Akari Therapeutics Plc 8-K, filed Nov 14, 2024
Akari Therapeutics Plc (AKTX)
About this 8-K
Akari Therapeutics Plc filed this 8-K on November 14, 2024, reporting on events of November 13, 2024.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.01: Completed an acquisition or sale of assets
- Item 3.01: Delisting notice or listing transfer
- Item 3.02: Unregistered sale of equity
- Item 5.02: Director or officer change, or executive pay
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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*Trading, but only in connection with the American Depositary Shares.
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01 Entry into a Material Definitive Agreement.
On November 13, 2024, Akari Therapeutics, Plc (“Akari”) entered into a securities purchase agreement (the “Purchase Agreement”) with certain investors, including Akari’s Chairman, Dr. Ray Prudo, and a director and Interim President and Chief Executive Officer of Akari, Dr. Samir R. Patel, pursuant to which Akari agreed to sell and issue in a private placement (the “Private Placement”) an aggregate of 1,713,402 unregistered American Depository Shares (“ADSs”), each representing 2,000 of Akari’s ordinary shares (the “Akari Ordinary Shares”), and Series D Warrants (the “Warrants”) to purchase up to 1,713,402 ADSs, at a per unit price of (i) $1.70 per ADS and Warrant for all investors other than Drs. Patel and Prudo, (ii) $2.385, which is equal to the consolidated closing bid price of the ADSs on The Nasdaq Stock Market on November 12, 2024 plus $0.125 for Drs. Patel and Prudo, for aggregate gross proceeds of $3.2 million. The Purchase Agreement also contains representations, warranties, indemnification and other provisions customary for transactions of this nature. The Private Placement is expected to close shortly after the closing of the Merger (as defined below), subject to the satisfaction of customary closing conditions.
The Warrants have a term of three years from the closing date of the Private Placement and have cashless exercise provisions. The Warrants have an exercise price of $2.26 per ADS, which is equal to the Nasdaq official closing price of Akari’s ADSs on the Nasdaq Capital Market on November 12, 2024. The warrants issued to Dr. Patel and Dr. Prudo are immediately exercisable and the warrants issued to each of the other investors will be exercisable six months after issuance.
Akari paid Paulson Investment Company, LLC (“Paulson”) and Chardan Capital Markets, LLC (“Chardan”, together with Paulson, the “Placement Agents”) (i) with respect to Paulson, a cash fee equal to 7.0% (or 3.5% for any investor that is a director or affiliate of Akari), and (ii) with respect to Chardan, a cash fee equal to 3.5%, in each case of the aggregate purchase price for the ADSs and Warrants sold in the Private Placement.
Pursuant to the Purchase Agreement, Akari has agreed to prepare and file a registration statement on Form S-3 with the Securities and Exchange Commission within 30 days of the closing of the Private Placement to register the resale of the ADSs (including ADSs issuable upon exercise of the Warrants) purchased pursuant to the Purchase Agreement.
The securities to be issued to the purchasers under the Purchase Agreement were offered in reliance on an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506 of Regulation D promulgated thereunder. Akari relied on this exemption from registration based in part on representations made by the purchasers, including that each purchaser is an “accredited investor”, as defined in Rule 501(a) promulgated under the Securities Act.
The offer and sale of the securities pursuant to the Purchase Agreement have not been registered under the Securities Act or any state securities laws. The securities may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Neither this Current Report on Form 8-K, nor the exhibits attached hereto, is an offer to sell or the solicitation of an offer to buy the securities described herein or therein.
The foregoing summary of the terms of the Warrants and the Purchase Agreement is subject to, and qualified in its entirety to the full text of such agreement, which are filed as Exhibits 4.1 and 10.1, respectively, to this Current Report on Form 8-K and is incorporated by reference herein.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On November 14, 2024, Akari completed the previously announced strategic combination (the “Closing”) contemplated by that Agreement and Plan of Merger by and among Akari, Peak Bio, Inc. (“Peak Bio”) and Pegasus Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Akari (“Merger Sub”) as amended by that certain side letter dated August 15, 2024 (the “Merger Agreement”), pursuant to which, upon the terms and subject to the conditions thereof, Merger Sub was merged with and into Peak Bio (the “Merger”), with Peak Bio surviving the Merger as a wholly owned subsidiary of Akari.
Pursuant to the Merger Agreement, and upon the terms and subject to the conditions thereof, at the effective time of the Merger (the “Effective Time”), each issued and outstanding share of Peak Bio common stock, par value $0.0001 per share (the “Peak Common Stock”) (other than (x) shares of Peak Common Stock held by Peak Bio as treasury stock, or shares of Peak Common Stock owned by Akari, Merger Sub or any direct or indirect wholly owned subsidiaries of Akari and (y) Dissenting Shares (as defined in the Merger Agreement)), was converted into the right to receive Akari ADSs representing a number of Akari Ordinary Shares equal to 0.2935 (the “Exchange Ratio”), each such share duly and validly issued against the deposit of the requisite number of Akari Ordinary Shares in accordance with the Deposit Agreement (as defined in the Merger Agreement). The Exchange Ratio was calculated in accordance with the terms of the Merger Agreement and is such that the total number of shares of Akari ADSs issued in connection with the Merger is approximately 48.40% of the outstanding shares of Akari on a fully diluted basis.
At the Effective Time, each warrant to purchase capital stock of Peak Bio (“Peak Warrant”) that was outstanding immediately prior to the Effective Time was converted into and exchangeable for warrants to purchase a number of Akari Ordinary Shares or Akari ADSs, as determined by Akari (each, an “Adjusted Warrant”), on substantially similar terms and subject to substantially similar conditions as were applicable to such Peak Warrant immediately prior to the Effective Time, except (i) for terms rendered inoperative by reason of the transactions contemplated by the Merger Agreement, (ii) as provided in the following sentence and (iii) such amendments to the terms of the Adjusted Warrants as are necessary to comply with applicable Law (as defined in the Merger Agreement). The number of Akari Ordinary Shares (or the number of Akari Ordinary Shares underlying Akari ADSs, as applicable) subject to each Adjusted Warrant is equal to the number of shares of Peak Common Stock issuable upon exercise of such Peak Warrant immediately prior to the Effective Time multiplied by the Exchange Ratio, with any fractional Akari Ordinary Shares or Akari ADSs rounded down to the nearest whole Akari Ordinary Share or Akari ADS, as applicable, and the exercise price with respect to each Akari Ordinary Share (or each Akari Ordinary Share underlying Akari ADSs, as applicable) underlying such Adjusted Warrant equal to the exercise price of such Peak Warrant immediately prior to the Effective Time divided by the Exchange Ratio.
At the Effective Time, each option to acquire shares of Peak Common Stock (“Peak Option”) that was outstanding and unexercised immediately prior to the Effective Time, whether or not vested, was assumed and converted into an option to purchase a number of Akari ordinary shares or Akari ADSs, as determined by Akari (each, an “Adjusted Option”). The number of Akari Ordinary Shares (or the number of Akari Ordinary Shares underlying Akari ADSs, as applicable) subject to the Adjusted Option is equal to the product of (i) the total number of shares of Peak Common Stock subject to such Peak Option immediately prior to the Effective Time multiplied by (ii) the Exchange Ratio, with any fractional Akari Ordinary Shares or Akari ADSs rounded down to the nearest whole Akari Ordinary Share or Akari ADS, as applicable, and the exercise price per share of each Adjusted Option equal to the exercise price of such Peak Option immediately prior to the Effective Time divided by the Exchange Ratio.
The issuance of Akari Ordinary Shares, which are represented by Akari ADSs, in connection with the Merger were registered under the Securities Act, pursuant to a registration statement on Form S-4 (File No. 333-282127) filed by Akari with the U.S. Securities and Exchange Commission (the “SEC”) and declared effective on October 11, 2024.
The parties to the Merger Agreement have agreed that the Private Placement described in Item 1.01 of this Current Report on Form 8-K satisfies the conditions set forth in Sections 7.2(e) and 7.3(e) of the Merger Agreement.
The foregoing is a general description of the Merger and Merger Agreement; it does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which filed as Exhibit 2.1 of this Current Report on Form 8-K and incorporated herein by reference.
