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 September 30, 2022

Commission File Number: 001-27072

AIM IMMUNOTECH INC.

(Exact name of registrant as specified in its charter)

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

2117 SW Highway 484, Ocala FL 34473

(Address of principal executive offices) (Zip Code)

(352) 448-7797

(Registrant’s telephone number, including area code)

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

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

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

☒ Yes ☐ No

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

☒ Yes ☐ No

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

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

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

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

48,082,275 shares of common stock were outstanding, and 713 shares of series B preferred stock were outstanding as November 9, 2022.

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)

	September 30, 2022			December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	29,759		$	32,093
Marketable securities		6,986			16,175
Funds receivable from New Jersey net operating loss		—			1,641
Prepaid expenses and other current assets		805			304
Assets held for sale		3,600			—
Total current assets		41,150			50,213
Property and equipment, net		118			4,047
Right of use asset, net		866			149
Patent and trademark rights, net		2,013			1,974
Other assets		2,138			1,316
Total assets	$	46,285		$	57,699
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	957		$	198
Accrued expenses		1,767			438
Current portion of operating lease liability		171			37
Total current liabilities		2,895			673
Long-term liabilities:
Operating lease liability		695			112
Redeemable warrants		—			35
Commitments and contingencies (Notes 12, 13, and 14)		-

Stockholders’ equity:
Series B Convertible Preferred Stock, stated value $1,000 per share, 713 and 715 issued and outstanding, respectively		713			715
Common Stock, par value $0.001 per share, authorized 350,000,000 shares: 48,082,275, and 47,994,672, issued and outstanding, respectively		48			48
Additional paid-in capital		418,091			417,217
Accumulated deficit		(376,157	)		(361,101	)
Total stockholders’ equity		42,695			56,879
Total liabilities and stockholders’ equity	$	46,285		$	57,699

See accompanying notes to consolidated financial statements.

AIM IMMUNOTECH INC. AND SUBSIDIARIES

Consolidated Statement of Operations and Comprehensive Loss

(in thousands, except share and per share data)

(Unaudited)


	Three months ended September 30,						Nine months ended September 30,
	2022			2021			2022			2021
Revenues:
Clinical treatment programs - US	$	21		$	33		$	85		$	85
Costs and Expenses:
Production costs		—			157			—			674
Research and development		1,372			2,006			4,883			4,749
General and administrative		5,170			1,799			9,569			6,055
Total Costs and Expenses		6,542			3,962			14,452			11,478
Operating loss		(6,521	)		(3,929	)		(14,367	)		(11,393	)
Loss on investments		(365	)		—			(1,769	)		—
Interest and other income, net		172			(20	)		296			100
Interest expense and other finance costs		—			—			—			(67	)
Extinguishment of financing obligation and note payable		—			—			—			(2,701	)
Gain on sale of fixed assets		—			—			—			216
Redeemable warrants valuation adjustment		1			51			35			22
Gain from sale of income tax operating losses		328			72			749			542

Net Loss		(6,385	)		(3,826	)		(15,056	)		(13,281	)

Other comprehensive (loss), net of tax
Reclassification adjustment for realized investment loss		—			101			—			126
Change in unrealized loss on marketable securities available for sale		—			(104	)		—			(329	)
Comprehensive loss	$	(6,385	)	$	(3,829	)	$	(15,056	)	$	(13,484	)
Basic and diluted loss per share	$	(0.13	)	$	(0.08	)	$	(0.31	)	$	(0.28	)
Weighted average shares outstanding basic and diluted		48,079,210			47,846,074			48,036,559			47,156,158

See accompanying notes to consolidated financial statements.

AIM IMMUNOTECH INC. AND SUBSIDIARIES

Consolidated Statement of Changes in Stockholders’ Equity

For the Nine Months Ended September 30, 2022

(in thousands except share data)

(Unaudited)


