What changed in this filing

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Item 1. Financial Statements

2022-05-16 compared with 2021-11-10 · 509 added, 348 removed, 129 unchanged (87% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

($ in thousands except share and per share

September 30,

($ in thousands except share and per share amounts)

Current assets

Cash and cash equivalents

Restricted cash

Marketable securities

Prepaid expenses and other assets

Short-term investment

Short-term investments at fair value

Notes receivable at fair value

Total current assets

Convertible note receivable

LIABILITIES AND STOCKHOLDERS’ EQUITY

Convertible note receivable at fair value

Security deposit

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY

Current liabilities

4 unchanged sentences

Commitments and contingencies

Series O Redeemable Convertible Preferred Stock, $ 0.0001 par value;

11,000 and 0 shares issued and outstanding, at $ 1,000.00 per share at March 31, 2022 and December 31, 2021

Series P Redeemable Convertible Preferred Stock, $ 0.0001 par value;

11,000 and 0 shares issued and outstanding, at $ 1,000.00 per share at March 31, 2022 and December 31, 2021

Stockholders’ equity

1 unchanged sentence

5,000,000 shares designated;

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

3,825 shares issued and outstanding at March 31, 2022 and December 31, 2021;

liquidation value of $ 0.0001 per share

5,000,000 shares designated;

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

834 shares issued and outstanding at March 31, 2022 and December 31, 2021;

liquidation value of $ 0.0001 per share

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

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

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

89,293,446 and 89,681,258 shares issued at March 31, 2022 and December 31, 2021, respectively;

89,293,443 and 89,681,255 shares outstanding at March 31, 2022 and December 31, 2021, respectively

Additional paid-in capital

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

Treasury stock, at cost, 3 shares at March 31, 2022 and December 31,

Accumulated deficit

Total stockholders’ equity

Total liabilities and stockholders’ equity

Total liabilities, redeemable convertible preferred stock and stockholders’ equity

See accompanying notes to condensed consolidated

2 unchanged sentences

Condensed Consolidated Statements of Operations

($ in thousands except share and per share

($ in thousands except share and per share amounts)

Three Months Ended

September 30,

Nine Months Ended

September 30,

Operating costs and expenses

9 unchanged sentences

Total other income (expenses)

Deemed dividends related to Series O and Series P Redeemable Convertible Preferred Stock

Net Loss Attributable to Common Shareholders

Net loss per share, basic and diluted

6 unchanged sentences

Condensed Consolidated Statements of Changes

in Stockholders’ Equity

($ in thousands except share and per share

For the Three Months Ended September 30, 2021

in Redeemable Preferred Stock and Stockholders’ Equity

($ in thousands except share and per share amounts)

For the Three Months Ended March 31, 2022

Preferred Stock

Treasury Stock

Total Stockholders’

Balance at June 30, 2021

$ ( 161,917 )

Stock-based compensation

Balance at September 30, 2021

$ ( 161,964 )

For the Three Months Ended September 30, 2021

Preferred Stock

Treasury Stock

Total Stockholders’

Balance at June 30, 2020

Stockholders’

at December 31, 2021

$ ( 163,774 )

Distribution of Hoth common stock

Balance at September 30, 2020

of Series O redeemable convertible preferred stock for cash

of Series P redeemable convertible preferred stock for cash

on issuance of Series O and Series P Redeemable Convertible Preferred Stock

dividends related to Series O and Series P Redeemable Convertible Preferred Stock

of common stock related to investment in CBM

at March 31, 2022

$ ( 167,309 )

See accompanying notes to condensed consolidated

financial statements.

AIKIDO PHARMA INC.

