10-Q

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, 2020

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)

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.

[X] 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).

[X] Yes [  ] No

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

[  ] Large accelerated filer	[  ] Accelerated filer
[X] Non-accelerated filer	[X] 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 [X] No

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

39,690,012 shares of common stock were outstanding as August 13, 2020.

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, 2020			December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	33,908		$	1,470
Marketable securities, short term		1,093			7,308
Funds receivable from sale of New Jersey net operating loss		—			776
Accounts receivable, net		46			44
Prepaid expenses and other current assets		118			848
Total current assets		35,165			10,446
Property and equipment, net		6,785			7,116
Right of use assets, net		130			152
Patent and trademark rights, net		1,381			1,151
Marketable securities, long term		5,308			—
Other assets		1,354			1,354
Total assets	$	50,123		$	20,219
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	255		$	472
Accrued expenses		325			403
Current portion of operating lease liabilities		32			38
Current portion of financing obligation		221			214
Total current liabilities		833			1,127
Long-term liabilities:
Operating lease obligation		98			114
Notes payable, net		—			3,910
Financing obligation arising from sale leaseback transaction (Note 14)		1,993			2,104
Redeemable warrants		207			57
Commitments and contingencies
Stockholders’ equity:
Series B Convertible Preferred Stock, stated value $1,000 per share, 8,000 shares designated, 737 and 778 shares issues and outstanding, respectively		737			778
Common stock, par value $0.001 per share, authorized 350,000,000 shares; issued and outstanding 34,250,615 and 10,386,754, respectively		34			10
Additional paid-in capital		381,427			340,228
Accumulated other comprehensive income		63			—
Accumulated deficit		(335,269	)		(328,109	)
Total stockholders’ equity		46,992			12,907
Total liabilities and stockholders’ equity	$	50,123		$	20,219

See accompanying notes to consolidated financial statements.

1

AIM IMMUNOTECH INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Loss

(in thousands, except share and per share data)

(Unaudited)

	Three months ended June 30,						Six months ended June 30,
	2020			2019			2020			2019
Revenues:
Clinical treatment programs –United States	$	40		$	4		$	83		$	4
Clinical treatment programs - Europe		—			25			2			25
Total revenues		40			29			85			29
Costs and expenses:
Production costs		200			215			404			446
Research and development		1,463			1,096			2,343			2,024
General and administrative		1,717			1,942			3,986			3,709
Total costs and expenses		3,380			3,253			6,733			6,179
Operating loss		(3,340	)		(3,224	)		(6,648	)		(6,150	)
Interest and other income		46			16			67			36
Interest expense and other finance costs		(249	)		(99	)		(571	)		(344	)
Extinguishment of notes payable		142			—			142			(250	)
Convertible note valuation adjustment		—			(74	)		—			16
Settlement of litigation		—			260			—			260
Redeemable warrants valuation adjustment		31			1,085			(150	)		1,039
Net loss		(3,370	)		(2,036	)		(7,160	)		(5,393	)
Other comprehensive income (loss):
Unrealized loss on marketable securities		67			—			63			—
Net comprehensive loss	$	(3,303	)	$	(2,036	)	$	(7,097	)	$	(5,393	)
Basic and diluted loss per share	$	(0.11	)	$	(1.07	)	$	(0.19	)	$	(3.53	)
Weighted average shares outstanding, basic and diluted		29,970,197			1,898,703			37,073,765			1,529,948

See accompanying notes to consolidated financial statements.

2

AIM IMMUNOTECH INC. AND SUBSIDIARIES

Consolidated Statement of Changes in Stockholders’ Equity

For the Six Months Ended June 30, 2020 and 2019

(in thousands except share data)

(Unaudited)

	Series B Preferred			Common Stock Shares		Common Stock		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
Shares issued for:
Common stock issuances		—			23,859,099		24		40,797		—		—			40,821
Warrant modification		—			—		—		46		—		—			46
Equity-based compensation		—			—		—		346		—		—			346
Shares issued to pay accounts payable		—			4,762		—		10		—		—			10
Series B preferred shares converted to common shares		(41	)		—		—		—		—		—			(41	)
Net comprehensive loss		—			—		—		—		63		(7,160	)		(7,097	)
Balance June 30, 2020	$	737			34,250,615	$	34	$	381,427	$	63	$	(335,269	)	$	46,992

	Series B Preferred			Common Stock Shares		Common Stock		Additional Paid-in Capital			Accumulated other Comprehensive Income (Loss)		Accumulated Deficit			Total Stockholders’ Equity
Balance December 31, 2018	$	—			1,107,607	$	1	$	323,749		$	—	$	(318,576	)	$	5,174
Shares issued for:
Common stock issuance, net of costs		—			893,054		1		6,522			—		—			6,523
Convertible note origination shares		—			204,246		—		1,473			—		—			1,473
Deemed Dividends		—			—		—		(135	)		—		—			(135	)
Equity-based compensation		—			1,932		—		426			—		—			426
Redeemable warrants		—			—		—		(2,787	)		—		—			(2,787	)
Shares issued to pay accounts payable		—			8,091		—		46			—		—			46
Series B preferred shares issued, net of offering costs		5,312			—		—		—			—		—			5,312
Series B preferred shares converted to common shares		(4,091	)		—		—		—			—		—			(4,091	)
Net comprehensive loss		—			—		—		—			—		(5,393	)		(5,393	)
Balance June 30, 2019	$	1,221			2,214,930	$	2	$	329,294		$	—	$	(323,969		$	6,548

See accompanying notes to consolidated financial statements.

3

AIM IMMUNOTECH INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2020 and 2019

(in thousands)

(Unaudited)

	2020			2019
Cash flows from operating activities:
Net loss	$	(7,160	)	$	(5,393	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment		340			380
Redeemable warrants valuation adjustment		150			(1,039	)
Fair value of convertible note adjustment		—			(16	)
Change in convertible debt – refinancing		—			20
Extinguishment of notes payable		142			344
Warrant modification		46			—
Amortization of patent, trademark rights		67			35
Changes in ROU assets		22			22
Equity-based compensation		346			426
Realized (loss) gain on sale of marketable securities		63			—
Amortization of finance and debt issuance costs		42			71
Change in assets and liabilities:
Accounts and other receivables		774			1,018
Prepaid expenses and other current assets		730			66
Lease liability		(22	)		(28	)
Accounts payable		(217	)		38
Accrued interest expense		230			(178	)
Accrued expenses		(78	)		—
Net cash used in operating activities		(4,525	)		(4,234	)
Cash flows from investing activities:
Proceeds from sale of marketable securities		8,497			—
Purchase of marketable securities		(7,590	)		(379	)
Purchase of property and equipment		(9	)		(63	)
Purchase of patent and trademark rights		(297	)		(184	)
Net cash provided by (used in) investing activities		601			(626	)
Cash flows from financing activities:
Payment of note payable		(4,283	)		—
Financing obligation payments		(176	)		(169	)
Proceeds from sale of stock, net of issuance costs		40,821			5,689
Net cash provided by financing activities		36,362			5,520
Net increase in cash and cash equivalents		32,438			660
Cash and cash equivalents at beginning of period		1,470			299
Cash and cash equivalents at end of period	$	33,908		$	959
Supplemental disclosures of non-cash investing and financing cash flow information:
Unrealized loss on marketable securities	$	63		$	—
Conversion of series B preferred		41			4,092
Conversion of note payable into shares		—			1,473
Stock issued to settle accounts payable	$	10		$	46
Operating Lease – Right of Use Assets	$	—		$	148

See accompanying notes to consolidated financial statements.

4

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” or “Company”) are an immuno-pharma company headquartered in Ocala, Florida and focused on the research and development of therapeutics to treat multiple types of cancers, various 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 US.

A global pandemic due to a novel strain of coronavirus (COVID-19) has occurred. Since the late 2019 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 is also being researched as part of a potential 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.

In February 2020, AIM filed three provisional patent applications related to Ampligen in the Company’s efforts toward joining the global health community in the fight against the deadly coronavirus. The Company’s three provisional patent applications include: 1) Ampligen as a therapy for the coronavirus; 2) Ampligen as part of a proposed intranasal universal coronavirus vaccine that combines Ampligen with inactivated coronavirus, conveying immunity and cross-protection and; 3) a high-volume manufacturing process for Ampligen. Under the Patent Cooperation Treaty of 1970, which provides international protections for patents, the three provisional patent applications can convert to international patent applications based on the date of their filings.

In early April 2020, the Company entered into a Material Transfer Agreement with Shenzhen Smoore Technologies located in Shenzhen China, the world’s largest manufacturer of inhalation devices. Pursuant to this agreement, the Company is providing Smoore with Ampligen and Smoore will be conducting in vitro tests using its porous ceramic atomizer technology. Initial testing will include evaluation of Ampligen with regard to safety and characterization of the inhaler vapor properties. Additional testing will study the particle size of various Ampligen concentrations in aqueous solutions obtainable using Smoore’s technology. The goal of these studies is to establish a reproducible method to obtain an Ampligen-containing atomized mist that can deliver biologically active Ampligen deep into the lung airways of humans. The Company is currently awaiting study details from Smoore. The Ampligen is scheduled to be shipped to Smoore for testing, pending resolution of various China inbound import regulatory requirements. The Company will provide additional updates as they become available.

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, Amarex Clinical Research LLC (“Amarex”), which will provide regulatory support, including managing a clinical trial testing Ampligen’s potential as a COVID-19 prophylaxis via intranasal delivery.

In addition, the Company has joined with ChinaGoAbroad (CGA) to facilitate the entry of Ampligen into the People’s Republic of China (PRC) for use as a prophylactic/early-onset therapeutic against COVID-19. CGA is a member-based online information platform and offline advisory firm serving to facilitate two-way international transactions relating to the PRC in collaboration with the China Overseas Development Association. The relationship with ChinaGoAbroad is ongoing.

5

On May 11, 2020, the FDA authorized an IND for Roswell Park Cancer Institute to conduct a Phase 1/2a study of a regimen of Ampligen and interferon alpha in cancer patients with mild or moderate COVID-19 infections. This new clinical trial, sponsored by the Roswell Park in collaboration with the Company, will test the safety of this combination regimen in patients with cancer and mild to moderate COVID-19, and the extent to which this therapy will promote clearance of the SARS-CoV-2 virus from the upper airway. It is planned that the phase 1/2a study will enroll up to 80 patients in two stages. Phase 1 will see 12-24 patients receiving both Ampligen and interferon alfa-2b at escalating doses. Once that initial phase is complete, further study participants will be randomized to two arms: one receiving the two-drug combination and a control group who will not receive Ampligen or interferon alfa but will receive best available care. The Company intends to be a financial sponsor of the study and will provide Ampligen at no charge for this study.

In March 2020, the Japanese National Institute of Infectious Diseases (“NIID”) initiated preliminary laboratory testing of Ampligen as a potential treatment for COVID-19. On July 1, 2020, we entered into a trilateral material transfer and research agreement with the NIID and Shionogi & Co., Ltd. (“Shionogi”), one of Japan’s premier pharma companies to test the Company’s drug Ampligen as a potential vaccine adjuvant for COVID-19. Under the agreement, we have and will continue to provide Ampligen samples for various research projects. Per this agreement, the details of all preclinical and clinical results will remain confidential until released by NIID and Shionogi.

On July 6, 2020, we entered into a clinical trial agreement with Roswell Park Comprehensive Cancer Center pursuant to which Roswell Park will conduct a Phase 1/2 trial of Ampligen (rintatolimod) in combination with Interon-A (interferon alfa-2b), in cancer patients with COVID-19, the disease caused by the SARS-CoV-2 coronavirus.

Recently, the Company also entered into a material transfer agreement with the University of Rochester which is planning a series of in vitro experiments in which it will be testing the direct antiviral activity of Ampligen on SARS-CoV-2, as well as the mechanism of action. The Company also entered into a specialized services agreement with Utah State University that has supplied Ampligen to support the University’s Institute for Viral Research in its research into SARS-CoV-2 and testing is underway.

In June of 2020, AIM filed a provisional patent application for, among other discoveries, the use of Ampligen® as a potential early-onset therapy for the treatment of COVID-19 induced chronic fatigue.

Many survivors of the first SARS-CoV-1 epidemic in 2003 continued to report chronic fatigue, difficulty sleeping and shortness of breath months after recovering from the acute illness. These patients are commonly referred to as “Long Haulers.” Now there is increasing evidence that patients with COVID-19 can develop a similar, ME/CFS-like illness. AIM plans to investigate the possible activity of Ampligen in the “Long Hauler” population, including a plan to modify our AMP-511 program to include Long Haulers.

The COVID-19 pandemic has significantly impacted the economic conditions in the U.S., accelerating during the first half of March. The ultimate impact of the pandemic on the Company’s results of operations, financial position, liquidity, or capital resources cannot be reasonably estimated at this time.

AIM is committed to a focused business plan oriented toward finding senior co-development partners with the capital and expertise needed to commercialize the many potential therapeutic aspects of its drug, Ampligen, and its approved drug, Alferon N Injection.

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, 2019 and 2018, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed on March 30, 2020.

6

On May 29, 2019, the Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation to effect a reverse stock split at a ratio in the range of 1-for-20 to 1-for-50. The Company’s Board of Directors approved the implementation of the reverse stock split at a ratio 1-for-44 which took effect on June 10, 2019. All share and per share amounts for prior periods have been revised to give retroactive effect to this reverse stock split.

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 5,758 and 0 and 526,266 and 840,380 are excluded from the calculation of diluted net loss per share for the three months and six months ended June 30, 2020 and 2019, 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. Options granted in the six months ended June 30, 2020 and 2019 were 0 and 39,267, respectively.

Stock option for employees’ activity during the six months ended June 30, 2020 is 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, 2020		127,747		$	29.61		6.41	$	—
Granted		—			—		—		—
Forfeited		(1,892	)		20.45		—		—
Expired		(568	)		348.48		—		—
Outstanding June 30, 2020		125,287		$	28.30		6.00	$	—
Vested and expected to vest June 30, 2020		125,287		$	28.30		6.00	$	—
Exercisable June 30, 2020		70,649		$	16.68		3.63	$	—

7

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, 2020		68,283		$	23.79		7.48	$	—
Granted		—			—		—		—
Vested		(13,645	)		14.61		—		—
Unvested June 30, 2020		54,638		$	26.08		8.25	$	—

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, 2020		66,675		$	24.09		5.47	$	—
Granted		—			—		—		—
Forfeited		—			—		—		—
Expired		(76	)		75.26		—		—
Outstanding June 30, 2020		66,599		$	23.75		4.98	$	—
Vested and expected to vest June 30, 2020		66,599		$	23.75		4.98	$	—
Exercisable June 30, 2020		9,694		$	12.41		8.08	$	—

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, 2020		66,675		$	12.80		5.59	$	—
Granted		—			—		—		—
Expired		—			—		—		—
Vested		(9,770	)		11.95		—		—
Unvested June 30, 2020		56,905		$	12.95		5.15	$	—

Stock-based compensation expense was approximately $346,000 and $426,000 for the six months ended June 30, 2020 and 2019 resulting in an increase in general and administrative expenses, respectively.

As of June 30, 2020, and 2019, respectively, there was approximately $442,000 and $1,101,000 of unrecognized equity-based compensation cost related to options granted under the Equity Incentive Plan.

Note 4: Inventories

The Company uses the lower of first-in, first-out (“FIFO”) cost or net realizable value method of accounting for inventory.

8

Commercial sales of Alferon in the U.S. will not resume until new batches of commercial filled and finished product are produced and released by the U.S. Food and Drug Administration (“FDA”). While the facility is approved by the FDA under the Biologics License Application (“BLA”) for Alferon, this status will need to be reaffirmed by an FDA pre-approval inspection. The Company will also need the FDA’s approval to release commercial product once it has submitted satisfactory stability and quality release data. Currently, the manufacturing process is on hold and there is no definitive timetable to have the facility back online. Due to the Company extending the timeline of Alferon production to in excess of one year, the Company reclassified Alferon work in process inventory of $1,095,000 to other assets within our balance sheet as of June 30, 2020 and December 31, 2019 and due to the high cost estimates to bring the facility back online. Prior to completing validation, the Company plans on modernizing the manufacturing process to make it lower-cost and higher volume. If, following modernization, the Company is unable to gain the necessary FDA approvals related to the manufacturing process and/or final product of new Alferon inventory, its operations most likely will be materially and/or adversely affected. Considering these contingencies, there can be no assurances that the approved Alferon N Injection product will be returned to production on a timely basis, if at all, or that if and when it is again made commercially available, it will return to prior sales levels.

The Alferon work in process is currently compliant with our internal protocols and is stored in a controlled state. All of these factors contribute to the potential sale of the Alferon work in process, after validation lots have been produced and including a successful pre-approval inspection.

Note 5: Marketable Securities

Marketable securities consist of mutual funds and debt securities. As of June 30, 2020, and December 31, 2019, it was determined that none of the marketable securities had an other-than-temporary impairment. At June 30, 2020 and December 31, 2019, all securities were measured as Level 1 instruments of the fair value measurements standard (see Note 13: Fair Value). As of June 30, 2020, and December 31, 2019 the Company held $6,401,000 and $7,308,000 in debt and equity securities, respectively.

Debt securities classified as available for sale consisted of:

June 30, 2020
(in thousands)

Securities	Amortized Cost		Gross Unrealized Gains /(Losses)		Gross Unrealized Gains /(Losses)			Fair Value		Marketable Securities
U.S. Treasury notes	$	1,772	$	—	$	(4	)	$	1,768	$	1,768
U.S. Government mortgage backed securities		2,001		—		(4	)		1,997		1,997
Corporate bonds		2,565		—		71			2,636		2,636
Totals	$	6,338	$	—	$	63		$	6,401	$	6,401

As of December 31, 2019 the Company held no debt securities.

9

The following presents available-for-sale securities’ gross unrealized losses and fair value aggregated by the short- and long-term maturity.

June 30, 2020
(in thousands)

	Less than 12 Months				12 Months or More					Total
Securities	Fair Value		Gross Unrealized Gains		Fair Value		Gross Unrealized Gains			Fair Value		Gross Unrealized Gains
U.S. Treasury notes	$	605	$	—	$	1,163	$	(4	)	$	1,768	$	(4	)
U.S. Government mortgage backed securities		—		—		1,997		(4	)		1,997		(4	)
Corporate bonds		488		—		2,148		71			2,636		71
Totals	$	1,093	$	—	$	5,308	$	63		$	6,401	$	63

Note 6: Accrued Expenses

Accrued expenses consist of the following:

	(in thousands)
	June 30, 2020		December 31, 2019
Compensation	$	78	$	94
Professional fees		101		73
Clinical trial expenses		10		56
Other expenses		136		180
	$	325	$	403

Note 7: Property and Equipment

	(in thousands)
	June 30, 2020			December 31, 2019
Land, buildings and improvements	$	10,547		$	10,547
Furniture, fixtures, and equipment		5,123			5,114
Total property and equipment		15,670			15,661
Less: accumulated depreciation		(8,885	)		(8,545	)
Property and equipment, net	$	6,785		$	7,116

Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets, ranging from three to thirty-nine years.

On March 16, 2018, the Company sold land and a building for $4,080,000 and concurrently entered into an agreement to lease the property back for ten years. The lease payments are initially $408,000 per year for two years through March 31, 2020 and will escalate in subsequent years. (See Note 14: Financing Obligation Arising from Sale Leaseback Transaction for more details on the sale leaseback of the property and equipment).

10

Note 8: 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 Directors. Of our authorized preferred stock, 250,000 shares have been designated as Series A Junior Participating Preferred Stock and 8,000 shares have been designated as Series B Convertible Preferred Stock. The Series B Convertible Preferred Stock has a stated value $1,000 per share.

The Company is authorized to issue 8,000 Series B Convertible Preferred Stock, no par value, stated value $1,000 per share. As of June 30, 2020, and December 31, 2019, the Company had 737 and 778 shares of Series B Convertible Preferred Stock outstanding, respectively. Each such Preferred Share is convertible into 114 shares of common stock.

Pursuant to a registration statement relating to a 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 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 warrants are exercisable for five years after the date of issuance. The net proceeds realized from the rights offering were approximately $4,700,000. During the six months ending June 30, 2020, 41 shares of Series B Convertible Preferred Stock were converted into common stock.

(b) Common Stock

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.

In June 2019, the Company effected a 44-to-1 reverse stock split of the outstanding shares, in order to become compliant with the NYSE regulations. This did not affect the number of authorized shares. All references herein to shares of common stock, options, warrants and preferred stock have been adjusted to give effect to this reverse stock.

On June 11, 2019, the board of directors approved up to $500,000 for all directors, officers and employees to buy Company shares from the Company at the market price. As of June 30, 2019, the Company has issued 67,767 shares of its common stock at prices between $4.03 and $4.37 for a total of $274,000. This plan expired August 19, 2019. On September 27, 2019, the Company closed an 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, 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 six months ended June 30, 2020, 1,870,000 of the Pre-funded Warrants were exercised and 8,873,860 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.

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On May 2, 2019, the Company entered into a modification agreement with certain redeemable warrant holders of the August 23, 2017 and April 20, 2018, respectively. The warrant exercise price was reduced to $6.60 and 103,410 warrants were exercised, reducing the liability attributed to the warrants by approximately $404,000, and the Company realized about $682,000 in net proceeds, resulting in an addition to stockholders’ equity of approximately $1,086,000, offset by a deemed dividend of $135,000.

On July 19, 2019, the Company entered into a new Equity Distribution Agreement (the “2019 EDA”) with Maxim, pursuant to which it may sell from time to time, shares of its Common Stock through Maxim, as agent (the “Offering”). The 2019 EDA replaced the EDA with Maxim. On July 19, 2019, the Company filed a prospectus supplement with the SEC in connection with the offering under the 2019 EDA under its existing Registration Statement on Form S-3 (File No 333-226059) related to the sale of shares of its common stock having an aggregate offering price of up to $4,508,244, the maximum number of Shares permitted to be sold under the 2019 EDA at that time. As of December 31, 2019, the Company had sold 905,869 shares under the 2019 EDA for gross proceeds of $2,553,079 which includes a 3.5% fee to Maxim of $89,358. On March 3, 2020, the Company filed a new prospectus supplement with SEC increasing the aggregate offering price of shares of common stock it could sell under the 2019 EDA $10,867,245. On March 10, 2020, the Company filed another prospectus supplement with SEC increasing the aggregate offering price under the 2019 EDA to $18,833,739. During the six months ended June 30, 2020, the Company sold 12,580,926 shares under the 2019 EDA for total gross proceeds of $32,878,403, which includes a 3.5% fee to Maxim of $1,150,744. On June 15, 2020, the Company filed another prospectus supplement with SEC increasing the aggregate offering price under the 2019 EDA to $19,406,552. During the quarter ended June 30, 2020, the Company sold 5,964,197 shares under the 2019 EDA for total gross proceeds of $15,560,537, which includes a 3.5% fee to Maxim of $544,619.The actual number of shares, that the Company can sell, and the proceeds to be received therefrom under the 2019 EDA are dependent upon the market price of its Common Stock.

The 2018 Equity Incentive Plan, effective September 12, 2018, 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 is reserved for potential issuance pursuant to awards under the 2018 Equity Incentive Plan. Unless sooner terminated, the 2018 Equity Incentive Plan will continue in effect for a period of 10 years from its effective date. On October 17, 2018, the Board of Directors issued 26,324 options to the officers and directors at the exercise price of $9.68 expiring in 10 years, and on November 14, 2018, the Board of Directors issued 23 options to each employee, officer and director at the exercise price of $9.68 expiring in ten years. On January 28, 2019, 27,570 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.

As of June 30, 2020, and December 31, 2019, there were 34,250,615 and 10,386,754 shares outstanding, respectively.

Note 9: Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

Note 10: Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Measurement of Credit Losses on Financial Instruments, and subsequent amendments to the guidance, ASU 2018-19 in November 2018 and ASU 2020-02 in February 2020. The standard significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace today’s “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. The amendment will affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2018-19 clarifies that receivables arising from operating leases are accounted for using lease guidance and not as financial instruments. The amendments should be applied on either a prospective transition or modified-retrospective approach depending on the subtopic. This ASU will be effective for us beginning the first day of our 2023 fiscal year. Early adoption is permitted. We are evaluating the impact of adoption of this ASU on our financial condition, results of operations and cash flows, and, as such, we are not able to estimate the effect the adoption of the new standard will have on our financial statements.

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Other recent accounting pronouncements issued by the FASB did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

Note 11: Convertible Note Payable

On September 28, 2018, the Company entered into a $3,170,000 10% Secured Convertible Promissory Note (the “IR Note”) with Iliad Research and Trading, L.P. (the “Holder”), which was issued to the Holder in conjunction with 500,000 shares of common stock (the “Origination Shares”). The Company collected $3,000,000 in cash from the Holder during September 2018 and the remainder $170,000 was retained by the Holder for the Holder’s legal fees of $20,000 for the issuance of the IR Note and the Original Issue Discount of $150,000. The Company incurred $210,000 in third-party fees directly attributed to the issuance of the IR Note. The Company promised to pay the principal amount, together with guaranteed interest at the annual rate of 10%, with principal and accrued interest on the IR Note due and payable on September 28, 2019 (unless converted under terms and provisions as set forth within the IR Note. The IR Note provides the Holder with the right to convert, at any time, all or any part of the outstanding principal and accrued but unpaid interest into shares of the Company’s common stock at a conversion price of $0.30 per share. In addition, beginning on March 28, 2019, the IR Note also provides the Holder with the right to redeem all or any portion of the IR Note (“Redemption Amount”). The payments of each Redemption Amount may be made, at the option of the Company, in cash, by converting such Redemption Amount into shares of common stock (“Redemption Conversion Shares”), or a combination thereof. The number of Redemption Conversion Shares equals the portion of the applicable Redemption Amount being converted divided by the lesser of $0.30 or 80% of the lowest Volume Weighted Average Price (“VWAP”) during the ten (10) trading days immediately preceding the applicable measurement date (the “Market Price”). The Purchase Agreement requires the Company to reserve at least 8,900,000 shares of common stock from its authorized and unissued common stock to provide for all issuances of common stock under the IR Note. However, the IR Note provides that the aggregate number shares of common stock issued to the Holder under the IR Note and Purchase Agreement shall not exceed 19.99% of the total number of shares of common stock outstanding as of the closing date unless the Company has obtained stockholder approval of the issuance. The Origination Shares were to be returned to the Company in the event that the Company could provide within 30 days of the closing of the transaction certain requested assets as security for repayment of the IR Note. The security was not provided so the Origination Shares remained with the Holder.

The Company determined the IR Note should be recorded at fair value with subsequent changes in fair value recorded in earnings. This conclusion is based on the redemption conversion feature, which allows the Holder to trigger the redemption of the IR Note for cash or conversion of the IR Note for common shares prior to its maturity date at a price of the lesser of $0.30 per share or the Market Price as defined within the IR Note. The choice of cash redemption or conversion of the IR Note for common shares is at the option of the Company. This feature may require the Company to issue a variable number of common shares to settle the IR Note which was determined to have a predominantly fixed monetary value at inception.

On March 13, 2019, the Company amended the Purchase Agreement pursuant to which it issued the Convertible IR Note (the “Amendment”). The Amendment extends the maturity of the IR Note to September 28, 2020. In addition, the redemption conversion rates were revised to a price to be determined by mutual agreement between the Company and the Holder. In the event that the Company and the Holder are unable to reach a mutually agreeable price, the Company will be required to pay the applicable redemption amount in cash. The maximum amount of the IR Note the Lender will be able to redeem in any given calendar month is $300,000.

The Company evaluated the Amendment in accordance with ASC 470, Debt (“ASC 470”) and determined the Amendment is considered an extinguishment of the existing debt and issuance of net debt. As a result, the Company derecognized the liability and recorded a loss on the extinguishment of debt of $345,000 in 2019 which was equal to the difference between the reacquisition price of the debt and the net carrying amount (amount due at maturity, adjusted for unamortized discounts) of the extinguished debt. Subsequently, the amended note was recorded in accordance with ASC 480 at the fair value that the note was issued with changes in fair value recorded through earnings at each reporting period.

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There were a series of debt conversions during 2019 which partially converted $1,400,000 of the $3,408,000 convertible debt, as amended, into stockholders’ equity, adding approximately $1,400,000 to stockholders’ equity. The number of shares issued in these conversions were 204,246 shares. In October 2019 and November 2019 respectively, the lender redeemed $300,000 pursuant to the terms of the modification. In connection with the IR Note, the Company recorded a gain equal to $127,000 for the year-end December 31, 2019. See Note 12: Long Term Debt.

Interest expense associated with the IR Note was $0 for June 30, 2020 and $50,000 for the six months ended June 30, 2019.

Note 12: Long Term Debt

On August 5, 2019, the Company issued a Secured Promissory Note (the “CV Note”) with Chicago Venture Partners, L.P. (the “CV”). The Note has an original principal amount of $2,635,000, bears interest at a rate of 10% per annum and will mature in 24 months, unless earlier paid in accordance with its terms. The Company received proceeds of $1,900,000 after an original issue discount and payment of Lender’s legal fees. Pursuant to a Security Agreement between the Company and the Lender, repayment of the Convertible Note is secured by substantially all of our assets other than its intellectual property.

During the three months ending June 30, 2020, the Holder made redemptions of $650,000 reducing the principal to $1,985,000. On May 29, 2020, the Company paid off the outstanding CV note consisted of principal of $1,985,000, and accrued interest payable of $220,000. The net payment of $1,795,000, less the write off of the origination discount of $369,000 and issuance costs of $6,000, resulted in a gain on extinguishment of $66,000.

On December 5, 2019, the Company issued a secured Promissory Note (the “AS Note”) to Atlas Sciences L.P. (“AS”). The AS Note has an original principal amount of $2,175,000, bears interest at a rate of 10% per annum and will mature in 24 months, unless earlier paid in accordance with its term. In conjunction with the AS Note, the Company utilized $1,650,000 of the net proceeds from the AS Note to pay off in full our obligation to Iliad, an entity with affiliations to AS, pursuant to the IR Note.

The Company evaluated the IR Note transaction in accordance with ASC 470, Debt (“ASC 470”) and determined the exchange is considered an extinguishment of the existing debt and issuance of new debt. As a result, the Company derecognized the liability and recorded a loss on the extinguishment of debt of $250,000 which was equal to the difference between the reacquisition price of the debt and the net carrying amount (amount due at maturity, adjusted for unamortized discounts) of the extinguished debt. Subsequently, the AS Note was recorded in accordance with ASC 470 whereby the Company will record a liability equal to the proceeds received on December 5, 2019.

On June 19, 2020, the Company paid off the outstanding AS note consisted of original principal of $2,175,000, and accrued interest payable of $122,000 less origination discount of $376,000 and issuance costs of $7,000, with a net note payable of $1,838,000, including a gain on extinguishment of $76,000.

In, conjunction with the financing, the Company used the proceeds to pay the outstanding IR Note. See Note 11: Convertible Note Payable.

Interest expense associated with the CV Note and AS Note for the period ended June 30, 2020 was approximately $116,000 and $106,000, respectively.

Note 13: Fair Value

The Company is required under U.S. GAAP to disclose information about the fair value of all the Company’s financial instruments, whether or not these instruments are measured at fair value on the Company’s consolidated balance sheets.

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The Company estimates that 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. The Company also has certain warrants with a cash settlement feature in the unlikely occurrence of a Fundamental Transaction, namely (1) a merger or consolidation with another person; (2) sale of substantially all of its assets; (3) holders of common stock sell 50% or more of outstanding shares; (4) the Company effects an exchange of all its securities for other securities, cash or property, and (5) the Company effects a stock purchase agreement or business combination for more than 50% of outstanding shares. The fair value of the redeemable warrants (“Warrants”) related to the Company’s August 2016, February 2017, June 2017, August 2017, April 2018 and March 2019 common stock warrant issuances, are calculated using a Monte Carlo Simulation. While the Monte Carlo Simulation is one of a number of possible pricing models, the Company has determined it to be industry accepted and fairly presented the fair value of the Warrants. As an additional factor to determine the fair value of the Put’s liability, the occurrence probability of a Fundamental Transaction event was factored into the valuation.

The Company recomputes the fair value of the Warrants at the issuance date and the end of each quarterly reporting period. Such value computation includes subjective input assumptions that are consistently applied each period. If the Company were to alter its assumptions or the numbers input based on such assumptions, the resulting fair value could be materially different.

