What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2021-03-01 compared with 2020-03-25 · 484 added, 430 removed, 44 unchanged (95% of the section changed)

Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

common stock began trading on the NASDAQ Capital Market under the symbol “AKER”

on January 23, 2014.

Prior to that,

our common stock traded on the OTCQB of the OTC Markets Group Inc.

under the same symbol.

of March 20, 2020, there were approximately 698 holders of record of our common stock.

This figure does not include

shareholders whose certificates are held in the name of the broker-dealers of other nominees.

have never paid any cash dividends on our common shares, and we do not anticipate that we will pay any dividends with respect

to those securities in the foreseeable future.

Our current business plan is to retain any future earnings to finance the expansion

and development of our business.

(d) Securities

Authorized for Issuance Under Equity Compensation Plans

following table shows information with respect to this plan as of the fiscal year ended December 31, 2019.

Compensation Plan Information

of securities to be issued upon exercise of outstanding options, warrants and rights (a)

Weighted-average

price of outstanding options, warrants and rights (b)

of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column

compensation plans approved by security holders

compensation plans not approved by security holders

transfer agent is VStock Transfer LLC, 18 Lafayette Place, Woodmere, NY 11598.

Sales of Unregistered Securities

issued 1,667 blank shares of our Common Stock to Typenex Medical, LLC on December 3, 2019.

The shares of Common Stock were issued

to Typenex pursuant to an exemption from registration afford by Section 4(a)(2) of the Securities Act of 1933, as amended.

for the foregoing, During the year ended December 31, 2019,

we have not issued any securities which were not registered under the Securities Act and not previously disclosed in our Quarterly

Reports on Form 10-Q or Current Reports on Form 8-K.

(f) Purchases

of Equity Securities by Issuer and Affiliated Purchasers

the year ended December 31, 2019, we and to our knowledge our affiliated purchasers have not purchased any securities which were

not previously disclosed in our Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.

of February 26, 2020, there were approximately 755 holders of record of our common stock.

as described herein, we have never paid any cash or other dividends to our stockholders and we do not plan to declare or pay any

cash or other dividends in the foreseeable future.

On or around September 9, 2020, our Board declared a dividend of one preferred

share purchase right for each share of our common stock outstanding held by stockholders of record on September 21, 2020.

intend to retain earnings, if any, for use in the operation and expansion of our business.

Subject to the foregoing, the payment

of cash dividends in the future, if any, will be at the discretion of our Board and will depend on such factors as earning levels,

contractual restrictions, capital requirements, our overall financial condition and any other factors deemed relevant by the Board.

Sales of Securities

Purchases of Equity Securities

did not repurchase any of our equity securities during the fourth quarter of the fiscal year ended December 31, 2020.

Selected Financial Data

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

following discussion of our plan of operation and results of operations should be read in conjunction with the financial statements

and related notes to the financial statements included elsewhere in this Annual Report.

This discussion contains forward-looking

statements that relate to future events or our future financial performance.

These statements involve known and unknown risks,

uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially

different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking

These risks and other factors include, among others, those listed under “Cautionary Note Regarding Forward-Looking

information set forth below should be read in conjunction with our consolidated financial statements and related notes thereto

included elsewhere in this Annual Report on Form 10-K.

This discussion and analysis contains forward-looking statements based

on our current expectations, assumptions, estimates and projections.

These forward-looking statements involve risks and uncertainties.

Our actual results could differ materially from those indicated in these forward-looking statements as a result of certain factors,

including those discussed in Item 1 of this Annual Report on Form 10-K, entitled “Business,”

under “Forward-Looking

Statements”

and “Risk Factors”

and those included elsewhere in this Annual Report.

develops, manufactures, and supplies rapid, point-of-care screening and testing products designed to bring health-related information

directly to the patient or clinician in a timely and cost-efficient manner.

Akers believes it has advanced the science of diagnostics

through the development of several proprietary platform technologies.

of Akers’

rapid, single-use tests are performed in vitro (outside the body) and are designed to enhance patient well-being

and reduce the cost of healthcare.

Our current product offerings focus on delivering diagnostic assistance in a variety of healthcare

fields/specialties, including diagnostic rapid manual point-of-care tests for the detection of allergic reactions to Heparin,

for cholesterol screening and for on- and off-the-job alcohol safety initiatives.

believes that low-cost, single-use testing not only saves time and money, but allows for more frequent, near-patient testing which

may save lives.

We believe that our FDA-cleared rapid diagnostic tests help facilitate targeted diagnoses and real-time treatment.

March 23, 2020, we entered into a Membership Interest Purchase Agreement (the “MIPA”) with the members of Cystron

Biotech, LLC (individually, each a “Seller,”

and collectively, the “Sellers”), pursuant to which the Company

will acquire 100% of the membership interests (the “Membership Interests”) of Cystron Biotech, LLC (“Cystron”).

Cystron is a party to license agreement with Premas Biotech PVT Ltd (“Premas) whereby Premas granted Cystron, amongst other

things, an exclusive license with respect to Premas’

vaccine platform for the development of a vaccine against COVID-19

and other corona virus infections.

March 23, 2020, we acquired Cystron pursuant to the MIPA.

consideration for the Membership Interests, we will deliver to the Sellers:

(1) that number of newly issued shares of our common

stock equal to 19.9% of the issued and outstanding shares of our common stock and pre-funded warrants as of the date of the MIPA,

but, to the extent that the issuance of the our common stock would result in any Seller owning in excess of 4.9% of our outstanding

common stock, then, at such Seller’s election, such Seller may receive “common stock equivalent”

preferred shares

with a customary 4.9% blocker (with such common stock and preferred stock collectively referred to as “Common Stock Consideration”),

and (2) $1,000,000 in cash.

and Item 1A of this Annual Report on Form 10-K, entitled “Risk Factors.”

References in this discussion

and analysis to “us,”

“we,”

“our,”

or “the Company”

refer collectively to Akers

Biosciences, Inc.

financial statements are prepared in accordance with GAAP.

These accounting principles require us to make certain estimates, judgments

and assumptions.

We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information

available to us at the time that these estimates, judgments and assumptions are made.

These estimates, judgments and assumptions

can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts

of revenues and expenses during the periods presented.

Our financial statements would be affected to the extent there are material

differences between these estimates and actual results.

In many cases, the accounting treatment of a particular transaction is

specifically dictated by GAAP and does not require management’s judgment in its application.

There are also areas in which

management’s judgment in selecting any available alternative would not produce a materially different result.

The following

discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this Annual Report

on Form 10-K.

were historically a developer of rapid health information technologies but since March 2020, have been primarily focused on the

development of a vaccine candidate against COVID-19.

In response to the global pandemic, we are pursuing rapid development and

manufacturing of our COVID-19 Vaccine Candidate, in collaboration with Premas.

November 11, 2020, we entered into the Merger Agreement, pursuant to which we will acquire MYMD as a wholly owned subsidiary.

Upon completion of the Merger, the combined company is expected to be renamed “MyMD Pharmaceuticals, Inc.”.

to the Merger Agreement, upon the effectiveness of the Merger, each share of MYMD common stock issued and outstanding immediately

prior to the Effective Time will convert into and become exchangeable for the number of pre-reverse stock split shares of our

common stock equal to the number of shares of MYMD common stock multiplied by the Exchange Ratio.

As a result of the issuance

of the merger consideration and the merger, MYMD stockholders will receive an aggregate of approximately 68,035,360 shares of

Akers common stock, without giving effect to the proposed reverse stock split contemplated by the Reverse Stock Split Proposal.

Additionally, MYMD stockholders will be entitled to receive (i) an amount in cash, on a pro rata basis, equal to the aggregate

cash proceeds received by Akers from the exercise of any options to purchase MYMD common stock assumed by Akers upon closing of

the merger during the Option Exercise Period, such payment to occur no later than 30 days after the last day of the Option Exercise

Period, and (ii) potential Milestone Payments of up to an aggregate of 68,035,360 Milestone Shares payable upon achievement of

certain market capitalization milestone events during the Milestone Period.

pursuant to the Merger Agreement, on January 15, 2020, we and MYMD filed the S-4 Registration Statement describing the Merger

and other related matters.