	Series B Preferred			Common Stock Shares		Common Stock .001 Par Value		Additional Paid-in Capital		Accumulated other Comprehensive Income (Loss)		Accumulated Deficit			Total Stockholders’ Equity
Balance December 31, 2021	$	715			47,994,672	$	48	$	417,217	$	—	$	(361,101	)	$	56,879
Equity-based compensation		—			—		—		242		—		—			242
Net comprehensive loss		—			—		—		—		—		(3,820	)		(3,820	)
Balance March 31, 2022	$	715			47,994,672	$	48	$	417,459	$	—	$	(364,921	)	$	53,301
Common stock issuance, net of costs		—			54,150		—		55		—		—			55
Equity-based compensation		—			—		—		275		—		—			275
Series B preferred shares converted to common shares		(2	)		—		—		2		—		—			—
Net comprehensive loss		—			—		—		—		—		(4,851	)		(4,851	)
Balance June 30, 2022	$	713			48,048,822	$	48	$	417,791	$	—	$	(369,772	)	$	48,780
Common stock issuance, net of costs		—			32,895		—		25		—		—			25
Equity-based compensation		—			—		—		275		—		—			275
Cashless Warrant Conversion		—			558		—		—		—		—			—
Net comprehensive loss		—			—		—		—		—		(6,385	)		(6,385	)
Balance September 30, 2022		713			48,082,275		48		418,091		—		(376,157	)		42,695

See accompanying notes to consolidated financial statements.

AIM IMMUNOTECH INC. AND SUBSIDIARIES

Consolidated Statement of Changes in Stockholders’ Equity

For the Nine Months Ended September 30, 2021

(in thousands except share data)

(Unaudited)

	Series B Preferred			Common Stock Shares		Common Stock Par Value		Additional Paid-in Capital		Accumulated other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity
Balance December 31, 2020	$	732			42,154,371	$	42	$	402,541	$	(47	)	$	(341,974	)	$	61,294
Common stock issuances, net of costs		—			5,678,626		6		12,881		—			—			12,887
Equity-based compensation		—			—		—		526		—			—			526
Series B preferred shares converted to common shares		(7	)		—		—		7		—			—			—
Comprehensive loss		—			—		—		—		(163	)		(3,579	)		(3,742	)
Balance March 31, 2021	$	725			47,832,997	$	48	$	415,955	$	(210	)	$	(345,553	)	$	70,965
Equity-based compensation		—			—		—		480		—			—			480
Comprehensive loss		—			—		—		—		(37	)		(5,876	)		(5,913	)
Balance June 30, 2021	$	725			47,832,997	$	48	$	416,435	$	(247	)	$	(351,429	)	$	65,532
Common stock issuances, net of costs		—			15,625		—		30		—			—			30
Equity-based compensation		—			—		—		314		—			—			314
Comprehensive loss		—			—		—		—		(3	)		(3,826	)		(3,829	)
Net Comprehensive loss		—			—		—		—		(3	)		(3,826	)		(3,829	)
Balance September 30, 2021	$	725			47,848,622	$	48	$	416,779	$	(250	)	$	(355,255	)	$	62,047

See accompanying notes to consolidated financial statements.

AIM IMMUNOTECH INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2022 and 2021

(in thousands)

(Unaudited)

	2022			2021
Cash flows from operating activities:
Net loss	$	(15,056	)	$	(13,281	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment		29			484
Redeemable warrants valuation adjustment		(35	)		(22	)
Extinguishment of financing obligation and note payable		—			2,701
Amortization of patent, trademark rights		57			97
Changes in ROU assets		(717	)		35
Gain on sale of property and equipment		—			(216	)
Gain from sale of income tax operating losses		(749	)		(542	)
Equity-based compensation		792			1,320
Gain (Loss) on sale of marketable securities		1,768			126
Amortization of finance and debt issuance costs		—			47
Change in assets and liabilities:
Accounts receivable		—			6
Funds Receivable from New Jersey net operating loss		1,641			1,090
Prepaid expenses and other current assets and other non-current assets		(500	)		64
Lease liability		717			(35	)
Other Assets		(73	)		—
Accounts payable		758			(14	)
Accrued expenses		1,329			(80	)
Net cash used in operating activities		(10,039	)		(8,220	)
Cash flows from investing activities:
Proceeds from sale of marketable securities		9,082			849
Purchase of marketable securities		(1,661	)		(1,611	)
Purchase of property and equipment		—			(34	)
Proceeds from sale of property and equipment		300			245
Purchase of patent and trademark rights		(96	)		(444	)
Net cash provided by (used in) investing activities		7,625			(995	)
Cash flows from financing activities:
Payment of financing obligation		—			(4,732	)
Financing obligation payments		—			(122	)
Proceeds from sale of stock, net of issuance costs		80			12,917
Net cash provided by financing activities		80			8,063
Net decrease in cash and cash equivalents		(2,334	)		(1,152	)
Cash and cash equivalents at beginning of period		32,093			38,501
Cash and cash equivalents at end of period	$	29,759		$	37,349
Supplemental disclosures of non-cash investing and financing cash flow information:
Operating lease-Right of Use Assets	$	717		$	—
Unrealized loss on marketable securities	$	(1,170	)	$	(329	)
Conversion of Series B preferred	$	2		$	7

See accompanying notes to consolidated financial statements.