The Company utilized the following assumptions to estimate the fair value of the August 2016 Warrants:

	June 30, 2020			December 31, 2019
Underlying price per share	$	2.48		$	0.54
Exercise price per share	$	82.50		$	82.50
Risk-free interest rate		0.16	%		1.58	%
Expected holding period		1.17			1.67
Expected volatility		145	%		96	%
Expected dividend yield		-			-

The Company utilized the following assumptions to estimate the fair value of the February 2017 Warrants:

	June 30, 2020			December 31, 2019
Underlying price per share	$	2.48		$	0.54
Exercise price per share		$ 30.25 – 33.00			$ 30.25-33.00
Risk-free interest rate		0.16	%		1.60	%
Expected holding period		2.09 – 2.10			2.59-2.60
Expected volatility		115	%		89	%
Expected dividend yield		-			-

The Company utilized the following assumptions to estimate the fair value of the June 2017 Warrants:

	June 30, 2020			December 31, 2019
Underlying price per share	$	2.48		$	0.54
Exercise price per share	$	27.50		$	27.50
Risk-free interest rate		0.16	%		1.60	%
Expected holding period		1.92			2.42
Expected volatility		120	%		91	%
Expected dividend yield		-			-

The Company utilized the following assumptions to estimate the fair value of the August 2017 Warrants:

	June 30, 2020			December 31, 2019
Underlying price per share	$	2.48		$	0.54
Exercise price per share		19.80		$	19.80
Risk-free interest rate		0.16	%		1.59	%
Expected holding period		1.68			2.18
Expected volatility		125	%		94	%
Expected dividend yield		-			-

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The Company utilized the following assumptions to estimate the fair value of the April 2018 Warrants:

	June 30, 2020		December 31, 2019
Underlying price per share	$	2.48	$	0.54
Exercise price per share	$	17.16	$	17.16
Risk-free interest rate		0.17 – 0.20 %		1.59%-1.65 %
Expected holding period		0.32 – 3.32		0.82-3.82
Expected volatility		100% - 155 %		86%-124 %
Expected dividend yield		-		-

The Company utilized the following assumptions to estimate the fair value of the March 2019 Warrants:

	June 30, 2020			December 31, 2019
Underlying price per share	$	2.48		$	0.54
Exercise price per share	$	8.80		$	8.80
Risk-free interest rate		0.22	%		1.66	%
Expected holding period		3.69			4.19
Expected volatility		100	%		87	%
Expected dividend yield		-			-

The significant assumptions using the Monte Carlo Simulation approach for valuation of the Warrants are:

(i)	Risk-Free Interest Rate. The risk-free interest rates for the Warrants are based on U.S. Treasury constant maturities for periods commensurate with the remaining expected holding periods of the warrants.
(ii)	Expected Holding Period. The expected holding period represents the period of time that the Warrants are expected to be outstanding until they are exercised. The Company utilizes the remaining contractual term of the Warrants at each valuation date as the expected holding period.
(iii)	Expected Volatility. Expected stock volatility is based on daily observations of the Company’s historical stock values for a period commensurate with the remaining expected holding period on the last day of the period for which the computation is made.
(iv)	Expected Dividend Yield. Expected dividend yield is based on the Company’s anticipated dividend payments over the remaining expected holding period. As the Company has never issued dividends, the expected dividend yield is $0.00 and this assumption will be continued in future calculations unless the Company changes its dividend policy.
(v)	Expected Probability of a Fundamental Transaction. The possibility of the occurrence of a Fundamental Transaction triggering a Put right is extremely remote. As discussed above, a Put right would only arise if a Fundamental Transaction (1) is an all cash transaction; (2) results in the Company going private; or (3) is a transaction involving a person or entity not traded on a national securities exchange. The Company believes such an occurrence is highly unlikely because:

a.	The Company only has one product that is FDA approved but which will not be available for commercial sales for 18 months at the earliest;
b.	The Company flagship product is approved only in Argentina for Severely Debilitated Chronic Fatigue Syndrome patients;
c.	The Company may have to perform additional clinical trials for FDA approval of its flagship product;
d.	Industry and global market conditions continue to include uncertainty, adding risk to any transaction;
e.	Available capital for a potential buyer in a cash transaction continues to be limited;
f.	The nature of a life science company is heavily dependent on future funding and high costs, including research & development;
g.	The Company has minimal revenues streams which are insufficient to meet the funding needs for the cost of operations or construction at their manufacturing facility; and
h.	The Company’s Rights Agreement and Executive Agreements make it less attractive to a potential buyer.

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With the above factors utilized in analysis of the likelihood of the Put’s potential Liability, the Company estimated the range of probabilities related to a Put right being triggered as:

Range of Probability	Probability
Low	0.5	%
Medium	1.0	%
High	5.0	%

The Monte Carlo Simulation has incorporated a 5.0% probability of a Fundamental Transaction to date for the life of the securities.

(vi)	Expected Timing of Announcement of a Fundamental Transaction. As the Company has no specific expectation of a Fundamental Transaction, for reasons stated above, the Company used a discrete uniform probability distribution over the Expected Holding Period to model the potential announcement of a Fundamental Transaction occurring during the Expected Holding Period.
(vii)	Expected 100 Day Volatility at Announcement of a Fundamental Transaction. An estimate of future volatility is necessary as there is no mechanism for directly measuring future stock price movements. Daily observations of the Company’s historical stock values for the 100 days immediately prior to the Warrants’ grant dates, with a floor of 100%, were utilized as a proxy for the future volatility.
(viii)	Expected Risk-Free Interest Rate at Announcement of a Fundamental Transaction. The Company utilized a risk-free interest rate corresponding to the forward U.S. Treasury rate for the period equal to the time between the date forecast for the public announcement of a Fundamental Transaction and the Warrant expiration date for each simulation.
(ix)	Expected Time Between Announcement and Consummation of a Fundamental Transaction. The expected time between the announcement and the consummation of a Fundamental Transaction is based on the Company’s experience with the due diligence process performed by acquirers and is estimated to be six months. The Monte Carlo Simulation approach incorporates this additional period to reflect the delay Warrant Holders would experience in receiving the proceeds of the Put.

While the assumptions remain consistent from period to period (e.g., using historical stock prices), the numbers input change from period to period (e.g., the actual historical prices input for the relevant period).

The Company applies FASB ASC 820 that defines fair value, establishes a framework for measuring fair value in U.S. GAAP, and expands disclosures about fair value measurements. The guidance does not impose any new requirements around which assets and liabilities are to be measured at fair value, and instead applies to asset and liability balances required or permitted to be measured at fair value under existing accounting pronouncements. The Company measures its warrant liability for those warrants with a cash settlement feature at fair value.

FASB ASC 820-10-35-37 establishes a valuation hierarchy based on the transparency of inputs used in the valuation of an asset or liability. Classification is based on the lowest level of inputs that is significant to the fair value measurement. The valuation hierarchy contains three levels:

● Level 1 – Quoted prices are available in active markets for identical assets or liabilities at the reporting date. Generally, this includes certain U.S. and government agency debt and equity securities that are traded in an active market.

● Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Generally, this includes debt and equity securities that are not traded in an active market.

● Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or other valuation techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. As of June 30, 2020, the Company has classified the warrants with cash settlement features as Level 3. Management evaluates a variety of inputs and then estimates fair value based on those inputs. As discussed above, the Company utilized the Monte Carlo Simulation Model in valuing these warrants.

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The table below presents the balances of assets and liabilities measured at fair value on a recurring basis by level within the hierarchy as:

	(in thousands) As of June 30, 2020
	Total		Level 1		Level 2		Level 3
Assets:
U. S. Treasury notes	$	1,768	$	1,768	$	—	$	—
U.S. Government mortgage backed Securities		1,997		1,997		—		—
Corporate bonds		2,636		2,636		—		—
Marketable Securities	$	6,401	$	6,401	$	—	$	—
Liabilities:
Redeemable warrants	$	207	$	—	$	—	$	207

	(in thousands) As of December 31, 2019
	Total		Level 1		Level 2		Level 3
Assets:
Mutual Fund	$	7,308	$	7,308	$	—	$	—
Liabilities:
Redeemable warrants	$	57	$	—	$	—	$	57

The changes in Level 3 Liabilities measured at fair value on a recurring basis are summarized as follows (in thousands):

Redeemable warrants:
Balance at December 31, 2019	$	57
Fair value adjustment		150
Balance at June 30, 2020	$	207

Note 14: Financing Obligation Arising from Sale Leaseback Transaction

On March 16, 2018, the Company sold land and a building for $4,080,000 and concurrently entered into an agreement to lease the property back for ten years at $408,000 per year for two years through March 31, 2020. The lease payments will increase 2.5% per year for the next three years through March 31, 2023 and the lease payments will increase 3% for the remaining five years through March 31, 2028. The sale of the property includes an option to repurchase the property at fair value which does not permanently transfer all the risks and rewards of ownership to the buyer. The option to repurchase the property also would be at a higher price than the sales price and is considered likely based upon the Company’s plans going forward. Because the sale of the property includes the option to repurchase the property and includes the above attributes, the transaction was accounted for as a financing transaction whereby the Company debited cash for the amount of cash received and credit financing obligation. The Company will continue to report the property as an asset and the property will continue to be depreciated. The fair value repurchase option is accounted for similar to a share appreciation mortgage. Accordingly, the guidance in ASC 470-30 related to participating mortgage loans would be applied to the liability. If the option expires unused, the sale is recognized at that time. The gain on the sale would be the excess of the liability (current fair value of the property) over its carrying amount. If the option is exercised, the cash payment by the seller-lessee is to pay off the financing obligation. As part of the sale of this building, warrants were provided to the buyer for the purchase of up to 73,314 shares of Company common stock for a period of five years at an exercise price of $17.05 per share, 125% of the closing price of the common stock on the NYSE American on the date of execution of the letter of intent for the purchase. The warrants cannot be exercised to the extent that any exercise would result in the purchaser owning in excess of 4.99% of our issued and outstanding shares of common stock.

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The Property and Equipment in Note 7 above are the property and equipment involved in this transaction. Depreciation on the building will continue until a sale has been recognized.

Future minimum payments required under the Financing Obligation and the balance of the Finance Obligation as of June 30, 2020 are as follows:

During the year:

	(in thousands)
2020	$	209
2021		426
2022		437
2023		449
2024		463
Thereafter		1,567
Total of payments		3,551
Less deferred issuance costs		(205	)
Less discount on debt instrument		(881	)
Less imputed interest		(251	)
Total balance		2,214
Less current portion		(221	)
Long term portion	$	1,993

Interest expense relating to this financing agreement was $31,000 for the six months ended June 30, 2020 and $35,000 for the six months ended June 30, 2019.

Note 15: Leases

In February 2016, the FASB established Topic 842, Leases, by issuing ASU No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; ASU No. 2018-11, Targeted Improvements; and ASU No. 2018-20, Narrow-Scope Improvements for Lessors. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

The new standard was effective for the Company on January 1, 2019, with early adoption permitted. A modified retrospective transition approach was required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered into between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods. We adopted the new standard on January 1, 2019 and used the effective date as our date of initial application. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019.

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The new standard provides several optional practical expedients in transition. We elected the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We elected all the new standard’s available transition practical expedients other than the use-of hindsight.

The new standard also provides practical expedients for an entity’s ongoing accounting. We elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also elected the practical expedient to not separate lease and non-lease components for leases of office equipment.

This standard had a material effect on our financial statements. The most significant effect related to the recognition of new ROU assets and lease liabilities on our balance sheet for our real estate and equipment operating leases and providing significant new disclosures about our leasing activities.

The Company entered into a Lease Agreement for a term of five years commencing on June 1, 2015 with Fraser Advanced Information Systems, pursuant to which the Company agreed to lease two Sharp copiers. The base rent increases by 5% each year, and ranges from approximately $1,049 per month for the first year to $1,335 per month on the fifth year.

On June 13, 2018, the Company entered into a Lease Agreement for a term of six years commencing on July 1, 2018 with SML FL Holdings LLC, pursuant to which the Company agreed to lease approximately 3,000 rentable square feet. The base rent increases by 3% each year, and ranges from $2,100 per month for the first year to $2,785 per month for the sixth year.

On May 1, 2019, the Company entered into a Lease Agreement for a term of three years commencing on May 1, 2019 with 604 Associates LLC, pursuant to which the Company agreed to lease approximately 3,000 rentable square feet. The base rent is $1,500 per month for the term of the lease.

The expected lease term includes both contractual lease periods and, when applicable, cancelable option periods when it is reasonably certain that the Company would exercise such options. The Company’s leases have remaining lease terms between 6 months and 4 years. As of June 30, 2020, the weighted-average remaining term is 2.17 years. The Company has determined that the incremental borrowing rate is 10% as of December 31, 2018 based upon the recently completed financing transaction in September 2018.

Below are the lease commitments for the next 5 years and thereafter.

Year-Ending June 30,
	(in thousands)
2020	$	36
2021		42
2022		30
2023		34
Thereafter		—
Less Imputed Interest		(12	)
Total	$	130

As of June, 30, 2020, the balance of the right of use assets was $130,000 and the corresponding lease liability balance was $130,000. Total rent expense was $30,000 for the six months ended June 30, 2020 and $28,000 for the six months end June 30, 2019.

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Note 16: Subsequent Events

On August 6, 2020, AIM contracted Amarex Clinical Research LLC (“Amarex”) to act as the Company’s Clinical Research Organization and provide regulatory support with regard to a clinical trial testing Ampligen’s potential as a COVID-19 prophylaxis via intranasal delivery. For Phase I the Company anticipates providing approximately $514,000 to Amarex. For the subsequent Phase II the Company anticipates providing approximately an additional $650,000. Additional costs expected to be incurred by us for the clinical trial are estimated at $4.5 million. It is anticipated that Phase I will consist of 24 test subjects and that Phase II will consist of 150 test subjects, subject to obtaining IND authorization from the FDA.

On August 12, 2020, the Company granted to Thomas K. Equels, Chief Executive Officer, consistent with his employment agreement, 300,000 ten-year options to purchase common stock with an exercise price of $3.07 per share which vest in one year. The Company also granted to Dr. William Mitchell and Stewart Appelrouth, as compensation for their services as members of committees of the board of directors, each 50,000 ten-year options to purchase common stock with an exercise price of $2.77 per share which vest in one year.

ITEM 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

Special Note Regarding Forward-Looking Statements

Certain statements in this Report contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act. These statements are based on our management’s current beliefs, expectations and assumptions about future events, conditions and results and on information currently available to us. Discussions containing these forward-looking statements may be found, among other places, in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section; Part II, Item 1 “Legal Proceedings”; and Part II, Item 1A “Risk Factors”.

All statements, other than statements of historical fact, included or incorporated herein regarding our strategy, future operations, financial position, future revenues, projected costs, plans, prospects and objectives are forward-looking statements. Words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “think,” “may,” “could,” “will,” “would,” “should,” “continue,” “potential,” “likely,” “opportunity” and similar expressions or variations of such words are intended to identify forward-looking statements but are not the exclusive means of identifying forward-looking statements.

Among the factors that could cause actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties inherent in our business including, without limitation: our ability to adequately fund our projects as we will need additional funding to proceed with our objectives, the potential therapeutic effect of our products, the possibility of obtaining regulatory approval, our ability to find senior co-development partners with the capital and expertise needed to commercialize our products and to enter into arrangements with them on commercially reasonable terms, our ability to manufacture and sell any products, our ability to enter into arrangements with third party vendors, market acceptance of our products, our ability to earn a profit from sales or licenses of any drugs, our ability to discover new drugs in the future, changing market conditions, changes in laws and regulations affecting our industry, and issues related to our New Brunswick, New Jersey facility.

With the outbreak of the COVID-19 coronavirus and our prior research into Ampligen’s antiviral activity against Severe Acute Respiratory Syndrome, or SARS, we are now expanding our clinical/business focus to include the potential of Ampligen to serve as a protective prophylaxis and an early-onset therapeutic for the virus SARS-CoV-2, the cause of COVID-19 and as part of a vaccine. Significant testing and trials will be required to determine whether Ampligen will be effective in the treatment of the COVID-19 coronavirus in humans and no assurance can be given that it will be the case. Our beliefs rely on a number of previous studies related to SARS-CoV-1. No assurance can be given that future studies will not result in findings that are different from those reported in the studies to which we refer. Results obtained in animal models do not necessarily predict results in humans. Some of the world’s largest pharmaceutical companies and medical institutions are racing to find a treatment for COVID-19. Even if Ampligen proves effective in combating the virus, no assurance can be given that our actions toward proving this will be given first priority or that another treatment that eventually proves capable will not negate our current and future efforts. The pandemic is disrupting world health and world economies and most likely will continue to do so for a long time. While we are able to continue to operate, we –like all businesses — are unable to gauge exactly how this pandemic will affect our operations in the future. We are reaching out, directly and indirectly, to the U.S. government, numerous foreign governments and entities related to the COVID-19 coronavirus and, if successful, will be working in these countries.

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In this regard, we are working with Japan’s National Institute of Infectious Diseases (“NIID”) to test Ampligen as a potential treatment for COVID-19 coronavirus. In March 2020, the NIID initiated preliminary laboratory testing of Ampligen as a potential treatment for COVID-19. On July 1, 2020, we entered into a trilateral material transfer and research agreement with the NIID and Shionogi & Co., Ltd. (“Shionogi”), one of Japan’s premier pharma companies to test the Company’s drug Ampligen as a potential vaccine adjuvant for COVID-19. Under the agreement, we have and will continue to provide Ampligen samples for various research projects. Per the agreement, the details of all preclinical and clinical results will remain confidential until released by NIID and Shionogi.

In addition, Shenzhen Smoore Technology Limited has agreed to run preliminary tests in China to the efficacy of Smoore’s inhalation delivery device using Ampligen. Assuming Ampligen proves an effective COVID-19 treatment, significant testing will be required to determine whether the Smoore device will be able to safely deliver Ampligen in an appropriate dose without diminishing its efficacy against COVID-19. Operating in foreign countries carries with it a number of risks, including potential difficulties in enforcing intellectual property rights. We cannot assure that our potential operations in foreign countries will not be adversely affected by these risks. We have filed provisional patent applications related to the COVID-19 coronavirus. However, these filings do not assure that patents will ultimately be granted. We recently contracted Amarex Clinical Research LLC (“Amarex”) to act as our Clinical Research Organization and provide regulatory support with regard to a clinical trial testing Ampligen’s potential as a COVID-19 prophylaxis via intranasal delivery. Testing is subject to obtaining IND authorization from the FDA. No assurance can be given that the IND will be obtained or that the testing will be successful. Should it prove promising, additional testing will be required.

On July 6, 2020, the Company entered into a clinical trial agreement (CTA) with Roswell Park Comprehensive Cancer Center to support Roswell Park’s Phase 1/2a trial of Ampligen in combination with interferon alfa-2b, in cancer patients with mild to moderate COVID-19, the disease caused by the SARS-CoV-2 coronavirus. Funding for the clinical trial is provided, in part, through grants from the National Cancer Institute and AIM, as well as institutional support from Roswell Park. It is planned that the phase 1/2b study will enroll up to 80 patients in two stages. Phase 1 will see 12-24 patients receiving both Ampligen and interferon alfa-2b at escalating doses. Once that initial phase is complete, further study participants will be randomized to two arms: one receiving the two-drug combination and a control group who will not receive Ampligen or interferon alfa but will receive best available care. We are a financial sponsor of the study and will provide Ampligen at no charge for this study. Additional information on the clinical trial is available at clinicaltrials.gov.

Recently, the Company also entered into a material transfer agreement with the University of Rochester which is planning a series of in vitro experiments in which it will be testing the direct antiviral activity of Ampligen on SARS-CoV-2, as well as the mechanism of action. The Company also entered into a specialized services agreement with Utah State University and has supplied Ampligen to support the university’s Institute for Viral Research in its research into SARS-CoV-2 and testing underway.

In February 2013, we received a Complete Response Letter from the Food and Drug Administration, or FDA, for our Ampligen New Drug Application, or NDA, for the treatment of CFS. The FDA communicated that we should conduct at least one additional clinical trial, complete various nonclinical studies and perform a number of data analyses. Accordingly, the remaining steps to potentially gain FDA approval of the Ampligen NDA, the final results of these and other ongoing activities could vary materially from our expectations and could adversely affect the chances for approval of the Ampligen NDA. These activities and the ultimate outcomes are subject to a variety of risks and uncertainties, including but not limited to risks that (i) the FDA may ask for additional data, information or studies to be completed or provided; and (ii) the FDA may require additional work related to the commercial manufacturing process to be completed or may, in the course of the inspection of manufacturing facilities, identify issues to be resolved.

In August 2016, we received approval of our NDA from Administracion Nacional de Medicamentos, Alimentos y Tecnologia Medica, or ANMAT, for commercial sale of rintatolimod (U.S. tradename: Ampligen®) in the Argentine Republic for the treatment of severe CFS. The product will be marketed by GP Pharm, our commercial partner in Latin America. We believe, but cannot assure, that this approval provides a platform for potential sales in certain countries within the European Union under regulations that support cross-border pharmaceutical sales of licensed drugs. In Europe, approval in a country with a stringent regulatory process in place, such as Argentina, should add further validation for the product as the Early Access Program, or EAP, as discussed below and was used in Europe in pancreatic cancer. ANMAT approval is only an initial, but important, step in the overall successful commercialization of our product. There are a number of actions that must occur before we could be able to commence commercial sales in Argentina. In September 2019, we received clearance from the FDA to ship Ampligen to Argentina for the commercial launch and subsequent sales. We are currently working with GP Pharm on the commercial launch of Ampligen in Argentina. Commercialization in Argentina will require, among other things, an appropriate reimbursement level, appropriate marketing strategies, completion of manufacturing preparations for launch. Additionally, AIM has shipped Ampligen to Argentina for ANMAT’s release. Approval of rintatolimod for severe CFS in the Argentine Republic does not in any way suggest that the Ampligen NDA in the United States or any comparable application filed in the European Union or elsewhere will obtain commercial approval.

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In May 2016, we entered into a five-year agreement with myTomorrows, a Netherlands based company, for the commencement and management of an EAP in Europe and Turkey related to CFS. Pursuant to the agreement, myTomorrows, as our exclusive service provider and distributor in this territory, is performing EAP activities. In January 2017, the EAP was extended to pancreatic cancer patients beginning in the Netherlands. In February 2018, we signed an amendment to extend the territory to cover Canada to treat pancreatic cancer patients, pending government approval. In March 2018, we signed an amendment to which myTomorrows will be our exclusive service provider for special access activities in Canada for the supply of Ampligen for the treatment of CFS. No assurance can be given that we can sufficiently supply product should we experience an unexpected demand for Ampligen in our clinical studies, the commercial launch in Argentina or pursuant to the EAPs. No assurance can be given that Ampligen will prove effective in the treatment of pancreatic cancer.

Currently, six oncology Ampligen clinical trials are underway with a number of subjects enrolled at university cancer centers testing whether tumor microenvironments can be reprogrammed to increase the effectiveness of cancer immunotherapy, including checkpoint blockade. Four are at Roswell Park Comprehensive Cancer Center (“RPCCC”) and the other two are at the University of Pittsburgh Medical Center. No assurance can be given as to the results of these underway trials. Six additional cancer trials in collaboration with University Medical/Cancer Research Centers using Ampligen plus checkpoint blockade are in various pre-enrollment stages. No assurance can be given as to whether some or all of the planned additional oncology clinical trials will occur and they are subject to many factors including lack of regulatory approval(s), lack of study drug, or a change in priorities at the sponsoring universities or cancer centers. Even if these additional clinical trials are initiated, as we are not the sponsor, we cannot assure that these clinical studies or the six studies underway will be successful or yield any useful data. In addition, initiation of planned clinical trials may not occur secondary to many factors including lack of regulatory approval(s) or lack of study drug. Even if these clinical trials are initiated, the Company cannot assure that the clinical studies will be successful or yield any useful data or require additional funding. The Company recognizes that all cancer centers, like all medical facilities, must make the pandemic their priority. Therefore, there is the potential for delays in clinical trial enrollment and reporting in ongoing studies in cancer patients because of the COVID-19 medical emergency.

Our overall objectives include plans to continue seeking approval for commercialization of Ampligen in the United States and abroad as well as seeking to broaden commercial therapeutic indications for Alferon N Injection presently approved in the United States and Argentina. We continue to pursue senior co-development partners with the capital and expertise needed to commercialize our products and to enter into arrangements with them on commercially reasonable terms. Our ability to commercialize our products, widen commercial therapeutic indications of Alferon N Injection and/or capitalize on our collaborations with research laboratories to examine our products are subject to a number of significant risks and uncertainties including, but not limited to our ability to enter into more definitive agreements with some of the research laboratories and others that we are collaborating with, to fund and conduct additional testing and studies, whether or not such testing is successful or requires additional testing and meets the requirements of the FDA and comparable foreign regulatory agencies. We do not know when, if ever, our products will be generally available for commercial sale for any indication.

We strived to maximize the outsourcing of certain components of our manufacturing, quality control, marketing and distribution while maintaining control over the entire process through our quality assurance and regulatory groups. We are investigating utilizing contract manufactures for the Alferon process. We cannot provide any guarantee that the facility or current or potential contract manufacturers will pass an FDA pre-approval inspection for Alferon manufacturing.

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Commercial sales of Alferon in the U.S. will not resume until new batches of commercial filled and finished product are produced and released by the FDA. While the facility is approved by the FDA under the Biologics License Application (“BLA”) for Alferon, this status will need to be reaffirmed by an FDA pre-approval inspection. We will also need the FDA’s approval to release commercial product once we have submitted satisfactory stability and quality release data. Currently, the manufacturing process is on hold and there is no definitive timetable to have the facility back online. Prior to completing validation, we plan on modernizing the manufacturing process to make it lower-cost and higher volume. If, following modernization, we are unable to gain the necessary FDA approvals related to the manufacturing process and/or final product of new Alferon inventory, our operations most likely will be materially and/or adversely affected. Considering these contingencies, there can be no assurances that the approved Alferon N Injection product will be returned to production on a timely basis, if at all, or that if and when it is again made commercially available, it will return to prior sales levels.

We believe, and are investigating, Ampligen’s potential role in enhancing the activity of influenza vaccines. While certain studies involving rodents, non-human primates (monkeys) and healthy human subjects indicate that Ampligen may enhance the activity of influenza vaccines by conferring increased cross-reactivity or cross-protection, further studies will be required and no assurance can be given that Ampligen will assist in the development of a universal vaccine for influenza or other viruses.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

This Report also refers to estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. In addition, projections, assumptions and estimates of our future performance and the future performance of the markets in which we operate are necessarily subject to a high degree of uncertainty and risk.

Overview

General

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, various viruses 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 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 US.

Since the outbreak of SARS-CoV-2, the novel virus that causes COVID-19, we have been actively engaged in determining whether Ampligen could be an effective treatment for this virus or could be part of a vaccine. We believe that Ampligen has the potential to be both an early-onset treatment for and prophylaxis against SARS-CoV-2. Ampligen is also being researched as part of a potential 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. We believe that prior studies of Ampligen in SARS-CoV-1 animal experimentation may predict similar protective effects against the new virus.

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Beginning in April 2020, we 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. We have 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 our 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 around the country. 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. We currently are awaiting a report on the Netherland’s EAP.

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, we received approval of our 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. On June 10, 2020, we 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. AIM has supplied GP Pharm with the Ampligen required for testing and ANMAT release. Once final approval by ANMAT is obtained, GP Pharm will begin distributing Ampligen® in Argentina. We continue to pursue our Ampligen New Drug Application, or NDA, for the treatment of CFS with the FDA.

Alferon N Injection® is approved for a category of sexually transmitted diseases infection 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. Funding is now available to commence modernization of a manufacturing process to potentially obtain FDA manufacturing approval of a low-cost, higher-volume process.

We operate a 30,000 sq. ft. facility in New Brunswick, NJ with the objective of producing Ampligen® and Alferon®. We are committed to a focused business plan oriented toward finding senior co-development partners with the capital and expertise needed to commercialize the many potential therapeutic aspects of Ampligen® and our FDA-approved drug Alferon® N.

OUR PRODUCTS

Our primary pharmaceutical product platform consists of Ampligen®, a first-in-class drug of large macromolecular double-stranded (ds) RNA (ribonucleic acid) molecules, and our FDA-approved natural alpha-interferon product, Alferon N Injection®.

Ampligen®

Ampligen® is approved for sale in Argentina for severe Chronic Fatigue Syndrome (CFS) and is an experimental drug in the United States currently undergoing clinical development for the treatment of certain cancers and ME/CFS. Over its developmental history, Ampligen® has received various designations, including Orphan Drug Product Designation (FDA and European Medicines Agency (“EMA”)), Treatment protocol (e.g., “Expanded Access” or “Compassionate” use authorization) with Cost Recovery Authorization (FDA) and “promising” clinical outcome recognition based on the evaluation of certain summary clinical reports (“AHRQ” or Agency for Healthcare Research and Quality). Ampligen® represents the first drug in the class of large (macromolecular) dsRNA molecules to apply for NDA review. Based on the results of published, peer reviewed pre-clinical studies and clinical trials, we believe that Ampligen® may have broad-spectrum anti-viral and anti-cancer properties.

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We believe that nucleic acid compounds represent a potential new class of pharmaceutical products designed to act at the molecular level for treatment of many human diseases. There are two forms of nucleic acids, deoxyribonucleic acid (“DNA”) and ribonucleic acid (“RNA”). DNA is a group of naturally occurring molecules found in chromosomes, the cell’s genetic machinery. RNA is a group of naturally occurring informational molecules which orchestrate a cell’s behavior which, in turn, regulates the action of groups of cells, including the cells which compromise the body’s immune system. RNA directs the production of proteins and regulates certain cell activities including the activation of an otherwise dormant cellular defense against viruses and tumors. Our drug technology utilizes specifically-configured RNA and is a selective TLR3 agonist that is administered intravenously. Ampligen® has been assigned the generic name rintatolimod by the United States Adopted Names Council (USANC) and has the chemical designation poly(I):poly(C₁₂U).

EAP/clinical trials of Ampligen® that have been conducted or that are ongoing include studies of the potential treatment of patients with renal cell carcinoma, malignant melanoma, non-small cell lung, ovarian, breast, colorectal, urothelial, prostate and pancreatic cancer, ME/CFS, Hepatitis B and HIV.

We have received approval of our NDA from ANMAT for commercial sale of rintatolimod (U.S. tradename: Ampligen®) in the Argentine Republic for the treatment of severe CFS. The product will be marketed by GP Pharm, our commercial partner in Latin America. On September 19, 2019, AIM received clearance from the FDA to ship Ampligen to Argentina for the commercial launch and subsequent sales. We are currently working with GP Pharm on the commercial launch of Ampligen in Argentina. Commercialization in Argentina will require, among other things, GP Pharm to establish disease awareness, medical education, creation of an appropriate reimbursement level, design of marketing strategies and completion of manufacturing preparations for launch.

The FDA has authorized an open-label expanded access treatment protocol, (“AMP-511”), allowing patient access to Ampligen® in an open-label safety study under which severely debilitated CFS patients have the opportunity to be on Ampligen® to treat this very serious and chronic condition. The data collected from the AMP-511 protocol through clinical sites provide safety information regarding the use of Ampligen® in patients with CFS. We are establishing an enlarged data base of clinical safety information which we believe will provide further documentation regarding the absence of autoimmune disease associated with Ampligen® treatment. We believe that continued efforts to understand existing data, and to advance the development of new data and information, will ultimately support our future filings for Ampligen® and/or the design of future clinical studies that the FDA requested in a complete response letter. The FDA approved the increase reimbursement level from $200 to $345 per 200 mg vial of Ampligen, due to increased production costs; which was re-authorized in 2020. At this time, we do not plan on passing this adjustment along to the patients in this program. As of June 30, 2020, there are 10 patients enrolled in this open-label expanded access treatment protocol.

In May 2016, we entered into a five-year agreement with myTomorrows, a Netherlands based company, for the commencement and management of an Early Access Program (“EAP”) in Europe and Turkey (the “Territory”) related to ME/CFS. Pursuant to the agreement, as amended, myTomorrows also will manage all Early Access Programs and Special Access Programs in Europe, Canada and Turkey to treat pancreatic cancer and ME/CFS patients.

In April 2018, we completed data analysis of an intranasal human safety study of Ampligen® plus FluMist® known as AMP-600. The study was previously closed after the US Centers for Disease Control and Prevention (“CDC”) recommended against the use of FluMist®. Intranasal Ampligen® in combination with FluMist® was generally well-tolerated in the study.

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In June 2018, Ampligen® was cited as outperforming two other TLR3 agonists, poly IC and natural double stranded RNA, in creating an enhanced tumor microenvironment for checkpoint blockage therapy in the journal of Cancer Research (http://cancerres.aacrjournals.org/content/early/2018/05/31/0008-5472.CAN-17-3985). In a head-to-head study in explant culture models, Ampligen® activated the TLR3 pathway and promoted an accumulation of killer T cells but, unlike the other two TLR3 agonists, it did so without causing regulatory T cell (Treg) attraction. These findings were considered important because they indicate that Ampligen® selectively reprograms the tumor microenvironment by inducing the beneficial aspects of tumor inflammation (attracting killer T cells), without amplifying immune suppressive elements such as regulatory T cells. The study was conducted at the University of Pittsburgh and Roswell Park Comprehensive Cancer Center (“RPCCC”), as a part of the NIH-funded P01 CA132714 and Ovarian Cancer Specialized Program of Research Excellence (SPORE). Based upon these findings AIM and RPCCC expanded their existing scientific collaboration to advance the clinical development of Ampligen® which has shown promise in preclinical studies when combined with checkpoint inhibitors (CPIs). The parties executed a Memorandum of Understanding (“MOU”) designed to further assess the clinical potential of Ampligen® in treating certain cancers. This phase I/II study will evaluate the potential of Ampligen® to enhance the immune mediated effects of CPIs in patients with advanced solid tumors including bladder, melanoma and renal cell carcinoma.

