Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Under Rule 14a-12

No fee required

Fee paid previously with preliminary materials

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

AIM’s stock price has declined by more than 99%.

AIM’s stock price continues its free fall – declining by approximately 40% in 2024 alone.

AIM has experienced massive net losses of over $100 million since 2016, and losses are accelerating – from $9 million reported in 2019 to $29 million reported in 2023.

Massive losses are driven primarily by the Board’s self-interested entrenchment efforts – excessive general and administrative (G&A) expense that ballooned to $21.1 million in 2023, up from $8.6 million in 2021.

Excessive G&A expense comes at the expense of research and clinical development (R&D) for Ampligen, with R&D expenses consistently falling below G&A (approximately half in recently reported periods).

As a direct result of the Board’s failures, AIM’s financial condition is perilous and it risks getting delisted. According to AIM’s recent third quarter Form 10-Q filing:

As of September 30, 2024, AIM was not in compliance with NYSE American requirements.

Management expressed substantial doubt about AIM’s ability to continue as a going concern.

Effectively liquidity (cash and cash equivalents plus marketable securities, minus accounts payable) was less than $1.0 million, providing less than one month of runway based on recent rate of cash used in operations, rendering AIM functionally insolvent.

This gross financial mismanagement comes at the expense of clinical development, with a lack of focus and proper investment impeding any meaningful progress.

Receipt of a usurious two-year loan bearing an effective interest rate of approximately 25% per year from a lender controlled by an individual with a history of securities law violations – someone the SEC described as a “recidivist violator of the federal securities laws.”

An equity line of credit with a different entity controlled by this same troubling individual, providing that the Company could sell up to almost 10.0 million shares (almost 20% of outstanding shares at the time) at a discount to market price, and allowing this individual with a history of securities law violations to profit at the expense of existing stockholders when the shares are quickly dumped into the market.

The sale of 10.3 million shares in two separate transactions to a short-term hedge fund for approximately $2.9 million of proceeds after expenses and granting that hedge fund warrants to purchase another 20.6 million shares at the same prices – effectively granting the hedge fund the upside of over one-third of the entire Company for minimal proceeds. According to the recent resale registration statement filed by AIM, this hedge fund has already sold the entire 10.3 million initial shares since its first purchase in June 2024, contributing to significant downward pressure on the stock price.

AIM also continues to maintain an at-the-market (“ATM”) offering program currently allowing it to sell up to $3.3 million of shares (which would be approximately 12.5 million shares at current prices). AIM has a long history of excessive ATM usage – selling 20 million shares in 2020 alone (which was twice the total number of shares outstanding at the beginning of the year).

After nearly nine years of control (and collectively involvement with AIM going back even longer), the incumbent Board has been a disaster. The plummeting stock price and lack of viable financing show that stockholders and investors agree: it’s time for a new Board and a new direction. The clock has run out for the incumbent Board.

The incumbent Board even bought itself two additional years to show progress by wasting $15 to $20 million* to entrench themselves and disenfranchise stockholders instead of advancing the strategic direction and fortunes of the Company, and they have failed and AIM’s condition has continued to significantly deteriorate. *Represents Kellner Group estimate based on increase in Company’s G&A expense from 2021 to 2023 and explanations provided as disclosed in AIM’s Annual Reports on Form 10-K for past two years, together with continued elevated G&A expenses in 2024 to date as disclosed AIM’s most recently Quarterly Report on Form 10-Q.

It is clear that the incumbent Board has no plans to create stockholder value and will not, and cannot, change course.

Ted D. Kellner:

Founded and operated Fiduciary Management, Inc., a highly successful investment management firm, until his retirement. This firm currently has $16.0 billion in assets under advisement.

Founded and operates a real estate investment firm that currently owns and manages approximately $1.8 billion in assets.

Has served on the board of directors of large and sophisticated organizations included Marshall & Ilsley Corporation, Metavante Technologies and American Family Mutual Insurance Company, and is active in charitable and community endeavors.

One of the Company’s largest stockholders for the past several years.

Todd Deutsch:

Also one of the Company’s largest stockholders for the past several years.

A successful trader and financial professional who currently manages his family office after a career as a portfolio manager and trader at various firms, including Bascom Hill Partners and Goldman Sachs.

Serves on the board of directors of Esquire Financial Holdings, Inc., a publicly traded financial holding company.

Member of the compensation committee of Esquire.

Robert L. Chioini:

Brings much needed life sciences experience, having founded and served as CEO of Rockwell Medical, Inc., a Nasdaq-listed pharmaceutical drug and medical device company, for over 20 years.

During his time at Rockwell, built the company to a valuation of almost $1 billion and generated a significant track record of successfully fundraising, running clinical trials through FDA approval, commercializing products and creating value for stockholders.

The incumbent Board continues to falsely claim Mr. Chioini was fired. The truth is that Mr. Chioini and the Rockwell CFO at the time filed a whistleblower and retaliation claim against conflicted directors and upon a settlement agreement received a significant financial payout to resolve the issue. This is demonstrated by the public record and the incumbent Board is fully aware of these facts.

Paul W. Sweeney:

Co-founded PS Capital Partners, a private equity firm with a focus in manufacturing and process-oriented industries, in 2001.

Through this role, he has successfully invested in and managed numerous companies across a variety of industries, creating value through long-term investments and collaboration with management.

Has served on the board of many portfolio companies, as well as on the boards of a number of non-profit and community organizations.

Rebuild the trust of current and new investors and attract sustainable capital. We believe the incumbent Board has burned bridges with the investment community through its gross waste, inadequate performance and lack of transparency and accountability to stockholders. It is absolutely necessary for AIM to attract long-term, institutional health care investors that can support clinical development through commercialization. The Kellner Group Nominees will bring credibility to the Board and clearly communicate a focused strategy for the creation of stockholder value. Through their networks and business reputations, they believe they can build relationships and attract capital and new investors.

Reduce excessive G&A spending; focus on effective and targeted R&D spending. AIM’s G&A expending has clearly been excessive under the incumbent Board, largely as a result of improper entrenchment efforts and excessive executive and director compensation in our view. The Kellner Group Nominees will seek to meaningfully reduce G&A spending in the near term. Beyond the obvious significant reductions in litigation expenses and reduced compensation, the Kellner Group Nominees will conduct a full review to ensure all G&A spending is right-sized for the organization and provides value to stockholders. At the same time, they will ensure that R&D spending is at appropriate levels relative to G&A – it is unacceptable for G&A to consistently exceed R&D by significant amounts, almost double in recent periods, for a clinical-stage life sciences company.

Focus on the most promising indications for Ampligen and invest resources into those efforts. Under the incumbent Board, AIM has pursued numerous and varied potential indications for Ampligen without communicating a clear and consistent strategy and focus. A lot of this has been done through collaborations rather than company-sponsored trials. The Kellner Group Nominees intend to review all available data and the status of AIM’s numerous programs and collaborations and allocate resources to the most promising indications. Importantly, the strategy will be clearly communicated to stockholders.

The Kellner Group Nominees will put an end to the perpetual lack of transparency and credibility of the incumbent Board. The Kellner Group Nominees intend to responsibly determine and communicate strategy after they are able to conduct an independent review of all available information.

The Kellner Group Nominees intend to bring in much needed expertise, in oncology and other relevant fields, to work together with the Company’s existing scientific personnel to conduct a thorough assessment of all relevant data to ensure the most value-resulting clinical programs are properly executed and report the findings to stockholders.

Mr. Kellner has significant connections to top Midwest research hospitals through his membership on the board of the Medical College of Wisconsin and the charitable activities of the Kelben Foundation, his family foundation, and intends to utilize this network to identify appropriate personnel for this process.

This independent review will be especially important given that AIM’s company-sponsored trials are being conducted by Amarex, a troubled CRO that recently paid a multi-million dollar settlement to a client as a result of its practices (and whose former CEO – an individual quoted in several AIM press releases in recent years – is facing criminal fraud trial as a result).

Review management and practices. We believe significant change is needed in the way AIM is operated for all the reasons described in this communication and in our proxy statement. This must include some level of change in management.

In particular, after being found by the Delaware Supreme Court, along with other directors, to have breached his fiduciary duty of loyalty to the Company and its stockholders, and causing severe damage to the Company’s financial condition and reputation in furtherance of his wrongful acts, we believe it would be difficult for the Company to turn around its fortunes and regain investor confidence while Mr. Equels remains the Company’s CEO.

The Kellner Group Nominees, if elected, intend to conduct a review to gather all necessary information and meet with management and key personnel before making any decisions and ultimately will do what they believe to be in the best interest of the Company and its stockholders after conducting such review.

As part of this process, the Kellner Group Nominees intend to attempt to work constructively with existing management, including Mr. Equels, to ensure continuity in key roles and functions and, to the extent changes are deemed necessary, to provide for appropriate transition arrangements.

However, if this is not possible, the Kellner Group Nominees believe they collectively have the necessary skill set and network to lead a turnaround for AIM, including the recruitment of qualified personnel in short order.

Implement governance changes. The incumbent Board has utterly failed to implement an effective governance structure. The Kellner Group Nominees intend to:

Identify an additional independent director to add to the Board, with a focus on finding a candidate with no past history with AIM, with scientific or other relevant expertise, and with a diverse background.

Engage a new, independent compensation consultant to overhaul existing compensation structures with goals of reducing guaranteed compensation, reducing executive and director fixed and cash compensation, implementing an incentive-based compensation structure with objective performance measures and appropriate vesting schedules, and eliminating excessive severance agreements.

Review AIM’s poison pill, which has been in effect for almost 25 years without stockholder approval, with consideration of putting it to a stockholder vote if it will be maintained long-term.