What changed in this filing

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Item 1. Financial Statements

2021-08-11 compared with 2021-05-10 · 286 added, 374 removed, 159 unchanged (81% of the section changed)

9 unchanged sentences

Convertible note receivable

LIABILITIES AND STOCKHOLDERS’

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

4 unchanged sentences

Commitments and contingencies

Stockholders’

Stockholders’ equity

Preferred stock, $ .0001 par value, 50,000,000 Authorized

5,000,000 shares designated;

4,725 shares issued and outstanding at March 31, 2021 and December 31, 2020;

4,725 shares issued and outstanding at June 30, 2021 and December 31, 2020;

liquidation value of $ 0.0001 per share

5,000,000 shares designated;

834 shares issued and outstanding at March 31, 2021 and December 31, 2020;

834 shares issued and outstanding at June 30, 2021 and December 31, 2020;

liquidation value of $ 0.0001 per share

Common stock, $0.0001 par value, 100,000,000 shares authorized;

89,531,149 and 34,920,222 shares issued at March 31, 2021 and December 31, 2020, respectively;

89,531,146 and 34,920,219 shares outstanding at March 31, 2021 and December 31, 2020, respectively

89,531,149 and 34,920,222 shares issued at June 30, 2021 and December 31, 2020, respectively;

89,531,146 and 34,920,219 shares outstanding at June 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

Treasury stock, at cost, 3 shares at March 31, 2021 and December 31, 2020

Treasury stock, at cost, 3 shares at June 30, 2021 and December 31, 2020

Accumulated deficit

Total stockholders’

Total liabilities and stockholders’

Total stockholders’ equity

Total liabilities and stockholders’ equity

accompanying notes to condensed consolidated financial statements

2 unchanged sentences

Three Months Ended

Six Months Ended

Operating costs and expenses

6 unchanged sentences

Interest income

Losses on marketable securities

Gains on marketable securities

Change in fair value of investment

Total other expenses

Total other income (expenses)

Net loss per share, basic and diluted

3 unchanged sentences

accompanying notes to condensed consolidated financial statements

Consolidated Statements of Changes in Stockholders’

Consolidated Statements of Changes in Stockholders’ Equity

in thousands except share and per share amounts)

the Three Months Ended March 31, 2021

the Three Months Ended June 30, 2021

Preferred Stock

Treasury Stock

Total Stockholders’

Balance at March 31, 2021

$ ( 160,565 )

Stock-based compensation

Balance at June 30, 2021

$ ( 161,917 )

the Three Months Ended June 30, 2020

Total Stockholders’

March 31, 2020

$ ( 152,599 )

Issuance of common stock,

net of offering cost

Common warrant and prefunded

warrant exercise

at June 30, 2020

$ ( 154,912 )

accompanying notes to condensed consolidated financial statements

Consolidated Statements of Changes in Stockholders’ Equity

in thousands except share and per share amounts)

the Six Months Ended June 30, 2021

Preferred Stock

Treasury Stock

Total Stockholders’

Balance at December 31, 2020

$ ( 156,603 )

Issuance of common stock and warrants (net of offering costs of $8,260)

2 unchanged sentences

Stock-based compensation

Balance at March 31, 2021

the Three Months Ended March 31, 2020

Preferred Stock

Treasury Stock

Stockholders’

Balance at December 31, 2019

Issuance of common stock, common warrants and prefunded warrants (net of offering costs of $958)

Issuance of common stock (net of offering costs of $655)

Common warrant and prefunded warrant exercise

Balance at March 31, 2020

Balance at June 30, 2021

$ ( 161,917 )

the Six Months Ended June 30, 2020

Stockholders’

at December 31, 2019

$ ( 144,266 )

of common stock, common warrants and prefunded warrants, net of offering cost

of common stock, net of offering cost

warrant and prefunded warrant exercise

at June 30, 2020

$ ( 154,912 )