The Merger Agreement, which is attached as Exhibit 2.1, has been described above to provide investors and Akari shareholders with information regarding the terms of the Merger Agreement and is not intended to modify or supplement any factual disclosures about Akari, Merger Sub or Peak Bio or any of their respective affiliates. The representations, warranties and covenants contained in the Merger Agreement were made only for the purposes of the Merger Agreement, were made as of specific dates, were made solely for the benefit of the parties to the Merger Agreement and may not have been intended to be statements of fact, but rather, as a method of allocating risk and governing the contractual rights and relationships among the parties to the Merger Agreement. In addition, such representations, warranties and covenants may have been qualified by certain disclosures not reflected in the text of the Merger Agreement and may apply standards of materiality and other qualifications and limitations in a way that is different from what may be viewed as material by Akari’s shareholders or Peak Bio’s stockholders. In reviewing the representations, warranties and covenants contained in the Merger Agreement or any descriptions thereof in this summary, it is important to bear in mind that such representations, warranties and covenants or any descriptions were not intended by the parties to the Merger Agreement to be characterizations of the actual state of facts or conditions of Akari, Merger Sub or Peak Bio or any of their respective affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in public disclosures. For the foregoing reasons, the representations, warranties and covenants or any descriptions of those provisions should not be read alone and should instead be read in conjunction with the other information contained in the reports, statements and filings that Akari and Peak Bio publicly file with the SEC.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
As previously disclosed on October 4, 2024, Akari received a delisting determination letter (“Delisting Determination Letter”) from the Listing Qualifications Staff (the “Staff”) of The Nasdaq Capital Market (“Nasdaq”) notifying Akari that it did not meet the terms of an extension granted by Nasdaq to regain compliance with the minimum $2,500,000 stockholders’ equity requirement for continued listing set forth in Listing Rule 5550(b) (the “Stockholders’ Equity Requirement”). The Delisting Determination Letter stated that unless Akari requests a hearing before a Nasdaq Hearing Panel (“Panel”) by October 8, 2024, trading of the Akari ADSs will be suspended.
On October 8, 2024, Akari requested a hearing before the Panel and such request for a hearing automatically stayed any suspension/delisting action by the Staff at least until the hearing process concludes and any extension granted by the Panel expires.
As of the date of this Current Report on Form 8-K, Akari believes that it has stockholders’ equity above the $2.5 million requirement and has regained Compliance with the Stockholders’ Equity Requirement upon the Closing of the Merger.
Nasdaq will continue to monitor Akari’s ongoing compliance with the Stockholders’ Equity Requirement and, if at the time of Akari’s next periodic report, Akari does not evidence compliance, Akari may be subject to delisting.
Item 3.02 Unregistered Sales of Equity Securities.
The information under Item 1.01 of this Current Report on Form 8-K regarding the unregistered securities described herein is incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Resignation of Directors
In connection with the Merger and effective as of the Effective Time, Wa’el Hashad and Donald Williams resigned as directors of Akari and any committees thereof. The decision to resign by each of Messrs. Hashad and Williams was not the result, in whole or in part, of any disagreement with Akari, its management team, or the board of directors of Akari (the “Akari Board”), on any matter relating to Akari operations, policies or practices. At the time of resignation, Mr. Hashad served on the Audit Committee and Nominating and Corporate Governance Committee of the Akari Board and Mr. Williams served on the Nominating & Corporate Governance Committee, as well as the chair of the Audit Committee and the Compensation Committee.
Appointment of Directors
As previously disclosed, effective as of the Effective Time and pursuant to the terms of the Merger Agreement, the Akari Board appointed Hoyoung Huh, M.D., Ph. D, James Neal and Sandip Patel, each of whom were members of the board of directors of Peak Bio, to serve as directors for a term commencing upon the Effective Time. Each of Dr. Huh and Messrs. Neal and Patel will be appointed as Class A Directors, for an initial term expiring at Akari’s 2025 Annual General Meeting of shareholders or until their respective successor is duly elected and qualified or until their respective earlier resignation, death or removal.
The Akari Board appointed Dr. Huh to serve on the Nominating and Corporate Governance Committee, Mr. Neal to serve on the Audit Committee and the Compensation Committee and Mr. Patel to serve on the Audit Committee and Compensation Committee. Following the Merger, the composition of the committees for the Akari Board is as follows:
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Compensation Committee |
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Nominating and Corporate Governance Committee |
Sandip Patel |
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James Neal |
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Michael Grissinger |
Michael Grissinger |
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Robert Bazemore |
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Raymondo Prudo-Chlebosz, M.D. |
James Neal |
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Sandip Patel |
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Hoyoung Huh, M.D. |
Additionally, pursuant to the approval of the proposal to approve the appointment of Dr. Huh. as the non-executive chairman of the Akari Board, contingent upon and effective as of the Effective Time at the Akari General Meeting held on November 7, 2024, Dr. Huh will serve as the non-executive chairman of the Akari Board as of the Effective Time.
The Akari Board has determined that each of Dr. Huh and Messrs. Neal and Patel is independent under the applicable Nasdaq listing rules. There are no arrangements or understandings between each of Dr. Huh and Messrs. Neal and Patel and any other person pursuant to which each such person was selected as a director. There are no related party transactions between the Akari and each of Dr. Huh and Messrs. Neal and Patel (or any of their respective immediate family members) requiring disclosure under Item 404(a) of Regulation S-K. None of Dr. Huh or Messrs. Neal and Patel has any family relationships with any of Akari’s directors or executive officers.
Each of Dr. Huh and Messrs. Neal and Patel will participate in the standard non-employee director compensation arrangements described under the heading “Director Compensation” contained in Akari’s proxy statement filed with the SEC on June 3, 2024.
Item 7.01 Regulation FD Disclosure.
On November 14, 2024, Akari issued a press release announcing the consummation of the Merger, a copy of which is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information contained in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
Financial statements of Peak Bio are not required to be filed in this Current Report on Form 8-K because substantially the same information that would otherwise be required under this Item 9.01(a) was previously filed with Akari’s Registration Statement on Form S-4/A (the “Registration Statement”) filed by Akari with the SEC on October 9, 2024 and declared effective on October 11, 2024.
(b) Pro forma financial information.
Pro forma financial information is not required to be filed in this Current Report on Form 8-K because substantially the same information that would otherwise be required under this Item 9.01(b) was previously filed with the Registration Statement, however in connection with the final determination of the Exchange Ratio, the unaudited pro forma condensed combined financial information of Akari and Peak Bio for the six months ended June 30, 2024 and the year ended December 31, 2023 each reflecting the final Exchange Ratio is filed herewith as Exhibit 99.2 and are incorporated herein by reference.
(d) Exhibits.
Exhibit No. |
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Description |
2.1* |
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2.2 |
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4.1 |
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10.1 |
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99.1 |
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99.2 |
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The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. |
* Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Such excluded information is not material and the registrant customarily and actually treats it as private and confidential.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Akari Therapeutics, Plc |
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Date: November 14, 2024 |
By: |
/s/ Samir R. Patel, M.D. |
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Samir R. Patel, M.D. |
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Interim President and Chief Executive Officer |
Exhibit 4.1
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAS BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY AND DEPOSITARY HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO EACH OF THEM THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(A) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
WARRANT TO PURCHASE ORDINARY SHARES REPRESENTED BY AMERICAN DEPOSITARY SHARES AKARI THERAPEUTICS, PLC.
Warrant No. [•] |
Initial Exercise Date: [•], 2024 |
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Issuance Date: [•], 2024 |
Number of American Depositary Shares: [•]
THIS WARRANT TO PURCHASE ORDINARY SHARES REPRESENTED BY AMERICAN DEPOSITARY SHARES (the “Warrant”) certifies that, for value received, [•] or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after [•], 2024 (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on [•], 2027 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Akari Therapeutics, Plc., a public company with limited liability incorporated under the laws of England and Wales (the “Company”), up to [•] Ordinary Shares (the “Warrant Shares”) represented by [•] American Depositary Shares (“ ADSs”), as subject to adjustment hereunder (the “Warrant ADSs”). The purchase price of one Warrant ADS shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”), dated [•] among the Company and the purchasers signatory thereto.
Section 2. Exercise.
(A) = |
as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the ADSs on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; |
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(B) = |
the Exercise Price of this Warrant for cash exercise, as adjusted hereunder; and |
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the number of Warrant ADSs that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the ADSs are then listed or quoted on a Trading Market, the bid price of the ADSs for the time in question (or the nearest preceding date) on the Trading Market on which the ADSs are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the ADSs for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the ADSs not then listed or quoted for trading on OTCQB or OTCQX and if prices for the ADSs are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the ADSs so reported, or (d) in all other cases, the fair market value of an ADSs as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the ADSs then listed or quoted on a Trading Market, the daily volume weighted average price of the
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ADSs for such date (or the nearest preceding date) on the Trading Market on which the ADSs then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the ADSs for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the ADSs not then listed or quoted for trading on OTCQB or OTCQX and if prices for the ADSs are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per ADS so reported, or (d) in all other cases, the fair market value of an ADS as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
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Section 3. Certain Adjustments.
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Section 4. Transfer of Warrant.
Section 5. Miscellaneous.
