AKERS BIOSCIENCES : Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

This quarterly report on Form 10-Q and other reports filed by Akers Biosciences,
Inc. ("Akers," "Akers Bio," "we" or the "Company") from time to time with the
SEC (collectively, the "Filings") contain or may contain forward-looking
statements and information that are based upon beliefs of, and information
currently available to, the Company's management as well as estimates and
assumptions made by Company's management. Readers are cautioned not to place
undue reliance on these forward-looking statements, which are only predictions
and speak only as of the date hereof. When used in the Filings, the words
"anticipate," "believe," "estimate," "expect," "future," "intend," "plan," or
the negative of these terms and similar expressions as they relate to the
Company or the Company's management identify forward-looking statements. Such
statements reflect the current view of the Company with respect to future events
and are subject to risks, uncertainties, assumptions, and other factors,
including the risks relating to the Company's business, industry, and the
Company's operations and results of operations. Should one or more of these
risks or uncertainties materialize, or should the underlying assumptions prove
incorrect, actual results may differ significantly from those anticipated,
believed, estimated, expected, intended, or planned.



Although the Company believes that the expectations reflected in the
forward-looking statements are reasonable, the Company cannot guarantee future
results, levels of activity, performance, or achievements. Except as required by
applicable law, including the securities laws of the United States, the Company
does not intend to update any of the forward-looking statements to conform these
statements to actual results.



Important factors that could cause actual results to differ materially from the
results and events anticipated or implied by such forward-looking statements
include, but are not limited to:

? our ability to achieve the expected benefits and costs of the transactions

related to the acquisition of Cystron Biotech, LLC ("Cystron"), including:

o the timing of, and our ability to, obtain and maintain regulatory approvals

for clinical trials of our COVID-19 vaccine or combination product candidate

(the "COVID-19 Vaccine Candidate");

o the timing and results of our planned clinical trials for our COVID-19 Vaccine

Candidate;

o the amount of funds we require for our COVID-19 Vaccine Candidate; and

o our ability to maintain our existing license with Premas Biotech PVT Ltd.

    ("Premas").


  ? our ability to develop a COVID-Vaccine Candidate in a timely manner;
  ? our ability to effectively execute and deliver our plans related to

commercialization, marketing and manufacturing capabilities and strategy;

? emerging competition and rapidly advancing technology in our industry;

? our ability to obtain adequate financing in the future on reasonable terms, as

and when we need it;

? challenges we may face in identifying, acquiring and operating new business

opportunities;

? our ability to retain and attract senior management and other key employees;

? our ability to quickly and effectively respond to new technological

developments;

? the outcome of litigation or other proceedings to which we are subject as

described in the "Legal Proceedings" sections of our annual report on Form

10-K filed with the SEC on March 25, 2020 and our subsequent filings with the

SEC or which we may become subject to in the future;

? changes in political, economic or regulatory conditions generally and in the

markets in which we operate;

? delisting of our common stock from the Nasdaq capital market;

? our ability to protect our trade secrets or other proprietary rights, operate

without infringing upon the proprietary rights of others and prevent others

from infringing on our proprietary rights;

? our compliance with all laws, rules, and regulations applicable to our

business and COVID-19 Vaccine Candidate; and

? the impact of the recent COVID-19 outbreak on our results of operations,

    business plan and the global economy.




Our financial statements are prepared in accordance with accounting principles
generally accepted in the United States ("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 report.



Overview



We 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 SARS-CoV-2, a coronavirus currently causing a pandemic
throughout the world. In response to the global pandemic, we are pursuing rapid
development and manufacturing of our COVID-19 Vaccine Candidate, in
collaboration with Premas. With Premas, we are currently conducting animal
studies for our COVID-19 Vaccine Candidate in India with different dose amounts,
including amounts that would be applicable to humans. We and Premas are
currently engaged in communications with the U.S. Food and Drug Administration
("FDA") and the office of the drug controller in India.



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Coronavirus and COVID-19 Pandemic

In December 2019, SARS-CoV-2 was reported to have surfaced in Wuhan, China, and
on March 12, 2020, the World Health Organization ("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 August 6, 2020, approximately
18 million cases were reported globally and 700,000 of these were deadly, making
the development of effective vaccines to prevent this disease a major global
priority. Although multiple vaccine candidates against SARS-CoV-2 are under
development, there is currently no known or approved vaccine or specific
antiviral treatment, with the primary treatment being symptomatic and supportive
therapies.



Competition



We face, and will continue to face, intense competition from large
pharmaceutical companies, specialty pharmaceutical and biotechnology companies
as well as academic and research institutions pursing research and development
of technologies, drugs or other therapies that would compete with our products
or product candidates. The pharmaceutical market is highly competitive, subject
to rapid technological change and significantly affected by existing rival drugs
and medical procedures, new product introductions and the market activities of
other participants. Our competitors may develop products more rapidly or more
effectively than us. If our competitors are more successful in commercializing
their products than us, their success could adversely affect our competitive
position and harm our business prospects.



Specifically, the competitive landscape of potential COVID-19 vaccines and
treatment therapies has been rapidly developing since the beginning of the
COVID-19 pandemic, with several hundreds of companies claiming to be
investigating possible candidates and approximately 3,000 studies registered
worldwide as investigating COVID-19 (source: clinicaltrials.gov). Given the
global footprint and the widespread media attention on the COVID-19 pandemic,
there are efforts by public and private entities to develop a COVID-19 vaccine
as soon as possible, including large, multinational pharmaceutical companies
such as AstraZeneca, GlaxoSmithKline, Johnson & Johnson, Moderna, Pfizer, and
Sanofi, with vaccine candidates that are currently at more advanced stage of
development than our vaccine candidate. Those other entities may develop
COVID-19 vaccines that are more effective than any vaccine we may develop, may
develop a COVID-19 vaccine that becomes the standard of care, may develop a
COVID-19 vaccine at a lower cost or earlier than we are able to jointly develop
any COVID-19 vaccine, or may be more successful at commercializing a COVID-19
vaccine. Many of these other organizations are much larger than we are and have
access to larger pools of capital, and as such, able to fund and carry on larger
research and development initiatives. Such other entities may have greater
development capabilities than we do and have substantially greater experience in
undertaking nonclinical and clinical testing of vaccine candidates, obtaining
regulatory approvals and manufacturing and marketing pharmaceutical products.
Our competitors may also have greater name recognition and better access to
customers. In addition, based on the competitive landscape, multiple COVID-19
vaccines or therapeutics may be approved to be marketed. Should another party be
successful in producing a more efficacious vaccine for COVID-19, such success
could reduce the commercial opportunity for our COVID-19 vaccine candidate and
could have a material adverse effect on our business, financial condition,
results of operations and future prospects. Moreover, if we experience delayed
regulatory approvals or disputed clinical claims, we may not have a commercial
or clinical advantage over competitors' products that we believe we currently
possess. The success or failure of other entities, or perceived success or
failure, may adversely impact our ability to obtain any future funding for our
vaccine development efforts or for us to ultimately commercialize and market any
vaccine candidate, if approved. In addition, we may not be able to compete
effectively if our product candidates do not satisfy government procurement
requirements with respect to biodefense products.

Coronavirus Vaccine Development

On March 23, 2020, we entered into that certain membership interest purchase
agreement (as subsequently amended, the "MIPA") with the members (the "Sellers")
of Cystron Biotech, LLC ("Cystron"), pursuant to which we acquired 100% of the
membership interests (the "Membership Interests") of Cystron. Cystron is a party
to a license agreement with Premas whereby Premas granted Cystron, among other
things, an exclusive license with respect to Premas' genetically engineered
yeast (S. cerevisiae)-based vaccine platform, D-Crypt™, for the development of a
vaccine against COVID-19 and other coronavirus infections. We have partnered
with Premas on this initiative as we seek to advance this COVID-19 Vaccine
Candidate through the regulatory process, both with the FDA and the office of
the drug controller in India. Premas is primarily responsible for the
development of the COVID-19 Vaccine Candidate through proof of concept and is
entitled to receive milestone payments upon achievement of certain development
milestones through proof of concept.



