Akari Therapeutics Plc

Previous wording

ADCs are a class of cancer therapies that combine the precision targeting of antibodies with payload toxins that attack cancer cells. To date, innovation in the field of ADC therapies has focused primarily on the development of novel antibodies linked to existing classes of payload toxins. For example, there is a range of approved ADCs with antibodies that target the Her2, Trop2, CD19, CD22, CD30, Nectin-4, Tissue Factor, and FR alpha antibodies. But there is a surprising lack of diversity in the payload toxins to which those antibodies are linked, as all of these marketed products, and more than 90% of ADCs in late-stage clinical development of which we are aware, utilize payloads from just two standard classes: (1) microtubule inhibitors or (2) DNA-damaging agents such as topoisomerase I inhibitors.

Current wording

ADCs are a class of cancer therapies that combine the precision targeting of antibodies with payload toxins that attack cancer cells. To date, innovation in the field of ADC therapies has focused primarily on the development of novel antibodies linked to existing classes of payload toxins. For example, there is a range of approved ADCs with antibodies that target the Her2, Trop-2, CD19, CD22, CD30, Nectin-4, Tissue Factor, and FR alpha antibodies. But there is a surprising lack of diversity in the payload toxins to which those antibodies are linked, as all of these marketed products, and more than 90% of ADCs in late-stage clinical development of which we are aware, utilize payloads from just two standard classes: (1) microtubule inhibitors or (2) DNA-damaging agents such as topoisomerase I inhibitors.

Previous wording

Our ADC Platform enables us to generate a range of ADC product candidates that pair our novel payloads with biologically validated antibody targets prevalent in cancer tumors. We believe that our focus on the development of ADCs that utilize our novel payloads may allow us to develop ADCs with benefits that include:

Current wording

Our ADC Platform enables us to generate a range of ADC product candidates that pair our novel payloads with biologically validated antibody targets prevalent in cancer tumors. We believe that our focus on the development of ADCs that utilize our novel payloads may allow us to develop ADCs with potential benefits that include:

Previous wording

Our lead product candidate is AKTX-101, a preclinical stage Trop2-targeting ADC that combines PH1 with the Trop2 antibody, which is expressed in the highest number of solid tumor cancer types, including lung, breast, colon and prostate. We aim to establish AKTX-101 as a best-in-class Trop2-targeting ADC for the treatment of a variety of solid tumors.

Current wording

Our lead product candidate is AKTX-101, a preclinical stage Trop-2-targeting ADC that combines PH1 with a Trop-2 targeting antibody. Trop-2 is an antigen that is expressed in a number of highly incident solid tumors, including lung, breast, bladder, head and neck, gastric, pancreatic, colon, prostate, and others. We aim to establish AKTX-101 as a best-in-class Trop-2-targeting ADC for the treatment of a variety of solid tumors.

Previous wording

We acquired the proprietary rights to our ADC discovery and development platform in connection with the Merger. Prior to that time, we were primarily focused on advancing our former product candidates nomacopan and PAS-nomacopan (longer-acting nomacopan that is PASylated). Since the closing of the Merger, we have focused substantially all of our efforts on the development of ADCs and our ADC Platform. We have suspended further internal development of our legacy programs, nomacopan and PAS-nomacopan, and intend to seek strategic partners to advance their development externally. For our PHP-303 program, a program that Peak Bio had advanced prior to the closing of the Merger, we intend to seek strategic partners for it as well to further its development externally.

Current wording

We acquired the proprietary rights to our ADC discovery and development platform in connection with the Merger. Prior to that time, we were primarily focused on advancing our former product candidates nomacopan and PAS-nomacopan (longer-acting nomacopan that is PASylated). Since the closing of the Merger, we have focused substantially all of our efforts on the development of ADCs and our ADC Platform. We have suspended further internal development of our legacy programs, nomacopan and PAS-nomacopan, and intend to seek strategic partners to advance their development externally. Our activities since inception have consisted of performing research and development activities and raising capital.

Previous wording

On March 14, 2025, we entered into an Executive Offer of Employment Agreement (as amended by a subsequent Chief Executive Officer Letter Agreement, dated March 18, 2025) with Mr. Abizer Gaslightwala pursuant to which Mr. Gaslightwala will serve as our President and Chief Executive Officer, effective on or around April 21, 2025. Mr. Gaslightwala will earn a base salary, which includes an annual cash bonus target, and receive share-based payment compensation based on time service and the achievement of specific performance criteria.

Current wording

Appointment of New President and Chief Executive Officer. On March 14, 2025, we entered into an Executive Offer of Employment Agreement (as amended by a subsequent Chief Executive Officer Letter Agreement dated March 18, 2025) with Mr. Abizer Gaslightwala pursuant to which Mr. Gaslightwala began serving as our President and Chief Executive Officer in April 2025.

Previous wording

During the year ended December 31, 2024, our loss from operations totaled $21.6 million, a 29% increase, compared to a loss from operations of $16.8 million for the year ended December 31, 2023. General and administrative expenses, merger related costs and restructuring costs comprise the majority of our total operating expenses, as shown in the table below:

Current wording

During the year ended December 31, 2025, our loss from operations totalled $17.3 million, a 20% decrease, compared to a loss from operations of $21.6 million for the year ended December 31, 2024. The decrease in our loss from operations from the prior year was primarily attributable to the merger-related expenses and restructuring and other expenses we incurred in connection with the Merger in 2024 as discussed in further detail below. General and administrative expenses and an impairment loss comprise the majority of our total operating expenses for the year ended December 31, 2025, as shown in the table below:

Previous wording

During the year ended December 31, 2024, total research and development expenses increased by approximately $1.5 million, or 28%, compared to the year ended December 31, 2023. The following sets forth research and development expenses for the years ended December 31, 2024 and 2023 by category:

Current wording

During the year ended December 31, 2025, total research and development expenses decreased by approximately $4.2 million, or 60%, compared to the year ended December 31, 2024. The following sets forth research and development expenses for the years ended December 31, 2025 and 2024 by category:

Previous wording

These expenses include external expenses that we incurred in connection with the research and discovery of our ADC platform and program(s), and primarily consist of payments to CROs and other vendors. In 2024, we announced our strategic prioritization of our ADC technology and programs and expect to incur material additional costs related to this program as we will invest in additional ADC related preclinical research and discovery activities.

Current wording

These expenses include external expenses that we incurred in connection with the discovery and pre-clinical development of our ADC platform and program(s) and primarily consist of payments to external vendors and consultants. In December 2024, we announced our strategic prioritization of our ADC technology and programs and expect to incur material additional costs going forward related to this program as we plan to invest in additional ADC related discovery and pre-clinical development activities.

Previous wording

These expenses include external expenses that we have incurred in connection with the development of nomacopan for the treatment of pediatric HSCT-TMA and primarily consist of payments to CROs and other vendors. The 5% increase in expenses incurred during the year ended December 31, 2024, as compared to the year ended December 31, 2023, were primarily due to clinical trial close-out costs. In May 2024, following the completion of a pipeline prioritization review, we decided to suspend our HSCT-TMA program. Accordingly, we expect future HSCT-TMA costs to decrease following completion of the wind-down and close-out of the clinical trial.

Current wording

These expenses include external expenses that we have incurred in connection with the development of nomacopan for the treatment of pediatric HSCT-TMA and primarily consist of payments to CROs and other vendors. Less than $0.1 million in expenses incurred during the year ended December 31, 2025, as compared to the year ended December 31, 2024, is primarily due to our decision to suspend the AK901 clinical program and find a collaborative partner for our nomacopan program in 2024.

Previous wording

These expenses include external expenses incurred related to the development and manufacturing of nomacopan for use in clinical trials and preclinical development of PAS-nomacopan. In general, such expenses primarily consist of payments to contract manufacturing organizations and other vendors for manufacturing of drug substance (including raw materials), drug product, supplies, and validation, quality assurance and other manufacturing development activities. The $0.8 million, or 30%, increase in expenses incurred during the year ended December 31, 2024, as compared to the year ended December 31, 2023, is primarily due to the timing of manufacturing and development activities, including increased spending on the development of and preparation for manufacturing of PAS-nomacopan.

