60 DEGREES PHARMACEUTICALS, INC.
For the period ended Dec 31, 2024. Filed Mar 27, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 27, 2025
SXTP$0.59-35.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-04-01.
0001213900-24-028577
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-27.
0001013762-25-003343
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 107 previous paragraphs and 103 current paragraphs.
51 unchanged; 32 reworded; 20 added; 23 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
1. Overview
Current report
We are a specialty pharmaceutical company with a goal of using cutting-edge biological science and applied research to further develop and commercialize new therapies for the prevention and treatment of infectious diseases. We have successfully achieved regulatory approval of Arakoda® (“Arakoda”), a malaria preventative treatment that has been on the market since late 2019. Currently, 60P’s pipeline under development covers development programs for vector-borne, fungal, and viral diseases utilizing three of the Company’s future products: (i) new products that contain the Arakoda regimen of Tafenoquine; (ii) new products that contain Tafenoquine; and (iii) Celgosivir.
Current report
Following our initial public offering in July 2023, our initial strategic priority was to conduct a Phase IIB study that would have evaluated the potential of the Arakoda regimen of Tafenoquine to accelerate disease recovery in COVID-19 patients with low risk of disease progression. In October 2023, we made a decision to suspend this study. This was a consequence of advice previously received from the U.S. Food and Drug Administration (FDA), which we interpreted to mean that the agency would not have granted clearance for the study to proceed unless we redesigned it to (i) enroll a patient population in which receipt of Paxlovid or Lagevrio would be medically contraindicated, or (ii) compare Tafenoquine to placebo in patients taking a “standard of care” regimen (defined by the FDA as Lagevrio or Paxlovid). The FDA’s position was somewhat surprising given that neither Paxlovid nor Lagevrio is indicated for treatment of COVID-19 in low-risk patients. We determined that conducting our study in an alternate population in the United States would be unfeasible, and that conducting an add-on-to standard of care study might not be Phase III enabling. Accordingly, we made a decision to pivot back to continue commercialization of Arakoda for malaria, and further evaluation of the Arakoda regimen of Tafenoquine for babesiosis and other diseases. We believe such an approach is both less risky and less expensive.
Current report
Moving forward, our general strategy to achieve profitability and grow shareholder value has three facets: (i) increase sales of Arakoda; (ii) conduct clinical trials to expand the number of patients who can use Tafenoquine for new indications in the future; and (iii) reposition small molecule therapeutics with good clinical safety profiles for new indications.
Current report
Cost of Revenues, Gross Profit (Loss), and Gross Margin
Current report
Other operating revenues for the periods presented include research revenue earned from the Australian Tax Authority for research activities conducted in Australia. Beginning in the third quarter of 2024, we began to recognize research revenues associated with our new contract with the United States Army Medical Materiel Development Activity (USAMMDA) for Arakoda supply chain upgrade support. Research revenue under this contract is recognized when we incur the direct costs eligible for reimbursement, up to the maximum allowable amount.
Current report
Product Revenues - net of Discounts and Rebates, Cost of Revenues, Gross Profit (Loss), and Gross Margin
Current report
Arakoda sales volume is also showing signs of sales growth in Europe. We first shipped Arakoda to our distributor Scandinavian Biopharma (“SB”) in September 2022. For the year ended December 31, 2024, SB reported 147 boxes sold (0 for the year ended December 31, 2023). According to our distributor, this is due to greater interest in treating babesiosis.
Current report
Cost of Revenues, Gross Profit (Loss), and Gross Margin
Current report
For the year ended December 31, 2024, we recognized a net gain on the change in fair value of derivative liabilities of $1,665,966 compared to a net loss of $37,278 for the year ended December 31, 2023. During the year ended December 31, 2024, derivative liabilities include the contingent milestone payment due to Knight upon a future sale of Arakoda or a Change of Control. The fair value of the contingent milestone payment is inversely related to the net present value of future investments in the Company and anticipated timing to profitability within our budget models. During the year ended December 31, 2023, derivative liabilities consisted of bridge shares, certain warrants, and embedded conversion features in our convertible notes, which were each converted or reclassified to equity upon the closing of our IPO. We use a probability-weighted expected return method or a Monte Carlo simulation model to estimate the fair value of these instruments.
Current report
Loss on Debt Extinguishment
Current report
Other Income (Expense), net
Current report
Our future results are subject to substantial risks and uncertainties. Since our inception, we have not demonstrated the ability to generate enough revenues to date to cover operating expenses and we have accumulated losses to date. To date, we have funded our operations primarily with proceeds from sales of common stock and warrants for the purchase of common stock, sales of preferred stock, proceeds from the issuance of convertible debt and borrowings under loan and security agreements.
Current report
Continuation as a going concern is dependent upon our ability to meet our financial requirements, raise additional capital, and achieve gross profitability from our single marketed product. To achieve profitability, we expect we will need to raise additional capital to fund our activities relating to commercial support for our existing product and any future clinical research trials and operating activities. However, there can be no assurance that we will ever achieve or maintain profitability. These conditions, among others, raise substantial doubt about our ability to continue as a going concern for one year from the date these financial statements are issued.
Current report
Net cash used in operating activities was $5,648,088 for the year ended December 31, 2024, as compared to $4,542,910 for the year ended December 31, 2023. Our net cash used in operating activities increased, in part due to higher general and administrative expenses of $5,024,985 for the year ended December 31, 2024 ($4,241,836 for the year ended December 31, 2023) primarily due to higher cash compensation and related expenses, legal and professional fees, insurance expenses, investor outreach expenses, and advertising and promotion expenses, as discussed above. In addition, we incurred $1,304,183 in costs related to our planned babesiosis trial for tafenoquine during the year ended December 31, 2024 ($0 during the year ended December 31, 2023).
