Corrects the Record Regarding Activist Group’s
False and Misleading Statements
Highlights Evidence of Group’s Scheme to Have
Jorgl Serve as the “Face of the Activist” to Help Them “Get
Control” Without Paying a Premium to All Shareholders
Group Concealed that Its Campaign Was
Orchestrated by One Convicted Felon and Financed by Another
Criminal – Until Forced to Do So in Context of Litigation
Urges Shareholders to Continue to Support
Company’s Positive Momentum Towards Value Creation by Voting on the
WHITE Proxy Card to Re-Elect AIM’s
Current Directors
The Board of Directors (“Board”) of AIM ImmunoTech Inc. (NYSE:
American AIM) (“AIM” or the “Company”) today issued a letter to
shareholders to correct the record around recent false and
misleading statements made by Jonathan Jorgl and other members of
an activist group, who have attempted to nominate two director
candidates for election as directors at the Company’s 2022 Annual
Meeting of Shareholders and are seeking to take control of the
Board.
The full text of the letter follows:
October 26, 2022
Dear fellow shareholders:
We are writing to you today to set the record straight following
the web of false and misleading statements made recently by a group
of individuals that is trying to take control of the Board of
Directors (the “Board”) of AIM ImmunoTech (the “Activist Group”).
Key facts that the Activist Group is concealing include:
- The fact that its campaign to gain control of AIM has been
orchestrated by an individual – Franz Tudor – who has been
convicted of insider trading and is being funded by another
individual – Michael Xirinachs – who recently pled guilty to wire
fraud.
- After Tudor determined to seek control via a proxy contest and
selected the director nominees, he and his nominees searched for
someone to buy AIM stock and serve as the “face” of the effort
because the Activist Group wanted to hide the involvement of
criminals (i.e., Tudor and Xirinachs).
- The Activist Group intends to potentially acquire AIM, merge
it with another company or sell all or part of the
Company.
Given that these facts only came out in the context of expedited
litigation in which the Activist Group tried to prevent and evade
discovery, shareholders should ask themselves what else this group
may be hiding.
As you may know, our 2022 Annual Meeting of Shareholders (the
“Annual Meeting”) is scheduled to be held on November 3, 2022.
Jonathan Jorgl, the “face” of the Activist Group, who personally
owns only 1,000 shares of AIM and purchased them in late June 2022,
has attempted to nominate two director candidates – Robert Chioini
and Michael Rice – for election to the Board at the Annual Meeting.
If these two individuals were elected, they would control the Board
and the Company.
Shareholders have the right to nominate director candidates for
election to the Board, but are required to comply with AIM’s
bylaws. Like many companies, AIM has bylaw provisions in place to
ensure that shareholders nominating director candidates present
sufficient information for the Board to assess the nominations and
to allow other investors to make informed decisions when they vote.
In this case, the Activist Group did not provide this required
information and, alarmingly, appears to have concealed myriad facts
about its actions, funding, associates and intentions.
After careful deliberation, the Board unanimously determined
that these nominations did not comply with AIM’s bylaws and were
invalid. Jorgl is attempting to fight this determination in a case
currently pending before the Delaware Court of Chancery. On October
5, 2022, the Delaware Court held a hearing on Jorgl’s request for a
preliminary injunction. The Court has not yet ruled, but the
Company anticipates that the Court will be issuing its decision in
advance of the Annual Meeting. Unless the result of the Delaware
litigation is that the nominations are valid, all proxies submitted
by the Activist Group at the Annual Meeting will be
disregarded.
The Activist Group has cherry-picked and distorted information
from the litigation discovery and has attempted to create a
smokescreen to hide its true intentions. The Company believes the
Activist Group is spreading misinformation about the Company, its
directors and its progress, including through numerous misleading
StockTwits posts by Tudor under his handle “beaufordb” (which he
conceded during a deposition belongs to him). It is important that
shareholders understand the truth and are not misled by those who
do not share their interests.
Fortunately for all shareholders, a great deal of information
has come to light as a result of the Activist Group’s lawsuit
against the Company. These facts reveal the true
picture:
- A convicted criminal, Franz
Tudor, initiated the Activist Group campaign and selected the
nominees,
- The campaign is being funded by another criminal, Michael Xirinachs, who recently
pled guilty to wire fraud,
- Jorgl is merely serving as the “face”
of the group to conceal the significant roles of the
criminals, and
- The Activist Group has plans to take
control of the Company’s Board for purposes at odds with the
best interests of all shareholders.
