What changed in this filing

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Item 1. Business

2021-03-25 compared with 2020-02-03 · 576 added, 458 removed, 5 unchanged (100% of the section changed)

Incorporated was initially formed in 1967 and is currently a biotechnology company seeking to develop small-molecule anti-cancer

therapeutics.

The Company recently purchased the rights to patented technology from leading universities and researchers and we

are currently in the process of developing innovative therapeutic drugs through partnerships with world renowned educational institutions,

including The University of Texas at Austin and Wake Forest University.

Our diverse pipeline of therapeutics includes therapies

for pancreatic cancer, acute myeloid leukemia (AML) and acute lymphoblastic leukemia (ALL).

to the closing on December 5, 2019 of the acquisition of assets and rights from CBM BioPharma, Inc., a Delaware corporation

(“CBM”), and since July 2013, the Company focused its efforts on owning, developing, acquiring and monetizing

intellectual property assets.

Since March 2016, the Company has received limited funds from its intellectual property

monetization.

In addition to its patent monetization efforts, since the fourth quarter of 2017, the Company has been

transitioning to focus its efforts as a technology and biotechnology development company.

These efforts have focused on

biotechnology research and blockchain technology research.

The Company’s biotechnology research development includes

investments in:

(i) Hoth Therapeutics Inc.

(“Hoth”), a development stage biopharmaceutical company focused on

unique targeted therapeutics for patients suffering from indications such as atopic dermatitis, also known as eczema, and

(ii) DatChat, Inc.

(“DatChat”), a privately held personal privacy platform focused on encrypted communication,

internet security and digital rights management.

a result of the Company’s biotechnology research development and associated investments and acquisitions, our business portfolio

now focuses on the treatment of three different cancers, including pancreatic cancer, acute myeloid leukemia (AML) and acute lymphoblastic

leukemia (ALL).

Our AML and ALL compounds, developed at the Wake Forest University, are next generation targeted therapeutics

designed to overcome multiple resistance mechanisms observed with the current standard of care.

DHA-dFdC, our pancreatic drug

developed at the University of Texas at Austin, is a new compound which we hope to become the next generation of chemotherapy

treatment for advanced pancreatic cancer.

The Company believes that DHA-dFdC overcomes tumor cell resistance to current chemotherapeutic

drugs and is well tolerated in preclinical toxicity tests.

Preclinical studies have also indicated that DHA-dFdC inhibits pancreatic

cancer cell growth (up to 100,000-fold more potent that gemcitabine, a current standard therapy), has documented efficacy against

pancreatic tumors in a clinically relevant transgenic mouse model and has demonstrated activities against other cancers, including

leukemia, lung and melanoma.

BioPharma, Inc.

October 10, 2018, the Company entered into that certain Agreement and Plan of Merger, dated as of October 10, 2018, by and among

the Company, Spherix Delaware Merger Sub Inc., a Delaware corporation, Scott Wilfong, as the CBM stockholder representative, and

CBM, pursuant to which all shares of capital stock of CBM would be converted into the right to receive an aggregate of 15,000,000

shares of the Company’s common stock, with CBM continuing as the surviving corporation in the merger.

May 15, 2019, the Company restructured the terms of the CBM merger and chose to proceed with purchasing substantially all of the

assets, properties and rights (the “Acquisition”) of CBM.

On December 5, 2019, the Company completed the Acquisition

of CBM, pursuant to that certain Asset Purchase Agreement, dated as of May 15, 2019, by and between the Company and CBM, as amended

by that certain Amendment No.

1 to Asset Purchase Agreement, dated as of May 30, 2019, and Amendment No.

2 to Asset Purchase Agreement,

dated as of December 5, 2019 (collectively, the “CBM Purchase Agreement”).

As consideration for the Acquisition, the

Company agreed to pay to CBM consideration consisting of (i) $1,000,000 in cash (the “Cash Consideration”) and (ii)

an aggregate of 1,939,058 shares (the “Stock Consideration”) of the Company’s common stock valued at a price

per share of $3.61.

The Cash Consideration will become payable to CBM upon the consummation by the Company of the first sale of

the Company’s common stock or any other equity or equity-linked financing of the Company to investors in or more transactions,

after the date of the CBM Purchase Agreement, for which the Company receives aggregate gross proceeds of greater than $2,000,000

(a “Qualified Financing”).

Upon the consummation of the Qualified Financing, the Company will retain the first $2,000,000

of the gross proceeds from the Qualified Financing and CBM will receive 100% of the gross proceeds of such Qualified Financing

received by the Company in excess of $2,000,000 as well as the gross proceeds of any subsequent equity financings by the Company

until the Cash Consideration amount is satisfied in full.

Additionally, at closing, 7% or 135,734 shares of common stock of the

Stock Consideration was deposited with VStock, the Company’s transfer agent, to be held in escrow for six months post-closing

to satisfy certain indemnification obligations pursuant to the terms and conditions of the CBM Purchase Agreement, and 93% or

1,803,324 shares of the Stock Consideration was issued and delivered to CBM.

the assets that Spherix acquired from CBM in the Acquisition are two drug candidates for the treatment of two cancers, acute myeloid

leukemia (“AML”) and pancreatic cancer.

at the Wake Forest School of Medicine, CBM’s AML drug candidate (“KPC34”) is designed to bypass the resistant

mechanisms in AML cancer cells.

In preclinical studies in mice, KPC34 has shown to be a superior treatment to gemcitabine, the

current state of the art treatment for AML and has served to double the mean survival time of mice versus the current standard

of care treatments.

KPC34 has also been shown to be more effective in AML relapse cases in mice, notably increasing the lifespan

of mice treated with the drug.

is able to be orally administered, which may be critical for patients that are unable to tolerate repeated cycles of chemotherapy.

Because of the low AML patient population, FDA orphan drug status will be sought for KPC34.

Agreement with Wake Forest University

April 17, 2018, CBM entered into a license agreement (the “WF Agreement”) with Wake Forest University Health Sciences

(“WF”).

The WF Agreement granted to CBM an exclusive, royalty-bearing license to WF’s and The University of

North Carolina at Chapel Hill’s patents relating to the KPC34 drug candidate (the “WF Patent Rights”).

Agreement also granted to CBM the right to sublicense.

paid WF an upfront license fee of $10,000 and will owe an additional $10,000 per year to WF beginning on the third anniversary

of the WF Agreement.

In addition, CBM is obligated to pay to WF a single-digit royalty fee and certain other milestone and other

payments upon sales milestones.

The aggregate milestone payments under the WF Agreement are up to $1,400,000.

In addition, as

consideration for entering into the WF Agreement, CBM issued WF 5,000 shares of common stock to WF, which equaled 2% of CBM’s

issued and outstanding capital stock at the effective date of the WF Agreement.

term of the WF Agreement continues until the expiration of the last of the WF Patent Rights to expire or the expiration of market

exclusivity via orphan drug status or new chemical entity status (or their non-U.S.

equivalents), or until the WF Agreement is

earlier terminated.

CBM may terminate the WF Agreement upon 90 days’

prior written notice.

Either party may terminate

the WF Agreement upon a breach of the WF Agreement that has not been cured in 90 days.

Additionally, the WF Agreement will

automatically terminate in the event CBM becomes insolvent, makes an assignment for the benefit of creditors, or if a petition

for bankruptcy is filed.

November 13, 2019, WF, the Company and CBM entered into an assignment of agreement, whereby CBM assigned all of its rights, title

and interest to, and obligations under the WF Agreement to the Company.

at the University of Texas at Austin, CBM’s pancreatic cancer drug candidate (“DHA-dFdC”) has shown positive

results in preclinical studies, inhibiting pancreatic tumor growth in clinically relevant transgenic mouse models.

cancer is a deadly disease that affects millions of people around the world.

has been shown to be well tolerated in preclinical toxicity tests, has demonstrated activities against other cancers (e.g.

lung, melanoma) and may stimulate immunogenic cell death to activate host antitumor immunity.

License Agreement with the University of Texas at Austin

was initially formed in 1967.