Current report
Net cash used in investing activities was $1,889,114 for the year ended December 31, 2024, as compared to $115,888 for the year ended December 31, 2023. The increase in cash used in investing activities is primarily driven by purchases of short-term certificates of deposit for a total cost of $1,708,000 during the year ended December 31, 2024 ($0 during the year ended December 31, 2023), purchased for the purposes of earning interest income. Additionally, purchases of computer and lab equipment totaled $103,773 during the year ended December 31, 2024 ($57,623 during the year ended December 31, 2023), and capitalized website development costs and patent costs totaled $25,374 and $51,967, respectively, for the year ended December 31, 2024 ($18,283 and $39,982 for the year ended December 31, 2023, respectively).
Current report
We recognize revenue in accordance with FASB ASC Topic No. 606,Revenue from Contracts with Customers (“ASC 606”). Revenues are recognized when control is transferred to customers in amounts that reflect the consideration we expect to be entitled to receive in exchange for those goods. Revenue recognition is evaluated through the following five steps: (i) identification of the contract, or contracts, with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied. As part of the accounting for these arrangements, we may be required to make significant judgments, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each performance obligation.
Current report
Revenues from product sales are recorded at the net sales price, or “transaction price,” which may include estimates of variable consideration that result from product returns. We determine the amount of variable consideration by using either the expected value method or the most-likely-amount method. We include the unconstrained amount of estimated variable consideration in the transaction price, which reflects the amount for which it is probable that a significant reversal of cumulative revenue recognized will not occur. At the end of each subsequent reporting period, we re-evaluate the estimated variable consideration included in the transaction price and any related constraint, and if necessary, adjust our estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis in the period of adjustment. Reserves are established for the estimates of variable consideration based on the amounts we expect to be earned or to be claimed on the related sales.
Current report
We record U.S. commercial revenues as a receivable when our American distributor transfers shipped product to their title model for 60P. Foreign sales to both Australia and Europe are recognized as a receivable at the point product is shipped to distributor. The shipments to Australia and Europe are further subject to profit sharing agreements for boxes sold to customers.
Current report
In November 2024, the FASB issued ASU 2024-03,Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses(“ASU 2024-03”), which applies to all public business entities that file financial statements with the SEC. The amendments in this ASU require public business entities to disclose on an annual and interim basis, disaggregated information about certain income statement expense line items. The new standard is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. We are currently evaluating the impact that ASU 2024-03 will have on our financial statement disclosures.
Removed paragraphs (23)
Previous report
Cost of Revenues, Gross Loss, and Gross Margin
Previous report
Our research revenues have historically been derived mostly from a single, awarded research grant in the amount of $4,999,814 at the beginning of December 2020 (with an additional $720,000 awarded February 26, 2021) from the Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense (which may be referred to as “JPEO”) to study Arakoda in mild-to-moderate COVID-19 patients. A majority of the study was completed in 2021 with the planned lab data analysis and the submission of the final study report completed during the first nine months of 2022. Research revenue was recognized when research expenses against the JPEO grant were recognized at the end of each month. Research revenues do not exceed directly related research expenses for a given period as the grant did not cover additional research beyond the scope of COVID-19.
Previous report
Product Revenues - net of Discounts and Rebates, Service Revenues, Cost of Revenues, Gross Loss, and Gross Margin
Previous report
Arakoda sales to our distributor Scandinavian Biopharma in Europe for the year ended December 31, 2023 were $18,000 ($18,000 for the year ended December 31, 2022). The distributor has also reported increased interest from consumers in Europe seeking treatment for Babesiosis.
Previous report
Service Revenues
Previous report
During the year ended December 31, 2022, we earned $30,295 from storing Arakoda purchased by the United States Army Medical and Materiel Development Activity (USAMMDA), compared to $0 earned during the year ended December 31, 2023. The service revenue contract from USAMMDA ended on August 31, 2022, though an insignificant amount was earned on the contract in the beginning of 2024 in association with final payment of the storage revenue receivable from 2022.
Previous report
Cost of Revenues, Gross Loss, and Gross Margin
Previous report
For the year ended December 31, 2023, we recognized a loss due to the change in fair value of derivative liabilities of $37,278 compared to $10,312 for the year ended December 31, 2022.
Previous report
(Loss) Gain on Debt Extinguishment
Previous report
Other Expenses, net
Previous report
Net cash used in operating activities was $4,542,910 for the year ended December 31, 2023, as compared to $1,009,980 for the year ended December 31, 2022. Our net cash used in operating activities increased as a result of higher general and administrative expenses of $4,241,836 for the year ended December 31, 2023 ($1,303,722 for the year ended December 31, 2022), primarily related to higher legal, accounting, and professional fees, and investor-related outreach expenses preceding our IPO in July 2023. In addition, we paid more cash to settle our accounts payable and other accrued liabilities during the year ended December 31, 2023 when compared to the year ended December 31, 2022.
Previous report
Net cash used in investing activities was $115,888 for the year ended December 31, 2023, as compared to $60,133 for the year ended December 31, 2022. The increase in cash used in investing activities is primarily attributable to higher purchases of property and equipment of $57,623 for the year ended December 31, 2023, as compared to $0 for the year ended December 31, 2022.
