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 ADCs designed around novel payload biology. Our platform is anchored by PH1, a spliceosome modulating payload that in preclinical settings has demonstrated cytotoxic activity and robust activation of the immune system to attack cancer. Our business is focused on advancing our lead program, AKTX-101, through IND enabling activities and clinical readiness while maintaining the ability to expand the PH1 based ADC pipeline, as capital and priorities permit. We also have a second program, including AKTX-102, a CEACAM5 directed ADC program, that is earlier 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, Trop-2, CD19, CD22, CD30, Nectin-4, Tissue Factor, and FR 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; ● robust activation of the immune system to drive greater and more enduring efficacy in treating cancer sustained duration of response of tumor regression or elimination; ● ability to be used in combination with checkpoint inhibitors to potentially deliver synergistic efficacy results (more than additive) to drive potential longer-term cancer remissions; ● reduced tumor resistance leading to superior outcomes; and ● improved safety and tolerability relative to ADCs that are currently available. Our lead product candidate is AKTX-101, a preclinical stage Trop-2-targeting ADC that combines PH1 with a Trop-2 targeting antibody. Trop-2 is an antigen that is expressed in a number of highly incident solid tumors, including lung, breast, bladder, head and neck, gastric, pancreatic, colon, prostate, and others. We aim to establish AKTX-101 as a best-in-class Trop-2-targeting ADC for the treatment of a variety of solid tumors. Our activities since inception have consisted of performing research and development activities and raising capital. 18 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 AKTX-101 IND-Enabling Plan and Activities Our near-term operational strategy remains focused on advancing AKTX-101 into IND-enabling activities and clinical readiness while maintaining the ability to expand our PH1-based ADC pipeline as capital and priorities permit. AKTX-101 is a preclinical Trop2–targeting ADC that combines PH1 with a proprietary non-cleavable linker and antibody construct. We are prioritizing the program’s path to Phase 1 clinical trials through the coordinated execution of GMP product supply and non-clinical data package workstreams that support IND/Phase 1 enabling activities. We rely on third-party Contract Development and Manufacturing Organizations (“CDMOs”) for development, scale-up, and GMP production of materials used in our research and development activities. In December 2025, we announced the initiation of GMP manufacturing activities for AKTX-101 and selected WuXi Biologics/XDC as our partner for this GMP product supply and related IND-enabling work. This milestone supports our timeline for our Phase 1 first-in-human study described in our public communications while we maintain an efficient, high-quality, and reliable virtual manufacturing model for clinical-grade supply. In December 2025, we publicly described that based on our anticipated GMP product supply and IND-enabling activities and planning, we are projected to advance AKTX-101 into clinical trials by middle of 2027. Strategic Research Collaboration with Whitehawk Therapeutics On July 21, 2026, we announced a strategic research collaboration with Whitehawk Therapeutics, a clinical-stage oncology therapeutics company applying advanced technologies to established tumor biology to efficiently develop improved ADC cancer treatments. Under the collaboration, we will conduct a series of focused preclinical studies evaluating Akari’s proprietary PH1 spliceosome-modulating payload technology in combination with Whitehawk’s topoisomerase I inhibitor ADC platform. We will lead the design, execution and evaluation of the research activities. Publication American Association for Cancer Research (AACR) Cancer Research Journal In April 2026, we issued a press release announcing the presentation of positive preclinical data for our lead TROP2-targeting ADC, AKTX-101, at the American Association for Cancer Research (AACR) Annual Meeting 2026. The preclinical data compares the performance of AKTX-101 versus TROP2 ADCs with Topoisomerase I Inhibitor payloads in the killing of different cancer types driven by different cancer genes (oncogenes). AKTX-101’s ability to kill cancer cells at lower concentrations vs. TROP2 ADCs using Topoisomerase I Inhibitor payloads suggests in our view that AKTX-101 is a more potent drug. The preclinical data was published as an abstract in Cancer Research, an AACR journal. AKTX-101 demonstrated greater potency and/or greater maximum cancer cell killing relative to TROP2 ADC Topoisomerase I Inhibitor payloads in cancers of the bladder, lung and breast. AKTX-101 demonstrated sub-nanomolar potency in all bladder cancer lines tested, a key tumor in which first-in-human clinical trials for AKTX-101 are planned. AKTX-101 also demonstrated sub-nanomolar potency in several non-small cell lung cancer cell lines driven by EGFR, BRAF, and SMARCA4, as well as potent cell killing in HER2 breast cancer cell lines with inherent resistance to Topoisomerase I Inhibitor ADCs such as trastuzumab deruxtecan (ENHERTU™). We believe that these findings show that AKTX-101 has strong potential for targeting a broad range of cancer tumors and sub-types with superior cytotoxicity than current TROP2 ADCs that use Topoisomerase I Inhibitor payloads. Publication at the American Society of Clinical Oncology (ASCO) 2026 Annual Meeting On April 21, 2026, we issued a press release announcing breakthrough preclinical data demonstrating synergistic activity of AKTX-101 with KRAS inhibition in KRAS-mutated pancreatic cancer models, which was featured in an online publication at the American Society of Clinical Oncology (ASCO) Annual Meeting 2026. This provides continued validation of our novel RNA splicing modulator payload platform for ADCs, and its broad potential in treating a wide range of cancer tumors, including those with KRAS mutations, a rapidly expanding therapeutic category. We believe this data highlights a growing body of evidence demonstrating that targeting RNA splicing in cancer cells could be a powerful way to attack even the most difficult cancers. 