AIM IMMUNOTECH INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Business and Basis of Presentation

AIM ImmunoTech Inc. and its subsidiaries (collectively, “AIM”, “the 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, viral diseases 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.

Our flagship products are Ampligen® (rintatolimod), a first-in-class drug of large macromolecular RNA (ribonucleic acid) molecules, and Alferon N Injection® (Interferon alfa-n3). Ampligen has not been approved by the U.S. Food and Drug Administration (“FDA”) or marketed in the United States. Ampligen is approved for commercial sale in the Argentine Republic for the treatment of severe Chronic Fatigue Syndrome (“CFS”).

Our primary present business focus involves Ampligen. Ampligen represents a double-stranded RNA being developed for globally important cancers, viral diseases and disorders of the immune system.

The Company is currently proceeding primarily in four areas:

	●	A randomized controlled study to evaluate efficacy and safety of Ampligen compared to a control group to treat locally advanced pancreatic cancer patients.
	●	Evaluate Ampligen in other cancers, as a potential therapy that modifies the tumor microenvironment with the goal of increasing anti-tumor responses to check point inhibitors and other immuno oncology therapies.
	●	Exploring Ampligen’s antiviral activities and potential use as a prophylactic or early onset treatment for existing viruses, new viruses and mutated viruses thereof.
	●	Ampligen as a treatment for myalgic encephalomyelitis/chronic fatigue syndrome (“ME/CFS”) and fatigue and/or Post-COVID conditions of fatigue.

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

In May 2021, AIM exercised the option to re-purchase the New Brunswick manufacturing facility, pursuant to the terms of the March 2018 sale and lease-back agreement. The Company thereafter sold certain equipment and machinery that it determined to be obsolete and no longer needed for current or future manufacturing. On March 3, 2022, AIM entered into an Agreement of Sale and Purchase with Acellories, Inc. to purchase the property for an estimated $3.9 million, with AIM’s intention to keep some space specifically for its Alferon activity. The sale closed on November 1, 2022 for $3.7 million net of normal closing cost.

AIM’s business plan requires one or more Contract Manufacturing Organizations (“CMO”) to produce Ampligen API. This includes utilizing Polysciences Inc. (“Polysciences”) for the manufacture of our Poly I and Poly C12U polynucleotides and associated test methods. While AIM believes it has sufficient Ampligen API to meet current needs, it is also continually exploring new efficiencies so as to maximize its ability to fulfill future obligations.

In the opinion of management, all adjustments necessary for a fair presentation of the 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, 2021 and 2020, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 31, 2022.

Use of Estimates

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

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 2,445,805 and 1,617,145, are excluded from the calculation of diluted net loss per share for the nine months ended September 30, 2022, and 2021, respectively, since their effect is antidilutive due to the net loss.

Note 3: Equity-Based Compensation

The fair value of each option and equity warrant award is estimated on the date of grant using a Black-Scholes-Merton option pricing valuation model. Expected volatility is based on the historical volatility of the price of the Company’s stock. The risk-free interest rate is based on U.S. Treasury issues with a term equal to the expected life of the option and equity warrant. The Company uses historical data to estimate expected dividend yield, expected life and forfeiture rates. There were 300,000 options granted in the nine months ended September 30, 2022, and no options granted in the nine months ended September 30, 2021.