Previous report
We receive revenues from sales of our Arakoda product to the DoD and resellers in the U.S. and abroad. We record deferred revenues for any advances and then recognize revenue upon shipment to the retailer who orders product for a specific customer. We record a receivable for any amounts to be received pursuant to such sales.
Previous report
Income Taxes
Previous report
From January 1, 2022 to May 31, 2022, 60 Degrees Pharmaceuticals, LLC was a C-corporation for income tax purposes before the incorporation/merger into 60 Degrees Pharmaceuticals, Inc. on June 1, 2022. The District of Columbia (“DC”) taxes corporations on form D-20 (DC Corporation Franchise Tax Return) and returns have a minimum tax due of $250 if gross receipts are at $1 million or less and $1,000 if above. The tax years that remain subject to examination by major tax jurisdictions include the years ended December 31, 2020, 2021, 2022 and 2023.
Previous report
60P Australia Pty Ltd. is subject to the taxes of the Australian Taxation Office and 60P Singapore Pte Ltd. was subject to the taxes of the Inland Revenue Authority of Singapore prior to its dissolution as of March 31, 2022.
Previous report
We account for income taxes under the liability method, and deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying values of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided on deferred tax assets if it is determined that it is more likely than not that the deferred tax asset will not be realized in the following five years. In determining the need for a valuation allowance, we have given consideration to our worldwide cumulative loss position when assessing the weight of the sources of taxable income that can be used to support the realization of deferred tax assets.
Previous report
We have assessed, on a jurisdictional basis, the available means of recovering deferred tax assets, including the ability to carry-back net operating losses, the existence of reversing temporary differences, the availability of tax planning strategies and available sources of future taxable income. On the basis of this evaluation, we have determined that it is more likely than not that we will not recognize the benefits of the U.S. Federal, state and net deferred tax assets, and, as a result, a full valuation allowance has been set against our net deferred tax assets as of December 31, 2023 and December 31, 2022.
Previous report
During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjust these reserves in light of changing facts and circumstances, such as the outcome of tax examinations. As of December 31, 2023 and December 31, 2022, we have not established any reserves for uncertain tax positions.
Previous report
We recognize interest and penalties accrued related to unrecognized tax benefits as income tax expense. During the years ended December 31, 2023 and 2022, we did not recognize interest and penalties related to unrecognized tax benefits.
Previous report
In August 2020, FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with our current accounting treatment under the current guidance. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year. We adopted this pronouncement on January 1, 2022; however, the adoption of this standard did not have a material effect on our consolidated financial statements.
Previous report
In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. This standard is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Issuers should apply the new standard prospectively to modifications or exchanges occurring after the effective date of the new standard. Early adoption is permitted, including adoption in an interim period. If an issuer elects to early adopt the new standard in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The adoption of this standard in 2022 did not have a material effect on our financial statements.
Previous report
In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with Accounting Standards Codification Topic 606. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, and early adoption is permitted. The adoption of ASU 2021-08 did not have an effect on our financial statements.
Reworded paragraphs (32)
Previous wording
To date, we have received the majority of our product revenues from sales of our Arakoda™ product to the US Department of Defense (the “DoD”) and resellers in the U.S. and abroad. Foreign sales to both Australia and Europe are further subject to profit sharing agreements for boxes sold to customers. Currently, the procurement contract with the DoD has expired and DoD sales last happened in 2021. Sales to resellers in the US are subject to considerable discounts and rebates for services provided by our third-party logistics (“3PL”) partner and wholesalers and pharmacy benefit managers (“PBMs”).
Current wording
We receive the majority of our product revenues from sales of our Arakoda product to resellers in the U.S. and abroad. Foreign sales to both Australia and Europe are further subject to profit sharing agreements for boxes sold to customers. Sales to resellers in the US are subject to considerable discounts and rebates for services provided by our third-party logistics (“3PL”) partner and wholesalers and pharmacy benefit managers (“PBMs”).
Previous wording
Cost of revenues associated with our products is primarily comprised of direct materials, manufacturing related costs incurred in the production process and inventory write-downs due to expiry.
Current wording
Cost of revenues associated with our products is primarily comprised of direct materials, shipping, manufacturing related costs incurred in the production process, serialization costs and inventory write-downs due to expiration.
Previous wording
Research and development costs for the periods presented primarily consist of contracted R&D services and costs associated with preparation for our now halted COVID-19 clinical trial. We expense all research and development costs in the period in which they are incurred. Payments made prior to the receipt of goods or services to be used in research and development are recognized as prepaid assets and expensed over the service period as the services are provided. We have also issued shares of our common stock in exchange for research and development services.
Current wording
Research and development costs for the periods presented primarily consist of contracted R&D services and costs associated with preparation for and conducting our Babesiosis trial in 2024 and, in 2023, related to our halted COVID-19 clinical trial. We expense all research and development costs in the period in which they are incurred. Payments made prior to the receipt of goods or services to be used in research and development are recognized as prepaid assets and expensed over the service period as the services are provided. We have also issued shares of our common stock to vendors in exchange for research and development services.
Previous wording
Interest expense consists of interest accrued on our outstanding debt obligations and related amortization of debt discounts and deferred issuance costs. Other components of other income (expense) include changes in the fair value of financial instruments, gains and losses on extinguishments of debt, and other miscellaneous income (expense). We now have interest income as a result of the IPO as certain cash proceeds are invested in Federal Deposit Insurance Corporation backed interest bearing accounts.
