Full Press Release Details
AKARI THERAPEUTICS, PLC
Quarterly Report For The Period Ended September 30,
Condensed Consolidated Financial Statements
| Page | ||
| Condensed Consolidated Balance Sheets as of September 30, 2021 (Unaudited) and December 31, 2020 | 2 | |
| Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2021 (Unaudited) and September 30, 2020 (Unaudited) | 3 | |
| Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three and Nine Months Ended September 30, 2021 (Unaudited) and September 30, 2020 (Unaudited) | 4 | |
| Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 (Unaudited) and September 30, 2020 (Unaudited) | 5 | |
| Notes to Condensed Consolidated Financial Statements - Unaudited | 6-22 |
AKARI THERAPEUTICS, Plc
CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2021 and December 31,
(in U.S. dollars, except share data)
| September 30, 2021 | December 31, 2020 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 13,390,989 | $ | 14,055,777 | ||||
| Prepaid expenses and other current assets | 1,303,605 | 521,880 | ||||||
| Total Current Assets | 14,694,594 | 14,577,657 | ||||||
| Patent acquisition costs, net | 23,927 | 27,150 | ||||||
| Total Assets | $ | 14,718,521 | $ | 14,604,807 | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 1,923,357 | $ | 3,380,782 | ||||
| Accrued expenses | 1,432,463 | 1,839,706 | ||||||
| Total Liabilities | 3,355,820 | 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: 4,759,731,923 and 3,847,331,923 at September 30, 2021 and December 31, 2020, respectively | 475,973 | 384,733 | ||||||
| Additional paid-in capital | 153,057,340 | 139,734,651 | ||||||
| Capital Redemption Reserve | 52,193,811 | 52,193,811 | ||||||
| Accumulated other comprehensive loss | (447,415 | ) | (648,065 | ) | ||||
| Accumulated deficit | (193,917,008 | ) | (182,280,811 | ) | ||||
| Total Shareholders' Equity | 11,362,701 | 9,384,319 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 14,718,521 | $ | 14,604,807 |
See notes to condensed consolidated financial statements.
AKARI THERAPEUTICS, Plc
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
For the Three and Nine Months Ended September 30,
2021 and September 30, 2020
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |||||||||||||
| Operating Expenses: | ||||||||||||||||
| Research and development (income) expenses | $ | (430,157 | ) | $ | (1,592,531 | ) | $ | 5,282,576 | $ | 4,160,066 | ||||||
| General and administrative expenses | 1,893,559 | 1,839,414 | 6,059,497 | 6,925,400 | ||||||||||||
| Total Operating Expenses | 1,463,402 | 246,883 | 11,342,073 | 11,085,466 | ||||||||||||
| Loss from Operations | (1,463,402 | ) | (246,883 | ) | (11,342,073 | ) | (11,085,466 | ) | ||||||||
| Other Income (expenses): | ||||||||||||||||
| Interest income | 1,371 | 6,132 | 6,621 | 8,294 | ||||||||||||
| Changes in fair value of warrant liabilities - gain | - | 1,003,521 | - | 397,368 | ||||||||||||
| Foreign currency exchange gains (losses) | 14,224 | 156,360 | (284,384 | ) | 417,756 | |||||||||||
| Other expenses | (3,554 | ) | (5,676 | ) | (16,361 | ) | (9,720 | ) | ||||||||
| Total Other Income (expenses) | 12,041 | 1,160,337 | (294,124 | ) | 813,698 | |||||||||||
| Net Income (loss) | (1,451,361 | ) | 913,454 | (11,636,197 | ) | (10,271,768 | ) | |||||||||
| Other Comprehensive Income (loss): | ||||||||||||||||
| Foreign Currency Translation Adjustment | (27,329 | ) | (3,676 | ) | 200,650 | (272,438 | ) | |||||||||
| Comprehensive Income (loss) | $ | (1,478,690 | ) | $ | 909,778 | $ | (11,435,547 | ) | $ | (10,544,206 | ) | |||||
| Earnings (loss) per ordinary share (basic and diluted) | $ | (0.00 | ) | $ | 0.00 | $ | (0.00 | ) | $ | (0.00 | ) | |||||
| Weighted average ordinary shares (basic and diluted) | 4,645,842,719 | 3,386,573,113 | 4,134,526,690 | 3,336,002,895 |
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 and Nine Months Ended September
| 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 | ) | |||||||||||||||||||
| Balance, March 31, 2021 | 3,847,331,923 | $ | 384,733 | $ | 139,819,543 | 52,193,811 | (341,968 | ) | $ | (188,119,312 | ) | $ | 3,936,807 | |||||||||||||||
| Stock-based compensation | - | - | 82,102 | - | - | - | 82,102 | |||||||||||||||||||||
| Issuance of share capital related to financing, net of issuance costs | 117,647,100 | 11,765 | 1,981,764 | - | - | - | 1,993,529 | |||||||||||||||||||||
| Comprehensive income (loss) | - | - | - | - | (78,118 | ) | (4,346,335 | ) | (4,424,453 | ) | ||||||||||||||||||
| Balance, June 30, 2021 | 3,964,979,023 | $ | 396,498 | $ | 141,883,409 | $ | 52,193,811 | $ | (420,086 | ) | $ | (192,465,647 | ) | $ | 1,587,985 | |||||||||||||
| Stock-based compensation | - | - | 70,611 | - | - | - | 70,611 | |||||||||||||||||||||
| Issuance of share capital related to financing, net of issuance costs | 794,752,900 | 79,475 | 11,103,320 | - | - | - | 11,182,795 | |||||||||||||||||||||
| Comprehensive income (loss) | - | - | - | - | (27,329 | ) | (1,451,361 | ) | (1,478,690 | ) | ||||||||||||||||||
| Shareholders' Equity, September 30, 2021 | 4,759,731,923 | $ | 475,973 | $ | 153,057,340 | $ | 52,193,811 | $ | (447,415 | ) | $ | (193,917,008 | ) | $ | 11,362,701 |
| 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 | |||||||||||||
| Stock-based compensation | - | - | 63,330 | - | - | - | 63,330 | |||||||||||||||||||||
| Issuance of share capital related to financing, net of issuance costs | 471,666,700 | 5,953,175 | 3,230,671 | - | - | - | 9,183,847 | |||||||||||||||||||||
| Issuance of share capital for entering into 2020 Purchase Agreement with Aspire Capital | 40,760,900 | 523,778 | 376,222 | - | - | - | 900,000 | |||||||||||||||||||||
| Exercise of warrants | 1,250,000 | 15,941 | 11,559 | - | - | - | 27,500 | |||||||||||||||||||||
| Comprehensive income (loss) | - | - | - | - | (46,037 | ) | (7,439,815 | ) | (7,485,852 | ) | ||||||||||||||||||
| Balance, June 30, 2020 | 3,386,573,113 | $ | 46,578,543 | $ | 136,380,909 | $ | - | $ | (617,622 | ) | $ | (176,384,416 | ) | $ | 5,957,414 | |||||||||||||
| Stock-based compensation | - | - | 81,107 | - | - | - | 81,107 | |||||||||||||||||||||
| Comprehensive income (loss) | - | - | - | - | (3,676 | ) | 913,454 | 909,778 | ||||||||||||||||||||
| Shareholders' Equity, September 30, 2020 | 3,386,573,113 | $ | 46,578,543 | $ | 136,462,016 | $ | - | $ | (621,298 | ) | $ | (175,470,962 | ) | $ | 6,948,298 |
See notes to condensed consolidated financial statements.
AKARI THERAPEUTICS, Plc
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2021 and
| Nine Months Ended | ||||||||
| September 30, 2021 | September 30, 2020 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | (11,636,197 | ) | $ | (10,271,768 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 3,116 | 7,907 | ||||||
| Stock-based compensation | 237,605 | 244,941 | ||||||
| Financing expense | - | 900,000 | ||||||
| Changes in fair value of warrant liabilities - gain | - | (397,368 | ) | |||||
| Foreign currency exchange losses (gains) | 193,289 | (488,532 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other current assets | (782,144 | ) | (635,758 | ) | ||||
| Accounts payable and accrued expenses | (1,858,325 | ) | (2,076,709 | ) | ||||
| Total adjustments | (2,206,459 | ) | (2,445,519 | ) | ||||
| Net Cash Used in Operating Activities | (13,842,656 | ) | (12,717,287 | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Net proceeds from issuance of shares | 13,176,323 | 19,053,960 | ||||||
| Net proceeds from exercise of warrants to purchase shares | - | 27,500 | ||||||
| Net Cash Provided by Financing Activities | 13,176,323 | 19,081,460 | ||||||
| Effect of Exchange Rates on Cash | 1,545 | 221,934 | ||||||
| Net (Decrease) Increase in Cash | (664,788 | ) | 6,586,107 | |||||
| Cash, beginning of period | 14,055,777 | 5,731,691 | ||||||
| Cash, end of period | $ | 13,390,989 | $ | 12,317,798 |
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 September 30, 2021, the Company has an
accumulated deficit of $193,917,008 and cash of $13,390,989 and negative cash flows from operating activities for the nine months
ended September 30, 2021 in the amount of $13,842,656. On September 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 September 30, 2021, approximately $22,000,000 remains available under the facility.
The Company believes its current capital resources are sufficient to support its operations into March 2022 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 commercial products.
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 nine months ended September 30, 2021,
the Company reported a net loss of $11,636,197 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 although 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 and nine months ended September 30, 2021 and September 30,
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