accompanying notes to condensed consolidated financial statements

1 unchanged sentence

in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities

3 unchanged sentences

Stock-based compensation

Realized (gain) loss on marketable securities

Realized gain on marketable securities

Unrealized loss on marketable securities

9 unchanged sentences

Sale of marketable securities

Sale of Hoth common shares

Funds to deposit accounts, net

Purchase of research and development licenses

2 unchanged sentences

Cash flows from financing activities

Proceeds from issuance common stock and warrants, net of offering cost

Proceeds from issuance common stock, net of offering cost

Proceeds from issuance of common stock and warrants, net of offering cost

Proceeds from issuance of common stock, net of offering cost

Proceeds from exercise of warrants

3 unchanged sentences

Cash and cash equivalents, end of period

Non-cash investing and financing activities

Offering cost included in accrued expenses

accompanying notes to condensed consolidated financial statements

to Condensed Consolidated Financial Statements

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

Organization and Description of Business and Recent Developments

and Description of Business

Pharma Inc.(the “Company”

and “We”), formerly known as Spherix Incorporated, was initially formed in 1967.

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.

The Company is

currently in the process of developing its 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.

The Company’s

oncology therapeutics include prospective treatments for pancreatic cancer, acute myeloid leukemia (AML) and acute lymphoblastic leukemia

The Company is also developing a broad-spectrum antiviral platform, in which the lead compounds have activity in cell-based assays

against multiple viruses including Influenza virus, Ebolavirus and Marburg virus, SARS-CoV, MERS-CoV, and SARS-CoV-2, the cause of COVID-19.

As a result of the Company’s biotechnology research

and development and associated investments and acquisitions, its business portfolio now focuses on the treatment of three different cancers

and multiple types of viral infections.

The Company’s pancreatic drug candidate, DHA-dFdC, developed at and licensed from the University

of Texas at Austin, is a new compound that it hopes will become the next generation of chemotherapy treatment for advanced pancreatic

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.

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.

Organization and Description of Business

AIkido Pharma Inc.

(the “Company”

and “We”), formerly known as Spherix Incorporated, 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.

The Company is currently in the process of developing

its 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.

The Company’s oncology therapeutics include

prospective 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 in cell-based assays against multiple viruses

including Influenza virus, Ebolavirus and Marburg virus, SARS-CoV, MERS-CoV, and SARS-CoV-2, the cause of COVID-19.

As a result of the Company’s biotechnology

research and development and associated investments and acquisitions, its business portfolio now focuses on the treatment of three different

cancers and multiple types of viral infections.

The Company’s pancreatic drug candidate, DHA-dFdC, developed at and licensed from

the University of Texas at Austin, is a new compound that it hopes 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

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.

has also executed a Sponsored Research Agreement with UMB to support the development of the technology under the direction of these inventors

Liquidity and Capital Resources

Company continues to incur ongoing administrative and other expenses, including public company expenses, in excess of corresponding (non-financing

related) revenue.

While the Company continues to implement its business strategy, it intends to finance its activities through managing

current cash on hand from the Company’s past debt and equity offerings.

the first quarter of 2021, the Company consummated a public offering of 53,905,927 shares of common stock (including the underwriter

overallotment).

The Company received net proceeds of approximately $78.0 million after deducting underwriting discounts and commissions

and estimated offering expenses payable by the Company.

Based upon projected cash flow requirements, the Company has adequate cash to

fund its operations for at least the next twelve months from the date of the issuance of these consolidated financial statements.

is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that

the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for drug candidates,

the specific impact is not readily determinable as of the date of these consolidated financial statements.

The consolidated financial

statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company continues to incur ongoing administrative

and other expenses, including public company expenses, in excess of corresponding (non-financing related) revenue.

While the Company continues

to implement its business strategy, it intends to finance its activities through managing current cash on hand from the Company’s

past debt and equity offerings.

During the first quarter of 2021, the Company

consummated a public offering of 53,905,927 shares of common stock (including the underwriter overallotment).

The Company received net

proceeds of approximately $ 78.0 million after deducting underwriting discounts and commissions and estimated offering expenses payable

by the Company.

Based upon projected cash flow requirements, the Company has adequate cash to fund its operations for at least the next

twelve months from the date of the issuance of these consolidated financial statements.

Summary of Significant Accounting Policies

of Presentation and Principles of Consolidation

accompanying unaudited condensed consolidated interim financial statements include the accounts of the Company and its wholly-owned subsidiaries,

Nuta Technology Corp.

(“Nuta”), Spherix Portfolio Acquisition II, Inc.

(“SPAII”), Guidance IP, LLC (“Guidance”),

Directional IP, LLC (“Directional”), Spherix Management Services, LLC (“SMS”), Spherix Delaware Merger Sub Inc.

(“Merger Sub”), Spherix Merger Subsidiary, Inc (“SMSI”) and NNPT, LLC (“NNPT”).

All significant intercompany

balances and transactions have been eliminated in consolidation.

to Condensed Consolidated Financial Statements

accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the accounting

principles generally accepted in the United States of America (“U.S.

GAAP”) for interim financial information and pursuant

to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and on

the same basis as the Company prepares its annual audited consolidated financial statements.

The condensed consolidated balance sheet

as of March 31, 2021, condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020, condensed consolidated

statement of stockholders’

equity for the three months ended March 31, 2021 and 2020, and the condensed consolidated statements

of cash flows for the three months ended March 31, 2021 and 2020 are unaudited, but include all adjustments, consisting only of normal

recurring adjustments, which the Company considers necessary for a fair presentation of the financial position, operating results and

cash flows for the periods presented.

The results for the three months ended March 31, 2021 are not necessarily indicative of results

to be expected for the year ending December 31, 2021 or for any future interim period.

The condensed consolidated balance sheet at December

31, 2020 has been derived from audited financial statements;

however, it does not include all of the information and notes required by

GAAP for complete financial statements.

The accompanying unaudited condensed consolidated financial statements should be read in

conjunction with the consolidated financial statements for the year ended December 31, 2020 and notes thereto included in the Company’s

annual report on Form 10-K, which was filed with the SEC on March 25, 2021.

accompanying condensed consolidated financial statements have been prepared in conformity with US GAAP.

This requires management to make

estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities

at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the period.

The Company’s

significant estimates and assumptions include stock-based compensation, the valuation of investments and the valuation allowance related

to the Company’s deferred tax assets.

Certain of the Company’s estimates could be affected by external conditions, including

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated

interim financial statements include the accounts of the Company and its wholly-owned subsidiaries, Nuta Technology Corp.

Spherix Portfolio Acquisition II, Inc.

(“SPAII”), Guidance IP, LLC (“Guidance”), Directional IP, LLC (“Directional”),

Spherix Management Services, LLC (“SMS”), Spherix Delaware Merger Sub Inc.

(“Merger Sub”), Spherix Merger Subsidiary,

Inc (“SMSI”) and NNPT, LLC (“NNPT”).

All significant intercompany balances and transactions have been eliminated

in consolidation.

The accompanying unaudited condensed consolidated

financial statements of the Company have been prepared in accordance with the accounting principles generally accepted in the United States

of America (“U.S.

GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of

Regulation S-X of the Securities and Exchange Commission (“SEC”) and on the same basis as the Company prepares its annual

audited consolidated financial statements.

The condensed consolidated balance sheet as of June 30, 2021, condensed consolidated statements

of operations for the three and six months ended June 30, 2021 and 2020, condensed consolidated statements of stockholders’ equity

for the three and six months ended June 30, 2021 and 2020, and the condensed consolidated statements of cash flows for the six months

ended June 30, 2021 and 2020 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company

considers necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

results for the three and six months ended June 30, 2021 are not necessarily indicative of results to be expected for the year ending

December 31, 2021 or for any future interim period.

The condensed consolidated balance sheet at December 31, 2020 has been derived from

audited financial statements;

however, it does not include all of the information and notes required by U.S.

GAAP for complete financial

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated

financial statements for the year ended December 31, 2020 and notes thereto included in the Company’s annual report on Form 10-K,

which was filed with the SEC on March 25, 2021.

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

Use of Estimates

The accompanying condensed consolidated financial

statements have been prepared in conformity with US GAAP.

This requires management to make estimates and assumptions that affect certain

reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial

statements, and the reported amounts of revenue and expenses during the period.

The Company’s significant estimates and assumptions

include stock-based compensation, the valuation of investments, the valuation of convertible note and the valuation allowance related

to the Company’s deferred tax assets.

Certain of the Company’s estimates could be affected by external conditions, including

those unique to the Company and general economic conditions.

It is reasonably possible that these external factors could have an effect

on the Company’s estimates and could cause actual results to differ from those estimates and assumptions.

Accounting Policies

than as described below, there have been no material changes in the Company’s significant accounting policies to those previously

disclosed in the Company’s annual report on Form 10-K, which was filed with the SEC on March 25, 2021.

