AIkido Pharma (AIKI) Receives $8/sh Acquisition Proposal

Shalom Auerbach, a significant stockholder of AIkido Pharma Inc. (NASDAQ: AIKI) (“AIKI” or the “Company”) beneficially owning approximately 3.8% of its common stock, today announced that he has sent a letter proposing to acquire the Company for $8.00 per share in cash. The full text of the letter follows below:

August 9, 2022

AIkido Pharma Inc.
One Rockefeller Plaza, 11^th Floor
New York, NY 10020

Dear Members of the Board of Directors:

I am a significant stockholder of AIkido Pharma Inc. (NASDAQ: AIKI) (“AIKI” or the “Company”), beneficially owning approximately 3.8% of the Company’s outstanding common stock. In prior public letters to the AIKI Board of Directors (the “Board”) and Company stockholders, I laid out significant concerns regarding the Company’s performance, direction and governance, which concerns are shared by many other stockholders. Most recently, I called upon the Board to take action immediately to prevent further destruction of stockholder value at AIKI, including by commencing an orderly process to sell the Company’s assets and distribute capital to stockholders. Disappointingly, the Board has refused to genuinely engage with me and appears set on continuing to pursue the Company’s “diversification” strategy by spending stockholder funds to start three (three!) new businesses unrelated to the Company’s historical biotechnology business.

I have invested in AIKI because I see substantial value in the Company’s assets, and I continue to be convinced that AIKI stockholders would be far better off if the Company stops its value-destroying actions, sells the Company’s assets and returns cash to stockholders. Today, I am prepared to stand behind that conviction and am proposing to acquire 100% of the outstanding shares of common stock of AIKI that I do not already own for $8.00 per share in cash.

This proposal to buy AIKI represents a 31% premium to the Company’s most recent closing share price on August 8, 2022,¹ and would provide substantial and immediate cash value for the Company’s stockholders. This proposed transaction should be an attractive alternative for the Company’s stockholders to bearing the risk of management’s uncertain pivot to three new business areas under the guidance of an entrenched Board that has demonstrated a lack of alignment with stockholder interests.

As of the date of this letter, I beneficially own approximately 3.8% of AIKI’s outstanding common stock. Based on financing proposals I have received, I am highly confident that I would be able to fully fund the transaction using cash on hand and external financing, such that the transaction would not be contingent on obtaining financing.

The transaction would be subject to the following conditions: (i) receipt of required Board and stockholder approvals; (ii) receipt of any required governmental and third-party approvals (including any required consents under material contracts); (iii) limited confirmatory due diligence; and (iv) the negotiation and execution of a definitive merger agreement containing terms and conditions customary for a transaction of this type and size.

Please note that my proposal is based entirely on publicly available information. If upon confirmatory due diligence, I become aware of some component or aspect of the business and its prospects that evidences additional value inherent in the Company, I am prepared to increase the proposed price to reflect this new information. Of course, this letter constitutes an expression of interest only and does not create and shall not be deemed to constitute or create any legally binding or enforceable obligations on the part of either of us until a definitive transaction agreement is executed. I reserve the right to withdraw or modify any proposal at any time and for any reason.

I am prepared to engage meaningfully and constructively with the Board to achieve a successful transaction in a quick and efficient manner. I strongly believe that this proposal is the best opportunity for AIKI stockholders to achieve certain value for their shares on an expeditious basis. I also would support a decision by the Company to commence a full sale process with a plan to distribute the proceeds to stockholders, as I urged the Board to do in my prior letters.

I will not hold this proposal open indefinitely while management continues to spend stockholder funds on its development of new businesses and destroy stockholder value at AIKI. It is critical that the Company meet with me by no later than August 23, 2022, so we can commence constructive discussions regarding my proposal.

I am readily available to meet with the Company to discuss my proposal and look forward to your prompt response.

Sincerely,

Shalom Auerbach

Contact:
[email protected]
(516) 217-3721

¹ Based on closing price of $6.09 on August 8, 2022.

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