Consummation of the Merger is conditioned upon, among other things, approval of the Merger by the stockholders

of Akers (including (i) approval of the Share Issuance Proposal, (ii) approval of the Reverse Stock Split Proposal, and (iii)

approval of the A&R Charter Proposal, including, among other things, changing the name of the combined company to MyMD Pharmaceuticals,

Inc., among others), approval of the Merger by the stockholders of MYMD, the continued listing of Akers’

common stock on

The Nasdaq Capital Market after the Merger and satisfaction of a minimum cash threshold by Akers.

In addition, the Merger Agreement

requires that MYMD consummate the Supera Purchase.

After closing of the Merger, the operations of MYMD’s business will

comprise substantially all of the combined company’s operations.

There is no assurance when or if the Merger will be completed.

Any delay in completing the Merger may substantially reduce the potential benefits that we expect to obtain from the Merger.

the intended benefits of the Merger may not be realized.

and COVID-19 Pandemic

December 2019, SARS-CoV-2 was reported to have surfaced in Wuhan, China, and on March 12, 2020, the WHO declared the global outbreak

of COVID-19, the disease caused by SARS-CoV-2, to be a pandemic.

In an effort to contain and mitigate the spread of COVID-19,

many countries, including the United States, Canada, China, and India, have imposed unprecedented restrictions on travel, quarantines,

and other public health safety measures.

According to the WHO situation report, dated as of February 16, 2021, approximately

108.2 million cases were reported globally and 2.4 million of these were deadly, making the development of effective

vaccines to prevent this disease a major global priority.

Multiple vaccine candidates against SARS-CoV-2 are under development,

and most recently, certain large, multinational pharmaceutical companies have been granted authorizations for emergency use by

however, widespread distribution of the vaccines remains limited, with the primary treatment being symptomatic and supportive

and Plan of Merger and Reorganization

November 11, 2020, the Company, Merger Sub, and MYMD, entered the Merger Agreement, pursuant to which, among other things, subject

to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into MYMD, with

MYMD being the surviving corporation and becoming a wholly owned subsidiary of the Company.

The Merger is intended to qualify

for federal income tax purposes as a tax-free reorganization under the provisions of Section 368(a) of the Internal Revenue Code

of 1986, as amended.

In addition, in connection with the execution of the Merger Agreement, Akers agreed to advance a bridge loan

of up to $3,000,000 to MYMD pursuant to the Note.

to the terms and conditions of the Merger Agreement, at the Effective Time (i) each outstanding share of MYMD common stock, will

be converted into the right to receive the number of shares of the Akers common stock equal to the Exchange Ratio;

and (ii) each

outstanding stock option of MYMD (collectively, “MYMD options”) that has not previously been exercised prior to the

Effective Time, whether or not vested, will be assumed by the Company subject to certain terms contained in the Merger Agreement

(including, but not limited to, the amendment of such stock option to extend the term of such stock option for a period expiring

on the second-year anniversary of the Effective Time).

In connection with the Merger, each holder of options is required to enter

into a Lock-Up Agreement/Leak-Out Agreement with respect to the shares of Akers common stock issued upon the exercise of such

Also, not later than 30 days after the second-year anniversary of the Effective Date, the Company will pay stockholders

of MYMD on a pro rata basis an amount in cash equal to the aggregate cash proceeds received by Akers from the exercise of any

MYMD options assumed by the Company prior to the second-year anniversary of the Effective Time;

provided, however, the amount

of such payment will not exceed the maximum amount of cash consideration that may be received by stockholders of MYMD without

affecting the intended tax consequences of the Merger.

Additionally,

we shall (A) make an initial payment to the Sellers of up to $1,000,000 upon our receipt of cumulative gross proceeds from the

consummation of an initial equity offering after the date of the MIPA of $8,000,000, and (B) pay to Sellers an amount in cash

equal to 10% of the gross proceeds in excess of $8,000,000 raised from future equity offerings after the date of the MIPA until

the Sellers have received an aggregate additional cash consideration equal to $10,000,000.

Upon the achievement of certain milestones,

including the completion of a Phase 2 study for a COVID-19 vaccine that meets its primary endpoints, Sellers will be entitled

to receive an additional 750,000 shares of our common stock or, in the event we are unable to obtain stockholder approval for

the issuance of such shares, 750,000 shares of non-voting preferred stock that are valued following the achievement of such milestones

and shall bear a 10% annual dividend (the “Milestone Shares”).

Sellers will also be entitled to contingent payments

from us of up to $20,750,000 upon the achievement of certain milestones, including the approval of a new drug application by the

Food and Drug Administration (“FDA”).

shall also make quarterly royalty payments to Sellers equal to 5% of the net sales of a COVID-19 vaccine or combination product

by the Company (the “COVID-19 Vaccine”) for a period of five (5) years following the first commercial sale of the

COVID-19 Vaccine;

provided, that such payment shall be reduced to 3% for any net sales of the COVID-19 Vaccine above $500 million.

addition, Sellers shall be entitled to receive 12.5% of the transaction value, as defined in the MIPA, of any change of control

transaction, as defined in the MIPA, that occurs prior to the fifth (5th) anniversary of the closing date of the MIPA, provided

that the Company is still developing the COVID-19 Vaccine at that time.

Following the consummation of any change of control transaction,

the Sellers shall not be entitled to any payments as described above under the MIPA.

March 23, 2020, as an inducement to enter into the MIPA, and as one of the conditions to the consummation of the transactions

contemplated by the MIPA, the Sellers entered into a shareholder voting agreement with the Company (the “Support Agreement”),

pursuant to which each Seller agreed to vote their shares of our common stock or preferred stock in favor of each matter proposed

and recommended for approval by our management at every meeting of the stockholders and on any action or approval by written consent

of the stockholders.

Rights Agreement

induce the Sellers to enter into the MIPA, on March 23, 2020, we entered into a registration rights agreement (the “Registration

Rights Agreement”) with the Sellers, pursuant to which we shall by the 30th day following the closing of the transactions

contemplated by the MIPA, file with the United States Securities and Exchange Commission (the “SEC”) an initial Registration

Statement on Form S-3 (if such form is available for use by the Company at such time) or, otherwise, on Form S-1, covering all

of the shares of our common stock issued, or underlying the preferred stock issued, at closing under the MIPA and to subsequently

is a party to a License and Development Agreement (the “Initial License Agreement”) with Premas Biotech PVT Ltd.

(“Premas”).

As a condition to the Company’s entry into the MIPA, Cystron amended and restated the Initial License Agreement on March

19, 2020 (as amended and restated, the “License Agreement”).

Pursuant to the License Agreement, Premas granted Cystron,

amongst other things, an exclusive license with respect to Premas’

vaccine platform for the development of a vaccine against

COVID-19 and other corona virus infections.

the achievement of certain developmental milestones by Cystron, Cystron shall pay to Premas a total of up to $2,000,000.

D Convertible Preferred Stock

March 24, 2020, we filed the Certificate of Designation of Preferences, Rights and Limitations of Series D Convertible Preferred

Stock (the “Certificate of Designation”) with the Secretary of State of the State of New Jersey.

Pursuant to the Certificate

of Designation, in the event of the Company’s liquidation or winding up of its affairs, the holders of our Series D Convertible

Preferred Stock (the “Preferred Stock”) will be entitled to receive the same amount that a holder of our common stock

would receive if the Preferred Stock were fully converted (disregarding for such purposes any conversion limitations set forth

in the Certificate of Designation) to common stock which amounts shall be paid pari passu with all holders of the Company’s

common stock.

