Item 1.01 Entry into a Material Definitive
Agreement.
Effective January 5,
2021, AIkido Pharma, Inc. (“ the Company”) entered into an exclusive patent license agreement (the “Agreement”)
with Silo Pharma Inc., a Delaware corporation and Silo Pharma Inc., a Florida corporation, and their affiliates/subsidiaries (collectively,
“Silo Pharma”). Pursuant to the Agreement, Silo Pharma granted the Company a worldwide exclusive, sublicensable, royalty-bearing
license to certain Silo Pharma owned provisional patent applications directed to the use of psilocybin in cancer treatment, and
any patents issuing therefrom, including all continuations, continuations-in-part, divisions, extensions, substitutions, reissues,
re-examinations, and any applications and all patents issuing from any applications and patents that claim domestic benefit or
foreign priority to the provisional patent applications (the “Licensed Patents”). The license is for “Field of
Use” (as defined in the Agreement) of “treatment of cancer and symptoms caused by cancer, including but not limited
to pain, nausea, neuroinflammation, brain and neural dysfunction, depression, seizures, confusion, dizziness, numbness/tingling,
dysfunction of the senses and all other symptoms that are caused by cancer of any type.”
As consideration for
the license of the Licensed Patents, the Company shall issue and deliver to Silo Pharma 500 shares of the Company’s Series
M Convertible Preferred Stock. The Company paid a one-time nonrefundable cash payment of five-hundred thousand US Dollars ($500,000.00)
to Silo Pharma. The Company shall also pay Silo Pharma a running royalty equal to two percent (2%) of “net sales” (as
such term is defined in the Agreement). The Agreement grants the Company an option to license any Silo Pharma Improvement Patents
as specified in the Agreement.
Under the Agreement,
Silo Pharma is required to prepare file, prosecute, and maintain the Licensed Patents.
Unless earlier terminated,
the term of the license to the Licensed Patents will continue until the expiration or abandonment of all issued patents and filed
patent applications within the Licensed Patents. Silo Pharma may terminate the Agreement upon thirty (30) day written notice if
the Company fails to pay any amounts due and payable to Silo Pharma or if the Company or any of its affiliates brings a patent
challenge against Silo Pharma, assists others in bringing a legal or administrative challenge to the validity, scope, or enforceability
of or opposes any of the Licensed Patents (“Patent Challenge”) against Silo Pharma (except as required under a court
order or subpoena).The Company may terminate the Agreement at any time without cause, and without incurring any additional penalty,
(i) by providing at least thirty (30) days’ prior written notice and paying Silo Pharma all amounts due to it through such
termination effective date. Either party may terminate the Agreement for material breaches that have failed to be cured within
sixty (60) days after receiving written notice.
The Agreement also
grants the Company a contingent right (“Contingent Right to License the UMB Patent Rights”), to negotiate with Silo
Pharma, to obtain a nonexclusive sublicense in the field of cancer and treating cancer, including neuroinflammatory diseases occurring
in any patient diagnosed with cancer (the “Field”), in the event Silo Pharma exercises its option (“Silo Pharma
Option”) to enter into a license with the University of Maryland, Baltimore (“UMB”), pursuant to a Commercial
Evaluation License and Option Agreement between Silo Pharma and UMB, having an Effective Date of July 15, 2020 (“UMB Agreement”).
The UMB Agreement relates to certain UMB patent rights directed to central nervous system homing peptides and uses thereof (“UMB
Patent Rights”).
The Contingent Right
to License the UMB Patent Rights shall be to the full extent permitted by and on terms and conditions required by UMB for a term
consistent with the term of patent and technology licenses that UMB normally grants. Silo Pharma must exercise the SiloPharma Option
by January 15, 2021, in accordance with the terms of the UMB Agreement. In the event that Silo Pharma exercises its Option and
executes a license with UMB to the UMB Patent Rights, within forty (40) days after the execution of such UMB License, for consideration
to be agreed upon and paid from the Company, which consideration shall in no event exceed 110% of any fee payable by Silo Pharma
to UMB for the right to sublicense the UMB Patent Rights, Silo Pharma shall grant the Company a nonexclusive sublicense in the
United States to the UMB Patent Rights in the Field, subject to the terms of any UMB License Licensor obtains, including any royalty
obligations on sublicensees required under any such sublicense.
The Company has agreed
to indemnify Silo Pharma and Silo Pharma has agreed to indemnify the Company in connection with a breach of any representation,
warranty, covenant, or obligation under the Agreement, except in each case to the extent any actions are caused by Silo Pharma
or one of its affiliates/subsidiaries gross negligence or willful misconduct.
The Agreement contains
mutual representations and warranties, as reflected in the Agreement, , including representations and warranties that Silo Pharma
will comply with all terms of the UMB Agreement to preserve its rights in the Option and that Silo Pharma intends to and will make
its best commercial efforts to exercise its option and take a UMB License under the UMB Agreement during the Term of the UMB Agreement
in compliance with the terms of the UMB Agreement.