What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2022-03-28 compared with 2021-03-25 · 903 added, 586 removed, 153 unchanged (91% of the section changed)

STATEMENTS AND SUPPLEMENTARY DATA

statements and supplementary data required by this Item 8 follow.

to Financial Statements Page

of Independent Registered Public Accounting Firm

Balance Sheets as of December 31, 2020 and 2019

Statements of Operations for the Years Ended December 31, 2020 and 2019

Statements of Changes in Stockholders’

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial statements and supplementary data required by this Item

Index to Financial Statements Page

Reports of Independent Registered Public Accounting Firms

Consolidated Balance Sheets as of December 31, 2021 and

Consolidated Statements of Operations for the Years Ended

December 31, 2021 and 2020

Consolidated Statements of Changes in Stockholders’

Equity for the Years Ended December 31, 2021 and 2020

Statements of Cash Flows for the Years Ended December 31, 2020 and 2019

to Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Shareholders and Board of Directors of

on the Financial Statements

have audited the accompanying consolidated balance sheets of AIkido Pharma Inc.

(the “Company”) as

of December 31, 2020 and 2019, the related consolidated statements of operations, stockholders’

equity and cash flows for

each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as the “financial

statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position

of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years

in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on

the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company

Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company

in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits

to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but

not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Consolidated Statements of Cash Flows for the Years Ended

December 31, 2021 and 2020

Notes to the Consolidated Financial Statements

Report of Independent Registered Public Accounting

To the Shareholders and the Board of Directors

AIkido Pharma, Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated

balance sheet of AIkido Pharma, Inc.

(the “Company”) as of December 31, 2021, the related consolidated statements of operations,

changes in stockholders’ equity and cash flows for the year then ended, and the related notes (collectively referred to as the “financial

statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial

position of the Company as of December 31, 2021 and the consolidated results of its operations and its cash flows for the year ended December

31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the

responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial

statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)

(“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws

and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we

engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to

error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit included performing procedures to assess

the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides

a reasonable basis for our opinion.

Critical Audit Matters

Critical Audit Matters are matters arising from the current

period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,

subjective, or complex judgments.

The critical audit matter communicated below is

a matter arising from the current period audit of the financial statements that is communicated or required to be communicated to the

audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially

challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the

financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion

on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of investments in privately-held

Description of the Matter

As of December 31, 2021, the Company had $9.5

million of investments in companies without readily determinable fair values.

The Company typically measures these investments at cost

less any impairment, adjusted for observable price changes in orderly transactions for an identical or similar investment.

We identified

the valuation of these investments as a critical audit matter because of the significant judgement management uses to estimate the investment

This is a challenging audit area due to the subjectivity in assessing whether observable price changes have occurred for investments

that are identical or similar to the investment the Company holds, and in assessing whether an investment is impaired.

How we Addressed the Matter in our Audit

Addressing the matter involved obtaining an understanding

of management’s process for accounting for their investments that do not have readily determinable fair values.

We considered the

appropriateness of the Company’s application of accounting policy by obtaining and reviewing the Company’s analysis and confirming

its compliance with accounting principles generally accepted in the United States.

We tested the mathematical accuracy of the Company’s

carrying value calculations and considered whether or not any of the investments should be impaired.

We evaluated the accounting conclusions

reached by the Company as to whether any observable transactions had occurred that were identical or similar in nature through reading

of the Company’s available financial and other information regarding the investee and through public searches for corroborating

or contradictory information.

Further, we evaluated the Company’s impairment conclusions considering this internal and external

We also evaluated the adequacy of the Company’s disclosures in Note 7 in relation to this matter.

/s/WithumSmith+Brown, PC

We have served as the Company's auditor since

New York, New York

March 28, 2022

PCAOB ID Number 100

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Shareholders and Board of Directors of

AIkido Pharma Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated

balance sheet of AIkido Pharma Inc.

(the “Company”) as of December 31, 2020, the related consolidated statement of operations,

stockholders’ equity and cash flows for the period ended December 31, 2020, and the related notes (collectively referred to as the

“financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial

position of the Company as of December 31, 2020 and the results of its operations and its cash flows for the period ended December 31,

2020, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements

are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform,

an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal

control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal

control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audit provide a reasonable basis for our opinion.

Critical Audit Matters

Critical Audit Matters are matters arising from the

current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective,

or complex judgments.

We determined that there are no critical audit matters.

have served as the Company’s auditor since 2013.

Balance Sheets

in thousands except per share amounts)

/s/ Marcum llp

We have served as the Company’s auditor since

2013 until 2021.

March 25, 2021

AIKIDO PHARMA INC.

Consolidated Balance Sheets

($ in thousands except share and per share

Current assets

1 unchanged sentence

Prepaid expenses and other assets

Short-term investments at fair value

Notes receivable at fair value

Total current assets

LIABILITIES AND STOCKHOLDERS’

Convertible note receivable at fair value

Security deposit

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

3 unchanged sentences

Total liabilities

Stockholders’

Commitments and contingencies

Stockholders’ equity

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

5,000,000 shares designated;

4,725 shares issued and

outstanding at December 31, 2020 and 2019;

3,825 and 4,725 shares issued and outstanding at December 31, 2021 and 2020, respectively;

liquidation value of $ 0.0001 per share

5,000,000 shares designated;

834 shares issued and

outstanding at December 31, 2020 and 2019;

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

liquidation value of $ 0.0001 per share

5 unchanged sentences

Accumulated deficit

Total stockholders’

Total liabilities and stockholders’

accompanying notes are an integral part of these consolidated financial statements.

Statements of Operations

in thousands)

Years Ended December 31,

Total stockholders’ equity

Total liabilities and stockholders’ equity

See accompanying notes to consolidated financial

AIKIDO PHARMA INC.

Consolidated Statements of Operations

($ in thousands except share and per share

Operating costs and expenses

5 unchanged sentences

Other income (expenses)

Gains on marketable securities

Interest income

(Loss) gains on marketable securities

Change in fair value of investment

Change in fair value of warrant liabilities

Total other (expenses) income

Total other income (expenses)

Net loss per share, basic and diluted

2 unchanged sentences

Basic and Diluted

accompanying notes are an integral part of these consolidated financial statements.

Statements of Changes in Stockholders’

in thousands)

Stockholders’

See accompanying notes to consolidated financial

AIKIDO PHARMA INC.

Consolidated Statements of Changes in Stockholders’

($ in thousands except share and per share

Stockholders’

at December 31, 2019

Issuance of common stock

and prefunded common stock warrants, net of offering cost

Issuance of common stock,

net of offering cost / At-the-market offering

Issuance of common stock

for research and development - license acquired

Exercise of prefunded

common stock warrants

Warrant exercise

Exchange of common shares

for prefunded warrants

Distribution of Hoth

Fractional shares adjusted

for reverse split

Stock-based compensation

Balance at December

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

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

Common warrant and prefunded

warrant exercise

Distribution of Hoth

Stock-based compensation

$ ( 144,266 )

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

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

warrant and prefunded warrant exercise

of Hoth common stock

at December 31, 2020

accompanying notes are an integral part of these consolidated financial statements.

Statements of Cash Flows

$ ( 156,603 )

Issuance of common stock and warrants (net of offering costs of $ 8,031 )

of common stock for research and development license acquired

of Series D Preferred stock

at December 31, 2021

$ ( 163,774 )

See accompanying notes to consolidated financial

AIKIDO PHARMA INC.

