UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

For the Quarterly Period Ended June 30, 2021

Commission File Number: 001-27072

AIM IMMUNOTECH INC.

(Exact name of registrant as specified in its charter)

Delaware		52-0845822
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

2117 SW Highway 484, Ocala FL 34473

(Address of principal executive offices) (Zip Code)

(352) 448-7797

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, par value $0.001 per share		AIM		NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

☐ Large accelerated filer	☐ Accelerated filer
☒ Non-accelerated filer	☒ Smaller reporting company
	☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

47,848,622 shares of common stock were outstanding as August 11, 2021.

PART I- FINANCIAL INFORMATION

ITEM 1: Financial Statements

AIM IMMUNOTECH INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, except for share and per share data)

(Unaudited)

	June 30, 2021			December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	41,142		$	38,501
Marketable securities		—			501
Funds receivable from New Jersey net operating loss		—			1,090
Accounts receivable, net		28			34
Prepaid expenses and other current assets		155			184
Total current assets		41,325			40,310
Property and equipment, net		6,145			6,473
Right of use asset, net		157			179
Patent and trademark rights, net		1,783			1,498
Marketable securities, long term		16,135			15,376
Other assets		1,177			748
Total assets	$	66,722		$	64,584
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	451		$	383
Accrued expenses		373			442
Current portion of operating lease liability		52			47
Current portion of financing obligation		—			230
Total current liabilities		876			1,102
Long-term liabilities:
Operating lease liability		105			132
Financing obligation arising from sale leaseback transaction (Note 13)		—			1,876
Redeemable warrants		209			180
Commitments and contingencies (Notes 11, 12, 13, and 14)		-			-

Stockholders’ equity:
Series B Convertible Preferred Stock, stated value $1,000 per share, 725 shares designated, 732 shares issued and outstanding		725			732
Common Stock, par value $0.001 per share, authorized 350,000,000 shares: issued and outstanding 47,832,997 and 42,154,371, respectively		48			42
Additional paid-in capital		416,435			402,541
Accumulated other comprehensive loss		(247	)		(47	)
Accumulated deficit		(351,429	)		(341,974	)
Total stockholders’ equity		65,532			61,294
Total liabilities and stockholders’ equity	$	66,722		$	64,584

See accompanying notes to consolidated financial statements.

AIM IMMUNOTECH INC. AND SUBSIDIARIES

Consolidated Statement of Operations and Comprehensive Loss

(in thousands, except share and per share data)

(Unaudited)


	Three months ended June 30,						Six months ended June 30,
	2021			2020			2021			2020
Revenues:
Clinical treatment programs - US	$	23		$	40		$	52		$	83
Clinical treatment programs - Europe		—			—			—			2
Total Revenues		23			40			52			85
Costs and Expenses:
Production costs		279			200			517			404
Research and development		1,317			1,463			2,742			2,343
General and administrative		2,145			1,717			4,256			3,986
Total Costs and Expenses		3,741			3,380			7,515			6,733
Operating loss		(3,718	)		(3,340	)		(7,463	)		(6,648	)
Interest and other income		51			46			120			67
Interest expense and other finance costs		(19	)		(249	)		(67	)		(571	)
Extinguishment of financing obligation and note payable		(2,701	)		142			(2,701	)		142
Gain on sale of fixed assets		216			—			216			—
Redeemable warrants valuation adjustment		7			31			(29	)		(150	)
Gain from sale of Income tax operating losses		288			—			469			—

Net Loss		(5,876	)		(3,370	)		(9,455	)		(7,160	)

Other comprehensive (loss)
Reclassification adjustment for realized investment loss		25			—			25			—
Change in unrealized loss on marketable securities available for sale		(62	)		67			(225	)		63
Comprehensive loss	$	(5,913	)	$	(3,303	)	$	(9,655	)	$	(7,097	)
Basic and diluted loss per share	$	(0.12	)	$	(0.11	)	$	(0.20	)	$	(0.19	)
Weighted average shares outstanding basic and diluted		47,832,997			29,970,197			46,805,492			37,073,765

See accompanying notes to consolidated financial statements.

