# EDGAR Filing Document

**Accession Number:** 0001541157
**File Stem:** 0001493152-25-022390
**Filing Date:** 2025-11
**Character Count:** 180798
**Document Hash:** 3582189a2c6571854e463e6dd4be29f1
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-25-022390.hdr.sgml**: 20251113

**ACCESSION NUMBER**: 0001493152-25-022390

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 83

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251113

**DATE AS OF CHANGE**: 20251113

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Akari Therapeutics Plc
- **CENTRAL INDEX KEY:** 0001541157
- **STANDARD INDUSTRIAL CLASSIFICATION:** PHARMACEUTICAL PREPARATIONS [2834]
- **ORGANIZATION NAME:** 03 Life Sciences
- **EIN:** 981034922
- **STATE OF INCORPORATION:** X0

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-36288
- **FILM NUMBER:** 251479576

**BUSINESS ADDRESS:**
- **STREET 1:** 401 EAST JACKSON STREET
- **STREET 2:** SUITE 3300
- **CITY:** TAMPA
- **STATE:** FL
- **ZIP:** 33602
- **BUSINESS PHONE:** (929) 274-7510

**MAIL ADDRESS:**
- **STREET 1:** 401 EAST JACKSON STREET
- **STREET 2:** SUITE 3300
- **CITY:** TAMPA
- **STATE:** FL
- **ZIP:** 33602

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Celsus Therapeutics Plc.
- **DATE OF NAME CHANGE:** 20130621

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Morria Biopharmaceuticals PLC
- **DATE OF NAME CHANGE:** 20120201

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

**(Mark One)**

**☒** **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

**For the quarterly period ended September 30, 2025**

**OR** 

**☐** **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

**For the transition period from ____________ to ____________**

**Commission File Number 001-36288**

**Akari Therapeutics, Plc**

**(Exact name of registrant as specified in its charter)**

---

| | |
|:---|:---|
| **England and Wales** | **98-1034922** |
| **(State or other jurisdiction of**<br> **incorporation or organization)** | **(I.R.S. Employer**<br> **Identification No.)** |
| **401 East Jackson Street, Suite 3300**<br> **Tampa, Florida** | **33602** |
| **(Address of principal executive offices)** | **(Zip Code)** |

---

**Registrant's telephone number, including area code: (929) 274-7510**

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading**<br> **Symbol(s)** | **Name of each exchange on which registered** |
| **American Depositary Shares, each representing 2,000 Ordinary Shares, par value $0.0001 per share** | **AKTX** | **The Nasdaq Capital Market** |
| **Ordinary Shares, $0.0001 par value per share\*** | AKTX | **The Nasdaq Capital Market** |

---

\* Trading, but only in connection with the American Depositary Shares.

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| 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. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

The number of shares of Registrant's Ordinary Shares outstanding as of November 13, 2025 was 71,479,461,523.

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| **PART I** | [**FINANCIAL INFORMATION**](#sd_001) | 1 |
| Item 1. | [Financial Statements (Unaudited)](#sd_002) | 1 |
|  | [Condensed Consolidated Balance Sheets](#sd_003) | 1 |
|  | [Condensed Consolidated Statements of Operations and Comprehensive Loss](#sd_004) | 2 |
|  | [Condensed Consolidated Statements of Shareholders' Equity (Deficit)](#sd_005) | 3 |
|  | [Condensed Consolidated Statements of Cash Flows](#sd_006) | 5 |
|  | [Notes to Unaudited Condensed Consolidated Financial Statements](#sd_007) | 6 |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#nor_001) | 28 |
| Item 3. | [Quantitative and Qualitative Disclosures About Market Risk](#nor_002) | 39 |
| Item 4. | [Controls and Procedures](#nor_003) | 39 |
| **PART II** | [**OTHER INFORMATION**](#nor_004) | 41 |
| Item 1. | [Legal Proceedings](#nor_005) | 41 |
| Item 1A. | [Risk Factors](#nor_006) | 41 |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#nor_007) | 41 |
| Item 3. | [Defaults Upon Senior Securities](#nor_008) | 41 |
| Item 4. | [Mine Safety Disclosures](#nor_009) | 41 |
| Item 5. | [Other Information](#nor_010) | 41 |
| Item 6. | [Exhibits](#nor_011) | 42 |
|  | [**SIGNATURES**](#nor_012) | 43 |

---

i

**GENERAL INFORMATION**

Unless otherwise stated or the context requires otherwise, references in this Quarterly Report on Form 10-Q ("Form 10-Q") to "Akari," the "company," the "Company," "we," "us," "our" or similar designations refer to Akari Therapeutics, Plc and its subsidiaries, taken together. All trademarks, service marks, trade names and registered marks used in this report are trademarks, trade names or registered marks of their respective owners.

Statements made in this Form 10-Q concerning the contents of any agreement, contract or other document are summaries of such agreements, contracts or documents and are not complete description of all of their terms. If we filed any of these agreements, contracts or documents as exhibits to this Form 10-Q or to any previous filing with the Securities and Exchange Commission ("SEC"), you may read the document itself for a complete understanding of its terms.

ii

**NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This Form 10-Q and the documents we incorporate by reference contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements, other than statements of historical fact, included or incorporated in this report regarding, among other things, our cash resources and projected cash runway, financial position, our strategy, strategic alternatives, future operations, clinical trials (including, without limitation, the anticipated timing enrollment, and results thereof), collaborations, intellectual property, future revenues, projected costs, fundraising and/or financing plans, prospects, developments relating to our competitors and our industry, the timing or likelihood of regulatory actions, filings and approvals for our current and future drug candidates, and the plans and objectives of management are forward-looking statements. The words "believes," "anticipates," "estimates," "plans," "expects," "intends," "may," "could," "should," "potential," "likely," "projects," "intend," "continue," "will," "schedule," "would," "aim," "contemplate," "estimate," and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We cannot guarantee that we will actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may be beyond our control, and which may cause the actual results, performance, or achievements of the Company to be materially different from future results, performance, or achievements expressed or implied by such forward-looking statements.

There are a number of important factors that could cause our actual results to differ materially from those indicated or implied by forward-looking statements. These important factors include those set forth under Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024 (our "Form 10-K") and Part II "Item 1A. Risk Factors" of this Form 10-Q and in our other disclosures and filings we have made with the SEC. These factors and the other cautionary statements made in this Form 10-Q and the documents we incorporate by reference should be read as being applicable to all related forward-looking statements whenever they appear in this Form 10-Q and the documents we incorporate by reference.

In addition, any forward-looking statements represent our estimates only as of the date that this Form 10-Q is filed with the SEC and should not be relied upon as representing our estimates as of any subsequent date. All forward-looking statements included in this Form 10-Q are made as of the date hereof and are expressly qualified in their entirety by this cautionary notice. We disclaim any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as may be required by law.

iii

**PART I—FINANCIAL INFORMATION**

**Item 1. Financial Statements.**

**AKARI THERAPEUTICS, PLC**

**Condensed Consolidated Balance Sheets**

(amounts in thousands, except share and per share data)

(unaudited)

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2025** | **December 31,**<br>**2024** |
| **ASSETS** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $2484 | $2599 |
| &nbsp;&nbsp;&nbsp;Restricted cash | 60 | 60 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses | 349 | 92 |
| &nbsp;&nbsp;&nbsp;Other current assets | 53 | 201 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 2946 | 2952 |
| Goodwill | 8430 | 8430 |
| Other intangible assets | 34000 | 39180 |
| **Total assets** | $45376 | $50562 |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $10844 | $12407 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 1623 | 3137 |
| &nbsp;&nbsp;&nbsp;Convertible notes, net | 663 | 700 |
| &nbsp;&nbsp;&nbsp;Convertible notes - related party |  | 250 |
| &nbsp;&nbsp;&nbsp;Notes payable, net | 198 | 659 |
| &nbsp;&nbsp;&nbsp;Notes payable - related party, net | 1256 | 1651 |
| &nbsp;&nbsp;&nbsp;Warrant liabilities | 503 | 1012 |
| &nbsp;&nbsp;&nbsp;Other current liabilities | 481 | 94 |
| Total current liabilities | 15568 | 19910 |
| &nbsp;&nbsp;&nbsp;Derivative liability | 100 |  |
| &nbsp;&nbsp;&nbsp;Other non-current liabilities | 69 | 383 |
| &nbsp;&nbsp;&nbsp;Deferred tax liability | 6952 | 8040 |
| **Total liabilities** | 22689 | 28333 |
| Commitments and contingencies (Note 14) |  |  |
| Shareholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;Share capital of $0.0001 par value |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Authorized: 330,854,276,210 and 245,035,791,523 Ordinary Shares at September 30, 2025 and December 31, 2024, respectively; issued and outstanding: 65,229,461,523 and 53,186,919,523 Ordinary Shares at September 30, 2025 and December 31, 2024, respectively | 6523 | 5319 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 224366 | 212706 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital redemption reserve | 52194 | 52194 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (1144) | (738) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | (259252) | (247252) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total shareholders' equity | 22687 | 22229 |
| **Total liabilities and shareholders' equity** | $45376 | $50562 |

---

The accompanying notes are an integral part of these condensed consolidated financial statements.

**AKARI THERAPEUTICS, PLC**

**Condensed Consolidated Statements of Operations** 

**and Comprehensive Loss**

(amounts in thousands, except share and per share data)

(unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
|  | **September 30,** | **September 30,** | **September 30,** | **September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Operating expenses: |  |  |  |  |
| Research and development | $249 | $143 | $1729 | $5736 |
| General and administrative | 1975 | 1709 | 7139 | 6616 |
| Impairment loss on other intangible assets | 5180 |  | 5180 |  |
| Merger-related costs |  | 992 |  | 2290 |
| Restructuring and other costs |  | 83 |  | 1723 |
| Loss from operations | (7404) | (2927) | (14048) | (16365) |
| Other income (expense): |  |  |  |  |
| Interest income | 1 | 3 | 1 | 7 |
| Interest expense | (121) | (69) | (226) | (120) |
| Gain on settlement of current liabilities | 774 |  | 2018 |  |
| Loss on debt extinguishment | (967) |  | (967) |  |
| Change in fair value of warrant liabilities | 253 | 30 | 333 | 528 |
| Foreign currency exchange gain (loss), net | 76 | 68 | (99) | (67) |
| Loss on derivative liability | (100) |  | (100) |  |
| Other expense, net |  |  |  | (2) |
| Total other income (expense), net | (84) | 32 | 960 | 346 |
| Net loss before income taxes | (7488) | (2895) | (13088) | (16019) |
| Benefit from deferred income taxes | 1088 |  | 1088 |  |
| Net loss | $(6400) | $(2895) | $(12000) | $(16019) |
| Net loss per share –– basic and diluted | $(0.00) | $(0.00) | $(0.00) | $(0.00) |
| Weighted-average number of Ordinary Shares used in computing net loss per share –– basic and diluted | 65326236698 | 24386005523 | 60968766829 | 18911928794 |
| Comprehensive loss: |  |  |  |  |
| Net loss | $(6400) | $(2895) | $(12000) | $(16019) |
| Other comprehensive (loss) income, net of tax: |  |  |  |  |
| Foreign currency translation adjustment | (38) | (177) | (406) | 114 |
| Total other comprehensive (loss) income, net of tax | (38) | (177) | (406) | 114 |
| Total comprehensive loss | $(6438) | $(3072) | $(12406) | $(15905) |

---

The accompanying notes are an integral part of these condensed consolidated financial statements.

**AKARI THERAPEUTICS, PLC**

**Condensed Consolidated Statements of Changes in Shareholders' Equity (Deficit)**

(amounts in thousands, except share data)

(unaudited)

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** |
|  | **Share Capital** | **Share Capital** | | | | | |
|  | **Ordinary Shares,** | **Ordinary Shares,** | | | | | |
|  | **$0.0001 par value** | **$0.0001 par value** | | | | | |
|  | **Shares** | **Amount** |<br>**Additional**<br>**Paid-in-**<br>**Capital** |<br>**Capital**<br>**Redemption**<br>**Reserve** | **Accumulated**<br>**Other**<br>**Comprehensive**<br>**Loss** |<br>**Accumulated**<br>**Deficit** |<br>**Total**<br>**Shareholders'**<br>**Equity** |
| **Balance, December 31, 2024** | **53186919523** | $**5319** | $**212706** | $**52194** | $**(738)** | $**(247252)** | $**22229** |
| &nbsp;&nbsp;&nbsp;Issuance of share capital related to <br> financing, net of issuance costs | 4566062000 | 457 | 1785 |  |  |  | 2242 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  |  | 1015 |  |  |  | 1015 |
| &nbsp;&nbsp;&nbsp;Foreign currency translation |  |  |  |  | (35) |  | (35) |
| &nbsp;&nbsp;&nbsp;Net loss |  |  |  |  |  | (3705) | (3705) |
| **Balance, March 31, 2025** | **57752981523** | $**5776** | $**215506** | $**52194** | $**(773)** | $**(250957)** | $**21746** |
| &nbsp;&nbsp;&nbsp;Issuance of share capital related to <br> financing, net of issuance costs | 5753878000 | 575 | 3829 |  |  |  | 4404 |
| &nbsp;&nbsp;&nbsp;Issuance of share capital on conversion of convertible notes, related party | 387880000 | 39 | 270 |  |  |  | 309 |
| &nbsp;&nbsp;&nbsp;Issuance of share capital for services | 1002900000 | 100 | 522 |  |  |  | 622 |
| &nbsp;&nbsp;&nbsp;Vesting of restricted shares | 331822000 | 33 |  |  |  |  | 33 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  |  | 719 |  |  |  | 719 |
| &nbsp;&nbsp;&nbsp;Foreign currency translation |  |  |  |  | (333) |  | (333) |
| &nbsp;&nbsp;&nbsp;Net loss |  |  |  |  |  | (1895) | (1895) |
| **Balance, June 30, 2025** | **65229461523** | $**6523** | $**220846** | $**52194** | $**(1106)** | $**(252852)** | $**25605** |
| &nbsp;&nbsp;&nbsp;Modification of warrants in connection with issuance of notes payable |  |  | 2643 |  |  |  | 2643 |
| &nbsp;&nbsp;&nbsp;Reclassification and modification of warrants in connection with amendment of convertible notes |  |  | 192 |  |  |  | 192 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  |  | 685 |  |  |  | 685 |
| &nbsp;&nbsp;&nbsp;Foreign currency translation |  |  |  |  | (38) |  | (38) |
| &nbsp;&nbsp;&nbsp;Net loss |  |  |  |  |  | (6400) | (6400) |
| **Balance, September 30, 2025** | **65229461523** | $**6523** | $**224366** | $**52194** | $**(1144)** | $**(259252)** | $**22687** |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** |
|  | **Share Capital** | **Share Capital** | | | | | |
|  | **Ordinary Share,** | **Ordinary Share,** | | | | | |
|  | **$0.0001 par value** | **$0.0001 par value** | | | | | |
|  | **Shares** | **Amount** |<br>**Additional**<br>**Paid-in-**<br>**Capital** |<br>**Capital**<br>**Redemption**<br>**Reserve** | **Accumulated**<br>**Other**<br>**Comprehensive**<br>**(Income) Loss** |<br>**Accumulated**<br>**Deficit** | **Total**<br>**Shareholders'**<br>**Equity**<br>**(Deficit)** |
| **Balance, December 31, 2023** | **13234315298** | $**1324** | $**174754** | $**52194** | $**(1040)** | $**(227461)** | $**(229)** |
| &nbsp;&nbsp;&nbsp;Issuance of share capital related to <br> financing, net of issuance costs | 2641228000 | 264 | 1400 |  |  |  | 1664 |
| &nbsp;&nbsp;&nbsp;Vesting of restricted shares | 97578000 | 10 | (7) |  |  |  | 3 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  |  | 296 |  |  |  | 296 |
| &nbsp;&nbsp;&nbsp;Foreign currency translation |  |  |  |  | 279 |  | 279 |
| &nbsp;&nbsp;&nbsp;Net loss |  |  |  |  |  | (5566) | (5566) |
| **Balance, March 31, 2024** | **15973121298** | $**1598** | $**176443** | $**52194** | $**(761)** | $**(233027)** | $**(3553)** |
| &nbsp;&nbsp;&nbsp;Issuance of share capital related to <br> financing, net of issuance costs | 8059508000 | 806 | 6145 |  |  |  | 6951 |
| &nbsp;&nbsp;&nbsp;Issuance of share capital for services | 91396000 | 9 | (9) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Vesting of restricted shares | 285697400 | 29 | (29) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Shares withheld for payroll taxes | (120490000) | (12) | 12 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  |  | 445 |  |  |  | 445 |
| &nbsp;&nbsp;&nbsp;Foreign currency translation |  |  |  |  | 12 |  | 12 |
| &nbsp;&nbsp;&nbsp;Net loss |  |  |  |  |  | (7558) | (7558) |
| **Balance, June 30, 2024** | **24289232698** | $**2430** | $**183007** | $**52194** | $**(749)** | $**(240585)** | $**(3703)** |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of restricted <br> shares |  |  | 26 |  |  |  | 26 |
| &nbsp;&nbsp;&nbsp;Shares withheld for payroll taxes | (1175) |  | (193) |  |  |  | (193) |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  |  | 248 |  |  |  | 248 |
| &nbsp;&nbsp;&nbsp;Foreign currency translation |  |  |  |  | (177) |  | (177) |
| &nbsp;&nbsp;&nbsp;Net loss |  |  |  |  |  | (2895) | (2895) |
| **Balance, September 30, 2024** | **24289231523** | $**2430** | $**183088** | $**52194** | $**(926)** | $**(243480)** | $**(6694)** |

---

The accompanying notes are an integral part of these condensed consolidated financial statements.

**AKARI THERAPEUTICS, PLC**

**Condensed Consolidated Statements of Cash Flows**

(amounts in thousands)

(unaudited)

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended** | **Nine Months Ended** |
|  | **September 30,** | **September 30,** |
|  | **2025** | **2024** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| Net loss | $(12000) | $(16019) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization |  | 13 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation | 2419 | 989 |
| &nbsp;&nbsp;&nbsp;Issuance of share capital for payments in kind | 27 |  |
| &nbsp;&nbsp;&nbsp;Accretion of debt issuance costs on notes payable and notes payable, related party | 93 |  |
| &nbsp;&nbsp;&nbsp;Gain on settlement of current liabilities | (2018) |  |
| &nbsp;&nbsp;&nbsp;Loss on debt extinguishment | 967 |  |
| &nbsp;&nbsp;&nbsp;Change in fair value of warrant liabilities | (333) | (528) |
| &nbsp;&nbsp;&nbsp;Impairment loss on other intangible assets | 5180 |  |
| &nbsp;&nbsp;&nbsp;Loss on derivative liability | 100 |  |
| &nbsp;&nbsp;&nbsp;Deferred tax benefit | (1088) |  |
| &nbsp;&nbsp;&nbsp;Unrealized foreign currency exchange (gains) losses | (450) | 121 |
| &nbsp;&nbsp;&nbsp;Change in assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 392 | 1114 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | (816) | 3882 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (7527) | (10428) |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| Proceeds from issuance of shares, net of issuance costs | 5879 | 8687 |
| Proceeds from issuance of convertible notes |  | 1000 |
| Proceeds from issuance of notes payable | 2099 |  |
| Proceeds from employee vesting of restricted shares | 33 | 29 |
| Proceeds from pre-funded warrants | 330 |  |
| Repayments of notes payable | (488) |  |
| Payments on short-term financing arrangement | (442) | (882) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 7411 | 8834 |
| Effect of exchange rates on cash | 1 | (5) |
| Net change in cash | (115) | (1599) |
| Cash and restricted cash at beginning of period | 2659 | 3845 |
| Cash and restricted cash at end of period | $2544 | $2246 |
| **Components of cash and restricted cash** |  |  |
| Cash | $2484 | $2246 |
| Restricted cash | 60 |  |
| Total cash and restricted cash | $2544 | $2246 |
| **SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Financing costs in accounts payable | $— | $72 |
| &nbsp;&nbsp;&nbsp;Issuance of share capital for settlement of convertible notes, related party | $309 | $— |
| &nbsp;&nbsp;&nbsp;Issuance of share capital for settlement of note payable, related party | $1000 | $— |
| &nbsp;&nbsp;&nbsp;Issuance of share capital for payments in kind | $595 | $— |
| &nbsp;&nbsp;&nbsp;Seller-financed purchases | $499 | $1105 |
| &nbsp;&nbsp;&nbsp;Modification of warrants in connection with issuance of notes payable | $2643 | $— |
| &nbsp;&nbsp;&nbsp;Reclassification and modification of warrants in connection with amendment of convertible notes | $192 | $— |
| &nbsp;&nbsp;&nbsp;Payroll taxes on share-based compensation in accrued expenses | $— | $193 |
| **SUPPLEMENTAL CASH FLOW DISCLOSURES:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $101 | $120 |

---

The accompanying notes are an integral part of these condensed consolidated financial statements.

**AKARI THERAPEUTICS, PLC**

**Notes to Condensed Consolidated Financial Statements**

**(unaudited)**

**Note 1. Description of Business**

***Business Overview***

Akari Therapeutics, Plc, (the "Company" or "Akari") is incorporated in the United Kingdom. The Company is developing next-generation antibody-drug conjugates, or ADCs, through its proprietary technology platform of novel payloads, enabling Akari to generate multiple ADC candidates to target a range of cancers. On March 4, 2024, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Peak Bio, Inc. ("Peak Bio") and Pegasus Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Akari ("Merger Sub"). On November 14, 2024, the Company completed the previously announced strategic business combination contemplated by the Merger Agreement ("Closing"), pursuant to which, Merger Sub merged with and into Peak Bio, with Peak Bio surviving the acquisition as a wholly owned subsidiary of Akari.

Since the Company's acquisition of Peak Bio in November 2024, Akari has focused substantially all of its efforts on its ADC platform utilizing a novel anti-cancer payload called PH1, a spliceosome modulator. Through its payload platform, the Company aims to establish a pipeline of ADC candidates that target and directly kill cancer cells, while also activating the immune system to provide for potentially more durable and sustained efficacy and responses, thereby overcoming limitations inherent in existing ADC therapies. The Company's activities since inception have consisted of performing research and development activities and raising capital.

The Company is subject to a number of risks similar to those of pre-clinical and clinical stage companies, including dependence on key individuals, uncertainty of product development and generation of revenues, dependence on outside sources of capital, risks associated with clinical trials of products, dependence on third-party collaborators for research and development operations, need for marketing authorization of products, risks associated with protection of intellectual property, and competition with larger, better-capitalized companies.

To fully execute its business plan, the Company will need, among other things, to complete its research and development efforts, pre-clinical and regulatory activities, and clinical trials. These activities may take several years and will require significant operating and capital expenditures in the foreseeable future. There can be no assurance that these activities will be successful. If the Company is not successful in these activities it could delay, limit, reduce or terminate its pre-clinical studies or other discovery and research activities.

***Basis of presentation***

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and the rules and regulations of the SEC and assumes that the Company will continue to operate as a going concern. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. These condensed consolidated financial statements have been prepared on the same basis as the Company's annual consolidated financial statements and, in the opinion of management, reflect all adjustments, including normal and recurring adjustments, which the Company considers necessary for the fair statement of financial information. The results of operations and comprehensive loss for the three and nine months ended September 30, 2025 are not necessarily indicative of expected results for the fiscal year ending December 31, 2025 or any other future period. The condensed balance sheet at December 31, 2024 has been derived from the audited consolidated financial statements at that date. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements as of December 31, 2024 and notes thereto included in its Form 10-K, as filed with the SEC on April 15, 2025.

 ****

***Use of estimates***

The preparation of the Company's condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that may affect the reported amounts of assets, liabilities, expenses and related disclosures. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the valuation of share-based awards, the valuation of warrant liabilities, the valuation of goodwill and indefinite-lived intangible assets, research and development prepayments, accruals and related expenses, and the valuation allowance for deferred income taxes. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Estimates are periodically reviewed considering changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results may differ from those estimates or assumptions.

***Liquidity and Financial Condition***

The Company follows the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 205-40, *Presentation of Financial Statements—Going Concern*, which requires management to assess the Company's ability to continue as a going concern within one year after the date the consolidated financial statements are issued.

The Company has incurred substantial losses and negative cash flows since inception and had an accumulated deficit of $259.3 million as of September 30, 2025. The Company's cash balance of $2.5 million as of September 30, 2025 is not sufficient to fund its operations for the one-year period after the date these condensed consolidated financial statements are issued. These factors raise substantial doubt about the Company's ability to continue as a going concern. The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales of its product candidates currently in research and development. The Company is subject to a number of risks and uncertainties similar to those of other companies of the same size within the biotechnology industry, such as uncertainty of pre-clinical research outcomes, uncertainty of additional funding, and history of operating losses. Substantial additional financing will be needed by the Company to fund its operations. Management is currently evaluating various strategies to obtain the required funding for future operations. These strategies may include, but are not limited to: private placements and/or public offerings of equity and/or debt securities, and strategic research and development collaborations and/or similar arrangements. There can be no assurance that these future funding efforts will be successful.

**Note 2. Summary of Significant Accounting Policies**

The significant accounting policies and estimates used in the preparation of the accompanying unaudited condensed consolidated financial statements are described in the Company's audited consolidated financial statements for the year ended December 31, 2024, included in the Company's Annual Report on Form 10-K filed with the SEC on April 15, 2025. There have been no material changes in the Company's significant accounting policies during the three and nine months ended September 30, 2025.

*Recent accounting pronouncements* 

Periodically, new accounting pronouncements are issued by the FASB or other standard setting bodies. Recently issued standards typically do not require adoption until a future effective date. Prior to their effective date, we evaluate the pronouncements to determine the potential effects of adoption on our accompanying unaudited consolidated financial statements. During the nine months ended September 30, 2025, no new accounting pronouncements issued or effective in the period had or are expected to have a material impact on our accompanying unaudited consolidated financial statements.

**Note 3. Agreement and Plan of Merger**

In connection with the November 14, 2024 acquisition of Peak Bio, the Company issued a total of 12,613,942 Akari ADSs which reflected the conversion of each issued and outstanding share of Peak Bio Common Stock into the right to receive Akari ADSs representing a number of Akari Ordinary Shares equal to 0.2935 (the "Exchange Ratio"). 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 acquisition is approximately 48.4% of the outstanding shares of Akari on a fully diluted basis.

At the Closing, each Peak Warrant and Peak Option was converted into an Adjusted Warrant and Adjusted Option to purchase a number of Akari Ordinary Shares or Akari ADSs, based on the Exchange Ratio. The Adjusted Warrants and the Adjusted Options have substantially similar terms and conditions as were applicable to such Peak Warrants and Peak Options immediately prior to the Closing.

***Consideration Paid***

The following table summarizes the total consideration paid pursuant to the Merger Agreement, which was based on the closing market price of Akari's ADS as of the November 14, 2024 acquisition date:

Summary of Total Consideration Paid

---

| | | |
|:---|:---|:---|
| **($ in thousands)** | **Number of ADSs issued and issuable on exercise** | **Consideration** |
| Company ADSs issued to Peak Bio Inc. shareholders | 12613942 | $28129 |
| Company ADSs issuable on exercise of November 2022 Peak Investor Warrants and April 2023 Peak Investor Warrants | 2764569 | 1844 |
| Company ADSs issuable on exercise of Peak Bio Adjusted Stock Options | 1618081 |  |
| &nbsp;&nbsp;&nbsp;Total consideration | 16996592 | $29973 |

---

The fair value of the 12,613,942 ADS issued in connection with the acquisition is based on the closing price of the Company's ADSs on the Closing Date multiplied by the number of ADSs issued.

In connection with the acquisition of Peak Bio, the Company assumed (i) warrants issued to investors ("November 2022 Peak Bio Warrants") to purchase an aggregate of 1,577,556 ADSs at $39.18 per ADS, and (ii) warrants issued to investors ("April 2023 Peak Bio Warrants") to purchase an aggregate of 1,187,013 ADSs at $2.04 per ADS. The assumed Peak Bio warrants are fully vested, and thus are included in the consideration transferred.

The Company determined that the November 2022 Peak Bio Warrants and the April 2023 Peak Bio Warrants are not indexed to the Company's own stock in the manner contemplated by the relevant accounting guidance. Accordingly, on the Closing of the acquisition, the Company classified the assumed Peak Bio warrants as derivative liabilities in its consolidated balance sheets.

The estimated fair value of the Adjusted Warrants of $1.8 million at the acquisition closing date was calculated using the Black Scholes Option Pricing Model. The following assumptions were used to determine the fair value of the assumed Peak Bio warrants as of November 14, 2024:

Summary of Assumptions Used to Determine Fair Value of the Assumed Warrants

---

| | | |
|:---|:---|:---|
|  | **Peak Bio Assumed Warrants** | **Peak Bio Assumed Warrants** |
|  | **November 2022** | **April 2023** |
| Stock price per ADS | $2.23 | $2.23 |
| Exercise price | $39.18 | $2.04 |
| Expected term (in years) | 3.0 | 3.5 |
| Expected volatility | 86.4% | 84.1% |
| Risk-free interest rate | 4.3% | 4.3% |
| Expected dividend yield | 0.0% | 0.0% |

---

The Company assumed Peak Bio's outstanding stock option awards to purchase 1,618,081 ADSs. The Company determined the Peak Bio Adjusted Options were not probable of vesting prior to the consummation of the Merger Agreement. For this reason, the fair value of the replacement awards was not included as consideration transferred in the business combination. Instead, the entire fair value of the adjusted options will be recognized as compensation cost in the post-combination period. The estimated fair value of the Adjusted Options of $1.8 million at the acquisition closing date was calculated using the Black Scholes Option Pricing Model. The valuation assumptions used in the Black Scholes Option Pricing Model include the Company's stock price on the date of closing of $2.23, volatility ranging from 84.1% to 86.4%, an expected dividend yield of 0.0%, an expected term ranging from 0.20 years to 5.32 years, and a risk-free interest rate ranging from 4.3% to 4.6%.

***Total Assets Acquired and Liabilities Assumed***

The acquisition of Peak Bio has been accounted for as a business combination using the acquisition method of accounting. The fair value of the purchase price was allocated to the assets acquired and liabilities assumed at their respective fair values. Management estimated the fair value of the acquired in-process research and development ("IPR&D") intangible assets using a multi-period excess earnings method. The significant assumptions used in the valuation are the probability of clinical trial success and obtaining regulatory approval, forecasted gross sales from up-front and milestone payments, royalties and product sales, and the discount rate reflecting the Company's weighted average cost of capital. This acquisition method requires, among other things, that assets acquired, and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date.

The following table summarizes the fair values of assets acquired and liabilities assumed as of the acquisition date (in thousands):

Summary of Final Fair Values of Assets Acquired and Liabilities Assumed

---

| | |
|:---|:---|
| **Assets acquired** | |
| &nbsp;&nbsp;&nbsp;Cash and restricted cash | $382 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 10 |
| &nbsp;&nbsp;&nbsp;Acquired IPR&D | 39180 |
| Total assets acquired | 39572 |
| **Liabilities assumed** |  |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 6979 |
| &nbsp;&nbsp;&nbsp;Convertible notes | 700 |
| &nbsp;&nbsp;&nbsp;Notes payable | 659 |
| &nbsp;&nbsp;&nbsp;Notes payable, related party | 1651 |
| &nbsp;&nbsp;&nbsp;Deferred tax liability | 8040 |
| Total liabilities assumed | 18029 |
| **Total assets acquired and liabilities assumed** | 21543 |
| &nbsp;&nbsp;&nbsp;Goodwill | 8430 |
| **Net assets acquired** | $**29973** |

---

Intangible assets of approximately $39.2 million and $8.4 million were recorded related to the value of acquired IPR&D from Peak Bio's therapeutic pipeline, consisting of two separate pipelines supported by intellectual property, and goodwill, respectively. The recognized goodwill is attributable primarily to the expected synergies and other benefits from the merger and the deferred tax liability associated with the Company's acquired IPR&D, which is not deductible for income tax purposes.

The fair value of IPR&D intangible assets was as follows (in thousands):

Summary of Fair Value of IPR&D Intangible Assets

---

| | |
|:---|:---|
| **In-Process Research and Development** |  |
| &nbsp;&nbsp;&nbsp;AKTX-101 | $34000 |
| &nbsp;&nbsp;&nbsp;PHP-303 | 5180 |
| **Total in-process research and development** | $**39180** |

---

The Company assumed convertible notes and notes payable with third parties, and notes payable with a related party, which are described in Note 7 and Note 13, respectively.

***Pro Forma Financial Information (Unaudited)***

The following table summarizes certain of the Company's supplemental pro forma financial information for the three and nine months ended September 30, 2024, as if the acquisition of Peak Bio had occurred as of January 1, 2024. The unaudited pro forma financial information for the three and nine months ended September 30, 2024 reflect (i) the reversal of fair value adjustments recognized on Peak Bio's warrant liabilities and derivative liability, (ii) the reversal of interest and accretion expense on Peak Bio's debt that was settled on the acquisition date, and (iii) the reversal of a gain recognized on Peak Bio's office lease termination and corresponding impairment of its right to use asset. The unaudited pro-forma financial information is for comparative purposes only and is not necessarily indicative of what would have occurred had the acquisition been made at that date or of results which may occur in the future (in thousands).

Summary of Pro Forma Financial Information

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** |
|  | **As Reported** | **Pro Forma** | **As Reported** | **Pro Forma** |
| Net loss | $(2895) | (4387) | $(16019) | (21107) |

---

**Note 4: Intangible Assets**

The Company's IPR&D and goodwill are tested for impairment at least annually, or more frequently if impairment indicators are present. The Company performed qualitative assessments to determine whether it was more likely than not that the assets were impaired in order to determine the necessity of performing a quantitative impairment test, under which management would calculate the asset's fair value. When performing the qualitative assessments, the Company evaluated events and circumstances that would affect the significant inputs used to determine the fair value of the assets.

