UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934



 
Filed by the Registrant x
Filed by a Party other than the Registrant o

Check the appropriate box:

x Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material under §240.14a-12

CELSUS THERAPEUTICS PLC

(Exact name of Registrant as specified in its charter)

Payment of Filing Fee (Check the appropriate box):

o No fee required.
x Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
Ordinary Shares, par value £0.01 (Ordinary Shares), represented by American Depositary Shares (ADSs), each representing ten (10) Ordinary Shares, of Celsus Therapeutics Plc, or Celsus.

2. Aggregate number of securities to which transaction applies:
849,949,588 Ordinary Shares of Celsus to be issued pursuant to that Share Exchange Agreement, or Acquisition Agreement, dated as of July 10, 2015, by and among Celsus and RPC Pharma Limited, assuming the exchange ratio determined based on information as to equity ownership as of July 13, 2015 and other assumptions discussed in this proxy statement and Celsus’s equityholders owning 8.32% of the combined company and Volution’s equityholders owning 91.68% of the combined company on a fully diluted basis.

3. Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
Calculated solely for the purpose of determining the filing fee. The maximum aggregate value was determined based upon the product of (i) 849,949,588 Ordinary Shares of Celsus and (ii) $.059 (value of one-tenth of one ADS of Celsus, based on the average of high and low prices of Celsus’s ADSs as reported on the NASDAQ Capital Market on July 13, 2015). In accordance with Section 14(g) of the Securities Exchange Act of 1934, as amended, the filing fee was determined by multiplying the amount calculated in the preceding sentence by 0.0001162.

4. Proposed maximum aggregate value of transaction:
$50,198,023

5. Total fee paid:
$5,833.01

o Fee paid previously with preliminary materials.
o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:

2. Form, Schedule or Registration Statement No.:

3. Filing Party:

4. Date Filed:


 
 

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To the Shareholders of Celsus Therapeutics Plc:

You are cordially invited to attend the general meeting of the shareholders of Celsus Therapeutics Plc, organized under the laws of England and Wales, which we refer to as “we”, “Celsus”, or the “Company”, which will be held at [•], local time, on [•], [•], 2015, at [•], unless postponed or adjourned to a later date. This is an important meeting that affects your investment in Celsus.

On July 10, 2015, Celsus and RPC Pharma Limited (“RPC”) entered into a Share Exchange Agreement (the “Acquisition Agreement”) pursuant to which Celsus will purchase all of the capital stock of Volution Immuno Pharmaceuticals SA (“Volution”) from RPC, Volution’s sole shareholder, in exchange for ordinary shares of Celsus (the “Acquisition”). Immediately following the effective time of the Acquisition, we anticipate that the securityholders of Celsus as of immediately prior to the effective time of the Acquisition will own 8.32% of the combined company and RPC will own 91.68% of the combined company on a fully diluted basis. The Acquisition has been approved by the boards of directors of both Celsus and RPC and is expected to close in [•], subject to certain approvals of the shareholders of each company as well as other customary conditions.

At the effective time of the Acquisition, the officers of Celsus will include Gur Roshwalb, M.D., Chief Executive Officer, Dov Elefant, Chief Financial Officer, Clive Richardson, Chief Operating Officer, and the key employees will include Miles Nunn, D.Phil., Chief Scientific Officer, and Wynne Weston Davies, M.D., UK Medical Director. At the effective time of the Acquisition, the combined company is expected to initially have a seven member board of directors, comprised of Ray Prudo, M.D. as Executive Chairman, Clive Richardson, Mark Cohen as Vice Chairman, Gur Roshwalb, M.D., David Sidransky, M.D., Allan Shaw and Johnson Yiu Nam Lau, M.D. Following the Acquisition, the headquarters of Celsus will be located at 24 West 40th Street, 8th Floor, New York, NY 10018.

Celsus’s ADSs are currently listed on The NASDAQ Capital Market under the symbol “CLTX”. Prior to consummation of the Acquisition, Celsus intends to file an initial listing application with The NASDAQ Capital Market pursuant to NASDAQ “change of control” rules. After completion of the Acquisition, Celsus will be renamed “Akari Therapeutics, Plc” and expects to trade on The NASDAQ Capital Market under the symbol “[•]”.

Celsus is holding the general meeting of shareholders in order to obtain the shareholder approvals necessary to complete the Acquisition and related matters (the “General Meeting”). At the General Meeting, Celsus will ask its shareholders to (1) approve the issuance of ordinary shares, par value £0.01 (“Ordinary Shares”) of Celsus to RPC pursuant to the Acquisition Agreement, (2) to change the Company’s name to “Akari Therapeutics, Plc” (3) elect Ray Prudo as a director of the Company, as a Class C Director as stated in Article 19.2.3 of the Articles of Association of the Company, to serve for a three year term commencing upon the completion of the Acquisition, (4) elect Clive Richardson as a director of the Company, as a Class B Director as stated in Article 19.2.2 of the Articles of Association of the Company, to serve for a two year term commencing upon the completion of the Acquisition, (5) approve a proposed amendment to the Company’s 2014 Equity Incentive Plan to increase the number of shares available for the grant of awards by 135,277,420 shares provided that the Acquisition is completed and (6) to set the cap on aggregate director fees (excluding executive Director remuneration) in article 27.1 of the Celsus’ Articles of Association at US$500,000 per annum, such sum to be automatically increased at the end of each fiscal year of Celsus by the same percentage increase as the increase in the U.S. consumer Prices Index as published by the U.S. Bureau of Labor Statistics over that fiscal year.

After careful consideration, Celsus’s board of directors has approved the Acquisition Agreement and the proposals referred to above, and has determined that they are advisable, fair and in the best interests of Celsus’s shareholders. Accordingly, Celsus’s board of directors unanimously recommends that our shareholders vote FOR each of the proposals (1) through (6) described in the preceding paragraph.

Your vote is very important, regardless of the number of shares you own.  Whether or not you expect to attend the General Meeting in person, please complete, date, sign and promptly return the accompanying proxy card in the enclosed postage paid envelope to ensure that your shares will be represented and voted at the General Meeting.


 
 

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More information about Celsus, Volution and the proposed transactions is contained in this proxy statement. Celsus urges you to read the accompanying proxy statement carefully and in its entirety. IN PARTICULAR, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER “RISK FACTORS” BEGINNING ON PAGE 14.

Celsus is excited about the opportunities the Acquisition brings to its shareholders, and thank you for your consideration and continued support.

Yours sincerely,

/s/ Gur Roshwalb

Gur Roshwalb, M.D.
Chief Executive Officer and Director

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the acquisition described in this proxy statement or the Celsus Ordinary Shares to be issued in connection with the acquisition or passed upon the adequacy or accuracy of this proxy statement. Any representation to the contrary is a criminal offense.

The accompanying proxy statement is dated [•], 2015, and is first being mailed to Celsus shareholders on or about [•], 2015.


 
 

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CELSUS THERAPEUTICS PLC

The Gridiron Building
One Pancras Square
C/O Pearl Cohen Zedek Latzer Baratz UK LLP
London, N1C 4AG, United Kingdom
+44-203-318-3004

NOTICE OF GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON [•], 2015

Dear Shareholders of Celsus Therapeutics Plc:

You are cordially invited to attend the general meeting (the “General Meeting”) of the shareholders of Celsus Therapeutics Plc, (“Celsus” or the “Company”), to be held at [•], local time, on [•], 2015, at [•], for the purpose of considering and, if thought fit, passing the following resolutions, of which Proposal No. 2 will be proposed as a special resolution and the remaining Proposals will be proposed as ordinary resolutions:

1. To approve the issuance of Celsus’s ordinary shares, par value £0.01 (“Ordinary Shares”) pursuant to the Share Exchange Agreement, dated as of July 10, 2015, by and among Celsus and RPC Pharma Limited (“RPC”), a copy of which is attached as Annex A to the accompanying proxy statement.
2. To change the name of the Company to “Akari Therapeutics, Plc”.
3. To elect Ray Prudo as a director of the Company, as a Class C Director as stated in Article 19.2.3 of the Articles of Association of the Company, to serve for a three year term commencing upon the completion of the Acquisition.
4. To elect Clive Richardson as a director of the Company, as a Class B Director as stated in Article 19.2.2 of the Articles of Association of the Company, to serve for a two year term commencing upon the completion of the Acquisition.
5. To approve a proposed amendment to the Company’s 2014 Equity Incentive Plan to increase the number of shares available for the grant of awards by 135,277,420 shares provided that the Acquisition is completed.
6. To set the cap on aggregate director fees (excluding executive Director remuneration) in article 27.1 of the Celsus’ Articles of Association at US$500,000 per annum, such sum to be automatically increased at the end of each fiscal year of Celsus by the same percentage increase as the increase in the U.S. consumer Prices Index as published by the U.S. Bureau of Labor Statistics over that fiscal year.

Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, as amended, the Company specifies that entitlement to attend and vote at the General Meeting, and the number of votes which may be cast at the General Meeting, will be determined by reference to the Company’s register of members at 6:00 p.m. (London time) on [•], 2015 or, if the General Meeting is adjourned, at the close of business on the date which is two days before the day of the adjourned General Meeting (as the case may be). In each case, changes to the register of members after such time will be disregarded. The accompanying Proxy Statement more fully describes the details of the business to be conducted at the General Meeting. After careful consideration, our Board of Directors has unanimously approved the proposals and recommends that you vote FOR each proposal described in the Proxy Statement.

The Company’s principal executive offices in the United States are located at 24 West 40th Street, 8th Floor, New York, NY 10018. The UK registered office of Celsus Therapeutics plc is 42-50 Hersham Road, Walton-on-Thames, Surrey KT12 1RZ, United Kingdom.

Your vote is important. The affirmative vote (on a show of hands or a poll) of the holders of a majority of shareholders present in person or by proxy and voting on the proposal in favor of such proposal of is required for approval of all resolutions to be proposed other than Proposal No. 2, which requires the affirmative vote in favor (on a show of hands or poll) of the holders of at least three quarters of shareholders present in person or by proxy. We encourage you to read this proxy statement carefully. If you have any questions or need assistance voting your shares, please call our proxy solicitor, Morrow & Co., LLC.


 
 

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Whether or not you expect to attend the General Meeting, please complete, date, sign and return the enclosed proxy card using the enclosed return envelope as promptly as possible in order to ensure your representation at the meeting. Even if you have voted by proxy, you may still vote in person if you attend the meeting. Please note, however, that if your shares are represented by American Depositary Shares and held on deposit by Deutsche Bank Trust Americas, as depositary, or if your Ordinary Shares are held of record by a broker, bank or other nominee and you wish to have your votes cast at the meeting, you must obtain, complete and timely return a proxy card issued in your name from that intermediary in accordance with any instructions provided therewith.

By Order of the Board of Directors of Celsus
Therapeutics Plc,

/s/ Gur Roshwalb

Gur Roshwalb, M.D.
Chief Executive Officer and Director
New York, New York
[•], 2015

Notes:

1. A shareholder entitled to attend and vote at the meeting is entitled to appoint more than one proxy, to exercise all or any of his rights to attend, speak and vote in his place on a show of hands or on a poll provided that each proxy is appointed to a different share or shares. Such proxy need not be a shareholder of the Company.
2. Only shareholders of whom are on the register of members by [           ], 2015, at [      ] local time (6.00 pm London time), shall be able to send their form of proxy. To be valid, the completed and signed form of proxy must be returned to SLC Registrars, either by mail to 42-50 Hersham Road, Walton-on-Thames, Surrey KT12 1RZ or by email to slc@davidvenus.com not less than 48 hours before the time fixed for the meeting. Lodging a form of proxy does not preclude a shareholder from attending and voting at the meeting.
3. If your shares are represented by American Depositary Shares and held on deposit by Deutsche Bank Trust Company Americas, as depositary, or if your shares are held of record by a broker, bank or other nominee and you wish to have your votes cast at the meeting, you must obtain, complete and timely return a proxy card issued in your name from that intermediary in accordance with any instructions provided therewith.
4. Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001 (as amended), the Company specifies that entitlement to attend and vote at the General Meeting, and the number of votes which may be cast at the General Meeting, will be determined by reference to the Company’s register of members at 6.00 p.m. (London time) on [          ], 2015 or, if the General Meeting is adjourned, at close of business on the date which is two days before the day of the adjourned General Meeting (as the case may be). In each case, changes to the register of members after such time will be disregarded.

THE CELSUS BOARD OF DIRECTORS HAS DETERMINED AND BELIEVES THAT EACH OF THE PROPOSALS OUTLINED ABOVE IS ADVISABLE TO, AND IN THE BEST INTERESTS OF, CELSUS AND ITS SHAREHOLDERS AND HAS APPROVED EACH SUCH PROPOSAL. THE CELSUS BOARD OF DIRECTORS RECOMMENDS THAT CELSUS SHAREHOLDERS VOTE “FOR” EACH SUCH PROPOSAL.


 
 

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REFERENCES TO ADDITIONAL INFORMATION

This proxy statement incorporates important business and financial information about Celsus that is not included in or delivered with this document. You may obtain this information without charge through the Securities and Exchange Commission (the “SEC”) website (www.sec.gov) or upon your written or oral request by contacting the Chief Executive Officer of Celsus Therapeutics Plc, 24 West 40th Street, 8th Floor, New York, NY 10018 or by calling (646) 350-0702, extension 101.

You may also request information from Morrow & Co., LLC, Celsus’s proxy solicitor, at the following address and telephone number:

Morrow & Co., LLC
470 West Ave
Stamford, CT 06902
800-662-5200

To ensure timely delivery of these documents, any request should be made no later than [•], 2015 to receive them before the General Meeting.

For additional details about where you can find information about Celsus, please see the section entitled “Where You Can Find More Information” in this proxy statement.


 
 

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ABOUT THIS DOCUMENT

Celsus Therapeutics Plc, which we refer to herein as the “Company,” “Celsus,” “we,” “our,” or “us,” is providing these proxy materials in connection with the solicitation by our board of directors of proxies to be voted at our General Meeting of our shareholders to be held on [•], 2015, commencing at [•], local time, at [•], or at any adjournment or postponement thereof. This proxy statement and the enclosed proxy card will be mailed to each shareholder entitled to notice of, and to vote at, the General Meeting of shareholders commencing on or about [•], 2015.

You should rely only on the information contained in or incorporated by reference into this proxy statement. No one has been authorized to provide you with information that is different from that contained in or incorporated by reference into this proxy statement. This proxy statement is dated [•], 2015. You should not assume that the information contained in this proxy statement is accurate as of any other date, nor should you assume that the information incorporated by reference into this proxy statement is accurate as of any date other than the date of such incorporated document. The mailing of this proxy statement to our shareholders will not create any implication to the contrary.

This proxy statement does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction in which or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.


 
 

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Questions and Answers About the General Meeting and the Acquisition     v  
Summary     1  
The Companies     1  
The Acquisition     2  
Reasons for the Acquisition     2  
Opinion of MTS Health Partners     2  
Overview of the Acquisition Agreement     2  
Executive Officers and Key Employees of Celsus Following the Acquisition     4  
Directors of Celsus Following the Acquisition     4  
Interests of the Celsus Directors and Executive Officers in the Acquisition     5  
Certain Material U.S. Federal and U.K. Income Tax Consequences of the Acquisition     5  
Risk Factors     5  
Regulatory Approvals     6  
NASDAQ Stock Market Listing     7  
Anticipated Accounting Treatment     7  
Selected Historical and Unaudited Pro Forma Combined Financial Data     8  
Selected Historical Financial Data of Celsus Therapeutics Plc     8  
Selected Unaudited Historical Financial Data of Volution Immuno Pharmaceuticals SA     9  
Selected Unaudited Pro Forma Combined Financial Data of Celsus and Volution     9  
Comparative Historical and Unaudited Pro Forma Per Share Data     11  
Market Price and Dividend Information     12  
Dividends     13  
Risk Factors     14  
Risks Related to the Acquisition     14  
Risks Related to Celsus     19  
Risks Related to the Ordinary Shares of Celsus     20  
Risks Related to Volution’s Business     23  
Risks Related to Volution’s Reliance on Third Parties     35  
Risks Related to the Combined Organization     37  
Forward-Looking Statements     41  
The General Meeting of Celsus Shareholders     42  
Date, Time and Place     42  
Purposes of the General Meeting     42  
Recommendation of the Celsus Board of Directors     42  
Entitlement to Vote and Voting Power     43  
Voting and Revocation of Proxies     43  
Required Vote     45  
Solicitation of Proxies     45  
Other Matters     45  

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The Acquisition     46  
Background of the Acquisition     46  
Historical Background of Volution     49  
Reasons for the Acquisition     49  
Opinion of MTS Health Partners     52  
Interests of the Celsus Directors and Executive Officers in the Acquisition     61  
Form of the Acquisition     62  
Acquisition Consideration     63  
Regulatory Approvals     63  
Certain Material U.S. Federal and U.K. Income Tax Consequences of the Acquisition     64  
NASDAQ Stock Market Listing     64  
Anticipated Accounting Treatment     64  
The Acquisition Agreement     65  
General     65  
Acquisition Consideration     65  
Treatment of Celsus Options and Warrants     65  
Directors and Officers of Celsus Following the Acquisition     66  
Conditions to the Completion of the Acquisition     66  
Representations and Warranties     66  
No Solicitation     67  
Meeting of Celsus Shareholders     68  
Covenants; Conduct of Business Pending the Acquisition     68  
Termination     70  
Termination Fee     70  
Amendment     70  
Governing Law     70  
Agreements Related to the Acquisition     71  
Lock-up Agreement     71  
Relationship Agreement     71  
Working Capital Agreement     71  
Matters Being Submitted To A Vote Of Celsus Shareholders     72  
Celsus Proposal No. 1: Approval of the Issuance of Ordinary Shares in the Acquisition     72  
Celsus Proposal No. 2: Approval of Name Change     73  
Celsus Proposal Nos. 3 and 4: Election of Directors     74  
Celsus Proposal No. 5: Approval of Amendment to the Company’s 2014 Equity Incentive Plan Provided that the Acquisition is Completed     83  
Celsus Proposal No. 6: Approval of Increase in Cap on Aggregate Director Fees     86  

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Celsus’s Business     87  
Overview     87  
Employees     87  
Intellectual Property and Certain Agreements     87  
Facilities and Corporate Information     87  
Independent Registered Public Accounting Firm     87  
Volution’s Business     88  
Overview     88  
The Complement System     88  
Lead Drug Candidate — Coversin     90  
Clinical Development — Past and Future     90  
Target Indications     92  
Market Opportunity in Complement Mediated Diseases     94  
Competition     95  
Sales and Marketing     95  
Manufacturing     95  
Intellectual Property     96  
Orphan Drug Designation     97  
Government Regulation     97  
Celsus Management’s Discussion and Analysis of Financial Condition and Results of Operations     105  
Volution Management’s Discussion And Analysis Of Financial Condition And Results Of Operations     106  
Overview     106  
Results of Operations     108  
Liquidity and Capital Resources     108  
Research and Development     109  
Off-balance Sheet Arrangements     109  
Tabular Disclosure of Contractual Obligations     110  
Directors and Officers of Celsus Following the Acquisition     111  
Resignations of Directors of Celsus     111  
Directors of Celsus Following the Acquisition     111  
Board Committees     112  
Audit Committee     113  
Compensation Committee     113  
Nominating and Corporate Governance Committee     113  
Executive Officers and Key Employees of Celsus Following the Acquisition     114  
Related Party Transactions Of Directors And Executive Officers Of The Combined Company     116  
Celsus Transactions     116  
Volution Transactions     116  

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Unaudited Pro Forma Combined Financial Statements     117  
Unaudited Pro Forma Combined Financial Statements     117  
Unaudited Pro Forma Combined Balance Sheet     119  
Unaudited Pro Forma Combined Statement of Operations and Comprehensive Loss     120  
Notes to Unaudited Pro Forma Combined Financial Information     121  
Description of Celsus Share Capital     124  
Principal Shareholders of Celsus     134  
Equity Compensation Plan Information     136  
Principal Shareholders of Volution     137  
Where You Can Find More Information     138  
Householding     140  
Future Shareholder Proposals     141  
VOLUTION FINANCIAL STATEMENTS     F-1  
Annex A Share Exchange Agreement, dated as of July 10, 2015, by and among Celsus Therapeutics Plc and Volution Immuno Pharmaceuticals SA     A-1  
Annex B Form of Lock-Up Agreement, by and between Celsus Therapeutics Plc and RPC Pharma Limited     B-1  
Annex C Relationship Agreement, dated as of July 10, 2015, by and between Celsus Therapeutics Plc and RPC Pharma Limited     C-1  
Annex D Opinion of MTS Health Partners     D-1  
Annex E Amended and Restated Celsus Therapeutics Plc 2014 Equity Incentive Plan     E-1  

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QUESTIONS AND ANSWERS ABOUT THE GENERAL MEETING AND THE ACQUISITION

The following section provides answers to frequently asked questions about the Acquisition and other matters relating to the General Meeting. This section, however, provides only summary information. For a more complete response to these questions and for additional information, please refer to the cross-referenced sections. Celsus urges its shareholders to read this document in its entirety prior to making any decision.

Q: What is the Acquisition?
A: Celsus Therapeutics Plc (“Celsus”) and RPC Pharma Limited (“RPC”) have entered into a Share Exchange Agreement, dated as of July 10, 2015 (the “Acquisition Agreement”). The Acquisition Agreement contains the terms and conditions of the proposed business combination of Celsus and Volution Immuno Pharmaceuticals SA (“Volution”). Under the Acquisition Agreement, Celsus will acquire the entire issued share capital of Volution, with Volution becoming a wholly-owned subsidiary of Celsus. This transaction is referred to as the “Acquisition.”

Immediately following the effective time of the Acquisition, the securityholders of Celsus as of immediately prior to the effective time of the Acquisition will own 8.32% of the combined company and RPC will own 91.68% of the combined company on a fully diluted basis. The Acquisition has been approved by the boards of directors of both Celsus and RPC and is expected to close in [•], subject to certain approvals of the shareholders of each company as well as other customary conditions. After the completion of the Acquisition and subject to shareholder approval, Celsus will change its corporate name to “Akari Therapeutics, Plc” as required by the Acquisition Agreement.

For a more complete description of the Acquisition, please see the section entitled “The Acquisition Agreement”.

Q: What will happen to Celsus if, for any reason, the Acquisition does not close?
A: If, for any reason, the Acquisition does not close, the Celsus board of directors may elect to, among other things, attempt to complete another strategic transaction like the Acquisition, attempt to sell or otherwise dispose of the various assets of Celsus or continue to operate the business of Celsus. If Celsus decides to dissolve and liquidate its assets, Celsus would be required to pay all of its debts and contractual obligations, and to set aside certain reserves for potential future claims, and there can be no assurance as to the amount or timing of available cash left to distribute to shareholders after paying the debts and other obligations of Celsus and setting aside funds for reserves.

If Celsus were to continue its business, it would need to identify, acquire and develop other products or product candidates as it does not believe it is in the best interest of Celsus or possible to pursue development of its current pre-clinical product candidates without significant additional capital which Celsus believes is unavailable to Celsus in its current iteration. In addition, as of June 30, 2015, the Celsus workforce was comprised of two full-time employees, who are involved in financial and administrative roles.

Q: Why are the two companies proposing to merge?
A: Celsus and Volution believe that the Acquisition will result in a pharmaceutical company focused on development and commercialization of anti-complement and anti-inflammatory molecules as life-transforming treatments for a wide range of rare and orphan autoimmune and inflammatory diseases.

Celsus’s board of directors considered a number of factors that supported its decision to approve the Acquisition Agreement. In the course of its deliberations, Celsus’s board of directors also considered a variety of risks and other countervailing factors related to entering into the Acquisition Agreement.

For a discussion of Celsus’s reasons for the Acquisition, please see the section entitled “The Acquisition — Reasons for the Acquisition” and “Opinion of MTS Health Partners.”

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Q: Why am I receiving this proxy statement?
A: You are receiving this proxy statement because you have been identified as a shareholder of record of Celsus, and you may be entitled to vote at the general meeting (the “General Meeting”) of the shareholders of Celsus, to be held at [•], local time, on [•], 2015 to approve, among other things, the issuance of Celsus’s Ordinary Shares pursuant to the Acquisition Agreement. This proxy statement contains important information about the Acquisition and the General Meeting and you should read it carefully and in its entirety. The enclosed voting materials allow you to authorize a proxy to vote your Celsus Ordinary Shares held without attending the General Meeting. As promptly as practicable, please complete, sign, date and mail your proxy card in the pre-addressed postage-paid envelope provided to SLC Registrars Limited or via email to slc@davidvenus.com.
Q: What is required to consummate the Acquisition?
A: To consummate the Acquisition, Celsus shareholders must approve the issuance of Celsus’s Ordinary Shares pursuant to the Acquisition Agreement.

The approval of the issuance of Celsus Ordinary Shares pursuant to the Acquisition Agreement requires the affirmative vote of the majority of votes properly cast (not counting “abstentions” or “broker non-votes” as votes cast).

In addition to the requirement of obtaining such Celsus shareholder approvals, each of the other closing conditions set forth in the Acquisition Agreement must be satisfied or waived.

For a more complete description of the closing conditions under the Acquisition Agreement, we urge you to read the section entitled “The Acquisition Agreement — Conditions to the Completion of the Acquisition” in this proxy statement.

Q: Are there any federal or state regulatory requirements that must be complied with or federal or state regulatory approvals or clearances that must be obtained in connection with the Acquisition?
A: Neither Celsus nor Volution is required to make any filings or obtain any approvals or clearances from any antitrust regulatory authorities in the United States or other countries to consummate the Acquisition. In the United States, Celsus must comply with applicable federal and state securities laws and NASDAQ rules and regulations in connection with the issuance of the Ordinary Shares in connection with the Acquisition, including the filing with the Securities and Exchange Commission, or SEC, of this proxy statement. Prior to consummation of the Acquisition, Celsus intends to file an initial listing application with The NASDAQ Capital Market pursuant to NASDAQ’s “change of control” rules and to effect the initial listing of Celsus’s ADSs issuable in connection with the Acquisition.
Q: What will the Volution shareholders receive in the Acquisition?
A: Upon shareholder approval and as a result of the Acquisition, RPC, as Volution’s sole shareholder, will become entitled to receive Celsus Ordinary Shares in exchange for shares of Volution in accordance with the exchange ratio described in the Acquisition Agreement.

Under the exchange ratio described in the Acquisition Agreement, immediately following the Acquisition, RPC will own 91.68% of the aggregate number of Celsus’s Ordinary Shares, and the securityholders of Celsus as of immediately prior to the Acquisition will own 8.32% of the aggregate number of Celsus’s Ordinary Shares on a fully diluted basis.

As a result of the Acquisition, certain warrants of Celsus to purchase 1,929,824 Ordinary Shares at an exercise price of $0.57 per share will be adjusted due to anti-dilution adjustment provisions contained in the warrants based on the consideration for each Ordinary Share issued to RPC in consideration for the Acquisition. The fully diluted percentages of Celsus Ordinary Shares following the closing of the Acquisition set forth above take into account the as adjusted warrants.