Please consider the following:
The Activist Group’s Campaign Was
Orchestrated by Undisclosed Individuals – Including Two Convicted
Criminals – Who Have Been Trying to Take Control of AIM for
Years
- From the start, Jorgl failed to disclose that he was making his
nominations on behalf of and in concert with other individuals,
including Tudor, Ted Kellner, Todd Deutsch and Walter Lautz – who
had been conspiring for years to influence control of AIM and
profit through stock manipulation efforts.
- Tudor is a convicted insider trader who has been improperly
interfering with AIM’s business relations and seeking to disrupt
AIM for approximately two years – ever since AIM declined his bid
in 2020 to be hired as an international business development
consultant to the Company. His harassment of AIM and attempts to
interfere with its business relations became so extreme that AIM
successfully obtained an injunction against Tudor in Marion County,
Florida in August 2021.
- As early as December 2021, Tudor and Lautz were working to find
an activist front man to remove AIM President, CEO and director
Thomas Equels and the other members of the Board from AIM, as shown
in their private communications:
- “[T]his board needs to be ousted”
- “[W]e need to find a way to get Tom [Equels]
ousted”
- Prior to Jorgl submitting his nominations, Tudor worked with
Lautz to present a proposal to AIM to nominate Chioini (later one
of Jorgl’s nominees) and Daniel Ring as candidates for the Board.
After that invalid proposal and its purported nominations were
properly rejected, Tudor emailed AIM’s outside IR firm and said
“you now get gloves off.”
Jorgl is Merely the “Face” of the
Activist Group’s Campaign – Which is Financially Supported by
Michael Xirinachs, Who Owns No AIM Stock and Recently Pled Guilty
to Wire Fraud
- In his nomination notice, Jorgl did not include the true
arrangements and motivations behind the nominations. Discovery in
the Delaware litigation brought to light numerous items that were
omitted.
- In early June 2022, Tudor sent an email to Deutsch stating that
Tudor had two candidates “to run and get control of the BOD,” and
further informing Deutsch that “I have a shareholder who is
will[ing] [sic] to have their name as the lead” but that he had not
yet been able to find someone to finance the effort.
- In June of 2022, Lautz texted Tudor indicating that Lautz could
no longer be “the face” of the activist undertaking.
- Lautz followed up several days later asking Tudor “were you
able to find someone to be the face of the activist?”
- Days later, the Activist Group learned that Jorgl, who owned no
AIM stock, was willing to be the “face” of its endeavor. Chioini
texted Rice:
- “[w]e really need to get [Jorgl] b[u]y the shares today every
day matters.”
- “Try to get him to do it in the next 40 minutes. It’s probably
very important. And I’ll jump on the phone with them and talk to
the guy if he wants.”
- “I [am] burning a Cuban limited edition Hoyo de Monterrey
[cigar] sitting on my dock in the 87 [degree] heat under the
sun. The same thing we’re going to do when we celebrate
winning board seats taking control of the company.”
- Finally, discovery revealed that Michael Xirinachs – whose
involvement Jorgl did not initially disclose – was actively
involved with the activist effort for months. Xirinachs recently
pled guilty to criminal charges of wire fraud relating to
fraudulent securities trading and promotion and material
misrepresentations to investors and misuse of funds. According
to the Activist Group’s definitive proxy statement, Xirinachs was
sentenced by a federal court on June 13, 2022 to three years of
probation and ordered to pay hundreds of thousands of dollars in
restitution.
- Email communications produced in discovery show that
Xirinachs began discussing AIM with the Activist Group as early as
April 29, 2022, less than two months before his sentencing for wire
fraud in connection with penny stock manipulation. Xirinachs
subsequently agreed to fund the effort to take over AIM.
- Xirinachs was deeply involved in the scheme nearly two months
before the Activist Group identified Jorgl to serve as the “face”
of the efforts.
- Initially, the Activist Group tried to construct a fiction
that an entity called River Rock Advisors was funding the
nomination efforts and stated in a press release that River Rock
would be participating in the solicitation. But discovery
revealed that River Rock had no funds and that Xirinachs is
secretly funding some or all of the group’s efforts, leading to
the Activist Group having to finally disclose Xirinachs’ role in
its proxy statement.