During the three and nine months ended September 30, 2025, we recorded an impairment charge of $5.18 million related to the Company's PHP 303 asset due to reprioritization of resources to our ADC platform, no further development plans and inability to find a collaborative partner to date for this program.

The following table presents information about the Company's IPR&D assets:

---

| | | | |
|:---|:---|:---|:---|
| | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
| <br>**(In thousands)** | **Gross Carrying Amount** | **Cumulative Impairment Charge** | **Net Book Value** |
| &nbsp;&nbsp;&nbsp;AKTX-101 | $34000 | $— | $34000 |
| &nbsp;&nbsp;&nbsp;PHP-303 | 5180 | 5180 |  |
| Total other intangible assets | $39180 | $5180 | $34000 |

---

---

| | | | |
|:---|:---|:---|:---|
| | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| <br>**(In thousands)** | **Gross Carrying Amount** | **Cumulative Impairment Charge** | **Net Book Value** |
| &nbsp;&nbsp;&nbsp;AKTX-101 | $34000 | $— | $34000 |
| &nbsp;&nbsp;&nbsp;PHP-303 | 5180 |  | 5180 |
| Total other intangible assets | $39180 | $— | $39180 |

---

There were no changes in the carrying value of goodwill during the three and nine months ended September 30, 2025.

**Note 5. Fair Value Measurements**

***Assets and Liabilities Measured at Fair Value on a Recurring Basis***

The following table presents information about the Company's financial liabilities measured at fair value on a recurring basis and indicates the level of the fair value hierarchy used to determine such values:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
| <br>**(In thousands)** | **Total** | **Level 1** | **Level 2** | **Level 3** |
| **Liabilities** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Warrant liability - November 2022 Peak Bio Warrants | $32 | $— | $— | $32 |
| &nbsp;&nbsp;&nbsp;Warrant liability - April 2023 Peak Bio Warrants | 388 |  |  | 388 |
| &nbsp;&nbsp;&nbsp;Warrant liability - September 2022 Series B Warrants | 83 |  |  | 83 |
| &nbsp;&nbsp;&nbsp;Derivative liability - ELOC | 100 |  |  | 100 |
| Total liabilities | $603 | $— | $— | $603 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| <br>**(In thousands)** | **Total** | **Level 1** | **Level 2** | **Level 3** |
| **Liabilities** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Warrant liability - November 2022 Peak Bio Warrants | $95 | $— | $— | $95 |
| &nbsp;&nbsp;&nbsp;Warrant liability - April 2023 Peak Bio Warrants | 736 |  |  | 736 |
| &nbsp;&nbsp;&nbsp;Warrant liability - September 2022 Series B Warrants | 181 |  |  | 181 |
| Total liabilities | $1012 | $— | $— | $1012 |

---

The Company's Level 3 liabilities consist of the September 2022 Warrants, the November 2022 Peak Bio Warrants and the April 2023 Peak Bio Warrants, which were determined to be liability-classified instruments, and a derivative liability related to the ELOC Purchase Agreement (described in Note 7). There were no transfers between Level 1, Level 2, and Level 3 during the three and nine months ended September 30, 2025 and the year ended December 31, 2024.

 ****

***Changes in Level 3 Liabilities Measured at Fair Value on a Recurring Basis***

The following table summarizes the activity in the warrant liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3) during the three and nine months ended September 30, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Warrant Liability** | **Warrant Liability** | **Warrant Liability** | | |
| <br>**(In thousands)** | **September<br> 2022<br> Series B<br> Warrants** | **November<br> 2022 Peak<br> Bio<br> Warrants** | **April 2023<br> Peak Bio<br> Warrants** |<br>**Derivative<br> Liability** |<br>**Total** |
| Balance, December 31, 2024 | $181 | $95 | $736 | $— | $1012 |
| &nbsp;&nbsp;&nbsp;Change in the fair value of liability | 30 |  | 24 |  | 54 |
| Balance, March 31, 2025 | 211 | 95 | 760 |  | 1066 |
| &nbsp;&nbsp;&nbsp;Extinguishment of liability | (66) |  |  |  | (66) |
| &nbsp;&nbsp;&nbsp;Change in the fair value of liability | (31) | (32) | (71) |  | (134) |
| Balance, June 30, 2025 | 114 | 63 | 689 |  | 866 |
| &nbsp;&nbsp;&nbsp;Initial recognition of liability |  |  |  | 100 | 100 |
| &nbsp;&nbsp;&nbsp;Reclassification to equity |  |  | (110) |  | (110) |
| &nbsp;&nbsp;&nbsp;Change in the fair value of liability | (31) | (31) | (191) |  | (253) |
| Balance, September 30, 2025 | $83 | $32 | $388 | $100 | $603 |

---

The following table summarizes the activity in the warrant liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3) during the three and nine months ended September 30, 2024:

---

| | | | |
|:---|:---|:---|:---|
| | **Warrant Liability** | **Warrant Liability** | |
| <br>**(In thousands)** | **September 2022 Series A Warrants** | **September 2022 Series B Warrants** |<br>**Total** |
| Balance, December 31, 2023 | $15 | $1238 | $1253 |
| &nbsp;&nbsp;&nbsp;Change in the fair value of liability | (15) | (634) | (649) |
| Balance, March 31, 2024 |  | 604 | 604 |
| &nbsp;&nbsp;&nbsp;Change in the fair value of liability |  | 151 | 151 |
| Balance, June 30, 2024 |  | 755 | 755 |
| &nbsp;&nbsp;&nbsp;Change in the fair value of liability |  | (30) | (30) |
| Balance, September 30, 2024 | $— | $725 | $725 |

---

***Liability-Classified Warrants***

The fair value of the warrant liabilities is based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The fair value of the liability classified warrants (each defined below) were determined using the Black-Scholes Option Pricing Model, which uses various assumptions, including (i) fair value of the Company's ADSs, (ii) exercise price of the warrant, (iii) expected term of the warrant, (iv) expected volatility and (v) expected risk-free interest rate.

Below are the assumptions used for the fair value calculations of the liability classified warrants as of September 30, 2025 and December 31, 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **September 2022 Series B Warrants** | **November 2022**<br> **Warrants** | **April 2023** <br> **Warrants** | **September 2022 Series B Warrants** | **November 2022**<br> **Warrants** | **April 2023** <br> **Warrants** |
| Stock (ADS) price | $1.01 | $1.01 | $1.01 | $1.22 | $1.22 | $1.22 |
| Exercise price | $17.00 | $39.18 | $2.04 | $17.00 | $39.18 | $2.04 |
| Expected term (in years) | 4.0 | 2.1 | 2.6 | 4.7 | 2.8 | 3.3 |
| Expected volatility | 90.0% | 100.0% | 100.0% | 85.0% | 95.0% | 90.0% |
| Risk-free interest rate | 3.6% | 3.6% | 3.6% | 4.4% | 4.3% | 4.3% |
| Expected dividend yield |  |  |  |  |  |  |

---

***Derivative Liability***

The derivative liability related to the ELOC Purchase Agreement (described in Note 7) is valued using the Monte Carlo simulation model and as such is considered to be a Level 3 fair value measurement, as the fair value was determined based on significant inputs not observable in the market. The significant unobservable inputs used to determine the fair value were the projected volume weighed average share price at each trading date and the use of the maximum draw down potential. The fair value of the ELOC Purchase Agreement derivative liability at inception of the agreement was $100,000. The fair value of the ELOC Purchase Agreement was approximately the same as the fair value at inception and therefore no change in fair value of the derivative liability was recorded for the three and nine months ended September 30, 2025.

**Note 6. Accrued Expenses**

Accrued expenses consisted of the following as of September 30, 2025 and December 31, 2024 (in thousands):

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2025** | **December 31,**<br>**2024** |
| Employee compensation and benefits | $607 | $473 |
| External research and development expenses | 117 | 178 |
| Professional and consulting fees | 814 | 1305 |
| Restructuring |  | 450 |
| Other | 85 | 731 |
| &nbsp;&nbsp;&nbsp;Total accrued expenses | $1623 | $3137 |

---

**Note 7. Convertible Notes and Notes Payable**

***September 2024 Note Payable***

In November 2024, the Company assumed a promissory note issued by Peak Bio in September 2024 in the amount of $0.3 million (the "September 2024 Note") to its former California landlord. Due to the short-term nature of the September 2024 Note, the Company concluded that its carrying value approximated its fair value as of the Closing on November 14, 2024. The September 2024 Note bears no interest and is payable over twenty equal monthly installments beginning on November 1, 2024 and expiring on June 1, 2026.

As of September 30, 2025 and December 31, 2024, the outstanding balance on the September 2024 Note was $0.1 million and $0.3 million, respectively.

***November 2023 Note Payable***

In November 2024, the Company assumed a promissory note issued by Peak Bio in November 2023 in the amount of $0.4 million (the "November 2023 Note") bearing interest at 6% per annum with a maturity date of December 31, 2024. Due to the short-term nature of the November 2023 Note, the Company concluded that its carrying value approximated its fair value as of the Closing on November 14, 2024.

As of December 31, 2024, the principal balance of $0.4 million plus accrued interest of less than $0.1 million was due for payment in order to settle the November 2023 Note obligation. On February 28, 2025, the Company signed a Settlement Agreement and Release in the amount of $325,000 for full satisfaction of the outstanding principal and accrued interest owed on the November 2023 Notes. The payment of $325,000 was made on March 6, 2025 and the Company recognized a gain on debt extinguishment of less than $0.1 million, which is reflected in the gain on settlement of current liabilities in the statements of operations, during the nine months ended September 30, 2025.

The Company did not recognize any interest expense during the three and nine months ended September 30, 2025.

***April 2023 Convertible Notes***

In November 2024, the Company assumed convertible promissory notes issued by Peak Bio in April 2023 in the principal amount of a total of $0.7 million (the "April 2023 Convertible Notes"). The April 2023 Convertible Notes permitted the holder to convert the outstanding principal and accrued interest at any time at a price of $2.04 per ADS (representing $0.00102 per underlying Ordinary Share of the Company), after giving effect to the Exchange Ratio. Due to the short-term nature of the April 2023 Convertible Notes, the Company concluded that its carrying value approximated its fair value as of the Closing on November 14, 2024. The April 2023 Convertible Notes were due on October 31, 2024 and bore interest at a default rate of 10% per annum.

On September 19, 2025, the Company entered into a letter agreement (the "April 2023 Convertible Notes and Warrants Amendment") with the holders of the April 2023 Convertible Notes to (i) extend the maturity date of the April 2023 Convertible Notes to August 31, 2026, (ii) amend the conversion price of the April 2023 Convertible Notes to $0.81 per ADS (representing $0.000405 per underlying Ordinary Share) and permit the holders of the April 2023 Convertible Notes to voluntarily convert, in whole or in part, the outstanding principal and accrued but unpaid interest on the April 2023 Convertible Notes into ADSs at any time, (iii) extend the expiration date of warrants held by the April 2023 Convertible Note holders ("April 2023 Peak Bio Convertible Noteholder Warrants") from April 28, 2028 to August 31, 2030, and (iv) amend the exercise price of the April 2023 Peak Bio Warrants to $0.81 per ADS (representing $0.000405 per underlying Ordinary Share). In connection with the April 2023 Convertible Notes and Warrants Amendment, the Company paid the holders an aggregate of $81,700, representing all interest accrued on the April 2023 Convertible Notes through September 30, 2025.

The Company accounted for April 2023 Convertible Notes and Warrants Amendment as a debt extinguishment in accordance with ASC 470. As the present value of the future cash flows was substantially different than the net carrying value of the original debt, a loss on debt extinguishment of less than $0.1 million was recognized. The discount of less than $0.1 million is being amortized as interest expense over the term of the convertible notes using the effective interest method.

In November 2024, in connection with the acquisition of Peak Bio, the April 2023 Peak Bio Convertible Noteholder Warrants were accounted for as a liability, as the April 2023 Peak Bio Convertible Noteholder Warrants were not considered indexed to the Company's own stock in the manner contemplated by ASC 815-40-15, *Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock*. Following the April 2023 Convertible Notes and Warrants Amendment on September 19, 2025, the Company determined that the amended April 2023 Peak Bio Convertible Noteholder Warrants for the issuance of 342,420 ADSs (equivalent to 684,840,000 Ordinary Shares) met the requirements to be considered indexed to the Company's own stock and therefore were reclassified to equity. The fair value of the warrant liability, immediately prior to the modification, was $109,700 at the reclassification date. The Company determined the fair value of the April 2023 Peak Bio Convertible Noteholder Warrants after the modification, using a Black Scholes Option Pricing Model was $191,800 based on a stock price of $0.81, expected volatility of 86%, a risk-free rate of 3.68% and an expected term of 5 years. The change in fair value of $82,100 was recognized as additional paid in capital.

As of September 30, 2025 and December 31, 2024, the outstanding principal amount of the April 2023 Convertible Note was $0.7million.

As of September 30, 2025 and December 31, 2024, accrued interest on the April 2023 Convertible Notes of $0 and less than $0.1 million is presented within accrued expenses in the unaudited condensed consolidated balance sheets. The Company recognized interest expense, including amortization of the discount, of less than $0.1 million during the three and nine months ended September 30, 2025.

Refer to Note 13 for convertible notes, related party.

***August 2025 Notes***

 

In August 2025, the Company issued unsecured promissory notes with a 20% original issuance discount (each a "August 2025 Note" and together, the "August 2025 Notes") to certain investors, including the Company's directors. In connection with the issuance and sale of the August 2025 Notes, the Company agreed to extend the expiration date of Series A warrants held by August 2025 Note investors, previously issued in the March 2025 Private Placement (as defined in Note 8) (the "Series A Warrants"), by 48 months from the original date of expiration (the "Warrant Amendment Agreements").

The Company closed the August 2025 Note Offering with investors and Company directors in three tranches and issued August 2025 Notes with an aggregate purchase price of $3,011,000 and an aggregate principal amount of $3,763,750, of which the Company issued August 2025 Notes with an aggregate purchase price of $1,500,000 and an aggregate principal amount of $1,875,000 to third party investors. The August 2025 Notes have maturity dates ranging from August 15, 2026 through September 26, 2026, depending on the date of issuance, at which time the principal amount is due and payable. The terms of the August 2025 Notes provided for accelerated payment of the outstanding principal amount in the event of a default as defined in the August 2025 Note (the Accelerated Payment Feature").

The Company also entered into Warrant Amendment Agreements with the recipients of such August 2025 Notes, which extended the expiration date of the Series A Warrants to purchase 4,891,272 ADSs held by third party investors to April 25, 2030.

At the close of the August 2025 Note Offering, the Company incurred a total of approximately less than $0.1 million in placement agent fees with Paulson Investment Company, LLC, which were accounted for as debt issuance costs.

The amended Series A Warrants were accounted for in accordance with ASC 815 with the change in fair value, as a result of the amendment, being recognized first as a loss on debt extinguishment to the extent of the purchase price and the remainder as a debt issuance cost. The aggregate fair value of the Series A Warrants at issuance date using a Black Scholes Option Pricing Model was $2.1 million based on a stock price of $1.11, expected volatility of 93%, a risk-free rate of 3.82% and an expected term of 0.6 years. The aggregate fair value of the Series A Warrants at the amendment date using a Black Scholes Option Pricing Model was $3.9 million based on a stock price of $1.11, expected volatility of 88%, a risk-free rate of 3.70% and an expected term of 4.6 years, resulting in a change in fair value of $1.9 million from the issuance date. The Company recognized a loss on debt issuance, which is recorded in loss on debt extinguishment on the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2025, of $0.4 million and the remaining $1.5 million was accounted for as a debt issuance cost.

The Company determined that the Accelerated Repayment Feature is subject to bifurcation under the guidance in ASC 815 as redemption features at a discount. The fair value of the derivative liability related to the Accelerated Repayment Feature was immaterial as the probability that the Company will trigger an event of default was deemed minimal.

At the issuance date, debt issuance costs were capitalized and is being amortized as interest expense over the term of the notes using the effective interest method.

The Company recorded amortization of debt issuance costs of $0.1 million in interest expense for the three and nine months ended September 30, 2025. At September 30, 2025, the outstanding principal balance of the August 2025 Notes was less than $0.1 million.

Refer to Note 13 for notes payable, related party.

***White Lion Ordinary Share Purchase and Registration Rights Agreements***

On August 29, 2025, the Company entered into an Ordinary Share Purchase Agreement (the "ELOC Purchase Agreement") and a Registration Rights Agreement (the "White Lion RRA") with White Lion Capital, LLC, a Delaware limited liability company ("White Lion"). Pursuant to the ELOC Purchase Agreement, the Company had the right, but not the obligation, to require White Lion to purchase, from time to time, up to $25,000,000 in aggregate gross purchase price of newly issued Ordinary Shares, which may be exchanged for ADSs, subject to certain limitations and conditions set forth in the ELOC Purchase Agreement.