Consolidated Statements of Cash Flows

($ in thousands)

Years Ended December 31,

Cash flows from operating activities

1 unchanged sentence

Change in fair value of investment

Change in fair value of warrant liabilities

Research and development-acquired license, expensed

Stock-based compensation

Realized (gain) loss on marketable securities

Unrealized loss (gain) on marketable securities

Changes in assets and liabilities:

Realized loss (gain) on marketable securities

Unrealized loss on marketable securities

Changes in operating assets and liabilities:

Prepaid expenses and other assets

1 unchanged sentence

Accrued salaries and benefits

Interest receivable on convertible note

Security deposit

Payable to DatChat

3 unchanged sentences

Sale of marketable securities

Sale of Hoth common shares

Purchase of investments at fair value

Proceeds from sale of Hoth common shares

Proceeds from sale of DatChat common shares

Funds to deposit accounts, net

Purchase of short-term investments

Purchase of research and development licenses

Net cash (used in) provided by investing activities

Purchase of convertible note

Purchase of short-term notes

Net cash used in investing activities

Cash flows from financing activities

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

Proceeds from issuance common stock, net of offering cost

Proceeds from issuance common stock/ At-the-market offering

Offering costs from the issuance of common stock / At-the-market offering

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

Net cash provided by financing activities

Net increase in cash

Cash, beginning of period

Cash, end of period

Net increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Non-cash investing and financing activities

Distribution of Hoth common stock

accompanying notes are an integral part of these consolidated financial statements.

See accompanying notes to consolidated financial

AIKIDO PHARMA INC.

Notes to Consolidated Financial Statements

Organization and Description of Business and Recent Developments

Organization and Description of Business

and Description of Business

AIkido Pharma Inc., 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,

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’s innovative therapeutic drug pipeline is currently being advanced through

strong collaborations with 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).

2 unchanged sentences

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

2 unchanged sentences

Preclinical studies have also indicated that DHA-dFdC inhibits pancreatic cancer cell growth (up to 100,000-fold more potent that

gemcitabine, a current standard therapy), targets pancreatic tumors and has demonstrated activities against other cancers, including leukemia,

lung and melanoma.

The Company’s 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.

The Company’s 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.

gemcitabine, a current standard therapy), targets pancreatic tumors and has demonstrated activities against other cancers, including

leukemia, lung and melanoma.

The Company’s 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.

The Company’s 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.

May 10, 2019, the Company effected a reverse stock split of its outstanding shares of common stock at a ratio of one-for-4.25

(the “Reverse Stock Split”).

The Reverse Stock Split, which was approved by the Company’s Board of Directors

under authority granted by the Company’s stockholders at the Company’s 2019 Annual Meeting of Stockholders held on

April 15, 2019, was consummated pursuant to a Certificate of Amendment filed with the Secretary of State of Delaware on May 9,

2019 (the “Certificate of Amendment”).

Unless the context otherwise requires, all references in this report to shares of the Company’s common stock,

including prices per share of its common stock, reflect the Reverse Stock Split.

Fractional shares were not issued, and the final

number of shares were rounded up to the next whole share.

and Financial Condition

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.

Liquidity and Capital Resources

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 our business strategy, it intends to finance our activities through:

managing current cash on hand from our past debt and equity offerings;

seeking additional funds

raised through the sale of additional securities in the future;

seeking additional liquidity

through credit facilities or other debt arrangements;

increasing revenue from

its patent portfolios, license fees and new business ventures.

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 $78.2 million after deducting underwriting discounts and commissions and estimated offering expenses payable by

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

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 financial statements.

The financial

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

Summary of Significant Accounting Policies

of Presentation and Principles of Consolidation

accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Nuta Technology

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

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

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

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

significant intercompany balances and transactions have been eliminated in consolidation.

accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted

in the United States of America (“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 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 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

Company operates in one operating segment and, accordingly, no segment disclosures have been presented herein.

Concentration

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

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements

include the accounts of the Company and its wholly-owned subsidiary, AIkido Labs LLC.

All significant intercompany balances and transactions

have been eliminated in consolidation.

AIKIDO PHARMA INC.

Notes to Consolidated Financial Statements

Use of Estimates

The accompanying 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 notes receivable 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.

The Company operates in one operating segment

and, accordingly, no segment disclosures have been presented herein.

Concentration of Cash

The Company maintains cash balances at two financial

4 unchanged sentences

no cash equivalents as of December 31, 2021 and 2020.

securities are classified as trading and are carried at fair value.

The Company’s marketable securities consist of corporate

bonds and highly liquid mutual funds and exchange-traded & closed-end funds which are valued at quoted market prices.

and Development

and development costs, including acquired in-process research and development expenses for which there is no alternative future

use, are expensed as incurred.

Advance payments for goods and services that will be used in future research and development activities

are expensed when the activity has been performed or when the goods have been received rather than when the payment is made.

Company accounts for the issuance of common stock purchase warrants issued in connection with the equity offerings in accordance

with the provisions of ASC 815, Derivatives and Hedging (“ASC 815”).

The Company classifies as equity any contracts

that (i) require physical settlement or net-share settlement or (ii) gives the Company a choice of net-cash settlement or settlement

in its own shares (physical settlement or net-share settlement).

Company accounts for share-based payment awards exchanged for services at the estimated grant date fair value of the award.

options issued under the Company’s long-term incentive plans are granted with an exercise price equal to no less than the

market price of the Company’s stock at the date of grant and expire up to ten years from the date of grant.

These options

generally vest over a one- to five-year period.

Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and the assumptions used

in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties

and the application of management’s judgment.

Term - The expected term of options represents the period that the Company’s stock-based awards are expected to be outstanding

based on the simplified method, which is the half-life from vesting to the end of its contractual term.

Volatility - The Company computes stock price volatility over expected terms based on its historical common stock trading

Interest Rate - The Company bases the risk-free interest rate on the implied yield available on U.

Treasury zero-coupon

issues with an equivalent remaining term.

Dividend - The Company has never declared or paid any cash dividends on its common shares and does not plan to pay cash dividends

in the foreseeable future, and, therefore, uses an expected dividend yield of zero in its valuation models.

Company accounts for forfeitures as they occur.

Company uses the asset and liability method of accounting for income taxes in accordance with ASC 740, “

Income Taxes ”

(“ASC 740”).

Under this method, income tax expense is recognized as the amount of:

(i) taxes payable or refundable

for the current year and (ii) deferred tax consequences of temporary difference resulting from matters that have been recognized

in the Company’s financial statement or tax returns.

Deferred tax assets and liabilities are determined based on the difference

between the financial statement and tax bases of assets and liabilities measured at the enacted tax rates in effect for the year

in which these items are expected to reverse.

Deferred tax assets are reduced by valuation allowances if, based on the consideration

of all available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Adopted Accounting Standards

August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-13, “

Fair Value Measurement

(Topic 820), - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement,”

a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst or hierarchy

associated with Level 1, Level 2 and Level 3 fair value measurements.

This guidance is effective for fiscal years, and interim

periods within those fiscal years, beginning after December 15, 2019.

Early adoption is permitted upon issuance of the update.

The Company adopted this ASU on January 1, 2020 and the adoption of this ASU did not have a material impact on its consolidated

financial statements or related disclosures.

In December 2019, the Financial Accounting Standards Board (“FASB”)

issued ASU No.

2019-12, “

Marketable Securities

Marketable securities are classified as trading

and are carried at fair value.

The Company’s marketable securities consist of highly liquid mutual funds and exchange-traded &

closed-end funds which are valued at quoted market prices.

Research and Development

Research and development costs, including acquired

in-process research and development expenses for which there is no alternative future use, are expensed as incurred.

Advance payments

for goods and services that will be used in future research and development activities are expensed when the activity has been performed

or when the goods have been received rather than when the payment is made.

Accounting for Warrants

The Company accounts for the issuance of common

stock purchase warrants issued in connection with the equity offerings in accordance with the provisions of ASC 815, Derivatives and

Hedging (“ASC 815”).

The Company classifies as equity any contracts that (i) require physical settlement or net-share

settlement or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share

Stock-based Compensation

The Company accounts for share-based payment

awards exchanged for services at the estimated grant date fair value of the award.

