Jaguar Health Inc

Previous wording

Jaguar Health, Inc. (“Jaguar” or the “Company”) is a commercial-stage pharmaceuticals company focused on developing novel, plant-based, sustainably derived prescription medicines for people and animals with gastrointestinal (“GI”) distress, including chronic, debilitating diarrhea. Jaguar's wholly owned subsidiary, Napo Pharmaceuticals, Inc. (“Napo”), focuses on developing and commercializing proprietary plant-based human prescriptions from plants for essential supportive care and management of neglected GI symptoms across multiple complicated disease states. Our crofelemer drug product candidate is the subject of the OnTarget study, a recently completed pivotal Phase 3 clinical trial for prophylaxis of diarrhea in adult cancer patients receiving targeted therapy. As announced, while the initial results from the OnTarget study show that the multicenter, double-blind, placebo-controlled pivotal clinical trial did not meet its primary endpoint for the prespecified analysis of all tumor types in the trial, the study results did reveal clinically relevant signals for crofelemer in prespecified subgroups of patients with breast and respiratory cancer, including lung cancer. Breast and lung cancer are two of the top three most common cancer types, and treatment options for breast and lung cancer include the long-term use of targeted therapies that cause high incidences of diarrhea. Jaguar plans to continue to review data from prespecified and non-prespecified OnTarget subgroups and then engage in discussions with the U.S. Food and Drug Administration (“FDA”) to seek the most efficient pathway to bring crofelemer to these patients and address the important and debilitating side effect of cancer therapy-related diarrhea with the paradigm shifting mechanism of crofelemer.

Current wording

Jaguar Health, Inc. (“Jaguar” or the “Company”) is a commercial-stage pharmaceuticals company focused on developing novel, plant-based, sustainably derived prescription medicines for people and animals with gastrointestinal (“GI”) distress, including chronic, debilitating diarrhea. Jaguar's wholly owned subsidiary, Napo Pharmaceuticals, Inc. (“Napo”), focuses on developing and commercializing proprietary plant-based human prescriptions from plants for essential supportive care and management of neglected GI symptoms across multiple complicated disease states. Our crofelemer drug product candidate is the subject of the OnTarget study, a recently completed pivotal Phase 3 clinical trial for prophylaxis of diarrhea in adult cancer patients receiving targeted therapy. The recently completed analysis of the prespecified subgroup of adult patients with breast cancer from OnTarget indicates that crofelemer achieved statistical significance in this subgroup. Patients with breast cancer accounted for nearly 180 of the 287 participants in this unprecedented prophylactic clinical trial in adult patients with solid tumors receiving targeted therapy with or without standard chemotherapy. This data in breast cancer patients has been submitted to a relevant oncology conference by the study's primary investigators, and a full study report for the breast cancer results is expected to be submitted to a peer-reviewed journal. Additional analyses of OnTarget prespecified subgroups are ongoing, and we believe data from additional analyses may result in future submissions to peer-reviewed forums. As announced, the initial top line results from the OnTarget study showed that the multicenter, double-blind, placebo-controlled pivotal clinical trial did not meet its primary estimand for the prespecified analysis of all tumor types. The subgroup analysis in adult breast cancer patients demonstrates that crofelemer provides clinically meaningful improvement in this patient population, and suggests that crofelemer has the potential to help breast cancer patients to better adhere to their cancer therapies. The subgroup analyses also show that crofelemer provides clinically meaningful improvement in the prespecified subgroup of lung cancer patients.

Previous wording

As part of our strategy to expand our commercial footprint beyond HIV-related supportive care to include cancer-related supportive care, on April 12, 2024, we entered into an exclusive 5-year in-license agreement with United Kingdom-based Venture Life Group PLC (“Venture Life”), an international consumer health company focused on the global self-care market, for Venture Life's FDA-approved oral mucositis prescription product, Gelclair, for the U.S. market. Gelclair is an FDA-approved prescription product and can be commercialized without any clinical development costs for Jaguar, and we plan to begin commercial launch in the fourth quarter of 2024 for Gelclair. Oral mucositis is among the most common, painful, and debilitating cancer treatment-related side effects. Gelclair is a protective gel with a mechanical action indicated for the management of pain and relief of pain by adhering to the mucosal surface of the mouth, soothing oral lesions of various etiologies, including oral mucositis/stomatitis. Unlike other products for oral mucositis, it is not a numbing agent and does not sting the mouth.