The Company does not have a right to commence any sales of Ordinary Shares to White Lion under the ELOC Purchase Agreement until all conditions to the Company's right to commence sales, as set forth in the ELOC Purchase Agreement, have been satisfied, including that a registration statement covering the resale of such shares is declared effective by the SEC and the final form of prospectus is filed with the SEC. Over the period ending on the earlier of (i) the date on which the Purchaser shall have purchased Ordinary Shares pursuant to the ELOC Purchase Agreement for an aggregate purchase price equal to the Commitment Amount or (ii) August 29, 2028 (the "Commitment Period"), subject to the conditions of the ELOC Purchase Agreement, the Company will control the timing and amount of any sales of Ordinary Shares to the Purchaser. Actual sales of Ordinary Shares to the Purchaser under the ELOC Purchase Agreement will 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 made by the Company as to appropriate levels and sources of funding.

The purchase price of the Ordinary Shares that the Company elects to sell to the Purchaser pursuant to the ELOC Purchase Agreement will be determined based on the type of Purchase Notice issued, as follows:

● Rapid Purchase Option 1: The lowest traded price of the ADSs on the notice date.

● Rapid Purchase Option 2: 97 % of the lowest traded price of the ADSs during the two hours following the Purchaser's confirmed receipt of the notice.

● Rapid Purchase Option 3: The lowest of (i) the opening price of the ADSs on the notice date, (ii) the closing price of the ADSs on the prior business day, or (iii) the volume-weighted average price (VWAP) on the notice date, with a 20 % discount if the trading price is below the opening price.

● VWAP Purchase: 97 % of the lowest daily VWAP during a two-day valuation period for the first $12,500,000 of closings, and 98 % thereafter.

In no event may the Company issue to the Purchaser under the ELOC Purchase Agreement more than 13,039,369,358 Ordinary Shares (the "Exchange Cap"), which equals 19.99% of the Company's outstanding Ordinary Shares as of the Execution Date, unless the Company obtains shareholder approval to issue shares in excess of the Exchange Cap or the average price paid for all Ordinary Shares issued under the agreement is equal to or greater than the Minimum Price (as defined in the ELOC Purchase Agreement). In any event, the ELOC Purchase Agreement provides that the Company may not issue or sell any Ordinary Shares if such issuance or sale would breach any applicable Nasdaq rules.

The ELOC Purchase Agreement prohibits the Company from directing the Purchaser to purchase any Ordinary Shares if those shares, when aggregated with all other Ordinary Shares then beneficially owned by the Purchaser (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended), would result in the Purchaser beneficially owning more than 4.99% of the outstanding Ordinary Shares (the "Beneficial Ownership Limitation"), which may be increased to 9.99% at the Purchaser's discretion upon 61 days' prior written notice.

As consideration for the Purchaser's execution of the ELOC Purchase Agreement, the Company will pay a document preparation fee of $15,000, to be deducted from the proceeds related to the first Purchase Notice, and cash commitment fees of $37,500 when aggregate Purchase Notices exceed $500,000 and $87,500 (or $125,000 if $1,000,000 is reached first) when aggregate Purchase Notices exceed $1,000,000. Additionally, if the Company fails to close at least $625,000 in purchases by the 180th day after the Registration Statement's effective date, the Company will issue ADSs, represented by Ordinary Shares, equivalent to $75,000 divided by the lowest traded ADS price during a 10-day period preceding that date (the "Commitment Shares").

Concurrently with the ELOC Purchase Agreement, the Company and the Purchaser entered into a Registration Rights Agreement, dated August 29, 2025 (the "Registration Rights Agreement"), pursuant to which the Company agreed to file a registration statement on Form S-1 (or any successor form) with the SEC within thirty (30) calendar days following August 29, 2025, to register the resale of the maximum number of Registrable Securities (including the Ordinary Shares, Commitment Shares, and ADSs representing such shares) permitted by applicable SEC rules.

The ELOC Purchase Agreement was accounted for as a standby equity purchase agreement under ASC 815 as it includes an embedded put option and an embedded forward option. The put option is recognized on inception and the forward option is recognized upon issuance of notice for the sale of the Company's Common Stock. The fair value of the derivative liability related to the embedded put option ("White Lion Derivative Liability) was $100,000 at the inception of the agreement. The fair value of the White Lion Derivative Liability was determined using a Monte Carlo simulation based on the projected stock price of $0.76, expected volatility of 97%, risk-free rate of 3.52% and discounted at 71.3% for the probability of the Company timely filing all SEC documents and meeting the NASDAQ listing requirements.

As of September 30, 2025, the Company had no outstanding purchase notices issued to White Lion.

**Note 8. Shareholders' Equity (Deficit)**

***Ordinary Shares***

On June 30, 2025, the Company's shareholders approved an increase to the number of authorized Ordinary Shares, par value $0.0001 (the "Ordinary Shares"). The Company can issue up to 200,000,000,000 Ordinary Shares plus 130,854,276,210 Ordinary Shares previously granted under previous allotments. All previously unallocated authorized shares were revoked. Accordingly, as of September 30, 2025, the Company was authorized to issue up to 330,854,276,210 Ordinary Shares.

Currently, each ADS represents 2,000 Ordinary Shares (the "ADS Ratio"). All ADS and per ADS amounts in the accompanying condensed consolidated financial statements reflect the ADS Ratio.

***March 2025 Private Placement***

In March 2025, the Company entered into a securities purchase agreement with certain investors and all directors of the Company, pursuant to which the Company sold and issued in a private placement (the "March 2025 Private Placement") ADSs, or pre-funded warrants ("Pre-Funded Warrants") in lieu thereof, each representing 2,000 of the Company's Ordinary Shares (the "Shares"), and, in each case, Series A warrants to purchase ADSs ("Series A Warrants") and Series B warrants to purchase ADSs ("Series B Warrants"), the "Warrants," and together with the ADSs or Pre-Funded Warrants, the "Units"). The Series A Warrants and Series B Warrants had a one-year term and a five-year term from the date of issuance, respectively, and the number of ADSs issuable pursuant to the exercise of each Series A Warrant ranges from 1 ADS to 1.5 ADSs depending on the "tier" of investment made.

In March 2025, the Company closed its first round of financing under the March 2025 Private Placement and issued 2,238,031 ADSs, Series A Warrants to purchase up to 2,283,031 ADS, at an exercise price of $0.87 per ADS, and Series B Warrants to purchase up to 2,283,031 ADS, at an exercise price of $0.87 per ADS. In connection with this round of financing, the Company's Chairman, Dr. Hoyoung Huh, agreed to purchase $1.0 million of Units, with the purchase price thereof to be satisfied through his agreement to cancel and extinguish $1.0 million of notes previously issued to him by Peak Bio in January 2024, which were assumed by the Company (the "March 2025 Note Termination") for an equal amount of Ordinary Shares and warrants.

In April 2025, the Company closed its final round of financing under the March 2025 Private Placement and issued 2,704,595 ADSs, Pre-Funded Warrants to purchase up to 1,650,000 ADS at an exercise price of $0.20 per ADS, Series A Warrants to purchase up to 6,057,405 ADS, at an exercise price of $0.87 per ADS, and Series B Warrants to purchase up to 4,354,595 ADS, at an exercise price of $0.87 per ADS. The Company received approximately $0.3 million in advance for the potential exercise of the Pre-funded Warrants which is reflected in other current liabilities.

At close of the March 2025 Private Placement, the Company incurred a total of approximately $0.4 million in placement agent fees with Paulson Investment Company, LLC ("Paulson") and issued to Paulson 172,344 ADSs with an estimated fair value of $0.2 million. Net proceeds from the March 2025 Private Placement were approximately $5.6 million, net of the $1.0 million from the March 2025 Note Termination.

***Merger with Peak Bio, Inc.***

On November 14, 2024, the Company completed its previously announced strategic combination with Peak Bio. In connection with the acquisition, the Company issued 25,227,884,000 Ordinary Shares and assumed (i) November 2022 Peak Warrants to purchase an aggregate of 1,577,566 ADSs at $39.18 per ADS, and (ii) April 2023 Peak Warrants to purchase an aggregate of 1,187,013 ADSs at $2.04 per ADS.

The Company determined that the November 2022 Peak Warrants and the April 2023 Peak Warrants are not indexed to the Company's own stock in the manner contemplated by the relevant accounting standard. Accordingly, on the Closing of the acquisition, the Company classified these warrants as derivative liabilities in its condensed consolidated balance sheets.

 ****

***Warrants***

In connection with various previous financing transactions, the Company has issued warrants to purchase the Company's Ordinary Shares represented by ADSs. The Company accounts for such warrants as equity instruments or liabilities, depending on the specific terms of the warrant agreement.

The following table summarizes the Company's outstanding warrant ADSs, with each ADS representing 2,000 Ordinary Shares, as of September 30, 2025 and December 31, 2024:

Schedule of Summarizes the Outstanding Warrants

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of Warrant ADSs** | **Number of Warrant ADSs** | | |
|  | **September 30,**<br>**2025** | **December 31,**<br>**2024** | **Weighted-**<br>**Average**<br>**Exercise Price** | <br>**Expiration**<br>**Date** |
| **Equity-classified Warrants** |  |  |  |  |
| October 2023 Investor Pre-funded Warrants | 48387 | 48387 | $0.20 |  |
| April 2025 Investor Pre-funded Warrants | 1650000 |  | $0.20 |  |
| April 2023 Peak Bio Warrants | 342420 |  | $0.81 | 8/31/2030 |
| March 2025 Series A Investor Warrants | 354462 |  | $0.87 | 3/6/2026 |
| March 2025 Series A Investor Warrants | 1928569 |  | $0.87 | 3/6/2030 |
| March 2025 Series B Investor Warrants | 2283031 |  | $0.87 | 3/6/2030 |
| April 2025 Series A Investor Warrants | 1121491 |  | $0.87 | 4/25/2026 |
| April 2025 Series A Investor Warrants | 4935914 |  | $0.87 | 4/25/2030 |
| April 2025 Series B Investor Warrants | 4354595 |  | $0.87 | 4/25/2030 |
| May 2024 Investor Warrants | 4029754 | 4029754 | $1.77 | May-Jun 2027 |
| March 2024 Placement Agent Warrants | 132061 | 132061 | $1.85 | 3/27/2029 |
| May 2024 Placement Agent Warrants | 322380 | 322380 | $1.89 | 5/31/2029 |
| November 2024 Investor Warrants | 1713402 | 1713402 | $2.26 | Dec 2027-Jun 2028 |
| October 2023 Placement Agent Warrants | 42550 | 42550 | $4.13 | 10/6/2028 |
| March 2022 Investor Warrants | 186007 | 186007 | $28.00 | 3/10/2027 |
| March 2022 Placement Agent Warrants | 14874 | 14874 | $30.00 | 3/10/2027 |
| December 2021 Investor Warrants | 107768 | 107768 | $33.00 | 1/4/2027 |
| December 2021 Placement Agent Warrants | 8615 | 8615 | $35.00 | 12/29/2026 |
| 2020 Investor Warrants |  | 139882 | $44.00 | Feb-Mar 2025 |
| July 2021 Placement Agent Warrants | 19909 | 19909 | $46.40 | 7/7/2026 |
| 2020 Placement Warrants | - | 22481 | $51.00 | Feb-Mar 2025 |
|  | 23596189 | 6788070 |  |  |
| **Liability-classified Warrants** |  |  |  |  |
| April 2023 Peak Bio Warrants | 844593 | 1187013 | $2.04 | 4/28/2028 |
| September 2022 Series B Investor Warrants | 519703 | 754997 | $17.00 | 9/14/2029 |
| November 2022 Peak Bio Warrants | 1577556 | 1577556 | $39.18 | 11/1/2027 |
|  | 2941852 | 3519566 |  |  |
| &nbsp;&nbsp;&nbsp;**Total outstanding warrants** | 26538041 | 10307636 |  |  |

---

The following table summarizes the Company's warrant ADS activity, with each ADS representing 2,000 Ordinary Shares, for the nine months ended September 30, 2025:

Schedule of Warrants Activity

---

| | | |
|:---|:---|:---|
|  | **Number of**<br>**Warrants** | **Weighted-<br> Average**<br>**Exercise Price** |
| **Outstanding at December 31, 2024** | 10307636 | $10.37 |
| Issued | 16628062 | 0.80 |
| Exercised |  |  |
| Forfeited | (235294) | 17.00 |
| Expired | (162363) | 44.97 |
| **Outstanding at September 30, 2025** | 26538041 | $4.09 |

---

**Note 9. Stock-Based Compensation**

***Stock Options***

The following is a summary of the Company's stock option ADSs activity, with each ADS representing 2,000 Ordinary Shares, under the 2014 Equity Incentive Plan, the 2023 Equity Incentive Plan and the Peak Bio 2022 Long Term Incentive Plan for the nine months ended September 30, 2025:

Schedule of Stock Option Activity

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Stock**<br> **Options** | **Weighted-**<br> **Average**<br> **Exercise**<br> **Price** | **Weighted-Average**<br> **Remaining**<br> **Contractual Life**<br> **(in years)** | **Aggregate**<br> **Intrinsic** <br> **Value** |
| **Outstanding at December 31, 2024** | 1981982 | $8.21 | 7.5 | $— |
| &nbsp;&nbsp;&nbsp;Granted | 6140896 | 1.45 |  |  |
| &nbsp;&nbsp;&nbsp;Exercised |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Forfeited | (587130) | 5.21 |  |  |
| &nbsp;&nbsp;&nbsp;Expired | (120256) | 20.87 |  |  |
| **Outstanding at September 30, 2025 <sup>(1)</sup>** | 7415492 | $2.64 | 9.1 | $— |
| **Exercisable at September 30, 2025** | 2177421 | $5.14 | 8.1 | $— |

---

<sup>(1)</sup> Includes both vested stock options as well as unvested stock options for which the requisite service period has not been rendered but that are expected to vest based on achievement of a service condition.

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the options and the fair value of the Company's ADSs for those options that had exercise prices lower than the fair value of the Company's Ordinary Shares.

The weighted-average grant-date fair value per ADS of options granted during each of the nine months ended September 30, 2025 and 2024 was $1.45 and $2.96, respectively.

***Option Valuation***

The weighted-average assumptions that the Company used to determine the fair value of share options granted were as follows, presented on a weighted average basis:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Expected volatility | 94.1% | 83.0% |
| Risk-free interest rate | 4.0% | 3.9% |
| Expected dividend yield |  |  |
| Expected term (in years) | 5.7 | 5.0 |

---

 ****

***Restricted Stock Units***

The 2014 Plan provided, and the 2023 Plan provides, for the award of restricted stock units ("RSUs"). RSUs are granted to employees that are subject to time-based vesting conditions that lapse between one year and four years from date of grant, assuming continued employment. Compensation cost for time-based RSUs, which generally vest only on continued service, is recognized on a straight-line basis over the requisite service period based on the grant date fair value of the RSUs, which is derived from the Nasdaq closing price of the Company's ADSs on the date of grant.

The following table summarizes the Company's RSU ADSs activity, with each ADS representing 2,000 Ordinary Shares, for the nine months ended September 30, 2025:

---

| | | |
|:---|:---|:---|
|  | **Time-based Awards** | **Time-based Awards** |
|  | **Number of Shares** | **Weighted-<br> Average Grant<br> Date Fair Value** |
| **Nonvested shares at December 31, 2024** |  |  |
| &nbsp;&nbsp;&nbsp;Granted | 40000 | 1.34 |
| &nbsp;&nbsp;&nbsp;Forfeited |  |  |
| &nbsp;&nbsp;&nbsp;Vested | (40000) | 1.34 |
| **Nonvested shares at September 30, 2025** |  |  |

---

The fair value of time-based RSUs that vested during the nine months ended September 30, 2025 and 2024 was less than $0.1 million and approximately $0.5 million, respectively.

As of September 30, 2025, there were no Ordinary Shares underlying vested time-based RSUs pending issuance that were included in the unaudited condensed consolidated statement of shareholders' equity (deficit).

***Performance-Based Stock Options***

During the nine months ended September 30, 2025, the Company granted performance-based stock options ("PSOs") to executives and consultants exercisable for the purchase of an aggregate of 975,000 ADSs of the Company. Vesting of PSOs granted to executives is based upon (i) a qualified financing or (ii) attainment of an ADC focused licensing deal by December 31, 2025. Vesting of PSOs granted to consultants is based upon attainment of certain research and licensing agreements. All PSOs are subject to continuous service by the executives. The probability of vesting is reviewed each reporting period and management has concluded that the PSOs have not vested until the performance conditions have been satisfied. Therefore, the PSOs remain unvested and outstanding as of September 30, 2025. The Company has not recognized stock-based compensation expense associated with these performance awards during the three and nine months ended September 30, 2025. As of September 30, 2025, total unrecognized compensation cost related to these performance-based stock options awards was $0.9 million, which will be recognized if the awards are deemed to be probable of vesting.

