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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2024
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ |
Commission File Number 001-36288
Akari Therapeutics, Plc
(Exact name of Registrant as specified in its Charter)
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England and Wales |
98-1034922 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
22 Boston Wharf Road, FL 7 Boston, Massachusetts |
02210 |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (929) 274-7510
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
American Depositary Shares, each representing 2,000 Ordinary Shares, par value $0.0001 per share |
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AKTX |
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The Nasdaq Capital Market |
Ordinary Shares, $0.0001 par value per share* |
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The Nasdaq Capital Market |
* Trading, but only in connection with the American Depositary Shares.
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer |
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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|
|
|
|
|
Emerging growth company |
|
☐ |
|
|
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒
The number of shares of Registrant’s Ordinary Shares outstanding as of November 15, 2024 was 49,517,115,523.
TABLE OF CONTENTS
GENERAL INFORMATION
Unless otherwise stated or the context requires otherwise, references in this Quarterly Report on Form 10-Q ("Form 10-Q") to “Akari,” the “company,” the “Company,” “we,” “us,” “our” or similar designations refer to Akari Therapeutics, Plc and its subsidiaries, taken together. All trademarks, service marks, trade names and registered marks used in this report are trademarks, trade names or registered marks of their respective owners.
Statements made in this Quarterly Report on Form 10-Q concerning the contents of any agreement, contract or other document are summaries of such agreements, contracts or documents and are not complete description of all of their terms. If we filed any of these agreements, contracts or documents as exhibits to this Quarterly Report on Form 10-Q or to any previous filing with the Securities and Exchange Commission (“SEC”), you may read the document itself for a complete understanding of its terms.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q and the documents we incorporate by reference contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical fact, included or incorporated in this report regarding, among other things, our cash resources and projected cash runway, financial position, our strategy, strategic alternatives, future operations, clinical trials (including, without limitation, the anticipated timing enrollment, and results thereof), collaborations, intellectual property, future revenues, projected costs, fundraising and/or financing plans, prospects, developments relating to our competitors and our industry, the timing or likelihood of regulatory actions, filings and approvals for our current and future drug candidates, and the benefits related to the Merger Agreement (as defined below) and the plans and objectives of management are forward-looking statements. The words “believes,” “anticipates,” “estimates,” “plans,” “expects,” “intends,” “may,” “could,” “should,” “potential,” “likely,” “projects,” “intend,” “continue,” “will,” “schedule,” “would,” “aim,” “contemplate,” “estimate,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We cannot guarantee that we will actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may be beyond our control, and which may cause the actual results, performance, or achievements of the Company to be materially different from future results, performance, or achievements expressed or implied by such forward-looking statements.
There are a number of important factors that could cause our actual results to differ materially from those indicated or implied by forward-looking statements. These important factors include those set forth under Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 (our “Form 10-K”) and Part II “Item 1A. Risk Factors” of this Form 10-Q and in our other disclosures and filings we have made with the SEC. These factors and the other cautionary statements made in this Form 10-Q and the documents we incorporate by reference should be read as being applicable to all related forward-looking statements whenever they appear in this Form 10-Q and the documents we incorporate by reference.
In addition, any forward-looking statements represent our estimates only as of the date that this Form 10-Q is filed with the SEC and should not be relied upon as representing our estimates as of any subsequent date. All forward-looking statements included in this Form 10-Q are made as of the date hereof and are expressly qualified in their entirety by this cautionary notice. We disclaim any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as may be required by law.
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
AKARI THERAPEUTICS, PLC
Condensed Consolidated Balance Sheets
(Unaudited, in U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
(In thousands, except share and per share amounts) |
|
2024 |
|
|
2023* |
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash |
|
$ |
2,246 |
|
|
$ |
3,845 |
|
Prepaid expenses |
|
|
396 |
|
|
|
299 |
|
Other current assets |
|
|
92 |
|
|
|
197 |
|
Total current assets |
|
|
2,734 |
|
|
|
4,341 |
|
Patent acquisition costs, net |
|
|
— |
|
|
|
14 |
|
Total assets |
|
$ |
2,734 |
|
|
$ |
4,355 |
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ DEFICIT |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
4,782 |
|
|
$ |
1,671 |
|
Accrued expenses |
|
|
2,605 |
|
|
|
1,566 |
|
Convertible notes, related party |
|
|
1,000 |
|
|
|
— |
|
Warrant liability |
|
|
725 |
|
|
|
1,253 |
|
Other current liabilities |
|
|
316 |
|
|
|
94 |
|
Total current liabilities |
|
|
9,428 |
|
|
|
4,584 |
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ deficit: |
|
|
|
|
|
|
Share capital of $0.0001 par value |
|
|
|
|
|
|
Authorized: 45,122,321,523 ordinary shares at
September 30, 2024 and December 31, 2023, respectively;
issued and outstanding: 24,289,231,523 and 13,234,315,298 at
September 30, 2024 and December 31, 2023, respectively |
|
|
2,430 |
|
|
|
1,324 |
|
Additional paid-in capital |
|
|
183,088 |
|
|
|
174,754 |
|
Capital redemption reserve |
|
|
52,194 |
|
|
|
52,194 |
|
Accumulated other comprehensive loss |
|
|
(926 |
) |
|
|
(1,040 |
) |
Accumulated deficit |
|
|
(243,480 |
) |
|
|
(227,461 |
) |
Total shareholders’ deficit |
|
|
(6,694 |
) |
|
|
(229 |
) |
Total liabilities and shareholders' deficit |
|
$ |
2,734 |
|
|
$ |
4,355 |
|
———————
* The condensed balance sheet at December 31, 2023 has been derived from the audited consolidated financial statements at that date.
The accompanying notes are an integral part of these condensed consolidated financial statements.
AKARI THERAPEUTICS, PLC
Condensed Consolidated Statements of Operations
and Comprehensive Loss
(Unaudited, in U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
(In thousands, except share and per share amounts) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
$ |
143 |
|
|
$ |
(314 |
) |
|
$ |
5,736 |
|
|
$ |
2,941 |
|
General and administrative |
|
|
1,709 |
|
|
|
2,821 |
|
|
|
6,616 |
|
|
|
8,775 |
|
Merger-related costs |
|
|
992 |
|
|
|
— |
|
|
|
2,290 |
|
|
|
— |
|
Restructuring and other costs |
|
|
83 |
|
|
|
— |
|
|
|
1,723 |
|
|
|
— |
|
Loss from operations |
|
|
(2,927 |
) |
|
|
(2,507 |
) |
|
|
(16,365 |
) |
|
|
(11,716 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
3 |
|
|
|
16 |
|
|
|
7 |
|
|
|
75 |
|
Interest expense |
|
|
(69 |
) |
|
|
— |
|
|
|
(120 |
) |
|
|
— |
|
Change in fair value of warrant liability |
|
|
30 |
|
|
|
(258 |
) |
|
|
528 |
|
|
|
5,889 |
|
Foreign currency exchange gain (loss), net |
|
|
68 |
|
|
|
(100 |
) |
|
|
(67 |
) |
|
|
(72 |
) |
Other expense, net |
|
|
— |
|
|
|
(22 |
) |
|
|
(2 |
) |
|
|
(46 |
) |
Total other income (expense), net |
|
|
32 |
|
|
|
(364 |
) |
|
|
346 |
|
|
|
5,846 |
|
Net loss |
|
$ |
(2,895 |
) |
|
$ |
(2,871 |
) |
|
$ |
(16,019 |
) |
|
$ |
(5,870 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share –– basic and diluted |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
Weighted-average number of ordinary shares used in computing net loss per share –– basic and diluted |
|
|
24,386,005,523 |
|
|
|
10,116,903,598 |
|
|
|
18,911,928,794 |
|
|
|
10,119,421,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(2,895 |
) |
|
$ |
(2,871 |
) |
|
$ |
(16,019 |
) |
|
$ |
(5,870 |
) |
Other comprehensive income, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
|
(177 |
) |
|
|
(3 |
) |
|
|
114 |
|
|
|
(58 |
) |
Total other comprehensive income, net of tax |
|
|
(177 |
) |
|
|
(3 |
) |
|
|
114 |
|
|
|
(58 |
) |
Total comprehensive loss |
|
$ |
(3,072 |
) |
|
$ |
(2,874 |
) |
|
$ |
(15,905 |
) |
|
$ |
(5,928 |
) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
AKARI THERAPEUTICS, PLC
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Deficit)
(Unaudited, in U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