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The Company covenants that, during the period the Warrant is outstanding, its directors will have authority to allot a sufficient number of shares to provide for the issuance of the Warrant ADSs and underlying Ordinary Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant ADSs may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the applicable Trading Market upon which the Ordinary Shares and ADSs may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant ADSs in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the number of Warrant ADSs for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof. Unless required by law, the Company shall not do anything that would require the Exercise Price to be adjusted to an amount that is less than the nominal value of an ADS at that time.
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(Signature Page Follows)
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
AKARI THERAPEUTICS, PLC |
By: |
Name: [•] |
Title: [•] |
NOTICE OF EXERCISE
TO: |
AKARI THERAPEUTICS, PLC |
DEUTSCHE BANK TRUST COMPANY AMERICAS, AS DEPOSITARY
☐ in lawful money of the United States; or
☐ if permitted the cancellation of such number of Warrant ADSs as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant ADSs purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
DTC Participant name and number:
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Name and account number of DTC Participant Client:
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Contact of DTC Participant:
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Contact of Holder:
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Telephone Number of DTC Participant:
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[SIGNATURE OF HOLDER]
Name of Investing Entity: |
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Signature of Authorized Signatory of Investing Entity: |
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Name of Authorized Signatory: |
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Title of Authorized Signatory: |
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Date: |
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EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase Warrant ADSs.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
Name: |
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Address: |
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Dated: ____________, ____ |
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Holder’s Signature: _____________________ |
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Holder’s Address: _____________________ |
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Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this “Agreement”) is dated as of November 13, 2024 between Akari Therapeutics, Plc, a public company with limited liability incorporated under the laws of England and Wales (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”).
WHEREAS, subject to the terms and conditions set forth in this Agreement, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:
“Action” shall have the meaning ascribed to such term in Section 3.1(j).
“ADS(s)” means American Depositary Shares issued pursuant to the Deposit Agreement (as defined below), each representing 2,000 Ordinary Shares.
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 405 under the Securities Act.
“Beneficial Ownership Limitation” shall have the meaning ascribed to such term in Section 2.1.
“Board of Directors” means the board of directors of the Company.
“Closing” means the closing of the purchase and sale of the Placed ADSs and the Series D Warrants pursuant to Section 2.1.
“Closing Date” means the second Trading Day on which all conditions precedent to (i) each Purchaser’s obligation to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived.
“Commission” means the United States Securities and Exchange Commission.
“Company UK Counsel” means Goodwin Procter LLP, with offices located at Sancroft, 10-15 Newgate Street, London EC1A 7AZ, United Kingdom.
“Company US Counsel” means Goodwin Procter LLP with offices located at One Commerce Square, 2005 Market Street, 32nd Floor, Philadelphia, PA 19103.
“Deposit Agreement” means the Deposit Agreement dated as of December 7, 2012 (as amended December 24, 2013, September 9, 2015 and August 17, 2023), among the Company, Deutsche Bank Trust Company Americas, as Depositary, and the owners and holders of ADSs from time to time, as such agreement may be amended or supplemented.
“Depositary” means Deutsche Bank Trust Company Americas.
“Disclosure Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.
“Evaluation Date” shall have the meaning ascribed to such term in Section 3.1(s).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.
“FDA” shall have the meaning ascribed to such term in Section 3.1(hh).
“FDCA” shall have the meaning ascribed to such term in Section 3.1(hh).
“Federal Reserve” shall have the meaning ascribed to such term in Section 3.1(ll).
“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).
“Indebtedness” shall have the meaning ascribed to such term in Section 3.1(aa).
“Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).
“Liens” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Material Adverse Effect” shall have the meaning ascribed to such term in Section 3.1(b).
“Material Permits” shall have the meaning ascribed to such term in Section 3.1(n).
“Money Laundering Laws” shall have the meaning ascribed to such term in Section 3.1(mm).
“Ordinary Share(s)” means the ordinary shares of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed, as represented by ADSs issued pursuant to the Deposit Agreement, each ADS representing 2,000 Ordinary Shares, issued and issuable to each Purchaser pursuant to this Agreement.
“Ordinary Share Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Ordinary Shares or ADSs, including, without limitation, any debt, preferred stock, right, option, warrant or
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other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Ordinary Shares or ADSs.
“Per Placed ADS Purchase Price” equals [$2.385, which is equal to the consolidated closing bid price of the ADSs on The Nasdaq Stock Market (as reflected on Nasdaq.com) on November 12, 2024 plus $0.0125][$1.70].
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Pharmaceutical Product” shall have the meaning ascribed to such term in Section 3.1(hh).
“Placed ADSs” means the ADSs deliverable and delivered at Closing pursuant to this Agreement.
“Placed Shares” means the Ordinary Shares underlying the Placed ADSs.
“Placement Agents” means Chardan Capital Markets, LLC (“Chardan”) and Paulson Investment Company, LLC. (“Paulson”), each Delaware limited liability companies, in their capacities as placement agents pursuant to the Placement Agency Agreements.
“Placement Agency Agreements” means (i) that certain Engagement Letter dated as of October 28, 2024, between the Company and Chardan, and (ii) that certain Placement Agency Agreement dated as of November 8, 2024, between the Company and Paulson.
“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.
“Prospectus” means the final prospectus filed in respect of the Registration Statement pursuant to Rule 424.
“Purchaser Party” shall have the meaning ascribed to such term in Section 4.8.
“Registration Statement” shall have the meaning ascribed to such term in Section 4.15(a).
“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any
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similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).
“Securities” means the Placed ADSs, the Placed Shares, the Series D Warrants, the Warrant ADSs and the Warrant Shares.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Series D Warrants” means, collectively, the ADS purchase warrants delivered to the Purchasers at Closing in accordance with Section 2.2(a) hereof, which Series D Warrants shall be exercisable [immediately upon issuance][ beginning on the date that is six months after the Closing Date], at an exercise price of $2.26 per Series D Warrant ADS, and have a term of exercise equal to three (3) years, in the form of Exhibit A attached hereto.
“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing Ordinary Shares and/or ADSs).
“Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for ADSs, each ADS representing 2,000 Ordinary Shares (and in each case, the Series D Warrants) purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately available funds.
“Subsidiary” means any subsidiary of the Company as set forth on Schedule 3.1(a), and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.
“Trading Day” means a day on which the principal Trading Market is open for trading.
“Trading Market” means any of the following markets or exchanges on which the ADSs are listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).
“Transaction Documents” means this Agreement, the Placement Agency Agreements, the Series D Warrants, all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Warrants” means, the Series D Warrants.
“Warrant ADSs” means ADSs representing the Warrant Shares.
“Warrant Shares” means the Ordinary Shares represented by ADSs issuable upon
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exercise of the Series D Warrants.
ARTICLE II.
PURCHASE AND SALE
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2.4 RESERVED.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
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(aa) Solvency. Except as set forth in the Company’s most recent Annual Report on Form 10-K and its most recent Quarterly Reports on Form 10-Q, based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. Schedule 3.1(aa) sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
(bb) Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such
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returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.
(cc) Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of FCPA.
(dd) Accountants. The Company’s independent registered public accounting firm is BDO USA, P.C. To the current knowledge and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) will express its opinion with respect to the financial statements included in the Company’s Annual Report for the fiscal year ended December 31, 2023.
(ee) Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.
(ff) Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(f) and 4.13 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term; (ii) past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently may have a “short” position in the Ordinary Shares and/or ADSs, and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period that the Securities are outstanding, including,
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without limitation, during the periods that the value of the Warrant Shares deliverable with respect to the Securities are being determined, and (z) such hedging activities (if any) could reduce the value of the existing shareholders’ equity interests in the Company at and after the time that the hedging activities are being conducted. The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.
(gg) Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Placement Agents in connection with the placement of the Securities pursuant to the Placement Agency Agreements.
(hh) FDA. As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration, investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the failure to be in compliance would not have a Material Adverse Effect. Except as set forth on Schedule (hh), there is no pending, completed or, to the Company’s knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate, would have a Material Adverse Effect. The properties, business and operations of the Company have been and are being conducted in all respects in accordance with all applicable laws, rules and regulations of the FDA except where the failure to be in compliance would not have a Material Adverse Effect. The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or
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use in the United States of any product proposed to be developed, produced or marketed by the Company.
(ii) Stock Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the Ordinary Shares on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.
(jj) Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).
(kk) U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.
(ll) Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
(mm) Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
(nn) Private Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.
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(oo) No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Securities by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.
(pp) No Disqualification Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 under the Securities Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Purchasers a copy of any disclosures provided thereunder.
(qq) Notice of Disqualification Events. The Company will notify the Purchasers in writing, prior to the Closing Date of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Issuer Covered Person.
(rr) Other Covered Persons. The Company is not aware of any person (other than any Issuer Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Securities.
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The Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
“[NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAS BEEN][THIS SECURITY HAS NOT BEEN] REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
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ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND, IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY AND DEPOSITARY HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO EACH OF THEM THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT. THIS SECURITY [AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY][THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.”
The Placed Shares, Placed ADSs, Warrant Shares and Warrant ADSs shall be imprinted with any such legend (or book entry notation) if (i) a Registration Statement covering the resale of such security is not effective under the Securities Act, (ii) they are not eligible for sale under Rule 144, or (iii) if otherwise required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission).
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ARTICLE V.
MISCELLANEOUS
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(Signature Pages Follow)
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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
AKARI THERAPEUTICS, PLC |
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With a copy to (which shall not constitute notice):
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
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[PURCHASER SIGNATURE PAGES TO AKTX SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
Name of Purchaser:
Signature of Authorized Signatory of Purchaser:
Name of Authorized Signatory:
Title of Authorized Signatory:
Email Address of Authorized Signatory:
Facsimile Number of Authorized Signatory:
Address for Notice to Purchaser:
Name:
Address:
Address for Delivery of Placed ADSs, Pre-Funded Warrants and Series D Warrants (if applicable) to Purchaser (if not same as address for notice):
Subscription Amount: $
Placed ADSs: (representing Placed Shares)
Number of Pre-Funded Warrants:
Number of Series D Warrants:
EIN Number:
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Exhibit A
Form of Series D Warrant
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Exhibit B
Accredited Investor Questionnaire
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Exhibit C
Accredited Investor Verification Letter
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Exhibit 99.1
Akari Therapeutics Announces Successful Completion of Merger of Akari Therapeutics and Peak Bio
- Secures $3.2m in PIPE Financing -
- $50m Term Sheet Obtained for Available Financing under Equity Line of Credit -
BOSTON and LONDON, November 14, 2024 (GLOBE NEWSWIRE) – Akari Therapeutics, Plc (Nasdaq: AKTX) announces the completion of the merger (the Merger) of Akari Therapeutics, Plc (the Company) and Peak Bio, Inc. (Peak Bio), creating an innovative biotechnology company with a broader focus in the advancement of multiple disease therapies. The combined entity will continue the two companies’ significant progress in the development of Antibody Drug Conjugates (ADCs) and advanced therapies for autoimmune and inflammatory diseases, including Geographic Atrophy (GA).
“We have worked throughout this year to bring these two exciting companies together and are thrilled that we have finally completed the merger,” said Samir Patel, MD, Akari’s Interim President & CEO. “Critically important, our post-merger, pro-forma financial statements, as released on Form 8-K, demonstrate shareholder equity sufficient to remedy our Nasdaq shareholder deficiency matter.”
“We will immediately begin executing against the strategy we have announced for the combined entity, with specific focus on Antibody Drug Conjugate and Geographic Atrophy milestones over the next 12 months,” continued Dr. Patel. “The combination of immediate capital provided by the PIPE financing and the available credit under the Equity Line of Credit (ELOC) will allow us to continue development on our lead assets, which have the potential to bring new treatment options to diseases with high unmet medical need.”
“I am thrilled to be leading Akari into the future as the incoming Chairman,” said Hoyoung Huh, MD, PhD, Chairman and Founder of Peak Bio. “We will fully leverage our current assets and programs to drive shareholder value, while aggressively seeking out new opportunities to bring forward therapies to alter the treatment paradigm in oncology, autoimmune and inflammatory diseases. I would also like to thank Akari’s outgoing Chairman, Dr Ray Prudo, for his dedicated service and continued support of the Company.”
The Financing
The Company entered into a definitive agreement for a private placement financing with investors on November 13, 2024, pursuant to which the Company agreed to sell and issue an aggregate of 1,713,402 unregistered American Depository Shares (ADSs), each representing 2,000 of the Company’s ordinary shares, and Series C Warrants (the Warrants) to purchase up to 1,173,402 ADSs. The per unit price per ADS was $1.70 for all investors other than insiders and $2.385 for insiders, which is equal to the consolidated closing bid price of the ADSs on The Nasdaq Stock Market on November 12, 2024 plus $0.125. The warrants have a term of 3 years from the closing date of the private placement, have cashless exercise provisions and, other than those issued to insiders which are exercisable immediately upon issuance, are exercisable beginning on the date that is six months after the Closing Date. All warrants have an exercise price of $2.26 per ADS, which is equal to the Nasdaq official closing price of the Company’s ADSs on the Nasdaq Capital Market on November 12, 2024.
The Company expects the private placement to close shortly after the merger subject to the satisfaction of customary closing obligations.
Paulson Investment Company LLC acted as placement agent for the financing. Chardan acted as an advisor for the merger and the Company has retained Chardan for future financing.
The securities described above were offered and sold in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the Act) and Regulation D promulgated thereunder and have not been registered under the Act or state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from such registration requirements.
The Equity Line of Credit
Additionally, on November 13, 2024, the Company entered into a term sheet for a $50m equity line of credit (ELOC) with White Lion Capital, LLC (White Lion). Under the ELOC, the Company would have the right, but not the obligation, to sell White Lion up to $50m of newly issued ADSs over a 3-year period, subject to conditions including the filing and effectiveness of a resale registration statement with the SEC covering the resale of ADSs sold to White Lion. Upon execution of the ELOC, sales of ADSs to White Lion under the ELOC would depend
on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the ADSs and determinations by the Company as to the appropriate sources of funding and the Company’s operations.
About Akari Therapeutics
Akari Therapeutics, Plc (Nasdaq: AKTX) is a biotechnology company developing advanced therapies for autoimmune and inflammatory diseases. Akari’s lead asset, investigational nomacopan, is a bispecific recombinant inhibitor of complement C5 activation and leukotriene B4 (LTB4) activity. The Company is conducting pre-clinical research of long-acting PAS-nomacopan in geographic atrophy (GA). For more information about Akari, please visit akaritx.com.
Cautionary Note Regarding Forward-Looking Statements
This press release includes express or implied forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), about the Company that involve risks and uncertainties relating to future events and the future performance of the Company. Actual events or results may differ materially from these forward-looking statements. Words such as “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “future,” “opportunity” “will likely result,” “target,” variations of such words, and similar expressions or negatives of these words are intended to identify such forward-looking statements, although not all forward-looking statements contain these identifying words. Examples of such forward-looking statements include, but are not limited to, express or implied statements regarding: the business combination and related matters, including, but not limited to, post-closing operations and the outlook for the Company’s business; the Company’s targets, plans, objectives or goals for future operations, including those related to its product candidates; financial projections; future economic performance,; and the assumptions underlying or relating to such statements. These statements are based on the Company’s current plans, estimates and projections. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific. A number of important factors, including those described in this communication, could cause actual results to differ materially from those contemplated in any forward-looking statements. Factors that may affect future results and may cause these forward-looking statements to be inaccurate include,
without limitation: the risk that Akari and Peak Bio may not realize the anticipated benefits of the Merger in the time frame expected, or at all; the ability to retain and hire key personnel; potential adverse reactions or changes to business relationships resulting from the Merger; the potential impact of unforeseen liabilities, future capital expenditures, revenues, costs, expenses, earnings, synergies, economic performance, indebtedness, financial condition and losses on the future prospects, business and management strategies for the management, expansion and growth of the combined business; uncertainties as to the long-term value of Akari’s American Depositary Shares (and the ordinary shares represented thereby), including the dilution caused by Akari’s issuance of additional American Depositary Shares (and the ordinary shares represented thereby) in connection with the Merger; risks related to global as well as local political and economic conditions, including interest rate and currency exchange rate fluctuations; potential delays or failures related to research and/or development of the Company’s programs or product candidates; risks related to any loss of the Company’s patents or other intellectual property rights; any interruptions of the supply chain for raw materials or manufacturing for the Company’s product candidates, the nature, timing, cost and possible success and therapeutic applications of product candidates being developed by the Company and/or its collaborators or licensees; the extent to which the results from the research and development programs conducted by the Company, and/or its collaborators or licensees may be replicated in other studies and/or lead to advancement of product candidates to clinical trials, therapeutic applications, or regulatory approval; uncertainty of the utilization, market acceptance, and commercial success of the Company’s product candidates; unexpected breaches or terminations with respect to the Company’s material contracts or arrangements; risks related to competition for the Company’s product candidates; the Company’s ability to successfully develop or commercialize its product candidates; potential exposure to legal proceedings and investigations; risks related to changes in governmental laws and related interpretation thereof, including on reimbursement, intellectual property protection and regulatory controls on testing, approval, manufacturing, development or commercialization of any of the Company’s product candidates; the Company’s ability to maintain listing of its ADSs on the Nasdaq Capital Market. While the foregoing list of factors presented here is considered representative, no list should be considered to be a complete statement of all potential risks and uncertainties. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's filings with the SEC, copies of which may be obtained from the SEC's website at www.sec.gov. The Company
assumes no, and hereby disclaims any, obligation to update the forward-looking statements contained in this press release.
For more information
Investor Contact:
Mike Moyer
LifeSci Advisors
(617) 308-4306
mmoyer@lifesciadvisors.com
Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Merger with Peak Bio
On March 4, 2024, Akari Therapeutics, Plc (“Akari”) entered into an Agreement and Plan of Merger with Peak Bio and Pegasus Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Akari (“Pegasus Merger Sub”), as amended by that certain side letter dated August 15, 2024 (the “Merger Agreement”), pursuant to which, on November 14, 2024, Pegasus Merger Sub merged with and into Peak Bio (the “Merger”), with Peak Bio surviving the Merger as a wholly-owned subsidiary of Akari.
Pursuant to the Merger Agreement, and upon the terms and subject to the conditions thereof, at the effective time of the Merger (the “Effective Time”), each issued and outstanding share of Peak Bio common stock, par value $0.0001 per share (the “Peak Common Stock”) (other than (x) shares of Peak Common Stock held by Peak Bio as treasury stock, or shares of Peak Common Stock owned by Akari, Pegasus Merger Sub or any direct or indirect wholly-owned subsidiaries of Akari and (y) Dissenting Shares (as defined in the Merger Agreement)), was converted into the right to receive the Company’s ADSs representing a number of Akari ordinary shares, par value $0.0001 per share (the “Akari Ordinary Shares”) equal to 0.2935 (the “Exchange Ratio”), each such share duly and validly issued against the deposit of the requisite number of Akari Ordinary Shares in accordance with the Deposit Agreement (as defined in the Merger Agreement). The Exchange Ratio was calculated in accordance with the terms of the Merger Agreement, such that the total number of shares of Akari ADSs issued in connection with the merger was approximately 48.4% of the outstanding shares of Akari ADSs on a fully diluted basis.
The parties to the Merger Agreement have agreed that the November Private Placement (defined below) satisfies the conditions set forth in Sections 7.2(e) and 7.3(e) of the Merger Agreement.
At the Effective Time, each warrant to purchase capital stock of Peak Bio (“Peak Warrant”) that was outstanding immediately prior to the Effective Time was converted into and exchangeable for warrants to purchase a number of Akari Ordinary Shares or Akari ADSs, as determined by Akari (each, an “Adjusted Warrant”), on substantially similar terms and subject to substantially similar conditions as were applicable to such Peak Warrant immediately prior to the Effective Time, except (i) for terms rendered inoperative by reason of the transactions contemplated by the Merger Agreement, (ii) as provided in the following sentence and (iii) such amendments to the terms of the Adjusted Warrants as are necessary to comply with applicable Law (as defined in the Merger Agreement). The number of Akari Ordinary Shares (or the number of Akari Ordinary Shares underlying Akari ADSs, as applicable) subject to each Adjusted Warrant is equal to the number of shares of Peak Common Stock issuable upon exercise of such Peak Warrant immediately prior to the Effective Time multiplied by the Exchange Ratio, with any fractional Akari Ordinary Shares or Akari ADSs rounded down to the nearest whole Akari Ordinary Share or Akari ADS, as applicable, and the exercise price with respect to each Akari Ordinary Share (or each Akari Ordinary Share underlying Akari ADSs, as applicable) underlying such Adjusted Warrant equal to the exercise price of such Peak Warrant immediately prior to the Effective Time divided by the Exchange Ratio. The Adjusted Warrants may be further adjusted, if applicable, to give effect to the impact of the Additional Exchange Ratio.
At the Effective Time, each option to acquire shares of Peak Common Stock (“Peak Option”) that was outstanding and unexercised immediately prior to the Effective Time, whether or not vested, was assumed and converted into an option to purchase a number of Akari ordinary shares or Akari ADSs, as determined by Akari (each, an “Adjusted Option”). The number of Akari Ordinary Shares (or the number of Akari Ordinary Shares underlying Akari ADSs, as applicable) subject to the Adjusted Option is equal to the product of (i) the total number of shares of Peak Common Stock subject to such Peak Option immediately prior to the Effective Time multiplied by (ii) the Exchange Ratio, with any fractional Akari Ordinary Shares or Akari ADSs rounded down to the nearest whole Akari Ordinary Share or Akari ADS, as applicable, and the exercise price per share of each Adjusted Option equal to the exercise price of such Peak Option immediately prior to the Effective Time divided by the Exchange Ratio. The Adjusted Options will be further adjusted, if applicable, to give effect to the impact of the Additional Exchange Ratio.
November Private Placement
On November 13, 2024, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain accredited investors, including the Company’s Chairman, Dr. Ray Prudo, and a director and Interim President and Chief Executive Officer of the Company, Samir R. Patel, M.D., pursuant to which the Company agreed to sell and issue in a private placement (the “November Private Placement”) an aggregate of 1,713,402 unregistered ADSs and Series D Warrants (the “Warrants”) to purchase up to 1,713,402 ADSs, at a per unit price of (i) $1.70 per ADS and Warrant for all investors other than Drs. Patel and Prudo, (ii) $2.385, which is equal to the consolidated closing bid price of the ADSs on The Nasdaq Stock
Market on November 12, 2024 plus $0.125 for Drs. Patel and Prudo, for aggregate gross proceeds of $3.2 million. The Purchase Agreement also contains representations, warranties, indemnification and other provisions customary for transactions of this nature. The Private Placement is expected to close shortly after the closing of the Merger (as defined below), subject to the satisfaction of customary closing conditions.
The Warrants have a term of three years from the closing date of the Private Placement and have cashless exercise provisions. The Warrants have an exercise price of $2.26 per ADS, which is equal to the Nasdaq official closing price of Akari’s ADSs on the Nasdaq Capital Market on November 12, 2024. The warrants issued to Dr. Patel and Dr. Prudo are immediately exercisable and the warrants issued to each of the other investors will be exercisable six months after issuance.
Basis of Presentation of Unaudited Pro Forma Financial Statements
The unaudited pro forma condensed combined financial information is provided for illustrative purposes only, does not necessarily reflect what the actual consolidated results of operations and financial position would have been had the acquisition occurred on the dates assumed and may not be useful in predicting the future consolidated results of operations or financial position.
The unaudited pro forma condensed combined financial information is based on the assumptions and adjustments that are described in the accompanying notes. Accordingly, the pro forma adjustments are preliminary, subject to further revision as additional information becomes available and additional analyses are performed and have been made solely for the purpose of providing unaudited pro forma condensed combined financial information. Differences between these preliminary accounting and estimates and the final accounting and estimates may occur as a result of changes in initial assumptions and related accounting, and the amount of cash used in Akari’s operations, and other changes in Akari’s assets and liabilities, which are expected to be completed after the closing of the Merger, and these differences could have a material impact on the accompanying unaudited pro forma condensed combined financial information and the combined company’s future results of operations and financial position.
The unaudited pro forma condensed combined financial information does not give effect to the potential impact of current financial conditions, regulatory matters, operating efficiencies or other savings or expenses that may be associated with the integration of the two companies and does not purport to represent the actual results of operations that Akari and Peak Bio would have achieved had the companies been combined during the periods presented and is not intended to project the future results of operations that the combined company may achieve after the Merger. The unaudited pro forma combined financial information does not reflect any potential cost savings that may be realized as a result of the Merger and also does not reflect any restructuring or integration-related costs to achieve those potential cost savings.
Accounting rules require evaluation of certain assumptions, estimates, or determination of financial statement classifications. During preparation of the unaudited pro forma condensed combined financial information, management has performed a preliminary analysis and is not aware of any material differences, and accordingly, this unaudited pro forma condensed combined financial information assumes no material differences in accounting policies of the two companies. Following the Merger, management will conduct a final review of Peak’s accounting policies in order to determine if differences in accounting policies require adjustment or reclassification of Peak Bio’s results of operations or reclassification of assets or liabilities to conform to Akari’s accounting policies and classifications. As a result of this review, management may identify differences that, when conformed, could have a material impact on these unaudited pro forma condensed combined financial statements.
The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X under the Securities Act and presents the combined historical consolidated financial position and consolidated results of operations of Akari and the historical combined financial position and results of operations of Peak Bio, adjusted to give effect to (i) the Merger and November Private Placement and (ii) the pro forma effects of certain assumptions and adjustments described in “Notes to the Unaudited Pro Forma Condensed Combined Financial Information” below.
The following unaudited pro forma combined financial information is presented to illustrate the estimated effects of the Merger and November Private Placement, based on the historical financial statements and accounting records of Akari and Peak Bio after giving effect to the Merger and November Private Placement and the related pro forma adjustments as described in the notes included below.