Premas' D-Crypt platform has been developed to express proteins that are
difficult to clone, express and manufacture and are a key component in vaccine
development. Premas has identified three major structural proteins of SARS-CoV-2
as antigens for potential vaccine candidates for COVID-19: spike protein or S
protein, envelope protein or E protein, and membrane protein or M protein. In
April 2020, Premas used its D-Crypt platform to recombinantly express all three
of such antigens, which we considered as a significant milestone for development
of a triple antigen vaccine. We believe including a combination of all three
antigens will provide advantages against the likelihood of protein mutation, in
which case a single-protein vaccine can be rendered non-efficacious, and
therefore, enhance efficacy of our vaccine candidates. We believe the D-Crypt
provides us advantages in vaccine production and manufacturing, as the
technology platform is highly scalable with a robust process, which we expect
will ultimately result in significant cost savings compared to other similar
vaccine platforms. Based on genetically engineered baker's yeast S. cerevisiae,
the platform is highly scalable into commercial production quantities and has
been previously utilized for the production of multiple human and animal health
vaccines candidates during its 10-year development track record. Yeast has a
large endoplasmic reticulum, or ER, which is a desirable attribute for
expressing membrane protein. In complex cells, ER is where the protein is
formed. The larger the surface, the more membrane protein that can attach to the
ER inside the cell. Yeast is also generally believed to be easily manipulated
and allow for results to be gathered quickly. Yeast multiplies faster than
mammalian cells and is cheaper to work with than mammalian systems, which are
much more complex and slower to grow comparatively. Yeast has received Generally
Recommended as Safe status from the FDA.



38

As of May 14, 2020, Premas has successfully completed its vaccine prototype and
obtained transmission electron microscopic (TEM) images of the recombinant virus
like particle (VLP) assembled in yeast. A manufacturing protocol has also been
established and large-scale production studies have been initiated for our
COVID-19 Vaccine Candidate. Though the prototype is complete, the COVID-19
Vaccine Candidate is still in early stages of development, and, accordingly,
must undergo preclinical testing and all phases of clinical trials before we can
submit a marketing application (in this case, a biologics license application,
or "BLA") to the FDA. The BLA must be approved by the FDA before any biological
product, including vaccines, may be lawfully marketed in the United States. We
believe the most pivotal, yet difficult, stage in our anticipated development of
the contemplated COVID-19 Vaccine Candidate is the requisite conduct of
extensive clinical trials to demonstrate the safety and efficacy of our COVID-19
Vaccine Candidate. Additionally, after we complete the necessary preclinical
testing, but before we may begin any clinical studies in the United States, we
must submit an Investigational New Drug ("IND") application to the FDA, as this
is required before any clinical studies may be conducted in the United States.
In some cases, clinical studies may be conducted in other countries; however,
the FDA may not accept data from foreign clinical studies in connection with a
BLA (or other marketing application) submission.



In July 2020, animal studies for our COVID-19 Vaccine Candidate were initiated
in India. In addition, we announced that Premas has successfully completed the
manufacturing process for the VLP vaccine candidate. Clinical testing is
expensive, time consuming, and uncertain as to outcome. We cannot guarantee that
any clinical trials will be conducted as planned or completed in a timely
manner, or at all. Failures in connection with one or more clinical trials can
occur at any stage of testing.



Premas owns, and has exclusively licensed rights to us, two provisional Indian
patent applications filed in January and March 2020. The scope of these Indian
provisional patent applications is directed, respectively, to (i) a platform for
the expression of difficult to express proteins (DTE-Ps), which might provide
coverage for a method of making the to-be-developed vaccine; and (ii) an
expression platform for SARS-CoV-2-like virus proteins, methods relevant
thereto, and a relevant vaccine. If non-provisional patent rights are pursued
claiming priority to each of these two provisional applications, any resulting
patent rights that issue might not expire until approximately January 20, 2041
and March 4, 2041, if all annuities and maintenance fees are timely paid. The
expiration dates may be extendable beyond these dates depending on the
jurisdiction and the vaccine development process. As we do not own the patents
or patent applications that we license, we may need to rely upon Premas to
properly prosecute and maintain those patent applications and prevent
infringement of those patents.

Impact of the COVID-19 Pandemic on Our Business

The ultimate impact of the global COVID-19 pandemic or a similar health epidemic
is highly uncertain and subject to future developments. These include but are
not limited to the duration of the COVID-19 pandemic, new information which may
emerge concerning the severity of the COVID-19 pandemic, and any additional
preventative and protective actions that regulators, or the board or management
of the Company, may determine are needed. We do not yet know the full extent of
potential delays or impacts on our business, our vaccine development efforts,
healthcare systems or the global economy as a whole. However, the effects are
likely to have a material impact on our operations, liquidity and capital
resources, and we will continue to monitor the COVID-19 situation closely.



In response to public health directives and orders, we have implemented
work-from-home policies for many of our employees and temporarily modified our
operations to comply with applicable social distancing recommendations. The
effects of the orders and our related adjustments in our business are likely to
negatively impact productivity, disrupt our business and delay our timelines,
the magnitude of which will depend, in part, on the length and severity of the
restrictions and other limitations on our ability to conduct our business in the
ordinary course. Similar health directives and orders are affecting third
parties with whom we do business, including Premas, whose operations are located
in India. Further, restrictions on our ability to travel, stay-at-home orders
and other similar restrictions on our business have limited our ability to
support our operations.



Severe and/or long-term disruptions in our operations will negatively impact our
business, operating results and financial condition in other ways, as well.
Specifically, we anticipate that the stress of COVID-19 on healthcare systems
generally around the globe will negatively impact regulatory authorities and the
third parties that we and Premas may engage in connection with the development
and testing of our vaccine candidate.



In addition, while the potential economic impact brought by, and the duration
of, COVID-19 may be difficult to assess or predict, it has significantly
disrupted global financial markets, and may limit our ability to access capital,
which could in the future negatively affect our liquidity. A recession or market
correction resulting from the spread of COVID-19 could materially affect our
business and the value of our common stock.



39

Government Regulation and Product Approval

Federal, state, and local government authorities in the United States and in
other countries extensively regulate, among other things, the research,
development, testing, manufacturing, quality control, approval, labeling,
packaging, storage, record-keeping, promotion, advertising, distribution,
post-approval monitoring and reporting, marketing and export and import of
biological and pharmaceutical products such as those we are developing. Our
prospective vaccine candidate(s) must be approved by the FDA before they may be
legally marketed in the United States and by the appropriate foreign regulatory
agency before they may be legally marketed in foreign countries. Generally, our
activities in other countries will be subject to regulation that is similar in
nature and scope as that imposed in the United States. The process for obtaining
regulatory marketing approvals and the subsequent compliance with appropriate
federal, state, local, and foreign statutes and regulations require the
expenditure of substantial time and financial resources.

U.S. Product Development Process

In the United States, the FDA regulates pharmaceutical and biological products
under the Federal Food, Drug and Cosmetic Act, Public Health Service Act, and
their respective implementing regulations. Products are also subject to other
federal, state, and local statutes and regulations. The process of obtaining
regulatory approvals and the subsequent compliance with appropriate federal,
state, local and foreign statutes and regulations require the expenditure of
substantial time and financial resources. Failure to comply with the applicable
U.S. requirements at any time during the product development process, approval
process or after approval, may subject an applicant to administrative or
judicial sanctions. FDA sanctions could include, among other actions, refusal to
approve pending applications, withdrawal of an approval, a clinical hold,
warning letters, product recalls or withdrawals from the market, product
seizures, total or partial suspension of production or distribution injunctions,
fines, refusals of government contracts, restitution, disgorgement or civil or
criminal penalties. Any agency or judicial enforcement action could have a
material adverse effect on us. The process required by the FDA before a drug or
biological product may be marketed in the United States generally involves

the
following:



? completion of nonclinical laboratory tests and animal studies according to
FDA's good laboratory practices (the "GLPs"), and applicable requirements for
the humane use of laboratory animals or other applicable regulations;

? submission to the FDA of an IND which must become effective before human clinical trials may begin;

? performance of adequate and well-controlled human clinical trials according to
the FDA's regulations commonly referred to as good clinical practice, or GCP,
and any additional requirements for the protection of human research subjects
and their health information, to establish the safety and efficacy of the
proposed biological product for its intended use;



? submission to the FDA of a Biologics License Application, or BLA, for
marketing approval that meets applicable requirements to ensure the continued
safety, purity, and potency of the product that is the subject of the BLA based
on results of nonclinical testing and clinical trials;



? satisfactory completion of an FDA inspection of the manufacturing facility or
facilities where the biological product is produced, to assess compliance with
current Good Manufacturing Process ("cGMP"), to assure that the facilities,
methods and controls are adequate to preserve the biological product's identity,
strength, quality and purity;

? potential FDA audit of the nonclinical study and clinical trial sites that generated the data in support of the BLA; and

? FDA review and approval, or licensure, of the BLA.

