AIM ImmunoTech Inc.

Current report

For the year ended December 31, 2024, research and development (“R&D”) expenses totaled approximately $6,197,000, compared to $10,939,000 in the prior year, representing a decrease of approximately $4,742,000. This reduction was primarily driven by a $3,216,000 decrease in company sponsored clinical trial expenses and a $1,622,000 reduction in outside consultant costs.

Current report

For the years ended December 31, 2024 and 2023, general and administrative (“G&A”) expenses were approximately $13,714,000 and $21,137,000, respectively, reflecting a decrease of approximately $7,423,000. This reduction was primarily driven by a $7,211,000 decrease in legal, financial and consulting fees, which were higher in the prior year due to expenses incurred in response to stockholder nomination litigation issues in 2023.

Current report

In 2024, we recognized a ($1,604,000) impact related to the sale of our net operating losses (NOLs) under the New Jersey Technology Business Tax Certificate Transfer Program, compared to a $1,667,000 benefit in 2023. This decline was primarily due to our company reaching the program’s lifetime cap of $20,000,000 in cumulative NOL sales.

Current report

Cash used in operating activities for the year ended December 31, 2024, was approximately $14,888,000 compared to approximately $21,267,000 for the same period in 2023, a decrease of $6,379,000. Net cash used in operating activities for the year ended December 31, 2024 was impacted by a net loss of approximately $17,320,000, an improvement from approximately $28,962,000 in 2023. However, since net loss includes significant non-cash expenses, actual cash from operations was influenced by several adjustments. Non-cash adjustments comparing 2024 to 2023 included a decrease of $2,000 in depreciation of property, plant, and equipment, an increase of $10,000 in amortization of patents and trademarks, an increase of $301,000 in amortization of financial obligations. Other significant non-cash expenses included $17,000 in non-cash lease expenses and $443,000 in equity-based compensation. Additionally, we recognized a $293,000 loss on the sale of marketable securities, a $458,000 loss related to the valuation of warrants, a $34,000 loss from patent abandonments. Proceeds from the sale of fixed assets were $0 in 2024, compared to $18,000 in 2023, reflecting a decrease in asset sales and related cash inflows year-over-year. These were partially offset by a $692,000 gain from funds received under the New Jersey NOL program and a $50,000 reduction in prepaid expenses. Changes in working capital also impacted operating cash flows, with a $6,126,000 decrease in accounts payable, a $2,378,000 decrease in accrued expenses, a $1,062,000 increase in other assets, and a $35,000 decrease in lease liabilities. Collectively, these factors contributed to the overall cash flow from operating activities during the period.

Current report

Cash provided by investing activities was $4,706,000 in 2024, a significant improvement from $(832,000) in 2023, reflecting a $5,538,000 year-over-year increase. The primary driver of this improvement was $5,623,000 in proceeds from the sale of marketable securities in 2024, compared to $1,299,000 in 2023. Additionally, purchases of marketable securities declined to $361,000 in 2024 from $1,593,000 in the prior year, further contributing to the positive cash flow impact. The Company continued investing in intellectual property, with $538,000 spent on patents and trademarks in 2024, compared to $585,000 in 2023. Capital expenditures included $18,000 in purchases of property, plant, and equipment (PP&E) in 2024, whereas 2023 included $47,000 in proceeds from the sale of PP&E. The overall increase in net investing cash flow was primarily attributable to higher proceeds from marketable securities and lower investment purchases, improving the company’s liquidity position.

Current report

Cash provided by financing activities totaled $6,444,000 in 2024, a significant increase compared to $485,000 in 2023, reflecting a $5,959,000 year-over-year improvement. This increase was primarily driven by $892,000 in net proceeds from the sale of stock in 2024, up from $485,000 in 2023. Additionally, the company secured $2,500,000 in proceeds from the issuance of notes payable, compared to zero in the prior year. Another key factor was a $3,303,000 non-cash warrant valuation adjustment in 2024, which had no comparable entry in 2023. In 2024, we repaid $251,000 in debt, whereas no debt repayments were made in 2023. These financing activities strengthened the company’s liquidity position and provided additional capital to support ongoing operations and strategic initiatives.

Current report

Our principal source of liquidity is our cash and cash equivalents, marketable securities, and proceeds from financing activities to provide the necessary funding to meet our obligations as they become due. As noted above, as of December 31, 2024, we had approximately $3,977,000 in cash, cash equivalents and marketable securities, inclusive of approximately $2,276,000 in marketable securities, representing a decrease of approximately $9,093,000 from December 31, 2023.

Current report

In addition, we have suffered losses from operations as of December 31, 2024, and have a working capital deficit. These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year from the date of the issuance of these consolidated financial statements. See Note 1 to our audited Consolidated Financial Statements. Please see “Risk Factors - We have a history of losses, expect to continue to incur losses in the near term and may not achieve or sustain profitability in the future, and as a result, there is a substantial doubt about our ability to continue as a going concern.”

Current report

The accompanying audited consolidated financial statements have been prepared assuming that we will continue as a going concern. On December 31, 2024, our current liabilities exceeded our current assets by $5,359,000 which raised doubt about our ability to continue as a going concern. Additionally, at December 31, 2024, our stockholders’ equity was below the minimum requirements for continued listing on the NYSE American.

Current report

Management evaluated the conditions, and their significance of those conditions related to our ability to meet our obligations and determined that the primary cause of the working capital deficit was related to an accounts payable balance of approximately $6,400,000. This balance includes approximately $4,900,000 of legal fees related to litigation. We are currently negotiating with the law firm to reduce prior billings. These negotiations are ongoing and could, if resolved favorably to us, partially alleviate the working capital deficit.

Current report

On September 6, 2024, an amendment to an agreement dated April 7, 2022, was executed by us and Amarex clarifying and changing the nature of the remaining execution fee of $725,437. The amendment allowed that the remainder would not be exclusive to the agreement dated on April 7, 2022, that the nature of the payment changed from an execution fee to a fully refundable deposit, and that it could be applied to any invoice upon mutual agreement of the parties, removed the threshold contingencies, and if such invoices were not sufficient to exhaust the balance, that the refund would be refunded in cash. Due to the changes brought about by the amendment, the nature of the payment changed to deposit status. At December 31, 2024, we had an outstanding deposit of $653,000 which may be used to offset future clinical research expenditures. This deposit is listed as a non-current asset on the balance sheet but could provide working capital if the timing of expenditures are realized within the next 12 months.

Current report

As a research and development company, we are conducting research necessary to bring our product, Ampligen, to market. As such, we primarily rely on financing activities to provide the necessary funding to meet our obligations as they become due. AIM has a long and demonstrated history of success in these efforts, however, there is no assurance that we will be successful in attaining the necessary funding in the future.

Current report

Potential Delisting from the NYSE American.

Current report

The closing price of our common stock on the NYSE American on March 24, 2025 was $0.14 per share. On December 11, 2024, we received an official notice of noncompliance with the NYSE American’s continued listing requirements. This includes the need for us to have stockholders’ equity of $6.0 million or more. The NYSE American’s review showed that we were not in compliance with that requirement. As required, we submitted a plan (the “Plan”) to the NYSE American illustrating how we can regain compliance by June 11, 2026. The Plan includes a number of ways to raise capital. The NYSE American accepted our Plan on February 26, 2025. If we are not able to regain compliance by June 11, 2026, our common stock may be delisted from the NYSE American. As of December 31, 2024, our stockholders’ deficit was ($1.3) million. We must increase our stockholders’ equity to be at least $6 million to regain compliance with this rule. If we are not able to raise sufficient capital as set forth in the Plan or by other means, we may be unable to regain compliance with the NYSE American’s listing standards and our securities could be subject to delisting. In the event that the price of our Common Stock drops to $0.10 per share, our Common Stock will automatically be delisted from the NYSE American.

