Dominari Holdings Inc. 10-K

Item 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures We maintain “disclosure controls and procedures,” as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. With respect to the annual period ended December 31, 2020, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures. Based upon this evaluation, our management has concluded that our disclosure controls and procedures were not effective as of December 31, 2020. We have a lack of segregation of duties, and a lack of controls in place to ensure that all material transactions and developments impacting the financial statements are reflected. However, to the extent possible, we will implement procedures to assure that the initiation of transactions, the custody of assets and the recording of transactions will be performed by separate individuals. We believe that the foregoing steps will remediate the material weakness identified above, and we will continue to monitor the effectiveness of these steps and make any changes that our management deems appropriate. Management is in the process of determining how best to make the required changes that are needed to implement an effective system of internal control over financial reporting. Our management acknowledges the existence of this problem, and intends to develop procedures to address it to the extent possible given the Company’s limitations in financial and human resources. Management’s Annual Report on Internal Control over Financial Reporting Our management, including our Chief Executive Officer and Interim Chief Financial Officer assessed the effectiveness of our internal control over financial reporting as of December 31, 2020 and concluded that our internal controls over financial reporting were not effective. In making this assessment, our management used the 2013 framework established in “Internal Control-Integrated Framework” promulgated by the Committee of Sponsoring Organizations of the Treadway Commission, commonly referred to as the “COSO” criteria. 27 In connection with management’s assessment of our internal control over financial reporting described above, management has identified the following material weaknesses in our internal control over financial reporting as of December 31, 2020. (1) The Company has inadequate segregation of duties consistent with control objectives. (2) The Company does not have properly documented controls designed and operating in place to ensure that it’s financial statements properly reflect material transactions and developments. We are currently reviewing our internal controls and procedures related to these material weaknesses and expect to implement changes in the near term, including identifying specific areas within our governance, accounting and financial reporting processes to add adequate resources to potentially mitigate these material weaknesses. Our management team will continue to monitor and evaluate the effectiveness of our disclosure controls and procedures and our internal controls over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. This Annual Report does not contain an attestation report of our independent registered public accounting firm regarding internal control over financial reporting since the rules for smaller reporting companies provide for this exemption. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the year ended December 31, 2020 which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. OTHER INFORMATION None. 28 PART III All per share amounts and outstanding shares, including stock options, restricted stocks and warrants, have been retroactively adjusted for all periods on a post-Reverse Stock Split basis below. Further, exercise prices of stock options and warrants have been retroactively adjusted in these consolidated financial statements for all periods presented to reflect the 1-for-19 Reverse Stock Split. Numbers of shares of the Company’s preferred stock were not affected by the Reverse Stock Split; however, the conversion ratios have been adjusted to reflect the Reverse Stock Split. Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Directors and Executive Officers The following table sets forth the name, age and position of each current director and executive officer of the Company. Name Age Position Director Since Robert J. Vander Zanden (1)(2)(3) 75 Director and Chairman of the Board 2004 Anthony Hayes 53 Chief Executive Officer, Principal Accounting Officer, Principal Financial Officer and Director 2013 Tim S. Ledwick (1)(2) 63 Director 2015 Gregory James Blattner(1)(3) 43 Director 2018 Paul LeMire(2)(3) 65 Director 2020 Robert Dudley(2)(3) 66 Director 2020 (1) Member of our Audit Committee. (2) Member of our Compensation Committee. (3) Member of our Nominating Committee. The biographies of our current directors are as follows: Dr. Robert J. Vander Zanden Dr. Robert J. Vander Zanden, a member of the Board of Directors since 2004, having served as a Vice President of R&D at Kraft Foods International, brings a long and distinguished career in applied technology, product commercialization, and business knowledge of the food science industry to us. Additionally, Mr. Vander Zanden has specific experience in developing organizations designed to deliver against corporate objectives. Dr. Vander Zanden holds a Ph.D. in Food Science and an M.S. in Inorganic Chemistry from Kansas State University, and a B.S. in Chemistry from the University of Wisconsin - Platteville, where he was named a Distinguished Alumnus in 2002. In his 30-year career, he has been with ITT Continental Baking Company as a Product Development Scientist; with Ralston Purina’s Protein Technology Division as Manager Dietary Foods R&D; with Keebler as Group Director, Product and Process Development (with responsibility for all corporate R&D and quality); with Group Gamesa, a Frito-Lay Company, as Vice President, Technology; and with Nabisco as Vice President of R&D for their International Division. With the acquisition of Nabisco by Kraft Foods, he became the Vice President of R&D for Kraft’s Latin American Division. Dr. Vander Zanden retired from Kraft Foods in 2004. He currently holds the title of Adjunct Professor and Lecturer in the Department of Food, Nutrition and Packaging Sciences at Clemson University, where he also is a member of their Industry Advisory Board. His focus on achieving product and process innovation through training, team building and creating positive working environments has resulted in his being recognized with many awards for product and packaging innovation. Mr. Vander Zanden executive experience provides him with valuable business expertise, which the Board believes qualifies him to serve as a director of the Company. 29 Anthony Hayes Mr. Anthony Hayes, a director and Chief Executive Officer since 2013, has served as the Chief Executive Officer of North South since March 2013 and since June 2013, as a consultant to our Company. Mr. Hayes was the fund manager of JaNSOME IP Management LLC and JaNSOME Patent Fund LP from August 2012 to August 2013, both of which he co-founded. Mr. Hayes was the founder and Managing Member of Atwater Partners of Texas LLC from March 2010 to August 2012 and a partner at Nelson Mullins Riley & Scarborough LLP from May 1999 to March 2010. Mr. Hayes received his Juris Doctorate from Tulane University School of Law and his B.A. in economics from Mary Washington College. The Board believes Mr. Hayes is qualified to serve as a director of the Company based on his intimate knowledge of the Company through his service as Chief Executive Officer. On March 10, 2017, as a result of Mr. Frank Reiner’s resignation as Chief Financial Officer, Mr. Hayes began serving as the Company’s Principal Accounting Officer. Tim S. Ledwick Mr. Tim S. Ledwick, who joined as a director in 2015, is currently the Chief Financial Officer of Management Health Solutions, a private equity-backed company that provides software solutions and services to hospitals focused on reducing costs through superior inventory management practices. In addition, since 2012 he has served on the board and as Chair of the Audit Committee of Telkonet, Inc. (TKOI) a smart energy management technology company. From 2007 to 2011, Mr. Ledwick provided CFO consulting services to AdvantageResourcing (former Advantage Human Resourcing, Inc.) a $150 million services firm and, in addition, from 2007-2008 also acted as special advisor to The Dellacorte Group, a middle market financial advisory firm focused on transactions between $100 million and $1 billion. From 2002 through 2006, Tim was a member of the Board of Directors and Executive Vice President-CFO of Dictaphone Corporation playing a lead role in developing a business plan which revitalized the company, resulting in the successful sale of the firm and delivering a seven times return to shareholders. From 2001-2002, Mr. Ledwick was brought on as CFO to lead the restructuring efforts of Lernout & Hauspie Speech Products, a Belgium-based Nasdaq listed speech technology company, whose market cap had at one point reached a high of $9 billion. From 1999 through 2001, he was CFO of Cross Media Marketing Corp, an $80 million public company headquartered in New York City, playing a lead role in the firm’s acquisition activity, tax analysis and capital raising. Mr. Ledwick is a member of the Connecticut Society of Certified Public Accountants and received his B.B.A. in accounting from The George Washington University and his M.S. in Finance from Fairfield University. The Board of Directors believes that Mr. Ledwick’s executive experience and financial expertise qualifies him to serve as a director of the Company. Paul LeMire Mr. LeMire, who joined as a member of our Board of Directors in 2020, is a high-performing investment sales manager and product specialist with 25 years of verifiable success in positioning investment management solutions across multiple channels. Mr. LeMire currently serves as the Managing Director of National Sales at Day Hagan Asset Management where he is responsible for managing the firm’s asset management business. Before joining Day Hagan Asset Management, Mr. LeMire was a Senior Regional Vice President for State Street Global Advisors and served in various other Vice President positions at Invesco, Old Mutual Investment Partners, Oppenheimer Funds and CitiGroup. Mr. LeMire holds a Master of Science degree in Mechanical Engineering from Polytechnic University, a Master of Business Administration from Adelphia University and a Bachelor of Science degree from Manhattan College. The Board of Directors believes that Mr. LeMire’s executive experience and financial expertise qualifies him to serve as a director of the Company. Robert Dudley Mr. Dudley, who joined as a member of our Board of Directors in 2020, currently serves as the Eastern Division and Metropolitan New York City Regional Sales Manager for Select Sector Standard & Poor’s Depositary Receipts (“SPDRs”). Prior to joining Select Sector SPDRs in 2008, Mr. Dudley held several managerial positions at Merrill Lynch within from 1981 through 2007. Mr. Dudley began his career in the Merrill Lynch White Weld Capital Markets in Corporate Bond Syndicate, later moving to Sales Manager for Taxable Fixed Income and Equity Marketing. Later, Mr. Dudley managed Merrill Lynch Consults for the New York City District and ended his career as a Financial Advisor and Sales Manager at the Merrill Lynch Rockefeller Center Branch office. The Board of Directors believes that Mr. Dudley’s executive experience and financial expertise qualifies him to serve as a director of the Company. 