Current wording

These expenses include external expenses incurred related to the development and manufacturing of nomacopan for use in clinical trials and preclinical development of PAS-nomacopan. In general, such expenses primarily consist of payments to contract manufacturing organizations and other vendors for manufacturing of drug substance (including raw materials), drug product, supplies, and validation, quality assurance and other manufacturing development activities. The $3.3 million decrease in expenses incurred during the year ended December 31, 2025, as compared to the year ended December 31, 2024, is primarily due our decision to suspend the AK901 clinical program and pre-clinical PAS-nomacopan program and instead seek an external partner for further development.

Previous wording

These expenses include external expenses, such as payments to contract vendors, that may be related to preclinical development activities, discontinued programs and unallocated expenses. The $0.7 million, or 44%, decrease in expenses incurred during the year ended December 31, 2024, as compared to the year ended December 31, 2023, is primarily related to lower costs incurred related to preclinical studies and other development work investigating PAS-nomacopan for the treatment of GA.

Current wording

These expenses include external expenses, such as payments to contract vendors, that may be related to preclinical development activities, discontinued programs and unallocated expenses. The $0.7 million, or 81%, decrease in expenses incurred during the year ended December 31, 2025, as compared to the year ended December 31, 2024, is primarily related to cessation of costs incurred related to preclinical studies and other development work investigating PAS-nomacopan for the treatment of GA.

Previous wording

These expenses include compensation and related costs associated with employees, independent consultants and staffing firms. The $1.1 million, or 36%, decrease in expenses incurred during the year ended December 31, 2024, as compared to the year ended December 31, 2023, is primarily due to the impact of the RIF which was announced in May 2024, along with lower costs incurred for consultants. Separation benefits paid to impacted employees are classified separately under “Restructuring and other expenses”, as discussed below.

Current wording

These expenses include compensation and related costs associated with employees, independent consultants and staffing firms. The $0.4 million decrease in expenses incurred during the year ended December 31, 2025, as compared to the year ended December 31, 2024, is primarily due to a reduction in workforce initiated in May 2024 (discussed in further detail below) along with lower costs incurred for consultants.

Previous wording

The extent of our future research and development expenditures will be determined based on future funding, and following the outcome of an assessment of our combined pipeline post-Merger, including program prioritization.

Current wording

The extent of our future research and development expenditures will be determined based on future funding and location of work performed.

Previous wording

During the year ended December 31, 2024, total general and administrative costs decreased by approximately $1.7 million, or 15%, as compared to the year ended December 31, 2023. The decrease was primarily due to decreases in (i) personnel costs of approximately $1.0 million resulting from the impact of the RIF which was announced in May 2024 (excluding separation benefits paid to impacted employees classified separately under “Restructuring and other expenses” below), (ii) director and officer insurance premiums of approximately $0.3 million, and (iii) consulting and professional fees of approximately $1.2 million. These decreases were partially offset by increases in other expenses of approximately $0.8 million related to regulatory and legal fees.

Current wording

The $0.4 million decrease in expenses incurred during the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily due to decreases in (i) personnel and consulting costs of approximately $1.1 million resulting from reorganization of the team and resources, (ii) director and officer insurance premiums of approximately $0.7 million, and (iii) rent of approximately $0.2 million. These decreases were offset by increases in stock-based compensation of $1.1 million and regulatory and legal fees of approximately $0.5 million.

Previous wording

Restructuring and other expenses consist primarily of severance and related benefit costs related to workforce reductions incurred in connection with the RIF, which we implemented in May 2024. Restructuring and other expenses includes $0.3 million of non-cash stock-based compensation expense. No restructuring expenses were incurred during the year ended December 31, 2023.

Current wording

Restructuring and other expenses consist primarily of severance and related benefit costs related to workforce reductions incurred in connection with the reduction in force (“RIF”), which we implemented in May 2024. Restructuring and other expenses includes $0.3 million of non-cash stock-based compensation expense. No restructuring expenses were incurred during the year ended December 31, 2025.

Previous wording

During each of the years ended December 31, 2024 and 2023, interest income was less than $0.1 million and not material. The nominal decrease in interest income during the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to lower cash deposits in interest bearing accounts. Amounts may fluctuate from period to period due to changes in average cash balances and prevailing interest rates.

