Full Press Release Details
AKARI THERAPEUTICS, PLC
Quarterly Report For The Period Ended March
Condensed Consolidated Financial Statements
| Page | ||||
| Condensed Consolidated Balance Sheets as of March 31, 2021 (Unaudited) and December 31, 2020 | 2 | |||
| Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2021 (Unaudited) and March 31, 2020 (Unaudited) | 3 | |||
| Condensed Consolidated Statements of Changes in Shareholders' Equity (Deficit) for the Three Months Ended March 31, 2021 (Unaudited) and March 31, 2020 (Unaudited) | 4 | |||
| Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 (Unaudited) and March 31, 2020 (Unaudited) | 5 | |||
| Notes to Condensed Consolidated Financial Statements - Unaudited | 6-17 |
AKARI THERAPEUTICS, Plc
CONDENSED CONSOLIDATED BALANCE SHEETS
As of March 31, 2021 and December 31, 2020
(in U.S. dollars, except share data)
| March 31, 2021 | December 31, 2020 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 6,668,325 | $ | 14,055,777 | ||||
| Prepaid expenses and other current assets | 1,144,960 | 521,880 | ||||||
| Total Current Assets | 7,813,285 | 14,577,657 | ||||||
| Patent acquisition costs, net | 26,460 | 27,150 | ||||||
| Total Assets | $ | 7,839,745 | $ | 14,604,807 | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 2,831,779 | $ | 3,380,782 | ||||
| Accrued expenses | 1,071,159 | 1,839,706 | ||||||
| Total Liabilities | 3,902,938 | 5,220,488 | ||||||
| Commitments and Contingencies | ||||||||
| Shareholders' Equity: | ||||||||
| Share capital of $0.0001 par value par value | ||||||||
| Authorized: 10,000,000,000 ordinary shares; issued and outstanding: 3,847,331,923 and 3,847,331,923 at March 31, 2021 and December 31, 2020, respectively | 384,733 | 384,733 | ||||||
| Additional paid-in capital | 139,819,543 | 139,734,651 | ||||||
| Capital Redemption Reserve | 52,193,811 | 52,193,811 | ||||||
| Accumulated other comprehensive loss | (341,968 | ) | (648,065 | ) | ||||
| Accumulated deficit | (188,119,312 | ) | (182,280,811 | ) | ||||
| Total Shareholders' Equity | 3,936,807 | 9,384,319 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 7,839,745 | $ | 14,604,807 |
See notes to condensed consolidated financial statements.
AKARI THERAPEUTICS, Plc
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
For the Three Months Ended March 31, 2021 and 2020
| Three Months Ended | ||||||||
| March 31, 2021 | March 31, 2020 | |||||||
| Operating Expenses: | ||||||||
| Research and development expenses | $ | 3,529,384 | $ | 2,732,165 | ||||
| General and administrative expenses | 2,019,286 | 2,194,809 | ||||||
| Total Operating Expenses | 5,548,670 | 4,926,974 | ||||||
| Loss from Operations | (5,548,670 | ) | (4,926,974 | ) | ||||
| Other (Expenses) Income: | ||||||||
| Interest income | 3,735 | 1,010 | ||||||
| Changes in fair value of warrant liabilities - gain | - | 949,456 | ||||||
| Foreign currency exchange (losses) gains | (285,854 | ) | 233,404 | |||||
| Other expenses | (7,712 | ) | (2,303 | ) | ||||
| Total Other (Expenses) Income | (289,831 | ) | 1,181,567 | |||||
| Net Loss | (5,838,501 | ) | (3,745,407 | ) | ||||
| Other Comprehensive Income (Loss): | ||||||||
| Foreign Currency Translation Adjustment | 306,097 | (222,725 | ) | |||||
| Comprehensive Loss | $ | (5,532,404 | ) | $ | (3,968,132 | ) | ||
| Loss per ordinary share (basic and diluted) | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Weighted average ordinary shares outstanding (basic and diluted) | 3,847,331,923 | 2,516,280,709 |
See notes to condensed consolidated financial statements.
