What changed in this filing

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Item 1. Financial Statements

2021-11-10 compared with 2021-08-11 · 319 added, 287 removed, 158 unchanged (79% of the section changed)

Financial Statements

Consolidated Balance Sheets

in thousands except share and per share amounts)

AIKIDO PHARMA INC.

Condensed Consolidated Balance Sheets

($ in thousands except share and per share

September 30,

Current assets

15 unchanged sentences

5,000,000 shares designated;

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

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

liquidation value of $ 0.0001 per share

5,000,000 shares designated;

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

834 shares issued and outstanding at September 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 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

89,681,149 and 34,920,222 shares issued at September 30, 2021 and December 31, 2020, respectively;

89,681,146 and 34,920,219 shares outstanding at September 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

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

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

Accumulated deficit

1 unchanged sentence

Total liabilities and stockholders’ equity

accompanying notes to condensed consolidated financial statements

Consolidated Statements of Operations

in thousands except share and per share amounts)

See accompanying notes to condensed consolidated

financial statements.

AIKIDO PHARMA INC.

Condensed Consolidated Statements of Operations

($ in thousands except share and per share

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Operating costs and expenses

6 unchanged sentences

Interest income

Gains on marketable securities

Loss on marketable securities

Change in fair value of investment

4 unchanged sentences

Basic and Diluted

accompanying notes to condensed consolidated financial statements

Consolidated Statements of Changes in Stockholders’ Equity

in thousands except share and per share amounts)

the Three Months Ended June 30, 2021

See accompanying notes to condensed consolidated

financial statements.

AIKIDO PHARMA INC.

Condensed Consolidated Statements of Changes

in Stockholders’ Equity

($ in thousands except share and per share

For the Three Months Ended September 30, 2021

Preferred Stock

1 unchanged sentence

Total Stockholders’

Balance at March 31, 2021

Balance at June 30, 2021

$ ( 161,917 )

Stock-based compensation

Balance at June 30, 2021

Balance at September 30, 2021

$ ( 161,964 )

the Three Months Ended June 30, 2020

For the Three Months Ended September 30, 2021

Preferred Stock

Treasury Stock

Total Stockholders’

March 31, 2020

Balance at June 30, 2020

$ ( 154,912 )

Issuance of common stock,

net of offering cost

Common warrant and prefunded

warrant exercise

at June 30, 2020

Distribution of Hoth common stock

Balance at September 30, 2020

$ ( 156,929 )

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

See accompanying notes to condensed consolidated

financial statements.

AIKIDO PHARMA INC.

Condensed Consolidated Statements of Changes

in Stockholders’ Equity

($ in thousands except share and per share

For the Nine Months Ended September 30, 2021

Preferred Stock

7 unchanged sentences

Stock-based compensation

Balance at June 30, 2021

Balance at September 30, 2021

$ ( 161,964 )

the Six Months Ended June 30, 2020

Stockholders’

at December 31, 2019

For the Nine Months Ended September 30, 2020

Preferred Stock

Treasury Stock

Total Stockholders’

Balance 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

Issuance of common stock, common warrants and prefunded warrants (net of offering costs of $ 941 )

Issuance of common stock, net of offering cost (net of offering costs of $ 1,905 )

Common warrant and prefunded warrant exercise

Distribution of Hoth common stock

Balance at September 30, 2020

$ ( 156,929 )

accompanying notes to condensed consolidated financial statements

Consolidated Statements of Cash Flows

See accompanying notes to condensed consolidated

financial statements.

AIKIDO PHARMA INC.

Condensed Consolidated Statements of Cash Flows

($ in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities

5 unchanged sentences

Unrealized loss on marketable securities

Changes in assets and liabilities:

Changes in operating assets and liabilities:

Prepaid expenses and other assets

7 unchanged sentences

Sale of marketable securities

Sale of Hoth common shares

Proceeds from sale of Hoth common shares

Proceeds from sale of DatChat common shares

Funds to deposit accounts, net

Purchase of investments

Purchase of research and development licenses

9 unchanged sentences

Cash and cash equivalents, end of period

accompanying notes to condensed consolidated financial statements

Non-cash investing and financing activities

Distribution of Hoth common stock

Unpaid investment

See accompanying notes to condensed consolidated

financial statements.

AIKIDO PHARMA INC.

30 unchanged sentences

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

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.

6 unchanged sentences

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

Summary of Significant Accounting Policies

Summary of Significant Accounting

Basis of Presentation and Principles of Consolidation

8 unchanged sentences

in consolidation.

to Condensed Consolidated Financial Statements

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

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;

The condensed consolidated balance sheet as of September 30, 2021, condensed consolidated

statements of operations for the three and nine months ended September 30, 2021 and 2020, condensed consolidated statements of stockholders’

equity for the three and nine months ended September 30, 2021 and 2020, and the condensed consolidated statements of cash flows for the

nine months ended September 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

The results for the three and nine months ended September 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.

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

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.

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.

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.

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.