For example, assuming 55,636,283 Celsus Ordinary Shares are issued and outstanding and a fair market value of $0.065 per Celsus Ordinary Share issued in the Acquisition (assuming a value equal to the closing sale price of Celsus ADSs of $0.65 per ADS on July 13, 2015), Celsus would issue an aggregate of 849,949,588 Ordinary Shares to RPC in connection with the Acquisition, which would represent

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93.86% of Celsus’s outstanding Ordinary Shares following the closing of the Acquisition (or 91.68% of Celsus Ordinary Shares on a fully diluted basis). As a result of the Acquisition and making the assumptions set forth above, such warrants of Celsus to purchase 1,929,824 Ordinary Shares at an exercise price of $0.57 per share would be adjusted so that such warrants would become exercisable for an aggregate of 16,923,077 Celsus Ordinary Shares at an adjusted exercise price of $0.065 per share.

There are certain other circumstances in which the number of Ordinary Shares over which warrants can be exercised may be adjusted. If such adjustment takes place, RPC may be entitled to receive additional Ordinary Shares and/or warrants to subscribe for Ordinary Shares. Please see ‘Acquisition Consideration’ on page 63 for further details.

In connection with the Reorganization, each outstanding Volution option became an option to purchase shares of RPC.

For a more complete description of what the Volution shareholder will receive in the Acquisition, please see the sections entitled “Market Price and Dividend Information” and “The Acquisition Agreement — Acquisition Consideration” in this proxy statement. Please also see the section entitled “Risk Factors” in this proxy statement for a discussion of the risks associated with the Acquisition.

Q: Will holders of the Celsus Ordinary Shares issued in the Acquisition be able to trade those shares?
A: The Celsus Ordinary Shares issued as consideration in the Acquisition will be issued in transactions exempt from registration under the Securities Act of 1933 in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation S promulgated thereunder and may not be offered or sold by the holders of those shares absent registration or an applicable exemption from registration requirements. As a general matter, holders of such Ordinary Shares will not be able to transfer any of their Ordinary Shares until at least six (6) months after receiving the Ordinary Shares, which is when the Ordinary Shares would first be eligible to be sold under Rule 144 promulgated under the Securities Act, assuming the conditions thereof are otherwise satisfied.

However, RPC has agreed to certain transfer restrictions on their Celsus Ordinary Shares for a period of 180 days from the closing date of the Acquisition. See the section in this proxy statement entitled “Agreements Related to the Acquisition — Lock-Up Agreement” for more detail.

Q: Who will be the directors of Celsus following the Acquisition?
A: At and immediately after the effective time of the Acquisition, the board of directors of Celsus and its committees are expected to be composed of the individuals set forth in the table below. The directors shall serve until their respective successors are duly elected or appointed and qualified or their earlier death, resignation or removal.

         
  Directors   Class   Audit
Committee
  Compensation
Committee
  Nominating
and
Corporate
Governance
Committee
Volution Appointees     Ray Prudo, M.D.
(Executive Chairman)
      C                             
       Clive Richardson       B                             
Celsus Appointees     Mark Cohen
(Vice Chairman)
      C                X       X (Chair)  
       Gur Roshwalb, M.D.       B                             
       David Sidransky, M.D.       A       X       X (Chair)       X  
       Allan Shaw       A       X (Chair)                    
       Johnson Yiu Nam Lau, M.D.       A       X       X       X  

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Q: Who will be the executive officers of Celsus immediately following the Acquisition?
A: Immediately following the Acquisition, the executive management team of Celsus is expected to be composed of:

   
Name   Position with the
Combined Company
  Current Position
Gur Roshwalb, M.D.   Chief Executive Officer and
Director
  Chief Executive Officer and
Director of Celsus
Dov Elefant   Chief Financial Officer   Chief Financial Officer of Celsus
Clive Richardson   Chief Operating Officer   Commercial Development at Volution

And the key employees are expected to be:

   
Name   Position with the
Combined Company
  Current Position
Miles Nunn, D.Phil.   Chief Scientific Officer   Chief Scientific Officer of Volution
Wynne Weston Davies, M.D.   UK Medical Director   Medical and Drug Development
at Volution
Q: What are the material U.S. federal and U.K. income tax consequences of the Acquisition to me?
A: The Acquisition will not result in any taxable gain or loss for U.S. federal or U.K. income tax purposes to Volution, Celsus or any Celsus shareholder in his or her capacity as a Celsus shareholder.
Q: Why is Celsus seeking shareholder approval of the issuance of Ordinary Shares issuable upon the Acquisition?
A: Because our ADSs are listed on the NASDAQ Capital Market, we are subject to NASDAQ Listing Rules. Rule 5635(b) of the NASDAQ listing standards requires shareholder approval when any issuance or potential issuance will result in a change of control of the issuer. Although NASDAQ has not adopted any rule on what constitutes a “change of control” for purposes of Rule 5635(b), NASDAQ has previously indicated that the acquisition of, or right to acquire, by a single investor or affiliated investor group, as little as 20% of the Ordinary Shares (or securities convertible into or exercisable for Ordinary Shares) or voting power of an issuer could constitute a change of control.

Following the closing of the Acquisition, RPC will own 91.68% of the aggregate number of Celsus’s Ordinary Shares and the securityholders of Celsus as of immediately prior to the effective time of the Acquisition will own 8.32% of the aggregate number of Celsus’s Ordinary Shares on a fully diluted basis.

Given the issuance of Ordinary Shares to a single investor in excess of 20% of our outstanding Ordinary Shares that constitutes a change of control, Celsus is seeking shareholder approval of this issuance of Ordinary Shares issuable in connection with the Acquisition.

Q: Why is the Company holding the General Meeting?
A: We are holding the General Meeting to (1) approve the issuance of Celsus Ordinary Shares pursuant to the Acquisition Agreement, (2) approve the change of the Company’s name to “Akari Therapeutics, Plc”, (3) elect Ray Prudo as a director of the Company, as a Class C Director as stated in Article 19.2.3 of the Articles of Association of the Company, to serve for a three year term commencing upon the completion of the Acquisition, (4) elect Clive Richardson as a director of the Company, as a Class B Director as stated in Article 19.2.2 of the Articles of Association of the Company, to serve for a two year term commencing upon the completion of the Acquisition, (5) approve a proposed amendment to the Company’s 2014 Equity Incentive Plan to increase the number of shares available for the grant of awards by 135,277,420 provided that the Acquisition is completed and (6) set the cap on aggregate director fees (excluding executive Director remuneration) in article 27.1 of the Celsus’ Articles of Association at US$500,000 per annum, such sum to be automatically increased at the end of each fiscal year of Celsus

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by the same percentage increase as the increase in the U.S. consumer Prices Index as published by the U.S. Bureau of Labor Statistics over that fiscal year. At the General Meeting, you will be asked to vote upon the proposals included in this proxy statement.
Q: As a Celsus shareholder, how does the Celsus board of directors recommend that I vote?
A: After careful consideration, the Celsus board of directors recommends that Celsus shareholders vote:
“FOR” Proposal No. 1 to approve the issuance of Celsus Ordinary Shares in the Acquisition;
“FOR” Proposal No. 2 to approve the change of the Company’s name to “Akari Therapeutics, Plc”;
“FOR” Proposal No. 3 to elect Ray Prudo as a director of the Company, as a Class C Director as stated in Article 19.2.3 of the Articles of Association of the Company, to serve for a three year term;
“FOR” Proposal No. 4 to elect Clive Richardson as a director of the Company, as a Class B Director as stated in Article 19.2.2 of the Articles of Association of the Company, to serve for a two year term;
“FOR” Proposal No. 5 to approve a proposed amendment to the Company’s 2014 Equity Incentive Plan to increase the number of shares available for the grant of awards by 135,277,420 provided that the Acquisition is completed; and
“FOR” Proposal No. 6 to set the cap on aggregate director fees (excluding executive Director remuneration) in article 27.1 of the Celsus’ Articles of Association at US$500,000 per annum, such sum to be automatically increased at the end of each fiscal year of Celsus by the same percentage increase as the increase in the U.S. consumer Prices Index as published by the U.S. Bureau of Labor Statistics over that fiscal year;
Q: What risks should I consider in deciding whether to vote in favor of the share issuance and name change?
A: You should carefully review the section of this proxy statement entitled “Risk Factors,” which sets forth certain risks and uncertainties related to the Acquisition, risks and uncertainties to which the combined organization’s business will be subject, risks and uncertainties to which Celsus, as an independent company, is subject and risks and uncertainties to which Volution, as an independent company, is subject.
Q: When do you expect the Acquisition to be consummated?
A: We anticipate that the Acquisition will occur as promptly as practicable after the General Meeting to be held on [•], 2015 and following satisfaction or waiver of all closing conditions, but we cannot predict the exact timing. For a more complete description of the closing conditions under the Acquisition Agreement, please see the section entitled “The Acquisition Agreement — Conditions to the Completion of the Acquisition” in this proxy statement.
Q: What do I need to do now?
A: Celsus urges you to read this proxy statement carefully, including its annexes, and to consider how the Acquisition affects you.

If you are a shareholder of record of Celsus, you may provide your proxy instructions in one of two different ways. First, you can mail your signed proxy card in the enclosed return envelope to SLC Registrars Limited. Alternatively, you can email your signed proxy card to slc@davidvenus.com. Please provide your proxy instructions only once, unless you are revoking a previously delivered proxy instruction, and as soon as possible so that your shares can be voted at the General Meeting of Celsus shareholders. The laws of England and Wales, under which the Company is incorporated, permit electronically transmitted proxies.

Whether you hold your shares directly as the shareholder of record or beneficially in “street name”, you may vote your shares by proxy without attending the General Meeting. Depending on how you hold your shares, you may vote your shares in one of the following ways:

Shareholders of Record: For Shares Registered in Your Name

By Email.  You may vote your shares by completing, signing and dating each proxy card, and

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returning via email in the form of a scanned document to slc@davidvenus.com. If you vote via email, you do not need to return a proxy card by mail. It is convenient and saves significant postage and processing costs. In addition, there is no risk that postal delays will cause your vote to arrive late and therefore not be counted.
By Mail.  If you received printed proxy materials, you may submit your vote by completing, signing and dating each proxy card received and returning it in the prepaid envelope. Sign your name exactly as it appears on the proxy card.
In person at the General Meeting.  You may vote your shares in person at the General Meeting. Even if you plan to attend the General Meeting in person, we recommend that you also submit your proxy card or voting instructions via email or mail by the applicable deadline so that your vote will be counted if you later decide not to attend the General Meeting.

Beneficial Shareholders: For Shares Registered in the Name of a Broker or Bank

Persons who own Ordinary Shares indirectly through a brokerage firm, bank or other financial institution, including persons who own Ordinary Shares in the form of ADSs through the Depositary (“beneficial owners”), must return a voting instruction form to have their shares or the shares underlying their ADSs, as the case may be, voted on their behalf. The availability of Internet voting will depend on the voting process of the broker, bank or other financial institution. Brokerage firms, banks or other financial institutions that do not receive voting instructions from beneficial owners may either vote these shares on behalf of the beneficial owners or return a proxy leaving these shares un-voted (a “broker non-vote”). ADR holders are not entitled to vote directly at the General Meeting, but a deposit agreement dated as of December 7, 2012, as amended (the “Deposit Agreement”), exists between the Depositary and the holders of ADRs pursuant to which registered holders of ADRs as of [•], 2015 (the “ADR Record Date”) are entitled to instruct the Depositary as to the exercise of voting rights pertaining to the Ordinary Shares so represented. The Depositary has agreed that it will endeavor, insofar as practicable, to vote (in person or by delivery to the Company of a proxy) the Ordinary Shares registered in the name of State Street Nominees Ltd., in accordance with the instructions of the ADR holders. In the event that the instruction card is executed but does not specify the manner in which the Ordinary Shares represented are to be voted (i.e., by marking a vote “FOR”, “AGAINST” or any other option), the Depositary will vote in respect of each proposal as recommended by the Board which is described in the Notice of General Meeting. Instructions from the ADR holders must be sent to the Depositary so that the instructions are received by no later than 10:00 a.m. New York time on [•], 2015 (the “Instruction Date”).

The Company has retained SLC Registrars to hold and maintain its register of members. SLC Registrars will be engaged by the Company to send proxy forms to all registered members appearing on that register and to take delivery of completed proxy forms posted to it in accordance with the details above.

General Information for All Shares Voted Via Email

Votes submitted via email must be received by [•], Eastern Time on [•]. Submitting your proxy via email will not affect your right to vote in person should you decide to attend the General Meeting.

Q: Who can vote at the General Meeting?
A: Only holders of record of Celsus Ordinary Shares at the close of business on the day two business days prior to the date of the General Meeting are entitled to notice of, and to vote at the General Meeting. There were approximately 332 holders of record of Celsus Ordinary Shares at the close of business on the date hereof. At the close of business on the date hereof, 55,636,283 Ordinary Shares of Celsus were issued and outstanding, of which approximately 49,349,583 were held in the name of State Street Nominees Ltd., the nominee of Deutsche Bank Trust Americas (the “Depositary”), which issues Company-sponsored American Depositary Receipts (“ADRs”) evidencing American Depositary Shares (“ADSs”) which, in turn, each represent ten (10) Ordinary Shares. Registered holders of ADRs as of [•], 2015 are entitled to instruct the Depositary as to the exercise of voting rights pertaining to the Ordinary Shares so represented.

With respect to all matters to be voted on at the General Meeting, each shareholder present has only one vote unless demand is made for a vote on a poll (in which case each shareholder gets one vote per

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Ordinary Share held). The presence, in person or by proxy, of at least two shareholders who hold at least one third of the outstanding Ordinary Shares constitute a quorum for the transaction of business at the General Meeting for the purposes of the NASDAQ Rules. At any adjournment of the General Meeting, if a quorum is not present within fifteen minutes from the time appointed for such meeting, one person entitled to be counted in a quorum present at the adjournment shall be a quorum. Each Ordinary Share of Celsus entitles the holder thereof to one vote on each matter submitted for shareholders approval.

Q: When and where will the General Meeting of Celsus shareholders be held?
A: The General Meeting of Celsus shareholders will be held at [•], local time, on [•], 2015 at [•]. Subject to space availability, all Celsus shareholders as of the close of business on the day two business days prior to the date of the General Meeting, or their duly appointed proxies, may attend the meeting. Since seating is limited, admission to the meeting will be on a first-come, first-served basis. Registration and seating will begin at [•], local time.
Q: What happens if I do not return a proxy card or otherwise provide proxy instructions, as applicable?
A: Shareholder of Record: Shares Registered in Your Name

If you are a shareholder of record and do not vote by completing and submitting the enclosed proxy card via mail or email or in person at the General Meeting, your shares will not be voted.

Beneficial Owner: Shares Registered in the Name of a Broker or Bank

If you are a beneficial owner and do not instruct your broker, bank, or other agent how to vote your shares, the question of whether your broker or nominee will still be able to vote your shares depends on whether The NASDAQ Stock Market (“NASDAQ”) deems the particular proposal to be a “routine” matter. Brokers and nominees can use their discretion to vote “uninstructed” shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. Under the rules and interpretations of The NASDAQ Stock Market Listing Rules, “non-routine” matters are matters that may substantially affect the rights or privileges of shareholders, such as mergers, shareholder proposals, elections of directors (even if not contested), executive compensation (including any advisory shareholder votes on executive compensation and on the frequency of shareholder votes on executive compensation), and certain corporate governance proposals, even if management-supported. Accordingly, your broker or nominee may not vote your shares on Proposal Nos. 1 through 6, without your instructions, and the resulting broker non-votes will have no effect on those proposals. To make sure that your vote is counted, you should instruct your broker to vote your shares, following the procedures provided by your broker.

If you are a Celsus shareholder, the failure to return your proxy card or otherwise provide proxy instructions will reduce the aggregate number of votes required to approve Celsus Proposal Nos. 1 through 6 and your shares will not be counted for purposes of determining whether a quorum is present at the General Meeting. For Celsus shares that are held in “street name” by your broker, see the below question and answer for information regarding your broker voting your shares.

Q: What if I return a proxy card or otherwise vote but do not make specific choices?
A: If you return a signed and dated proxy card or otherwise vote without marking voting selections, your shares will be voted by the Chairman, as applicable, “For” the approval of the issuance of Celsus Ordinary Shares in the Acquisition, “For” the approval of the change of the Company’s name to “Akari Therapeutics, Plc”, “For” the election of Ray Prudo and Clive Richardson, “For” the approval of a proposed amendment to the Company’s 2014 Equity Incentive Plan to increase the number of shares available for the grant of awards by 135,277,420 shares provided that the Acquisition is completed and “For” the proposal to set the cap on aggregate director fees (excluding executive Director remuneration) in article 27.1 of the Celsus’ Articles of Association at US$500,000 per annum, such sum to be automatically increased at the end of each fiscal year of Celsus by the same percentage increase as the increase in the U.S. consumer Prices Index as published by the U.S. Bureau of Labor Statistics over that fiscal year.

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Q: May I change my vote after I have submitted a proxy or provided proxy instructions?
A: Celsus shareholders of record, may change their vote at any time before their proxy is voted at the General Meeting in one of three ways. First, a shareholder of record of Celsus can send a written notice to the Chief Executive Officer of Celsus stating that it would like to revoke its proxy. Second, a shareholder of record of Celsus can submit new proxy instructions on a new proxy card via mail or email. Third, a shareholder of record of Celsus can attend the General Meeting and vote in person. Attendance alone will not revoke a proxy.

Beneficial owners of our Ordinary Shares and holders of ADSs representing our Ordinary Shares who wish to change or revoke their voting instructions should contact their brokerage firm, bank or other financial institution or the Depositary, as applicable, for information on how to do so. Generally, however, beneficial owners of our Ordinary Shares and holders of ADSs representing our Ordinary Shares who wish to change or revoke their voting instructions may do so up until 10:00 a.m. London Time on the Instruction Date. Beneficial owners who wish to attend the General Meeting and vote in person should contact their brokerage firm, bank or other financial institution holding Ordinary Shares of Celsus on their behalf in order to obtain a “legal proxy” which will allow them to both attend the meeting and vote in person. Without a legal proxy, beneficial owners cannot vote at the General Meeting because their brokerage firm, bank or other financial institution may have already voted or returned a broker non-vote on their behalf. Record holders of ADSs representing our Ordinary Shares who wish to attend the General Meeting and vote in person should contact the Depositary (and beneficial owners wishing to do the same should contact their brokerage firm, bank or other financial institution holding their ADSs) to cause their ADSs to be cancelled and the underlying shares to be withdrawn in accordance with the terms and conditions of the Deposit Agreement so as to be recognized by us as a record holder of our Ordinary Shares.

Your most current proxy card is the one that is counted.

Q: Should Volution’s and Celsus’s shareholders send in their share certificates now?
A: No. After the Acquisition is consummated, Volution’s shareholder will receive written instructions from the exchange agent for exchanging its certificates representing shares of Volution share capital for certificates representing Celsus Ordinary Shares. Each fraction of a Celsus Ordinary Share issuable will be rounded up to the nearest whole number of Celsus Ordinary Shares.
Q: Am I entitled to appraisal rights?
A: No, Celsus’s shareholders are not entitled to appraisal rights in connection with the Acquisition or any of the proposals to be voted on at the General Meeting.
Q: Have Volution’s shareholders agreed to adopt the Acquisition Agreement?
A: Yes. On July 10, 2015, Volution’s sole shareholder, RPC, approved the Acquisition Agreement, the Acquisition and related transactions.
Q: Who is paying for this proxy solicitation?
A: Celsus will pay for the cost of printing and filing of this proxy statement and the proxy card. Arrangements will also be made with brokerage firms and other custodians, nominees and fiduciaries who are record holders of Celsus’s Ordinary Shares for the forwarding of solicitation materials to the beneficial owners of Celsus’s Ordinary Shares. Celsus will reimburse these brokers, custodians, nominees and fiduciaries for the reasonable out-of-pocket expenses they incur in connection with the forwarding of solicitation materials. Pursuant to our agreement with Morrow &Co., LLC, we have agreed to pay a fee of approximately $8,000 for their advice regarding proxy solicitation issues and for soliciting proxies from our stockholders on our behalf in connection with the General Meeting.
Q: What constitutes a quorum at the General Meeting?
A: For the purposes of the NASDAQ Rules, the presence, in person or by proxy, of at least two shareholders who hold an aggregate of at least one third of outstanding Celsus Ordinary Shares will

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constitute a quorum for the transaction of business at the General Meeting. For the purposes of Celsus’ Articles of Association the presence of at least 2 shareholders entitled to vote in person or by proxy, holding at least in the aggregate 15% of Celsus Ordinary Shares at the date of the meeting will constitute a quorum for the transaction of business at the General Meeting. Abstentions and broker non-votes will be counted for the purpose of determining the presence or absence of a quorum, but will not be counted for the purpose of determining the number of votes cast on a given proposal. At any adjournment of the General Meeting, if a quorum is not present within fifteen minutes from the time appointed for such meeting, one person entitled to be counted in a quorum present at the adjournment shall be a quorum.
Q: Who can help answer my questions?
A: If you are a Celsus shareholder and would like additional copies, without charge, of this proxy statement or if you have questions about the Acquisition, including the procedures for voting your shares, you should contact Morrow & Co., LLC, Celsus’s proxy solicitor, by telephone at the following address and phone number or Gur Roshwalb, M.D., Chief Executive Officer and Director of Celsus, at the following address, phone number and email address:

Morrow & Co., LLC
470 West Ave
Stamford, CT 06902
203-658-9400
Shareholders Call Toll Free: 800-662-5200
Banks and Brokers Call: 203-658-9400

Celsus Therapeutics Plc
24 West 40th Street, 8th Floor
New York, New York 10018
Attn: Gur Roshwalb, M.D., Chief Executive Officer and Director
Tel: (646) 350-0702, ext. 101
Email: info@celsustx.com

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SUMMARY

This summary highlights selected information from this proxy statement and may not contain all of the information that is important to you. To better understand the Acquisition, and the proposals being considered at the General Meeting, you should read this entire proxy statement carefully, including the Acquisition Agreement attached as Annex A, the opinion of MTS Health Partners attached as Annex D and the other annexes to which you are referred herein. You may obtain the information incorporated by reference into this proxy statement without charge by following the instructions in the section entitled “Where You Can Find More Information” beginning on page 138.

The Companies

Celsus Therapeutics Plc

24 West 40th Street, 8th Floor
New York, New York 10018
(646) 350-0702, ext. 101

Celsus Therapeutics Plc is a biopharmaceutical company that was dedicated to the discovery and development of novel, first-in-class, non-steroidal, synthetic anti-inflammatory drugs. In February 2015, we announced that the Phase II Trial of MRX-6 Cream 2% in pediatric atopic dermatitis did not reach the primary endpoint and did not demonstrate any improvement over the vehicle (placebo) cream. Prior to this announcement, we were conducting a double-blind, parallel-group, vehicle-controlled clinical trial to evaluate the safety and efficacy of MRX-6 cream 2% in a pediatric population with mild to moderate atopic dermatitis. Since February 2015, we have been exploring potential business opportunities. Following the announcement, after considering our various alternatives, we decided to suspend development of the MRX-6 dermatology program and on April 6, 2015 we sent a letter to the FDA to close our IND for MRX-6 cream 2%. Our senior management considered potential strategic opportunities available to us, including repeat testing of MRX-6 in a dermatology indication or other non-dermatologic indication, advancing our pre-clinical candidates through animal models, the acquisition of new program assets and/or the sale of the company, or the liquidation of our company and distribution of assets to our shareholders. Because of the magnitude of the resources required to redesign and/or develop our current product candidates, both clinical and pre-clinical, our management concluded that the process to redesign and/or develop the assets and the early-stage of the other product candidates would likely not enable us to obtain the amount of funding required to meaningfully develop such assets in the near-term. We believe that our status as an SEC reporting company, our strong and experienced management and our continued NASDAQ listing, combined with our existing cash resources, could likely attract high-quality merger partners who may possess new, later or same-stage clinical assets that, if developed, could provide greater potential value to our shareholders in the future.

Volution Immuno Pharmaceuticals SA

Landmark Fiduciaire (Suisse) SA
6 Place des Eaux-Vives
PO Box 3461
1211 Geneva 3
Switzerland
+44 (0)20 7025 7911

Volution Immuno Pharmaceuticals SA is a private, Swiss-based, clinical stage biotechnology company that is a wholly-owned subsidiary of RPC. The company is focused on developing anti-complement and anti-inflammatory molecules as treatments for a wide range of rare and orphan conditions in the autoimmune and inflammatory diseases sectors. Volution’s lead molecule, Coversin, is a second generation and potentially best-in-class complement inhibitor which acts on complement C5 preventing release of C5a and formation of C5b-9, the membrane attack complex (MAC). C5 inhibition is a new form of treatment that was commercially pioneered by Alexion Pharmaceuticals in 2007 (Nasdaq: ALXN) with FDA approval of their drug Soliris® (eculizumab) to treat PNH. To date, Volution has demonstrated: (i) 100% inhibition of complement C5 activity by Coversin within 12 hours in a Phase Ia clinical trial in healthy volunteers; (ii) that Coversin inhibits PNH red blood cell lysis in vitro and (iii) that Coversin can achieve full complement inhibition in the blood of

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eculizumab-resistant patients tested to date. Volution believes that the subcutaneous formulation of Coversin will provide considerable patient benefits, accelerating recruitment for trials, and patient uptake if Coversin is approved by regulatory authorities for commercial sale.

Complement C5 inhibition has demonstrated clinical benefit in treating a wide range of autoimmune diseases including paroxysmal nocturnal hemoglobinuria (PNH), atypical hemolytic uremic syndrome (aHUS) and in certain other diseases and conditions, such as myasthenia gravis, Guillain Barré syndrome, Sjogren’s syndrome and in conditions such as antibody mediated transplant rejection.

The Acquisition (see page 46)

Upon the terms and conditions of the Acquisition Agreement, Celsus will acquire the entire issued share capital of Volution, with Volution becoming a wholly-owned subsidiary of Celsus.

Subject to shareholder approval, Celsus will change its name to “Akari Therapeutics, Plc”. Volution and Celsus expect the Acquisition to be consummated in [•] 2015, subject to the satisfaction of applicable conditions. Immediately following the effective time of the Acquisition, the securityholders of Celsus as of immediately prior to the Acquisition will own 8.32% of the combined company and the former Volution securityholders will own 91.68% of the combined company on a fully-diluted basis.

Reasons for the Acquisition (see page 49)

Our board considered various reasons for the Acquisition, as described later in this proxy statement.

Opinion of MTS Health Partners (see page 52)

At the meeting of the Celsus board of directors on June 23, 2015, MTS Health Partners (“MTS”), a financial advisor of Celsus, delivered its opinion to the Celsus board of directors to the effect that and subject to the various assumptions, qualifications and limitations set forth therein, as of that date, the exchange ratio used in the Acquisition was fair, from a financial point of view, to Celsus.

The full text of the written opinion of MTS, dated June 23, 2015, which sets forth the assumptions made, procedures followed, other matters considered and limitations on the review undertaken in rendering its opinion, is attached as Annex D to this proxy statement and is incorporated herein by reference. Celsus urges securityholders of Celsus to read the opinion in its entirety. MTS’s written opinion is addressed to the Celsus board of directors, is directed only to the aggregate number of Celsus’s Ordinary Shares to be paid in the Acquisition and does not constitute a recommendation to any shareholder as to how to vote with respect to the proposed Acquisition or to take any action in connection with the Acquisition or otherwise. The summary of the opinion of MTS set forth in this proxy statement is qualified in its entirety by reference to the full text of such opinion.