Current wording
Prior to the IPO, our interest expense consisted of interest accrued on our outstanding debt obligations and amortization of debt discounts and deferred issuance costs. Subsequently, interest expense is mostly limited to a single, $150,000 SBA loan. Other components of other income and expense include changes in the fair value of financial instruments, gains and losses on extinguishments of debt, and other miscellaneous income or expenses. We also earn interest income from cash invested in interest-bearing accounts, as well as cash equivalents and short-term investments consisting of certificates of deposits with original maturities ranging from three to six months.
Previous wording
Our product revenues – net of discounts and rebates were $253,573 for the year ended December 31, 2023, as compared to $192,913 for the year ended December 31, 2022. For the year ended December 31, 2023, our U.S. pharmaceutical distributor accounted for 72% of our total net product sales and Kodatef sales to our Australian distributor accounted for 21% of total net product sales (46% and 39% for the year ended December 31, 2022, respectively). The increase in product sales is primarily due to increased sales volume during the period and was partially offset by the reduction of our wholesale acquisition cost (sales price) of Arakoda™ (16 x 100 mg tablets) from $285 to $235 per box in January 2023.
Current wording
Our product revenues - net of discounts and rebates were $607,574 for the year ended December 31, 2024, as compared to $253,573 for the year ended December 31, 2023. For the year ended December 31, 2024, our U.S. pharmaceutical distributor accounted for 95% of our total net product sales and Kodatef sales to our Australian distributor accounted for 5% of total net product sales (72% and 21% for the year ended December 31, 2023, respectively). Domestic commercial product sales are primarily driving increased sales volume during the period.
Previous wording
We offer discounts and rebates to the civilian U.S. supply chain distribution channel. We record sales when our 3PL partner transfers boxes into their title model. Discounts and rebates are offered to our 3PL partner amounting to 12% along with a fixed monthly fee that started in 2023 (2% and no fixed fee in 2022). The product is then transferred usually to one of the three large U.S. pharmaceutical distributors where rebates are 10%. Lastly, we have relationships with several large pharmacy benefit managers (“PBMs”) that allow patients to purchase Arakoda at a discount. The rebate associated with PBMs ranges from 30 to 41.25% (15 to 39.75% in 2022) depending on the amount of coverage provided. For the year ended December 31, 2023, discounts and rebates were $216,031 compared to $59,552 for the year ended December 31, 2022.
Current wording
We offer discounts and rebates to the civilian U.S. supply chain distribution channel. We record sales when our 3PL partner transfers boxes into their title model. Discounts and rebates offered to our 3PL partner amount to 12% (lower rates available upon reaching larger revenue tiers) along with a $5,500 fixed monthly fee that started in 2023. The product is then transferred usually to one of the three large U.S. pharmaceutical distributors where rebates are 10%. Lastly, we have relationships with several large pharmacy benefit managers (“PBMs”) that allow patients to purchase Arakoda at a discount. The rebate associated with PBMs ranges from 30% to 41.25% depending on the amount of coverage provided. For the year ended December 31, 2024, discounts and rebates were $476,218 compared to $216,031 for the year ended December 31, 2023.
Previous wording
Arakoda entered the U.S. civilian supply chain in the third quarter of 2019. For the year ended December 31, 2022, 570 boxes were sold to pharmacies and dispensaries. Sales volume increased by 186% to 1,632 boxes sold to pharmacies and dispensaries for the year ended December 31, 2023. This growth in sales volumes is a combination of natural organic growth, the reduction in the wholesale acquisition cost of $285 per box to $235 per box effective January 2023, and increased prescribing by doctors of Arakoda off-label for usage treatment of babesiosis. The sales volume growth to pharmacies and dispensaries ties more closely to the growth in discounts and rebates previously discussed than our reported sales to our 3PL.
Current wording
Arakoda entered the U.S. civilian supply chain in the third quarter of 2019. For the year ended December 31, 2023, 1,632 boxes were sold to pharmacies and dispensaries. Sales volume increased by 214% to 5,119 boxes sold to pharmacies and dispensaries for the year ended December 31, 2024. Based on IQVIA data, this growth in sales volume appears to be driven primarily by organic growth in the Lyme disease community, whose prescribers utilize Arakoda for treatment of babesiosis.
Previous wording
Kodatef sales to our distributor Biocelect in Australia for the year ended December 31, 2023 were $53,718 ($86,763 for the year ended December 31, 2022). Sales to Biocelect are currently subject to a profit share distribution once the original transfer price has been recouped. As of December 31, 2023, no profit share has been due to us ($0 as of December 31, 2022), though we did settle the historical profit share through September 30, 2022 for $24,486 (AUD$35,000) on January 16, 2023.
Current wording
Kodatef sales to our distributor Biocelect in Australia for the year ended December 31, 2024 were $30,652 ($53,718 for the year ended December 31, 2023). Sales to Biocelect are currently subject to a profit share distribution once the original transfer price has been recouped. The most recent sale of boxes to Biocelect reached profit share at the end of Q1 2024. Biocelect reported approximately 105% year-over-year growth, the equivalent of 1,850 boxes sold for the year ended December 31, 2024, compared to 903 boxes for the year ended December 31, 2023. As of December 31, 2024, Biocelect’s unsold inventory that remains subject to profit share was the equivalent of 385 boxes. While growth in Australia is similarly positive to that in the US, Biocelect has achieved that growth by competing directly with Malarone in terms of price in their market for the approved antimalarial prophylaxis indication. As of December 31, 2024, $9,444 of profit share was due to us ($0 as of December 31, 2023).