30 Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act, requires our directors and executive officers, and anyone who beneficially owns ten percent (10%) or more of our Common Stock, to file with the SEC initial reports of beneficial ownership and reports of changes in beneficial ownership of Common Stock. Anyone required to file such reports also need to provide us with copies of all Section 16(a) forms they file. Based solely upon a review of (i) copies of the Section 16(a) filings received during or with respect to 2020 and (ii) certain written representations of our officers and directors, we believe that all filings required to be made pursuant to Section 16(a) of the Exchange Act during and with respect to 2020 were filed in a timely manner. Code of Ethics We have adopted a Code of Ethics, which is available on our website at www.aikidopharma.com . Audit Committee We have a standing Audit Committee. The Audit Committee members are Mr. Ledwick, Chair, Dr. Vander Zanden and Mr. Gregory Blattner. The Audit Committee has authority to review our financial records, deal with our independent auditors, recommend financial reporting policies to the Board of Directors, and investigate all aspects of our business. The Audit Committee Charter is available for your review on our website at www.spherix.com. Each member of the Audit Committee satisfies the independence requirements and other criteria established by NASDAQ and the SEC applicable to audit committee members. The Board of Directors has determined that Mr. Ledwick meets the requirements of an audit committee financial expert as defined in the SEC and NASDAQ rules. Item 11. EXECUTIVE COMPENSATION The following Summary of Compensation table sets forth the compensation paid by our Company during the two years ended December 31, 2020, to all Executive Officers or employees earning in excess of $100,000 during any such year. Summary of Compensation Name and Principal Position Year Salary ($) Bonus ($) Stock Awards ($) Option Awards ($) Non-Equity Incentive Plan Compensation ($)(1) Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Anthony Hayes, Chief Executive Officer, Director, 2020 395,341 700,000 - 26,910 - - - 1,122,251 Principal Accounting Officer and Principal Financial Officer 2019 350,000 - - - - - - 350,000 Darrell Dotson, 2020 218,750 100,000 - - - - - 318,750 VP of Drug Development & General Counsel 2019 125,000 - - - - - - 125,000 (1) Awards pursuant to the Spherix Incorporated 2013 Incentive Compensation Plan and 2014 Plan. 31 Narrative Disclosure to Summary Compensation Table Employment Agreements Anthony Hayes On April 1, 2016, we entered into an employment agreement with Mr. Anthony Hayes pursuant to which Mr. Hayes serves as the Chief Executive Officer for a period of one year, subject to renewal. In consideration for his employment, we agreed to pay Mr. Hayes a base salary of $350,000 per annum. Mr. Hayes will be entitled to receive an annual bonus in an amount equal to up to 100% of his base salary if we meet or exceed certain criteria adopted by our Compensation Committee. We further agreed to grant executive restricted stock units, pursuant to the Corporation’s 2014 Equity Incentive Plan, with respect to 118,512 shares of the Company’s common stock. One-half of the grant shall vest if as of December 31, 2016, the Corporation has pro-forma cash of at least five million dollars ($5,000,000) (cash plus any cash used for a Board-approved extraordinary acquisition or transaction reconstituting the Company’s core operations, less accrued bonuses) and one-half shall vest upon the Company meeting certain agreed upon criteria. As of December 31, 2020, 59,256 restricted stock units were vested and 59,256 restricted stock units were forfeited. On October 19, 2017, the Company entered into an amendment to the employment agreement of Mr. Hayes, pursuant to which, effective January 1, 2017, Mr. Hayes was entitled to receive an annual cash bonus in an amount equal to up to $250,000 if the Company meets or exceeds certain criteria adopted by the Compensation Committee of the Company’s Board of Directors. In addition, Mr. Hayes was awarded a restricted stock unit grant for 30,000 shares of the Company’s common stock under the Company’s 2014 Equity Incentive Plan. Such grant shall vest in installments, in tandem with the satisfaction of the same criteria to which the cash bonus is subject. If all criteria are met, 100% of the grant of restricted stock units shall vest upon the determination of the Compensation Committee, which in any event shall not be later than March 15, 2018. All other terms of Mr. Hayes’ employment agreement, effective as of April 1, 2016, remain in full force and effect. Under the April 1, 2016 employment agreement