November 6, 2023
Dear Fellow Shareholders:
Thank you for your investment in AIM ImmunoTech (“AIM” or the “Company”). We remain deeply committed to our mission of serving patients and delivering value for you, our shareholders. We are excited about the opportunities ahead as we continue to develop life-saving therapies – including oncology treatments for large potential markets with lethal unmet medical needs.
Last year, we told you that we were building substantial positive momentum. This remains the case, with numerous milestones achieved over the past 12 months and more expected through the rest of 2023. To protect this progress and allow it to continue, we have executed a multi-year turnaround of the business ensuring that the Company’s operational execution is fully supported by a strong cash position.
Unfortunately, as happened last year, a group of activist investors (the “Activist Group”) is trying to take over control of the AIM Board of Directors (the “Board”) to further their own self-serving motives. If successful, the Activist Group would be able to disrupt the Company’s progress and put the value of your investment in danger.
The Activist Group comprises effectively the same individuals who surfaced in 2022. As you might recall, the Board determined that the nomination notice delivered by a member of the Activist Group in connection to the 2022 Annual Meeting of Stockholders (the “2022 Annual Meeting”) was not valid because it contained numerous deficiencies and false and misleading statements in violation of the Company’s Bylaws (the “Bylaws”). Furthermore, we discovered the Activist Group contained several individuals with concerning backgrounds – including two convicted criminals: Franz N. Tudor, who was convicted of insider trading, and Michael J. Xirinachs, who pled guilty to wire fraud involving fraudulent securities trading and misuse of funds. Tudor and Xirinachs orchestrated the 2022 nominations and Xirinachs – who owns no AIM stock – agreed to fund them, along with the Activist Group’s repeat nominee Robert L. Chioini, who also owns no AIM stock. Tudor, Xirinachs and Chioini worked together for many years at Rockwell Medical prior to Chioini being terminated as CEO in 2018. A member of the Activist Group subsequently brought litigation in Delaware, but the Court agreed with the Board, noting that the Activist Group’s 2022 nomination notice “was – at best – misleading.”
This year, the Board has once again found that the Activist Group’s nomination notice (the “Notice”) – submitted by Ted D. Kellner – seeking to put forth three individuals for election as directors to our four-person Board, is invalid because it once again omits and misleads as to key information our Bylaws required Kellner to disclose regarding, among other things, those who have been involved in the deceptive campaign to acquire control of AIM. In our view, this is an attempt to mislead AIM shareholders. Numerous individuals referenced in the Notice were part of the unsuccessful campaign to take control of the Board in 2022, including the two criminals who surfaced last year. We are currently involved in litigation with the Activist Group around this issue. Unless the Court rules otherwise, the Company will not recognize the nominations and any proxies submitted or votes cast for the election of the individuals from the Activist Group will be disregarded.
We want to stress that the Bylaws exist for the protection of all shareholders. The Board intends to defend shareholders vigorously against this group of interconnected individuals, including convicted felons, who seek to disregard our Bylaws and make their own rules in an attempt to take control of AIM, without paying a control premium, and use shareholder funds for its own interests.
Your vote at the 2023 Annual Meeting of Stockholders (the “2023 Annual Meeting”) scheduled for December 1st is critical in order to safeguard AIM and maintain our promising momentum. This is why we urge you to vote for the election of your incumbent Board members – Stewart L. Appelrouth, Nancy K. Bryan, Thomas K. Equels and Dr. William M. Mitchell.
Consider the following:
AIM Is Building on Substantial Momentum to Bring New Therapies to Market
We continue to be laser-focused on our development programs and achieving upcoming clinical and regulatory milestones. Our pipeline includes treatments for a range of life-threatening cancers, debilitating immune disorders and viral conditions (including Long COVID). Our lead product, Ampligen, is an immuno-modulator with significant opportunity across multiple high-value disease areas, and we continue to explore its broad application potential through our R&D efforts.
We are able to continue developing Ampligen and stay focused on clinical execution due to the Company’s prudent financial management over the past year. We have reduced R&D and G&A expenses, and the Company’s cash position is expected to fund operations across multiple key milestones through the end of 2024. It is imperative that we protect this progress.
Recent clinical highlights include:
- September 2023: Received complete topline data report from Roswell Park Comprehensive Cancer’s Phase 1 study evaluating Ampligen (rintatolimod) as a component of a CKM regimen for the treatment of early-stage triple negative breast cancer (TNBC). The results confirmed the treatment was well tolerated, with promising clinical activity of pathologic complete response (pCR) + microinvasive residual disease (ypTmic) at 66%, comparable to pembrolizumab/neoadjuvant chemotherapy (NAC).
- August 2023: Ampligen was identified as one of two potential therapeutics possessing modest to high potential for the treatment of post-COVID conditions out of 22 identified ongoing randomized clinical trials in a recent peer-reviewed publication.