Current wording

As part of our strategy to expand our commercial footprint beyond HIV-related supportive care to include cancer-related supportive care, on April 12, 2024, we entered into an exclusive 5-year in-license agreement with United Kingdom-based Venture Life Group PLC (“Venture Life”), an international consumer health company focused on the global self-care market, for Venture Life's 510(k) cleared oral mucositis prescription product, Gelclair, for the U.S. market. Gelclair is a 510(k) cleared prescription product and can be commercialized without any clinical development costs for Jaguar. We initiated the commercial launch in October 2024 for Gelclair. Oral mucositis is among the most common, painful, and debilitating cancer treatment-related side effects. Gelclair is a protective gel with a mechanical action indicated for the management of pain and relief of pain by adhering to the mucosal surface of the mouth, soothing oral lesions of various etiologies, including oral mucositis/stomatitis. Unlike other products for oral mucositis, it is not a numbing agent and does not sting the mouth.

Previous wording

Jaguar is the majority stockholder of Napo Therapeutics S.p.A. (“Napo Therapeutics”), an Italian corporation established by Jaguar in Milan, Italy, in 2021, focusing on expanding crofelemer access in Europe. Napo Therapeutics’ core mission is to provide access to crofelemer in Europe to address significant rare/orphan disease indications, including, initially, two key rare disease target indications: Short bowel syndrome (“SBS”) with intestinal failure and microvillus inclusion disease (“MVID”). Jaguar Animal Health is a tradename of Jaguar Health. Magdalena Biosciences Inc. (“Magdalena”), a joint venture formed by Jaguar and Filament Health Corp. (“Filament”) that emerged from Jaguar’s Entheogen Therapeutics Initiative (“ETI”), is focused on identifying the next generation of plant-based first-in-class agents for treatment of mental health conditions.

Current wording

Jaguar is the majority stockholder of Napo Therapeutics S.p.A. (“Napo Therapeutics”), an Italian corporation established by Jaguar in Milan, Italy, in 2021, focusing on expanding crofelemer access in Europe. Napo Therapeutics’ core mission is to provide access to crofelemer in Europe to address significant rare/orphan disease indications, including, initially, two key rare disease target indications: Short bowel syndrome (“SBS”) with intestinal failure and microvillus inclusion disease (“MVID”) an ultrarare congenital diarrheal disorders ("CDD"). Jaguar Animal Health is a tradename of Jaguar Health. Magdalena Biosciences Inc. (“Magdalena”), a joint venture formed by Jaguar and Filament Health Corp. (“Filament”) that emerged from Jaguar’s Entheogen Therapeutics Initiative (“ETI”), is focused on identifying the next generation of plant-based first-in-class agents for treatment of mental health conditions.

Previous wording

Merger Sub merged with and into Napo, with Napo surviving as the wholly owned subsidiary (the “Merger” or “Napo Merger”). Immediately following the merger, Jaguar changed its name from “Jaguar Animal Health, Inc.” to “Jaguar Health, Inc.” Napo now operates as a wholly owned subsidiary of Jaguar focused on human health, including the ongoing development of crofelemer and commercialization of Mytesi.

Current wording

On July 31, 2017, Jaguar completed a merger with Napo pursuant to the Agreement and Plan of Merger dated March 31, 2017, by and among Jaguar, Napo, Napo Acquisition Corporation (“Merger Sub”), and Napo's representative (the “Merger Agreement”). In accordance with the terms of the Merger Agreement, upon the completion of the merger, Merger Sub merged with and into Napo, with Napo surviving as the wholly owned subsidiary (the “Merger” or “Napo Merger”). Immediately following the merger, Jaguar changed its name from “Jaguar Animal Health, Inc.” to “Jaguar Health, Inc.” Napo now operates as a wholly owned subsidiary of Jaguar focused on human health, including the ongoing development of crofelemer and commercialization of Mytesi.