Current report

As part of the Plan, we will be holding a special meeting of stockholders solely for the purpose of authorizing a reverse split of our outstanding shares. The proxy statement for that meeting has been filed with the SEC and is available on the SEC’s website. We believe that effecting a reverse split will assist us with raising capital we need to continue our business and avoiding an automatic delisting if the stock price drops to $0.10 per share.

Current report

Research & Development (R&D) Expenses

Current report

We expense R&D costs as incurred. However, we estimate and accrue costs related to clinical trials, third-party contract research organizations (CRO’s), manufacturing development, and preclinical studies based on services performed. Material changes in assumptions could significantly impact R&D expenses in any given period.

Current report

Stock-Based Compensation

Current report

We grant stock options, the valuation of which requires significant judgement. To estimate their fair value, we use the Black-Scholes model, which involves assumptions about stock volatility, expected option life, and risk-free interest rates. Changes in estimated volatility or expected option life could have a material impact stock-based compensation expenses.

Previous report

Fair Value

Previous report

We have issued warrants (the “Warrants”) in February 2017, June 2017, August 2017, April 2018, and March 2019 that are single compound derivatives containing both an embedded right to obtain stock upon exercise (a “Call”) and a series of embedded rights to settle the Warrants for cash upon the occurrence of certain events (each, a “Put”). Generally, the Put provisions allow the Warrant Holders liquidity protection; the right to receive cash in certain situations where the Holders would not have a means of readily selling the shares issuable upon exercise of the Warrants (e.g., where there would no longer be a significant public market for our common stock). However, because the contractual formula used to determine the cash settlement value of the embedded Put requires use of certain assumptions, the cash settlement value of the embedded Put can differ from the fair value of the unexercised embedded Call option at the time the embedded Put option is exercised.

Previous report

We recompute the fair value of the Warrants at the end of each quarterly reporting period. Such value computation includes subjective input assumptions that are consistently applied each period. If we were to alter our assumptions or the numbers input based on such assumptions, the resulting fair value could be materially different.

Previous report

Overall Research and Development (“R&D”) costs for the year ended December 31, 2023, were approximately $10,939,000 as compared to $6,990,000 a year ago, reflecting an increase of approximately $3,949,000. The primary reason for the increase in research and development costs was due to the increases in Company sponsored clinical trials expenses of approximately $2,162,000 and an increase in outside consultant costs of approximately $1,787,000.

Previous report

General and Administrative (“G&A”) expenses for the years ended December 31, 2023 and 2022, were approximately $21,137,000 and $13,074,000, respectively, reflecting an increase of approximately $8,063,000. The increase in G&A expenses during the current period was largely due to increases in legal fees of approximately $6,500,000 primarily related to responding to an attempt by a group of shareholders to bypass our bylaws and nominating procedures, and financial consultant fees of $2,407,000 offset by a decrease in stock compensation of $711,000. We are in the process of submitting an insurance claim and hopes to recover a portion of the legal expenses related to the shareholder action, but recovery, if any, at this time cannot be determined.

Previous report

Redeemable Warrants

Previous report

The revaluation of certain redeemable warrants resulted in a non-cash adjustment to the redeemable warrants liability. There was no change for the twelve months ended December 31, 2023, compared with a gain of $35,000 for the twelve months ended December 31, 2022 (see “Financial Statements: Note 15: Fair Value” for the various factors considered in the valuation of redeemable warrants).

Previous report

In December 2023, we effectively sold $14,156,000 of our New Jersey state net operating loss carryforward and $38,600 in R&D credits for the year 2022 for approximately $1,313,000. Additionally, we recorded a deferred tax asset in the amount of approximately $1,604,000 for the current year 2023 operating losses to be sold in 2024. (see Note 12 Income Taxes (FASB ASC 740 Income Taxes).