Previous wording
Cost of revenues was $474,550 for the year ended December 31, 2023, as compared to $432,370 for the year ended December 31, 2022. The increase in cost of goods sold is in part, due to the 31.44% increase in product sales over the same periods, as well as higher write-offs for expired inventory, which increased to $191,111 for the year ended December 31, 2023 (up from $162,222 for the year ended December 31, 2022). Despite higher write-offs, the Gross Margin % increased to (87.15)% for the year ended December 31, 2023 from (93.71)% for the year ended December 31, 2022.
Current wording
Cost of revenues was $384,765 for the year ended December 31, 2024, as compared to $474,550 for the year ended December 31, 2023. While net product sales increased over the same periods, the decrease in cost of goods sold is primarily attributable to the fixed part of cost of goods. As the sales volume has increased, the gross margin has improved as the variable cost of goods of each unit sold is substantially less than the sales price. Additionally, write-downs for expired inventory were significantly higher during the year ended December 31, 2023 at $191,111, as compared to $22,046 during the year ended December 31, 2024. Due to these factors, the Gross Margin % increased significantly from (87.15%) for the year ended December 31, 2023 to 37.78% for the year ended December 31, 2024.
Previous wording
The research revenues earned by us were $0 for the year ended December 31, 2023, as compared to $288,002 for the year ended December 31, 2022. Our research revenues for the year ended December 31, 2022 were primarily derived from remnants of a research grant received in 2021 to study Arakoda in mild-to-moderate COVID-19 patients. The study was completed in 2022, therefore we recognized $0 in research revenues from the COVID-19 grant during the year ended December 31, 2023. We also earn research revenues from the Australian Tax Authority for research expenses conducted in Australia. The revenue was $42,250 for the year ended December 31, 2022 compared to $0 for the year ended December 31, 2023. We had been accruing anticipated research rebates quarterly but after the COVID-19 research cancellation, in the fourth quarter of 2023, we made the decision not to file for the research rebate and reversed the previously accrued revenues and charged them to research and development.
Current wording
The research revenues earned by us were $73,771 for the year ended December 31, 2024, as compared to $0 for the year ended December 31, 2023. Our research revenues for the year ended December 31, 2024 primarily relate to research revenues earned from the Australian Tax Authority for research expenses conducted in Australia, and we earned $55,395 during the year ended December 31, 2024 ($0 during the year ended December 31, 2023). We did not earn research revenues from the Australian Tax Authority in 2023 due to the cancellation of our COVID-19 trial, after which we made the decision not to file for the research rebate. In 2024, we also began to recognize research revenues related to the new USAMMDA contract we were awarded in July 2024 to facilitate commercial validation of a new bottle and replacement blister packaging of Arakoda.
Previous wording
Research and development costs increased during the year ended December 31, 2023 when compared to the year ended December 31, 2022. Research and development costs incurred during the year ended December 31, 2022 related to our Phase II clinical trial to assess the safety and efficacy of tafenoquine for the treatment of mild to moderate COVID-19 disease, which was completed in the third quarter of 2022. During the year ended December 31, 2023, we incurred initial costs related to our Phase II B clinical trial, which was then suspended in the fourth quarter of 2023. Direct COVID-19-related trial costs are 83% of the costs for the year ended December 31, 2023 at $574,609 and 49% of the costs at $256,581 for the year ended December 31, 2022.
Current wording
Research and development costs increased during the year ended December 31, 2024 when compared to the year ended December 31, 2023. Research and development costs incurred during the year ended December 31, 2023 consisted of initiation costs related to our Phase IIB COVID-19 clinical trial, which was later suspended in the fourth quarter of 2023. Direct COVID-19-related trial costs represent less than 1% of the total research and development costs for the year ended December 31, 2024 at $16,247 and 83% of the costs for the year ended December 31, 2023 at $574,609. During the year ended December 31, 2024, $3,225,000, or 65% of the total research and development costs, relate to share-based payments granted to two vendors in January 2023, which payments were initially deferred and capitalized. Kentucky Technology, Inc. delivered us a report on the potential development of SJ733 + tafenoquine in the second quarter of 2024 and Trevally completed the synthesis of 8.8 kilograms of castanospermine in the third quarter of 2024, resulting in $2,625,000 and $600,000, respectively, of research and development expense recognized for the year ended December 31, 2024. We also incurred $1,359,532 in costs related to our babesiosis trial for tafenoquine during the year ended December 31, 2024 ($0 during the year ended December 31, 2023).
Previous wording
For the year ended December 31, 2023, our general and administrative expenses increased by 225.36% or $2,938,114 from the year ended December 31, 2022. During the year ended December 31, 2023, we incurred significantly higher compensation expenses as a result of compensation arrangements with our directors, which came into effect on the date of our IPO, and year-end bonuses of restricted stock units to our executives. Pursuant to these arrangements, we recognized $528,926 in stock-based compensation expense and $99,000 in cash compensation to our directors during the year ended December 31, 2023 ($0 and $0 for the year ended December 31, 2022, respectively). Additionally, during the year ended December 31, 2023, we incurred $969,581 in accounting, audit, legal and professional fees, $304,581 of insurance expenses, and $668,639 of investor-related outreach expenses (up from $656,089, $84,879, and $142 for the year ended December 31, 2022, respectively).