Since 2017, the Company has operated as a biotechnology company with a diverse portfolio

of small-molecule anticancer and antiviral therapeutics in development.

The Company’s pipeline consists of patented technology

from leading universities and researchers.

We are currently in the process of developing our innovative therapeutic drug pipeline

through strong partnerships with world renowned educational institutions, including the University of Texas at Austin, the University

of Maryland, Baltimore and Wake Forest University.

Our oncology therapeutics include treatments for pancreatic cancer, acute myeloid

leukemia (AML) and acute lymphoblastic leukemia (ALL).

The Company is also developing a broad-spectrum antiviral platform, in

which the lead compounds have activity against multiple viruses including Influenza virus, Ebolavirus and Marburg virus, SARS-CoV,

MERS-CoV, and SARS-CoV-2, the cause of COVID-19.

a result of the Company’s biotechnology research and development and associated investments and acquisitions, our business

portfolio now focuses on the treatment of three different cancers and multiple types of viral infections.

Our pancreatic drug

candidate, DHA-dFdC, developed at and licensed from the University of Texas at Austin, is a new compound that we hope will become

the next generation of chemotherapy treatment for advanced pancreatic cancer.

DHA-dFdC overcomes tumor cell resistance to current

chemotherapeutic drugs and is well tolerated in preclinical toxicity tests.

Preclinical studies have also indicated that DHA-dFdC

inhibits pancreatic cancer cell growth (up to 100,000-fold more potent that gemcitabine, a current standard therapy), targets

pancreatic tumors and has demonstrated activities against other cancers, including leukemia, lung and melanoma.

Our AML and ALL

compound, developed at the Wake Forest University, is a targeted therapeutic designed to overcome multiple resistance mechanisms

observed with the current standard of care.

broad-spectrum antiviral platform was developed at the University of Maryland Baltimore (“UMB”), which granted the

Company an exclusive worldwide Master License Agreement (MLA”) to technology covered by three separate patent applications.

The licensed technology comprises broadly acting pan-viral inhibitory compounds targeting multiple viral pathogens.

The technology

was invented by UMB scientists Drs.

Matthew Frieman, Alexander MacKerell and Stuart Watson.

The Company has also executed a Sponsored

Research Agreement with UMB to support the development of the technology under the direction of these inventors at UMB.

addition, we are constantly seeking to grow our pipeline of treatments in oncology indications.

For example, in January 2021,

the Company invested in Convergent Therapeutics, Inc., which has exclusive rights to technology related to next-generation dual-action

peptide receptor radionuclide therapy (“PRRT”) for prostate cancer covered by multiple issued U.S.

and foreign patents.

Convergent is currently conducting advanced human trials relating to prostate cancer treatments utilizing PRRT that targets the

prostate-specific membrane antigen (“PSMA”) present on prostate cancer cells.

The technology was developed under the

direction of Dr.

Neil Bander, Professor of Urologic Oncology at Weill Cornell Medicine.

In addition, the Company was granted a

license to four patent applications for the use of psilocybin in cancer indications.

Additionally,

on January 6, 2021 the Company announced that it entered into an exclusive patent license agreement with Silo Pharma Inc.

Pharma”) pursuant to which Silo Pharma granted the Company a worldwide exclusive, sublicensable, royalty-bearing license

to certain Silo Pharma owned provisional patent applications directed to the use of psilocybin in cancer treatment, and any patents

issuing therefrom, including all continuations, continuations-in-part, divisions, extensions, substitutions, reissues, re-examinations,

and any applications and all patents issuing from any applications and patents that claim domestic benefit or foreign priority

to the provisional patent applications.

The license is for “Field of Use”

(as defined in the exclusive patent license

agreement) of “treatment of cancer and symptoms caused by cancer, including but not limited to pain, nausea, neuroinflammation,

brain and neural dysfunction, depression, seizures, confusion, dizziness, numbness/tingling, dysfunction of the senses and all

other symptoms that are caused by cancer of any type.”

Drugs in Development

from the University of Texas at Austin

(4-(N)-Docosahexaenoyl 2´, 2´-Difluorodeoxycytidine) is patented technology licensed to the Company from the University

of Texas at Austin.

DHA-dFdC is a new compound we believe may become the next generation of second-line chemotherapy treatment

for advanced pancreatic cancer.

DHA-dFdC overcomes tumor cell resistance to current chemotherapeutic drugs and is well tolerated

in preclinical toxicity tests.

Preclinical studies, referenced in subsection DHA-dFdC Published Data below, have

also indicated that DHA-dFdC inhibits pancreatic cancer cell growth (up to 100,000-fold more potent that gemcitabine, a current

standard therapy;

for example, the IC 50 value of DHA-dFdC is more than 100,000-fold smaller than gemcitabine), targets

pancreatic tumors and has demonstrated activities against other cancer cell lines, including leukemia, lung and melanoma.

to the Hirshberg Foundation for Pancreatic Research, pancreatic cancer has the highest mortality rate of all major cancers.

is currently the 3rd leading cause of cancer-related death in the United States after lung and colon cancer.

In January 2020,

the Hirschberg Foundation estimated that 60,430 Americans will be diagnosed with pancreatic cancer, and more than 48,220 will

die from the disease.

For all stages combined, the 5-year relative survival rate is 10%.

Even for the small percentage of people

diagnosed with local disease, the 5-year survival is only 39%.

The majority of patients are diagnosed at a distant stage, for

which the 5-year survival is 3%.

cancer is one of the few cancers for which survival has not improved substantially over nearly 40 years.

Treatment options for

pancreatic cancer include surgery, radiation therapy and chemotherapy, which extend survival or relieve symptoms, but seldom produce

Surgical removal of the tumor is possible in less than 20% of patients diagnosed with pancreatic cancer because detection

is often in late stages and has spread beyond the pancreas.

The current state of the art chemotherapy treatment is gemcitabine,

Folfirinox cocktail or gemcitabine in combination with Abraxane.

University of Texas at Austin has identified a new drug, DHA-dFdC, that has shown positive results in preclinical studies (see

publications listed below), inhibiting pancreatic tumor growth in clinically relevant transgenic mouse models.

In preclinical

studies, DHA-dFdC has:

pancreatic cancer cell growth (up to 100,000-fold more potent that gemcitabine, a current standard therapy);

pancreatic tumors;

overcome tumor cell resistance to current chemotherapeutic drugs;

well tolerated in preclinical toxicity test;

demonstrated activities against other cancers (e.g.

leukemia, lung, melanoma);

stimulate immunogenic cell death to activate host antitumor immunity.

Foundation for Pancreatic Cancer Research

Technology Summary

is a conjugate molecule containing gemcitabine linked to a fatty acid called docosahexaenoic acid (DHA).

The chemical structure

is shown in the following diagram:

DHA structure is illustrated above the dashed line in the graphic above and the gemcitabine structure is illustrated below the

The DHA-dFdC published data indicates that DHA-dFdC was more effective than gemcitabine alone in killing cancer cells

in vitro and in vivo in a certain mouse model.

In addition, conjugation of gemcitabine with fatty acids other than DHA did not

increase effectiveness over gemcitabine.

collaboration with our contract manufacturing organization, Parimer Scientific, we are currently optimizing the manufacturing

procedure for DHA-dFdC.

We have now successfully replicated the synthesis as reported in the literature with satisfactory yield

We are currently optimizing the procedure to ensure batch-to-batch consistency.

We plan to begin formulation development

in the second quarter of 2021, which will require limited animal testing to determine proper dosage.

We expect to have manufactured

20,000 mg of purified DHA-dFdC during the second quarter of 2021 to use for such purposes.

We plan to engage a contract research

organization for the purpose of such animal testing during the second quarter of 2021.

Our goal is to have acceptable intravenous

and oral formulations developed in the fourth quarter of 2021.