Value Option - Convertible Note

guidance in ASC 825, Financial Instruments , provides a fair value option election that allows entities to make

an irrevocable election of fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities.

Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings.

to elect the fair value option is determined on an instrument-by-instrument basis and must be applied to an entire instrument

and is irrevocable once elected.

Assets and liabilities measured at fair value pursuant to this guidance are required to be reported

separately in our condensed consolidated balance sheets from those instruments using another accounting method.

Adopted Accounting Standards

December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2019-12, “

on the Company’s estimates and could cause actual results to differ from those estimates and assumptions.

Significant Accounting Policies

Other than as described below, there have been

no material changes in the Company’s significant accounting policies to those previously disclosed in the Company’s annual

report on Form 10-K, which was filed with the SEC on March 25, 2021.

Fair Value Option - Convertible Note

The guidance in ASC 825, Financial Instruments ,

provides a fair value option election that allows entities to make an irrevocable election of fair value as the initial and subsequent

measurement attribute for certain eligible financial assets and liabilities.

Unrealized gains and losses on items for which the fair value

option has been elected are reported in earnings.

The decision to elect the fair value option is determined on an instrument-by-instrument

basis and must be applied to an entire instrument and is irrevocable once elected.

Assets and liabilities measured at fair value pursuant

to this guidance are required to be reported separately in our condensed consolidated balance sheets from those instruments using another

accounting method.

During the three months ended June 30, 2021, the Company deposited

$ 5 million with a fund to identify opportunities to expand the Company’s core business strategies in Asia.

The cash are held in

bank accounts on behalf of the Company until the fund manager identifies investments.

During the three months ended June 30, 2021, the

Company incurred fees of approximately $ 0.5 million advisory fees and the balance held in cash in this fund was $ 4.5 million as of June

Recently Adopted Accounting Standards

In December 2019, the Financial Accounting Standards

Board (“FASB”) issued ASU No.

2019-12, “ Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to

accounting for income taxes.

ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends

existing guidance to improve consistent application.

This guidance is effective for fiscal years, and interim periods within those fiscal

years, beginning after December 15, 2020, with early adoption permitted.

Simplifying the Accounting for Income Taxes (“ASU

2019-12”), which is intended to simplify various aspects related to accounting for income taxes.

ASU 2019-12 removes certain exceptions

to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.

This guidance

is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted.

The Company adopted ASU No.

2019-12 effective January 1, 2021,

and the adoption did not have a material impact on its consolidated financial statements.

to Condensed Consolidated Financial Statements

License agreement with Silo Pharma Inc.

January 5, 2021, the Company entered into an exclusive patent license agreement (the “License Agreement”) with Silo Pharma

Inc., a Delaware corporation and Silo Pharma Inc., a Florida corporation, and their affiliates/subsidiaries (collectively, “Silo

Pharma”).

On April 12, 2021, the Company entered into an amendment to the License Agreement (“Amendment”).

The Amendment

amended a portion of the license fees included in the original License Agreement and converted 500 shares of the Company’s Series

M Convertible Preferred Stock into an aggregate of 625,000 restricted shares of the Company’s common stock, par value $0.001 per

share, effective as of January 5, 2021.

consideration for the license of the Licensed Patents, the Company issued and delivered to Silo Pharma 625,000 shares of the Company’s

restricted stock.

2019-12 effective January 1, 2021, and the adoption did not have a material impact on its consolidated financial

License agreement with Silo Pharma

Effective January 5, 2021, the Company entered

into an exclusive patent license agreement (the “License Agreement”) with Silo Pharma Inc., a Delaware corporation and Silo

Pharma Inc., a Florida corporation, and their affiliates/subsidiaries (collectively, “Silo Pharma”).

On April 12, 2021, the

Company entered into an amendment to the License Agreement (“Amendment”).

The Amendment amended a portion of the license fees

included in the original License Agreement and exchange 500 shares of the Company’s Series M Convertible Preferred Stock to an

aggregate of 625,000 restricted shares of the Company’s common stock, par value $ 0.001 per share, effective as of January 5, 2021.

The Company paid a one-time nonrefundable cash payment of $ 0.5 million to Silo Pharma.

The Company shall also pay Silo

Pharma a running royalty equal 2% of “net sales”

(as such term is defined in the License Agreement).