Each share of Preferred Stock has a stated value equal to $0.01 (the “Stated Value”), subject to increase

as set forth in Section 7 of the Certificate of Designation.

holder of Preferred Stock is entitled at any time to convert any whole or partial number of shares of Preferred Stock into shares

of our common stock determined by dividing the Stated Value of the Preferred Stock being converted by the conversion price of

$0.01 per share.

holder of Preferred Stock will be prohibited from converting Preferred Stock into shares of our common stock if, as a result of

such conversion, the holder, together with its affiliates, would own more than 4.99% of the total number of shares of our common

stock then issued and outstanding (with such ownership restriction referred to as the “Beneficial Ownership Limitation”).

However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99%, provided that any

increase in such percentage shall not be effective until 61 days after such notice to us.

to the Beneficial Ownership Limitation, on any matter presented to our stockholders for their action or consideration at any meeting

of our stockholders (or by written consent of stockholders in lieu of a meeting), each holder of Preferred Stock will be entitled

to cast the number of votes equal to the number of whole shares of our common stock into which the shares of Preferred Stock beneficially

owned by such holder are convertible as of the record date for determining stockholders entitled to vote on or consent to such

matter (taking into account all Preferred Stock beneficially owned by such holder).

Except as otherwise required by law or by

the other provisions of our certificate of incorporation, the holders of Preferred Stock will vote together with the holders of

our common stock and any other class or series of stock entitled to vote thereon as a single class.

holder of Preferred Stock shall be entitled to receive dividends as and when paid to the holders of our common stock on an as-converted

Backlog of PIFA®

Heparin/PF4 and PIFA®

of March 20, 2020, we are experiencing a production backlog of our PIFA®

Heparin/PF4 and PIFA®

Pluss/PF4 rapid assays.

As a result, one of our distributors notified us that the distributor is informing its customers that the PIFA®

and PIFA®

Pluss/PF4 rapid assays are temporarily unavailable.

While we believe that we will be able to remedy the production

backlog in several weeks, we cannot be certain what impact this backlog will have on our business and it may have an adverse effect

on our 2020 revenues and results of operation.

Events, Management’s Plans and Basis of Presentation

Board’s

Evaluation of Strategic Alternatives

November 7, 2018, we announced that our board of directors had initiated a process to evaluate strategic alternatives to maximize

shareholder value.

The Company continues to explore how to leverage its 30 years of operational history in its medical device

business, where its current products have FDA clearance, its current operations practice Good Manufacturing Processes (cGMP),

its medical device facility is certified under ISO 13485 –

2016 and the facility carries an Analytical Lab Certification

for Schedules 2, 3, 4 and 5 controlled substances issued by the U.S.

Drug Enforcement Administration (DEA) and the State of New

The Company intends to pursue opportunities in the extraction, testing, purification and formulation of safe cannabinoids

within the hemp industry, including pathways to consumer products with a focus on minor cannabinoids.

to our pursuit of strategic alternatives, pursuant to an unsecured promissory note date July 4, 2019, on July 25, 2019 we advanced

$100,000 to a company in the hemp related industry with which we had been considering a potential business transaction.

with this party toward a potential transaction have been suspended.

The unsecured promissory note became due on October 2, 2019

and we are pursuing collection of the obligation.

December 19, 2018, we announced our intent to delist from the AIM Market of the London Stock Exchange.

We believed that due to

the relatively low liquidity in our common stock, reaming listed on the AIM did not merit the ongoing costs and regulatory complexities

associated with maintaining the AIM listing.

On March 5, 2019, we held a special meeting of shareholders who then voted in favor

of our delisting from the AIM Market.

The delisting took effect on March 29, 2019.

March 29, 2019, the Compensation Committee of the Board of Directors approved payments to the members of the Board of Directors,

which were paid as follows (i) lump sum payment of $64,000 to each of Mr.

Schreiber and Mr.

White and a lump sum payment of $56,000

Silverman, (ii) each of Mr.

Schreiber, Mr.

White and Mr.

Silverman were granted 5,201 Restricted Stock Units (“RSUs”),

which vested on January 1, 2020, and (iii) beginning April 2019, each serving director who is not also holding a position as an

executive officer shall be paid $8,000 per month.

The lump sum payments were paid during April 2019 and the monthly payments to

directors have been paid each month.

There was no other compensation for directors during the year ended December 31, 2019.

to Articles of Incorporation or Bylaws;

Change in Fiscal Year.

filed two certificates of amendment (each a “Certificate of Amendment”, collectively, the “Certificates of Amendment”)

to our Amended and Restated Certificate of Incorporation with the Secretary of State of the State of New Jersey, each to be effective

as of November 25, 2019, to reduce our authorized common stock at a ratio of one-for-eight then effect a reverse stock split of

our authorized and outstanding common stock at a ratio of one-for-twenty four.

The reduction and the reverse stock split affected

all stockholders uniformly and did not alter any stockholder’s percentage interest in our equity, except to the extent that

the reverse stock split would have resulted in a stockholder owning a fractional share.

Fractional shares have not been issued

as a result of the reverse stock split;

instead, the Board of Directors determined to effect an issuance of shares to holders

that would otherwise have been entitled to a fractional share such that any fractional shares were rounded up to the nearest whole

The Certificates of Amendment reduced the number of outstanding shares of our common stock to 521,676 and the number of

shares of common stock we are authorized to issue to 2,604,167.

On December 30, 2019, our shareholders approved an increase

to 100,000,000 of the number of the authorized shares of our Common Stock.

of Christopher C.

Schreiber as Executive Chairman of the Board of Directors

November 1, 2019, the Board of Directors appointed Christopher C.

Schreiber, a current director of our company, as Executive Chairman

of the Board of Directors of our company, effective immediately.

Schreiber’s appointment as Executive Chairman

of the Board of Directors, Mr.

Schreiber is no longer “independent”

within the meaning of the Nasdaq Stock Market

Rules and under Rule 10A-3(b)(1)(i) of the Securities Exchange Act of 1934 and is no longer a “non-employee director”

under Rule 16b-3 of the Securities Exchange Act of 1934.

As such, on November 1, 2019, Mr.

Schreiber resigned from our Audit Committee,

Compensation Committee and Nominating and Corporate Governance Committee.

In order to fill the vacancy occasioned by the resignation

Schreiber as the Chairman of the Compensation Committee, Mr.

Joshua Silverman, a current director and member of the Compensation

Committee, was appointed as the Chairman of the Compensation Committee.

Schroeder as a Director

November 1, 2019, the Board of Directors appointed Robert C.

Schroeder as a director and as a member of our Audit Committee, effective

November 15, 2019, the Board of Directors approved a reverse stock split of our authorized and issued and outstanding common stock

at a ratio of 1-for-24, effective on Monday, November 25, 2019 at 8:00 a.m.

Trading on our common stock on a post-reverse stock

split basis began at market open on November 25, 2019 (the “Reverse Stock Split”).

No fractional shares have been

issued in the Reverse Stock Split and the remaining fractions were rounded up to the next whole share.

On November 22, 2019, the

Board of Directors approved an amendment to the amended and restated certificate of incorporation to reduce the number of authorized

shares of common stock, prior to the Reverse Stock Split, at a ratio of 1-for-8.

connection with the Reverse Stock Split, all shares of our common stock subject to all outstanding equity awards and the exercise

price of any such award (if applicable) have been reduced by the 1-for-24 ratio.

The number of shares remaining available

for issuance under the 2018 Akers Biosciences, Inc.

Equity Incentive Plan were not reduced by the 1-for-24 ratio.

December 4, 2019, we formed an advisory board (the “Advisory Board”) with expertise in the hemp and minor cannabinoid

We will continue our strategic alternatives review and have identified the hemp and minor cannabinoid sectors

as potential opportunities that could benefit from our core competencies.

We are exploring how to leverage its 30 years of operational

history in our medical device business, where our current products have U.S.

Food and Drug Administration (FDA) clearance, our

current operations practice Good Manufacturing Processes (cGMP), our medical device facility is certified under ISO 13485 –

2016 and the facility carries an Analytical Lab Certification for Schedules 2, 3, 4 and 5 controlled substances issued by the

Drug Enforcement Administration (DEA) and the State of New Jersey.

The Advisory Board will assist the Board of Directors

in its strategic review including, potentially, the extraction, testing, purification and formulation of safe cannabinoids within

the hemp industry.

The Advisory Board may also explore a pathway to consumer products with a focus on minor cannabinoids.

under the terms of the Merger Agreement, the Company has agreed to pay contingent consideration to MYMD stockholders in the form

of Milestone Payments.

The Milestone Payments are payable in the dollar amounts set forth in the chart below upon the achievement

of the milestone events set forth opposite such dollar amount during the Milestone Period as follows:

capitalization of Akers for at least 10 trading days during any 20 consecutive trading day period during the Milestone Period

is equal to or greater than $500 million (the “

First Milestone Event ”).

every $250 million incremental increase in market capitalization of Akers after the First Milestone Event to the extent such

incremental increase occurs for at least 10 trading days during any 20 consecutive trading day period during the Milestone

Period, up to a $1 billion market capitalization of Akers.

million per each incremental increase (it being understood, however, that, if such incremental increase results in market

capitalization equal to $1 billion, such $20 million payment in respect of such incremental increase shall be payable without

duplication of any amount payable in respect of a Second Milestone Event).

Capitalization of Akers for at least 10 trading days during any 20 consecutive trading day period is equal to or greater than

$1 billion (the “

Second Milestone Event ”).

every $1 billion incremental increase in market capitalization of Akers after the Second Milestone Event to the extent such

incremental increase occurs for at least 10 trading days during any 20 consecutive trading day period during the Milestone

million per each incremental increase.

Milestone Payment will be payable in shares of common stock of Akers, with the number of Milestone Shares to be issued determined

by dividing the applicable Milestone Payment amount by the volume-weighted average price of a share of Akers’

during the 10 trading days immediately preceding the achievement of the milestone event;

provided, however, that in no event shall

the price of a share of Akers common stock used to determine the number of Milestone Shares to be issued be deemed to be less

than $5.00 per share (as adjusted for stock splits, stock dividends, reverse stock splits, and the like occurring after the closing

Notwithstanding

the above, the number of Milestone Shares payable by Akers shall not exceed the number of shares of Akers common stock to be issued

to MyMD stockholders at the Effective Time in connection with the Merger (as described in the following paragraph).

the exchange ratio formula in the Merger Agreement, and immediately upon the closing of the Merger, the former MYMD securityholders

are expected to own approximately 80% of the aggregate number of shares of Akers common stock issued and outstanding immediately

following the consummation of the Merger (the “Post-Closing Shares”), and the stockholders of the Company as of immediately

prior to the Merger are expected to own approximately 20% of the aggregate number of Post-Closing Shares.

prior to the Effective Time, the name of the Company will be changed from “Akers Biosciences, Inc.”

to “MyMD

Pharmaceuticals, Inc.”

At the Effective Time, the Merger Agreement contemplates that the board of directors of the Company

will consist of seven directors, with (i) Akers having the right to designate up to four members and (ii) MYMD having the right

to designate up to three members.

The officers of the Company immediately after the Effective Time will be elected by the board

of directors of Akers.

Merger Agreement contains customary representations, warranties and covenants made by the Company and MYMD, including covenants

relating to obtaining the requisite approvals of the stockholders of the Company and MYMD, indemnification of directors and officers,

and the Company’s and MYMD’s conduct of their respective businesses between the date of signing the Merger Agreement

and the closing of the Merger.

Consummation of the Merger is subject to certain closing conditions, including, among other things,

approval by the stockholders of Akers and MYMD.

Merger Agreement contains certain termination rights for both the Company and MYMD, including, among other things, (a) Akers may,

upon written notice, extend the originally scheduled End Date to May 15, 2021 (the “Extended Date”) so long as (i)

Akers and Merger Sub are not then in material breach of any provision of the Merger Agreement and (ii) within three calendar days

of the written request by MYMD, Akers makes an additional loan to MYMD of up to $600,000, which will have the same terms and conditions

of the Note (such additional note “Second Note”) and (b) Akers may, upon written notice, extend the Extended Date

to June 30, 2021, so long as (i) Akers and Merger Sub are not then in material breach of any provision of the Merger Agreement,

(ii) on the effective date of such extension, the loan amount evidenced by the Note and the Second Note may, at the sole option

of MYMD upon written notice to Akers, be converted into shares of MYMD common stock at a conversion price of $2.00 per share,

subject to certain adjustments and (iii) Akers will, at MYMD’s request, either (at the option of MYMD);

(A) subscribe for

300,000 shares of MYMD common stock at a subscription price of $2.00 per share, subject to certain adjustments as set forth in

the Merger Agreement, or (B) make an additional loan to MYMD of up to $600,000, which will have the same terms and conditions

of the Note (the “Third Note,”

and all amounts outstanding under the Note, the Second Note and the Third Note, the

“Loan Amount”).

In addition, if Akers terminates the Merger Agreement under certain circumstances specified therein,

the Loan Amount, if any, at the sole discretion of MYMD, will be convertible into shares of common stock of MYMD at a conversion

price of $2.00 per share upon delivery of written notice by MYMD to Akers within 30 calendar days after the effective date of

termination of the Merger Agreement.

Merger Agreement also contemplates that the Company will seek approval from its stockholders to effect a reverse stock split,

if applicable, at a reverse stock split ratio mutually agreed to by the Company and MYMD and within the range approved by the

Company’s stockholders immediately prior to the Effective Time, which range shall be sufficient to cause the price of Akers

common stock on the Nasdaq Capital Market following such reverse stock split and the Effective Time to be no less than $5.00 per

In addition, under the Merger Agreement, Akers may, in its discretion, consummate a spin-off of all or a part of its pre-closing

assets and liabilities (the “Spin-Off”).

connection with the Merger, the Company will seek the approval of its stockholders of (a) the transactions contemplated in the

Merger Agreement, including the issuance of Akers common stock pursuant to the Merger and (b) the amendment of its certificate

of incorporation, including for purposes of (i) effectuating a reverse split of Akers common stock at a ratio to be determined

by a split ratio to be mutually agreed to by Akers and MYMD within the range approved by the Company’s stockholders immediately

prior to the Effective Time and on certain terms as specifically described herein, (ii) change Akers’

name to “MyMD

Pharmaceuticals, Inc.,”

and (c) to the extent necessary, the Spin-Off.

accordance with the terms of the Merger Agreement, (i) the officers and directors of Akers have each entered into a voting agreement

with MYMD (the “Akers Voting Agreements”), and (ii) the officers, directors and certain affiliated stockholders of

MYMD have each entered into a voting agreement with Akers (the “MYMD Voting Agreement s ,”

together with the

Akers Voting Agreements, the “Voting Agreements”).

The Voting Agreements place certain restrictions on the transfer

of the shares of Akers and MYMD held by the respective signatories thereto and include covenants as to the voting of such shares

in favor of approving the transactions contemplated by the Merger Agreement and against any actions that could adversely affect

the consummation of the Merger.

with the execution of the Merger Agreement or prior to the closing, the officers and directors of Akers, and the officers, directors

and certain stockholders of MYMD, each entered into lock-up/leak-out agreements (the “Lock-Up/Leak-Out Agreements”)

pursuant to which they have agreed, among other things, not to sell or dispose of (subject to certain exceptions specified therein)

any shares of Akers common stock which are or will be beneficially owned by them at the Effective Time or which are acquired thereafter,

with such shares being released from such restrictions 180 days after the Effective Time.

After the expiration of such initial

180-day period, such stockholders will be subject to a 180-day leak-out period during which they may not sell shares in excess

of the amount permitted by the Rule 144 volume limitations (even if such stockholder is not currently subject to such provisions

of Rule 144), which leak-out period shall be extended for an additional 180 days for any shares of Akers common stock issued upon

the exercise of existing options or warrants.

Promissory Note

set forth above, in connection with the execution of the Merger Agreement, Akers will advance a bridge loan to MYMD in an amount

of up to $3,000,000 pursuant to the Note.

Advances under the Note will be made in accordance with MYMD’s cash needs pursuant

to a pre-agreed operating budget for MYMD.

