an increase in legal professional fees of $1,571,000.
Current wording
General and Administrative (“G&A”) expenses for the three months ended June 30, 2024, and 2023, were approximately $2,591,000 and $2,550,000, respectively, reflecting an increase of approximately $41,000. The increase in G&A expenses for the three months ended June 30, 2024 was due primarily to an increase of approximately $184,000 in investment banker fees offset by a decrease in professional fees of approximately $144,000.
Previous wording
Interest expenses for the three months ended March 31, 2024 was approximately $72,000 and there was no interest expense for the three months ended March 31, 2023. The increase in interest expense in the current period was due to the interest expense incurred related to the Note Purchase Agreement entered into on February 16, 2024 with Streeterville.
Current wording
Interest expenses for the three months ended June 30, 2024 was approximately $179,000 and there was no interest expense for the three months ended June 30, 2023. The increase in interest expense for the three months ended June 30, 2024 was due to the interest expense incurred related to the Note Purchase Agreement entered into on February 16, 2024 with Streeterville.
Previous wording
Revenues from our Ampligen® Cost Recovery Program were $40,000 and $49,000 for the three months ended March 31, 2024, and 2023, respectively, representing a decrease of $9,000 which is primarily related to the fluctuation of patient participation.
Current wording
Revenues from our Ampligen® Cost Recovery Program were $90,000 and $91,000 for the six months ended June 30, 2024, and 2023, respectively, representing a decrease of $1,000 which is primarily related to the fluctuation of patient participation.
Previous wording
Gain (loss) on investments for the three months ended March 31, 2024, and 2023 was approximately $(92,000) and $203,000, respectively, reflecting an increase in the loss on investments of approximately ($295,000). The increase in loss was due to the change in the fair value of equity investments.
Current wording
Gain (loss) on investments for the six months ended June 30, 2024, and 2023 was approximately $(177,000) and $109,000, respectively, reflecting an increase in the loss on investments of approximately ($286,000). The increase in loss was due to the change in the fair value of equity investments.
Previous wording
Cash used in operating activities for the three months ended March 31, 2024, was approximately $4,815,000 compared to approximately $3,680,000 for the same period in 2023, an increase of $1,135,000. The primary reasons for this increase in cash used in operations in 2024 was an increased net loss during the three months of $2,156,000, a decrease in gain from sale of income tax operating losses of $255,000 as well as in increase in loss on marketable investments of $295,000 which was partially offset by an increase of accrued expenses of $430,000, a decrease in accounting payable of 462,000, an increase in funds received from the 2023 sale of New Jersey net operating loss and received in 2024 of $1,184,000 and a decrease in prepaid expense of $118,000.
Current wording
Cash used in operating activities for the six months ended June 30, 2024, was approximately $7,823,000 compared to approximately $5,838,000 for the same period in 2023, an increase of $1,985,000. The primary reasons for this increase was an increase in cash utilized for accounts payable of $2,762,000, accrued expenses of $909,000, as well as an increase in loss on issuance of warrants of $458,000, loss on marketable investments of $286,000 which is partially offset by a decrease in net loss during the six months of $917,000, a decrease in gain from sale of income tax operating losses of $582,000, prepaid expenses of $12,000 as well as a decrease in funds received from the 2023 sale of New Jersey net operating loss and received in 2024 of $495,000.
Previous wording
Cash used in investing activities for the three months ended March 31, 2024, was approximately $158,000 compared to cash used in investing activities in 2023 of approximately $78,000, representing a change of $80,000. The primary reason for the change during the current period is the net purchase and sale of marketable investments activity of $108,000 compared to $114,000 for the same period in 2023, the loss on sale of property and equipment of $0 in the current period in 2024, compared with $29,000 in the same period in 2023 as well as the purchase of patents in the current period in 2024 of $50,000 compared with the abandonment of patents in the same period in 2023 of $7,000.
Current wording
Cash provided by investing activities for the six months ended June 30, 2024, was approximately $668,000 compared to cash used in investing activities for the six months ended June 30, 2023 of approximately $282,000, representing a change of $950,000. The primary reason for the change was the cash provided by the net purchase and sale of marketable investments activity of $947,000 compared to cash used in the purchase of marketable investments of $114,000 for the same period in 2023, the loss on sale of property and equipment of $0 in the current period in 2024, compared with $35,000 in the same period in 2023 as well as the net purchase and abandonment of patents in the current period in 2024 of $279,000 compared with the net purchase and abandonment of patents in the same period in 2023 of $203,000 .