The Company shall also pay Silo Pharma a running

royalty equal to 2 % of “net sales” (as such term is defined in the License Agreement).

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

Investments in Marketable Securities

realized gain or loss, unrealized gain or loss, and dividend income related to marketable securities for the three months ended March

31, 2021 and 2020, which are recorded as a component of gains and (losses) on marketable securities on the consolidated statements of

operations, are as follows ($ in thousands):

For the Three Months

Ended March 31,

The realized gain or loss, unrealized gain or

loss, and dividend income related to marketable securities for the three and six months ended June 30, 2021 and 2020, which are recorded

as a component of gains and (losses) on marketable securities on the consolidated statements of operations, are as follows ($ in thousands):

For the Three

Realized gain (loss)

Unrealized loss

Unrealized gain (loss)

Dividend income

1 unchanged sentence

Investment in Hoth Therapeutics, Inc.

following summarizes the Company investment in Hoth as of March 31, 2021:

The following summarizes the Company investment

in Hoth as of June 30, 2021:

Security Name

Shares Owned as of

Fair value per Share as of

Fair value as of March 31,

(in thousands)

Fair Value of Financial Assets and Liabilities

instruments, including cash and cash equivalents, accounts payable and accrued liabilities are carried at cost, which management believes

approximates fair value due to the short-term nature of these instruments.

The Company measures the fair value of financial assets and

liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal

or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.

Company uses three levels of inputs that may be used to measure fair value:

1 - quoted prices in active markets for identical assets or liabilities

2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable

3 - inputs that are unobservable (for example, cash flow modeling inputs based on assumptions)

to Condensed Consolidated Financial Statements

following table presents the Company’s assets and liabilities that are measured at fair value at March 31, 2021 and December 31,

Fair value per Share

(in thousands)

Fair value measured at March 31, 2021

Total at March 31,

Fair Value of Financial Assets and

Financial instruments, including cash and cash

equivalents, accounts payable and accrued liabilities are carried at cost, which management believes approximates fair value due to the

short-term nature of these instruments.

The Company measures the fair value of financial assets and liabilities based on the exchange

price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market

for the asset or liability in an orderly transaction between market participants on the measurement date.

The Company maximizes the use

of observable inputs and minimizes the use of unobservable inputs when measuring fair value.

The Company uses three levels of inputs that may

be used to measure fair value:

Level 1 - quoted prices in active markets for

identical assets or liabilities

Level 2 - quoted prices for similar assets and

liabilities in active markets or inputs that are observable

Level 3 - inputs that are unobservable (for example,

cash flow modeling inputs based on assumptions)

The following table presents the Company’s

assets and liabilities that are measured at fair value at June 30, 2021 and December 31, 2020 ($ in thousands):

Fair value measured at June 30, 2021

Total at June 30,

Quoted prices in active markets

2 unchanged sentences

Marketable securities:

Mutual fund securities

Unit Investments Trust

Short-term investment

Convertible note receivable

to Condensed Consolidated Financial Statements

Fair value measured at December 31, 2020

Total at December 31,

Quoted prices in active markets

2 unchanged sentences

Marketable securities

3 Valuation Techniques

following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial assets that are measured

at fair value on a recurring basis:

Fair Value of Level 3 investment

Level 3 Valuation Techniques

The following table sets forth a summary of the

changes in the fair value of the Company’s Level 3 financial assets that are measured at fair value on a recurring basis:

Fair Value of Level 3

Beginning balance

2 unchanged sentences

Ending balance

January 29, 2021, the Company purchased an 8% convertible promissory note (“Convertible Note”) issued by Convergent Therapeutics,

(“Convergent”) with a principal amount of $2 million pursuant to a Note Purchase Agreement with Convergent.

paid a purchase price for the Convertible Note of $2 million.

The Company will receive interest on the Convertible Note at the rate of

8% per annum payable upon conversion or maturity of the Convertible Note.

Convergent Investment

On January 29, 2021, the Company purchased an

8 % convertible promissory note (“Convertible Note”) issued by Convergent Therapeutics, Inc.

(“Convergent”) with

a principal amount of $ 2 million pursuant to a Note Purchase Agreement with Convergent.

The Company paid a purchase price for the Convertible

Note of $ 2 million.

The Company will receive interest on the Convertible Note at the rate of 8 % per annum payable upon conversion or maturity

of the Convertible Note.

The Convertible Note shall mature on January 29, 2023.

Company has elected to measure the purchase of the Convertible Note from Convergent using the fair value option at each reporting

Under the fair value option, bifurcation of an embedded derivative is not necessary, and all related gains and losses

on the host contract and derivative due to change in the fair value will be reflected in interest income and other, net in the condensed

consolidated statements of operations.

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

The Convertible Note is disclosed as

a noncurrent Convertible Note investment in the condensed consolidated balance sheets.

As of March 31, 2021, the fair value of the Convertible

Note was measured at $2.0 million, taking into consideration cost of the investment, market participant inputs, market conditions,

liquidity, operating results and other qualitative and quantitative factors.

The value at which the Company’s Convertible Note is

carried on its books is adjusted to estimated fair value at the end of each quarter, taking into account general economic and stock market

conditions and those characteristics specific to the underlying investments.

No change in fair value was recorded during the three months

ended March 31, 2021.

The Company has elected to measure the purchase

of the Convertible Note from Convergent using the fair value option at each reporting date.

Under the fair value option, bifurcation of

an embedded derivative is not necessary, and all related gains and losses on the host contract and derivative due to change in the fair

value will be reflected in interest income and other, net in the condensed consolidated statements of operations.

The Convertible Note is disclosed as a noncurrent

Convertible Note investment in the condensed consolidated balance sheets.

As of June 30, 2021, the fair value of the Convertible Note

was measured at $ 2.0 million, taking into consideration cost of the investment, market participant inputs, market conditions, liquidity,

operating results and other qualitative and quantitative factors.

The value at which the Company’s Convertible Note is carried on

its books is adjusted to estimated fair value at the end of each quarter, taking into account general economic and stock market conditions

and those characteristics specific to the underlying investments.

No change in fair value was recorded during the six months ended June

Interest accrues on the unpaid principal balance

1 unchanged sentence

The Company recorded

an interest income receivable of approximately $27,000 on the Convertible Note as of March 31, 2021.

an interest income receivable of approximately $ 67,000 on the

Convertible Note as of June 30, 2021.

Net Loss per Share

Securities that could potentially dilute loss

per share in the future that were not included in the computation of diluted loss per share at March 31, 2021 and 2020 are as follows:

As of March 31,

Basic loss per common share is computed by dividing

the net loss allocable to common stockholders by the weighted-average number of shares of common stock or common stock equivalents outstanding.

Diluted loss per common share is computed similar to basic loss per share except that it reflects the potential dilution that could occur

if dilutive securities or other obligations to issue common stock were exercised or converted into common stock.

Securities that could

potentially dilute loss per share in the future that were not included in the computation of diluted loss per share at June 30, 2021 and

2020 are as follows:

As of June 30,

Convertible preferred stock

1 unchanged sentence

Options to purchase common stock

Stockholders’

Equity and Convertible

to Condensed Consolidated Financial Statements

Stockholders’ Equity and Convertible

Preferred Stock

1 unchanged sentence

On February 19, 2021, the Company consummated

the public offering pursuant to an amended and restated underwriting agreement (the “Underwriting Agreement”) with H.C.

& Co., LLC, as representative to the underwriters named therein (the “Underwriter”), pursuant to which the Company agreed

to issue and sell to the Underwriter in an underwritten public offering (the “Offering”) an aggregate of 46,875,000 shares

(the “Shares”) of common stock, $0.0001 par value per share, of the Company (the “Common Stock”).

the public offering pursuant to an amended and restated underwriting agreement (the “Underwriting Agreement”) with H.C.

& Co., LLC, as representative to the underwriters named therein (the “Underwriter”), pursuant to which the Company agreed

to issue and sell to the Underwriter in an underwritten public offering (the “Offering”) an aggregate of 46,875,000 shares

(the “Shares”) of common stock, $ 0.0001 par value per share, of the Company (the “Common Stock”).

received gross proceeds of approximately $ 75 million before deducting underwriting discounts and commissions and estimated offering expenses

5 unchanged sentences

In connection with the Offering, the Company issued

the Underwriter warrants (the “Underwriter’s Warrants”) to purchase up to 4,312,473 shares of Common Stock, or 8% of

the Underwriter warrants (the “Underwriter’s Warrants”) to purchase up to 4,312,473 shares of Common Stock, or 8 % of

the Shares sold in the Offering.