Capital |
|
|
Other |
|
|
|
|
|
Total |
|
|
|
Share Capital $0.0001 par value |
|
|
Paid-in- |
|
|
Redemption |
|
|
Comprehensive |
|
|
Accumulated |
|
|
Shareholders’ |
|
(In thousands, except share amounts) |
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Reserve |
|
|
Loss |
|
|
Deficit |
|
|
Deficit |
|
Balance, December 31, 2023 |
|
|
13,234,315,298 |
|
|
$ |
1,324 |
|
|
$ |
174,754 |
|
|
$ |
52,194 |
|
|
$ |
(1,040 |
) |
|
$ |
(227,461 |
) |
|
$ |
(229 |
) |
Issuance of share capital related to
financing, net of issuance costs |
|
|
2,641,228,000 |
|
|
|
264 |
|
|
|
1,400 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,664 |
|
Vesting of restricted shares |
|
|
97,578,000 |
|
|
|
10 |
|
|
|
(7 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3 |
|
Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
296 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
296 |
|
Foreign currency translation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
279 |
|
|
|
— |
|
|
|
279 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,566 |
) |
|
|
(5,566 |
) |
Balance, March 31, 2024 |
|
|
15,973,121,298 |
|
|
$ |
1,598 |
|
|
$ |
176,443 |
|
|
$ |
52,194 |
|
|
$ |
(761 |
) |
|
$ |
(233,027 |
) |
|
$ |
(3,553 |
) |
Issuance of share capital related to
financing, net of issuance costs |
|
|
8,059,508,000 |
|
|
|
806 |
|
|
|
6,145 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,951 |
|
Issuance of share capital for services |
|
|
91,396,000 |
|
|
|
9 |
|
|
|
(9 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Vesting of restricted shares |
|
|
285,697,400 |
|
|
|
29 |
|
|
|
(29 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Shares withheld for payroll taxes |
|
|
(120,490,000 |
) |
|
|
(12 |
) |
|
|
12 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
445 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
445 |
|
Foreign currency translation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12 |
|
|
|
— |
|
|
|
12 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7,558 |
) |
|
|
(7,558 |
) |
Balance, June 30, 2024 |
|
|
24,289,232,698 |
|
|
$ |
2,430 |
|
|
$ |
183,007 |
|
|
$ |
52,194 |
|
|
$ |
(749 |
) |
|
$ |
(240,585 |
) |
|
$ |
(3,703 |
) |
Proceeds from issuance of restricted shares |
|
|
— |
|
|
|
— |
|
|
|
26 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
26 |
|
Shares withheld for payroll taxes |
|
|
(1,175 |
) |
|
|
— |
|
|
|
(193 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(193 |
) |
Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
248 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
248 |
|
Foreign currency translation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(177 |
) |
|
|
— |
|
|
|
(177 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,895 |
) |
|
|
(2,895 |
) |
Balance, September 30, 2024 |
|
|
24,289,231,523 |
|
|
$ |
2,430 |
|
|
$ |
183,088 |
|
|
$ |
52,194 |
|
|
$ |
(926 |
) |
|
$ |
(243,480 |
) |
|
$ |
(6,694 |
) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
AKARI THERAPEUTICS, PLC
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Deficit) (Continued)
(Unaudited, in U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
Capital |
|
|
Other |
|
|
|
|
|
Total |
|
|
|
Share Capital $0.0001 par value |
|
|
Paid-in- |
|
|
Redemption |
|
|
Comprehensive |
|
|
Accumulated |
|
|
Shareholders’ |
|
(In thousands, except share amounts) |
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Reserve |
|
|
Loss |
|
|
Deficit |
|
|
Equity |
|
Balance, December 31, 2022 |
|
|
7,444,917,123 |
|
|
$ |
745 |
|
|
$ |
167,076 |
|
|
$ |
52,194 |
|
|
$ |
(771 |
) |
|
$ |
(217,453 |
) |
|
$ |
1,791 |
|
Issuance of share capital related to
financing, net of issuance costs |
|
|
2,666,666,700 |
|
|
|
267 |
|
|
|
3,235 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,502 |
|
Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
265 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
265 |
|
Foreign currency translation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
— |
|
|
|
2 |
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,001 |
|
|
|
1,001 |
|
Balance, March 31, 2023 |
|
|
10,111,583,823 |
|
|
$ |
