Akari Therapeutics Announces Existing Investors Support the Company Through a $2 Million Private Placement Financing

Rhea-AI Summary

Akari Therapeutics, Plc (Nasdaq: AKTX) closed a private placement financing with existing investors, resulting in gross proceeds of approximately $2 million. The company issued 947,868 unregistered American Depository Shares at a purchase price of $2.11 per ADS. Paulson Investment Company, LLC acted as the exclusive placement agent for this financing.

Insights

Financial Analyst

The private placement financing completed by Akari Therapeutics is a strategic move to bolster the company's capital, indicative of insider confidence given the participation of the Akari Chairman and a Director. With gross proceeds of $2 million, the immediate liquidity infusion can support ongoing research and operational expenses. However, the issuance of American Depository Shares (ADSs) at $2.11 each represents a non-dilutive financing option that can affect the stock's liquidity and future price.

Investors should note that the private nature of this transaction limits immediate public trading of these shares. The reliance on Section 4(a)(2) and Regulation D for this placement suggests a targeted approach to fundraising, avoiding the broader market and potentially signaling a strategic alignment with the investors involved. This could imply a vote of confidence or an initiative to retain greater control among existing stakeholders.

Long-term implications include the potential for these unregistered ADSs to be registered in the future, possibly leading to increased market liquidity and dilution of existing shares. The impact on the company's stock will depend on the success of their clinical pipeline and the effective use of the raised capital.

Legal Expert

The legal framework surrounding the private placement of ADSs by Akari Therapeutics is significant for compliance with securities regulations. The transaction’s reliance on Section 4(a)(2) of the Securities Act of 1933 and Regulation D exempts it from the registration requirements, which streamlines the process for the company but restricts the securities' transferability.

This exemption is typically utilized for transactions with a limited number of accredited investors, which can be advantageous for the company by reducing the costs and time associated with public offerings. However, the lack of registration also means that the securities cannot be sold in the United States without either registration or an applicable exemption, which could limit their marketability and affect their liquidity.

It is essential for stakeholders to understand that this press release does not serve as an offer to sell or a solicitation of an offer to buy the securities, which underscores the regulatory compliance and the importance of adhering to securities laws that govern private placements.

Market Research Analyst

The biotechnology sector is highly competitive and capital-intensive, with a significant emphasis on the ability to continue funding research and development. Akari Therapeutics' private placement is a reflection of the ongoing need for capital in the sector to drive product development, particularly for late-stage companies approaching commercialization.

By examining industry trends, it's evident that biotech firms frequently resort to capital raising through various means, including private placements, to maintain their developmental momentum. The involvement of company insiders in this financing round could be perceived as a positive signal to the market, suggesting an alignment of interests between management and shareholders.

The decision to opt for a private placement rather than a public offering could also be indicative of market conditions and investor sentiment. In times of market volatility or when a company's valuation is perceived to be lower than its potential, private placements with insiders can provide necessary funds without the pressure of market scrutiny.

BOSTON and LONDON, Jan. 02, 2024 (GLOBE NEWSWIRE) -- Akari Therapeutics, Plc (Nasdaq: AKTX), a late-stage biotechnology company developing advanced therapies for autoimmune and inflammatory diseases, today announced that it closed a private placement financing with existing investors, Akari Chairman Dr. Ray Prudo and Director Samir R. Patel, M.D., on December 29, 2023, resulting in gross proceeds of approximately $2 million.

In connection with the financing, Akari issued 947,868 unregistered American Depository Shares (“ADSs”), each representing 2,000 of the company’s ordinary shares, at a purchase price of $2.11 per ADS.

Paulson Investment Company, LLC acted as the exclusive placement agent for this financing.

