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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

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly Period Ended June 30, 2024

 

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

 

57,136,680 shares of common stock were outstanding, and no shares of series B preferred stock were outstanding as of August 12, 2024.

 

 

 

 
 

 

PART I- FINANCIAL INFORMATION

ITEM 1: Financial Statements

 

AIM IMMUNOTECH INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

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

(Unaudited June 30, 2024 and Audited December 31, 2023)

 

  

June 30, 2024

  

December 31, 2023

 
ASSETS          
Current assets:          
Cash and cash equivalents  $3,554   $5,439 
Marketable securities   6,507    7,631 
Funds receivable from New Jersey net operating loss   —    1,184 
Prepaid expenses and other current assets   300    302 
Total current assets   10,361    14,556 
Property and equipment, net   109    127 
Right of use asset, net   700    697 
Patent and trademark rights, net   2,491    2,313 
Other assets   2,054    1,688 
Total assets  $15,715   $19,381 
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable  $5,455   $6,443 
Accrued expenses   799    1,986 
Current portion of operating lease liability   234    223 
Current portion of note payable, net   2,354    — 
Total current liabilities   8,842    8,652 
Long-term liabilities:          
Operating lease liability   488    495 
Note payable, net   283    — 
Total liabilities   9,613    9,147 
Commitments and contingencies (Notes 12 and 13)   -     -  
           
Stockholders’ equity:          
Series A Junior Participating Preferred Stock, $0.001 par value, 4,000,000 and 250,000 shares authorized as of June 30, 2024, and December 31, 2023, respectively: issued and outstanding – none   —    — 
Series B Convertible Preferred Stock, stated value $1,000 per share, 10,000 shares authorized; no issued and outstanding as of June 30, 2024 and 689 issued and outstanding as December 31, 2023   —    689 
Common Stock, $0.001 par value, authorized shares - 350,000,000; issued and outstanding shares 57,136,680 and 49,102,484 as of June 30, 2024 and December 31, 2023, respectively   57    49 
Additional paid-in capital   423,206    419,004 
Accumulated deficit   (417,161)   (409,508)
Total stockholders’ equity   6,102    10,234 
Total liabilities and stockholders’ equity  $15,715   $19,381 

 

See accompanying notes to consolidated financial statements.

 

2
 

 

AIM IMMUNOTECH INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Loss

(in thousands, except share and per share data)

(Unaudited)

 

   2024   2023   2024   2023 
   Three months ended June 30,   Six months ended June 30, 
   2024   2023   2024   2023 
Revenues:                    
Clinical treatment programs - US  $50   $42   $90   $91 
Total Revenues   50    42    90    91 
Costs and Expenses:                    
Production costs   8    —    16    — 
Research and development   1,145    2,953    3,096    5,005 
General and administrative   2,591    2,550    6,406    4,841 
Total Costs and Expenses   3,744    5,503    9,518    9,846 
Operating loss   (3,694)   (5,461)   (9,428)   (9,755)
Gain (Loss) on investments   (85)   (94)   (177)   109 
Interest and other income   2,580    318    2,661    517 
Interest expense and other finance costs   (179)   —    (251)   — 
(Loss) on sale of fixed assets   —    —    —    (23)
(Loss) on warrant issuance   

(458

)   

—

    

(458

)   

—

 
Gain from sale of income tax operating losses   —    328    —    582 
                     
Net Loss  $(1,836)  $(4,909)  $(7,653)  $(8,570)
Basic and diluted loss per share  $(0.03)  $(0.10)  $(0.15)  $(0.18)
Weighted average shares outstanding basic and diluted   52,837,477    48,411,251    51,161,956    48,405,675 

 

See accompanying notes to consolidated financial statements.

 

3
 

 

AIM IMMUNOTECH INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity

For the Six Months Ended June 30, 2024 and 2023

(in thousands except share data)

(Unaudited)

 

   Series B
Preferred Shares		   Common
Stock
Shares		   Common
Stock .001
Par Value		   Additional
Paid-in
Capital		   Accumulated other Comprehensive
Income (Loss)		   Accumulated
Deficit		   Total
Stockholders’
Equity		 
Balance December 31, 2023  $689    49,102,484   $49   $419,004   $       —   $(409,508)  $10,234 
Common stock issuance, net of costs   —    807,577    1    328    —    —    329 
Cashless Exercise of Warrants   —    3,272    —    —    —    —    — 
Equity-based compensation   —    —    —    80    —    —    80 
Committed shares   —    338,600    —    —    —    —    — 
Net comprehensive loss   —    —    —    —    —    (5,817)   (5,817)
Balance March 31, 2024  $689    50,251,933   $50   $419,412   $—   $(415,325)  $4,826 
Common stock issuance, net of costs   —    6,884,747    7    525    —    —    532 
Issuance of warrants   