The Underwriter’s Warrants will be exercisable for a period of five years from February 19, 2021

at an exercise price of $ 2.00 per share, subject to adjustment.

A summary of warrant activity for the three months

ended March 31, 2021 is presented below:

A summary of warrant activity for the six months

ended June 30, 2021 is presented below:

Weighted Average Exercise Price

2 unchanged sentences

Outstanding as of December 31, 2020

Outstanding as of March 31, 2021

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

Outstanding as of June 30, 2021

Stock Options

A summary of stock option activity for the three

months ended March 31, 2021 is presented below:

A summary of stock option activity for the six

months ended June 30, 2021 is presented below:

Number of Shares

1 unchanged sentence

Total Intrinsic Value

Weighted Average Remaining Contractual Life (in years)

Weighted Average Remaining

Contractual Life

Outstanding as of December 31, 2020

Employee options granted

Outstanding as of March 31, 2021

Employee options expired

Outstanding as of June 30, 2021

Options vested and exercisable

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

Stock-based compensation associated with the amortization

of stock option expense was approximately $0.1 million and $0 for the three months ended March 31, 2021 and 2020, respectively.

compensation was recorded as a component of general and administrative expenses.

of stock option expense was approximately $ 63,000 and $ 0 for the three months ended June 30, 2021 and 2020, respectively.

compensation associated with the amortization of stock option expense was approximately $ 0.2 million and $ 0 for the six months ended June

30, 2021 and 2020, respectively.

All stock compensation was recorded as a component of general and administrative expenses.

Estimated future stock-based compensation expense

2 unchanged sentences

Pursuant to the patent license agreement effective

January 5, 2021 with Silo Parma Inc., the Company issued and delivered to Silo Pharma 625,000 shares of the Company’s restricted

stock as consideration for the license of the licensed patents.

1 unchanged sentence

The Company recorded approximately

$0.5 million in research and development expense related with license acquired during the three months ended March 31, 2021 related to

this arrangement.

$ 0.5 million in research and development expense related with license acquired during the six months ended June 30, 2021 related to this

Commitments and Contingencies

3 unchanged sentences

Other than ordinary routine litigation incidental to the business, we know of no material, active or pending legal proceedings against

Risks and Uncertainties –

Management continues to evaluate the impact of

Risks and Uncertainties – COVID-19

Management continues to valuate the impact of

the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect

on the Company’s financial position, results of its operations and/or search for drug candidates, the specific impact is not readily

determinable as of the date of these consolidated financial statements.

The COVID-19 pandemic has slowed down some drug

development efforts and has slowed the acquisition of new drugs.

However, the impact of the pandemic and ensuing lockdowns are easing.

The process of drug development and further acquisitions is now continuing.

The consolidated financial statements do not include any adjustments

2 unchanged sentences

The Company evaluated events that have occurred

after the balance sheet date through the date the financial statements were issued.

Based upon the evaluation and transactions, the Company

did not identify any other subsequent events that would have required adjustment or disclosure in the consolidated financial statements.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

Forward-Looking Statements

You should read this discussion together with

the Financial Statements, related Notes and other financial information included elsewhere in this Form 10-Q.

The following discussion

contains assumptions, estimates and other forward-looking statements that involve a number of risks and uncertainties.

These risks could

cause our actual results to differ materially from those anticipated in these forward-looking statements.

All references to “we,”

“us,”

“our”

and the “Company”

refer to Aikido Pharma Inc., a Delaware corporation and its consolidated

subsidiaries unless the context requires otherwise.

AIkido Pharma Inc.

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.

As 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.

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.

Our 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.

In 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.

(“Silo 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.”

Critical Accounting Policies

Our critical accounting policies are disclosed

in our annual report on Form 10K for the year ended December 31, 2020 and there have been no material changes to such policy or estimates

during the three months ended March 31, 2021.

Recently Issued Accounting Pronouncements

See Note 3 to the condensed consolidated financial

statements for a discussion of recent accounting standards.

Results of Operations

Three months ended March 31, 2021 compared

to three months ended March 31, 2020

During the three months ended March 31, 2021,

we incurred a loss from operations of approximately $2.3 million, as compared to $2.4 million during the comparable prior year period.

