Akari Therapeutics Reports Significant Financial Challenges, Losses, and Doubt Over Going Concern

Akari Therapeutics, Plc reported significant financial challenges in its latest 10-Q filing for the period ending September 30, 2024. The company recorded a cash balance of $2.2 million, a decrease from $3.8 million at the end of 2023. Total current assets also fell to $2.7 million from $4.3 million, while total assets decreased to $2.7 million from $4.4 million. Current liabilities surged to $9.4 million, up from $4.6 million, resulting in a total shareholders’ deficit of $(6.7 million), worsening from $(0.2 million) at the end of 2023.

For the three months ended September 30, 2024, Akari reported a loss from operations of $(2.9 million), a 17% increase from $(2.5 million) in the same period of 2023. The nine-month loss from operations reached $(16.4 million), a 40% increase from $(11.7 million) year-over-year. Research and development expenses for the nine months totaled $5.7 million, up from $2.9 million in the previous year, reflecting increased investment in clinical trials and product development.

The company has not generated any revenue to date and has primarily relied on equity sales and convertible notes for funding. Notably, Akari completed a merger with Peak Bio, Inc. on November 14, 2024, which is expected to enhance its product pipeline with new therapeutic candidates. The merger was part of a strategic move to bolster its capabilities in developing therapies for autoimmune and inflammatory diseases.

In May 2024, Akari implemented a significant reduction-in-force, affecting approximately 67% of its workforce, aimed at cutting costs associated with its HSCT-TMA program. This restructuring resulted in a decrease in general and administrative expenses, which fell by 39% for the three months ended September 30, 2024, compared to the same period in 2023.

The company faced substantial doubt regarding its ability to continue as a going concern, primarily due to ongoing losses and negative cash flows. As of September 30, 2024, Akari had no firm commitments for future external funding and anticipated needing to raise additional capital to meet its operational needs. The company is exploring various financing strategies, including private placements and public offerings, but acknowledges the risks of potential shareholder dilution.

In terms of compliance, Akari was notified by Nasdaq of its non-compliance with the minimum shareholders’ equity requirement of $2.5 million. Following a compliance plan submission and an extension, the company regained compliance on November 18, 2024, but future compliance remains uncertain.