Current wording
For the year ended December 31, 2024, our general and administrative expenses increased by 18.46% or $783,149 from the year ended December 31, 2023. During the year ended December 31, 2024, we recorded higher compensation expenses including $275,114 of bonus expense and $662,951 of salaries, taxes, and benefits expense, respectively (compared to $0 and $492,780 for the year ended December 31, 2023, respectively) due to certain sales and performance bonuses payable to our executives, and higher salaries due to hiring of our new Chief Commercial Officer in February 2024. Additionally, during the year ended December 31, 2024, we incurred $410,016 in legal and professional fees, $549,912 of insurance expenses, $1,019,111 of investor outreach expenses, and $433,884 of advertising and promotion expenses (up from $268,611, $304,581, $668,639, and $172,551 for the year ended December 31, 2023, respectively). These were partially offset by a significant decrease in stock-based compensation, which decreased from $528,926 for the year ended December 31, 2023 to $32,767 for the year ended December 31, 2024. The decrease is, in part, due to a decrease in the average grant date fair value of stock-based awards granted in 2024 as compared to 2023, as well as certain fully vested stock-based awards granted to our directors on the closing date of our IPO, and to our executives at the end of 2023.
Previous wording
For the year ended December 31, 2023, we recognized $2,286,637 of interest expense ($3,989,359 for the year ended December 31, 2022). The decrease in interest expense is the result of the settlement or conversion of a majority of our outstanding debt obligations upon the closing of our IPO on July 14, 2023. Cash paid for interest was $179,117 and $2,193 for the years ended December 31, 2023 and December 31, 2022, respectively.
Current wording
For the year ended December 31, 2024, we recognized $7,912 of interest expense ($2,286,637 for the year ended December 31, 2023). The decrease in interest expense is the result of the settlement or conversion of a majority of our outstanding debt obligations upon the closing of our IPO on July 14, 2023. Cash paid for interest was $8,772 and $179,117 for the years ended December 31, 2024 and December 31, 2023, respectively.
Previous wording
For the year ended December 31, 2023, we recognized $399,725 of derivative expense in connection with the raising of $555,000 in net proceeds from our bridge funding in May 2023. We recognized $504,613 of derivative expense during the year ended December 31, 2022 from the bridge funding raise in May 2022, generating $979,275 in net proceeds. The decrease in derivative expense is related to the initial fair value of the related derivative liabilities in excess of the proceeds received.
Current wording
For the year ended December 31, 2023, we recognized $399,725 of derivative expense in connection with the raising of $555,000 in net proceeds from our bridge funding in May 2023. We record derivative expense when the initial fair value of the related derivative liabilities exceeds the cash proceeds received. We did not record derivative expense for the year ended December 31, 2024 as we did not complete any debt financing transactions during the period.
Previous wording
For the year ended December 31, 2023, we recognized a $1,231,480 net loss on debt extinguishment, compared to a $120,683 net gain on debt extinguishment for the year ended December 31, 2022. The gain recognized for the year ended December 31, 2022 was due to our renegotiation of the Xu Yu promissory note in December 2022 to add an equity conversion feature, which was accounted for under the debt extinguishment model. The loss for the year ended December 31, 2023 is related, in part to the exchange of the cumulative outstanding debt pursuant to the Knight Debt Conversion Agreement in January 2023, as well as losses recognized upon extinguishment of our interim bridge financing notes, all of which were settled or converted upon our IPO in July 2023. The net amount for the year ended December 31, 2023 was partially offset by a debt extinguishment gain of $223,077 recognized on conversion of the Xu Yu promissory note on the date of our IPO.
Current wording
For the year ended December 31, 2024, we did not recognize a gain or loss on debt extinguishment ($1,231,480 loss recognized during the year ended December 31, 2023). The decrease is related, in part to the conversion of the cumulative outstanding debt pursuant to the Knight Debt Conversion Agreement in January 2023, which was accounted for as a debt extinguishment, as well as losses recognized upon extinguishment of our interim bridge financing notes, all of which were settled or converted upon our IPO in July 2023. The net amount for the year ended December 31, 2023 was partially offset by a debt extinguishment gain of $223,077 recognized on conversion of the Xu Yu promissory note on the date of our IPO.
Previous wording
For the year ended December 31, 2023, we recognized a net gain of $5,379,269 related to the change in the fair value of the promissory note with Knight, which was carried at fair value. The gain relates to the mark to market adjustment recognized immediately prior to the automatic conversion of the outstanding debt obligation into our equity shares upon the closing of our IPO. Our cumulative debt outstanding with Knight was not measured at fair value on a recurring basis prior to the Knight Debt Conversion Agreement executed in January 2023, hence we recorded a $0 change in fair value for the year ended December 31, 2022.
Current wording
For the year ended December 31, 2023, we recognized a net gain of $5,379,269 related to the change in the fair value of the Convertible Knight Loan, which was held at fair value beginning on the modification date in January 2023. The gain relates to the mark to market adjustment recognized immediately prior to the automatic conversion of the outstanding debt obligation into our equity shares upon the closing of our IPO. We no longer have any debt obligations measured at fair value on a recurring basis, hence we recorded a $0 change in fair value for the year ended December 31, 2024.
Previous wording
For the year ended December 31, 2023, we recognized $83,116 in other expenses compared to $43,238 for the year ended December 31, 2022. During the year ended December 31, 2023, $48,236 was recognized in other expense due to a one-time write off of an uncollectible receivable from our 3PL for an uninvoiced return.
Current wording
For the year ended December 31, 2024, we recognized $101,464 in other income compared to $83,116 in other expense for the year ended December 31, 2023. As a result of the IPO as well as additional equity financing transactions completed in 2024, we have earned higher interest income from investing certain cash proceeds in interest-bearing accounts and short-term certificates of deposit. We recognized interest income of $103,299 during the year ended December 31, 2024 ($19,985 during the year ended December 31, 2023). Additionally, during the year ended December 31, 2024, we recognized $10,789 in service revenue in association with the final payment from the USAMMDA for storing Arakoda purchases ($0 for the year ended December 31, 2023), upon the final resolution of storage fees payable from the USAMMDA under the original development contract entered into in 2014. As the development contract ended on August 31, 2022, additional storage revenue is not expected in the near future. Other expense during the year ended December 31, 2023, was primarily related to net foreign exchange transaction losses as well as a one-time write off of an uncollectible receivable from our 3PL for an uninvoiced return of $48,236.
Previous wording
For the year ended December 31, 2023 and 2022, our net cash used in operating activities was $4,542,910 and $1,009,980, respectively and the cash balance was $2,142,485 as of December 31, 2023 ($264,865 as of December 31, 2022). To date, we have funded our operations through debt and equity financings. Based on current internal projections, taking into consideration the net proceeds of approximately $1.9 million received in connection with the offering completed in January 2024, recent growth in Arakoda sales, and preparatory clinical trial activities, we estimate that we will have sufficient funds to remain viable through October 31, 2024. We cannot give assurance that we can increase our cash balances or limit our cash consumption and thus maintain sufficient cash balances for our planned operations or future acquisitions. Future business demands may lead to cash utilization at levels greater than recently experienced. We may need to raise additional capital in the future. However, we cannot assure you that we will be able to raise additional capital on acceptable terms, or at all.
Current wording
As of December 31, 2024, we had cash and cash equivalents of $1,659,353 ($2,142,485 as of December 31, 2023). For the year ended December 31, 2024 and 2023, our net cash used in operating activities was $5,648,088 and $4,542,910, respectively. To date, we have financed our operations primarily through the issuance of common stock, warrants to purchase common stock, and proceeds from the issuance of convertible debt and promissory notes. Based on current internal projections, taking into consideration the net proceeds of approximately $1.9 million received under the ATM Agreement, an additional $5.127 million in cumulative net proceeds received from the September, 2024 Private Placement and 2025 offerings, and recent growth in Arakoda sales, we estimate that we will have sufficient funds to remain viable through August 31, 2025, excluding the additional costs of conducting the expanded access study for chronic babesiosis patients (currently being planned), and assuming no additional capital raises. We cannot give assurance that we can increase our cash balances or limit our cash consumption and thus maintain sufficient cash balances for our planned operations or future acquisitions. Future business demands may lead to cash utilization at levels greater than recently experienced. We may need to raise additional capital in the future. However, we cannot assure you that we will be able to raise additional capital on acceptable terms, or at all.
Previous wording
As of December 31, 2023, we had an accumulated deficit of $32,580,850. In their audit report for the fiscal year ended December 31, 2023, our auditors have expressed their concern as to our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate cash flows from operations and obtain financing.
Current wording
In their audit report for the fiscal year ended December 31, 2024, our auditors have expressed their concern as to our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate cash flows from operations and obtain financing. The audited consolidated financial statements for the years ended December 31, 2024, and December 31, 2023, respectively, included an explanatory note referring to our recurring operating losses and expressing substantial doubt in our ability to continue as a going concern.
Previous wording
In view of these matters, continuation as a going concern is dependent upon our ability to meet financial requirements, raise additional capital, and achieve gross profitability from our single marketed product. We plan to fund our operations through third party and related party debt/advances, private placement of restricted securities and the issuance of stock in a subsequent offering until such a time as we are able to generate profitable operations or a business combination may be achieved.
Current wording
We plan to fund our operations through third party and related party debt/advances, private placement of restricted securities and the issuance of stock in a subsequent offering until such a time as the business achieves profitability or a business combination may be achieved. However, there can be no assurance that we will be successful in raising additional capital or that such capital, if available, will be on terms that are favorable to us. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.
Previous wording
The consolidated financial statements for the years ended December 31, 2023, and December 31, 2022, respectively, included an explanatory note referring to our recurring operating losses and expressing substantial doubt in our ability to continue as a going concern. The accompanying financial statements are prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of obligations in the normal course of business. However, we have not demonstrated the ability to generate enough revenues to date to cover operating expenses and have accumulated losses to date. This condition, among others, raises substantial doubt about our ability to continue as a going concern for one year from the date these financial statements are issued.
Current wording
As such, we have concluded that such plans do not alleviate the substantial doubt about our ability to continue as a going concern for one year from the date the accompanying financial statements are issued.
Previous wording
Our consolidated financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.
Current wording
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of obligations in the normal course of business, and do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.
Previous wording
Net cash provided by financing activities was $6,474,565 for the year ended December 31, 2023, as compared to $1,221,706 for the year ended December 31, 2022. The increase in net cash provided by financing activities is attributable to net proceeds of $6,454,325 generated from our IPO, which closed on July 14, 2023, as well as $1,131,771 received from the exercise of warrants, partially offset by repayments of certain of our outstanding debt obligations in July 2023. Cash provided by financing activities for the year ended December 31, 2022 was primarily due to our interim bridge debt financing raise in May 2022 and advances from related parties.
Current wording
Net cash provided by financing activities was $7,053,571 for the year ended December 31, 2024, as compared to $6,474,565 for the year ended December 31, 2023. The increase in net cash provided by financing activities is primarily attributable to (i) net proceeds of $1,914,513 received for the sale of common stock and warrants in January 2024, (ii) net proceeds of $1,790,670 from the sale of common stock pursuant to the At-the-Market Sales Agreement in July and August 2024, and (iii) $3,439,502 received from the sale of warrants in our Private Placement offering that closed in September 2024, in each case partially offset by payment of deferred offering costs. Cash provided by financing activities for the year ended December 31, 2023 related to net proceeds of $6,454,325 generated from our IPO, which closed on July 14, 2023, as well as $1,131,771 received from the exercise of warrants, but partially offset by repayments of certain of our outstanding debt obligations in July 2023.