The decrease in loss was primarily attributed to $13,000 decrease in research and development expense and $ $92,000 decrease in general

and administrative expenses, partially offset by $23,000 increase in research and development expense related with license acquisition.

During the three months ended March 31, 2021,

other expense was approximately $1.7 million as compared to approximately $5.9 million during the comparable prior year period.

loss per share went down from a decrease in net operating losses and a significant increase in the number of shares outstanding.

in other expense was primarily attributed to a $4.6 million lower loss in the change in fair value of investment in Hoth, and partially

offset by $0.5 million increase in losses on marketable securities.

The Company experienced very little or no revenue

in the last two years and we don’t expect any revenue until a biotechnology product is fully developed which may not occur for many

Liquidity and Capital Resources

We continue to incur ongoing administrative and

other expenses, including public company expenses, in excess of corresponding (non-financing related) revenue.

We do not expect to incur

revenue until any of our biotechnology products are fully developed.

While we continue to implement our business strategy, we intend to

finance our activities through managing current cash on hand from our past equity offerings.

During the first quarter of 2021, the Company

consummated a public offering of 53,905,927 shares of common stock (including the underwriter overallotment).

The Company received net

proceeds of approximately $78.0 million after deducting underwriting discounts and commissions and estimated offering expenses payable

by the Company.

Therefore, the Company has adequate cash to fund its operations for at least the next twelve months.

Moving forward, the Company intends to manage

its cash through an investment committee focused on asset preservation and reasonable risk allocation.

Further, the Company intends to

grow its drug platform through additional licensing efforts that are similar to those the Company has already entered into and disclosed.

In addition, the Company is seeking partnerships with academic institutions and private enterprise to find, fund and advance new drug

compounds that can be brought to commercialization.

Management continues to evaluate the impact of

the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect

on the Company’s consolidated financial position, results of its consolidated operations and/or search for drug candidates, the

specific impact is not readily determinable as of the date of these consolidated financial statements.

The consolidated financial statements

do not include any adjustments that might result from the outcome of this uncertainty.

Cash Flows from Operating Activities -

For the three months ended March 31, 2021 and 2020, net cash used in operations was approximately $1.1 million and $1.4 million, respectively.

The cash used in operating activities for the three months ended March 31, 2021 primarily resulted from a net loss of $4.0 million, and

partially offset by $2.0 million unrealized loss on marketable securities and $1.0 million research and development expense related with

license acquired.

The cash used in operating activities for the three months ended March 31, 2020 primarily resulted from a net loss of

$8.3 million, and partially offset by reduction in fair value of investment of $5.1 million and $1.0 million research and development

expense related with license acquired.

Cash Flows from Investing Activities -

For the three months ended March 31, 2021 and 2020, net cash used in investing activities was approximately $71.8 million and $17.2 million,

respectively.

The cash used in investing activities for the three months ended March 31, 2021 primarily resulted from our purchase of

marketable securities of $83.6 million and purchase of convertible note of $2.0 million, partially offset by our sale of marketable securities

of $14.3 million since we invest excess cash into marketable securities until additional cash is needed.

The cash used in investing activities

for the three months ended March 31, 2020 primarily resulted from our purchase of marketable securities of $20.4 million and research

and development expense related with license acquired of $1.0 million, partially offset by our purchase of marketable securities of $4.2

million since we invest excess cash into marketable securities.

Cash Flows from Financing Activities - Cash

provided by financing activities for the three months ended March 31, 2021 was $78.1 million, which reflects the net proceeds of $78.0

million from investors in exchange of issuance of common stock and warrants and net proceeds of $84,000 from the exercise of common warrants.

Cash provided by financing activities for the three months ended March 31, 2020 was $18.8 million, which reflects the net proceeds of

$6.5 from investors in exchange of issuance of common stock, common warrants and prefunded warrants, net proceeds of $5.1 from investors

in exchange of issuance of common stock, and net proceeds of $7.1 million from the exercise of common warrants and prefunded warrants.

Off-balance sheet arrangements.

Quantitative and Qualitative Disclosures about Market Risk

Not required for smaller reporting companies.

after the balance sheet date through the date the consolidated financial statements were issued.

Based upon the evaluation and transactions,

the Company did not identify any other subsequent events that would have required adjustment or disclosure in the consolidated financial

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-Q

Item 1. Financial Statements