1,012 |
|
|
$ |
170,576 |
|
|
$ |
52,194 |
|
|
$ |
(769 |
) |
|
$ |
(216,452 |
) |
|
$ |
6,561 |
|
Vesting of restricted shares |
|
|
10,737,700 |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
276 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
276 |
|
Foreign currency translation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(57 |
) |
|
|
— |
|
|
|
(57 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,000 |
) |
|
|
(4,000 |
) |
Balance, June 30, 2023 |
|
|
10,122,321,523 |
|
|
$ |
1,013 |
|
|
$ |
170,852 |
|
|
$ |
52,194 |
|
|
$ |
(826 |
) |
|
$ |
(220,452 |
) |
|
$ |
2,781 |
|
Vesting of restricted shares |
|
|
2,684,400 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
305 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
305 |
|
Foreign currency translation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
|
|
(2 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,871 |
) |
|
|
(2,871 |
) |
Balance, September 30, 2023 |
|
|
10,125,005,923 |
|
|
$ |
1,013 |
|
|
$ |
171,157 |
|
|
$ |
52,194 |
|
|
$ |
(828 |
) |
|
$ |
(223,323 |
) |
|
$ |
213 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
AKARI THERAPEUTICS, PLC
Condensed Consolidated Statements of Cash Flows
(Unaudited, in U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
September 30, |
|
(In thousands) |
|
2024 |
|
|
2023 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net loss |
|
$ |
(16,019 |
) |
|
$ |
(5,870 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
13 |
|
|
|
3 |
|
Share-based compensation |
|
|
989 |
|
|
|
846 |
|
Change in fair value of warrant liability |
|
|
(528 |
) |
|
|
(5,889 |
) |
Foreign currency exchange losses (gains) |
|
|
121 |
|
|
|
(54 |
) |
Change in assets and liabilities: |
|
|
|
|
|
|
Prepaid expenses and other current assets |
|
|
1,114 |
|
|
|
(223 |
) |
Accounts payable and accrued expenses |
|
|
3,882 |
|
|
|
(836 |
) |
Net cash used in operating activities |
|
|
(10,428 |
) |
|
|
(12,023 |
) |
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
Proceeds from issuance of shares, net of issuance costs |
|
|
8,687 |
|
|
|
3,502 |
|
Proceeds from issuance of convertible notes |
|
|
1,000 |
|
|
|
— |
|
Proceeds from issuance of restricted shares |
|
|
29 |
|
|
|
1 |
|
Payments on short-term financing arrangement |
|
|
(882 |
) |
|
|
— |
|
Net cash provided by financing activities |
|
|
8,834 |
|
|
|
3,503 |
|
|
|
|
|
|
|
|
Effect of exchange rates on cash |
|
|
(5 |
) |
|
|
1 |
|
|
|
|
|
|
|
|
Net decrease in cash |
|
|
(1,599 |
) |
|
|
(8,519 |
) |
Cash at beginning of period |
|
|
3,845 |
|
|
|
13,250 |
|
Cash at end of period |
|
$ |
2,246 |
|
|
$ |
4,731 |
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES: |
|
|
|
|
|
|
Financing costs in accrued expenses |
|
$ |
72 |
|
|
$ |
— |
|
Non-cash seller-financed purchases |
|
$ |
1,105 |
|
|
$ |
— |
|
Payroll taxes on share-based compensation in accrued expenses |
|
$ |
193 |
|
|
$ |
— |
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFO: |
|
|
|
|
|
|
Cash paid during the period for interest |
|
$ |
120 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
AKARI THERAPEUTICS, PLC
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Note 1. Description of Business
Business Overview
Akari Therapeutics, Plc, (the “Company” or “Akari”) is incorporated in the United Kingdom. The Company is a biotechnology company focused on developing advanced therapies for autoimmune and inflammatory diseases involving the complement component 5 (“C5”) and leukotriene B4 (“LTB4”) pathways. The Company’s activities since inception have consisted of performing research and development activities and raising capital.
The Company is subject to a number of risks similar to those of preclinical stage companies, including dependence on key individuals, uncertainty of product development and generation of revenues, dependence on outside sources of capital, risks associated with preclinical trials of products, dependence on third-party collaborators for research and development operations, need for marketing authorization of products, risks associated with protection of intellectual property, and competition with larger, better-capitalized companies.