19 Intellectual Property – Expanding Protection Around AKTX 101 We believe patents and other proprietary rights are an essential element of our business. Our success depends in part on our ability to obtain and maintain proprietary protection for our product candidates, technology, and know-how, to operate without infringing the proprietary rights of others, and to prevent others from infringing our proprietary rights. Our policy is to seek to protect our proprietary position by, among other methods, filing U.S. and foreign patent applications related to our proprietary technology, inventions, and improvements that are important to the development of our business, and defending our patent applications and patents if they are subjected to challenge by third parties. During the six months ended June 30, 2026, we received Australian patent protection covering the PH1 RNA splicing modulator ADC payload, and a European patent that provides composition of matter protection for our Thailanstatin-based payloads. May 2026 Financing We closed a private placement (“May 2026 Private Placement”) with certain investors in two tranches on May 27, 2026 and June 26, 2026 providing for the issuance and sale of an aggregate of 1,470,588 ADSs, (or prefunded warrants to purchase ADSs in lieu thereof), each representing 80,000 of the Company’s ordinary shares, and, accompanying each ADS (or prefunded warrant in lieu thereof), one Series H warrants to purchase one ADS, one Series I warrants to purchase one ADS and one Series J warrants to purchase one ADS. The purchase price per ADS and accompanying series warrants was equal to $3.74 and the purchase price per prefunded warrant and accompanying series warrants was equal to $3.739. For more information, please refer to “Financial Condition, Liquidity and Capital Resources – May 2026 Private Placement” below. Results of Operations Three and Six Months Ended June 30, 2026 and 2025 Overview During the three months ended June 30, 2026, our loss from operations totaled $4.6 million, as compared to a loss from operations of $3.1 million for the three months ended June 30, 2025, which was primarily driven by increase in research and development activities. During the six months ended June 30, 2026, our loss from operations totaled $20.4 million, as compared to a loss from operations of $6.6 million for the six months ended June 30, 2025, which was primarily due to a $12.1 million non-cash impairment on other intangible assets and goodwill. Our total operating expenses are set forth by category in the table below: Three Months Ended Six Months Ended June 30, June 30, Change (In thousands) 2026 2025 $ Change 2026 2025 $ Operating expenses: Research and development $ 2,077 $ 667 $ 1,410 $ 3,536 $ 1,480 $ 2,056 General and administrative 2,525 2,452 73 4,694 5,164 (470 ) Impairment loss on other intangible assets — — — 3,700 — 3,700 Impairment loss on goodwill — — — 8,430 — 8,430 Total operating expenses 4,602 3,119 1,483 20,360 6,644 13,716 Loss from operations (4,602 ) (3,119 ) (1,483 ) (20,360 ) (6,644 ) (13,716 ) Interest expense (80 ) (50 ) (30 ) (141 ) (105 ) (36 ) Gain on settlement of current liabilities — 1,190 (1,190 ) 167 1,244 (1,077 ) Change in fair value of warrant liabilities (99 ) 134 (233 ) (55 ) 80 (135 ) Foreign currency exchange gain (loss), net (26 ) (50 ) 24 38 (175 ) 213 Change in fair value of derivative liability — — — 230 — 230 Total other income (expense), net (205 ) 1,224 (1,429 ) 239 1,044 (805 ) Net loss before income taxes (4,807 ) (1,895 ) (2,912 ) (20,121 ) (5,600 ) (14,521 ) Benefit from deferred income taxes — — — 859 — 859 Net loss $ (4,807 ) $ (1,895 ) $ (2,912 ) $ (19,262 ) $ (5,600 ) $ (13,662 ) 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 preclinical program, which may include third-party costs such as CDMOs, contract laboratories, and consulting. 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. 20 During the three months ended June 30, 2026, total research and development expenses increased by approximately $1.4 million, as compared to the three months ended June 30, 2025. During the six months ended June 30, 2026, total research and development expenses increased by approximately $2.1 million, as compared to the six months ended June 30, 2025. The following sets forth research and development expenses for the three and six months ended June 30, 2026 and 2025 by category: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2026 2025 $ Change 2026 2025 $ Change ADC preclinical development $ 1,870 $ 145 $ 1,725 $ 3,107 $ 162 $ 2,945 Other external development expenses 43 1 42 60 189 (129 ) Personnel costs 164 521 (357 ) 369 1,129 (760 ) Total research and development expenses $ 2,077 $ 667 $ 1,410 $ 3,536 $ 1,480 $ 2,056 ADC preclinical 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 2025 we announced that based on our anticipated GMP product supply and IND-enabling activities and planning, we are projected to advance AKTX-101 into clinical trials by middle of 2027. Other external development expenses These expenses include external expenses to contract vendors that may be related to pre-clinical development activities, discontinued programs and unallocated expenses. The increase in expenses of less than $0.1 million incurred during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, was