Overview of the Acquisition Agreement

Acquisition Consideration (see page 63)

RPC, as the sole Volution shareholder, shall receive Celsus Ordinary Shares in exchange for Volution’s entire issued share capital at the ratio determined by the exchange ratio set forth in the Acquisition Agreement.

Treatment of Celsus Options and Warrants (see page 65)

Under the terms of the Acquisition Agreement, each option and warrant to purchase Celsus’s Ordinary Shares that is outstanding and unexercised immediately prior to the effective time of the Acquisition will continue according to its normal terms following the consummation of the Acquisition. Pursuant to the terms of his employment agreement, Celsus’s Chief Executive Officer Gur Roshwalb’s options will be accelerated in connection with the consummation of the Acquisition.

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Conditions to the Completion of the Acquisition (see page 66)

The obligations to consummate the Acquisition and the other transactions contemplated by the Acquisition Agreement shall be subject to the satisfaction or waiver, on or prior to the effective time of the Acquisition, of the conditions set forth in the section entitled “The Acquisition Agreement — Conditions to the Completion of the Acquisition” below.

No Solicitation (see page 67)

Both Volution and Celsus are prohibited by the terms of the Acquisition Agreement from soliciting, initiating, knowingly encouraging, inducing or facilitating the making, submission or announcement of any Acquisition Proposal (as defined in the Acquisition Agreement) or taking any action that would reasonably be expected to lead to an Acquisition Proposal. Both companies, however, may provide information in response to an Acquisition Proposal if, after consultation with a financial adviser and external legal adviser, they determine in good faith that the Acquisition Proposal is likely to result in a Third Party Offer (as defined in the Acquisition Agreement) or if the board concludes in good faith, having consulted with outside legal counsel, that they are required to provide information in response to an Acquisition Proposal so in order to comply with their fiduciary duties.

Termination and Termination Fee (see page 70)

The Acquisition Agreement may be terminated by either party only under certain circumstances, including, among others: (i) if the closing has not occurred by the five-month anniversary of the Acquisition Agreement (or such later date as is agreed between Celsus and RPC); (ii) if Celsus’s shareholders fail to approve the transaction; (iii) if there has been a material breach of warranty by the other party; (iv) if there has been a material breach of the conduct provisions contained in the Acquisition Agreement by the other party; (v) if an event occurs which would have been a material breach of the warranties in the Acquisition Agreement had those warranties been repeated between signing and closing; (vi) if the RPC board is not satisfied that Celsus can be financed at levels and on terms satisfactory to it; (vii) if the Celsus ADSs cease to remain listed on the NASDAQ Capital Market; or (viii) if the other party accepts a Third Party Offer. Upon termination of the Acquisition Agreement for Celsus’ failure to obtain the required approval of its shareholders Celsus is obligated to reimburse RPC’s reasonably incurred fees and expenses. If the Acquisition Agreement is terminated because one party accepts a Third Party Offer, such party is obliged to pay a termination fee of US$6,000,000 to the other party. If the Celsus board withdraws its recommendation of the transaction in the absence of a right for Celsus to terminate the Acquisition Agreement, Celsus is obliged to pay a termination fee of US$6,000,000 to RPC. If RPC terminates the Acquisition Agreement because its board is not satisfied that Celsus can be financed at levels and on terms satisfactory to it and RPC accepts a Third Party Offer within 6 months of such termination, RPC is obliged to pay a termination fee of US$6,000,000 to Celsus.

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Executive Officers and Key Employees of Celsus Following the Acquisition (see page 114)

Immediately following the Acquisition, the executive management team of Celsus is expected to be composed of:

   
Name   Position with the
Combined Company
  Current Position
Gur Roshwalb, M.D.   Chief Executive Officer and
Director
  Chief Executive Officer and
Director of Celsus
Dov Elefant   Chief Financial Officer   Chief Financial Officer of Celsus
Clive Richardson   Chief Operating Officer   Commercial Development

And the key employees are expected to be:

   
Name   Position with the
Combined Company
  Current Position
Miles Nunn, D.Phil.   Chief Scientific Officer   Chief Scientific Officer of Volution
Wynne Weston Davies, M.D.   UK Medical Director   Medical and Drug Development at
Volution

Directors of Celsus Following the Acquisition (see page 111)

At the effective time of the Acquisition, the combined company is expected to initially have a seven member board of directors, comprised of Ray Prudo, M.D., as Executive Chairman, Clive Richardson, Mark Cohen as Vice Chairman, Gur Roshwalb, M.D., David Sidransky, M.D., Allan Shaw and Johnson Yiu Nam Lau, M.D. until their respective successors are duly elected or appointed and qualified or their earlier death, resignation or removal.

Ray Prudo, M.D. and Clive Richardson are expected to become directors of Celsus at the effective time of the Acquisition, with Ray Prudo, M.D. serving as the Executive Chairman of the board. Mark Cohen, Gur Roshwalb, M.D., David Sidransky, M.D., Allan Shaw and Johnson Yiu Nam Lau, M.D. are directors of Celsus prior to the effective time of the Acquisition and are expected to continue in such capacity after the effective time of the Acquisition, with Mark Cohen serving as the Vice Chairman of the board. In connection with the Annual General Meeting that is anticipated to occur on July 15, 2015, Dr. Roshwalb, Dr. Sidransky and Dr. Lau will retire from their current Class positions as directors and will be nominated for re-election by the board of directors (in the case of Dr. Roshwalb as a Class B Director, in the case of Dr. Sidransky as a Class A Director and in the case of Dr. Lau as a Class A Director) and Mr. Shaw and Mr. Cohen will be nominated for re-election by the board of directors as Class A and Class C Directors, respectively. The biographies of each of the directors of the combined company are set forth below in the section entitled “Directors and Officers of Celsus Following the Acquisition.” Other than Mark Cohen, Gur Roshwalb, M.D., David Sidransky, M.D., Allan Shaw and Johnson Yiu Nam Lau, M.D., the directors of Celsus serving in such capacity prior to the effective time of the Acquisition will no longer be directors upon the effective time of the Acquisition.

The board of directors of the combined company is expected to have the following committees: (1) an audit committee comprised of Allan Shaw (chair), Johnson Yiu Nam Lau, M.D. and David Sidransky, M.D., (2) a compensation committee comprised of David Sidransky, M.D. (chair), Mark Cohen and Johnson Yiu Nam Lau, M.D., (3) a nominating and corporate governance committee comprised of Mark Cohen (chair), Johnson Yiu Nam Lau, M.D. and David Sidransky, M.D and (4) a research and development committee comprised of Ray Prudo, M.D. (chair), Gur Roshwalb, M.D. and David Sidransky, M.D. Mark Cohen will be independent within the meaning of the NASDAQ corporate governance rules of independence for purposes of the Nominating and Corporate Governance Committee following the Acquisition. These committees are described in further detail in the section below entitled “Directors and Officers of Celsus following the Acquisition.”

Each of Amos Eiran and Robert F. Doman, current members of our board of directors, were not nominated for re-election by our board of directors.

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Interests of the Celsus Directors and Executive Officers in the Acquisition (see page 61)

In considering the recommendation of Celsus’s board of directors with respect to the issuance of Celsus’s Ordinary Shares in connection with the Acquisition and the other matters to be acted upon by Celsus’s shareholders at the General Meeting, Celsus’s shareholders should be aware that members of the board of directors and executive officers of Celsus have interests in the Acquisition that may be different from, or in addition to, your interests.

As of June 30, 2015, all directors and executive officers of Celsus, together with their affiliates, beneficially owned approximately 6.8% of the outstanding shares of the Celsus capital stock. The affirmative vote of the holders of a majority of votes properly cast on Proposal No. 1 is required for approval of the Acquisition.

Certain Material U.S. Federal and U.K. Income Tax Consequences of the Acquisition (see page 64)

The Acquisition will not result in any taxable gain or loss for U.S. federal income tax purposes or U.K. income tax purposes to Volution, Celsus or any Celsus shareholder in his or her capacity as a Celsus shareholder. Celsus shareholders who are also shareholders of Volution should consult their own tax advisor as to the tax consequences to them of participating in the Acquisition with respect to their Volution registered shares.

The foregoing discussion is for general information purposes only and is not intended to be a complete analysis or description of all potential U.S. federal and U.K. income tax consequences of the Acquisition. In addition, the discussion does not address tax consequences which may vary with, or are contingent on, your individual circumstances. Moreover, the discussion does not address any non-income tax or any foreign, state or local tax consequences of the Acquisition. Accordingly, you are strongly encouraged to consult with your own tax advisor as to the tax consequences of the Acquisition in your particular circumstances, including the applicability and effect of the alternative minimum tax and any state, local or foreign and other tax laws and of changes in those laws.

Risk Factors (see page 14)

Both Celsus and Volution are subject to various risks associated with their businesses and their industries. In addition, the Acquisition, including the possibility that the Acquisition may not be completed, poses a number of risks to each company and its respective shareholders, including the following risks:

The exchange ratio is not adjustable based on the market price of Celsus’s Ordinary Shares so the Acquisition consideration at the closing may have a greater or lesser value than the market price of Celsus’s Ordinary Shares at the time the Acquisition Agreement was signed;
Celsus’s shareholders will experience immediate and substantial dilution upon the completion of the Acquisition and any equity financing to occur following the completion of the Acquisition;
The announcement and pendency of the Acquisition could have an adverse effect on the market price of Celsus’s Ordinary Shares and/or the business, financial condition, results of operations, or business prospects for Celsus and/or Volution;
The Acquisition may be completed even though material adverse changes may result solely from the announcement of the Acquisition, changes in the industry in which Celsus and Volution operate that apply to all companies generally and other causes;
Some Celsus officers and directors have interests that are different than, or in addition to, those of other Celsus shareholders and may influence them to support or approve the transactions contemplated by the Acquisition Agreement without regard to your interests;
Celsus’s ADSs could be delisted from The NASDAQ Capital Market if we do not comply with NASDAQ’s listing standards;
Celsus and Volution shareholders may not realize a benefit from the Acquisition commensurate with the ownership dilution they will experience in connection with the Acquisition and any equity financing to occur following the completion of the Acquisition;

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During the pendency of the Acquisition, Celsus may not be able to enter into a business combination with another party under certain circumstances because of restrictions in the Acquisition Agreement, which could adversely affect its business;
Certain provisions of the Acquisition Agreement may discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Acquisition Agreement;
Because the lack of a public market for Volution shares makes it difficult to evaluate the fairness of the exchange ratio, Celsus may pay more than the fair market value of the Volution shares;
The issuance of the shares pursuant to the Acquisition and certain related matters are subject to approval by Celsus shareholders, and there can be no assurance that Celsus’s shareholders will approve such matters;
If the conditions to the Acquisition are not met or waived, the Acquisition will not occur;
Failure to complete the Acquisition may result in Celsus paying a termination fee or expenses to Volution and could harm the Ordinary Share price of Celsus and future business and operations of Celsus;
Failure to complete the Acquisition may result in Celsus pursuing alternative strategic transactions or filing for liquidation and dissolution;
The announcement and pendency of the Acquisition could cause disruptions in the business of Volution, which could have an adverse effect on its business and financial results;
As a result of the Acquisition, certain warrants of Celsus will be adjusted due to anti-dilution adjustment provisions contained in the warrants which will further dilute the holdings of Celsus shareholders;
The ownership of the Ordinary Shares following the Acquisition will be highly concentrated and it may prevent you and other shareholders from influencing significant corporate decisions and may result in conflicts of interest that could cause the ADS price to decline;
The success of the proposed business combination of Celsus and Volution will depend in part on relationships with third parties, which relationships may be affected by third-party preferences or public attitudes about the Acquisition, and any adverse changes in these relationships could adversely affect Celsus’s or Volution’s business, financial condition, or results of operations; and
If any of the events described in “Risks Related to Volution’s Development, Commercialization and Regulatory Approval” or “Risks Related to Volution’s Reliance on Third Parties” or “Risks Related to Volution’s Business” occur, those events could cause the potential benefits of the Acquisition not to be realized.

These risks and other risks are discussed in greater detail under the section entitled “Risk Factors” in this proxy statement. Celsus encourages you to read and consider all of these risks carefully.

Regulatory Approvals (see page 63)

In the United States, Celsus must comply with applicable federal and state securities laws and the rules and regulations of The NASDAQ Capital Market in connection with the issuance of Celsus Ordinary Shares and the filing of this proxy statement with the SEC.

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NASDAQ Stock Market Listing (see page 64)

Prior to consummation of the Acquisition, Celsus intends to file an initial listing application with The NASDAQ Capital Market pursuant to NASDAQ Stock Market LLC “change of control” rules. If such application is accepted, Celsus anticipates that Celsus’s ADSs will be listed on The NASDAQ Capital Market following the closing of the Acquisition and will, subject to shareholder approval, trade under Celsus’s new name, “Akari Therapeutics, Plc” and new trading symbol, “[•]”.

Anticipated Accounting Treatment (see page 64)

The Acquisition will be treated by Celsus as a reverse merger under the acquisition method of accounting in accordance with accounting principles generally accepted in the United States. For accounting purposes, Volution is considered to be acquiring Celsus in the Acquisition.

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SELECTED HISTORICAL AND UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

The following tables present summary historical financial data for each of Celsus and Volution, unaudited pro forma combined financial data for Celsus and Volution and comparative historical and unaudited pro forma per share data for Celsus and Volution.

Selected Historical Financial Data of Celsus Therapeutics Plc

The following table summarizes Celsus’s selected consolidated financial data as of December 31, 2014 and 2013 and for the years ended December 31, 2014 and 2013 and have been derived from our audited consolidated financial statements and notes thereto prepared in accordance with United States GAAP, or GAAP. Our historical results are not necessarily indicative of results to be expected for future periods. The selected consolidated financial data set forth below should be read in conjunction with, and are entirely qualified by reference to “Celsus Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and notes thereto appearing in Celsus’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on February 11, 2015 (the “Celsus 10-K”), which is incorporated by reference in this proxy statement.

   
  Year Ended December 31,
(in thousands except per share data)   2014   2013
Statements of Operations Data
                 
Research and development   $ 6,417     $ 1,276  
General and administrative     3,760       2,330  
Total operating expenses     10,177       3,606  
Financial (income) expense, net     (529 )      14  
Net Loss     9,648       3,620  
Net basic and diluted loss per share   $ (0.18 )    $ (0.17 ) 
Weighted average number of Ordinary Shares     54,116,557       21,075,065  
Balance Sheet Data
                 
Total current assets   $ 6,431     $ 7,832  
Total assets     6,480       7,832  
Total current liabilities     1,359       1,231  
Total liabilities     1,627       2,018  
Working capital     5,072       6,601  
Capital stock     927       675  
Shareholders’ equity     4,853       5,814  

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Selected Unaudited Historical Financial Data of Volution Immuno Pharmaceuticals SA

The following table summarizes Volution’s financial data as of the date and for each of the periods indicated. The tables below present selected financial data of Volution prepared in accordance with U.S. generally accepted accounting principles. The historical financial data for each of the two years ended December 31, 2014 and 2013 is derived from Volution’s audited financial statements except for the net basic and diluted loss per share and are combined from those of both Volution and its predecessor, Varleigh Immuno Pharmaceuticals SA (“Varleigh”). Volution was formed in October 2013, and operationally overlapped with Varleigh through July 2014, when Varleigh effectively ceased operations. Volution’s historical results are not necessarily indicative of the results that may be expected in the future. The following selected financial data should be read in conjunction with “Volution Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and notes thereto appearing elsewhere in this proxy statement.

   
  Year Ended December 31,
(in thousands except per share data)   2014   2013
Statements of Operations Data
                 
Research and development   $ 1,616     $ 962  
General and administrative     303       135  
Total operating expenses     1,919       1,097  
Other (income) expense, net     28       (1 ) 
Net Loss     1,947       1,096  
Net basic and diluted loss per share   $ (16.42 )    $ (57.95 ) 
Weighted average number of Ordinary Shares     118,593       18,904  
Balance Sheet Data
                 
Total current assets   $ 3,335     $ 554  
Total assets     3,394       621  
Total current liabilities     1,171       333  
Total liabilities     1,171       333  
Working capital     2,164       221  
Capital stock     1,028       2,000  
Shareholders’ equity     2,223       288  

Selected Unaudited Pro Forma Combined Financial Data of Celsus and Volution

The following selected unaudited pro forma combined financial data is intended to show how the Acquisition might have affected historical financial statements if the Acquisition had been completed on January 1, 2014 for the purpose of the statement of operations and comprehensive loss and as of December 31, 2014 for the purpose of the balance sheet and was prepared based on the historical financial results reported by Celsus and Volution. The following should be read in conjunction with the section entitled “Unaudited Pro Forma Combined Financial Statements” beginning on page 117, Celsus’s audited historical financial statements and notes thereto of the Celsus 10-K, Volution’s audited historical financial statements and the notes thereto beginning on page F-1, the sections entitled “Celsus Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 105 and “Volution Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 106 and the other information contained in this proxy statement.

The transaction will be accounted for as a reverse acquisition under the acquisition method of accounting. Under the acquisition method of accounting, Volution will be treated as the accounting acquirer and Celsus will be treated as the acquiree for financial reporting purposes because, immediately upon completion of the Acquisition, the Volution securityholders prior to the Acquisition will hold a majority of the voting interest of the combined company.

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The unaudited pro forma combined financial statements were prepared in accordance with the regulations of the SEC. The pro forma adjustments reflecting the completion of the Acquisition are based upon the acquisition method of accounting in accordance with Generally Accepted Accounting Principles (GAAP) and upon the assumptions set forth in the unaudited pro forma combined financial statements.

The unaudited pro forma combined statements of operations and comprehensive loss for the year ended December 31, 2014 combines the historical statements of operations of Celsus and Volution and gives pro forma effect to the Acquisition as if it had been completed on January 1, 2014.

The historical financial data has been adjusted to give pro forma effect to events that are (i) directly attributable to the Acquisition, (ii) factually supportable and (iii) with respect to the statements of operations, expected to have a continuing impact on the combined results. The pro forma combined financial statements and pro forma adjustments have been prepared based on preliminary estimates of fair value. The unaudited pro forma combined financial data is presented for illustrative purposes only and is not necessarily indicative of the financial condition or results of operations of future periods or the financial condition or results of operations that actually would have been realized had the entities been combined during the periods presented. In addition, as explained in more detail in the accompanying notes to the unaudited pro forma combined financial statements (see the section entitled “Unaudited Pro Forma Combined Financial Statements” beginning on page 117), the preliminary acquisition-date fair value of the identifiable assets acquired and liabilities assumed reflected in the unaudited pro forma combined financial statements is subject to adjustment and may vary from the actual amounts that will be recorded upon completion of the Acquisition.

 
  Year Ended
December 31,
2014
     (In thousands)
Unaudited Pro Forma Combined Statements of Operations
and Comprehensive Loss Data:
        
Operating expenses:
        
Research and development   $ 8,033  
General and administrative     4,063  
Total operating expenses     12,096  
Net loss and comprehensive loss     (11,516 ) 
Unaudited Pro Forma Combined Balance Sheet Data:
        
Cash and cash equivalents   $ 9,543  
Working capital     4,598  
Total assets     12,589  
Total liabilities     5,436  
Stockholders’ equity     7,153  

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Comparative Historical and Unaudited Pro Forma Per Share Data

The following table sets forth certain historical, unaudited pro forma combined and pro forma combined equivalent financial information and reflects:

Celsus and Volution Historical Data: the historical Celsus net loss and net loss per share of Celsus’s Ordinary Shares and the historical Volution net loss and net loss per Volution registered share; and
Combined Company Pro Forma Data: the unaudited pro forma combined company net loss after giving effect to the Acquisition on a purchase basis as if the Acquisition had been completed on January 1, 2014.

You should read the table below in conjunction with the financial statements and notes thereto appearing in Celsus’s Annual Report on Form 10-K for the year ended December 31, 2014, which financial statements are incorporated by reference herein, and the financial statements and related notes thereto of Volution beginning on page F-1 of this proxy statement. You are urged to also read the section entitled “Unaudited Pro Forma Combined Financial Statements” beginning on page 117.

 
  Year Ended
December 31,
2014
     (In thousands)
Celsus Historical Data
        
Basic and diluted net loss per common share:   $ (0.18 ) 
Volution Historical Data
        
Basic and diluted net loss per common share:   $ (16.42 ) 
Combined Company Pro Forma Data
        
Basic and diluted net loss per common share (unaudited):   $ (0.07 ) 

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MARKET PRICE AND DIVIDEND INFORMATION

Our ADSs have been listed on the NASDAQ Capital Market under the symbol “CLTX” since January 31, 2014. Prior to that, our ADSs were quoted on the OTCQB under the symbol “CLSXD” from January 3, 2014 to January 30, 2014 and were quoted on the OTCQB under the symbol “CLSXY” from September 16, 2013 until January 2, 2014 and under the symbol “MRRBY” from February 19, 2013 to September 15, 2013. Effective January 3, 2014, our ratio of ADS to Ordinary Shares changed from one ADS per each two Ordinary Shares to one ADS per each ten Ordinary Shares. Currently, each ADS is represented by ten Ordinary Shares.

The following table sets forth the range of high and low closing sale prices for our ADSs for the periods indicated, as reported by the NASDAQ Capital Market or the OTCQB, as applicable. These prices do not include retail mark-ups, markdowns, or commissions but give effect to the change in the number of Ordinary Shares represented by each ADS to ten Ordinary Shares per each ADS, implemented on January 3, 2014. Historical data in the table has been restated to take into account these changes.

Volution is a private company and its registered shares are not publicly traded.

   
  USD High   USD Low
Fiscal Year Ended December 31, 2013
                 
First Quarter   $ 25.00     $ 25.00  
Second Quarter   $ 25.00     $ 20.00  
Third Quarter   $ 20.00     $ 20.00  
Fourth Quarter   $ 20.00     $ 7.10  
Fiscal Year Ended December 31, 2014
                 
First Quarter   $ 11.00     $ 6.15  
Second Quarter   $ 6.96     $ 5.00  
Third Quarter   $ 6.27     $ 5.40  
Fourth Quarter   $ 6.05     $ 4.70  
Fiscal Year Ended December 31, 2015
                 
First Quarter   $ 6.17     $ 0.76  
Second Quarter   $ 0.79     $ 0.41  
Third Quarter (through July 13, 2015   $ 0.68     $ 0.49  

The closing price of our ADSs on July 10, 2015, the date immediately prior to the public announcement of the Acquisition on July 13, 2015, as reported on The NASDAQ Capital Market, was $0.49 per share. The closing price of our ADSs on [•], the latest practicable date prior to the printing of this proxy statement, as reported on The NASDAQ Capital Market, was $[•] per share.

Because the market price of our ADSs is subject to fluctuation, the market value of our shares represented by ADSs that Volution shareholders will be entitled to receive in the Acquisition may increase or decrease.

Assuming approval of Celsus Proposal Nos. 1 and 2 and successful application for initial listing with The NASDAQ Capital Market, following the consummation of the Acquisition, our ADSs will be listed on The NASDAQ Capital Market and will trade under Celsus’s new name, “Akari Therapeutics, Plc” and new trading symbol, “[•]”. In order to satisfy the minimum bid price requirement and maintain the listing of our ADSs on the NASDAQ Capital Market, we may have to implement a change in our ratio of ADSs to Ordinary Shares from 1-to-10 to 1-to-[•].

As of July 13, 2015, Celsus had 332 holders of record of its registered shares. State Street Nominees Ltd., the nominee of Deutsche Bank Trust Americas, our depositary, constitutes a single record holder of our ordinary shares.

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Dividends

Celsus has never paid or declared any cash dividends on its Ordinary Shares. If the Acquisition does not occur, Celsus does not anticipate paying any cash dividends on its Ordinary Shares in the foreseeable future, and Celsus intends to retain all available funds and any future earnings to fund the development and expansion of its business. Any future determination to pay dividends will be at the discretion of Celsus’s board of directors and will depend upon a number of factors, including its results of operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors Celsus’s board of directors deems relevant.

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RISK FACTORS

The combined organization will be faced with a market environment that cannot be predicted and that involves significant risks, many of which will be beyond its control. In addition to the other information contained in this proxy statement, you should carefully consider the material risks described below before deciding how to vote your Ordinary Shares. In addition, you should read and consider the risks associated with the business of Celsus because these risks may also affect the combined company — these risks can be found in Celsus’s Annual Report on Form 10-K for the year ended December 31, 2014 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2015. You should also read and consider the other information in this proxy statement and the other documents incorporated by reference into this proxy statement. Please see the section entitled “Where You Can Find More Information” in this proxy statement.

Risks Related to the Acquisition

The exchange ratio is not adjustable based on the market price of Celsus’s American Depositary Shares, or ADSs (each representing ten (10) Celsus Ordinary Shares), so the Acquisition consideration at the closing may have a greater or lesser value than the market price at the time the Acquisition Agreement was signed.

The Acquisition Agreement has set the exchange ratio formula for Volution Ordinary Shares. Any changes in the market price of Celsus ADSs before the completion of the Acquisition will not affect the number of shares Volution securityholders will be entitled to receive pursuant to the Acquisition Agreement. Therefore, if before the completion of the Acquisition the market price of Celsus ADSs declines from the market price on the date of the Acquisition Agreement, then Volution securityholders could receive Acquisition consideration with substantially lower value. Similarly, if before the completion of the Acquisition, the market price of Celsus ADSs increases from the market price on the date of the Acquisition Agreement, then Volution securityholders could receive Acquisition consideration with substantially more value for their shares of Volution capital stock than the parties had negotiated for in the establishment of the exchange ratio. The Acquisition Agreement does not include a price-based termination right.

Celsus’s shareholders will experience immediate and substantial dilution upon the completion of the Acquisition and any equity financing that will occur as soon as practicable following the Acquisition.

Celsus’s current securityholders will own only 8.32% of Celsus’s Ordinary Shares on a fully diluted basis following the Acquisition. Such ownership share will be further diluted if we consummate an equity financing following the Acquisition and any such further dilution could be substantial. Increases in the share price at which Celsus’s Ordinary Shares is sold to third parties in any equity financing will result in relative ownership percentages that are different than those described above. In addition, the holders of Celsus Ordinary Shares will be diluted by the payment of $750,000 in fees to MTS Health Partners, our financial advisor, which are payable in Celsus Ordinary Shares following completion of the Acquisition.

The announcement and pendency of the Acquisition could have an adverse effect on the market price of Celsus ADSs and/or the business, financial condition, results of operations, or business prospects for Celsus and/or Volution.

The market price of Celsus ADSs may decline as a result of the Acquisition for a number of reasons including if:

investors react negatively to the prospects of the combined organization’s business and prospects from the Acquisition;
the effect of the Acquisition on the combined organization’s business and prospects is not consistent with the expectations of financial or industry analysts; or
the combined organization does not achieve the perceived benefits of the Acquisition as rapidly or to the extent anticipated by financial or industry analysts.

The announcement and pendency of the Acquisition could also disrupt Volution’s and/or Celsus’s businesses. For example, Volution and Celsus management may need to focus additional attention on the completion of the Acquisition and related matters, thereby diverting their attention from the day-to-day

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business operations of their respective companies. Should these disruptions occur, any of these matters could adversely affect the ADS price of Celsus or harm the financial condition, results of operations, or business prospects of Volution and/or Celsus.