Previous wording

Napo’s marketed drug Mytesi (crofelemer 125 mg delayed-release tablets) is a first-in-class oral botanical drug product approved by the FDA for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy. To date, this is the only oral plant-based botanical prescription medicine approved under the FDA’s Botanical Guidance. The Company’s Canalevia-CA1 (crofelemer delayed-release tablets) drug is the first and only oral plant-based prescription product that is FDA conditionally approved to treat chemotherapy-induced diarrhea (“CID”) in dogs.

Current wording

Napo’s marketed drug Mytesi (crofelemer 125 mg delayed-release tablets) is a first-in-class oral botanical drug product approved by the FDA for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy. To date, this is the only oral plant-based botanical prescription medicine approved under the FDA’s Botanical Guidance. The Company’s

Previous wording

Crofelemer was granted Orphan Drug Designation (“ODD”) by the FDA in February 2023 for MVID and granted ODD for MVID by the European Medicines Agency (“EMA”) in October 2022. Crofelemer was granted ODD for SBS by the EMA in December 2021 and by the FDA in August 2017. In August 2023, Napo’s Investigational New Drug (“IND”) application was activated by the FDA for a new crofelemer powder for oral solution formulation for treating MVID. Jaguar is supporting independent investigator-initiated proof-of-concept (“POC”) studies of crofelemer for the rare disease indications of SBS with intestinal failure and MVID, an ultrarare CDD, focused on obtaining POC data showing reduction of requirements of parenteral support, including parenteral nutrition and IV fluids. In accordance with the guidelines of specific European Union countries, publications of data from POC trials could support participation in early patient access programs for crofelemer for SBS or MVID, especially for patients with intestinal failure requiring parenteral support. Participation in early access programs, which do not exist in the United States, provides an opportunity for reimbursement while impacting the morbidity and high cost of care for these chronic unmet needs.

Current wording

Crofelemer was granted Orphan Drug Designation (“ODD”) by the FDA in February 2023 for MVID and granted ODD for MVID by the European Medicines Agency (“EMA”) in October 2022. Crofelemer was granted ODD for SBS by the EMA in December 2021 and by the FDA in August 2017. In August 2023, Napo’s Investigational New Drug (“IND”) application was activated by the FDA for a new crofelemer powder for oral solution formulation for treating MVID. Our global MVID phase 2 trial for Jaguar is being conducted under this IND. The global phase 2 trial of crofelemer in adults with SBS with intestinal failure is taking place under a Clinical Trial Application (CTA) approved by European health authorities. These phase 2 studies are planned to initiate in the fourth quarter of 2024. We expect that enrollment will continue in 2025 for each of these phase 2 trials, with data expected in the beginning of 2026 for both trials. Additionally, Jaguar is supporting independent investigator-initiated proof-of-concept (“POC”) studies of crofelemer for the rare disease indications of SBS with intestinal failure and MVID, focused on obtaining POC data showing reduction of requirements of parenteral support, including parenteral nutrition and IV fluids. In accordance with the guidelines of specific European Union countries, publications of data from POC trials and Phase 2 trials could support participation in early patient access programs for crofelemer for SBS or MVID, especially for patients with intestinal failure requiring parenteral support. Participation in early access programs, which do not exist in the United States, provides an opportunity for reimbursement while impacting the morbidity and high cost of care for these chronic unmet needs.

Previous wording

Most of the activities of the Company are focused on the development and commercialization of Mytesi, the ongoing clinical development of crofelemer for the prophylaxis of diarrhea in adult patients receiving targeted cancer therapy, the upcoming commercial launch of Gelclair, and our prioritized clinical program centered around investigator-initiated POC trials of crofelemer for SBS and CDD.

Current wording

Most of the activities of the Company are focused on the development and commercialization of Mytesi, the ongoing clinical development of crofelemer for the prophylaxis of diarrhea in adult patients receiving targeted cancer therapy, the ongoing commercial launch of Gelclair, and our prioritized clinical program centered around investigator-initiated POC trials of crofelemer for SBS and CDD.

Previous wording

Crofelemer is a novel, first-in-class anti-secretory antidiarrheal drug that has a normalizing effect on electrolyte and fluid balance in the gut, and this mechanism of action has the potential to benefit multiple disorders that cause GI distress, including diarrhea and abdominal discomfort. Crofelemer is in development for multiple possible follow-on indications, including for our lead Phase 3 program in Caner Therapy-related Diarrhea (“CTD”), investigating prophylaxis of diarrhea related to targeted therapy with or without standard chemotherapy. Crofelemer delayed-release tablets are also being evaluated in diarrhea-predominant irritable bowel syndrome (“IBS-D”) and being evaluated for chronic idiopathic/functional diarrhea in investigator-initiated trials.

Current wording

Crofelemer is a novel, first-in-class anti-secretory antidiarrheal drug that has a normalizing effect on electrolyte and fluid balance in the gut, and this mechanism of action has the potential to benefit multiple disorders that cause GI distress, including diarrhea and abdominal discomfort. Crofelemer is in development for multiple possible follow-on indications, including for our lead Phase 3 program in cancer therapy-related diarrhea (“CTD”), investigating prophylaxis of diarrhea related to targeted therapy with or without standard chemotherapy. Crofelemer delayed-release tablets are also being evaluated in diarrhea-predominant irritable bowel syndrome (“IBS-D”) and being evaluated for chronic idiopathic/functional diarrhea in investigator-initiated trials.

Previous wording

In addition, a second-generation proprietary anti-secretory antidiarrheal drug (“NP-300”) is in development for symptomatic relief and treatment of moderate-to-severe diarrhea, with or without concomitant antimicrobial therapy, from bacterial, viral, and parasitic infections, includingVibrio cholerae, the bacterium that causes cholera. This program is being pursued with the potential targeted incentive from the FDA for a tropical disease priority review voucher.

Current wording

In addition, a second-generation proprietary anti-secretory antidiarrheal drug (“NP-300”) is in development for symptomatic relief and treatment of moderate-to-severe diarrhea, with or without concomitant antimicrobial therapy, from bacterial, viral, and parasitic infections, including Vibrio cholerae, the bacterium that causes cholera. This program is being pursued with the potential targeted incentive from the FDA for a tropical disease priority review voucher.

Previous wording

On a consolidated basis, we have not yet generated enough revenue to date to achieve break-even or positive cash flows, and we expect to continue to incur significant research and development and other expenses. Our net loss was $19.0 million and $24.7 million for the six months ended June 30, 2024, and 2023, respectively. As of June 30, 2024, we had a total stockholders' equity of $16.6 million, an accumulated deficit of $326.7 million, and cash of $16.0 million. We expect to continue to incur losses, and experience increased expenditures for the foreseeable future as we expand our product development activities, seek necessary approvals for our product candidates, conduct species-specific formulation studies for our non-prescription products, establish API manufacturing capabilities and begin additional commercialization activities.

Current wording

On a consolidated basis, we have not yet generated enough revenue to date to achieve break-even or positive cash flows, and we expect to continue to incur significant research and development and other expenses. Our net loss was $29.0 million and $32.6 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had a total stockholders' equity of $13.1 million, an accumulated deficit of $336.6 million, and cash of $13.3 million. We expect to continue to incur losses, and experience increased expenditures for the foreseeable future as we expand our product development activities, seek necessary approvals for our product candidates, conduct species-specific formulation studies for our non-prescription products, establish API manufacturing capabilities and begin additional commercialization activities. Payments of cash compensation to directors under the Director Compensation Program or the three and nine months ended September 30, 2024 amounted to $109,000 and $218,000, respectively.

Previous wording

Our product and collaboration revenue consists of the following:

Current wording

Our product and license revenue consists of the following:

Previous wording

The timing and amount of our research and development expenses will depend largely upon the outcomes of current and future trials for our prescription drug product candidates, as well as the related regulatory requirements, the outcomes of current and future species-specific formulation studies for our non-prescription products, manufacturing costs and any costs associated with the advancement of our line extension programs. We cannot determine with certainty the duration and completion costs of the current or future development activities.

