The Delaware Supreme Court Ruled that the
Incumbent Board Breached its Fiduciary Duties to
Stockholders
AIM Board Wasted Millions in Furtherance of
Improper Purpose
Stockholders Urged to Act Now Before the
Board's Self-Interested Behavior Irreversibly Damages the
Company
Stockholders Should Not be Fooled by
Misleading Statements by AIM Board – The Facts Speak for
Themselves
Kellner Group Nominees
Bring Skills, Experience and Credibility Necessary
for AIM to be Successful
NEW
YORK, Nov. 14, 2024 /PRNewswire/ -- Ted
Kellner, as the nominating stockholder and a nominee, together with
his other nominees, Todd Deutsch,
Robert L. Chioini and Paul W. Sweeney (collectively, the "Kellner
Group," "we" or "us" and, as nominees, the "Kellner Group
Nominees") today issued the following statement in connection with
their efforts to bring accountability to the entrenched, incumbent
Board of Directors of AIM Immunotech Inc. (NYSE American: AIM) and
finally start creating value for stockholders. Mr. Kellner is
convinced that the Kellner Group Nominees have the experience to
make AIM successful and that an immediate change in directors on
the AIM board at this year's annual meeting is absolutely
necessary.
The Delaware Supreme Court Ruled that the
Incumbent Board Breached its Fiduciary Duties to
Stockholders.
On July 11, 2024, the Delaware Supreme Court ruled that
bylaws adopted by the Board in 2023 were inequitable and
unenforceable. The court found that the Board's motive was not to
counter the threat of an uninformed vote. Rather, the "primary
purpose was to interfere with Kellner's nomination notice, reject
his nominees, and maintain control." The court ruled that the
2023 amended bylaws were the "product of an improper motive and
purpose, which constitutes a breach of the duty of
loyalty." (emphasis added)
This illegal behavior by the AIM Board was not an isolated
incident. A federal district court in Florida sanctioned AIM and its counsel in 2024
in its Section 13(d) claims against members of the Kellner Group
and others – claims that have been dismissed multiple times – for
pursuing arguments that were "factually and legally frivolous and
advanced for an improper purpose." (emphasis
added)
The incumbent Board is engaged in what we consider to be gross
waste in pursuit of its improper purpose. Based on AIM's own
disclosures, we estimate that the incumbent Board has spent
between $15.0 to $20.0 million in just the past two years in their
bad faith effort to prevent a meaningful election of directors and
maintain control. This is an unconscionable amount for a
company of AIM's size – approximately equal to its entire market
capitalization. We believe the incumbent Board bears sole
responsibility for this waste - the incumbent directors initiated
and continued this effort in order to entrench themselves and
disenfranchise stockholders. And instead of raising capital to
research and develop Ampligen, the Board has chosen to raise
capital -- at enormous expense from unscrupulous lenders and at
usurious rates -- to fund litigation against stockholders who seek
to hold the Board accountable at the ballot box. As a direct result
of the Board's bad faith actions, AIM's stock price is down 99+%
since the incumbent Board took control and continues to reach new
lows and its financial condition has significantly deteriorated to
the point that its viability is in serious jeopardy.
All of the incumbent Board members bear responsibility and
must be held accountable. Although Mr. Equels, Dr.
Mitchell and Mr. Appelrouth adopted the 2023 bylaw amendments in
breach of their fiduciary duties, the improper purpose and waste
has clearly continued in our view. Ms. Bryan joined the Board in
spring of 2023 – after being hand-picked by Mr. Equels and
rubber-stamped by Dr. Mitchell and Mr. Appelrouth – and has joined
right in. All four incumbent Board members – Equels, Mitchell,
Appelrouth and Bryan – should be held responsible for spending
millions to disenfranchise stockholders last year and continuing to
pursue improper litigation. Ms. Bryan is the chair of the
compensation committee that recently signed off on the issuance of
almost 900,000 shares of fully vested common stock to
Mr. Equels and Mr. Rodino, AIM's COO and General Counsel, as
an advance on salary payable in the next year. We believe that
doing this before the record date for this year's annual meeting,
with the knowledge that AIM was facing another proxy contest,
clearly demonstrates continuation of the same bad faith
entrenchment efforts from the incumbent Board.
The incumbent Board's claim that it is taking these wasteful and
self-interested actions to protect stockholders is disingenuous and
lacks credibility in our view. AIM's stockholders have clearly, and
repeatedly, conveyed a clear message to the Board that they demand
change. This was evident in the significant support of stockholders
for the election of Mr. Kellner, Mr. Deutsch and Mr. Chioini at the
2023 annual meeting of stockholders, and the significant support
for the election of Mr. Chioini and another nominee at the 2022
annual meeting of stockholders. It was evident in the overwhelming
failures of the say-on-pay votes at the last three annual meetings
of stockholders.
The incumbent Board has acknowledged this stockholder
dissatisfaction – two years ago, after the 2022 annual meeting, AIM
announced that it valued stockholder feedback and would seek to add
two new independent directors and conduct a review of executive
compensation. The incumbent Board never followed through. Instead,
Mr. Equels selected only one new director without any
independent search, Ms. Bryan, who had pre-existing relationship
with him. The Board conducted only a cursory, selective,
self-affirming compensation review using the same small search firm
that recommended Mr. Equels's outrageous compensation package in
the first place, with no changes announced. We believe that the
incumbent Board does not value stockholder feedback, and this farce
of a process demonstrates that.
The Incumbent Board has No Plan and is Continuing to
Mislead Stockholders to Distract from its Failures.
Mr. Kellner is one of AIM's largest stockholders and has held
his shares for several years. Mr. Deutsch is also one of AIM's
largest stockholders and has also held his shares for several
years. They have no motivations other than to improve the Company's
performance. Collectively, the Kellner Group is AIM's largest
stockholder according to AIM's proxy statement. If the incumbent
Board was acting in good faith, it would be attempting to attract
long-term stockholders like Mr. Kellner and Mr. Deutsch.
Instead, the incumbent Board has attacked them and questioned their
motives with no basis. We believe this behavior alienates potential
long-term investors like Mr. Kellner and Mr. Deutsch.
The incumbent Board's primary argument for its election –
suggesting that the Kellner Group includes criminals – is
completely and demonstrably false. Likewise, the claim
that Mr. Kellner is motivated to pursue these nominations by the
potential to recoup expenses is illogical and disingenuous. It is
utterly shameless in our view for the incumbent Board, which has
squandered $15 to $20 million to thwart the expressed will of
stockholders and forced them to foot the bill without giving them
any say in the matter, to take issue with the Kellner Group
transparently disclosing the intent to seek reimbursement (of a
fraction of the amount spent by AIM) in furtherance of the will of
stockholders. Given AIM's distressed financial condition, the idea
advanced by the incumbent Board that the Kellner Group is
motivated by access to AIM's capital is frivolous.
These are the facts:
- Each of the Kellner Group Nominees will bring desperately
needed skills, experience and credibility to AIM's Board – each of
them is an accomplished and respected business person in their
field and none of them has any criminal history whatsoever.
- There are no other AIM stockholders or other third parties
involved in the Kellner Group's activities, nor were there any
other AIM stockholders or other third parties involved in Mr.
Kellner's nominations and solicitation for AIM's 2023 annual
meeting of stockholders.
The AIM Board's tired and pathetic attempt to connect the
Kellner Group to Mr. Tudor and Mr. Xirinachs – whose past histories
with respect to AIM are well-known at this point – is a misleading
distraction from their own fiduciary duty breaches, the plummeting
stock price that continues to reach new lows, and complete lack of
a plan to change course.
The Incumbent Board's Breach of Fiduciary Duties, Gross
Waste and Lack of Transparency are Disqualifying.
We believe the Board's breach of its fiduciary duties, gross
waste in pursuit of its improper purpose of entrenchment and
disenfranchisement and continuing lack of transparency and attempts
to mislead stockholders are disqualifying. No Board acting in
good faith could justify these actions. But for the incumbent
Board, which has overseen a massive destruction in
stockholder value and 99+% stock price decline under its
control, to engage in this bad faith effort is completely
shocking to us.
Unfortunately, the incumbent Board's failures are far broader
than this and include, among others, large and increasing net
losses, excessive G&A spending, inadequate R&D spending,
excessive executive compensation, a stagnant clinical program that
lacks focus and proper investment, financial mismanagement, a
failure to attract long-term investment and poor corporate
governance practices. The incumbent Board has communicated no
plans to change any of this and promises only more of the same,
with better outcomes somehow perpetually right around the
corner. All of this is discussed in more detail in
the Kellner Group's proxy statement and will be highlighted in
more detail in subsequent communications to stockholders, along
with why the Kellner Group Nominees are the only choice to turn
around AIM's fortunes and finally start creating value for
stockholders.
THE KELLNER GROUP URGES ALL STOCKHOLDERS TO
VOTE ON THE GOLD PROXY CARD TODAY TO ELECT
TED D. KELLNER, TODD DEUTSCH, ROBERT L. CHIOINI AND PAUL
SWEENEY
Contact:
Okapi Partners LLC
1212 Avenue of the Americas, 17th
Floor,
New York, New York 10036
Stockholders may call toll-free: (844) 343-2621
Banks and brokers call: (212) 297-0720
Email: info@okapipartners.com
Important Information and Participants in the
Solicitation
The Kellner Group has filed a definitive proxy statement and
associated GOLD proxy card with the Securities and
Exchange Commission ("SEC") to be used to solicit votes for the
election of its slate of highly qualified director nominees at the
upcoming annual meeting of stockholders of AIM. Details regarding
the Kellner Group Nominees are included in its proxy statement.
THE KELLNER GROUP STRONGLY ADVISES ALL STOCKHOLDERS OF AIM TO
READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Information regarding the identity of participants in the
Kellner Group's solicitation, and their direct or indirect
interests, by security holdings or otherwise, is set forth in the
Kellner Group's proxy statement. Stockholders can obtain a copy of
the proxy statement, and any amendments or supplements thereto and
other documents filed by the Kellner Group with the SEC for no
charge at the SEC's website at www.sec.gov. Copies will also be
available at no charge at the following website:
https://www.okapivote.com/AIM. Investors can also contact Okapi
Partners LLC at the telephone number or email address set for the
above.
SOURCE Kellner Group