Current wording

During each of the years ended December 31, 2025 and 2024, interest income was less than $0.1 million. Amounts may fluctuate from period to period due to changes in average cash balances and prevailing interest rates.

Previous wording

Interest expense primarily consists of interest incurred on the May 2024 Convertible Notes, the financing of director and officer insurance premiums and the notes assumed in the acquisition of the Peak Bio, Inc., which include the April 2023 Convertible Notes, the November 2023 Note, the September 2024 Note and the Notes Payable, Related Party. Refer to Note 6 and Note 9 of our consolidated financial statements included in this Form 10-K.

Current wording

Interest expense primarily consists of amortization of debt issuance costs on the August 2025 Notes and interest expense on the May 2024 Notes, the financing of director and officer insurance premiums and the notes assumed in the Merger, which include the April 2023 Convertible Notes, the November 2023 Note, the September 2024 Note, the 2021 Notes and the January 2024 Note. Refer to Note 6 and Note 9 of our consolidated financial statements included in this Form 10-K.

Previous wording

Interest expense may fluctuate from period to period due to changes in average interest-bearing loans and related interest rates. No interest expense was recognized during the year ended December 31, 2023.

Current wording

Interest expense may fluctuate from period to period due to changes in average interest-bearing loans and related interest rates.

Previous wording

During the years ended December 31, 2024 and 2023, we recorded a change in the fair value of warrant liabilities, representing a non-cash warrant revaluation gain of approximately $2.1 million and $6.6 million, respectively. Change in the fair value of the warrant liabilities and resulting warrant revaluation gain for the year ended December 31, 2024 was driven by the decrease in our stock price and decreases in the expected term and expected volatility assumptions during the reporting period, offset by the recognition of warrant liabilities relating to the assumed warrants resulting from the acquisition of Peak Bio. Change in the fair value of the warrant liabilities and resulting warrant revaluation gain for the year ended December 31, 2023 was driven primarily by the decrease in our stock price and decreases in the expected term and expected volatility assumptions during the reporting period.

Current wording

During the years ended December 31, 2025 and 2024, we recorded a change in the fair value of warrant liabilities, representing a non-cash warrant revaluation gain of approximately $0.8 million and $2.1 million, respectively. Change in the fair value of the warrant liabilities and resulting warrant revaluation gain for the years ended December 31, 2025 and 2024 were driven primarily by the decrease in our stock price and decreases in the expected term and expected volatility assumptions during the reporting period.

Previous wording

During each of the years ended December 31, 2024 and 2023, we recorded a net foreign currency exchange gain of approximately less than $0.1 million. Exchange gains and losses can fluctuate significantly from period to period due to changes in exchange rates, as well as the volume and timing of expenditures and related payments denominated in foreign currencies.

Current wording

During the year ended December 31, 2025, we recorded a net foreign currency exchange loss of approximately $0.4 million, as compared to a net foreign currency gain of less than $0.1 million during the year ended December 31, 2024. Exchange gains and losses can fluctuate significantly from period to period due to changes in exchange rates, as well as the volume and timing of expenditures and related payments denominated in foreign currencies.

Previous wording

As a result of the factors discussed above, our net loss applicable to common shareholders for the years ended December 31, 2024 and 2023 was $19.8 million and $10.0 million, respectively.

Current wording

As a result of the factors discussed above, our net loss applicable to common shareholders for the years ended December 31, 2025 and 2024 was $17.3 million and $19.8 million, respectively.

Previous wording

Since inception, we have incurred substantial losses, and we have primarily funded our operations with proceeds from the sale of equity securities, including ordinary shares, warrants and pre-funded warrants, and convertible notes. At December 31, 2024, we had $2.6 million in cash and an accumulated deficit of $247.3 million. To date, we have not generated any revenue.

Current wording

Since inception, we have incurred substantial losses, and we have primarily funded our operations with proceeds from the sale of equity securities, including ordinary shares, warrants and pre-funded warrants, and convertible notes. At December 31, 2025, we had $5.2 million in cash and an accumulated deficit of $264.5 million. To date, we have not generated any revenue.