Before testing any biological vaccine candidate in humans, the vaccine candidate
enters the preclinical testing stage. Preclinical tests, also referred to as
nonclinical studies, include laboratory evaluations of product chemistry,
toxicity and formulation, as well as animal studies to assess the potential
safety and activity of the vaccine candidate. The conduct of the preclinical
tests must comply with federal regulations and requirements including GLPs. The
clinical trial sponsor must submit the results of the preclinical tests,
together with manufacturing information, analytical data, any available clinical
data or literature and a proposed clinical protocol, to the FDA as part of the
IND. Some preclinical testing may continue even after the IND is submitted. The
IND automatically becomes effective 30 days after receipt by the FDA, unless the
FDA raises concerns or questions regarding the proposed clinical trials and
places the trial on a clinical hold within that 30-day time period. In such a
case, the IND sponsor and the FDA must resolve any outstanding concerns before
the clinical trial can begin. The FDA may also impose clinical holds on a
biological product candidate at any time before or during clinical trials due to
safety concerns or non-compliance. If the FDA imposes a clinical hold, trials
may not recommence without FDA authorization and then only under terms
authorized by the FDA. Accordingly, we cannot be sure that submission of an IND
will result in the FDA allowing clinical trials to begin, or that, once begun,
issues will not arise that suspend or terminate such trials.



40






Clinical trials involve the administration of the biological product candidate
to healthy volunteers or patients under the supervision of qualified
investigators, generally physicians not employed by or under the trial sponsor's
control. Clinical trials are conducted under protocols detailing, among other
things, the objectives of the clinical trial, dosing procedures, subject
selection and exclusion criteria, and the parameters to be used to monitor
subject safety, including stopping rules that assure a clinical trial will be
stopped if certain adverse events should occur. Each protocol and any amendments
to the protocol must be submitted to the FDA as part of the IND. Clinical trials
must be conducted and monitored in accordance with the FDA's regulations
composing the GCP requirements, including the requirement that all research
subjects provide informed consent. Further, each clinical trial must be reviewed
and approved by an independent institutional review board, or IRB, at or
servicing each institution at which the clinical trial will be conducted. An IRB
is charged with protecting the welfare and rights of trial participants and
considers such items as whether the risks to individuals participating in the
clinical trials are minimized and are reasonable in relation to anticipated
benefits. The IRB also approves the form and content of the informed consent
that must be signed by each clinical trial subject or his or her legal
representative and must monitor the clinical trial until completed. Human
clinical trials are typically conducted in three sequential phases that may
overlap or be combined:



? Phase 1. The biological product is initially introduced into healthy human
subjects and tested for safety. In the case of some products for severe or
life-threatening diseases, especially when the product may be too inherently
toxic to ethically administer to healthy volunteers, the initial human testing
is often conducted in subjects having the specific disease.



? Phase 2. The biological product is evaluated in a limited patient population
to identify possible adverse effects and safety risks, to preliminarily evaluate
the efficacy of the product for specific targeted diseases and to determine
dosage tolerance, optimal dosage and dosing schedule.

? Phase 3. Clinical trials are undertaken to further evaluate dosage, clinical efficacy, potency, and safety in an expanded patient population at geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk to benefit ratio of the product and provide an adequate basis for product labeling.

Post-approval clinical trials, sometimes referred to as Phase 4 clinical trials,
may be conducted after initial marketing approval. These clinical trials are
used to gain additional experience from the treatment of patients in the
intended therapeutic indication, particularly for long-term safety follow-up.



During all phases of clinical development, regulatory agencies require extensive
monitoring and auditing of all clinical activities, clinical data, and clinical
trial investigators. Annual progress reports detailing the results of the
clinical trials must be submitted to the FDA. Written IND safety reports must be
promptly submitted to the FDA and the investigators for serious and unexpected
adverse events, any findings from other studies, tests in laboratory animals or
in vitro testing that suggest a significant risk for human subjects, or any
clinically important increase in the rate of a serious suspected adverse
reaction over that listed in the protocol or investigator brochure. The sponsor
must submit an IND safety report within 15 calendar days after the sponsor
determines that the information qualifies for reporting. The sponsor also must
notify the FDA of any unexpected fatal or life-threatening suspected adverse
reaction within seven calendar days after the sponsor's initial receipt of the
information. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed
successfully within any specified period, if at all. The FDA or the sponsor or
its data safety monitoring board may suspend or terminate a clinical trial at
any time on various grounds, including a finding that the research subjects are
being exposed to an unacceptable health risk. Similarly, an IRB can suspend or
terminate approval of a clinical trial at its institution if the clinical trial
is not being conducted in accordance with the IRB's requirements or if the
biological product has been associated with unexpected serious harm to subjects.



Concurrently with clinical trials, companies usually complete additional studies
and must also develop additional information about the physical characteristics
of the biological product as well as finalize a process for manufacturing the
product in commercial quantities in accordance with cGMP requirements. To help
reduce the risk of the introduction of adventitious agents with use of
biological products, the PHSA emphasizes the importance of manufacturing control
for products whose attributes cannot be precisely defined. The manufacturing
process must be capable of consistently producing quality batches of the product
candidate and, among other criteria, the sponsor must develop methods for
testing the identity, strength, quality, potency and purity of the final
biological product. Additionally, appropriate packaging must be selected and
tested, and stability studies must be conducted to demonstrate that the
biological product candidate does not undergo unacceptable deterioration over
its shelf life.

U.S. Review and Approval Processes

After the completion of clinical trials of a biological product, FDA approval of
a BLA must be obtained before commercial marketing of the biological product.
The BLA must include results of product development, laboratory and animal
studies, human trials, information on the manufacture and composition of the
product, proposed labeling and other relevant information. The FDA may grant
deferrals for submission of data, or full or partial waivers. The testing and
approval processes require substantial time and effort and there can be no
assurance that the FDA will accept the BLA for filing and, even if filed, that
any approval will be granted on a timely basis, if at all.



Under the Prescription Drug User Fee Act, or PDUFA, as amended, each BLA must be
accompanied by a significant user fee. The FDA adjusts the PDUFA user fees on an
annual basis. PDUFA also imposes an annual program fee for biological products.
Fee waivers or reductions are available in certain circumstances, including a
waiver of the application fee for the first application filed by a small
business.



41






Within 60 days following submission of the application, the FDA reviews a BLA
submitted to determine if it is substantially complete before the agency accepts
it for filing. The FDA may refuse to file any BLA that it deems incomplete or
not properly reviewable at the time of submission and may request additional
information. In this event, the BLA must be resubmitted with the additional
information. The resubmitted application also is subject to review before the
FDA accepts it for filing. Once the submission is accepted for filing, the FDA
begins an in-depth substantive review of the BLA. The FDA reviews the BLA to
determine, among other things, whether the proposed product is safe, potent,
and/or effective for its intended use, and has an acceptable purity profile, and
whether the product is being manufactured in accordance with cGMP to assure and
preserve the product's identity, safety, strength, quality, potency and purity.
The FDA may refer applications for novel biological products or biological
products that present difficult questions of safety or efficacy to an advisory
committee, typically a panel that includes clinicians and other experts, for
review, evaluation, and a recommendation as to whether the application should be
approved and under what conditions. The FDA is not bound by the recommendations
of an advisory committee, but it considers such recommendations carefully when
making decisions. During the biological product approval process, the FDA also
will determine whether a Risk Evaluation and Mitigation Strategy, or REMS, is
necessary to assure the safe use of the biological product. If the FDA concludes
a REMS is needed, the sponsor of the BLA must submit a proposed REMS. The FDA
will not approve a BLA without a REMS, if required.



Before approving a BLA, the FDA will inspect the facilities at which the product
is manufactured. The FDA will not approve the product unless it determines that
the manufacturing processes and facilities are in compliance with cGMP
requirements and adequate to assure consistent production of the product within
required specifications. Additionally, before approving a BLA, the FDA will
typically inspect one or more clinical sites to assure that the clinical trials
were conducted in compliance with IND trial requirements and GCP requirements.
To assure cGMP and GCP compliance, an applicant must incur significant
expenditure of time, money and effort in the areas of training, record keeping,
production, and quality control.



Notwithstanding the submission of relevant data and information, the FDA may
ultimately decide that the BLA does not satisfy its regulatory criteria for
approval and deny approval. Data obtained from clinical trials are not always
conclusive and the FDA may interpret data differently than we interpret the same
data. If the agency decides not to approve the BLA in its present form, the FDA
will issue a complete response letter that describes all of the specific
deficiencies in the BLA identified by the FDA. The deficiencies identified may
be minor, for example, requiring labeling changes, or major, for example,
requiring additional clinical trials. Additionally, the complete response letter
may include recommended actions that the applicant might take to place the
application in a condition for approval. If a complete response letter is
issued, the applicant may either resubmit the BLA, addressing all of the
deficiencies identified in the letter, or withdraw the application.

If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product.