Stock options issued under the Company’s long-term

incentive plans are granted with an exercise price equal to no less than the market price of the Company’s stock at the date of

grant and expire up to ten years from the date of grant.

These options generally vest over a one- to five-year period.

The Company estimates the fair value of stock

option grants using the Black-Scholes option pricing model and the assumptions used in calculating the fair value of stock-based awards

represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment.

Expected Term - The expected term of options

represents the period that the Company’s stock-based awards are expected to be outstanding based on the simplified method, which

is the half-life from vesting to the end of its contractual term.

Expected Volatility - The Company computes

stock price volatility over expected terms based on its historical common stock trading prices.

Risk-Free Interest Rate - The Company

bases the risk-free interest rate on the implied yield available on U.

Treasury zero-coupon issues with an equivalent remaining term.

Expected Dividend - The Company has never

declared or paid any cash dividends on its common shares and does not plan to pay cash dividends in the foreseeable future, and, therefore,

uses an expected dividend yield of zero in its valuation models.

AIKIDO PHARMA INC.

Notes to Consolidated Financial Statements

The Company accounts for forfeitures as they

Fair Value Option – Short-term Note

and 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 consolidated balance sheets from those instruments using another accounting

Long-term investments

Effective January 1, 2018, the Company adopted

Accounting Standards Update (“ASU”) 2016-01 and related ASU 2018-03 concerning recognition and measurement

of financial assets and financial liabilities.

In adopting this guidance, the Company has made an accounting policy election to adopt

an adjusted cost method measurement alternative for investments in equity securities without readily determinable fair values.

For equity investments that are accounted for

using the measurement alternative, the Company initially records equity investments at cost but is required to adjust the carrying value

of such equity investments through earnings when there is an observable transaction involving the same or a similar investment with the

same issuer or upon an impairment.

In April 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 year ended December 31, 2021, the Company incurred

advisory fees and legal fee of approximately $ 0.8 million, and the balance held in cash in this fund was $ 4.2 million as of December

The Company uses the asset and liability method

of accounting for income taxes in accordance with ASC 740, “ Income Taxes ” (“ASC 740”).

Under this method,

income tax expense is recognized as the amount of:

(i) taxes payable or refundable for the current year and (ii) deferred tax consequences

of temporary difference resulting from matters that have been recognized in the Company’s financial statement or tax returns.

tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities

measured at the enacted tax rates in effect for the year in which these items are expected to reverse.

Deferred tax assets are reduced

by valuation allowances if, based on the consideration of all available evidence, it is more likely than not that some portion or all

of the deferred tax asset will not be realized.

Recently Adopted Accounting Standards

In August 2018, the Financial Accounting Standards

Board (“FASB”) issued ASU 2018-13, “ Fair Value Measurement (Topic 820), - Disclosure Framework - Changes to

the Disclosure Requirements for Fair Value Measurement,” which makes a number of changes meant to add, modify or remove certain

disclosure requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements.

This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

adoption is permitted upon issuance of the update.

The Company adopted this ASU on January 1, 2020 and the adoption of this ASU did not

have a material impact on its consolidated financial statements or related disclosures.

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”),

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.

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

1 unchanged sentence

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.

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

financial statements.

AIKIDO PHARMA INC.

Notes to Consolidated Financial Statements

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,

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).

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

realized gain or loss, unrealized gain or loss, and dividend income related to marketable securities for the year ended December

31, 2020 and 2019, which are recorded as a component of other (expenses) income on the consolidated statements of operations (excluding

a $70,000 distribution to CBM shareholders during the year ended December 31, 2020), are as follows ($ in thousands):

The realized gain or loss, unrealized gain or

loss, and dividend income related to marketable securities for the years ended December 31, 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 year ended December 31, 2020), are as follows ($ in thousands):

For the Years Ended

Realized gain (loss)

Unrealized gain (loss)

Unrealized loss

Dividend income

Interest income

Short-term investments

The following table presents the Company’s

short-term investments at December 31, 2021 and 2020 ($ in thousands):

As of December 31,

Investment in Hoth Therapeutics, Inc.

is a clinical stage biopharmaceutical company focused on unique targeted therapeutics for patients suffering from indications

such as atopic dermatitis, also known as eczema, skin toxicities associated with cancer therapy, chronic wounds, psoriasis, asthma,

acne, and pneumonia.

February 20, 2019, Hoth closed its initial public offering (the “IPO”) at an initial offering price to the public

of $5.60 per share.

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

operations (see Note 8).

October 2, 2019, the Board of Directors approved a distribution to the Company’s stockholders of 100,000 Hoth Shares held

by the Company.

Accordingly, each of the Company’s stockholders received one (1) share of Hoth common stock for every twenty-nine

(29) shares of Company common stock held as of 5 p.m.

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

did not distribute fractional shares of Hoth common stock, and any fractional shares were rounded down to the nearest whole share.

February 23, 2020, the Board of Directors approved a distribution to the Company’s stockholders of up to 70,000 Hoth Shares

held by the Company.

Accordingly, each of the Company’s stockholders received one (1) share of Hoth common stock for every

five hundred (500) shares of Company common stock held as of 5 p.m.

Eastern Time on April 30, 2020, the dividend record date.

The Company did not distribute fractional shares of Hoth common stock, and any fractional shares were rounded down to the nearest

The final distribution amount of Hoth Shares is 69,815.

The fair value of this distribution is approximately $0.3

million on the dividend record date.

May 6, 2020, the Company entered into that certain Stock Transfer Agreement, by and between the Company and a purchaser, and sold

400,000 shares of Hoth common stock for net proceeds of approximately $0.5 million.

following summarizes the Company investment in Hoth:

Investment in DatChat, Inc.

Investment in Vicinity Motor Corp.

Investment in Hoth Therapeutics, Inc.

The following summarizes the Company investment

in Hoth as of December 31, 2021 and 2020:

Security Name

per Share as of

Shares Owned as of

Fair value per Share

as of December 31,

Fair value as of

2021 (in thousands)

Security Name

per Share as of

Shares Owned as of

Fair value per Share

as of December 31,

Fair value as of

2020 (in thousands)

fair value of Hoth common shares as of December 31, 2020 and 2019 was based on the closing price of $2.37 and $6.19, respectively,

reported on The NASDAQ Capital Market as of December 31, 2020 and 2019.

Investment in Others

May 2019, the Company purchased (a) a senior convertible note issued by DatChat with outstanding principal of $300,000, with an

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

price of $0.20 per share, (c) an option to acquire an additional $300,000 senior convertible note and a warrant to purchase 1,500,000

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

stockholder, (e) a contingent option to put 200,000 shares of DatChat common stock and (f) 50,000 shares of common stock of CBM

which represents a 20% interest in CBM.

The Company allocated all the fair value of this investment to CBM.

As a result of the

nominal purchase price allocated to DatChat, the Company reviewed its existing holdings in DatChat and reduced its existing carrying

amount from $1.0 million to $0.

The Company recorded its initial investment in DatChat on adjusted cost method measurement alternative

in accordance with ASU 2016-01.

December 5, 2019, in connection with the acquisition of the assets of CBM, the Company wrote-off its investment to research and

development expense as the original purchase of 50,000 CBM shares was a component of the transaction contemplated with CBM.

the year ended 2020, the Company wrote-off its investment of $25,000 in The BitDaily.

balance of Company’s other investments was $0 and $25,000 as of December 31, 2020 and 2019, respectively.

CBM Asset Acquisition

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

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

CBM, a Delaware corporation and a pharmaceutical company focused on the development of cancer treatments, pursuant to which all

shares of capital stock of CBM were be converted into the right to receive an aggregate of 15,000,000 shares of the Company’s

common stock, with CBM continuing as the surviving corporation in the merger.

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

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

On December 5, 2019, the Company completed the Acquisition

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

by that certain Amendment No.