with Mr. Hayes, we have agreed to, in the event of termination by us without “cause” or pursuant to a change in control, grant Mr. Hayes, in addition to reimbursement of any documented, unreimbursed expenses incurred prior to such date, (i) any unpaid compensation and vacation pay accrued during the term of the Employment Agreement, and any other benefits accrued to him under any of our benefit plans outstanding at such time, (ii) twelve (12) months base salary at the then current rate to be paid in a single lump sum within thirty (30) days of Mr. Hayes’ termination, (iii) continuation for a period of twelve (12) months of any benefits as extended to our executive officers from time to time, including but not limited to group health care coverage and (iv) payment on a pro rata basis of any annual bonus or other payments earned in connection with any bonus plans to which Mr. Hayes was a participant as of the date of termination. In addition, any options or restricted stock shall be immediately vested upon termination of Mr. Hayes’s employment without “cause” or pursuant to a change in control. Darrell Dotson On January 1, 2017, we entered into an employment agreement with Mr. Darrell Dotson pursuant to which Mr. Dotson serves as the Vice President, for a period of three months, which shall automatically be extended for three months unless either party provides notice of non-renewal. In consideration for his employment, we agreed to pay Mr. Dotson a base salary of $125,000 per annum. Mr. Dotson will be entitled to receive an annual bonus in an amount equal to up to 50% of his base salary if we meet or exceed certain criteria adopted by our Compensation Committee. We further agreed to grant executive restricted stock units, pursuant to the Corporation’s 2014 Equity Incentive Plan, in addition to the cash bonus, upon confirmation by the compensation committee. On March 24, 2020, we entered into an amendment to the employment agreement of Mr. Dotson pursuant to which Mr. Dotson was entitled to receive a base salary of $250,000 per annum. 32 Under the January 1, 2017 employment agreement with Mr. Dotson, we have agreed to, in the event of termination by us without “cause” or pursuant to a change in control, grant Mr. Dotson, in addition to reimbursement of any documented, unreimbursed expenses incurred prior to such date, (i) a cash payment of $250,000 and any unpaid compensation and vacation pay accrued during the term of his employment agreement, and any other benefits accrued to him under any of our benefit plans outstanding at such time, (ii) continuation for a period of twelve (12) months of any benefits as extended to our executive officers from time to time, including but not limited to group health care coverage and (iii) payment on a pro rata basis of any annual bonus or other payments earned in connection with any bonus plans to which Mr. Dotson was a participant as of the date of termination. In addition, any options or restricted stock shall be immediately vested upon termination of Mr. Dotson employment without “cause” or pursuant to a change in control. Outstanding Equity Awards at December 31, 2020 Option Awards Name Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Option Exercise Price ($) Option Expiration Date Anthony Hayes 9,290 - $ 571.71 4/1/2023 930 - $ 8.42 5/2/2021 930 - $ 4.34 5/30/2022 25,000 25,000 $ 0.64 12/23/2030 Darrell Dotson 1,240 - $ 108.21 8/1/2024 33 Director Compensation The following table summarizes the compensation paid to non-employee directors during the year ended December 31, 2020. Fees earned or paid in cash ($) Stock Awards ($) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Eric Weisblum (2) 15,000 15,000 Robert J. Vander Zanden (3) 70,000 - 26,910 - - - 96,910 Tim Ledwick (4) 60,000 - 26,910 - - - 86,910 Gregory Blattner (5) 60,000 - 26,910 - - - 86,910 Paul LeMire (6) 42,033 - 26,910 - - - 68,943 Robert Dudley (7) 42,033 - 26,910 - - - 68,943 (1) All stock options were granted in accordance with ASC Topic 718. (2) Mr. Weisblum was paid $15,000 in cash compensation for his service as a director in 2020. Effective April 17, 2020, Mr. Weisblum resigned as a director and member of the Audit, Compensation and Nomination Committees of the Company. (3) Mr. Vander Zanden was paid $70,000 in cash compensation for his service as a director in 2020. In addition, in December 2020, Mr. Vander Zanden was granted options to purchase 50,000 shares of Common Stock, with a term of ten years and an exercise price of $0.64, vesting with 50% vesting immediately and the remaining 50% vesting on the six months anniversary of the date of issue. (4) Mr. Ledwick was paid $60,000 in cash compensation for his service as a director in 2020. In addition, in December 2020, Mr. Ledwick was granted options to purchase 50,000 shares of Common Stock, with a term of ten years and an exercise price of $0.64, vesting with 50% vesting immediately and the remaining 50% vesting on the six months anniversary of the date of issue. (5) Mr. Blattner was paid $60,000 in cash compensation for his service as a director in 2020. In addition, in December 2020, Mr. Blattner was granted options to purchase 50,000 shares of Common Stock, with a term of ten years and an exercise price of $0.64, vesting with 50% vesting immediately and the remaining 50% vesting on the six months anniversary of the date of issue. (6) Mr. LeMire was paid $42,033 in cash compensation for his service as a director in 