April 2021, the Company deposited $ 5 million with a fund to identify opportunities to expand the Company’s core business strategies

The cash are held in bank accounts on behalf of the Company until the fund manager identifies investments.

During the nine and

three months ended September 30, 2021, the Company incurred advisory fees of approximately $ 0.6 million and $ 56,000 , respectively, and

the balance held in cash in this fund was $ 4.4 million as of September 30, 2021.

Adopted Accounting Standards

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

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.

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

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

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

shall also pay Silo Pharma a running royalty equal to 2 % of “net sales” (as such term is defined in the License Agreement).

Running royalties are amounts paid to the licensor over time based on the revenue earned by the licensee from sales of products that

embody the licensed IP, if any.

Investments in Marketable Securities

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 gain (loss)

Dividend income

Interest income

Investment in Hoth Therapeutics, Inc.

The following summarizes the Company investment

in Hoth as of June 30, 2021:

Security Name

Fair value per Share

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

September 30, 2021 and 2020, which are recorded as a component of gains and (losses) on marketable securities on the consolidated statements

of operations (excluding a $ 70,000 distribution to CBM shareholders during the nine months ended September 30, 2020), are as follows

($ in thousands):

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

Significant other observable inputs

Significant unobservable inputs

Marketable securities:

Mutual fund securities

Unit Investments Trust

Short-term investment

Convertible note receivable

the Three Months Ended

September 30,

the Nine Months Ended

September 30,

Short-term investment - investment in Hoth Therapeutics, Inc.

following summarizes the Company investment in Hoth as of September 30, 2021:

September 30,

(in thousands)

to Condensed Consolidated Financial Statements

Fair value measured at December 31, 2020

Quoted prices in active markets

Significant other observable inputs

Significant unobservable inputs

Marketable securities

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

Purchase of convertible note

Accrued interest receivable

Ending balance

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.

Short-term investment - investment in DatChat, Inc.

(“DatChat”) is a communications software company that gives users the ability to communicate with privacy and protection.

August 17, 2021, DatChat closed its initial public offering (the “IPO”) at an initial offering price to the public of

$ 4.15 per share under the ticker DATS.

The Company records this investment at fair value and records any change in fair value in the

statements of operations (see Note 9).

September 22, 2021, the Company entered into a certain Stock Transfer Agreement, by and between the Company and a purchaser, and sold

167,084 shares of DatChat common stock for net proceeds of approximately $ 0.9 million.

following summarizes the Company investment in DatChat as of September 30, 2021:

September 30,

(in thousands)

Other Investments

Company has made an accounting policy election to adopt an adjusted cost method measurement alternative for the below investments pursuant

to ASU 2016-01.

in Kerna Health Inc

September 15, 2021, the Company entered into a securities purchase agreement (the “Kerna Securities Purchase Agreement”)

with Kerna Health Inc., (“Kerna”).

Under the Kerna Securities Purchase Agreement, the Company agreed to purchase 1,333,334

shares of common stock of Kerna for $ 1.0 million.

in Kaya Holding Corp

September 29, 2021, the Company entered into a securities purchase agreement (the “Kaya Securities Purchase Agreement”) with

Kaya Holding Corp., (“Kaya”).

Under the Kaya Securities Purchase Agreement, the Company agreed to purchase 8,325,000 shares

of common stock of Kaya for approximately $ 0.7 million.

Investment in Tevva Motors

September 22, 2021, the Company entered into a securities purchase agreement (the “Tevva Motors Subscription Agreement”)

with Big Sky Opportunities Fund, LLC, who handled the offering for Tevva Motors.

Under the Tevva Motors Subscription Agreement, the Company

agreed to purchase 29,004 Interests of Tevva Motors for approximately $ 1.0 million.

Subsequently, on September 30, 2021, the Company

entered into a second securities purchase agreement with Big Sky Opportunities Fund, LLC to purchase an additional 29,004 Interests of

Tevva Motors for approximately $ 1.0 million.

to Condensed Consolidated Financial Statements

in Slinger Bag Inc

August 6, 2021, the Company entered into a securities purchase agreement (the “Slinger Bag Securities Purchase Agreement”)

with Slinger Bag Inc., (“Slinger Bag”).

Under the Slinger Bag Securities Purchase Agreement, the Company agreed to pay $ 1.4

million to Slinger Bag for the issuance of a convertible promissory note in the principal amount of $ 1.4 million and a common stock purchase

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)

Observable inputs are based on market data obtained

from independent sources, while unobservable inputs are based on the Company's market assumptions.

Unobservable inputs require significant

management judgment or estimation.

In some cases, the inputs used to measure an asset or liability may fall into different levels of

the fair value hierarchy.

In those instances, the fair value measurement is required to be classified using the lowest level of input

that is significant to the fair value measurement.

Such determination requires significant management judgment.

following table presents the Company’s assets and liabilities that are measured at fair value at September 30, 2021 and December

31, 2020 ($ in thousands):

value measured at September 30, 2021

September 30,

fund securities

Investments Trust

purpose acquisition corps

Total marketable securities

note receivable

value measured at December 31, 2020

fund securities

Total marketable securities

to Condensed Consolidated Financial Statements

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 ($ in thousands):

Value of Level 3

of convertible note

interest receivable

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

(“Convergent”) in the 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.

The Convertible Note shall mature on January 29, 2023.

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

on a quarterly basis and is recognized in interest income in the condensed consolidated statements of operations.

The Company recorded

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

Convertible Note as of June 30, 2021.

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.

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

As of September

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 nine months ended September 30, 2021.

accrues on the unpaid principal balance on a quarterly basis and is recognized in interest income in the condensed consolidated statements

of operations.

The Company recorded an interest income receivable of approximately $ 107,000 on the Convertible Note as of September 30,

Net Loss per Share

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

Warrants to purchase common stock

Options to purchase common stock

to Condensed Consolidated Financial Statements

Stockholders’ Equity and Convertible

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 September 30, 2021 and 2020 are as follows:

of As of September 30,

preferred stock

Public Offering

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”).

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

payable by the Company.

On February 23, 2021, the Underwriter partially exercised its over-allotment option and purchased an additional

7,030,927 Shares, resulting in aggregate proceeds of approximately $ 86.2 million, before deducting underwriting discounts and commissions

and other expenses.

The total net proceeds received from these two offerings were approximately $ 78.0 million.

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 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 six months

ended June 30, 2021 is presented below:

Weighted Average Exercise Price

Total Intrinsic Value

Weighted Average Remaining Contractual Life

Outstanding as of December 31, 2020

Outstanding as of June 30, 2021

Stock Options

A summary of stock option activity for the six

months ended June 30, 2021 is presented below:

Number of Shares

Weighted Average Exercise Price

Total Intrinsic Value

Weighted Average Remaining

Contractual Life

Outstanding as of December 31, 2020

Employee options granted

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 $ 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

to purchase common stock

to Condensed Consolidated Financial Statements

Stockholders’ Equity and Convertible Preferred Stock

February 19, 2021, the Company consummated the public offering pursuant to an amended and restated underwriting agreement (the “Underwriting

Agreement”) with H.C.

Wainwright & 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

The Company received gross proceeds of approximately $ 75 million before deducting underwriting discounts and commissions

and estimated offering expenses payable by the Company.

On February 23, 2021, the Underwriter partially exercised its over-allotment

option and purchased an additional 7,030,927 Shares, resulting in aggregate proceeds of approximately $ 86.2 million, before deducting

underwriting discounts and commissions and other expenses.

The total net proceeds received from these two offerings were approximately

$ 78.0 million.

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 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.

summary of warrant activity for the nine months ended September 30, 2021 is presented below:

as of December 31, 2020

as of September 30, 2021

summary of stock option activity for the nine months ended September 30, 2021 is presented below:

as of December 31, 2020

options granted

options expired

as of September 30, 2021

vested and exercisable

to Condensed Consolidated Financial Statements

compensation associated with the amortization of stock option expense was approximately $ 6,000 and $ 0 for the three months ended September

30, 2021 and 2020, respectively.

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

Estimated future stock-based compensation expense

relating to unvested stock options is approximately $ 6,000 and will be recorded through July 2021.

Restricted Stock Awards

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.

This restricted stock award vested immediately.

The Company recorded approximately

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

Stock-based compensation associated with the amortization of stock option expense was approximately

$ 0.2 million and $ 0 for the nine months ended September 30, 2021 and 2020, respectively.

All stock compensation was recorded as a component

of general and administrative expenses.

future stock-based compensation expense relating to unvested stock options is approximately $ 0 .

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.

This restricted stock award

vested immediately.

The Company recorded approximately $ 0.5 million in research and development expense related with license acquired

during the nine months ended September 30, 2021 related to this arrangement.

July 31, 2021, the Company issued each of six directors 25,000 shares of the Company’s common stock pursuant to the Company’s

2020 Equity Incentive Plan.

These shares have a total fair value of approximately $ 0.1 million.

These restricted stock awards vested

Commitments and Contingencies

Legal Proceedings

In the past, in the ordinary course of business,

the Company actively pursued legal remedies to enforce its intellectual property rights and to stop unauthorized use of our technology.

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

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 past, in the ordinary course of business, the Company actively pursued legal remedies to enforce its intellectual property rights

and to stop unauthorized use of our technology.

Other than ordinary routine litigation incidental to the business, we know of no material,

active or pending legal proceedings against us.

and Uncertainties – COVID-19

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

that might result from the outcome of this uncertainty.

The consolidated financial statements

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

Subsequent Events

The Company evaluated events that have occurred

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

Company evaluated events that have occurred after the balance sheet date through the date the condensed consolidated financial statements

Based upon the evaluation and transactions, the Company did not identify any other subsequent events that would have required

adjustment or disclosure in the condensed consolidated financial statements.

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