Condensed Consolidated Statements of Changes

in Stockholders’ Equity

($ in thousands except share and per share

For the Nine Months Ended September 30, 2021

For the Three Months Ended March 31, 2021

Preferred Stock

Treasury Stock

Total Stockholders’

Stockholders’

Balance at December 31, 2020

4 unchanged sentences

Stock-based compensation

Balance at September 30, 2021

$ ( 161,964 )

For the Nine Months Ended September 30, 2020

Preferred Stock

Treasury Stock

Total Stockholders’

Balance at December 31, 2019

$ ( 144,266 )

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

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

Common warrant and prefunded warrant exercise

Distribution of Hoth common stock

Balance at September 30, 2020

Balance at March 31, 2021

$ ( 160,565 )

4 unchanged sentences

($ in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities

Adjustments to reconcile net loss to net cash used in operating activities:

Change in fair value of investment

Change in fair value of short-term investment

Change in fair value of long-term investment

Research and development-acquired license, expensed

Stock-based compensation

Realized gain on marketable securities

Realized loss (gain) on marketable securities

Unrealized loss on marketable securities

Realized gain on sale of digital currencies

Changes in operating assets and liabilities:

3 unchanged sentences

Interest receivable on convertible note

Payable to DatChat

Net cash used in operating activities

2 unchanged sentences

Sale of marketable securities

Proceeds from sale of Hoth common shares

Proceeds from sale of DatChat common shares

Funds to deposit accounts, net

Purchase of investments

Proceeds from sale of digital currencies

Purchase of short-term and long-term investments

Purchase of research and development licenses

3 unchanged sentences

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

Proceeds from issuance of common stock, net of offering cost

Proceeds from issuance of Series O and Series P Redeemable Convertible Preferred Stock, net of discount and offering cost

Proceeds from exercise of warrants

Net cash provided by financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Net increase in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash, beginning of period

Cash and cash equivalents and restricted cash, end of period

Non-cash investing and financing activities

Distribution of Hoth common stock

Unpaid investment

Transfer from short-term investment to marketable securities

Reclassify from convertible note receivable to notes receivable at fair value

See accompanying notes to condensed consolidated

6 unchanged sentences

(the “Company”),

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

Since 2017, the Company has operated

as a biotechnology company with a diverse portfolio of small-molecule anticancer and antiviral therapeutics in development.

The Company’s

pipeline consists of patented technology from leading universities and researchers.

The Company is currently in the process of developing

its innovative therapeutic drug pipeline through strong partnerships with world renowned educational institutions, including the University

of Texas at Austin, the University of Maryland, Baltimore and Wake Forest University.

The Company’s oncology therapeutics include

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

The Company is also

developing a broad-spectrum antiviral platform, in which the lead compounds have activity in cell-based assays against multiple viruses

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

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’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).

The Company is also developing a broad-spectrum

antiviral platform, in which the lead compounds have activity in cell-based assays against multiple viruses including Influenza virus,

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

As a result of the Company’s biotechnology

6 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.

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

gemcitabine, a current standard therapy), accumulates preferentially in pancreatic tissue 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.

Liquidity and Capital Resources

1 unchanged sentence

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

While the Company

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

While the Company continues

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

past debt and equity offerings.

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

Based upon projected cash flow requirements, the

Company has adequate cash to fund its operations for at least the next twelve months from the date of the issuance of these consolidated

financial statements.

Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated

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

Spherix Portfolio Acquisition II, Inc.

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

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

(“Merger Sub”), Spherix Merger Subsidiary,

Inc (“SMSI”) and NNPT, LLC (“NNPT”).

All significant intercompany balances and transactions have been eliminated

in consolidation.

to Condensed Consolidated Financial Statements

interim 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.

The accompanying unaudited condensed consolidated

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

States of America (“U.S.

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

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

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

of America (“U.S.

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

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

audited consolidated financial statements.

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

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

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

nine months ended September 30, 2021 and 2020 are unaudited, but include all adjustments, consisting only of normal recurring adjustments,

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

The results for the three and nine months ended September 30, 2021 are not necessarily indicative of results to be expected

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

The condensed consolidated balance sheet at December 31, 2020

has been derived from audited financial statements;

The condensed consolidated balance sheet as of March 31, 2022, condensed consolidated statements

of operations for the three months ended March 31, 2022 and 2021, condensed consolidated statements of stockholders’ equity for

the three months ended March 31, 2022 and 2021, and the condensed consolidated statements of cash flows for the three months ended March

31, 2022 and 2021 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers

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

The results for

the three months ended March 31, 2022 are not necessarily indicative of results to be expected for the year ending December 31, 2022 or

for any future interim period.