Current wording

As of September 30, 2024, the Company has incurred approximately $4.8 million on its primary R&D projects. The timing and amount of our research and development expenses will depend largely upon the outcomes of current and future trials for our prescription drug product candidates, as well as the related regulatory requirements, the outcomes of current and future species-specific formulation studies for our non-prescription products, manufacturing costs and any costs associated with the advancement of our line extension programs. We cannot determine with certainty the duration and completion costs of the current or future development activities. The total project costs remain uncertain due to regulatory and clinical trial complexities. Management continues to monitor timelines closely to address any risks that could impact timely project completion and future operations.

Previous wording

We expect research and development expenses to increase due to the start-up costs associated with our clinical trials for other indications.

Current wording

We expect research and development expenses to decrease with the Phase 3 OnTarget Trial completion in the first half of 2025; though we expect start-up costs associated with our clinical trials for other indications.

Previous wording

Sales and marketing expenses consist of personnel and related benefits, stock-based compensation, direct sales and marketing, employee travel, and management consulting expenses. We currently incur sales and marketing expenses to promote Mytesi. We do not have significant marketing or promotional expenses related to Canalevia and Neonorm Calf or Neonorm Foal for the six months ended June 30, 2024, and 2023.

Current wording

Sales and marketing expenses consist of personnel and related benefits, stock-based compensation, direct sales and marketing, employee travel, and management consulting expenses. We currently incur sales and marketing expenses to promote Mytesi and GelClair. We do not have significant marketing or promotional expenses related to Canalevia and Neonorm Calf or Neonorm Foal for the nine months ended September 30, 2024 and 2023.

Previous wording

We expect sales and marketing expenses to increase going forward as we focus on expanding our market access activities and commercial partnerships to develop follow-on indications of Mytesi and crofelemer.

Current wording

We expect sales and marketing expenses to increase going forward as we focus on expanding our market access activities and commercial partnerships to develop follow-on indications of Mytesi, GelClair and crofelemer.

Previous wording

The following table summarizes the Company’s operations results for the items outlined in the table for the six months ended June 30, 2024, and 2023, together with the change in such items in dollars and as a percentage.

Current wording

The following table summarizes the Company’s operations results for the items outlined in the table for the nine months ended September 30, 2024 and 2023, together with the change in such items in dollars and as a percentage.

Previous wording

Due to the Company’s arrangements, including elements of variable consideration, gross product sales are reduced to reflect the expected consideration to arrive at net product sales. Deductions to reduce gross product sales to net product sales for the six months ended June 30, 2024, and 2023 were as follows:

Current wording

Due to the Company’s arrangements, including elements of variable consideration, gross product sales are reduced to reflect the expected consideration to arrive at net product sales. Deductions to reduce gross product sales to net product sales for the nine months ended September 30, 2024 and 2023 were as follows:

Previous wording

Our gross product revenues were $7.0 million and $6.3 million for the six months ended June 30, 2024, and 2023, respectively. These periods reflect revenue from the sale of our human drug Mytesi and our animal products branded as Canalevia-CA1, Neonorm Calf and Neonorm Foal.

Current wording

Our gross product revenues were $11.0 million and $10.0 million for the nine months ended September 30, 2024 and 2023, respectively. These periods reflect revenue from the sale of our human drug Mytesi and our animal products branded as Canalevia-CA1, Neonorm Calf and Neonorm Foal.

Previous wording

The following table presents the components of research and development (“R&D”) expense for the six months ended June 30, 2024, and 2023 together with the change in such components in dollars and as a percentage:

Current wording

The following table presents the components of research and development (“R&D”) expense for the nine months ended September 30, 2024 and 2023 together with the change in such components in dollars and as a percentage:

Previous wording

The decrease in R&D expense of $1.1 million for the six months ended June 30, 2024, compared to the same period in 2023 was largely due to:

Current wording

The decrease in R&D expense of $3.1 million for the nine months ended September 30, 2024, compared to the same period in 2023 was largely due to:

Previous wording

The following table presents the components of sales and marketing (“S&M”) expense for the six months ended June 30, 2024, and 2023 together with the change in such components in dollars and as a percentage:

Current wording

The following table presents the components of sales and marketing (“S&M”) expense for the nine months ended September 30, 2024 and 2023 together with the change in such components in dollars and as a percentage:

Previous wording

The decrease in S&M expense of $490,000 for the six months ended June 30, 2024, compared to the same period in 2023 was largely due to:

Current wording

The increase in S&M expense of $48,000 for the nine months ended September 30, 2024, compared to the same period in 2023 was largely due to:

Previous wording

The following table presents the components of general and administrative (“G&A”) expense for the six months ended June 30, 2024, and 2023 together with the change in such components in dollars and as a percentage:

Current wording

The following table presents the components of general and administrative (“G&A”) expense for the nine months ended September 30, 2024 and 2023 together with the change in such components in dollars and as a percentage:

Previous wording

The decrease in G&A expenses of $555,000 for the six months ended June 30, 2024, compared to the same period in 2023 was largely due to:

Current wording

The decrease in G&A expenses of $312,000 for the nine months ended September 30, 2024, compared to the same period in 2023 was largely due to:

Previous wording

Interest expense decreased by $5.1 million from $5.6 million for the six months ended June 30, 2023, to $503,000 for the same period in 2024, primarily due to changes in accounting of certain debt instruments to FVO. The lower interest expense was offset by a higher loss in change in fair value of financial instruments and hybrid instrument designated at FVO.

Current wording

Interest expense decreased by $5.8 million from $6.1 million for the nine months ended September 30, 2023, to $341,000 in the same period in 2024, primarily due to changes in accounting of certain debt instruments to FVO. The lower interest expense was offset by a higher loss in change in fair value of freestanding and hybrid financial instruments designated at FVO.

Previous wording

Change in fair value of financial instrument and hybrid instrument designated at FVO increased by $2.7 million from a loss of $1.1 million in the six months ended June 30, 2023, to a loss of $3.8 million for the same period in 2024 primarily due to fair value adjustments in liability classified warrants and notes payable designated at FVO.

Current wording

The fair value of financial instrument and hybrid instrument designated at FVO decreased by 3.6 million, from a loss of $3.4 million in the nine months ended September 30, 2023, to a loss of $6.9 million in the same period in 2024 primarily due to fair value adjustments in liability classified warrants and notes payable designated at FVO.

Previous wording

Gain on extinguishment of debt increased by $1.2 million from zero in the six months ended June 30, 2023, to $1.2 million for the same period in 2024 primarily due to significant modifications of royalty interest agreements resulting to extinguishment accounting.

Current wording

Gain on extinguishment of debt decreased by $2.5 million from $3.7 million in the nine months ended September 30, 2023, to $1.2 million in the same period in 2024 primarily due to significant modifications of royalty interest agreements resulting to extinguishment accounting.

Previous wording

Sales discounts were $511,000 and $515,000 for the six months ended June 30, 2024, and 2023, respectively, a decrease of $5,000.

Current wording

Sales discounts were $327,000 and $296,000 for the three months ended September 30, 2024 and 2023, respectively, a decrease of $31,000.

Previous wording

Medicaid and AIDS Drug Assistance Program (“ADAP”) rebates accounted for $1.3 million and $1.0 million for the six months ended June 30, 2024, and 2023, respectively.

Current wording

Medicaid and AIDS Drug Assistance Program (“ADAP”) rebates accounted for $553,000 and $437,000 for the three months ended September 30, 2024 and 2023, respectively, a decrease of $116,000.

Previous wording

Our gross product revenues were $3.6 million and $3.5 million for the three months ended June 30, 2024, and 2023, respectively. These periods reflect revenue from selling our human drug Mytesi and our animal products branded as Canalevia-CA1, Neonorm Calf, and Neonorm Foal.

Current wording

Our gross product revenues were $4.0 million and $3.7 million for the three months ended September 30, 2024 and 2023, respectively. These periods reflect revenue from the sale of our human drug Mytesi and our animal products branded as Canalevia-CA1, Neonorm Calf and Neonorm Foal.