The Activist Group Has Nefarious
Intentions
Perhaps most damning for the Activist Group’s campaign is that
discovery has revealed it is hiding its true intentions for the
Company.
The Company received additional evidence in the litigation that
the Activist Group includes other undisclosed AIM shareholders with
significant ownership in likely violation of the federal securities
laws. This evidence included handwritten notes belonging to Ted
Kellner that, in reference to 2022 conversations with Todd Deutsch
and others, estimate that their undisclosed group had significant
aggregate beneficial ownership over AIM shares:
- “Thought collectively we had 20 percent”
- “What do we own? 15 to 18 percent. Franz Tudor? Who wrote
this [memo on AIM]? Franz”
With this context, it is no surprise that despite owning just
1,000 shares acquired for $870, Jorgl and the members of the
Activist Group that have been disclosed have said they will spend
nearly 1,000 times that (approximately $850,000) on its campaign to
take control of the Board.
As to what the Activist Group might do if it is successful,
Xirinachs stated in a July 2022 email to Chioini:
- “The way I hope this all plays out is we get control of AIM
… we continue to look for opportunities to either acquire, (to spin
off at a later time), license technology, or possibly merge
with.”
- Xirinachs twice refers to Jorgl’s nominees as “our
slate.”
The AIM Board Has Successfully Executed
on a Multi-Year Turnaround Plan and the Company Has Significant
Momentum
The incumbent AIM Board has overseen the Company’s successful
efforts to overcome multiple obstacles, keep the lights on when
there was no money, improve its financial condition and set the
Company on a path towards long-term shareholder value creation.
- In 2015, AIM was in crisis: cash was extremely low, the NYSE
threatened to delist AIM’s stock because it was trading under $0.20
per share, and auditors questioned AIM’s going-concern status. The
Company’s supply of its primary drug, Ampligen, was perilously low
and there were no clinical trials in the works.
- Then, in 2016, the current members of the Board put in place a
plan to contain expenses, including through reworking and in
numerous instances deferring executive and director compensation,
and to increase cash reserves to manufacture Ampligen. The
turnaround plan has been successful. Ampligen is now in adequate
supply, AIM is conducting several clinical trials and results to
date are promising, establishing the drug’s potential in multiple
applications.
- We have achieved multiple potentially game-changing clinical
and regulatory milestones this year, and expect this positive
momentum to continue throughout the rest of 2022 and into next
year. These include the following:
- Extremely positive data from a single-center named patient
program was published in March 2022. The manuscript titled,
“Rintatolimod (Ampligen®) enhances numbers of peripheral B cells
and is associated with longer survival in patients with locally
advanced and metastasized pancreatic cancer pre-treated with
FOLFIRINOX: a single-center named patient program,” was published
in the peer-reviewed journal, Cancers Special Issue: Combination
and Innovative Therapies for Pancreatic Cancer.
- Presented positive data in an abstract at the American
Association for Cancer Research (AACR) Annual Meeting 2022 which
shows significant survival advantage when Ampligen is combined with
Keytruda in advanced recurrent ovarian cancer.
- We received notification from the U.S. Food and Drug
Administration (“FDA”) that the FDA’s Clinical Hold on AIM’s
investigational new drug (“IND”) application for a Phase 2 study of
Ampligen as a therapy for locally advanced pancreatic cancer
(“AMP-270”) had been lifted and the Company may proceed with the
study.
- On July 28, 2022, we reported positive preliminary pilot study
data from our ongoing Expanded Access Program (“AMP-511”)
evaluating Ampligen in patients with chronic fatigue symptoms
following COVID infections (a form of “Long COVID”).
- Subsequent to the positive results in AMP-511, on October 12,
2022, we reported that the FDA had authorized AIM to proceed with a
Phase 2 study evaluating Ampligen as a therapeutic for patients
with post-COVID conditions (“AMP-518”).
- Your Board has the right experience, skill sets and deep
knowledge of the Company and its drug candidates to continue
overseeing the successful execution of our strategy to deliver
therapies for patients and value for our shareholders.
- Stewart L. Appelrouth is a certified public accountant
with over 40 years of accounting and audit experience. He serves as
head of the Board’s audit committee and brings important
leadership, industry, financial and regulatory expertise, including
having served as a FINRA Arbitrator.