In 2018, we completed production of two commercial-size batches of more than 16,000 vials of Ampligen®, following its “Fill & Finish” at the Contract Manufacturing Organization. These lots passed all required testing for regulatory release for human use and are being used for multiple programs including the treatment of ME/CFS, the pancreatic cancer EAP in the Netherlands, and will continue to be used for ongoing and future clinical studies in oncology. Additionally, two lots of Ampligen were manufactured in December 2019 and January 2020 at Jubilant. The current manufactured lots of Ampligen have been fully tested and released for commercial product launch in Argentina and for clinical trials.

Alferon N Injection®

Alferon N Injection® is the registered trademark for our injectable formulation of natural alpha interferon. Alferon® is the only natural-source, multi-species alpha interferon currently approved for sale in the U.S. and Argentina for the intralesional (within lesions) treatment of refractory (resistant to other treatment) or recurring external genital warts in patients 18 years of age or older. Alferon® is also approved in Argentina for the treatment of refractory patients that failed or were intolerant to treatment with recombinant interferons. Certain types of human papilloma viruses (“HPV”) cause genital warts, a sexually transmitted disease (“STD”). According to the CDC, HPV is the most common sexually transmitted infection, with approximately 79 million Americans — most in their late teens and early 20s — infected with HPV. In fact, the CDC states that “HPV is so common that nearly all sexually active men and women get the virus at some point in their lives.” Although they do not usually result in death, genital warts commonly recur, causing significant morbidity and entail substantial health care costs.

Interferons are a group of proteins produced and secreted by cells to combat diseases. Researchers have identified four major classes of human interferon: alpha, beta, gamma and omega. Alferon N Injection® contains a multi-species form of alpha interferon. The world-wide market for injectable alpha interferon-based products has experienced rapid growth and various alpha interferon injectable products are approved for many major medical uses worldwide. Alpha interferons are manufactured commercially in three ways: by genetic engineering, by cell culture, and from human white blood cells. All three of these types of alpha interferon are or were approved for commercial sale in the U.S. Our natural alpha interferon is produced from human white blood cells.

The potential advantages of natural alpha interferon over recombinant (synthetic) interferon produced and marketed by other pharmaceutical firms may be based upon their respective molecular compositions. Natural alpha interferon is composed of a family of proteins containing many molecular species of interferon. In contrast, commercial recombinant alpha interferon products each contain only a single species. Researchers have reported that the various species of interferons may have differing antiviral activity depending upon the type of virus. Natural alpha interferon presents a broad complement of species, which we believe may account for its higher activity in laboratory studies. Natural alpha interferon is also glycosylated (partially covered with sugar molecules). Such glycosylation is not present on the currently U.S. marketed recombinant alpha interferons. We believe that the absence of glycosylation may be, in part, responsible for the production of interferon-neutralizing antibodies seen in patients treated with recombinant alpha interferon. Although cell culture-derived interferon is also composed of multiple glycosylated alpha interferon species, the types and relative quantity of these species are different from our natural alpha interferon.

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Alferon N Injection® [Interferon alfa-n3 (human leukocyte derived)] is a highly purified, natural-source, glycosylated, multi-species alpha interferon product. There are essentially no neutralizing antibodies observed against Alferon N Injection® to date and the product has a relatively low side-effect profile. The recombinant DNA derived alpha interferon formulations have been reported to have decreased effectiveness after one year of treatment, probably due to neutralizing antibody formation

See “Manufacturing” and “Marketing/Distribution” sections below for more details on the manufacture and marketing/distribution of Alferon N Injection®.

COVID-19

Following the SARS-CoV-1 outbreak in 2002-03, Ampligen exhibited excellent antiviral properties and protective survival effect in NIH-contracted studies of SARS-infected mice, which is almost identical to SARS-CoV-2, the novel virus that causes COVID-19.

● The Barnard 2006 study (https://journals.sagepub.com/doi/abs/10.1177/095632020601700505) found that Ampligen reduced virus lung levels to below detectable limits.

● The Day 2009 study (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2787736/) found that, instead of 100% mortality, there was 100% protective survival.

AIM compared key transcription regulatory sequences of SARS-CoV-1 to SARS-CoV-2 and found significant and compelling similarities, suggesting highly probable extension of the antiviral effects of Ampligen in the earlier NIH-contracted SARS experiments to COVID-19.

The SARS-CoV-2 virus – which causes COVID-19 – shares important genomic and pathogenic similarities with SARS-CoV-1 (hence its name). Since Ampligen has shown antiviral activity against more distantly related coronaviruses, there is a reasonable probability that the antiviral effects of Ampligen against SARS-CoV-1 will likely extend to SARS-CoV-2. This creates a compelling case for clinical trials to evaluate Ampligen as a potential tool in the fight against COVID-19.

Since the late 2019 outbreak of SARS-CoV-2, we have been actively engaged in determining whether Ampligen could be an effective treatment for this virus or could be part of a vaccine. We believe that Ampligen has the potential to be both an early-onset treatment for and prophylaxis against SARS-Cov-2. Ampligen is also being researched as part of a potential 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. We believe that prior studies of Ampligen in SARS-CoV-1 animal experimentation may predict similar protective effects against the new virus.

In February 2020, we filed three provisional patent applications related to Ampligen in our efforts toward joining the global health community in the fight against the deadly coronavirus. Our three provisional patent applications include: 1) Ampligen as a therapy for the coronavirus; 2) Ampligen as part of a proposed intranasal universal coronavirus vaccine that combines Ampligen with inactivated coronavirus, conveying immunity and cross-protection and; 3) a high-volume manufacturing process for Ampligen. Under the Patent Cooperation Treaty of 1970, which provides international protections for patents, the three provisional patent applications can convert to international patent applications based on the date of their filings.

In early April 2020, we entered into a Material Transfer Agreement with Shenzhen Smoore Technologies located in Shenzhen China, the world’s largest manufacturer of inhalation devices. Pursuant to this agreement, we are providing Smoore with Ampligen and Smoore will be conducting in vitro tests using its porous ceramic atomizer technology. Initial testing will include evaluation of Ampligen with regard to safety and characterization of the inhaler vapor properties. Additional testing will study the particle size of various Ampligen concentrations in aqueous solutions obtainable using Smoore’s technology. The goal of these studies is to establish a reproducible method to obtain an Ampligen-containing atomized mist that can deliver biologically active Ampligen deep into the lung airways of humans. The Company is currently awaiting additional proposed study details from Smoore. We will provide additional updates as they become available.

On August 6, 2020, we contracted Amarex Clinical Research LLC (“Amarex”) to act as our Clinical Research Organization and provide regulatory support with regard to a clinical trial testing Ampligen’s potential as a COVID-19 prophylaxis via intranasal delivery. For Phase I we anticipate providing approximately $514,000 to Amarex. For the subsequent Phase II we anticipate providing approximately an additional $650,000. Additional costs expected to be incurred by us for the clinical trial are estimated at $4.5 million. We expect that Phase I will consist of 24 test subjects and that Phase II will consist of 150 test subjects, subject to obtaining IND authorization from the FDA.

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Beginning in April 2020, we 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, Amarex, which will provide regulatory support related to a clinical trial testing Ampligen’s potential as a COVID-19 prophylaxis via intranasal delivery.

In addition, we have joined with ChinaGoAbroad (CGA) to facilitate the entry of Ampligen into the People’s Republic of China (PRC) for use as a prophylactic/early-onset therapeutic against COVID-19. CGA is a member-based online information platform and offline advisory firm serving to facilitate two-way international transactions relating to the PRC in collaboration with the China Overseas Development Association (CODA). The relationship with ChinaGoAbroad is ongoing.

On May 11, 2020, the FDA authorized an IND for Roswell Park Cancer Institute to conduct a Phase 1/2a study of a regimen of Ampligen and interferon alpha in cancer patients with mild or moderate COVID-19 infections. This new clinical trial, sponsored by the Roswell Park in collaboration with us, will test the safety of this combination regimen in patients with cancer and mild to moderate COVID-19, and the extent to which this therapy will promote clearance of the SARS-CoV-2 virus from the upper airway. It is planned that the phase 1/2a study will enroll up to 80 patients in two stages. Phase 1 will see 12-24 patients receiving both Ampligen and interferon alfa-2b at escalating doses. Once that initial phase is complete, further study participants will be randomized to two arms: one receiving the two-drug combination and a control group who will not receive Ampligen or interferon alfa but will receive best available care. We intend to be a financial sponsor of the study and will provide Ampligen at no charge for this study.

On July 6, 2020, we entered into a clinical trial agreement with Roswell Park Comprehensive Cancer Center pursuant to which Roswell Park will conduct a Phase 1/2 trial of Ampligen (rintatolimod) in combination with interferon alfa, in cancer patients with COVID-19, the disease caused by the SARS-CoV-2 coronavirus. The National Cancer Institute and AIM are supporting this trial. See: clinicaltrials.gov/NCT04379518.

Recently, we also entered into a material transfer agreement with the University of Rochester which is planning a series of in vitro experiments in which it will be testing the direct antiviral activity of Ampligen on SARS-CoV-2, as well as the mechanism of action. We also entered into a specialized services agreement with Utah State University and has supplied Ampligen to support the University’s Institute for Viral Research in its research into SARS-CoV-2 and testing is underway.

Cancer

We have been working with the University of Pittsburgh’s chemokine modulation research initiative which includes the use of Ampligen® as a potential adjuvant to modify the tumor microenvironment (TME) with the goal of increasing anti-tumor responses to check point inhibitors (CPI). As part of this collaboration, AIM has supplied Ampligen® (rintatolimod) to the University. The study, under the leadership of Robert P. Edwards, MD, chair of gynecologic services at Magee-Women’s Hospital of the University of Pittsburgh School of Medicine, and Professor of Surgery Pawel Kalinski, M.D., Ph.D., at RPCCC, Buffalo, N.Y., involved the chemokine modulatory regimen developed by Dr. Kalinski’s group and successfully completed the Phase 1 dose escalation in patients with resectable colorectal cancer. In the 1st quarter of 2017, Dr. Kalinski relocated to RPCCC in Buffalo, NY and has established a cancer program which will continue to require a supply of Ampligen®.

In October 2018, we signed a clinical trial agreement with RPCCC to evaluate Ampligen® in combination with checkpoint inhibitors (CPIs). The Phase IIa clinical trial will evaluate the immune-mediated effects of cytokine modulation in combination with CPIs in patients with primary resistance to CPI therapy. The protocol will seek to evaluate the combination of Ampligen® and CPIs in patients with advanced urothelial carcinoma, renal cell carcinoma and melanoma. Ampligen® is our investigational immune-enhancing TLR3 agonist that has demonstrated a robust anti-cancer effect in preclinical models when combined with CPIs. This new agreement expands the extensive prior clinical and preclinical work into the clinical checkpoint blockade arena and offers the opportunity to begin evaluation of this combination therapy in patients with a variety of solid tumors where large numbers of patients do not respond or progress following treatment with standard CPI-based therapy.

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Currently, six Ampligen® clinical trials are underway at university cancer centers testing whether tumor microenvironments can be reprogrammed to increase the effectiveness of cancer immunotherapy, including checkpoint inhibitors:

● Advanced Recurrent Ovarian Cancer - Phase 1 / 2 study of intraperitoneal chemo-immunotherapy in advanced recurrent ovarian cancer; Phase 1 portion establishes intraperitoneal safety. Awaiting publication of Phase I results. https://clinicaltrials.gov/ct2/show/NCT02432378

● Advanced Recurrent Ovarian Cancer - A follow-up Phase 2 study of advanced recurrent ovarian cancer using cisplatin, pembrolizumab, plus Ampligen; up to 45 patients to be enrolled; enrollment has commenced, and the numerous patients have commenced treatment. https://clinicaltrials.gov/ct2/show/NCT03734692

● Stage 4 Metastatic Triple Negative Breast Cancer - Phase 2 study of metastatic triple-negative breast cancer using chemokine modulation therapy, including Ampligen and pembrolizumab. All patients have been treated or are in treatment. https://www.clinicaltrials.gov/ct2/show/NCT03599453

● Stage 4 Colorectal Cancer Metastatic to the Liver - Phase 2a study of Ampligen as component of chemokine modulatory regimen on colorectal cancer metastatic to liver; the majority of the 12 planned patients enrolled and treated. https://clinicaltrials.gov/ct2/show/NCT03403634

● Early-Stage Prostate Cancer - Phase 2 study investigating the effectiveness and safety of aspirin and Ampligen with or without interferon-alpha 2b (Intron A) compared to no drug treatments in a randomized three-arm study of patients with prostate cancer before undergoing radical prostatectomy. Patient enrollment has been initiated in this study designed for up to 45 patients. https://clinicaltrials.gov/ct2/show/NCT03899987

● Early-Stage Triple Negative Breast Cancer - Phase 1 study of chemokine modulation plus neoadjuvant chemotherapy in patients with early-stage triple negative breast cancer has received FDA authorization; the objective of this study is to evaluate the safety and tolerability of a combination of Ampligen, celecoxib with or without Intron A, when given along with chemotherapy; the goal of this approach is to increase survival. This study is recruiting patients designed for up to 24 patients. https://clinicaltrials.gov/ct2/show/NCT04081389

In addition, six Ampligen clinical trials are planned for initiation in 2020/21, subject to funding:

● Brain-Metastatic Breast Cancer — Phase 2 study to assess the effectiveness of a three-pronged strategy combining distinct immunotherapy approaches, including Ampligen. RPCCC and Moffitt Cancer Center have both received “Breakthrough Awards” from the U.S. Department of Defense. Together, these separate but parallel proposed clinical trials are receiving approximately $15 million in DOD funding to study Ampligen. RPCCC is currently working on its draft of the IND, which its study and Moffitt’s study require before next steps can be taken.

● Stage 4 Refractory Metastatic Colorectal Carcinoma — Phase 2 study that will evaluate Ampligen in combination with pembrolizumab in refractory metastatic colorectal carcinoma at RPCCC. Dr. C. Fountzilas, PI. Up to 25 patients to be enrolled. This is expected to be funded by grants, testing Ampligen and pembrolizumab. See: https://www.clinicaltrials.gov/show/NCT04119830

● Refractory Melanoma — Phase 2 study that will evaluate polarized dendritic cell vaccine, interferon alpha-2, Ampligen and celecoxib for the treatment of HLA-A2+ refractory melanoma at RPCCC. Dr. I. Puzanov, PI. Up to 24 patients to be enrolled. See: https://www.clinicaltrials.gov/show/NCT04093323

● Stage 4 Urothelial, Melanoma and Renal Cell Carcinoma — Phase 2 study of advanced urothelial (bladder), melanoma and renal cell carcinoma, resistant to checkpoint blockade, that will evaluate Ampligen in combination with a checkpoint blockade therapy at RPCCC. Dr. M. Opyrchal, PI. Protocol design and funding currently being finalized.

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● Non-Small Cell Lung Cancer — First-line therapy for non-small cell lung cancer with SOC chemotherapy that will evaluate Ampligen in combination with pembrolizumab at University of Nebraska Medical Center. Dr. V. Ernani, PI. Study design and budget being developed. However, we now anticipate an extended delay, as other studies with funding have moved ahead of the Ampligen project. RPCCC is exploring a pilot study to establish proof of concept.

● Advanced Pancreatic Cancer — Phase 2 study in advanced pancreatic cancer using checkpoint blockade plus Ampligen at University of Nebraska Medical Center. Dr. K. Klute, PI. Protocol and budget being developed. This proposed study may be based on data from our Dutch EAP (see below) and UNMC animal experiments showing synergy between Ampligen and checkpoint therapy. A second confirmatory animal trial has been completed; while it did not replicate the previous survival results, it did demonstrate a significant anti-tumor effect.

In January 2017, the EAP through our agreement with myTomorrows designed to enable access of Ampligen® to ME/CFS patients was extended to pancreatic cancer patients beginning in the Netherlands. myTomorrows is our exclusive service provider in Europe and Turkey and will manage all EAP activities relating to the pancreatic cancer extension of the program . In February 2018, the agreement with myTomorrows was extended to cover Canada to treat pancreatic cancer patients, pending government approval. There have been no physician requests to date that would cause the program to move forward with the approval process.

As of December 31, 2019, 42 pancreatic cancer patients have received treatment with Ampligen® immuno-oncology therapy under the EAP program at Erasmus University in the Netherlands. Supervised by Prof. Casper van Eijck, MD, a world-renowned specialist in this dread malignancy, and Diba Latifi, MD, the team at Erasmus is making progress. Early progress was reported in a published abstract from Erasmus, and a copy of the abstract can be found at http://ir.aimimmuno.com/Events_Presentations. The abstract was part of a larger original report covering a variety of medical topics, which can be found at https://www.pancreasclub.com/wp-content/uploads/2018/06/Poster-Abstracts.pdf.

All patients have completed treatment and we expect a comprehensive report from the Erasmus team on the immunological response in relation to survival (while again recognizing the SARS-CoV-2 pandemic could very well re-direct the focus of clinicians and the health care community). AIM hopes to work with Dr. Van Eijck, Dr. Latifi, and Erasmus M.C. to initiate a combination therapy program to extend the results seen thus far in the Netherlands by combining Ampligen with checkpoint blockade therapy.

Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (“ME/CFS”)

Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (“ME/CFS”), also known as Chronic Fatigue Immune Dysfunction Syndrome (“CFIDS”) and Chronic Fatigue Syndrome (“CFS”), is a serious and debilitating chronic illness and a major public health problem. ME/CFS is recognized by both the government and private sector as a significant unmet medical need, including the U.S. National Institutes of Health (“NIH”), FDA and the CDC. The CDC states on its website at https://www.cdc.gov/me-cfs/ that “Myalgic encephalomyelitis/chronic fatigue syndrome (ME/CFS) is a serious, long-term illness that affects many body systems. People with ME/CFS are often not able to do their usual activities. At times, ME/CFS may confine them to bed. People with ME/CFS have severe fatigue and sleep problems. ME/CFS may get worse after people with the illness try to do as much as they want or need to do. This symptom is known as post-exertional malaise (PEM). Other symptoms can include problems with thinking and concentrating, pain, and dizziness.”

Many severe ME/CFS patients become completely disabled or totally bedridden and are afflicted with severe pain and mental confusion even at rest. ME/CFS is characterized by incapacitating fatigue with profound exhaustion and extremely poor stamina, sleep difficulties and problems with concentration and short-term memory. It is also accompanied by flu-like symptoms, pain in the joints and muscles, tender lymph nodes, sore throat and new headaches. A distinctive characteristic of the illness is a worsening of symptoms following physical or mental exertion, which do not subside with rest.

In October 2016, an analysis of a subset of CFS patients from the AMP-516 Phase 3 study was performed and presented at the IACFS/ME annual meeting in Fort Lauderdale, FL. The ITT Population (n=208) was separated into two subsets based primarily on baseline CFS symptom duration (2-8 years (n=75) and <2 years plus >8 years (n=133)). Responder analyses of the ITT Population and both subsets were performed. Responder analyses of Ampligen® vs. placebo patients improving ET duration from baseline by ≥25% shows over twice the percentage of patients with clinical enhancement in ET effect in the Ampligen® cohort compared to placebo for the 2-8-year subset vs. the ITT population. This subset may assist in the design of future clinical studies of Ampligen® in the treatment for ME/CFS patients.

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The high number of younger people being hospitalized for COVID-19 suggests considerable numbers of people in the prime of their lives may have a COVID-induced ME/CFS-like illness in their future. Individuals with CFS lost an estimated $20,000 in 2002, implying a total societal loss of $9.1 billion. Twenty-five percent ($2.3 billion) resulted from lost household productivity, and the remaining 75% ($6.8 billion) from lost labor force productivity.

In June of 2020, AIM filed a provisional patent application for, among other discoveries, the use of Ampligen® as a potential early-onset therapy for the treatment of COVID-19 induced chronic fatigue.

Many survivors of the first SARS-CoV-1 epidemic in 2003 continued to report chronic fatigue, difficulty sleeping and shortness of breath months after recovering from the acute illness. “After one year, 17% of patients had not returned to work and 9% more had not returned to their pre-SARS work levels” (Simmaron Research). Now there is increasing evidence that patients with COVID-19 can develop a similar, ME/CFS-like illness. These patients are commonly referred to as “Long Haulers.” http://simmaronresearch.com/2020/04/will-covid-19-leave-an-explosion-of-me-cfs-cases-in-its-wake/

AIM plans to investigate the possible activity of Ampligen in the “Long Hauler” population, including a plan to modify our AMP-511 program to include Long Haulers.

Other Diseases

In Europe, the EMA has approved the Orphan Medicinal Products Designation for rintatolimod (Ampligen®) as a potential treatment of Ebola virus disease and for Alferon® N Injection, also known as interferon alfa-n3, as a potential treatment of MERS.

We concluded our series of collaborations designed to determine the potential effectiveness of Ampligen® and Alferon® N as potential preventative and/or therapeutic treatments for Ebola related disorders. Although we believe that the threat of both MERS and Ebola globally may reemerge in the future, it appears that the spread of these disorders has somewhat diminished. As a result, we have elected to focus our research and development efforts on other areas at this time.

Manufacturing

In January 2017, AIM approved a quote and provided a purchase order commitment with Jubilant Hollister-Stier LLC (“Jubilant”) pursuant to which Jubilant will manufacture commercial size batches of Ampligen®. Additional orders will be placed upon approved quotes and purchase orders provided by AIM to Jubilant. Jubilant was approved by the FDA as a manufacture of Ampligen by the successful completion of a previous preapproval inspection by the agency. The Administracion Nacional de Medicamentos, Alimentos y Tecnologia Medica (ANMAT) in Argentina has approved Ampligen for commercial distribution for the treatment of Chronic Fatigue Syndrome (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, AIM received clearance from the FDA to ship Ampligen to Argentina for the commercial launch and subsequent sales. We are currently working with GP Pharm on the commercial launch of Ampligen in Argentina.

Jubilant Hollister-Stier (Jubilant) is AIM’s authorized CMO for Ampligen for our approval in Argentina. Since the 2017 engagement of Jubilant to manufacture Ampligen, two lots of Ampligen consisting of more than 16,000 units have been manufactured and released in year 2018. These lots passed all required testing for regulatory release for human use and are being used for multiple programs including the treatment of ME/CFS, the pancreatic cancer EAP in the Netherlands, and will continue to be used for ongoing and future clinical studies in oncology. The production of additional polymer (Ampligen intermediates) took place in 2019 at our New Brunswick facility. Additionally, two lots of Ampligen were manufactured in December 2019 and January 2020 at Jubilant. The current manufactured lots of Ampligen have been fully tested and released by Jubilant for commercial product launch in Argentina and for clinical trials.

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Alferon® is approved by the FDA for commercial sales in the US for the treatment of genital warts. It is also approved by ANMAT in Argentina for commercial sales for the treatment of genital warts and in patients who are refractory to treatment with recombinant interferons. While the AIM facility in New Brunswick is approved by the FDA under the Biologic License Application (BLA) for Alferon®, this status will need to be reaffirmed by an FDA pre-approval inspection which will not occur until new batches of commercial filled and finished product are produced and released by the FDA. Funding is now available to commence modernization of a manufacturing process to potentially obtain FDA manufacturing approval of a low-cost, higher-volume process.

Licensing/Collaborations/Joint Ventures

To maximize the availability of Ampligen® to patients on a worldwide basis, we have embarked on a strategy to license the product and/or to collaborate and/or create a joint venture with companies that have the demonstrated capabilities and commitment to successfully gain approval and commercialize Ampligen® in their respective territories of the world. Ideal partners would have the following characteristics: well established global and regional experience and coverage, robust commercial infrastructure, strong track record of successful development and registration of in-licensed products, as well as a therapeutic area fit (ME/CFS, immuno-oncology, etc.).

Marketing/Distribution

In May 2016, we entered into a five-year exclusive Renewed Sales, Marketing, Distribution and Supply Agreement (the “Agreement”) with GP Pharm. Under this Agreement, GP Pharm was responsible for gaining regulatory approval in Argentina for Ampligen® to treat severe CFS in Argentina and for commercializing Ampligen® for this indication in Argentina. We granted GP Pharm the right to expand rights to sell this experimental therapeutic into other Latin America countries based upon GP Pharm achieving certain performance milestones. We also granted GP Pharm an option to market Alferon N Injection® in Argentina and other Latin America countries.

In January 2017, the ANMAT granted a five-year extension to a previous approval to sell and distribute Alferon N Injection® (under the brand name “Naturaferon”) in Argentina. This extends the approval until 2022. In February 2013, we received the ANMAT approval for the treatment of refractory patients that failed or were intolerant to treatment with recombinant interferon, with Naturaferon® in Argentina.

In May 2016, we entered into a five-year agreement (the “Impatients Agreement”) with Impatients, N.V. (“myTomorrows”), a Netherlands based company, for the commencement and management of an EAP in Europe and Turkey (the “Territory”) related to ME/CFS. Pursuant to the agreement, myTomorrows, as our exclusive service provider and distributor in the Territory, is performing EAP activities. These activities will be directed to (a) the education of physicians and patients regarding the possibility of early access to innovative medical treatments not yet the subject of a Marketing Authorization (regulatory approval) through named-patient use, compassionate use, expanded access and hospital exemption, (b) patient and physician outreach related to a patient-physician platform, (c) the securing of Early Access Approvals (exemptions and/or waivers required by regulatory authorities for medical treatments prior to Marketing Authorization) for the use of such treatments, (d) the distribution and sale of such treatments pursuant to such Early Access Approvals, (e) pharmacovigilance (drug safety) activities and/or (f) the collection of data such as patient-reported outcomes, doctor-reported experiences and registry data. We are supporting these efforts and supplying Ampligen® to myTomorrows at a predetermined transfer price. In the event that we receive Marketing Authorization in any country in the Territory, we will pay myTomorrows a royalty on products sold. Pursuant to the Impatients Agreement, the royalty would be a percentage of Net Sales (as defined in the Impatients Agreement) of Ampligen® sold in the Territory where Marketing Authorization was obtained, and the maximum royalty would be a percentage of Net Sales. The formula to determine the percentage of Net Sales will be based on the number of patients that are entered into the EAP. We believe that disclosure of the exact maximum royalty rate and royalty termination date could cause competitive harm. However, to assist the public in gauging these terms, the actual maximum royalty rate is somewhere between 2% and 10% and the royalty termination date is somewhere between five and fifteen years from the First Commercial Sale of a product within a specific country. The parties established a Joint Steering Committee comprised of representatives of both parties to oversee the EAP. No assurance can be given that activities under the EAP will result in Marketing Authorization or the sale of substantial amounts of Ampligen® in the Territory.

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In January 2017, the EAP through our agreement with myTomorrows designed to enable access of Ampligen® to ME/CFS patients has been extended to pancreatic cancer patients beginning in the Netherlands. myTomorrows is our exclusive service provider in the Territory and will manage all EAP activities relating to the pancreatic cancer extension of the program.

In February 2018, we signed an amendment to the EAP with myTomorrows. This amendment extended the territory to cover Canada to treat pancreatic cancer patients, pending government approval.

In March 2018, we signed an amendment to the EAP with myTomorrows, pursuant to which myTomorrows will be our exclusive service provider for special access activities in Canada for the supply of Ampligen® for the treatment of ME/CFS.

401(k) Plan

Each participant immediately vests in his or her deferred salary contributions, while Company contributions will vest over one year. The 6% Company matching contribution was terminated effective January 1, 2016. For the six months ended June 30, 2020, the Company did not make any contributions towards the 401(k) Plan.

New Accounting Pronouncements

See “Note 10: Recent Accounting Pronouncements”.

Disclosure About Off-Balance Sheet Arrangements

None.

Critical Accounting Policies

There have been no material changes in our critical accounting policies and estimates from those disclosed in Part II; Item 7: “Management’s Discussion and Analysis of Financial Condition and Results of Operations; Critical Accounting Policies” contained in our Annual Report on Form 10-K for the year ended December 31, 2019.

RESULTS OF OPERATIONS

Three months ended June 30, 2020 versus three months ended June 30, 2019

Net Loss

Our net loss was approximately $3,370,000 and $2,036,000 for the three months ended June 30, 2020 and 2019, respectively, representing an increase in loss of approximately $1,344,000 or 66% when compared to the same period in 2019. This increase in loss for these three months was primarily due to the following:

● a loss of $1,054,000 from the quarterly reevaluation of certain redeemable warrants in 2020; offset by

● a decrease in general and administrative (G&A) expense of $225,000 or 12%; and

● an increase in research and development expenses of $367,000, mostly due to completion of Ampligen manufacturing of $454,000, offset by a decrease of $97,000 in clinical research; offset by

● a gain on extinguishment of notes payable of $142,000.

Net loss per share was $(0.11) and $(1.07) for the three months ended June 30, 2020 and 2019, respectively. The weighted average number of shares of our common stock outstanding as of June 30, 2020 was 29,970,197 as compared to 1,898,703 as of June 30, 2019.

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Revenues

Revenues from our Ampligen® Cost Recovery Program were $40,000 and $29,000 for the quarters ended June 30, 2020 and 2019, respectively. There was an increase in revenues of $11,000. The revenue was generated from the EAP and our FDA approved open-label treatment protocol, (“AMP 511”), that allows patient access to Ampligen® for treatment in an open-label safety study.

Production Costs

Production costs were approximately $200,000 and $215,000, respectively, for the three months ended June 30, 2020 and 2019, representing a decrease of $15,000 in production costs in the current period. These costs primarily represent production expenses related to Ampligen produced in 2019.

Research and Development Costs

Research and Development (“R&D”) costs for the quarter ended June 30, 2020 were approximately $1,463,000 as compared to $1,096,000 for the quarter ended June 30, 2019 reflecting an increase of approximately $367,000. The reason for the increase in research and development costs was due to an increase in Ampligen polymer production cost of $230,000, and increase in Ampligen compliance and stability of $224,000 and an increases in cost recovery of $10,000 offset by decreases in clinical research of $97,000 and maintenance and engineering cost of $27,000.

General and Administrative Expenses

General and Administrative (“G&A”) expenses for the quarters ended June 30, 2020 and 2019 were approximately $1,717,000 and $1,942,000, respectively, reflecting a decrease of approximately $225,000 or 12%. The decrease in G&A expenses during the current period was mainly due to a decrease in public relations of $132,000, salaries & benefits, including bonuses of $200,000 offset by an increase in professional and legal fees of $130,000.

Other Income-Expenses

Interest and other finance costs increased $150,000 in the three months ended June 30, 2020 mostly due to the costs associated with the long-term debt which were not in effect in the three months ended June 30, 2019. The long-term debt was extinguished in the second quarter of 2020.

Gain on extinguishment of notes payable

During the quarter ended June 30, 2020 there was a gain of $142,000 related to the prepayment of the notes payable.

Redeemable Warrants

The quarterly revaluation of certain redeemable warrants resulted in a non-cash adjustment to the redeemable warrants liability for the three months ended June 30, 2020 which amounted to a gain of approximately $31,000 compared to a gain of $1,085,000 for June 30, 2019 (see Note 13: Fair Value - for the various factors considered in the valuation of redeemable warrants).

Six months ended June 30, 2020 versus six months ended June 30, 2019

Net Loss

Our net loss was approximately $7,160,000 and $5,393,000 for the six months ended June 30, 2020 and 2019, respectively, representing an increase in loss of approximately $1,767,000 or 33% when compared to the same period in 2019. This increase in loss for these six months was primarily due to the following:

● an increase in G&A expense of $277,000 or 7%;

● an increase in interest and finance costs of $227,000 related to long term debt;

● a loss of $150,000 from the quarterly reevaluation of certain redeemable warrants in 2020 compared to a gain of $1,039,000 in 2019; and

● an increase in research and development expenses of $319,000, mostly due to a general increase of Ampligen manufacturing cost of $260,000; offset by

● an increase of $392,000 from the extinguishment of notes payable; and

● a decrease in an insurance settlement of $260,000 in 2019.

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Net loss per share was $(0.19) and $(3.53) for the six months ended June 30, 2020 and 2019, respectively. The weighted average number of shares of our common stock outstanding as of June 30, 2020 was 37,073,765 as compared to 1,529,848 as of June 30, 2019.

Revenues

Revenues from our Ampligen® Cost Recovery Program were $85,000 and $29,000 for the six month ended June 30, 2020 and 2019, respectively. There was an increase in revenues of $56,000. The revenue was generated from the EAP and our FDA approved open-label treatment protocol, (“AMP 511”), that allows patient access to Ampligen® for treatment in an open-label safety study.

Production Costs

Production costs were approximately $404,000 and $446,000, respectively, for the six months ended June 30, 2020 and 2019, representing an increase of $42,000 in production costs in the current period. These costs primarily represent production expenses related to Ampligen produced in 2019.