Previous wording

The change in R&D expense of $624,000 for the three months ended June 30, 2024, compared to the same period in 2024 was due primarily to:

Current wording

The change in R&D expense of $2.0 million for the three months ended September 30, 2024, compared to the same period in 2024 was due primarily to:

Previous wording

The change in S&M expense of $49,000 in the three months ended June 30, 2024 compared to the same period in 2023 was due primarily to:

Current wording

The change in S&M expense of $538,000 in the three months ended September 30, 2024 compared to the same period in 2023 was due primarily to:

Previous wording

The change in G&A expenses of $123,000 in the three months ended June 30, 2024, compared to the same period in 2023 was due primarily to:

Current wording

The change in G&A expenses of $243,000 in the three months ended September 30, 2024, compared to the same period in 2023 was due primarily to:

Previous wording

Interest expense decreased by $3.6 million from $3.5 million for the three months ended June 30, 2023, to $108,000 interest income for the same period in 2024, primarily due to changing the accounting of certain debt instruments to FVO. The lower interest expense was offset by a higher loss in a change in the fair value of financial instruments and hybrid instruments designated at FVO.

Current wording

Interest expense decreased by $662,000, from $500,000 for the three months ended September 30, 2023, to a $162,000 net interest income for the same period in 2024, primarily due to changing the accounting of certain debt instruments to FVO. The lower interest expense was offset by a higher loss in a change in the fair value of financial instruments and hybrid instruments designated at FVO.

Previous wording

Change in fair value of financial instrument and hybrid instrument designated at FVO decreased $1.1 million from a loss of $762,000 in the three months ended June 30, 2023, to a loss of $1.8 million for the same period in 2024 primarily due to fair value adjustments in liability classified warrants and notes payable designated at FVO.

Current wording

Change in fair value of financial instrument and hybrid instrument designated at FVO decreased $845,000 from a loss of $2.2 million in the three months ended September 30, 2023, to a loss of $3.1 million for the same period in 2024 primarily due to fair value adjustments in liability classified warrants and notes payable designated at FVO.

Previous wording

We have incurred net losses since our inception. For the six months ended June 30, 2024, and 2023, we had net losses of $19.0 million and $24.7 million, respectively. We expect to incur additional losses in the near-term future. At June 30, 2024, we had an accumulated deficit of $326.7 million. To date, we have generated only limited revenue, and we may never achieve revenue sufficient to offset our expenses.

Current wording

We have incurred net losses since our inception. For the nine months ended September 30, 2024 and 2023, we had net losses of $29.0 million and $32.6 million, respectively. We expect to incur additional losses in the near-term future due to significant expenses incurred related to the research and development phase. At September 30, 2024, we had an accumulated deficit of $336.6 million. We continue our efforts to develop our products and continue the development of our pipeline in the near term and to date, we have generated only limited revenues.

Previous wording

We had cash of $16.0 million as of June 30, 2024. We do not believe our current capital is sufficient to fund our operating plan through one year from the issuance of these unaudited condensed consolidated financial statements.

Current wording

As of September 30, 2024, we had cash of $13.3 million. While we are actively exploring various strategies to optimize our cash flows, we recognize that our current capital resources will be sufficient to fund our operating plan for at least one year from the issuance of these unaudited condensed consolidated financial statements.

Previous wording

We have funded our operations primarily through issuing debt and equity securities, in addition to selling our commercial products. Cash provided by financing activities for the six months ended June 30, 2024, were generated from the issuance of an aggregate of 5,011,564 shares of common stock under the ATM Agreement for total net proceeds of approximately $24.0 million, issuance of an aggregate 16,666,666 common in exchange of License Agreement for total net proceeds of $1.2 million.

Current wording

We have funded our operations primarily through issuing debt and equity securities, in addition to selling our commercial products. Cash provided by financing activities for the nine months ended September 30, 2024, were generated from the issuance of an aggregate of 6,925,606 shares of common stock under the ATM Agreement for total net proceeds of approximately $27.8 million, and issuance of an aggregate 277,778 common in exchange of License Agreement for total net proceeds of $1.2 million.

Previous wording

Cash Flows for the Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

Current wording

Cash Flows for the Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023

Previous wording

The following table shows a summary of cash flows for the six months ended June 30, 2024, and 2023:

Current wording

The following table shows a summary of cash flows for the nine months ended September 30, 2024 and 2023: