Full Press Release Details
AKARI THERAPEUTICS, PLC
Quarterly Report For The Period Ended March 31,
Condensed Consolidated Financial Statements
| Page | ||
| Condensed Consolidated Balance Sheets as of March 31, 2022 (Unaudited) and December 31, 2021 | 2 | |
| Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2022 (Unaudited) and March 31, 2021 (Unaudited) | 3 | |
| Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three Months Ended March 31, 2022 (Unaudited) and March 31, 2021 (Unaudited) | 4 | |
| Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 (Unaudited) and March 31, 2021 (Unaudited) | 5 | |
| Notes to Condensed Consolidated Financial Statements - Unaudited | 6-20 |
AKARI THERAPEUTICS, Plc
CONDENSED CONSOLIDATED BALANCE SHEETS
As of March 31, 2022 and December 31,
(in U.S. dollars, except share data)
| March 31, | December 31, | |||||||
| 2022 | 2021 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 16,722,503 | $ | 9,361,270 | ||||
| Prepaid expenses | 2,385,131 | 2,173,528 | ||||||
| Other current assets | 325,742 | 90,301 | ||||||
| Total Current Assets | 19,433,376 | 11,625,099 | ||||||
| Patent acquisition costs, net | 21,335 | 22,929 | ||||||
| Total Assets | $ | 19,454,711 | $ | 11,648,028 | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | 3,076,033 | 1,788,563 | ||||||
| Accrued expenses | 2,447,536 | 3,184,883 | ||||||
| Liability related to deposits received for share subscriptions | - | 1,120,000 | ||||||
| Total Liabilities | $ | 5,523,569 | $ | 6,093,446 | ||||
| Commitments and Contingencies | ||||||||
| Shareholders' Equity: | ||||||||
| Share capital of $0.0001 par value | ||||||||
| Authorized: 15,000,000,000 ordinary shares; issued and outstanding: 5,934,917,123 and 4,759,731,923 at March 31, 2022 and December 31, 2021, respectively | 593,492 | 475,973 | ||||||
| Additional paid-in capital | 166,598,599 | 153,130,813 | ||||||
| Capital redemption reserve | 52,193,811 | 52,193,811 | ||||||
| Accumulated other comprehensive loss | (573,317 | ) | (540,967 | ) | ||||
| Accumulated deficit | (204,881,443 | ) | (199,705,048 | ) | ||||
| Total Shareholders' Equity | 13,931,142 | 5,554,582 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 19,454,711 | $ | 11,648,028 |
See notes to condensed consolidated financial statements.
AKARI THERAPEUTICS, Plc
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
For the Three Months Ended March 31, 2022
| Three Months Ended | ||||||||
| March 31, 2022 | March 31, 2021 | |||||||
| Operating Expenses: | ||||||||
| Research and development expenses | $ | 2,139,607 | $ | 3,529,384 | ||||
| General and administrative expenses | 3,104,378 | 2,019,286 | ||||||
| Total Operating Expenses | 5,243,985 | 5,548,670 | ||||||
| Loss from Operations | (5,243,985 | ) | (5,548,670 | ) | ||||
| Other Income: | ||||||||
| Interest income | 4,362 | 3,735 | ||||||
| Foreign currency exchange gains (losses) | 70,337 | (285,854 | ) | |||||
| Other expenses | (7,109 | ) | (7,712 | ) | ||||
| Total Other Income (Loss) | 67,590 | (289,831 | ) | |||||
| Net Loss | (5,176,395 | ) | (5,838,501 | ) | ||||
| Other Comprehensive (Loss)/ Income: | ||||||||
| Foreign Currency Translation Adjustment | (32,350 | ) | 306,097 | |||||
| Comprehensive Loss | $ | (5,208,745 | ) | $ | (5,532,404 | ) | ||
| Loss per ordinary share (basic and diluted) | $ | (0.00 | ) | $ | (0.0 | ) | ||
| Weighted average ordinary shares (basic and diluted) | 5,358,350,789 | 3,847,331,923 |
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, 2021 | 4,759,731,923 | $ | 475,973 | $ | 153,130,813 | $ | 52,193,811 | $ | (540,967 | ) | $ | (199,705,048 | ) | $ | 5,554,582 | |||||||||||||
| Stock-based compensation | - | - | 98,836 | - | - | - | 98,836 | |||||||||||||||||||||
| Issuance of share capital related to financing, net of issuance costs | 1,175,185,200 | 117,519 | 13,368,950 | - | - | - | 13,486,469 | |||||||||||||||||||||
| Comprehensive loss | - | - | - | - | (32,350 | ) | (5,176,395 | ) | (5,208,745 | ) | ||||||||||||||||||
| Shareholders' Equity, March 31, 2022 | 5,934,917,123 | $ | 593,492 | $ | 166,598,599 | $ | 52,193,811 | $ | (573,317 | ) | $ | (204,881,443 | ) | $ | 13,931,142 |
| 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 |
See notes to condensed consolidated financial statements.