2020. In addition, in December 2020, Mr. LeMire was granted options to purchase 50,000 shares of Common Stock, with a term of ten years and an exercise price of $0.64, vesting with 50% vesting immediately and the remaining 50% vesting on the six months anniversary of the date of issue. (7) Mr. Dudley was paid $42,033 in cash compensation for his service as a director in 2020. In addition, in December 2020, Mr. Dudley was granted options to purchase 50,000 shares of Common Stock, with a term of ten years and an exercise price of $0.64, vesting with 50% vesting immediately and the remaining 50% vesting on the six months anniversary of the date of issue. Non-employee directors received the following annual compensation for service as a member of the Board for the fiscal year ended December 31, 2020: Annual Retainer $ 60,000 To be paid in cash in four equal quarterly installments. Additional Retainer $ 5,000 To be paid to the Chairman of the Board upon election annually. 34 Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT, AND RELATED STOCKHOLDERS Securities Authorized for Issuance under Equity Compensation Plans The following table provides information about our Common Stock that may be issued upon the exercise of options, warrants and rights under all of our existing equity compensation plans as of December 31, 2020. Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights (1) Weighted average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (1)) (2) Equity compensation plans approved by security holder 384,304 $ 40.15 4,650,494 Equity compensation plans not approved by security holder - - - 384,304 4,650,494 (1) Consists of options to acquire 24,840 shares of our common stock under the 2013 Equity Incentive Plan and 359,464 under the 2014 Equity Incentive Plan. (2) Consists of shares of Common Stock available for future issuance under our equity incentive plans. 35 Beneficial Ownership of our Capital Stock by Certain Beneficial Owners and Management The following tables set forth certain information concerning the number of shares of our Common Stock, Series D Preferred Stock and Series D-1 Preferred Stock owned beneficially as of March 25, 2021 by (i) our officers and directors as a group and (ii) each person (including any group) known to us to own more than 5% of our Common Stock, Series D Preferred Stock and Series D-1 Preferred Stock. As of March 25, 2021 there were 88,906,146 shares of Common Stock outstanding, 4,725 shares of Series D Preferred Stock outstanding and 834 shares of Series D-1 Preferred Stock outstanding. Unless otherwise indicated, it is our understanding and belief that the stockholders listed possess sole voting and investment power with respect to the shares shown. Common Stock Beneficially Owned Series D Preferred Stock Series D-1 Preferred Stock Name of Beneficial Owner(1) Shares Percentage Shares Percentage Shares Percentage Robert J. Vander Zanden 44,499 (2) * — — — — Anthony Hayes 48,430 (3) * — — — — Tim S. Ledwick 45,685 (4) * — — — — Paul LeMire 25,000 (5) * Robert Dudley 25,000 (6) * Gregory James Blattner 36,766 (7) * All Directors and Officers as a Group (6 persons) 225,380 * — — — — Stockholders Daniel W. Armstrong 611 Loch Chalet Ct Arlington, TX 76012-3470 — — 1,350 28.57 % — — R. Douglas Armstrong 570 Ocean Dr. Apt 201 Juno Beach, FL 33408-1953 — — 450 9.52 % — — Thomas Curtis 4280 10 Oaks Road Dayton, MD 21036-1124 — — 900 19.05 % — — Francis Howard 376 Victoria Place London, SW1 V1AA United Kingdom — — 900 19.05 % — — Charles Strogen 6 Winona Ln Sea Ranch Lakes, FL 33308-2913 — — 1,125 23.81 % — — Chai Lifeline Inc. 151 West 30th Street, Fl 3 New York, NY 10001-4027 — — — — 834 100 % * Less than 1% of the outstanding shares of the Company Common Stock. (1) Under Rule 13d-3 of the Exchange Act a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares: (i) voting power, which includes the power to vote or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. (2) Includes 4,944 shares of Common Stock and 39,555 options for purchase of Common Stock exercisable as of March 25, 2021. (3) Includes 12,280 shares of Common Stock and 36,150 options for purchase of Common Stock exercisable as of March 25, 2021. (4) Includes 7,059 shares of Common Stock and 38,626 options for purchase of Common Stock exercisable as of March 25, 2021. (6) Includes 25,000 options for purchase of Common Stock exercisable as of January 30, 2021. (7) Includes 25,000 options for purchase of Common Stock exercisable as of January 30, 2021. (8) Includes 36,766 options for purchase of Common Stock exercisable as of January 30, 2021. 36 Effective March 23, 2020, and as amended and restated on November 24, 2020, the Company and Continental Stock Transfer & Trust Co. (the “Rights Agreement”) The Rights Agreement provides each stockholder of record a dividend distribution of one “right” for each outstanding share of Common Stock. Rights become exercisable at the earlier of ten days following: (1) a public announcement that an acquirer has purchased or has the right to acquire 4.99% or more of our Common Stock, in connection with, (x) the Company consolidating, or merging into any other person, (y) any person consolidates or merges with or into the Company or (z) the Company sells or otherwise transfers to any person or persons, in one or more transactions, assets or earning power aggregating 50% or more of the assets or earning power of the Company, or (2) the commencement of a tender