Akari Therapeutics : Securities Purchase Agreement (Form 6-K)

CONTENTS

On July 7, 2021, Akari Therapeutics, Plc (the 'Company') entered into a securities purchase agreement (the 'Purchase Agreement') with certain accredited and institutional investors, led by existing investors of the Company, including Dr. Ray Prudo, the Company's Chairman, providing for the issuance of an aggregate of 7,947,540 American Depositary Shares (the 'ADSs') in a private placement at $1.55 per ADS for aggregate gross proceeds of approximately $12 million. The offering initially closed on July 14, 2021 and a second closing was held on July 15, 2021. The Company anticipates closing on a remaining $0.6 million during the next few days. Following the closing of the offering, and after accounting for the shares to be issued during the next few days, the Company will have 47,597,330 ADSs equivalent to 4,759,733,023 ordinary shares outstanding.

Under the Purchase Agreement, the Company agreed to file, as soon as reasonably practicable, but in no event later than August 13, 2021, a registration statement with the Securities and Exchange Commission (the 'SEC'), registering the resale of the ADSs and to use commercially reasonable efforts to cause such registration statement to be declared following the closing date and to keep such registration statement effective at all times until the earlier of: (a) the ADSs are sold under such registration statement or pursuant to Rule 144 or other exemption under the Securities Act of 1933, as amended (the 'Securities Act'), and (b) the ADSs may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 under the Securities Act.

The Purchase Agreement also contains representations, warranties, indemnification and other provisions customary for transactions of this nature.

The Company also entered into a letter agreement (the 'Placement Agent Agreement') with Paulson Investment Company, LLC (the 'Placement Agent'), pursuant to which the Placement Agent agreed to serve as the placement agent for the Company in connection with the offering. Under the Placement Agent Agreement, the Company paid the Placement Agent a total cash placement fee of approximately $933,000; an expense reimbursement not to exceed $50,000 and a non-accountable expense allowance of $10,000. The Placement Agent also received 398,384 of compensation warrants, which are immediately exercisable and will expire five years from issuance at an exercise price of $2.32 per ADS, subject to adjustment as set forth therein. The warrants may be exercised on a cashless basis if six months after issuance there is no effective registration registering the ADSs underlying the warrants. Subject to certain conditions, the Company has the option to 'call' the exercise of the warrants from time to time after any 10 consecutive trading day period during which the daily volume weighted average price of the ADSs exceeds $3.00.

The ADSs are being offered and sold pursuant to an exemption from the registration requirements under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. Each investor has represented that they are an accredited investor, as that term is defined in Regulation D, or a qualified institutional buyer as defined in Rule 144(A)(a), and has acquired the ADSs as principal for their own account and have no arrangements or understandings for any distribution thereof. The offer and sale of the foregoing securities is being made without any form of general solicitation or advertising. The ADSs have not been registered under the Securities Act or applicable state securities laws. Accordingly, the ADSs may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws.

This Report shall not constitute an offer to sell or the solicitation to buy nor shall there be any sale of the ADSs in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

The foregoing summaries of the terms of the Purchase Agreement and warrants are subject to, and qualified in their entirety by such documents attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated herein by reference. The Purchase Agreement contains representations and warranties that the parties made to, and solely for the benefit of, the others, except as expressly set forth in the Purchase Agreement, in the context of all of the terms and conditions of that agreement and in the context of the specific relationship between the parties.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this Report constitute 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995, regarding, among other things, statements related to the offering of securities described herein, the expected gross proceeds, and the expected closing of the offering. You should not place undue reliance upon the Company's forward looking statements. Except as required by law, the Company undertakes no obligation to revise or update any forward looking statements in order to reflect any event or circumstance that may arise after the date of this Report. 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 therefrom; difficulties enrolling patients in our clinical trials; our ability to enter into collaborative, licensing, and other commercial relationships and on terms commercially reasonable to us; 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 U.S. Food and Drug Administration (FDA) and European Medicines Agency (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 Securities and Exchange Commission (SEC), 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 Report and we undertake no obligation to update or revise any of these statements to reflect events or circumstances occurring after this Report. We caution investors not to place considerable reliance on the forward-looking statements contained in this Report.

The information contained in this Report is hereby incorporated by reference into all effective registration statements filed by the Company under the Securities Act.

Exhibit No.

10.1		Form of Securities Purchase Agreement
10.2		Form of Warrant issued by Akari Therapeutics, Plc