The unaudited pro forma combined statements of operations for the six months ended June 30, 2024 and for the year ended December 31, 2023 combine the historical statements of operations of Akari and Peak Bio, giving effect to the Merger and November Private Placement as if they had occurred on January 1, 2023. The unaudited pro forma condensed combined balance sheet data assumes that the Merger and November Private Placement took place on June 30, 2024, and combines the historical balance sheets of Akari and Peak Bio as of such date.
The unaudited pro forma combined financial statements should be read in conjunction with the accompanying notes to the unaudited pro forma combined financial statements. The unaudited pro forma condensed combined financial information, including the notes thereto, are based on and should be read in conjunction with the separate historical financial statements of Akari and Peak Bio, and their respective management’s discussion and analysis of financial condition and results of operations as set forth in:
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF JUNE 30, 2024
|
|
|
|
|
|
|
|
Transaction |
|
|
|
|
Pro Forma Combined |
|
||||
|
|
Akari |
|
|
|
|
|
Accounting |
|
|
Note |
|
Akari |
|
||||
(In thousands, except share amounts) |
|
Therapeutics, Plc |
|
|
Peak Bio, Inc. |
|
|
Adjustments |
|
|
References |
|
Therapeutics, Plc |
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash |
|
$ |
4,177 |
|
|
$ |
236 |
|
|
$ |
3,200 |
|
|
C |
|
$ |
7,613 |
|
Prepaid expenses |
|
|
805 |
|
|
|
1,096 |
|
|
|
- |
|
|
|
|
|
1,901 |
|
Other current assets |
|
|
94 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
94 |
|
Total current assets |
|
|
5,076 |
|
|
|
1,332 |
|
|
|
3,200 |
|
|
|
|
|
9,608 |
|
Patent acquisition costs, net |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
- |
|
|
Property and equipment, net |
|
|
- |
|
|
|
32 |
|
|
|
- |
|
|
|
|
|
32 |
|
Restricted cash |
|
|
- |
|
|
|
60 |
|
|
|
- |
|
|
|
|
|
60 |
|
Intangible assets |
|
|
- |
|
|
|
- |
|
|
|
43,223 |
|
|
A |
|
|
43,223 |
|
Goodwill |
|
|
- |
|
|
|
- |
|
|
|
10,341 |
|
|
B |
|
|
10,341 |
|
Other noncurrent assets |
|
|
- |
|
|
|
11 |
|
|
|
- |
|
|
|
|
|
11 |
|
Total assets |
|
$ |
5,076 |
|
|
$ |
1,435 |
|
|
$ |
56,764 |
|
|
|
|
$ |
63,275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities and stockholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accounts payable |
|
$ |
4,686 |
|
|
$ |
5,472 |
|
|
$ |
- |
|
|
|
|
$ |
10,158 |
|
Accrued expenses |
|
|
1,685 |
|
|
|
4,402 |
|
|
|
(1,005 |
) |
|
D, F, G |
|
|
5,082 |
|
Operating lease liability |
|
|
- |
|
|
|
4,604 |
|
|
|
- |
|
|
|
|
|
4,604 |
|
Derivative liability |
|
|
- |
|
|
|
1,854 |
|
|
|
(1,854 |
) |
|
F |
|
|
- |
|
Promissory note |
|
|
- |
|
|
|
350 |
|
|
|
- |
|
|
|
|
|
350 |
|
Convertible notes |
|
|
1,000 |
|
|
|
3,932 |
|
|
|
(3,232 |
) |
|
F |
|
|
1,700 |
|
Convertible notes, related party |
|
|
- |
|
|
|
1,761 |
|
|
|
(1,761 |
) |
|
F |
|
|
- |
|
Related party loans |
|
|
- |
|
|
|
1,651 |
|
|
|
- |
|
|
|
|
|
1,651 |
|
Warrant liability |
|
|
755 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
755 |
|
Deferred tax liability |
|
|
- |
|
|
|
- |
|
|
|
9,941 |
|
|
B, H |
|
|
9,941 |
|
Other current liabilities |
|
|
653 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
653 |
|
Total current liabilities |
|
|
8,779 |
|
|
|
24,026 |
|
|
|
2,089 |
|
|
|
|
|
34,894 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shareholders’ (deficit) equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sharecapitalof$0.0001parvalue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Ordinary shares |
|
|
2,430 |
|
|
|
- |
|
|
|
2,866 |
|
|
C |
|
|
5,296 |
|
Common Stock |
|
|
- |
|
|
|
2 |
|
|
|
(2 |
) |
|
C |
|
|
- |
|
Additional paid-in capital |
|
|
183,007 |
|
|
|
19,949 |
|
|
|
11,124 |
|
|
C |
|
|
214,080 |
|
Capital redemption reserve |
|
|
52,194 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
52,194 |
|
Accumulated other comprehensive loss |
|
|
(749 |
) |
|
|
142 |
|
|
|
(142 |
) |
|
C |
|
|
(749 |
) |
Accumulated deficit |
|
|
(240,585 |
) |
|
|
(42,684 |
) |
|
|
40,829 |
|
|
C, D |
|
|
(242,440 |
) |
Total shareholders’ deficit: |
|
|
(3,703 |
) |
|
|
(22,591 |
) |
|
|
54,675 |
|
|
|
|
|
28,381 |
|
Total liabilities and stockholders' deficit |
|
$ |
5,076 |
|
|
$ |
1,435 |
|
|
$ |
56,764 |
|
|
|
|
$ |
63,275 |
|
See accompanying notes to Unaudited Pro Forma Condensed Combined Financial Statements.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2024
|
|
|
|
|
|
|
|
Transaction |
|
|
|
|
Pro Forma |
|
||||
|
|
Akari |
|
|
|
|
|
Accounting |
|
|
|
|
Combined |
|
||||
(In thousands, except share and per share amounts) |
|
Therapeutics, Plc |
|
|
Peak Bio, Inc. |
|
|
Adjustments |
|
|
Note References |
|
Akari Therapeutics, Plc |
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
$ |
5,593 |
|
|
$ |
179 |
|
|
$ |
- |
|
|
|
|
$ |
5,772 |
|
General and administrative |
|
|
4,907 |
|
|
|
3,417 |
|
|
|
- |
|
|
|
|
|
8,324 |
|
Merger-related costs |
|
|
1,298 |
|
|
|
- |
|
|
|
1,521 |
|
|
D, G |
|
|
2,819 |
|
Restructuring and other costs |
|
|
1,640 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
1,640 |
|
Loss from operations |
|
|
(13,438 |
) |
|
|
(3,596 |
) |
|
|
(1,521 |
) |
|
|
|
|
(18,555 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
|
4 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
4 |
|
Interest expense |
|
|
(51 |
) |
|
|
(772 |
) |
|
|
737 |
|
|
F |
|
|
(86 |
) |
Change in fair value of warrant liability |
|
|
498 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
498 |
|
Change in fair value of derivative liability |
|
|
- |
|
|
|
(353 |
) |
|
|
353 |
|
|
F |
|
|
- |
|
Foreign currency exchange loss, net |
|
|
(135 |
) |
|
|
- |
|
|
|
- |
|
|
|
|
|
(135 |
) |
Cancellation of trade liability |
|
|
- |
|
|
|
208 |
|
|
|
- |
|
|
|
|
|
208 |
|
Other expense, net |
|
|
(2 |
) |
|
|
- |
|
|
|
- |
|
|
|
|
|
(2 |
) |
Total other income (expense), net |
|
|
314 |
|
|
|
(917 |
) |
|
|
1,090 |
|
|
|
|
|
487 |
|
Net (loss) income |
|
$ |
(13,124 |
) |
|
$ |
(4,513 |
) |
|
$ |
(431 |
) |
|
|
|
$ |
(18,068 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) income per share - basic and diluted |
|
$ |
(0.00 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.00 |
) |
|
|
|
$ |
(0.00 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weight-average number of ordinary shares used in computing net (loss) income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
˗˗ Basic |
|
|
16,144,813,478 |
|
|
|
23,124,888 |
|
|
|
28,654,688,000 |
|
|
E |
|
|
44,799,501,478 |
|
˗˗ Diluted |
|
|
16,144,813,478 |
|
|
|
23,124,888 |
|
|
|
28,654,688,000 |
|
|
E |
|
|
44,799,501,478 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss |
|
$ |
(13,124 |
) |
|
$ |
(4,513 |
) |
|
$ |
(431 |
) |
|
|
|
$ |
(18,068 |
) |
Other comprehensive loss, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|||
Foreign currency translation adjustment |
|
|
291 |
|
|
|
48 |
|
|
|
- |
|
|
|
|
|
339 |
|
Total other comprehensive loss, net of tax |
|
|
291 |
|
|
|
48 |
|
|
|
- |
|
|
|
|
$ |
339 |
|
Total other comprehensive loss |
|
$ |
(12,833 |
) |
|
$ |
(4,465 |
) |
|
$ |
(431 |
) |
|
|
|
$ |
(17,728 |
) |
See accompanying notes to Unaudited Pro Forma Condensed Combined Financial Statements.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2023
|
|
|
|
|
|
|
|
Transaction |
|
|
|
|
Pro Forma |
|
||||
|
|
Akari |
|
|
|
|
|
Accounting |
|
|
|
|
Combined |
|
||||
(In thousands, except share and per share amounts) |
|
Therapeutics, Plc |
|
|
Peak Bio, Inc. |