Stock option for employees’ activity during the nine months ended September 30, 2022, is as follows:

Stock option activity for employees:

Schedule of Stock Option Activity

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding January 1, 2021		1,498,798		$	4.22		9.11	$	—
Granted		150,000			0.70		9.17		—
Forfeited		(1,684	)		117.6		—		—
Expired		—			—		—		—
Outstanding September 30, 2022		1,647,114		$	3.78		8.43	$	—
Vested and expected to vest September 30, 2022		1,647,114		$	3.78		8.43	$	—
Exercisable September 30, 2022		1,542,949		$	2.43		6.66	$	—

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, 2022		412,500		$	4.15		5.85	$	—
Granted		150,000			0.70		9.17		—
Expired		(1,684	)		117.6		—		—
Vested		(456,651	)		1.43		—		—
Unvested September 30, 2022		104,165		$	6.52		3.14	$	—

Stock option activity for non-employees:

Schedule of Stock Option Activity

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding January 1, 2022		279,723	$	6.12		7.93	$	—
Granted		150,000		0.70		9.42		—
Forfeited		—		—		—		—
Expired		—		—		—		—
Outstanding September 30, 2022		429,723	$	4.10		7.96	$	—
Vested and expected to vest September 30, 2022		429,723	$	4.10		7.96	$	—
Exercisable September 30, 2022		354,526	$	4.21		8.32	$	—

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, 2022		97,831		$	3.89		7.82	$	—
Granted		150,000			0.70		9.42		—
Expired		—			—		—		—
Vested		(172,634	)		1.16		—		—
Unvested September 30, 2022		75,197		$	3.79		8.24	$	—

Stock-based compensation expense was approximately $792,000 and $1,320,000 for the nine months ended September 30, 2022, and 2021, resulting in an increase in general and administrative expenses, respectively.

As of September 30, 2022, and 2021, respectively, there was approximately $179,000 and $279,000 of unrecognized equity-based compensation cost related to options granted under the Equity Incentive Plan.

Note 4: Marketable Securities

Marketable securities consist of mutual funds. As of September 30, 2022, and December 31, 2021, it was determined that none of the marketable securities had an other-than-temporary impairment. As of September 30, 2022, and December 31, 2021, all securities were measured as Level 1 instruments under the fair value measurements standard (See Note 11: Fair Value). As of September 30, 2022, and December 31, 2021, the Company held approximately $6,986,000 and $16,175,000 in mutual funds.

Mutual Funds classified as available for sale consisted of:

Schedule of Available for Sale

September 30, 2022

(in thousands)

Securities	Fair Value		Short-Term Investments
Mutual Funds	$	6,986	$	6,986
Totals	$	6,986	$	6,986

Schedule of Equity Securities

September 30, 2022

(in thousands)

Securities
Net losses recognized during the period on equity securities	$	(1,769	)
Less: Net gains and losses recognized during the period on equity securities sold during the period		(598	)
Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date	$	(1,171	)

Mutual Funds classified as available for sale consisted of:

December 31, 2021

(in thousands)

Securities	Fair Value		Short-Term Investments
Mutual Funds	$	16,175	$	16,175
Totals	$	16,175	$	16,175

December 31, 2021

(in thousands)

Securities
Net losses recognized during the period on equity securities	$	(88	)
Less: Net gains and losses recognized during the period on equity securities sold during the period		—
Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date	$	(88	)

Note 5: Accrued Expenses

Accrued expenses consist of the following:

Schedule of Accrued Expenses


	(in thousands)
	September 30, 2022		December 31, 2021
Compensation	$	33	$	1
Professional fees		1,535		169
Clinical trial expenses		—		61
Other expenses		199		207
Accrued expenses	$	1,767	$	438

Note 6: Property and Equipment, net

Schedule of Property and Equipment


	(in thousands)
	September 30, 2022			December 31, 2021
Land, buildings and improvements	$	—		$	3,900
Furniture, fixtures, and equipment		2,353			2,353
Total property and equipment		2,353			6,253
Less: accumulated depreciation		(2,235	)		(2,206	)
Property and equipment, net	$	118		$	4,047

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. Depreciation expense for the nine months ending September 30, 2022 and September 30, 2021 was $29,000 and $484,000.

The Company made a strategic shift on in-house manufacturing and recorded an impairment of the facility in the amount of $1,800,000 during the year ended December 31, 2021. During the period ending September 30, 2022, the Company reported assets held for sale related to the pending sale of the manufacturing facility located at 783 Jersey Avenue. On November 1, 2022, AIM completed the sale of its facility at 783 Jersey Avenue, New Brunswick, N.J., for $3.7 million net of normal closing cost. (See Note 11 Fair Value).