Research and Development Costs

Research and Development (“R&D”) costs for the six months ended June 30, 2020 were approximately $2,343,000 as compared to $2,024,000 for the six months ended June 30, 2019 reflecting an increase of approximately $319,000. The primary reasons for the increase in research and development costs was due to an increase in production cost of $114,000, an increase in stability and compliance expense of $325,000, offset by a decreases in clinical research of $91,000 and maintenance and engineering of $56,000.

General and Administrative Expenses

General and Administrative (“G&A”) expenses for the six months ended June 30, 2020 and 2019 were approximately $3,986,000 and $3,709,000, respectively, reflecting an increase of approximately $277,000 or 7%. The increase in G&A expenses during the current period was mainly due to increases in salaries & benefits, including bonuses of $249,000, professional and legal fees of $267,000 and warrant modification of $46,000 offset by decreases in public relations of $154,000 and stock market fees of $110,000.

Other Income-Expenses

Interest and finance costs increased $227,000 in the six months ended June 30, 2020 mostly due to the costs associated with the long-term debt which were not in effect in the six months ended June 30, 2019.

There was gain on extinguishment of notes payable of $142,000 in the six months ended June 30, 2020, in the same six months ending June 30, 2019 there was a loss on extinguished debt of $250,000.

In June 2019 the was a gain from settlement proceeds of $260,000 which did not occur in 2020.

Redeemable Warrants

The quarterly revaluations of certain redeemable warrants resulted in a non-cash adjustment to the redeemable warrants liability for the six months ended June 30, 2020 which amounted to a loss of approximately $150,000 compared to a gain of $1,039,000 for June 30, 2019 (see Note 13: Fair Value - for the various factors considered in the valuation of redeemable warrants).

Liquidity and Capital Resources

As of June 30, 2020, we had approximately $33,908,000 in cash and cash equivalents As of December 31, 2019, we had approximately $1,470,000 in cash and cash equivalents. Cash used in operating activities for the six months ended June 30, 2020 was $4,525,000 compared to $4,324,000. The primary reasons for the increase was the decrease in accounts receivable and other receivables which included the sale of New Jersey NOL in the period ended June 30, 2020.

36

Cash provided from investing activities for the six months ended June 30, 2020 was approximately $601,000 compared to cash used in investing activities of approximately $626,000 for the same period in 2019, representing an increase of $1,227,000. The primary reason for the decrease during the current period is the purchase of marketable securities of $7,590,000 offset by the sale of marketable securities of $8,497,000.

Cash provided by financing activities for the six months ended June 30, 2020 was approximately $36,362,000 compared to approximately $5,520,000 for the same period in 2019, an increase of $30,842,000. The primary reason for the increase in the six months ended June 30, 2020 is our receipt of net proceeds of approximately $32,878,000 from the sale common stock pursuant to our 2019 EDA with Maxim Group and the exercise of warrants (see Note 8: Stockholders’ Equity).

On August 6, 2020, we contracted Amarex to act as our Clinical Research Organization and provide regulatory support with regard to a clinical trial testing Ampligen’s potential as a COVID-19 prophylaxis via intranasal delivery. For Phase I we anticipate providing approximately $514,000 to Amarex. In Phase II we anticipate providing approximately an additional $650,000. Additional costs expected to be incurred by us for the clinical trial are estimated at $4.5 million. (see “Covid-19” above).

If we are unable to commercialize and sell Ampligen and/or recommence material sales of Alferon N Injection, our operations, financial position and liquidity may be adversely impacted, and additional financing may be required.

We are committed to a focused business plan oriented toward finding senior co-development partners with the capital and expertise needed to commercialize the many potential therapeutic aspects of our experimental drugs and our FDA approved drug Alferon.

The proceeds from our financings have been used to fund infrastructure growth including manufacturing, regulatory compliance and market development along with our efforts regarding the Ampligen manufacturing, Ampligen NDA. There can be no assurances that, if needed, we will raise adequate funds from these or other sources, which may have a material adverse effect on our ability to develop our products. Also, we have the ability to curtail discretionary spending, including some research and development activities, if required to conserve cash.

ITEM 3: Quantitative and Qualitative Disclosures About Market Risk

We had approximately $40,309,000 in cash, cash equivalents and marketable securities at June 30, 2020 as compared to $8,778,000 at December 31, 2019.

To the extent that our cash and cash equivalents exceed our near-term funding needs, we intend to invest the excess cash in money market accounts, high-grade corporate bonds or fixed-income type bond funds. We employ established conservative policies and procedures to manage any risks with respect to investment exposure.

ITEM 4: Controls and Procedures

Our Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”) performed an evaluation of the effectiveness of our disclosure controls and procedures, which have been designed to permit us to effectively identify and timely disclose important information. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our CEO and CFO concluded that the controls and procedures were effective as of June 30, 2020, to ensure that material information was accumulated and communicated to our management, including our CEO and CFO, is appropriate to allow timely decisions regarding required disclosure.

During the six months ended June 30, 2020, we have made no change in our internal controls over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

37

Part II – OTHER INFORMATION

ITEM 1: Legal Proceedings

We commenced an action against BioLife in December of 2017 for Breach of Contract. The amount of damages we are seeking in this matter are yet to be determined. Damages are not covered by insurance. BioLife, the defendant, has filed its Answer, Affirmative Defenses and a Counterclaim in the amount of $96,676 representing the invoices withheld after BioLife indicated that they were not intending to fulfill the balance of the contract. We have denied the allegations of the counterclaim. We conducted one mediation session to date but have been unable to resolve the matter. The parties are currently waiting to start discovery, which we believe will lead to an anticipated trial date. The scheduled dates for these events to transpire have yet to be determined, as they are dependent on the reopening of the Courts, which have been temporarily closed in connection with the declared state of emergency caused by the COVID-19 pandemic. Although it cannot be determined, we believe there is little chance for an unfavorable outcome in this matter.

ITEM 1A: Risk Factors

Please carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 30, 2020, which could materially affect our business, financial condition, or future results. The risks described in the above report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and operating results. Please also see “Special Note Regarding Forward-Looking Statements” above.

The COVID-19 coronavirus could adversely impact our business, including our clinical trials.

In December 2019, a novel strain of coronavirus, COVID-19, was first reported in China. The coronavirus has since spread to six continents and has been diagnosed in countries in which there are planned or active clinical trial sites studying Ampligen. As COVID-19 continues to spread, we could very well experience disruptions that could severely impact our business and clinical trials, including:

● delays or difficulties in enrolling patients in our clinical trials;

● delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;

● diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials;

● interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others;

● limitations in employee resources that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people;

● delays in issuing reports, results and publishing papers;

● delays in receiving approval from local regulatory authorities to initiate our planned clinical trials;

● delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials;

● interruption in global shipping that may affect the transport of clinical trial materials, such as investigational drug product used in our clinical trials;

● changes in local regulations as part of a response to the COVID-19 coronavirus outbreak which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether;

● delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees; and

● refusal of the FDA to accept data from clinical trials in affected geographies outside the United States.

38

The global outbreak of the COVID-19 coronavirus continues to rapidly evolve. The extent to which the COVID-19 coronavirus may impact our business and clinical trials will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.

ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds

None.

ITEM 3: Defaults upon Senior Securities

None.

ITEM 4: Mine Safety Disclosures

Not Applicable.

ITEM 5: Other Information

On August 12, 2020, the Company granted to Thomas K. Equels, Chief Executive Officer, consistent with his employment agreement, 300,000 ten-year options to purchase common stock with an exercise price of $3.07 per share which vest in one year. The Company also granted to Dr. William Mitchell and Stewart Appelrouth, as compensation for their services as members of committees of the board of directors, each 50,000 ten-year options to purchase common stock with an exercise price of $2.77 per share which vest in one year.

ITEM 6: Exhibits

(a) Exhibits

10.1	June 1, 2020, Material Transfer and Research Agreement with the University of Rochester. (Portions of this Agreement have been redacted in compliance with Regulation S-K Item 601(b)(10))*
10.2	June 23, 2020, Specialized Services Agreement with Utah State University. (Portions of this Agreement have been redacted in compliance with Regulation S-K Item 601(b)(10))*
10.3	July 1, 2020, Material Transfer and Research Agreement with the Japanese National Institute of Infectious Diseases and Shionogi & Co., Ltd. (Portions of this Agreement have been redacted in compliance with Regulation S-K Item 601(b)(10))*
10.4	July 6, 2020, Clinical Trial Agreement with Roswell Park Comprehensive Cancer Center. (Portions of this Agreement have been redacted in compliance with Regulation S-K Item 601(b)(10))*
10.5	August 6, 2020, Project Work Order with Amarex Clinical Research LLC. (Portions of this Agreement have been redacted in compliance with Regulation S-K Item 601(b)(10))*
31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 from the Company’s Chief Executive Officer.*
31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 from the Company’s Chief Financial Officer.*
32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 from the Company’s Chief Executive Officer.*
32.2	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 from the Company’s Chief Financial Officer.*

101.INS	XBRL Instance Document * **
101.SCH	XBRL Taxonomy Extension Schema Document * **
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document * **
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document * **
101.LAB	XBRL Taxonomy Extension Label Linkbase Document * **
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document * **

* Filed herewith.

** Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities and Exchange Act of 1934, as amended and otherwise are not subject to liability under those sections.

39

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	AIM IMMUNOTECH INC.
	/s/ Thomas K. Equels
	Thomas K. Equels, Esq.
	Chief Executive Officer & President
	/s/ Ellen M. Lintal
	Ellen M. Lintal
	Chief Financial Officer
Date: August 14, 2020

40

EX-10.1

EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT

THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND

(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.

EXHIBIT 10.1

MATERIAL TRANSFER AND RESEARCH AGREEMENT

This Material Transfer and Research Agreement (the “Agreement”) is made as of May 15, 2020, (“Effective Date”) by and between AIM ImmunoTech, Inc. (“AIM”), located at 2117 SW Highway 484, Ocala, FL 34473, and University of Rochester (“Rochester”), having a business address at the Office of Research & Project Administration 518 Hylan Building, Box 270140, Rochester, NY 14627. AIM and Rochester shall be referred to individually as a “party” and together as the “parties.”

WHEREAS, Rochester may receive Confidential Information pertaining to AIM’s inventions and knowhow and wishes to receive samples of AIM’s drug Ampligen® for the sole purposes of conducting the pre-clinical Research Project, and

WHEREAS, AIM is willing to provide Confidential Information and Ampligen® to Rochester solely for purposes of conducting the Research Project and in exchange for a potential non-exclusive license to resulting Intellectual Property from the Research Project, on the following terms and conditions,

NOW THEREFORE, in consideration of the premises and the mutual agreements and undertakings herein set forth, Rochester and AIM hereby agree as follows:

1.       DEFINITIONS. Whenever used in this Agreement, the following terms will have the following meanings:

1.1 “Confidential Information” means any confidential or proprietary information, knowledge, intellectual property, pre-clinical and clinical information or data, technical and/or non-technical material or property, relating to RNA pharmaceutical products and technologies, including but not limited to double-stranded RNA compounds and in particular the double-stranded RNA compound trademarked Ampligen® provided under this Agreement. A party disclosing Confidential Information shall be a “Disclosing Party” and a party receiving same shall be a “Receiving Party.”

1.2 The “Research Project,” described in the Exhibit section, and appended by reference, is to be conducted by Rochester utilizing Ampligen® and is being funded by an entity independent of AIM.

1.3 The Principal Investigator means the person(s) responsible for the day-to-day supervision of the Research Project as identified in Exhibit A.

2.       PROVIDING OF MATERIAL, CONFIDENTIAL INFORMATION, AND PERFORMANCE OF THE RESEARCH PROJECT.

2.1 AIM shall provide to Rochester such Ampligen® as described in Exhibit(s) and which as may be reasonably requested by Rochester from time to time for purposes of the Research Project and shall be used by Rochester solely for the purpose of conducting the Research Project. The Ampligen® delivered pursuant to this Agreement shall not be sold, distributed or otherwise made available by the Institution to any other party for any other purpose.

2.2 The parties shall provide to each other such Confidential Information as is reasonably necessary for purposes of the Research Project.

2.3 The parties will utilize the Confidential Information exchanged solely for the purposes of conducting the Research Project.

2.4 Rochester will promptly and diligently pursue the Research Project in a scientific manner, documenting the work performed and results achieved in pursuing the Research Project and disclose results of the Research Project to AIM as described in Article 5 herein.

1

EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT

THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND

(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.

3. INTELLECTUAL PROPERTY.

3.1 Ownership of and title to all copyrights, patents and other intellectual property rights in all inventions, discoveries, and other intellectual property (all herein “Intellectual Property”) which are made, conceived, reduced to practice, generated by or arise out of the Research Project under this Agreement shall follow inventorship under U.S. patent law. Inventions made solely by Rochester shall be owned solely by Rochester. Inventions made solely by AIM shall be owned solely by AIM. Inventions made by both parties shall be owned jointly. Rochester hereby grants a non-exclusive, royalty free license to any Intellectual Property developed under this Agreement to AIM for internal research and development uses only. The provisions of this Article 3 shall survive any termination or expiry of this Agreement.

Rochester further grants to AIM an exclusive first option as well as a right of first refusal to an exclusive, world-wide license (with the right to grant sub-licenses), to exploit the Intellectual Property. AIM may exercise its option with regard to such Intellectual Property by providing Rochester with written notice within three (3) months after Rochester provides notice of such Intellectual Property to AIM. Upon AIM’s exercise of the option within the three (3) months, AIM and Rochester will negotiate in good faith in an attempt to reach a license agreement satisfactory to both parties, the negotiation period not to exceed six months. If AIM does not exercise the option, or Rochester and AIM are unable to finalize terms of an exclusive license on commercially reasonable terms, Rochester shall be free to grant a license, exclusive or non-exclusive to any other party.

4. CONFIDENTIALITY.

4.1 (a) The parties will employ the same degree of care to keep the Disclosing Party’s Confidential Information confidential as they employ with respect to their own information of like importance, which shall not constitute less than a reasonable standard of care, and will not use the Disclosing Party’s Confidential Information except for the express purposes of this Agreement and will not disclose any Confidential Information received from the other party to any third party, including, but not limited to, any third party investor, except to employees, staff, students and/or consultants who are entitled to know such Confidential Information for the purposes of carrying out the object of this Agreement, and who the Receiving Party causes to comply with the provisions of this Agreement. Nothing in this Agreement shall prevent a Disclosing Party from disclosing or using its own Confidential Information as it deems appropriate.

(b)       The Receiving Party will ensure that its employees, staff, students and/or consultants shall abide by the terms of this Agreement.

4.2 All Confidential Information shall remain the property of the Disclosing Party. Upon the written request of a Disclosing Party or upon termination or expiration of this Agreement, all tangible Confidential Information received from the Disclosing Party (including all copies thereof and samples) shall be promptly returned to the Disclosing Party; provided that the Receiving Party may retain one (1) copy of such tangible Confidential Information in a secure location for purposes of identifying its obligations under this Agreement.

2

EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT

THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND

(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.

4.3 The obligations of confidentiality and non-use set forth in this Article 4 of this Agreement shall not apply to any portion of the Confidential Information that:

(a)	is or becomes public or available to the general public without being wrongfully obtained or through breach of Agreement or is developed independently of Confidential Information received from the Disclosing Party; or
(b)	was known to and evidenced by the Receiving Party’s reasonable records prepared prior to the date of this Agreement; or
(c)	is properly obtained by the Receiving Party from a third party with a valid legal right to disclose such Confidential Information and such third party is not under a confidentiality obligation to the Disclosing Party; or
(d)	is released by the Disclosing Party to a third party without restriction.

4.4 In the event that a Receiving Party is requested or required (by deposition, interrogatories, request for information or documents in legal proceedings, subpoena, civil investigative demand or other similar process) to disclose any of the Disclosing Party’s Confidential Information, the Receiving Party shall provide the Disclosing Party with prompt notice of any such request or requirement so the Disclosing Party may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Confidentiality Agreement. If, in the absence of a protective order or other remedy or the receipt of a signed written waiver, the Receiving Party or its representatives are nonetheless, in the written opinion of their counsel, legally compelled to disclose Confidential Information to any governmental or regulatory body or else stand liable for contempt or suffer such other censure or penalty, Receiving Party may, without liability hereunder, disclose to such body only that portion of the Confidential Information the Receiving Party is legally required to be disclosed, provided that the Receiving Party exercised efforts to allow the Disclosing Party to use its reasonable efforts to preserve the confidentiality of the Confidential Information.

4.5 Nothing in this Agreement shall be construed as giving a Receiving Party any right, title, interest in or ownership of the Confidential Information.

4.6 The provisions of this Article 4 shall survive any termination or expiry of this Agreement, provided the Receiving Party’s obligations of confidentiality and non-use with respect to the Disclosing Party’s Confidential Information shall terminate five (5) years from the Effective Date of this Agreement.

5. DISCLOSURE

5.1 During the term of the Research Project, Rochester shall provide AIM on a bi-annual basis a summary of the results including efficacy and safety data of the Research Project.

5.2 Notwithstanding anything to the contrary, this Agreement shall not be interpreted to prevent or delay publication of the Research Project results. Rochester agrees to notify AIM within a reasonable period, not less than thirty (30) days, prior to the submission for publication of the Research Project results or other disclosure of the results. AIM is entitled to review such proposed publication or disclosure. Rochester agrees to delete from any such proposed publication or disclosure any Confidential Information disclosed by AIM to Rochester, upon the reasonable request of AIM. AIM may request the reasonable delay of any such proposed publication or disclosure for an additional thirty (30) day period in order to file or have filed any patent applications on any inventions disclosed therein. Rochester agrees to provide appropriate acknowledgement of the source of the material received under this Agreement in all publications.

3

EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT

THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND

(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.

6. INDEMNIFICATION.

6.1 Indemnification. Except to the extent prohibited by law and/or to the extent caused by the negligence, gross negligence and/or wilful misconduct of AIM, Rochester shall indemnify, defend and hold harmless AIM, its directors, officers, employees (collectively, “AIM Indemnities”) against any third party claims, including reasonable attorney’s fees for defending those claims (each, a “Claim”), to the extent a Claim arises out of improper use, storage, or disposal of the Confidential Information and/or material received under this Agreement.

7. TERMINATION.

7.1 This Agreement shall terminate upon the earlier of (a) the completion of the Research Project, (b) the written agreement signed by authorized representatives of the parties, or (c) three (3) years from the Effective Date.

8. LEGAL COMPLIANCE; AUTHORIZATION.

8.1 Legal Compliance. Each Party shall comply in all material respects with all U.S., federal and state laws and regulations applicable to the conduct of its business pursuant to this Agreement.

9. FORCE MAJEURE.

9.1 Effects of Force Majeure. Neither Party shall be held liable or responsible for failure or delay in fulfilling or performing any of its obligations under this Agreement in case such failure or delay is due to any condition beyond the reasonable control of the affected Party including, but not limited to, acts of God, strikes, war, riot, earthquake, tornado, hurricane, fire, civil disorder, explosion, flood, sabotage, governmental order relating to national defense requirements (a “Force Majeure Event”). Such excuse shall continue as long as the Force Majeure Event continues, provided, however, that Rochester may cancel without penalty any and all orders upon the occurrence of a Force Majeure Event. Upon cessation of such Force Majeure Event, such Party shall promptly resume performance on all orders which have been terminated.

9.2 Notice of Force Majeure Event. In the event either Party is delayed or rendered unable to perform due to a Force Majeure Event, the affected Party shall give notice thereof and its expected duration to the other party no later than five (5) days after the occurrence of the Force Majeure Event. Upon notice of a Force Majeure Event, the obligations of the affected Party will be suspended during the continuation of the Force Majeure Event. The affected Party shall take commercially reasonable steps to remedy the Force Majeure Event with all reasonable discretion, but such obligation shall not require the settlement of strikes or labor controversies on terms unfavourable to the affected Party.

10. MISCELLANEOUS.

10.1 Notices. All notices required or permitted to be given under this Agreement will be given in writing and will be effective when either personally delivered (including delivery by Fedex or other courier), or when sent by facsimile, addressed as follows:

To: University of Rochester

Steve Dewhurst

Vice Dean for Research

Professor & Chair, Microbiology & Immunology

School of Medicine & Dentistry

University of Rochester

Tel: (585) 275 3216

stephen_dewhurst@urmc.rochester.edu

To AIM ImmunoTech, Inc.:

604 Main Street

Riverton, NJ 08077

Attn: David R. Strayer, MD, CSO/CMO

Email: David.Strayer@aimimmuno.com

4

EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT

THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND

(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.

Or such other address as either party may hereinafter specify by written notice to the other under this Section 10.1. Such notices and communications will be deemed effective on the date of personal delivery or upon confirmed answer back by facsimile.

10.2 Entire Agreement; Amendment and Waivers. This Agreement, including all Exhibits hereto, is the entire agreement between Rochester and AIM with respect to the specific subject matter hereof and supersedes all prior agreements and understandings, oral or written, with respect to such matters. This Agreement may not be modified, amended or terminated, nor may any term hereof be waived, except by an instrument in writing, signed by authorized representatives of both Rochester and AIM.

10.3 Severability; Enforcement. If any provision of this Agreement, or the application thereof to any person, place, or circumstance, is held by a court of competent jurisdiction to be invalid, unenforceable, or void, as written, in whole or in part, such provision will be deemed to be amended to the extent necessary to be enforceable and applied by such court in the broadest possible manner, consistent with enforceability, and the remainder of this Agreement and such provisions as applied to other persons, places, and circumstances will remain in full force and effect.

10.4 Assignment; Binding Effect. This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and, as such, this Agreement may not be assigned, nor may any of the rights or obligations be delegated, without the prior approval and express written consent of both parties.

10.5 Remedies. The parties agree that they will be entitled to seek injunctive relief against the other party in the event of any breach of the confidentiality terms of this Agreement, in addition to any other relief (including damages) available under this Agreement or under law.

10.6 Governing Law. (a) The validity, interpretation, enforceability, and performance of this Agreement will be governed by and construed in accordance with the laws of New York without regard to the application of conflict laws.

(b)       Any legal action or proceeding with respect to this Agreement may be brought in the courts of New York, and by execution and delivery of this Agreement, the parties agree to the jurisdiction of those courts.

10.7 Counterparts. This Agreement may be executed in one, or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement.

10.8 Waiver. Neither Party’s waiver of any breach or failure to enforce any of the terms and conditions of this Agreement, at any time, shall in any way affect, limit or waiver such Party’s right thereafter to enforce and compel strict compliance with every term and condition of this Agreement.

5

EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT

THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND

(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.

10.9 Headings. The headings in this Agreement are for convenience of reference only and shall not affect its interpretation.

10.10 Construction. This Agreement has been jointly prepared on the basis of the mutual understanding of the Parties and shall not be constructed against either Party by reason of such party’s being the drafter hereof or thereof.

10.11 Exhibits, Schedules and Attachments. Any and all exhibits, schedules and attachments referred to herein form an integral part of this Agreement and are incorporated into this Agreement by such reference.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

AIM IMMUNOTECH, INC.
By:	/s/ Peter Rodino	Date: 6/1/2020
Name:	Peter Rodino
Title:	General Counsel

UNIVERSITY OF ROCHESTER
By:	/s/ Anthony Beckman	Date: 6/1/2020
Name:	Anthony Beckman
Title:	Associate Director, ORPA

Read and Acknowledged:

I have read the foregoing and, while not a party to this Agreement, I understand and will comply with the obligations stated herein.

By:	/s/ Stephen Dewhurst
Name:	Stephen Dewhurst, Ph.D.
Title:	Professor
	Vice Dean for Research
Date:	6/1/2020

6

EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT

THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND

(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.

Exhibit A

Research Project

***

The detailed protocol design will be sent to AIM for review and comment prior to the start of the laboratory experiments with Ampligen.

7

EX-10.2

EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT

THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND

(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.

EXHIBIT 10.2

Specialized Services Agreement
USU	Sponsor
Name: Utah State University Sponsored Programs Office of Research and Graduate Studies 1415 Old Main Hill Logan, UT 84322-1415 Attn: Devin Hansen Email: devin.hansen@usu.edu Phone: (435) 797-9153 Fax: (435) 797-3543	SPONSOR: Dave Strayer Company Name: AIM ImmunoTech, Inc. Address: 2117 SW Highway 484 Ocala, FL 34473 Email David.Strayer@AIMimmuno.com Phone:
Make checks payable to: Utah State University Institute for Antiviral Research 5600 Old Main Hill Logan, UT 84322-5600 Attn: Therese Tarbet	Send Invoice To: (If different than above) Name: Address:
Specialized Services Requested:  (See attached Exhibit A)

THIS AGREEMENT is entered into on __23 June 2020__ by and between __ Dave Strayer, AIM ImmunoTech Inc. _ (Sponsor) having its principal place of business as detailed above, and Utah State University (USU), a state institution of higher education.

WHEREAS, Sponsor desires the specialized services the USU Institute for Antiviral Research has developed, and WHEREAS USU provides specialized services to both public and private entities for the public’s benefit, and in fulfillment of its role as a Land Grant University, THEREFORE, under the direction of Dr. Jonna Westover (“Principal Investigator”), the Parties agree as follows:

1)       Scope of Work – USU shall provide the Services identified in the attached Exhibit A.

2)       Payment for Services - Sponsor agrees to pay the fixed price amount shown in Exhibit A to USU for performance of the Services, and in accordance with the terms, rates, and descriptions found in Exhibit A. Sponsor understands that USU may use these funds to purchase materials and/or capital equipment in furtherance of USU’s research capabilities.

3)       Scheduling Services - The scheduling of such Services shall be arranged to avoid conflict with USU’s educational and research programs. USU shall control the scheduling of such Services, but will use reasonable efforts to meet the mutually agreed upon written schedule of delivery.

4)       Term – This Agreement shall be in effect from the date first written herein until 1 year from above date.

5)       Reports - USU shall provide Sponsor with a written report regarding the data obtained in the course of said Services upon the completion of the Services.

6)       Confidentiality –“Confidential Information” shall mean any Sponsor-provided materials, written information, and data marked “Confidential,” or non-written information and data disclosed which is identified at the time of disclosure as confidential by Sponsor. USU hereby agrees to use the same reasonable care it uses to protect its own confidential information to maintain as confidential any data provided by Sponsor, and will not disclose or publish Sponsor’s Confidential Information without Sponsor’s express, prior written permission. USU’s obligations hereunder do not apply to information in the public domain through no act or failure to act of USU, or independently known or obtained by USU prior to disclosure by Sponsor. USU will use reasonable efforts to limit use and access to any Confidential Information provided by Sponsor to only those USU employees and faculty performing Services. As an entity of the State of Utah, USU is subject the Government Records Access and Management Act (“GRAMA”), making it subject to rulings of courts that may prompt the disclosure of certain protected documents. A disclosure required by the courts will not be in violation of this section.

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7)       Publication – USU reserves the right to publish, or permit to be published by USU personnel, any results or conclusions of Services, to the extent any such results or conclusions do not disclose Sponsor Confidential Information. To prevent unauthorized disclosure or exploitations of Sponsor Confidential Information, USU shall provide Sponsor with a copy of any proposed publication resulting from Services at least thirty (30) days prior to submission for publication. If, during that time, USU receives written notification from Sponsor that the proposed publication includes Confidential Information, USU will delay such publication for an additional thirty (30) days to give Sponsor time to address concerns. If Sponsor determines that Confidential Information is included in the proposed publication, USU will, at Sponsor’s written request, remove such Confidential Information prior to submission for publication. AIM also has the right to jointly co-publish with the Utah State authors based on the data.

8)       Intellectual Property – USU’s intellectual property rights are limited to discoveries made by USU during the Services identified under Exhibit A, including laboratory methodologies or techniques developed or used in the performance of Services, and any data from experiments or tests not involving Sponsor-provided materials (controls, generic materials, or samples), including control data that is reported to Sponsor. USU reserves all rights title and interest to new or existing methodologies, procedures, and processes used by USU to complete Services, except to the extent such improvements, modifications or enhancements include, incorporate, reference or access Sponsor-provided materials and/or Confidential Information (“Sponsored IP”); in which case such rights, title and interest to Sponsored IP will vest with Sponsor. Ownership of and title to all trademarks, patents and other intellectual property rights in all inventions, discoveries, and other intellectual property (all herein “Intellectual Property”) which are made, conceived, reduced to practice, generated by or arise out of the Research Project under this Agreement shall follow the inventorship under U.S. patent law.

9)       Publicity - Neither party will use the name of the other party in any publicity, advertising, or news release without the prior written approval of the authorized representative of the other party. This includes reference to USU or Sponsor’s names, internal organizations (departments, institutes, subsidiaries, etc.), or individual employees.

10)       Termination - Either party may terminate this Agreement upon thirty (30) days prior written notice to the other. All reasonable costs and non-cancelable obligations incurred by USU at the time of said termination shall be reimbursed by Sponsor. At the request of Sponsor, all unused Sponsor-provided materials at the time of termination shall either be destroyed by USU, or returned to Sponsor, at Sponsor’s direction and discretion.

11)       University Status – Each party shall be deemed to be an independent contractor and neither party will have the power or authority to bind or obligate the other party. USU will not subcontract or assigns its duties, obligations or the Services hereunder without Sponsor’s prior written permission. USU will be fully responsible for any subcontractor’s performance of Services.

12)       Warranties and Indemnity – USU RESEARCH SERVICES ARE DELIVERED “AS IS.” USU MAKES NO REPRESENTATIONS REGARDING ITS QUALITY OR PERFORMANCE WHEN USED BY SPONSOR. USU EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. Sponsor agrees to indemnify and hold harmless USU against any claims and costs (including counsel fees) arising out of Sponsor’s commercial sale or distribution of products or processes developed under this Agreement to the extent of Sponsor’s negligence or willful misconduct, except to the extent of USU’s negligence or willful misconduct.

13)       Export Control - USU will not accept export-controlled materials or technical information under this agreement. Sponsor warrants that materials and technical information provided to USU are not subject to U.S. Export Control laws.

14)       Governing Law - This Agreement shall be governed and construed in accordance with the laws of the State of Utah.

15)       Entire Agreement - This Agreement contains the entire and only agreement between the parties respecting the subject matter hereof and supersedes or cancels all previous negotiations, agreements, commitments and writings between the parties on the subject of this Agreement. Should processing of this Agreement require issuance of a purchase Agreement or other contractual document, all terms and conditions of said document are hereby deleted in entirety. This Agreement may not be amended in any manner except by an instrument in writing signed by the duly authorized representatives of each of the parties hereto.

By an Authorized Official of Utah State University		By an Authorized Official of Sponsor
/s/ Devin Hansen	06/23/2020	/s/ Peter Rodino	06/23/2020
Devin Hansen	Date	Name:  Peter Rodino	Date
Contract Administrator		Title: General Counsel

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EXHIBIT A

***

EX-10.3

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EXHIBIT 10.3

MATERIAL TRANSFER AND RESEARCH AGREEMENT

This Agreement is made as of June 22, 2020 (“Effective Date”) by and between AIM IMMUNOTECH INC. (“AIM”), a corporation incorporated under the laws of Delaware, having an Offices at 2117 SW Hwy 484 Ocala Fl 34473 as the supplier of the experimental drug Ampligen® and a collaborative group consisting of Japanese National Institute of Infectious Disease (“NIID”) with its address at 4-7-1 Gakuen, Musashimurayama-shi, Tokyo, 208-0011 Japan, and Shionogi & Co., Ltd. (including its affiliates, “Shionogi”) with its address at 1-8, Doshomachi 3-chome Chuo-ku, Osaka 541-0045 Japan (together referred to as the “Companies”). AIM, Shionogi and NIID shall be referred to individually as a “Party” and together as the “Parties.”

WHEREAS, the Companies wish to receive Confidential Information (as defined below) pertaining to AIM’s inventions and know-how and also receive samples of AIM’s drug Ampligen®, solely for purposes of conducting studies described in Exhibit A (“Research Projects”). It is the shared goal of all Parties to translate what is learned into clinical research projects involving patients. This, it is understood, would require a separate license agreement, and

WHEREAS, AIM is willing to provide Ampligen® to Shionogi and NIID solely for purposes of conducting Research Projects on the following terms and conditions, and

WHEREAS the Parties agree that the commitments under this Agreement are not exclusive and that any Party may enter into similar agreements with third parties.

NOW THEREFORE, in consideration of the premises and the mutual agreements and undertakings herein set forth, Companies and AIM hereby agree as follows:

1. DEFINITIONS. Whenever used in this Agreement, the following terms will have the following meanings:

1.1 “Confidential Information” means any confidential or proprietary information, knowledge, intellectual property including but not limited to trade secrets and unpublished patent applications, pre-clinical and clinical information or data, technical and/or non-technical material or property, relating to RNA pharmaceutical products and technologies, including but not limited to double-stranded RNA compounds and in particular the double-stranded RNA compound trademarked Ampligen® provided under this Agreement. A party disclosing Confidential Information shall be a “disclosing party” and a party receiving same shall be a “receiving party.” The Confidential Information disclosed or provided by the disclosing party under this Agreement is additionally governed by the Mutual Confidentiality Agreement between the Parties, dated as of April 21, 2020 (“Confidentiality Agreement”) which is incorporated by reference herein.

