AIM ImmunoTech's Reverse Stock Split: A Strategic Move to Avoid Delisting or a Risky Gamble?

On June 12, 2025, AIM ImmunoTech Inc. (AIMI) executed a 1-for-100 reverse stock split—a drastic measure aimed at boosting its share price to meet the New York Stock Exchange's (NYSE) $1 minimum bid requirement. The move, approved by shareholders in April 2025, underscores the company's precarious financial position and its fight to avoid delisting. But is this a necessary strategic shift or a short-term fix that masks deeper vulnerabilities?

The Reverse Split: Compliance or Desperation?

AIM ImmunoTech's stock had hovered near $0.07 per share in early June 2025, far below the NYSE's $1 threshold. The reverse split, which converts every 100 shares into 1 share, would theoretically lift the price to around $7.00 post-split. This adjustment is a lifeline for the company, as failure to meet the NYSE's requirements would trigger delisting—a blow to liquidity and investor confidence.

However, the Securities and Exchange Commission's (SEC) 2025 rules now restrict reverse splits to prevent companies from repeatedly using them to avoid delisting. AIM ImmunoTech's 1-for-100 ratio falls within the allowable limits, but the move raises questions about its long-term viability. The split does not address underlying financial or operational challenges, making it a tactical, not strategic, solution.

Financial Health: A Fragile Foundation

The company's financials reveal significant strain. As of December 31, 2024, cash reserves had plummeted to $4.0 million from $13.1 million a year earlier. While research and development (R&D) expenses dropped to $6.2 million from $10.9 million in 2023, and general and administrative (G&A) costs fell to $13.7 million from $21.1 million, these cuts suggest a prioritization of cash conservation over growth.

The reduced spending may indicate a strategic reallocation to critical projects, such as its lead drug Ampligen®—a nucleoside analog being tested in Phase 2 trials for pancreatic, ovarian, and other cancers. However, manufacturing Ampligen for these trials requires capital, and with limited cash reserves, the company may need external funding or partnerships to sustain operations.

Clinical Pipeline: The Silver Lining

AIM ImmunoTech's pipeline centers on Ampligen®, which has shown promise in boosting immune response in cancer patients. Collaborations with partners like AstraZeneca and Merck, along with National Cancer Institute trials, could accelerate its path to market. If successful, Ampligen® could generate significant revenue, but the risks are stark: clinical success does not guarantee regulatory approval, and even if approved, market adoption is uncertain.

Risks and Considerations for Investors

1. Delisting Avoidance: The reverse split buys AIMI time, but the company must sustain the post-split price. A drop below $1 again could trigger delisting, with no further reverse splits allowed for two years.
2. Cash Constraints: With $4 million in cash, the company must secure funding soon. Potential avenues include equity offerings, partnerships, or debt, each with drawbacks.
3. Regulatory Hurdles: Ampligen®'s path to approval is fraught with challenges. Clinical trial outcomes will dictate the drug's—and the company's—future.

Investment Implications

For investors, AIM ImmunoTech represents a high-risk, high-reward bet. The reverse split's immediate goal is to avoid delisting, but long-term value hinges on Ampligen®'s success. Key watchpoints include:
- Post-Split Stock Performance: Will the adjusted price hold above $1?
- Clinical Trial Updates: Results from the DURIPANC pancreatic cancer trial (ongoing) and others could drive volatility.
- Funding Moves: Any equity or debt raises or strategic partnerships will signal financial stability.

Final Analysis: Proceed with Caution

AIM ImmunoTech's reverse stock split is a necessary step to avoid immediate delisting but does not resolve its fundamental challenges. While the company's focus on Ampligen® offers potential upside, investors must weigh its financial fragility and regulatory risks. For speculative investors, a small position could be justified, but the stock remains a gamble. The next 12–18 months will be critical: positive clinical data and a sustainable capital strategy could turn AIMI into a survivor, but missteps could spell disaster.

Investment Advice: Monitor post-split price stability and clinical trial updates. Consider a watch-and-wait approach until clearer financial and regulatory clarity emerges. This is not a core holding for most portfolios but a speculative play for high-risk investors.