AIM IMMUNOTECH INC. AND SUBSIDIARIES

Consolidated Statement of Changes in Stockholders’ Equity

For the Six Months Ended June 30, 2021 and 2020

(in thousands except share data)

(Unaudited)


	Series B Preferred			Common Stock Shares		Common Stock Par Value		Additional Paid-in Capital		Accumulated other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity
Balance December 31, 2020	$	732			42,154,371	$	42	$	402,541	$	(47	)	$	(341,974	)	$	61,294
Common stock issuances, net of costs		—			5,678,626		6		12,881		—			—			12,887
Warrant modification
Shares issued to pay accounts payable
Shares issued to pay accounts payable, shares
Equity-based compensation		—			—		—		526		—			—			526
Series B preferred shares converted to common shares		(7	)		—		—		7		—			—			—
Comprehensive loss		—			—		—		—		(163	)		(3,579	)		(3,742	)
Balance March 31, 2021	$	725			47,832,997	$	48	$	415,955	$	(210	)	$	(345,553	)	$	70,965
Equity-based compensation		—			—		—		480		—			—			480
Comprehensive loss		—			—		—		—		(37	)		(5,876	)		(5,913	)
Balance June 30, 2021	$	725			47,832,997	$	48	$	416,435	$	(247	)	$	(351,429	)	$	65,532

	Series B Preferred			Common Stock Shares		Common Stock Par Value		Additional Paid-in Capital		Accumulated other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity
Balance December 31, 2019	$	778			10,386,754	$	10	$	340,228	$	—		$	(328,109	)	$	12,907
Common stock issuance, net of costs		—			17,628,996		18		25,746		—			—			25,764
Warrant modification		—			—		—		46		—			—			46
Equity-based compensation		—			—		—		196		—			—			196
Shares issued to pay accounts payable		—			4,762		—		10		—			—			10
Series B preferred shares converted to common shares		(9	)		—		—		9		—			—			—
Comprehensive loss		—			—		—		—		(4	)		(3,790	)		(3,794	)
Balance March 31, 2020	$	769			28,020,512	$	28	$	366,235	$	(4	)	$	(331,899	)	$	35,129
Common stock issuance, net of costs		—			6,230,103		6		15,010		—			—			15,016
Equity-based compensation		—			—		—		150		—			—			150
Series B preferred shares converted to common shares		(32	)		—		—		32		—			—			—
Comprehensive loss		—			—		—		—		67			(3,370	)		(3,303	)
Balance June 30, 2020	$	737			34,250,615	$	34	$	381,427	$	63		$	(335,269	)	$	46,992

See accompanying notes to consolidated financial statements.

AIM IMMUNOTECH INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2021 and 2020

(in thousands)

(Unaudited)

	2021			2020
Cash flows from operating activities:
Net loss	$	(9,455	)	$	(7,160	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment		325			340
Redeemable warrants valuation adjustment		29			150
Warrant modification		—			46
Extinguishment of financing obligation and note payable		2,701			142
Amortization of patent, trademark rights		80			67
Changes in ROU assets		22			22
Gain on sale of property and equipment		(216	)		—
Gain from sale of income tax operating losses		(469	)		—
Equity-based compensation		1,006			346
Realized (loss) gain on sale of marketable securities		25			63
Amortization of finance and debt issuance costs		47			42
Change in assets and liabilities:
Accounts receivable		6			4
Funds Receivable from New Jersey net operating loss		1,090			770
Prepaid expenses and other current assets and other non-current assets		69			730
Lease liability		(22	)		(22	)
Accounts payable		68			(217	)
Accrued interest expense		—			230
Accrued expenses		(69	)		(78	)
Net cash used in operating activities		(4,763	)		(4,525	)
Cash flows from investing activities:
Proceeds from sale of marketable securities		1,613			8,497
Purchase of marketable securities		(2,096	)		(7,590	)
Purchase of property and equipment		(26	)		(9	)
Proceeds from sale of property and equipment		245			—
Purchase of patent and trademark rights		(365	)		(297	)
Net cash (used in) provided by investing activities		(629	)		601
Cash flows from financing activities:
Payment and note payable		—			(4,283	)
Payment of financing obligation		(4,732	)		—
Financing obligation payments		(122	)		(176	)
Proceeds from sale of stock, net of issuance costs		12,887			40,821
Net cash provided by financing activities		8,033			36,362
Net increase in cash and cash equivalents		2,641			32,438
Cash and cash equivalents at beginning of period		38,501			1,470
Cash and cash equivalents at end of period	$	41,142		$	33,908
Supplemental disclosures of non-cash investing and financing cash flow information:
Stock issued to settle accounts payable	$	—		$	10
Unrealized loss on marketable securities	$	(225	)	$	63
Conversion of Series B preferred	$	7		$	41

See accompanying notes to consolidated financial statements.

AIM IMMUNOTECH INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Business and Basis of Presentation

AIM ImmunoTech Inc. (collectively with its subsidiaries, “AIM” or the “Company”) is an immuno-pharma company headquartered in Ocala, Florida and focused on the research and development of therapeutics to treat multiple types of cancers, viruses and immune-deficiency disorders. The Company has 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.

AIM’s flagship products include Ampligen® (rintatolimod), a first-in-class drug of large macromolecular RNA (ribonucleic acid) molecules, and Alferon N Injection® (Interferon Alfa-N3). A first-in-class drug is also known as a new molecular entity that contains an active moiety. Ampligen has not been approved by the FDA or marketed in the United States.

Since the outbreak of SARS-CoV-2, the novel virus that causes COVID-19, the Company has been actively engaged in determining whether Ampligen could be an effective treatment for this virus or could be part of a vaccine. The Company believes that Ampligen has the potential to be both an early-onset treatment for and prophylaxis against SARS-CoV-2. Ampligen also has potential as a COVID-19 vaccine strategy that combines Ampligen as an immune enhancer seeking to boost the efficacy of the vaccine and also convey cross-reactivity and cross-protection against future mutations. The Company believes that prior studies of Ampligen in SARS-CoV-1 animal experimentation may predict similar protective effects against the new virus. Given the evolution of uncertainty associated with SAR-CoV-2, there is uncertainty as to the effects on the Company’s financial position, results of operations or cash flows.

The full impact of the COVID-19 pandemic continues to evolve, as such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the global situation on its financial condition, liquidity, operations, scientific collaborations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its impact, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2021.

Although the Company cannot estimate the length or gravity of the impact of the COVID-19 pandemic at this time, if the pandemic continues, it may have a material adverse effect on the Company’s results of future operations, financial position, and liquidity for the fiscal year 2021. (see Note 13: Financing Obligation Arising from Sale Leaseback Transaction).

Beginning in April 2020, the Company entered into confidentiality and non-disclosure agreements with numerous companies for the potential outsourcing of the production of polymer, enzyme, placebo as well as Ampligen and one Contract Research Organization which may also assist with the planning, presentation and filing of documents with the FDA. These confidentiality and non-disclosure agreements are only the initial step in forging relationships with these entities to obtain contract manufacturers and research partners. No assurance can be given as to how many of these, initial explorations, if any, will result in definitive arrangements or, with regard to potential research partners, what research arrangements will develop and thereafter prove fruitful.

