Akari Therapeutics Plc
For the period ended Dec 31, 2023. Filed Mar 29, 2024.
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FY2023 · Filed Mar 29, 2024
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Item 16. Form 10-K Summary
Exhibit Index
| ExhibitNumber | Description |
| 2.1 | Agreement and Plan of Merger, dated as of March 4, 2024, by and among Akari Therapeutics, Plc, Peak Bio, Inc. and Pegasus Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 to Registrant's Current Report on Form 8-K, as filed with the SEC on March 5, 2024). |
| 2.2 | Share Exchange Agreement, dated as of July 10, 2015, by and between Celsus Therapeutics Plc and RPC Pharma Limited (incorporated by reference to Exhibit 2.1 to Registrant's Current Report on Form 8-K, as filed with the SEC on July 13, 2015). |
| 3.1 | Amended Articles of Association of Akari Therapeutics, Plc (incorporated by reference to the Exhibit 3.1 to Registrant’s Current Report on Form 6-K, as filed with the SEC on July 7, 2023). |
| 4.1 | Form of Deposit Agreement among the Registrant, Deutsche Bank Trust Company Americas, as Depositary, and all Owners and Holders from time to time of American Depositary Shares issued thereunder (incorporated by reference to the exhibit 99-a previously filed with the Registrant’s Registration Statement on Form F-6 (No. 333-185197) filed on November 30, 2012). |
| 4.2 | Amendment to Deposit Agreement among the Registrant, Deutsche Bank Trust Company Americas, as Depositary, and all Owners and Holders from time to time of American Depositary Shares issued thereunder (incorporated by reference to the registrant’s Post-Effective Amendment No. 1 to Registration Statement on Form F-6 (No. 333-185197) filed on December 24, 2013). |
| 4.3 | Form of American Depositary Receipt; the Form is Exhibit A of Amendment No. 1 to the Deposit Agreement (incorporated by reference to the exhibit previously filed with the Registrant’s Registration Statement on Form F-6 (No. 333-185197) filed on November 30, 2012). |
| 4.4 | Form of Amendment No. 2 to Deposit Agreement (incorporated by reference to the exhibit previously filed with the Registrant’s Post-Effective Amendment on Registration Statement Form F-6 (File No. 333-185197) filed on September 9, 2015). |
| 4.5 | Form of Amendment No. 3 to Deposit Agreement (incorporated by reference to the exhibit previously filed with the Registrant’s Post-Effective Amendment on Registration Statement Form F-6 (File No. 333-185197) filed on August 17, 2023). |
| 4.6 | Form of American Depositary Receipt; the Form is Exhibit A of Amendment No. 2 to the Deposit Agreement (incorporated by reference to the exhibit previously filed with the Registrant’s Post-Effective Amendment on Registration Statement Form F-6 (File No. 333-185197) filed on September 9, 2015). |
| 4.7* | Description of the Akari Therapeutics Plc Securities Registered Under Section 12 of the Securities Exchange Act of 1934. |
| 10.1 | Relationship Agreement, dated as of July 10, 2015, by and between Celsus Therapeutics Plc and RPC Pharma Limited. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, as filed with the SEC on July 13, 2015). |
| 10.2 | Form of Working Capital Agreement, by and between Volution Immuno Pharmaceuticals SA and the Shareholders named therein. (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, as filed with the SEC on July 13, 2015). |
| 10.3† | 2014 Equity Incentive Plan (incorporated by reference to Exhibit 99.1 to the Registrant's Report on Form 6-K (No. 001-36288), as filed with the SEC on June 24, 2014). |
| 10.4† | Amended and Restated 2014 Equity Incentive Plan (incorporated by reference to Annex E to the Registrants Definitive Proxy Statement on Schedule 14A, as filed with the SEC on August 3, 2015). |
| 10.5† | 2023 Equity Incentive Plan (incorporated by reference to Exhibit 4.8 to the Registrant’s Form S-8, as filed with the SEC on October 12, 2023). |
| 10.6†* | Form of ISO/NQ Stock Option Agreement Granted Under the 2023 Equity Incentive Plan |
| 10.7†* | Form of Restricted Stock Unit Agreement Granted Under the 2023 Equity Incentive Plan |
| 10.8 | Amended and Restated Non-Employee Director Compensation Policy (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, as filed with the SEC on June 30, 2016). |
| 10.9 | Form of Securities Purchase Agreement dated as of June 28, 2019 between Akari Therapeutics, Plc and the investors listed therein (incorporated by reference to Exhibit 10.1 to the Registrant’s Report on Form 6-K, as filed with the SEC on July 2, 2019). |
| 10.10 | Form of Warrant issued by Akari Therapeutics, Plc in connection with the July 2019 Registered Direct Offering (incorporated by reference to Exhibit 10.2 to the Registrant’s Report on Form 6-K, as filed with the SEC on July 2, 2019). |
| 10.11 | Form of Placement Agent Warrant issued by Akari Therapeutics, Plc in connection with the July 2019 Registered Direct Offering (incorporated by reference to Exhibit 4.6 to the Registrant’s Registration Statement on Form F-1 (333-233048), as filed with the SEC on August 6, 2019). |