AKARI THERAPEUTICS, Plc
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2022
| Three Months Ended | ||||||||
| March 31, 2022 | March 31, 2021 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | (5,176,395 | ) | $ | (5,838,501 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 1,006 | 1,034 | ||||||
| Stock-based compensation | 98,836 | 84,892 | ||||||
| Foreign currency exchange (gains)/ losses | (82,362 | ) | 265,484 | |||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other current assets | (442,851 | ) | (623,629 | ) | ||||
| Accounts payable and accrued expenses | 552,155 | (1,307,452 | ) | |||||
| Total adjustments | 126,784 | (1,579,671 | ) | |||||
| Net Cash Used in Operating Activities | (5,049,611 | ) | (7,418,172 | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Net proceeds from issuance of shares | 12,366,469 | - | ||||||
| Net Cash Provided by Financing Activities | 12,366,469 | - | ||||||
| Effect of Exchange Rates on Cash | 44,375 | 30,720 | ||||||
| Net Increase/ (Decrease) in Cash | 7,361,233 | (7,387,452 | ) | |||||
| Cash, beginning of period | 9,361,270 | 14,055,777 | ||||||
| Cash, end of period | $ | 16,722,503 | $ | 6,668,325 | ||||
| Supplement cash flow information: | ||||||||
| Ordinary Share Subscriptions Deposit received in December 2021 | $ | 1,120,000 | $ | - |
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 biotechnology company focused on developing
advanced therapies for autoimmune and inflammatory 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, 2022, the Company has an
accumulated deficit of $204,881,443 and cash of $16,722,503 and negative cash flows from operating activities for the three months ended
March 31, 2022 in the amount of $5,049,611. 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 $30,000,000 of the Company's ADSs over the 30-month term of the Purchase Agreement (See Note 3). As of March 31,
2022, approximately $22,000,000 remains available under the facility.
The Company believes its current capital resources
are sufficient to support its operations into December 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, alliance and/or 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 pandemic and the Russian invasion of Ukraine, risks associated with
clinical 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. In
addition, the Company is subject to risks related to COVID-19.
For the three months ended March 31, 2022,
the Company reported a net loss of $5,176,395 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.
Public health epidemics or outbreaks could adversely
impact the Company's business. The situation surrounding the COVID-19 pandemic, including the mutation of variants, continues to
remain fluid globally and the Company continues to manage ongoing challenges associated with the pandemic as they relate to operations.
The potential for a material impact on our business, financial condition and results of operation remains a risk. Management cannot reasonably
estimate with any degree of certainty any future impact of COVID-19. Pandemics such as this can adversely impact the Company's business
as a result of disruptions, such as travel bans, quarantines, staffing shortages, 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 certain non-critical activities in medical centers. For example,
while now open for enrollment, prior clinical trials have been halted or delayed due to COVID-19. The extent to which COVID-19 impacts
operations will depend on future developments, including the scope of any new virus mutations and outbreaks, the nature of government
public health guidelines and the public's adherence to those guidelines, the rate of individuals becoming fully vaccinated and the public's
adherence to guidelines to receive booster vaccinations, and the extent to which new lockdowns may be needed or are required in particular
countries, including China. In particular, the continued spread of COVID-19 globally could adversely impact our 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 our product candidates, and could result in the inability of suppliers to deliver components
or raw materials, including drug product and drug substance, on a timely basis or at all, each of which in turn could have an adverse
impact on our business, financial condition and results of operation.
AKARI THERAPEUTICS, Plc
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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,
2022 and March 31, 2021 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, 2021 and notes thereto included in the Form 20-F for the year ended December 31, 2021 ("2021 Annual
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 been eliminated.
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