What changed in this filing

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Item 1. Financial Statements

2022-08-12 compared with 2022-05-16 · 531 added, 401 removed, 237 unchanged (80% of the section changed)

Financial Statements

AIKIDO PHARMA INC.

Condensed Consolidated Balance Sheets

Consolidated Balance Sheets

in thousands except share and per share amounts)

1 unchanged sentence

Cash and cash equivalents

Restricted cash

Marketable securities

4 unchanged sentences

Convertible note receivable at fair value

Notes receivable at fair value

Security deposit

5 unchanged sentences

Total liabilities

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;

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

3,825 shares issued and outstanding at June 30, 2022 and December 31, 2021;

liquidation value of $ 0.0001 per share

5,000,000 shares designated;

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

834 shares issued and outstanding at June 30, 2022 and December 31, 2021;

liquidation value of $ 0.0001 per share

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

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

5,246,852 and 5,275,329 shares issued at June 30, 2022 and December 31, 2021, respectively;

4,953,950 and 5,275,329 shares outstanding at June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

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

Treasury stock, at cost, 242,902 and 0 shares at June 30, 2022 and December 31, 2021, respectively

Accumulated deficit

Total stockholders’ equity

Total liabilities, redeemable convertible preferred stock and stockholders’ equity

See accompanying notes to condensed consolidated

financial statements.

AIKIDO PHARMA INC.

Condensed Consolidated Statements of Operations

Total liabilities and stockholders’ equity

accompanying notes to condensed consolidated financial statements.

Consolidated Statements of Operations

in thousands except share and per share amounts)

Three Months Ended

Six Months Ended

Operating costs and expenses

6 unchanged sentences

Interest income

Loss on marketable securities

(Loss) gain on marketable securities

Change in fair value of investment

6 unchanged sentences

Basic and Diluted

See accompanying notes to condensed consolidated

financial statements.

AIKIDO PHARMA INC.

Condensed Consolidated Statements of Changes

in Redeemable Preferred Stock and Stockholders’ Equity

accompanying notes to condensed consolidated financial statements.

Condensed Consolidated Statements of Changes in

Redeemable Convertible Preferred Stock and Stockholders’ Equity

($ in thousands except share and per share amounts)

For the Three Months Ended March 31, 2022

For the Three Months Ended June 30, 2022

Preferred Stock

Stockholders’

Balance at March 31, 2022

$ ( 167,309 )

Redemption of Series O Redeemable

Convertible Preferred Stock

Redemption of Series

P Redeemable Convertible Preferred Stock

Deemed dividends related

to Series O and Series P Redeemable Convertible Preferred Stock

Repurchase of treasury stock

Stock-based compensation

Fractional shares adjusted

for reverse split

at June 30, 2022

$ ( 172,386 )

the Three Months Ended June 30, 2021

Preferred Stock

Treasury Stock

Total Stockholders’

Balance at March 31, 2021

$ ( 160,565 )

Stock-based compensation

Balance at June 30, 2021

$ ( 161,917 )

accompanying notes to condensed consolidated financial statements.

the Six Months Ended June 30, 2022

Preferred Stock

Stockholders’

at December 31, 2021

Balance at December 31,

$ ( 163,774 )

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

Issuance of Series O redeemable

convertible preferred stock for cash

Issuance of Series P redeemable

convertible preferred stock for cash

Cost on issuance of Series

O and Series P Redeemable Convertible Preferred Stock

Deemed dividends related

to Series O and Series P Redeemable Convertible Preferred Stock

Redemption of Series O Redeemable

Convertible Preferred Stock

Redemption of Series

P Redeemable Convertible Preferred Stock

Repurchase of treasury stock

Stock-based compensation

Cancellation of common stock

related to investment in CBM

Fractional shares adjusted

for reverse split

at June 30, 2022

$ ( 172,386 )

For the Three Months Ended March 31, 2021

the Six Months Ended June 30, 2021

Preferred Stock

7 unchanged sentences

Stock-based compensation

Balance at March 31, 2021

Balance at June 30, 2021

$ ( 161,917 )

See accompanying notes to condensed consolidated

financial statements.