Previous wording

We currently do not have any commitments for future external funding. We will need to raise additional funds, and we may decide to raise additional funds even before we need such funds if the conditions for raising capital are favorable. Until we can generate significant recurring revenues, we expect to satisfy our future cash needs through debt or equity financings, credit facilities or by out-licensing arrangements of our product candidates. The sale of equity or convertible debt securities may result in dilution to our existing shareholders. The incurrence of indebtedness would result in increased fixed obligations and could also subject us to covenants that restrict our operations. We cannot be certain that additional funding, whether through grants, financings, credit facilities or out-licensing arrangements, will be available to us on acceptable terms, if at all. If sufficient funds are not available, we may be required to delay, reduce the scope of or eliminate research or development plans for, or commercialization efforts with respect to, one or more applications of our product candidates, or obtain funds through arrangements with collaborators or others that may require us to relinquish rights to certain potential products that we might otherwise seek to develop or commercialize independently.

Current wording

Other than under the ELOC Purchase Agreement, the use of which is subject to the effectiveness of the registration statement we filed with the SEC pursuant to the White Lion RRA, we currently do not have any commitments for future external funding. We will need to raise additional funds, and we may decide to raise additional funds even before we need such funds if the conditions for raising capital available and/or favorable. Until we can generate significant recurring revenues, we expect to satisfy our future cash needs through debt or equity financings, credit facilities or by out-licensing arrangements of our product candidates. The sale of equity or convertible debt securities may result in dilution to our existing shareholders. The incurrence of indebtedness would result in increased fixed obligations and could also subject us to covenants that restrict our operations. We cannot be certain that additional funding, whether through grants, financings, credit facilities or out-licensing arrangements, will be available to us on acceptable terms, if at all. If sufficient funds are not available, we may be required to delay, reduce the scope of or eliminate research or development plans for, or commercialization efforts with respect to, one or more applications of our product candidates, or obtain funds through arrangements with collaborators or others that may require us to relinquish rights to certain potential products that we might otherwise seek to develop or commercialize independently.

Previous wording

As of the date of this report, we expect our existing cash, which includes gross proceeds of approximately $6.6 million received in connection with the March 2025 Private Placement (as defined above), will be sufficient to fund our operations into September 2025. While we have additional funding activities in progress to fund our operations, we will need to raise additional capital to continue to fund our operations and service our obligations in the future. If we are unable to raise additional capital when needed, we will not be able to continue as a going concern. We do not currently have any products approved for sale and do not generate any revenue from product sales. We are currently seeking and expect to continue to seek additional funding through financings of equity and/or debt securities. We may also engage in strategic research and development collaborations, pre-clinical and clinical funding arrangements, the sale or license of technology assets, and/or other strategic alternatives.

Current wording

As of the date of this report, we expect our existing cash, will be sufficient to fund our operations into April 2026. While we have additional funding activities in progress to fund our operations, we will need to raise additional capital to continue to fund our operations and service our obligations in the future. If we are unable to raise additional capital when needed, we will not be able to continue as a going concern. We do not currently have any products approved for sale and do not generate any revenue from product sales. We are currently seeking and expect to continue to seek additional funding through financings of equity and/or debt securities. We may also engage in strategic research and development collaborations, pre-clinical and clinical funding arrangements, the sale or license of technology assets, and/or other strategic alternatives.

Previous wording

Based on our recurring losses from operations incurred since inception, our expectation of continuing operating losses for the foreseeable future, negative operating cash flows for the foreseeable future, and the need to raise additional capital to finance its future operations, we have concluded that there is substantial doubt regarding our ability to continue as a going concern within one year after the date that our consolidated financial statements, included elsewhere in this Form 10-K (such consolidated financial statements, the “consolidated financial statements”) are issued. Because of these uncertainties, the accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As such, the accompanying consolidated financial statements do not reflect any adjustments relating to the recoverability and classification of recorded assets and liabilities that might be necessary if we are unable to continue as a going concern.

