What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-05-16 compared with 2021-11-10 · 263 added, 151 removed, 4 unchanged (99% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking

should read this discussion together with the Financial Statements, related Notes and other financial information included elsewhere

in this Form 10-Q.

The following discussion contains assumptions, estimates and other forward-looking statements that involve a number

of risks and uncertainties.

These risks could cause our actual results to differ materially from those anticipated in these forward-looking

All references to “we,” “us,” “our” and the “Company” refer to Aikido Pharma

Inc., a Delaware corporation and its consolidated subsidiaries unless the context requires otherwise.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

Forward-Looking Statements

You should read this discussion together with

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

The following discussion

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

These risks could

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

All references to “we,”

“us,” “our” and the “Company” refer to Aikido Pharma Inc., a Delaware corporation and its consolidated

subsidiaries unless the context requires otherwise.

AIkido Pharma Inc.

was initially formed in 1967

Since 2017, the Company has operated as a biotechnology company with a diverse portfolio of

small-molecule anticancer and antiviral therapeutics in development.

The Company’s pipeline consists of patented technology from

leading universities and researchers.

We are currently in the process of developing our innovative therapeutic drug pipeline through

strong partnerships with world renowned educational institutions, including the University of Texas at Austin, the University of Maryland,

Baltimore and Wake Forest University.

Our oncology therapeutics include treatments for pancreatic cancer, acute myeloid leukemia (AML)

and acute lymphoblastic leukemia (ALL).

The Company is also developing a broad-spectrum antiviral platform, in which the lead compounds

have activity against multiple viruses including Influenza virus, Ebolavirus and Marburg virus, SARS-CoV, MERS-CoV, and SARS-CoV-2, the

cause of COVID-19.

a result of the Company’s biotechnology research and development and associated investments and acquisitions, our business portfolio

now focuses on the treatment of three different cancers and multiple types of viral infections.

Our pancreatic drug candidate, DHA-dFdC,

developed at and licensed from the University of Texas at Austin, is a new compound that we hope will become the next generation of chemotherapy

treatment for advanced pancreatic cancer.

DHA-dFdC overcomes tumor cell resistance to current chemotherapeutic drugs and is well tolerated

in preclinical toxicity tests.

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.

Our AML and ALL compound, developed at the Wake Forest University, is a targeted therapeutic designed

to overcome multiple resistance mechanisms observed with the current standard of care.

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.

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.

addition, we are constantly seeking to grow our pipeline of treatments in oncology indications.

For example, in January 2021, the Company

invested in Convergent Therapeutics, Inc., which has exclusive rights to technology related to next-generation dual-action peptide receptor

radionuclide therapy (“PRRT”) for prostate cancer covered by multiple issued U.S.

and is currently a biotechnology company with a diverse portfolio of small-molecule anti-cancer therapeutics in development.

The Company’s

platform consists of patented technology from leading universities and researchers and our innovative therapeutic drug platform is currently

being advanced through strong collaborations with world-renowned educational institutions, including the University of Texas at Austin,

the University of Maryland, Baltimore and Wake Forest University.

Our diverse pipeline of therapeutics includes therapies for pancreatic

cancer, acute myeloid leukemia (“AML”) and acute lymphoblastic leukemia (“ALL”).

The Company is also developing

broad-spectrum antiviral compounds with the potential to inhibit replication of multiple viruses including Influenza virus, SARS-CoV (coronavirus),

MERS-CoV, Ebolavirus and Marburg virus.

The Company previously focused its efforts on

owning, developing, acquiring and monetizing intellectual property assets.

Since May 2016, the Company has received limited funds from

its intellectual property monetization.

In addition to its patent monetization efforts, since the fourth quarter of 2017, the Company

has been transitioning to focus its efforts as a technology and biotechnology development company.

These efforts have focused on biotechnology

research and blockchain technology research.

The Company’s investment in biotechnology research development includes:

(i) an investment

in Hoth Therapeutics, Inc.

(“Hoth”), a development stage biopharmaceutical company focused on unique targeted therapeutics

for patients suffering from indications such as atopic dermatitis, also known as eczema, (ii) an investment in DatChat, Inc.

a privately held personal privacy platform focused on encrypted communication, internet security and digital rights management, and (iii)

the acquisition of assets of CBM BioPharma, Inc.