***Stock-Based Compensation Expense***

The Company classifies stock-based compensation expense in the statements of operations in the same manner in which the award recipients' payroll costs are classified or in which the award recipients' service payments are classified. Total stock-based compensation expense attributable to share-based payments made to employees, consultants and directors included in operating expenses in the Company's condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2025 and 2024, was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended<br> September 30,** | **Three Months Ended<br> September 30,** | **Nine Months Ended<br> September 30,** | **Nine Months Ended<br> September 30,** |
| <br>**($ in thousands)** | **2025** | **2024** | **2025** | **2024** |
| Research and development | $34 | $27 | $409 | $83 |
| General and administrative | 651 | 221 | 2010 | 621 |
| Restructuring and other costs |  |  |  | 285 |
| &nbsp;&nbsp;&nbsp;Total stock-based compensation expense | $685 | $248 | $2419 | $989 |

---

As of September 30, 2025, total unrecognized compensation cost related to unvested stock options was $4.3 million, which is expected to be recognized over a weighted average period of 2.8 years. As of September 30, 2025, no unrecognized compensation cost remains related to time-based RSUs.

**Note 10. Net Loss per Share**

The following potential dilutive securities, presented based on Ordinary Shares outstanding at the end of each reporting period, have been excluded from the calculation of diluted net loss per share because including them would have had an anti-dilutive impact:

Schedule of Antidilutive Securities Excluded From Computation of Earnings Per Share

---

| | | |
|:---|:---|:---|
|  | **As at September 30,** | **As at September 30,** |
|  | **2025** | **2024** |
| Stock options | 14830984000 | 507014688 |
| Restricted stock units |  | 251823915 |
| Warrants | 53076082000 | 11562563300 |
| Convertible notes | 1728414000 | 1257860000 |
| &nbsp;&nbsp;&nbsp;Total | 69635480000 | 13579261903 |

---

**Note 11. Income Taxes**

In accordance with ASC 270, *Interim Reporting*, and ASC 740, *Income Taxes*, the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. The Company recorded an income tax benefit of $1.1 million for the three and nine months ended September 30, 2025 in connection with the impairment loss on one of the Company's IPR&D assets. For the three and nine months ended September 30, 2024, the Company recorded no tax expense or benefit due to the expected current year loss and its historical losses. The Company has not recorded its net deferred tax asset as of either September 30, 2025 or December 31, 2024 because it maintained a full valuation allowance against all deferred tax assets as of these dates as management has determined that it is not more likely than not that the Company will realize these future tax benefits. As of September 30, 2025 and December 31, 2024, the Company had no uncertain tax positions.

**Note 12. Segment Information**

The Company manages its operations as a single operating segment for the purpose of assessing performance, making operating decisions and allocating resources, resulting in a single reportable segment. The Company has determined that its Chief Operating Decision Maker ("CODM") is its Chief Executive Officer. The Company's CODM reviews the Company's financial information on a consolidated basis for the purpose of allocating resources and assessing financial performance.

The Company has assembled a portfolio of pre-clinical product candidates that aim to develop next-generation precision bifunctional ADCs for the treatment of cancer. The Company has not generated any revenue since its inception and does not expect to generate any revenue from the sale of products in the near future. The Company primarily incurs expenses in connection with the research and development of its product candidates as well as general and administrative costs consisting of salaries and related costs for personnel in executive, finance and administrative functions, as well as consulting, restructuring and merger-related expenses.

The key measure of segment profit or loss that the CODM uses to allocate resources and assess performance is the Company's consolidated net loss, as reported on the consolidated statements of operations and comprehensive loss. In addition, the CODM is regularly provided the following significant segment expense categories which are reviewed against budgeted expectations to assist in resource allocation decision-making:

Schedule of Significant Segment Expense Categories

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended<br> September 30** | **Three Months Ended<br> September 30** | **Nine Months Ended<br> September 30** | **Nine Months Ended<br> September 30** |
| <br>**(In thousands)** | **2025** | **2024** | **2025** | **2024** |
| ADC preclinical development | $(464) | $— | $(626) | $— |
| HSCT-TMA (AK901) clinical program expense | 36 | (477) | (70) | (1560) |
| Chemistry, manufacturing and control | (21) | (459) | (69) | (3401) |
| Other external development expense | (57) | (159) | (92) | (754) |
| Internal and other research and development expense | (227) | (303) | (981) | (1220) |
| U.K. Research and Development Tax Credit | 518 | 1282 | 518 | 1282 |
| General and administrative expense | (1324) | (1488) | (5129) | (5995) |
| Impairment loss on other intangible assets | (5180) |  | (5180) |  |
| Merger-related costs |  | (992) |  | (2290) |
| Restructuring and other costs |  | (83) |  | (1438) |
| Stock-based compensation expense | (685) | (248) | (2419) | (989) |
| Other segment items *(1)* | (84) | 32 | 960 | 346 |
| Deferred tax benefit | 1088 |  | 1088 |  |
| Net loss | $(6400) | $(2895) | $(12000) | $(16019) |

---

*(1)* *Other segment items include interest income, interest expense, gain on settlement of accounts payable, loss on debt extinguishment, change in fair value of warrant liabilities, net foreign currency exchange gains (losses), loss on derivative liability, and other expense, net as reported in the Company's condensed consolidated statements of operations and comprehensive loss.* 

Assets regularly provided to the CODM are consistent with those reported on the consolidated balance sheets with particular emphasis on the Company's available liquidity, including its cash and restricted cash. All of the Company's tangible assets are held in the United States.

**Note 13. Related Party Transactions**

***CEO Agreement***

On May 31, 2024, the Company and Dr. Samir Patel entered into an Interim Chief Executive Officer Agreement, effective as of May 1, 2024 (the "Interim CEO Agreement"). Pursuant to the Interim CEO Agreement, Dr. Patel served as the Company's Interim President and Chief Executive Officer as an independent contractor on an at-will basis. The Interim CEO Agreement could be terminated by the Company immediately for any reason. As the sole compensation for services provided under the Interim CEO Agreement, Dr. Patel was paid $50,000 per month in the form of fully vested Ordinary Shares. On September 16, 2024, the Company entered into an amendment to the Interim CEO Agreement (the "CEO Amendment Agreement"), effective July 1, 2024, to revise Dr. Patel's compensation in connection with the services as Interim President and Chief Executive Officer. Pursuant to the CEO Amendment Agreement, in lieu of receiving the stated monthly compensation of $50,000 in the form of fully vested Ordinary Shares, Dr. Patel is paid in the form of fully vested non-qualified stock options to purchase Ordinary Shares ("NQSO"), with the number of ADSs underlying each such monthly NQSOs grant to be equal to two times the number determined by dividing (i) $50,000 by (ii) the closing price of the Company's ADSs on the Nasdaq Capital Market on the last day of each month (or partial month) Dr. Patel has served as the Company's Interim President and Chief Executive Officer.

On December 12, 2024, the Company's board of directors approved the appointment of Dr. Samir Patel to President and Chief Executive Officer, effective December 16, 2024. There were no changes to Dr. Patel's revised compensation under the CEO Amendment Agreement described above, following Dr. Patel's appointment as President and Chief Executive Officer on December 16, 2024. On April 21, 2025, Dr. Patel stepped down as President and Chief Executive Officer.

During the three months ended September 30, 2025, the Company recognized $0.3 million in non-cash stock-based compensation pursuant to the CEO Amendment Agreement, pertaining to NQSOs granted to Dr. Patel to purchase Ordinary Shares.

During the nine months ended September 30, 2025, the Company recognized $0.3 million in non-cash stock-based compensation pursuant to the CEO Amendment Agreement, pertaining to NQSOs granted to Dr. Patel to purchase 400,896 ADSs at a weighted average exercise price of $1.17 per ADS.

***Notes Payable, Related Party***

 ****

*Dr. Huh Notes*

Pursuant to the acquisition of Peak Bio, which closed on November 14, 2024, the Company assumed certain notes payable due to Dr. Huh, the Company's Chairman of the Board. The Company assumed two notes in the amount of a total of $0.9 million, which were entered into in May and August 2021 (the "2021 Notes") and had a one-year maturity date from date of issuance. The 2021 Notes carried an interest rate of 1.0% per annum. The Company also assumed a note in the amount of $0.75 million, which was entered into in January 2024 (the "January 2024 Note") and had an original maturity date of January 23, 2025 which was extended to December 31, 2025 on April 1, 2025. The January 2024 Note carried an interest rate of 15% per annum.

In March 2025, in connection with the March 2025 Private Placement (Note 8), Dr. Huh's 2021 Notes including accrued interest, and a portion of his January 2024 Note, aggregating to $1.0 million were cancelled, extinguished and paid in full for an equal amount of Ordinary Shares and warrants of the Company.

In September 2025, in connection with the August 2025 Notes Offering (see below), Dr. Huh agreed to purchase an August 2025 Note with a principal amount of $1,250,000 for a purchase price of $1,000,000, with the purchase price thereof to be satisfied through his agreement to cancel and extinguish $837,433 of outstanding principal and accrued interest under January 2024 Note plus cash of $162,567. The Company accounted for the cancellation and extinguishment in exchange for the issuance of the August 2025 Note as a debt extinguishment in accordance with ASC 470. As the present value of the future cash flows was substantially different than the net carrying value of the original debt, a loss of approximately $0.5 million was recognized.

The Company recognized interest expense of less than $0.1 million during each of the three and nine months ended September 30, 2025.

As of September 30, 2025 and December 31, 2024, the outstanding principal and accrued interest on the 2021 Notes and the January 2024 Note was $0 and $1.651 million, respectively. As of each of September 30, 2025, and December 31, 2024, accrued interest of $0 million and $0.1 million, respectively is presented within accrued expenses in the consolidated balance sheets.

*August 2025 Notes, Related Party* 

 

In August 2025, the Company issued notes to the Company's directors with the same terms as the August 2025 Notes (as described in Note 7) with an aggregate purchase price of $1,511,000 and an aggregate principal amount of $1,888,750, inclusive of a note exchange with the Company's Chairman, Dr. Hoyoung Huh, as outlined above. The Notes have maturity dates ranging from August 15, 2026 through August 18, 2026, at which time the principal amount is due and payable.

The Company also entered into Warrant Amendment Agreements with the recipients of such August 2025 Notes, which extended the expiration date of certain Series A Warrants held by such investors to purchase 1,928,569 ADSs to March 6, 2030 and 44,642 ADSs to April 25, 2030.

The amended Series A Warrant were accounted for in accordance with ASC 815 with the change in fair value, as a result of the amendment, being recognized as a debt issuance cost. The aggregate fair value of the warrants at issuance date using a Black Scholes Option Pricing Model was $0.6 million based on a weighted average stock price of $0.98, weighted average expected volatility of 83%, a weighted average risk-free rate of 4.12% and an expected term of 0.6 years. The aggregate fair value of the warrants at the amendment date using a Black Scholes Option Pricing Model was $1.4 million based on a weighted average stock price of $0.98, weighted average expected volatility of 88%, a weighted average risk-free rate of 3.85% and an expected term of 4.6 years, resulting in a change in fair value of $0.8 million from the issuance date.

At the issuance date, the change in fair value of the amended Series A Warrants was capitalized and is being amortized as interest expense over the term of the notes using the effective interest method.

The Company recorded amortization of debt issuance costs of less than $0.1 million in interest expense for the three and nine months ended September 30, 2025. At September 30, 2025, the outstanding principal balance of the August 2025 Notes was $1.3 million.

***Convertible Notes, Related Party***

On May 10, 2024, the Company entered into unsecured convertible promissory notes (the "May 2024 Notes") with Dr. Ray Prudo, the Company's Chairman at the time, and its then Interim President and Chief Executive Officer and director, Dr. Samir Patel, for an aggregate of $1.0 million in gross proceeds. The May 2024 Notes bear interest at 15% per annum, which may be increased to 17% upon the occurrence of certain events of default as described therein, and the principal and all accrued but unpaid interest is due on the date that is the earlier of (a) ten (10) business days following the Company's receipt of a U.K. research and development tax credit from HM Revenue and Customs, and (b) November 10, 2024. Provided, however, at any time or times from the date of the note and until the tenth business day prior to closing of the acquisition, the note holders are entitled to convert any portion of the outstanding and unpaid amount, including principal and accrued interest, into Company ADSs at a fixed conversion price equal to $1.59, representing the Nasdaq official closing price of the Company's ADSs on the issuance date, subject to certain restrictions. In October 2024, the aggregate principal balance of $750,000, was repaid in cash with proceeds from the Company's U.K. research and development tax credit from the U.K. HM Revenue and Customs. Drs. Prudo and Patel each elected to convert the $125,000 of remaining principal and accrued interest into the Company's ADSs at a conversion price of $1.59 per ADS. These Ordinary Shares were issued to Drs. Prudo and Patel on April 30, 2025.

The Company recognized no interest expense during the three and nine months ended September 30, 2025.

As of September 30, 2025 and December 31, 2024, the outstanding principal and accrued interest, presented within accrued expenses, on the May 2024 Notes was $0 and $0.3 million, respectively.

***The Doctors Laboratory***

The Company leased office space for its U.K. headquarters in London from The Doctors Laboratory ("TDL"), an entity with a common director, and had incurred expenses of less than $0.1 million plus VAT during each of the three and nine months ended September 30, 2025 and 2024. The Company also received certain administrative services provided by TDL and incurred expenses of less than $0.1 million during each of the three and nine months ended September 30, 2025 and 2024. The Company recorded payable balances owed to TDL of less than $0.1 million as of September 30, 2025 and December 31, 2024.

***Other***

In November 2024, the Company assumed an amount due to an entity in which the Company's Chairman, Dr. Hoyoung Huh, is a director. As of September 30, 2025 and December 31, 2024, the amounts due totaled less than $0.1 million and are included in accounts payable in the Company's condensed consolidated balance sheets.

**Note 14. Commitments and Contingencies**

***Leases***

The Company currently leases office space for both our U.S. headquarters on a short-term basis. The lease for our U.K. headquarters, located in London, was vacated in May 2025. The Company leased its U.S. headquarters virtual office, located in Boston, Massachusetts, on a month-to-month basis through September 30, 2025. In October 2025, the Company moved its U.S. headquarters virtual office to Tampa, Florida. The Company also leases laboratory space, located in San Francisco, California, on a month-to-month basis and is cancellable anytime with 60 days' notice. The Company is not party to any material lease agreements.

For each of the three months ended September 30, 2025 and 2024, the Company incurred lease costs of less than $0.1 million.

For the nine months ended September 30, 2025 and 2024, the Company incurred lease costs of less than $0.1 million and approximately $0.2 million, respectively.

***Employee Benefit Plans***

The Company adopted an employee benefit plan under Section 401(k) of the Internal Revenue Code for its U.S.-based employees. The plan allows employees to make contributions up to a specified percentage of their compensation. Under the plan, the Company matches 100% of employees' contributions up to 5% of the annual eligible compensation contributed by each employee, subject to Internal Revenue Code limitations.

The Company also adopted a defined contribution pension scheme which allows for U.K. employees to make contributions and provides U.K. employees with a Company contribution of 10% of compensation, subject to U.K. law.

During each of the three and nine months ended September 30, 2025 and 2024, respectively, the Company charged less than $0.1 million to operating expenses related to the Company's contributions to employee benefit plans.

***Bayer Acquisition Agreement***

In November 2024, the Company assumed an assignment, license, development and commercialization agreement dated March 17, 2017 with Bayer (the "Bayer Acquisition Agreement"), to acquire from Bayer all right, title and interest in and to PHP-303, including each and every invention and any priority rights relating to its patents.

Under the Bayer Acquisition Agreement, the Company is committed to pay certain development and regulatory milestones up to an aggregate amount of $23,500,000 and high single digit royalties based on the sale of products developed based on the licensed compound. Royalties will be payable on a licensed product-by-licensed product and country-by-country basis until the later of ten years after the first commercial sale of such licensed product in such country and expiration of the last patent covering such licensed product in such country that would be sufficient to prevent generic entry.

Either party may terminate the Bayer Acquisition Agreement upon prior written notice for the other party's material breach that remains uncured for a specified period of time or insolvency. Bayer agreed not to assert any Bayer intellectual property rights that were included in the scope of the Bayer Acquisition Agreement against the Company.

The Company incurred zero expenses under this agreement as no milestones have been achieved since inception, and no products were sold from inception through September 30, 2025.

***Legal Proceedings***

In May 2025, a former employee of Peak Bio CA, Inc. subsidiary filed a claim stating that they are entitled to certain discretionary bonuses from 2022 totalling less than $0.1 million. The Company denies the former employee's claim and intends to defend itself.

In December 2024, the Company received demand letters from two individuals formerly serving the Company as consultants outlining claims relating to wrongful termination. The wrongful termination claims included claims for unpaid consulting fees, consulting fees owed due to improper termination notice, unpaid bonuses, severance, and the accelerated vesting of outstanding restricted stock unit awards as of the termination date. On March 3, 2025 and on May 30, 2025, the Company signed separate Settlement Agreements and Mutual Releases with each of such former consultants. The agreements require the Company to make a payment totalling $0.4 million in equal monthly installments with the last installment being payable November 2025. In addition, the agreements allowed for the terms of the previously awarded restricted stock units to continue to govern, including the continued vesting of the restricted stock units. Accordingly, during the nine months ended September 30, 2025, the Company issued 125,911 ADSs (representing 251,822,000 Ordinary Shares) on vesting of these restricted stock awards. As of September 30, 2025, the Company recognized $0.1 million, representing the remainder aggregate settlement amount, which is presented within accounts payable in the Company's condensed consolidated balance sheets.