Ampligen represents an RNA being developed for globally important cancers, viral diseases and disorders of the immune system. Ampligen has in the clinic demonstrated the potential for standalone efficacy in a number of solid tumors. The Company has also seen success in increasing survival rates and efficacy in the treatment of animal tumors when Ampligen is used in combination with checkpoint blockade therapies. This success in the field of immuno-oncology has guided the Company’s focus toward the potential use of Ampligen as a combinational therapy for the treatment of a variety of solid tumor types. There are currently multiple Ampligen clinical trials testing Ampligen in humans — both underway and planned — at major cancer research centers. Ampligen was used as a monotherapy to treat pancreatic cancer patients in an Early Access Program (EAP) approved by the Inspectorate of Healthcare in the Netherlands at Erasmus Medical Center. In September 2020, AIM reported receipt of statistically significantly results of positive survival benefit when using Ampligen in patients with locally advanced/metastatic pancreatic cancer after systemic chemotherapy. AIM will work with its Contract Research Organization, Amarex Clinical Research LLC, to seek FDA “fast-track” and possibly even FDA “breakthrough” designations and to obtain authorization to conduct follow-up pancreatic cancer Phase 2/3 clinical trials with potential sites in the Netherlands at Erasmus MC under Prof. van Eijck, and also at major cancer research centers in the United States.

Ampligen is also being evaluated for the treatment of myalgic encephalomyelitis/chronic fatigue syndrome (ME/CFS). AIM is currently sponsoring an expanded access program for ME/CFS patients in the U.S. In August 2016, the Company received approval of its New Drug Application, or NDA from Administracion Nacional de Medicamentos, Alimentos y Tecnologia Medica (ANMAT) for commercial sale of Ampligen in the Argentine Republic for the treatment of severe CFS. With regulatory approval in Argentina, Ampligen is the world’s only approved therapeutic for ME/CFS. Shipment of the drug product to Argentina was initiated in 2018 to complete the release testing by ANMAT needed for commercial distribution. On September 19, 2019, we received clearance from the FDA to ship Ampligen to Argentina for the commercial launch and subsequent sales. On June 10, 2020, the Company received import clearance from ANMAT to import the first shipment of commercial grade vials of Ampligen to Argentina. The next steps in the commercial launch of Ampligen include ANMAT conducting a final inspection of the product and release tests before granting final approval to begin commercial sales. Progress in Argentina is delayed, due to pandemic factors. The ongoing impact of COVID-19 in Argentina is taxing the nation’s health care system and is, understandably, the main priority of its regulators. AIM has supplied GP Pharm with the Ampligen required for testing and ANMAT release. Once final approval by ANMAT is obtained, the Company anticipates that GP Pharm will begin distributing Ampligen in Argentina. The Company continues to pursue its Ampligen NDA, for the treatment of CFS, with the FDA.

Alferon N Injection is approved for a category of sexually transmitted disease infections and patients that are intolerant to recombinant interferon in Argentina. Alferon is the only natural-source, multi-species alpha interferon currently approved for sale in the U.S. for the intralesional treatment of refractory (resistant to other treatment) or recurring external condylomata acuminata/genital warts (GW) in patients 18 years of age or older. Certain types of human papilloma viruses cause GW. AIM also has approval from ANMAT for the treatment of refractory patients that failed or were intolerant to treatment with recombinant interferon in Argentina.

The Company owns and operates a 30,000 sq. ft. facility at 783 Jersey Ave, New Brunswick, NJ, where it conducts testing and has produced limited quantities of active pharmaceutical ingredients (“API”) for its products. AIM is in the planning stages of updating the manufacturing and laboratory suites with state-of-the-art, mobile-ready equipment that can be used either there or in future alternate space. While the Company believes it has sufficient API to meet its current needs, it is also continually exploring new efficiencies so as to maximize its ability to fulfill future obligations. AIM’s current and active production plan is to shift to the utilization of Contract Manufacturing Organizations (CMO), while maintaining on-site teams for QC, QA, R&D, bench and small-batch manufacturing.

On April 5, 2021, the Company’s board of directors approved the exercise of AIM’s option to re-purchase the New Brunswick facility, pursuant to the terms of the March 16, 2018, sale and lease-back agreement and, thereafter, the Company sold certain equipment and machinery that it determined to be obsolete and no longer needed for current and future manufacturing. The buy-back purchase was completed in May 2021. (see Note 13: Financing Obligation Arising from Sale Leaseback Transaction).

In the opinion of management, all adjustments necessary for a fair presentation of such consolidated financial statements have been included. Such adjustments consist of normal recurring items. Interim results are not necessarily indicative of results for a full year.

The interim consolidated financial statements and notes thereto are presented as permitted by the Securities and Exchange Commission (“SEC”), and do not contain certain information which will be included in the Company’s annual consolidated financial statements and notes thereto.

These consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the years ended December 31, 2020, and 2019, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed on March 31, 2021.

Note 2: Net Loss Per Share

Basic and diluted net loss per share is computed using the weighted average number of shares of common stock outstanding during the period. Equivalent common shares, consisting of stock options and warrants which amounted to 1,621,928 and 526,266 are excluded from the calculation of diluted net loss per share for the six months ended June 30, 2021, and 2020, respectively, since their effect is antidilutive due to the net loss.

Note 3: Equity-Based Compensation

The fair value of each option and equity warrant award is estimated on the date of grant using a Black-Scholes-Merton option pricing valuation model. 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. There were no options granted in the six months ended June 30, 2021, and 2020.

Stock option for employees’ activity during the six months ended June 30, 2021, is as follows:

Stock option activity for employees:

Schedule of Stock Option Activity

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding January 1, 2021		1,049,695		$	5.38		9.28	$	—
Granted		—			—		—		—
Forfeited		(50,898	)		2.39		—		—
Expired		—			—		—		—
Outstanding June 30, 2021		998,797		$	5.53		9.23	$	—
Vested and expected to vest June 30, 2021		998,797		$	5.53		9.23	$	—
Exercisable June 30, 2021		725,198		$	4.07		8.10	$	—

Unvested stock option activity for employees:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Unvested January 1, 2021		767,029		$	3.71		9.68	$	—
Granted		—			—		—		—
Expired		(50,898	)		2.39		—		—
Vested		(442,532	)		2.47		—		—
Unvested June 30, 2021		273,599		$	13.99		7.33	$	—

Stock option activity for non-employees:

Schedule of Stock Option Activity

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding January 1, 2021		166,533		$	11.03		6.88	$	—
Granted		—			—		—		—
Forfeited		—			—		—		—
Expired		(322	)		965.93		—		—
Outstanding June 30, 2021		166,211		$	9.18		7.05	$	—
Vested and expected to vest June 30, 2021		166,211		$	9.18		7.05	$	—
Exercisable June 30, 2021		155,766		$	4.07		7.74	$	—

Unvested stock option activity for non-employees:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Unvested January 1, 2021		66,202		$	7.24		6.38	$	—
Granted		—			—		—		—
Expired		—			—		—		—
Vested		(55,757	)		4.69		—		—
Unvested June 30, 2021		10,445		$	20.86		6.25	$	—

Stock-based compensation expense was approximately $1,006,000 and $346,000 for the six months ended June 30, 2021 and 2020, resulting in an increase in general and administrative expenses, respectively.

As of June 30, 2021, and 2020, respectively, there was approximately $434,000 and $442,000 of unrecognized equity-based compensation cost related to options granted under the Equity Incentive Plan.

Note 4: Marketable Securities

Marketable securities consist of debt securities. As of June 30, 2021, and December 31, 2020, it was determined that none of the marketable securities had an other-than-temporary impairment. As of June 30, 2021, and December 31, 2020, all securities were measured as Level 1 instruments of the fair value measurements standard (see Note 12: Fair Value). As of June 30, 2021, and December 31, 2020, the Company held $16,135,000 and $15,877,000 in debt securities.

Debt securities classified as available for sale consisted of:

Schedule of Available for Sale

June 30, 2021

(in thousands)

Securities		Amortized Cost				Gross Unrealized Gains /(Losses)				Fair Value				Marketable Securities
U.S. Treasury notes		$	5,502			$	(

SEC Form 10-Q filed by AIM Immunotech