due to a recovery of expenses related to a trial for a nomacopan program. The decrease in expenses of $0.1 million incurred during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025 is primarily related to lower costs related to our HSCT-TMA, PAS-nomacopan, and PHP-303 programs. In December 2024, we announced our decision to suspend these programs and find a collaborative partner. Personnel costs These expenses include compensation and related costs associated with employees. The decrease in expenses of $0.4 million and $0.8 million, incurred during the three and six months ended June 30, 2026, as compared to the three and six months ended March 31, 2025, respectively, is primarily due to decreases in non-cash stock-based compensation expense and lower cash-based salaries. The extent of our future research and development expenditures will be determined based on future funding. 21 General and administrative expenses During the three months ended June 30, 2026, total general and administrative costs increased by less than $0.1 million as compared to the three months ended June 30, 2025, primarily due to an increase in non-cash stock-based compensation expense. During the six months ended June 30, 2026, total general and administrative costs decreased by approximately $0.5 million as compared to the six months ended June 30, 2025, primarily due to a decrease in non-cash stock-based compensation expense of $0.4 million and a decrease in personnel and professional fees of $0.1 million. Impairment loss During the six months ended June 30, 2026, we recognized non-cash impairment losses on goodwill, and in process research and development (“IPR&D”) assets recorded in connection with our December 2024 merger with Peak Bio, Inc. The impairment assessment was triggered by the sustained decline in the Company’s market capitalization as of March 31, 2026, which required a reassessment of the carrying value of these assets. As part of this assessment, goodwill was impaired based on the determination that the estimated fair value of the Company’s reporting unit was lower than its carrying value. In addition, management reassessed the valuation assumptions underlying the AKTX 101 IPR&D asset, including expected development timelines, probability weighted cash flows, and discount rates, to reflect current market conditions, capital availability considerations, and the heightened uncertainty inherent in advancing the program under these conditions. The resulting IPR&D impairment reflects the application of a risk adjusted valuation approach consistent with the available market evidence and the requirements of U.S. GAAP. No such impairment loss was recognized in the three months ended June 30, 2026 or the three and six months ended June 30, 2025. Interest expense Interest expense primarily consists of amortization of debt issuance costs on the financing of director and officer insurance premiums and the April 2023 Convertible Notes. Refer to Note 6 and Note 12 of our unaudited condensed consolidated financial statements included in this Form 10-Q. 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 six months ended June 30, 2026, we recognized a gain on settlement of current liabilities of approximately $0.2 million which relates to settlements with former vendors for outstanding payables. During the three and six months ended June 30, 2025, we recognized a gain on settlement of current liabilities of $1.2 million with a former vendor for outstanding payables. No settlements were recognized in the three months ended June 30, 2026. 22 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 re-measurement of our liability-classified instruments, namely our September 2022 Warrants and the warrants we assumed on November 14, 2024, in connection with the Merger Closing (the “Peak Bio Warrants”). 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 re-measurement 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 and six months ended June 30, 2026, we recorded a change in the fair value of warrant liabilities, representing a non-cash revaluation loss of $0.1 million each, which was primarily driven by an increase in our stock price and estimated stock price volatility. During the three and six months ended June 30, 2025, we recorded a change in the fair value of warrant liabilities, representing a non-cash revaluation gain of $0.1 million each, which was driven by a decrease in our stock price. Change in fair value of derivative liability During the six months ended June 30, 2026, we recognized a non-cash revaluation gain of $0.2 million in relation to the embedded derivative in the White Lion ELOC, which was primarily attributable to the effect of the ADS Ratio Change. No such loss was recognized during the three months ended June 30, 2026 and the three and six months ended June 30, 2025. Foreign currency exchange gain, net During the three months ended June 30, 2026 and 2025, we recorded a net foreign currency exchange loss of less than $0.1 million each. During the six months ended June 30, 2026 and 2025, we recorded a net foreign currency exchange gain of less than $0.1 million each and a foreign currency exchange loss of approximately $0.2 million, respectively. 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. Benefit from deferred income taxes During the six months ended June 30, 2026, we recognized a deferred income tax recovery of $0.8 million, in connection with the impairment loss on other intangible assets described above. No such recovery was recognized during the three months ended June 30, 2026 and the three and six months ended June 30, 2025. 