The Note accrues interest on the outstanding principal amount at the rate of 5% per

annum and matures on the earliest of (i) April 15, 2022, (ii) upon demand of Akers in the event the Merger is consummated, or

(iii) the date on which MYMD’s obligations under the Note are accelerated in accordance with the terms of the Note.

forth above, in the event the Merger Agreement is terminated by MYMD upon a change in Akers’

board of directors’

recommendations

to the Akers stockholders in connection with the Merger Agreement and certain other circumstances specified in the Merger Agreement,

the principal amount of the Note, and all accrued and unpaid interest thereon, shall be converted into shares of MYMD common stock

at a conversion price of $2.00 per share.

MYMD may prepay the Note in whole or in part at any time or from time to time at its

sole discretion.

Under the terms of the Note, if, at any time after the termination or expiration of the Merger Agreement, MYMD

(i) incurs any debt other than Permitted Debt (as defined in the Note), (ii) issues any equity interests, or (iii) consummates

any Asset Sale or Recovery Event (each as defined in the Note) then, in each case, no later than two business days after MYMD

receives the net cash proceeds of such incurrence, issuance or other action, then MYMD shall be required to prepay an amount under

the Note equal to the net cash proceeds received, up to the total amount of the advances made under the Note at such time, including

all accrued and unpaid interest thereon, of the Note.

The payment and performance of all obligations under the Note are secured

by a first priority security interest in all of MYMD’s right, title and interest in and to its assets as collateral.

As of December 31,

2020, the Company had advanced MYMD $1,200,000 under the Note, which is classified as Other Receivables on the Consolidated Balance

The Company advanced two additional draws of $600,000, or $1,200,000 cumulatively, on January 21, 2021 and February 25,

2021 to MYMD under this secured promissory note.

with the Merger Agreement, on November 11, 2020, Akers entered into the Private Placement SPA with certain institutional and accredited

investors (the “SPA Purchasers”), pursuant to which Akers agreed to issue and sell to the SPA Purchasers (i) an aggregate

of 9,765,933 shares of Akers common stock, at an offering price of $1.85 per share or, at the election of each investor, Pre-Funded

Warrants, and (ii) for each share of Akers common stock (or for each Pre-Funded Warrant, as applicable) purchased in the Private

Placement, a common warrant (the “Investor Warrants”

and, together with the Pre-Funded Warrants, the “Warrants”)

to purchase one share of Akers common stock, for gross proceeds of approximately $18.1 million before the deduction of placement

agent fees and expenses and estimated offering expenses.

In addition, Akers also issued the Placement Agent a warrant to purchase

up to 390,368 shares of Akers common stock at an exercise price of $1.85 (the “Placement Agent Warrant”).

The Placement

Agent Warrant will be exercisable at any time and from time to time, in whole or in part, for a term of five and a half years.

The Private Placement closed on November 17, 2020, and Akers issued an aggregate of 8,725,393 shares of Akers common stock, Pre-Funded

Warrants to purchase 1,040,540 shares of Akers common stock, and Investor Warrants to purchase 9,765,933 shares of Akers common

In February 2021, an investor exchanged 932,432 shares of common stock purchased in the Private Placement into Pre-Funded

Warrants to purchase 932,432 shares of common stock.

the Private Placement SPA, Akers agreed not to (i) issue, enter into any agreement to issue or announce the issuance or proposed

issuance of, any shares of Akers common stock or any securities convertible into or exercisable or exchangeable for shares of

Akers common stock at an effective price less than the exercise price of the Investor Warrants or (ii) file any registration statement

or any amendment or supplement thereto, other than as contemplated under the Private Placement SPA, for a period of 90 days following

the later of (x) the date the Registration Statement (as defined below) is declared effective by the SEC and (y) the record date

for the Akers stockholder meeting called to approve the Merger.

In addition, Akers agreed not to effect or enter into an agreement

to effect any issuance of Akers common stock or common stock equivalents involving a variable rate transaction (as defined in

the Private Placement SPA) from the date of the Private Placement SPA until such time as no SPA Purchaser holds any of the Investor

Warrants, subject to certain exceptions (including the issuance of any of Akers common stock pursuant to the Merger Agreement).

Private Placement SPA provides that (i) within 10 days following the date that Akers first files a proxy statement with the SEC

in connection with the merger (including by means of a registration statement on Form S-4), Akers shall file a registration statement

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

the resale of all of the shares of Akers common stock issued in the private placement and the shares of Akers common stock issuable

upon exercise of the Warrants (the “Warrant Shares”) by the SPA Purchasers and (ii) Akers shall use commercially reasonable

efforts to cause such Registration Statement to be declared effective within 60 days of the filing thereof (or 90 days in the

event of a full review);

provided, however, that Akers shall not be required to register any shares of Akers common stock issued

in the private placement or Warrant Shares that are eligible for resale pursuant to Rule 144 under the Securities Act (assuming

cashless exercise of the Warrants).

currently intend to use the proceeds from the Private Placement in order to satisfy the closing conditions set forth in the

Merger Agreement that requires the Company to have a minimum parent net cash amount equal to $25 million, less

certain amounts advanced to MyMD, which shall also include any amounts to be used to payoff The Starwood Trust to repay in

full the Starwood Line of Credit at the closing of the Merger, and for general working capital purposes.

In addition, the

Company paid $1,204,525 of the proceeds from the Private Placement to three of the former members of Cystron and recorded a

liability of $602,172 to the fourth former member of Cystron pursuant to the MIPA.

addition, we paid a cash fee of $501,500 and issued warrants to purchase an aggregate of 255,135 shares of common stock to the

designees of H.C.

Wainwright & Co., LLC (“HCW”), pursuant to a side letter by and between Akers and HCW, dated

November 23, 2020, regarding certain tail fees provided in two engagement letters (one dated October 18, 2019 and the other dated

April 7, 2020) entered into in connection with prior offerings by and between Akers and HCW.

Such warrants issued were in the

same form as the Investor Warrants except that the HCW Warrants have an exercise price of $2.3125 per share.

Investor Warrants

Investor Warrant issued in the Private Placement has an initial exercise price equal to $2.06 per share of common stock.

Warrants are immediately exercisable and will terminate five and a half years following issuance.

The exercise price and number

of shares of Akers common stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock

splits, reorganizations or similar events affecting Akers common stock and the exercise price.

at any time following the six-month anniversary of November 17, 2020, there is no effective registration statement registering,

or the prospectus contained therein is not available for the issuance of the shares underlying the Investor Warrants (the “Investor

Warrant Shares”) to the holder, then the Investor Warrants may also be exercised, in whole or in part, at such

time by means of a “cashless exercise”

in which the holder shall be entitled to receive a number of Investor

Warrant Shares according to a formula set forth in the Investor Warrants.

holder (together with its affiliates) may not exercise any portion of the Investor Warrant to the extent that the holder would

own more than 4.99% (or, at the election of a holder prior to the date of issuance, 9.99%) of the outstanding Akers common stock

immediately after exercise;

provided, however, that upon notice to Akers, the holder may increase or decrease the beneficial ownership

limitation, provided that in no event shall the beneficial ownership limitation exceed 9.99% and any increase in the beneficial

ownership limitation will not be effective until 61 days following notice of such increase from the holder to Akers.

the event of a fundamental transaction, as described in the Investor Warrants and generally including any reorganization, recapitalization

or reclassification of Akers common stock, the sale, transfer or other disposition of all or substantially all of Akers’

properties or assets, Akers’

consolidation or merger with or into another person, the acquisition of more than 50% of Akers

outstanding common stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by Akers’

outstanding common stock, the holders of the Investor Warrants will be entitled to receive upon exercise of such warrants the

kind and amount of securities, cash or other property that the holders would have received had they exercised the Investor Warrants

immediately prior to such fundamental transaction.

The Merger shall not be deemed a fundamental transaction as defined in the

Investor Warrants.

Pre-Funded Warrants

the request of an investor, in lieu of Akers common stock, certain investors received Pre-Funded Warrants.