Published Data

science behind DHA-dFdC has been published in the following peer-reviewed scientific journals:

(2016) Synthesis, characterization, and in vitro and in vivo evaluations of 4-(N)-docosahexaenoyl 2 ́,

2 ́- difluorodeoxycytidine with potent and broad-spectrum antitumor activity, NeoPlasia 18:

(2017) Preclinical evaluation of the short-term toxicity of 4-(N)-docosahexaenoyl 2 ́, 2 ́- difluorodeoxycytidine

(DHA-dFdC), Pharm.

(2019) A solid lipid nanoparticle formulation of 4-(N)-docosahexaenoyl 2 ́, 2 ́- difluorodeoxycytidine

with increased solubility, stability, and antitumor activity, Int.

(2020) Effect of a Solid Lipid Nanoparticle Formulation on the Bioavailability of 4-(N)-Docosahexaenoyl 2 ́,

2 ́-Difluorodeoxycytidine After Oral Administration, AAPS PharmSciTech 21:77 .

of the published data also indicate the following:

drug unexpectedly concentrates itself in the pancreas relative to other organs.

significantly increases the lifespan of mice with pancreatic cancer in either mice predisposed to develop the cancer, or into

which human pancreatic cancer has been injected.

significantly decreases the growth of pancreatic tumors in mice, better than gemcitabine, the current standard of care.

oral formulation using lipid nanoparticles is highly effective and stable and has outstanding bioavailability.

Patent Coverage

is covered by one issued patent on the drug itself and there is one application relating to the oral formulation, as listed in

the following table:

PCT/US2015013454,

filed 1/29/2015

Nucleobase Analogue

Derivatives and Their Applications

filed 9/19/2019 as continuation of App.

15/115,393, filed 1/29/2015

Nucleobase Analogue

Derivatives and Their Applications

issued 11/5/2019 from App.

15/115,393, filed 1/29/2015

Nucleobase Analogue

Derivatives and Their Applications

PCT/US2020036603,

filed 06/08/2019

Lipid Nanoparticles

Containing Pharmaceutical and/or Nutraceutical agents and methods thereof

Pursuant to the Patent License Agreement between

the Company and the University of Texas, as amended, the patents listed above have been exclusively licensed to the Company for commercial

development worldwide, in all fields, along with all future patent applications that are entitled to claim priority from the listed patents,

and all patents that issue from such applications (See also the Licenses section below).

Spectrum Antiviral Platform from University of Maryland, Baltimore

at UMB have discovered that the SKI complex present in all mammalian cells, including human cells, is a broad-spectrum, host-directed,

antiviral drug target.

Using computer modeling technology and database screening, the scientists identified binding pockets on

the SKI complex structure and designed compounds predicted to bind to the pockets.

Tests of the designed compounds identified

several chemical structures that had antiviral activity against influenza A virus along with the filoviruses Ebola and Marburg

and two further coronaviruses, SARS-CoV and SARS-CoV-2, the cause of COVID-19.

The tests are currently at an early stage and there

is no guarantee that the aintiviral platform will be effective on human cells.

In conjunction with the MLA, the Company has also

executed a Sponsored Research Agreement SRA with UMB to support the development of the technology, which is currently ongoing

at UMB under the direction of the inventors.

Under the MLA and SRA, to meet the first two milestones of the MLA the Company shall

make periodic payments for the support of the research outlined in the SRA totaling $3.1M over a period of two years.

under the SRA will entail initial development and optimization of the most effective compounds and will be performed by the scientists

who invented the licensed technology.

the end of 2019, cases of pneumonia of unknown etiology were identified in China.

In the first week of January 2020, a novel coronavirus

was identified as the cause and was found to be spreading between people.

Throughout 2020, the virus spread around the world with

over 28 million cases by September 2020.

Among many things that the SARS-CoV-2 (severe acute respiratory syndrome coronavirus-2)

outbreak has demonstrated is the immense need for both specific and broadly acting antiviral therapeutics to treat known viruses

and those yet to emerge in the human population.

infection can have a major burden on human health.

Influenza has historically caused numerous large epidemics and pandemics such

as 1918 Spanish flu and swine flu.

Ebola has caused sporadic outbreaks since the 1970s, but in recent years these have been growing

The 2014 West Africa Ebola outbreak saw over 28,000 people contract the disease causing over 11,000 deaths.

Coronaviruses

have always posed a threat of mass spread because of their respiratory transmission.

In 2002 to 2003, the emergence of SARS-CoV

infected over 8,000 people, killing around 10% in nine months, while MERS-CoV-has sporadically spread since 2012, causing around

2,500 infections with a case fatality rate of around 35%.

(2020) The SKI complex is a broad-spectrum, host-directed antiviral drug target for coronaviruses, influenza,

and filoviruses PNAS 117 (48) 30687-30698, https://doi.org/10.1073/pnas.2012939117

year 2020 has seen the rapid emergence of the novel coronavirus, SARS-CoV-2, the cause of COVID-19, which rapidly spread after

its identification in Wuhan, China, caused a pandemic, and has infected almost 110 million people and killed over 2.4 million

people worldwide, with almost 490,000 deaths in the United States.

Hopkins University of Medicine, Coronavirus Resource Center, https://coronavirus.jhu.edu/

at UMB, including Drs.

Matthew Frieman, Alexander MacKerell and Stuart Watson have demonstrated that the SKI complex is a broad-spectrum

antiviral target and designed compounds using in silico drug design that target the SKI complex and inhibit replication

of several virus types, influenza A virus along with the filoviruses Ebola and Marburg and two further coronaviruses, SARS-CoV

and SARS-CoV-2.

has filed three separate patent applications on the resulting antiviral compounds and has granted the Company an exclusive worldwide

license to the technology.

UMB recently filed the following PCT application claiming priority to the first two of the three applications:

PCT/US2020036482,

Int’l filing date 5/6/2020

US62/858,0710,

6/6/2019, US62/909,352,

filed 2/10/2019

WO/2020/247860

Broad Spectrum Antiviral

Compounds Targeting the SKI Complex

from Wake Forest University

small molecule treatment for AML and ALL, developed at the Wake Forest University and called KPC34, is a next generation targeted

therapeutic designed to overcome multiple resistance mechanisms observed with the current standard of care.

is an uncommon cancer, making up about 1% of cancers.

In 2020, an estimated 19,940 people of all ages (11,090 males and 8,850

females) in the United States were be diagnosed with AML.

It is the second most common type of leukemia diagnosed in adults and

children, but most cases occur in adults.

AML makes up 32% of all adult leukemia cases.

AML can be diagnosed at any age, but it

is uncommon in people younger than 45.

The average age of diagnosis is age 68.

An estimated 11,180 deaths (6,470 men and boys

and 4,710 women and girls) from AML occurred in 2020.

(https://www.cancer.net/cancer-types/leukemia-acute-myeloid-aml/statistics).

ALL is also a rare disease, making up only half of 1% of cancers diagnosed in the United States.

In 2020, an estimated 6,150 people

of all ages (3,470 males and 2,680 females) in the United States were diagnosed with ALL.

Most cases occur in children.

under age 20, ALL is the most common type of leukemia, accounting for 74% of all leukemia diagnosed in this age group.

younger than 5 have the highest risk of ALL.

After a child grows into adulthood, the general risk of ALL rises again after age

About 4 out of every 10 people diagnosed with ALL are adults.

An estimated 1,520 deaths (860 men and boys and 660 women and

girls) from ALL will occur this year.

(https://www.cancer.net/cancer-types/leukemia-acute-lymphocytic-all/statistics).

Technology Summary

a conjugate molecule made of a gemcitabine molecule linked to a phospholipid, has the following structure:

the illustration above, to the left of the dashed line is the phospholipid portion and to the right of the dashed line is gemcitabine.

is a chemotherapy drug used to treat a wide array of cancers, including breast cancer, ovarian cancer, non-small cell lung cancer,

pancreatic cancer and bladder cancer.

The drug interferes with DNA and its function of the phospholipid to which the gemcitabine

is linked in KPC34, is to inhibit protein kinase C-type enzymes, which are involved in multiple signaling pathways in leukemia.

strategy behind targeting both DNA synthesis and protein kinase C with one molecule is to double-target different mechanisms of

action in leukemia cells and greatly reduce the possibility of development of resistance to the drug.

is intended to treat the relatively small population of patients with AML and ALL.

Because of the low patient population, FDA

orphan drug status can be sought, which provides expedited review and seven years of exclusivity from approval of the new drug

data from preclinical studies at Wake Forest on the drug includes the following results:

leukemia cells in vitro;

protein kinase C in biochemical assays;

central nervous system leukemia;

AML exhibiting phosphorylated protein kinase C;

also appears to overcome resistance to gemcitabine;

it is effective against gemcitabine-resistant cancer.

technology licensed is much broader than KPC34 represents, and includes both anticancer and antiviral conjugates, and could include

a much broader range of indications, but we have no such drug candidates in development other than KPC34.

Patent Coverage

KPC34 license includes five issued patents, but only one of them covers KPC34.

The patent is US7309696, entitled “Compositions

and methods for targeting cancer cells.”

It expires on August 11, 2021.

All five of the licensed patents will expire by

April 12, 2018, CBM entered into a patent license agreement (the “UT Agreement”) with the University of Texas at Austin

2 unchanged sentences

license to certain patent applications related to nucleobase analogue derivatives and their applications, and specifically to

the DHA-dFdC drug candidate (the “UT Patent Rights”).

The UT Agreement also granted to CBM the right to sublicense.

November 13, 2019, the University of Texas at Austin, the Company and CBM entered into an assignment of agreement, whereby CBM

assigned all of its rights, title and interest to, and obligations under the UT Agreement to the Company.

Wainwright & Co., LLC At The Market Offering

August 9, 2019, the Company entered into that certain At The Market Offering Agreement, dated as of August 9, 2019, by and between

the Company and H.C.

Wainwright & Co., LLC, as agent (“H.C.

Wainwright”) (the “ATM Agreement”), pursuant

to which the Company may offer and sell, from time to time through H.C.

Wainwright, shares of the Company’s common stock,

having an aggregate offering price of up to $1.2 million (the “HCW Shares”).

The offer and sale of the HCW Shares

is made pursuant to a shelf registration statement on Form S-3 and the related prospectus (File No.

Pursuant to the ATM Agreement, H.C.

Wainwright may sell the HCW Shares by any method permitted by law deemed to be an “at

the market offering”

as defined in Rule 415 of the Securities Act, including sales made by means of ordinary brokers’

transactions, including on The NASDAQ Capital Market, at market prices or as otherwise agreed with H.C.

will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the HCW Shares from time

to time, based upon instructions from the Company, including any price or size limits or other customary parameters or conditions

the Company may impose.

Company is not obligated to make any sales of the HCW Shares under the ATM Agreement.

The offering of HCW Shares pursuant to the

ATM Agreement will terminate upon the earliest of (a) the sale of all of the HCW Shares subject to the ATM Agreement, (b) the

termination of the ATM Agreement by H.C.

Wainwright or the Company, as permitted therein, or (c) August 9, 2022.

will pay H.C.

Wainwright a commission rate equal to 3.0% of the aggregate gross proceeds from each sale of HCW Shares and have

agreed to provide H.C.

Wainwright with customary indemnification and contribution rights.

The Company will also reimburse H.C.

Wainwright for certain specified expenses in connection with entering into the ATM Agreement.

As of the date hereof, the Company

has sold a total of 532,070 shares of common stock for aggregate gross proceeds of $1.2 million at an average selling price of

$2.17 per share, resulting in net proceeds of $1.1 million after deducting commissions and other transaction costs.

Securities Purchase Agreement

March 12, 2018, the Company entered into that certain Agreement and Plan of Merger, dated as of March 12, 2018, by and among the

Company, Spherix Merger Subsidiary Inc., a Nevada corporation, Darin Myman, as the representative of the stockholders of the Company,

and DatChat, as amended by that certain First Amendment to Agreement and Plan of Merger, dated as of May 3, 2018 (collectively,

the “Merger Agreement”).

DatChat developed a secure messaging application that utilizes blockchain technology.

further negotiations, the Company determined not to pursue a merger with DatChat and on August 8, 2018, entered into that certain

Securities Purchase Agreement, dated as of August 8, 2018, by and between the Company and DatChat (the “DatChat Purchase

Agreement”), pursuant to which the Company and DatChat agreed to terminate the Merger Agreement and release and discharge

and hold harmless each of the other parties with respect to the transaction contemplated by the Merger Agreement.

to a share purchase agreement, dated as of May 15, 2019, the Company purchased (i) 50,000 shares of common stock of CBM and (ii)

certain securities and uncertificated rights of DatChat from an existing shareholder of CBM and DatChat for an aggregate purchase

price of $350,000.

The investment represents a 20% interest in CBM, and the securities and rights of DatChat that were purchased

from the existing shareholder of CBM include:

(a) a senior convertible note issued by DatChat with outstanding principal of $300,000,

with an initial conversion rate of $0.20 per share (b) a warrant to purchase 2,250,000 shares of DatChat common stock at an initial

exercise price of $0.20 per share, (c) an option to acquire an additional $300,000 senior convertible note and a warrant to purchase

1,500,000 shares of DatChat common stock, (d) a contingent option to purchase 500,000 shares of DatChat common stock from an existing

DatChat stockholder, and (e) a contingent option to put 200,000 shares of DatChat common stock, subject to certain terms and conditions.

The transaction closed on May 22, 2019.

of shares of Hoth Therapeutics, Inc.

June 30, 2017, the Company entered into that certain Securities Purchase Agreement, dated as of June 30, 2017, by and between

the Company and Hoth (the “Hoth Purchase Agreement”), for the purchase of an aggregate of 1,700,000 shares of common

stock, par value $0.0001 per share, of Hoth, for a purchase price of $675,000.

Hoth is a development stage biopharmaceutical company

focused on unique targeted therapeutics for patients suffering from indications such as atopic dermatitis, also known as eczema.

Hoth’s primary asset is a sublicense agreement with Chelexa Biosciences, Inc.

(“Chelexa”) pursuant to which

Chelexa has granted Hoth an exclusive sublicense to use its BioLexa Platform, a proprietary, patented, drug compound platform

developed at the University of Cincinnati.

Hoth intends to develop BioLexa’s applications in the aesthetic dermatology field

to help treat and reduce post-procedure infections, accelerate healing and improve clinical outcomes for patients undergoing procedures.

Hoth will be implementing FDA testing procedures for BioLexa.

In addition to the Purchase Agreement, the Company and Hoth entered

into a Registration Rights Agreement, pursuant to which Hoth is obligated to register for resale on a registration statement on

Form S-1 under the Securities Act, all of the shares.

Further, the Company, Hoth and Hoth’s existing shareholders have entered

into a Shareholders Agreement, pursuant to which Spherix shall have a right to appoint one director to the board of directors

of Hoth for so long as the Company holds at least 10% of the issued and outstanding common stock of Hoth.

February 14, 2019, the Company purchased an aggregate of 35,714 shares of the common stock of Hoth in connection with

Hoth’s initial public offering, which was consummated on February 20, 2019, at a purchase price of $5.60 per share, for

an aggregate purchase price of $200,000.

Hoth’s common stock commenced trading on The NASDAQ Capital Market, on

February 15, 2019 under the ticker symbol “HOTH”.

The Company entered into a lock-up agreement with Hoth

pursuant to which the Company has agreed not to sell any shares of Hoth common stock or common stock equivalents until

February 20, 2022, which is the 36 month anniversary of the consummation of Hoth’s initial public offering, (the

“Spherix Securities”) provided, however (i) Spherix may offer, sell, contract to sell, hypothecate, pledge,

dividend or distribute to its shareholders or otherwise dispose of, directly or indirectly, up to an aggregate of 10% of the

initially issued Spherix Securities, provided further that the recipients of the Spherix Securities shall not be permitted to

resell such Spherix Securities until six months after the date of the Initial Public Offering, (ii) beginning 12 months after

the date of Hoth’s initial public offering, Spherix may offer, sell, contract to sell, hypothecate, pledge, dividend or

distribute to its shareholders or otherwise dispose of, directly or indirectly, up to an additional 10% of the initially

issued Spherix Securities, (iii) beginning 24 months after the date of Hoth’s initial public offering, Spherix may

offer, sell, contract to sell, hypothecate, pledge, dividend or distribute to its shareholders or otherwise dispose of,

directly or indirectly, up to an additional 10% of the initially issued Spherix Securities and (iv) beginning 36 months after

the date of the Hoth initial public offering, Spherix may offer, sell, contract to sell, hypothecate, pledge, dividend or

distribute to its shareholders or otherwise dispose of, directly or indirectly, the Spherix Securities without any

restrictions.

October 2, 2019, the Board of Directors of the Company (the “Board of Directors”) approved a distribution to the Company’s

stockholders of approximately 100,000 shares of Hoth held by the Company.

Accordingly, each of the Company’s stockholders

received one (1) share of Hoth common stock for every twenty-nine (29) shares of Company common stock held as of 5 p.m.

Time on October 21, 2019, the dividend record date.

The Company did not distribute fractional shares of Hoth common stock, and

any fractional shares were rounded down to the nearest whole share.

Scooters Investment

On November 23, 2018, the Company entered

into that certain Security Purchase Agreement, dated as of November 23, 2018, by and between the Company and Mellow Scooters, LLC

(“Mellow Scooters”), a leading-edge company that enables anyone to own and operate a personal fleet of electric scooters

and dockless bicycles to generate revenue.

Mellow Scooters agreed to sell 250 units to the Company, representing 25% of its issued

and outstanding limited liability company membership interests for a subscription price of $106,000.

The $106,000 consisted of

(a) a cash payment of $30,000, (b) the forgiveness of prior advances made to Mellow Scooters by the Company, and (c) an obligation

of the Company to pay certain specific future expenses of Mellow Scooters (amounts in clauses (b) and (c) not to exceed a maximum

of $76,000 in the aggregate).

Daily LLC Investment

March 23, 2018, the Company purchased 8.0% of the issued and outstanding limited liability company membership interests of TheBit

Daily LLC, a development stage media and education platform focused on the blockchain and cryptocurrency space, for a subscription

price of $25,000.

principal executive offices are located at One Rockefeller Plaza, 11 th Floor, New York, New York 10020, our telephone

number is (703) 992-9325, and our Internet website address www.spherix.com .

common stock trades on the NASDAQ Capital Market under the symbol “SPEX”.

principal Internet address is www.spherix.com.

We make available free of charge on www.spherix.com our annual, quarterly

and current reports, and amendments to those reports, as soon as reasonably practicable after we electronically file such material

with, or furnish it to, the Securities and Exchange Commission (“SEC”).

The SEC maintains an Internet site that contains

reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.

biopharmaceutical industry is characterized by rapidly advancing technologies, strong emphasis on proprietary products and significant

CBM faces potential competition from many sources, including major pharmaceutical, specialty pharmaceutical and biotechnology

companies, academic institutions and government agencies and public and private research institutions.

Any product candidates

that CBM successfully develops and commercializes will compete with any existing therapies and new therapies that may become available

in the future.

Property and Patent Rights

success depends, in part, on our ability to obtain, maintain, and enforce patents and other proprietary protections of our commercially

important technologies and product candidates, to operate without infringing the proprietary rights of others, and to maintain

trade secrets or other proprietary know-how, both in the U.S.

and other countries.

We were assigned licenses that CBM had with

Wake Forest University Health Sciences (“Wake Forest”) and The University of Texas at Austin (“UTA”) that

include rights to eight patents and patent applications as follows:

License Agreement with Wake Forest relating to all fields of use, expressly including

human therapeutic and diagnostic uses, of the inventions claimed in five licensed patents,

which are listed below.

The patents cover many novel compounds showing promise in the

treatment of several cancer types, including acute myeloid leukemia (AML) and acute lymphoblastic

leukemia (ALL), and several types of viral infections, including human immunodeficiency

virus (HIV), hepatitis viruses and herpes viruses.

The lead compound CBM is currently

pursuing is KPC34, which has been shown to be effective against AML and ALL.

licensed patents include patent claims covering the compound KPC34.

CBM is in the

process of drafting and finalizing requests for Orphan Drug Designation to the FDA for

KPC34 for each of the AML and ALL indications.

The following patent rights are

included under the license agreement with Wake Forest:

Patent 6,670,341 titled “Compositions and methods for double-targeting virus infections

and targeting cancer cells”

issued December 30, 2003

Patent 7,026,469 titled “Compositions and methods for double-targeting virus infections

and targeting cancer cells”

issued April 11, 2006

Patent 7,309,696 titled “Novel phospholipid conjugates double-targeting HIV”

issued December 18, 2007

Patent 7,638,528 titled “Compositions and methods for targeting cancer cells”

issued December 29, 2009

Patent 8,138,200 titled “Compositions and methods for double-targeting virus infections

and targeting cancer cells”

issued March 20, 2012

Patent License Agreement with UTA relating to all fields of use of the inventions disclosed in the three patent applications

listed below.

The lead compound, which has been designated as Gem-DHA, a.k.a., DHA-dFdC, has been shown to be effective

against pancreatic cancer in mice.

Specifically, the data show that the drug halts tumor growth and significantly increases

in life expectancy.

Surprisingly, the data show that Gem-DHA preferentially concentrates itself in the pancreas relative

to other organs.

The Patent Office recently issued a Notice of Allowance and Issue Fee due in pending U.S.

15/115,393 and the allowed claims include claims that specifically cover the lead compound Gem-DHA.

The following

patent rights are included under the license agreement with UTA:

Patent 61/933,035 titled “Nucleobase Analogue Derivatives and their applications”

filed January 29, 2014

Patent 7,026,469 titled “Compositions and methods for double-targeting virus infections

and targeting cancer cells”

issued April 11, 2006

Patent 7,309,696 titled “Novel phospholipid conjugates double-targeting HIV”

issued December 18, 2007

of December 31, 2019, we have three full-time employees, none of which are represented by a labor union or covered by a collective

bargaining agreement.

Company has transitioned to a highly regulated industry that is subject to significant federal, state, local and foreign regulation.

The Company’s present and future business has been, and will continue to be, subject to a variety of laws including, the

Federal Food, Drug, and Cosmetic Act, or FDC Act, and the Public Health Service Act, among others.

authorities in the United States, at the federal, state and local levels, and in other countries and jurisdictions, including

the European Union, extensively regulate, among other things, the research, development, testing, manufacture, quality control,

approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring

and reporting, and import and export of pharmaceutical products.

The processes for obtaining marketing approvals in the United

States and in foreign countries and jurisdictions, along with subsequent compliance with applicable statutes and regulations and

other regulatory authorities, require the expenditure of substantial time and financial resources.

the United States, the FDA approves and regulates drugs under the Federal Food, Drug, and Cosmetic Act (the “FDCA”)

and the implementing regulations promulgated thereunder.

The failure to comply with requirements under the FDCA and other applicable

laws at any time during the product development process, approval process or after approval may subject an applicant and/or sponsor

to a variety of administrative or judicial sanctions, including refusal by the FDA to approve pending applications, withdrawal

of an approval, imposition of a clinical hold, issuance of warning letters and other types of letters, product recalls, product

seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution,

disgorgement of profits, or civil or criminal investigations and penalties brought by the FDA and the Department of Justice or

other governmental entities.

applicant seeking approval to market and distribute a new drug product in the United States must typically undertake the following:

of preclinical laboratory tests, animal studies and formulation studies in compliance

with the FDA’s Good Laboratory Practice regulations;

to the FDA of an IND application, which must take effect before human clinical trials

by an independent institutional review board, representing each clinical site before

each clinical trial may be initiated;

● performance

of adequate and well-controlled human clinical trials in accordance with good clinical

practices to establish the safety and efficacy of the proposed drug product for each

● preparation

and submission to the FDA of an NDA requesting marketing for one or more proposed indications;

by an FDA advisory committee, where appropriate or if applicable;

● satisfactory

completion of one or more FDA inspections of the manufacturing facility or facilities

at which the product, or components thereof, are produced to assess compliance with current

good manufacturing practices, requirements and to assure that the facilities, methods

and controls are adequate to preserve the product’s identity, strength, quality

of user fees and securing FDA approval of the NDA;

with any post-approval requirements, including the potential requirement to implement

a risk evaluation and mitigation strategy and the potential requirement to conduct post-approval

Drug Act in the United States

Orphan Drug Act provides incentives to manufacturers to develop and market drugs for rare diseases and conditions affecting fewer

than 200,000 persons in the U.S.

at the time of application for orphan drug designation.

Orphan drug designation must be requested

before submitting a BLA.

Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory

review and approval process.

If a product that has orphan drug designation subsequently receives the first FDA approval for the

disease for which it has such designation, the holder of the approval is entitled to a seven-year exclusive marketing period in

for that product except in very limited circumstances.

For example, a drug that the FDA considers to be clinically superior

to, or different from, another approved orphan drug, even though for the same indication, may also obtain approval in the U.S.

during the seven-year exclusive marketing period.

In addition, holders of exclusivity for orphan drugs are expected to assure

the availability of sufficient quantities of their orphan drugs to meet the needs of patients.

Failure to do so could result in

the withdrawal of marketing exclusivity for the drug.

Designation and Exclusivity in the European Union

authorized as “orphan medicinal products”

in the EU are entitled to certain exclusivity benefits.

In accordance with

Article 3 of Regulation (EC) No.

141/2000 of the European Parliament and of the Council of 16 December 1999 on

orphan medicinal products, a medicinal product may be designated as an orphan medicinal product if:

(1) it is intended for

the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition;

(2) either (a) such

condition affects no more than five in 10,000 persons in the European Union when the application is made, or (b) the product,

without the incentives derived from orphan medicinal product status, would not generate sufficient return in the European Union

to justify investment;

and (3) there exists no satisfactory method of diagnosis, prevention or treatment of such condition

authorized for marketing in the EU, or if such a method exists, the product will be of significant benefit to those affected by

the condition.

application for orphan drug designation must be submitted before the application for marketing authorization.

Orphan drug designation

does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

authorized in the EU as orphan medicinal products are entitled to 10 years of market exclusivity.

The 10-year market exclusivity

may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria

for orphan designation, for example, if the product is sufficiently profitable not to justify maintenance of market exclusivity.

Additionally, marketing authorization may be granted to a similar product during the 10-year period of market exclusivity for

the same therapeutic indication at any time if:

second applicant can establish in its application that its product, although similar

to the orphan medicinal product already authorized, is safer, more effective or otherwise

clinically superior;

holder of the marketing authorization for the original orphan medicinal product consents

to a second orphan medicinal product application;

holder of the marketing authorization for the original orphan medicinal product cannot

supply enough orphan medicinal product.

Reform in the United States

the United States and some non-United States jurisdictions, there have been, and we expect there will continue to be, a number

of legislative and regulatory changes and proposed changes regarding the healthcare system that could, among other things, affect

our ability to profitably sell any product candidates for which we obtain marketing approval.

policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare

systems with the stated goals of containing healthcare costs, improving quality and/or expanding access.

For example, in the

United States, in March 2010, the Patient Protection and Affordable Care Act (the “ACA”), was passed, which

substantially changed the way healthcare is financed by both the government and private insurers.

Among the ACA’s

provisions of importance to our business are the following:

implementation

of a 2.3% excise tax imposed on manufacturers and importers for certain sales of medical

devices, which, due to subsequent legislation will not go into effect until January 1,

of eligibility criteria for Medicaid programs by, among other things, allowing states

to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility

categories for individuals with income at or below 133% of the federal poverty level,

thereby potentially increasing manufacturers’

Medicaid rebate liability;

new Patient-Centered Outcomes Research Institute to oversee, identify priorities in,

and conduct comparative clinical effectiveness research, along with funding for such

establishment

of a Center for Medicare Innovation at CMS to test innovative payment and service delivery

models to lower Medicare and Medicaid spending, potentially including prescription drug

spending that began on January 1, 2011.

have been judicial and Congressional challenges to certain aspects of the ACA, as well as recent efforts by the current administration

to repeal or replace certain aspects of the ACA and we expect such challenges and amendments to continue.

For example, the Tax

Cuts and Jobs Act of 2017 includes a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment

imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly

referred to as the “individual mandate.”

Additionally, on January 22, 2018, the Executive Office of the President

of the United States signed a continuing resolution on appropriations for fiscal year 2018 that delayed the implementation of

certain ACA-mandated fees, including the 2.3% excise tax imposed on manufacturers and importers for certain sales of medical devices,

the so-called “Cadillac”

tax on certain high cost employer-sponsored insurance plans, and the annual fee imposed on

certain health insurance providers based on market share.

addition, other legislative changes have been proposed and adopted in the U.S.

since the ACA was enacted.

In August 2011, the

Budget Control Act of 2011, among other things, led to aggregate reductions of Medicare payments to providers of 2% per fiscal

These reductions went into effect in April 2013 and, due to subsequent legislative amendments to the statute, including

the Bipartisan Budget Act of 2018, will remain in effect through 2027 unless additional action is taken by Congress.

2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments

to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of

limitations period for the government to recover overpayments to providers from three to five years.

recently, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed

products, which has resulted in several U.S.

Congressional inquiries and proposed and enacted federal legislation designed to

bring transparency to product pricing and reduce the cost of products and services under government healthcare programs.

the DHA-dFdC drug candidate.

On November 13, 2019, the University of Texas at Austin, the Company and CBM entered into an assignment

of agreement, whereby CBM assigned all of its rights, title and interest to, and obligations under the UT Agreement to the Company.

April 17, 2018, CBM entered into a license agreement (the “WF Agreement”) with Wake Forest University Health Sciences

(“WF”).

The WF Agreement granted to CBM an exclusive, royalty-bearing license to WF’s and The University of

North Carolina at Chapel Hill’s patents relating to the KPC34 drug candidate.

On November 13, 2019, WF, the Company and

CBM entered into an assignment of agreement, whereby CBM assigned all of its rights, title and interest to, and obligations under

the WF Agreement to the Company.

April 13, 2020, the Company executed a Master License Agreement (the “UMB License Agreement”) with UMB, pursuant to

which UMB agreed to license inventions collectively known as “Broad Spectrum Antiviral Compounds Which Target the SKI Complex”

(the “Inventions”) to the Company.

The Inventions, which are covered by three patent applications on file with the

United States Patent and Trademark Office, are currently in the pre-clinical stage and seek to inhibit replication of multiple

viruses, including the Influenza virus, SARS-CoV, MERS-CoV, Ebolavirus and Marburg virus.

In addition, the Company entered into

a Sponsored Research Agreement with UMB to support the development of various technologies.

Pursuant to the UMB License Agreement,

UMB grants to the Company the ability to utilize the licensed products (“Licensed Products”) and patents associated

with the Inventions, subject to certain limitations described in the UMB License Agreement.

All improvements to the Inventions

are solely owned by the party improving the Inventions, unless jointly made, in which case both parties jointly own the improvements;

however, the Company grants to UMB the royalty-free license to practice the Company’s improvements.

The Company has agreed

to deliver to UMB a commercialization plan setting forth the Company’s plan for research and development required to develop

the Licensed Products and the Company’s overall commercialization strategy by December 31, 2022.

August 7, 2020, the Company entered into a fixed price agreement (the “Fixed Price Agreement”) with the University

of Kentucky Research Foundation (“UKRF”), pursuant to which the Company received an option to negotiate an exclusive

license with the UKRF for certain of its patents related to G4-1 for solid tumor treatment in exchange for $67,000.

shall involve testing of the drug G4-1 and its ability to increase the duration of survival of mice injected with tumor cells

relative to an FDA approved drug.

The patents subject to the option do not expire until 2035.

Commercialization

business success with our drug portfolio depends not only on the successful development and approval of the products but also

on the commercialization.

At present, our plan anticipates us making the investments necessary to build an in-house marketing

and sales capability for the U.S.

market for our drug pipeline, or to partner with a larger drug development company to commercialize

our drugs as they move through the FDA approval process.

As our drug compounds make their way through clinical development in

the U.S., we intend to approach pharmaceutical and biotechnology companies outside the U.S.

to negotiate and enter into strategic

partnerships that will enable development and commercialization of our platform outside the U.S., where we believe the market

opportunity is larger than that of the U.S.

albeit far more complex to reach.

We have no operations outside the U.S., nor are

we planning to have any non-U.S.

Manufacturing

do not have any manufacturing capabilities and therefore we will have to engage a third party to assist in manufacturing.

manufacturing will need to be done in accordance with good manufacturing practice requirements (“cGMP”) regulations,

to formulate and manufacture our product candidates.

A list of third party manufacturers is currently being developed.

authorities in the U.S.

and other countries extensively regulate the research, development, testing, manufacture, labeling, promotion,

advertising, distribution and marketing of pharmaceutical products such as those being developed by us.

In the U.S., the FDA regulates

such products under the FDCA and implements related regulations.

Failure to comply with applicable FDA requirements, both before

and after approval, may subject us to administrative and judicial sanctions, such as a delay in approving or refusal by the FDA

to approve pending applications, warning letters, product recalls, product seizures, total or partial suspension of production

or distribution, injunctions and/or criminal prosecution.

Food and Drug Administration Regulation

States Drug Development

the United States, the FDA regulates drugs, medical devices and combinations of drugs and devices, or combination products, under

the FDCA and its implementing regulations.

Drugs are also subject to other federal, state and local statutes and regulations.

The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign

statutes and regulations requires the expenditure of substantial time and financial resources.

Failure to comply with the applicable

requirements at any time during the product development process, approval process or after approval, may subject an applicant

to administrative or judicial sanctions.

These sanctions could include, among other actions, the FDA’s refusal to approve

pending applications, withdrawal of an approval, a clinical hold, untitled or warning letters, requests for voluntary product

recalls or withdrawals from the market, product seizures, total or partial suspension of production or distribution injunctions,

fines, refusals of government contracts, restitution, disgorgement, or civil or criminal penalties.

Any agency or judicial enforcement

action could have a material adverse effect on us.

process required by the FDA before a drug may be marketed in the United States generally involves the following:

of extensive pre-clinical laboratory tests, animal studies and formulation studies in accordance with applicable regulations,

including the FDA’s Good Laboratory Practice regulations;

to the FDA of an IND, which must become effective before human clinical trials may begin;

of adequate and well-controlled human clinical trials in accordance with an applicable IND and other clinical study related

regulations, sometimes referred to as good clinical practices, or GCPs, to establish the safety and efficacy of the proposed

drug for its proposed indication;

to the FDA of an NDA;

completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the product, or components

thereof, are produced to assess compliance with the FDA’s cGMP requirements;

FDA audit of the clinical trial sites that generated the data in support of the NDA;

review and approval of the NDA prior to any commercial marketing or sale.

a pharmaceutical product candidate is identified for development, it enters the pre-clinical testing stage.

Pre-clinical tests

include laboratory evaluations of product chemistry, toxicity, formulation and stability, as well as animal studies.

An IND sponsor

must submit the results of the pre-clinical tests, together with manufacturing information, analytical data and any available

clinical data or literature, to the FDA as part of the IND.

The sponsor must also include a protocol detailing, among other things,

the objectives of the initial clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to

be evaluated if the initial clinical trial lends itself to an efficacy evaluation.

Some pre-clinical testing may continue even

after the IND is submitted.

The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA raises concerns

or questions related to a proposed clinical trial and places the trial on a clinical hold within that 30-day period.

case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin.

Clinical holds also

may be imposed by the FDA at any time before or during clinical trials due to safety concerns or non-compliance, and may be imposed

on all drug products within a certain class of drugs.

The FDA also can impose partial clinical holds, for example, prohibiting

the initiation of clinical trials of a certain duration or for a certain dose.

clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP regulations.

These regulations include the requirement that all research subjects provide informed consent in writing before their participation

in any clinical trial.

Further, an IRB must review and approve the plan for any clinical trial before it commences at any institution,

and the IRB must conduct continuing review and reapprove the study at least annually.

An IRB considers, among other things, whether

the risks to individuals participating in the clinical trial are minimized and are reasonable in relation to anticipated benefits.

The IRB also approves the information regarding the clinical trial and the consent form that must be provided to each clinical

trial subject or his or her legal Representative and must monitor the clinical trial until completed.

new clinical protocol and any amendments to the protocol must be submitted for FDA review, and to the IRBs for approval.

detail, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria,

and the parameters to be used to monitor subject safety.

clinical trials are typically conducted in three sequential phases that may overlap or be combined:

The product is initially introduced into a small number of healthy human subjects or patients and tested for safety, dosage

tolerance, absorption, metabolism, distribution and excretion and, if possible, to gain early evidence on effectiveness.

the case of some products for severe or life-threatening diseases, especially when the product is suspected or known to be

unavoidably toxic, the initial human testing may be conducted in patients.

Involves clinical trials in a limited patient population to identify possible adverse effects and safety risks, to preliminarily

evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage and

Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population

at geographically dispersed clinical trial sites.

These clinical trials are intended to establish the overall risk/benefit

relationship of the product and provide an adequate basis for product labeling.

Post-approval

trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval.

These studies are

used to gain additional experience from the treatment of patients in the intended therapeutic indication.

In certain instances,

the FDA may mandate the performance of Phase 4 trials.

Companies that conduct certain clinical trials also are required to register

them and post the results of completed clinical trials on a government-sponsored database, such as ClinicalTrials.gov in the United

States, within certain timeframes.

Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.

reports detailing the results of the clinical trials, among other information, must be submitted at least annually to the FDA,

and written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected adverse events, findings

from other studies that suggest a significant risk to humans exposed to the product, findings from animal or in vitro testing

that suggest a significant risk to human subjects, and any clinically important increase in the rate of a serious suspected adverse

reaction over that listed in the protocol or investigator brochure.

Phase 1, Phase 2 and Phase 3 clinical trials may not be completed

successfully within any specified period, if at all.

The FDA or the clinical trial sponsor may suspend or terminate a clinical

trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable

Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial

is not being conducted in accordance with the IRB’s requirements or if the product has been associated with unexpected serious

harm to patients.

Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the

clinical trial sponsor, known as a data safety monitoring board or committee.

This group provides authorization for whether a

trial may move forward at designated check points based on access to certain data from the study.

The clinical trial sponsor may

also suspend or terminate a clinical trial based on evolving business objectives and/or competitive climate.

with clinical trials, companies usually complete additional animal studies and must also develop additional information about

the chemistry and physical characteristics of the product and finalize a process for manufacturing the product in commercial quantities

in accordance with cGMP requirements.

The manufacturing process must be capable of consistently producing quality batches of the

product candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and

purity of the final product.

Additionally, appropriate packaging must be selected and tested and stability studies must be conducted

to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.

and FDA Review Process

results of product development, pre-clinical studies and clinical trials, along with descriptions of the manufacturing process,

analytical tests conducted on the drug, proposed labeling and other relevant information, are submitted to the FDA as part of

an NDA for a new drug, requesting approval to market the product.

The submission of an NDA is subject to the payment of a substantial

user fee, and the sponsor of an approved NDA is also subject to an annual program user fee;

although a waiver of such fee may

be obtained under certain limited circumstances.

For example, the agency will waive the application fee for the first human drug

application that a small business or its affiliate submits for review.

FDA reviews all NDAs submitted before it accepts them for filing and may request additional information rather than accepting

an NDA for filing.

The FDA typically makes a decision on accepting an NDA for filing within 60 days of receipt.

The decision to

accept the NDA for filing means that the FDA has made a threshold determination that the application is sufficiently complete

to permit a substantive review.

Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act (“PDUFA”),

the FDA’s goal to complete its substantive review of a standard NDA and respond to the applicant is ten months from the

receipt of the NDA.

The FDA does not always meet its PDUFA goal dates, and the review process is often significantly extended

by FDA requests for additional information or clarification and may go through multiple review cycles.

the NDA submission is accepted for filing, the FDA reviews the NDA to determine, among other things, whether the proposed product

is safe and effective for its intended use, and whether the product is being manufactured in accordance with cGMPs to assure and

preserve the product’s identity, strength, quality and purity.

The FDA may refer applications for novel drug products or

drug products which present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes

clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and

under what conditions.

The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations

carefully when making decisions.

The FDA will likely re-analyze the clinical trial data, which could result in extensive discussions

between the FDA and us during the review process.

The review and evaluation of an NDA by the FDA is extensive and time consuming

and may take longer than originally planned to complete, and we may not receive a timely approval, if at all.

approving an NDA, the FDA will conduct a pre-approval inspection of the manufacturing facilities for the new product to determine

whether they comply with cGMPs.

The FDA will not approve the product unless it determines that the manufacturing processes and

facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required

specifications.

In addition, before approving an NDA, the FDA may also audit data from clinical trials to ensure compliance with

GCP requirements.

After the FDA evaluates the application, manufacturing process and manufacturing facilities, it may issue an

approval letter or a Complete Response Letter.

An approval letter authorizes commercial marketing of the drug with specific prescribing

information for specific indications.

A Complete Response Letter indicates that the review cycle of the application is complete

and the application will not be approved in its present form.

A Complete Response Letter usually describes all the specific deficiencies

in the NDA identified by the FDA.

The Complete Response Letter may require additional clinical data and/or an additional pivotal

Phase 3 clinical trial(s), and/or other significant and time-consuming requirements related to clinical trials, nonclinical studies

or manufacturing.

If a Complete Response Letter is issued, the applicant may either resubmit the NDA, addressing all the deficiencies

identified in the letter, or withdraw the application.

Even if such data and information are submitted, the FDA may ultimately

decide that the NDA does not satisfy the criteria for approval.

Data obtained from clinical trials are not always conclusive,

and the FDA may interpret data differently than we interpret the same data.

is no assurance that the FDA will ultimately approve a product for marketing in the United States, and we may encounter significant

difficulties or costs during the review process.

If a product receives marketing approval, the approval may be significantly limited

to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value

of the product.

Further, the FDA may require that certain contraindications, warnings or precautions be included in the product

labeling or may condition the approval of the NDA on other changes to the proposed labeling, development of adequate controls

and specifications, or a commitment to conduct post-market testing or clinical trials and surveillance to monitor the effects

of approved products.

For example, the FDA may require Phase 4 clinical trials to further assess drug safety and effectiveness

and may require testing and surveillance programs to monitor the safety of approved products that have been commercialized.

FDA may also place other conditions on approvals, including the requirement for a risk evaluation and mitigation strategy (“REMS”),

to assure the safe use of the drug.

If the FDA concludes a REMS is needed, the sponsor of the NDA must submit a proposed REMS;

the FDA will not approve the NDA without an approved REMS, if required.

A REMS could include medication guides, physician communication

plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization

Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or

dispensing of products.

Product approvals may be withdrawn for non-compliance with regulatory requirements or if problems occur

following initial marketing.

Reimbursement

sales of any of our product candidates, if approved, will depend, at least in part, on the extent to which such products will

be covered by third-party payors, such as government health care programs, commercial insurance and managed healthcare organizations.

These third-party payors are increasingly limiting coverage and/or reducing reimbursements for medical products and services.

A third-party payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate

will be approved.

Further, one payor’s determination to provide coverage for a drug product does not assure that other payors

will also provide coverage for the drug product.

In addition, the U.S.

government, state legislatures and foreign governments

have continued implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements

for substitution of generic products.

Adoption of price controls and cost-containment measures, and adoption of more restrictive

policies in jurisdictions with existing controls and measures, could further limit our future revenues and results of operations.

Decreases in third-party reimbursement or a decision by a third-party payor to not cover a product candidate, if approved, or

any future approved products could reduce physician usage of our products, and have a material adverse effect on our sales, results

of operations and financial condition.

the United States, the Medicare Part D program provides a voluntary outpatient drug benefit to Medicare beneficiaries for certain

We do not know whether our product candidates, if approved, will be eligible for coverage under Medicare Part D, but

individual Medicare Part D plans offer coverage subject to various factors such as those described above.

Furthermore, private

payors often follow Medicare coverage policies and payment limitations in setting their own coverage policies.

Laws and Regulations

of our product candidates, if approved, or any other future product candidate will be subject to healthcare regulation and enforcement

by the federal government and the states and foreign governments in which we might conduct our business.

The healthcare laws and

regulations that may affect our ability to operate include the following:

federal Anti-Kickback Statute makes it illegal for any person or entity to knowingly and willfully, directly or indirectly,

solicit, receive, offer, or pay any remuneration that is in exchange for or to induce the referral of business, including

the purchase, order, lease of any good, facility, item or service for which payment may be made under a federal healthcare

program, such as Medicare or Medicaid.

The term “remuneration”

has been broadly interpreted to include anything

false claims and false statement laws, including the federal civil False Claims Act, prohibits, among other things, any person

or entity from knowingly presenting, or causing to be presented, for payment to, or approval by, federal programs, including

Medicare and Medicaid, claims for items or services, including drugs, that are false or fraudulent.

Insurance Portability and Accountability Act of 1996 (“HIPAA”) created additional federal criminal statutes that

prohibit among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare

benefit program, including private third-party payors or making any false, fictitious or fraudulent statement in connection

with the delivery of or payment for healthcare benefits, items or services.

as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 and their implementing regulations,

impose obligations on certain types of individuals and entities regarding the electronic exchange of information in common

healthcare transactions, as well as standards relating to the privacy and security of individually identifiable health information.

federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for

which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions,

to report annually to the Centers for Medicare & Medicaid Services information related to payments or other transfers

of value made to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their

immediate family members.

many states have similar laws and regulations, such as anti-kickback and false claims laws that may be broader in scope and may

apply regardless of payor, in addition to items and services reimbursed under Medicaid and other state programs.

Additionally,

individual states in the U.S.

have also become increasingly active in passing legislation and implementing regulations designed

to control product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access

and marketing cost disclosure and transparency measures.

Moreover, regional healthcare authorities and individual hospitals are

increasingly using bidding procedures to determine what products to purchase and which suppliers will be included in their healthcare

in the European Union

the European Union (the “EU”), for example, there is a centralized approval procedure that authorizes marketing

of a product in all countries of the EU, which includes most major countries in Europe.

If this procedure is not used,

approval in one country of the EU can be used to obtain approval in another country of the EU under two

simplified application processes, the mutual recognition procedure or the decentralized procedure, both of which rely on the

principle of mutual recognition.

After receiving regulatory approval through any of the European registration procedures,

pricing and reimbursement approvals are also required in most countries.

are also subject to numerous federal, state and local laws relating to such matters as safe working conditions, manufacturing

practices, environmental protection, fire hazard control, and disposal of hazardous or potentially hazardous substances and biological

We may incur significant costs to comply with such laws and regulations now or in the future.

we may be subject to state laws that require pharmaceutical companies to comply with the federal government’s and/or pharmaceutical

industry’s voluntary compliance guidelines, state laws that require drug manufacturers to report information related to

payments and other transfers of value to physicians and other healthcare providers or marketing expenditures, as well as state

and foreign laws governing the privacy and security of health information, many of which differ from each other in significant

ways and often are not preempted by HIPAA.

Additionally,

to the extent that our product is sold in a foreign country, we may be subject to similar foreign laws.

of December 31, 2020, we have four full-time employees and one part-time employee, none of which are represented by a labor union

or covered by a collective bargaining agreement.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business