Further, the FDA may require that certain contraindications, warnings or
precautions be included in the product labeling. The FDA may impose restrictions
and conditions on product distribution, prescribing, or dispensing in the form
of a risk management plan, or otherwise limit the scope of any approval. In
addition, the FDA may require post marketing clinical trials, sometimes referred
to as Phase 4 clinical trials, designed to further assess a biological product's
safety and effectiveness, and testing and surveillance programs to monitor the
safety of approved products that have been commercialized.



In addition, under the Pediatric Research Equity Act, a BLA or supplement to a
BLA must contain data to assess the safety and effectiveness of the product for
the claimed indications in all relevant pediatric subpopulations and to support
dosing and administration for each pediatric subpopulation for which the product
is safe and effective. The FDA may grant deferrals for submission of data or
full or partial waivers.



Post-Approval Requirements



Any products for which we receive FDA approvals are subject to continuing
regulation by the FDA, including, among other things, record-keeping
requirements, reporting of adverse experiences with the product, providing the
FDA with updated safety and efficacy information, product sampling and
distribution requirements, and complying with FDA promotion and advertising
requirements, which include, among others, standards for direct-to-consumer
advertising, restrictions on promoting products for uses or in patient
populations that are not described in the product's approved uses, known as
"off-label" use, limitations on industry-sponsored scientific and educational
activities, and requirements for promotional activities involving the internet.
Although physicians may prescribe legally available products for off-label uses,
if the physicians deem to be appropriate in their professional medical judgment,
manufacturers may not market or promote such off-label uses.



In addition, quality control and manufacturing procedures must continue to
conform to applicable manufacturing requirements after approval to ensure the
long-term stability of the product. cGMP regulations require among other things,
quality control and quality assurance as well as the corresponding maintenance
of records and documentation and the obligation to investigate and correct any
deviations from cGMP. Manufacturers and other entities involved in the
manufacture and distribution of approved products are required to register their
establishments with the FDA and certain state agencies and are subject to
periodic unannounced inspections by the FDA and certain state agencies for
compliance with cGMP and other laws. Accordingly, manufacturers must continue to
expend time, money, and effort in the area of production and quality control to
maintain cGMP compliance. Discovery of problems with a product after approval
may result in restrictions on a product, manufacturer, or holder of an approved
BLA, including, among other things, recall or withdrawal of the product from the
market. In addition, changes to the manufacturing process are strictly
regulated, and depending on the significance of the change, may require prior
FDA approval before being implemented. Other types of changes to the approved
product, such as adding new indications and claims, are also subject to further
FDA review and approval.



42






Discovery of previously unknown problems with a product or the failure to comply
with applicable FDA requirements can have negative consequences, including
adverse publicity, judicial or administrative enforcement, warning letters from
the FDA, mandated corrective advertising or communications with doctors, and
civil or criminal penalties, among others. Newly discovered or developed safety
or effectiveness data may require changes to a product's approved labeling,
including the addition of new warnings and contraindications, and also may
require the implementation of other risk management measures. Also, new
government requirements, including those resulting from new legislation, may be
established, or the FDA's policies may change, which could delay or prevent
regulatory approval of our prospective vaccine candidate(s).

Other U.S. Healthcare Laws and Compliance Requirements

In the United States, our activities are potentially subject to regulation by
various federal, state and local authorities in addition to the FDA, including
but not limited to, the Centers for Medicare and Medicaid Services, or CMS,
other divisions of the U.S. Department of Health and Human Services, for
instance the Office of Inspector General, the U.S. Department of Justice, or
DOJ, and individual U.S. Attorney offices within the DOJ, and state and local
governments. For example, sales, marketing and scientific/educational grant
programs must comply with the anti-fraud and abuse provisions of the Social
Security Act, the false claims laws, the physician payment transparency laws,
the privacy and security provisions of the Health Insurance Portability and
Accountability Act, or HIPAA, as amended by the Health Information Technology
and Clinical Health Act, or HITECH, and similar state laws, each as amended.



The federal Anti-Kickback Statute prohibits, among other things, any person or
entity, from knowingly and willfully offering, paying, soliciting or receiving
any remuneration, directly or indirectly, overtly or covertly, in cash or in
kind, to induce or in return for purchasing, leasing, ordering or arranging for
the purchase, lease or order of any item or service reimbursable under Medicare,
Medicaid or other federal healthcare programs. The term remuneration has been
interpreted broadly to include anything of value. The Anti-Kickback Statute has
been interpreted to apply to arrangements between pharmaceutical manufacturers
on one hand and prescribers, purchasers, and formulary managers on the other.
There are a number of statutory exceptions and regulatory safe harbors
protecting some common activities from prosecution. The exceptions and safe
harbors are drawn narrowly and practices that involve remuneration that may be
alleged to be intended to induce prescribing, purchasing or recommending may be
subject to scrutiny if they do not qualify for an exception or safe harbor. Our
practices may not in all cases meet all of the criteria for protection under a
statutory exception or regulatory safe harbor. Failure to meet all of the
requirements of a particular applicable statutory exception or regulatory safe
harbor, however, does not make the conduct per se illegal under the
Anti-Kickback Statute. Instead, the legality of the arrangement will be
evaluated on a case-by-case basis based on a cumulative review of all of its
facts and circumstances.



Additionally, the intent standard under the Anti-Kickback Statute was amended by
the Affordable Care Act to a stricter standard, such that a person or entity no
longer needs to have actual knowledge of the statute or specific intent to
violate it in order to have committed a violation. In addition, the Affordable
Care Act codified case law that a claim including items or services resulting
from a violation of the federal Anti-Kickback Statute constitutes a false or
fraudulent claim for purposes of the federal False Claims Act, or FCA, as
discussed below.



The civil monetary penalties statute imposes penalties against any person or
entity that, among other things, is determined to have presented or caused to be
presented a claim to a federal health program that the person knows or should
know is for an item or service that was not provided as claimed or is false

or
fraudulent.



The federal FCA prohibits, among other things, any person or entity from
knowingly presenting, or causing to be presented, a false claim for payment to,
or approval by, the federal government or knowingly making, using, or causing to
be made or used a false record or statement material to a false or fraudulent
claim to the federal government. As a result of a modification made by the Fraud
Enforcement and Recovery Act of 2009, a claim includes "any request or demand"
for money or property presented to the U.S. government. Recently, several
pharmaceutical and other healthcare companies have been prosecuted under these
laws for allegedly providing free product to customers with the expectation that
the customers would bill federal programs for the product. Other companies have
been prosecuted for causing false claims to be submitted because of the
companies' marketing of the product for unapproved, and thus non-reimbursable,
uses.



HIPAA created new federal criminal statutes that prohibit knowingly and
willfully executing, or attempting to execute, a scheme to defraud or to obtain,
by means of false or fraudulent pretenses, representations or promises, any
money or property owned by, or under the control or custody of, any healthcare
benefit program, including private third-party payors and knowingly and
willfully falsifying, concealing or covering up by trick, scheme or device, a
material fact or making any materially false, fictitious or fraudulent statement
in connection with the delivery of or payment for healthcare benefits, items or
services. Similar to the federal Anti-Kickback Statute, a person or entity does
not need to have actual knowledge of the statute or specific intent to violate
it in order to have committed a violation.

Also, many states have similar fraud and abuse statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.

We may be subject to data privacy and security regulations by both the federal
government and the states in which we conduct our business. HIPAA, as amended by
the HITECH Act, imposes requirements relating to the privacy, security and
transmission of individually identifiable health information. Among other
things, HITECH makes HIPAA's privacy and security standards directly applicable
to business associates independent contractors or agents of covered entities
that receive or obtain protected health information in connection with providing
a service on behalf of a covered entity. HITECH also created four new tiers of
civil monetary penalties, amended HIPAA to make civil and criminal penalties
directly applicable to business associates, and gave state attorneys general new
authority to file civil actions for damages or injunctions in federal courts to
enforce the federal HIPAA laws and seek attorneys' fees and costs associated
with pursuing federal civil actions. In addition, state laws govern the privacy
and security of health information in specified circumstances, many of which
differ from each other in significant ways, thus complicating compliance
efforts.



43






Additionally, the Federal Physician Payments Sunshine Act under the Affordable
Care Act, and its implementing regulations, require that certain manufacturers
of drugs, devices, biological and medical supplies for which payment is
available under Medicare, Medicaid or the Children's Health Insurance Program,
with certain exceptions, to report information related to certain payments or
other transfers of value made or distributed to physicians and teaching
hospitals, or to entities or individuals at the request of, or designated on
behalf of, the physicians and teaching hospitals and to report annually certain
ownership and investment interests held by physicians and their immediate family
members. Failure to submit timely, accurately, and completely the required
information may result in civil monetary penalties of up to an aggregate of
$150,000 per year and up to an aggregate of $1 million per year for "knowing
failures". Certain states also mandate implementation of compliance programs,
impose restrictions on pharmaceutical manufacturer marketing practices and/or
require the tracking and reporting of gifts, compensation and other remuneration
to healthcare providers and entities.