Previous wording
Cash provided by financing activities for the three months ended March 31, 2024, was approximately $2,829,000 compared to approximately $100,000 for the same period in 2023, representing an increase of $2,729,000. The primary reason for this increase was the receipt of $2,500,000 in net proceeds from the notes payable, net of issuance cost as well as an increase in the sale of shares in the current period in 2024 of $329,000 compared to $100,000 in the same period in 2023.
Current wording
Cash provided by financing activities for the six months ended June 30, 2024, was approximately $5,270,000 compared to approximately $105,000 for the same period in 2023, representing an increase of $5,165,000. The primary reason for this increase was the receipt of $2,367,000 in net proceeds from the notes payable, net of issuance cost, an increase in the sale of shares in the current period in 2024 of $856,000 compared to $105,000 in the same period in 2023 as well as an increase in warrant valuation of $2,047,000 in the current period in 2024.
Previous wording
As of March 31, 2024, we had approximately $10,942,000 in cash, cash equivalents and marketable investments, inclusive of approximately $7,647,000 in marketable investments, representing an increase of approximately $2,128,000 from December 31, 2023.
Current wording
As of June 30, 2024, we had approximately $10,061,000 in cash, cash equivalents and marketable investments, inclusive of approximately $6,507,000 in marketable investments, representing a decrease of approximately $3,009,000 from December 31, 2023. We are currently disputing Kirkland & Ellis accounts payable invoices. This dispute involves amounts claimed which we believe require a reduction. We are actively working to resolve this dispute by settlement, but there is no assurance as to the timing or outcome. Depending on the resolution of this dispute, there may be a significant impact reducing the balance of the outstanding Kirkland & Ellis invoices.
Previous wording
The development of our products requires the commitment of substantial resources to conduct the time-consuming research, preclinical development, and clinical trials that are necessary to bring pharmaceutical products to market. We believe, based on our current financial condition, that we have adequate funds to meet our anticipated operational cash needs and fund current clinical trials over approximately the next twenty-four months. At present we do not generate any material revenues from operations, and we do not anticipate doing so in the near future. We may need to obtain additional funding in the future for new studies and/or if current studies do not yield positive results, require unanticipated changes and/or additional studies. In this regard, in February 2022, the SEC declared our new S-3 shelf Registration Statement effective which will allow us to raise additional capital in the future. On April 19, 2023, we entered into an Equity Distribution Agreement (the “EDA”), with Maxim Group LLC (“Maxim”), pursuant to which we may sell from time to time, shares of our common stock having an aggregate offering price of up to $8.5 million through Maxim, as agent. Sales under the EDA were registered under the S-3 Shelf Registration Statement. Under the terms of the Distribution Agreement, Maxim is 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, we sold 564,568 shares under the EDA for total gross proceeds of approximately $253,870, which includes a 3.0% fee to Maxim of $7,616. During the year ended December 31, 2023, we 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 the three months ended March 31, 2024, we 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. We hope to raise additional funds through the EDA. In addition, we raised $2,500,000 in net proceeds from the sale of an unsecured Note and entered into an equity line of credit to raise up to 15.000,000 (seeOverview; The Atlas Equity Line of Credit above). No assurance can be given as to the amount of funds that could be raised or the potential dilution to current stockholders. If we are unable to commercialize and sell Ampligen and/or recommence material sales of Alferon N Injection, our operations, financial position and liquidity may be adversely impacted, and additional financing may be required. There can be no assurances that, if needed, we will be able to raise adequate funds from the EDA or otherwise, or enter into licensing, partnering or other arrangements to advance our business goals. We may seek to access the public equity market whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time. We are unable to estimate the amount, timing or nature of future sales of…
Excerpt shortened here; the source contains the full paragraph.