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

2 to Asset Purchase Agreement,

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

As consideration for the Acquisition, the

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

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

per share of $3.61.

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

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

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

(a “Qualified Financing”).

the consummation of the Qualified Financing, the Company shall retain the first $2,000,000 of the gross proceeds from the Qualified

Financing and CBM shall receive 100% of the gross proceeds of such Qualified Financing received by the Company in excess of $2,000,000

as well as the gross proceeds of any subsequent equity financings by the Company until the Cash Consideration amount is satisfied

Additionally, at closing, 7% or 135,734 shares of common stock of the Stock Consideration was deposited with VStock (the

“Escrow Shares”), the Company’s transfer agent, to be held in escrow for six months post-closing to satisfy

certain indemnification obligations pursuant to the terms and conditions of the CBM Purchase Agreement, and 93% or 1,803,324 shares

of the Stock Consideration was issued and delivered to CBM.

On December 5, 2019, the Company recorded the

issuance of Stock Consideration at fair value, based upon the closing stock price per share of $1.11 as of December 5, 2019.

of Escrow Shares was considered probable as of December 31, 2019.

The Cash Consideration was not considered probable as of December 31,

2019 as such consideration is payable on a Qualified Financing.

Because acquisition of CBM’s intellectual property had not received

regulatory approval, the $2.5 million purchase price paid for CBM was immediately expensed in the Company’s statement of operations

as research and development –

intellectual property acquired.

On March 9, 2020, the Company raised over $2.0 million of proceeds (see Note 10), therefore a payment of $1.0 million was due

to CBM under the CBM Purchase Agreement.

The Company recorded this Cash Consideration as a component of research and development

license acquired during the year ended December 31, 2020 the consolidated statements of operations.

Fair Value of Financial Assets and Liabilities

Financial instruments, including cash, 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)

following table presents the Company’s assets and liabilities that are measured at fair value at December 31, 2020 and 2019

The investment in HOTH as of December 31, 2020

is recorded in long term investments.

AIKIDO PHARMA INC.

Notes to Consolidated Financial Statements

Investment in DatChat, Inc.

DatChat, Inc.

(“DatChat”) is a communications

software company that gives users the ability to communicate with privacy and protection.

On 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.

records this investment at fair value and records any change in fair value in the statements of operations (see Note 9).

On 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.

The following summarizes the Company investment

in DatChat as of December 31, 2021:

Security Name

Shares Owned as

Fair value per Share

as of December 31,

Fair value as of

2021 (in thousands)

Investment in Vicinity Motor Corp.

On October 25, 2021, the Company entered into

a warrant agreement with Vicinity Motor Corp.

(“Vicinity”) that entitles the Company to purchase up to 246,399 shares

of Vicinity common stock at $ 5.10 per share.

The warrant expires on October 25, 2024 .

The fair value was determined using a Black-Scholes

The Company recorded the fair value of the Vicinity warrant of approximately $ 0.4 million in the consolidated balance

sheet as of December 31, 2021, reflecting the benefit received as part of its purchase of Vicinity common shares through its brokerage

The initial investment in Vicinity was measured at approximately $ 0.6 million.

Gains or losses associated with changes in the

fair value of investments in Vicinity warrants are recognized as Change in fair value of investment on consolidated statements of operations

(see Note 9).

During the year ended December 31, 2021, the Company recorded approximately $ 0.4 million of change in fair value of investment

for this investment.

The following table

provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates:

As of Octorber 25,

As of December 31,

Option term (in years)

Risk-free interest rate

Expected dividends

AIKIDO PHARMA INC.

Notes to Consolidated Financial Statements

Long-Term Investments

The following table presents the Company’s

other investments at December 31, 2021 and 2020 ($ in thousands):

As of December 31,

Investment in Kerna Health Inc

Investment in Kaya Holding Corp

Investment in Tevva Motors

Investment in ASP Isotopes

Investment in AerocarveUS Corporation

Investment in HOTH

Investment in Kerna Health Inc

On 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.

Kerna, a private company, raised capital during the fourth quarter of 2021, increasing its share price value to $ 2.85 per share.

the Company recorded a $ 2.8 million unrealized gain on this investment during the fourth quarter of 2021.

The investment in Kerna was

valued at $ 3.8 million as of December 31, 2021.

Investment in Kaya Holding Corp

On 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.

Kaya, a private company, raised capital during the fourth quarter of 2021, increasing its share price value to $ 0.20 per

Therefore, the Company recorded approximate $ 1.0 million in unrealized gain on this investment during the fourth quarter

The investment in Kaya was valued at approximately $ 1.7 million as of December 31, 2021.

Investment in Tevva Motors

On 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.

The investment

in Tevva was valued at approximately $ 2.0 million as of December 31, 2021.

AIKIDO PHARMA INC.

Notes to Consolidated Financial Statements

Investment in ASP Isotopes

On November 18, 2021, the Company entered into

a securities purchase agreement (the “ASP Securities Purchase Agreement”) with ASP Isotopes Inc., (“ASP Isotopes”).

Under the ASP Securities Purchase Agreement, the Company agreed to purchase 500,000 shares of common stock of ASP Isotopes for $ 1.0 million.

The investment in ASP Isotepes was valued at approximately $ 1.0 million as of December 31, 2021.

Investment in AerocarveUS Corporation

On November 22, 2021, the Company entered into

a securities purchase agreement (the “AerocarveUS Securities Purchase Agreement”) with AerocarveUS Corporation, (“AerocarveUS”).

Under the AerocarveUS Securities Purchase Agreement, the Company agreed to purchase 250,000 shares of common stock of AerocarveUS for

$ 1.0 million.

The investment in AerocarveUS was valued at approximately $ 1.0 million as of December 31, 2021.

Notes Receivable

The following table presents the Company’s

notes receivable at December 31, 2021 ($ in thousands):

Stated Interest

Shor-term convertible notes receivable

Slinger Bag Inc Investment

Nano Innovations Inc Investment

Short-term notes receivable

Raefan Group LLC Investment

Raefan Industries LLC Investment

Long-term convertible note receivable

Convergent Investment

On January 29, 2021, the Company purchased an

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

(“Convergent”)

in the principal amount of $ 2.0 million pursuant to a Note Purchase Agreement with Convergent.

The Company paid a purchase price for

the Convergent Convertible Note of $ 2 million.

The Company will receive interest on the Convergent Convertible Note at the rate of 8 %

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

The Convergent Convertible Note shall mature on January

The Company recorded an interest income receivable

of approximately $ 0.1 million on the Convergent Convertible Note as of December 31, 2021.

Raefan Group LLC Investment

On October 13, 2021, the Company purchased an

8 % promissory note (“Raefan Group Promissory Note”) issued by Raefan Group, LLC (“Raefan Group”) in the principal

amount of approximately $ 2.8 million pursuant to a Note Purchase Agreement with Raefan Group.

The Company will receive interest

on the Raefan Group Promissory Note at the rate of 8 % per annum payable upon conversion or maturity of the Raefan Group Promissory Note.

The Raefan Group Promissory Note shall mature on October 13, 2022 .

The Company recorded an interest income receivable

of approximately $ 48,000 on the Raefan Group Promissory Note as of December 31, 2021.

AIKIDO PHARMA INC.

Notes to Consolidated Financial Statements

Raefan Industries LLC Investment

On December 6, 2021, the Company purchased an

8 % promissory note (“Raefan Industries Promissory Note”) issued by Raefan Industries, LLC (“Raefan Industries”)

in the principal amount of approximately $ 2.0 million pursuant to a Note Purchase Agreement with Raefan Industries.

The Company paid

a purchase price for the Raefan Industries Promissory Note of approximately $2.0 million.

The Company will receive interest on the Raefan

Industries Promissory Note at the rate of 8 % per annum payable upon conversion or maturity of the Raefan Industries Promissory Note.

The Raefan Industries Promissory Note shall mature on December 6, 2022 .

The Company recorded an interest income receivable

of approximately $ 11,000 on the Raefan Industries Promissory Note as of December 31, 2021.

Slinger Bag Inc Investment

On 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 purchased an 8 % convertible promissory note (“Slinger Bag Convertible

Note”) in the principal amount of $ 1.4 million and a common stock purchase warrant to purchase up to 933,333 shares of common stock

of Slinger Bag.

The Company paid a purchase price of $ 1.4 million for the Slinger Bag Convertible Note and the common stock purchase

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

maturity of the Slinger Bag Convertible Note.

The Slinger Bag Convertible Note shall mature on August 6, 2022 .

The Company recorded an interest income receivable

of approximately $ 45,000 on the Slinger Bag Convertible Note as of December 31, 2021.

Nano Innovations Inc Investment

On December 26, 2021, the Company entered into

a securities purchase agreement (the “Nano Securities Purchase Agreement”) with Nano Innovations Inc., (“Nano”).

Under the Nano Securities Purchase Agreement, the Company purchased a 10 % senior secured convertible promissory note (“Nano Convertible

Note”) in the principal amount of $ 750,000 and warrants permitting the Company to purchase an amount of Nano’s common voting

shares equal to 50 % of the number of common shares issuable upon the conversion of Nano Convertible Note.

The Company paid a purchase

price of $ 750,000 for the Nano Convertible Note and the common stock purchase warrants.

The Company will receive interest on the Nano

Convertible Note at the rate of 10 % per annum payable upon conversion or maturity of the Nano Convertible Note.

The Nano Convertible

Note shall mature on December 26, 2022.

The Company recorded an interest income receivable

of approximately $ 1,000 on the Nano Convertible Note as of December 31, 2021.

AIKIDO PHARMA INC.

Notes to Consolidated Financial Statements

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)

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.

The following table presents the Company’s

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

Fair value measured at December 31, 2021

Quoted prices in

active markets

Significant other

observable inputs

unobservable inputs

Marketable securities - mutual and exchange traded funds

Investments in Hoth

Marketable securities:

Total marketable securities

Short-term investment

Notes receivable at fair value

Convertible note receivable at fair value

Fair value measured at December 31, 2020

Quoted prices in

active markets

Significant other

observable inputs

unobservable inputs

Marketable securities - mutual and exchange traded funds

Investments in Hoth

the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different

methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate

of fair value at the reporting date.

Net Earnings (Loss) per Share Applicable to Common Stockholders

that could potentially dilute loss per share in the future that were not included in the computation of diluted loss per share

at December 31, 2020 and 2019 are as follows:

Marketable securities:

Mutual fund securities

AIKIDO PHARMA INC.

Notes to Consolidated Financial Statements

Level 3 Measurement

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 ($ in

Fair Value of Level 3

short-term investment

Beginning balance

Change in fair value of investment

Ending balance

Fair Value of Level 3

Notes receivable at fair value

Beginning balance

Purchase of notes receivable

Accrued interest receivable

Ending balance

Fair Value of Level 3

Convertible note receivable

Beginning balance

Purchase of notes receivable

Accrued interest receivable

Ending balance

Short-term Note Receivable and Convertible

Notes Receivable

The Company has elected to measure the purchases

of the notes 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 consolidated statements of operations.

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.

Interest accrues on the unpaid principal balance

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

Convergent Investment

As of December 31, 2021, the fair value of the

Convergent Convertible Note was measured at $ 2.1 million, taking into consideration cost of the investment, market participant inputs,

market conditions, liquidity, operating results and other qualitative and quantitative factors.

No change in fair value was recorded

during the year ended December 31, 2021.

AIKIDO PHARMA INC.

Notes to Consolidated Financial Statements

Raefan Group LLC Investment

As of December 31, 2021, the fair value of the

Raefan Group Promissory Note was measured at approximately $ 2.8 million, taking into consideration cost of the investment, market participant

inputs, market conditions, liquidity, operating results and other qualitative and quantitative factors.

No change in fair value was recorded

during the year ended December 31, 2021.

Raefan Industries LLC Investment

As of December 31, 2021, the fair value of the

Raefan Industries Promissory Note was measured at approximately $ 2.0 million, taking into consideration cost of the investment, market

participant inputs, market conditions, liquidity, operating results and other qualitative and quantitative factors.

No change in fair

value was recorded during the year ended December 31, 2021.

Slinger Bag Inc Investment

As of December 31, 2021, the fair value of the

Slinger Bag Convertible Note was measured at $ 1.4 million, taking into consideration cost of the investment, market participant inputs,

market conditions, liquidity, operating results and other qualitative and quantitative factors.

No change in fair value was recorded

during the year ended December 31, 2021.

The Company believes that the fair value of the

warrant of Slinger Bag is immaterial.

Nano Innovations Inc Investment

As of December 31, 2021, the fair value of the

Nano Convertible Note was measured at approximately $ 0.8 million, taking into consideration cost of the investment, market participant

inputs, market conditions, liquidity, operating results and other qualitative and quantitative factors.

No change in fair value was recorded

during the year ended December 31, 2021.

The Company believes that the fair value of the

warrant of Nano is immaterial.

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 December 31, 2021

and 2020 are as follows:

As of December 31,

2 unchanged sentences

Options to purchase common stock

Stockholders’

Equity and Convertible Preferred Stock

to Consolidated Financial Statements

Stockholders’ Equity and Convertible Preferred Stock

March 3, 2020, the Company entered into that certain Securities Purchase Agreement, by and among the Company and certain purchasers,

pursuant to which the Company agreed to issue and sell to the purchasers 3,245,745 shares of the Company’s common stock,

and common warrants (“Common Warrants”) to purchase up to 7,142,858 shares of common stock at a price of $1.05 per

share of common stock and Common Warrant.

The Company also offered 3,897,113 pre-funded warrants (“Pre-Funded Warrants”)

to purchase shares of common stock with a purchase price of $1.0499 each Pre-Funded Warrant.

The exercise price of each Pre-Funded

Warrant was $0.0001 per share.

offering resulted in gross proceeds of approximately $7.5 million before deducting the placement agent’s fee and related

offering expenses of $1.0 million.

pursuant to which the Company agreed to issue and sell to the purchasers 3,245,745 shares of the Company’s common stock, and common

warrants (“Common Warrants”) to purchase up to 7,142,858 shares of common stock at a price of $ 1.05 per share of common stock

and Common Warrant.

The Company also offered 3,897,113 pre-funded warrants (“Pre-Funded Warrants”) to purchase shares of

common stock with a purchase price of $1.0499 each Pre-Funded Warrant.

The exercise price of each Pre-Funded Warrant was $0.0001 per

offering resulted in gross proceeds of approximately $ 7.5 million before deducting the placement agent’s fee and related offering

expenses of $ 1.0 million.

March 9, 2020, the Company entered into that certain Securities Purchase Agreement, by and among the Company and certain purchasers,

pursuant to which the Company agreed to issue and sell, in a registered direct offering, 2,090,909 shares of the Company’s

common stock at an offering price of $2.75 per share.

This offering resulted in gross proceeds to the Company of $5.8 million,

before deducting the placement agent’s fee and other related offering expenses.

Company also issued placement agent warrants to the placement agent (the “Placement Agent Warrant”) to purchase 167,273

shares of common stock with an exercise price of $3.4375 per share.

Company has determined that the Placement Agent Warrant should be accounted as a component of stockholders’

issuance date, the Company estimated the aggregate fair value of Placement Agent Warrant at $0.2 million using the Black-Scholes

option pricing model using the following primary assumptions:

fair value of common stock underlying the warrants is $1.83, expected

life of 5 years, volatility rate of 122.29%, risk-free interest rate of 0.63% and expected dividend rate of 0%.

pursuant to which the Company agreed to issue and sell, in a registered direct offering, 2,090,909 shares of the Company’s common

stock at an offering price of $ 2.75 per share.

This offering resulted in gross proceeds to the Company of $ 5.8 million, before deducting

the placement agent’s fee and other related offering expenses.

Company also issued placement agent warrants to the placement agent (the “Placement Agent Warrant”) to purchase 167,273 shares

of common stock with an exercise price of $3.4375 per share.

Company has determined that the Placement Agent Warrant should be accounted as a component of stockholders’ equity.

On the issuance

date, the Company estimated the aggregate fair value of Placement Agent Warrant at $ 0.2 million using the Black-Scholes option pricing

model using the following primary assumptions:

fair value of common stock underlying the warrants is $ 1.83 , expected life of 5 years,

volatility rate of 122.29 %, risk-free interest rate of 0.63 % and expected dividend rate of 0 %.

April 14, 2020, the Company, entered into that certain Securities Purchase Agreement, by and among the Company and certain purchasers,

pursuant to which the Company agreed to issue and sell 14,000,000 shares of the Company’s common stock at an offering price

of $1.00 per share.

The registered offering resulted in gross proceeds to the Company of $14.0 million, before deducting the placement

agent’s fee and other related offering expenses.

Company also issued placement agent warrants to the placement agent (the “Placement Agent Warrant”) to purchase 1,120,000

pursuant to which the Company agreed to issue and sell 14,000,000 shares of the Company’s common stock at an offering price of

$1.00 per share.

The registered offering resulted in gross proceeds to the Company of $ 14.0 million, before deducting the placement agent’s

fee and other related offering expenses.

Company also issued placement agent warrants to the placement agent (the “Placement Agent Warrant”) to purchase 1,120,000

shares of common stock with an exercise price of $1.25 per share.

The Market Offering Agreement

August 9, 2019, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C.

& Co., LLC, as agent (“H.C.

Wainwright”), pursuant to which the Company may offer and sell, from time to time

Wainwright, shares of the Company’s common stock having an aggregate offering price of up to $1.2 million (the

“Shares”).

The Company will pay H.C.

Wainwright a commission rate equal to 3.0% of the aggregate gross proceeds from

each sale of Shares.

the year ended December 31, 2019, the Company sold a total of 532,070 shares of common stock under the ATM for aggregate total

gross proceeds of approximately $1.2 million at an average selling price of $2.17 per share, resulting in net proceeds of approximately

$1.1 million after deducting commissions and other transaction costs.

Common Stock and Warrant Financing

May 29, 2019, the Company entered into a Securities Purchase Agreement (the “Common Stock Purchase Agreement”) for

the sale by the Company of 221,000 shares of the Company’s common stock, at a purchase price of $2.60 per share, and pre-funded

common stock purchase warrants to purchase up to 86,692 shares of common stock at a purchase price of $2.5999 per Warrant, which

represents the per share purchase price, less a $0.0001 per share exercise price for each of the warrants (“Penny Warrants”).

The Company sold the shares and warrants for net proceeds of approximately $0.8 million which transaction closed on May 31, 2019.

Stock Warrant Exchange

June 6, 2019, the Company entered into an amendment to the Common Stock Purchase Agreement, pursuant to which the Purchaser surrendered

an aggregate of 115,269 shares to the Company and the Company issued 115,269 Penny Warrants to the Purchaser in order to limit

the Purchaser’s beneficial ownership.

exchange of 115,269 Penny Warrants do not meet the definition of a derivative under ASC 815 because their fair value at issuance

is equal to the fair value of the shares underlying the warrant.

As such, they have the characteristics of a prepaid forward sale

Since the shares underlying the Penny Warrants are issuable for little or no consideration, they are considered outstanding

in the context of earnings per share, as discussed in ASC 260-10-45-13.

On 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 Stock”).

The Company received gross proceeds of approximately

$ 75 million before deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.

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 $ 78.2 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.

to Consolidated Financial Statements

D Convertible Preferred Stock

connection with the acquisition of North South’s patent portfolio in September 2013, the Company issued 1,379,685 shares of its

Series D Convertible Preferred Stock (“Series D Preferred Stock”) to the stockholders of North South.

Each share of Series

D Preferred Stock has a stated value of $ 0.0001 per share and is convertible into ten-nineteenths of a share of Common Stock.

liquidation, dissolution or winding up of the Company’s business, each holder of Series D Preferred Stock shall be entitled to

receive, for each share of Series D Preferred Stock held, a preferential amount in cash equal to the greater of (i) the stated value

or (ii) the amount the holder would receive as a holder of Common Stock on an “as converted” basis.

Each holder of Series

D Preferred Stock shall be entitled to vote on all matters submitted to its stockholders and shall be entitled to such number of votes

equal to the number of shares of Common Stock such shares of Series D Preferred Stock are convertible into at such time, taking into

account the beneficial ownership limitations set forth in the governing Certificate of Designation and the conversion limitations described

The conversion ratio of the Series D Preferred Stock is subject to adjustment in the event of stock splits, stock dividends, combination

of shares and similar recapitalization transactions.

December 21, 2021, the Company issued 112 shares of common stock upon the conversion of 900 shares of Series D Convertible

Preferred stock.

Series D Convertible Preferred Stock

In connection with the acquisition of North South’s

patent portfolio in September 2013, the Company issued 1,379,685 shares of its Series D Convertible Preferred Stock (“Series D Preferred

Stock”) to the stockholders of North South.

Each share of Series D Preferred Stock has a stated value of $0.0001 per share and is

convertible into ten-nineteenths of a share of Common Stock.

Upon the liquidation, dissolution or winding up of the Company’s business,

each holder of Series D Preferred Stock shall be entitled to receive, for each share of Series D Preferred Stock held, a preferential

amount in cash equal to the greater of (i) the stated value or (ii) the amount the holder would receive as a holder of Common Stock on

an “as converted”

Each holder of Series D Preferred Stock shall be entitled to vote on all matters submitted to its

stockholders and shall be entitled to such number of votes equal to the number of shares of Common Stock such shares of Series D Preferred

Stock are convertible into at such time, taking into account the beneficial ownership limitations set forth in the governing Certificate

of Designation and the conversion limitations described below.

The conversion ratio of the Series D Preferred Stock is subject to adjustment

in the event of stock splits, stock dividends, combination of shares and similar recapitalization transactions.

As of December 31, 2020 and 2019, 5,000,000

Series D Preferred Stock designated;

4,725 shares remained issued and outstanding.

Series D-1 Convertible Preferred Stock

The Company’s Series D-1 Convertible Preferred

Stock (“Series D-1 Preferred Stock”) was established on November 22, 2013.

Each share of Series D-1 Preferred Stock has a

stated value of $0.0001 per share and is convertible into ten-nineteenths of a share of Common Stock.

Upon the liquidation, dissolution

or winding up of the Company’s business, each holder of Series D-1 Preferred Stock shall be entitled to receive, for each share

of Series D-1 Preferred Stock held, a preferential amount in cash equal to the greater of (i) the stated value or (ii) the amount the

holder would receive as a holder of Common Stock on an “as converted”

Each holder of Series D-1 Preferred Stock shall

be entitled to vote on all matters submitted to the Company’s stockholders and shall be entitled to such number of votes equal to

the number of shares of Common Stock such shares of Series D-1 Preferred Stock are convertible into at such time, taking into account

the beneficial ownership limitations set forth in the governing Certificate of Designation.

The conversion ratio of the Series D-1 Preferred

Stock is subject to adjustment in the event of stock splits, stock dividends, combination of shares and similar recapitalization transactions.

The Company commenced an exchange with holders of Series D Convertible Preferred Stock pursuant to which the holders of the Company’s

outstanding shares of Series D Preferred Stock acquired in the Merger could exchange such shares for shares of the Company’s Series

D-1 Preferred Stock on a one-for-one basis.

As of December 31, 2020 and 2019, 5,000,000

Series D-1 Preferred Stock designated;

of December 31, 2021 and 2020, 5,000,000 Series D Preferred Stock designated;

3,825 and 4,725 shares remained issued and outstanding,

respectively.

D-1 Convertible Preferred Stock

Company’s Series D-1 Convertible Preferred Stock (“Series D-1 Preferred Stock”) was established on November 22, 2013.

Each share of Series D-1 Preferred Stock has a stated value of $ 0.0001 per share and is convertible into ten-nineteenths of a share of

Common Stock.

Upon the liquidation, dissolution or winding up of the Company’s business, each holder of Series D-1 Preferred Stock

shall be entitled to receive, for each share of Series D-1 Preferred Stock held, a preferential amount in cash equal to the greater of

(i) the stated value or (ii) the amount the holder would receive as a holder of Common Stock on an “as converted” basis.

Each holder of Series D-1 Preferred Stock shall be entitled to vote on all matters submitted to the Company’s stockholders and

shall be entitled to such number of votes equal to the number of shares of Common Stock such shares of Series D-1 Preferred Stock are

convertible into at such time, taking into account the beneficial ownership limitations set forth in the governing Certificate of Designation.

The conversion ratio of the Series D-1 Preferred Stock is subject to adjustment in the event of stock splits, stock dividends, combination

of shares and similar recapitalization transactions.

The Company commenced an exchange with holders of Series D Convertible Preferred

Stock pursuant to which the holders of the Company’s outstanding shares of Series D Preferred Stock acquired in the Merger could

exchange such shares for shares of the Company’s Series D-1 Preferred Stock on a one-for-one basis.

of December 31, 2021 and 2020, 5,000,000 Series D-1 Preferred Stock designated;

834 shares remained issued and outstanding.

1 unchanged sentence

Outstanding as of December 31, 2019

( 10,758,016 )

Outstanding as of December 31, 2020

May 29, 2019, the Company entered into the Master Service Agreement (“MSA”) with a consultant, World Wide Holdings,

LLC (“Consultant”).

In consideration for services provided by Consultant, the Company paid to Consultant three warrants

(the “Consultant Warrants”), with each warrant immediately exercisable for 33,333 shares of common stock with a $0.01

strike price.

The Company issued each of the three warrants on June 28, July 28 and August 27, 2019, respectively.

recorded $0.3 million in stock-based compensation during the year ended December 31, 2019 related to this arrangement.

12, 2019, the Company issued 33,333 shares of common stock upon exercise of one Consultant Warrant which resulted in gross proceeds

of approximately $333.

Outstanding as of December 31, 2021

Confirmation of

Mutual Understanding - In March 2022, pursuant to a Confirmation of Mutual Understanding (the “Confirmation”),

all parties to the Confirmation acknowledged and confirmed a scrivener’s error set forth in warrants to purchase shares of the

Company’s common stock (the “Warrants”) dated March 10, 2020, April 15, 2020 and March 2, 2021.

Pursuant to the

Confirmation, all parties, which were involved in the original execution of the warrants, agreed that clause (v) of the definition

of Fundamental Transaction in Section 3(d) of the Warrants, is as follows:

Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business

combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another

Person or group of Persons whereby such other Person or group acquires more than 50 % of the voting power of the Company’s outstanding

equity securities, including with respect to the election of directors (not including any shares of Common Stock held by the other Person

or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase

agreement or other business combination) ”.

to Consolidated Financial Statements

Plan and Option Grants

4 unchanged sentences

fair value of options granted in 2021 and 2020 was estimated using the following assumptions:

For the Years Ended December 31,

For the Years Ended

Exercise price

1 unchanged sentence

Risk-free rate of interest

summary of option activity under the Company’s stock option plan for year ended December 31, 2020 and 2019 is presented

summary of option activity under the Company’s stock option plan for year ended December 31, 2021 and 2020 is presented below:

Outstanding as of December 31, 2019

Employee options expired

Non-employee options expired

options granted

options expired

Outstanding as of December 31, 2020

Employee options granted

Employee options expired

options granted

options expired

Outstanding as of December

Options vested and exercisable

compensation associated with the amortization of stock option expense was $84,000 and $8,000 for the years ended December 31,

compensation associated with the amortization of stock option expense was $ 0.2 million and $ 84,000 for the years ended December 31, 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 $77,000 and will be recorded

through June 2021.

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 year ended December 31, 2021related 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

2014 Equity Incentive Plan.

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

These restricted stock awards vested

Commitments and Contingencies

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 –

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 financial statements.

The financial

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

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.

to Consolidated Financial Statements

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.

income tax provision consists of the following ($ in thousands):

For the years ended

Increase in valuation allowance

State and local

Increase in valuation allowance

Income Tax Provision (Benefit)

the years ended

in valuation allowance

Tax Provision (Benefit)

following is a reconciliation of the U.S.

federal statutory rate to the effective income tax rates for the years ended December 31, 2021

31, 2020 and 2019:

For the years ended

the years ended

Statutory Federal Rate

State Taxes, Net of Federal Tax Benefit

Other Permanent Differences

State rate change in effect

AMT credit benefit

Decrease due to true up of State NOL

Decrease due to change in Federal NOL and other true ups

Change in Valuation Allowance

Income Tax Benefit

December 31, 2020 and 2019, the Company’s deferred tax assets and liabilities consisted of the effects of temporary differences

Taxes, Net of Federal Tax Benefit

Permanent Differences

rate change in effect

credit benefit

due to true up of State NOL

due to change in Federal NOL and other true ups

in Valuation Allowance

December 31, 2021 and 2020, the Company’s deferred tax assets and liabilities consisted of the effects of temporary differences

attributable to the following ($ in thousands):

9 unchanged sentences

Fair value adjustment of investment

assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or

all of the deferred tax assets will be realized.

The ultimate realization of deferred tax assets is dependent upon the generation

of future taxable income during the period in which those temporary differences become deductible.

Management considers the scheduled

reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

Company has determined that, based on objective evidence currently available, it is more likely than not, the deferred tax assets

will not be realized in future periods.

Accordingly, the Company has provided a full allowance for the deferred tax assets at

December 31, 2020 and 2019.

As of December 31, 2020, the change in valuation allowance is approximately $5.56 million.

to Consolidated Financial Statements

assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of

the deferred tax assets will be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future

taxable income during the period in which those temporary differences become deductible.

Management considers the scheduled reversal

of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

The Company has determined

that, based on objective evidence currently available, it is more likely than not, the deferred tax assets will not be realized in future

Accordingly, the Company has provided a full allowance for the deferred tax assets at December 31, 2021 and 2020.

As of December

31, 2021, the change in valuation allowance is approximately $ 4.1 million.

March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic.

The CARES Act, among other things, makes any Alternative Minimum Tax Credit carry forward fully refundable in tax years beginning

on or after January 1, 2018.

The Company filed Form 1139 in 2020 and received a cash refund for its $85k AMT credit carry forward

before December 31, 2020.

December 27, 2020 the Consolidated Appropriations Act, 2021 (“CAA”) was signed into law.

The CARES Act, among other things, makes any Alternative Minimum Tax Credit carry forward fully refundable in tax years beginning on

or after January 1, 2018.

The Company filed Form 1139 in 2020 and received a cash refund for its $85k AMT credit carry forward before

December 31, 2020.

December 27, 2020 the Consolidated Appropriations Act, 2021 (“CAA”) was signed into law.

The CAA includes the COVID-related

Tax Relief Act of 2020 (“COVID TRA”).

The Company is continuing to assess the effect of the CAA and does not believe

it will result in a material impact to the Company’s income tax provision.

of December 31, 2020, the Company has approximately $41 million federal net operating loss carryovers (“NOLs”), which

expire from 2033 through 2037, and $22 million of federal NOLs with indefinite utilization.

The Company has approximately $85

million of state and city NOLs, which expire from 2024 through 2040.

NOL carryover may be subject to limitation under Internal Revenue Code section 382, should there be a greater than 50% ownership

change as determined under the regulations.

Tax Relief Act of 2020 (“COVID TRA”).

The Company is continuing to assess the effect of the CAA and does not believe it will

result in a material impact to the Company’s income tax provision.

of December 31, 2021, the Company has approximately $ 41 million federal net operating loss carryovers (“NOLs”), which expire

from 2033 through 2037, and $ 22 million of federal NOLs with indefinite utilization.

The Company has approximately $ 85 million of state

and city NOLs, which expire from 2024 through 2040.

NOL carryover may be subject to limitation under Internal Revenue Code section 382, should there be a greater than 50 % ownership change

as determined under the regulations.

No study has been performed since the last known ownership change of September 10, 2013.

1 unchanged sentence

that the relevant tax authority would more likely than not sustain the position following an audit.

For tax positions meeting

the more likely than not threshold, the amount recognized in the consolidated financial statements is the largest benefit that

has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

between tax positions taken or expected to be taken in a tax return and the net benefit recognized and measured pursuant to the

interpretation are referred to as “unrecognized benefits.”

A liability is recognized (or amount of NOL or amount of

tax refundable is reduced) for an unrecognized tax benefit because it represents an enterprise’s potential future obligation

to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740.

applicable, interest costs and penalties related to unrecognized tax benefits are required to be calculated and would be classified

as interest and penalties in general and administrative expense in the statement of operations.

As of December 31, 2020 and 2019,

no liability for unrecognized tax benefit was required to be reported.

No interest or penalties were recorded during the years

ended December 31, 2020 and 2019.

The Company does not expect any significant changes in its unrecognized tax benefits in the

The Company files U.S.

For tax positions meeting the more

likely than not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than

50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

Differences between tax positions taken

or expected to be taken in a tax return and the net benefit recognized and measured pursuant to the interpretation are referred to as

“unrecognized benefits.” A liability is recognized (or amount of NOL or amount of tax refundable is reduced) for an unrecognized

tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was

not recognized as a result of applying the provisions of ASC 740.

applicable, interest costs and penalties related to unrecognized tax benefits are required to be calculated and would be classified as

interest and penalties in general and administrative expense in the statement of operations.

As of December 31, 2021 and 2020, no liability

for unrecognized tax benefit was required to be reported.

No interest or penalties were recorded during the years ended December 31,

2021 and 2020.

The Company does not expect any significant changes in its unrecognized tax benefits in the next year.

The Company files

federal and state income tax returns.

As of December 31, 2020, the Company’s U.S.

state tax returns (Delaware, New York, New York City, Pennsylvania, Virginia, and Texas) remain subject to examination by tax

authorities beginning with the tax return filed for the year ended December 31, 2017, however, there were no audits pending in

any of the above-mentioned jurisdictions during 2020 and 2019.

The Company believes that its income tax positions would be sustained

upon an audit and does not anticipate any adjustments that would result in material changes to its consolidated financial position.

As of December 31, 2021, the Company’s U.S.

and state tax returns (Delaware, New York,

New York City, Pennsylvania, Virginia, and Texas) remain subject to examination by tax authorities beginning with the tax return filed

for the year ended December 31, 2017, however, there were no audits pending in any of the above-mentioned jurisdictions during 2021 and

The Company believes that its income tax positions would be sustained upon an audit and does not anticipate any adjustments that

would result in material changes to its consolidated financial position.

Related Party Transaction

In 2021, the Company engaged the services of Revere Securities, LLC

(“Revere”) to strategically manage and build our investment processes.

Kyle Wool, Board Member, is the president of Revere.

The Company incurred fees of approximately $ 1.2 million during the year December 31, 2021.

These fees were included in general and administrative

expense in the consolidated statements of operations.

Subsequent Events

License Agreement

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”).

consideration for the license of the Licensed Patents, the Company will issue and deliver to Silo Pharma 500 shares of the Company’s

Series M Convertible Preferred Stock.

The Company paid a one-time nonrefundable cash payment of five-hundred thousand US Dollars

($500,000.00) to Silo Pharma.

The Company shall also pay Silo Pharma a running royalty equal to two percent (2%) of “net

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

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

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.

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 Stock”).

The Company received gross proceeds of approximately $75

million before deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.

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.

connection with the Offering, the Company issued the Underwriter warrants (the “Underwriter’s Warrants”) to

purchase up to 4,312,475 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.

CHANGES IN AND

DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Repurchase Program

January 21, 2022, the board of directors of AIkido Pharma Inc., a Delaware corporation (the “Company”), authorized a share

repurchase program (the “Share Repurchase Program”), pursuant to which the Company may, from time to time, purchase shares

of its outstanding stock for an aggregate purchase price not to exceed $ 3 million dollars.

Share repurchases may be executed in open

market transactions pursuant to a plan which will be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934 (the

“Exchange Act”) and in accordance with Rule 10b-18 of the Exchange Act.

The authorization for the Share Repurchase Program

may be terminated by the Company in its discretion at any time.

to Consolidated Financial Statements

previously disclosed, on August 10, 2021, AIkido Pharma Inc., a Delaware corporation, (the “Company”) received a written

notice from the Nasdaq Stock Market LLC (“Nasdaq”) informing the Company that its common stock, par value $ 0.0001 per share,

failed to comply with the $ 1.00 minimum bid price required for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule

Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company was granted an initial 180-calendar day compliance period, or

until February 7, 2022, to regain compliance with the minimum bid price requirement.

To regain compliance, the closing bid price of the

Company’s common stock was required to meet or exceed $ 1.00 per share for at least 10 consecutive business days during the 180-calendar

day compliance period.

February 8, 2022, the Company received a written notice from Nasdaq that its listed security had not regained compliance with the $ 1.00

minimum bid price per share requirement.

The Company was granted an additional 180 calendar day period, or until August 8, 2022, to regain

February 24, 2022 the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional

investors (the “Investors”), pursuant to which the Company agreed to issue and sell, in concurrent registered direct offerings

(the “Offerings”), (i) 11,000 shares of the Company’s Series O Redeemable Convertible Preferred Stock, par value $0.001

per share (the “Series O Preferred Stock”), and (ii) 11,000 shares of the Company’s Series P Redeemable Convertible

Preferred Stock, par value $0.001 per share (the “Series P Preferred Stock” and together with the Series O Preferred Stock,

the “Preferred Stock”), in each case, at an offering price of $952.38 per share, representing a 5% original issue discount

to the stated value of $1,000 per share of Preferred Stock, for gross proceeds of each Offering of $10,476.180, or approximately $21.9

million in the aggregate for the Offerings, before the deduction of the placement agent’s fee and offering expenses.

of Series O Preferred Stock will have a stated value of $ 1,000 per share and will be convertible, at a conversion price of $ 1.00 per

share, into 11,000,000 shares of common stock (subject in certain circumstances to adjustments).

The shares of Series P Preferred Stock

will have a stated value of $ 1,000 per share and will be convertible, at a conversion price of $ 1.00 per share, into 11,000,000 shares

of common stock (subject in certain circumstances to adjustments).

The Series O Preferred Stock and the Series P Preferred Stock are

being offered by the Company pursuant to a registration statement on Form S-3 (File No.

333-238172) (the “Registration Statement”)

filed under the Securities Act of 1933, as amended (the “Securities Act”).

The Company retained the investment banking firm

Wainwright & Co., LLC (“HCW”) to facilitate the Offerings.

The Purchase Agreement contains customary representations,

warranties and agreements by the Company and customary conditions to closing.

The closing of the Offerings occurred on March 2, 2022.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data