—

    

—

    

—

    

2,500

    

—

    

—

    

2,500

 
Equity-based compensation   —    —    —    80    —    —    80 
Series B preferred shares expired   (689)   —    —    689    —    —    — 
Net comprehensive loss   —    —    —    —    —    (1,836)   (1,836)
Balance June 30, 2024  $—    57,136,680   $57   $423,206   $—   $(417,161)  $6,102 

 

   Series B
Preferred Shares		   Common
Stock
Shares		   Common
Stock .001
Par Value		   Additional
Paid-in
Capital		   Accumulated other
Comprehensive
Income (Loss)		   Accumulated
Deficit		   Total
Stockholders’
Equity		 
Balance December 31, 2022  $696    48,084,287   $48   $418,270   $     —   $(380,546)  $38,468 
Common stock issuance, net of costs   —    323,039    —    100    —    —    100 
Equity-based compensation   —    —    —    82    —    —    82 
Series B preferred shares converted to common shares   (4)   —    —    4    —    —    — 
Net comprehensive loss   —    —    —    —    —    (3,661)   (3,661)
Balance March 31, 2023  $692    48,407,326   $48   $418,456    —   $(384,207)  $34,989 
Common stock issuance, net of costs   —    12,165    —    5    —    —    5 
Equity-based compensation   —    —    —    50    —    —    50 
Series B preferred shares converted to common shares   (2)   —    —    2    —    —    — 
Net Comprehensive loss   —    —    —    —    —    (4,909)   (4,909)
Balance June 30, 2023  $690    48,419,491   $48   $418,513   $—   $(389,116)  $30,135 

 

See accompanying notes to consolidated financial statements.

 

4
 

 

AIM IMMUNOTECH INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2024 and 2023

(in thousands)

(Unaudited)

 

   2024   2023 
Cash flows from operating activities:          
Net loss  $(7,653)  $(8,570)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation of property and equipment   18    21 
Amortization of patent, trademark rights   101    106 
Changes in right of use assets   150   48 
Gain from sale of income tax operating losses   —    (582)
Equity-based compensation   160    132 
Loss (gain) on sale of marketable securities   177    (109)
Loss on issuance of warrants   458    — 
Amortization of financial obligation   270    — 
Change in assets and liabilities:          
Funds receivable from New Jersey net operating loss   1,181    1,676 
Prepaid expenses and other current assets and other non-current assets   5    17 
Lease liability   (149)   (34)
Other assets   (366)   (39)
Accounts payable   (988)   1,774 
Accrued expenses   (1,187)   (278)
Net cash used in operating activities   (7,823)   (5,838)
Cash flows from investing activities:          
Proceeds from sale of marketable securities   1,105    598 
Purchase of marketable securities   (158)   (712)
Proceeds from sale of property and equipment   —    35 
Purchase of patent and trademark rights   (279)   (203)
Net cash provided by (used in) investing activities   668    (282)
Cash flows from financing activities:          
Proceeds from sale of stock, net of issuance costs   856    105 
Proceeds from note payable, net of issuance costs   2,367    — 
Proceeds from issuance of equity warrants   

2,047

    

—

 
Net cash provided by financing activities   5,270    105 
Net decrease in cash and cash equivalents   (1,885)   (6,015)
Cash and cash equivalents at beginning of period   5,439    27,053 
Cash and cash equivalents at end of period  $3,554   $21,038 
Supplemental disclosures of non-cash investing and financing cash flow information:          
Operating lease-Right of Use Assets  $3   $(48)
Unrealized gain on marketable securities  $42   $196 
Conversion of Series B preferred  $—   $6 

 

See accompanying notes to consolidated financial statements.

 

5
 

 

AIM IMMUNOTECH INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Note 1: Business and Basis of Presentation

 

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.

 

AIM’s 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”).

 

The Company is currently proceeding primarily in four areas:

 

●Conducting clinical trials to evaluate the efficacy and safety of Ampligen for the treatment of pancreatic cancer.
●Evaluating Ampligen across multiple cancers as a potential therapy that modifies the tumor microenvironment with the goal of increasing anti-tumor responses to checkpoint inhibitors.
●Exploring Ampligen’s antiviral activities and potential use as a prophylactic or treatment for existing viruses, new viruses and mutated viruses thereof.
●Evaluating Ampligen as a treatment for myalgic encephalomyelitis/chronic fatigue syndrome (“ME/CFS”) and fatigue and/or the Post-COVID condition of fatigue.