offer which would result in an offer or beneficially owning 10% or more of our outstanding Common Stock. All rights held by an acquirer or offer or expire on the announced acquisition date, and all rights expire at the close of business on March 23, 2023, subject to further extension. Each right entitles a stockholder to acquire, at a price of $5.00 per one one-thousandth of a share of our Series A Preferred Stock, subject to adjustments, which carries voting and dividend rights similar to one share of our Common Stock. The purchase price of the preferred stock fractional amount is subject to adjustment for certain events as described in the Rights Agreement. At the discretion of a majority of the Board of Directors and within a specified time period, we may redeem all of the rights at a price of $0.0001 per right. The Board may also amend any provisions of the Rights Agreement prior to exercise. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The current Board of Directors consists of Mr. Tim S. Ledwick, Mr. Anthony Hayes, Dr. Robert J. Vander Zanden, Mr. Robert Dudley, Mr. Paul LeMire, and Mr. Gregory James Blattner. The Board of Directors has determined that Dr. Vander Zanden, Mr. Ledwick, Mr. Weisblum and Mr. Blattner are independent directors within the meaning of the applicable NASDAQ rules. Our Audit, Compensation, and Nominating Committees consist solely of independent directors. We have not adopted written policies and procedures specifically for related person transactions. Our Board of Directors is responsible to approve all related party transactions, and approved each of the transactions set forth above. Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES Fees Paid to Auditor The following table sets forth the fees paid by our Company to Marcum LLP for audit and other services provided in 2020 and 2019. 2020 2019 Audit Fees $ 163,770 $ 227,630 Audit Related Fees - - Tax Fees - - All Other Fees - - Total 163,770 227,630 Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors Consistent with SEC policies and guidelines regarding audit independence, the Audit Committee is responsible for the pre-approval of all audit and permissible non-audit services provided by our principal accountants. Our Audit Committee has established a policy regarding approval of all audit and permissible non-audit services provided by our principal accountants. No non-audit services were performed by our principal accountants during the fiscal years ended December 31, 2020 and 2019. Our Audit Committee pre-approves these services by category and service. Our Audit Committee has pre-approved all of the services provided by our principal accountants. 37 PART IV Item 15. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES Consolidated Financial Statements The following financial statements are included in Item 8 herein: Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets as of December 31, 2020 and 2019 F-3 Consolidated Statements of Operations for the Years Ended December 31, 2020 and 2019 F-4 Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2020 and 2019 F-5 Consolidated Statements of Cash Flows for the Years Ended December 31, 2020 and 2019 F-6 Notes to Consolidated Financial Statements F-7 2. Financial Statement Schedules None 38 Exhibits Exhibit No. Description 1.1 Underwriting Agreement, dated July 18, 2017, by and between Spherix Incorporated and Laidlaw & Co. (UK) Ltd (incorporated by reference to Form 8-K filed July 24, 2017) 1.2 Placement Agency Agreement, dated July 15, 2015, by and between Spherix Incorporated and Chardan Capital Markets LLC (incorporated by reference to Form 8-K filed July 17, 2015) 3.1 Amended and Restated Certificate of Incorporation of Spherix Incorporated, dated April 24, 2014 (incorporated by reference to Form 8-K filed April 25, 2014) 3.2 Certificate of Amendment of the Amended and Restated Certificate of Incorporation of Spherix Incorporated, dated March 2, 2016 (incorporated by reference to Form 8-K filed March 18, 2016) 3.3 Amended and Restated Bylaws of Spherix Incorporated (incorporated by reference to Form 8-K filed October 15, 2013) 3.4 Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Spherix Incorporated, effective March 4, 2016 (incorporated by reference to Form 10-K filed March 29, 2016) 4.1 Specimen Certificate for common stock, par value $0.0001 per share, of Spherix Incorporated (incorporated by reference to Form S-3/A filed April 17, 2014) 4.2 Rights Agreement, dated as of January 24, 2013, by and between Spherix Incorporated and Equity Stock Transfer, LLC (incorporated by reference to Form 8-K filed January 30, 2013) 4.3 Amended and Restated Rights Agreement, dated as of June 9, 2017, by and between Spherix Incorporated and Transfer Online Inc. (incorporated by reference to Form 8-K filed June 9, 2017) 4.4 Certificate of Designation of Preferences, Rights and Limitations of Series J Convertible Preferred Stock (incorporated by reference to Form 8-K/A filed on June 2, 2014) 4.5 Certificate of Designation of Preferences, Rights and Limitations of Series K Convertible Preferred Stock (incorporated by reference to Form 8-K filed on December 3, 2015) 4.6 Form of Warrant (incorporated by reference to Form 8-K filed on March 26, 2014) 4.7 Form of Placement Agent Warrant (incorporated by reference to Form 8-K filed on March 26, 2014) 4.8 Form of Common Stock Purchase Warrant (incorporated by reference to Form 8-K filed July 17, 2015) 4.9 Form of Warrant (incorporated by reference to Form 8-K filed December 3, 2015) 10.1 2012 Equity Incentive Plan (incorporated by reference from the Company’s Information Statement on Definitive 14C filed November 26, 2012) 39 10.2 Warrant Exchange Agreement, dated March 1, 2013, by and among the Company and certain investors (incorporated by reference to Form 8-K filed March 7, 2013) 10.3 Agreement and Plan of Merger, dated April 2, 2013 (incorporated by reference to the Form 8-K filed on April 4, 2013) 10.4 First Amendment to Agreement and Plan of Merger, dated August 30, 2013 (incorporated by reference to the Form 8-K filed on September 4, 2013) 10.5 Spherix Incorporated 2013 Equity Incentive Plan (incorporated by reference to the Form 8-K filed on April 4, 2013) 10.6 Spherix Incorporated 2014 Equity Incentive Plan (incorporated by reference from the Company’s Proxy Statement on Form DEF 14A filed December 20, 2013) 10.7 Amendment to Spherix Incorporated 2014 Equity Incentive Plan (incorporated by reference from the Company’s Proxy Statement on Form DEF 14A filed March 28, 2014) 10.8 Form of Indemnification Agreement (incorporated by reference to the Form 8-K filed on September 10, 2013) 10.9 Employment Agreement, by and between Spherix Incorporated and Anthony Hayes (incorporated by reference to the Form 8-K filed on September 13, 2013) 10.10 Indemnification Agreement, by and between Spherix Incorporated and Jeffrey Ballabon (incorporated by reference to the Form 8-K filed on June 13, 2014) 10.11** Patent Purchase Agreement, by and between Spherix Incorporated and Rockstar Consortium US LP, including Amendment No. 1 thereto (incorporated by reference to the Form 8-K/A filed on November 19, 2013) 10.12 Form of Series F Exchange Agreement (incorporated by reference to the Form 8-K filed on November 26, 2013) 10.13 Form of Series D Exchange Agreement (incorporated by reference to the Form 8-K filed on December 30, 2013) 10.14 Confidential Patent Purchase Agreement, dated December 31, 2013, by and between Spherix Incorporated and Rockstar Consortium US LP (incorporated by reference to the Form S-1/A filed January 21, 2014) 10.15 Form of Subscription Agreement (incorporated by reference to the Form 8-K filed March 26, 2014) 10.16 Form of Registration Rights Agreement (incorporated by reference to the Form 8-K filed March 26, 2014) 10.17 Form of Subscription Agreement (incorporated by reference to the Form 8-K filed on May 29, 2014) 10.18 Letter of Agreement, dated January 6, 2014, by and between Spherix Incorporated and Chord Advisors, LLC (incorporated by reference to the Form 10-K filed on March 30, 2015) 10.19 Letter of Agreement, dated April 11, 2014, by and between Spherix Incorporated and Chord Advisors, LLC (incorporated by reference to the Form 10-K filed on March 30, 2015) 40 10.20 Securities Purchase Agreement, dated July 15, 2015, by and among Spherix Incorporated and the purchasers party thereto (incorporated by reference to Form 8-K filed July 17, 2015) 10.21 Employment Agreement, dated as of March 14, 2014, by and between Spherix Incorporated and Frank Reiner (incorporated by reference to Form 10-K filed March 29, 2016) 10.22 Amendment to Employment Agreement, dated as of June 30, 2015, by and between Spherix Incorporated and Frank Reiner (incorporated by reference to Form 10-K filed March 29, 2016) 10.23 Settlement and License Agreement, dated October 13, 2015, by and between Spherix Incorporated and Huawei Technologies Co., Ltd. (incorporated by reference to Form 10-K filed March 29, 2016) 10.24 Patent License Agreement, dated as of November 23, 2015, by and between Spherix Incorporated and RPX Corporation (incorporated by reference to Form 8-K filed November 30, 2015 10.25 Securities Purchase Agreement, dated as of December 2, 2015, by and among Spherix Incorporated and the investors party thereto (incorporated by reference to Form 8-K filed December 3, 2015) 10.26 Engagement Agreement, dated September 16, 2015, as amended, by and between Spherix Incorporated and H.C. Wainwright & Co., LLC (incorporated by reference to Form 8-K filed December 3, 2015) 10.27 Employment Agreement, effective as of April 1, 2016, by and between Spherix Incorporated and Anthony Hayes (incorporated by reference to Form 8-K filed May 26, 2016) 10.28 Amendment to Employment Agreement, by and between Spherix Incorporated and Anthony Hayes (incorporated by reference to the Form 8-K filed on October 25, 2017) 10.29 Separation Agreement and Release, dated March 10, 2017, by and between Spherix Incorporated and Frank Reiner (incorporated by reference to Form 8-K filed March 15, 2017) 10.30 Patent License Agreement, dated as of May 23, 2016, by and between Spherix Incorporated and RPX Corporation (incorporated by reference to Form 10-Q filed August 15, 2016) 10.31 Technology Monetization Agreement, dated as of March 11, 2016, and amended as of April 22, 2016, April 27, 2016 and May 22, 2016, by and between Spherix Incorporated and Equitable IP Corporation (incorporated by reference to Form 8-K filed August 2, 2016) 10.32 Underwriting Agreement, dated as of August 2, 2016, by and among Spherix Incorporated and the underwriters named on Schedule I thereto (incorporated by reference to Form 8-K filed August 3, 2016) 10.33 Assignment and Assumption of Rights Agreement, dated as of June 16, 2016, by and between Spherix Incorporated and Transfer Online, Inc. (incorporated by reference to Form 8-K filed June 21, 2016) 10.34 