AIKIDO PHARMA INC.

Condensed Consolidated Statements of Cash Flows

accompanying notes to condensed consolidated financial statements.

Consolidated Statements of Cash Flows

in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities

17 unchanged sentences

Proceeds from sale of digital currencies

Proceeds from promissory note receivable interest received

Funds to deposit accounts, net

Purchase of short-term and long-term investments

Purchase of research and development licenses

Purchase of short-term and long-term promissory notes

Purchase of convertible note

4 unchanged sentences

Proceeds from exercise of warrants

Net cash provided by financing activities

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

Payment for fractional shares

Redemption of Series O and Series P Redeemable Convertible Preferred Stock

Purchase of treasury stock

Net cash (used in) provided by financing activities

Net (decrease) increase in cash and cash equivalents and restricted cash

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Non-cash investing and financing activities

1 unchanged sentence

Reclassify from convertible note receivable to notes receivable at fair value

See accompanying notes to condensed consolidated

financial statements.

Promissory convertible note receivable conversion into common shares

accompanying notes to condensed consolidated financial statements.

AIKIDO PHARMA INC.

1 unchanged sentence

Organization and Description of Business and Recent Developments

Organization and Description of Business

AIkido Pharma Inc.

(the “Company”),

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

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

cancers and multiple types of viral infections.

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

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

pancreatic cancer.

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

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

gemcitabine, a current standard therapy), 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.

and Description of Business

(the “Company”), 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).

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.

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

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

The Company’s pancreatic drug candidate,

DHA-dFdC, developed at and licensed from the University of Texas at Austin, is a new compound that it hopes will become the next generation

of chemotherapy treatment for advanced pancreatic cancer.

DHA-dFdC overcomes tumor cell resistance to current chemotherapeutic drugs

and is well tolerated in preclinical toxicity 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), 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.

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.

June 7, 2022, the Company effected a seventeen-for-one (17-for-1) reverse stock split of its class of common stock (the “Reverse

Stock Split”).

The Reverse Stock Split, which was approved by stockholders at an annual stockholder meeting on May 20, 2022, was

consummated pursuant to a Certificate of Amendment filed with the Secretary of State of Delaware on June 2, 2022 (the “Certificate

of Amendment”).

The Reverse Stock Split was effective on June 7, 2022 (the “Effective Date”).

All references to common

stock, convertible preferred stock, warrants to purchase common stock, options to purchase common stock, restricted stock units, restricted

stock awards, share data, per share data and related information contained in the condensed consolidated financial statements have been

retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented.

Payment for fractional shares resulting

from the reverse stock split amounted to $ 26 thousand.

Liquidity and Capital Resources

The Company continues to incur ongoing administrative

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

While the Company continues

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

past debt and equity offerings.

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.

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

related) revenue.

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

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

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.

AIKIDO PHARMA INC.

Notes to Condensed 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 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

audited consolidated 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.

of Presentation and Principles of Consolidation

accompanying unaudited condensed consolidated 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.

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

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

GAAP”) for interim financial information and pursuant

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

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

The condensed consolidated balance sheet

as of June 30, 2022, condensed consolidated statements of operations for the three and six months ended June 30, 2022 and 2021, condensed

consolidated statements of stockholders’ equity for the three and six months ended June 30, 2022 and 2021, and the condensed consolidated

statements of cash flows for the six months ended June 30, 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 and six months ended June 30, 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.

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.

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.

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.

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

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.

Treasury Stock

Treasury stock is

recorded at cost and is presented as a reduction of stockholders’ equity.

accounting pronouncements

does not believe that any recently issued, but not yet effective accounting pronouncements, if currently adopted, would have an

effect on the Company’s condensed consolidated financial statements.

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

Investments in Marketable Securities

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):

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

June 30, 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

Six Months Ended

Realized (loss) gain

Unrealized loss

Unrealized (loss) gain

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):

following table presents the Company’s short-term investments at June 30, 2022 and December 31, 2021 ($ in thousands):

Investment in Hoth Therapeutics, Inc.

1 unchanged sentence

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:

change in the fair value of the short-term investments for the six months ended June 30, 2022 is summarized as follows:

($ in thousands):

4 unchanged sentences

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:

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

in Hoth Therapeutics, Inc.

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.

following summarizes the Company investment in Hoth as of June 30, 2022 and December 31, 2021:

Security Name

1 unchanged sentence

Security Name

December 31, 2021

as of December 31, 2021

December 31, 2021

(in thousands)

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.

in DatChat, Inc.

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.

in Vicinity Motor Corp.

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:

fair value was determined using a Black-Scholes simulation.

The Company recorded the fair value of the Vicinity warrant of

approximately $ 89,000 and $ 0.4 million in the consolidated balance sheet as of June 30, 2022 and December 31, 2021, respectively,

reflecting the benefit received as part of its purchase of Vicinity common shares through its brokerage account.

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 the consolidated statements of operations.

During the six months ended June 30, 2022, the Company recorded approximately $ 0.3 million of change in fair value of investment for

this investment.

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

Option term (in years)

2 unchanged sentences

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):

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.

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

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.

following table presents the Company’s other investments at June 30, 2022 and December 31, 2021 ($ in thousands):

Investment in Kerna Health Inc

10 unchanged sentences

Investment in Databricks

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

Investment in Discord

Investment in Thrasio

Investment in Automation Anywhere

Investment in Anduril

change in the value of the long-term investments for the six months ended June 30, 2022 is summarized as follows:

($ in thousands):

1 unchanged sentence

Purchase of investments

Adjustment to carrying value of investments

Change in fair value of long-term 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.

in Kerna Health Inc

In May 2022, the Company purchased additional 400,000

shares of common stock of Kerna Health Inc, (“Kerna”) for approximately $ 1.1 million.

The investment in Kerna was valued at

$ 4.9 million as of June 30, 2022.

in Kaya Holding Corp

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 six months ended June 30, 2022.

The investment in Kaya was valued at approximately $ 2.3 million as of June 30, 2022.

in Tevva Motors

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 six months ended June 30,

The investment in Tevva was valued at approximately $ 3.4 million as of June 30, 2022.

in ASP Isotopes

investment in ASP Isotopes Inc.

was valued at $ 1.0 million as of June 30, 2022.

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

in AerocarveUS Corporation

investment in AerocarveUS Corporation was valued at $ 1.0 million as of June 30, 2022.

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 June 30, 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.

In March of 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 June 30, 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.

In March of 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 June 30, 2022.

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.

In April 2022, the Company

invested an additional $ 2 M for the purchase of additional shares of common stock of Epic Games.

The investment in Epic Games was valued

at $ 3.5 million as of June 30, 2022.

March 23, 2022, the Company entered into a securities purchase agreement (the “Tesspay Securities Purchase Agreement”) with

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 six months ended June 30, 2022.

The investment in Tesspay was valued at approximately

$ 1.3 million as of June 30, 2022.

On March 30, 2022, the Company entered into a securities purchase agreement

(the “SpaceX Securities Purchase Agreement”) with SpaceX, under which the company agreed to purchase shares of common stock

of SpaceX for $1.5M.

In April 2022, the Company invested an additional $2M for the purchase of additional shares of common stock of SpaceX.

The investment in SpaceX was valued at $ 3.5 million as of June 30, 2022.

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

in Databricks

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 June 30, 2022.

in Discord, Inc.

May 2022, the Company entered into a securities purchase agreement (the “Discord Securities Purchase Agreement”) with privately-held

company Discord, Inc., a social communications platform provider that is particularly popular with gamers, as one of the Company’s

pursuits of potentially high growth interests with near term monetization events.

Under the Discord Securities Purchase Agreement, the

Company agreed to purchase a total of 618 shares of common stock of Discord for approximately $ 0.5 million.

The investment in Discord

was valued at $ 0.5 million as of June 30, 2022.

in Thrasio, LLC

April 2022, the Company entered into a securities purchase agreement (the “Thrasio Securities Purchase Agreement”) with privately-held

company Thrasio, LLC, an aggregator of private brands of top Amazon businesses and direct-to-consumer brands, as one of the Company’s

pursuits of potentially high growth interests with near term monetization events.

Under the Thrasio Securities Purchase Agreement, the

Company agreed to purchase a total of 20,000 shares of common stock of Thrasio for $ 0.3 million.

The investment in Thrasio was valued

at $ 0.3 million as of June 30, 2022.

in Automation Anywhere, Inc.

April 2022, the Company entered into a securities purchase agreement (the “Automation Anywhere Securities Purchase Agreement”)

with privately-held company Automation Anywhere, Inc., a provider of business automation solutions, as one of the Company’s pursuits

of potentially high growth interests with near term monetization events.

Under the Automation Anywhere Securities Purchase Agreement,

the Company agreed to purchase a total of 18,490 shares of common stock of Automation Anywhere 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.

in Automation Anywhere was valued at $ 0.5 million as of June 30, 2022.

in Anduril Industries, Inc.

April 2022, the Company entered into a securities purchase agreement (the “Anduril Securities Purchase Agreement”) with privately-held

company Anduril Industries, Inc., a defense products company, as one of the Company’s pursuits of potentially high growth interests

with near term monetization events.

Under the Anduril Securities Purchase Agreement, the Company agreed to purchase a total of 14,880

shares of common stock of Anduril for approximately $ 0.5 million.

The investment in Anduril was valued at $ 0.5 million as of June 30,

Notes Receivable

The following table presents the Company’s

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

Short-term convertible notes receivable

following table presents the Company’s notes receivable at June 30, 2022 ($ in thousands):

Maturity Date

Stated Interest Rate

Principal Amount

Interest Receivable

Shor-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.

Jeffrey Cooper Investment

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

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

Unobservable inputs require significant

management judgment or estimation.

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

fair value hierarchy.

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

is significant to the fair value measurement.

Such determination requires significant management judgment.

The following table presents the Company’s

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

Fair value measured at March 31, 2022

Significant other

observable inputs

Kaya Now Investment

Long-term notes receivable

American Innovative Robotics Investment

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

Company recorded an interest income receivable of approximately $ 0.2 million on the Convergent Convertible Note as of June 30, 2022.

Jeffrey Cooper Investment

Group LLC promissory note was satisfied and replaced with a personal note issued to Mr.

Jeffrey Cooper, of Raefan Industries.

recorded an interest income receivable of approximately $ 0.2 million on the Mr.

Jeffrey Cooper Promissory Note as of June 30, 2022.

Industries LLC Investment

Company recorded an interest income receivable of approximately $ 88,000 on the Raefan Industries Promissory Note as of June 30, 2022.

Bag Inc Investment

Company recorded an interest income receivable of approximately $ 63,000 on the Slinger Bag Convertible Note as of June 17, 2022.

17, 2022, the Company received 558,659 shares of common stock of Connexa Sports Technologies Inc (also known as Slinger Bag) as a result

of conversion of principal and accrued interest on the Slinger Bag Convertible Note.

All the 558,659 shares of common stock of Connexa

Sports received were transferred to marketable securities account.

Now Investment

On April 5, 2022, the Company purchased an 8 %

promissory note (“Kaya Now Promissory Note”) issued by Kaya Now Inc (“Kaya Now”) in the principal amount of $ 0.5 million

pursuant to a Note Purchase Agreement with Kaya Now.

The Company paid a purchase price for the Kaya Now Promissory Note of $ 0.5 million.

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

of the Kaya Now Promissory Note.

The Kaya Now Promissory Note shall mature on February 1, 2023 .

Company recorded an interest income receivable of approximately $ 0.1 million on the Kaya Now Promissory Note as of June 30, 2022.

Innovative Robotics Investment

April 1, 2022, the Company purchased an 8 % promissory note (“Robotics Promissory Note”) issued by American Innovative

Robotics, LLC (“Robotics”) in the principal amount of $ 1.1 million pursuant to a Note Purchase Agreement with Robotics.

The Company paid a purchase price for the Robotics Promissory Note of $ 1.1 million.

The Company will receive interest on the Robotics

Promissory Note at the rate of 8 % per annum payable every three months starting from July 1, 2022.

The Robotics Promissory Note

shall mature on April 1, 2027 .

Company recorded an interest income receivable of approximately $ 20,000 on the Robotics Promissory Note as of June 30, 2022.

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.

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

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)

inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market

Unobservable inputs require significant management judgment or estimation.

In some cases, the inputs used to measure an

asset or liability may fall into different levels of the fair value hierarchy.

In those instances, the fair value measurement is required

to be classified using the lowest level of input that is significant to the fair value measurement.

Such determination requires significant

management judgment.

following table presents the Company’s assets and liabilities that are measured at fair value at June 30, 2022 and December 31,

2021 ($ in thousands):

Fair value measured at June 30, 2022

Quoted prices

Marketable securities:

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Short-term investment

Notes receivable at fair value

Short-term notes receivable at fair value

Long-term notes receivable at fair value

Fair value measured at December 31, 2021

Quoted prices

Significant other

observable inputs

Marketable securities:

3 unchanged sentences

Convertible note receivable

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

Level 3 Measurement

1 unchanged sentence

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

Short-term notes receivable at fair value at December 31, 2021

Accrued interest receivable

Reclassify from convertible note receivable to notes receivable at fair value

Notes receivable at fair value at March 31, 2022

Purchase of notes receivable

Change in fair value of note receivable

Conversion of note receivable to marketable securities

Short-term notes receivable at fair value at June 30, 2022

Long-term notes receivable at fair value at December 31, 2021

Purchase of notes receivable

Long-term notes receivable at fair value at June 30, 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

Short-term investment at June 30, 2022

Long term and Short-term Note Receivable

and Convertible Notes Receivable

The Company has elected to measure the purchases

9 unchanged sentences

Convergent Investment

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

As of June 30, 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,

1 unchanged sentence

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

the six months ended June 30, 2022.

Jeffrey Cooper Investment

As of June 30, 2022, the fair value of the Mr.

Jeffrey Cooper 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.

was recorded during the six months ended June 30, 2022.

Raefan Industries LLC Investment

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

As of June 30, 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

1 unchanged sentence

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.

was recorded during the six months ended June 30, 2022.

Nano Innovations Inc Investment

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

As of June 30, 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,

1 unchanged sentence

No change in fair value for principal

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

was recorded during the six months ended June 30, 2022.

The Company believes that the fair value of the

warrant of Nano is immaterial.

Net Loss per Share Attributable to Common Stockholders

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

Kaya Now Investment

As of June 30, 2022, the fair value of the Kaya

Now Promissory Note was measured at $ 0.5 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 six months ended June 30, 2022.

The Company believes that the fair value of the

warrant of Kaya Now is immaterial.

American Innovative Robotics Investment

As of June 30, 2022, the fair value of the Slinger

Bag Convertible Note was measured at $ 1.1 million, taking into consideration cost of the investment, market participant inputs, market

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

No change in fair value for principal was recorded

during the six months ended June 30, 2022.

Net Loss per Share Attributable to

Common Stockholders

Basic loss per common share is computed by dividing

3 unchanged sentences

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

potentially dilute loss per share in the future that were not included in the computation of diluted loss per share at June 30, 2022

and 2021 are as follows:

As of March 31,

As of June 30,

Convertible preferred stock

4 unchanged sentences

Preferred Stock

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.

On February 24, 2022, the Company entered into a Securities

Purchase Agreement (the “Purchase Agreement”) with certain institutional investors (the “Investors”), pursuant

to which the Company agreed to issue and sell, in concurrent registered direct offerings (the “Offerings”), (i) 11,000 shares

of the Company’s Series O Redeemable Convertible Preferred Stock, par value $ 0.001 per share (the “Series O Preferred Stock”),

and (ii) 11,000 shares of the Company’s Series P Redeemable Convertible Preferred Stock, par value $ 0.001 per share (the “Series

P Preferred Stock” and together with the Series O Preferred Stock, the “Preferred Stock”), in each case, at an offering

price of $ 952.38 per share, representing a 5 % original issue discount to the stated value of $ 1,000 per share of Preferred Stock, for

gross proceeds of each Offering of $ 10,476,180 , or approximately $ 21.0 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.

