Akari Therapeutics Plc

Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2024. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applied its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosures controls and procedures were not effective at a reasonable assurance level as of December 31, 2024, due to the material weaknesses described below in Management's Annual Report on Internal Control over Financial Reporting.

a)

Management’s Annual Report on Internal Control over Financial Reporting

Our management, with the participation of our principal executive officer and principal financial officer, is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

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Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

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Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

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Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework(2013). Based on its assessment, management concluded that as of December 31, 2024, our internal control over financial reporting was not effective at the reasonable assurance level due to the material weaknesses described below.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

During 2024, we migrated our ERP system to QuickBooks and our payables management to Bill.com with the intention of introducing manual controls to mitigate the known control deficiencies inherent in such systems. In addition, we acquired Peak Bio in November 2024. Due to the reduction-in-force announced in May 2024 and other personnel changes during the year, we did not have sufficient personnel available to lead the implementation of the necessary manual controls relating to QuickBooks, Bill.com and the accounting for the business combination. As a result of these 2024 initiatives, and the business combination that closed in November 2024, management identified three material weaknesses.

Lack of Formalized Controls over Information Technology General Controls (QuickBooks)

We did not design and maintain effective IT general controls (“ITGCs”) for information systems that are relevant to the preparation of our financial statements. Specifically, we did not design and maintain:

(i)

Program and data change management controls to ensure that program and data changes are identified, tested, authorized, and implemented appropriately;

(ii)

User access controls to ensure a secure access environment through appropriate segregation of duties that adequately restrict user and privileged access to appropriate personnel;

(iii)

Computer operations controls to maintain data integrity and ensure that processing and transfer of data, and data backups and data recovery are monitored; and

(iv)

Program development controls to ensure that new software development/enhancements are tested, authorized, and implemented appropriately.

Lack of Formally Designed and Implemented Internal Controls – Purchase to Pay (Bill.com)

We have not adequately designed or maintained effective internal controls in the purchase to pay process, specifically to monitor the completeness and accuracy of vendor data, the approval and release of vendor payments, and appropriate segregation of duties.

Lack of Effective Controls over Business Combination Accounting

We have not adequately designed or maintained effective internal controls associated with our recent business combination, specifically, to monitor the completeness of due diligence procedures, estimates and assumptions used in the valuation of acquired intangible assets, technical accounting matters and the review and approval process of reconciliations and journal entries.

Management’s Plan to Remediate the Material Weaknesses

Management, with oversight from the Audit Committee, is taking steps to remediate the control deficiencies which resulted in the material weaknesses described above by implementing changes to our internal control over financial reporting. Our plans for remediation include, but are not limited to, the efforts summarized below, which are in the process of being implemented:

Information Technology Controls

We will focus on the following areas to mitigate the material weakness associated with QuickBooks:

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Access Security: For user account creation and provisioning to in-scope systems, a designated system administrator will grant access only upon request. The designated system administrator and appropriate approvers will consider segregation of duties access conflicts when granting new access. For de-provisioning, the system administrator will remove users in a timely manner upon appropriate notification. Further, to maintain integrity of access privileges, the appropriate personnel will perform periodic user access reviews of in-scope systems to ensure access remains appropriate, ensure any inappropriate access is identified regularly, and perform lookback procedures as needed to identify the impact of inappropriate activity.

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Program Changes: Management will identify a system administrator who will manage change management to enforce appropriate segregation of duties and change management controls.

Purchase to Pay Controls

We will perform the following over the subsequent reporting periods to mitigate the material weakness associated with Bill.com:

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We will design and implement control activities related to vendor data and vendor payment reviews which will be completed on a periodic basis (at least quarterly).

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Perform a segregation of duties assessment to identify the systematic conflicts and/or operational incompatible duties and evaluate the impact on our internal control environment.

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Design and implement controls over the review of service organization control reports for key service organizations (as available) and map the complementary user entity controls to our controls. This includes evaluating any control deficiencies identified at the service organization and the impact on our control environment.

Business Combination Accounting

We are in the process of designing and implementing control activities to ensure that there is an appropriate periodic assessment of our business combination accounting policies and procedures, and other complex technical accounting matters. Additionally, we are consulting with accounting experts to provide appropriate guidance in connection with accounting for business combinations. Our Chief Executive Officer, Chief Financial Officer, and management will continue to monitor the effectiveness of this remediation plan and refine it as appropriate.

We expect to expend efforts to remediate the material weaknesses as described above through fiscal year 2025. We believe that the implementation of the above steps will allow us to address the deficient controls within our internal control environment, which will facilitate the remediation of the material weaknesses. As we continue to evaluate and work to improve our internal control over financial reporting, we will take additional measures to address control deficiencies, and we may modify certain of the remediation measures described above. Following our design and implementation of our remediation efforts, we will need to demonstrate their operating effectiveness. We will not be able to consider the material weaknesses remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that our controls are operating effectively.

b)

Attestation Report of the Registered Public Accounting Firm

Not Applicable.

c)

Changes in Internal Control over Financial Reporting

Other than the material weaknesses described above, there have been no changes in our internal control over financial reporting occurred during the fiscal quarter ended December 31, 2024 that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.