Securities Purchase Agreement, dated as of June 30, 2017, by and between Spherix Incorporated and Hoth Therapeutics, Inc. (incorporated by reference to Form 8-K filed July 3, 2017) 10.35 Registration Rights Agreement, dated as of June 30, 2017, by and between Spherix Incorporated and Hoth Therapeutics, Inc. (incorporated by reference to Form 8-K filed July 3, 2017) 41 10.36 Form of Shareholders Agreement, dated as of June 30, 2017 (incorporated by reference to Form 8-K filed July 3, 2017) 10.37 Agreement and Plan of Merger, dated as of March 12, 2018, by and among Spherix Incorporated, Spherix Merger Subsidiary Inc., DatChat, Inc. and Darin Myman (incorporated by reference to Form 8-K filed March 14, 2018) 10.38 Placement Agency Agreement, dated as of March 14, 2018, by and between Spherix Incorporated and Laidlaw & Company (UK) Ltd. (incorporated by reference to Form 8-K filed March 19, 2018) 10.39 Assignment of Agreement, dated as of November 13, 2019, by and among The University of Texas in Austin, on behalf of the Board of Regents of the University of Texas, CBM BioPharma, Inc. and Spherix Incorporated (incorporated by reference to Form S-1 filed January 31, 2020) 10.40 Assignment of Agreement, dated as of November 13, 2019, by and among Wake Forest University Health Sciences, CBM BioPharma, Inc. and Spherix Incorporated (incorporated by reference to Form S-1 filed January 31, 2020) 10.41 First Amendment to Agreement and Plan of Merger, dated as of May 3, 2018, by and among Spherix Incorporated, Spherix Merger Subsidiary Inc., DatChat, Inc. and Darin Myman (incorporated by reference to Form 8-K filed May 7, 2018) 10.42 Agreement and Plan of Merger, dated as of October 10, 2018, by and among Spherix Incorporated, Spherix Delaware Merger Sub Inc., Scott Wilfong and CBM Biopharma, Inc. (incorporated by reference to Form 8-K filed October 16, 2018) 10.43 At The Market Offering Agreement, dated as of August 9, 2019, by and between Spherix Incorporated and H.C. Wainwright & Co., LLC (incorporated by reference to Form 8-K filed August 9, 2019) 10.44 Asset Purchase Agreement, dated as of May 15, 2019, by and between the Company and CBM BioPharma, Inc. (incorporated herein by reference to Form 10-Q filed on August 14, 2019) 10.45 Amendment No. 1 to Asset Purchase Agreement, dated as of May 30, 2019, by and between the Company and CBM BioPharma, Inc. (incorporated herein by reference to Form 10-Q filed on August 14, 2019) 10.46 Amendment No. 2 to Asset Purchase Agreement, dated as of December 5, 2019, by and between the Company and CBM BioPharma, Inc. (incorporated herein by reference to Form 8-K filed on December 10, 2019) 10.47 Form of Placement Agent’s Warrant (incorporated by reference to Form 8-K filed on March 10, 2020) 10.48 Form of Securities Purchase Agreement (incorporated by reference to Form 8-K filed on March 10, 2020) 10.49 Certificate of Designation of Series L Preferred Stock of AIkido Pharma Inc. (incorporated by reference to Form 8-K filed on March 25, 2020) 10.50 Rights Agreement, dated March 23, 2020, by and between AIkido Pharma Inc. and VStock Transfer, LLC (incorporated by reference to Form 8-K filed on March 25, 2020) 42 10.51 Form of Securities Purchase Agreement (incorporated by reference to Form 8-K filed on April 15, 2020) 10.52 Form of Placement Agent’s Warrant (incorporated by reference to Form 8-K filed on April 15, 2020) 10.53 Certificate of Designation of Series M Preferred Stock (incorporated by reference to Form 8-K filed on January 11, 2021) 10.54 Securities Purchase Agreement bt and between Convergent Therapeutics, Inc. and AIkido Pharma Inc., dated January 29, 2021 (incorporated by reference to Form 8-K filed February 3, 2021) 10.55 Convertible Promissory Note, dated January 29, 2021 (incorporated by reference to Form 8-K filed February 3, 2021) 10.56 Amended and Restated Underwriting Agreement by and between the Company and H.C. Wainwright & Co., LLC, dated February 16, 2021 (incorporated by reference to Form 8-K filed on February 18, 2021) 10.48 Form of Underwriter’s Warrant (incorporated by reference to Form 8-K filed on February 18, 2021) 21.1* List of Subsidiaries 23.1* Consent of Marcum LLP, independent registered public accounting firm 31.1* Certification of Principal Executive Officer pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1* Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS* XBRL Instance Document 101.SCH* XBRL Taxonomy Extension Schema Document 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* XBRL Taxonomy Extension Label Linkbase Document 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document * Filed herewith. ** Pursuant to a Confidential Treatment Request under Rule 24b-2 filed with and approved by the SEC, portions of this exhibit have been omitted Item 16. Form 10-K Summary Not applicable. 43 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Aikido Pharma Inc. (Registrant) By: /s/ Anthony Hayes Anthony Hayes Date: March 25, 2021 Chief Executive Officer and Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. /s/ Anthony Hayes Chief Executive Officer and Director March 25, 2021 Anthony Hayes /s/ Tim S. Ledwick Director March 25, 2021 Tim S. Ledwick /s/ Robert J. Vander Zanden Chairman of the Board March 25, 2021 Robert J. Vander Zanden /s/ Paul LeMire Director March 25, 2021 Paul LeMire /s/ Robert Dudley Director March 25, 2021 Robert Dudley /s/ Gregory James Blattner Director March 25, 2021 Gregory James Blattner 44