Current wording
The development of our products requires the commitment of substantial resources to conduct the time-consuming research, preclinical development, and clinical trials that are necessary to bring pharmaceutical products to market. We believe, based on our current financial condition, that we have adequate funds to meet our anticipated operational cash needs and fund current clinical trials over approximately the next twenty-four months. At present we do not generate any material revenues from operations, and we do not anticipate doing so in the near future. We may need to obtain additional funding in the future for new studies and/or if current studies do not yield positive results, require unanticipated changes and/or additional studies. In this regard, in February 2022, the SEC declared our new S-3 shelf Registration Statement effective which will allow us to raise additional capital in the future. On April 19, 2023, we entered into an Equity Distribution Agreement (the “EDA”), with Maxim Group LLC (“Maxim”), pursuant to which we may sell from time to time, shares of our common stock having an aggregate offering price of up to $8.5 million through Maxim, as agent. Sales under the EDA were registered under the S-3 Shelf Registration Statement. Under the terms of the Distribution Agreement, Maxim is 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 six months ended June 30, 2024, we sold 1,294,678 shares under the EDA for total gross proceeds of approximately $626,094, which includes a 3.0% fee to Maxim of $18,783. During the year ended December 31, 2023, we 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. We hope to raise additional funds through the EDA.
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
Revenues from our Ampligen® Cost Recovery Program were $50,000 and $42,000 for the three months ended June 30, 2024, and 2023, respectively, representing an increase of $8,000 which is primarily related to the fluctuation of patient participation.
Current report — wording carried from elsewhere
Gain (loss) on investments for the three months ended June 30, 2024, and 2023 was approximately $(85,000) and ($94,000), respectively, reflecting a decrease in the loss on investments of approximately $9,000. The increase in loss was due to the change in the fair value of equity investments.
Current report — wording carried from elsewhere
Net loss per share was $ (0.15) and $(0.18) for the six months ended June 30, 2024, and 2023, respectively. The weighted average number of shares of our common stock outstanding as of June 30, 2024, was 51,161,956 as compared to 48,405,675 as of June 30, 2023.
Current report — wording carried from elsewhere
For the six months ended June 30, 2024 and 2023, we had no Alferon N Injection® Finished Good product to commercially sell and all revenue was generated from the EAP and our FDA approved open-label treatment protocol, (“AMP 511”), that allows patient access to Ampligen® for treatment in an open-label safety study.
Current report — wording carried from elsewhere
Production costs were approximately $16,000 and $0, respectively, for the six months ended June 30, 2024, and 2023, representing an increase of $16,000 in production costs in the current period. There was no production for the six months ended June 30, 2023 whereas there was production costs in the six months ended June 30, 2024.
Current report — wording carried from elsewhere
Gain (loss) from sale of income tax operating loss
Current report — wording carried from elsewhere
The quarterly income tax benefit for the six months ended June 30, 2024, was $0 compared to a gain of $582,000 for the six months ended June 30, 2023. This was due to the lifetime limit of $20,000,000 for the sale of the New Jersey NOL being reached and therefore no tax provision was calculated in 2024.
Current report — wording carried from elsewhere
Interest expenses for the six months ended June 30, 2024 was approximately $251,000 and there was no interest expense for the six months ended June 30, 2023. The increase in interest expense for the six months ended June 30, 2024 was due to the interest expense incurred related to the Note Purchase Agreement entered into on February 16, 2024 with Streeterville.
Current report — wording carried from elsewhere
No assurance can be given as to the amount of funds that could be raised or the potential dilution to current stockholders. If we are unable to commercialize and sell Ampligen and/or recommence material sales of Alferon N Injection, our operations, financial position and liquidity may be adversely impacted, and additional financing may be required. There can be no assurances that, if needed, we will be able to raise adequate funds from the EDA or otherwise, or enter into licensing, partnering or other arrangements to advance our business goals. We may seek to access the public equity market whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time. We are unable to estimate the amount, timing or nature of future sales of outstanding common stock or instruments convertible into or exercisable for our common stock. Any additional funding may result in significant dilution and could involve the issuance of securities with rights, which are senior to those of existing stockholders. See Part I, Item 1A - “Risk Factors;We may require additional financing which may not be available” in our Annual Report on Form 10-K for the year ended December 31, 2023.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Our 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.
Previous report — wording carried elsewhere
On May 9, 2023, we were granted a U.S. Patent for a method for preventing or reducing antigenic drift or viral reassortment in a host animal comprising determining if a host animal has been exposed to or infected by an avian influenza virus and administering to the exposed host animal alpha-interferon.