 

The Company is prioritizing activities in an order related to the stage of development, with those clinical activities such as pancreatic cancer, ME/CFS and Post-COVID conditions having priority over antiviral experimentation. The Company intends that priority clinical work be conducted in trials authorized by the FDA or European Medicines Agency (“EMA”), which trials support a potential future NDA. However, AIM’s antiviral experimentation is designed to accumulate additional preliminary data supporting their hypothesis that Ampligen is a powerful, broad-spectrum prophylaxis and early-onset therapeutic that may confer enhanced immunity and cross-protection. Accordingly, AIM will conduct antiviral programs in those venues most readily available and able to generate valid proof-of-concept data, including foreign venues.

 

AIM’s business plan requires one or more Contract Manufacturing Organizations (“CMO”) to produce Ampligen and its Active Pharmaceutical Ingredients (APIs). This includes utilizing Jubilant HollisterStier and Sterling for the manufacture of Ampligen and our Poly I and Poly C12U polynucleotides, respectively. Additionally, our relationship with Polysciences Inc. (“Polysciences”) continues and R&D development of polymer manufacture is ongoing.

 

In the opinion of management, all adjustments necessary for a fair presentation of its 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, 2023, and 2022, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed on April 1, 2024.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure (“GAAP”) of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from those estimates, and those differences may be material. Accounts requiring the use of significant estimates include determination of other-than-temporary impairment on securities, valuation of deferred taxes, patent and trademark valuations, stock-based compensation calculations, fair value of warrants, and contingency accruals.

 

6
 

 

Note 2: Cash and Cash Equivalents

 

Cash includes bank deposits maintained at several financial institutions. The Company considers highly liquid instruments with an original maturity of three months or less to be cash equivalents. At various times throughout the six months ended June 30, 2024, some accounts held at financial institutions were in excess of the federally insured limit of $250,000. The Company has not experienced any losses on these accounts and believes credit risk to be minimal.

 

Note 3: 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 11,202,957 and 73,524 for the three months ended June 30, 2024, and 2023, respectively; and 14,589,746 and 2,595,914 shares for the six months ended June 30, 2024 and 2023, respectively, are excluded from the calculation of diluted net loss per share since their effect is anti-dilutive.

 

Note 4: Equity-Based Compensation

 

The 2018 Equity Incentive Plan, effective September 12, 2018, as amended and restated on August 19, 2019 (the “2018 Equity Incentive Plan”) authorizes the grant of (i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) Stock Appreciation Rights, (iv) Restricted Stock Awards, (v) Restricted Stock Unit Awards, (vi) Performance Stock Awards, (vii) Performance Cash Awards, and (viii) Other Stock Awards. Initially, a maximum of 7,000,000 shares of Common Stock were reserved for potential issuance pursuant to awards under the 2018 Equity Incentive Plan. When the plan was amended and restated, an additional 250,000 shares were reserved for potential issuance pursuant to awards under the 2018 Equity Incentive Plan. The number of shares of the Company’s common stock available for grant and issuance under the 2018 Equity Incentive Plan is subject to an annual increase on July 1 of each calendar year, by an amount equal to two percent (2%) of the then outstanding shares of the Company’s common stock (the “2018 Plan Evergreen Provision”). On August 3, 2020 and July 1, 2021, 2022 and 2023, the number of shares of the Company’s common stock available for grant and issuance under the 2018 Equity Incentive Plan increased by 979,311 shares, 956,660 shares, 960,976 shares and 968,389 shares, respectively. As a result of the 2018 Plan Evergreen Provisions, a maximum of 10,865,336 shares of Common Stock is reserved for potential issuance pursuant to awards under the 2018 Equity Incentive Plan as of January 1, 2024. Unless sooner terminated, the 2018 Equity Incentive Plan will continue in effect for a period of 10 years from its effective date. During the fiscal year ending December 31, 2018 the Board of Directors (the “Board”) issued 1,189,284 options to each employee, the officers and directors at the exercise price of $9.68 expiring in 10 years. During the fiscal year ending December 31, 2019, 1,727,756 options were issued to each of these officers with an exercise price of $9.68 for a period of ten years with a vesting period of one year. During the fiscal year ending December 31, 2020, 1,025,000 options were issued to each of these officers and directors with an exercise price range of $2.77 to $3.07 for a period of ten years with a vesting period of one year During the fiscal year ending December 31, 2021, 613,512 options were issued to officers, directors and consultants with an exercise price range of $1.11 to $1.71 for a period of ten years with a vesting period of one year. During the fiscal year ending December 31, 2022, 850,000 options were issued to officers, directors and consultants with an exercise price range of $0.31 to $0.71 for a period of ten years with a vesting period of one year. During the fiscal year ending December 31, 2023, 400,000 options were issued to officers with an exercise price range of $0.47 for a period of ten years with a vesting period of one year. During the six months ended June 30, 2024 there were no options issued.