1.2 “Material Events” means events, as AIM is a public company therefore, any agreements in AIM’ s judgement, that are required to be publicly disclosed under Federal and state securities laws, rules and regulations, including events that AIM has customarily disclosed in the past, including this agreement, will be considered material and as such reports will be filed in AlMs 8K, 10K and 10Qs that address AIM’s contractual relationships. For clarity, it is agreed by the Parties that such reports shall not contain the detailed description of the Research Project including contents of Exhibit A.

2. PROVIDING OF MATERIAL FOR THE RESEARCH PROJECTS.

2.1 AIM shall provide to the Companies such Ampligen® free of charge as described in Exhibit A and which as may be reasonably requested by the Companies from time to time for purposes of the Research Projects, and shall be used by the Companies solely for the purpose of conducting the Research Projects.

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2.2 The Parties shall provide to each other such Confidential Information as is necessary for purposes of the Research Projects.

2.3 The Companies will utilize the Confidential Information exchanged solely for the purposes of conducting the Research Projects.

2.4 The Companies will promptly and diligently pursue the Research Projects in a scientific manner, documenting in reproducible form the work performed and results achieved in pursuing the Research Projects and disclose updates on the Research Projects to AIM as described in Article 5 herein.

3. INTELLECTUAL PROPERTY.

3.1 Ownership of and title to all trademarks, patents and other intellectual property rights in all inventions, discoveries, and other intellectual property (all herein “Intellectual Property”) which are made, conceived, reduced to practice, generated by or arising out of the Research Projects under this Agreement shall follow inventorship under U.S. patent and trademark law. Inventions made solely by the Companies shall be owned solely by the Companies. Inventions made by multiple Parties shall be owned by the Parties jointly.

3.2 Nothing in the Agreement should be construed as a license or authorization from AIM for any use of any of AIM’s trademarks including the trademark Ampligen^®.

3.3 Inventions made solely by AIM include, at least, all patents and patent applications including provisional patent applications, whether published or unpublished, filed by AIM, assigned to AIM, or issued to AIM in the United States, Japan, and worldwide. These inventions made solely by AIM, including multiple patents and applications, and including patents and patent applications comprising Ampligen®, and also including any composition comprising Ampligen® or a therapeutic double stranded RNA, are owned solely by AIM. Nothing in this Agreement should be construed as a license to any intellectual property, patents, and patent applications owned solely by AIM. However, AIM is willing to negotiate a license to these intellectual property and developments.

4. CONFIDENTIALITY.

4.1 Please see the attached Mutual Confidentiality Agreement signed and dated by all Parties which remains in full force and effect and which is incorporated by reference in Section 1.1.

5. DISCLOSURE

5.1 Results of the Research Projects (“Results”) including efficacy and safety data are provided without warranty of any type and Companies shall not be liable to AIM in any way for use of such Results. AIM is authorized to use updates of data as they are made available to AIM, including data from pre-clinical studies which is needed for submission to the FDA, other regulatory bodies and timely disclosure of Material Events to the public or where it is needed to comply with applicable laws and regulations. The Parties shall not publish or present the Results without prior written consent of the other Party, which consent shall not be unreasonably withheld.

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5.2 The Companies will provide AIM with an oral report every three (3) months and with a final written report within sixty (60) days after the conclusion of Research Projects described in the Exhibit A. If requested by AIM, the Companies will confirm within a reasonable period of time, but no later than thirty (30) days, any oral progress reports with follow-up summary written reports. The written reports will include descriptions of the methods used and results obtained together with any other pertinent findings from the Research Projects.

5.3 It is understood that Research Projects is currently ongoing at NIID and it is a preliminary experiment utilizing aliquots of Ampligen® already sent to NIID. The additional aliquots of Ampligen® mentioned in this Agreement are for follow up experimental activity to continue the Research Projects. In addition, by mutual agreement, this Agreement may be amended to add or revise Exhibits as new experiments and related activities are undertaken. Each revision and amendment shall be agreed to and signed by all the Parties as added.

5.4 Other than the initial request by NIID for 30 aliquots of Ampligen® 1.0 ml at 2.5 mg/ml, which was already received by NIID, additional Ampligen will be supplied by AIM to Shionogi or NIID in the amount as listed in Exhibit A. Any Ampligen® aliquots delivered pursuant to this Agreement shall not be sold, distributed or otherwise made available by Companies to any other party for any other purpose. There is no obligation to supply any further amounts of Ampligen® unless the Parties mutually agree it is needed to complete the Research Projects.

6. INDEMNIFICATION

6.1 The Parties shall indemnify, defend and hold harmless the other Party, its directors, officers, employees against any third party claims, including reasonable attorney’s fees for defending those claims (each, a “Claim”), to the extent a Claim arises out of improper use, storage, or disposal of the drug(s), unless such Claim is solely due to the gross negligence or material and willful misconduct of the indemnified Party.

7. TERMINATION.

7.1 This Agreement shall terminate upon the earlier of (a) the completion of the Research Projects,

(b) the written agreement signed by authorized representatives of the Company, or (c) one (1) year from the Effective Date; provided that, the provisions of Articles 3, 4 and 6, and Section 8.5 and 8.6 shall survive the termination of this Agreement indefinitely.

8. MISCELLANEOUS.

8.1 Notices. All notices required or permitted to be given under this Agreement will be given in writing and will be effective when either personally delivered (including delivery by Federal Express or other internationally recognized courier), or when sent by facsimile, addressed as follows:

To National Institute of Infectious Disease:

Hideki Hasegawa, M.D., Ph.D.

4-7-1Gakuen,Musashimurayama-shi,

Tokyo, 208-0011 JAPAN

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To Shionogi & Co., Ltd.:

Yasuyoshi Isou, Ph.D.

1-8, Doshomachi 3-chome Chuo-ku,

Osaka 541-0045 Japan

To AIM ImmunoTech Inc.: Thomas K. Equels

AIM ImmunoTech Inc.

2117 SW Highway 484

Ocala, Florida 34473

Or such other address as each Party may hereinafter specify by written notice to the other under this Section 8.1. Such notices and communications will be deemed effective on the date of personal delivery or upon confirmed answer back by facsimile.

8.2 Entire Agreement; Amendment and Waivers. This Agreement, including the Confidentiality Agreement incorporated in this Agreement, is the entire agreement between the Companies and AIM with respect to the specific subject matter hereof. This Agreement may not be modified, amended or terminated, nor may any term hereof be waived, except by an instrument in writing, signed by authorized representatives of both the Companies and AIM.

8.3 Severability; Enforcement. If any provision of this Agreement, or the application thereof to any person, place, or circumstance, is held by a court of competent jurisdiction to be invalid, unenforceable, or void, as written, in whole or in part, such provision will be deemed to be amended to the extent necessary to be enforceable and applied by such court in the broadest possible manner, consistent with enforceability, and the remainder of this Agreement and such provisions as applied to other persons, places, and circumstances will remain in full force and effect.

8.4 Assignment; Binding Effect. This Agreement may not be assigned, nor may any of the rights or obligations be delegated, without the prior approval of both Parties.

8.5 Remedies. The Companies agree that in the event of any breach or threatened breach of any of the covenants herein, the damage or imminent damage to the value and the goodwill of a Party may be irreparable and extremely difficult to estimate, making any remedy extremely difficult to estimate, and/or making any remedy at law or in damages inadequate. Accordingly, the Parties agree that they will be entitled to seek injunctive relief against the other Party in the event of any breach of any such terms of this Agreement, in addition to any other relief (including damages) available under this Agreement or under law.

8.6 Governing Law. The validity, interpretation, enforceability, and performance of this Agreement will be governed by and construed in accordance with the laws of the State of New York, U.S.A. without regard to the application of conflict laws.

8.7 Force Majeure. No Party will be liable to the other for any failure or delay in the performance of its obligations to the extent such failure or delay is caused by fire, flood, earthquakes, other elements of nature, acts of war, terrorism, riots, civil disorders, rebellions or revolutions, disease, epidemics, quarantines, pandemics, acts of government, a declared state of emergency, delays in visas, changes in laws and governmental policies, or other conditions beyond its reasonable control following execution of this Agreement. If the performance by either Party of any of its obligations under this Agreement (including making a payment) is prevented by any such circumstances, then such Party shall communicate the situation to the other as soon as possible, and the Parties shall endeavor to limit the impact to the Projects. The Parties agree to mitigate risks to the Research Projects and personnel, and to amend Research Projects period of performance and milestones if possible.

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date,

AIM  ImmunoTech, Inc.
By:	/s/ Thomas K. Equels	Date: 06/26/2020
Name:	Thomas  K.  Equels
Title:	Chief  Executive  Officer

Japanese  National  Institute  of  Infectious  Disease
By:	/s/ Hideki Hasegawa	Date: 07/01/2020
Name:	Hideki  Hasegawa,  M.D.,  Ph.D.
Title:	Director,  Influenza  Virus  Research  Center

Shionogi  &  Co.,  Ltd.
By:	/s/ Yasuyoshi Isou	Date: 06/26/2020
Name:	Yasuyoshi Isou, Ph.D.
Title:	Corporate  Officer
	Senior Vice President, CMC R&D Division

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Exhibit A — Research Projects

I. Studies to be conducted evaluating Ampligen as an *** vaccine adjuvant:

***

II. Necessary Amounts of Ampligen®:

***

EX-10.4

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EXHIBIT 10.4

CLINICAL TRIAL AGREEMENT

THIS AGREEMENT (“Agreement”), made as of the date of last signature (“Effective Date”), by and between ROSWELL PARK CANCER INSTITUTE CORPORATION D/B/A ROSWELL PARK COMPREHENSIVE CANCER CENTER (“Institution”), a New York State public benefit corporation, with its principal office located at Elm and Carlton Streets, Buffalo, NY 14263, employer of, Brahm Segal, MD (“Principal Investigator”), and AIM ImmunoTech Inc. (hereinafter “AIM”), a corporation with its principal place of business at 2117 SW Highway 484, Ocala, Florida 34473. The Institution and AIM together are referred to herein as the Parties.

WITNESSETH:

WHEREAS, institution is conducting a clinical Study (“Study”) to “Phase 1b Trial of Rintatolimod and IFNα Regimen in Cancer Patients with Mild or Moderate COVID-19 infection;” and

WHEREAS, AIM is providing Rintatolimod, also known as Ampligen® (“Study Drug”), information, and funding to Institution as a collaborator and partner of the Study and in support of the Study; and,

WHEREAS, Institution is a National Cancer Institute-designated Comprehensive Cancer Center and conducts clinical research studies designed to test, inter alia, methods of preventing cancer and

WHEREAS, AIM is an immuno-pharma company focused on the research and development of therapeutics to treat multiple types of cancer; and

WHEREAS, Institution has reviewed sufficient information regarding the Study Drug and has prepared the Protocol for the Study, and desires to conduct the Study as Study Sponsor.

NOW, THEREFORE, in consideration of the premises and for other good and lawful consideration, receipt of which is acknowledged, the Parties agree as follows:

1. Study Protocol

Institution will conduct the Study in accordance with “***” and any, subsequent amendments thereto, incorporated by reference herein (the “Protocol”). The Protocol fully details the clinical research activities and responsibilities to be undertaken, pursued, and followed with all due diligence, by Institution. The Protocol will be considered final after it is approved by the Institution’s Institutional Review Board or another designated Institutional Review Board (“IRB”). Institution will provide AIM with the final Protocol, which shall be considered Confidential Information pursuant to section 8 of this Agreement before commencement of the Study. Thereafter, the Protocol may be amended only following consultation with AIM and consent of the Institution and subsequent approval by the IRB.

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2. Conduct of Study

a.	Standards. Institution agrees to conduct the Study in accordance with generally accepted standards of professional medical practice, and in compliance with: (i) applicable standards of good clinical practice (“GCP”), (ii) the Protocol, and (iii) any and all applicable federal, state, and local laws, regulations, and any other relevant professional standards (“Applicable Laws”). Institution may subcontract its responsibilities under this Agreement to subsites (“Subsites”), provided that such Subsite shall be bound by the same or comparable obligations that Institution has agreed to assume in this Agreement for those specific obligations the Subsite agrees to undertake.
b.	ClinicalTrial.gov. AIM shall be listed on the clinicaltrial.gov website as a collaborator on this study. In the event, AIM and Institution agree that errant information posted on clinicaltrial.gov website regarding this Study, Institution will submit and request corrections in a timely manner.
c.	Conduct of Study. Institution further agrees that in the performance of the Study their employees and agents shall:

i.	Obtain from each Study subject a signed consent form (“Informed Consent Form”) in accordance with the Protocol and template informed consent form which has been approved by the IRB in accordance with 21 CFR §56, et, seq., or any successor thereto.
ii.	Perform the Study with reasonable care, diligence and skill and ensure that personnel participating in the Study are competent and have appropriate professional qualifications, training and experience.
iii.	Promptly notify the IRB of any failures to comply with the Protocol ( deviation where necessary to eliminate an immediate hazard(s) to Study subjects or from the Protocol arising out of medical necessity for Study subject safety shall not be deemed a failure to adhere to the Protocol),
iv.	Maintain complete and accurate records of the status and progress of the Study as required by the Protocol and with sufficient legibility and detail for use by regulatory agencies (“Study Records”). The Study Records shall include: case report forms; records reflecting the receipt and disposition of the Study Drug, including all dates, quantity and use by Study subjects; Study safety data required by the Protocol; records of Study subject identification; and clinical observations and laboratory tests as required in the Protocol.
v.	Institution will notify AIM within two (2) business days of receiving FDA authorization to initiate the Study.
vi.	Institution shall notify AIM within two (2) business days of when first treatment of Study Drug is administered and when first combination cohort Study Drug plus IntronA is administered pursuant to the Protocol. However, Institution is obligated to confirm in a confidential communication whether any dose-limiting toxicity was observed in the initial cohort before implementing the combination cohorts. For the avoidance of doubt, such communication shall be treated as Confidential Information, ( as defined below) by the Parties

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vii.	Ensure that Confidential Information (as defined below) generated by Institution, or its respective employees or agents is accurate, complete, and legible.
viii.	Ensure that Principal Investigator is not currently participating, and shall not participate, in any study which by its nature will preclude Principal Investigator from conducting the Study.
ix.	Ensure that neither it, nor any of its employees directly involved with the conduct of the Study, including the Principal Investigator, has ever been, or is currently:

● an individual who has been debarred by the FDA pursuant to 21 U.S.C. §335a(a) or (b) from providing services in any capacity to a person that has an approved or pending drug product application (a “Debarred Individual”), or an employer, employee, or partner of a Debarred Individual; or

●  a corporation, partnership, or association that has been debarred by the FDA pursuant to 21 U.S.C. § 33% (a) or (b) from submitting or assisting in the submission of any abbreviated drug application (a “Debarred Entity”), or an employee, partner, shareholder, member, subsidiary, or affiliate of a Debarred Entity; or

● an individual or corporation, partnership, or association that has been barred from participation in a Federal Health Care Program (as defined in 42 U.S.C. § 1320a (7b (f)), as amended from time to time or in any other governmental payment program.

x. Nothing in this agreement shall prevent AIM from conducting other clinical research studies intravenously or otherwise at other institutions and in other countries related to Ampligen for Cancer, or as an early onset Therapy /Prophylaxis or vaccine adjuvant for SARS-CoV-2/COVID 19. For the avoidance of doubt, nothing in this provision shall be construed as allowing AIM to utilize the protocols drafted by and belonging to Roswell Park and its employees.

3. Study Drug

a.	AIM will furnish an agreed upon number of vials of Study Drug, approximately *** vials, *** to the Institution pursuant to this Agreement solely for use in the Protocol. ***
b.	Institution will store, handle and administer Study Drug under adequately controlled conditions and in accordance with the Protocol, and Study Drug information provided by AIM.
c.	Institution will return or destroy Study Drug in accordance with written directions of AIM and with Institution’s drug destruction policies. The Study Drug delivered pursuant to this Agreement shall not be sold, distributed or otherwise made available by the Institution to any other party for any other purpose, without the written consent of AIM, which written consent shall not be unreasonably withheld.
d.	Institution will not bill any Study subject or any third parties for any service or activity that is funded in accordance with this Agreement or any Study Drug that is supplied by AIM under this Agreement.
e.	The Parties acknowledge that the Study Drug is being provided “as is,” without any warranties or representations of any sort, express or implied, including without limitation warranties of merchantability and fitness for a particular use. AIM makes no representation and provides no ‘warranty that the use of the Study Drug in the Study will not infringe any patent or other proprietary right of third parties.

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4. Privacy Laws

Institution will ensure that any of its employees, including Principal Investigator, and persons performing the Study on the Institution’s behalf will comply with all applicable federal and New York state laws and regulations governing privacy and confidentiality of health information, including without limitation, the Health Insurance Portability and Accountability Act of 1996 and implementing regulations (“HIPAA”), as well as confidentiality agreements entered into by the Parties.

5. Adverse Events

a.	Adverse Events. Institution will ensure that its personnel comply with notification procedures provided in the Protocol and Applicable Law, including time limits in the reporting of adverse events of pregnancy, serious adverse events including death, unexpected adverse events and severe adverse events determined to be related or possibly related to the Study Drug. Institution shall notify IRB and AIM's Medical Monitor (email at SAE@aimimmuno.com) of any of the above "Adverse Events" on a quarterly basis. Adverse event reporting to AIM shall be completed on a quarterly basis and will be initiated upon the written request of AIM to the Institution's counsel.
b.	Reporting by AIM. AIM shall notify Institution promptly and in writing of any information that could affect the safety of Study subjects or their willingness to continue participation, influence the conduct of the Study, or alter the IRB’s approval to continue the Study. AIM shall communicate such information to Institution and Principal Investigator that may directly affect the Study subject’s safety or medical care for a period of at least two (2) years following the end of the Study. Subject to other terms of this Agreement, Institution, through its Principal Investigator and/or IRB, as appropriate, will inform Study subjects of additional information in accordance with IRB direction.
e.	Reporting by Institution: Institution shall notify AIM of adverse events in section 5.a above. In addition, Institution shall provide IND Safety Reports to AIM at the time of report to FDA or as soon as possible thereafter, according to FDA Reporting time frame specified in Protocol. At study completion, Institution will provide final safety data / listing of all adverse events (including but not limited to severity, relationship to each study medication, to the COVID-19, or to baseline co-morbidities, i.e., cancer, and start and stop dates of each event). Adverse events that result in death shall also capture the above information.

6. Term, Termination, and Replacement of Principal Investigator

a. Term. This Agreement shall commence on the Effective Date and shall continue until the completion of the Study or such other date as may be agreed to by the Parties (“Term”).

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THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND

(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.

b. Termination Prior to Expiration. This Agreement may be terminated, in whole or in part, by the Parties prior to the expiration of its Term upon written notice, if any of the following conditions occur:

i.	By either party, effective upon notice, if authorization and approval to conduct the Study is withdrawn by the FDA or other regulatory authority.
ii.	By either party, effective upon notice, if in the reasonable and good faith opinion of Principal Investigator, Institution, and/or AIM the Study should be terminated for safety reasons.
iii.	By AIM, effective upon notice, if Principal Investigator or Institution becomes disbarred
iv.	Upon written mutual agreement or upon thirty (30) days’ notice for uncured breach of this Agreement.

c.

Termination of this Agreement shall not affect any rights or obligations of the Parties that occurred prior to termination of this Agreement or rights or remedies of either party available at law or in equity.

d.

Replacement of Principal Investigator. In the event Principal Investigator becomes either unwilling or unable to perform the duties required by this Agreement, upon request by AIM, Institution will cooperate, in good faith and expeditiously, to find a replacement. The Institution’s cooperation in finding an acceptable replacement does not negate their obligations to perform this Agreement up to the effective date of termination.

7. Payment

The Parties acknowledge that Health Research Inc., Roswell Park Division, a New York non-profit corporation, is authorized to manage funds from clinical research, on behalf of Institution, has an office of Elm and Carlton Streets, Buffalo, New York 14263 and is the Institution’s payee (“Payee”), In consideration for performance of the Study and as a collaborator of this Study, AIM will provide funding to Institution, through its Payee and will provide Institution $***. Payments to be distributed as follows:

Study: ***

8. Confidential Information

a. Definition. “Confidential Information” will mean all information or data provided by one party to another that a reasonable person familiar with the area would recognize as confidential or proprietary information and materials (whether or not patentable) identified in writing as “Confidential.” In addition, Confidential Information includes, but is not limited to clinical data expressly required to be collected by the Study Protocol or pursuant to the terms of this Agreement, the Investigational Drug/Device Brochure, Study Records, preclinical data and formulation information, patent applications, audit reports, study reports, formulas and manufacturing processes, provided or made available to either party.

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THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND

(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.

b. Obligations. Each party shall maintain in strict confidence all of the other party’s Confidential Information and not disclose or disseminate to any third party or use for any purpose other than the performance of the Study. Such Confidential Information shall remain the confidential and proprietary property of the disclosing party, and, shall be disclosed only on a need-to-know basis to employees and agents who are bound by confidentiality terms at least as strict as those herein.

c, Non-applicability. The foregoing obligation of non-disclosure shall not apply to Confidential Information to the extent such information:

i.	was available in the public domain at the time of disclosure or subsequently becomes publicly available through no fault of the receiving party;
ii.	is disclosed to receiving party by a third party entitled to disclose such information not subject to any obligation of confidentiality, as shown by prior written records
iii.	is already known to receiving party prior to disclosure hereunder, as shown by prior written records; or
iv.	is independently developed by receiving personnel without reliance on Confidential Information, as shown by prior written records

d.	Allowable Disclosures. Confidential information may be disclosed to the extent it is required by Applicable Laws to be disclosed to US federal, state, or local authorities and agencies including the Food and Drug Administration (“FDA”) or the Securities and Exchange Commission (“SEC”), provided that such disclosure is subject to all applicable governmental or judicial protection available for like material and reasonable advance notice of such request is given to the other party.
e.	Equitable Remedies. Parties acknowledge and agree that ally violation of the terms of this Agreement relating to the disclosure or use of Confidential Information may result in irreparable injury and damage to disclosing party not adequately compensable in money damages, and for which disclosing party will have no adequate remedy at law. Nondisclosing party acknowledges and agrees that if those disclosure terms are violated, then disclosing party has a right to seek injunctions, orders, or decrees to protect the Confidential Information.
f.	Period of Confidentiality. The obligations of the Parties under this Section 8 shall continue until ten (10) years from the expiration or termination of this Agreement.
g.	Recordkeeping. In accordance with Applicable Law, upon completion of the Study or earlier termination of this Agreement pursuant to section 6, all Study Drug and related materials and all Confidential Information that were furnished under this Agreement will be returned, except for record copies which nondisclosing Party is required to retain and a copy maintained to monitor compliance with this Agreement, Neither Party shall be required to delete or destroy any electronic back-up tapes or other electronic back-up files that have been created solely by their automatic or routine archiving and back-up procedures, to the extent created and retained in a manner consistent with its or their standard archiving and back-up procedures.

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(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.

9. Publication

a,	For purposes of this Agreement, Scientific Publication means any scientific publication or medical communication regarding Study results in any form that is intended for disclosure to third parties, including, without limitation, manuscripts, abstracts, posters, slides or other materials used for presentations.
b.	Scientific Publications should be published in a timely manner, in accordance with industry standards, and present scientific information in an accurate and balanced way that does not exclude or inappropriately downplay negative safety or health information. Authorship related to Scientific Publications shall be determined in accordance with and governed by the criteria defined by the International Committee of Medical Journal Editors (ICMJE) Recommendations for the Conduct, Reporting, Editing, and Publication of Scholarly Work in Medical Journals.
c.	Institution shall provide and shall require Principal Investigator to provide AIM with a draft of any proposed Scientific Publication at least thirty (30) days prior to submission of such publication for AIM to ascertain whether any patentable subject matter or Confidential Information (other than the results of the Study generated hereunder) are disclosed therein. AIM shall provide a response to Institution within thirty (30) days after receipt of the draft Scientific Publication ( “Review Period”). Institution shall delay any proposed Scientific Publication an additional sixty (60) days in addition to the Review Period in the event AIM so requests to enable AIM to secure patent or other proprietary protection (“Delay Period”). Institution agrees to (i) keep the proposed Scientific Publication confidential until expiration of the Review Period and any Delay Period, and (ii) delete Confidential Information (other than the results of the Study generated hereunder) from any Scientific Publication. In the event that Institution and AIM differ in their conclusions or interpretation of data in the Scientific Publication, the Parties shall use good faith efforts to attempt to resolve such differences through appropriate scientific debate, but, subject to the removal of Confidential Information (other than the results of the Study generated hereunder), Institution, as applicable, shall retain control over the final version of the Scientific Publication.
	Nothing herein affords AIM editorial rights with respect to Institution’s publications.

10. Intellectual Property

a. Pre-existing Property. Institution understands and acknowledges that the Study Drug, Ampligen® (rintatolimod) is the property of AIM and/or that it may be subject to certain intellectual property rights owned by or licensed to AIM including patents, patent applications that may issue as patents in the future, trademarks and trademark applications. All rights to Ampligen® (rintatolimod) belong to AIM. This Agreement shall not be deemed or construed to convey, transfer, or license any of such intellectual property rights to Institution, other than the limited rights necessary to permit Institution to conduct the Study during the term of this Agreement, Further, all intellectual property belonging to either party prior to the execution of this Agreement (“Pre-existing Property”) shall remain the separate property of that party and nothing contained in this Agreement shall be deemed to grant either directly or by implication, estoppel or otherwise any license under any patents, patent applications, trademarks, trade secrets, or other proprietary interests to Pre-existing Property of the other party.

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b. New Inventions. Ownership and rights to any new and patentable or unpatentable discovery, technology, know-how or other intellectual property arising from the performance of the Protocol (hereinafter “Other Inventions”) shall be determined by the application of U.S. patent laws.

11. Audits and Inspections

a.

Institution shall notify AIM, or if instructed, its representative, promptly if the FDA or other duly authorized authority requests permission to or does inspect Institution’s facilities or research records during the term of this Agreement. Institution will make reasonable efforts to ensure the Principal Investigator and other requested personnel, are available for any meeting or conference calls with the FDA concerning the approval of the Study Drug.

b.

Institution will permit AIM or AIM’s representatives to examine or audit the financial records related to such work, agreed upon times during regular business hours. , Institution shall provide AIM’s representatives with reasonable access to such records. Information regarding Institution’s systems, the information therein, and any incidental information that would be understood by a reasonable professional in the field to be confidential shall remain the property of Institution and will be treated as Institution’s Confidential Information by AIM’s representatives.

12. Use of Names

AIM and Institution shall not disclose publicly the terms of this Agreement, except to the extent required by academic policies or law. No news release, publicity or other public announcement, either written or oral, regarding this Agreement or performance hereunder or results arising from the Study, shall be made by a Party without the prior written approval of the other except as set forth in this section. Written approval shall not be required for the purposes of (i) announcing FDA authorization to initiate the Study following disclosure by Institution to AIM in a press release or (ii) when stating in part that the Study is supported by AIM in a press release.

13. Independent Contractors

Each party to this Agreement shall act as an independent contractor and shall not be construed for any purpose as the partner, agent, employee, servant, or representative of the other party. Accordingly, the employee(s) of one party shall not be considered to be employee(s) of the other party, and neither party shall enter into any contract or Agreement with a third party which purports to obligate or bind the other party.

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14. Complete Agreement. Amendment. Notice

The Parties agree that this Agreement constitutes the sole, full, and complete Agreement by and between the Parties concerning the Protocol and supersedes all other written and oral agreements and representations between the Parties with respect to the items herein, except where in conflict with the Protocol, No amendments, changes, additions, deletions, or modifications to or of this Agreement shall be valid unless reduced to writing and signed by the Parties. Any requests for changes or amendments or other notices or communications concerning this Agreement should be in writing or shall be deemed to have been given when mailed by personal delivery, nationally recognized courier, and shall be deemed effective only upon receipt, and forwarded to the following:

To AIM:	AIM ImmunoTech Inc,
	2117 SW Highway 484
	Ocala, Florida 34473
	Attn: David Strayer, MD
To Institution:	Roswell Park Cancer Institute Corporation d/b/a Roswell Park
	Comprehensive Cancer Center
	Elm and Carlton Streets Buffalo NY 14263
	Attn: VP, Clinical Research Services
With a copy to:	Attn: General Counsel (same address)
To Investigator:	Brahm Segal, MD
	Pawel Kalinski, MD, PhD (same address)

15. Compliance with Governing Law

The validity, interpretation, enforceability, and performance of this Agreement will be governed by and construed in accordance with the laws of the state of New York without regard to the application of conflict laws.

16. Reporting

Institution will provide AIM with the final study report (including all adverse events with severity and relationship to Study Drug) and any interim reports, such interim reports are prepared by Institution in its sole discretion (“Reports”). In order to maintain the integrity of the Study as required by the Protocol. Reports shall be considered Confidential Information and shall not be disclosed for any public dissemination without Institution’s prior written consent.

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Such interim data reports may include, interim efficacy data necessary to maintain the integrity of the study as dictated by the protocol and interim analysis conducted by a statistician to inform on futility. Such interim and final reports are not intended for disclosure other than to AIM employees who require the information in order to complete their duties. For the avoidance of doubt, such interim and final data reports shall not be disclosed publicly and shall not be disclosed to non-AIM employees or consultants or for broad public dissemination without Institution’s prior written consent; in addition all such reports may be submitted without Institution’s consent by AIM to the FDA (or other regulatory agency or governmental authority) for purposes of Emergency Approval, Orphan Drug Status, Fast Track Status and New Drug Approval consideration upon receipt due to the urgency of the current COVID-I9 pandemic.

In addition, upon completion of the Study once the results are finalized, the results will be published in accordance with Section 9 of this Agreement in a fashion that is publicly available. AIM will be entitled to use the published results as they deem necessary. Nothing in this provision shall be deemed to provide AIM with editorial rights on the nature of the results that will be published.

Additionally, Institution agrees that to the extent that there is positive data that would support FDA Fast Track status or an Emergency Approval, Institution will submit the interim data to AIM, in Institution’s reasonable discretion and to allow AIM to submit and file for necessary approval with the appropriate agencies.

17. Insurance

The Parties shall maintain insurance or a program of self-insurance in commercially reasonable amounts for the nature of services being performed.

18. Binding, Effect

This Agreement shall be binding upon the Parties, their legal representatives, successors, and assigns. The obligations of the Parties contained in Sections 5 (Adverse Events and Study subject Injury), 8 (Confidential Information), 9 (Publication), 10 (Intellectual Property), shall survive the termination or expiration of this Agreement.

19. Waiver

Failure to insist upon compliance with any of the terms and conditions of this Agreement shall not constitute a general waiver or relinquishment of any such terms or conditions, and the same shall remain at all times in full force and effect.

20. Assignment

Neither Party shall assign or transfer any rights, obligations or duties under this Agreement.

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21. Force Majeure

21.1 Non-fulfillment, delay or omission by any of the Parties as regards of any and all of the obligations imposed by this Agreement will not be considered a breach of the Agreement, nor will it entail any liability when it is the result of Force Majeure. Force Majeure will be understood to comprise any extraordinary event, unforeseeable, or if foreseeable, an inevitable event, such as labor disputes, fire, mobilization, public health emergencies, insurrection, war, natural disasters, the prohibition of a government to not supply to a national company or organization, damages caused by the application of extraterritorial laws, embargoes and blockades imposed by third countries to any of the Parties, among others, that may occur or remain in force after the signing of this Agreement which may impede the partial or total fulfillment by the Parties of the obligations pursuant to this Agreement. The Party that invokes Force Majeure must notify the other Party in writing, within a period of thirty (30) days following the date of occurrence of the event or events constituting Force Majeure. This notification must be supported by a document issued for a competent authority and shall be duly certified. The document containing the above-mentioned information will be sent by courier delivery service within a period of thirty (30) days following the date of the initial notification.

21.2 If the event or events defined as causes determining an exemption from responsibility or Force Majeure persist for more than ninety (90) consecutive days, the Parties will, within the following sixty (60) days, meet in the most convenient place to examine all issues in the spirit of finding the best solution, and agree on all the steps, terms and conditions required to normalize the situation, without prejudice to the contracted obligations thus affected.

21.3 In the event that no such Agreement is reached on the steps, terms or conditions within the aforementioned period of sixty (60) days or in the event that such an Agreement is reached but not fulfilled under the terms and conditions agreed upon, the Party affected by the non-fulfillment may request the termination of the Agreement, and must be accepted by the other Party and will be in force the fulfillment of the pending payments.

22. Severability

If any term or condition of this Agreement, the deletion of which would not adversely affect the receipt of any material benefit by a party hereunder, shall be held illegal, invalid or unenforceable, the remaining terms and conditions of this Agreement shall not be affected thereby and such terms and conditions shall be valid and enforceable to the fullest extent permitted by law.