On November 21, 2024, "Sabby" Volatility Warrant Master Fund Ltd. ("Sabby") filed a lawsuit against the Company in New York state court for alleged breach of contract. Sabby alleges that it validly exercised a warrant issued to Sabby in September 2022 and alleges that the Company breached the warrant by not honouring Sabby's exercise request. On May 7, 2025, the Company and Sabby entered into a Settlement Agreement pursuant to which the Company agreed to issue 272,450 ADSs (representing 544,900,000 Ordinary Shares) to Sabby, which were issued on June 13, 2025.

***Accounts Payable Settlements***

During the nine months ended September 30, 2025, the Company entered into settlement agreements with vendors for the settlement of outstanding payables. This resulted in a $0.8 million and a $2.0 million gain on settlement of current liabilities, which is reflected in the condensed consolidated statements of operations for the three and nine months ended September 30, 2025, respectively.

On April 4, 2025, the Company issued 204,000 ADS (representing 408,000,000 Ordinary Shares) to Paulson for the settlement of outstanding placement agent fees earned in connection with a private placement in November 2024.

**Note 15. Restructuring**

In May 2024, the Company implemented a reduction-in-force of approximately 67% of its total workforce as a result of the recently announced research and development program prioritization under which the Company's hematopoietic stem cell transplantation-associated thrombotic microangiopathy ("HSCT-TMA") program with investigational nomacopan was suspended. The reduction-in-force was part of an operational restructuring plan (the "May 2024 Restructuring Plan") which also included the elimination of certain senior management positions. The May 2024 Restructuring Plan was completed in the third quarter of 2024. The purpose of the May 2024 Restructuring Plan, including the reduction-in-force, was to reduce HSCT-TMA program related operating costs, while supporting the execution of the Company's long-term strategic plan including the acquisition of Peak Bio. As of September 30, 2025, the Company does not expect to incur additional restructuring-related expenses related to the May 2024 Restructuring Plan.

The following table presents the restructuring reserve and activity for the nine months ended September 30, 2025:

---

| | | | |
|:---|:---|:---|:---|
| <br>**(In thousands)** | **Severance and**<br>**Employee Benefit Costs** | **Other**<br>**Restructuring Charges** |<br>**Total** |
| Balance at December 31, 2024 | $450 | $&nbsp;&nbsp;&nbsp;&nbsp; — | $450 |
| &nbsp;&nbsp;&nbsp;Restructuring adjustment | (50) |  | (50) |
| &nbsp;&nbsp;&nbsp;Cash payments | (400) |  | (400) |
| Balance at September 30, 2025 | $— | $— | $— |

---

The following table presents the restructuring reserve and activity for the nine months ended September 30, 2024:

---

| | | | |
|:---|:---|:---|:---|
| <br>**(In thousands)** | **Severance and**<br>**Employee Benefit Costs** | **Other**<br>**Restructuring Charges** |<br>**Total** |
| Balance at December 31, 2023 | $— | $&nbsp;&nbsp;&nbsp;&nbsp; — | $— |
| &nbsp;&nbsp;&nbsp;Restructuring charges | 1562 | 78 | 1640 |
| &nbsp;&nbsp;&nbsp;Cash payments | (827) | (78) | (905) |
| &nbsp;&nbsp;&nbsp;Non-cash stock-based compensation | (285) |  | (285) |
| Balance at September 30, 2024 | $450 | $— | $450 |

---

The restructuring reserve is presented within accrued expenses in the Company's condensed consolidated balance sheets for the nine months ended September 30, 2024.

**Note 16. Subsequent Events**

On October 16, 2025, the Company closed a registered direct offering (the "2025 Registered Direct Offering") with certain institutional investors providing for the issuance and sale of 3,125,000 ADSs of the Company. The ADSs have been offered and sold together with series E warrants to purchase up to an aggregate of 3,125,000 ADSs ("Series E Warrants") and series F warrants to purchase up to an aggregate of 3,125,000 ADSs ("Series F Warrants", and, with the Series E Warrants, the "Warrants"), which are being issued in a concurrent private placement. The combined purchase price per each ADS and accompanying Warrants sold in the 2025 Registered Direct Offering was $0.80. The aggregate gross proceeds from the 2025 Registered Direct Offering were $2.5 million, excluding any proceeds from any future exercises of Warrants.

The Series E Warrants have an exercise price of $0.98 per share, subject to customary adjustments as set forth therein, are exercisable commencing on the effective date (the "Shareholder Approval Date") of shareholder approval of the issuance of the ADSs issuable upon exercise of the Warrants (the "Shareholder Approval"), and will have a 5-year term from the Shareholder Approval Date. The Series F Warrants have an exercise price of $0.98 per share, subject to customary adjustments as set forth therein, are exercisable on the Shareholder Approval Date, and will have a thirty-month term from the Shareholder Approval Date. If at the time of exercise there is no effective registration statement registering the ADSs underlying the Warrants, the Warrants may be exercised on a cashless basis. The Company has agreed to file a registration statement registering for resale the ADSs issuable upon exercise of the Warrants and the Placement Agent Warrants (defined below) within 30 days of the Closing Date.

The Company entered into a placement agency agreement (the "Placement Agent Agreement") with Ladenburg Thalmann & Co. Inc. (the "Placement Agent"), pursuant to which the Company paid $262,500 in cash at closing of the 2025 Registered Direct Offering. The Placement Agent also received warrants (the "Placement Agent Warrants") on substantially the same terms as the Series E Warrants in an amount equal to 4.0% of the aggregate number of ADSs sold in the 2025 Registered Direct Offering to purchase up to 125,000 ADSs, at an exercise price of $1.00 per share and will have a 5-year term expiring October 14, 2030.

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.**

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with:*

● *our unaudited condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Form 10-Q; and* 

● *our audited consolidated financial statements and accompanying notes included in our Form 10-K, as well as the information contained under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Form 10-K.* 

*In addition to historical information, this discussion and analysis contains forward-looking statements that are subject to risks and uncertainties, including those discussed in the section titled "Risk Factors," set forth in Item 1A of our Form 10-K, that could cause actual results to differ materially from historical results or anticipated results.*

**Overview**

We are an oncology company developing next-generation antibody-drug conjugates ("ADCs") designed around novel proprietary cancer-killing toxins ("payloads"). We believe these novel payloads may have the potential to transform the efficacy and safety outcomes of ADCs as cancer therapies beyond options that are currently available or in development.

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

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

● more effective cancer-killing properties, or cytotoxicity;

● activation of the immune system to generate a greater numbers of neoepitopes than currently available ADCs, leading to activation of both B-cells and T-cells in the tumor microenvironment to generate an immune response that has the potential to continue to kill cancer cells in the tumor microenvironment and throughout the body;

● ability to be used in combination with checkpoint inhibitors to potentially deliver synergistic efficacy results (more than additive);

● sustained duration of response of tumor regression or elimination;

● reduced tumor resistance; and

● improved safety and tolerability relative to ADCs that are currently available.

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

We acquired the ADC Platform in connection with our acquisition of Peak Bio (the "Merger") in November 2024. Prior to that time, we were primarily focused on advancing our former lead product candidates nomacopan and PAS-nomacopan (longer-acting nomacopan that is PASylated). Since the closing of the Merger, we have focused substantially all of our efforts on the development of ADCs and our ADC Platform. We have suspended further internal development of our legacy programs, nomacopan and PAS-nomacopan, and intend to seek strategic partners to advance their development externally. For our PHP-303 program, a program that Peak Bio had advanced prior to the closing of the Merger, we intend to seek strategic partners for it as well to further its development externally.

Our activities since inception have consisted of performing research and development activities and raising capital.

We do not have any products available for commercial sale, and we have not generated any product revenue from our portfolio of product candidates or other sources. Our ability to generate revenue sufficient to achieve profitability, if ever, will depend on the successful development and eventual commercialization of our potential therapies, which we expect, if it ever occurs, will take a number of years. The research and development efforts require significant amounts of additional capital and adequate personnel infrastructure. There can be no assurance that our research and development activities will be successfully completed, or that our potential therapies will be commercially viable.

**Recent Developments**

***Presentation at 2025 Society for Immunotherapy of Cancer Annual Meeting***

On November 10, 2025, we issued a press release announcing our abstract highlighting immune mechanism-of-action data for our novel ADC payload, which was presented at the 2025 Society for Immunotherapy of Cancer Annual Meeting. The presentation outlines our investigation of multiple mechanisms behind preclinical colon tumor regressions induced by a Trastuzumab PH1 ADC as a single agent or in combination with an anti-PD-1 therapy. The unique results seen with both the single agent ADC Trastuzumab-PH1 and the combination therapy with an anti-PD1 agent open up the possibility of creating a new paradigm of an ADC/checkpoint inhibitor therapy that goes beyond today's regimens using ADCs with traditional payloads.

***Appointment of Interim Chief Financial Officer***

On October 22, 2025, we entered into a consulting agreement with Mr. Kameel Farag and KDF Ventures LLC, as amended on October 31, 2025 (the "Consulting Agreement"), pursuant to which Mr. Farag will serve as our Interim Chief Financial Officer, effective on October 22, 2025. Mr. Farag succeeds our prior Chief Financial Officer, Torsten Hombeck, whose departure was previously reported.

The Consulting Agreement provides for a monthly cash fee of $18,000 through the end of 2025 and a monthly cash fee of $27,000 starting January 1, 2026 through to February 15, 2026, pro-rated for any partial months. The Consulting Agreement also provides for the grant of RSU awards as follows: $4,645 in RSUs on October 22, 2025, which vested on October 31, 2025, $24,000 in RSUs on November 1, 2025 which vests on January 1, 2026 (subject to continued service through vesting) and $19,964 in RSUs on November 1, 2025, which vests on February 15, 2026 (subject to continued service through vesting). Further, in connection with certain capital raises by the Company, KDF Ventures shall be entitled to compensation payable in cash and RSUs based on a percentage of total gross proceeds, subject to maximum limits and depending on when the capital raise is completed. The Consulting Agreement provides for a term end date of February 16, 2026 and is extendable on a month-to-month basis at the Company's discretion.

***October 2025 Financing***

 ****

On October 16, 2025, we closed a registered direct offering (the "2025 Registered Direct Offering") with certain institutional investors providing for the issuance and sale of 3,125,000 ADSs of the Company. The ADSs have been offered and sold together with series E warrants to purchase up to an aggregate of 3,125,000 ADSs ("Series E Warrants") and series F warrants to purchase up to an aggregate of 3,125,000 ADSs ("Series F Warrants", and, with the Series E Warrants, the "Warrants"), which are being issued in a concurrent private placement. The combined purchase price per each ADS and accompanying Warrants sold in the 2025 Registered Direct Offering was $0.80. The aggregate gross proceeds from the 2025 Registered Direct Offering were $2.5 million, excluding any proceeds from any future exercises of Warrants. For more information, please refer to "Financial Condition, Liquidity and Capital Resources – October 2025 Financing" below.

***White Lion Ordinary Share Purchase and Registration Rights Agreements***

On August 29, 2025, we entered into an Ordinary Share Purchase Agreement (the "ELOC Purchase Agreement") and Registration Rights (the "White Lion RRA") with White Lion Capital, LLC, a Delaware limited liability company ("White Lion"). Pursuant to the ELOC Purchase Agreement, the Company had the right, but not the obligation, to require White Lion to purchase, from time to time, up to $25,000,000 in aggregate gross purchase price of newly issued Ordinary Shares, which may be exchanged for ADSs, subject to certain limitations and conditions set forth in the ELOC Purchase Agreement. For more information, please refer to "Financial Condition, Liquidity and Capital Resources – White Lion Ordinary Share Purchase and Registration Rights Agreements" below.

***August 2025 Financing***

 ****

In August 2025, we entered into Note Purchase Agreements with certain investors, including the Company's directors in a private placement offering pursuant to which the investors agreed to purchase, and the Company agreed to issue unsecured promissory notes with a 20% original issuance discount (each a "August 2025 Note" and together, the "August 2025 Notes"). In connection with the issuance and sale of the August 2025 Notes, the Company agreed to extend the expiration date of Series A Warrants held by certain August 2025 Note investors, previously issued in the March 2025 Private Placement, by 48 months from the original date of expiration. For more information, please refer to "Financial Condition, Liquidity and Capital Resources – August 2025 Financing" below.

**Merger Agreement**

On November 14, 2024, we completed the previously announced business combination contemplated by the Merger Agreement with Peak Bio, pursuant to which, upon the terms and subject to the conditions thereof, Merger Sub was merged with and into Peak Bio, with Peak Bio surviving such merger as our wholly owned subsidiary.

For additional information on the Merger, refer to our Form 10-K for the fiscal year ended December 31, 2024.

**Results of Operations**

***Three and Nine Months Ended September 30, 2025 and 2024***

***Overview***

During the three months ended September 30, 2025, our loss from operations totaled $7.4 million, including a $5.18 million non-cash impairment loss on other intangible assets, a 153% increase, compared to a loss from operations of $2.9 million for the three months ended September 30, 2024. During the nine months ended September 30, 2025, our loss from operations totaled $14.0 million, a 14% decrease, compared to a loss from operations of $16.4 million for the nine months ended September 30, 2024. Our total operating expenses are set forth by category in the table below:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
| | **September 30,** | **September 30,** | **September 30,** | **September 30,** | **September 30,** |
| <br>**($ in thousands)** | **2025** | **2024** | **$ Change** | **2025** | **2024** |
| Operating expenses: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Research and development | $249 | $143 | $106 | $1729 | $5736 |
| &nbsp;&nbsp;&nbsp;General and administrative | 1975 | 1709 | 266 | 7139 | 6616 |
| &nbsp;&nbsp;&nbsp;Impairment loss on other intangible assets | 5180 |  | 5180 | 5180 |  |
| &nbsp;&nbsp;&nbsp;Merger-related costs |  | 992 | (992) |  | 2290 |
| &nbsp;&nbsp;&nbsp;Restructuring and other costs |  | 83 | (83) |  | 1723 |
| Total operating expenses | $7404 | $2927 | $(4477) | $14048 | $16365 |
| Loss from operations | $(7404) | $(2927) | $(4477) | $(14048) | $(16365) |

---

 ****

***Research and development expenses***

Our research and development expenses are charged to operations as incurred and we incur both direct and indirect expenses for each of our programs. We track direct research and development expenses by pre-clinical and clinical programs, which may include third-party costs such as costs related to Contract Research Organizations ("CROs"), contract laboratories, consulting, and clinical trial costs. We do not allocate indirect research and development expenses, which may include product development and manufacturing, clinical, medical, regulatory, laboratory (equipment and supplies), personnel, facility and other overhead costs, to specific programs.

During the three months ended September 30, 2025, total research and development expenses increased by approximately $0.1 million, as compared to the three months ended September 30, 2024. During the nine months ended September 30, 2025, total research and development expenses decreased by approximately $4.0 million as compared to the nine months ended September 30, 2024. The reduction in research and development expenses is due to the decrease of costs associated with our legacy assets nomacopan and PHP-303 as we suspended the internal development of those programs while we prioritize our research and development activities on our ADC platform and pipeline. The following sets forth research and development expenses for the three and nine months ended September 30, 2025 and 2024 by category:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
| | **September 30,** | **September 30,** | **September 30,** | **September 30,** | **September 30,** |
| <br>**($ in thousands)** | **2025** | **2024** | **$ Change** | **2025** | **2024** |
| ADC pre-clinical development | $464 | $— | $464 | $626 | $— |
| HSCT-TMA clinical development (AK901) | (36) | 477 | (513) | 70 | 1560 |
| Chemistry, manufacturing and control | 21 | 459 | (438) | 69 | 3401 |
| Other external development expenses | 57 | 159 | (102) | 92 | 754 |
| Personnel costs | 261 | 330 | (69) | 1390 | 1303 |
| U.K Research and Development tax credits | (518) | (1282) | 764 | (518) | (1282) |
| &nbsp;&nbsp;&nbsp;Total research and development expenses | $249 | $143 | $106 | $1729 | $5736 |

---

*ADC discovery and pre-clinical development*

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

*HSCT-TMA clinical development (AK901)*

These expenses include external expenses that we have incurred in connection with the development of nomacopan for the treatment of pediatric HSCT-TMA and primarily consist of payments to CROs and other vendors. The decrease in HSCT-TMA clinical development expenses of $0.5 million and $1.5 million incurred during the three and nine months ended September 30, 2025, respectively, as compared to the three and nine months ended September 30, 2024, is primarily due to our decision to suspend the AK901 clinical program and find a collaborative partner for our nomacopan program.

*Chemistry, manufacturing and control ("CMC")*

CMC expenses historically included external expenses incurred related to the development and manufacturing of nomacopan for use in clinical trials and pre-clinical development of PAS-nomacopan. In general, such expenses primarily consist of payments to vendors for manufacturing of drug substance (including raw materials), drug product, supplies, validation, quality assurance and other manufacturing development activities. The decrease in expenses of $0.4 million and $3.3 million incurred during the three and nine months ended September 30, 2025, respectively, as compared to the three and nine months ended September 30, 2024, is primarily due to our decision to suspend our pre-clinical PAS-nomacopan program and instead seek an external partner for further development.

*Other external development expenses*

These expenses include external expenses, such as payments to contract vendors, that may be related to pre-clinical development activities, discontinued programs and unallocated expenses. The decrease in expenses of $0.1 million and $0.7 million incurred during the three and nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, is related to lower costs incurred mainly related to pre-clinical studies and other pre-clinical development work investigating PAS-nomacopan for the treatment of GA.

*Personnel costs*

These expenses include compensation and related costs associated with employees, independent consultants and staffing firms. Personnel costs decreased by less than $0.1 million during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. Personnel costs increased by less than $0.1 million during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. The increase is primarily due to increases in non-cash stock-based compensation expense, partially offset by lower cash-based salaries.

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

*U.K Research and Development Tax Credit*

We record receipts of U.K. tax credits in the year received as a reduction in research and development expenses. Changes in tax credits received are the result of eligible research and development expenses paid in the previous tax year, which can fluctuate depending on timing of and location in which expenses are incurred.

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

***General and administrative expenses***

During the three months ended September 30, 2025, total general and administrative costs increased by approximately $0.3 million as compared to the three months ended September 30, 2024, primarily due to an increase in non-cash stock-based compensation expense of $0.4 million, an increase of less than $0.1 million in professional fees mainly related to implementation of the ELOC Purchase Agreement with White Lion, and partially offset by a decrease of approximately $0.2 million in premiums for our directors and officers insurance.

During the nine months ended September 30, 2025, total general and administrative costs increased by approximately $0.5 million as compared to the nine months ended September 30, 2024, primarily due to an increase in non-cash stock-based compensation expense of $1.1 million, an increase of $0.3 million in professional fees (primarily driven from Merger related financial disclosures and implementation of the ELOC Purchase Agreement with White Lion), partially offset by a decrease of approximately $0.5 million in cash-based salaries, a decrease of approximately $0.4 million in premiums for our directors and officers insurance.

***Impairment loss***

 ****

During the three and nine months ended September 30, 2025, we recognized an impairment loss on the in-process R&D related to PHP 303 which was acquired in connection with the Merger. The impairment loss was triggered due to reprioritization of resources to our ADC platform, no further development plans and inability to find a collaborative partner to date.

***Merger-related costs***

Merger-related costs consist of direct expenses incurred in connection with the Merger and are comprised primarily of legal and professional fees.

Merger-related costs for the three and nine months ended September 30, 2024 were $1 million and $2.3 million, respectively. No such costs were incurred during three and nine months ended September 30, 2025.

***Restructuring and other costs***

Restructuring costs consist primarily of severance and related benefit costs related to workforce reductions incurred in connection with the reduction in force ("RIF"), which the Company began to implement in May 2024.

Restructuring and other costs for the three and nine months ended September 30, 2024 were less than $0.1 million and $1.7 million, respectively. No such costs were incurred during three and nine months ended September 30, 2025.

***Interest income***

During each of the three and nine months ended September 30, 2025 and 2024, interest income was less than $0.1 million. Amounts may fluctuate from period to period due to changes in average cash balances and prevailing interest rates.

***Interest expense***

Interest expense primarily consists of amortization of share issuance costs on the August 2025 Notes and interest expense on the May 2024 Notes, the financing of director and officer insurance premiums and the notes assumed in the Merger, which include the April 2023 Convertible Notes, the November 2023 Note, the September 2024 Note, the 2021 Notes and the January 2024 Note. Refer to Note 7 and Note 13 of our unaudited condensed consolidated financial statements included in this Form 10-Q (the "Quarterly Financial Statements").

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

***Gain on settlement of current liabilities***

During the three months ended September 30, 2025, we recognized a gain on settlement of current liabilities of $0.8 million with a vendor.

During the nine months ended September 30, 2025, we recognized a gain on settlement of current liabilities of $2.0 million which is comprised of a gain on settlement of $1.9 million with former vendors and a less than $0.1 million gain on debt extinguishment related to a promissory note issued by Peak Bio in November 2023 and assumed by the Company in November of 2024 in the amount of $0.4 million, bearing interest at 6% per annum with a maturity date of December 31, 2024.

No such gain was recognized during the three and nine months ended September 30, 2024.

***Loss on debt extinguishment***

During the three and nine months ended September 30, 2025, we recognized a loss on extinguishment of debt of $1 million, of which $0.4 million was in relation to the issuance of the August 2025 Note to third party investors, $0.5 million was related to the cancellation and exchange of Dr. Huh's January 2024 Note for his August 2025 Note and less than $0.1 million was related to the modification of the April 2023 Convertible Notes pursuant to the April 2023 Convertible Notes and Warrants Amendment (as defined and described in Note 7 to the Quarterly Financial Statements).

No such loss was recognized during the three and nine months ended September 30, 2024.

***Loss on derivative liability***

During the three and nine months ended September 30, 2025, we recognized expense of $0.1 million in relation to the embedded derivative in the White Lion ELOC.

No such loss was recognized during the three and nine months ended September 30, 2024.

***Change in fair value of warrant liabilities***

Change in fair value of warrant liabilities represents non-cash warrant revaluation gains or losses related to the remeasurement of our liability-classified instruments, namely our September 2022 Warrants and the warrants we assumed on November 14, 2024 in connection with our acquisition of Peak Bio (the "Peak Bio Warrants"), which are more fully described in Note 5 to the Quarterly Financial Statements. Due to the nature of and inputs in the model used to assess the fair value of our outstanding September 2022 Warrants and Peak Bio Warrants, it is not unusual to experience significant fluctuations during each remeasurement period. These fluctuations may be due to a variety of factors, including changes in our stock price and changes in estimated stock price volatility over the remaining life of the warrants.

During the three months ended September 30, 2025 and 2024, we recorded a change in the fair value of warrant liabilities, representing a non-cash revaluation gain of approximately $0.3 million and $0.1 million, respectively. Changes in the fair value of warrant liabilities and resulting warrant revaluation gain for the three months ended September 30, 2025 and 2024 were driven by the decrease in our stock price during the respective reporting period.

During the nine months ended September 30, 2025 and 2024, we recorded a change in the fair value of warrant liabilities, representing a non-cash revaluation gain of approximately $0.3 million and $0.5 million, respectively. Change in the fair value of warrant liabilities and resulting warrant revaluation gain for the nine months ended September 30, 2025 was driven by the decrease in our stock price during the reporting period, offset by an extinguishment of liability related to certain September 2022 Warrants and reclassification of certain Peak Warrants from warrant liability to equity following amendment of certain Peak Bio Warrants. Change in the fair value of warrant liabilities and resulting warrant revaluation gain for the nine months ended September 30, 2024 was driven primarily by the decrease in our stock price and the decrease in the expected term assumption during the reporting period.

***Foreign currency exchange gain (loss), net***

During each of the three months ended September 30, 2025 and 2024, we recorded a net foreign currency exchange gain of less than $0.1 million. During each of the nine months ended September 30, 2025 and 2024, we recorded a net foreign currency exchange loss of less than $0.1 million. Exchange gains and losses can fluctuate significantly from period to period due to changes in exchange rates, as well as the volume and timing of expenditures and related payments denominated in foreign currencies.

***Other expense, net***

Other expense was less than $0.1 million during the nine months ended September 30, 2024. During the three and nine months ended September 30, 2025 and the three months ended September 30, 2024, we incurred no such expense. Other expenses are not material to our results of operations.

***Net loss applicable to common shareholders***

As a result of the factors discussed above, our net loss applicable to common shareholders for the three months ended September 30, 2025 was $6.4 million, compared to net loss applicable to ordinary shareholders for the three months ended September 30, 2024 of $2.9 million. Our net loss applicable to common shareholders for the nine months ended September 30, 2025 was $12.0 million, compared to net loss applicable to ordinary shareholders for the nine months ended September 30, 2024 of $16.0 million.

**Financial Condition, Liquidity and Capital Resources**

***Sources of Liquidity***

Since inception, we have incurred substantial losses, and we have primarily funded our operations with proceeds from the sale of equity securities, including Ordinary Shares, warrants and pre-funded warrants, and convertible notes. At September 30, 2025, we had $2.5 million in cash and an accumulated deficit of $259.3 million. To date, we have not generated any revenue.

We have devoted substantially all of our efforts to research and development, including clinical trials, and we have not commercialized any products. Our research and development activities, together with our general and administrative expenses, are expected to continue to result in substantial operating losses for the foreseeable future. These losses, among other things, have had and will continue to have an adverse effect on our shareholders' equity, total assets and working capital. Due to the numerous risks and uncertainties associated with developing drug candidates and, if approved, commercial products, we are unable to predict the extent of any future losses, whether or when any of our drug candidates will become commercially available or when we will become profitable, if at all. Our future capital requirements will depend on many factors, including:

● the progress and costs of our drug discovery activities and pre-clinical studies, clinical trials and other research and development activities;

● the costs associated with the integration activities related to the Merger;

● the scope, prioritization and number of our clinical trials and other research and development programs;

● the amount of revenues and contributions we receive under future licensing, development and commercialization arrangements with respect to our product candidates;

● the costs of the development and expansion of our operational infrastructure;

● the costs and timing of obtaining regulatory approval for our product candidates;

● the costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights;

● the costs and timing of securing manufacturing arrangements for clinical or commercial production;

● the costs of contracting with third parties to provide sales and marketing capabilities for us;

● the magnitude of our general and administrative expenses; and

● any cost that we may incur under future in- and out-licensing arrangements relating to current or future product candidates.

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

*October 2025 Financing*

 ****

On October 16, 2025, the Company closed its 2025 Registered Direct Offering with certain institutional investors providing for the issuance and sale of 3,125,000 ADSs of the Company. The ADSs have been offered and sold together with Series E warrants to purchase up to an aggregate of 3,125,000 ADSs and Series F warrants to purchase up to an aggregate of 3,125,000 ADSs, which are being issued in a concurrent private placement. The combined purchase price per each ADS and accompanying Warrants sold in the 2025 Registered Direct Offering is $0.80. The aggregate gross proceeds from the 2025 Registered Direct Offering were $2.5 million, excluding any proceeds from any future exercises of Warrants.

The Series E Warrants have an exercise price of $0.98 per share, subject to customary adjustments as set forth therein, are exercisable commencing on the effective date (the "Shareholder Approval Date") of shareholder approval of the issuance of the ADSs issuable upon exercise of the Warrants (the "Shareholder Approval"), and will have a 5-year term from the Shareholder Approval Date. The Series F Warrants have an exercise price of $0.98 per share, subject to customary adjustments as set forth therein, are exercisable on the Shareholder Approval Date, and will have a thirty-month term from the Shareholder Approval Date. If at the time of exercise there is no effective registration statement registering the ADSs underlying the Warrants, the Warrants may be exercised on a cashless basis. The Company has agreed to file a registration statement registering for resale the ADSs issuable upon exercise of the Warrants and the Placement Agent Warrants (defined below) within 30 days of the Closing Date.

The Company entered into a placement agency agreement (the "Placement Agent Agreement") with Ladenburg Thalmann & Co. Inc. (the "Placement Agent"), pursuant to which the Company paid $262,500 in cash at closing of the 2025 Registered Direct Offering. The Placement Agent also received warrants (the "Placement Agent Warrants") on substantially the same terms as the Series E Warrants in an amount equal to 4.0% of the aggregate number of ADSs sold in the 2025 Registered Direct Offering to purchase up to 125,000 ADSs, at an exercise price of $1.00 per ADS and will have a 5-year term expiring October 14, 2030.

***White Lion Ordinary Share Purchase and Registration Rights Agreements***

On August 29, 2025, the Company entered into the ELOC Purchase Agreement and White Lion RRA with White Lion Capital. Pursuant to the ELOC Purchase Agreement, the Company had the right, but not the obligation, to require White Lion to purchase, from time to time, up to $25,000,000 in aggregate gross purchase price of newly issued Ordinary Shares, which may be exchanged for ADSs, subject to certain limitations and conditions set forth in the ELOC Purchase Agreement.

The Company does not have a right to commence any sales of Ordinary Shares to White Lion under the ELOC Purchase Agreement until all conditions to the Company's right to commence sales, as set forth in the ELOC Purchase Agreement, have been satisfied, including that a registration statement covering the resale of such shares is declared effective by the SEC and the final form of prospectus is filed with the SEC. Over the period ending on the earlier of (i) the date on which the Purchaser shall have purchased Ordinary Shares pursuant to the ELOC Purchase Agreement for an aggregate purchase price equal to the Commitment Amount or (ii) August 29, 2028 (the "Commitment Period"), subject to the conditions of the ELOC Purchase Agreement, the Company will control the timing and amount of any sales of Ordinary Shares to the Purchaser. Actual sales of Ordinary Shares to the Purchaser under the ELOC Purchase Agreement will 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 made by the Company as to appropriate levels and sources of funding.

The purchase price of the Ordinary Shares that the Company elects to sell to the Purchaser pursuant to the ELOC Purchase Agreement will be determined based on the type of Purchase Notice issued, as follows:

● Rapid Purchase Option 1: The lowest traded price of the ADSs on the notice date.

● Rapid Purchase Option 2: 97% of the lowest traded price of the ADSs during the two hours following the Purchaser's confirmed receipt of the notice.

● Rapid Purchase Option 3: The lowest of (i) the opening price of the ADSs on the notice date, (ii) the closing price of the ADSs on the prior business day, or (iii) the volume-weighted average price (VWAP) on the notice date, with a 20% discount if the trading price is below the opening price.

● VWAP Purchase: 97% of the lowest daily VWAP during a two-day valuation period for the first $12,500,000 of closings, and 98% thereafter.

In no event may the Company issue to the Purchaser under the ELOC Purchase Agreement more than 13,039,369,358 Ordinary Shares (the "Exchange Cap"), which equals 19.99% of the Company's outstanding Ordinary Shares as of the Execution Date, unless the Company obtains shareholder approval to issue shares in excess of the Exchange Cap or the average price paid for all Ordinary Shares issued under the agreement is equal to or greater than the Minimum Price (as defined in the ELOC Purchase Agreement). In any event, the ELOC Purchase Agreement provides that the Company may not issue or sell any Ordinary Shares if such issuance or sale would breach any applicable Nasdaq rules.

The ELOC Purchase Agreement prohibits the Company from directing the Purchaser to purchase any Ordinary Shares if those shares, when aggregated with all other Ordinary Shares then beneficially owned by the Purchaser (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended), would result in the Purchaser beneficially owning more than 4.99% of the outstanding Ordinary Shares (the "Beneficial Ownership Limitation"), which may be increased to 9.99% at the Purchaser's discretion upon 61 days' prior written notice.

As consideration for the Purchaser's execution of the ELOC Purchase Agreement, the Company will pay a document preparation fee of $15,000, to be deducted from the proceeds related to the first Purchase Notice, and cash commitment fees of $37,500 when aggregate Purchase Notices exceed $500,000 and $87,500 (or $125,000 if $1,000,000 is reached first) when aggregate Purchase Notices exceed $1,000,000. Additionally, if the Company fails to close at least $625,000 in purchases by the 180th day after the Registration Statement's effective date, the Company will issue ADSs, represented by Ordinary Shares, equivalent to $75,000 divided by the lowest traded ADS price during a 10-day period preceding that date (the "Commitment Shares").

Concurrently with the ELOC Purchase Agreement, the Company and the Purchaser entered into a Registration Rights Agreement, dated August 29, 2025 (the "Registration Rights Agreement"), pursuant to which the Company agreed to file a registration statement on Form S-1 (or any successor form) with the SEC within thirty (30) calendar days following August 29, 2025, to register the resale of the maximum number of Registrable Securities (including the Ordinary Shares, Commitment Shares, and ADSs representing such shares) permitted by applicable SEC rules. The Company shall use its commercially reasonable efforts to have the registration statement declared effective as soon as practicable and to maintain its effectiveness during the Registration Period, which continues until all Registrable Securities are sold, the ELOC Purchase Agreement terminates and no Registrable Securities are held, or the securities cease to be Registrable Securities under specified conditions.

As of September 30, 2025, the Company had no outstanding purchase notices issued to White Lion.

 ****

*August 2025 Financing*

 ****

In August 2025, we entered into Note Purchase Agreements with certain investors, including the Company's directors in a private placement offering pursuant to which the investors agreed to purchase, and the Company agreed to issue unsecured promissory notes with a 20% original issuance discount. In connection with the issuance and sale of the August 2025 Notes, the Company agreed to extend the expiration date of Series A Warrants held by certain August 2025 Note investors, previously issued in the March 2025 Private Placement, by 48 months from the original date of expiration.

We issued August 2025 Notes with an aggregate purchase price of $3,011,000 and an aggregate principal amount of $3,763,750, inclusive of the Note Termination (described below). The August 2025 Notes have maturity dates ranging from August 15, 2026, through September 26, 2026, at which time the principal amount is due and payable. The Company also entered into Warrant Amendment Agreements with the recipients of such August 2025 Notes, which extended the expiration date of the Series A Warrants to purchase an aggregate of 6,864,483 ADSs held by such investors from 2026 to 2030.