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 June 30, 2026 was $4.8 million, compared to net loss applicable to ordinary shareholders for the three months ended June 30, 2025 of $1.9 million. Our net loss applicable to common shareholders for the six months ended June 30, 2026 was $19.3 million, compared to net loss applicable to ordinary shareholders for the six months ended June 30, 2025 of $5.6 million. 23 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. On June 30, 2026, we had $7.7 million in cash and an accumulated deficit of $283.8 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 preclinical studies, clinical trials and other research and development activities; ● 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. 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. 24 May 2026 Financing In May 2026, the Company entered into a securities purchase agreement with certain investors pursuant to which the Company sold and issued in a private placement (the “May 2026 Private Placement”) an aggregate of 1,470,588 unregistered American Depository Shares (“ADSs”), or prefunded warrants to purchase ADSs (“Pre-Funded Warrants”), each ADS representing 80,000 of the Company’s ordinary shares per ADS, together with one Series H warrants, one Series I warrants and one Series J warrants to purchase an equivalent number of ADSs (the Series H, Series I, and Series J warrants collectively referred to as the “Series Warrants”). The purchase price per ADS and accompanying Series Warrants was equal to $3.74 and the purchase price per Pre-Funded Warrant and accompanying Series Warrants was equal to $3.739. The Series H Warrants, Series I Warrants, and Series J Warrants were issued on June 30, 2026, following requisite shareholder approval and are exercisable at a price of $3.74 per ADS. The Series H Warrants have an eighteen-month term, and the Series I and J warrants have a five-year term. The Pre-Funded Warrants have an exercise price of $0.001 per ADS, became exercisable immediately when issued and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. At close of the May 2026 Private Placement, the Company incurred a total of approximately $0.1 million in placement agent fees with Paulson Investment Company, LLC (“Paulson”) and were required to issue 117,647 ADSs. Net proceeds from the May 2026 Private Placement were approximately $5.2 million. 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”). 25 Concurrently with the ELOC Purchase Agreement, the Company and the Purchaser entered into the White Lion RRA, pursuant to which the Company agreed to file the ELOC Resale Registration Statement. The Company filed the ELOC Resale Registration Statement on August 29, 2025, which was subsequently amended on June 26, 2026, and was declared effective by the SEC on July 7, 2026. As of June 30, 2026, the Company had no outstanding purchase notices issued to White Lion. Funding Requirements As of the date of this report, our existing cash is sufficient to fund our operations into December 2026. 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. 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. 26 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; ● the results of our preclinical 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 condensed consolidated financial statements, included in this Form 10-Q (such condensed consolidated financial statements, the “consolidated 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): Six Months Ended June 30, (In thousands) 2026 2025 Net cash (used in) provided by: Net cash used in operating activities $ (5,597 ) $ (5,406 ) Net cash provided by financing activities 8,088 5,514 Effect of exchange rates on cash — 4 Net change in cash $ 2,491 $ 112 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 increase in cash used in operating activities during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, was primarily due to an increase in research and development costs. Investment Activities. There were no investing activities during the six months ended June 30, 2026 and 2025. Financing Activities. Net cash provided by financing activities primarily consisted of the following: ● For the six months ended June 30, 2026, an aggregate of $0.2 million in net proceeds received from the second closing of the December 2025 financing, $5.2 million in net proceeds received from the May 2026 Private Placement, and $3.0 million in net proceeds from warrant exercises partially offset by $0.3 million of payments for our insurance premium financing and repayments of notes payable; and ● For the six months ended June 30, 2025, an aggregate of $5.9 million in net proceeds received from the March 2025 Private Placement, 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 $0.3 million of payments for our insurance premium financing. 27 Material Cash Requirements Insurance Financing Obligations In January 2026, 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 October 2026. Debt Obligations We have outstanding convertible notes and promissory notes with third parties, assumed from the acquisition of Peak Bio Inc., as more fully described in Note 6 to our unaudited condensed consolidated financial statements appearing in this Form 10-Q. As of June 30, 2026, these obligations are expected to result in principal payments of approximately $0.7 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) fair value of warrants classified as liabilities and (ii) impairment assessment of goodwill and other intangible assets. 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. 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. There have been no material changes to our critical accounting estimates since December 31, 2025, except the estimates related to other intangible assets and goodwill as of June 30, 2026. Refer to Note 3 of our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further details of our impairment assessment of goodwill and other intangibles assets during the quarter ending March 31, 2026. Item