In order to distribute products commercially, we must also comply with state
laws that require the registration of manufacturers and wholesale distributors
of drug and biological products in a state, including, in certain states,
manufacturers and distributors who ship products into the state even if such
manufacturers or distributors have no place of business within the state. Some
states also impose requirements on manufacturers and distributors to establish
the pedigree of product in the chain of distribution, including some states that
require manufacturers and others to adopt new technology capable of tracking and
tracing product as it moves through the distribution chain. Several states have
enacted legislation requiring pharmaceutical and biotechnology companies to
establish marketing compliance programs, file periodic reports with the state,
make periodic public disclosures on sales, marketing, pricing, clinical trials
and other activities, and/or register their sales representatives, as well as to
prohibit pharmacies and other healthcare entities from providing certain
physician prescribing data to pharmaceutical and biotechnology companies for use
in sales and marketing, and to prohibit certain other sales and marketing
practices. All of our activities are potentially subject to federal and state
consumer protection and unfair competition laws.



If our operations are found to be in violation of any of the federal and state
healthcare laws described above or any other governmental regulations that apply
to us, we may be subject to penalties, including without limitation, civil,
criminal and/or administrative penalties, damages, fines, disgorgement,
exclusion from participation in government programs, such as Medicare and
Medicaid, injunctions, private "qui tam" actions brought by individual
whistleblowers in the name of the government, or refusal to allow us to enter
into government contracts, contractual damages, reputational harm,
administrative burdens, diminished profits and future earnings, and the
curtailment or restructuring of our operations, any of which could adversely
affect our ability to operate our business and our results of operations.



U.S. Healthcare Reform



We anticipate that current and future U.S. legislative healthcare reforms may
result in additional downward pressure on the price that we receive for any
approved product, if covered, and could seriously harm our business. Any
reduction in reimbursement from Medicare and other government programs may
result in a similar reduction in payments from private payors. The
implementation of cost containment measures or other healthcare reforms may
prevent us from being able to generate revenue, attain profitability or
commercialize our prospective vaccine candidate(s). In addition, it is possible
that there will be further legislation or regulation that could harm our
business, financial condition and results of operations.



Recent Developments

Discontinuation of Screening and Testing Products

As previously disclosed, in light of the unfavorable factors persistent in our
rapid, point-of-care screening and testing product business and the progress we
have made in our partnership with Premas, we conducted a strategic review of the
screening and testing products business. Following such review, in early July
2020, we ceased the production and sale of our rapid, point-of-care screening
and testing products. We will continue to provide support for these testing
products that remain in the market through their respective product expiration
dates. We had been experiencing declining sales revenue and production backlogs
for these products and, as we previously reported, had eliminated our sales
force for such products. We intend to devote our attention to our partnership
with Premas for the development of our COVID-19 Vaccine Candidate and will
continue to explore strategic alternatives that we believe will increase
shareholder value. In connection with the discontinuation of our existing
product line, on July 16, 2020, we decided to close our facility in West
Deptford, New Jersey (the "Thorofare Facility") and exercised the early
termination option under the lease agreement, which provided for a 150-day
notice to terminate the lease. Pursuant to the early termination option, the
lease for the Thorofare Facility will mature on December 13, 2020.

Exploration of Strategic Alternatives

In addition, our board of directors (the "Board") continues to evaluate
strategic alternatives to maximize shareholder value. This process will consider
a range of potential strategic alternatives including, but not limited to,
business combinations. We do not plan to disclose or comment on developments
regarding the strategic review process until it is complete or further
disclosure is deemed appropriate. There can be no assurance that the exploration
of strategic alternatives will result in any transaction or other alternative.



44






August Offering



On August 13, 2020, pursuant to a securities purchase agreement with certain
institutional and accredited investors, dated August 11, 2020, we issued and
sold in a registered direct offering (the "August Offering") an aggregate of
1,207,744 shares of our common stock at an offering price of $5.67 per share,
for gross and net proceeds of approximately $6.8 million and $6.2 million,
respectively. We issued to the placement agent or its designees warrants to
purchase up to 96,620 shares of common stock at an exercise price of $7.0875 as
compensation in connection with the August Offering. Such warrants are
exercisable immediately and will expire on August 11, 2025. The August Offering
triggered an accrued payment to the Sellers of $684,790 (equal to 10% of the
gross proceeds raised from the August Offering), which will be due and payable
on September 24, 2020.

ChubeWorkx Settlement Agreement and General Release

On August 3, 2020, we entered into a Settlement Agreement and General Release
(the "SAGR") with ChubeWorkx Guernsey Limited ("ChubeWorkx"). We and ChubeWorkx
entered into the SAGR to terminate a prior Settlement Agreement, dated August
17, 2016, by and among us and ChubeWorkx (the "Prior Settlement Agreement" and,
collectively with all other contracts, agreements and understandings by and
between us and ChubeWorkx, whether written or oral, the "Prior Agreements"),
pursuant to which we granted ChubeWorkx a security interest in substantially all
of our assets, and to fully and finally settle and compromise any and all
current and future claims and liabilities of any nature arising between us and
ChubeWorkx in relation to, or otherwise connected with, the Prior Agreements, on
the terms set forth in the SAGR.



As consideration for the settlement of claims pursuant to the SAGR, we agreed to
(i) pay to ChubeWorkx an amount equal to $300,000 and (ii) deliver to ChubeWorkx
with 500,000 shares of our common stock. We granted ChubeWorkx registration
rights with respect to such shares. In the event that the we fail to file a
resale registration statement covering the such shares by August 18, 2020 (the
"Filing Deadline"), or fails to cause such registration statement to be declared
effective by the earlier of October 2, 2020 or 45 days after the filing of such
registration statement (the "Effectiveness Deadline"), then, on each of the
Filing Deadline and the Effectiveness Deadline, as the case may be, and on each
monthly anniversary thereof (if the such registration statement shall not have
been filed or declared effective by such date, as the case may be) until such
registration statement is filed or declared effective, we shall pay to
ChubeWorkx an amount in cash, as partial liquidated damages equal to 1.0% of the
market value of 500,000 shares of our common stock issued to ChubeWorkx pursuant
to the SAGR.

As of the earlier to occur, following and subject to delivery and complete full
effective legal transfer to ChubeWorkx of the shares of our common stock and
delivery of the cash payment to ChubeWorkx in full in accordance with the
provisions of the SAGR, of (i) the date that the resale registration statement
covering the such shares is declared effective by the SEC and (ii) the date that
all of such shares may be resold by ChubeWorkx under Rule 144 of the Securities
Act of 1933, as amended, without restriction (the "Release Date"), any and all
claims, differences, and disputes of any current and/or future claims and/or
liabilities arising between us and ChubeWorkx in relation to, or otherwise
connected with, the Prior Agreements shall be deemed fully and finally settled
and compromised (with the exception of any claims arising under the SAGR or the
Leak-Out and Support Agreement described below). As of the Release Date, each of
the Prior Agreements will be terminated, and ChubeWorkx will automatically and
irrevocably release all security interests and liens created under the Security
Agreement or otherwise as security for our obligations under the Prior
Agreements.

Chubeworkx Leak-Out and Support Agreement

On August 3, 2020, as an inducement to enter into the SAGR, and as one of the
conditions to the consummation of the transactions contemplated by the SAGR,
ChubeWorkx entered into a Leak-Out and Support Agreement with us, pursuant to
which ChubeWorkx agreed to vote its shares of common stock issued pursuant to
the SAGR in favor of each matter proposed and recommended for approval by the
Board or management at every meeting of the stockholders and on any action or
approval by written consent of the stockholders and (ii) limit sales of its
shares of common stock issued pursuant to the SAGR per day to no more than 10%
of our daily traded volume per day on the Nasdaq Capital Market and we agreed to
register the resale of such shares pursuant to a registration statement.



Corporate Governance Reforms



On May 28, 2020, the United Stated District Court for the District of New Jersey
approved that certain Amended Stipulation and Agreement of Settlement, dated
October 1, 2019 (the "Settlement") among the settling parties in connection with
a consolidated shareholder derivative action, Case No.: 2:18-cv-15992. Pursuant
to the Settlement, effective as of July 21, 2020, we made various modifications
to our corporate governance and business ethics practices as further discussed
below.



On July 21, 2020, our Board adopted amended and restated bylaws (the "A&R
Bylaws") that became effective as of July 21, 2020 pursuant to the Settlement.
The A&R Bylaws were adopted to require that, among other things: (i) each member
of the Board attend each annual meeting of our shareholders in person, absent
extraordinary circumstances; (ii) the role of the Chairman of the Board be
rotated among our independent directors every five years; (iii) at least half
(50%) of the Board be comprised of directors who qualify as independent
directors under applicable listing standards of The Nasdaq Stock Market LLC;
(iv) our independent directors to meet in executive session following each Board
meeting, in no event less than four (4) times per year; (v) following November
27, 2020, the positions of Chairman of the Board and Chief Executive Officer are
to be held by different individuals, and (vi) following November 27, 2020, no
one person shall serve the positions of the chief executive officer and the
chief financial officer. Pursuant to the Settlement, these changes will remain
in place for at least four years.



45

In addition, pursuant to the Settlement, on July 21, 2020, the Board formed a
risk and disclosure committee (the "Risk and Disclosure Committee") and adopted
a new whistleblower policy (the "Whistleblower Policy") and a charter for the
Risk and Disclosure Committee (the "Risk and Disclosure Committee Charter") to
govern the Risk and Disclosure Committee. In order to align our Code of Ethics
(the "Code") that applies to all of our directors, officers, and employees with
the newly adopted Whistleblower Policy and the Risk and Disclosure Committee
Charter, the Board revised the Code. As required by the Settlement, any waivers
of any provision of the Code may be granted only by the Risk and Disclosure
Committee. In addition, the Code was revised to clarify the enforcement
mechanism for violations of the Code. Furthermore, pursuant to the Settlement,
the Board approved and adopted revised charters of our standing committees.

Departure of Interim Chief Financial Officer

On July 19, 2020, we and Howard R. Yeaton, our Interim Chief Financial Officer,
agreed by mutual understanding that Mr. Yeaton's employment as our officer and
employee will cease effective August 19, 2020, in accordance with the terms of
his employment agreement dated January 6, 2020.

Appointment of Chief Financial Officer

On July 21, 2020, we entered into a CFO Consulting Agreement (the "Consulting
Agreement") with Brio Financial Group ("Brio"), pursuant to which we appointed
Mr. Stuart Benson as Chief Financial Officer, effective August 19, 2020, with a
term ending June 30, 2021. Pursuant to the Consulting Agreement, we will pay
Brio an initial retainer fee of $7,500 and a fixed monthly payment of $13,500,
commencing August 15, 2020. We will also be billed for travel and other
out-of-pocket costs, such as report production, postage, etc.

Summary of Statements of Operations for the Three Months Ended June 30, 2020 and 2019

On July 7, 2020, after the completion of a review of our medical device business
by our Board, we immediately ceased the production and sale of our rapid,
point-of-care screening and testing products and determined to devote our
attention and resources to our partnership with Premas for the development of a
COVID-19 Vaccine Candidate. The Board's evaluation included an assessment of our
product lineup and features, our market presence and the profit potential of our
medical device products along with their fit within the market as analog devices
within a principally digital product marketplace. Additionally, we had been
experiencing declining sales revenue and significant production delays resulting
in shipment backlogs for these products. We will continue to provide support for
our medical devices that remain in the marketplace through their respective

expiration dates.



Product Revenue

Akers' product revenue for the three months ended June 30, 2020 totaled ($1,888), a 100% decrease from the same period in 2019. The table below summarizes our revenue by product line for the three months ended June 30, 2020 and 2019, as well as the percentage of change year-over-year:

                                                For the Three Months Ended
                                                         June 30,
Product Lines                                    2020                 2019           Percent Change

Particle ImmunoFiltration Assay ("PIFA") $ (3,399 ) $ 304,658

                 (101 )%
MicroParticle Catalyzed Biosensor ("MPC")                -               65,344                 (100 )%
Repid Enzymatic Assay ("REA")                            -               85,000                 (100 )%
Other                                                1,511                9,511                  (84 )%
Total Product Revenue                       $       (1,888 )     $      464,513                 (100 )%

Product revenue (negative revenue) from our PIFA products decreased 101% to ($3,399) (2019: $304,658) during the three months ended June 30, 2020, as compared to the same period of 2019. The decrease in the 2020 quarter was principally attributable to product supply issues encountered in 2020 that resulted in only minimal shipments during the quarter.

MPC product sales decreased by 100% to $0 (2019: $65,344) during the three months ended June 30, 2020, on account of a decline in customer demand.

REA product sales decreased by 100% to $0 (2019: $85,000) during the three months ended June 30, 2020, as this product was discontinued during 2019.

Other revenue decreased to $1,511 (2019: $9,511) during the three months ended June 30, 2020 due to a decline in shipping/handling revenue.

Gross Income (Loss)



The gross margin percentage declined to a negative 255% (2019: 53%), principally
due to negative net revenues for the period and the impact of fixed and variable
production costs, as well as the impact of the charge to adjust inventory to net
realizable value. The gross loss was ($379,057) (2019: gross income of $244,649)
for the three months ended June 30, 2020.



Product cost of sales for the three months ended June 30, 2020 increased to
$377,169 (2019: $219,864). During the three months ended June 30, 2020, fixed
costs associated with production amounted to $104,955 (2019: $110,246)
(principally including personnel and facilities costs), variable production
costs were $78,375 (2019: $107,571) (principally costs for raw materials,
testing and production consumables) and on account of the unfavorable factors
existing within its rapid, point-of-care screening and testing products
business, as described above, we recorded a charge of $193,839 (2019: $2,047) to
adjust inventory to a net realizable value of $0.



46

Research and Development Expenses

Research and development expenses for the three months ended June 30, 2020
totaled $1,916,161, which was a 100% increase as compared to $0 for the three
months ended June 30, 2019, as we are currently focused on the development of
the COVID-19 Vaccine Candidate.



The table below summarizes our research and development expenses for the three
months ended June 30, 2020 and 2019 as well as the percentage of change
year-over-year:



                                               For the Three Months Ended
                                                        June 30,
Description                                    2020                 2019            Percent Change

Professional Service Costs                $       23,661       $             -                  100 %

Vaccine License and Development Costs          1,892,500                     -                  100 %
Total Research and Development Expenses   $    1,916,161       $           

 -                  100 %

Professional services costs are associated with the Cystron Medical Advisory Board established by the Board on April 10, 2020.

Vaccine license and development costs increased by 100%, for the three months ended June 30, 2020, as compared to the same period of 2019.

Pursuant to the terms of the MIPA, upon the closing of our registered direct
equity offering on April 8, 2020, we paid the Sellers $250,000, and upon the
closing of our registered direct offering on May 18, 2020, we incurred
obligations to pay the Sellers $892,500. Pursuant to that certain license
agreement, dated March 29, 2020, during the three months ended June 30, 2020, we
incurred development costs of $750,000 upon Premas having achieved certain

development milestones.



Administrative Expenses

Administrative expenses for the three months ended June 30, 2020, totaled $736,708, which was a 25% decrease as compared to $981,309 for the three months ended June 30, 2019.

The table below summarizes our administrative expenses for the three months
ended June 30, 2020 and 2019 as well as the percentage of change year-over-year:



                                              For the Three Months Ended
                                                       June 30,
Description                                    2020                 2019           Percent Change

Personnel Costs                           $      254,076       $      169,960                   49 %
Professional Service Costs                       133,051              345,282                  (61 )%
Stock Market & Investor Relations Costs           37,818               63,407                  (40 )%
Other Administrative Costs                       311,763              402,660                  (23 )%
Total Administrative Expense              $      736,708       $      981,309                  (25 )%




Personnel expenses increased by 49% for the three months ended June 30, 2020 as
compared to the same period of 2019 due to the addition of an executive staff
member.



Professional service costs decreased 61% for the three months ended June 30,
2020 as compared to the same period of 2019, principally due to decreased legal
fees.



Stock market and investor costs decreased 40% for the three months ended June
30, 2020. The decrease in these costs was principally associated with the
Company having delisted from the London Stock Exchange during the first half of
2019, and thereafter avoiding the costs associated with a presence on the London
Stock Exchange.

Other administrative expenses decreased by 23%, principally attributable to decreased stock-based compensation.

Sales and Marketing Expenses



Sales and marketing expenses for the three months ended June 30, 2020 totaled
$7,240 which was a 49% decrease compared to $14,139 for the three months ended
June 30, 2019.

Sales and marketing expenses decreased 49% for the three months ended June 30,
2020, as compared to the same period of 2019, principally on account of reduced
marketing service fees and reduced royalty expenses due to lower sales revenue.



47

Regulatory and Compliance Expenses

Regulatory and Compliance expenses for the three months ended June 30, 2020 totaled $67,667, which was an 11% increase, as compared to $60,909 for the three months ended June 30, 2019.

The table below summarizes our regulatory and compliance expenses for the three
months ended June 30, 2020 and 2019, as well as the percentage of change
year-over-year:



                                               For the Three Months Ended
                                                        June 30,
Description                                     2020                 2019           Percent Change

Personnel Costs                            $       56,439       $       59,237                   (5 )%
Professional Service Costs                         10,800                1,299                  731 %
Other Regulatory and Compliance Costs                 428                  373                   15 %

Total Regulatory and Compliance Expenses $ 67,667 $ 60,909

                   11 %




Professional service costs increased by 731% for the three months ended June 30,
2020, as compared to the same period of 2019, principally due to increased

third
party consultant costs.

Impairment of Prepaid Expenses

We determined that on account of the unfavorable factors existing within its
rapid, point-of-care screening and testing products business that prepaid
royalties of $291,442, which are based upon future revenues, were not
recoverable, and as such, were fully impaired during the three months ended

June
30, 2020.

Impairment of Production Equipment

We determined that as of June 30, 2020 equipment with a net book value of $18,680 utilized in the production of our rapid, point-of-care screening and testing products was fully impaired.

Impairment of Intangible Assets

We determined that on account of the unfavorable factors existing within its
rapid, point-of-care screening and testing products business, that the
intellectual property comprising the remaining intangible assets with a net book
value of $149,870 was fully impaired during the three months ended June 30,

2020.



Other Income and Expense



Other income, net of expenses, for the three months ended June 30, 2020, totaled
$29,138. Other income, net of expense, for the three months ended June 30,

2019
totaled $26,819.



The table below summarizes our other income and expenses for the three months
ended June 30, 2020 and 2019, as well as the percentage of change
year-over-year:



                                           For the Three Months Ended
                                                    June 30,
Description                                 2020                 2019           Percent Change

Currency Translation (Gains)/Losses $ (93 ) $ 219

               (142 )%
Losses on Investments                               -                  543                 (100 )%
Interest and Dividend Income                  (29,045 )            (27,581 )                  5 %

Total Other Income, Net of Expenses $ (29,138 ) $ (26,819 )

                  9 %




48

Summary of Statements of Operations for the Six Months Ended June 30, 2020 and 2019

Product Revenue



Akers' product revenue for the six months ended June 30, 2020 totaled $361,627,
a 66% decrease from the same period in 2019. The table below summarizes our
revenue by product line for the six months ended June 30, 2020 and 2019, as well
as the percentage of change year-over-year:



                          For the Six Months Ended
                                  June 30,
Product Lines               2020             2019          Percent Change

PIFA                    $    351,059      $   880,973                  (60 )%
MPC                                -           88,664                 (100 )%
REA                                -           85,000                 (100 )%
Other                         10,568           21,997                  (52 )%
Total Product Revenue   $    361,627      $ 1,076,634                  (66 )%




Product revenue from our PIFA products decreased 60% to $351,059 (2019:
$880,973) during the six months ended June 30, 2020, as compared to the same
period of 2019. The decrease in the 2020 period was principally attributable to
product supply issues encountered that resulted in reduced shipments during

the
period.

MPC product sales decreased by 100% to $0 (2019: $88,664) during the six months ended June 30, 2020, on account of the decline in customer demand.

REA product sales decreased by 100% to $0 (2019: $85,000) during the six months ended June 30, 2020, as this product was discontinued during 2019.

Other revenue decreased to $10,568 (2019: $21,997) during the six months ended June 30, 2020 due to a decline in shipping/handling revenue.

Gross Income (Loss)



The gross margin percentage declined to a negative 131% (2019: 57%), principally
due to a substantially lower net revenues for the period and the impact of fixed
and variable production costs, as well as the impact of the charge to adjust
inventory to net realizable value. The gross loss was ($188,413) (2019: gross
income of $610,833) for the six months ended June 30, 2020.



Product cost of sales for the six months ended June 30, 2020 increased to
$550,040 (2019: $465,801). During the six months ended June 30, 2020, fixed
costs associated with production amounted to $225,365 (2019: $270,325)
(principally including personnel and facilities costs), variable production
costs were $126,951 (2019: $193.429) (principally costs for raw materials,
testing and production consumables) and on account of the unfavorable factors
existing within its rapid, point-of-care screening and testing products
business, as described above, we recorded a charge of $197,724 (2019: $2,047) to
adjust inventory to a net realizable value of $0.

Research and Development Expenses

Research and development expenses for the six months ended June 30, 2020 totaled
$4,399,218 which was a 100% increase as compared to $0 for the six months ended
June 30, 2019.



The table below summarizes our research and development expenses for the six
months ended June 30, 2020 and 2019 as well as the percentage of change
year-over-year:



                                                  For the Six Months Ended
                                                          June 30,
Description                                      2020                    2019           Percent Change

Professional Service Costs                $            23,661       $            -                  100 %
Vaccine License and Development Costs               4,375,557                    -                  100 %
Total Research and Development Expenses   $         4,399,218       $      

     -                  100 %

Professional services costs are associated with the Cystron Medical Advisory Board established by the Board on April 10, 2020.

Vaccine license and development costs increased by 100%, for the six months ended June 30, 2020, as compared to the same period of 2019.

49






On March 24, 2020 we paid $1,000,000 to the Sellers and delivered 411,403 shares
of common stock and 211,353 shares of Series D Convertible Preferred Stock, with
an aggregate fair market value of $1,233,057, which in the aggregate was
$2,233,057, which was recorded as a charge to vaccine license and development
costs. Pursuant to the terms of the MIPA, upon the closing of our registered
direct equity offerings on April 8, 2020 and May 18, 2020, we incurred
obligations to pay the Sellers $250,000, and $892,500 respectively. Pursuant to
that certain license agreement, dated March 29, 2020, during the six months
ended June 30, 2020, we incurred development costs of $1,000,000 upon Premas
having achieved certain development milestones.



Administrative Expenses

Administrative expenses for the six months ended June 30, 2020, totaled $1,894,440, which was a 4% decrease as compared to $1,964,265 for the six months ended June 30, 2019.

The table below summarizes our administrative expenses for the six months ended June 30, 2020 and 2019 as well as the percentage of change year-over-year:

                                              For the Six Months Ended
                                                      June 30,
Description                                    2020              2019           Percent Change

Personnel Costs                           $      537,583     $     377,999                   42 %
Professional Service Costs                       680,407           575,165                   18 %

Stock Market & Investor Relations Costs           85,700           277,961 

                (69 )%
Other Administrative Costs                       590,750           733,140                  (19 )%
Total Administrative Expense              $    1,894,440     $   1,964,265                   (4 )%

Personnel expenses increased by 42% for the six months ended June 30, 2020 as
compared to the same period of 2019 due to the addition of an executive staff
member.

Professional service costs increased 18% for the six months ended June 30, 2020
as compared to the same period of 2019, principally due to increased legal

fees
and accounting & audit fees.

Stock market and investor costs decreased 69% for the six months ended June 30,
2020. The decrease in these costs was principally associated with the Company
having delisted from the London Stock Exchange during the first half of 2019,
and thereafter avoiding the costs associated with a presence on the London

Stock
Exchange.

Other administrative expenses decreased by 19%, principally attributable to decreased stock-based compensation.

Sales and Marketing Expenses

Sales and marketing expenses for the six months ended June 30, 2020 totaled $21,703 which was an 87% decrease compared to $163,979 for the six months ended June 30, 2019.

The table below summarizes our sales and marketing expenses for the six months
ended June 30, 2020 and 2019 as well as the percentage of change year-over-year:



                                              For the Six Months Ended
                                                      June 30,
Description                                   2020                 2019           Percent Change

Personnel Costs                          $            -       $       65,717                 (100 )%
Professional Service Costs                       (9,462 )             33,103                 (129 )%
Royalties and Outside Commission Costs           20,748               40,750                  (49 )%
Other Sales and Marketing Costs                  10,417               24,409                  (57 )%

Total Sales and Marketing Expenses $ 21,703 $ 163,979

                  (87 )%

During 2019, as part of our cost savings measures, we eliminated the personnel within the sales and marketing department.

Professional service costs decreased 129% for the six months ended June 30, 2020, as compared to the same period of 2019, principally on account of reductions in the services provided by third party vendors and the reversal of a charge for a marketing program.

50






Royalties and outside commission costs decreased 49% for the six months ended
June 30, 2020, as compared to the same period of 2019, principally on account of
reduced royalty expenses due to lower sales revenue and the elimination of the
independent sales representatives in 2019.

Other sales and marketing costs declined 57% principally due to the elimination of the support and maintenance of the OxiChek platform.

Regulatory and Compliance Expenses

Regulatory and Compliance expenses for the six months ended June 30, 2020 totaled $139,758, which was an 6% decrease, as compared to $149,300 for the six months ended June 30, 2019.

The table below summarizes our regulatory and compliance expenses for the six
months ended June 30, 2020 and 2019, as well as the percentage of change
year-over-year:



                                                For the Six Months Ended
                                                        June 30,
Description                                     2020                2019           Percent Change

Personnel Costs                            $      118,175       $     130,403                   (9 )%
Professional Service Costs                         18,155              10,043                   81 %
Other Regulatory and Compliance Costs               3,428               8,854                  (61 )%

Total Regulatory and Compliance Expenses $ 139,758 $ 149,300

                   (6 )%

Personnel costs decreased by 9% for the six months ended June 30, 2020 as compared to the same period of 2019. In January 2019, our headcount was reduced by one full-time employee.

Professional service costs increased by 81% for the six months ended June 30,
2020, as compared to the same period of 2019, principally due to an increase in
third party consultant costs.

Other regulatory and compliance costs decreased 61%, for the six months ended June 30, 2020, as compared to the same period of 2019, principally due to a decrease in the cost of lab supplies.

Impairment of Prepaid Expenses

We determined that on account of the unfavorable factors existing within its
rapid, point-of-care screening and testing products business that prepaid
royalties of $291,442, which are based upon future revenues, were not
recoverable, and as such, were fully impaired during the six months ended June
30, 2020.

Impairment of Production Equipment

We determined that as of June 30, 2020 equipment with a net book value of $18,680 utilized in the production of our rapid, point-of-care screening and testing products was fully impaired.

Impairment of Intangible Assets

We determined that on account of the unfavorable factors existing within its
rapid, point-of-care screening and testing products business, that the
intellectual property comprising the remaining intangible assets with a net book
value of $152,822 was fully impaired during the six months ended June 30, 2020.



Other Income and Expense



Other income, net of expenses, for the six months ended June 30, 2020, totaled
$39,127. Other income, net of expense, for the six months ended June 30, 2019
totaled $49,866.



51






The table below summarizes our other income and expenses for the six months
ended June 30, 2020 and 2019, as well as the percentage of change
year-over-year:



                                        For the Six Months Ended
                                                June 30,
Description                               2020              2019         Percent Change

Currency Translation (Gains)/Losses             (93 )         4,878        

        (102 )%
Losses on Investments                        36,714           4,258                  762 %
Interest and Dividend Income                (75,748 )       (59,002 )                 28 %

Total Other Income, Net of Expenses   $     (39,127 )     $ (49,866 )

         (22 )%

Loss on investments of $36,714 (2019 $4,258) was principally due to the impact of COVID-19 on the financial markets.

Interest and dividend income increased to $75,748 (2019 $59,002) principally due to the increase in funds available for investment.

Liquidity and Capital Resources

As of June 30, 2020, the Company's cash on hand was $11,561,811 (which included
restricted cash of $115,094), and its marketable securities were $6,856,805. The
Company has incurred net losses of $7,166,667 for the six months ended June 30,
2020 and $3,888,249 for the year ended December 31, 2019, respectively. As of
June 30, 2020, the Company had working capital of $15,772,329 and stockholder's
equity of $15,972,148. During the six months ended June 30, 2020, cash flows
used in operating activities were $3,883,101, consisting primarily of a net loss
of $7,166,667, which includes, principally, research and development costs in
connection with the purchase of a license and milestone license fees in the
aggregate amount of $4,375,557. Since its inception, the Company has met its
liquidity requirements principally through the sale of its common stock in
public and private placements.



On April 8, 2020, pursuant to a Securities Purchase Agreement with certain
institutional and accredited investors, we issued and sold in a registered
direct offering (the "April Offering") an aggregate of 766,667 shares of common
stock at an offering price of $6.00 per share, for gross and net proceeds of
$4,600,002 and $4,086,207, respectively. Pursuant to the terms of the MIPA, we
paid $250,000 of the net proceeds from the April Offering to pay the Sellers.



During the period of April 6, 2020 through April 16, 2020, warrants to purchase
an aggregate of 1,043,500 shares of Series C Convertible Preferred Stock were
exercised at an exercise price of $4.00 per share, yielding proceeds of
$4,174,000.



On May 18, 2020, pursuant to a Securities Purchase Agreement with certain
institutional and accredited investors, we issued and sold in a registered
direct offering (the "May Offering") an aggregate of 1,366,856 shares of its
common stock at an offering price of $3.53 per share, for gross and net proceeds
of $4,825,002 and $4,320,720, respectively. Pursuant to the terms of the MIPA,
we incurred an obligation to pay the Sellers $892,500 by September 24, 2020 in
connection with the May Offering.

During the period subsequent to June 30, 2020 and through August 11, 2020, warrants to purchase an aggregate of 891,500 shares of Series C Convertible Preferred Stock were exercised at an exercise price of $4.00 per share, yielding proceeds of $3,566,000.

In connection with the August Offering, we issued and sold an aggregate of 1,207,744 shares of its common stock at an offering price of $5.67 per share, for gross and net proceeds of $6,847,908 and approximately $6,178,000,

 respectively. Pursuant to the terms of the MIPA, we incurred an obligation to
pay the Sellers $684,790 by September 24, 2020 in connection with the August
Offering.



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 it will incur in the development of
the COVID-19 Vaccine, we anticipate that 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 strategic alternatives. Our
ability to obtain additional capital may depend on prevailing economic
conditions and financial, business and other factors beyond our control. The
COVID-19 pandemic has caused an unstable economic environment globally, and the
ultimate impact of the COVID-19 pandemic on the our operations is unknown and
will depend on future developments, which are highly uncertain and cannot be
predicted with confidence. These include, but are not limited to, the duration
of the COVID-19 pandemic, new information which may emerge concerning the
severity of the COVID-19 pandemic, and any additional preventative and
protective actions that regulators, or the board or management of the Company,
may determine are needed. Disruptions in the global financial markets may
adversely impact the availability and cost of credit, as well as our ability to
raise money in the capital markets. Current economic conditions have been and
continue to be volatile. Continued instability in these market conditions may
limit our ability to access the capital necessary to fund and grow its business.



We believe that that our current financial resources as of the date of the
issuance of these condensed consolidated financial statements are sufficient to
fund our current twelve month operating budget, and satisfying our estimated
liquidity needs for twelve months from the issuance of these condensed
consolidated financial statements.



52






Operating Activities

Our net cash used by operating activities totaled $3,883,101 during the six
months ended June 30, 2020. Net cash used consisted principally of the net loss
of $7,166,667, offset by a non-cash adjustment principally consisting of the
fair value of shares issued for the purchase of a license of $1,233,057,
impairment charges of $462,944, a charge to reduce inventory to net realizable
value $197,723, and an increase in trade and other payables of $1,071,566.



Our net cash consumed by operating activities totaled $1,610,352 during the six
months ended June 30, 2019. Cash was consumed by the loss of $1,711,849 reduced
by non-cash adjustments principally consisting of $3,514 for accrued interest on
marketable securities, $34,979 for depreciation and amortization of non-current
assets, $4,247 for the allowance of doubtful accounts, $4,258 for loss on sales
of securities and $144,828 for share based compensation. For the six months
ended June 30, 2019, within changes of assets and liabilities, cash provided
consisted of a decrease in inventories of $41,026, a decrease in prepaid
expenses of $305,531, a decrease in deposits and other receivables of $9,347, a
decrease in other assets of $4,330, off-set by an increase in trade receivables
of $94,781 and a decrease in trade and other payables of $355,782.



Investing Activities



The Company's net cash provided by investing totaled $2,231,367, as compared to
$1,292,130 during the six months ended June 30, 2020 and 2019, respectively. Net
cash provided by investing activities for the six months ended June 30, 2020
consisted of proceeds from the sale of marketable securities of $2,307,462,
offset by $76,095 for the purchase of marketable securities. During the six
months ended June 30, 2019, investing activities consisted of proceeds from the
sale of marketable securities of $1,354,646, offset by $62,516 for the purchase
of marketable securities and capital expenditures.



Financing Activities



The Company's net cash provided by financing activities during the six months
ended June 30, 2020 was $12,581,007 (2019: $0). Net cash provided during the
2020 period reflected the net proceeds from the April Offering and May Offering
of $8,406,927, the net proceeds from the exercise of Series C Convertible
Preferred Warrants of $4,174,000, the net proceeds from exercise of pre-funded
equity forward contracts for the purchase of common stock of $80.



Critical Accounting Policies

See accounting policies in Note 2 of the condensed consolidated financial statements included in Part I, Item 1 of this report.

Off-Balance Sheet Arrangements

We have no significant known off balance sheet arrangements.

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