Previous report

Cash used in operating activities for the year ended December 31, 2023, was approximately $21,267,000 compared to approximately $16,108,000 for the same period in 2022, an increase of $5,159,000. The primary reasons for this increase in cash used in operations in 2023 was an increased net loss during the year of $9,517,000 and a gain on investments of $1,879,000, a decrease in stock compensation of $711,000 which was partially offset by an increase in accounts payable of $5,887,000 an increase in accrued expenses of $812,000.

Previous report

Cash used in investing activities for the year ended December 31, 2023, was approximately ($832,000) compared to cash provided by investing activities in 2022 of approximately $10,988,000, representing a change of $11,820,000. The primary reason for the change during the current period is the net purchase and sale of marketable investments activity of ($294,000) compared to the $7,359,000 for the same period in 2022, and by the proceeds from the sale of property and equipment of $47,000 in 2023, compared with $3,900,000 in 2022.

Previous report

Cash provided by financing activities for the year ended December 31, 2023, was approximately $485,000 compared to approximately $80,000 for the same period in 2022, an increase of $405,000. The primary reason for this increase was the receipt of $485,000 in net proceeds from the sale of shares in 2023 compared to $80,000 from the proceeds from sale of stock, net of issuance costs in 2022. As discussed below, in April 2023 we entered into an Equity Distribution Agreement, which was the primary source of additional equity proceeds in 2023 compared with 2022.

Previous report

As of December 31, 2023, we had approximately $13,070,000 in cash, cash equivalents and marketable investments, inclusive of approximately $7,631,000 in marketable investments, representing a decrease of approximately $21,120,000 from December 31, 2022.

Previous report

Redeemable Warrants

Previous report

We utilize the guidance contained in ASC 480 Distinguishing Liabilities from Equity in the determination of whether to record warrants and options as Equity and/or Liability. If the guidance of ASC 480 is deemed inconclusive, we continue our analysis utilizing ASC 815 Derivatives and Hedging.

Previous report

Our method of recording the related value is consistent with the standards as defined by the Financial Accounting Standards Board utilizing the concept of “Fair Value” from ASC 820-10-55-1 that states that any fair value measurement requires that the reporting entity, to determine the valuation technique(s) appropriate for the measurement, consider the availability of data with which to develop inputs that represent the assumptions that market participants would use in pricing the asset or liability and the level in the fair value hierarchy within which the inputs fall.

Previous report

We recomputed the value of the redeemable warrants at the end of each quarterly period. We use the Monte Carlo Simulation approach which includes subjective input assumptions that are consistently applied each quarter. If we were to alter our assumptions or the numbers input based on such assumptions, the resulting fair value could be materially different. As discussed in greater detail in “Fair Value” at the beginning of this ITEM 7, the significant assumptions using this model are: (i) Risk-Free Interest Rate; (ii) Expected Holding Period; (iii) Expected Volatility; (iv) Expected Dividend Yield; (v) Expected Probability of a Fundamental Transaction; (vi) Expected Timing of Announcement of a Fundamental Transaction; (vii) Expected 100 Day Volatility at Announcement of a Fundamental Transaction; (viii) Expected Risk-Free Interest Rate at Announcement of a Fundamental Transaction; and (ix) Expected Time Between Announcement and Consummation of a Fundamental Transaction. The derivative is values using Level 3 inputs which are highly subjective and require a high degree of judgment.

Previous report

Concentration of Credit Risk

Previous report

Our policy is to limit the amount of credit exposure to any one financial institution and place investments with financial institutions evaluated as being credit worthy, or in short-term money markets, which are exposed to minimal interest rate and credit risks. We have bank deposits and overnight repurchase agreements that exceed federally insured limits.

Previous report

Concentration of credit risk, with respect to receivables, is limited through our credit evaluation process. We do not require collateral on our receivables. Our receivables historically consisted principally of amounts due from wholesale drug companies.