Business Context and Reporting Period
This Form 6-K filing by Akari Therapeutics Plc, dated July 2, 2019, reports on a definitive agreement entered into on June 28, 2019, for a registered direct offering of American Depositary Shares (ADSs). The offering is expected to close on or about July 3, 2019, subject to customary closing conditions.
Key Financial Metrics
- Gross Proceeds: Approximately $4.5 million from the issuance of 2,368,392 ADSs at $1.90 per ADS.
- Warrant Issuance: Investors received unregistered warrants to purchase 1,184,213 ADSs (50% of the offering size) at an exercise price of $3.00 per ADS, expiring five years from issuance.
- Placement Agent Fees: A cash fee of 7.5% of the aggregate purchase price, expense reimbursement up to $50,000, a non-accountable expense allowance of $10,000, and compensation warrants equal to 7.5% of the ADSs sold (exercise price $2.85).
- Net Proceeds: The filing text does not provide a clear value for net proceeds after deducting fees and expenses.
- Revenue, Profit, Cash Flow, Margins, Debt, Liquidity: The filing text does not provide a clear value for these operational financial metrics.
Material Changes
The primary material change is the capital raise via the registered direct offering. The filing does not provide comparative financial data against a prior period to quantify changes in revenue, profit, or cash flow.
Outlook, Risks, and Contingencies
- Offering Contingencies: Closing is subject to satisfaction of customary conditions; failure to meet these may prevent the offering from closing.
- Warrant Call Provision: The Company has the option to "call" the exercise of warrants after any 10-consecutive trading day period where the daily volume weighted average price of ADSs exceeds $4.50.
- Registration Obligations: The Company must file a registration statement for the resale of shares underlying the warrants by August 1, 2019.
- Key Risks:
- Need for additional capital to fund operations and ability to continue as a going concern.
- Uncertainties regarding regulatory approvals for product candidate nomacopan.
- Risks associated with the SEC investigation.
- Departure of former Chief Executive Officers.
- Challenges in clinical trial enrollment and commercial manufacturing.
Investor Verification Checklist
- Confirm the actual closing date of the offering and the final net proceeds received.
- Verify the status of the SEC registration statement for warrant shares (due by August 1, 2019).
- Monitor the Company's cash runway and any announcements regarding additional capital needs.
- Review updates on the ongoing SEC investigation and its potential impact on operations.
- Track clinical trial progress and regulatory milestones for nomacopan.