(“CBM”), a pharmaceutical company focusing on the development of cancer treatments.

In January of 2021, the Company acquired an ownership interest in Convergent Therapeutics, Inc., (“Convergent”) which has

exclusive rights to technology related to dual-action peptide receptor radionuclide therapy (“PRRT”) for prostate cancer covered

by multiple issued U.S.

and foreign patents.

Convergent is currently

conducting advanced human trials relating to prostate cancer treatments utilizing PRRT that targets the prostate-specific membrane antigen

(“PSMA”) present on prostate cancer cells.

The technology was developed under the direction of Dr.

Neil Bander, Professor

of Urologic Oncology at Weill Cornell Medicine.

In addition, the Company was granted a license to four patent applications for the use

of psilocybin in cancer indications.

Additionally,

on January 6, 2021 the Company announced that it entered into an exclusive patent license agreement with Silo Pharma Inc.

Pharma”) pursuant to which Silo Pharma granted the Company a worldwide exclusive, sublicensable, royalty-bearing license to certain

Silo Pharma owned provisional patent applications directed to the use of psilocybin in cancer treatment, and any patents issuing therefrom,

including all continuations, continuations-in-part, divisions, extensions, substitutions, reissues, re-examinations, and any applications

and all patents issuing from any applications and patents that claim domestic benefit or foreign priority to the provisional patent applications.

The license is for “Field of Use” (as defined in the exclusive patent license agreement) of “treatment of cancer and

symptoms caused by cancer, including but not limited to pain, nausea, neuroinflammation, brain and neural dysfunction, depression, seizures,

confusion, dizziness, numbness/tingling, dysfunction of the senses and all other symptoms that are caused by cancer of any type.”

Accounting Policies

critical accounting policies are disclosed in our annual report on Form 10K for the year ended December 31, 2020 and there have been

no material changes to such policy or estimates during the nine months ended September 30, 2021.

Issued Accounting Pronouncements

Note 3 to the condensed consolidated financial statements for a discussion of recent accounting standards.

of Operations

months ended September 30, 2021 compared to three months ended September 30, 2020

the three months ended September 30, 2021, we incurred a loss from operations of approximately $1.8 million, as compared to $1.0 million

during the comparable prior year period.

The increase in loss was primarily attributed to $0.9 million increase in in general and administrative

expenses, partially offset by $91,000 million decrease research and development expense and $38,000 decrease in research and development

expense related with license acquisition.

the three months ended September 30, 2021, other income was approximately $1.7 million as compared to other expense of approximately

$1.1 million during the comparable prior year period.

The net loss per share decreased from a decrease in net operating losses and a

significant increase in the number of shares outstanding.

The increase in other income was primarily attributed to a $5.3 million increase

in the change in fair value of investment in DatChat and a decrease in the change in fair value of investment in Hoth, and partially

offset by $2.6 million increase in loss on marketable securities.

Company experienced very little or no revenue in the last two years and we don’t expect any revenue until a biotechnology product

is fully developed which may not occur for many years.

months ended September 30, 2021 compared to nine months ended September 30, 2020

the nine months ended September 30, 2021, we incurred a loss from operations of approximately $6.9 million, as compared to a loss of

$5.2 million during the comparable prior year period.

The increase in loss was primarily attributed to $2.2 million increase in general

and administrative expenses, and partially offset by $0.5 million decrease in research and development expense $26,000 decrease in research

and development expense related to the license acquisition.

the nine months ended September 30, 2021, other income was approximately $1.5 million as compared to other expense of approximately $7.5

million during the comparable prior year period.

The net loss per share decreased from a decrease in net operating losses and a significant

increase in the number of shares outstanding.

The increase in other income was primarily attributed to a $11.2 million increase in the

change in fair value of investment in DatChat, decrease in the change in fair value of investment in Hoth, and partially offset by $2.4

million increase in loss on marketable securities.

Company experienced very little or no revenue in the last two years and we don’t expect any revenue until a biotechnology product

is fully developed which may not occur for many years.

and Capital Resources

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

related) revenue.

We do not expect to incur revenue until any of our biotechnology products are fully developed.

While we continue to

implement our business strategy, we intend to finance our activities through managing current cash on hand from our past equity offerings.

the nine months of 2021, the Company consummated a public offering of 53,905,927 shares of common stock (including the underwriter overallotment).

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

offering expenses payable by the Company.

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

forward, the Company intends to manage its cash through an investment committee focused on asset preservation and reasonable risk allocation.

Further, the Company intends to grow its drug platform through additional licensing efforts that are similar to those the Company has

already entered into and disclosed.

In addition, the Company is seeking partnerships with academic institutions and private enterprise

to find, fund and advance new drug compounds that can be brought to commercialization.

continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that

the virus could have a negative effect on the Company’s consolidated financial position, results of its consolidated operations

and/or search for drug candidates, the specific impact is not readily determinable as of the date of these consolidated financial statements.

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

August 10, 2021, the Company received a staff deficiency notice from The Nasdaq Stock Market (“Nasdaq”) informing the Company

that its common stock failed to comply with the $1.00 minimum bid price required for continued listing on The Nasdaq Capital Market under

Nasdaq Listing Rule 5550(a)(2).

Nasdaq’s letter advised the Company that, based upon the closing bid price during the period from

June 28, 2021 to August 9, 2021, the Company no longer meets this test.

to Nasdaq Marketplace Rule 5810(c)(3)(A), the Company has been provided with a compliance period of 180 calendar days, or 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 must meet or exceed $1.00 per share for a minimum of 10 consecutive business days prior to February 7, 2022.

Flows from Operating Activities - For the nine months ended September 30, 2021 and 2020, net cash used in operations was approximately

Convergent is currently conducting advanced human trials relating to prostate cancer treatments

utilizing PRRT that targets the prostate-specific membrane antigen (“PSMA”) present on prostate cancer cells.

The technology

was developed under the direction of Dr.

Neil Bander, Professor of Urologic Oncology at Weill Cornell Medicine.

Outside of the biotechnology space, the Company

has put capital into a series of small investments in private companies that are expected to go public in 2022.

These investments include,

but are not limited to, an investment in Tevva Motors, an electric truck producer, a space with recent Rivian Automotive (NASDAQ:

Additionally, the Company has invested in Kerna Health, a growing tele-health business with recurring revenue and large contract

backlog, as well an investment in Kaya Holding Corp., a holding company with a portfolio of wholly-owned subsidiaries focused on emerging

technologies and social networking for cannabis enthusiasts.

As a result of the Company’s biotechnology

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

cancers, including pancreatic cancer, AML and ALL.

DHA-dFdC, our pancreatic drug candidate developed at the University of Texas at Austin

(“UTA”), is a new compound that we hope will become the next generation of chemotherapy treatment for advanced pancreatic

DHA-dFdC is designed to overcome tumor cell resistance to current chemotherapeutic drugs and is well tolerated in preclinical

toxicity tests.

Preliminary studies have also indicated that DHA-dFdC inhibits pancreatic cancer cell growth in culture (up to 100,000-fold

more potent that gemcitabine, a current standard therapy), has documented efficacy against pancreatic tumors in a clinically relevant

transgenic mouse model and has demonstrated activities against other cancers, including leukemia, lung and melanoma.

Ultimately, we plan

to develop DHA-dFdC for oral and intravesous administration in a solid lipid nanoparticle carrier matrix, which has also been licensed

from UTA, and is intended to be a second-line treatment for advanced pancreatic cancer.

The Company has entered into an agreement with

Parimer Scientific , which is working with other third parties, to assist in researching, developing and optimizing the manufacturing

process of the active ingredient, formulating the dosage formulation and performing drug stability tests.

The Company’s license

with UTA (the “License”) is a royalty-bearing exclusive license that, unless terminated earlier, continues until the last

date of expiration or termination of the patent rights granted under the License (the “Patent Rights”).

With regard to DHA-dFdC,

the Patent Rights include two issued U.S.

Patents, several filed U.S.

patent applications and an application filed under the Patent Cooperation

Treaty (“PCT”) that is currently being prosecuted to secure rights in foreign countries.

So far, two patents have issued,

10,463,684 (the “684 Patent”) and U.S.

11,219,633 (the “633 Patent”), which contain

claims covering the compound DHA-dFdC.

Assuming all maintenance fees are timely paid, the 684 Patent is expected to expire on October

27, 2035 and the 633 Patent is expected to expire on May 28, 2035.

The Company’s license with UTA also covers a U.S.

patent application relating to the solid lipid nanoparticle carrier matrix for the drug, which was filed on June 6, 2019.

In June of 2020,

at the request of the Company, UTA filed both a U.S.

non-provisional utility patent application as well as a PCT application relating

to the lipid nanoparticle carrier matrix claiming the June 6, 2019 priority date of the provisional application.

Patent prosecution on

all pending patent applications is currently underway.

The Company is currently engaged in research and development activities related

to the manufacture of DHA-dFdC, which have thus far confirmed the critical chemical steps required for the manufacturing and scalability

of the process.

In collaboration with our contract manufacturing organization, Parimer Scientific, we are currently optimizing the manufacturing

procedure for DHA-dFdC.

Our manufacturing activities were initially delayed several months due to COVID-19 because Parimer was recruited

and South Carolina governments to manufacture hand sanitizer for use in hospitals.

For that reason, our manufacturing activities

did not begin in earnest until the beginning of the third quarter of 2020.

Once manufacturing began, shipping delays due to the pandemic

further slowed progress.

Further delay resulted from the inherent difficulty in producing scalable quantities of the key intermediate

compound in the process.

Despite these delays, we now have successfully replicated the synthesis as reported in the literature, have developed

a new procedure for the production of the key intermediate on a large scale, and are currently optimizing the procedure to ensure that

incorporation of our new procedure into the overall manufacturing process will result in levels of DHA-dFdC on an acceptably large scale.

In tandem, the Company will also develop the solid lipid nanoparticle delivery system containing DHA-dFdC to optimize the manufacturing

process for size and consistency of the particles.

We plan to then develop the drug formulation for oral and intravenous delivery via

the solid lipid nanoparticles for use in future animal testing.

We do not currently have FDA approval, which will eventually be required

to begin administering DHA-dFdC to patients as part of any clinical trials.

Animal studies will be a necessary prerequisite to filing

an Investigational New Drug Application (“IND”) with the FDA.

Depending upon the success of the animal studies, the Company’s

development activities will also include preparing the IND for submission to the FDA.

The Company’s formulation is a new chemotherapy

oral dosage form “repurposing” the chemotherapeutic agent gemcitabine, which we believe enables it to be developed for use

in patients following a special regulatory pathway codified in Section 505(b)(2) of the FDA rules.

Section 505(b)(2) was enacted to enable

sponsors to seek New Drug Application (“NDA”) approval for novel repurposed drugs without the need for such sponsors to undertake

certain time consuming and expensive safety studies.

Proceeding under this regulatory pathway, we hope to be able to rely upon all of

the publicly available safety and toxicology data with respect to gemcitabine in our FDA submissions.

We believe that this path will dramatically

reduce the required clinical development efforts, costs and risks as compared to what would be required of us if we were required to conduct

the entire scope of trials required for new chemical entities that are not eligible to be reviewed pursuant to the Section 505(b)(2) regulatory

We estimate that by using the Section 505(b)(2) regulatory pathway, the clinical development process may be several years shorter

than is required for a new chemical entity, and the FDA approval process may be six to nine months shorter than the typical eighteen-month

period, which we believe may result in lower development costs and shorter development time.

As of the date hereof, we have not submitted

an IND or an NDA to the FDA.

Our AML and ALL compounds, developed at Wake Forest University, are targeted therapeutics designed to overcome

multiple resistance mechanisms observed with the current standard of care.

In addition, we are constantly seeking to grow our pipeline

to treat unmet medical needs in oncology.

In addition, the Company owns an exclusive world-wide

license to patented technology from the University of Maryland Baltimore (“UMB”).

Our license is for a broad-spectrum antiviral

drug platform.

The licensed technology is a broadly acting pan-viral inhibitory compound with efficacy against multiple viral pathogens.

The technology works to inhibit replication of multiple viruses including Influenza virus, SARS-CoV (coronavirus), MERS-CoV, Ebolavirus

and Marburg virus.

The technology is covered by two patent applications already on file with the United States Patent and Trademark Office.

The Company’s license covers two U.S.

provisional applications, which were consolidated and timely filed as a PCT application on

June 5, 2020, commencing patent prosecution.

Any patents issued from this application are expected to expire 20 years later, on June 5,

2040, unless the term is extended by the patent office.

The PCT application describing the technology to which the Company is licensed

was published on December 12, 2020 by the World Intellectual Property Organization under International Publication Number WO 2020/247860

Currently, the Company and UMB are collaborating to identify chemical structures that are as effective as, or more effective than,

the lead compounds covered in the PCT application.

The UMB inventors are 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.

Effective March 23, 2020, and as amended and restated

on November 24, 2020, the Company and Continental Stock Transfer & Trust Co.

entered into a rights agreement (the “Rights Agreement”)

The Rights Agreement provides each stockholder of record a dividend distribution of one “right” for each outstanding share

of common stock.

Rights become exercisable at the earlier of ten days following:

(1) a public announcement that an acquirer has purchased

or has the right to acquire 4.99% or more of our common stock, in connection with, (x) the Company consolidating, or merging into any

other person, (y) any person consolidates or merges with or into the Company or (z) the Company sells or otherwise transfers to any person

or persons, in one or more transactions, assets or earning power aggregating 50% or more of the assets or earning power of the Company,

or (2) the commencement of a tender offer which would result in an offer or beneficially owning 10% or more of our outstanding common

All rights held by an acquirer or offer or expire on the announced acquisition date, and all rights expire at the close of business

on March 23, 2023, subject to further extension.

Each right entitles a stockholder to acquire, at a price of $5.00 per one one-thousandth

of a share of our Series A preferred stock, subject to adjustments, which carries voting and dividend rights similar to one share of our

common stock.

The purchase price of the preferred stock fractional amount is subject to adjustment for certain events as described in

the Rights Agreement.

At the discretion of a majority of the Board and within a specified time period, we may redeem all of the rights

at a price of $0.0001 per right.

The Board may also amend any provisions of the Rights Agreement prior to exercise.

Critical Accounting Policies

Our critical accounting policies are disclosed

in our annual report on Form 10K for the year ended December 31, 2021 and there have been no material changes to such policy or estimates

during the three months ended March 31, 2022.

Critical Accounting Estimates

The preparation of financial statements in accordance

with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that

affect the reported amounts and related disclosures in the financial statements.

Management considers an accounting estimate to be critical

it requires assumptions to be made that were uncertain at the time the estimate was made, and

changes in the estimate or different estimates that could have been selected could have material impact inour results of operations or financial condition.

While we base our estimates and judgments on our

experience and on various other factors that we believe to be reasonable under the circumstances, actual results could differ from those

estimates and the differences could be material.

See Note 2 to our condensed consolidated financial

statements for a discussion of our significant accounting policies.

Recently Issued Accounting Pronouncements

See Note 3 to the condensed consolidated financial

statements for a discussion of recent accounting standards.

Results of Operations

Three months ended March 31, 2022 compared

to three months ended March 31, 2021

During the three months ended March 31, 2022,

we incurred a loss from operations of approximately $3.8 million, as compared to $2.3 million during the comparable prior year period.

The increase in loss was primarily attributed to $0.6 million increase in in general and administrative expenses and $1.9 million increase

research and development expense, and was partially offset by $1.0 million decrease in research and development expense related with license

During the three months ended March 31, 2022, other income was approximately

$0.3 million as compared to other expense of approximately $1.7 million during the comparable prior year period.

in other income was primarily attributed to a $1.0 million increase in the change in fair value of investment and $0.8 million decrease

in loss on marketable securities.

The Company experienced very little or no revenue

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

Liquidity and Capital Resources

We continue to incur ongoing administrative and

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

While we continue to implement

our business strategy, we intend to finance our activities through:

managing current cash and cash equivalents 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.

Our ultimate success is dependent on our ability

to obtain additional financing and generate sufficient cash flow to meet our obligations on a timely basis.

Our business will require

significant amounts of capital to sustain operations and make the investments it needs to execute its longer-term business plan to support

new technologies and help advance innovation.

Our working capital amounted to approximately $98.3 million at March 31, 2022.

to obtain additional debt or equity financing, especially if we experience downturns in our business that are more severe or longer than

anticipated, or if we experience significant increases in expense levels resulting from being a publicly-traded company or operations.

If we attempt to obtain additional debt or equity financing, we cannot assume that such financing will be available to the Company on

favorable terms, or at all.

The Company plans to pursue its plans regarding

research and development of our two pre-clinical products which will require resources beyond those currently, ultimately requiring third

party capital.

During this time, the Company does not expect to generate revenue and there is substantial doubt about the Company’s

ability to continue as a going concern within one year from the date of this filing.

The consolidated financial statements have been prepared

assuming that the Company will continue as a going concern, and do not include any adjustments to reflect the possible future effects

on the recoverability and classification of assets, or the amounts and classification of liabilities that may result from the outcome

of this uncertainty.

Flows from Operating Activities - For the three months ended March 31, 2022 and 2021, net cash used in operations was approximately

$3.8 million and $1.1 million, respectively.

The cash used in operating activities for the nine months ended September 30, 2021 primarily

resulted from a net loss of $5.4 million and change in fair value of investment of $3.8 million, and partially offset by $4.3 million

unrealized loss on marketable securities and $1.1 million research and development expense related with license acquired.

The cash used

in operating activities for the nine months ended September 30, 2020 primarily resulted from a net loss of $12.7 million, and partially

offset by reduction in fair value of investment of $7.4 million and $1.2 million research and development expense related with license

Flows from Investing Activities - For the nine months ended September 30, 2021 and 2020, net cash used in investing activities was

approximately $70.3 million and $27.2 million, respectively.

The cash used in investing activities for the nine months ended September

30, 2021 primarily resulted from our purchase of marketable securities of $90.5 million, funds to deposit accounts of $4.4 million (net

of fee), purchase of investments at fair value of $4.1 million and purchase of convertible note of $2.0 million, partially offset by

our sale of marketable securities of $30.4 million since we invest excess cash into marketable securities until additional cash is needed.

The cash used in investing activities for the nine months ended September 30, 2020 primarily resulted from our purchase of marketable

securities of $98.5 million and research and development expense related with license acquired of $1.2 million, partially offset by our

sale of marketable securities of $72.0 million since we invest excess cash into marketable securities until additional cash is needed.

Flows from Financing Activities - Cash provided by financing activities for the nine months ended September 30, 2021 was $78.1 million,

which reflects the net proceeds of $78.0 million from investors in exchange of issuance of common stock and warrants and net proceeds

of $84,000 from the exercise of common warrants.

Cash provided by financing activities for the nine months ended September 30, 2020 was

$31.6 million, which reflects the net proceeds of $6.6 million from investors in exchange of issuance of common stock, common warrants

and prefunded warrants, net proceeds of $17.8 million from investors in exchange of issuance of common stock, and net proceeds of $7.2

million from the exercise of common warrants and prefunded warrants.

sheet arrangements.

The cash used in operating

activities for the three months ended March 31, 2022 primarily resulted from a net loss of $3.5 million and change in fair value of long-term

investment of $1.4 million, and is partially offset by change in fair value of short-term investment of $0.9 million.

The cash used in

operating activities for the three months ended March 31, 2021 primarily resulted from a net loss of $4.0 million, and partially offset

by $2.0 million unrealized loss on marketable securities and $1.0 million research and development expense related with license acquired.

Cash Flows from Investing Activities - For the three months ended March

31, 2022 and 2021, net cash used in investing activities was approximately $10.1 million and $71.8 million , respectively.

used in investing activities for the three months ended March 31, 2022 primarily resulted from our purchase of marketable securities of

$27.1 million and purchase of investments of $7.7 million, partially offset by our sale of marketable securities of $24.7 million since

we invest excess cash into marketable securities until additional cash is needed.

The cash used in investing activities for the three

months ended March 31, 2021 primarily resulted from our purchase of marketable securities of $83.6 million and purchase of convertible

note of $2.0 million, partially offset by our sale of marketable securities of $14.3 million since we invest excess cash into marketable

securities until additional cash is needed.

Cash Flows from Financing Activities - Cash

provided by financing activities for the three months ended March 31, 2022 was $19.0 million, which reflects the net proceeds of $19.0

million from investors in exchange of issuance of issuance of Series O and Series P Redeemable Convertible Preferred Stock.

Cash provided

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

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

Off-balance sheet arrangements.

Quantitative and Qualitative Disclosures About Market Risk

required for smaller reporting companies.

Not required for smaller reporting companies.

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 2. Management’s Discussion and Analysis