The Acquisition may be completed even though material adverse changes may result from the announcement of the Acquisition, industry-wide changes and other causes.

Although both Celsus and RPC have certain termination rights, there could be material adverse changes that affect either or both of Celsus or Volution that do not give rise to a termination right. In particular certain matters which affect the wider industry or markets and certain matters which are not within the control of the parties may give rise to material adverse changes but may not give rise to a termination right.

If adverse changes occur and Celsus and Volution still complete the Acquisition, the combined organization stock price may suffer. This in turn may reduce the value of the Acquisition to the shareholders of Celsus, Volution or both.

Some Celsus officers and directors have interests in the Acquisition that are different from, or in addition to, yours and that may influence them to support or approve the issuance of Celsus Ordinary Shares in connection with the Acquisition and the related matters to be acted upon by Celsus’s shareholders at the General Meeting.

Certain officers and directors of Celsus participate in arrangements that provide them with interests in the Acquisition that are different from, or in addition to, yours, including, among others, the continued service as an officer or director of the combined organization, the acceleration of option vesting, and continued indemnification.

For example, the closing of the Acquisition will result in the acceleration of vesting of a portion of the stock awards, including options to purchase approximately 495,000 Celsus Ordinary Shares held by the Celsus Chief Executive Officer. For more information concerning the treatment of Celsus options in connection with the Acquisition, see the section entitled “The Acquisition Agreement — Treatment of Celsus Options” in this proxy statement.

In addition, Gur Roshwalb, Celsus’s Chief Executive Officer, and Dov Elefant, Celsus’s Chief Financial Officer, will enter into new employment agreements upon completion of the Acquisition.

These interests, among others, may influence the officers and directors of Celsus to support or approve the issuance of Celsus Ordinary Shares in connection with the Acquisition and the related matters to be acted upon by Celsus’s shareholders at the General Meeting. For more information concerning the interests of Celsus executive officers and directors, see the section entitled “The Acquisition — Interests of the Celsus Directors and Executive Officers in the Acquisition” in this proxy statement.

Celsus’s ADSs could be delisted from The NASDAQ Capital Market if we do not comply with NASDAQ’s listing standards.

Pursuant to the NASDAQ Listing Rules, consummation of the Acquisition requires the combined company to submit an initial listing application and, at the time of the Acquisition, meet all of the criteria applicable to a company initially requesting listing. We intend to apply for listing on The NASDAQ Capital Market. In connection with such listing, we may implement a change in our ratio of ADSs to Ordinary Shares from 1-to-10 to 1-to-[•]. While we intend to obtain listing status for the combined company and maintain such listing, no guarantees can be made about our ability to do so.

If Celsus’s ADSs are delisted by NASDAQ, the ADSs may be eligible to trade on the OTCQB or another over-the-counter market. Any such alternative would likely result in it being more difficult for the company to raise additional capital through the public or private sale of equity securities and for investors to dispose of, or obtain accurate quotations as to the market value of, the ADSs. In addition, there can be no assurance that the ADSs would be eligible for trading on any such alternative exchange or markets.

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Celsus and Volution shareholders may not realize a benefit from the Acquisition commensurate with the ownership dilution they will experience in connection with the Acquisition and any equity financing to occur following the completion of the Acquisition.

If the combined organization is unable to realize the full strategic and financial benefits currently anticipated from the Acquisition and any equity financing to occur following completion of the Acquisition, Celsus and Volution shareholders will have experienced substantial dilution of their ownership interests in their respective companies without receiving any commensurate benefit, or only receiving part of the commensurate benefit to the extent the combined organization is able to realize only part of the strategic and financial benefits currently anticipated from the Acquisition. Significant management attention and resources will be required to integrate the two companies. Delays in this process could adversely affect the combined company’s business, financial results, financial condition and ADS price following the Acquisition. Even if the combined company were able to integrate the business operations successfully, there can be no assurance that this integration will result in the realization of the full benefits of synergies, innovation and operational efficiencies that may be possible from this integration and that these benefits will be achieved within a reasonable period of time.

During the pendency of the Acquisition, Celsus may not be able to enter into a business combination with another party at a favorable price because of restrictions in the Acquisition Agreement, which could adversely affect their respective businesses.

Both Volution and Celsus are prohibited by the terms of the Acquisition Agreement from soliciting, initiating, knowingly encouraging, inducing or facilitating the making, submission or announcement of any Acquisition Proposal (as defined in the Acquisition Agreement), or taking any action that would reasonably be expected to lead to an Acquisition Proposal. As a result, if the Acquisition is not completed, the parties may be at a disadvantage to their competitors during that period. Both companies, however, may provide information in response to an Acquisition Proposal if, after consultation with a financial adviser and external legal adviser, they determine in good faith that the Acquisition Proposal is likely to result in a Third Party Offer (as defined in the Acquisition) or if the board concludes in good faith, having consulted with outside legal counsel, that they are required to provide information in response to an Acquisition Proposal so in order to comply with their fiduciary duties.

Certain provisions of the Acquisition Agreement may discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Acquisition Agreement.

The terms of the Acquisition Agreement prohibit each of Celsus and Volution from soliciting alternative takeover proposals or cooperating with persons making unsolicited takeover proposals, except in limited circumstances when such party’s board of directors determines in good faith that an unsolicited alternative takeover proposal is or is reasonably likely to lead to a superior takeover proposal and that such action is required in order for Celsus’s board to comply with its fiduciary duties. In addition, if Celsus or Volution terminates the Acquisition Agreement under certain circumstances, including terminating because of a decision of a board of directors to recommend a superior proposal or withdrawing the recommendation of its board of directors in the absence of a specific right to terminate the Acquisition Agreement, Celsus or Volution would be required to pay a termination fee of up to $6,000,000 to the other party. This termination fee may discourage third parties from submitting alternative takeover proposals to Celsus or Volution or their shareholders, and may cause the respective boards of directors to be less inclined to recommend an alternative proposal.

Because the lack of a public market for Volution shares makes it difficult to evaluate the fairness of the exchange ratio, Celsus may pay more than the fair market value of the Volution shares.

The outstanding share capital of Volution is privately held and is not traded in any public market. The lack of a public market makes it difficult to determine the fair market value of the Volution shares. Because the percentage of Celsus equity to be issued to Volution shareholders was determined based on negotiations between the parties, it is possible that Celsus may pay more than the aggregate fair market value for the Volution shares.

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The Celsus Ordinary Shares issuable in the Acquisition constitute restricted securities under federal securities laws and are subject to additional restrictions on transfer. As a result, the shares will not be freely tradable following the Acquisition, and shareholders receiving them may never be able to achieve liquidity.

The Celsus Ordinary Shares issued as consideration in the Acquisition will not immediately be registered under the Securities Act. The Celsus Ordinary Shares will constitute “restricted stock” under the Securities Act and, therefore, such shares may not be sold unless the shares are registered or unless an exemption from the registration and prospectus delivery requirements of the Securities Act is available. As a general matter, holders of such shares will not be able to transfer any of their shares until at least six (6) months after receiving Celsus Ordinary Shares, which is when the shares would first be eligible to be sold under Rule 144 promulgated under the Securities Act, assuming the conditions thereof are otherwise satisfied.

Shareholders receiving such Celsus shares in the Acquisition will not be able to achieve liquidity with respect to their Celsus Ordinary Shares until the time that a registration statement covering the resale of such shares is declared effective and, as a result, holders of such shares may be required to bear the financial risks of this investment until that time. There can be no guarantee that holders of such shares will be able to sell them at or above the price per share in the Acquisition.

If the conditions to the Acquisition are not met or waived, the Acquisition will not occur.

Specified conditions must be satisfied or waived to complete the Acquisition. These conditions are set forth in the Acquisition Agreement and described in the section entitled “The Acquisition Agreement — Conditions to the Completion of the Acquisition” in this proxy statement. Neither Celsus nor Volution can assure you that all of the conditions will be satisfied or waived. If the conditions are not satisfied or waived, the Acquisition will not occur or will be delayed, and Celsus and Volution each may lose some or all of the intended benefits of the Acquisition. In the event that the Acquisition is not consummated, Celsus may be subject to many risks, including the fees and the costs related to the Acquisition, such as legal, accounting and advisory fees, which must be paid even if the Acquisition is not completed.

Failure to complete the Acquisition may result in Celsus and Volution paying a termination fee or expenses to the other party and could harm the Ordinary Shares price of Celsus and future business and operations of each company.

If the Acquisition is not completed, Celsus and Volution are subject to the following risks:

if the Acquisition Agreement is terminated because one party accepts a Third Party Offer (as defined in the Acquisition Agreement), the accepting party is obliged to pay a termination fee of $6,000,000 to the other;
if the Celsus board withdraws its recommendation of the transaction in the absence of a right for Celsus to terminate the Acquisition Agreement, Celsus is obliged to pay a termination fee of US$6,000,000 to RPC;
if the Acquisition Agreement is terminated for Celsus’ failure to obtain the required approval of its shareholders, Celsus is obligated to pay RPC its reasonably incurred costs and expenses; and
costs related to the Acquisition, such as legal and accounting fees, which must be paid even if the Acquisition is not completed.

In addition, if the Acquisition Agreement is terminated and the board of directors of Celsus or Volution determines to seek another business combination, there can be no assurance that either Celsus or Volution will be able to find a partner willing to provide equivalent or more attractive consideration than the consideration to be provided by each party in the Acquisition.

Failure to complete the Acquisition may result in Celsus filing for liquidation and dissolution.

In February 2015, following its announcement that its Phase II clinical trial of MRX-6 Cream 2% in pediatric atopic dermatitis did not reach its primary endpoint, Celsus began a significant restructuring plan to preserve its financial resources, minimize its exposure to fixed costs for staff and facilities and increase its

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control over the strategic timing and use of all of its resources. If Celsus is unable to complete the Acquisition, it may decide to liquidate. If a dissolution and liquidation were pursued, Celsus’s board of directors, in consultation with its advisors, would need to evaluate its outstanding obligations and potential contingent liabilities and make a determination about a reasonable amount to reserve. Accordingly, holders of Celsus’s Ordinary Shares and ADSs may lose their entire investment in the event of a bankruptcy, liquidation, dissolution or winding up of our company.

The success of the proposed business combination of Celsus and Volution will depend in part on relationships with third parties, which relationships may be affected by third-party preferences or public attitudes about the Acquisition. Any adverse changes in these relationships could adversely affect Celsus’s or Volution’s business, financial condition, or results of operations.

The success of the Acquisition will be in part dependent on the combined entity’s ability to maintain and renew the business relationships of both Celsus and Volution and to establish new business relationships. There can be no assurance that the management of either Celsus or Volution will be able to maintain such business relationships, or enter into or maintain new business contracts and other business relationships, on acceptable terms, if at all. The failure to maintain important business relationships could have a material adverse effect on the business, financial condition, or results of operations of Celsus and Volution.

If any of the events described in “Risks Related to Volution’s Development, Commercialization and Regulatory Approval” or “Risks Related to Volution’s Reliance on Third Parties” or “Risks Related to Volution’s Business” occur, those events could cause the potential benefits of the Acquisition not to be realized.

If the parties complete the Acquisition, the composition of the Celsus Board will change in accordance with the Acquisition Agreement. Following the completion of the Acquisition, Celsus’s Board will consist of seven members and will be comprised of two representatives of Volution, two representatives of Celsus and up to three members may be appointed by Volution to replace current Celsus directors David Sidransky, Allan Shaw and Johnson Lau prior to the filing of the definitive proxy statement, with Celsus’s current chairman of the board of directors, Mark Cohen, to act as vice chairman of the board of Celsus following the Acquisition. This new composition of the Board may affect the business strategy and operating decisions of the combined company upon completion of the Acquisition.

Volution’s business is expected to constitute most, if not all, of the business of the combined company following the Acquisition. As a result, the risks described below in the section entitled “Risks Related to Volution’s Development, Commercialization and Regulatory Approval” beginning on page 0 are among the most significant risks to the combined company if the Acquisition is completed. To the extent any of the events in the risks described below in the sections entitled “Risks Related to Volution’s Development, Commercialization and Regulatory Approval” or “Risks Related to Volution’s Reliance on Third Parties” beginning on page 0 or “Risks Related to Volution’s Business” beginning on page 0 occur, those events could cause the potential benefits of the Acquisition not to be realized and the market price of the combined company’s ADSs to decline.

If Volution’s agreements with employees, consultants, advisors and corporate partners fail to protect its intellectual property, proprietary information or trade secrets, it could have a significant adverse effect on Volution’s and Celsus.

Volution has taken steps to protect its intellectual property and proprietary technology by entering into confidentiality agreements and invention assignment agreements with its employees, consultants, scientific advisors, contractors and commercial partners. However, such agreements may not be enforceable or may not provide meaningful protection for all of its trade secrets or other proprietary information in the event of unauthorized use or disclosure or other breaches of the agreements, and Celsus may not be able to prevent such unauthorized disclosure. Monitoring unauthorized disclosure is difficult, and Celsus does not know whether the steps it has taken to prevent such disclosure are, or will be, adequate. In addition, Celsus’s trade secrets may otherwise become known or be independently discovered by competitors. To the extent that Volution’s contractors use intellectual property owned by others in their work for Celsus, disputes may arise

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as to the rights in related or resulting know-how and inventions. Furthermore, the laws of some foreign countries may not protect its intellectual property rights to the same extent as do the laws of the United States.

Risks Related to Celsus

Celsus may not be able to complete the Acquisition and may elect to pursue another strategic transaction similar to such Acquisition, which may not occur on commercially reasonably terms or at all.

Celsus cannot assure you that it will complete the Acquisition in a timely manner or at all. The Acquisition Agreement is subject to many closing conditions and termination rights, as set forth in more detail in “The Acquisition Agreement — Conditions to the Completion of the Acquisition” and “The Acquisition Agreement — Termination” below. In addition to Celsus’s product candidates, for which it has suspended all development, Celsus’s assets currently consist primarily of cash, cash equivalents and marketable securities, its listing on The NASDAQ Capital Market and the Acquisition Agreement with Volution. If Celsus does not close the Acquisition, its board of directors may elect to attempt to complete another strategic transaction similar to the Acquisition. Attempting to complete another strategic transaction similar to the Acquisition will prove to be costly and time consuming, and Celsus cannot make any assurances that a future strategic transaction will occur on commercially reasonable terms or at all. Even if Celsus does complete the Acquisition, the Acquisition ultimately may not deliver the anticipated benefits or enhance shareholder value.

If the Acquisition is not completed, in light of the challenges of rebuilding an operating business, Celsus may elect to liquidate its remaining assets, and there can be no assurances as to the amount of cash available to distribute to shareholders after paying its debts and other obligations.

If Celsus does not close the Acquisition, in light of the risks of reestablishing an operating business, as set forth herein, the Celsus board of directors may elect to take the steps necessary to liquidate all remaining assets of Celsus. The process of liquidation may be lengthy and Celsus cannot make any assurances regarding timing of completion. In addition, Celsus would be required to pay all of its debts and contractual obligations, and to set aside certain reserves for potential future claims. There can be no assurance as to the amount or timing of available cash remaining to distribute to shareholders after paying Celsus’s debts and other obligations and setting aside funds for reserves.

If the Acquisition is not completed, and Celsus fails to acquire and develop other products or product candidates at all or on commercially reasonable terms, Celsus may be unable to reestablish a viable operating business.

Given the discontinuation of development of MRX-6, if the Acquisition is not completed, Celsus may not be able to reestablish a viable operating business. Due to Celsus’s history, its limited operational and management capabilities, and the intense competition for pharmaceutical product candidates, even if Celsus finds promising product candidates, and generates interest in a collaborative or strategic arrangement to acquire such product candidates, it may not be able to acquire rights to additional product candidates or approved products on commercially reasonable terms that it finds acceptable, or at all. Proposing, negotiating and implementing an economically viable product acquisition or license is a lengthy and complex process. In addition, even if Celsus finds promising product candidates, and generates interest in a collaborative or strategic arrangement to acquire such product candidates, it may not be able to acquire rights to additional product candidates or approved products on commercially reasonable terms that Celsus finds acceptable, or at all.

Celsus has had a limited operating history that may make it difficult for you to evaluate the potential success of its business and Celsus has a history of incurring losses.

Celsus was founded in February 2005 under its former name, Morria Biopharmaceuticals plc and changed its name to Celsus Therapeutics PLC in June 2013. Celsus’s operations to date have been limited to organizing and staffing, acquiring, developing and securing technology and undertaking preclinical studies and clinical trials. Furthermore, its business is not profitable and Celsus has incurred losses in each year since its inception. Celsus’s net loss for the years ended December 31, 2014, 2013 and 2012 was $9,648,000,

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$3,620,000 and $4,268,000, respectively. Celsus had an accumulated deficit at December 31, 2014 of $30,190,000. To date, Celsus has not commercialized any products or generated any revenues from the sale of products, and absent the realization of sufficient revenues from product sales, Celsus may never attain profitability in the future.

If Celsus does not successfully complete the Acquisition, it will require substantial additional funding in the event Celsus resumes its operations, and may need to curtail operations if it has insufficient capital.

Celsus had cash and cash equivalents of approximately $4.0 million at March 31, 2015. Celsus expects its negative cash flows from operations to continue for the foreseeable future.

Celsus currently believes that its available cash, cash equivalents and marketable securities and interest income will be sufficient to fund its anticipated levels of operations for the next 12 months. However, if Celsus does not successfully complete the Acquisition, Celsus will require substantial additional funding in the event it resumes its operations. Any such financing, if available to us on favorable terms or at all, will likely be dilutive to existing shareholders. As such, its future capital requirements will depend on many factors, including:

Celsus’s ability to complete the Acquisition;
the timing and nature of any future strategic transactions that Celsus undertakes, including, but not limited to licensing a product candidate or potential partnerships;
the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;
the effect of competing technological and market developments; and
the cost incurred in responding to disruptive actions by activist shareholders.

Having an insufficient level of capital to resume its operations may require Celsus to significantly curtail one or more of its development, licensing or acquisition programs, which could have a negative impact on its financial condition and Celsus’s ability to successfully pursue its business strategy.

If Celsus’s agreements with employees, consultants, advisors and corporate partners fail to protect its intellectual property, proprietary or confidential information or trade secrets, it could have a significant adverse effect on Celsus.

Celsus has taken steps to protect its intellectual property and proprietary technology by entering into confidentiality agreements and invention assignment agreements with its employees, consultants, scientific advisors, contractors and commercial partners. However, such agreements may not be enforceable or may not provide meaningful protection for all of its trade secrets or other proprietary information in the event of unauthorized use or disclosure or other breaches of the agreements, and Celsus may not be able to prevent such unauthorized disclosure. Monitoring unauthorized disclosure is difficult, and Celsus does not know whether the steps it has taken to prevent such disclosure are, or will be, adequate. In addition, Celsus’s trade secrets may otherwise become known or be independently discovered by competitors. To the extent that Celsus’s contractors use intellectual property owned by others in their work for Celsus, disputes may arise as to the rights in related or resulting know-how and inventions. Furthermore, the laws of some foreign countries may not protect its intellectual property rights to the same extent as do the laws of the United States.

Risks Related to the Ordinary Shares of Celsus

Ownership of Celsus ADSs and/or Ordinary Shares involves a high degree of risk.

Investing in and owning Celsus ADSs and Ordinary Shares involves a high degree of risk. Shareholders should read carefully the risk factors provided within this section, as well as Volution’s and Celsus’s public documents filed by each party with the SEC, including the financial statements therein.

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If the Acquisition is not completed, the Celsus ADS price may continue to be volatile.

The market price of Celsus ADSs is subject to significant fluctuations. During the six month period ended June 30, 2015, the sales price of Celsus ADSs on The NASDAQ Capital Market ranged from a high of $6.20 in February 2015 to a low of $0.40 in May 2015. Market prices for securities of early-stage pharmaceutical, biotechnology and other life sciences companies have historically been particularly volatile. The volatility of the market price of Celsus ADSs is exacerbated by low trading volume and the high proportion of shares held by insiders. Some of the factors that may cause the market price of Celsus ADSs to fluctuate include:

sales or potential sales of substantial amounts of our Ordinary Shares or ADSs;
delay or failure in initiating, enrolling, or completing pre-clinical or clinical trials or unsatisfactory results of these trials or events reported in any of our current or future clinical trials;
announcements about us or about our competitors, including funding announcements, corporate or business updates, updated on manufacturing of our drug candidates, clinical trial results, regulatory approvals or new product introductions;
developments concerning our licensors or product manufacturers;
litigation and other developments relating to our patents or other proprietary rights or those of our competitors;
conditions in the pharmaceutical or biotechnology industries;
governmental regulation and legislation;
variations in our anticipated or actual operating results;
change in securities analysts’ estimates of our performance, or our failure to meet analysts’ expectations;
whether, to what extent and under what conditions the FDA or EMA will permit us to continue developing our product candidates, if at all, and if development is continued, any reports of safety issues or other adverse events observed in any potential future studies of these product candidates;
our ability to enter into new collaborative arrangements with respect to our product candidates;
the terms and timing of any future collaborative, licensing or other arrangements that we may establish;
our ability to raise additional capital to carry through with our pre-clinical and clinical development plans and current and future operations and the terms of any related financing arrangements;
the timing of achievement of, or failure to achieve, our and any potential future collaborators’ manufacturing, pre-clinical, clinical, regulatory and other milestones, such as the commencement of clinical development, the completion of a clinical trial or the receipt of regulatory approval;
announcement of FDA approval or non-approval of our product candidates or delays in or adverse events during the FDA review process;
actions taken by regulatory agencies with respect to our product candidates or products, our clinical trials or our sales and marketing activities, including regulatory actions requiring or leading to restrictions, limitations and/or warnings in the label of an approved product candidate;
uncontemplated problems in the supply of the raw materials used to produce our product candidates or any manufacturing problems with our product candidates;
the commercial success of any product approved by the FDA or its foreign counterparts;
introductions or announcements of technological innovations or new products by us, our potential future collaborators, or our competitors, and the timing of these introductions or announcements;

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market conditions for equity investments in general, or the biotechnology or pharmaceutical industries in particular;
we may have limited or very low trading volume that may increase the volatility of the market price of our ADSs;
regulatory developments in the United States and foreign countries;
changes in the structure or reimbursement policies of health care payment systems;
any intellectual property infringement lawsuit involving us;
actual or anticipated fluctuations in our results of operations;
changes in financial estimates or recommendations by securities analysts;
hedging or arbitrage trading activity that may develop regarding our ADSs;
regional or worldwide recession;
sales of large blocks of our Ordinary Shares or ADSs;
sales of our Ordinary Shares or ADSs by our executive officers, directors and significant shareholders;
managerial costs and expenses;
changes in accounting principles; and
the loss of any of our key scientific or management personnel.

Moreover, the stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading price of Celsus ADSs.

In the past, following periods of volatility in the market price of a company’s securities, shareholders have often instituted class action securities litigation against the company. Such litigation, if instituted, could result in substantial costs and diversion of management attention and resources, which could significantly harm Celsus’s profitability and reputation.

If Celsus fails to meet all applicable NASDAQ Capital Market requirements and NASDAQ determines to delist Celsus ADSs, the delisting could adversely affect the market liquidity of its ADSs and the market price of Celsus ADSs could decrease.

Celsus ADSs are listed on The NASDAQ Capital Market. In order to maintain its listing, Celsus must meet minimum financial, operating and other requirements, including requirements for a minimum amount of capital, a minimum price per share, and active operations. If Celsus is unable to comply with NASDAQ’s listing standards, NASDAQ may determine to delist the Celsus ADSs from The NASDAQ Capital Market. If Celsus ADSs are delisted for any reason, it could reduce the value of its Ordinary Shares and its liquidity. Delisting could also adversely affect the ability to obtain financing for the continuation of Celsus operations, if Celsus chooses to reestablish its business, or to use its Ordinary Shares in acquisitions, including the Acquisition.

On April 9, 2015, Celsus received a written notification from NASDAQ indicating that the Company was not in compliance with NASDAQ Listing Rule 5450(a)(2) because the minimum bid price of the Company’s ADSs, was below $1.00 per ADS for the previous 30 consecutive business days.

Pursuant to the NASDAQ Listing Rule 5810(c)(3)(A), the Company has been granted a 180-calendar day compliance period, or until October 6, 2015, to regain compliance with the minimum bid price requirement. During the compliance period, the Company’s ADSs, will continue to be listed and traded on The NASDAQ Capital Market. To regain compliance, the closing bid price of the Company’s ADSs must meet or exceed $1.00 per ADS for at least ten consecutive business days during this 180-day grace period.

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The Company intends to consider available options to resolve the noncompliance with the minimum bid price requirement, including a change in its ratio of Ordinary Shares to each ADS. There can be no assurance that the Company will be able to regain compliance with the minimum bid price requirement or will otherwise be in compliance with other NASDAQ listing criteria.

Delisting could result in the loss of confidence by suppliers, investors and employees. Delisting would prevent Celsus from satisfying a closing condition for the Acquisition, and, in such event, Volution may elect not to consummate the Acquisition. In addition, the combined organization must submit a new application for listing on The NASDAQ Capital Market after the Acquisition pursuant to the reverse merger rules, and the combined organization will need to meet The NASDAQ Capital Market minimum requirements.

Raising additional funds by issuing securities or through licensing arrangements may cause dilution to existing shareholders, restrict Celsus operations or require Celsus to relinquish proprietary rights.

Additional financing may not be available to Celsus when it needs it or such financing may not be available on favorable terms. To the extent that Celsus raises additional capital by issuing equity securities, its existing shareholders’ ownership will be diluted and the terms of any new equity securities may have preferences over its Ordinary Shares. Any debt financing it enters into may involve covenants that restrict its operations. These restrictive covenants may include limitations on additional borrowing and specific restrictions on the use of Celsus assets, as well as prohibitions on its ability to create liens, pay dividends, redeem its stock or make investments. In addition, if Celsus raises additional funds through licensing arrangements, it may be necessary to relinquish potentially valuable rights to potential products or proprietary technologies, or grant licenses on terms that are not favorable to Celsus.

Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could have a material adverse effect on Celsus stock price.

Section 404 of the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the SEC require an annual management assessment of the effectiveness of Celsus’s internal control over financial reporting. If Celsus fails to maintain the adequacy of its internal control over financial reporting as such standards are modified, supplemented or amended from time to time, it may not be able to ensure that it can conclude on an ongoing basis that Celsus has effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the SEC. If Celsus cannot in the future favorably assess the effectiveness of its internal control over financial reporting, investor confidence in the reliability of its financial reports may be adversely affected, which could have a material adverse effect on Celsus’s stock price.

Risks Related to Volution’s Business

Volution has limited operating history, has incurred significant operating losses since inception and expects to incur significant losses for the foreseeable future. Volution may never become profitable or, if achieved, be able to sustain profitability.

Volution has incurred significant operating losses since it was founded in 2013 and expects to incur significant losses for the foreseeable future as it continues its clinical trial and development programs for Coversin. As of December 31, 2014, Volution had an accumulated deficit of approximately $11.5 million. Losses have principally resulted from costs incurred in its clinical trials, research and development programs and general and administrative expenses. Volution has funded its operations primarily through the private placement of equity securities and debt financing. During 2013 and 2014, Volution received net proceeds of approximately $1.5 million and approximately $4.2 million, respectively, from the issuance of securities and debt financing. As of December 31, 2014, Volution had cash and cash equivalents of $3.3 million. Volution expects to incur significant losses for the foreseeable future as it continues to conduct research and development, clinical testing, regulatory compliance activities and, if Coversin or other future product candidates receive regulatory approval, sales and marketing activities.

Volution currently generates no revenue from product sales, and may never be able to commercialize Coversin or other future product candidates. Because of the numerous risks and uncertainties associated with developing and commercializing Volution’s product candidates, Volution is unable to predict the extent of any future losses or when it will become profitable, if at all.

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Volution’s business depends on the success of Coversin, which is still under development. If Volution is unable to obtain regulatory approval for or successfully commercialize Coversin, its business will be materially harmed.

Coversin has been the sole focus of Volution’s product development. Successful continued development and ultimate regulatory approval of Coversin for a wide range of autoimmune diseases including PNH, aHUS, Guillain-Barré Syndrome (GBS) and others, is critical to the future success of its business. Volution has invested, and will continue to invest, a significant portion of its time and financial resources in the development of Coversin. Volution will need to raise sufficient funds for, and successfully enroll and complete, its ongoing clinical development program for Coversin in PNH. The future regulatory and commercial success of this product candidate is subject to a number of risks, including the following:

Volution may not have sufficient financial and other resources to complete the necessary clinical trials for Coversin;
Volution may not be able to obtain adequate evidence of efficacy and safety for Coversin in PNH, aHUS, myasthenia gravis, GBS, keratoconjunctivitis sicca secondary to Sjogren’s and in conditions such as antibody mediated transplant rejection or any other indication;
Volution does not know the degree to which Coversin will be accepted as a therapy, even if approved;
in its clinical programs, Volution may experience variability in patients, adjustments to clinical trial procedures and the need for additional clinical trial sites, which could delay its clinical trial progress;
the results of its clinical trials may not meet the level of statistical or clinical significance required by the FDA, EMA or comparable foreign regulatory bodies for marketing approval;
patients in Volution’s clinical trials may die or suffer other adverse effects for reasons that may or may not be related to Coversin, which could delay or prevent further clinical development;
the standards implemented by clinical or regulatory agencies may change at any time;
the FDA, EMA or foreign clinical or regulatory agencies may require efficacy endpoints for a Phase 2 clinical trial for the treatment of PNH, aHUS, GBS and in conditions such as antibody mediated transplant rejection that differ from the endpoints of Volution’s planned current or future trials, which may require Volution to conduct additional clinical trials;
the mechanism of action of Coversin is complex and Volution does not know the degree to which it will translate into a medical benefit in certain indications;
if approved for PNH, aHUS, myasthenia gravis, GBS, keratoconjunctivitis sicca secondary to Sjogren’s or antibody mediated transplant rejection, Coversin will likely compete with the off-label use of currently marketed products and other therapies in development;
Volution’s intellectual property rights may not be patentable, valid or enforceable; and
Volution may not be able to obtain, maintain or enforce its patents and other intellectual property rights.

Of the large number of drugs in development in the pharmaceutical industry, only a small percentage results in the submission of a new drug application, or NDA, to the FDA and even fewer are approved for commercialization. Furthermore, even if Volution does receive regulatory approval to market Coversin, any such approval may be subject to limitations on the indicated uses or patient populations for which Volution may market the product. Accordingly, even if Volution is able to obtain the requisite financing to continue to fund its development programs, Volution cannot assure you that Coversin will be successfully developed or commercialized. If Volution or any of its future development partners are unable to develop, or obtain regulatory approval for, or, if approved, successfully commercialize Coversin, Volution may not be able to generate sufficient revenue to continue its business.

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If Volution encounters difficulties enrolling patients in its clinical trials, its clinical development activities could be delayed or otherwise adversely affected.

Volution may not be able to initiate or continue clinical trials required by the FDA, EMA or other foreign regulatory agencies for Coversin if it is unable to locate and enroll a sufficient number of eligible patients to participate in these clinical trials. Volution will be required to identify and enroll a sufficient number of patients with PNH, aHUS, GBS, keratoconjunctivitis sicca secondary to Sjogren’s or antibody mediated transplant rejection for each of its ongoing and planned clinical trials of Coversin in these indications. Each of these is a rare disease or indication with relatively small patient populations, which could result in slow enrollment of clinical trial participants.

Patient enrollment is affected by other factors, including:

severity of the disease under investigation;
design of the clinical trial protocol;
size and nature of the patient population;
eligibility criteria for the trial in question;
perceived risks and benefits of the product candidate under trial;
proximity and availability of clinical trial sites for prospective patients;
availability of competing therapies and clinical trials;
clinicians’ and patients’ perceptions as to the potential advantages of the drug being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating;
efforts to facilitate timely enrollment in clinical trials;
patient referral practices of physicians; and
Volution’s ability to monitor patients adequately during and after treatment.

Further, there are only a limited number of specialist physicians that treat patients with these diseases, and major clinical centers are concentrated in a few geographic regions. Volution also may encounter difficulties in identifying and enrolling such patients with a stage of disease appropriate for its ongoing or future clinical trials. In addition, the process of finding and diagnosing patients may prove costly. Volution’s inability to enroll a sufficient number of patients for any of its clinical trials would result in significant delays or may require Volution to abandon one or more clinical trials.

If clinical trials or regulatory approval processes for Coversin are prolonged, delayed or suspended, Volution may be unable to commercialize Coversin on a timely basis.

Volution cannot predict whether it will encounter problems with any of its completed, ongoing or planned clinical trials that will cause Volution or any regulatory authority to delay or suspend those clinical trials or delay the completion of Volution’s ongoing and planned clinical trials and negatively impact its ability to obtain regulatory approval for, and to market and sell, a particular product candidate:

conditions imposed on Volution by the FDA, EMA or another foreign regulatory authority regarding the scope or design of its clinical trials;
insufficient supply of Volution product candidates or other materials necessary to conduct and complete its clinical trials;
slow enrollment and retention rate of subjects in its clinical trials; and
serious and unexpected drug-related side effects related to the product candidate being tested.

Commercialization may be delayed by the imposition of additional conditions on its clinical trials by the FDA, EMA or any other applicable foreign regulatory authority or the requirement of additional supportive studies by the FDA, EMA or such foreign regulatory authority.

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We do not know whether Volution’s clinical trials will begin as planned, will need to be restructured, or will be completed on schedule, if at all. Delays in Volution’s clinical trials will result in increased development costs for its product candidates, and its financial resources may be insufficient to fund any incremental costs. In addition, if Volution’s clinical trials are delayed, its competitors may be able to bring products to market before it does and the commercial viability of its product candidates could be limited.

The efficacy of Coversin may not be known until advanced stages of testing, after Volution has incurred significant product development costs which may not be recoverable.

Coversin may fail to show the desired efficacy at any phase in the clinical development program. Good efficacy in animal models of the target indication are no guarantee of success in human clinical trials. Often there is no adequate animal model of a human disease, such as PNH. As a result, the first definitive proof of efficacy may not occur until clinical trials in humans. Until Coversin has completed proof of principal clinical trials in target indications, for example, PNH, aHUS and GBS, there can be no assurance that it will have its expected efficacy in these conditions. If Coversin does not demonstrate adequate efficacy, its development may be delayed or terminated, which could have a material adverse effect on Volution’s financial condition and results of operation.

The route of administration or dose for Coversin may be inadequate.

Unsatisfactory drug availability due to problems relating to the route of administration or the target tissue availability of the drug is another potential cause of lack of efficacy of Coversin if and when it is commercialized. Complement component C5, the target of Coversin is predominantly found in blood. For both PNH, aHUS and GBS, Coversin will be administered subcutaneously. The completed single dose phase 1 study shows that Coversin is able to enter the systemic circulation by absorption from subcutaneous sites in healthy volunteers. However, if daily subcutaneous administration proves to be unfeasible, then Volution may need to research additional doses or routes of administration, which could delay commercialization of Coversin and result in significant additional costs to Volution.

Long-term animal toxicity studies of Coversin could result in adverse results.

Volution has not yet undertaken long-term animal toxicity studies of Coversin. Such tests may show that Coversin is toxic in certain animals, is not as effective as Volution expected, or other adverse results. If animal toxicity tests do not yield favorable results, Volution may be required to abandon its development of Coversin, which could have a material adverse effect on Volution’s financial condition and results of operation.

Chronic dosing of patients with Coversin could lead to an immune response that causes adverse reactions or impairs the activity of the drug.

There is a risk that chronic dosing of patients with Coversin may lead to an immune response that causes adverse reactions or impairs the activity of the drug. Patients may develop an allergic reaction to the drug and/or develop antibodies directed at the drug. Impaired drug activity could be caused by neutralization of the drug’s inhibitory activity or by an increased rate of clearance of the drug from circulation.

One potential toxic side effect of Coversin that has occurred in patients receiving Soliris®, (eculizumab), a humanized antibody against complement component C5, may include the inhibition of the terminal complement system, which can result in an increased incidence of meningitis. As a result, we expect that patients receiving Coversin would also receive meningitis immunization and prophylactic antibiotics as indicated.

Coversin has a secondary binding site that sequesters leukotriene B4 (LTB4). LTB4 synthesis from eicosanoid fatty acids can be induced by a variety of triggers including complement. LTB4 is a pro-inflammatory mediator with potent neutrophil attractant properties. LTB4 inhibition may lead to positive anti-inflammory benefits, but another potential cause of undesired side effects is that. The reduction of these neutrophil attractant properties may include increased risk of infection, among others.

Any immune response that causes adverse reactions or impairs the activity of the drug could cause a delay in or termination of Volution’s development of Coversin, which would have a material adverse effect on Volution’s financial condition and results of operation.

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If Coversin is not convenient for patients to use, then potential sales may decrease materially.

Coversin may be required to be kept refrigerated prior to use and will likely require self-injection. If the drug product is not stable at temperatures of between 4 and 8 degrees Celsius, then the drug product may need to be defrosted before use, which patients could view as inconvenient, causing sales to decrease. In addition, if Coversin shows a lack of long-term stability at low storage temperatures, this may negatively impact Volution’s ability to manage the commercial supply chain, which could result in Volution having to refund customers or replace products that are unstable, which could materially increase Volution’s costs and have an adverse effect on its financial condition and results of operation.

Because Coversin has not yet received regulatory approval, it is difficult to predict the time and cost of development and Volution’s ability to successfully complete clinical development and obtain the necessary regulatory approvals for commercialization.

Coversin has not yet received regulatory approval for the treatment of PNH, or other potential indications, and unexpected problems may arise that can cause Volution to delay, suspend or terminate its development efforts. Further, Coversin has not yet demonstrated efficacy for PNH in humans, and the long-term safety consequences of inhibition of C5 with Coversin is not known. Regulatory approval of new product candidates such as Coversin can be more expensive and take longer than approval for candidates for the treatment of more well understood diseases with previously approved products.

Volution plans to seek orphan drug status for Coversin, but it may be unable to obtain such designation or to maintain the benefits associated with orphan drug status, including market exclusivity.

Volution plans to seek orphan drug designation for Coversin in specific orphan indications in which there is a medically plausible basis for its use. In the United States, orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages, and user-fee waivers. After the FDA grants orphan drug designation, the generic identity of the drug and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. Although Volution intends to seek orphan product designation for Coversin, it may never receive such designation.

If a product that has orphan drug designation subsequently receives the first FDA approval for a particular active ingredient for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a BLA, to market the same biologic for the same indication for seven years, except in limited circumstances such as a showing of clinical superiority to the product with orphan product exclusivity or if FDA finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated. Even if Volution were to obtain orphan drug designation for Coversin, it may not be the first to obtain marketing approval for any particular orphan indication due to the uncertainties associated with developing pharmaceutical products. If Volution does obtain exclusive marketing rights in the United States, they may be limited if Volution seeks approval for an indication broader than the orphan designated indication and may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of the relevant patients. Further, exclusivity may not effectively protect the product from competition because different drugs with different active moieties can be approved for the same condition. Even after an orphan drug is approved, the FDA can subsequently approve a drug with the same active moiety for the same condition if the FDA concludes that the later drug is safer, more effective, or makes a major contribution to patient care. Furthermore, the FDA can waive orphan exclusivity if Volution is unable to manufacture sufficient supply of its product.

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Volution may seek a breakthrough therapy designation from the FDA for Coversin. Such designation or similar a designation from other national or international regulatory agencies, may not lead to a faster development or regulatory review or approval process, and it does not increase the likelihood that Coversin or any other product candidates will receive marketing approval.

Volution may seek a breakthrough therapy designation for Coversin. A breakthrough therapy is defined as a product that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. Designation as a breakthrough therapy is within the discretion of the FDA. Receipt of a breakthrough therapy designation for Coversin may not result in a faster development process, review or approval compared to products considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even if Coversin qualifies as a breakthrough therapy, the FDA may later decide that it no longer meet the conditions for qualification.

Even if Volution obtains FDA approval of Coversin, Volution or its partners may never obtain approval or commercialize its products outside of the United States.

In order to market any products outside of the United States, Volution must establish and comply with numerous and varying regulatory requirements of other countries regarding clinical trial design, safety and efficacy. Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not mean that regulatory approval will be obtained in any other country. Approval procedures vary among countries and can involve additional product testing and validation and additional administrative review periods. Seeking foreign regulatory approvals could result in significant delays, difficulties and costs for Volution and may require additional preclinical studies or clinical trials which would be costly and time consuming and could delay or prevent introduction of Coversin in those countries. Volution does not have experience in obtaining regulatory approval in international markets. If Volution or its partners fail to comply with regulatory requirements or to obtain and maintain required approvals, Volution’s target market will be reduced and its ability to realize the full market potential of Coversin will be harmed.

Volution currently has no marketing, sales or distribution infrastructure with respect to its product candidates. If Volution is unable to develop its sales, marketing and distribution capability on its own or through collaborations with marketing partners, Volution will not be successful in commercializing its product candidates.

Volution currently has no marketing, sales or distribution capabilities and has limited sales or marketing experience within its organization. If Volution’s product candidate Coversin is approved, Volution intends either to establish a sales and marketing organization with technical expertise and supporting distribution capabilities to commercialize Coversin, or to outsource this function to a third party. Either of these options would be expensive and time consuming. Some or all of these costs may be incurred in advance of any approval of Coversin. In addition, Volution may not be able to hire a sales force in the United States or other target market that is sufficient in size or has adequate expertise in the medical markets that Volution intends to target. Any failure or delay in the development of Volution’s or third parties’ internal sales, marketing and distribution capabilities would adversely impact the commercialization of Coversin and other future product candidates.

With respect to Volution’s existing and future product candidates, Volution may choose to collaborate with third parties that have direct sales forces and established distribution systems, either to augment or to serve as an alternative to its own sales force and distribution systems. Volution’s product revenue may be lower than if it directly marketed or sold any approved products. In addition, any revenue Volution receives will depend in whole or in part upon the efforts of these third parties, which may not be successful and are generally not within Volution’s control. If Volution is unable to enter into these arrangements on acceptable terms or at all, Volution may not be able to successfully commercialize any approved products. If Volution is not successful in commercializing any approved products, Volution’s future product revenue will suffer and it may incur significant additional losses.

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Volution only has a limited number of employees to manage and operate its business.

As of June 30, 2015, Volution had three full-time employees and a further four full-time equivalent consultants. Its focus on limiting cash utilization requires it to manage and operate its business in a highly efficient manner. We cannot assure you that Volution will be able to retain adequate staffing levels to run its operations and/or to accomplish all of the objectives that Volution otherwise would seek to accomplish.

Volution depends heavily on its executive officers, directors, and principal consultants and the loss of their services would materially harm Volution’s business.

Volution’s success depends, and will likely continue to depend, upon its ability to retain the services of its current executive officers, directors, principal consultants and others. In addition, Volution has established relationships with universities and research institutions which have historically provided, and continue to provide, Volution with access to research laboratories, clinical trials, facilities and patients. The loss of the services of any of these individuals or institutions would have a material adverse effect on Volution’s business.

If Volution fails to obtain the capital necessary to fund its operations, Volution will be unable to successfully develop and commercialize Coversin and other future product candidates.

Volution will require substantial capital in the future to complete the remaining clinical development for Coversin. In order to initiate its Phase 2 clinical program for Coversin in PNH, Volution will need to collaborate with a strategic partner or raise significant capital. Volution expects its spending levels to increase in connection with its clinical trials of Coversin, as well as other corporate activities. The amount and timing of any expenditure needed will depend on numerous factors, including:

the type, number, scope, progress, expansion costs, results of and timing of Volution’s ongoing or future clinical trials or the need for additional clinical trials of Coversin for PNH, aHUS, or any of its other indications or product candidates which Volution is pursuing or may choose to pursue in the future;
the costs of obtaining, maintaining and enforcing its patents and other intellectual property rights;
the costs and timing of obtaining or maintaining manufacturing for Coversin for PNH, aHUS and any its other indications or product candidates, including commercial manufacturing if any product candidate is approved;
the costs and timing of establishing sales marketing, and reimbursement capabilities and enhanced internal controls over financial reporting;
the terms and timing of establishing and maintaining collaborations, license agreements and other partnerships;
costs associated with any new product candidates that Volution may develop, in-license or acquire;
the effect of competing technological and market developments; and
the costs associated with being a public company.

Some of these factors are outside of Volution’s control. Volution does not expect its existing capital resources together with the net proceeds from this Acquisition to be sufficient to enable it to fund the completion of its clinical trials and commercialization of its product candidates. Volution expects that it will need to raise additional funds in the future.

Volution has not sold any products, and it does not expect to sell or derive revenue from any product sales for the foreseeable future. Volution may seek additional funding through future debt and equity financing, as well as potential additional collaborations or strategic partnerships with other companies or through non-dilutive financings. Additional funding may not be available to Volution on acceptable terms or at all. In addition, the terms of any financing may adversely affect the holdings or the rights of Volution’s shareholders. In addition, the issuance of additional shares by Volution, or the possibility of such issuance, may cause the market price of Volution’s shares to decline.

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If Volution is unable to obtain funding on a timely basis, Volution will be unable to complete ongoing and planned clinical trials for Coversin and Volution may be required to significantly curtail some or all of its activities. Volution also could be required to seek funds through arrangements with collaborative partners or otherwise that may require Volution to relinquish rights to its product candidates or some of its technologies or otherwise agree to terms unfavorable to Volution.

If Volution or its partners market products in a manner that violates fraud and abuse and other healthcare laws, or if they violate government price reporting laws, Volution or its partners may be subject to administrative civil and/or criminal penalties.

In addition to FDA restrictions on marketing of pharmaceutical products, several other types of state and federal healthcare laws, including those commonly referred to as “fraud and abuse” laws have been applied in recent years to restrict certain marketing practices in the pharmaceutical industry. These laws include, among others, false claims and anti-kickback statutes. At such time, if ever, as Volution or any of its partners market any of its future approved products, it is possible that some of the business activities of Volution and/or its partners could be subject to challenge under one or more of these laws.

Federal false claims, false statements and civil monetary penalties laws prohibit any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal government or to get a false claim paid. The federal healthcare program anti-kickback statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce, or in return for, purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under Medicare, Medicaid or other federally financed healthcare programs. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other. Although there are several statutory exceptions and regulatory safe harbors protecting certain common activities from prosecution, they are drawn narrowly, and practices that involve remuneration intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor.

In addition, Volution and/or its partners may be subject to data privacy and security regulation, including the Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their respective implementing regulations, which impose specified requirements relating to the privacy, security and transmission of individually identifiable health information.

Most states also have statutes or regulations similar to these federal laws, which may apply to items such as pharmaceutical products and services reimbursed by private insurers. Volution and/or its partners may be subject to administrative, civil and criminal sanctions for violations of any of these federal and state laws.

Volution’s success depends on its ability to protect its intellectual property and its proprietary technologies.

Volution’s commercial success depends in part on its ability to obtain and maintain patent protection and trade secret protection for its product candidates, proprietary technologies, and their uses as well as its ability to operate without infringing upon the proprietary rights of others. Volution can provide no assurance that its patent applications or those of its licensors will result in additional patents being issued or that issued patents will afford sufficient protection against competitors with similar technologies, nor can there be any assurance that the patents issued will not be infringed, designed around or invalidated by third parties. Even issued patents may later be found unenforceable or may be modified or revoked in proceedings instituted by third parties before various patent offices or in courts. The degree of future protection for Volution’s proprietary rights is uncertain. Only limited protection may be available and may not adequately protect Volution’s rights or permit Volution to gain or keep any competitive advantage. Composition-of-matter patents on the biological or chemical active pharmaceutical ingredients are generally considered to offer the strongest protection of intellectual property and provide the broadest scope of patent protection for pharmaceutical products, as such patents provide protection without regard to any method of use or any method of manufacturing. While Volution has issued composition-of-matter patents in the United States and other countries for Coversin, Volution cannot be certain that the claims in its issued composition-of-matter patents will not be found invalid or unenforceable if challenged. Volution cannot be certain that the claims in its patent applications covering

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composition-of-matter or formulations of its product candidates will be considered patentable by the United States Patent and Trademark Office, or USPTO, and courts in the United States or by the patent offices and courts in foreign countries, nor can Volution be certain that the claims in its issued composition-of-matter patents will not be found invalid or unenforceable if challenged. Even if Volution’s patent applications covering formulations of its product candidates issue as patents, the formulation patents protect a specific formulation of a product and may not be enforced against competitors making and marketing a product that has the same active pharmaceutical ingredient in a different formulation. Method-of-use patents protect the use of a product for the specified method or for treatment of a particular indication. This type of patents may not be enforced against competitors making and marketing a product that has the same active pharmaceutical ingredient but is used for a method not included in the patent. Moreover, even if competitors do not actively promote their product for Volution’s targeted indications, physicians may prescribe these products “off-label.” Although off-label prescriptions may infringe or contribute to the infringement of method-of-use patents, the practice is common and such infringement is difficult to prevent or prosecute.

Volution’s issued composition of matter patents for Coversin are expected to expire in the United States as early as 2024. Volution’s additional patents and pending patent applications that cover formulations, combination products and use of Coversin to treat various indications are expected to expire at various times that range from 2024 (for issued patents) to potentially 2031 (for pending patent applications if patents were to issue on the pending applications filed thereon).

The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that Volution or any of its future development partners will be successful in protecting Volution’s product candidates by obtaining and defending patents. These risks and uncertainties include the following:

the USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process. There are situations in which noncompliance can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enter the market earlier than would otherwise have been the case;
patent applications may not result in any patents being issued;
patents that may be issued or in-licensed may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage;
Volution’s competitors, many of whom have substantially greater resources and many of whom have made significant investments in competing technologies, may seek or may have already obtained patents that will limit, interfere with or eliminate Volution’s ability to make, use, and sell its potential product candidates;
there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and
countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing product candidates.

In addition, Volution relies on the protection of its trade secrets and proprietary know-how. Although Volution has taken steps to protect its trade secrets and unpatented know-how, including entering into confidentiality agreements with third parties, and confidential information and inventions agreements with employees, consultants and advisors, Volution cannot provide any assurances that all such agreements have been duly executed, and third parties may still obtain this information or may come upon this or similar information independently. Additionally, if the steps taken to maintain Volution’s trade secrets are deemed inadequate, Volution may have insufficient recourse against third parties for misappropriating its trade secrets. If any of these events occurs or if Volution otherwise loses protection for its trade secrets or proprietary know-how, Volution’s business may be harmed.

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Others may claim an ownership interest in Volution intellectual property which could expose it to litigation and have a significant adverse effect on its prospects.

A third party may claim an ownership interest in one or more of Volution’s patents or other intellectual property. A third party could bring legal actions against Volution and seek monetary damages and/or enjoin clinical testing, manufacturing and marketing of the affected product or products. While Volution believes it owns the right, title and interest in the patents for which it has applied and Volution’s other intellectual property and is presently unaware of any claims or assertions by third-parties with respect to Volution’s patents or other intellectual property, it cannot guarantee that a third-party will not assert a claim or an interest in any of such patents or intellectual property. If Volution becomes involved in any litigation, it could consume a substantial portion of Volution’s resources, and cause a significant diversion of effort by Volution’s technical and management personnel. If any of these actions are successful, in addition to any potential liability for damages, Volution could be required to obtain a license to continue to manufacture or market the affected product, in which case Volution may be required to pay substantial royalties or grant cross-licenses to Volution’s patents. Volution cannot, however, assure you that any such license will be available on acceptable terms, if at all. Ultimately, Volution could be prevented from commercializing a product, or be forced to cease some aspect of its business operations as a result of claims of patent infringement or violation of other IP rights, Further, the outcome of IP litigation is subject to uncertainties that cannot be adequately quantified in advance, including the demeanor and credibility of witnesses and the identity of the adverse party. This is especially true in IP cases that may turn on the testimony of experts as to technical facts upon which experts may reasonably disagree.

Volution’s industry is highly competitive, and its product candidates may become obsolete.

Volution is engaged in a rapidly evolving field. Competition from other pharmaceutical companies, biotechnology companies and research and academic institutions is intense and likely to increase. Many of those companies and institutions have substantially greater financial, technical and human resources than Volution. Those companies and institutions also have substantially greater experience in developing products, conducting clinical trials, obtaining regulatory approval and in manufacturing and marketing pharmaceutical products. Volution’s competitors may succeed in obtaining regulatory approval for their products more rapidly than it does. Competitors have developed or are in the process of developing technologies that are, or in the future may be, the basis for competitive products, such as Alexion Pharmaceuticals’ eculizumab. Volution’s competitors may succeed in developing products that are more effective and/or cost competitive than those it is developing, or that would render its product candidates less competitive or even obsolete. In addition, one or more of Volution’s competitors may achieve product commercialization or patent protection earlier than Volution, which could materially adversely affect Volution’s business.

If the FDA or other applicable regulatory authorities approve generic products that compete with any of Volution’s or any of its partners’ product candidates, the sales of Volution’s product candidates would be adversely affected.

Once an NDA or marketing authorization application outside the United States is approved, the product covered thereby becomes a “listed drug” that can, in turn, be cited by potential competitors in support of approval of an abbreviated new drug application in the United States. Agency regulations and other applicable regulations and policies provide incentives to manufacturers to create modified, non-infringing versions of a drug to facilitate the approval of an abbreviated new drug application or other application for generic substitutes in the United States and in nearly every pharmaceutical market around the world. These generic equivalents, which must meet the same quality standards as branded pharmaceuticals, would be significantly less costly than Volution’s to bring to market, and companies that produce generic equivalents are generally able to offer their products at lower prices. Thus, after the introduction of a generic competitor, a significant percentage of the sales of any branded product is typically lost to the generic product. Accordingly, competition from generic equivalents to Volution’s or any of its partners’ future products, if any, could materially adversely impact Volution’s future revenue, profitability and financial condition.

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If physicians and patients do not accept Volution’s future products or if the market for indications for which any product candidate is approved is smaller than expected, Volution may be unable to generate significant revenue, if any.

Even if any of Volution’s product candidates obtain regulatory approval, they may not gain market acceptance among physicians, patients, and third-party payers. Physicians may decide not to recommend its treatments for a variety of reasons including:

timing of market introduction of competitive products;
demonstration of clinical safety and efficacy compared to other products;
cost-effectiveness;
limited or no coverage by third-party payers;
convenience and ease of administration;
prevalence and severity of adverse side effects;
restrictions in the label of the drug;
other potential advantages of alternative treatment methods; and
ineffective marketing and distribution support of its products.

If any of Volution’s product candidates are approved, but fail to achieve market acceptance or such market is smaller than anticipated, Volution may not be able to generate significant revenue and its business would suffer.

The uncertainty associated with pharmaceutical reimbursement and related matters may adversely affect Volution’s business.

Market acceptance and sales of any one or more of Volution’s product candidates will depend on reimbursement policies and may be affected by future healthcare reform measures in the United States and in foreign jurisdictions. Government authorities and third-party payers, such as private health insurers and health maintenance organizations, decide which drugs they will cover and establish payment levels. We cannot be certain that reimbursement will be available for any of Volution’s product candidates. Also, we cannot be certain that reimbursement policies will not reduce the demand for, or the price paid for, Volution products. The insurance coverage and reimbursement status of newly-approved products for orphan diseases is particularly uncertain, and failure to obtain or maintain adequate coverage and reimbursement for Coversin or any other product candidates could limit Volution’s ability to generate revenue.

The United States and several foreign jurisdictions are considering, or have already enacted, a number of legislative and regulatory proposals to change the healthcare system in ways that could affect Volution’s ability to sell its products profitably. There is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access to healthcare. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives. We expect Volution to experience pricing pressures in connection with the sale of any products that it develops due to the trend toward managed healthcare, increasing influence of health maintenance organizations and additional legislative proposals.

In March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, or collectively, ACA, became law in the U.S. While we cannot predict what impact on federal reimbursement policies this legislation will have, the ACA may result in downward pressure on pharmaceutical reimbursement, which could negatively affect market acceptance of, and the price Volution may charge for, any products it develops that receive regulatory approval.

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If any product liability lawsuits are successfully brought against Volution or any of its collaborative partners, Volution may incur substantial liabilities and may be required to limit commercialization of its product candidates.

Volution faces an inherent risk of product liability lawsuits related to the testing of its product candidates in seriously ill patients and will face an even greater risk if product candidates are approved by regulatory authorities and introduced commercially. Product liability claims may be brought against Volution or its partners by participants enrolled in Volution’s clinical trials, patients, health care providers or others using, administering or selling any of Volution’s future approved products. If Volution cannot successfully defend itself against any such claims, it may incur substantial liabilities, which may result in:

decreased demand for any of Volution’s future approved products;
injury to Volution’s reputation;
withdrawal of clinical trial participants;
termination of clinical trial sites or entire trial programs;
significant litigation costs;
substantial monetary awards to or costly settlements with patients or other claimants;
product recalls or a change in the indications for which they may be used;
loss of revenue;
diversion of management and scientific resources from Volution’s business operations; and
the inability to commercialize Volution’s product candidates.

If any of Volution’s product candidates are approved for commercial sale, Volution will be highly dependent upon consumer perceptions of Volution and the safety and quality of its products. Volution could be adversely affected if it is subject to negative publicity associated with illness or other adverse effects resulting from patients’ use or misuse of Volution’s products or any similar products distributed by other companies.

Volution currently does not have product liability insurance coverage and expects to obtain such coverage initially per clinical trial, which may not be adequate to cover all liabilities that Volution may incur. Volution will need to obtain more comprehensive product liability insurance and increase its insurance coverage when it begins the commercialization of its product candidates. Insurance coverage is becoming increasingly expensive. As a result, Volution may be unable to maintain or obtain sufficient insurance at a reasonable cost to protect Volution against losses that could have a material adverse effect on its business.

Volution enters into various contracts in the normal course of its business in which Volution indemnifies the other party to the contract. In the event Volution has to perform under these indemnification provisions, it could have a material adverse effect on its business, financial condition and results of operations.

In the normal course of business, Volution periodically enters into academic, commercial, service, collaboration, licensing, consulting and other agreements that contain indemnification provisions. With respect to Volution’s academic and other research agreements, Volution typically indemnifies the institution and related parties from losses arising from claims relating to the products, processes or services made, used, sold or performed pursuant to the agreements for which Volution has secured licenses, and from claims arising from Volution’s or its sublicensees’ exercise of rights under the agreement. With respect to Volution’s commercial agreements, Volution indemnifies its vendors from any third-party product liability claims that could result from the production, use or consumption of the product, as well as for alleged infringements of any patent or other intellectual property right by a third party.

Should Volution’s obligation under an indemnification provision exceed applicable insurance coverage or if Volution were denied insurance coverage, Volution’s business, financial condition and results of operations could be adversely affected. Similarly, if Volution is relying on a collaborator to indemnify Volution and the collaborator is denied insurance coverage or the indemnification obligation exceeds the applicable insurance

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coverage and does not have other assets available to indemnify Volution, its business, financial condition and results of operations could be adversely affected.

Volution’s business and operations would suffer in the event of computer system failures.

Despite the implementation of security measures, Volution’s internal computer systems, and those of its partners and other third parties on which Volution relies, are vulnerable to damage from computer viruses, unauthorized access, natural disasters, fire, terrorism, war and telecommunication and electrical failures. In addition, Volution’s systems safeguard important confidential personal data regarding its subjects. If a disruption event were to occur and cause interruptions in Volution’s operations, it could result in a material disruption of its drug development programs. For example, the loss of clinical trial data from completed, ongoing or planned clinical trials could result in delays in Volution’s regulatory approval efforts and significantly increase its costs to recover or reproduce the data. To the extent that any disruption or security breach results in a loss of or damage to Volution’s data or applications, or inappropriate disclosure of confidential or proprietary information, Volution could incur liability and the further development of Coversin and other product candidates could be delayed.

If Volution fails to develop and commercialize other product candidates, Volution may be unable to grow its business.

Although the development and commercialization of Coversin is Volution’s primary focus, as part of its longer-term growth strategy, Volution plans to evaluate the development and commercialization of other therapies related to immune-mediated, inflammatory, orphan and other diseases. Volution will evaluate internal opportunities from its current product candidates, and also may choose to in-license or acquire other product candidates as well as commercial products to treat patients suffering from immune-mediated or orphan or other disorders with high unmet medical needs and limited treatment options. These other product candidates will require additional, time-consuming development efforts prior to commercial sale, including preclinical studies, clinical trials and approval by the FDA and/or applicable foreign regulatory authorities. All product candidates are prone to the risks of failure that are inherent in pharmaceutical product development, including the possibility that the product candidate will not be shown to be sufficiently safe and effective for approval by regulatory authorities. In addition, Volution cannot assure you that any such products that are approved will be manufactured or produced economically, successfully commercialized or widely accepted in the marketplace or be more effective than other commercially available alternatives.

Risks Related to Volution’s Reliance on Third Parties

If the third parties on which Volution relies on for its clinical trials and results do not perform Volution’s clinical trial activities in accordance with good clinical practices and related regulatory requirements, Volution may be unable to obtain regulatory approval for or commercialize its product candidates.

Volution uses and heavily relies on third-party service providers to conduct and/or oversee the clinical trials of its product candidates and expects to continue to do so for the foreseeable future. Nonetheless, Volution is responsible for confirming that each of its clinical trials is conducted in accordance with the FDAs and/or EMA’s requirements and its general investigational plan and protocol.

The FDA and EMA require Volution and its third-party service providers to comply with regulations and standards, commonly referred to as good clinical practices, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the trial participants are adequately protected. Volution’s reliance on third parties that it does not control does not relieve Volution of these responsibilities and requirements. Third parties may not complete activities on schedule or conduct Volution’s clinical trials in accordance with regulatory requirements or the respective trial plans and protocols. In addition, third parties may not be able to repeat their past successes in clinical trials. The third parties’ failure to carry out their obligations could delay or prevent the development, approval and commercialization of Volution product candidates or result in enforcement action against Volution.

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Use of third parties to manufacture Volution’s product candidates may increase the risk that it will not have sufficient quantities of its product candidates, products, or necessary quantities at an acceptable cost.

Volution does not own or operate manufacturing facilities for the production of clinical or commercial quantities of its product candidates, and Volution lacks the resources and the capabilities to do so. As a result, Volution currently relies on third parties for supply of the active pharmaceutical ingredients, or API, in its product candidates. Volution’s strategy is to outsource all manufacturing of its product candidates and products to third parties.

Volution currently engages a third-party manufacturer to provide clinical material of the API and fill and finish services for the final drug product formulation of Coversin that is being used in its clinical trials. Although Volution believes that there are several potential alternative manufacturers who could manufacture Coversin, Volution may incur added costs and delays in identifying and qualifying any such replacement. In addition, Volution has not yet concluded a commercial supply contract with any commercial manufacturer. There is no assurance that Volution would be able to timely secure needed supply arrangements on satisfactory terms, or at all. Volution’s failure to secure these arrangements as needed could have a material adverse effect on its ability to complete the development of its product candidates or, to commercialize them. Volution may be unable to conclude agreements for commercial supply with third-party manufacturers, or may be unable to do so on acceptable terms. There may be difficulties in scaling up to commercial quantities and formulation of Coversin and the costs of manufacturing could be prohibitive.

Even if Volution is able to establish and maintain arrangements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:

reliance on third-parties for manufacturing process development, regulatory compliance and quality assurance;
limitations on supply availability resulting from capacity and scheduling constraints of third-parties;
the possible breach of manufacturing agreements by third-parties because of factors beyond Volution’s control; and
the possible termination or non-renewal of the manufacturing agreements by the third-party, at a time that is costly or inconvenient to Volution.

If Volution does not maintain its key manufacturing relationships, Volution may fail to find replacement manufacturers or develop its own manufacturing capabilities, which could delay or impair Volution’s ability to obtain regulatory approval for its products. If Volution does find replacement manufacturers, Volution may not be able to enter into agreements with them on terms and conditions favorable to it and there could be a substantial delay before new facilities could be qualified and registered with the FDA and other foreign regulatory authorities.

The FDA and other foreign regulatory authorities require manufacturers to register manufacturing facilities. The FDA and corresponding foreign regulators also inspect these facilities to confirm compliance with current good manufacturing practices, or cGMPs. Contract manufacturers may face manufacturing or quality control problems causing drug substance production and shipment delays or a situation where the contractor may not be able to maintain compliance with the applicable cGMP requirements. Any failure to comply with cGMP requirements or other FDA, EMA and comparable foreign regulatory requirements could adversely affect Volution’s clinical research activities and Volution’s ability to develop its product candidates and market its products following approval.

If Volution’s third-party manufacturer of Coversin is unable to increase the scale of its production of Coversin, and/or increase the product yield of its manufacturing, then Volution’s costs to manufacture the product may increase and commercialization may be delayed.

In order to produce sufficient quantities of Coversin to meet the demand for clinical trials and subsequent commercialization, Volution’s third party manufacturer of Coversin will be required to increase its production and optimize its manufacturing processes while maintaining the quality of the product. The transition to larger scale production could prove difficult. In addition, if Volution’s third party manufacturer is not able to optimize its manufacturing process to increase the product yield for Coversin, or if it is unable to produce

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increased amounts of Coversin while maintaining the quality of the product, then Volution may not be able to meet the demands of clinical trials or market demands, which could decrease the Volution’s ability to generate profits and have a material adverse impact on its business and results of operation.

Risks Related to the Combined Organization

In determining whether you should approve the Acquisition, the issuance of Celsus Ordinary Shares and other matters related to the Acquisition, as the case may be, you should carefully read the following risk factors in addition to the risks described under “Risk Factors — Risks Related to the Acquisition,” “Risk Factors — Risks Related to Celsus,” “Risk Factors — Risks Related to the Ordinary shares of Celsus,” “Risk Factors — Risks Related to Volution’s Development, Commercialization and Regulatory Approval,” “Risk Factors — Risks Related to Volution’s Reliance on Third Parties,” and “Risk Factors — Risks Related to Volution’s Business,” which will also apply to the combined organization.

The combined company will incur losses for the foreseeable future and might never achieve profitability.

The combined company may never become profitable, even if the combined company is able to complete clinical development for one or more product candidates and eventually commercialize such product candidates. The combined company will need to successfully complete significant research, development, testing and regulatory compliance activities that, together with projected general and administrative expenses, is expected to result in substantial increased operating losses for at least the next several years. Even if the combined company does achieve profitability, it may not be able to sustain or increase profitability on a quarterly or annual basis.

We expect Celsus’s stock price to be volatile, and the market price of its ADSs may drop following the Acquisition.

The market price of Celsus ADSs following the Acquisition could be subject to significant fluctuations. Market prices for securities of early-stage pharmaceutical, biotechnology and other life sciences companies have historically been particularly volatile. Some of the factors that may cause the market price of Celsus ADSs to fluctuate include:

the ability of the combined organization to obtain regulatory approvals for Coversin or other product candidates, and delays or failures to obtain such approvals;
failure of any of the combined organization’s product candidates, if approved, to achieve commercial success;
issues in manufacturing the combined organization’s approved products, if any, or product candidates;
the results of the combined organization’s current and any future clinical trials of its product candidates;
the entry into, or termination of, key agreements, including key commercial partner agreements;
the initiation of, material developments in, or conclusion of litigation to enforce or defend any of the combined organization’s intellectual property rights or defend against the intellectual property rights of others;
announcements of any dilutive equity financings;
announcements by commercial partners or competitors of new commercial products, clinical progress or the lack thereof, significant contracts, commercial relationships or capital commitments;
adverse publicity relating to the aHUS, myasthenia gravis, Guillain Barré syndrome, keratoconjunctivitis sicca secondary to Sjogren’s or in conditions such as antibody mediated transplant rejection markets, including with respect to other products and potential products in such markets;
the introduction of technological innovations or new therapies that compete with potential products of the combined organization;

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the loss of key employees;
changes in estimates or recommendations by securities analysts, if any, who cover the combined organization’s Ordinary Shares;
general and industry-specific economic conditions that may affect the combined organization’s research and development expenditures;
changes in the structure of health care payment systems; and
period-to-period fluctuations in the combined organization’s financial results.

Moreover, the stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading price of the combined organization’s ADSs.

In the past, following periods of volatility in the market price of a company’s securities, shareholders have often instituted class action securities litigation against those companies. Such litigation, if instituted, could result in substantial costs and diversion of management attention and resources, which could significantly harm the combined organization’s profitability and reputation.

The failure to integrate successfully the businesses of Volution and Celsus in the expected timeframe could adversely affect the future results of the combined organization following the completion of the Acquisition.

The success of the Acquisition will depend, in large part, on the ability of the combined organization following the completion of the Acquisition to realize the anticipated benefits from combining the businesses of Celsus and Volution. The continued operation of the two companies will be complex.

The failure to integrate successfully and to manage successfully the challenges presented by the integration process may result in the combined company’s failure to achieve some or all of the anticipated benefits of the Acquisition.

Potential difficulties that may be encountered in the integration process include the following:

using the combined company’s cash and other assets efficiently to develop the business of Volution;
appropriately managing the liabilities of the combined company;
potential unknown or currently unquantifiable liabilities associated with the Acquisition and the operations of the combined company;
potential unknown and unforeseen expenses, delays or regulatory conditions associated with the Acquisition; and
performance shortfalls at one or both of the companies as a result of the diversion of management’s attention caused by completing the Acquisition and integrating the companies’ operations.

The combined organization will incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies.

The combined organization will incur significant legal, accounting and other expenses that Volution did not incur as a private company, including costs associated with public company reporting requirements. The combined organization will also incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act, as well as new rules implemented by the SEC and The NASDAQ Stock Market LLC. These rules and regulations are expected to increase the combined organization’s legal and financial compliance costs and to make some activities more time-consuming and costly. For example, the combined organization’s management team will consist of the executive officers of Volution prior to the Acquisition, many of whom have not previously managed and operated a public company. These executive officers and other personnel will need to devote substantial time to gaining expertise regarding operations as a public company and compliance with applicable laws and regulations. These rules and regulations may also make it difficult and expensive for the combined organization to obtain directors and officers liability insurance. As a result, it may be more difficult for the combined organization to attract and retain qualified

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individuals to serve on the combined organization’s board of directors or as executive officers of the combined organization, which may adversely affect investor confidence in the combined organization and could cause the combined organization’s business or stock price to suffer.

Anti-takeover provisions in the combined organization’s charter documents and under English law could make an acquisition of the combined organization more difficult and may prevent attempts by the combined organization shareholders to replace or remove the combined organization management.

Provisions in the combined organization’s articles of incorporation may delay or prevent an acquisition or a change in management. These provisions include a classified board of directors and a prohibition on actions by written consent of the combined organization’s shareholders. Although Celsus and Volution believe these provisions collectively will provide for an opportunity to receive higher bids by requiring potential acquirors to negotiate with the combined organization’s board of directors, they would apply even if the offer may be considered beneficial by some shareholders. In addition, these provisions may frustrate or prevent any attempts by the combined organization’s shareholders to replace or remove then current management by making it more difficult for shareholders to replace members of the board of directors, which is responsible for appointing the members of management.

Celsus and Volution do not anticipate that the combined organization will pay any cash dividends in the foreseeable future.

The current expectation is that the combined organization will retain its future earnings to fund the development and growth of the combined organization’s business. As a result, capital appreciation, if any, of the Ordinary Shares of the combined organization will be your sole source of gain, if any, for the foreseeable future.

The pro forma financial statements are presented for illustrative purposes only and may not be an indication of the combined company’s financial condition or results of operations following the completion of the Acquisition.

The pro forma financial statements contained in this proxy statement are presented for illustrative purposes only and may not be an indication of the combined company’s financial condition or results of operations following the Acquisition for several reasons. The pro forma financial statements have been derived from the historical financial statements of Celsus and Volution and adjustments and assumptions have been made regarding the combined company after giving effect to the Acquisition. The information upon which these adjustments and assumptions have been made is preliminary, and these kinds of adjustments and assumptions are difficult to make with accuracy. Moreover, the pro forma financial statements do not reflect all costs that are expected to be incurred by the combined company in connection with the Acquisition. For example, the impact of any incremental costs incurred in integrating the two companies is not reflected in the pro forma financial statements. As a result, the actual financial condition of the combined company following the Acquisition may not be consistent with, or evident from, these pro forma financial statements. The assumptions used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect the combined company’s financial condition following the transaction. See “Unaudited Pro Forma Combined Financial Statements” beginning on page 117 of this proxy statement.

Future sales of shares by existing shareholders could cause the combined organization ADS price to decline.

If existing shareholders of Celsus and Volution sell, or indicate an intention to sell, substantial amounts of the combined organization’s ADSs in the public market after the post-Acquisition lock-up and other legal restrictions on resale discussed in this proxy statement lapse, the trading price of the ADSs of the combined organization could decline.

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The ownership of the combined organization Ordinary Shares will be highly concentrated, it may prevent you and other shareholders from influencing significant corporate decisions and may result in conflicts of interest that could cause the combined organization ADS price to decline.

RPC, which is controlled by Ray Prudo, is expected to beneficially own or control approximately 91.68% of the outstanding shares of the combined organization’s fully diluted Ordinary Shares following the completion of the Acquisition (assuming the exercise of all outstanding vested and unvested options and warrants). Accordingly, Ray Prudo will have substantial influence over the outcome of corporate actions requiring shareholder approval, including the election of directors, any merger, consolidation or sale of all or substantially all of the combined organization’s assets or any other significant corporate transactions. This shareholder may also delay or prevent a change of control of the combined organization, even if such a change of control would benefit the other shareholders of the combined organization. The significant concentration of stock ownership may adversely affect the trading price of the combined organization’s Ordinary Shares due to investors’ perception that conflicts of interest may exist or arise.

Even if the combined company’s drug candidate is successful in clinical trials, the combined company may not be able to successfully commercialize it, which may adversely affect the combined company’s future revenues and financial condition.

Volution has dedicated substantially all of its resources to the research and development of its product candidates. At present, Volution is focusing its resources on Coversin, while strategically conducting development activities on the remainder of its other future product candidates. Volution’s primary product candidate, Coversin, is currently in the clinical development stage. The combined company may not develop any product candidates suitable for commercialization.

Prior to commercialization, each product candidate will require significant additional research, development and preclinical testing and extensive clinical investigation before submission of any regulatory application for marketing approval. Potential products that appear to be promising at early stages of development may not reach the market for a number of reasons, including that they may:

be found ineffective or cause harmful side effects during clinical trials;
fail to receive necessary regulatory approvals;
be difficult to manufacture on a large scale;
be uneconomical to produce;
fail to achieve market acceptance; or
be precluded from commercialization by proprietary rights of third parties.

The combined company’s product development efforts or the combined company’s collaborative partners’ efforts may not be successfully completed for any product candidate, and the combined company may not obtain any required regulatory approvals or successfully commercialize a product candidate even if clinical development for such product candidate is successfully completed. Any products, if introduced, may not be successfully marketed nor achieve customer acceptance, which may adversely affect the combined company’s future revenues and financial condition.

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FORWARD-LOOKING STATEMENTS

This proxy statement and the documents incorporated by reference into this proxy statement contain forward-looking statements. These forward-looking statements are based on current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. These forward-looking statements should not be relied upon as predictions of future events as Celsus cannot assure you that the events or circumstances reflected in these statements will be achieved or will occur. You can identify forward-looking statements by the use of forward-looking terminology including “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “pro forma,” “estimates,” or “anticipates” or the negative of these words and phrases or other variations of these words and phrases or comparable terminology. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. For example, forward-looking statements include, but are not limited to statements about:

the expected benefits of and potential value created by the proposed Acquisition for the shareholders of Celsus and Volution;
the plans, strategies and objectives of management for future operations, including the execution of integration and restructuring plans and the anticipated timing of filings;
any statements concerning proposed new products, services or developments;
likelihood of the satisfaction of certain conditions to the completion of the Acquisition and whether and when the Acquisition will be consummated;
any statements regarding future economic conditions or performance;
statements of the plans, strategies and objectives of management with respect to the approval and closing of the Acquisition, Celsus’s ability to solicit a sufficient number of proxies to approve matters related to the consummation of the Acquisition;
the anticipated exchange ratio, relative ownership percentages of the Celsus and Volution shareholders of the combined company; and
statements of belief and any statement of assumptions underlying any of the foregoing.

For a discussion of the factors that may cause Celsus, Volution or the combined organization’s actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied in such forward-looking statements, or for a discussion of risk associated with the ability of Celsus and Volution to complete the Acquisition and the effect of the Acquisition on the business of Celsus, Volution and the combined organization, see “Risk Factors” beginning on page 14.

Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in reports filed with the SEC by Celsus. See “Where You Can Find More Information” beginning on page 138.

If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, the results of Celsus, Volution or the combined organization could differ materially from the forward-looking statements. All forward-looking statements in this proxy statement are current only as of the date on which the statements were made. Celsus and Volution do not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances after the date on which any statement is made or to reflect the occurrence of unanticipated events.

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THE GENERAL MEETING OF CELSUS SHAREHOLDERS

Date, Time and Place

The General Meeting of Celsus shareholders will be held on [•], 2015, at [•] commencing at [•] local time. Celsus is sending this proxy statement to its shareholders in connection with the solicitation of proxies by the Celsus board of directors for use at the General Meeting and any adjournments or postponements of the General Meeting. This proxy statement is first being furnished to shareholders of Celsus on or about [•], 2015.

Purposes of the General Meeting

The purposes of the General Meeting are:

1. To approve the issuance of Celsus’s Ordinary Shares, par value £0.01 (“Ordinary Shares”) pursuant to the Share Exchange Agreement, dated as of July 10, 2015, by and among Celsus and RPC, a copy of which is attached as Annex A to the accompanying proxy statement.
2. To change the name of the Company to “Akari Therapeutics, Plc”.
3. To elect Ray Prudo as a director of the Company, as a Class C Director as stated in Article 19.2.3 of the Articles of Association of the Company, to serve for a three year term commencing upon the completion of the Acquisition.
4. To elect Clive Richardson as a director of the Company, as a Class B Director as stated in Article 19.2.2 of the Articles of Association of the Company, to serve for a two year term commencing upon the completion of the Acquisition.
5. To approve a proposed amendment to the Company’s 2014 Equity Incentive Plan to increase the number of shares available for the grant of awards by 135,277,420 shares provided that the Acquisition is completed.
6. To set the cap on aggregate director fees (excluding executive Director remuneration) in article 27.1 of the Celsus’ Articles of Association at US$500,000 per annum, such sum to be automatically increased at the end of each fiscal year of Celsus by the same percentage increase as the increase in the U.S. consumer Prices Index as published by the U.S. Bureau of Labor Statistics over that fiscal year.

Recommendation of the Celsus Board of Directors

The Celsus board of directors has determined and believes that the issuance of Celsus’s Ordinary Shares to Volution shareholders pursuant to the terms of the Acquisition Agreement is in the best interests of Celsus and its shareholders and has approved such items. The Celsus board of directors recommends that Celsus shareholders vote “FOR” Celsus Proposal No. 1 to approve the issuance of Celsus’s Ordinary Shares in the Acquisition.
The Celsus board of directors has determined and believes that the change of the name of the Company to “Akari Therapeutics, Plc” is advisable to, and in the best interests of, Celsus and its shareholders and has approved such name change. The Celsus board of directors recommends that Celsus shareholders vote “FOR” Celsus Proposal No. 2 to approve the name change of Celsus to “Akari Therapeutics, Plc”.
The Celsus board of directors has determined and believes that the election of Ray Prudo and Clive Richardson to serve until its director class is up for re-election and until their successors are elected and qualified, is advisable to, and in the best interests of, Celsus and its shareholders and has approved such re-elections. The Celsus board of directors recommends that Celsus shareholders vote “FOR” Celsus Proposal Nos. 3 and 4 to elect Ray Prudo and Clive Richardson.
The Celsus board of directors has determined and believes that the amendment to the Company’s 2014 Equity Incentive Plan to increase the number of shares available for the grant of awards by 135,277,420 shares provided that the Acquisition is completed is in the best interest of Celsus and its shareholders and has approved such amendment. The Celsus board of directors recommends that

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Celsus shareholders vote “FOR” Celsus Proposal No. 5 to approve the amendment to the Company’s 2014 Equity Incentive Plan.
The Celsus board of directors believes that increasing the level of aggregate director fees is in the best interests of Celsus and its shareholders and has approved such proposal. The Celsus board of directors recommends that Celsus shareholders vote “FOR” Celsus Proposal No. 6 to set the cap on aggregate director fees in article 27.1 of the Celsus’ Articles of Association at US$500,000 per annum, such sum to be automatically increased at the end of each fiscal year of Celsus by the same percentage increase as the increase in the U.S. consumer Prices Index as published by the U.S. Bureau of Labor Statistics over that fiscal year.

Entitlement to Vote and Voting Power

Only holders of record of Celsus Ordinary Shares at the close of business on the day two business days prior to the date of the General Meeting are entitled to notice of, and to vote at, the General Meeting. There were approximately 332 holders of record of Celsus Ordinary Shares at the close of business on the date hereof. At the close of business on the date hereof, 55,636,283 Ordinary Shares of Celsus were issued and outstanding, of which approximately 49,349,583 were held in the name of State Street Nominees Ltd., the nominee of Deutsche Bank Trust Americas (the “Depositary”), which issues Company-sponsored American Depositary Receipts (“ADRs”) evidencing American Depositary Shares (“ADSs”) which, in turn, each represent ten (10) Ordinary Shares. With respect to all matters to be voted on at the General Meeting, each shareholder present has only one vote unless demand is made for a vote on a poll (in which case each shareholder gets one vote per Ordinary Share held). The presence, in person or by proxy, of at least two shareholders who hold at least one third of the outstanding Ordinary Shares will constitute a quorum for the transaction of business at the General Meeting. At any adjournment of the General Meeting for the purposes of the NASDAQ Rules, if a quorum is not present within fifteen minutes from the time appointed for such meeting, one person entitled to be counted in a quorum present at the adjournment shall be a quorum. Each Ordinary Share of Celsus entitles the holder thereof to one vote on each matter submitted for shareholders approval.

Voting and Revocation of Proxies

The proxy accompanying this proxy statement is solicited on behalf of the board of directors of Celsus for use at the General Meeting.

If you are a shareholder of record of Celsus as of the close of business on the day two business days prior to the date of the General Meeting, you may vote in person at the General Meeting or vote by proxy using the enclosed proxy card via mail or email. Whether or not you plan to attend the General Meeting, Celsus urges you to vote by proxy to ensure your vote is counted. You may still attend the General Meeting and vote in person if you have already voted by proxy. As a shareholder of record:

to vote in person, come to the General Meeting and Celsus will give you a ballot when you arrive.
to vote using the proxy card, simply mark, sign and date your proxy card and return it promptly in the postage-paid envelope provided to SLC Registrars Limited or via email to slc@davidvenus.com. If you return your signed proxy card to Celsus before the General Meeting, Celsus will vote your shares as you direct.

Persons who hold Ordinary Shares directly must return a proxy card or attend the General Meeting in person in order to vote on the proposals. Persons who own Ordinary Shares indirectly through a brokerage firm, bank or other financial institution, including persons who own Ordinary Shares in the form of ADSs through the Depositary (“beneficial owners”), must return a voting instruction form to have their shares or the shares underlying their ADSs, as the case may be, voted on their behalf. Brokerage firms, banks or other financial institutions that do not receive voting instructions from beneficial owners may either vote these shares on behalf of the beneficial owners or return a proxy leaving these shares un-voted (a “broker non-vote”). ADR holders are not entitled to vote directly at the General Meeting, but a deposit agreement dated as of December 7, 2012, as amended (the “Deposit Agreement”), exists between the Depositary and the holders of ADRs pursuant to which registered holders of ADRs as of the ADR Record Date are entitled to instruct the Depositary as to the exercise of voting rights pertaining to the Ordinary Shares so represented.

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The Depositary has agreed that it will endeavor, insofar as practicable, to vote (in person or by delivery to the Company of a proxy) the Ordinary Shares registered in the name of State Street Nominees Ltd., in accordance with the instructions of the ADR holders. In the event that the instruction card is executed but does not specify the manner in which the Ordinary Shares represented are to be voted (i.e., by marking a vote “FOR”, “AGAINST” or any other option), the Depositary will vote in respect of each proposal as recommended by the Board which is described in the Notice of General Meeting. Instructions from the ADR holders must be sent to the Depositary so that the instructions are received by no later than 10:00 a.m. London time on [•  ], 2015 (the “Instruction Date”).

The Company has retained SLC Registrars to hold and maintain its register of members. SLC Registrars will be engaged by the Company to send proxy forms to all registered members appearing on that register and to take delivery of completed proxy forms posted to it in accordance with the details above.

Abstentions and broker non-votes will be counted for the purpose of determining the presence or absence of a quorum, but will not be counted for the purpose of determining the number of votes cast on a given proposal. The required vote for each of the proposals expected to be acted upon at the General Meeting is described below:

If you do not give instructions to your broker, your broker can vote your Celsus shares with respect to “discretionary” items but not with respect to “non-discretionary” items. Discretionary items are proposals considered routine under the rules of the NASDAQ Capital Market on which your broker may vote shares held in “street name” in the absence of your voting instructions. On non-discretionary items for which you do not give your broker instructions, the Celsus shares will be treated as broker non-votes. It is anticipated that Celsus Proposal Nos. 1 through 6 will be non-discretionary items. Broker non-votes will have no effect on these proposals.

All properly executed proxies that are not revoked will be voted at the General Meeting and at any adjournments or postponements of the General Meeting in accordance with the instructions contained in the proxy. If a holder of Celsus Ordinary Shares executes and returns a proxy and does not specify otherwise, the shares represented by that proxy will be voted by the Chairman “For” the approval of the issuance of Celsus Ordinary Shares in the Acquisition, “For” the approval of the change of the Company’s name to “Akari Therapeutics, Plc”, “For” the approval of the amendment to the Company’s 2014 Equity Incentive Plan and “For” the increased cap on director fees.

Celsus shareholders of record, may change their vote at any time before their proxy is voted at the General Meeting in one of three ways. First, a shareholder of record of Celsus can send a written notice to the Chief Executive Officer of Celsus stating that the shareholder would like to revoke its proxy. Second, a shareholder of record of Celsus can submit new proxy instructions on a new proxy card via mail or email. Third, a shareholder of record of Celsus can attend the General Meeting and vote in person. Attendance alone will not revoke a proxy.

Beneficial owners of our Ordinary Shares and holders of ADSs representing our Ordinary Shares who wish to change or revoke their voting instructions should contact their brokerage firm, bank or other financial institution or the Depositary, as applicable, for information on how to do so. Generally, however, beneficial owners of our Ordinary Shares and holders of ADSs representing our Ordinary Shares who wish to change or revoke their voting instructions may do so up until 10:00 a.m. London Time on the Instruction Date. Beneficial owners who wish to attend the General Meeting and vote in person should contact their brokerage firm, bank or other financial institution holding Ordinary Shares of Celsus on their behalf in order to obtain a “legal proxy” which will allow them to both attend the meeting and vote in person. Without a legal proxy, beneficial owners cannot vote at the General Meeting because their brokerage firm, bank or other financial institution may have already voted or returned a broker non-vote on their behalf. Record holders of ADSs representing our Ordinary Shares who wish to attend the General Meeting and vote in person should contact the Depositary (and beneficial owners wishing to do the same should contact their brokerage firm, bank or other financial institution holding their ADSs) to cause their ADSs to be cancelled and the underlying shares to be withdrawn in accordance with the terms and conditions of the Deposit Agreement so as to be recognized by us as a record holder of our Ordinary Shares.

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Required Vote

The presence, in person or by proxy, of at least two shareholders who hold at least one third of the outstanding Ordinary Shares will constitute a quorum for the transaction of business at the General Meeting for the purposes of the NASDAQ Rules. At any adjournment of the General Meeting, if a quorum is not present within fifteen minutes from the time appointed for such meeting, one person entitled to be counted in a quorum present at the adjournment shall be a quorum.

Proposal No. 1 — Approval of the Issuance of Ordinary Shares in the Acquisition.  This proposal will be approved if (i) on a show of hands, a majority of shareholders present in person or by proxy and voting on the proposal vote in favor of the resolution or (ii) on a poll, a majority of the shares present at the meeting in person or by proxy and voting on the proposal are voted in favor of the resolution. As a result, abstentions and broker non-votes will have no effect on the vote outcome.

Proposal No. 2 — Approval of Name Change.  This proposal will be approved if (i) on a show of hands, three quarters of shareholders present in person or by proxy and voting on the proposal vote in favor of the resolution or (ii) on a poll, three quarters of the shares present at the meeting in person or by proxy and voting on the proposal are voted in favor of the resolution. As a result, abstentions and broker non-votes will have no effect on the vote outcome.

Proposal Nos. 3 and 4 — Election of Directors.  Each director nominated for election is elected if (i) on a show of hands, a majority of shareholders present in person or by proxy and voting on the proposal vote in favor of such director or (ii) on a poll, a majority of the shares present at the meeting in person or by proxy and voting on the proposal are voted in favor of such director. As a result, abstentions and broker non-votes will have no effect on the vote outcome.

Proposal No. 5 — Approval of Amendment to the Company’s 2014 Equity Incentive Plan.  This proposal will be approved if (i) on a show of hands, a majority of shareholders present in person or by proxy and voting on the proposal vote in favor of the resolution or (ii) on a poll, a majority of the shares present at the meeting in person or by proxy and voting on the proposal are voted in favor of the resolution. As a result, abstentions and broker non-votes will have no effect on the vote outcome.

Proposal No. 6 — Increase in Cap on Aggregate Director Fees.  This proposal will be approved if (i) on a show of hands, a majority of shareholders present in person or by proxy and voting on the proposal vote in favor of the resolution or (ii) on a poll, a majority of the shares present at the meeting in person or by proxy and voting on the proposal are voted in favor of the resolution. As a result, abstentions and broker non-votes will have no effect on the vote outcome.

As of June 30, 2015, the directors and executive officers of Celsus beneficially owned approximately 6.8% of the outstanding Ordinary Shares of Celsus entitled to vote at the General Meeting. As of June 30, 2015, Celsus is not aware of any affiliate of Volution, owning any Celsus Ordinary Shares entitled to vote at the General Meeting. See the “The Acquisition — Interests of the Celsus Directors and Executive Officers in the Acquisition” section for additional information.

Solicitation of Proxies

In addition to solicitation by mail, the directors, officers, employees and agents of Celsus may solicit proxies from Celsus shareholders by personal interview, telephone, telegram or otherwise. Arrangements will also be made with brokerage firms and other custodians, nominees and fiduciaries who are record holders of Celsus Ordinary Shares for the forwarding of solicitation materials to the beneficial owners of Celsus Ordinary Shares. Celsus will reimburse these brokers, custodians, nominees and fiduciaries for the reasonable out-of-pocket expenses they incur in connection with the forwarding of solicitation materials.

Other Matters

As of the date of this proxy statement, the Celsus board of directors does not know of any business to be presented at the General Meeting other than as set forth in the notice accompanying this proxy statement. If any other matters should properly come before the General Meeting, it is intended that the shares represented by proxies will be voted with respect to such matters in accordance with the judgment of the persons voting the proxies.

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THE ACQUISITION

This section and the section entitled “The Acquisition Agreement” in this proxy statement describe the material aspects of the Acquisition, including the Acquisition Agreement. While Celsus and Volution believe that this description covers the material terms of the Acquisition and the Acquisition Agreement, it may not contain all of the information that is important to you. You should read carefully this entire proxy statement for a more complete understanding of the Acquisition and the Acquisition Agreement, including the Acquisition Agreement attached as Annex A, the Lock-up Agreement attached as Annex B, the Relationship Agreement attached as Annex C, the opinion of MTS attached as Annex D, and the other documents to which you are referred herein. See the section entitled “Where You Can Find More Information” in this proxy statement.

Background of the Acquisition

The terms of the Acquisition Agreement between Celsus and RPC (together, “the companies”) with respect to Celsus’s acquisition of the entire issued share capital of Volution are the result of extensive arm’s-length negotiations among the management teams, and representatives of the management teams, of Celsus and Volution, under the guidance of each company’s board of directors, and involving outside advisors retained by each of the companies. From the beginning of the process, Celsus followed a careful process assisted by experienced outside financial and legal advisors to rigorously examine potential merger and acquisition partners in a broad and inclusive manner. The following is a summary of the background of the process, the negotiations, the Acquisition and related transactions, including the circumstances surrounding Celsus’s decision to review strategic alternatives available to it.

In February 2015, Celsus announced that the Phase II Trial of MRX-6 Cream 2% in pediatric atopic dermatitis did not reach the primary endpoint. Prior to this announcement, Celsus was conducting a double-blind, parallel-group, vehicle-controlled clinical trial to evaluate the safety and efficacy of MRX-6 cream 2% in a pediatric population with mild to moderate atopic dermatitis. Following such announcement, Celsus’s board of directors and management determined that it should begin exploring potential business combination opportunities.

Following the direction of the Board, Celsus management reached out to its bankers, including MTS Health Partners, L.P. (“MTS”), board members, advisors, including Torreya Partners LLC (“Torreya”) and industry contacts to determine the best path forward in terms of finding potential candidates to in-license or for merger, as well as screening candidates from several bankers and biotech/pharma contacts. Celsus initially hired Torreya and entered into an engagement letter on March 1, 2015 with Torreya. Celsus subsequently hired MTS as its investment banker and entered into an engagement letter with MTS on May 4, 2015.

During February, 2015, our senior management dealt with Torreya and MTS, on an informal basis to develop criteria for the potential acquisition of merger candidates and to assess and identify suitable third parties for a potential strategic transaction. During this period, Torreya, in consultation with our senior management, screened approximately 40 companies for a potential business combination. Of this group of 40 companies, 20 were investigated further and approximately six were identified as potential business combination candidates. Our senior management met with MTS informally to determine whether there were any known conflicts with MTS as the banker and the potential merger partners. Our senior management also spoke with and considered several other investment banks and boutique banks to assess the possibility of working with them during the merger candidate selection process.

On February 16, 2015, our board met to discuss the outcome of the MRX-6 clinical trial. After extensive discussion, our board resolved to suspend development of MRX-6. At this meeting, our senior management also reviewed with the board Celsus’s strategic plan and considered potential strategic opportunities available to Celsus, including repeat testing of MRX-6 in a dermatology indication in the United States or other non-dermatologic indication, advancing our pre-clinical candidates through animal models, the liquidation of the Company and distribution of assets to our shareholders, or the acquisition of new program assets and/or the sale of the Company. Our board and senior management discussed the magnitude of the resources required to redesign and develop Celsus’s current product candidates, both clinical and pre-clinical, and concluded that the process to redesign the assets and the early-stage of the other product candidates would likely not enable the Company to obtain the amount of funding required to meaningfully develop such assets in the near-term.

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Additionally, our board felt that liquidation of the Company and distribution of the Company’s remaining cash resources to shareholders would provide little or no immediate increase in value to shareholders. On the other hand, our board believed that the Company’s status as an SEC reporting company, its strong and experienced management and its continued NASDAQ listing, combined with its existing cash resources, could likely attract high-quality merger partners who may possess new later-stage clinical assets that, if developed, could provide greater potential value to Celsus’s shareholders in the future. Our senior management also discussed with our board of directors their efforts to identify potential strategic partners, including an initial identification of approximately six potential merger candidates using screening criteria developed in consultation with representatives of MTS.

On February 27, 2015, Clive Richardson, a representative of Volution and Michael King, a U.S. advisor for Volution, acting on behalf of Volution’s board of directors, initiated dialogue with our chief executive officer, Gur Roshwalb, M.D. to provide an introduction to Volution and express interest in being a merger partner with Celsus. Following that discussion, the parties arranged a meeting between the companies to discuss a possible merger.

During the months of February and March, 2015, non-disclosure agreements were executed by seven potential merger or business candidates, including Volution.

On March 3, 2015, Ray Prudo, chief executive officer and chairman of Volution, had a conversation with a representative of MTS regarding our strategic alternatives process and expressed Volution’s interest in being considered as a merger partner for Celsus. On the same day, Gur Roshwalb, M.D. provided Clive Richardson with a copy of Celsus’s nondisclosure agreement. On March 4, 2015, Clive Richardson, acting on behalf of Volution’s board of directors, delivered an executed nondisclosure agreement to Gur Roshwalb, M.D.

During the period from March 10 through March 12, 2015, members of Volution’s and our management teams participated in meetings during which we provided an overview of our current operations and recently announced restructuring, and Volution provided an overview and an in-depth slide presentation of its development program for its lead product Coversin.

On March 10, 2015, members of our due diligence team started reviewing Volution’s regulatory, commercial, intellectual property, Chemistry, Manufacturing and Control (CMC), preclinical and clinical data.

On March 11 and 12, 2015, Mark Cohen and Gur Roshwalb, M.D. had diligence meetings with the advisors and Board members of Volution.

On March 18, 2015, MTS met with representatives of Volution in New York to discuss potential structure. On that same date, management of Celsus met with MTS after the Volution meeting to discuss suggested structure.

On March 18, 2015, after thorough discussion of the Volution suggested conceptual terms with MTS, Celsus responded with a counter proposal. On March 20, 2015, Volution relayed their initial response to the counter proposal.

On March 18, 2015, Clive Richardson and Michael King, a U.S. advisor for Volution, acting on behalf of Volution’s board of directors, discussed with MTS terms of a non-binding proposal letter that outlined a potential merger with Volution and provided details for a pro forma equity split between the companies, an overview of Volution’s clinical program, Volution’s financial projections and near-term financing needs for Volution’s business.

On March 18, 2015, Mintz provided a due diligence request list to Volution. Both companies provided multiple diligence requests and responses through access to electronic data rooms and emailed documents from March, 2015 through the eventual signing of the Acquisition Agreement on July 10, 2015.

Discussion of terms continued from March 23, 2015 through March 26, 2015 and On March 26, 2015, Celsus forwarded to MTS an initial draft term sheet.

Beginning on March 23, 2015, we began to provide the top potential candidates, including Volution, access to our dataroom. Our data room included all clinical, preclinical, regulatory, intellectual property,

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financial and business operational information and corporate records. All candidates were granted the same level of access to our dataroom at this stage.

During the week of March 30, 2015, Volution suggested several changes to the language of the term sheet that were discussed with MTS and counsel for both parties.

On March 31, 2015, after an in-depth discussion, our board, in consultation with a representative of Mintz, approved the engagement of a financial advisor to act as the exclusive provider of a fairness opinion in connection with a transaction.

A meeting of our board was held on March 31, 2015, at which management of Celsus presented an updated list of possible merger candidates. From an initial list of approximately six companies, all companies were selected for more detailed evaluation based on general company criterion and program, indication, technology, and specific company characteristics. These six candidates were chosen based on certain characteristics, including pedigree science, differentiated drug pipelines and meaningful catalysts to drive value appreciation within twelve to eighteen months using Celsus’s cash contribution and management in addition to those candidates own cash. Our board discussed the potential merger candidates with our management at length and our board conferred with its legal counsel, DLA Piper UK and Mintz, relating to its duties and obligations in connection with the process.

In February, March and April, 2015, the process of considering various merger partners continued with several meetings and conference calls between Celsus management and companies under confidentiality agreements, as well as experts and key opinion leaders for various potential therapies under discussion.

On March 10, March 11, March 12, March 20, April 2 and April 13, 2015, representatives of Volution and Celsus discussed financial modeling inputs and assumptions in meetings and telephone calls.

On or around March 12, 2015, March 18, 2015 and March 23 – 26, 2015, Mark Cohen and Ray Prudo, in their capacities as chairman of the board of directors of Volution and Celsus, respectively, with MTS and management from both parties, discussed the potential composition of the board of directors and management team of the merged company.

On March 31, 2015, representatives from management of Celsus and Volution, counsel for both companies and representatives of MTS held a meeting in New York to discuss transaction structure, timelines and a potential path forward.

On April 6, 2015, representatives of MTS sent a summary of the bid process to date to our executive chairman and management and provided potential transaction timelines.

A final term sheet was sent on April 7, 2015 and executed by both Celsus and Volution.

On April 12, 2015, Mark Cohen provided our board of directors with an update on the diligence process with Volution.

On April 21, 2015, a special meeting of our board of directors was held to discuss the potential transaction. Representatives of MTS and our management presented candidate evaluation materials for Volution. Our board of directors engaged in extensive discussions regarding Volution. Our board of directors decided that a business combination with Volution was in the best interests of the Celsus shareholders after an in-depth discussion of various factors including the following: Volution’s sizeable market opportunity, the opportunity as a result of the Acquisition for Celsus shareholders to participate in the value of the Volution product candidate portfolio, the likelihood that the combined organization would allow management to raise sufficient financial resources to allow the management team to focus on the continued development and anticipated commercialization of Coversin, and an experienced senior management team and board of directors that would be comprised of representatives from each of the current board of directors of Celsus and Volution to lead the combined organization. Our board of directors deliberated and decided unanimously to direct our management to move negotiations forward with Volution.

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On May 5, 2015, members of Volution’s management and board of directors met with members of our management and board of directors in London to discuss the proposed transaction and the outstanding diligence questions relating to Volution’s business. Volution presented and discussed additional information regarding its development plans.

On May 6, 2015, DLA Piper, Celsus’s UK legal counsel, also delivered to Volution an initial draft of the Acquisition Agreement. Between May 6, 2015 and July 1, 2015, Volution and Celsus exchanged several revisions to the Acquisition Agreement, its exhibits and schedules, exchanged materials in response to diligence requests and representatives of each of the companies participated in various calls to discuss the Acquisition Agreement, its exhibits and schedules and various due diligence matters.

On June 23, 2015, at a special telephonic meeting, our board in consultation with our management and representatives of MTS and Mintz reviewed the strategic review process and considered the proposals received to date, including Volution’s current proposal. At this meeting, representatives of MTS reviewed with our board of directors its financial analyses of the consideration to be paid by Celsus in the Acquisition and delivered to our board MTS’s opinion, to the effect that and subject to the various assumptions, qualifications and limitations set forth in its opinion, as of that date, the exchange ratio for the consideration to be paid in the Acquisition was fair, from a financial point of view, to Celsus. Also, at this meeting, representatives of DLA Piper and Mintz reviewed the terms of the proposed Acquisition Agreement and other transaction agreements, including conditions to closing, termination rights and any fees associated with terminations under circumstances, and our limited right to continue negotiations with other interested parties. Our board engaged in extensive discussions relating to Volution, its business and the terms of the proposed transaction. Our board of directors voted unanimously to approve the Acquisition Agreement, the Acquisition, the issuance of Celsus Ordinary Shares to Volution shareholders pursuant to the terms of the Acquisition Agreement, the change of control of Celsus, and the other actions contemplated by the Acquisition Agreement, subject to satisfactory resolution of certain outstanding terms.

Between June 24, 2015 and July 1, 2015, Mark Cohen, Gur Roshwalb, Ray Prudo, Stuart Unger, a director of Volution, and Clive Richardson and counsel for both finalized the outstanding terms of the Acquisition Agreement.

On July 10, 2015, we entered into the Acquisition Agreement with Volution. Before the opening of trading on the Nasdaq Stock Market on July 13, 2015, we issued a joint press release with Volution announcing the execution of the Acquisition Agreement.

Historical Background of Volution

Varleigh Limited was incorporated in 2007 by a group of private shareholders, the largest of which and majority shareholder being Dr. Ray Prudo. Varleigh Limited then acquired the intellectual property, by an assignment dated September 5, 2007, of the intellectual property for Coversin from Evolutec Plc.

On June 29, 2010, Varleigh Limited changed its name to Varleigh Immuno Pharmaceuticals Ltd (“VIP”). On October 14, 2013 the shareholders of VIP formed a Swiss company, Volution Immuno Pharmaceuticals SA (“Volution”) and in July 2014, VIP completed the transfer of its entire business and assets (including its intellectual property assets) to Volution.

On June 23, 2015, the shareholders of Volution formed a Maltese company, RPC Pharma Limited (“RPC Pharma”) and on July 3, 2015 the shareholders of Volution contributed the entire issued share capital of Volution to RPC Pharma. Accordingly, as of July 3, 2015 Volution is a wholly-owned subsidiary of RPC Pharma Limited.

Reasons for the Acquisition

Our board considered the following factors in reaching its conclusion to approve the Acquisition and to recommend that the Celsus shareholders approve the issuance of Celsus Ordinary Shares in the Acquisition, all of which our board viewed as supporting its decision to approve the business combination with Volution:

Our board and its financial advisor had undertaken a comprehensive and thorough process of reviewing and analyzing potential merger candidates to identify the opportunity that would, in our board’s opinion, create the most value for Celsus’s shareholders.

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Our board believes, based in part on the judgment, advice and analysis of our senior management with respect to the potential strategic, financial and operational benefits of the Acquisition (which judgment, advice and analysis was informed in part on the business, technical, financial, accounting and legal due diligence investigation performed with respect to Volution), that Volution’s lead drug candidate represents a sizeable market opportunity, and may provide new medical benefits for a diverse patient population of complement mediated rare and orphan diseases and returns for investors.
Our board also reviewed with our management and Volution’s management the current plans of Volution for developing Coversin to confirm the likelihood that the combined organization would possess sufficient financial resources to allow the management team to focus on the continued development and potential commercialization of Coversin. Our board also considered the possibility that the combined organization would be able to take advantage of the potential benefits resulting from the combination of the Celsus public company structure with the Volution business to raise additional funds in the near future, as well as the combination of two strong management teams.
Our board concluded that the Acquisition would provide the existing Celsus shareholders a significant opportunity to participate in the potential growth of the combined organization following the Acquisition.
Our board also considered that the combined organization will be led by an experienced senior management team and a board of directors with representation from each of the current boards of directors of Celsus and Volution.
Our board considered the financial analyses of MTS, including MTS’s opinion to our board as to the fairness to Celsus, from a financial point of view and as of the date of the opinion, of the exchange ratio, as more fully described below under the caption “The Acquisition — Opinion of MTS Health Partners.”

Our board also reviewed the recent financial condition, results of operations and financial condition of Celsus, including:

the lack of success in developing our lead product and the unlikeliness that such circumstances would change for the benefit of our shareholders in the foreseeable future;
the loss of the operational capabilities of Celsus, and the risks associated with continuing to operate Celsus on a stand-alone basis, including the need to rebuild infrastructure and management to continue its operations and the need to raise significant additional capital to prosecute any development program for our pre-clinical candidates, which both the board and management feel would not be available from the public markets based on the early nature of the programs;
the results of substantial efforts made by Celsus’s senior management and financial advisors to solicit strategic alternatives for Celsus to the Acquisition, including the discussions that Celsus management and the Celsus board of directors had in early 2015 with other potential Acquisition candidates; and
the projected liquidation value of Celsus and the risks, costs and timing associated with liquidating compared to the value Celsus shareholders will receive in the Acquisition.

Our board also reviewed the terms of the Acquisition and associated transactions, including:

the exchange ratio used to establish the number of Celsus’s Ordinary Shares to be issued in the Acquisition is fixed based on the relative valuations of the companies, and thus the relative percentage ownership of Celsus shareholders and Volution shareholders immediately following the completion of the Acquisition is similarly fixed;
the limited number and nature of the conditions to the Volution obligation to consummate the Acquisition and the limited risk of non-satisfaction of such conditions as well as the likelihood that the Acquisition will be consummated on a timely basis;

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the respective rights of, and limitations on, Celsus and Volution under the Acquisition Agreement to consider certain unsolicited acquisition proposals under certain circumstances should Celsus or Volution receive an alternative proposal;
the reasonableness of the potential termination fee of up to $6,000,000, which could become payable by either Celsus or Volution if the Acquisition Agreement is terminated in certain circumstances;
the fact that Celsus would solicit the approval of its shareholders to the Acquisition Agreement as soon as practicable following execution of the Acquisition Agreement and, if the Acquisition Agreement is not approved, RPC could terminate the Acquisition Agreement and receive reimbursement of reasonably incurred expenses;
the fact that the Acquisition Agreement could be terminated if RPC’s board were not satisfied that Celsus could be financed at levels and on terms satisfactory to RPC;
the controls in the agreement which would restrict what each of Celsus and Volution could do between signing and closing of the Acquisition Agreement without the consent of the other; and
the belief that the terms of the Acquisition Agreement, including the parties’ representations, warranties and covenants, and the conditions to their respective obligations, are reasonable under the circumstances.