The condensed consolidated balance sheet at December 31, 2021 has been derived from audited financial statements;

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

for complete financial statements.

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

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

GAAP for complete financial statements.

The accompanying

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

year ended December 31, 2021 and notes thereto included in the Company’s annual report on Form 10-K, which was filed with the SEC

on March 28, 2022.

Use of Estimates

The accompanying condensed consolidated financial

statements have been prepared in conformity with US GAAP.

This requires management to make estimates and assumptions that affect certain

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

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

The Company’s significant estimates and assumptions

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

to the Company’s deferred tax assets.

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

those unique to the Company and general economic conditions.

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

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

Significant Accounting Policies

Other than as described below, there have been

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

report on Form 10-K, which was filed with the SEC on March 28, 2022.

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

This requires management to make

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

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

The Company’s

significant estimates and assumptions include stock-based compensation, the valuation of investments, the valuation of convertible note

and the valuation allowance related to the Company’s deferred tax assets.

Certain of the Company’s estimates could be affected

by external conditions, including those unique to the Company and general economic conditions.

It is reasonably possible that these external

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

Accounting Policies

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

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

Value Option - Convertible Note

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

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

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

The decision to elect the fair value

option is determined on an instrument-by-instrument basis and must be applied to an entire instrument and is irrevocable once elected.

Assets and liabilities measured at fair value pursuant to this guidance are required to be reported separately in our condensed consolidated

balance sheets from those instruments using another accounting method.

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

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

During the nine and

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

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

Adopted Accounting Standards

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

2019-12, “ Income Taxes (Topic 740):

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

accounting for income taxes.

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

existing guidance to improve consistent application.

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

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

The Company adopted ASU No.

2019-12 effective January 1, 2021,

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

to Condensed Consolidated Financial Statements

License agreement with Silo Pharma Inc.

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

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

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

The Amendment

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

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

share, effective as of January 5, 2021.

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

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.

Redeemable Convertible Preferred Stock

The convertible preferred stock was not unconditionally redeemable at

the option of the holder thereof.

However, the convertible preferred stock was contingently redeemable upon certain liquidation

As redemption by the holders was not solely within the control of the Company, all of the outstanding convertible preferred stock

was classified as temporary equity in the condensed consolidated balance sheets.

Restricted Cash

The following table provides a summary of the

Company’s cash and restricted cash total as presented in the condensed consolidated statements of cash flows for

the three months ended March 31, 2022 (in thousands):

Restricted cash

Total cash and restricted cash

In accordance with the public offering of 11,000

shares of Series O Redeemable Convertible Preferred Stock and 11,000 shares of Series P Redeemable Convertible Preferred Stock, $ 21.0

million is held in escrow and disbursed to the Company only upon conversion of the Series O and Series P Preferred Stock.

are included within restricted cash on the accompanying consolidated balance sheets.

Recent accounting pronouncements

Management does not believe that any other recently

issued, but not yet effective accounting pronouncements, if currently adopted, would have an effect on the Company’s condensed consolidated

financial statements.

Investments in Marketable Securities

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

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

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

The realized gain or loss, unrealized gain or

loss, and dividend income related to marketable securities for the three months ended March 31, 2022 and 2021, which are recorded as a

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

Three Months Ended

Realized (loss) gain

Unrealized loss

Dividend income

Short-term investments

The following table presents the Company’s

short-term investments at March 31, 2022 and December 31, 2021 ($ in thousands):

Investment in Hoth Therapeutics, Inc.

Investment in DatChat, Inc.

Investment in Vicinity Motor Corp.

in the fair value of the short-term investments for the three months ended March 31, 2022

is summarized as follows:

($ in thousands):

the Three Months Ended

September 30,

the Nine Months Ended

September 30,

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

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

September 30,

Beginning balance

Transfer to marketable securities

Change in fair value of investment

Realized gain recognized through sale of marketable securities

Ending balance

Investment in Hoth Therapeutics, Inc.

On March 11, 2022, 1,130,701 shares of Hoth common

stock were transferred to marketable securities account and were sold for net proceeds of approximately $ 0.9 million.

The following summarizes the Company investment

in Hoth as of March 31, 2022 and December 31, 2021:

Security Name

(in thousands)

to Condensed Consolidated Financial Statements

Short-term investment - investment in DatChat, Inc.

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

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

$ 4.15 per share under the ticker DATS.

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

statements of operations (see Note 9).

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

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

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

September 30,

Security Name

(in thousands)

Other Investments

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

to ASU 2016-01.

in Kerna Health Inc

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

with Kerna Health Inc., (“Kerna”).

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

shares of common stock of Kerna for $ 1.0 million.

in Kaya Holding Corp

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

Kaya Holding Corp., (“Kaya”).

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

of common stock of Kaya for approximately $ 0.7 million.

Investment in DatChat, Inc.

On February 14, 2022, 357,916 shares (valued at

$ 2.21 per share) of DatChat common stock were transferred to marketable securities account and were sold for net proceeds of approximately

$ 0.8 million.

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 simulation.

The Company recorded the fair value of the Vicinity warrant of approximately $ 0.3 and $ 0.4 million in the consolidated balance sheet as

of March 31, 2022 and December 31, 2021, respectively, reflecting the benefit received as part of its purchase of Vicinity common shares

through its brokerage account.

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.

During the three months ended March 31, 2022, the Company recorded approximately $ 188,000 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:

Option term (in years)

Risk-free interest rate

Expected dividends

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.

The following table presents the Company’s

other investments at March 31, 2022 and December 31, 2021 ($ in thousands):

Investment in Kerna Health Inc

Investment in Kaya Holding Corp

Investment in Tevva Motors

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

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

Under the Tevva Motors Subscription Agreement, the Company

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

Subsequently, on September 30, 2021, the Company

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

Tevva Motors for approximately $ 1.0 million.

to Condensed Consolidated Financial Statements

in Slinger Bag Inc

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

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

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

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

Fair Value of Financial Assets and Liabilities

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

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

The Company measures the fair value of financial assets and

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

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

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

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

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

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

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

Investment in ASP Isotopes

Investment in AerocarveUS Corporation

Investment in Qxpress

Investment in Masterclass

Investment in Kraken

Investment in Epic Games

Investment in Tesspay

Investment in SpaceX

Investment in Databricks

in the value of the long-term investments for the three months ended March 31, 2022 is summarized

($ in thousands):

Beginning balance

Purchase of investments

Adjustment to carrying value of investments

Ending balance

Investment in Kerna Health Inc

The investment in Kerna Health Inc.

at $ 3.8 million as of March 31, 2022.

Investment in Kaya Holding Corp

On March 2, 2022, the Company purchased additional

3,375,000 shares of common stock of Kaya Holding Corp., (“Kaya”) for approximately $ 0.6 million.

The Company recorded approximate

$ 34,000 in unrealized gain on this investment during the three months ended March 31, 2022.

The investment in Kaya was valued at approximately

$ 2.3 million as of March 31, 2022.

Investment in Tevva Motors

Tevva Motors (“Tevva”), a private

company, raised capital during the first quarter of 2022, increasing its share price value to $ 58.0 per share.

Therefore, the Company

recorded a $ 1.4 million unrealized gain on this investment during the three months ended March 31, 2022.

The investment in Tevva was valued

at approximately $ 3.4 million as of March 31, 2022.

Investment in ASP Isotopes

The investment in ASP Isotopes Inc.

at $ 1.0 million as of March 31, 2022.

Investment in AerocarveUS Corporation

The investment in AerocarveUS Corporation was

valued at $ 1.0 million as of March 31, 2022.

Investment in Qxpress

On January 27, 2022, the Company entered into

a securities purchase agreement (the “Qxpress Securities Purchase Agreement”) with Qxpress.

Under the Qxpress Securities Purchase

Agreement, the Company agreed to purchase 46,780 shares of common stock of Qxpress for $ 1.0 million.

The investment in Qxpress was valued

at $ 1.0 million as of March 31, 2022.

Investment in Masterclass

On March 11, 2022, the Company entered into a

securities purchase agreement (the “Masterclass Securities Purchase Agreement”) with Masterclass.

Under the Masterclass Securities

Purchase Agreement, the Company agreed to purchase 4,841 shares of common stock of Masterclass for approximately $ 0.2 million.

The investment

in Masterclass was valued at approximately $ 0.2 million as of March 31, 2022.

Investment in Kraken

On March 11, 2022, the Company entered into a

securities purchase agreement (the “Kraken Securities Purchase Agreement”) with Kraken.

Under the Kraken Securities Purchase

Agreement, the Company agreed to purchase a total of 8,409 shares of common stock of Kraken for approximately $ 0.5 million.

The investment

in Kraken was valued at approximately $ 0.5 million as of March 31, 2022.

Investment in Epic Games

On March 22, 2022, the Company entered into a

securities purchase agreement (the “Epic Games Securities Purchase Agreement”) with Epic Games.

Under the Epic Games Securities

Purchase Agreement, the Company agreed to purchase an aggregate of 901 shares of common stock of Epic Games for a total $ 1.5 million.

The investment in Epic Games was valued at $ 1.5 million as of March 31, 2022.

Investment in Tesspay

On March 23, 2022, the Company entered into a

securities purchase agreement (the “Tesspay Securities Purchase Agreement”) with Tesspay.

Under the Tesspay Securities Purchase

Agreement, the Company agreed to purchase 1,000,000 shares of common stock of Tesspay for approximately $ 0.2 million.

The Company also

invested an additional $ 1.0 million for pre-IPO.

Tesspay, a private company, raised capital during the first quarter of 2022, increasing

its share price value to $ 0.25 per share.

Therefore, the Company recorded $ 10,000 in unrealized gain on this investment during the three

months ended March 31, 2022.

The investment in Tesspay was valued at approximately $ 1.3 million as of December 31, 2021.

Investment in SpaceX

On March 30, 2022, the Company entered into a

securities purchase agreement (the “SpaceX Securities Purchase Agreement”) with SpaceX.

Under the SpaceX Securities Purchase

Agreement, the Company agreed to purchase a total of 100,000 shares of common stock of SpaceX for $ 1.5 million.

The investment in SpaceX

was valued at $ 1.5 million as of March 31, 2022.

Investment in Databricks

On March 25, 2022, the Company entered into a

securities purchase agreement (the “Databricks Securities Purchase Agreement”) with Databricks.

Under the Databricks Securities

Purchase Agreement, the Company agreed to purchase an aggregate of 3,830 shares of common stock of Databricks for a total $ 1.2 million.

The investment in Databricks was valued at $ 1.2 million as of March 31, 2022.

Notes Receivable

The following table presents the Company’s

notes receivable at March 31, 2022 ($ in thousands):

Short-term convertible notes receivable

Convergent Investment

Slinger Bag Inc Investment

Nano Innovations Inc Investment

Short-term notes receivable

Raefan Group LLC Investment

Raefan Industries LLC Investment

Convergent Investment

The Company recorded an interest income receivable

of approximately $ 0.2 million on the Convergent Convertible Note as of March 31, 2022.

Raefan Group LLC Investment

The Company recorded an interest income receivable

of approximately $ 0.1 million on the Raefan Group Promissory Note as of March 31, 2022.

Raefan Industries LLC Investment

The Company recorded an interest income receivable

of approximately $ 49,000 on the Raefan Industries Promissory Note as of March 31, 2022.

Slinger Bag Inc Investment

The Company recorded an interest income receivable

of approximately $ 73,000 on the Slinger Bag Convertible Note as of March 31, 2022.

Nano Innovations Inc Investment

The Company recorded an interest income receivable

of approximately $ 20,000 on the Nano Convertible Note as of March 31, 2022.

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

2 unchanged sentences

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.

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

fair value hierarchy.

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

is significant to the fair value measurement.

Such determination requires significant management judgment.

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

31, 2020 ($ in thousands):

value measured at September 30, 2021

September 30,

fund securities

Investments Trust

purpose acquisition corps

The following table presents the Company’s

assets and liabilities that are measured at fair value at March 31, 2022 and December 31, 2021 ($ in thousands):

Fair value measured at March 31, 2022

Significant other

observable inputs

Marketable securities:

Total marketable securities

note receivable

value measured at December 31, 2020

fund securities

Short-term investment

Notes receivable at fair value

Fair value measured at December 31, 2021

Significant other

observable inputs

Marketable securities:

Total marketable securities

to Condensed Consolidated Financial Statements

3 Valuation Techniques

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

at fair value on a recurring basis ($ in thousands):

Value of Level 3

of convertible note

interest receivable

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

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

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

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

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

The Convertible Note shall mature on January 29, 2023.

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

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

and derivative due to change in the fair value will be reflected in interest income and other, net in the condensed consolidated statements

of operations.

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

As of September

30, 2021, the fair value of the Convertible Note was measured at $ 2.0 million, taking into consideration cost of the investment, market

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

The value at which

the Company’s Convertible Note is carried on its books is adjusted to estimated fair value at the end of each quarter, taking into

account general economic and stock market conditions and those characteristics specific to the underlying investments.

No change in fair

value was recorded during the nine months ended September 30, 2021.

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

of operations.

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

Net Loss per Share

loss per common share is computed by dividing the net loss allocable to common stockholders by the weighted-average number of shares

of common stock or common stock equivalents outstanding.

Diluted loss per common share is computed similar to basic loss per share except

that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised

or converted into common stock.

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

of diluted loss per share at September 30, 2021 and 2020 are as follows:

of As of September 30,

Short-term investment

Notes receivable at fair value

Convertible note receivable

Level 3 Measurement

The following tables set forth a summary of the

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

Notes receivable at fair value at December 31, 2021

Accrued interest receivable at December 31, 2021

Reclassify from convertible note receivable to notes receivable at fair value

Notes receivable at fair value at March 31, 2022

Short-term investment at December 31, 2021

Change in fair value of investment

Short-term investment at March 31, 2022

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 March 31, 2022, the fair value of the Convergent

Convertible Note was measured at $ 2.2 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 for principal was recorded during

the three months ended March 31, 2022.

Raefan Group LLC Investment

As of March 31, 2022, the fair value of the Raefan

Group Promissory Note was measured at approximately $ 2.9 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 for principal

was recorded during the three months ended March 31, 2022.

Raefan Industries LLC Investment

As of March 31, 2022, 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 for principal

was recorded during the three months ended March 31, 2022.

Slinger Bag Inc Investment

As of March 31, 2022, the fair value of the Slinger

Bag Convertible Note was measured at $ 1.5 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 for principal was recorded

during the three months ended March 31, 2022.

The Company believes that the fair value of the

warrant of Slinger Bag is immaterial.

Nano Innovations Inc Investment

As of March 31, 2022, 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 for principal

was recorded during the three months ended March 31, 2022.

The Company believes that the fair value of the

warrant of Nano is immaterial.

Net Loss per Share Attributable to Common Stockholders

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 March 31, 2022

and 2021 are as follows:

As of March 31,

Convertible preferred stock

Warrants to purchase common stock

Options to purchase common stock

Redeemable Convertible Preferred Stock

Series O and Series P Redeemable Convertible

Preferred Stock

to purchase common stock

to Condensed Consolidated Financial Statements

Stockholders’ Equity and Convertible Preferred Stock

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

Agreement”) with H.C.

Wainwright & Co., LLC, as representative to the underwriters named therein (the “Underwriter”),

pursuant to which the Company agreed to issue and sell to the Underwriter in an underwritten public offering (the “Offering”)

an aggregate of 46,875,000 shares (the “Shares”) of common stock, $ 0.0001 par value per share, of the Company (the “Common

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

and estimated offering expenses payable by the Company.

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

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

underwriting discounts and commissions and other expenses.

The total net proceeds received from these two offerings were approximately

$ 78.0 million.

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

up to 4,312,473 shares of Common Stock, or 8 % of the Shares sold in the Offering.

The Underwriter’s Warrants will be exercisable

for a period of five years from February 19, 2021 at an exercise price of $ 2.00 per share, subject to adjustment.

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

as of December 31, 2020

as of September 30, 2021

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

as of December 31, 2020

options granted

options expired

as of September 30, 2021

vested and exercisable

to Condensed Consolidated Financial Statements

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

30, 2021 and 2020, respectively.

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

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

All stock compensation was recorded as a component

of general and administrative expenses.

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

to the patent license agreement effective January 5, 2021 with Silo Parma Inc., the Company issued and delivered to Silo Pharma 625,000

shares of the Company’s restricted stock as consideration for the license of the licensed patents.

This restricted stock award

vested immediately.

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

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

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

2020 Equity Incentive Plan.

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

These restricted stock awards vested

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.

The shares 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 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.

In connection

with this transaction, the Company placed $ 21.0 million in an escrow account which was recorded as restricted cash on the Condensed Consolidated

Balance Sheets as of March 31, 2022.

In connection

with the Offerings, the Company has entered into an engagement agreement (the “Engagement Agreement Agreement”) with H.C Wainwright

& Company, LLC, as placement agent (“HCW”), pursuant to which the Company agreed to pay HCW an aggregate cash fee equal

to 8 % of the aggregate gross proceeds raised in the offerings and issue HCW common stock purchase warrants to purchase up to 1,760,000

shares of common stock in the aggregate at an exercise price of $ 1.25 .

The warrants were recorded as a component of stockholders’

equity in accordance with FASB Accounting Standards Codification (“ASC”) 815.

After (i) the earlier of (1) the receipt of stockholder

approval and (2) the date that is 90 days following the Original Issue Date (the date of the first issuance of any shares of the Preferred

Stock regardless of the number of transfers of any particular shares of Preferred Stock and regardless of the number of certificates which

may be issued to evidence such Preferred Stock) and (ii) before the date that is 120 days after the Original Issue Date (the “ Redemption

Period ”), each Holder shall have the right to cause the Company to redeem all or part of such Holder’s shares of Preferred

Stock at a price per share equal to 105 % of the Stated Value.

As a result, the Preferred Stock were recorded

separately from stockholders’ equity because they are redeemable upon the occurrence of redemption events that are considered not

solely within the Company’s control.

During the three months ended March 31, 2022,

the Company recognized approximately $ 3.0 in deemed dividends related to the Preferred Stock in the condensed consolidated statements

of operations and the condensed consolidated statements of changes in redeemable preferred stock and stockholders’ equity.

Stockholders’ Equity

One June 5, 2020, CBM Biopharma, Inc.

approved a distribution to its stockholders of 1,939,058 the Company’s common shares.

The Company, as one of CBM’s shareholder,

received 387,812 shares of its common stock.

The Company cancelled 387,812 shares received on January 1, 2022.

A summary of warrant activity for the nine months

ended March 31, 2022 is presented below:

Outstanding as of December 31, 2021

Outstanding as of March 31, 2022

Stock Options

A summary of stock option activity for the nine

months ended March 31, 2022 is presented below:

Outstanding as of December 31, 2021

Outstanding as of March 31, 2022

Options vested and exercisable

Stock-based compensation associated with the amortization

of stock option expense was approximately $ 0 and $ 0.1 million for the three months ended March 31, 2022 and 2021, respectively.

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

Estimated future stock-based compensation expense

relating to unvested stock options is approximately $ 0 .

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 – 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.

Legal Proceedings

In the past, in the ordinary course of business,

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

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

Risks and Uncertainties - COVID-19

Management continues to valuate the impact of

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

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

determinable as of the date of these consolidated financial statements.

The COVID-19 pandemic has slowed down some drug development efforts

and has slowed the acquisition of new drugs.

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

The 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.

Subsequent Events

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

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

adjustment or disclosure in the condensed consolidated financial statements.

The Company evaluated events that have occurred

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

Based upon the evaluation and

transactions, the Company did not identify any other subsequent events that would have required adjustment or disclosure in the condensed

consolidated financial statements.

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

What changed 10-Q

Item 1. Financial Statements