To fully execute its business plan, the Company will need, among other things, to complete its research and development efforts and clinical and regulatory activities. These activities may take several years and will require significant operating and capital expenditures in the foreseeable future. There can be no assurance that these activities will be successful. If the Company is not successful in these activities it could delay, limit, reduce or terminate preclinical studies, clinical trials or other research and development activities.
Merger with Peak Bio
As further described in Note 10, on November 14, 2024, the Company closed the previously announced merger with Peak Bio, Inc. (“Peak Bio”). As a result, the Company expanded its pipeline of assets spanning early and late development stages with the addition of Peak Bio’s antibody drug conjugate (“ADC”) toolkit with novel payload and linker technologies as well as the Peak Bio PHP-303 small molecule selective and reversible neutrophil elastase inhibitor. By combining chemotherapy with immunotherapy strategies, the Company aims to develop cutting-edge solutions for cancer patients.
Liquidity and Financial Condition
The Company follows the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 205-40, Presentation of Financial Statements—Going Concern, which requires management to assess the Company’s ability to continue as a going concern within one year after the date the consolidated financial statements are issued.
The Company has incurred substantial losses and negative cash flows since inception and had an accumulated deficit of $243.5 million as of September 30, 2024. The Company’s cash balance of $2.2 million as of September 30, 2024 is not sufficient to fund its operations for the one-year period after the date these condensed consolidated financial statements are issued. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.
The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales of its product candidates currently in development. The Company is subject to a number of risks and uncertainties similar to those of other companies of the same size within the biotechnology industry, such as uncertainty of
clinical trial outcomes, uncertainty of additional funding, and history of operating losses. Substantial additional financing will be needed by the Company to fund its operations and to commercially develop its product candidates. Management is currently evaluating different strategies to obtain the required funding for future operations. These strategies may include, but are not limited to: product development financing, private placements and/or public offerings of equity and/or debt securities, and strategic research and development collaborations and/or similar arrangements. There can be no assurance that these future funding efforts will be successful.
Nasdaq Continued Listing Rules
On April 5, 2024, the Company received a letter (“Letter”) from the Listing Qualifications Staff (the “Staff”) of The Nasdaq Capital Market (“Nasdaq”) notifying the Company that the Company’s shareholders’ equity as reported in its Form 10-K is no longer in compliance with the minimum shareholders’ equity requirement for continued listing on Nasdaq under Nasdaq Listing Rule 5550(b)(1), which requires listed companies to maintain shareholders’ equity of at least $2.5 million (the “Shareholders’ Equity Requirement”). As reported on the Form 10-K, the Company’s shareholders’ deficit as of December 31, 2023 was approximately $0.2 million. As of September 30, 2024, the Company had a shareholders' deficit of $6.7 million and was not in compliance with the Shareholders' Equity Requirement.
In accordance with the Nasdaq Listing Rules, on May 20, 2024, the Company submitted a plan to regain compliance with the Stockholders’ Equity Requirement (the “Compliance Plan”) for the Staff’s consideration. On August 5, 2024, the Company was notified by the Staff that it has been granted an extension until September 30, 2024 to comply with the Compliance Plan and evidence compliance with the Shareholders’ Equity Requirement. On October 1, 2024, the Company received a delisting determination letter (“Delisting Determination Letter”) from the Staff notifying the Company that it did not meet the terms of an extension granted by Nasdaq to regain compliance with the Shareholders’ Equity Requirement. On October 8, 2024, the Company requested a hearing (the “Hearing”) before the Nasdaq Listing Qualifications Panel (“Panel”) to appeal the Staff’s delisting determination.
On November 18, 2024, the Company received a letter from the Nasdaq Office of General Counsel notifying the Company that the Company has regained compliance with the Shareholders’ Equity Requirement, and that the Hearing, originally scheduled for November 21, 2024, has been canceled.
Note 2. Summary of Significant Accounting Policies
Basis of presentation – The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and the rules and regulations of the SEC and assumes that the Company will continue to operate as a going concern. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. These condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments, including normal and recurring adjustments, which the Company considers necessary for the fair statement of financial information. The results of operations and comprehensive loss for the three and nine months ended September 30, 2024 are not necessarily indicative of expected results for the fiscal year ended December 31, 2024 or any other future period. These interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of December 31, 2023 and notes thereto included in its Form 10-K, as filed with the SEC on March 29, 2024.