AIM ImmunoTech(AIM) - 2024 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis for the six months ended June 30, 2024 Financial Statements This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of comprehensive loss, changes in stockholders' equity, and cash flows, with detailed accompanying notes Condensed Consolidated Balance Sheet Highlights (Unaudited) | Metric | June 30, 2024 (in thousands) | Dec 31, 2023 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $3,554 | $5,439 | | Total Assets | $15,715 | $19,381 | | Total Liabilities | $9,613 | $9,147 | | Total Stockholders' Equity | $6,102 | $10,234 | Consolidated Statements of Comprehensive Loss Highlights (Unaudited) | Metric (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $50 | $42 | $90 | $91 | | Research and development | $1,145 | $2,953 | $3,096 | $5,005 | | Net Loss | $(1,836) | $(4,909) | $(7,653) | $(8,570) | | Basic and diluted loss per share | $(0.03) | $(0.10) | $(0.15) | $(0.18) | Consolidated Statements of Cash Flows Highlights (Unaudited) | Metric (in thousands) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(7,823) | $(5,838) | | Net cash provided by (used in) investing activities | $668 | $(282) | | Net cash provided by financing activities | $5,270 | $105 | | Net decrease in cash and cash equivalents | $(1,885) | $(6,015) | Notes to Unaudited Condensed Consolidated Financial Statements These notes detail the company's focus on Ampligen development, significant financing activities, R&D expenses for clinical trials, and subsequent corporate governance changes - The company's primary focus is on the research and development of therapeutics for cancers, viral diseases, and immune-deficiency disorders, with flagship products Ampligen (rintatolimod) and Alferon N Injection[15] - On February 16, 2024, the company entered into a Note Purchase Agreement with Streeterville Capital LLC, receiving $2,500,000 in exchange for an unsecured promissory note[77] - On May 31, 2024, the company entered into a Securities Purchase Agreement with a single accredited investor, issuing 5,640,958 shares and warrants, raising approximately $2.05 million in gross proceeds[57] - The company has significant R&D agreements with Amarex Clinical Research for managing a Phase 2 pancreatic cancer trial (AMP-270) and a Phase 2 trial for Post-COVID Conditions[90][92] - Subsequent to the quarter end, the company amended its 2018 Equity Incentive Plan, adopted amended bylaws following a court ruling, and amended employment agreements for its CEO and another executive[101][102][104][105] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses the company's financial performance, strategic direction, and liquidity, focusing on Ampligen's clinical development and funding for future operations Overview This section outlines AIM's immuno-pharma business, prioritizing Ampligen's clinical trials for pancreatic cancer, ME/CFS, and Post-COVID conditions, supported by recent financing agreements - The company is prioritizing clinical activities for pancreatic cancer, ME/CFS, and Post-COVID conditions, with the goal of conducting trials that support future NDA submissions to the FDA or EMA[114][116] - The Phase 2 AMP-270 clinical trial for locally advanced pancreatic cancer is actively recruiting patients, following FDA clearance[118][160] - The company completed a Phase 2 study (AMP-518) for Post-COVID conditions, with topline data reported in February 2024[125][181] - AIM entered into a purchase agreement with Atlas Sciences for an equity line of credit of up to $15 million, providing flexible access to capital[131][132] - In May 2024, the company raised gross proceeds of approximately $2.05 million through a securities purchase agreement with a single accredited investor[142][143] Results of Operations This section provides a comparative financial analysis, highlighting a significant decrease in net loss for Q2 2024 and the first six months, primarily due to reduced R&D costs and an insurance recovery Q2 Financial Comparison (in thousands) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Net Loss | $(1,836) | $(4,909) | $3,073 (Decrease) | | R&D Costs | $1,145 | $2,953 | $(1,808) | | G&A Expenses | $2,591 | $2,550 | $41 | | Interest and Other Income | $2,580 | $318 | $2,262 | Six-Month Financial Comparison (in thousands) | Metric | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | Net Loss | $(7,653) | $(8,570) | $917 (Decrease) | | R&D Costs | $3,096 | $5,005 | $(1,909) | | G&A Expenses | $6,406 | $4,841 | $1,565 | - The decrease in R&D costs for both the three and six-month periods was primarily due to a reduction in expenses for outside contractors and clinical studies[226][237] - The increase in G&A expenses for the six-month period was mainly driven by a $1.4 million increase in legal professional fees[238] Liquidity and Capital Resources As of June 30, 2024, the company held approximately $10.1 million in cash, which management deems sufficient for the next 24 months, bolstered by recent financing activities - As of June 30, 2024, the company had approximately $10.1 million in cash, cash equivalents, and marketable securities[243] - Management believes current funds are sufficient to meet operational cash needs and fund current clinical trials for approximately the next twenty-four months[245] - Cash provided by financing activities for H1 2024 was $5.27 million, a significant increase from $105,000 in H1 2023, due to proceeds from a note payable ($2.37M), stock sales ($0.86M), and warrant issuance ($2.05M)[242] - The company has multiple avenues for future funding, including an Equity Distribution Agreement (EDA), an equity line of credit with Atlas, and an effective S-3 shelf registration statement[245][246][247] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, AIM ImmunoTech is not required to provide the information for this item - The company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information under this item[254] Controls and Procedures The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2024, with no material changes to internal controls - Based on an evaluation, the CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2024[255] - No changes were made in internal controls over financial reporting during the six months ended June 30, 2024, that have materially affected, or are reasonably likely to materially affect, internal controls[256] PART II - OTHER INFORMATION This section covers legal proceedings, risk factors, other corporate information, and a list of exhibits filed with the report Legal Proceedings This section updates on key legal cases, including sanctions in AIM v. Tudor and the Kellner v. AIM ruling on bylaws and nominations - In the AIM ImmunoTech, Inc. v. Tudor, et al. case, the District Court sanctioned the company and its counsel, leading to judgments for attorneys' fees totaling $293,409, which AIM has filed a notice of appeal for[258] - In Kellner v. AIM ImmunoTech Inc., the Delaware Supreme Court affirmed in part and reversed in part a lower court opinion, finding certain bylaws legally invalid but not requiring action on Kellner's rejected nominations due to 'deceptive conduct' by the nominating group[260][261] - Following the Supreme Court's decision, the company's board revised the bylaws to address the deficiencies, and the court denied Kellner's subsequent motion for reargument and attorneys' fees[261] Risk Factors This section refers readers to the comprehensive risk factors detailed in the company's Annual Report on Form 10-K for the year ended December 31, 2023 - The company refers to the 'Risk Factors' section in its Annual Report on Form 10-K for the year ended December 31, 2023, for a discussion of factors that could materially affect its business[264] Other Information This section details the adoption of amended bylaws and revisions to employment agreements for the CEO and another executive, adjusting their short-term compensation - On July 31, 2024, the company adopted Restated and Amended Bylaws to address issues deemed unenforceable or invalid by the Delaware Supreme Court[268] - The employment agreements for CEO Thomas K. Equels and executive Peter W. Rodino III were amended, revising their short-term compensation to include a mix of base salary and company common stock[270][271] Exhibits This section lists all exhibits filed with the 10-Q report, including corporate governance documents, financial agreements, and required certifications - The list of exhibits includes key corporate governance and financial documents, such as the Amended and Restated By-Laws, a Securities Purchase Agreement from May 2024, and amendments to executive employment agreements[274]