Note 7: Patents

Schedule of Patents, Trademark Rights

(in thousands)
December 31, 2020	$	1,498
Acquisitions		592
Amortization		(116	)
December 31, 2021	$	1,974
Acquisitions		96
Amortization		(57	)
September 30, 2022	$	2,013

Patents and trademarks are stated at cost (primarily legal fees) and are amortized using the straight-line method of the estimated useful life of 17 years.

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


Period Ending December 31,
(in thousands)
2022	$	23
2023		154
2024		178
2025		199
2026		235
Thereafter		1,224
Total	$	2,013

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 September 30, 2022, and December 31, 2021, the Company had 713 and 715 shares of Series B Convertible Preferred Stock outstanding, respectively. Holders shall be entitled to receive, and the Company shall pay, dividends on shares of Series B Preferred Stock equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividend actually paid on shares of Common Stock when as and if such dividends are paid on shares of the Common Stock. Each such Preferred Share is convertible into 114 shares of common stock. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the Holders shall be entitled to receive out of the assets, whether capital or surplus of the Company the same amount that a holder of Common Stock would receive if the Preferred Stock was fully converted. The Series B Convertible Preferred Stock shall have no voting Rights.

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 nine months ending September 30, 2022 and September 30, 2021, 2 and 7 shares, respectively, 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.

On July 7, 2020, the board of directors approved a plan pursuant to which all directors, officers, and employees could purchase from the Company up to an aggregate of $500,000 worth of shares at the market price. Pursuant to NYSE American rules, this plan was effective for a sixty-day period commencing upon the date that the NYSE American approved the Company’s Supplemental Listing Application. When this plan expired, the board of directors approves subsequent similar $500,000 plans for all directors, officers and employees to buy Company shares from the Company at the market price. Subsequent plans were approved by the board of directors upon the expiration of prior plans. The latest plan was approved by the board of directors on March 2, 2022.

During the nine months ended September 30, 2022, the Company issued a total of 87,045 shares of its common stock at prices ranging from $0.76 to $1.02 for a total of $80,000 as part of the employee stock purchase plan, not from the 2018 Equity Incentive Plan.

During the twelve months ended December 31, 2021, the Company issued a total of 132,238 shares of its common stock at prices ranging from $1.16 to $2.35 for a total of $205,000.

On September 27, 2019, the Company closed a public offering underwritten by A.G.P./Alliance Global Partners, LLC (the “Offering”) of (i) 1,740,550 shares of Common Stock; (ii) pre-funded warrants exercisable for 7,148,310 shares of Common Stock (the “Pre-funded Warrants”), and (iii) warrants to purchase up to an aggregate of 8,888,860 shares of Common Stock (the “Warrants”). In conjunction with the Offering, 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. As of September 30, 2022, there are 15,000 Warrants outstanding.

On July 19, 2019, the Company entered into a new Equity Distribution Agreement (the “2019 EDA”) with Maxim Group LLC (“Maxim”), pursuant to which it could sell, from time to time, shares of its Common Stock through Maxim, as agent. The 2019 EDA replaced a prior EDA with Maxim. For the year ended December 31, 2020, the Company sold 20,444,807 shares under the 2019 EDA for total gross proceeds of $53,936,615, which includes a 3.5% fee to Maxim of $1,888,727. During the period ended December 31, 2021, the Company sold 5,665,731 shares under the 2019 EDA for total gross proceeds of $13,301,526, which includes a 3.5% fee to Maxim of $465,533. The 2019 EDA was terminated in early February 2021.

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. During first quarter of 2022, 300,000 options were issued to employees with an exercise price of $.70 for a period of ten years with a vesting period of one year. During fourth quarter of 2021, 613,512 options were issued to employees with an exercise price range of $1.11 to $1.71 for a period of ten years with a vesting period of one year.

As of September 30, 2022, and December 31, 2021, there were 48,082,275 and 47,994,672 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

During the third quarter of 2022 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: 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 occurrence of a Fundamental Transaction. The fair value of the redeemable warrants (“Warrants”) related to the Company’s April 2018, and March 2019 common stock and warrant issuance, 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 April 2018 Warrants:

SEC Form 10-Q filed by AIM ImmunoTech Inc.