- Thomas K. Equels, M.S., J.D., Executive Vice Chairman,
Chief Executive Officer and President, has decades 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 – as well as industry legal
experience.
- Dr. William M. Mitchell, Chairman, 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. Dr. Mitchell is the inventor of record on
numerous U.S. and international patents and is experienced in
regulatory affairs through filings with the FDA.
We appreciate your support and investment in the Company. As
described above, the Activist Group’s actions have created much
noise and distraction around this year’s Annual Meeting. We urge
you to listen to the facts and recognize that the Activist Group’s
best interests are not aligned with yours.
Please ignore any proxy materials you receive from the Activist
Group and vote on the Company’s WHITE proxy card for your current
highly qualified directors to protect your investment.
Sincerely,
The AIM ImmunoTech Board of Directors
WE URGE YOU TO COMPLETE, DATE, AND SIGN THE
ENCLOSED WHITE PROXY CARD AND MAIL IT
PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED, OR VOTE BY
TELEPHONE OR THE INTERNET AS INSTRUCTED ON THE WHITE PROXY CARD, WHETHER OR NOT YOU PLAN TO
ATTEND THE ANNUAL MEETING.
THE BOARD RECOMMENDS A VOTE “FOR ALL” OF OUR BOARD’S NOMINEES
(STEWART L. APPELROUTH, THOMAS K. EQUELS AND
WILLIAM M. MITCHELL)
ON PROPOSAL 1 USING THE ENCLOSED
WHITE PROXY CARD.
If you have any
questions or need assistance voting, please contact the Company’s
proxy solicitor Morrow Sodali LLC (“Morrow Sodali”) using the below
information.
Morrow Sodali
509 Madison Avenue Suite 1206 New York, NY
10022
Banks and Brokers Call: (203) 658-9400
Shareholders Call Toll Free: (800) 662-5200 E-mail:
AIM@investor.morrowsodali.com
About AIM ImmunoTech Inc.
AIM ImmunoTech Inc. is an immuno-pharma company focused on the
research and development of therapeutics to treat multiple types of
cancers, immune disorders, and viral diseases, including COVID-19.
The Company’s lead product, Ampligen® (rintatolimod) is an
immuno-modulator with broad spectrum activity being developed for
globally important cancers, viral diseases and disorders of the
immune system.
Ampligen is currently being 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 and AIM plans to initiate a Phase 2 clinical
study in 2022. The Company also has multiple ongoing clinical
trials to evaluate Ampligen as a combinational therapy for the
treatment of a variety of solid tumor types both underway and
planned at major cancer research centers. Additionally, Ampligen is
approved in Argentina for the treatment of severe chronic fatigue
syndrome (CFS) and is currently being evaluated in many aspects of
SARS-CoV-2/COVID-19 myalgic encephalomyelitis/chronic fatigue
syndrome (ME/CFS) and Post COVID Conditions.
For more information, please visit aimimmuno.com and connect
with the Company on Twitter, LinkedIn, and Facebook.
Forward-Looking
Statements
This press release contains certain forward-looking statements
that involve risks, uncertainties and assumptions that are
difficult to predict. Words and expressions reflecting optimism,
satisfaction or disappointment with current prospects, as well as
words such as “believes,” “hopes,” “intends,” “estimates,”
“expects,” “projects,” “plans,” “anticipates” and variations
thereof, or the use of future tense, identify forward-looking
statements, but their absence does not mean that a statement is not
forward-looking. The Company’s forward-looking statements are not
guarantees of performance, and actual results could vary materially
from those contained in or expressed by such statements due to
risks, uncertainties and other factors. The Company urges investors
to consider specifically the various risk factors identified in its
most recent Form 10-K, and any risk factors or cautionary
statements included in any subsequent Form 10-Q or Form 8-K, filed
with the Securities and Exchange Commission. You are cautioned not
to place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. Except as required
by law, the Company does not undertake any responsibility to update
any forward-looking statements to take into account events or
circumstances that occur after the date of this press release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221026006042/en/
Investors: JTC Team, LLC Jenene Thomas 833-475-8247
AIM@jtcir.com
OR
Morrow Sodali AIM@investor.MorrowSodali.com
Media:
Longacre Square Partners Dan Zacchei / Joe Germani
dzacchei@longacresquare.com / jgermani@longacresquare.com
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