The ADSs described above were offered and sold in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Act”) and Regulation D promulgated thereunder and have not been registered under the Act or state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from such registration requirements.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein. There shall not be any offer, solicitation of an offer to buy, or sale of securities in any state or jurisdiction in which such an offering, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Akari Therapeutics
Akari Therapeutics, plc (Nasdaq: AKTX) is a biotechnology company developing advanced therapies for autoimmune and inflammatory diseases. Akari’s lead asset, investigational nomacopan, is a bispecific recombinant inhibitor of complement C5 activation and leukotriene B4 (LTB4) activity. Akari’s pipeline includes a Phase 3 clinical trial program investigating nomacopan for severe pediatric hematopoietic stem cell transplant-related thrombotic microangiopathy (HSCT-TMA). Akari has been granted Orphan Drug, Fast Track and Rare Pediatric Disease designations from the FDA for nomacopan for the treatment of pediatric HSCT-TMA and orphan drug designation from the European Commission for treatment in hematopoietic stem cell transplantation. Akari’s pipeline also includes a clinical program developing nomacopan for adult HSCT-TMA and pre-clinical research of long-acting PAS-nomacopan in geographic atrophy (GA). For more information about Akari, please visit akaritx.com.

Cautionary Note Regarding Forward-Looking Statements
Certain statements in this press release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies, and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies, and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations, or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control. Such risks and uncertainties for our company include, but are not limited to: needs for additional capital to fund our operations, our ability to continue as a going concern; uncertainties of cash flows and inability to meet working capital needs; an inability or delay in obtaining required regulatory approvals for nomacopan and any other product candidates, which may result in unexpected cost expenditures; our ability to obtain orphan drug designation in additional indications; risks inherent in drug development in general; uncertainties in obtaining successful clinical results for nomacopan and any other product candidates and unexpected costs that may result there; difficulties enrolling patients in our clinical trials; failure to realize any value of nomacopan and any other product candidates developed and being developed in light of inherent risks and difficulties involved in successfully bringing product candidates to market; inability to develop new product candidates and support existing product candidates; the approval by the FDA and EMA and any other similar foreign regulatory authorities of other competing or superior products brought to market; risks resulting from unforeseen side effects; risk that the market for nomacopan may not be as large as expected risks associated with the impact of the COVID-19 pandemic; inability to obtain, maintain and enforce patents and other intellectual property rights or the unexpected costs associated with such enforcement or litigation; inability to obtain and maintain commercial manufacturing arrangements with third party manufacturers or establish commercial scale manufacturing capabilities; the inability to timely source adequate supply of our active pharmaceutical ingredients from third party manufacturers on whom the company depends; unexpected cost increases and pricing pressures and risks and other risk factors detailed in our public filings with the U.S. Securities and Exchange Commission, including our most recently filed Annual Report on Form 20-F filed with the SEC. Except as otherwise noted, these forward-looking statements speak only as of the date of this press release and we undertake no obligation to update or revise any of these statements to reflect events or circumstances occurring after this press release. We caution investors not to place considerable reliance on the forward-looking statements contained in this press release.

For more information

Investor Contact:
Mike Moyer
LifeSci Advisors
(617) 308-4306
mmoyer@lifesciadvisors.com

Media Contact:
Eliza Schleifstein
Schleifstein PR 
(917) 763-8106
eliza@schleifsteinpr.com

FAQ

What did Akari Therapeutics, Plc (AKTX) announce recently?

The company announced the closing of a private placement financing with existing investors, resulting in gross proceeds of approximately $2 million.

How many unregistered American Depository Shares did Akari issue?

Akari issued 947,868 unregistered American Depository Shares.

At what purchase price were the ADSs issued?

The ADSs were issued at a purchase price of $2.11 per ADS.

Who acted as the exclusive placement agent for the financing?

Paulson Investment Company, LLC acted as the exclusive placement agent for this financing.

Under which regulation were the ADSs offered and sold?

The ADSs were offered and sold in a private placement under Section 4(a)(2) of the Securities Act of 1933 and Regulation D.

Have the ADSs been registered under the Securities Act of 1933?

The ADSs have not been registered under the Act and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption.