What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-12 compared with 2022-05-16 · 134 added, 128 removed, 139 unchanged (65% of the section changed)

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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.

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:

These efforts have focused mainly on

biotechnology research and development.

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 next 24 months.

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

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technologies and social networking for cannabis enthusiasts.

The Company’s investments now also include interests in privately-held

companies Discord, Inc., a social communications platform provider that is particularly popular

Thrasio, LLC, an aggregator of private brands of top Amazon businesses and direct-to-consumer brands;

Automation Anywhere,

a provider of business automation solutions, and Anduril Industries, Inc., a defense

products company.

As a result of the Company’s biotechnology

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Ultimately, we plan

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

to develop DHA-dFdC for oral and intravenous 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.

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,

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, U.S.

(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.

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

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.

provisional 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.

The PCT application has now entered the national phase

in Europe, China and India.

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 by the U.S.

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

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.

studies will be a necessary prerequisite to filing an Investigational New Drug Application (“IND”) with the FDA.

upon the success of the animal studies, the Company’s development activities will also include preparing the IND for submission

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.

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 pathway.

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.

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

In addition, the Company owns an exclusive world-wide

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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 PCT application has now entered the national phase in the USPTO (U.S.

Application Serial No.

17/616,586) and is currently under

active prosecution.

The Company’s license has been amended to cover a second PCT application, which was published on June 9, 2022

by the World Intellectual Property Organization under International Publication Number WO 2022/120207 A1.

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.

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

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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.

during the six months ended June 30, 2022.

Critical Accounting Estimates

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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.

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

While we base our estimates and judgments on our

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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

Three months ended June 30, 2022 compared to

three months ended June 30, 2021

During the three months ended June 30, 2022, we

incurred a loss from operations of approximately $2.3 million, as compared to $2.8 million during the comparable prior year period.

decrease in loss was primarily attributed to $81,000 decrease in in general and administrative expenses, $0.3 million decrease research

and development expense, and $91,000 decrease in research and development expense related to development of our license technology.

During the three months ended June 30, 2022, other

expense was approximately $2.8 million as compared to other income of approximately $1.4 million during the comparable prior year period.

The increase in other expense was primarily attributed to a $0.3 million decrease in the change in fair value of investment and $4.0 million

increase in loss on marketable securities.

Six months ended June 30, 2022 compared to

six months ended June 30, 2021

During the six months ended June 30, 2022, we

incurred a loss from operations of approximately $6.1 million, as compared to $5.1 million during the comparable prior year period.

increase in loss was primarily attributed to $0.5 million increase in in general and administrative expenses and $1.7 million increase

research and development expense, and was partially offset by $1.1 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.

During the six months ended June 30, 2022, other

expense was approximately $2.5 million as compared to other expense of approximately $0.2 million during the comparable prior year period.

The increase in other expense was primarily attributed to a $3.2 million decrease in loss on marketable securities, and was partially

offset by $0.7 million increase in the change in fair value of investment.

The Company experienced very little or no revenue

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new technologies and help advance innovation.

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

Our working capital amounted to approximately $60.7 million at June 30, 2022.

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

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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 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 Operating Activities -

For the six months ended June 30, 2022 and 2021, net cash used in operations was approximately $5.9 million and $2.7 million, respectively.

The cash used in operating activities for the three months ended June 30, 2022 primarily resulted from a net loss of $8.6 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 $1.6 million and unrealized loss on marketable securities of $2.3 million.

The cash used in operating activities for the six months

ended June 30, 2021 primarily resulted from a net loss of $5.3 million and $1.1 million realized gain on marketable securities, and partially

offset by $1.4 million unrealized loss on marketable securities and $1.1 million research and development expense related with license

Cash Flows from Investing Activities - For the

six months ended June 30, 2022 and 2021, net cash used in investing activities was approximately $15.3 million and $70.4 million, respectively.

The cash used in investing activities for the six months ended June 30, 2022 primarily resulted from our purchase of marketable securities

of $27.5 million, purchase of promissory notes of $1.6 million and purchase of investments of $14.6 million, partially offset by our sale

of marketable securities of $28.3 million since we invest excess cash into marketable securities until additional cash is needed.

cash used in investing activities for the six months ended June 30, 2021 primarily resulted from our purchase of marketable securities

of $86.5 million, funds to deposit accounts of $4.5 million (net of fee) and purchase of convertible note of $2.0 million, partially offset

by our sale of marketable securities of $23.2 million since we invest excess cash into marketable securities until additional cash is

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.

used in financing activities for the six months ended June 30, 2022 was $15.3 million, which reflects the cost for redemption of Series

O and Series P Redeemable Convertible Preferred Stock of $23.1 million and cost for purchase of treasury stock of $1.5 million, partially

offset by 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 six months ended June 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.

Off-balance sheet arrangements.

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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