- August 2023: Received updated data from Early Access Program (EAP) at Erasmus Medical Center which bolsters previously published data indicating that treatment with Ampligen following FOLFIRINOX was associated with improved survival rates in pancreatic cancer patients compared to matched controls of patients who did not receive Ampligen.
- August 2023: Commenced and completed full enrollment in the Company’s Phase 2 study evaluating Ampligen as a potential therapeutic for people with post-COVID conditions (AMP-518).
- June 2023: Announced the publication of pre-clinical data that suggests Ampligen has the potential to act directly on tumor cells to reduce tumor cell growth in pancreatic cancer patients with sufficient tumor levels of TLR-3, indicating a potential biomarker to identify patients who may respond to Ampligen. The anti-tumor analysis was published in the peer-reviewed journal American Journal of Cancer Research in the paper “Rintatolimod: A potential treatment in patients with pancreatic cancer expressing Toll-like receptor 3.”
- June 2023: Received the required approvals from the Netherlands for Erasmus Medical Center (“Erasmus MC”) to begin a Phase 1b/2 study evaluating Ampligen in combination with AstraZeneca’s Imfinzi, an FDA approved checkpoint inhibitor in specific cancers, under the previously announced external sponsored collaborative clinical research agreement with AstraZeneca and Erasmus MC.
- June 2023: Announced the opening of an additional clinical trial site at the University of Nebraska for Phase 2 study of Ampligen for the treatment of pancreatic cancer (AMP-270).
Our Refreshed Board Has the Right Industry Experience and Backgrounds to Successfully Lead AIM Forward
Under the current Board, AIM is positioned to capitalize on its significant momentum and achieve additional clinical milestones in 2024. Your current Board members – and candidates for election this year – include:
- Stewart L. Appelrouth – Mr. Appelrouth has valuable financial and regulatory expertise as a certified public accountant with over 40 years of accounting and audit experience. His extensive experience as an accountant and provider of business and tax consulting services equips him to serve as Chairman of the Board’s Audit Committee.
- Nancy K. Bryan – Ms. Bryan possesses deep commercial, marketing, business development and corporate finance expertise from her service at major pharmaceutical companies including Merck, GlaxoSmithKline and Bayer Pharmaceuticals as well as startup biotech companies including Indevus Pharmaceuticals and NPS Pharmaceuticals. She was named a director in March 2023 as part of AIM’s effort to bring additional diverse perspectives and biotechnology commercialization experience into the boardroom.
- Thomas K. Equels, M.S., J.D. – Mr. Equels is Executive Vice Chairman, Chief Executive Officer and President and has over 25 years of experience as a practicing attorney specializing in complex business litigation. He also has extensive experience in clinical trial design and development, creating intellectual property concepts and in financing drug development.
- Dr. William M. Mitchell – Dr. Mitchell serves asChairman of the Board and has extensive medical industry experience, including as a Professor of Pathology at Vanderbilt University School of Medicine, a board-certified physician and a former member of the board of directors of Chronix Biomedical, a company involved in next-generation DNA sequencing for medical diagnostics.
The Activist Group is Not Acting in the Best Interests of AIM Shareholders and Cannot be Trusted With Your Investment
We believe the Activist Group has a self-interested agenda that will put your investment in AIM at serious risk. In fact, the Activist Group appears motivated in part by its attempt to get reimbursed for the millions of dollars of expenses it has incurred in trying to take over the AIM Board.
The Activist Group has disclosed that its members “intend to seek reimbursement from the Company of all expenses” for not only their 2023 campaign and litigation but also all expenses incurred in connection with last year’s failed campaign. In total, the Activist Group intends to seek reimbursement from the Company for expenses that they estimate will exceed $5.5 million. They have also indicated that they do not intend to submit the matter of their reimbursement to a shareholder vote if their nominees are elected, meaning that they plan to force you – the AIM shareholders – to foot the bill for their millions of dollars of expenditures without giving you any say. Remarkably, over $2 million of this reimbursement would be used to repay Chioini and his long-time associate and known felon, Xirinachs – neither of whom is even an AIM shareholder – for their failed efforts to take control of the Company in 2022.
The Delaware Court of Chancery described the Activist Group as a “web of individuals” working together to nominate a slate of nominees to take control of the Board in 2022. As noted above, the Activist Group’s interconnections and similar composition this year is striking. (See Figure 1).
AIM is committed to protecting the best interests of all shareholders and positioning the Company to capitalize on important upcoming clinical milestones. We encourage you to vote on the WHITE card to safeguard AIM and support its highly qualified Board.
To learn more, shareholders are encouraged to visit: www.SafeguardAIM.com
Sincerely,
The AIM ImmunoTech Board of Directors