The Pre-Funded Warrants

are exercisable at any time immediately upon issuance and until such warrant is exercised in full.

The exercise price of the Pre-Funded

Warrants is $0.001 per share of Akers common stock, and, in lieu of making the cash payment otherwise contemplated to be

made to Akers upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such

exercise (either in whole or in part) the net number of shares of Akers common stock determined according to a formula set forth

in the Pre-Funded Warrants.

holder (together with its affiliates) may not exercise any portion of the Pre-Funded Warrants to the extent that the holder would

own more than 4.99% (or, at the election of a holder prior to the date of issuance, 9.99%) of the outstanding Akers common stock

immediately after exercise;

provided, however, that upon notice to Akers, the holder may increase or decrease the beneficial ownership

limitation, provided that in no event shall the beneficial ownership limitation exceed 9.99% and any increase in the beneficial

ownership limitation will not be effective until 61 days following notice of such increase from the holder to Akers.

and Support Agreement

November 11, 2020, Akers entered into a Lock-Up and Support Agreement (the “Support Agreement”) with substantially

all of the SPA Purchasers, pursuant to which, from the date of the Support Agreement until May 31, 2021, such SPA Purchasers agreed

to vote their respective shares of Akers common stock in favor of each matter proposed and recommended for approval by the Akers

board of directors or management at every shareholders’

Pursuant to the Support Agreement, such SPA Purchasers

also agreed to, until the earlier of (a) the termination of the Merger Agreement or (b) the date that the SPA Purchasers vote

their respective shares of Akers common stock in support of the merger and all matters related to the merger, will not, directly

or indirectly, without Akers’

prior written consent, transfer, assign or dispose of their rights to vote the shares of Akers

common stock issued in the private placement or otherwise take any act that could restrict or otherwise affect their legal power,

authority or right to vote all of their shares of Akers common stock issued in the private placement in the manner required by

the Support Agreement.

Securities LLC Engagement Letter

October 31, 2020, Akers entered into an engagement letter with Katalyst Securities LLC (the “Placement Agent”

or “Katalyst”),

pursuant to which the Placement Agent agreed to serve as the non-exclusive placement agent for Akers, on a reasonable best efforts

basis, in connection with the Private Placement.

Akers agreed to pay the Placement Agent an aggregate cash fee equal to 6.5% of

the gross proceeds received in the Private Placement and reimburse the Placement Agent’s expenses in the Private Placement

up to $25,000.

In addition, Akers agreed to grant to Katalyst the Placement Agent Warrant, which was issued upon closing of the

Private Placement.

The Placement Agent Warrant is exercisable at any time and from time to time, in whole or in part, following

the date of issuance and for a term of five and a half years.

of Operations

discussed in Note 3 and Note 6 of the Notes to the Consolidated Financial Statements, the results of operations presented below

exclude our screening and testing products business due to its classification as discontinued operations.

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

Company’s revenue for the year ended December 31, 2019

totaled $1,577,033, a 5% decrease from the same period in 2018.

The table below summarizes our revenue by product line for the

years ended December 31, 2019 and 2018, as well as the percentage of change year-over-year:

the Years Ended

ImmunoFiltration Assay (“PIFA”)

MicroParticle

Catalyzed Biosensor (“MPC”)

Enzymatic Assay (“REA”)

from the Company’s PIFA products decreased 7% to $1,327,752 (2018:

$1,422,361) during the year ended December 31, 2019,

as compared to the same period of 2018.

The decrease was attributable to both a decline in shipments of the PIFA products as well

as increase in customer rebates.

Company’s largest U.S.

distribution partners are Cardinal

Health and Thermo Fisher Scientific.

Domestic net sales for the year ended December 31, 2019 for these two distributors accounted

for $1,249,913 of the total PIFA related product revenue as compared to $1,104,533 for the same period of 2018.

Company’s MPC product sales increased by 2% to $126,150 (2018:

$123,941) during the year ended December 31, 2019.

Company’s REA products generated $85,000 (2018:

$68,750) during the year ended December 31, 2019, principally on account

of a large order by a customer during the 2019 period.

revenue, consisting primarily of shipping and handling charges, decreased to $38,131 (2018:

$50,518) during the year ended December

31, 2019 due to a decline in orders shipped.

Company’s gross profit percentage improved to 30% (2018:

8%), and the gross margin improved to $478,747 (2018:

for the year ended December 31, 2019, principally due to our focus on a more narrowed and higher margin product lineup.

improvements in gross margin were attributable to cost reductions, including reduced headcount .

of sales for the year ended December 31, 2019 decreased to $1,098,286 (2018:

$1,538,285) primarily as a result of decreases in

manufacturing personnel costs ($286,187 (2018:

$471,563)), inventory obsolescence ($336,349 (2018:

$453,761)) and shipping expenses

($46,534 (2018:

previously disclosed, in light of the unfavorable factors persistent in our rapid, point-of-care screening and testing product

business and the progress the Company has made in its partnership with Premas, the Company conducted a strategic review of the

screening and testing products business.

Following such review, in early July 2020, the Company ceased the production and sale

of its rapid, point-of-care screening and testing products.

The Company will continue to provide support for these testing products

that remain in the market through their respective product expiration dates.

The Company had been experiencing declining sales

revenue and production backlogs for these products and, as it previously reported, had eliminated its sales force for such products.

The Company intends to devote its attention to its partnership with Premas for the development of its COVID-19 Vaccine Candidate

and transactions that the Company believes will increase shareholder value.

In connection with the ceasing production and sale

of its existing product line, on July 16, 2020, the Company decided to close the Thorofare Facility and exercised the early termination

option under the Thorofare Lease, which provided for a 150-day notice to terminate the lease.

Pursuant to the early termination

option, the Thorofare Lease matured on December 13, 2020.

The lease terminated on November 30, 2020, at the lessor’s

request, and the property was handed over to the property manager on November 30, 2020.

Company determined that the discontinuation of the production and distribution of the Company’s screening and testing products

constituted a strategic shift in the Company’s business and as a result the elimination of the product lines should be presented

as discontinued operations under FASB ASC 205-20 Presentation of Financial Statements, Discontinued Operations.

had no revenue from continuing operations during the years ended December 31, 2020 and December 31, 2019.

Administrative

expenses for the year ended December 31, 2019, totaled $3,728,514 which was a 34% decrease as compared to $5,666,018 for the year

expenses for the year ended December 31, 2020, totaled $4,299,062 which was a 27% increase as compared to $3,372,103 for the year

ended December 31, 2019.

2 unchanged sentences

the Years Ended

Service Costs

Market & Investor Relations Costs

Administrative Costs

Administrative Expense

expenses decreased by 28% for the year ended December 31, 2019 as compared to the same period of 2018 on account of a reduction

bonus expense, benefits, payroll service fees and auto allowances during 2019, as compared to December 31, 2018.

service costs decreased 63% for the year ended December 31, 2019 as compared to the same period of 2018, principally on account

of reduced legal fees ($699,118 (2018:

$1,551,798)) and accounting and audit expenses ($51,381 (2018:

The higher costs

in 2018 were principally attributable to the investigation and restatement of the financial statements, and certain litigation

defense costs.

Personnel Costs

Professional Service Costs

Stock Market & Investor Relations

Other Administrative

Total Administrative

expenses increased by 57% for the year ended December 31, 2020 as compared to the same period of 2019 on account of the addition

of an executive staff member.

service costs increased 115% for the year ended December 31, 2020 as compared to the same period of 2019, principally due to increased

accounting and audit, legal and general consulting fees.

market and investor fees decreased 37% for the year ended December 31, 2020.

The decrease in these fees was principally associated

with the costs savings generated by the withdrawal from the London Stock Exchange.

administrative expenses increased by 10%, principally attributable to increased Director’s fees and expenses ($706,964 (2018:

$409,910)), including the amortization of RSU awards, of ($362,005 (2018:

The decrease in these fees was principally due to

our delisting from the London Stock Exchange during the first half of 2019 and the avoidance of the costs associated with a presence

on the London Stock Exchange.

administrative expenses decreased by 5%, principally due to a decrease in bad debt expense, decreases in legal settlements,

license and permit fees and travel expenses which were offset by increases in board, building, business insurance and computer

and Marketing Expenses

and marketing expenses for the year ended December 31, 2019 totaled $238,036 which was an 87% decrease compared to $1,782,315

for the year ended December 31, 2018.

table below summarizes our sales and marketing expenses for the years ended December 31 and 2018 as well as the percentage of

change year-over-year:

the Years Ended

Service Costs

and Outside Commission Costs

Sales and Marketing Costs

Sales and Marketing Expenses

the first quarter of 2019, as part of our cost savings measures, we eliminated the personnel within the sales and marketing departments,

including employees, consultants and third-party related representatives.

expenses decreased by 93% for the year ended December 31, 2019 as compared to the same period of 2018 on account of the reduction

in the sales and marketing headcount to zero as of December 31, 2019, as compared to four as of December 31, 2018.

service costs decreased by 72% for year ended December 31, 2019, as compared to the same period of 2018 primarily on account of

reductions in marketing and sales related consultants.

and outside commission costs decreased by 76%, principally on account of ISR costs incurred for approximately two months in 2019

as compared to twelve months in the 2018 period.

An evaluation of the ISR program determined it to be ineffective and, as a result,

all ISR’s agreements were terminated effective February 19, 2019.

sales and marketing costs declined to $28,974 (2018:

$225,896) principally due to the reductions in travel and entertainment for

the sales and marketing personnel.

Research and Development Expenses

research and development expenses for the year ended December 31, 2019 totaled $276,788, which was a 74% decrease as compared

to $1,063,253 for the year ended December 31, 2018.

table below summarizes our compliance, research and development expenses for the years ended December 31, 2019 and 2018 as well

as the percentage of change year-over-year:

the Years Ended

Service Costs

Compliance, Research and Development Costs

Compliance, Research and Development Expenses

expenses decreased by 64% for the year ended December 31, 2019 as compared to the same period of 2018 due to a reduction in the

headcount to three as of December 31, 2019, as compared to four as of December 31, 2018.

These staff reductions eliminated the

research & development functions, with the remaining personnel maintaining regulatory and quality assurance (compliance) functions.

service costs, principally third-party engineering costs, declined by 90% for the year ended December 31, 2019, as compared to

the same period of 2018, principally on account of the elimination of research & development activities.

compliance, research and development costs declined by 94%, for the year ended December 31, 2019, as compared to the same period

of 2018, principally on account of reduction in research and development activities, as discussed above.

Settlement Expense

settlement expenses for the year ended December 31, 2019, were $141,478 as compared to $1,505,000 for the year ended December

settlement expenses for the year ended December 31, 2018 principally consisted of the settlement of the Pulse Litigation which

resulted in a one-time charge of $930,000 and $500,000 in connection with the class action and derivative lawsuits.

of Non-Current Assets

of non-current assets for the year ended December 31, 2019 totaled $40,008, which was a 77% decrease as compared to $171,108 for

the year ended December 31, 2018.

The 2019 amount was less on account of impairment of intellectual property recorded in 2018,

principally connected with the settlement of the Pulse Litigation.

and marketing expenses for the year ended December 31, 2020 totaled $22,963 which was an 8% decrease compared to $25,000 for the

year ended December 31, 2019.

and Development Expenses

and development expenses for the year ended December 31, 2020 totaled $7,963,678 as compared to $0 for the year ended December

31, 2019, principally reflecting our current focus on the development of the COVID-19 Vaccine Candidate.

Income and Expense

income, net of expense, for the year ended December 31, 2019 totaled $57,828 as compared to other expenses, net of income of $788,625

for the year ended December 31, 2018.

income, net of expenses, for the year ended December 31, 2020 totaled $133,489 as compared to other income,

net of expenses of $90,808 for the year ended December 31, 2019.

table below summarizes our other income and expenses for the years ended December 31, 2020 and 2019 as well as the percentage

1 unchanged sentence

the Years Ended

of Intangible Assets

of Other Assets

on Disposal of Property and Equipment

Currency Transaction (Gain)/Loss

on FMV of Equity Investments

on Investments

1 unchanged sentence

Other (Income)/Expense

of intangible assets, for the year ended December 31, 2019 totaled $32,980 as compared to $716,418 for the year ended December

The 2018 amount included the impairment of intellectual property principally as a result of the settlement of the Pulse

on disposal of property and equipment, for the year ended December 31, 2019 totaled $9,576 as compared to $156,493 for the year

ended December 31, 2018.

The 2018 amount included the write-off of computer equipment, computer software and production molds

no longer in use by the Company.

investment gains increased to $54,100 for the year ended December 31, 2020 as compared to $0 for the same period in 2019.

increase was due to an increase in the fair market value of the equity investments.

loss on investments was $36,714 for the year ended December 31, 2020 as compared to a gain of $3,952 for the same period in 2019.

The decrease is principally due to the impact of the COVID-19 pandemic on the financial markets.

and dividend income increased to $119,052 for the year ended December 31, 2020 compared to $101,483 for the year ended December

The increase was principally due to the increase in funds available for investment.

of December 31, 2020, and 2019, the Company had Federal net operating loss carry forwards of approximately $100,615,000 and $79,678,000,

respectively, expiring through the year ending December 31, 2039.

As of December 31, 2019, and 2018, the Company had New Jersey

state net operating loss carry forwards of approximately $28,855,000 and $29,700,000, respectively, expiring the year ending December

respectively, expiring through the year ending December 31, 2037 for net operating losses originating in tax years beginning

before January 1, 2018.

Net operating losses recorded in tax years beginning January 1, 2018 and after are allowed for an indefinite

carryforward period but limited to 80% of each subsequent year’s net income.

As of December 31, 2020, and 2019, the

Company had New Jersey state net operating loss carry forwards of approximately $7,548,000 and $28,855,000, respectively,

through the year ending December 31, 2040.

Section 382 of the Code, use of our NOLs will be limited if we experience a cumulative change in ownership of greater than 50%

in a moving three-year period.

We will experience an ownership change as a result of the Merger and therefore our ability to utilize

our NOLs and certain credit carryforwards remaining at the Effective Time will be limited.

The limitation will be determined by

the fair market value of our common stock outstanding prior to the ownership change, multiplied by the applicable federal rate.

It is expected that the Merger will impose a limitation on our NOLs.

The Company has recorded a full valuation allowance for its

deferred tax assets as of December 31, 2020 and 2019.

(See Note 9 to the Consolidated Financial Statements)

and Capital Resources

of December 31, 2019, the Company’s cash on hand was $632,538 (which included restricted cash of $115,094

and its marketable securities were $9,164,273.

The Company has incurred net losses of $3,888,249 and $10,849,034

for the years ended December 31, 2019 and 2018, respectfully.

As of December 31, 2019, the Company had working capital of $8,781,049

and a stockholder’s deficit of $119,583,130.

During the year ended December 31, 2019, cash flows used in operating activities

were $3,074,283, consisting primarily of a net loss of $3,888,249, which includes non-cash stock-based compensation charges

of December 31, 2020, the Company’s cash and cash equivalents on hand was $18,617,955 and its marketable securities

were $16,718,452.

The Company has incurred net losses of $17,580,609 and $3,888,249 for the years ended December

31, 2020 and 2019, respectfully.

As of December 31, 2020, the Company had working capital of $34,579,466 and a stockholders’

deficit of $137,163,739.

During the year ended December 31, 2020, cash flows used in operating activities were $11,924,941,

consisting primarily of a net loss from ongoing operations of $12,152,214 and net loss from discontinued operations of

Since inception, the Company has met its liquidity requirements principally through the sale of its common stock

in public and private placements.

December 9, 2019, the Company raised proceeds of $6,965,635 net of offering costs of $994,227 in connection with a registered

offering of its common stock.

our current cash resources will not be sufficient to fund the development of our COVID-19 Vaccine candidate through all of the

required clinical trials to receive regulatory approval and commercialization.