Included in the issued Notes with an aggregate purchase price of $3,011,000 and an aggregate principal amount of $3,763,750, as outlined above, Dr. Hoyoung Huh, the Company's Chairman, purchased a Note with a principal amount of $1,250,000 for a purchase price of $1,000,000, with the purchase price thereof to be satisfied through the payment of $162,567 in cash and the cancellation of $837,433 of outstanding principal and accrued interest under a senior secured promissory note previously issued to him by the Company's wholly owned subsidiary, Peak Bio Inc., in January 2024.

We paid a placement agent fee of $75,000 to Paulson in connection with the August 2025 Notes Offering.

 

***Funding Requirements***

As of the date of this report, our existing cash, together with funds from the October 2025 Financing, is sufficient to fund our operations into December 2025. While we have additional funding activities in progress to fund our operations, we will need to raise additional capital to continue to fund our operations and service our obligations in the future. If we are unable to raise additional capital when needed, we will not be able to continue as a going concern. We do not currently have any products approved for sale and do not generate any revenue from product sales. We are currently seeking and expect to continue to seek additional funding through financings of equity and/or debt securities. We may also engage in strategic research and development collaborations, pre-clinical and clinical funding arrangements, the sale or license of technology assets, and/or other strategic alternatives.

Financing may not be available to us when we need it, or on favorable or acceptable terms, or at all. We could be required to seek funds through means that may require us to relinquish rights to some of our technologies, drug candidates or drugs that we would otherwise pursue on our own. In addition, if we raise additional funds by issuing equity securities, our then existing shareholders may experience dilution. The terms of any financing may adversely affect the holdings or the rights of existing shareholders. An equity financing that involves existing shareholders may cause a concentration of ownership. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, and are likely to include rights that are senior to the holders of our Ordinary Shares. Any additional debt or equity financing may contain terms which are not favorable to us or to our shareholders, such as liquidation and other preferences, or liens or other restrictions on our assets. As discussed in Note 11 to the consolidated financial statements included in the 2024 Form 10-K, additional equity financings may also result in cumulative changes in ownership over a three-year period in excess of 50% which would limit the amount of net operating loss and tax credit carryforwards that we may utilize in any one year.

If we are unable to raise additional capital when required or on acceptable terms, we may be required to:

● significantly delay, scale back, or discontinue the development or commercialization of our product candidates;

● seek strategic alliances for research and development programs at an earlier stage than otherwise would be desirable or that we otherwise would have sought to develop independently, or on terms that are less favorable than might otherwise be available in the future;

● dispose of technology assets, including current product candidates, or relinquish or license on unfavorable terms, our rights to technologies or any of our product candidates that we otherwise would seek to develop or commercialize ourselves;

● pursue the sale of our company to a third party at a price that may result in a loss on investment for our shareholders; or

● file for bankruptcy or cease operations altogether.

Any of these events could have a material adverse effect on our business, operating results, and prospects.

We believe the key factors which will affect our ability to obtain funding are:

● the receptivity of the capital markets to financings by biotechnology companies generally and companies with drug candidates and technologies similar to ours specifically;

● the receptivity of the capital markets to any in-licensing, product acquisition or other transaction we may enter into or attempt to enter into;

● our ability to successfully integrate operations with Peak Bio following the Merger and realize anticipated benefits of the Merger;

● the results of our pre-clinical and clinical development activities in our drug candidates we develop on the timelines anticipated;

● competitive and potentially competitive products and technologies and investors' receptivity to our drug candidates we develop and the technology underlying them in light of competitive products and technologies; and

● the cost, timing, and outcome of regulatory reviews.

In addition, increases in expenses or delays in clinical development may adversely impact our cash position and require additional funds or cost reductions.

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

 

***Cash Flows***

The following table summarizes our sources and uses of cash for each of the periods presented (in thousands):

---

| | | |
|:---|:---|:---|
| | **Nine Months Ended** | **Nine Months Ended** |
| | **September 30,** | **September 30,** |
| <br>**(In thousands)** | **2025** | **2024** |
| Net cash (used in) provided by: |  |  |
| &nbsp;&nbsp;&nbsp;Net cash used in operating activities | $(7527) | $(10428) |
| &nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 7411 | 8834 |
| &nbsp;&nbsp;&nbsp;Effect of exchange rates on cash | 1 | (5) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net change in cash** | $(115) | $(1599) |

---

*Operating Activities.* The net cash used in operating activities for the periods presented consists primarily of our net loss adjusted for non-cash charges and changes in components of working capital. The decrease in cash used in operating activities during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, was primarily due to a decrease in research and development costs and restructuring costs related to the program reprioritization and a decrease in merger-related costs incurred in connection with the Peak Bio acquisition.

 

*Investment Activities.* There were no investing activities during the nine months ended September 30, 2025 and 2024.

*Financing Activities.* Net cash provided by financing activities primarily consisted of the following:

● For the nine months ended September 30, 2025, an aggregate of $5.9 million in net proceeds received from the March 2025 Private Placement, an aggregate of $2.1 million in net proceeds received from the August 2025 Notes, an aggregate of $0.3 million received in advance for pre-funded warrants issued in the March 2025 Private Placement, partially offset by $0.5 million of payments related to our promissory notes and $0.4 million of payments for our insurance premium financing; and

● For the nine months ended September 30, 2024, an aggregate of $8.7 million in net proceeds received from debt and equity financings, including (i) $1.7 million in net proceeds from the March 2024 Private Placement, (ii) $1.0 million in net proceeds from the issuance of the May 2024 Notes, and (iii) $7.0 million in net proceeds from the May 2024 Private Placement, partially offset by $0.9 million in payments related to our short-term insurance premium financing arrangement.

***Material Cash Requirements***

*Insurance Financing Obligations*

In January 2025, we entered into a short-term financing arrangement with a third-party vendor to finance insurance premiums. The aggregate amount financed under this agreement was $0.5 million which is scheduled to be paid in monthly installments through November 2025.

*Debt Obligations*

We have outstanding convertible notes and notes payable with third parties and related parties assumed from the acquisition of Peak Bio Inc. and through new financings as more fully described in Note 7 and Note 13, respectively, to our Quarterly Financial Statements. As of September 30, 2025, these obligations are expected to result in principal payments of approximately $4.6 million.

*Other*

We enter into a variety of agreements and financial commitments in the normal course of business. The terms generally provide us the option to cancel, reschedule and adjust our requirements based on our business needs, prior to the delivery of goods or performance of services. However, it is not possible to predict the amount of future payments under these agreements due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular agreement.

**Critical Accounting Estimates** 

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

We regard an accounting estimate or assumption underlying our financial statements as a "critical accounting estimate" if:

● the nature of the estimate or assumption is material due to the level of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change; and

● the impact of the estimates and assumptions on financial condition or operating performance is material.

There have been no material changes to our critical accounting policies and estimates since December 31, 2024. See "*Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Estimates"* of our Form 10-K, for a discussion of significant estimates and assumptions made by our management as part of the preparation of this management's discussion and analysis of financial condition and results of operations and accompanying condensed consolidated financial statements.

**Item 3. Quantitative and Qualitative Disclosures About Market Risk.**

We are a smaller reporting company, as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide the information required under this item.

**Item 4. Controls and Procedures.**

As previously disclosed under "Part II - Item 9A - Controls and Procedures" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (our "Form 10-K"), management concluded that our internal control over financial reporting was not effective at the reasonable assurance level as of December 31, 2024, due to certain deficiencies that constituted material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

We have not yet begun to engage in the implementation of remediation efforts to address the material weaknesses, as well as other identified areas of risk. For a complete description of management's remediation plan, see "Part II - Item 9A - Controls and Procedures" in our Form 10-K.

 ****

***Evaluation of Disclosure Controls and Procedures***

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) as of September 30, 2025. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applied its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, and previously identified material weaknesses in internal control over financial reporting, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective at a reasonable assurance level as of September 30, 2025.

***Management's Implementation of Remediation Plan***

Management, with oversight from the Audit Committee, has not yet commenced implementing changes to our internal control over financial reporting in order to remediate the control deficiencies that resulted in the material weaknesses as previously disclosed in our Form 10-K. We expect to begin our efforts during the third quarter and continue our efforts through fiscal year 2025 to remediate the material weaknesses described in our Form 10-K. We believe that the remediation steps disclosed under "Part II - Item 9A - Controls and Procedures" in our Form 10-K will allow us to address the deficient controls within our internal control environment, which will facilitate the remediation of the material weaknesses.

Remediation plans described in our Form 10-K are under development and are expected to be implemented during the final quarter of 2025. We will not be able to consider the material weaknesses remediated until the applicable remedial controls are designed and implemented and such controls operate for a sufficient period of time and our management has concluded, through testing, that our controls are operating effectively. Once implemented, we, along with our Audit Committee, will continue to monitor and evaluate the effectiveness of these remedial actions and take further actions as deemed appropriate.

***Changes in Internal Control over Financial Reporting***

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**PART II—OTHER INFORMATION**

**Item 1. Legal Proceedings.**

From time to time, we may become involved in litigation relating to claims arising out of operations in the normal course of business, which we consider routine and incidental to our business.

Refer to Note 14 of the Notes to our condensed consolidated financial statements related to commitments and contingencies, which is incorporated herein by reference.

**Item 1A. Risk Factors.**

Investing in our securities involves a high degree of risk. You should carefully consider the risks and uncertainties discussed within *"Item 1A. Risk Factors"* of our Form 10-K, together with all of the other information in this Form 10-Q, including the section "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our unaudited condensed consolidated financial statements and related notes, before deciding whether to purchase any of our ADSs.

There have been no material changes to the risk factors from those previously disclosed in our Form 10-K.

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.**

During the three and nine months ended September 30, 2025, we did not have any sales of unregistered securities, other than as previously disclosed by us in a Current Report on Form 8-K.

**Item 3. Defaults Upon Senior Securities.**

None.

**Item 4. Mine Safety Disclosures.**

None.

**Item 5. Other Information.**

None of our directors or "officers," as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, adopted, modified or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement," as defined in Item 408(c) of Regulation S-K, which are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c), during the fiscal quarter covered by this report.

**Item 6. Exhibits.**

---

| | |
|:---|:---|
| **Exhibit**<br> **Number** | **Description** |
| 2.1 | [Agreement and Plan of Merger, dated as of March 4, 2024, by and among Akari Therapeutics, Plc, Peak Bio, Inc. and Pegasus Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 to Registrant's Current Report on Form 8-K, as filed with the SEC on March 5, 2024).](https://www.sec.gov/Archives/edgar/data/1541157/000110465924030777/tm247836d1_ex2-1.htm) |
| 10.1 | [Form of 20% Original Issue Discount Promissory Note (incorporated by reference to Exhibit 10.3 to Registrant's Quarterly Report on Form 10-Q, as filed with the SEC on August 13, 2025).](https://www.sec.gov/Archives/edgar/data/1541157/000164117225023569/ex10-3.htm) |
| 10.2 | [Form of Amendment No. 1 to Series A Warrant (incorporated by reference to Exhibit 10.4 to Registrant's Quarterly Report on Form 10-Q, as filed with the SEC on August 13, 2025).](https://www.sec.gov/Archives/edgar/data/1541157/000164117225023569/ex10-4.htm) |
| 10.3 | [Loan Cancellation and Exchange Agreement, dated August 7, 2025, by and among Hoyoung Huh, Akari Therapeutics, Plc and Peak Bio Inc. (incorporated by reference to the Exhibit 10.1 to Registrant's Current Report on Form 8-K, as filed with the SEC on August 21, 2025).](https://www.sec.gov/Archives/edgar/data/1541157/000164117225025104/ex10-1.htm) |
| 10.4 | [Ordinary Share Purchase Agreement, dated August 29, 2025, by and between Akari Therapeutics, Plc and White Lion Capital, LLC (incorporated by reference to the Exhibit 10.1 to Registrant's Current Report on Form 8-K, as filed with the SEC on August 29, 2025).](https://www.sec.gov/Archives/edgar/data/1541157/000164117225026032/ex10-1.htm) |
| 10.5 | [Registration Rights Agreement, dated August 29, 2025, by and between Akari Therapeutics, Plc and White Lion Capital, LLC (incorporated by reference to the Exhibit 10.2 to Registrant's Current Report on Form 8-K, as filed with the SEC on August 29, 2025).](https://www.sec.gov/Archives/edgar/data/1541157/000164117225026032/ex10-2.htm) |
| 10.6 | [Letter Agreement, dated September 19, 2025, by and among Akari Therapeutics Plc and the Holders party thereto (incorporated by reference to the Exhibit 10.1 to Registrant's Current Report on Form 8-K, as filed with the SEC on September 25, 2025).](https://www.sec.gov/Archives/edgar/data/1541157/000149315225014962/ex10-1.htm) |
| 31.1\* | [Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ex31-1.htm) |
| 31.2\* | [Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ex31-2.htm) |
| 32.1\*\* | [Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ex32-1.htm) |
| 32.2\*\* | [Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ex32-2.htm) |
| 101.INS | Inline XBRL Instance Document–the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document. |
| 101.SCH | lnline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents. |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |

---

\* Filed herewith.

\*\* This certification is not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates it by reference.

† Indicates management contract or compensatory arrangement.

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized**.**

---

| | | |
|:---|:---|:---|
|  | **Akari Therapeutics, Plc.** | **Akari Therapeutics, Plc.** |
| Date: November 13, 2025 | By: | */s/ Abizer Gaslightwala* |
|  |  | **Abizer Gaslightwala** |
|  |  | ***President and Chief Executive Officer*** |
| Date: November 13, 2025 | By: | */s/ Kameel Farag* |
|  |  | **Kameel Farag** |
|  |  | ***Interim Chief Financial Officer*** |

---

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER UNDER** 

**SECTION 302 OF THE SARBANES-OXLEY ACT**

I, Abizer Gaslightwala, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I
 have reviewed this Quarterly Report on Form 10-Q of Akari Therapeutics, Plc;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or
 omit to state a material fact necessary to make the statements made, in light of the circumstances
 under which such statements were made, not misleading with respect to the period covered
 by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based
 on my knowledge, the financial statements, and other financial information included in this
 report, fairly present in all material respects the financial condition, results of operations
 and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The
 company's other certifying officer(s) and I are responsible for establishing and maintaining
 disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
 and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
 and 15d-15(f)) for the company and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others
 within those entities, particularly during the period in which this report is being prepared;

(b) Designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
 for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated
 the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the
 effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

(d) Disclosed
 in this report any change in the company's internal control over financial reporting that occurred during the company's
 most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the company's internal
 control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The
 company's other certifying officer(s) and I have disclosed, based on our most recent
 evaluation of internal control over financial reporting, to the company's auditors
 and the audit committee of the company's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information;
 and

(b) Any
 fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal
 control over financial reporting.

Date: November 13, 2025

---

| |
|:---|
| */s/ Abizer Gaslightwala* |
| Abizer Gaslightwala |
| *President and Chief Executive Officer* |
| *(Principal Executive Officer)* |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER UNDER** 

**SECTION 302 OF THE SARBANES-OXLEY ACT**

I, Kameel Farag, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I
 have reviewed this Quarterly Report on Form 10-Q of Akari Therapeutics, Plc;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or
 omit to state a material fact necessary to make the statements made, in light of the circumstances
 under which such statements were made, not misleading with respect to the period covered
 by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based
 on my knowledge, the financial statements, and other financial information included in this
 report, fairly present in all material respects the financial condition, results of operations
 and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The
 company's other certifying officer(s) and I are responsible for establishing and maintaining
 disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
 and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
 and 15d-15(f)) for the company and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under
 our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known
 to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
 under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
 statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions
 about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such
 evaluation; and

(d) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the
 company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the company's
 internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The
 company's other certifying officer(s) and I have disclosed, based on our most recent
 evaluation of internal control over financial reporting, to the company's auditors
 and the audit committee of the company's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
 which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information;
 and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's
 internal control over financial reporting.

Date: November 13, 2025

---

| |
|:---|
| */s/ Kameel Farag* |
| Kameel Farag |
| *Interim Chief Financial Officer* |
| *(Principal Financial Officer)* |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of Akari Therapeutics, Plc (the "Company") on Form 10-Q for the quarter ended September 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned officer of the Company certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to such officer's knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The
 Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange
 Act of 1934 (15 U.S.C. 78m or 78o(d)); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The
 information contained in the Report fairly presents, in all material respects, the financial
 condition and results of operations of the Company.

---

| |
|:---|
| Date: November 13, 2025 |
| */s/ Abizer Gaslightwala* |
| Abizer Gaslightwala |
| *President and Chief Executive Officer* |
| *(Principal Executive Officer)* |

---

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of Akari Therapeutics, Plc (the "Company") on Form 10-Q for the quarter ended September 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned officer of the Company certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to such officer's knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The
 Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange
 Act of 1934 (15 U.S.C. 78m or 78o(d)); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The
 information contained in the Report fairly presents, in all material respects, the financial
 condition and results of operations of the Company.

---

| |
|:---|
| Date: November 13, 2025 |
| */s/ Kameel Farag* |
| Kameel Farag |
| *Interim Chief Financial Officer* |
| *(Principal Financial Officer)* |

---