23. Miscellaneous

No delay by a Party to exercise any right or a non-exercise of it by the Party under this Agreement or the applicable law shall operate as a waiver of such right. The exercise in part of a right shall not preclude any other exercise or future exercise of such right or remedy deriving from it.

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24. Authority

Each of the Parties hereto certifies that the person signing below on such party’s behalf has the authority to enter into this Agreement, and that this Agreement does not violate any existing agreement or obligation of such party.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the last date and year below written.

AIM ImmunoTech, Inc.
Name:	s/Thomas K. Equels
Title:	CEO, President
Date:	7/6/2020

Roswell Park Cancer Institute Corporation d/b/a Roswell Park Comprehensive Cancer Center

Name:	s/Michael B. Sexton, Esq.
Title:	Chief Administration Officer and General Counsel
Date:	June 24, 2020

Read and Acknowledged as Payee:

Health Research Inc., Roswell Park Division

Name:	s/John Blandino
Title:	Director of Health Research, Inc.
	Roswell Park Division
Date:	7/3/2020

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EXHIBIT 10.5

Response to AIM ImmunoTech’s Request for
Proposal for Services to Support a Phase I/II Clinical Trial for Ampligen in Healthy Volunteers

August 4, 2020

 

 

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Important Information

This proposal for a Project Work Order is provided to AIM ImmunoTech, Inc (AIM) for the purpose of its evaluation and the information contained herein is not intended to be used by (AIM) for any other purpose than the subject of this proposal. (AIM) agrees not to voluntarily disclose any of the information contained herein to any third party without the prior written consent of Amarex Clinical Research, LLC (Amarex).

This proposal document is subject to negotiation and, when the final version is signed by both parties, shall create a Project Work Order with legal obligations on the part of both parties.

Proposal Expiration Date: August 22, 2020

Prepared for:

AIM ImmunoTech Inc

2117 SW Highway 484

Ocala, FL 34473

Prepared by:

Amarex Clinical Research, LLC

20201 Century Boulevard, Suite 450

Germantown, MD 20874

Phone: (301) 528-7000

Fax: (301) 528-2300

Amarex’s Response to AIM’s Request for Proposal	4 August 2020
Amarex Clinical Research, LLC Confidential and Proprietary Information	Page 2

 

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Key Study Assumptions

Amarex understands that AIM would like to conduct a Phase I/II study in healthy volunteers of Ampligen to prevent COVID-19 infection.

Amarex will provide:

● Project Management

● Data Management

● Clinical Site Management

● Randomization

● Statistics

● Safety and Pharmacovigilance

● Data Management Committee (DMC)

● Medical Writing

As previously discussed, Amarex has identified a clinical site that will be able to handle the Phase I portion of the study. The site also believes they will be able to handle the Phase II portion of the study, as long as the enrollment is around 150 subjects. Additional sites may be added at AIM’s discretion. It is assumed that all lab work can be managed and run through the site. Costs provided by the site and their projected enrollment times have been included in this proposal. The storage of serum samples is not included in the budget.

This proposal is based on the information provided by AIM and is subject to change based on the finalized protocol. We have assumed that the Phase I will have 4 cohorts with 6 subjects each conducted in parallel, with 3 active cohorts and 1 placebo cohort. It is assumed the subjects will receive treatments over a 28 day period. A follow up period of 28 days will occur after last treatment. A DMC will occur after the last treatment visit is complete to determine if the Phase II should commence. Amarex will conduct a remote initiation and interim monitoring visits during this Phase.

The Phase II estimates 3 cohorts of 50 subjects each, 2 active cohorts and 1 placebo. An initial DMC will be held after the first 6 subjects in each cohort are enrolled and treated. Once the DMC clears the study to continue, the remaining 132 subjects will be enrolled across the 3 cohorts. It is anticipated that some of the interim monitoring visits will be held at the site for this part of the study. The schedule of events is expected to be nearly identical between the two Phases, and therefore no additional programming would be needed to setup the EDC for the Phase II portion. A final analysis has been quoted in the budget below, but it is understood that AIM may like to conduct another analysis for sample size purposes prior to closing enrollment.

Amarex’s Response to AIM’s Request for Proposal	4 August 2020
Amarex Clinical Research, LLC Confidential and Proprietary Information	Page 3

 

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Study Parameters

 Following is a list of study parameters Amarex has used in order to prepare this proposal response:

Table 3. Study Parameters Used to Prepare This Proposal

STUDY PARAMETERS	Phase I	Phase II
Number of sites	***	***
Number of countries participating in study	***	***
Number of subjects screened	***	***
Number of subjects randomized/enrolled	***	***
SITE MONITORING AND AUDITING	***	***
Number of site qualification visits	***	***
Number of site initiation visits	***	***
Number of interim monitoring visits	***	***
Number of site closeout visits	***	***
Number of study sites audited	***	***
COMMITTEE FORMATION, INVESTIGATOR MEETING
Number of DMC meetings to review data	***	***
Number safety listings for DMC meetings (uniques/replicates)	***	***
Number of Investigator meetings	***	***
MEDICAL MONITORING
Estimated number of SAEs	***	***
Estimated number of reportable events	***	***
DATA MANAGEMENT
Estimated Number of Adverse Events and Concomitant Medications to code	***	***
Number of unique pages in eCRF	***	***
Number of central labs	***	***
BIOSTATISTICS
Number of stat. tables for interim analysis (uniques/replicates)	***	***
Number of listings for interim analysis (uniques/replicates)	***	***
Number of graphs for interim analysis (uniques/replicates)	***	***

Amarex’s Response to AIM’s Request for Proposal	4 August 2020
Amarex Clinical Research, LLC Confidential and Proprietary Information	Page 4

 

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Number of stat. tables for final analysis (uniques/replicates)	***	***
Number of listings for final analysis (uniques/replicates)	***	***
Number of graphs for final analysis (uniques/replicates)	***	***
CLINICAL STUDY REPORT WRITING
Write interim clinical trial report	***	***
Write final clinical trial report	***	***
PROJECT MANAGEMENT
Number of months for project setup	***	***
Number of months for enrollment/treatment	***	***
Number of months for follow-up	***	***
Number of months for close out	***	***
Number of months of project management (including set up and close out)	***	***

*More sites may be added to the Phase II, if desired. Additional sites will increase the Phase II cost, and an amendment can be signed to make any such adjustments.

**Assumes DMC after Phase I will review the Interim Analysis report.

Amarex’s Response to AIM’s Request for Proposal	4 August 2020
Amarex Clinical Research, LLC Confidential and Proprietary Information	Page 5

 

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Study Roles and Responsibilities

Clearly-defined roles and responsibilities are essential to project success, and Amarex will work closely with AIM to make sure all project tasks are covered. It is our current understanding that the tasks associated with this trial are assigned as shown in Table 1, below.

Table 1. Study Tasks and Responsibilities

Service	NA	Amarex	AIM
PROJECT MANAGEMENT
Meetings, Training, and Study Start Up
Prepare for and Attend Kick-off Meeting & Study Start-Up		X
Communication and Tracking
Coordinate Amarex’s Internal Project Team		X
Communicate with Sponsor (includes standard teleconferences with activities reports, emails, faxes)		X
Manage Central Labs/Vendors	X
Tracking Systems Setup		X
Management of Payments to Sites, IRBs, and/or Vendors		X
REGULATORY SERVICES	X
PRODUCT MANAGEMENT
Support Drug Shipments		X
DATA MANAGEMENT SERVICES
Data Management
Develop Data Management Plan		X
Standard Data Cleaning (Run edit checks; generate, process, and track data queries)		X
Develop Edit Specifications		X
Data Operations
Program Edit Checks		X
Set Up Transfer of Final SAS Data to Sponsor (in Amarex’s format)		X
Perform Data Transfer to Sponsor (Including export of final SAS Analysis Datasets)		X
EDC Support
Conduct Electronic Data Capture Site Training		X

Amarex’s Response to AIM’s Request for Proposal	4 August 2020
Amarex Clinical Research, LLC Confidential and Proprietary Information	Page 6

 

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Prepare EDC Manual and Completion Instructions (includes up to 1 round of edits)		X
Prepare User Acceptance Testing (UAT) Management Plan		X
Conduct QC of EDC Database		X
Provide Electronic Data Capture Help Desk		X
EDC PROGRAMMING
Development of CRF Screen Shots		X
EDC Programming		X
EDC Maintenance		X
CLINICAL SITE SERVICES
Site Identification and Contracting
Prepare Site Identification Plan	X
Perform Site Identification	X
Present Sites for Site Qualification Visits	X
Develop Site Contracts (includes up to 2 rounds of edits)		X
Negotiate Site Contract CTAs		X
Negotiate Site Contract Budgets		X
IRB and Ethics Committee Management		X
Site Regulatory Document Collection
Set Up Trial Master File		X
Set Up, File, and Track Investigator/Site Regulatory Files		X
Conduct Ongoing Regulatory Document Collection, Review, Tracking, and Maintenance of Trial Master File		X
Monitoring Services
Prepare Study Operations Manual (includes up to 2 rounds of edits)		X
Prepare Monitoring Guidelines (includes up to 2 round of edits)		X
Perform Site Management		X
Prepare for Site Visit		X
Prepare Documents for Site Initiation		X
Conduct Site Qualification Visits		X
Conduct Study Initiation Visits		X
Conduct Interim Monitoring Visits		X
Conduct Close Out Visits		X

Amarex’s Response to AIM’s Request for Proposal	4 August 2020
Amarex Clinical Research, LLC Confidential and Proprietary Information	Page 7

 

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SAFETY
Set Up Tracking System and SAE Start Up		X
Prepare Safety Management Plan		X
Collect, Process, Evaluate, Prepare Narrative, and Report SAEs (CIOMS or MedWatch)		X
Medical Monitoring (24/7)		X
Distribute SAE “Dear Dr.” Letters to Sites		X
Submit Safety Reports to Regulatory Authorities		X
Reconcile Safety Database with Clinical Database		X
DATA MONITORING COMMITTEE (DMC)
Establish and Manage 3-Member DMC		X
Develop DMC Charter (includes up to 1 round of edits)		X
Organize, Conduct and Participate in DMC Meetings		X
Prepare Statistical Analysis Plan for DMC	X
Program Tables, Listings and Graphs for DMC		X
Prepare Statistical Report for DMC Meetings		X
RANDOMIZATION AND ENROLLMENT		X
BIOSTATISTICS
Review the Protocol and Prepare Statistical Analysis Plan (1 draft and 1 final, mock templates for TLGs, and data set conventions)		X
Program Tables, Listings and Graphs for Interim and Final Analysis		X
Conduct QC Audit of Stats		X
Production and Review of Tables, Listings, and Graphs for Interim and Final Analysis		X
MEDICAL WRITING
Prepare Interim Clinical Study Report (non-ICH Format) - includes up to one round of edits		X
Prepare Final Clinical Study Report Shell (ICH Format) - includes up to one round of edits		X
Prepare Final Clinical Study Report (ICH Format) with Appendices - includes up to two rounds of edits		X
Conduct QC Audit of Clinical Study Report		X

Amarex’s Response to AIM’s Request for Proposal	4 August 2020
Amarex Clinical Research, LLC Confidential and Proprietary Information	Page 8

 

EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT

THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND

(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.

Proposed Amarex Direct Services Budget

***

Estimated Pass-Through Costs

***

Estimated Third Party Costs

***

Payment Schedule for Services

The payment terms and obligations for the services outlined in this proposal are as follows:

Payment Description	Percentage Due	Phase I Amount		Phase II Amount
Execution of Project Work Order	20%	$	***	$	***
Monthly Unit-Based Billing	Balance Due	$	***	$	***
TOTAL		$	514,391.29	$	650,247.87

The Execution payment will be credited back to AIM as monthly invoices hit certain milestones against the expected total cost of Amarex services. Milestones will be on the *** totals have been billed to AIM. AIM will be billed each month for units of service performed in that month. If the study is terminated early, AIM will only be responsible for the units of work performed, and any remaining funds from the execution fee that have not been applied will be refunded to AIM.

Payment Schedule for Pass-Through Expenses

Pass-through expenses such as approved travel, document shipping and printing, and other reasonable expenses will be invoiced to AIM at cost. These expenses will be supported by acceptable documentation or actual receipts and will be invoiced on a monthly basis.

Payment Terms

***

Amarex’s Response to AIM’s Request for Proposal	4 August 2020
Amarex Clinical Research, LLC Confidential and Proprietary Information	Page 9

EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT

THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND

(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.

Project Work Order Signatures

In Witness Whereof, AIM ImmunoTech Inc. and Amarex Clinical Research, LLC agree to all items and payment terms and conditions presented in this Project Work Order as indicated by the signatures below of their respective duly authorized representatives as of the “Effective Date”, appearing below.

ACKNOWLEDGED, ACCEPTED, AND AGREED TO:

For and on behalf of AIM ImmunoTech Inc.:		For and on behalf of Amarex Clinical Research, LLC:
Print Name:	Peter Rodino	Print Name:	Kazem Kazempour
Signature:	/s/ Peter Rodino	Signature:	/s/ Kazem Kazempour
Title:	COO and General Counsel	Title:	President and CEO (Member)
Effective Date:	08/06/20	Effective Date:

Amarex’s Response to AIM’s Request for Proposal	4 August 2020
Amarex Clinical Research, LLC Confidential and Proprietary Information	Page 10

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002

I, Thomas K. Equels, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of AIM ImmunoTech Inc. (the “Registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.	The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: August 14, 2020
	/s/ Thomas K. Equels
	Thomas K. Equels, Esq.
	Chief Executive Officer & President

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002

I, Ellen M. Lintal, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of AIM ImmunoTech Inc. (the “Registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.	The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: August 14, 2020
	/s/ Ellen M. Lintal
	Ellen M. Lintal
	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AIM ImmunoTech Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas K. Equels, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: August 14, 2020
	/s/ Thomas K. Equels
	Thomas K. Equels, Esq.
	Chief Executive Officer & President

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AIM ImmunoTech Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ellen M. Lintal, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: August 14, 2020
	/s/ Ellen M. Lintal
	Ellen M. Lintal
	Chief Financial Officer

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2020	Aug. 13, 2020
Cover [Abstract]
Entity Registrant Name	AIM ImmunoTech Inc.
Entity Central Index Key	0000946644
Document Type	10-Q
Document Period End Date	Jun. 30, 2020
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business Flag	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		39,690,012
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2020

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 33,908	$ 1,470
Marketable securities, short term	1,093	7,308
Funds receivable from sale of New Jersey net operating loss		776
Accounts receivable, net	46	44
Prepaid expenses and other current assets	118	848
Total current assets	35,165	10,446
Property and equipment, net	6,785	7,116
Right of use assets, net	130	152
Patent and trademark rights, net	1,381	1,151
Marketable securities, long term	5,308
Other assets	1,354	1,354
Total assets	50,123	20,219
Current liabilities:
Accounts payable	255	472
Accrued expenses	325	403
Current portion of operating lease liabilities	32	38
Current portion of financing obligation	221	214
Total current liabilities	833	1,127
Long-term liabilities:
Operating lease obligation	98	114
Notes payable, net		3,910
Financing obligation arising from sale leaseback transaction (Note 14)	1,993	2,104
Redeemable warrants	207	57
Commitments and contingencies
Stockholders' equity:
Series B Convertible Preferred Stock, stated value $1,000 per share, 8,000 shares designated, 737 and 778 shares issues and outstanding, respectively	737	778
Common stock, par value $0.001 per share, authorized 350,000,000 shares; issued and outstanding 34,250,615 and 10,386,754, respectively	34	10
Additional paid-in capital	381,427	340,228
Accumulated other comprehensive income (loss)	63
Accumulated deficit	(335,269)	(328,109)
Total stockholders' equity	46,992	12,907
Total liabilities and stockholders' equity	$ 50,123	$ 20,219

XML

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2020	Dec. 31, 2019
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	350,000,000	350,000,000
Common stock, shares issued	34,250,615	10,386,754
Common stock, shares outstanding	34,250,615	10,386,754
Series B Convertible Preferred Stock [Member]
Preferred stock, par value	$ 1,000	$ 1,000
Preferred stock, shares authorized	8,000	8,000
Preferred stock, shares, issued	737	778
Preferred stock, shares, outsanding	737	778

XML

Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenues:
Total revenues	$ 40	$ 29	$ 85	$ 29
Costs and expenses:
Production costs	200	215	404	446
Research and development	1,463	1,096	2,343	2,024
General and administrative	1,717	1,942	3,986	3,709
Total costs and expenses	3,380	3,253	6,733	6,179
Operating loss	(3,340)	(3,224)	(6,648)	(6,150)
Interest and other income	46	16	67	36
Interest expense and other finance costs	(249)	(99)	(571)	(344)
Extinguishment of notes payable	142		142	(250)
Convertible note valuation adjustment		(74)		16
Settlement of litigation		260		260
Redeemable warrants valuation adjustment	31	1,085	(150)	1,039
Net loss	(3,370)	(2,036)	(7,160)	(5,393)
Other comprehensive income (loss):
Unrealized loss on marketable securities	67		63
Net comprehensive loss	$ (3,303)	$ (2,036)	$ (7,097)	$ (5,393)
Basic and diluted loss per share	$ (0.11)	$ (1.07)	$ (0.19)	$ (3.53)
Weighted average shares outstanding, basic and diluted	29,970,197	1,898,703	37,073,765	1,529,948
United States [Member]
Revenues:
Clinical treatment programs	$ 40	$ 4	$ 83	$ 4
Europe [Member]
Revenues:
Clinical treatment programs		$ 25	$ 2	$ 25

XML

Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Series B Preferred [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Accumulated Deficit [Member]	Total
Balance at Dec. 31, 2018		$ 1	$ 323,749		$ (318,576)	$ 5,174
Balance, shares at Dec. 31, 2018		1,107,607
Shares issued for: Common stock issuance, net of costs		$ 1	6,522			6,523
Shares issued for: Common stock issuance, net of costs, shares		893,054
Shares issued for: Convertible note originations shares			1,473			1,473
Shares issued for: Convertible note originations shares, shares		204,246
Deemed dividends			(135)			(135)
Equity-based compensation			426			426
Equity-based compensation, shares		1,932
Redeemable warrants			(2,787)			(2,787)
Shares issued to pay accounts payable			46			46
Shares issued to pay accounts payable , shares		8,091
Series B preferred shares issued, net of offering costs	$ 5,312					5,312
Series B preferred shares converted to common shares	(4,091)					(4,091)
Warrant modification
Net comprehensive loss					(5,393)	(5,393)
Balance at Jun. 30, 2019	$ 1,221	$ 2	329,294		(323,969)	6,548
Balance, shares at Jun. 30, 2019		2,214,930
Balance at Dec. 31, 2019	$ 778	$ 10	340,228		(328,109)	12,907
Balance, shares at Dec. 31, 2019		10,386,754
Shares issued for: Common stock issuance, net of costs		$ 24	40,797			40,821
Shares issued for: Common stock issuance, net of costs, shares		23,859,099
Equity-based compensation			346			346
Equity-based compensation, shares
Shares issued to pay accounts payable			10			10
Shares issued to pay accounts payable , shares		4,762
Series B preferred shares converted to common shares	$ (41)					(41)
Warrant modification			46			46
Net comprehensive loss				63	(7,160)	(7,097)
Balance at Jun. 30, 2020	$ 737	$ 34	$ 381,427	$ 63	$ (335,269)	$ 46,992
Balance, shares at Jun. 30, 2020		34,250,615

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities:
Net loss	$ (7,160)	$ (5,393)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment	340	380
Redeemable warrants valuation adjustment	150	1,039
Fair value of convertible note adjustment		(16)
Change in convertible debt - refinancing		20
Extinguishment of notes payable	142	344
Warrant modification	46
Amortization of patent, trademark rights	67	35
Changes in ROU assets	22	22
Equity-based compensation	346	426
Realized (loss) gain on sale of marketable securities	63
Amortization of finance and debt issuance costs	42	71
Change in assets and liabilities:
Accounts and other receivables	774	1,018
Prepaid expenses and other current assets	730	66
Lease liability	(22)	(28)
Accounts payable	(217)	38
Accrued interest expense	230	(178)
Accrued expenses	(78)
Net cash used in operating activities	(4,525)	(4,234)
Cash flows from investing activities:
Proceeds from sale of marketable securities	8,497
Purchase of marketable securities	(7,590)	(379)
Purchase of property and equipment	(9)	(63)
Purchase of patent and trademark rights	(297)	(184)
Net cash provided by (used in) investing activities	601	(626)
Cash flows from financing activities:
Payment of note payable	(4,283)
Financing obligation payments	(176)	(169)
Proceeds from sale of stock, net of issuance costs	40,821	5,689
Net cash provided by financing activities	36,362	5,520
Net increase in cash and cash equivalents	32,438	660
Cash and cash equivalents at beginning of period	1,470	299
Cash and cash equivalents at end of period	33,908	959
Supplemental disclosures of non-cash investing and financing cash flow information:
Unrealized loss on marketable securities	63
Conversion of series B preferred	41	4,092
Conversion of note payable into shares		1,473
Stock issued to settle accounts payable	10	46
Operating Lease - Right of Use Assets		$ 148

XML

Business and Basis of Presentation

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business and Basis of Presentation

Note 1: Business and Basis of Presentation

AIM ImmunoTech Inc. and its subsidiaries (collectively, “AIM” or “Company”) are an immuno-pharma company headquartered in Ocala, Florida and focused on the research and development of therapeutics to treat multiple types of cancers, various 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 US.

A global pandemic due to a novel strain of coronavirus (COVID-19) has occurred. Since the late 2019 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 is also being researched as part of a potential 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.

In February 2020, AIM filed three provisional patent applications related to Ampligen in the Company’s efforts toward joining the global health community in the fight against the deadly coronavirus. The Company’s three provisional patent applications include: 1) Ampligen as a therapy for the coronavirus; 2) Ampligen as part of a proposed intranasal universal coronavirus vaccine that combines Ampligen with inactivated coronavirus, conveying immunity and cross-protection and; 3) a high-volume manufacturing process for Ampligen. Under the Patent Cooperation Treaty of 1970, which provides international protections for patents, the three provisional patent applications can convert to international patent applications based on the date of their filings.

In early April 2020, the Company entered into a Material Transfer Agreement with Shenzhen Smoore Technologies located in Shenzhen China, the world’s largest manufacturer of inhalation devices. Pursuant to this agreement, the Company is providing Smoore with Ampligen and Smoore will be conducting in vitro tests using its porous ceramic atomizer technology. Initial testing will include evaluation of Ampligen with regard to safety and characterization of the inhaler vapor properties. Additional testing will study the particle size of various Ampligen concentrations in aqueous solutions obtainable using Smoore’s technology. The goal of these studies is to establish a reproducible method to obtain an Ampligen-containing atomized mist that can deliver biologically active Ampligen deep into the lung airways of humans. The Company is currently awaiting study details from Smoore. The Ampligen is scheduled to be shipped to Smoore for testing, pending resolution of various China inbound import regulatory requirements. The Company will provide additional updates as they become available.

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, Amarex Clinical Research LLC (“Amarex”), which will provide regulatory support, including managing a clinical trial testing Ampligen’s potential as a COVID-19 prophylaxis via intranasal delivery.

In addition, the Company has joined with ChinaGoAbroad (CGA) to facilitate the entry of Ampligen into the People’s Republic of China (PRC) for use as a prophylactic/early-onset therapeutic against COVID-19. CGA is a member-based online information platform and offline advisory firm serving to facilitate two-way international transactions relating to the PRC in collaboration with the China Overseas Development Association. The relationship with ChinaGoAbroad is ongoing.

On May 11, 2020, the FDA authorized an IND for Roswell Park Cancer Institute to conduct a Phase 1/2a study of a regimen of Ampligen and interferon alpha in cancer patients with mild or moderate COVID-19 infections. This new clinical trial, sponsored by the Roswell Park in collaboration with the Company, will test the safety of this combination regimen in patients with cancer and mild to moderate COVID-19, and the extent to which this therapy will promote clearance of the SARS-CoV-2 virus from the upper airway. It is planned that the phase 1/2a study will enroll up to 80 patients in two stages. Phase 1 will see 12-24 patients receiving both Ampligen and interferon alfa-2b at escalating doses. Once that initial phase is complete, further study participants will be randomized to two arms: one receiving the two-drug combination and a control group who will not receive Ampligen or interferon alfa but will receive best available care. The Company intends to be a financial sponsor of the study and will provide Ampligen at no charge for this study.

In March 2020, the Japanese National Institute of Infectious Diseases (“NIID”) initiated preliminary laboratory testing of Ampligen as a potential treatment for COVID-19. On July 1, 2020, we entered into a trilateral material transfer and research agreement with the NIID and Shionogi & Co., Ltd. (“Shionogi”), one of Japan’s premier pharma companies to test the Company’s drug Ampligen as a potential vaccine adjuvant for COVID-19. Under the agreement, we have and will continue to provide Ampligen samples for various research projects. Per this agreement, the details of all preclinical and clinical results will remain confidential until released by NIID and Shionogi.

On July 6, 2020, we entered into a clinical trial agreement with Roswell Park Comprehensive Cancer Center pursuant to which Roswell Park will conduct a Phase 1/2 trial of Ampligen (rintatolimod) in combination with Interon-A (interferon alfa-2b), in cancer patients with COVID-19, the disease caused by the SARS-CoV-2 coronavirus.

Recently, the Company also entered into a material transfer agreement with the University of Rochester which is planning a series of in vitro experiments in which it will be testing the direct antiviral activity of Ampligen on SARS-CoV-2, as well as the mechanism of action. The Company also entered into a specialized services agreement with Utah State University that has supplied Ampligen to support the University’s Institute for Viral Research in its research into SARS-CoV-2 and testing is underway.

In June of 2020, AIM filed a provisional patent application for, among other discoveries, the use of Ampligen® as a potential early-onset therapy for the treatment of COVID-19 induced chronic fatigue.

Many survivors of the first SARS-CoV-1 epidemic in 2003 continued to report chronic fatigue, difficulty sleeping and shortness of breath months after recovering from the acute illness. These patients are commonly referred to as “Long Haulers.” Now there is increasing evidence that patients with COVID-19 can develop a similar, ME/CFS-like illness. AIM plans to investigate the possible activity of Ampligen in the “Long Hauler” population, including a plan to modify our AMP-511 program to include Long Haulers.

The COVID-19 pandemic has significantly impacted the economic conditions in the U.S., accelerating during the first half of March. The ultimate impact of the pandemic on the Company’s results of operations, financial position, liquidity, or capital resources cannot be reasonably estimated at this time.

AIM is committed to a focused business plan oriented toward finding senior co-development partners with the capital and expertise needed to commercialize the many potential therapeutic aspects of its drug, Ampligen, and its approved drug, Alferon N Injection.

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, 2019 and 2018, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed on March 30, 2020.

On May 29, 2019, the Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation to effect a reverse stock split at a ratio in the range of 1-for-20 to 1-for-50. The Company’s Board of Directors approved the implementation of the reverse stock split at a ratio 1-for-44 which took effect on June 10, 2019. All share and per share amounts for prior periods have been revised to give retroactive effect to this reverse stock split.

XML

Net Loss Per Share

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Net Loss Per Share

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 5,758 and 0 and 526,266 and 840,380 are excluded from the calculation of diluted net loss per share for the three months and six months ended June 30, 2020 and 2019, respectively, since their effect is antidilutive due to the net loss.

XML

Equity-Based Compensation

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

Equity-Based Compensation

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. Options granted in the six months ended June 30, 2020 and 2019 were 0 and 39,267, respectively.

Stock option for employees’ activity during the six months ended June 30, 2020 is 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, 2020		127,747		$	29.61		6.41	$	—
Granted		—			—		—		—
Forfeited		(1,892	)		20.45		—		—
Expired		(568	)		348.48		—		—
Outstanding June 30, 2020		125,287		$	28.30		6.00	$	—
Vested and expected to vest June 30, 2020		125,287		$	28.30		6.00	$	—
Exercisable June 30, 2020		70,649		$	16.68		3.63	$	—

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, 2020		68,283		$	23.79		7.48	$	—
Granted		—			—		—		—
Vested		(13,645	)		14.61		—		—
Unvested June 30, 2020		54,638		$	26.08		8.25	$	—

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, 2020		66,675		$	24.09		5.47	$	—
Granted		—			—		—		—
Forfeited		—			—		—		—
Expired		(76	)		75.26		—		—
Outstanding June 30, 2020		66,599		$	23.75		4.98	$	—
Vested and expected to vest June 30, 2020		66,599		$	23.75		4.98	$	—
Exercisable June 30, 2020		9,694		$	12.41		8.08	$	—

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, 2020		66,675		$	12.80		5.59	$	—
Granted		—			—		—		—
Expired		—			—		—		—
Vested		(9,770	)		11.95		—		—
Unvested June 30, 2020		56,905		$	12.95		5.15	$	—

Stock-based compensation expense was approximately $346,000 and $426,000 for the six months ended June 30, 2020 and 2019 resulting in an increase in general and administrative expenses, respectively.

As of June 30, 2020, and 2019, respectively, there was approximately $442,000 and $1,101,000 of unrecognized equity-based compensation cost related to options granted under the Equity Incentive Plan.

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Inventories

6 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

Inventories

Note 4: Inventories

The Company uses the lower of first-in, first-out (“FIFO”) cost or net realizable value method of accounting for inventory.

Commercial sales of Alferon in the U.S. will not resume until new batches of commercial filled and finished product are produced and released by the U.S. Food and Drug Administration (“FDA”). While the facility is approved by the FDA under the Biologics License Application (“BLA”) for Alferon, this status will need to be reaffirmed by an FDA pre-approval inspection. The Company will also need the FDA’s approval to release commercial product once it has submitted satisfactory stability and quality release data. Currently, the manufacturing process is on hold and there is no definitive timetable to have the facility back online. Due to the Company extending the timeline of Alferon production to in excess of one year, the Company reclassified Alferon work in process inventory of $1,095,000 to other assets within our balance sheet as of June 30, 2020 and December 31, 2019 and due to the high cost estimates to bring the facility back online. Prior to completing validation, the Company plans on modernizing the manufacturing process to make it lower-cost and higher volume. If, following modernization, the Company is unable to gain the necessary FDA approvals related to the manufacturing process and/or final product of new Alferon inventory, its operations most likely will be materially and/or adversely affected. Considering these contingencies, there can be no assurances that the approved Alferon N Injection product will be returned to production on a timely basis, if at all, or that if and when it is again made commercially available, it will return to prior sales levels.

The Alferon work in process is currently compliant with our internal protocols and is stored in a controlled state. All of these factors contribute to the potential sale of the Alferon work in process, after validation lots have been produced and including a successful pre-approval inspection.

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Marketable Securities

6 Months Ended

Jun. 30, 2020

Marketable Securities [Abstract]

Marketable Securities

Note 5: Marketable Securities

Marketable securities consist of mutual funds and debt securities. As of June 30, 2020, and December 31, 2019, it was determined that none of the marketable securities had an other-than-temporary impairment. At June 30, 2020 and December 31, 2019, all securities were measured as Level 1 instruments of the fair value measurements standard (see Note 13: Fair Value). As of June 30, 2020, and December 31, 2019 the Company held $6,401,000 and $7,308,000 in debt and equity securities, respectively.

Debt securities classified as available for sale consisted of:

June 30, 2020
(in thousands)

Securities	Amortized Cost		Gross Unrealized Gains /(Losses)		Gross Unrealized Gains /(Losses)			Fair Value		Marketable Securities
U.S. Treasury notes	$	1,772	$	—	$	(4	)	$	1,768	$	1,768
U.S. Government mortgage backed securities		2,001		—		(4	)		1,997		1,997
Corporate bonds		2,565		—		71			2,636		2,636
Totals	$	6,338	$	—	$	63		$	6,401	$	6,401

As of December 31, 2019 the Company held no debt securities.

The following presents available-for-sale securities’ gross unrealized losses and fair value aggregated by the short- and long-term maturity.

June 30, 2020
(in thousands)

	Less than 12 Months				12 Months or More					Total
Securities	Fair Value		Gross Unrealized Gains		Fair Value		Gross Unrealized Gains			Fair Value		Gross Unrealized Gains
U.S. Treasury notes	$	605	$	—	$	1,163	$	(4	)	$	1,768	$	(4	)
U.S. Government mortgage backed securities		—		—		1,997		(4	)		1,997		(4	)
Corporate bonds		488		—		2,148		71			2,636		71
Totals	$	1,093	$	—	$	5,308	$	63		$	6,401	$	63

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Accrued Expenses

6 Months Ended

Jun. 30, 2020

Payables and Accruals [Abstract]

Accrued Expenses

Note 6: Accrued Expenses

Accrued expenses consist of the following:

	(in thousands)
	June 30, 2020		December 31, 2019
Compensation	$	78	$	94
Professional fees		101		73
Clinical trial expenses		10		56
Other expenses		136		180
	$	325	$	403

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Property and Equipment

6 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

Property and Equipment

Note 7: Property and Equipment

	(in thousands)
	June 30, 2020			December 31, 2019
Land, buildings and improvements	$	10,547		$	10,547
Furniture, fixtures, and equipment		5,123			5,114
Total property and equipment		15,670			15,661
Less: accumulated depreciation		(8,885	)		(8,545	)
Property and equipment, net	$	6,785		$	7,116

Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets, ranging from three to thirty-nine years.

On March 16, 2018, the Company sold land and a building for $4,080,000 and concurrently entered into an agreement to lease the property back for ten years. The lease payments are initially $408,000 per year for two years through March 31, 2020 and will escalate in subsequent years. (See Note 14: Financing Obligation Arising from Sale Leaseback Transaction for more details on the sale leaseback of the property and equipment).

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Stockholders' Equity

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

Stockholders' Equity

Note 8: 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 Directors. Of our authorized preferred stock, 250,000 shares have been designated as Series A Junior Participating Preferred Stock and 8,000 shares have been designated as Series B Convertible Preferred Stock. The Series B Convertible Preferred Stock has a stated value $1,000 per share.

The Company is authorized to issue 8,000 Series B Convertible Preferred Stock, no par value, stated value $1,000 per share. As of June 30, 2020, and December 31, 2019, the Company had 737 and 778 shares of Series B Convertible Preferred Stock outstanding, respectively. Each such Preferred Share is convertible into 114 shares of common stock.

Pursuant to a registration statement relating to a 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 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 warrants are exercisable for five years after the date of issuance. The net proceeds realized from the rights offering were approximately $4,700,000. During the six months ending June 30, 2020, 41 shares of Series B Convertible Preferred Stock were converted into common stock.

(b) Common Stock

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.

In June 2019, the Company effected a 44-to-1 reverse stock split of the outstanding shares, in order to become compliant with the NYSE regulations. This did not affect the number of authorized shares. All references herein to shares of common stock, options, warrants and preferred stock have been adjusted to give effect to this reverse stock.

On June 11, 2019, the board of directors approved up to $500,000 for all directors, officers and employees to buy Company shares from the Company at the market price. As of June 30, 2019, the Company has issued 67,767 shares of its common stock at prices between $4.03 and $4.37 for a total of $274,000. This plan expired August 19, 2019. On September 27, 2019, the Company closed an 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, 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 six months ended June 30, 2020, 1,870,000 of the Pre-funded Warrants were exercised and 8,873,860 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.

On May 2, 2019, the Company entered into a modification agreement with certain redeemable warrant holders of the August 23, 2017 and April 20, 2018, respectively. The warrant exercise price was reduced to $6.60 and 103,410 warrants were exercised, reducing the liability attributed to the warrants by approximately $404,000, and the Company realized about $682,000 in net proceeds, resulting in an addition to stockholders’ equity of approximately $1,086,000, offset by a deemed dividend of $135,000.

On July 19, 2019, the Company entered into a new Equity Distribution Agreement (the “2019 EDA”) with Maxim, pursuant to which it may sell from time to time, shares of its Common Stock through Maxim, as agent (the “Offering”). The 2019 EDA replaced the EDA with Maxim. On July 19, 2019, the Company filed a prospectus supplement with the SEC in connection with the offering under the 2019 EDA under its existing Registration Statement on Form S-3 (File No 333-226059) related to the sale of shares of its common stock having an aggregate offering price of up to $4,508,244, the maximum number of Shares permitted to be sold under the 2019 EDA at that time. As of December 31, 2019, the Company had sold 905,869 shares under the 2019 EDA for gross proceeds of $2,553,079 which includes a 3.5% fee to Maxim of $89,358. On March 3, 2020, the Company filed a new prospectus supplement with SEC increasing the aggregate offering price of shares of common stock it could sell under the 2019 EDA $10,867,245. On March 10, 2020, the Company filed another prospectus supplement with SEC increasing the aggregate offering price under the 2019 EDA to $18,833,739. During the six months ended June 30, 2020, the Company sold 12,580,926 shares under the 2019 EDA for total gross proceeds of $32,878,403, which includes a 3.5% fee to Maxim of $1,150,744. On June 15, 2020, the Company filed another prospectus supplement with SEC increasing the aggregate offering price under the 2019 EDA to $19,406,552. During the quarter ended June 30, 2020, the Company sold 5,964,197 shares under the 2019 EDA for total gross proceeds of $15,560,537, which includes a 3.5% fee to Maxim of $544,619.The actual number of shares, that the Company can sell, and the proceeds to be received therefrom under the 2019 EDA are dependent upon the market price of its Common Stock.

The 2018 Equity Incentive Plan, effective September 12, 2018, 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 is reserved for potential issuance pursuant to awards under the 2018 Equity Incentive Plan. Unless sooner terminated, the 2018 Equity Incentive Plan will continue in effect for a period of 10 years from its effective date. On October 17, 2018, the Board of Directors issued 26,324 options to the officers and directors at the exercise price of $9.68 expiring in 10 years, and on November 14, 2018, the Board of Directors issued 23 options to each employee, officer and director at the exercise price of $9.68 expiring in ten years. On January 28, 2019, 27,570 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.

As of June 30, 2020, and December 31, 2019, there were 34,250,615 and 10,386,754 shares outstanding, respectively.

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Cash and Cash Equivalents

6 Months Ended

Jun. 30, 2020

Cash and Cash Equivalents [Abstract]

Cash and Cash Equivalents

Note 9: Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

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Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2020

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

Note 10: Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Measurement of Credit Losses on Financial Instruments, and subsequent amendments to the guidance, ASU 2018-19 in November 2018 and ASU 2020-02 in February 2020. The standard significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace today’s “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. The amendment will affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2018-19 clarifies that receivables arising from operating leases are accounted for using lease guidance and not as financial instruments. The amendments should be applied on either a prospective transition or modified-retrospective approach depending on the subtopic. This ASU will be effective for us beginning the first day of our 2023 fiscal year. Early adoption is permitted. We are evaluating the impact of adoption of this ASU on our financial condition, results of operations and cash flows, and, as such, we are not able to estimate the effect the adoption of the new standard will have on our financial statements.

Other recent accounting pronouncements issued by the FASB did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

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Convertible Note Payable

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Convertible Note Payable

Note 11: Convertible Note Payable

On September 28, 2018, the Company entered into a $3,170,000 10% Secured Convertible Promissory Note (the “IR Note”) with Iliad Research and Trading, L.P. (the “Holder”), which was issued to the Holder in conjunction with 500,000 shares of common stock (the “Origination Shares”). The Company collected $3,000,000 in cash from the Holder during September 2018 and the remainder $170,000 was retained by the Holder for the Holder’s legal fees of $20,000 for the issuance of the IR Note and the Original Issue Discount of $150,000. The Company incurred $210,000 in third-party fees directly attributed to the issuance of the IR Note. The Company promised to pay the principal amount, together with guaranteed interest at the annual rate of 10%, with principal and accrued interest on the IR Note due and payable on September 28, 2019 (unless converted under terms and provisions as set forth within the IR Note. The IR Note provides the Holder with the right to convert, at any time, all or any part of the outstanding principal and accrued but unpaid interest into shares of the Company’s common stock at a conversion price of $0.30 per share. In addition, beginning on March 28, 2019, the IR Note also provides the Holder with the right to redeem all or any portion of the IR Note (“Redemption Amount”). The payments of each Redemption Amount may be made, at the option of the Company, in cash, by converting such Redemption Amount into shares of common stock (“Redemption Conversion Shares”), or a combination thereof. The number of Redemption Conversion Shares equals the portion of the applicable Redemption Amount being converted divided by the lesser of $0.30 or 80% of the lowest Volume Weighted Average Price (“VWAP”) during the ten (10) trading days immediately preceding the applicable measurement date (the “Market Price”). The Purchase Agreement requires the Company to reserve at least 8,900,000 shares of common stock from its authorized and unissued common stock to provide for all issuances of common stock under the IR Note. However, the IR Note provides that the aggregate number shares of common stock issued to the Holder under the IR Note and Purchase Agreement shall not exceed 19.99% of the total number of shares of common stock outstanding as of the closing date unless the Company has obtained stockholder approval of the issuance. The Origination Shares were to be returned to the Company in the event that the Company could provide within 30 days of the closing of the transaction certain requested assets as security for repayment of the IR Note. The security was not provided so the Origination Shares remained with the Holder.

The Company determined the IR Note should be recorded at fair value with subsequent changes in fair value recorded in earnings. This conclusion is based on the redemption conversion feature, which allows the Holder to trigger the redemption of the IR Note for cash or conversion of the IR Note for common shares prior to its maturity date at a price of the lesser of $0.30 per share or the Market Price as defined within the IR Note. The choice of cash redemption or conversion of the IR Note for common shares is at the option of the Company. This feature may require the Company to issue a variable number of common shares to settle the IR Note which was determined to have a predominantly fixed monetary value at inception.

On March 13, 2019, the Company amended the Purchase Agreement pursuant to which it issued the Convertible IR Note (the “Amendment”). The Amendment extends the maturity of the IR Note to September 28, 2020. In addition, the redemption conversion rates were revised to a price to be determined by mutual agreement between the Company and the Holder. In the event that the Company and the Holder are unable to reach a mutually agreeable price, the Company will be required to pay the applicable redemption amount in cash. The maximum amount of the IR Note the Lender will be able to redeem in any given calendar month is $300,000.

The Company evaluated the Amendment in accordance with ASC 470, Debt (“ASC 470”) and determined the Amendment is considered an extinguishment of the existing debt and issuance of net debt. As a result, the Company derecognized the liability and recorded a loss on the extinguishment of debt of $345,000 in 2019 which was equal to the difference between the reacquisition price of the debt and the net carrying amount (amount due at maturity, adjusted for unamortized discounts) of the extinguished debt. Subsequently, the amended note was recorded in accordance with ASC 480 at the fair value that the note was issued with changes in fair value recorded through earnings at each reporting period.

There were a series of debt conversions during 2019 which partially converted $1,400,000 of the $3,408,000 convertible debt, as amended, into stockholders’ equity, adding approximately $1,400,000 to stockholders’ equity. The number of shares issued in these conversions were 204,246 shares. In October 2019 and November 2019 respectively, the lender redeemed $300,000 pursuant to the terms of the modification. In connection with the IR Note, the Company recorded a gain equal to $127,000 for the year-end December 31, 2019. See Note 12: Long Term Debt.

Interest expense associated with the IR Note was $0 for June 30, 2020 and $50,000 for the six months ended June 30, 2019.

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Long Term Debt

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Long Term Debt

Note 12: Long Term Debt

On August 5, 2019, the Company issued a Secured Promissory Note (the “CV Note”) with Chicago Venture Partners, L.P. (the “CV”). The Note has an original principal amount of $2,635,000, bears interest at a rate of 10% per annum and will mature in 24 months, unless earlier paid in accordance with its terms. The Company received proceeds of $1,900,000 after an original issue discount and payment of Lender’s legal fees. Pursuant to a Security Agreement between the Company and the Lender, repayment of the Convertible Note is secured by substantially all of our assets other than its intellectual property.

During the three months ending June 30, 2020, the Holder made redemptions of $650,000 reducing the principal to $1,985,000. On May 29, 2020, the Company paid off the outstanding CV note consisted of principal of $1,985,000, and accrued interest payable of $220,000. The net payment of $1,795,000, less the write off of the origination discount of $369,000 and issuance costs of $6,000, resulted in a gain on extinguishment of $66,000.

On December 5, 2019, the Company issued a secured Promissory Note (the “AS Note”) to Atlas Sciences L.P. (“AS”). The AS Note has an original principal amount of $2,175,000, bears interest at a rate of 10% per annum and will mature in 24 months, unless earlier paid in accordance with its term. In conjunction with the AS Note, the Company utilized $1,650,000 of the net proceeds from the AS Note to pay off in full our obligation to Iliad, an entity with affiliations to AS, pursuant to the IR Note.

The Company evaluated the IR Note transaction in accordance with ASC 470, Debt (“ASC 470”) and determined the exchange is considered an extinguishment of the existing debt and issuance of new debt. As a result, the Company derecognized the liability and recorded a loss on the extinguishment of debt of $250,000 which was equal to the difference between the reacquisition price of the debt and the net carrying amount (amount due at maturity, adjusted for unamortized discounts) of the extinguished debt. Subsequently, the AS Note was recorded in accordance with ASC 470 whereby the Company will record a liability equal to the proceeds received on December 5, 2019.

On June 19, 2020, the Company paid off the outstanding AS note consisted of original principal of $2,175,000, and accrued interest payable of $122,000 less origination discount of $376,000 and issuance costs of $7,000, with a net note payable of $1,838,000, including a gain on extinguishment of $76,000.

In, conjunction with the financing, the Company used the proceeds to pay the outstanding IR Note. See Note 11: Convertible Note Payable.

Interest expense associated with the CV Note and AS Note for the period ended June 30, 2020 was approximately $116,000 and $106,000, respectively.

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Fair Value

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value

Note 13: Fair Value

The Company is required under U.S. GAAP to disclose information about the fair value of all the Company’s financial instruments, whether or not these instruments are measured at fair value on the Company’s consolidated balance sheets.

The Company estimates that 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. The Company also has certain warrants with a cash settlement feature in the unlikely occurrence of a Fundamental Transaction, namely (1) a merger or consolidation with another person; (2) sale of substantially all of its assets; (3) holders of common stock sell 50% or more of outstanding shares; (4) the Company effects an exchange of all its securities for other securities, cash or property, and (5) the Company effects a stock purchase agreement or business combination for more than 50% of outstanding shares. The fair value of the redeemable warrants (“Warrants”) related to the Company’s August 2016, February 2017, June 2017, August 2017, April 2018 and March 2019 common stock warrant issuances, are calculated using a Monte Carlo Simulation. While the Monte Carlo Simulation is one of a number of possible pricing models, the Company has determined it to be industry accepted and fairly presented the fair value of the Warrants. As an additional factor to determine the fair value of the Put’s liability, the occurrence probability of a Fundamental Transaction event was factored into the valuation.

The Company recomputes the fair value of the Warrants at the issuance date and the end of each quarterly reporting period. Such value computation includes subjective input assumptions that are consistently applied each period. If the Company were to alter its assumptions or the numbers input based on such assumptions, the resulting fair value could be materially different.

The Company utilized the following assumptions to estimate the fair value of the August 2016 Warrants:

	June 30, 2020			December 31, 2019
Underlying price per share	$	2.48		$	0.54
Exercise price per share	$	82.50		$	82.50
Risk-free interest rate		0.16	%		1.58	%
Expected holding period		1.17			1.67
Expected volatility		145	%		96	%
Expected dividend yield		-			-

The Company utilized the following assumptions to estimate the fair value of the February 2017 Warrants:

	June 30, 2020			December 31, 2019
Underlying price per share	$	2.48		$	0.54
Exercise price per share		$ 30.25 – 33.00			$ 30.25-33.00
Risk-free interest rate		0.16	%		1.60	%
Expected holding period		2.09 – 2.10			2.59-2.60
Expected volatility		115	%		89	%
Expected dividend yield		-			-

The Company utilized the following assumptions to estimate the fair value of the June 2017 Warrants:

	June 30, 2020			December 31, 2019
Underlying price per share	$	2.48		$	0.54
Exercise price per share	$	27.50		$	27.50
Risk-free interest rate		0.16	%		1.60	%
Expected holding period		1.92			2.42
Expected volatility		120	%		91	%
Expected dividend yield		-			-

The Company utilized the following assumptions to estimate the fair value of the August 2017 Warrants:

	June 30, 2020			December 31, 2019
Underlying price per share	$	2.48		$	0.54
Exercise price per share		19.80		$	19.80
Risk-free interest rate		0.16	%		1.59	%
Expected holding period		1.68			2.18
Expected volatility		125	%		94	%
Expected dividend yield		-			-

The Company utilized the following assumptions to estimate the fair value of the April 2018 Warrants:

	June 30, 2020		December 31, 2019
Underlying price per share	$	2.48	$	0.54
Exercise price per share	$	17.16	$	17.16
Risk-free interest rate		0.17 – 0.20 %		1.59%-1.65 %
Expected holding period		0.32 – 3.32		0.82-3.82
Expected volatility		100% - 155 %		86%-124 %
Expected dividend yield		-		-

The Company utilized the following assumptions to estimate the fair value of the March 2019 Warrants:

	June 30, 2020			December 31, 2019
Underlying price per share	$	2.48		$	0.54
Exercise price per share	$	8.80		$	8.80
Risk-free interest rate		0.22	%		1.66	%
Expected holding period		3.69			4.19
Expected volatility		100	%		87	%
Expected dividend yield		-			-

The significant assumptions using the Monte Carlo Simulation approach for valuation of the Warrants are:

(i)	Risk-Free Interest Rate. The risk-free interest rates for the Warrants are based on U.S. Treasury constant maturities for periods commensurate with the remaining expected holding periods of the warrants.
(ii)	Expected Holding Period. The expected holding period represents the period of time that the Warrants are expected to be outstanding until they are exercised. The Company utilizes the remaining contractual term of the Warrants at each valuation date as the expected holding period.
(iii)	Expected Volatility. Expected stock volatility is based on daily observations of the Company’s historical stock values for a period commensurate with the remaining expected holding period on the last day of the period for which the computation is made.
(iv)	Expected Dividend Yield. Expected dividend yield is based on the Company’s anticipated dividend payments over the remaining expected holding period. As the Company has never issued dividends, the expected dividend yield is $0.00 and this assumption will be continued in future calculations unless the Company changes its dividend policy.
(v)	Expected Probability of a Fundamental Transaction. The possibility of the occurrence of a Fundamental Transaction triggering a Put right is extremely remote. As discussed above, a Put right would only arise if a Fundamental Transaction (1) is an all cash transaction; (2) results in the Company going private; or (3) is a transaction involving a person or entity not traded on a national securities exchange. The Company believes such an occurrence is highly unlikely because:

a.	The Company only has one product that is FDA approved but which will not be available for commercial sales for 18 months at the earliest;
b.	The Company flagship product is approved only in Argentina for Severely Debilitated Chronic Fatigue Syndrome patients;
c.	The Company may have to perform additional clinical trials for FDA approval of its flagship product;
d.	Industry and global market conditions continue to include uncertainty, adding risk to any transaction;
e.	Available capital for a potential buyer in a cash transaction continues to be limited;
f.	The nature of a life science company is heavily dependent on future funding and high costs, including research & development;
g.	The Company has minimal revenues streams which are insufficient to meet the funding needs for the cost of operations or construction at their manufacturing facility; and
h.	The Company’s Rights Agreement and Executive Agreements make it less attractive to a potential buyer.

With the above factors utilized in analysis of the likelihood of the Put’s potential Liability, the Company estimated the range of probabilities related to a Put right being triggered as:

Range of Probability	Probability
Low	0.5	%
Medium	1.0	%
High	5.0	%

The Monte Carlo Simulation has incorporated a 5.0% probability of a Fundamental Transaction to date for the life of the securities.

(vi)	Expected Timing of Announcement of a Fundamental Transaction. As the Company has no specific expectation of a Fundamental Transaction, for reasons stated above, the Company used a discrete uniform probability distribution over the Expected Holding Period to model the potential announcement of a Fundamental Transaction occurring during the Expected Holding Period.
(vii)	Expected 100 Day Volatility at Announcement of a Fundamental Transaction. An estimate of future volatility is necessary as there is no mechanism for directly measuring future stock price movements. Daily observations of the Company’s historical stock values for the 100 days immediately prior to the Warrants’ grant dates, with a floor of 100%, were utilized as a proxy for the future volatility.
(viii)	Expected Risk-Free Interest Rate at Announcement of a Fundamental Transaction. The Company utilized a risk-free interest rate corresponding to the forward U.S. Treasury rate for the period equal to the time between the date forecast for the public announcement of a Fundamental Transaction and the Warrant expiration date for each simulation.
(ix)	Expected Time Between Announcement and Consummation of a Fundamental Transaction. The expected time between the announcement and the consummation of a Fundamental Transaction is based on the Company’s experience with the due diligence process performed by acquirers and is estimated to be six months. The Monte Carlo Simulation approach incorporates this additional period to reflect the delay Warrant Holders would experience in receiving the proceeds of the Put.

While the assumptions remain consistent from period to period (e.g., using historical stock prices), the numbers input change from period to period (e.g., the actual historical prices input for the relevant period).

The Company applies FASB ASC 820 that defines fair value, establishes a framework for measuring fair value in U.S. GAAP, and expands disclosures about fair value measurements. The guidance does not impose any new requirements around which assets and liabilities are to be measured at fair value, and instead applies to asset and liability balances required or permitted to be measured at fair value under existing accounting pronouncements. The Company measures its warrant liability for those warrants with a cash settlement feature at fair value.

FASB ASC 820-10-35-37 establishes a valuation hierarchy based on the transparency of inputs used in the valuation of an asset or liability. Classification is based on the lowest level of inputs that is significant to the fair value measurement. The valuation hierarchy contains three levels:

● Level 1 – Quoted prices are available in active markets for identical assets or liabilities at the reporting date. Generally, this includes certain U.S. and government agency debt and equity securities that are traded in an active market.

● Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Generally, this includes debt and equity securities that are not traded in an active market.

● Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or other valuation techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. As of June 30, 2020, the Company has classified the warrants with cash settlement features as Level 3. Management evaluates a variety of inputs and then estimates fair value based on those inputs. As discussed above, the Company utilized the Monte Carlo Simulation Model in valuing these warrants.

The table below presents the balances of assets and liabilities measured at fair value on a recurring basis by level within the hierarchy as:

	(in thousands) As of June 30, 2020
	Total		Level 1		Level 2		Level 3
Assets:
U. S. Treasury notes	$	1,768	$	1,768	$	—	$	—
U.S. Government mortgage backed Securities		1,997		1,997		—		—
Corporate bonds		2,636		2,636		—		—
Marketable Securities	$	6,401	$	6,401	$	—	$	—
Liabilities:
Redeemable warrants	$	207	$	—	$	—	$	207

	(in thousands) As of December 31, 2019
	Total		Level 1		Level 2		Level 3
Assets:
Mutual Fund	$	7,308	$	7,308	$	—	$	—
Liabilities:
Redeemable warrants	$	57	$	—	$	—	$	57

The changes in Level 3 Liabilities measured at fair value on a recurring basis are summarized as follows (in thousands):

Redeemable warrants:
Balance at December 31, 2019	$	57
Fair value adjustment		150
Balance at June 30, 2020	$	207

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Financing Obligation Arising from Sale Leaseback Transaction

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Financing Obligation Arising from Sale Leaseback Transaction

Note 14: Financing Obligation Arising from Sale Leaseback Transaction

On March 16, 2018, the Company sold land and a building for $4,080,000 and concurrently entered into an agreement to lease the property back for ten years at $408,000 per year for two years through March 31, 2020. The lease payments will increase 2.5% per year for the next three years through March 31, 2023 and the lease payments will increase 3% for the remaining five years through March 31, 2028. The sale of the property includes an option to repurchase the property at fair value which does not permanently transfer all the risks and rewards of ownership to the buyer. The option to repurchase the property also would be at a higher price than the sales price and is considered likely based upon the Company’s plans going forward. Because the sale of the property includes the option to repurchase the property and includes the above attributes, the transaction was accounted for as a financing transaction whereby the Company debited cash for the amount of cash received and credit financing obligation. The Company will continue to report the property as an asset and the property will continue to be depreciated. The fair value repurchase option is accounted for similar to a share appreciation mortgage. Accordingly, the guidance in ASC 470-30 related to participating mortgage loans would be applied to the liability. If the option expires unused, the sale is recognized at that time. The gain on the sale would be the excess of the liability (current fair value of the property) over its carrying amount. If the option is exercised, the cash payment by the seller-lessee is to pay off the financing obligation. As part of the sale of this building, warrants were provided to the buyer for the purchase of up to 73,314 shares of Company common stock for a period of five years at an exercise price of $17.05 per share, 125% of the closing price of the common stock on the NYSE American on the date of execution of the letter of intent for the purchase. The warrants cannot be exercised to the extent that any exercise would result in the purchaser owning in excess of 4.99% of our issued and outstanding shares of common stock.

The Property and Equipment in Note 7 above are the property and equipment involved in this transaction. Depreciation on the building will continue until a sale has been recognized.

Future minimum payments required under the Financing Obligation and the balance of the Finance Obligation as of June 30, 2020 are as follows:

During the year:

	(in thousands)
2020	$	209
2021		426
2022		437
2023		449
2024		463
Thereafter		1,567
Total of payments		3,551
Less deferred issuance costs		(205	)
Less discount on debt instrument		(881	)
Less imputed interest		(251	)
Total balance		2,214
Less current portion		(221	)
Long term portion	$	1,993

Interest expense relating to this financing agreement was $31,000 for the six months ended June 30, 2020 and $35,000 for the six months ended June 30, 2019.

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Leases

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases

Note 15: Leases

In February 2016, the FASB established Topic 842, Leases, by issuing ASU No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; ASU No. 2018-11, Targeted Improvements; and ASU No. 2018-20, Narrow-Scope Improvements for Lessors. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

The new standard was effective for the Company on January 1, 2019, with early adoption permitted. A modified retrospective transition approach was required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered into between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods. We adopted the new standard on January 1, 2019 and used the effective date as our date of initial application. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019.

The new standard provides several optional practical expedients in transition. We elected the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We elected all the new standard’s available transition practical expedients other than the use-of hindsight.

The new standard also provides practical expedients for an entity’s ongoing accounting. We elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also elected the practical expedient to not separate lease and non-lease components for leases of office equipment.

This standard had a material effect on our financial statements. The most significant effect related to the recognition of new ROU assets and lease liabilities on our balance sheet for our real estate and equipment operating leases and providing significant new disclosures about our leasing activities.

The Company entered into a Lease Agreement for a term of five years commencing on June 1, 2015 with Fraser Advanced Information Systems, pursuant to which the Company agreed to lease two Sharp copiers. The base rent increases by 5% each year, and ranges from approximately $1,049 per month for the first year to $1,335 per month on the fifth year.

On June 13, 2018, the Company entered into a Lease Agreement for a term of six years commencing on July 1, 2018 with SML FL Holdings LLC, pursuant to which the Company agreed to lease approximately 3,000 rentable square feet. The base rent increases by 3% each year, and ranges from $2,100 per month for the first year to $2,785 per month for the sixth year.

On May 1, 2019, the Company entered into a Lease Agreement for a term of three years commencing on May 1, 2019 with 604 Associates LLC, pursuant to which the Company agreed to lease approximately 3,000 rentable square feet. The base rent is $1,500 per month for the term of the lease.

The expected lease term includes both contractual lease periods and, when applicable, cancelable option periods when it is reasonably certain that the Company would exercise such options. The Company’s leases have remaining lease terms between 6 months and 4 years. As of June 30, 2020, the weighted-average remaining term is 2.17 years. The Company has determined that the incremental borrowing rate is 10% as of December 31, 2018 based upon the recently completed financing transaction in September 2018.

Below are the lease commitments for the next 5 years and thereafter.

Year-Ending June 30,
	(in thousands)
2020	$	36
2021		42
2022		30
2023		34
Thereafter		—
Less Imputed Interest		(12	)
Total	$	130

As of June, 30, 2020, the balance of the right of use assets was $130,000 and the corresponding lease liability balance was $130,000. Total rent expense was $30,000 for the six months ended June 30, 2020 and $28,000 for the six months end June 30, 2019.

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Subsequent Events

6 Months Ended

Jun. 30, 2020

Subsequent Events [Abstract]

Subsequent Events

Note 16: Subsequent Events

On August 6, 2020, AIM contracted Amarex Clinical Research LLC (“Amarex”) to act as the Company’s Clinical Research Organization and provide regulatory support with regard to a clinical trial testing Ampligen’s potential as a COVID-19 prophylaxis via intranasal delivery. For Phase I the Company anticipates providing approximately $514,000 to Amarex. For the subsequent Phase II the Company anticipates providing approximately an additional $650,000. Additional costs expected to be incurred by us for the clinical trial are estimated at $4.5 million. It is anticipated that Phase I will consist of 24 test subjects and that Phase II will consist of 150 test subjects, subject to obtaining IND authorization from the FDA.

On August 12, 2020, the Company granted to Thomas K. Equels, Chief Executive Officer, consistent with his employment agreement, 300,000 ten-year options to purchase common stock with an exercise price of $3.07 per share which vest in one year. The Company also granted to Dr. William Mitchell and Stewart Appelrouth, as compensation for their services as members of committees of the board of directors, each 50,000 ten-year options to purchase common stock with an exercise price of $2.77 per share which vest in one year.

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Equity-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2020

Employees [Member]

Schedule of Stock Option Activity

Stock option activity for employees:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding January 1, 2020		127,747		$	29.61		6.41	$	—
Granted		—			—		—		—
Forfeited		(1,892	)		20.45		—		—
Expired		(568	)		348.48		—		—
Outstanding June 30, 2020		125,287		$	28.30		6.00	$	—
Vested and expected to vest June 30, 2020		125,287		$	28.30		6.00	$	—
Exercisable June 30, 2020		70,649		$	16.68		3.63	$	—

Schedule of Unvested Stock Option Activity

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, 2020		68,283		$	23.79		7.48	$	—
Granted		—			—		—		—
Vested		(13,645	)		14.61		—		—
Unvested June 30, 2020		54,638		$	26.08		8.25	$	—

Non-Employees [Member]

Schedule of Stock Option Activity

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, 2020		66,675		$	24.09		5.47	$	—
Granted		—			—		—		—
Forfeited		—			—		—		—
Expired		(76	)		75.26		—		—
Outstanding June 30, 2020		66,599		$	23.75		4.98	$	—
Vested and expected to vest June 30, 2020		66,599		$	23.75		4.98	$	—
Exercisable June 30, 2020		9,694		$	12.41		8.08	$	—

Schedule of Unvested Stock Option Activity

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, 2020		66,675		$	12.80		5.59	$	—
Granted		—			—		—		—
Expired		—			—		—		—
Vested		(9,770	)		11.95		—		—
Unvested June 30, 2020		56,905		$	12.95		5.15	$	—

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Marketable Securities (Tables)

6 Months Ended

Jun. 30, 2020

Marketable Securities [Abstract]

Schedule of Available for Sale

Debt securities classified as available for sale consisted of:

June 30, 2020
(in thousands)

Securities	Amortized Cost		Gross Unrealized Gains /(Losses)		Gross Unrealized Gains /(Losses)			Fair Value		Marketable Securities
U.S. Treasury notes	$	1,772	$	—	$	(4	)	$	1,768	$	1,768
U.S. Government mortgage backed securities		2,001		—		(4	)		1,997		1,997
Corporate bonds		2,565		—		71			2,636		2,636
Totals	$	6,338	$	—	$	63		$	6,401	$	6,401

The following presents available-for-sale securities’ gross unrealized losses and fair value aggregated by the short- and long-term maturity.

June 30, 2020
(in thousands)

	Less than 12 Months				12 Months or More					Total
Securities	Fair Value		Gross Unrealized Gains		Fair Value		Gross Unrealized Gains			Fair Value		Gross Unrealized Gains
U.S. Treasury notes	$	605	$	—	$	1,163	$	(4	)	$	1,768	$	(4	)
U.S. Government mortgage backed securities		—		—		1,997		(4	)		1,997		(4	)
Corporate bonds		488		—		2,148		71			2,636		71
Totals	$	1,093	$	—	$	5,308	$	63		$	6,401	$	63

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Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2020

Payables and Accruals [Abstract]

Schedule of Accrued Expenses

Accrued expenses consist of the following:

	(in thousands)
	June 30, 2020		December 31, 2019
Compensation	$	78	$	94
Professional fees		101		73
Clinical trial expenses		10		56
Other expenses		136		180
	$	325	$	403

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Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

	(in thousands)
	June 30, 2020			December 31, 2019
Land, buildings and improvements	$	10,547		$	10,547
Furniture, fixtures, and equipment		5,123			5,114
Total property and equipment		15,670			15,661
Less: accumulated depreciation		(8,885	)		(8,545	)
Property and equipment, net	$	6,785		$	7,116

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Fair Value (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Schedule of Assumptions to Estimate Fair Value of Warrants

The Company utilized the following assumptions to estimate the fair value of the August 2016 Warrants:

	June 30, 2020			December 31, 2019
Underlying price per share	$	2.48		$	0.54
Exercise price per share	$	82.50		$	82.50
Risk-free interest rate		0.16	%		1.58	%
Expected holding period		1.17			1.67
Expected volatility		145	%		96	%
Expected dividend yield		-			-

The Company utilized the following assumptions to estimate the fair value of the February 2017 Warrants:

	June 30, 2020			December 31, 2019
Underlying price per share	$	2.48		$	0.54
Exercise price per share		$ 30.25 – 33.00			$ 30.25-33.00
Risk-free interest rate		0.16	%		1.60	%
Expected holding period		2.09 – 2.10			2.59-2.60
Expected volatility		115	%		89	%
Expected dividend yield		-			-

The Company utilized the following assumptions to estimate the fair value of the June 2017 Warrants:

	June 30, 2020			December 31, 2019
Underlying price per share	$	2.48		$	0.54
Exercise price per share	$	27.50		$	27.50
Risk-free interest rate		0.16	%		1.60	%
Expected holding period		1.92			2.42
Expected volatility		120	%		91	%
Expected dividend yield		-			-

The Company utilized the following assumptions to estimate the fair value of the August 2017 Warrants:

	June 30, 2020			December 31, 2019
Underlying price per share	$	2.48		$	0.54
Exercise price per share		19.80		$	19.80
Risk-free interest rate		0.16	%		1.59	%
Expected holding period		1.68			2.18
Expected volatility		125	%		94	%
Expected dividend yield		-			-

The Company utilized the following assumptions to estimate the fair value of the April 2018 Warrants:

	June 30, 2020		December 31, 2019
Underlying price per share	$	2.48	$	0.54
Exercise price per share	$	17.16	$	17.16
Risk-free interest rate		0.17 – 0.20 %		1.59%-1.65 %
Expected holding period		0.32 – 3.32		0.82-3.82
Expected volatility		100% - 155 %		86%-124 %
Expected dividend yield		-		-

The Company utilized the following assumptions to estimate the fair value of the March 2019 Warrants:

	June 30, 2020			December 31, 2019
Underlying price per share	$	2.48		$	0.54
Exercise price per share	$	8.80		$	8.80
Risk-free interest rate		0.22	%		1.66	%
Expected holding period		3.69			4.19
Expected volatility		100	%		87	%
Expected dividend yield		-			-

Schedule of Range of Probabilities

With the above factors utilized in analysis of the likelihood of the Put’s potential Liability, the Company estimated the range of probabilities related to a Put right being triggered as:

Range of Probability	Probability
Low	0.5	%
Medium	1.0	%
High	5.0	%

Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The table below presents the balances of assets and liabilities measured at fair value on a recurring basis by level within the hierarchy as:

	(in thousands) As of June 30, 2020
	Total		Level 1		Level 2		Level 3
Assets:
U. S. Treasury notes	$	1,768	$	1,768	$	—	$	—
U.S. Government mortgage backed Securities		1,997		1,997		—		—
Corporate bonds		2,636		2,636		—		—
Marketable Securities	$	6,401	$	6,401	$	—	$	—
Liabilities:
Redeemable warrants	$	207	$	—	$	—	$	207

	(in thousands) As of December 31, 2019
	Total		Level 1		Level 2		Level 3
Assets:
Mutual Fund	$	7,308	$	7,308	$	—	$	—
Liabilities:
Redeemable warrants	$	57	$	—	$	—	$	57

Schedule of Changes in Level 3 Liabilities Measured at Fair Value on a Recurring Basis

The changes in Level 3 Liabilities measured at fair value on a recurring basis are summarized as follows (in thousands):

Redeemable warrants:
Balance at December 31, 2019	$	57
Fair value adjustment		150
Balance at June 30, 2020	$	207

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Financing Obligation Arising from Sale Leaseback Transaction (Tables)

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Schedule of Future Minimum Payments Under Financing Obligation

Future minimum payments required under the Financing Obligation and the balance of the Finance Obligation as of June 30, 2020 are as follows:

During the year:

	(in thousands)
2020		209
2021		426
2022		437
2023		449
2024		463
Thereafter		1,567
Total of payments		3,551
Less deferred issuance costs		(205	)
Less discount on debt instrument		(881	)
Less imputed interest		(251	)
Total balance		2,214
Less current portion		(221	)
Long term portion	$	1,993

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Leases (Tables)

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Schedule of Operating lease Future Payments

Below are the lease commitments for the next 5 years and thereafter.

Year-Ending June 30,
	(in thousands)
2020	$	36
2021		42
2022		30
2023		34
Thereafter		—
Less Imputed Interest		(12	)
Total	$	130

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Business and Basis of Presentation (Details Narrative)		6 Months Ended
	May 29, 2019	Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Reverse stock split	1-for-20 to 1-for-50	In June 2019, the Company effected a 44-to-1 reverse stock split of the outstanding shares

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Net Loss Per Share (Details Narrative) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Stock Options [Member]
Antidilutive securities excluded from computation of earnings per share	5,758	526,266	0	840,380
Warrants [Member]
Antidilutive securities excluded from computation of earnings per share	5,758	526,266	0	840,380

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Equity-Based Compensation (Details Narrative) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Share-based Payment Arrangement [Abstract]
Number of options granted	0	39,267
Stock-based compensation expense	$ 346	$ 426
Unrecognized equity-based compensation cost	$ 442	$ 1,010

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Equity-Based Compensation - Schedule of Stock Option Activity (Details) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Number of Options, Granted	0	39,267
Employees [Member]
Number of Options, Granted
Number of Options, Expired
Stock Options [Member] | Employees [Member]
Number of Options Outstanding, Beginning of Year	127,747
Number of Options, Granted
Number of Options, Forfeited	(1,892)
Number of Options, Expired	(568)
Number of Options Outstanding, Ending of Year	125,287
Number of Options, Vested and Expected to Vest	125,287
Number of Options Exercisable, End of Year	70,649
Weighted Average Exercise Price Outstanding, Beginning of Year	$ 29.61
Weighted Average Exercise Price, Granted
Weighted Average Exercise Price, Forfeited	20.45
Weighted Average Exercise Price, Expired	348.48
Weighted Average Exercise Price Outstanding, End of Year	28.30
Weighted Average Exercise Price, Vested and Expected to Vest	28.30
Weighted Average Exercise Price Exercisable, Ending of Year	$ 16.68
Weighted Average Remaining Contracted Term (years) Outstanding, Beginning of Year	6 years 4 months 28 days
Weighted Average Remaining Contracted Term (years) Outstanding, End of Year	6 years
Weighted Average Remaining Contracted Term (years), Vested and Expected to Vest	3 years 7 months 17 days
Weighted Average Remaining Contracted Term (years), Exercisable at End of Year	3 years 7 months 17 days
Aggregate Intrinsic Value Outstanding, Beginning of Year
Aggregate Intrinsic Value, Granted
Aggregate Intrinsic Value, Forfeited
Aggregate Intrinsic Value Outstanding, Ending of Year
Aggregate Intrinsic Value, Vested and Expected to Vest
Aggregate Intrinsic Value, Exercisable at End of Year
Stock Options [Member] | Non-Employees [Member]
Number of Options Outstanding, Beginning of Year	66,675
Number of Options, Granted
Number of Options, Forfeited
Number of Options, Expired	(76)
Number of Options Outstanding, Ending of Year	66,599
Number of Options, Vested and Expected to Vest	66.599
Number of Options Exercisable, End of Year	9,694
Weighted Average Exercise Price Outstanding, Beginning of Year	$ 24.09
Weighted Average Exercise Price, Granted
Weighted Average Exercise Price, Forfeited
Weighted Average Exercise Price, Expired	75.26
Weighted Average Exercise Price Outstanding, End of Year	23.75
Weighted Average Exercise Price, Vested and Expected to Vest	23.75
Weighted Average Exercise Price Exercisable, Ending of Year	$ 12.41
Weighted Average Remaining Contracted Term (years) Outstanding, Beginning of Year	5 years 5 months 20 days
Weighted Average Remaining Contracted Term (years) Outstanding, End of Year	4 years 11 months 23 days
Weighted Average Remaining Contracted Term (years), Vested and Expected to Vest	4 years 11 months 23 days
Weighted Average Remaining Contracted Term (years), Exercisable at End of Year	8 years 29 days
Aggregate Intrinsic Value Outstanding, Beginning of Year
Aggregate Intrinsic Value, Granted
Aggregate Intrinsic Value, Forfeited
Aggregate Intrinsic Value Outstanding, Ending of Year
Aggregate Intrinsic Value, Vested and Expected to Vest
Aggregate Intrinsic Value, Exercisable at End of Year

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Equity-Based Compensation - Schedule of Unvested Stock Option Activity (Details) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Number of Options, Granted	0	39,267
Employees [Member]
Number of Options Unvested, Beginning of Year	68,283
Number of Options, Granted
Number of Options, Vested	(13,645)
Number of Options, Expired
Number of Options Unvested, End of Year	54,638
Weighted Average Exercise Price Unvested, Beginning of Year	$ 23.79
Weighted Average Exercise Price, Granted
Weighted Average Exercise Price, Vested	14.61
Weighted Average Excercise Price, Expired
Weighted Average Exercise Price Unvested, Ending of Year	$ 26.08
Average Remaining Contractual Term (years) Unvested, Beginning of Year	7 years 5 months 23 days
Average Remaining Contractual Term (years) Unvested, End of Year	8 years 2 months 30 days
Aggregate Intrinsic Value Unvested, Beginning of Year
Aggregate Intrinsic Value, Granted
Aggregate Intrinsic Value, Vested
Aggregate Intrinsic Value Unvested, End of Year
Non-Employees [Member]
Number of Options Unvested, Beginning of Year	66,675
Number of Options, Granted
Number of Options, Vested	(9,770)
Number of Options, Expired
Number of Options Unvested, End of Year	56,905
Weighted Average Exercise Price Unvested, Beginning of Year	$ 12.8
Weighted Average Exercise Price, Granted
Weighted Average Exercise Price, Vested	11.95
Weighted Average Excercise Price, Expired
Weighted Average Exercise Price Unvested, Ending of Year	$ 12.95
Average Remaining Contractual Term (years) Unvested, Beginning of Year	5 years 7 months 2 days
Average Remaining Contractual Term (years) Unvested, End of Year	5 years 1 month 24 days
Aggregate Intrinsic Value Unvested, Beginning of Year
Aggregate Intrinsic Value, Granted
Aggregate Intrinsic Value, Vested
Aggregate Intrinsic Value Unvested, End of Year

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Inventories (Details Narrative) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Work-in-process inventory	$ 1,095	$ 1,095

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Marketable Securities (Details Narrative) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Marketable Securities [Abstract]
Debt marketable securities	$ 6,401	$ 7,308
Debt securities

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Marketable Securities - Schedule of Available for Sale (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2020 USD ($)
Amortized Cost	$ 6,338
Gross Unrealized Gains
Gross Unrealized Losses	63
Fair Value	6,401
Marketable securities	6,401
Less Than Twelve Months [Member]
Gross Unrealized Gains
Fair Value	1,093
12 Months or More [Member]
Gross Unrealized Gains	63
Fair Value	5,308
U.S. Treasury Notes [Member]
Amortized Cost	1,772
Gross Unrealized Gains
Gross Unrealized Losses	(4)
Fair Value	1,768
Marketable securities	1,768
U.S. Treasury Notes [Member] | Less Than Twelve Months [Member]
Gross Unrealized Gains
Fair Value	605
U.S. Treasury Notes [Member] | 12 Months or More [Member]
Gross Unrealized Gains	(4)
Fair Value	1,163
U.S. Government Mortgage Backed Securities [Member]
Amortized Cost	2,001
Gross Unrealized Gains
Gross Unrealized Losses	(4)
Fair Value	1,997
Marketable securities	1,997
U.S. Government Mortgage Backed Securities [Member] | Less Than Twelve Months [Member]
Gross Unrealized Gains
Fair Value
U.S. Government Mortgage Backed Securities [Member] | 12 Months or More [Member]
Gross Unrealized Gains	(4)
Fair Value	1,997
Corporate Bonds [Member]
Amortized Cost	2,565
Gross Unrealized Gains
Gross Unrealized Losses	71
Fair Value	2,636
Marketable securities	2,636
Corporate Bonds [Member] | Less Than Twelve Months [Member]
Gross Unrealized Gains
Fair Value	488
Corporate Bonds [Member] | 12 Months or More [Member]
Gross Unrealized Gains	71
Fair Value	$ 2,148

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Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Payables and Accruals [Abstract]
Compensation	$ 78	$ 94
Professional fees	101	73
Clinical trial expenses	10	56
Other expenses	136	180
Accrued expenses	$ 325	$ 403

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Property and Equipment (Details Narrative) $ in Thousands	Mar. 16, 2018 USD ($)
Property, Plant and Equipment [Abstract]
Proceeds from sale of property	$ 4,080
Lease description	Concurrently entered into an agreement to lease the property back for ten years. The lease payments are initially $408,000 per year for two years through March 31, 2020 and will escalate in subsequent years.
Lease of rent expenses	$ 408

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Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Property, Plant and Equipment [Abstract]
Land, buildings and improvements	$ 10,547	$ 10,547
Furniture, fixtures, and equipment	5,123	5,114
Total property and equipment	15,670	15,661
Less: accumulated depreciation and amortization	(8,885)	(8,545)
Property and equipment, net	$ 6,785	$ 7,116

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Stockholders' Equity (Details Narrative) - USD ($)													3 Months Ended	6 Months Ended		12 Months Ended
	Jun. 15, 2020	Mar. 10, 2020	Mar. 03, 2020	Sep. 27, 2019	Jul. 19, 2019	Jun. 30, 2019	Jun. 11, 2019	May 29, 2019	May 02, 2019	Jan. 28, 2019	Nov. 14, 2018	Oct. 17, 2018	Jun. 30, 2020	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019	Mar. 16, 2018
Subscription/exercise price																	$ 17.05
Warrants issued																	73,314
Proceeds from issuance of rights														$ 25,774,000
Common stock, shares authorized													350,000,000	350,000,000		350,000,000
Reverse stock split description								1-for-20 to 1-for-50						In June 2019, the Company effected a 44-to-1 reverse stock split of the outstanding shares
Common stock shares issued, value														$ 40,821,000	$ 6,523,000
Number of warrant to purchase shares of common stock													266,665	266,665
Warrant description														In addition, on March 25, 2020, the Representative's Warrant was amended to permit exercise of such warrant to commence on March 30, 2020.
Proceeds from warrants exercised														$ 264,000
Warrant modification														$ 46,000
Deemed dividend															$ 135,000
Number of options granted														0	39,267
Common stock, shares outstanding													34,250,615	34,250,615		10,386,754
Board of Directors [Member]
Number of options granted												26,324
Option exercise price per share												$ 9.68
Option vested years												10 years
Number of common stock reserved for potential issuance												7,000,000
Employee [Member]
Number of options granted											23
Option exercise price per share											$ 9.68
Option vested years											10 years
Officers [Member]
Number of options granted										27,570
Option exercise price per share										$ 9.68
Options holding period										10 years
Option vested years										1 year
Equity Distribution Agreement [Member]
Number of shares sold in transaction													5,964,197	12,580,926
Proceeds from sale of common stock, net of issuance costs													$ 15,560,537	$ 32,878,403
Number of shares sold in transaction, value		$ 18,833,739	$ 10,867,245
Underwriting fee amount													$ 544,619	$ 1,150,744
Percentage of fees paid													3.50%	3.50%
Pre-funded Warrants [Member]
Proceeds from warrants exercised														$ 8,873,860
Warrant [Member]
Subscription/exercise price									$ 6.60
Number of warrant exercisable									103,410
Proceeds from warrants exercised									$ 682,000					$ 1,870,000
Reduced liability attributed to the warrants									404,000
Additional shareholder's equity									1,086,000
Deemed dividend									$ 135,000
Alliance Global Partners, LLC [Member]
Number of shares issued upon transaction				1,740,550
Common stock shares issued, value				$ 7,148,310
Alliance Global Partners, LLC [Member] | Warrants [Member]
Number of warrant to purchase shares of common stock				8,888,860
Alliance Global Partners, LLC [Member] | Pre-funded Warrants [Member]
Subscription/exercise price				$ 0.90
Proceeds from issuance of rights				$ 7,200,000
Warrant description				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.
Maxim Group LLC [Member] | Equity Distribution Agreement [Member]
Number of shares sold in transaction																905,869
Number of shares sold in transaction, value	$ 19,406,552				$ 4,508,244											$ 2,553,079
Shares sales fee percentage																3.50%
Underwriting fee amount																$ 89,358
Maximum [Member]
Shares issued price per share						$ 4.37									$ 4.37
Maximum [Member] | Alliance Global Partners, LLC [Member] | Representative Warrants [Member]
Number of warrant to purchase shares of common stock				266,665
Minimum [Member]
Shares issued price per share						$ 4.03									$ 4.03
Directors, Officers and Employees [Member]
Number of shares issued upon transaction						67,767
Common stock shares issued, value						$ 274,000
Directors, Officers and Employees [Member] | Maximum [Member]
Payments approved for company shares, value							$ 500,000
Rights [Member]
Subscription/exercise price													$ 1,000	$ 1,000
Common stock conversion price													8.80	$ 8.80
Proceeds from issuance of rights														$ 4,700,000
Warrant [Member]
Subscription/exercise price													$ 8.80	$ 8.80
Warrants issued													114	114
Warrants exercisable term													5 years	5 years
Series A Junior Participating Preferred Stock [Member]
Preferred stock, shares authorized													250,000	250,000
Series B Convertible Preferred Stock [Member]
Preferred stock, shares authorized													8,000	8,000		8,000
Preferred stock par or stated value													$ 1,000	$ 1,000		$ 1,000
Preferred stock, shares outstanding													737	737		778
Number of shares to be issued on conversion													41	41
Series B Convertible Preferred Stock [Member] | Rights [Member]
Preferred stock value													$ 1,000	$ 1,000
Series B Preferred [Member]
Preferred stock, shares outstanding																778
Number of shares issued upon transaction
Common stock shares issued, value
Deemed dividend
Preferred Stock [Member]
Number of shares to be issued on conversion													114	114

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Convertible Note Payable (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands			6 Months Ended		12 Months Ended
	Mar. 13, 2019	Sep. 28, 2018	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019	Dec. 31, 2018	Nov. 30, 2019	Oct. 31, 2019
Maximum amount of redemption	$ 300						$ 300	$ 300
Loss on extinguishment of debt			$ 345
Extended Maturity [Member]
Debt instrument maturity date	Sep. 28, 2020
Secured Convertible Promissory Note [Member]
Loss on extinguishment of debt					$ 127
Interest expense			$ 0	$ 50
Secured Convertible Promissory Note [Member] | Iliad Research and Trading, L.P. [Member]
Convertible promissory note		$ 3,170
Convertible promissory note, interest percentage		10.00%
Proceeds from convertible promissory note		$ 3,000
Debt retained by the holder		170
Legal fees		20
Original issue discount		150
Third-party fees		$ 210
Debt instrument maturity date		Sep. 28, 2019
Convertible note, conversion price per share		$ 0.30
Convertible note, conversion description		The IR Note provides the Holder with the right to convert, at any time, all or any part of the outstanding principal and accrued but unpaid interest into shares of the Company's common stock at a conversion price of $0.30 per share. In addition, beginning on March 28, 2019, the Note also provides the Holder with the right to redeem all or any portion of the IR Note ("Redemption Amount"). The payments of each Redemption Amount may be made, at the option of the Company, in cash, by converting such Redemption Amount into shares of common stock ("Redemption Conversion Shares"), or a combination thereof. The number of Redemption Conversion Shares equals the portion of the applicable Redemption Amount being converted divided by the lesser of $0.30 or 80% of the lowest Volume Weighted Average Price ("VWAP") during the ten (10) trading days immediately preceding the applicable measurement date (the "Market Price").
Lowest volume weighted average price percentage		80.00%
Common stock reserved		8,900,000
Common stock issuance, maximum percentage		19.99%
Secured Convertible Promissory Note [Member] | Iliad Research and Trading, L.P. [Member] | Origination Shares [Member]
Number of shares issued in conversion		500,000
Convertible Note [Member]
Number of shares issued in conversion					204,246
Debt conversion, partial amount					$ 1,400	$ 3,408
Additional shareholder's equity					$ 1,400

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Long Term Debt (Details Narrative) - USD ($)					6 Months Ended
	Jun. 19, 2020	May 29, 2020	Dec. 05, 2019	Aug. 05, 2019	Jun. 30, 2020
Gain (loss) on extinguishment of debt					$ 345,000
CV Note [Member]
Interest expense debt					116,000
CV Note [Member] | Chicago Venture Partners, L.P. [Member]
Debt instrument, face amount				$ 2,635,000	1,985,000
Note interest rate				10.00%
Debt term				24 months
Proceeds from notes payable				$ 1,900,000
Debt instrument, redemption amount					65,000
Accrued interest payable		$ 220,000
Net payment of debt		1,795,000
Origination discount		369,000
Issuance costs		6,000
Gain (loss) on extinguishment of debt		$ 66,000
AS Note [Member]
Interest expense debt					106,000
AS Note [Member] | Atlas Sciences L.P. [Member]
Debt instrument, face amount	$ 2,175,000		$ 2,175,000
Note interest rate			10.00%
Debt term			24 months
Proceeds from notes payable			$ 1,650,000
Accrued interest payable	122,000
Origination discount	376,000
Issuance costs	7,000
Gain (loss) on extinguishment of debt	76,000
Prepayment discount	460,000
Note payable	$ 1,838,000
IR Note [Member]
Gain (loss) on extinguishment of debt					$ 250,000

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Fair Value (Details Narrative)	6 Months Ended
	Jun. 30, 2020
Sale of stock, description	The Company also has certain warrants with a cash settlement feature in the unlikely occurrence of a Fundamental Transaction, namely (1) a merger or consolidation with another person; (2) sale of substantially all of its assets; (3) holders of common stock sell 50% or more of outstanding shares; (4) the Company effects an exchange of all its securities for other securities, cash or property, and (5) the Company effects a stock purchase agreement or business combination for more than 50% of outstanding shares.
Probability of fundamental transaction	5.00%
Floor rate used as proxy for future volatility percentage	100.00%
Expected Dividend Yield [Member]
Fair value measurement, input Percentage	0.00%

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Fair Value - Schedule of Assumptions to Estimate Fair Value of Warrants (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2020 $ / shares	Dec. 31, 2019 $ / shares
August 2016 Warrants [Member]
Underlying price per share	$ 2.48	$ 0.54
August 2016 Warrants [Member] | Exercise Price Per Share [Member]
Fair value measurement, input per share	$ 82.50	$ 82.50
August 2016 Warrants [Member] | Risk Free Interest Rate [Member]
Fair value measurement, input Percentage	0.16	1.58
August 2016 Warrants [Member] | Expected Holding Period [Member]
Fair value measurement, input term	1 year 2 months 1 day	1 year 8 months 2 days
August 2016 Warrants [Member] | Expected Volatility [Member]
Fair value measurement, input Percentage	145	96
August 2016 Warrants [Member] | Expected Dividend Yield [Member]
Fair value measurement, input Percentage
February 2017 Warrants [Member]
Underlying price per share	$ 2.48	$ 0.54
February 2017 Warrants [Member] | Exercise Price Per Share [Member] | Minimum [Member]
Fair value measurement, input per share	30.25	30.25
February 2017 Warrants [Member] | Exercise Price Per Share [Member] | Maximum [Member]
Fair value measurement, input per share	$ 33.00	$ 33.00
February 2017 Warrants [Member] | Risk Free Interest Rate [Member]
Fair value measurement, input Percentage	0.16	1.60
February 2017 Warrants [Member] | Expected Holding Period [Member] | Minimum [Member]
Fair value measurement, input term	2 years 1 month 2 days	2 years 7 months 2 days
February 2017 Warrants [Member] | Expected Holding Period [Member] | Maximum [Member]
Fair value measurement, input term	2 years 1 month 6 days	2 years 7 months 6 days
February 2017 Warrants [Member] | Expected Volatility [Member]
Fair value measurement, input Percentage	115	89
February 2017 Warrants [Member] | Expected Dividend Yield [Member]
Fair value measurement, input Percentage
June 2017 Warrants [Member]
Underlying price per share	$ 2.48	$ 0.54
June 2017 Warrants [Member] | Exercise Price Per Share [Member]
Fair value measurement, input per share	$ 27.50	$ 27.50
June 2017 Warrants [Member] | Risk Free Interest Rate [Member]
Fair value measurement, input Percentage	.16	1.60
June 2017 Warrants [Member] | Expected Holding Period [Member]
Fair value measurement, input term	1 year 11 months 1 day	2 years 5 months 1 day
June 2017 Warrants [Member] | Expected Volatility [Member]
Fair value measurement, input Percentage	120	91
June 2017 Warrants [Member] | Expected Dividend Yield [Member]
Fair value measurement, input Percentage
August 2017 Warrants [Member]
Underlying price per share	$ 2.48	$ 0.54
August 2017 Warrants [Member] | Exercise Price Per Share [Member]
Fair value measurement, input per share	$ 19.80	$ 19.80
August 2017 Warrants [Member] | Risk Free Interest Rate [Member]
Fair value measurement, input Percentage	0.16	1.59
August 2017 Warrants [Member] | Expected Holding Period [Member]
Fair value measurement, input term	1 year 8 months 5 days	2 years 2 months 5 days
August 2017 Warrants [Member] | Expected Volatility [Member]
Fair value measurement, input Percentage	125	94
August 2017 Warrants [Member] | Expected Dividend Yield [Member]
Fair value measurement, input Percentage
April 2018 Warrants [Member]
Underlying price per share	$ 2.48	$ 0.54
April 2018 Warrants [Member] | Exercise Price Per Share [Member]
Fair value measurement, input per share	$ 17.16	$ 17.16
April 2018 Warrants [Member] | Risk Free Interest Rate [Member] | Minimum [Member]
Fair value measurement, input Percentage	0.17	1.59
April 2018 Warrants [Member] | Risk Free Interest Rate [Member] | Maximum [Member]
Fair value measurement, input Percentage	0.20	1.65
April 2018 Warrants [Member] | Expected Holding Period [Member] | Minimum [Member]
Fair value measurement, input term	3 months 26 days	9 months 25 days
April 2018 Warrants [Member] | Expected Holding Period [Member] | Maximum [Member]
Fair value measurement, input term	3 years 3 months 26 days	3 years 9 months 25 days
April 2018 Warrants [Member] | Expected Volatility [Member] | Minimum [Member]
Fair value measurement, input Percentage	100	86
April 2018 Warrants [Member] | Expected Volatility [Member] | Maximum [Member]
Fair value measurement, input Percentage	155	124
April 2018 Warrants [Member] | Expected Dividend Yield [Member]
Fair value measurement, input Percentage
March 2019 Warrants [Member]
Underlying price per share	$ 2.48	$ 0.54
March 2019 Warrants [Member] | Exercise Price Per Share [Member]
Fair value measurement, input per share	$ 8.80	$ 8.80
March 2019 Warrants [Member] | Risk Free Interest Rate [Member]
Fair value measurement, input Percentage	0.22	1.66
March 2019 Warrants [Member] | Expected Holding Period [Member]
Fair value measurement, input term	3 years 8 months 9 days	4 years 2 months 8 days
March 2019 Warrants [Member] | Expected Volatility [Member]
Fair value measurement, input Percentage	100	87
March 2019 Warrants [Member] | Expected Dividend Yield [Member]
Fair value measurement, input Percentage

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Fair Value - Schedule of Range of Probabilities (Details)	6 Months Ended
	Jun. 30, 2020
Minimum [Member]
Percentage of probability	0.50%
Weighted Average [Member]
Percentage of probability	1.00%
Maximum [Member]
Percentage of probability	5.00%

XML

Fair Value - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Marketable securities	$ 6,401
Redeemable warrants	207	$ 57
Mutual Fund [Member]
Marketable securities		7,308
Level 1 [Member]
Marketable securities	6,401
Redeemable warrants
Level 1 [Member] | Mutual Fund [Member]
Marketable securities		7,308
Level 2 [Member]
Marketable securities
Redeemable warrants
Level 2 [Member] | Mutual Fund [Member]
Marketable securities
Level 3 [Member]
Marketable securities
Redeemable warrants	207	57
Level 3 [Member] | Mutual Fund [Member]
Marketable securities
US Treasury Notes [Member]
Marketable securities	1,768
US Treasury Notes [Member] | Level 1 [Member]
Marketable securities	1,768
US Treasury Notes [Member] | Level 2 [Member]
Marketable securities
US Treasury Notes [Member] | Level 3 [Member]
Marketable securities
U.S. Government Mortgage Backed Securities [Member]
Marketable securities	1,997
U.S. Government Mortgage Backed Securities [Member] | Level 1 [Member]
Marketable securities	1,997
U.S. Government Mortgage Backed Securities [Member] | Level 2 [Member]
Marketable securities
U.S. Government Mortgage Backed Securities [Member] | Level 3 [Member]
Marketable securities
Corporate Bonds [Member]
Marketable securities	2,636
Corporate Bonds [Member] | Level 1 [Member]
Marketable securities	2,636
Corporate Bonds [Member] | Level 2 [Member]
Marketable securities
Corporate Bonds [Member] | Level 3 [Member]
Marketable securities

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Fair Value - Schedule of Changes in Level 3 Liabilities Measured at Fair Value on a Recurring Basis (Details) - Redeemable Warrants [Member] $ in Thousands	6 Months Ended
	Jun. 30, 2020 USD ($)
Balance at beginning	$ 57
Fair value adjustments	150
Balance at ending	$ 207

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Financing Obligation Arising from Sale Leaseback Transaction (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands		6 Months Ended
	Mar. 16, 2018	Jun. 30, 2020	Jun. 30, 2019
Proceeds from sale of property	$ 4,080
Lease of rent expenses	$ 408
Lease and property agreement description	lease the property back for ten years at $408,000 per year for two years through March 31, 2020. The lease payments will increase 2.5% per year for the next three years through March 31, 2023 and the lease payments will increase 3% for the remaining five years through March 31, 2028.
Warrant to purchase of common stock	73,314
Warrant term	5 years
Warrant exercise price per share	$ 17.05
Warrant closing price, percentage	125.00%
Warrant owning excess percentage	4.99%
Financing Agreement [Member]
Interest expenses		$ 31	$ 35

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Financing Obligation Arising from Sale Leaseback Transaction - Schedule of Future Minimum Payments Under Financing Obligation (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Leases [Abstract]
2020	$ 209
2021	426
2022	437
2023	449
2024	463
Thereafter	1,567
Total of payments	3,551
Less deferred issuance costs	(205)
Less discount on debt instrument	(881)
Less imputed interest	(251)
Total balance	2,214
Less current portion	(221)	$ (214)
Long term portion	$ 1,993	$ 2,104

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Leases (Details Narrative) $ in Thousands					6 Months Ended		12 Months Ended
	May 01, 2019 USD ($) ft²	Jun. 13, 2018 USD ($) ft²	Mar. 16, 2018 USD ($)	Jun. 01, 2015 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Dec. 31, 2018	Dec. 31, 2019 USD ($)
Base rent per month			$ 408
weighted-average remaining term					2 years 2 months 1 day
Percentage of incremental borrowing rate							10.00%
Right of use asset					$ 130			$ 152
Operating lease liability					130
Rent expense					$ 30	$ 28
Minimum [Member]
Remaining lease terms					6 months
Maximum [Member]
Remaining lease terms					4 years
Lease Agreement [Member] | Fraser Advanced Information Systems [Member]
Lease agreement term				5 years
Lease commenced date				Jun. 01, 2015
Percentage of base rent				5.00%
Lease Agreement [Member] | Fraser Advanced Information Systems [Member] | First Year [Member]
Base rent per month				$ 1,049
Lease Agreement [Member] | Fraser Advanced Information Systems [Member] | Fifth Year [Member]
Base rent per month				$ 1,335
Lease Agreement [Member] | SML FL Holdings LLC [Member]
Lease agreement term		6 years
Lease commenced date		Jul. 01, 2018
Percentage of base rent		3.00%
Rentable area | ft²		3,000
Lease Agreement [Member] | SML FL Holdings LLC [Member] | First Year [Member]
Base rent per month		$ 2,100
Lease Agreement [Member] | SML FL Holdings LLC [Member] | Sixth Year [Member]
Base rent per month		$ 2,785
Lease Agreement [Member] | 604 Associates LLC [Member]
Lease agreement term	3 years
Lease commenced date	May 01, 2019
Base rent per month	$ 1,500
Rentable area | ft²	3,000

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Leases - Schedule of Operating lease Future Payments (Details) $ in Thousands	Jun. 30, 2020 USD ($)
Leases [Abstract]
2020	$ 36
2021	42
2022	30
2023	34
Thereafter
Less Imputed Interest	(12)
Total	$ 130

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Subsequent Events (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended		6 Months Ended
	Aug. 12, 2020	Aug. 06, 2020	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Amount provided for clinical research			$ 1,463	$ 1,096	$ 2,343	$ 2,024
Number of options granted					0	39,267
Subsequent Event [Member] | Thomas K. Equels [Member]
Number of options granted	300,000
Common stock grant term	10 years
Common stock grant exercise price	$ 3.07
Common stock vest term	1 year
Subsequent Event [Member] | Dr. William Mitchell and Stewart Appelrouth [Member]
Number of options granted	50,000
Common stock grant term	10 years
Common stock grant exercise price	$ 2.77
Common stock vest term	1 year
Subsequent Event [Member] | Amarex [Member]
Additional costs expected to be incurred for clinical research		$ 4,500
Subsequent Event [Member] | Amarex [Member] | Phase 1 [Member]
Amount provided for clinical research		514
Subsequent Event [Member] | Amarex [Member] | Phase 2 [Member]
Amount provided for clinical research		$ 650