|
|
Adjustments |
|
|
Note References |
|
Akari Therapeutics, Plc |
|
||||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Grant Revenue |
|
$ |
- |
|
|
$ |
368 |
|
|
$ |
- |
|
|
|
|
$ |
368 |
|
Total Revenue |
|
|
- |
|
|
|
368 |
|
|
|
- |
|
|
|
|
|
368 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
|
5,450 |
|
|
|
1,628 |
|
|
|
- |
|
|
|
|
|
7,078 |
|
General and administrative |
|
|
11,356 |
|
|
|
8,292 |
|
|
|
2,508 |
|
|
D, G |
|
|
22,156 |
|
Impairment loss on operating right-of-use asset |
|
|
|
|
|
3,514 |
|
|
|
- |
|
|
|
|
|
3,514 |
|
|
Total operating expenses |
|
|
16,806 |
|
|
|
13,434 |
|
|
|
2,508 |
|
|
|
|
|
32,748 |
|
Loss from operations |
|
|
(16,806 |
) |
|
|
(13,066 |
) |
|
|
(2,508 |
) |
|
|
|
|
(32,380 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
|
82 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
82 |
|
Interest expense |
|
|
- |
|
|
|
(2,728 |
) |
|
|
1,956 |
|
|
F |
|
|
(772 |
) |
Change in fair value of warrant liability |
|
|
6,599 |
|
|
|
2,100 |
|
|
|
- |
|
|
|
|
|
8,699 |
|
Change in fair value of derivative liability |
|
|
- |
|
|
|
837 |
|
|
|
(645 |
) |
|
F |
|
|
192 |
|
Other income |
|
|
- |
|
|
|
46 |
|
|
|
- |
|
|
|
|
|
46 |
|
Gain (loss) on extinguishment of debt |
|
|
- |
|
|
|
(15 |
) |
|
|
- |
|
|
|
|
|
(15 |
) |
Foreign currency exchange gains (losses), net |
|
|
136 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
136 |
|
Other expense, net |
|
|
(19 |
) |
|
|
- |
|
|
|
- |
|
|
|
|
|
(19 |
) |
Total other income (expense), net |
|
|
6,798 |
|
|
|
240 |
|
|
|
1,311 |
|
|
|
|
|
8,349 |
|
Net (loss) income |
|
$ |
(10,008 |
) |
|
$ |
(12,826 |
) |
|
$ |
(1,197 |
) |
|
|
|
$ |
(24,031 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) income per share - basic and diluted |
|
$ |
(0.00 |
) |
|
$ |
(0.61 |
) |
|
$ |
(0.00 |
) |
|
|
|
$ |
(0.00 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weight-average number of ordinary shares used in computing net (loss) income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
˗˗ Basic |
|
|
9,788,980,193 |
|
|
|
21,175,668 |
|
|
|
28,654,688,000 |
|
|
E |
|
|
38,443,668,193 |
|
˗˗ Diluted |
|
|
9,788,980,193 |
|
|
|
21,175,668 |
|
|
|
28,654,688,000 |
|
|
E |
|
|
38,443,668,193 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss |
|
$ |
(10,008 |
) |
|
$ |
(12,826 |
) |
|
$ |
(1,197 |
) |
|
|
|
|
(24,031 |
) |
Other comprehensive loss, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|||
Foreign currency translation adjustment |
|
|
(269 |
) |
|
|
64 |
|
|
|
- |
|
|
|
|
|
(205 |
) |
Total other comprehensive loss, net of tax |
|
|
(269 |
) |
|
|
64 |
|
|
|
- |
|
|
|
|
$ |
(205 |
) |
Total other comprehensive loss |
|
$ |
(10,277 |
) |
|
$ |
(12,762 |
) |
|
$ |
(1,197 |
) |
|
|
|
$ |
(24,236 |
) |
See accompanying notes to Unaudited Pro Forma Condensed Combined Financial Statements.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Note 1. Description of the Transaction
Peak Bio Merger
On March 4, 2024, Akari Therapeutics, Plc (“Akari”) entered into an Agreement and Plan of Merger with Peak Bio and Pegasus Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Akari (“Pegasus Merger Sub”), as amended by that certain side letter dated August 15, 2024 (the “Merger Agreement”), pursuant to which, on November 14, 2024, Pegasus Merger Sub merged with and into Peak Bio (the “Merger”), with Peak Bio surviving the Merger as a wholly-owned subsidiary of Akari.
Pursuant to the Merger Agreement, and upon the terms and subject to conditions thereof, at the effective time of the Merger (the “Effective Time”), each issued and outstanding share of Peak Bio common stock, par value $0.0001 per share (the “Peak Common Stock”) (other than (x) shares of Peak Common Stock held by Peak Bio as treasury stock, or shares of Peak Common Stock owned by Akari, Pegasus Merger Sub or any direct or indirect wholly-owned subsidiaries of Akari and (y) Dissenting Shares (as defined in the Merger Agreement)), was converted into the right to receive the Company’s ADSs representing a number of Akari ordinary shares, par value $0.0001 per share (the “Akari Ordinary Shares”) equal to $0.2935 (the “Exchange Ratio”), each such share duly and validly issued against the deposit of the requisite number of Akari Ordinary Shares in accordance with the Deposit Agreement (as defined in the Merger Agreement). The Exchange Ratio was calculated in accordance with the terms of the Merger Agreement, such that the total number of shares of Akari ADSs issued in connection with the merger was approximately 48.4% of the outstanding shares of Akari ADSs on a fully diluted basis.
The parties to the Merger Agreement have agreed that the November Private Placement (defined below) satisfies the conditions set forth in Sections 7.2(e) and 7.3(e) of the Merger Agreement.
At the Effective Time, each warrant to purchase capital stock of Peak Bio (“Peak Warrant”) that was outstanding immediately prior to the Effective Time was converted into and exchangeable for warrants to purchase a number of Akari Ordinary Shares or Akari ADSs, as determined by Akari (each, an “Adjusted Warrant”), on substantially similar terms and subject to substantially similar conditions as were applicable to such Peak Warrant immediately prior to the Effective Time, except (i) for terms rendered inoperative by reason of the transactions contemplated by the Merger Agreement, (ii) as provided in the following sentence and (iii) such amendments to the terms of the Adjusted Warrants as are necessary to comply with applicable Law (as defined in the Merger Agreement). The number of Akari Ordinary Shares (or the number of Akari Ordinary Shares underlying Akari ADSs, as applicable) subject to each Adjusted Warrant is equal to the number of shares of Peak Common Stock issuable upon exercise of such Peak Warrant immediately prior to the Effective Time multiplied by the Exchange Ratio, with any fractional Akari Ordinary Shares or Akari ADSs rounded down to the nearest whole Akari Ordinary Share or Akari ADS, as applicable, and the exercise price with respect to each Akari Ordinary Share (or each Akari Ordinary Share underlying Akari ADSs, as applicable) underlying such Adjusted Warrant equal to the exercise price of such Peak Warrant immediately prior to the Effective Time divided by the Exchange Ratio. The Adjusted Warrants may be further adjusted, if applicable, to give effect to the impact of the Additional Exchange Ratio.
At the Effective Time, each option to acquire shares of Peak Common Stock (“Peak Option”) that was outstanding and unexercised immediately prior to the Effective Time, whether or not vested, was assumed and converted into an option to purchase a number of Akari ordinary shares or Akari ADSs, as determined by Akari (each, an “Adjusted Option”). The number of Akari Ordinary Shares (or the number of Akari Ordinary Shares underlying Akari ADSs, as applicable) subject to the Adjusted Option is equal to the product of (i) the total number of shares of Peak Common Stock subject to such Peak Option immediately prior to the Effective Time multiplied by (ii) the Exchange Ratio, with any fractional Akari Ordinary Shares or Akari ADSs rounded down to the nearest whole Akari Ordinary Share or Akari ADS, as applicable, and the exercise price per share of each Adjusted Option equal to the exercise price of such Peak Option immediately prior to the Effective Time divided by the Exchange Ratio. The Adjusted Options will be further adjusted, if applicable, to give effect to the impact of the Additional Exchange Ratio.
November Private Placement
On November 13, 2024, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain accredited investors, including the Company’s Chairman, Dr. Ray Prudo, and a director and Interim President and Chief Executive Officer of the Company, Samir R. Patel, M.D., pursuant to which the Company agreed to sell and issue in a private placement (the “November Private Placement”) an aggregate of 1,713,402 unregistered ADSs and Series D Warrants (the “Warrants”) to purchase up to 1,713,402 ADSs, at a per unit price of (i) $1.70 per ADS and Warrant for all investors other
than Drs. Patel and Prudo, (ii) $2.385, which is equal to the consolidated closing bid price of the ADSs on The Nasdaq Stock Market on November 12, 2024 plus $0.125 for Drs. Patel and Prudo, for aggregate gross proceeds of $3.2 million. The Purchase Agreement also contains representations, warranties, indemnification and other provisions customary for transactions of this nature. The Private Placement is expected to close shortly after the closing of the Merger (as defined below), subject to the satisfaction of customary closing conditions.
The Warrants have a term of three years from the closing date of the Private Placement and have cashless exercise provisions. The Warrants have an exercise price of $2.26 per ADS, which is equal to the Nasdaq official closing price of Akari’s ADSs on the Nasdaq Capital Market on November 12, 2024. The warrants issued to Dr. Patel and Dr. Prudo are immediately exercisable and the warrants issued to each of the other investors will be exercisable six months after issuance.
Note 2. Basis of Presentation
The unaudited pro forma condensed combined financial information were prepared with the Merger being accounted for as a business combination by Akari of Peak Bio. The unaudited pro forma condensed combined financial information is provided for illustrative purposes only, does not necessarily reflect what the actual consolidated results of operations and financial position would have been had the acquisition occurred on the dates assumed and may not be useful in predicting the future consolidated results of operations or financial position.
The unaudited pro forma condensed combined financial statements have been prepared based on Akari’s and Peak Bio’s historical financial information, giving effect to the acquisition and related adjustments described in these notes to show how the acquisition might have affected the historical financial statements if it had been completed on January 1, 2023 for the purposes of the unaudited pro forma condensed combined statements of operations, and as of June 30, 2024, for purposes of the unaudited pro forma condensed combined balance sheet. In addition, certain items have been reclassified from Peak Bio’s historical financial statements to align them with Akari’s financial statement presentation and accounting policies. Peak Bio and Akari prepare their consolidated financial statements in accordance with U.S. generally accepted accounting principles.
Akari accounts for business combinations in accordance with Financial Accounting Standards Board Accounting Standards Codification 805, Business Combinations. Accordingly, the preliminary fair value of purchase consideration for the acquisition has been allocated to the estimated fair value of assets acquired and liabilities assumed. The purchase price allocation is based on preliminary estimates, including estimates for acquired intangible assets which are in the process of being fair valued, and may change when the final valuation of the assets acquired and liabilities assumed is determined.
The pro forma adjustments reflecting the consummation of the Merger are based on certain currently available information and certain assumptions and methodologies that Akari believes are reasonable under the circumstances. The pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments, and it is possible the difference may be material. Akari believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the Merger based on information available to management at this time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial information.
The unaudited pro forma condensed combined financial information does not give effect to any anticipated synergies, operating efficiencies, tax savings, or cost savings that may be associated with the Merger.
The unaudited pro forma condensed combined financial information does not give effect to the potential impact of current financial conditions, regulatory matters or other savings or expenses that may be associated with the integration of the two companies and does not purport to represent the actual results of operations that Akari and Peak Bio would have achieved had the companies been combined during the periods presented and is not intended to project the future results of operations that the combined company may achieve after the Merger.
Note 3. Estimated consideration and preliminary purchase price allocation
The estimated fair value of the consideration transferred, based on Akari’s stock price as of November 13, 2024 (most recent practical date), of $30.7 million is summarized as follows (in thousands):
Ordinary Shares |
|
$ |
28,255 |
|
Assumed Options |
|
|
628 |
|
Assumed Warrants |
|
|
1,856 |
|
Total consideration transferred |
|
$ |
30,739 |
|
The actual number of Akari Ordinary Shares represented by ADSs issued to Peak Bio stockholders upon the completion of the Merger as Merger Consideration and related Exchange Ratio is not fixed and subject to adjustment in certain circumstances, as more fully described in Note 1. As a result, the final valuation of the Merger Consideration will be based on the actual number of Akari Ordinary Shares represented by ADSs issued to Peak Bio stockholders, the actual number of Adjusted Options and Adjusted Warrants issued in exchange for Peak Bio Options and Peak Bio Warrants outstanding, and the per share price of Akari ADSs at closing of the Merger. Accordingly, the total purchase price for the Merger could differ from the amount of total consideration transferred reflected in the unaudited proforma condensed combined financial statements, and that difference could be material. A ten percent (10%) increase/decrease to the Akari ADS price would increase/decrease the purchase price by approximately $3.2 million, with a corresponding change to goodwill. Therefore, the estimated consideration expected to be transferred reflected in these unaudited pro forma condensed combined financial statements does not purport to represent what the actual consideration transferred will be when the Merger is completed.
Akari’s total transaction costs are estimated to be $3.9 million, $1.9 million of which will be incurred and expensed subsequent to June 30, 2024.
The following table summarizes the allocation of the consideration transferred to the fair values of the assets acquired and liabilities assumed based on the Peak Bio balance sheet as of June 30, 2024 (in thousands):
Cash |
|
$ |
236 |
|
Prepaid expenses |
|
|
1,096 |
|
Property and equipment, net |
|
|
32 |
|
Restricted cash |
|
|
60 |
|
Other noncurrent assets |
|
|
11 |
|
In-process research and development |
|
|
43,223 |
|
Total identifiable assets acquired |
|
$ |
44,658 |
|
Accounts payable |
|
|
5,472 |
|
Accrued expenses |
|
|
1,542 |
|
Operating lease liability |
|
|
4,604 |
|
Promissory note |
|
|
350 |
|
Convertible notes |
|
|
700 |
|
Related party loans |
|
|
1,651 |
|
Deferred tax liability |
|
|
9,941 |
|
Total liabilities assumed |
|
$ |
24,260 |
|
Net identifiable assets acquired |
|
$ |
20,398 |
|
Goodwill |
|
|
10,341 |
|
Total consideration transferred |
|
$ |
30,739 |
|
The estimated fair values of the consideration transferred and assets acquired and liabilities assumed are preliminary estimates and may change upon the finalization of a more detailed analysis of the facts and circumstances that existed at the date of the Merger. The estimated value of in-process research and development acquired, which is still in the process of being fair valued, is capitalized as of the acquisition date and is subsequently accounted for as indefinite-lived intangible assets until completion or abandonment of the associated research and development efforts. Accordingly, during the development period after the completion of the mergers, these assets will not be amortized into earnings; instead, these assets will be subject to periodic impairment testing.
Note 4. Transaction accounting adjustments
Transaction adjustments are necessary to reflect the acquisition consideration exchanged and to adjust amounts related to the tangible and intangible assets acquired and liabilities assumed of Peak Bio to the preliminary estimate of their fair values, and to reflect the impact on the statements of operations of the acquisition as if the companies had been combined during the periods presented therein. The transaction adjustments included in the unaudited pro forma condensed combined financial statements are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
Capital |
|
|
Other |
|
|
|
|
|
|
|
|||||||
|
|
Share Capital $.0001 par value |
|
|
Additional |
|
|
Redemption |
|
|
Comprehensive |
|
|
Accumulated |
|
|
|
|
||||||||||
(In thousands, except share amounts) |
|
Shares |
|
|
Amount |
|
|
Paid-in-Capital |
|
|
Reserve |
|
|
Loss |
|
|
Deficit |
|
|
Total |
|
|||||||
Elimination of Peak Bio's historical Common Stock balances as of June 30, 2024 |
|
|
(23,124,888 |
) |
|
$ |
(2 |
) |
|
$ |
(19,949 |
) |
|
$ |
- |
|
|
$ |
(142 |
) |
|
$ |
42,684 |
|
|
$ |
22,591 |
|
Issuance of Ordinary Shares to Peak's stockholders |
|
|
25,227,884,000 |
|
|
|
2,523 |
|
|
|
25,732 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
28,255 |
|
Issuance of Adjusted Warrants |
|
|
- |
|
|
|
- |
|
|
|
1,856 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,856 |
|
Issuance of Adjusted Options |
|
|
- |
|
|
|
- |
|
|
|
628 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
628 |
|
Issuance of Ordinary Shares pursuant to the PIPE Investment |
|
|
3,426,804,000 |
|
|
|
343 |
|
|
|
2,857 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3,200 |
|
Pro forma adjustment |
|
|
28,631,563,112 |
|
|
$ |
2,864 |
|
|
$ |
11,124 |
|
|
$ |
- |
|
|
$ |
(142 |
) |
|
$ |
42,684 |
|
|
$ |
56,530 |
|