In the course of its deliberations, our board also considered a variety of risks and other countervailing factors related to entering into the Acquisition, including:

the termination fee of $6,000,000 upon the occurrence of certain events and the potential effect of such termination fee in deterring other potential acquirors from proposing an alternative transaction that may be more advantageous to Celsus shareholders;
the substantial expenses to be incurred in connection with the Acquisition;
the possible volatility, at least in the short term, of the trading price of the Celsus ADSs resulting from the Acquisition announcement;
the risk that the Acquisition might not be consummated in a timely manner or at all and the potential adverse effect of the public announcement of the Acquisition or on the delay or failure to complete the Acquisition on the reputation of Celsus;
the risk to the business of Celsus, operations and financial results in the event that the Acquisition is not consummated, including the diminution of Celsus’s cash and its likely inability to raise additional capital through the public or private sale of equity securities;
the strategic direction of the continuing entity following the completion of the Acquisition, which will be determined by our board of directors, which will include Ray Prudo and Clive Richardson of Volution; and
various other risks associated with the combined organization and the Acquisition, including those described in the section entitled “Risk Factors” in this proxy statement.

The foregoing information and factors considered by the Celsus board of directors are not intended to be exhaustive but are believed to include all of the material factors considered by the Celsus board of directors. In view of the wide variety of factors considered in connection with its evaluation of the Acquisition and the complexity of these matters, the Celsus board of directors did not find it useful, and did not attempt, to quantify, rank or otherwise assign relative weights to these factors. In considering the factors described above, individual members of the Celsus board of directors may have given different weight to different factors. The Celsus board of directors conducted an overall analysis of the factors described above, including thorough discussions with, and questioning of, the Celsus management team and the legal and financial advisors of Celsus, and considered the factors overall to be favorable to, and to support, its determination.

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Opinion of MTS Health Partners

Pursuant to an engagement letter dated May 4, 2015, Celsus retained MTS to act as a financial advisor in connection with the Acquisition and to render an opinion to the Celsus board of directors as to the fairness, from a financial point of view, to Celsus of the exchange ratio in the Acquisition.

On June 23, 2015, MTS delivered its opinion to the Celsus board of directors to the effect that and subject to the various assumptions, qualifications and limitations set forth therein, as of that date, the exchange ratio in the Acquisition was fair, from a financial point of view, to Celsus. The full text of the written opinion of MTS, dated June 23, 2015, is attached as Annex D to this proxy statement and is incorporated by reference. Celsus encourages holders of Celsus Ordinary Shares to read the opinion in its entirety for the assumptions made, procedures followed, other matters considered and limits of the review by MTS. The summary of the written opinion of MTS set forth herein is qualified by reference to the full text of such opinion. MTS’ analyses and opinion were prepared for and addressed to the Celsus board of directors and are directed only to the fairness, from a financial point of view, of the exchange ratio in the Acquisition. MTS’ opinion is not a recommendation to any stockholder as to how to vote with respect to the proposed Acquisition or to take any other action in connection with the Acquisition or otherwise.

In connection with its opinion, MTS reviewed and considered such financial and other matters as it deemed relevant, including, among other things:

a draft of the Acquisition Agreement dated June 22, 2015;
certain publicly available business and financial information concerning Celsus and Volution and the industries in which they operate furnished to MTS by Celsus management;
certain internal financial analyses and forecasts of Celsus and Volution prepared by the management of Celsus relating to each of Celsus’s and Volution’s business, including certain benefits to be realized as a result of the Transaction (the “Financial Forecasts”);
discussions MTS had with certain members of the managements of each of Celsus and Volution concerning the historical and current business operations, financial condition and prospects of Volution and such other matters MTS deemed relevant;
compared the financial and operating performance of Volution with publicly available information concerning other publicly-traded companies and reviewed the current and historical market prices of securities of certain publicly traded securities of such other companies, in each case, that MTS deemed relevant;
compared the financial and operating performance of Volution with the performance of the initial public offerings of certain companies that MTS deemed relevant;
certain financial terms of the Acquisition as compared to the financial terms of certain selected business combinations MTS deemed relevant;
reviewed and analyzed, based on the Financial Forecasts, the cash flows generated by Volution to determine the present value of Volution’s discounted cash flows; and
such other information, financial studies, analyses and investigations and such other factors that MTS deemed relevant for the purposes of its opinion.

In conducting its review and arriving at its opinion, MTS, with the Celsus board of directors’ consent, assumed and relied, without independent investigation, upon the accuracy and completeness of all financial and other information provided to it by Celsus and Volution, respectively, or which is publicly available or was otherwise reviewed by MTS. MTS did not undertake any responsibility for the accuracy, completeness or reasonableness of, or independent verification of, such information. MTS relied upon, without independent verifications, the assessment of Celsus management and Volution management as to the viability of, and risks associated with, the current and future products and services of Volution (including without limitation, the development, testing and marketing of such products and services, the receipt of all necessary governmental and other regulatory approvals for the development, testing and marketing thereof, and the life and

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enforceability of all relevant patents and other intellectual and other property rights associated with such products and services). In addition, MTS did not conduct or assume any obligation to conduct any physical inspection of the properties or facilities of Celsus or Volution. MTS, with the Celsus board of directors’ consent, assumed that Financial Forecasts were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments as to the future performance of Volution, and such projections provide a reasonable basis for MTS’ opinion. MTS expressed no opinion as to the Financial Forecasts or the assumptions on which they were made. MTS expressly disclaimed any undertaking or obligation to advise any person of any change in any fact or matter affecting its opinion of which MTS becomes aware after the date of its opinion.

MTS assumed that there were no material changes in the assets, liabilities, financial condition, results of operations, business or prospects of Celsus or Volution since the date of the last financial statements made available to it. MTS did not make or obtain any independent evaluations, valuations or appraisals of the assets or liabilities of Celsus or Volution, nor was MTS furnished with such materials. In addition, MTS did not evaluate the solvency or fair value of Volution under any state or federal laws relating to bankruptcy, insolvency or similar matters. MTS’ opinion did not address any legal, tax or accounting matters related to the Acquisition Agreement or the Acquisition, as to which MTS assumed that Celsus and the Celsus board of directors received such advice from legal, tax and accounting advisors as each has determined appropriate. MTS’ opinion addressed only the fairness of the exchange ratio in the Acquisition, from a financial point of view to Celsus. MTS expressed no view as to any other aspect or implication of the Acquisition or any other agreement, arrangement or understanding entered into in connection with the Acquisition or otherwise. MTS’ opinion was necessarily based upon economic and market conditions and other circumstances as they existed and could be evaluated by MTS on the date of its opinion. It should be understood that although subsequent developments may affect MTS’ opinion, MTS does not have any obligation to update, revise or reaffirm its opinion and MTS expressly disclaims any responsibility to do so.

MTS did not consider any potential legislative or regulatory changes currently being considered or recently enacted by the United States or any foreign government, or any domestic or foreign regulatory body, or any changes in accounting methods or generally accepted accounting principles that may be adopted by the Securities and Exchange Commission, the Financial Accounting Standards Board, or any similar foreign regulatory body or board.

For purposes of rendering its opinion MTS assumed in all respects material to its analysis, that the representations and warranties of each party contained in the Acquisition Agreement are true and correct, that each party will perform all of the covenants and agreements required to be performed by it under the Acquisition Agreement and that all conditions to the consummation of the Acquisition will be satisfied without waiver thereof. MTS assumed that the final form of the Acquisition Agreement will be substantially similar to the last draft reviewed by MTS. MTS also assumed that all governmental, regulatory and other consents and approvals contemplated by the Acquisition Agreement will be obtained and that in the course of obtaining any of those consents no restrictions will be imposed or waivers made that would have an adverse effect on the contemplated benefits of the Acquisition. MTS assumed that the Acquisition will be consummated in a manner that complies with the applicable provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all other applicable federal and state statutes, rules and regulations. The Celsus board of directors informed MTS, and MTS assumed, that the Acquisition will be treated as a tax-free reorganization.

It is understood that MTS’ opinion was intended for the benefit and use of the Celsus board of directors in its consideration of the financial terms of the Acquisition and may not be used for any other purpose or reproduced, disseminated, quoted or referred to at any time, in any manner or for any purpose without MTS’ prior written consent. MTS’ opinion did not constitute a recommendation to the Celsus board of directors on whether or not to approve the Acquisition or to any stockholder or any other person as to how to vote with respect to the Acquisition or to take any other action in connection with the Acquisition or otherwise. MTS was not requested to opine as to, and MTS’ opinion does not in any manner address, Celsus’ underlying business decision to effect the Acquisition or the relative merits of the Acquisition as compared to other business strategies or transactions that might be available to Celsus. Additionally, MTS was not engaged to be involved in any determinations of the Celsus board of directors or Celsus’ management to pursue strategic

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alternatives or in the negotiation of any of the terms of the Acquisition, and MTS was not authorized or requested to, and did not, solicit alternative offers for Celsus or its assets, nor did MTS investigate any other alternative transactions that may be available to Celsus. In addition, MTS has not been requested to opine as to, and MTS’ opinion does not in any manner address, (i) the fairness of the amount or nature of the compensation to any of Celsus’ officers, directors or employees, or class of such persons, relative to the compensation to the public shareholders of Celsus, or (ii) the fairness of the Acquisition or the aggregate number of shares of Celsus’ Ordinary Shares to be paid in the Acquisition to the holders of any class of securities, creditors or other constituencies of Celsus. Furthermore, MTS expressed no view as to the price or trading range for Celsus Ordinary Shares at any time.

The following is a summary of the principal financial analyses performed by MTS to arrive at its opinion. Some of the summaries of financial analyses include information presented in tabular format. In order to fully understand the financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data set forth in the tables without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses. MTS performed certain procedures, including each of the financial analyses described below, and reviewed with the management of Celsus the assumptions on which such analyses were based and other factors, including the historical and projected financial results of Volution.

Transaction Overview

MTS performed stand-alone valuation analyses of both Celsus and Volution using a variety of valuation methodologies described below. MTS then performed a relative valuation analysis in order to compare the proposed pro forma ownership ratio of 11:1 to the pro forma ownership ratios implied based on the respective stand-alone valuation ranges. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before June 22, 2015 and is not necessarily indicative of current market conditions.

Celsus Valuation Analysis

MTS analyzed the valuation of Celsus using two different methodologies: the current public market capitalization and a preliminary liquidation analysis. The results of these analyses are summarized below.

Public Market Capitalization.  Based upon the closing price per share of Celsus ADSs on June 22, 2015 of $0.61, MTS calculated a market capitalization of approximately $3.4 million.

Preliminary Liquidation Analysis.  Based on information provided by Celsus’ management and assuming Celsus would be liquidated on June 30, 2015, MTS calculated the total implied equity value of Celsus. The total implied equity value is defined as the amount of cash available to Celsus stockholders in an orderly liquidation of Celsus, including a potential near-term distribution of cash. The illustrative valuation from the preliminary liquidation analysis assumed cash distributions net of liabilities. MTS calculated, based on these assumptions, that Celsus stockholders would receive a near-term cash distribution of approximately $0.5 million.

Volution Valuation Analysis

MTS analyzed the valuation of Volution using four different methodologies: analysis of selected Initial Public Offerings, analysis of selected publicly traded companies, analysis of selected precedent acquisitions, and discounted cash flow analysis. The results of these analyses are summarized below.

Analysis of Selected Initial Public Offerings.  MTS reviewed the implied pre-money enterprise values at IPO of five companies which completed initial public offerings (each, an “IPO”) since 2011 and whose lead program was a rare disease product that was at a stage comparable to Volution (which included lead programs that had completed a Phase I clinical trial and were ready to initiate or had initiated a Phase II clinical trial) at the time of their IPO (the “Selected Rare Disease IPO Companies”). The implied pre-money enterprise value at IPO is defined as the pre-money equity value of the company plus Net Debt at the IPO. Pre-money equity value is defined as the equity valuation of the company implied by the offering price of the company’s current fully diluted shares outstanding in its IPO, excluding the proceeds of the IPO.

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These companies, which are referred to as the Selected Rare Disease IPO Companies, were:

Applied Genetic Technologies Corporation
aTyr Pharma, Inc.
bluebird bio, Inc.
Sage Therapeutics, Inc.
Ultragenyx Pharmaceutical Inc.

The Selected Rare Disease IPO Companies had the following range of implied pre-money enterprise values at IPO:

Selected Rare Disease IPO Companies
Implied Pre-Money Enterprise Values at IPO
($ in millions)

     
Low
  Mean   Median   High
$90   $ 255     $ 210     $ 463  

Analysis of Selected Publicly Traded Companies.  MTS reviewed the total enterprise values of: (a) three selected publicly traded companies that were developing rare disease products that were at a stage comparable to Volution (the “Selected Publicly Traded Rare Disease Companies”).

Selected Publicly Traded Rare Disease Companies

Applied Genetic Technologies Corporation
aTyr Pharma, Inc.
Pluristem Therapeutics, Inc.

The Selected Publicly Traded Rare Disease Companies had the following ranges of implied total enterprise values:

Selected Publicly Traded Rare Disease Companies
Implied Total Enterprise Values
($ in millions)

     
Low
  Mean   Median   High
$148   $ 272     $ 237     $ 433  

Although the companies referred to above were used for comparison purposes, none of those companies is directly comparable to Volution. Accordingly, an analysis of the results of such a comparison is not purely mathematical, but instead involves complex considerations and judgments concerning differences in historical and projected financial and operating characteristics of the Selected Rare Disease IPO Companies and the Selected Publicly Traded Rare Disease Companies and other factors that could affect the public trading value of such companies and Volution to which they are being compared.

Analysis of Selected Precedent Acquisitions.  MTS reviewed the financial terms, to the extent publicly available, of: (a) four all cash transactions involving the acquisition of private companies that were developing rare disease products that were at a stage comparable to Volution (the “Selected Precedent Rare Disease Acquisitions”). For each transaction, MTS reviewed the upfront payment and total consideration (the upfront payment plus any defined milestone payments) of the target company or business. The total implied enterprise

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values of the target company or business is defined as either the upfront payment or the total consideration paid for the target company or business. These transactions, including the month and year each were announced, were:

Selected Precedent Rare Disease Acquisitions

   
Month and Year Announced
  Target Company   Acquiror
May 2014
  Lumena Pharmaceuticals Inc.   Shire plc
May 2014
  Fibrotech Therapeutics Pty Ltd.   Shire plc
February 2012
  Stromedix, Inc.   Biogen Inc.
July 2011
  Amira Pharmaceuticals, Inc.   Nabi Biopharmaceuticals

The Selected Precedent Rare Disease Acquisitions had the following range of implied total equity values:

Implied Total Enterprise Values
($ in millions)

     
  Low
  Mean   Median   High
Upfront Payment   $ 75     $ 184     $ 168     $ 325  
Total Consideration   $ 75     $ 343     $ 368     $ 563  

Although the Selected Precedent Rare Disease Acquisitions were used for comparison purposes, none of those transactions is directly comparable to the Acquisition, and none of the companies or businesses in those transactions is directly comparable to Celsus or Volution. Accordingly, an analysis of the results of such a comparison is not purely mathematical, but instead involves complex considerations and judgments concerning differences in historical and projected financial and operating characteristics of the companies involved and other factors that could affect the acquisition value of such companies and Volution to which they are being compared.

Discounted Cash Flow Analysis.  MTS separately estimated a range of equity values for Volution based upon the present value of Volution’s estimated unlevered free cash flows for three sets of projections, Base Case, Upside Case and Downside Case, for the fiscal years ended December 31, 2015 through December 31, 2032. For further information regarding these financial forecasts, including Base Case, Upside Case and Downside Case, see “The Acquisition — Certain Financial Projections.” In performing this discounted cash flow analysis, MTS utilized discount rates ranging from 10.5% to 12.5%, which were selected based on the capital asset pricing model and the estimated weighted average cost of capital of commercial stage rare disease and specialty biotech companies. This discounted cash flow analysis was based upon certain key assumptions (i) at management’s instruction, MTS took into account the dilutive effect of subsequent capital raising by the Company to existing shareholders assuming the existing shareholders do not participate in future financings required to reach profitability, (ii) the Financial Forecasts supplied by the management of Celsus after consultation with Volution management, and (iii) a corporate tax rate of 20% in accordance with UK corporate tax rate, given Volution’s UK domicile. This discounted cash flow analysis assumed that Volution has no terminal value after 2032.

Probability of Success Adjustments.  In calculating unlevered free cash flow for purposes of performing its discounted cash flow analysis, MTS applied probability of success adjustments of 50%, 60% and 70% to the Volution projections, based on guidance received from Celsus' senior management. The probability of success adjustments were based on the outcome of technical and regulatory due diligence to account for the risk associated with achieving Coversin regulatory approval for marketing. The probability of success adjustment percentages were based on Celsus' senior management's experience in the pharmaceutical industry and commercialization of products, and on the basis of extensive scientific, development, technical, and regulatory due diligence performed by Celsus and its consultants. Based on such experience and findings of due diligence, Celsus' senior management determined that it was appropriate to use a “base” probability of success and a conservative range of “pessimistic” and “optimistic” probability of success to apply to Volution's forecasts. The probability of success adjustments were applied by multiplying the applicable unlevered free cash flows by 50%, 60% and 70%, as the case may be. The probability of success is applied directly to unlevered free cash flows that are projected to occur post-marketing approval. For any unlevered

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free cash flows that are projected to occur before marketing approval, the appropriate cumulative probability from the current phase to the appropriate projected stage of development is applied to the unlevered free cash flows. These adjusted forecast scenarios were used for purposes of the application of the discounted cash flow analysis for each case.

The discounted cash flow analysis resulted in the following implied total equity values for Volution:

Implied Total Equity Values
($ in millions)

   
Financial Projection Case   Low   High
Upside Case   $ 702     $ 2,044  
Base Case   $ 333     $ 1,057  
Downside Case   $ 120     $ 418  

Relative Valuation Analysis

MTS analyzed the relative valuations resulting from the stand-alone equity value ranges calculated for Celsus and Volution. MTS compared the total implied equity value of Celsus calculated from the preliminary liquidation analysis and the public market capitalization against the total implied equity value of Volution for each of the following methodologies (i) selected Initial Public Offerings, (ii) selected publicly traded companies, (iii) selected precedent acquisitions, and (iv) discounted cash flow analysis. The relative valuation analysis assumes that Volution had no cash and debt on hand at closing, and therefore Volution enterprise and equity value are equivalent.

The result of this relative valuation analysis showed a range of implied pro forma ownership ratios of:

Implied Pro Forma Ownership Ratios (Volution: Celsus)

       
Volution Valuation Methodology   Volution High/
Celsus Low
  Volution High/
Celsus High
  Volution Low/
Celsus Low
  Volution Low/
Celsus High
IPO Comps     950.2:1       135.5:1       185.9:1       26.5:1  
Trading Comps     888.2:1       126.7:1       309.8:1       44.2:1  
Acquisition Comps: Upfront     681.6:1       97.2:1       165.2:1       23.6:1  
Acquisition Comps: Total     1,156.7:1       165.0:1       165.2:1       23.6:1  
DCF – Upside     4,213.8:1       601.1:1       1,445.9:1       206.3:1  
DCF – Base     2,189.5:1       312.3:1       681.6:1       97.2:1  
DCF – Downside     867.5:1       123.8:1       247.9:1       35.4:1  

In calculating the implied pro forma ownership ratios, MTS rounded the respective Volution valuations to the nearest ten. MTS noted that all of the implied pro forma ownership ratios in this analysis exceed the 11:1 ratio proposed in the transaction.

The summary set forth above does not purport to be a complete description of all the analyses performed by MTS. The preparation of a fairness opinion involves various determinations as to the most appropriate and relevant methods of financial analysis and the application of these methods to the particular circumstances and, therefore, such an opinion is not readily susceptible to partial analysis or summary description. MTS did not attribute any particular weight to any analysis or factor considered by it, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, notwithstanding the separate factors summarized above, MTS believes, and has advised the Celsus board of directors, that its analyses must be considered as a whole and that selecting portions of its analyses and the factors considered by it, without considering all analyses and factors, could create an incomplete view of the process underlying its opinion. In performing its analyses, MTS made numerous assumptions with respect to industry performance, business and economic conditions and other matters, many of which are beyond the control of Celsus and Volution. These analyses performed by MTS are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by such analyses. In addition, analyses relating to the value of businesses do not purport to be appraisals or to reflect the prices at which businesses or securities may actually be sold. Accordingly, such analyses and estimates are inherently subject

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to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors. None of Celsus, Volution, MTS or any other person assumes responsibility if future results are materially different from those projected. The analyses supplied by MTS and its opinion were among several factors taken into consideration by the Celsus board of directors in making its decision to enter into the Acquisition Agreement and should not be considered as determinative of such decision.

MTS was selected by the Celsus board of directors to render an opinion to the Celsus board of directors because MTS and its affiliates, as part of their investment banking services, are regularly engaged in performing financial analyses with respect to businesses (including those in the health care industry) and securities in connection with mergers and acquisitions, and for other purposes. In addition, in the ordinary course of its business, MTS and its affiliates trade the equity securities of Celsus for their own account and for the accounts of their customers, and, accordingly, may at any time hold a long or short position in such securities. In the two years preceding the date of its opinion, MTS served as a placement agent to Celsus and has received fees for the rendering of such services. In the two years preceding the date of its opinion, MTS did not have a material relationship with Volution or any other party to the Acquisition. MTS and its affiliates may in the future provide commercial and investment banking services to Celsus and may receive fees for the rendering of such services. The issuance of MTS’ opinion was approved by MTS’ fairness opinion review committee.

Pursuant to the engagement letter between MTS and Celsus, if the Acquisition is consummated, MTS will be entitled to receive a transaction fee of $1,250,000; $500,000 of such fee will be payable in cash, earned upon closing of the Acquisition, and payable immediately following the closing of an equity financing by the Company, and $750,000 of such fee will be payable in shares of Celsus Ordinary Shares based upon the closing price of the ADSs on the day of the Closing of the proposed Acquisition. Celsus intends to issue the shares of Celsus Ordinary Shares to MTS following the completion of the Acquisition. Celsus also paid a fee of $250,000 to MTS in cash for rendering its opinion on the date of delivery of its opinion. Additionally, Celsus has agreed to reimburse MTS for its out-of-pocket expenses, including attorneys’ fees, and has agreed to indemnify MTS against certain liabilities, including liabilities under the federal securities laws. The terms of the fee arrangement with MTS, which are customary in transactions of this nature, were negotiated at arm’s length between Celsus and MTS, and the Celsus board of directors was aware of the arrangement, including the fact that a portion of the fee payable to MTS is contingent upon the completion of the Acquisition.

Certain Financial Projections

Celsus does not, as a matter of course publicly disclose long-term forecasts or internal projections as to future performance or results of operations due to the inherent unpredictability of the underlying assumptions and projections. However, during our consideration of the transactions contemplated by the Acquisition Agreement, as described in the section “The Acquisition — Background of the Acquisition” in this proxy statement, Celsus prepared and provided the Financial Forecasts to our board of directors and to MTS in connection with the rendering of MTS’ opinion to the board of directors and in performing its related financial analyses, as described above under the heading “The Acquisition — Opinion of MTS Securities LLC”, which include certain non-public financial projections regarding Volution’s anticipated future operations. A summary of the Financial Forecasts is included below to provide Celsus stockholders access to specific non-public information that was considered by the Celsus board for purposes of evaluating the Acquisition.

Such summary is presented in this document, but it is not being included to influence your decision whether to vote for or against any of the stockholder proposals included in this proxy statement, and is being included because financial forecasts were made available to our board of directors and MTS. The inclusion of this information should not be regarded as an indication that our board, its advisors or any other person considered, or now considers, such financial forecasts to be material or to be a reliable prediction of actual future results, and these Financial Forecasts should not be relied upon as such. The Financial Forecasts are subjective in many respects. There can be no assurance that these Financial Forecasts will be realized or that actual results will not significantly higher or lower than forecasted. The Financial Forecasts cover multiple years and such information, by its nature, becomes subject to greater uncertainty with each successive year. As a result, the inclusion of the Financial Forecasts in this proxy statement should not be relied on as predictive of actual future events.

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In addition, the Financial Forecasts were generated solely for internal use and not prepared with a view toward public disclosure or toward complying with United States generally accepted accounting principles (referred to as GAAP), the published guidelines of the SEC regarding projections and the use of non-GAAP measures or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Neither Celsus’ independent public accounting firm, nor Volution's independent accounting firm, nor any other independent accountants, has compiled, examined or performed any procedures with respect to the Financial Forecasts contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the Financial Forecasts. The independent auditor's reports included or incorporated by reference in this proxy statement relate to historical financial statements only and do not extend to any prospective financial information and should not be read to do so.

Although presented with numerical specificity, the projections were prepared in the context of numerous variables, estimates and assumptions that are inherently uncertain and beyond our control and which may prove not to have been, or to no longer be, accurate. The amounts presented in the table below represent a forecast for operating results, do not include any merger-related expenses and required the input of highly subjective assumptions about Volution's business that may not occur, and changes in the assumptions could materially affect the forecast presented below. Important factors that may affect actual results and cause these Financial Forecasts to not be achieved include, but are not limited to, risks and uncertainties relating Volution's business (including its ability to achieve strategic goals, obtain regulatory approval of Coversin, the availability of reimbursement from third party payors for Coversin, objectives and targets over the applicable periods), industry performance, the regulatory environment, general business and economic conditions and other factors described or referenced under the section entitled, “Forward-Looking Statements” in this proxy statement. In addition, the Financial Forecasts also reflect assumptions that are subject to change and do not reflect revised prospects for Volution's business, changes in general business or economic conditions or any other transaction or event that has occurred or that may occur and that was not anticipated at the time the Financial Forecasts were prepared. Accordingly, there can be no assurance that these Financial Forecasts will be realized or that Volution's future financial results will not materially vary from these Financial Forecasts. By including the Financial Forecasts in this proxy statement, neither Celsus nor any of its advisors has made or makes any representation to any person regarding the information included in the Financial Forecasts or the ultimate performance of Celsus, Volution or any of their affiliates compared to the information contained in the Financial Forecasts. Celsus has made no representation to Volution, in the Share Exchange Agreement or otherwise, concerning the Financial Forecasts.

The inclusion of a summary of the Financial Forecasts in this proxy statement should not be regarded as an indication that any of Celsus, Volution or their respective affiliates, officers, directors, financial advisors or other representatives consider the projections to be necessarily predictive of actual future events, and the projections should not be relied upon as such. None of Celsus, Volution or their respective affiliates, officers, directors, financial advisors or other representatives gives any stockholder of Celsus, Volution or any other person any assurance that actual results will not differ materially from the Financial Forecasts set forth below, and, except as otherwise required by law, none of them undertakes any obligation to update or otherwise revise or reconcile the projections to reflect circumstances existing after the date the projections were generated or to reflect the occurrence of future events, even in the event that any or all of the assumptions and estimates underlying the projections are shown to be in error. Volution's actual results of operations for the fiscal years ended December 31, 2013 and December 31, 2014 are included in this proxy statement, and Celsus stockholders are urged to review this information carefully.

The Financial Forecasts are forward-looking statements. For information on factors that may cause these future financial results to materially vary, see the section entitled, “Forward-Looking Statements” in this proxy statement.

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The following is a summary of the Financial Forecasts.

Summary Financial Forecasts

Celsus' management delivered three sets of projections with respect to Volution's future financial performance to MTS and our board for the fiscal years ended December 31, 2015 through December 31, 2032. These projections were prepared by Celsus’ management and were based on certain input and guidance from Volution management, consultants and Celsus management assumptions.