While we do not currently have an estimate of all

of the costs that we will incur in the development of the COVID-19 Vaccine, we anticipate we will need to raise significant additional

funds in order to continue the development of the our COVID-19 Vaccine candidate during the next 12-months.

In addition, we could

also have increased capital needs if we were to engage in a strategic transaction in the cannabinoid space.

Company believes that its current financial resources as of the date of the issuance of these consolidated financial statements,

are sufficient to fund its current twelve month operating budget, alleviating any substantial doubt raised by our historical operating

results and satisfying our estimated liquidity needs for twelve months from the issuance of these consolidated financial statements.

expenditures for the year ended December 31, 2019 were $0 (2018:

and commercialization of the Company’s COVID-19 Vaccine Candidate will require the Company to raise significant additional

funds as the project proceeds through clinical trials, the attainment of the required regulatory approvals and the commercialization

of the vaccine.

The timing of these events is difficult to estimate and are unlikely to be fully completed within the next twelve-months.

The Company evaluated

the current cash requirements for operations in conjunction with management’s strategic plan and believes that the Company’s

current financial resources as of the date of the issuance of these consolidated financial statements, are sufficient to fund

its current operating budget and contractual obligations as of December 31, 2020 as they fall due within the next twelve-month

period, alleviating any substantial doubt raised by the Company’s historical operating results and satisfying its estimated

liquidity needs for twelve months from the issuance of these consolidated financial statements.

expenditures for the years ended December 31, 2020 and December 31, 2019 were $0.

net cash consumed by operating activities totaled $11,924,941 during the year ended December 31, 2020.

Cash was consumed

by the loss of $3,888,249 reduced by non-cash adjustments principally consisting of $3,353 for accrued interest on marketable

securities, $74,064 for depreciation and amortization of non-current assets, $32,980 for impairment of intangible assets, $9,576

for the loss on the disposal of fixed assets, $371,997 for charge for obsolescence, $105,325 for the allowance of doubtful accounts

and other receivables and $400,174 for share based compensation.

For the year ended December 31, 2019, within changes of assets

and liabilities, cash provided consisted of a decrease in trade receivables of $128,120, a decrease in deposits and other receivables

of $9,347, a decrease in inventories of $14,285, a decrease in prepaid expenses of $103,152 and a decrease in other assets of

$9,280, off-set by a decrease in trade and other payables of $443,735.

by the net loss from continuing operations of $12,152,214 and a net loss from discontinued operations of $5,428,395 reduced by

non-cash adjustments principally consisting of $4,154,964 for stock-based compensation, $291,442 for impairment of prepaid royalties,

$152,822 for impairment of intangible assets and $197,723 for inventory adjustment for net realizable value.

For the year ended

December 31, 2020, within changes of assets and liabilities, cash was principally provided by an increase in trade and other

payables of $733,530 and decreases in trade receivables of 42,881 and prepaid expenses of $41,452.

net cash consumed by operating activities totaled $3,074,283 during the year ended December 31, 2019.

Cash was consumed

by the loss of $10,849,034 reduced by non-cash adjustments principally consisting of impairment of intangible assets of $716,148,

reserve for obsolete inventory of $279,029, $234,486 for depreciation and amortization of non-current assets, $156,835 for the

allowance of doubtful accounts, $50,647 for share based compensation less $11,011 for accrued interest and dividends on marketable

For the year ended December 31, 2019, within changes of assets and liabilities, cash provided consisted of a decrease

in trade receivables of $631,510, a decrease in inventories of $83,316, an increase in trade and other payables of $188,462, off-set

by an increase in prepaid expenses of $225,586.

Company’s net cash provided by investing totaled $3,940,627, as compared to $359,685 during the years ended

by the net loss from continuing operations of $3,381,295 and a net loss from discontinued operations of $506,954 reduced by non-cash

adjustments principally consisting of $74,064 for depreciation and amortization of non-current assets, $32,980 for impairment

of intangible assets, $371,997 for charge for obsolescence inventory, $105,325 for the allowance of doubtful accounts and other

receivables and $400,174 for share-based compensation.

For the year ended December 31, 2019, within changes of assets and

liabilities, cash provided consisted principally of a decrease in trade receivables of $128,120, and a decrease in prepaid expenses

of $103,152 off-set by a decrease in trade and other payables of $443,735.

Company’s net cash used in investing totaled $8,757,469, as compared to $3,940,627 during the years ended

December 31, 2020 and 2019, respectively.

Net cash provided by investing activities for the year ended December 31, 2019 consisted

of proceeds from the sale of marketable securities of $2,857,960 and the sale of equipment of $6,250 offset by $6,704,837

consumed by the purchase of marketable securities and $100,000 for the issuance of a short-term note receivable.

During the year

ended December 31, 2018, investing activities consisted of proceeds from the sale of marketable securities of $6,313,330 offset

by $6,604,801 consumed by the purchase of marketable securities and $68,214 for capital expenditures.

Net cash used in investing activities for the year ended December 31, 2020 consisted

of proceeds from the sale of marketable securities of $2,314,374 offset by $9,871,843 consumed by the purchase of marketable

Net cash used in investing activities for the year ended December 31, 2019 consisted of proceeds from the sale of

marketable securities of $2,857,960 and the sale of equipment of $6,250 offset by $6,704,837 consumed by the purchase of

marketable securities and $100,000 for the issuance of a short-term note receivable.

Company’s net cash provided by financing activities in 2020 was $38,667,827 (2019:

1 unchanged sentence

the 2020 period consisted of $29,184,244 of net proceeds from the issuance of common shares, $1,743,503 of net proceeds for the

issuance of prepaid equity forward contracts for the purchase of common shares and $58 of net proceeds for the exercise of prepaid

equity forward contracts for common shares Net cash provided during the 2018 period consisted of $1,950,000 of net proceeds for

the issuance of common shares and $7,155,200 for the exercise of warrants for common shares.

issuance of prepaid equity forward contracts for the purchase of common shares and $7,740,000 of net proceeds from the

exercise of warrants for common stock.

Net cash provided during the 2019 period consisted of $2,147,778 of net proceeds from issuance

of common stock and $4,817,857 of net proceeds from issuance of prepaid equity forward contracts for the purchase of common stock.

Accounting Policies

preparation of financial statements in conformity with accounting principles generally accepted in the United States of America

(US GAAP) requires management to make estimates and assumptions about future events that affect the amounts reported in the financial

statements and accompanying notes.

(“US GAAP”) requires management to make estimates and assumptions about future events that affect the amounts reported

in the financial statements and accompanying notes.

Future events and their effects cannot be determined with absolute certainty.

Therefore, the

determination of estimates requires the exercise of judgment.

Actual results inevitably will differ from those estimates, and

such differences may be material to the financial statements.

The most significant accounting estimates inherent in the preparation

of our financial statements include estimates associated with revenue recognition, impairment analysis of intangibles and stock-based

compensation.

Therefore, the determination of estimates requires the exercise of judgment.

Actual results inevitably will differ from those

estimates, and such differences may be material to the financial statements.

The most significant accounting estimates inherent

in the preparation of our financial statements include estimates associated with revenue recognition, impairment analysis of intangibles

and stock-based compensation.

financial position, results of operations and cash flows are impacted by the accounting policies we have adopted.

get a full understanding of our financial statements, one must have a clear understanding of the accounting policies employed.

A summary of our critical accounting policies is presented within the footnotes in the consolidated financial statements presented

with in the Annual Report.

and Qualitative Disclosure About Market Risk

A summary of our critical accounting policies is presented within the notes to our consolidated financial statements appearing

elsewhere in this Annual Report on Form 10-K.

Sheet Arrangements

1 unchanged sentence

Quantitative and Qualitative Disclosures About Market Risk.

Financial Statements and Supplementary Data.

information required by this Item 8 is included at the end of this Annual Report on Form 10-K beginning on page F-1.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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

What changed 10-K

Item 5. Market for Registrant’s Common Equity