| 10.12 | Form of Warrant issued by Akari Therapeutics, Plc in connection with the February 2020 Private Placement (incorporated by reference to Exhibit 10.2 to the Registrant’s Report on Form 6-K, as filed with the SEC on March 4, 2020). |
| 10.13 | Registration Rights Agreement dated June 30, 2020 between the Company and Aspire Capital Fund, LLC (incorporated by reference to Exhibit 4.1 to the Registrant’s Report on Form 6-K, as filed with the SEC on July 1, 2020). |
| 10.14 | Form of Warrant issued by Akari Therapeutics, Plc in connection with the July 2021 Private Placement (incorporated by reference to Exhibit 10.2 to the Registrant’s Report on Form 6-K, as filed with the SEC on July 20, 2021). |
| 10.15 | Form of Warrant issued by Akari Therapeutics, Plc in connection with the December 2021 Registered Direct Offering (incorporated by reference to Exhibit 10.2 to the Registrant’s Report on Form 6-K, as filed with the SEC on January 4, 2022). |
| 10.16 | Form of Warrant issued by Akari Therapeutics, Plc in connection with the March 2022 Registered Direct Offering (incorporated by reference to Exhibit 10.2 to the Registrant’s Report on Form 6-K, as filed with the SEC on March 10, 2022). |
| 10.17 | Form of Series A Warrant issued by Akari Therapeutics, Plc in connection with the September 2022 Registered Direct Offering and Concurrent Private Placement (incorporated by reference to Exhibit 10.2 to the Registrant’s Report on Form 6-K, as filed with the SEC on September 14, 2022). |
| 10.18 | Form of Series B Warrant issued by Akari Therapeutics, Plc in connection with the September 2022 Registered Direct Offering and Concurrent Private Placement (incorporated by reference to Exhibit 10.3 to Registrant’s Report on Form 6-K, as filed with the SEC on September 14, 2022). |
| 10.19 | Form of Pre-Funded Warrant issued under the Securities Purchase Agreement dated as of September 20, 2023 between Akari Therapeutics, Plc and the investors listed therein (incorporated by reference to Exhibit 10.2 to Registrant's Current Report on Form 8-K, as filed with the SEC on September 21, 2023. |
| 10.20 | Form of Placement Agent Warrant issued under the Securities Purchase Agreement dated as of September 20, 2023 between Akari Therapeutics, Plc and the investors listed therein (incorporated by reference to Exhibit 10.3 to Registrant's Current Report on Form 8-K, as filed with the SEC on September 21, 2023. |
| 10.21 | Executive Employment Agreement between the Company and Rachelle Jacques dated June 1, 2022 (incorporated by reference to Exhibit 10.11 to the Registrant’s Registration Statement on Form F-1, as filed with the SEC on October 12, 2022). |
| 10.22 | Stock Option Agreement between the Company and Rachelle Jacques dated June 1, 2022 (incorporated by reference to Exhibit 10.12 to Registrant’s Registration Statement on Form F-1, as filed with the SEC on October 12, 2022). |
| 10.23 | Restricted Stock Unit Agreement between the Company and Rachelle Jacques dated June 1, 2022 (incorporated by reference to Exhibit 10.13 to Registrant’s Registration Statement on Form F-1, as filed with the SEC on October 12, 2022). |
| 10.24†* | Stock Option Agreement between the Company and Rachelle Jacques dated March 28, 2023. |
| 10.25†* | Restricted Stock Unit Agreement between the Company and Rachelle Jacques dated June 1, 2023. |
| 10.26†* | Consulting Agreement between the Company and Wendy DiCicco dated July 17, 2023. |
| 10.27†* | Amendment No. 1 to Consulting Agreement between the Company and Wendy DiCicco dated September 1, 2023. |
| 10.28†* | Consulting Agreement between the Company and Wendy F. DiCicco dated January 15, 2024. |
| 10.29†* | Stock Option Agreement between the Company and Wendy F. DiCicco dated July 17, 2023. |
| 10.30 | Form of Voting and Support Agreement, dated as of March 4, 2024, by and among Akari, and certain stockholders of Peak Bio (incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K, as filed with the SEC on March 5, 2024). |
| 10.31 | Form of Voting and Support Agreement, dated as of March 4, 2024, by and among Peak Bio and certain shareholders of Akari (incorporated by reference to Exhibit 10.2 to Registrant's Current Report on Form 8-K, as filed with the SEC on March 5, 2024). |
| 21.1* | List of Subsidiaries. |
| 23.1* | Consent of Independent Registered Public Accounting Firm. |
| 31.1* | Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 31.2* | Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 32.1* | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 32.2* | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 97* | Clawback Policy. |
| 101.INS | Inline XBRL Instance Document–the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document. |
| 101.SCH | line XBRL Taxonomy Extension Schema With Embedded Linkbase Documents. |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
- Filed herewith.
† Indicates management contract or compensatory arrangement.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Akari Therapeutics, Plc | ||
| By: | ||
| Date: March 29, 2024 | /s/ Rachelle Jacques | |
|---|---|---|
| Rachelle Jacques | ||
| President, Chief Executive Officer and Director | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.
| Name | Title | Date |
|---|---|---|
| /s/ Rachelle Jacques | President, Chief Executive Officer and Director | March 29, 2024 |
| Rachelle Jacques | (principal executive officer) | |
| /s/ Wendy DiCicco | Interim Chief Financial Officer | March 29, 2024 |
| Wendy DiCicco | (principal financial officer and principal accounting officer) | |
| /s/ Dr. Ray Prudo | Chairman | March 29, 2024 |
| Dr. Ray Prudo | ||
| /s/ Donald Williams | Director | March 29, 2024 |
| Donald Williams | ||
| /s/ Michael Grissinger | Director | March 29, 2024 |
| Michael Grissinger | ||
| /s/ Wa’el Hashad | Director | March 29, 2024 |
| Wa'el Hashad | ||
| /s/ Samir Patel | Director | March 29, 2024 |
| Samir Patel | ||
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
| Report of Independent Registered Public Accounting Firm (BDO USA, P.C.; New York, NY; PCAOB ID# 243) | F-2 |
|---|---|
| Consolidated Balance Sheets as of December 31, 2023 and 2022 | F-4 |
| Consolidated Statements of Operations and Comprehensive Loss for the Years ended December 31, 2023 and 2022 | F-5 |
| Consolidated Statements of Shareholders’ (Deficit) Equity for the Years ended December 31, 2023 and 2022 | F-6 |
| Consolidated Statements of Cash Flows for the Years ended December 31, 2023 and 2022 | F-7 |
| Notes to Consolidated Financial Statements | F-8 |
Report of Independent Registered Public Accounting Firm
Shareholders and Board of Directors
Akari Therapeutics, Plc
Boston, Massachusetts
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Akari Therapeutics, Plc (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, changes in shareholders’ (deficit) equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Uncertainty
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Classification of Warrants
As described in Note 5 to the consolidated financial statements, in September 2023, the Company entered into purchase agreements to sell in a private placement to existing investors an aggregate of 551,816 American Depository Shares (“ADSs”) at $3.30 per ADS, and pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 48,387 ADSs at a purchase price per Pre-Funded Warrant of $3.10, for aggregate gross proceeds of approximately $2.0 million. The Company determined that the Pre-Funded Warrants met all of the criteria for equity classification and recorded them as a component of additional paid-in capital upon the closing of the transaction in October 2023.
We identified the evaluation of the financial statement classification for the Pre-Funded Warrants as a critical audit matter. Our principal considerations included the existence of accounting complexities related to certain provisions of the warrant agreement, including settlement provisions and derivative elements. Auditing these elements involved especially complex auditor judgment due to the terms of the applicable agreement, including the extent of specialized knowledge and skills needed.
The primary procedures we performed to address this critical audit matter included:
Evaluating the appropriateness of management’s conclusions through the review of: (i) the relevant terms of the warrant agreement, (ii) the completeness and accuracy of the Company’s technical accounting analysis, and (iii) the appropriateness of application of the relevant accounting literature.
Utilizing personnel with specialized knowledge and skills in technical accounting to assist in: (i) evaluating relevant terms of the warrant agreement in relation to the appropriate accounting literature, and (ii) assessing the appropriateness of conclusions reached by the Company.
/S/BDO USA, P.C.
We have served as the Company’s auditor since 2016.
New York, New York
March 29, 2024
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.