 

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. During the six months ended June 30, 2024 and 2023, there were no options granted.

 

7
 

 

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

 

Stock option activity for employees:

 

   Number of
Options		   Weighted
Average
Exercise
Price		   Weighted
Average
Remaining
Contractual
Term
(Years)		   Aggregate
Intrinsic
Value		 
Outstanding March 31, 2024   2,408,438   $2.50    8.70   $— 
Granted   —    —    —    — 
Forfeited   —    —    —    — 
Expired   (663)   —    —    — 
Outstanding June 30, 2024   2,407,775   $2.50    8.70   $— 
Vested and expected to vest June 30, 2024   2,407,775   $2.50    8.70   $— 
Exercisable June 30, 2024   2,241,109   $1.83    6.89   $— 

 

Unvested stock option activity for employees:

 

   Number of
Options		   Weighted
Average
Exercise
Price		   Weighted
Average
Remaining
Contractual
Term
(Years)		   Aggregate
Intrinsic
Value		 
Unvested March 31, 2024   266,666   $2.75    14.52   $— 
Granted   —    —    —    — 
Expired   (663)   —    —    — 
Vested   (99,337)   0.47    7.04    — 
Unvested June 30, 2024   166,666   $4.11    18.87   $— 

 

Stock option activity for non-employees:

 

   Number of
Options		   Weighted
Average
Exercise
Price		   Weighted
Average
Remaining
Contractual
Term (Years)		   Aggregate
Intrinsic
Value		 
Outstanding March 31, 2024   885,055   $2.02    9.23   $— 
Granted   —    —    —    — 
Forfeited   —    —    —    — 
Expired   —    —    —    — 
Outstanding June 30, 2024   885,055   $2.02    9.23   $— 
Vested and expected to vest June 30, 2024   885,055   $2.02    9.23   $— 
Exercisable June 30, 2024   730,055   $2.27    10.04   $— 

 

Unvested stock option activity for non-employees:

 

   Number of
Options		   Weighted
Average
Exercise
Price		   Weighted
Average
Remaining
Contractual
Term
(Years)		   Aggregate
Intrinsic
Value		 
Unvested March 31, 2024   245,001   $2.33    11.15   $— 
Granted   —    —    —    — 
Expired   —    —    —    — 
Vested   (90,000)   0.46    10.18    — 
Unvested June 30, 2024   155,001   $3.42    11.30   $— 

 

Stock-based compensation expense was approximately $80,000 and $50,000 for the three months ended June 30, 2024 and 2023, resulting in a decrease in general and administrative expenses, respectively.

 

8
 

 

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

 

Stock option activity for employees:

 

   Number of
Options		   Weighted
Average
Exercise
Price		   Weighted
Average
Remaining
Contractual
Term
(Years)		   Aggregate
Intrinsic
Value		 
Outstanding January 1, 2024   2,408,438   $2.50    8.70   $— 
Granted   —    —    —    — 
Forfeited   —    —    —    — 
Expired   (663)   —    —    — 
Outstanding June 30, 2024   2,407,775   $2.50    8.70   $— 
Vested and expected to vest June 30, 2024   2,407,775   $2.50    8.70   $— 
Exercisable June 30, 2024   2,241,109   $1.83    6.89   $— 

 

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, 2024   366,666   $2.13    12.44   $— 
Granted   —    —    —    — 
Expired   (663)   —    —    — 
Vested   (199,337)   0.47    7.04    — 
Unvested June 30, 2024   166,666   $4.11    18.87   $— 

 

Stock option activity for non-employees:

 

   Number of
Options		   Weighted
Average
Exercise
Price		   Weighted
Average
Remaining
Contractual
Term (Years)		   Aggregate
Intrinsic
Value		 
Outstanding January 1, 2024   885,055   $2.02    9.23   $— 
Granted   —    —    —    — 
Forfeited   —    —    —    — 
Expired   —    —    —    — 
Outstanding June 30, 2024   885,055   $2.02    9.23   $— 
Vested and expected to vest June 30, 2024   885,055   $2.02    9.23   $— 
Exercisable June 30, 2024   730,055   $2.27    10.04   $— 

 

9
 

 

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, 2024   335,001   $1.83    10.70   $— 
Granted   —    —    —    — 
Expired   —    —    —    — 
Vested   (180,000)   0.46    10.18    — 
Unvested June 30, 2024   155,001   $3.42    11.30   $— 

 

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

 

On June 30, 2024, and 2023, respectively, there was approximately $134,000 and $85,000 of unrecognized equity-based compensation cost related to options granted under the Equity Incentive Plan.

 

Note 5: Marketable Securities

 

Marketable securities consist of mutual funds. At June 30, 2024 and December 31, 2023, it was determined that none of the marketable securities had an other-than-temporary impairment. At June 30, 2024 and December 31, 2023, all securities were measured as Level 1 instruments of the fair value measurements standard (See Note 11: Fair Value). At June 30, 2024, and December 31, 2023 the Company held $6,507,000 and $7,631,000 respectively, in mutual funds.

 

Mutual Funds classified as available for sale consisted of:

 

  

June 30, 2024

(in thousands)

Securities  Fair
Value		   Short-Term
Investments		 
Mutual Funds  $6,507   $6,507 
Totals  $6,507   $6,507 

 

Securities 

For the six
months ended

June 30, 2024

(in thousands)

 
Net gain recognized during the period on equity securities  $(177)
Less: Net gains and losses recognized during the period on equity securities sold during the period   (218)
Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date  $41 

 

 

Mutual Funds classified as available for sale consisted of:

  

  

December 31, 2023

(in thousands)

 
Securities  Fair
Value		   Short-Term
Investments		 
Mutual Funds  $7,631   $7,631 
Totals  $7,631   $7,631 

 

10
 

 

Securities 

For the six months ended

June 30, 2023

(in thousands)

 
Net losses recognized during the period on equity securities  $109 
Less: Net gains and losses recognized during the period on equity securities sold during the period   (87)
Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date  $196 

 

Note 6: Accrued Expenses

 

Accrued expenses consist of the following:

 

   June 30, 2024   December 31, 2023 
   (in thousands) 
   June 30, 2024   December 31, 2023 
Compensation  $1   $414 
Professional fees   518    1,352 
Clinical trial expenses   154    184 
Interest   118    — 
Other expenses   8    36 
Total   $799   $1,986 

 

Note 7: Property and Equipment, net

 

   June 30, 2024   December 31, 2023 
   (in thousands) 
   June 30, 2024   December 31, 2023 
Furniture, fixtures, and equipment   1,448    1,448 
Less: accumulated depreciation   (1,339)   (1,321)
Property and equipment, net  $109   $127 

 

Property and equipment are recorded at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the respective assets, ranging from three to ten years. Depreciation expense for the six months ending June 30, 2024 and June 30, 2023 was $18,000 and $21,000, respectively.

 

Note 8: Patents, and Trademark Rights, Net

 

Patent and trademark rights consist of the following (in thousands):

 

 

   June 30, 2024   December 31, 2023 
   Gross Carrying Value   Accumulated Amortization   Net Carrying Value   Gross Carrying Value   Accumulated Amortization   Net Carrying Value 
Patents  $3,223   $(841)  $2,382   $2,947   $(750)  $2,197 
Trademarks   232    (123)   109    229    (113)   116 
Net amortizable patents and trademarks rights  $3,455   $(964)  $2,491   $3,176   $(863)  $2,313 

 

11
 

 

Patent and trademark rights acquisitions, abandonments and amortization:

 

December 31, 2023  $2,313 
Acquisitions   282 
Abandonments   (3)
Amortization   (101)
June 30, 2024  $2,491 

 

Patents and trademarks are stated at cost (primarily legal fees) and are amortized using the straight-line method over an estimated useful life of 17 years for patents and 10 years for trademarks. The weighted remaining average amortization period is approximately 12 years for patents and 7 years for trademarks, respectively. The company expenses annuity costs related to its trademarks and patents.

 

Amortization of patents and trademarks for each of the next five years and thereafter is as follows:

 

Year Ending December 31,    
2024  $136 
2025   258 
2026   255 
2027   230 
2028   211 
Thereafter   1,401 
Total  $2,491 

 

Note 9: Stockholders’ Equity

 

(a) Preferred Stock

 

The Company is authorized to issue 5,000,000 shares of $0.01 par value preferred stock with such designations, rights and preferences as may be determined by the Board. Of our authorized preferred stock, 4,000,000 shares have been designated as Series A Junior Participating Preferred Stock and 10,000 shares have been designated as Series B Convertible Preferred Stock.