AKARI THERAPEUTICS, Plc
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
SHAREHOLDERS' EQUITY - UNAUDITED
As of and for the Three Months Ended March 31,
| Accumulated | ||||||||||||||||||||||||||||
| Additional | Capital | Other | ||||||||||||||||||||||||||
| Share Capital | Paid-in | Redemption | Comprehensive | Accumulated | ||||||||||||||||||||||||
| Shares | Amount | Capital | Reserve | Loss | Deficit | Total | ||||||||||||||||||||||
| Shareholders' Equity, December 31, 2020 | 3,847,331,923 | $ | 384,733 | $ | 139,734,651 | $ | 52,193,811 | $ | (648,065 | ) | $ | (182,280,811 | ) | $ | 9,384,319 | |||||||||||||
| Stock-based compensation | - | - | 84,892 | - | - | - | 84,892 | |||||||||||||||||||||
| Comprehensive income (loss) | - | - | - | - | 306,097 | (5,838,501 | ) | (5,532,404 | ) | |||||||||||||||||||
| Shareholders' Equity, March 31, 2021 | 3,847,331,923 | $ | 384,733 | $ | 139,819,543 | $ | 52,193,811 | $ | (341,968 | ) | $ | (188,119,312 | ) | $ | 3,936,807 |
| Accumulated | ||||||||||||||||||||||||||||
| Additional | Capital | Other | ||||||||||||||||||||||||||
| Share Capital | Paid-in | Redemption | Comprehensive | Accumulated | ||||||||||||||||||||||||
| Shares | Amount | Capital | Reserve | Loss | Deficit | Total | ||||||||||||||||||||||
| Shareholders' Equity, December 31, 2019 | 2,245,865,913 | $ | 31,987,016 | $ | 133,568,636 | $ | - | $ | (348,860 | ) | $ | (165,199,194 | ) | $ | 7,598 | |||||||||||||
| Stock-based compensation | - | - | 100,504 | - | - | - | 100,504 | |||||||||||||||||||||
| Issuance of share capital related to financing, net of issuance costs | 627,029,600 | 8,098,632 | (970,013 | ) | - | - | - | 7,128,619 | ||||||||||||||||||||
| Comprehensive income (loss) | - | - | - | - | (222,725 | ) | (3,745,407 | ) | (3,968,132 | ) | ||||||||||||||||||
| Shareholders' Equity, March 31, 2020 | 2,872,895,513 | $ | 40,085,648 | $ | 132,699,127 | $ | - | $ | (571,585 | ) | $ | (168,944,601 | ) | $ | 3,268,589 |
See notes to condensed consolidated financial statements.
AKARI THERAPEUTICS, Plc
CONDENSED CONSOLIDATED STATEMENTS OF CASH
For the Three Months Ended March 31, 2021 and 2020
| Three Months Ended | ||||||||
| March 31, 2021 | March 31, 2020 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | (5,838,501 | ) | $ | (3,745,407 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 1,034 | 3,877 | ||||||
| Stock-based compensation | 84,892 | 100,504 | ||||||
| Changes in fair value of warrant liabilities - gain | - | (949,456 | ) | |||||
| Foreign currency exchange losses (gains) | 265,484 | (171,806 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other current assets | (623,629 | ) | (1,115,329 | ) | ||||
| Accounts payable and accrued expenses | (1,307,452 | ) | (1,862,039 | ) | ||||
| Total adjustments | (1,579,671 | ) | (3,994,249 | ) | ||||
| Net Cash Used in Operating Activities | (7,418,172 | ) | (7,739,656 | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Net proceeds from issuance of shares and warrants | - | 9,877,988 | ||||||
| Net Cash Provided by Financing Activities | - | 9,877,988 | ||||||
| Effect of Exchange Rates on Cash | 30,720 | (47,843 | ) | |||||
| Net (Decrease) Increase in Cash | (7,387,452 | ) | 2,090,489 | |||||
| Cash, beginning of period | 14,055,777 | 5,731,691 | ||||||
| Cash, end of period | $ | 6,668,325 | $ | 7,822,180 |
See notes to condensed consolidated financial statements.
AKARI THERAPEUTICS, Plc
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Akari Therapeutics, Plc, (the "Company"
or "Akari") is incorporated in the United Kingdom. The Company is a clinical-stage biopharmaceutical company focused on developing
treatments for autoinflammatory diseases involving the complement (C5) and leukotriene (LTB4) pathways. The Company's activities
since inception have consisted of performing research and development activities and raising capital.
As of March 31, 2021, the Company has
an accumulated deficit of $188,119,312 and cash of $6,668,325 and negative cash flows from operating activities in the amount of $7,418,172.
On June 30, 2020, the Company entered into a securities purchase agreement (the "2020 Purchase Agreement") with Aspire Capital
Fund, LLC, an Illinois limited liability company ("Aspire Capital") which provides that, upon the terms and subject to the
conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $30.0 million of the Company's
ADSs over the 30-month term of the Purchase Agreement (See Note 3). As of March 31, 2021, $24,000,000 remains available under the facility.