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

Purchase Agreement contains customary representations, warranties and agreements by the Company and customary conditions to closing.

closing of the Offerings occurred on March 2, 2022.

In connection with this transaction, the Company received net proceeds of $ 21.0 million,

which was deposited in an escrow account.

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.

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

Redemption Rights

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

7 unchanged sentences

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.

During the second quarter of 2022, the Company redeemed for

cash at a price equal to 105% of the $1,000 stated value per share all of its 11,000 outstanding shares of Series

O Preferred Stock and its 11,000 Series P Preferred Stock.

The total redemption amount was $ 23.1 million.

As a result, all shares

of the Series O Preferred Stock and Series P Preferred Stock have been retired and are no longer outstanding.

During the six months ended June 30, 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

4 unchanged sentences

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:

Treasury Stock

On January 21, 2022, the Company’s board

of directors authorized a share buyback program (the “Share Buyback Program”), pursuant to which the Company authorized the

Repurchase Program in an amount of up to three million dollars.

During the second quarter of 2022, the Company repurchased 242,902 shares

at a cost of approximately $ 1.5 million or $ 6.12 per share through marketable securities account under the Share Buyback Program.

Company records treasury stock using the cost method.

A summary of warrant activity for the six months

ended June 30, 2022 is presented below:

Weighted Average Exercise Price

Total Intrinsic Value

Weighted Average Remaining Contractual Life

Outstanding as of December 31, 2021

Outstanding as of March 31, 2022

Outstanding as of June 30, 2022

AIKIDO PHARMA INC.

Notes to Condensed Consolidated Financial Statements

Stock Options

A summary of stock option activity for the nine

months ended March 31, 2022 is presented below:

A summary of stock option activity for the six

months ended June 30, 2022 is presented below:

Number of Shares

Weighted Average Exercise Price

Total Intrinsic Value

Weighted Average Remaining Contractual Life (in years)

Outstanding as of December 31, 2021

Outstanding as of March 31, 2022

Employee options granted

Outstanding as of June 30, 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.

of stock option expense was approximately $ 0.1 million for the three months ended June 30, 2022 and 2021.

Stock-based compensation associated

with the amortization of stock option expense was approximately $ 0.1 million and $ 0.2 million for the six months ended June 30, 2022 and

2021, respectively.

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

Estimated future stock-based compensation expense

relating to unvested stock options is approximately $ 0 .

relating to unvested stock options is approximately $ 0.8 million.

Commitments and Contingencies

4 unchanged sentences

Risks and Uncertainties - COVID-19

Management continues to valuate the impact of

Management continues to evaluate the impact of

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

9 unchanged sentences

Subsequent Events

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.

As of August 1, 2022 Anthony Hayes divested all shares of common

stock that he owed in Revere Securities LLC.

On July 22, 2022, Carlos Aldavero entered into an employment agreement with the Company

(the “Employment Agreement”).

The Employment Agreement provides for payment of an annual base salary of $ 450,000.00 to

Aldavero, to be paid in equal semi-monthly or bi-weekly installments, a cash signing bonus of $ 213,000.00 , and an annual cash

bonus in an amount determined by the Board in its discretion if the Company meets or exceeds criteria adopted by the Board.

On July 21, 2022, the Company and Kaya Now Inc.

executed an amendment of the Kaya Now Promissory Note (“Amendment”) such that

the Kaya Now Promissory Note shall mature on February 1, 2023.

In consideration of the Amendment, Kaya Now has agreed to issue to the

Company 1,000,000 additional shares at 20 cents per share of Kaya Now’s common stock.

Under the amendment, interest on the Note

during the extended term shall be paid on October 1, 2022 and January 1, 2023 at the rate of 8% per annum.

On August 10, 2022 we agreed to extend the term of

our employment agreement with our chief executive officer, Anthony Hayes, for an additional five years, renewable thereafter for one year

increments on 6 months notice.

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