 

Series A Junior Participating Preferred Stock

 

On May 10, 2023, the Company filed a Certificate of Increase in Delaware, increasing the number of preferred stock designated as Series A Junior Participating Preferred Stock to 4,000,000 from 250,000 shares. As of June 30, 2024, there were no Series A Junior Participating Preferred Stock outstanding.

 

Series B Convertible Preferred Stock

 

The Company has designated 10,000 shares of its preferred stock as Series B Convertible Preferred Stock (the “Preferred Stock”). Each share of Preferred Stock has a par value of $0.01 per share and a stated value equal to $1,000 (the “Stated Value”). The shares of Preferred Stock shall initially be issued and maintained in the form of securities held in book-entry form and the Depository Trust Company or its nominee (“DTC”) shall initially be the sole registered holder of the shares of Preferred Stock.

 

Each share of Preferred Stock shall be convertible, at any time and from time to time from and after the Original Issue Date at the option of the Holder thereof or at any time and from time to time on or after the second anniversary of the Original Issue Date at the option of the Corporation, into that number of shares of Common Stock (subject in each case to the limitations determined by dividing the Stated Value of such share of Preferred Stock by the Conversion Price). The conversion price for the Preferred Stock shall be equal to $0.20, subject to adjustment herein (the “Conversion Price”).

 

12
 

 

Pursuant to a registration statement relating to a rights offering (the “Rights Offering”) declared effective by the SEC on February 14, 2019, AIM distributed to its holders of common stock and to holders of certain options and redeemable warrants as of February 14, 2019, at no charge, one non-transferable subscription right for each share of common stock held or deemed held on the record date. Each right entitled the holder to purchase one unit, at a subscription price of $1,000 per unit, consisting of one share of Series B Convertible Preferred Stock with a face value of $1,000 (and immediately convertible into common stock at an assumed conversion price of $8.80) and 114 warrants with an assumed exercise price of $8.80. The redeemable warrants are exercisable for five years after the date of issuance. The net proceeds realized from the rights offering were approximately $4,700,000. As of June 30, 2024, 689 shares of Series B Convertible Preferred Stock expired, and none were converted prior to expiration.

 

(b) Common Stock and Equity Finances

 

The Company has authorized shares of 350,000,000 with specific limitations and restrictions on the usage of 8,000,000 of the 350,000,000 authorized shares. As of June 30, 2024, and December 31, 2023, there were 57,136,680 and 49,102,484 shares of Common Stock issued and outstanding, respectively.

 

Employee Stock Purchase Plan (Not equity compensation)

 

On July 7, 2020, the Board approved a plan pursuant to which all directors, officers, and employees could purchase from the Company up to an aggregate of $500,000 worth of shares at the market price (including subsequent plans, the “Employee Stock Purchase Plan”). Pursuant to NYSE American rules, this plan was effective for a sixty-day period commencing upon the date that the NYSE American approved the Company’s Supplemental Listing Application. The Company created successive new plans following the expiration of the July 7, 2020 plan. The latest plan was approved by the Board on June 26, 2024 and expires in August 2024.

 

During the three months ended June 30, 2024, the Company issued a total of 92,594 shares of its Common Stock at a price of $0.41 for total proceeds of approximately $37,500 as part of the employee stock purchase plan.

 

During the six months ended June 30, 2024, the Company issued a total of 335,603 shares of its Common Stock at a price ranging from $0.33 to $0.41 for total proceeds of approximately $120,000 as part of the employee stock purchase plan.

 

During the three months ended June 30, 2023, the Company did not issue any shares of its Common Stock as part of the employee stock purchase plan.

 

During the six months ended June 30, 2023, the Company issued a total of 322,583 shares of its Common Stock at a price of $0.31 for total proceeds of approximately $100,000 as part of the employee stock purchase plan.

 

Rights Plan

 

On May 12, 2023, the Company amended and restated its November 14, 2017 Rights Plan with American Stock Transfer & Trust Company as Rights Agent (the “Rights Plan”).

 

Warrants (Rights offering)

 

On September 27, 2019, the Company closed a public offering underwritten by A.G.P./Alliance Global Partners, LLC (the “Offering”) of (i) 1,740,550 shares of Common Stock; (ii) pre-funded warrants exercisable for 7,148,310 shares of Common Stock (the “Pre-funded Warrants”), and (iii) warrants to purchase up to an aggregate of 8,888,860 shares of Common Stock (the “Warrants”). In conjunction with the Offering, we issued a Representative’s Warrant to purchase up to an aggregate of 266,665 shares of common stock (the “Representative’s Warrant”). The shares of Common Stock and Warrants were sold at a combined Offering price of $0.90, less underwriting discounts and commissions. Each Warrant sold with the shares of Common Stock represents the right to purchase one share of Common Stock at an exercise price of $0.99 per share. The Pre-Funded Warrants and Warrants were sold at a combined Offering price of $0.899, less underwriting discounts and commissions. The Pre-Funded Warrants were sold to purchasers whose purchase of shares of Common Stock in the Offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% of the Company’s outstanding Common Stock immediately following the consummation of the Offering, in lieu of shares of Common Stock. Each Pre-Funded Warrant represents the right to purchase one share of Common Stock at an exercise price of $0.001 per share. The Pre-Funded Warrants are exercisable immediately and may be exercised at any time until the Pre-Funded Warrants are exercised in full. A registration statement on Form S-1, relating to the Offering was filed with the SEC and was declared effective on September 25, 2019, the net proceeds were approximately $7,200,000. During the year ended December 31, 2020, 1,870,000 of the Pre-funded Warrants were exercised and 8,873,960 Warrants were exercised. In addition, on March 25, 2020, the Representative’s Warrant was amended to permit exercise of such warrant to commence on March 30, 2020. These warrants were exercised on March 31, 2020, and an aggregate of 266,665 shares were issued upon exercise of this warrant for gross proceeds of approximately $264,000 and a $46,000 expense for the warrant modification.

 

During the three months ended June 30, 2024, there were no warrants exercised. During the six months ended June 30, 2024, 205,000 warrants were exercised, and 5,830,028 warrants expired unexercised. As of June 30, 2024 and December 31, 2023 there were 15,000 and 152,160 post-split warrants outstanding, respectively.

 

13
 

 

Equity Distribution Agreement

 

On April 19, 2023, the Company entered into an Equity Distribution Agreement (the “EDA”) with Maxim Group LLC (“Maxim”), pursuant to which the Company may sell, from time to time, shares of its common stock having an aggregate offering price of up to $8,500,000 through Maxim, as agent (the “Offering”). Sales under the EDA were registered under the S-3 Shelf Registration Statement. Under the terms of the EDA, Maxim will be entitled to a transaction fee at a fixed rate of 3.0% of the gross sales price of shares sold under the EDA. For the three months ended June 30, 2024, the Company sold 730,110 shares under the EDA for total gross proceeds of approximately $372,223, which includes a 3.0% fee to Maxim of $11,167. For the six months ended June 30, 2024, the Company sold 1,294,678 shares under the EDA for total gross proceeds of approximately $626,094, which includes a 3.0% fee to Maxim of $18,783. During the year ended December 31, 2023, the Company sold 598,114 shares under the EDA for total gross proceeds of approximately $344,000, which includes a 3.0% fee to Maxim of $10,326.

 

Equity Purchase Agreement

 

On March 28, 2024, the Company entered into a purchase agreement and a registration rights agreement with Atlas Sciences, LLC (“Atlas”), pursuant to which Atlas committed to purchase up to $15,000,000 of common stock of the Company for a period of 24 months from the date of the purchase agreement.

 

Under the terms of the purchase agreement, the Company, at its sole discretion, shall have the right to issue Put shares to the Investor at 95% of the Market Price of the shares on the day of trade. Sales under the purchase 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 purchase agreement. In April 2024, the Company filed a registration statement with the SEC on Form S-1 registering a total of 9,975,000 shares for resale pursuant to the Atlas Agreements, consisting of 9,636,400 shares that can be sold by the Company to Atlas and 338,600 shares that were issued to Atlas as Commitment Shares. As of June 30, 2024, a total of 759,685 shares have been issued pursuant to the purchase agreement for a total of approximately $128,000.

 

Securities Purchase Agreement

 

On May 31, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) to complete an offering (the “Transactions”) with a single accredited investor (the “Purchaser”), pursuant to which the Company will issue to the Purchaser, (i) in a registered direct offering, 5,640,958 shares of the Company’s common stock (the “Shares”), par value $0.001 per share (“Common Stock”) and (ii) in a concurrent private placement, the Company will issue to the Purchaser Class A common warrants to purchase an aggregate of up to 5,640,958 shares of its common stock (the “A Warrants”) at an exercise price of $0.363 per share and Class B common warrants to purchase an aggregate of up to 5,640,958 shares of its common stock (the “B “Warrants” and, along with the A Warrants, the “Common Warrants”) at an exercise price of $0.363 per share. 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.

 

The Shares are being offered by the Company pursuant to a shelf registration statement on Form S-3 (File No. 333-262280), which was declared effective on February 4, 2022 (as amended from time to time, the “Registration Statement”).

 

Pursuant to the terms of the Purchase Agreement, subject to certain exceptions, the Company cannot issue any equity securities for 60 days following the issuance date, provided that the Company will be able to utilize its at-the-market offering program with the Placement Agent after 30 days. Additionally, the Company cannot enter into a variable rate transaction (other than the ATM program with the Placement Agent) for 120 days after the issuance date. In addition, the Company’s executive officers and each of the Company’s directors have entered into lock-up agreements with the Company pursuant to which each of them has agreed not to, for a period of 90 days from the closing of the Transactions, offer, sell, transfer or otherwise dispose of the Company’s securities, subject to certain exceptions.

 

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 the Company, and may exercise every right and power that the Company may exercise and will assume all of its obligations under the Common Warrants with the same effect as if such successor entity had been named in the warrant itself. Common Warrant Holders will have additional rights defined in the Common Warrants. The Common Warrants will be exercisable on a “cashless” basis only if there is not a current registration statement permitting public resale. In this regard, the Company has agreed to file a registration statement to register the resale of the Common Warrant Shares as soon as practicable (and in any event within 45 calendar days) providing for the resale of the Shares issued and issuable upon exercise of the Common Warrants. The Company has agreed to use commercially reasonable efforts to cause such registration statement to become effective within 181 days following the issuance date and to keep such registration statement effective at all times until no Purchaser owns any Warrants or Warrant Shares issuable upon exercise thereof.

 

14
 

 

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 the Company and the Placement Agent. Pursuant to the Placement Agency Agreement, the Placement Agent will be entitled to a cash fee of 8% of the aggregate gross proceeds paid to the Company for the securities sold in the Transactions and reimbursement of certain out-of-pocket expenses.

 

The Company evaluated the Common Warrants under the guidance of ASC 480 – Distinguishing Liabilities from Equity and determined that they were in scope under the guidance as freestanding financial instruments but did not meet the criteria for liability classification and are classified as equity within the condensed consolidated financial statements. Proceeds allocated to such warrants totaled approximately $2.5 million. For the six months ended June 30,2024, no Common Warrants were exercised, and all remain outstanding on June 30, 2024.

 

Note 10: Recent Accounting Pronouncements

 

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. Accounting pronouncements issued by the FASB since filing the Annual Report on Form 10-K for the year ended December 31, 2023 did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

 

Note 11: Fair Value

 

Fair Value

 

The Company complies with the provisions of FASB ASC 820 “Fair Value Measurements” for its financial and non-financial assets and liabilities. ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis.

 

The fair values of cash and cash equivalents, other assets, accounts payable and accrued expenses approximate their carrying values due to the short-term maturities of these items and are considered a Level 1 instrument of the fair value measurements standard. The Company also has certain warrants with a cash settlement feature in the occurrence of a Fundamental Transaction. The fair value of the warrants (“June 2024 Warrants”) related to the Company’s June 2024 common stock and warrant issuance, are calculated using a Monte Carlo Simulation.

 

The Company also had certain redeemable warrants in the Rights Offering with a cash settlement feature in the occurrence of a Fundamental Transaction. No Fundamental Transaction occurred. In March 2024, 205,000 of these warrants converted on a cashless basis and 5,830,028 expired.

 

The Company estimated the fair value of the June 2024 Warrants using the Black-Scholes Model, which uses multiple inputs including the Company’s stock price, the exercise price of the warrant, volatility of the Company’s stock price, the risk-free interest rate and the expected term of the warrants.

 

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

 

   June 30,   December 31, 
   2024   2023 
Underlying price per share  $0.350    — 
Exercise price per share  $0.363    — 
Risk-free interest rate   4.42%   — 
Expected holding period   5.5 years    — 
Expected volatility   110%   — 
Expected dividend yield   —    — 

 

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

 

   June 30,   December 31, 
   2024   2023 
Underlying price per share  $0.350    — 
Exercise price per share  $0.363    — 
Risk-free interest rate   4.82%   — 
Expected holding period   2 years  <