The Company believes its current capital
resources are sufficient to support its operations into September 2021 without giving effect to the sale of additional shares to Aspire
Capital under the Purchase Agreement. To fund its capital needs, the Company plans to raise additional funds through equity or debt financings
or other sources, such as strategic partnerships and alliance and licensing arrangements, and in the long term, proceeds from sales of
The Company is subject to a number of risks similar
to those of clinical stage companies, including dependence on key individuals, uncertainty of product development and generation of revenues,
dependence on outside sources of capital, risks associated with the outbreak of coronavirus, risks associated with clinical trials of
products, dependence on third-party collaborators for research operations, need for regulatory approval of products, risks associated
with protection of intellectual property, and competition with larger, better-capitalized companies. In addition, the Company is subject
to risks related to the COVID-19 outbreak.
For the three months ended March 31,
2021, the Company reported a net loss of $5,838,501 and expects to continue to incur substantial losses over the next several years during
its development phase. 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. To fund its capital needs, the Company plans to raise funds through equity or debt financings or other sources, such as strategic
partnerships and alliance and licensing arrangements, and in the long term, from the proceeds from sales of commercial products. Additional
funds may not be available when the Company needs them, on terms that are acceptable to it, or at all. These matters raise substantial
doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments to the
carrying amounts and classifications of assets and liabilities that would result if the Company was unable to continue as a going concern.
The global outbreak of COVID-19, also
known as coronavirus and public health epidemics can adversely impact the Company's business as a result of disruptions, such as
travel bans, quarantines, and interruptions to access the trial sites and supply chains, which could result in material delays and complications
with respect to our research and development programs and clinical trials. Moreover, as a result of COVID-19, there is a general unease
of conducting unnecessary activities in medical centers. As a consequence, the Company's ongoing trials have been halted or disrupted.
It is too early to assess the full impact of the COVID-19 outbreak on trials for nomacopan, but COVID-19 may affect the Company's
ability to complete recruitment in the original timeframe. For example, during 2020, the Phase I/II clinical trial in patients with AKC
study was halted and recruitment in the Phase III clinical trial in pediatric patients with HSCT-TMA was delayed until the end of 2020
althought it is now open for enrollment of patients. The extent to which COVID-19 impacts operations will depend on future developments,
which are highly uncertain and cannot be predicted with confidence, including the duration and continued severity of the outbreak, and
the actions that may be required to contain the coronavirus or treat its impact. In particular, the continued spread of COVID-19 globally
could adversely impact the Company's operations and workforce, including research and clinical trials and the ability to raise capital,
could affect the operations of key governmental agencies, such as the FDA, which may delay the development of the Company's product
candidates, and could result in the inability of suppliers to deliver components or raw materials on a timely basis or at all, each of
which in turn could have an adverse impact on the Company's business, financial condition and results of operation.
AKARI THERAPEUTICS, Plc
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation - The
accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with 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 of the information and footnotes required by U.S. GAAP for complete financial statements. These financial statements
have been prepared on the same basis as the Company's annual financial statements and, in the opinion of management, reflect all
adjustments, including normal and recurring adjustments, which the Company considers necessary for the fair presentation of financial
information. The results of operations and comprehensive loss for the three months ended March 31, 2021 and March 31, 2020, are not necessarily
indicative of expected results for the full fiscal year or any other period. These interim condensed consolidated financial statements
should be read in conjunction with the Company's audited financial statements as of December 31, 2020 and notes thereto included
in the Form 20-F for the year ended December 31, 2020 ("2020 Annual Report").
Principles of Consolidation - The
unaudited Condensed Consolidated Financial Statements include the accounts of the Company, Volution Immuno Pharmaceuticals SA, a private
Swiss company, and Akari Malta Limited, a private Maltese company, each wholly-owned subsidiaries. All intercompany transactions have
Foreign Currency - The functional
currency of the Company is U.S. dollars, as that is the primary economic environment in which the Company operates as well as the currency
in which it has been financed.
The reporting currency of the Company is U.S.
dollars. The Company translated its non-U.S. operations' assets and liabilities denominated in foreign currencies into U.S. dollars
at current rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the reporting
period. Translation adjustments resulting from exchange rate fluctuations are recorded as foreign currency translation adjustments, a
component of accumulated other comprehensive loss. Gains or losses from foreign currency transactions are included in foreign currency
exchange gains/ (losses).
Use of Estimates - The preparation