Current wording

Based on our recurring losses from operations incurred since inception, our expectation of continuing operating losses for the foreseeable future, negative operating cash flows for the foreseeable future, and the need to raise additional capital to finance its future operations, we have concluded that there is substantial doubt regarding our ability to continue as a going concern within one year after the date that our consolidated financial statements, included elsewhere in this Form 10-K are issued. Because of these uncertainties, the accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As such, the accompanying consolidated financial statements do not reflect any adjustments relating to the recoverability and classification of recorded assets and liabilities that might be necessary if we are unable to continue as a going concern.

Previous wording

Operating Activities. The net cash used in operating activities for the periods presented consists primarily of our net loss adjusted for non-cash charges and changes in components of working capital. The decrease in cash used in operating activities during the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to increases in accounts payable and accrued expenses resulting from the timing of cash outlays.

Current wording

*Operating Activities.*The net cash used in operating activities for the periods presented consists primarily of our net loss adjusted for non-cash charges and changes in components of working capital. The decrease in cash used in operating activities during the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily due to a decrease in research and development costs, restructuring costs related to the program reprioritization, and a decrease in merger-related costs incurred in connection with the Peak Bio acquisition.

Previous wording

In November 2024 as part of the Merger, we assumed convertible notes and notes payable with third parties, and notes payable with a related party, through the acquisition of Peak Bio Inc., as more fully described in Note 6 and Note 9, respectively, to our consolidated financial statements appearing elsewhere in this Form 10-K. These obligations are expected to result in payments of approximately $2.2 million.

Current wording

We have outstanding convertible notes and notes payable with third parties assumed from the acquisition of Peak Bio Inc. as more fully described in Note 7, to our consolidated financial statements appearing elsewhere in this Form 10-K. As of December 31, 2025, these obligations are expected to result in principal payments of approximately $0.8 million.

Previous wording

This management’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. In doing so, we must make estimates and assumptions that affect our reported amounts of assets, liabilities and expenses, as well as related disclosure of contingent assets and liabilities. On an ongoing basis, management evaluates its estimates and judgments, including, but not limited to, those related to (i) stock-based compensation, (ii) fair value of warrants classified as liabilities, (iii) research and development prepayments, accruals and related expenses, (iv) the valuation allowance for deferred income taxes, (v) accounting for the acquisition of Peak Bio Inc., and (vi) the valuation of intangible assets. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Current wording

This management’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. In doing so, we must make estimates and assumptions that affect our reported amounts of assets, liabilities and expenses, as well as related disclosure of contingent assets and liabilities. On an ongoing basis, management evaluates its estimates and judgments, including, but not limited to, those related to (i) fair value of warrants classified as liabilities, (ii) accounting for the acquisition of Peak Bio Inc., (iii) the valuation of intangible assets, and (iv) valuation of intangible assets and goodwill. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Previous wording

We utilize a Black-Scholes model to value our outstanding September 2022 Warrants and the Peak Bio Warrants, at each reporting period, with changes in fair value recognized in the consolidated statements of operations and comprehensive loss. The estimated fair value of warrant liabilities is determined using Level 3 inputs. Inherent in an options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. We estimate the expected volatility of our stock price based on historical volatility of our ADSs, considering the expected remaining life of the September 2022 Warrants and the Peak Bio Warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the valuation date for a maturity similar to the expected remaining life of the September 2022 Warrants and the Peak Bio Warrants. The expected life of the

Current wording

Warrants classified as liabilities must be recorded at fair value under ASC 820, with changes in fair value recognized in earnings each period. We utilize a Black-Scholes model to value our outstanding September 2022 Warrants and the Peak Bio Warrants, at each reporting period, with changes in fair value recognized in the consolidated statements of operations and comprehensive loss. The estimated fair value of warrant liabilities is determined using Level 3 inputs. Inherent in an options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. We estimate the expected volatility of our stock price based on historical volatility of our ADSs, considering the expected remaining life of the September 2022 Warrants and the Peak Bio Warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the valuation date for a maturity similar to the expected remaining life of the September 2022 Warrants and the Peak Bio Warrants. The expected life of the September 2022 Warrants and the Peak Bio Warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on our historical rate, which we anticipate to remain at zero. Due to the nature of and inputs in the model used to assess the fair value of the warrants, it is not unusual to experience significant fluctuations during each remeasurement period.

Previous wording

In a business combination, the fair value of acquired IPR&D is capitalized and accounted for as indefinite-lived intangible assets, and not amortized until the underlying project receives regulatory approval, at which point the intangible assets will be accounted for as definite-lived intangible assets or discontinued. If discontinued, the intangible assets will be written off. R&D costs incurred after the acquisition are expensed as incurred.

Current wording

In a business combination, the fair value of acquired IPR&Dis capitalized and accounted for as indefinite-lived intangible assets and are not amortized until the underlying project receives regulatory approval, at which point the intangible assets will be accounted for as definite-lived intangible assets. The intangible assets are assessed for impairment annually as outlined below. R&D costs incurred after the acquisition are expensed as incurred.

Previous wording

The estimated fair values of identifiable intangible assets were determined using the multi-period excess earnings method, which is a valuation methodology that provides an estimate of the fair value of an asset based on market participant expectations of the cash flows an asset would generate over its remaining useful life. The projected discounted cash flow models used to estimate the fair value of assets of our IPR&D reflect significant assumptions and are level 3 unobservable data regarding the estimates a market participant would make in order to evaluate a drug development asset, including the following:

Current wording

The estimated fair values of identifiable intangible assets were determined using the multi-period excess earnings method, which is a valuation methodology that provides an estimate of the fair value of an asset based on market participant expectations of the cash flows an asset would generate over its remaining useful life. The projected discounted cash flow models used to estimate the fair value of assets of our IPR&D reflect significant assumptions and are estimates a market participant would make in order to evaluate a drug development asset.

Previous wording

We recognized goodwill and other intangible assets comprised of IPR&D during the year ended December 31, 2024 in connection with our acquisition of Peak Bio (collectively, our “Intangible Assets”).

Current wording

As noted above, we recognized goodwill and other intangible assets comprised of in-process research and development, or IPR&D, in connection with our acquisition of Peak Bio.

Previous wording

We manage our operations as a single operating segment for the purposes of assessing performance, making operating decisions and allocating resources, resulting in a single reportable segment, or reporting unit. Subsequent to our acquisition of Peak Bio, the fair market value of our ADSs experienced a significant decline. As a result, we performed a qualitative assessment as of December 31, 2024 to determine whether our Intangible Assets were impaired.

Current wording

Goodwill is tested for impairment at the reporting unit level. We manage our operations as a single operating segment for the purposes of assessing performance, making operating decisions and allocating resources, resulting in a single reportable segment, or reporting unit. If goodwill and another asset from the same reporting unit are tested for impairment simultaneously, the other asset shall be tested for impairment before goodwill.

Previous wording

In our qualitative assessment, we considered relevant facts and circumstances for our reportable segment, including (i) overall financial performance, including recent fundraising activities and our strategic acquisition of Peak Bio (ii) industry and market conditions in which we operate, (iii) changes in the reporting unit carrying value since prior year, (iv) macroeconomic conditions, and (v) changes in the fair market value of our ADSs.

Current wording

We have the option to first assess qualitative factors to determine whether the fair value of our IPR&D asset or reporting unit is more likely than not less than its carrying value. In our qualitative assessment, we considered relevant facts and circumstances for our reporting unit, including (i) overall financial performance, including recent fundraising activities (ii) industry and market conditions in which the Company operates, (iii) changes in key inputs and assumptions used to rationalize the carrying value, (iv) changes in management or strategy, (v) macroeconomic conditions, and (vi) changes in the fair market value of the Company’s ADSs, market capitalization and relevant comparable control premiums.

Previous wording

We test indefinite-lived intangible assets for impairment by first assessing qualitative factors to determine whether it is more likely than not that the fair value is less than its carrying amount. If we conclude it is more likely than not that the fair value is less than its carrying amount, a quantitative impairment test is performed.

Current wording

If the Company concludes that it is more likely than not that the fair value of the asset or the reporting unit is less than its carrying value, or if the Company elects to bypass the qualitative assessment, a quantitative impairment test is performed. The quantitative test compares the fair value of the asset or reporting unit with its carrying amount. If the carrying amount of the asset or a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to the excess. For goodwill, an impairment loss is limited to the total amount of goodwill allocated to that reporting unit.