Previous wording
Our foreign operations were small relative to U.S. operations for the year ended December 31, 2023 and December 31, 2022, thus effects of foreign currency translation have been minor.
Current wording
Our foreign operations were small relative to U.S. operations for the years ended December 31, 2024 and December 31, 2023, thus effects of foreign currency translation have been minor.
Previous wording
The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Current wording
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Previous wording
We measure compensation for all share-based payment awards granted to employees, directors, and nonemployees, based on the estimated fair value of the awards on the date of grant. For awards that vest based on continued service, the service-based compensation cost is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the awards. For service vesting awards with compensation expense recognized on a straight-line basis, at no point in time does the cumulative grant date value of vested awards exceed the cumulative amount of compensation expense recognized. The grant date is determined based on the date when a mutual understanding of the key terms of the share-based awards is established. We account for forfeitures as they occur.
Current wording
We account for share-based payments in accordance with ASC Subtopic 718,Compensation - Stock Compensation (“ASC 718”). We measure compensation for all share-based payment awards granted to employees, directors, and nonemployees, based on the estimated fair value of the awards on the date of grant. For awards that vest based on continued service, the service-based compensation cost is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the awards. For service vesting awards with compensation expense recognized on a straight-line basis, at no point in time does the cumulative grant date value of vested awards exceed the cumulative amount of compensation expense recognized. The grant date is determined based on the date when a mutual understanding of the key terms of the share-based awards is established. We account for forfeitures as they occur.
Previous wording
We estimate the fair value of all stock option awards as of the grant date by applying the Black-Scholes option pricing model. The application of this valuation model involves assumptions, including the fair value of the common stock, expected volatility, risk-free interest rate, expected dividends and the expected term of the option. Due to the lack of a public market for our common stock prior to the IPO and lack of company-specific historical implied volatility data, we base our computations of expected volatility on the historical volatility of a representative group of public companies with similar characteristics of the Company, including stage of development and industry focus. The historical volatility is calculated based on a period of time commensurate with the expected term assumption. We use the simplified method as prescribed by the SEC Staff Accounting Bulletin Topic 14,Share-Based Payment, to calculate the expected term for stock options, whereby, the expected term equals the midpoint of the weighted average remaining time to vest, vesting period and the contractual term of the options due to our lack of historical exercise data. The risk-free interest rate is based on U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The expected dividend yield is assumed to be zero as we have never paid dividends and have no current plans to pay any dividends on our common stock. The assumptions used in calculating the fair value of share-based awards represent our best estimates and involve inherent uncertainties and the application of significant judgment.
Current wording
We estimate the fair value of all stock option awards as of the grant date by applying the Black-Scholes option pricing model. The application of this valuation model involves assumptions, including the fair value of the common stock, expected volatility, risk-free interest rate, expected dividends and the expected term of the option. Due to the lack of a public market for our common stock prior to the IPO and lack of company-specific historical implied volatility data, we base our computations of expected volatility on the historical volatility of a representative group of public companies with similar characteristics of the Company, including stage of development and industry focus. The historical volatility is calculated based on a period of time commensurate with the expected term assumption. We generally use the simplified method as prescribed by the SEC Staff Accounting Bulletin Topic 14,Share-Based Payment, to estimate the expected term for stock options, whereby, the expected term equals the midpoint of the weighted average remaining time to vest, vesting period and the contractual term of the options due to our lack of historical exercise data. For certain options granted out-of-the-money, our best estimate of the expected term is the contractual term of the award. The risk-free interest rate is based on U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The expected dividend yield is assumed to be zero as we have never paid dividends and have no current plans to pay any dividends on our common stock. The assumptions used in calculating the fair value of share-based awards represent our best estimates and involve inherent uncertainties and the application of significant judgment.
Previous wording
We assess the classification of our derivative financial instruments each reporting period, which formerly consisted of bridge shares, convertible notes payable, and certain warrants, and determined that such instruments qualified for treatment as derivative liabilities as they met the criteria for liability classification under ASC 815 (excluding certain warrants issued in connection with the IPO). As of December 31, 2023, our derivative financial instruments consist of contingent payment arrangements.
Current wording
We assess the classification of our derivative financial instruments each reporting period, which formerly consisted of bridge shares, convertible notes payable, and certain warrants, and determined that such instruments initially qualified for treatment as derivative liabilities as they met the criteria for liability classification under ASC 815. As of December 31, 2024, our derivative financial instruments consist of contingent payment arrangements.
Previous wording
We analyze all financial instruments with features of both liabilities and equity under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 480, (“ASC 480”), Distinguishing Liabilities from Equity and FASB ASC Topic No. 815, Derivatives and Hedging (“ASC 815”). Derivative liabilities are adjusted to reflect fair value at each reporting period, with any increase or decrease in the fair value recorded in the results of operations (other income/expense) as change in fair value of derivative liabilities. We use a Monte Carlo Simulation Model to determine the fair value of these instruments.
Current wording
We analyze all financial instruments with features of both liabilities and equity under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 480,Distinguishing Liabilities from Equity (“ASC 480”), and FASB ASC Topic No. 815,Derivatives and Hedging (“ASC 815”). Derivative liabilities are adjusted to reflect fair value at each reporting period, with any increase or decrease in the fair value recorded in the results of operations, as a component of other income or expense as change in fair value of derivative liabilities. We use a Monte Carlo simulation model or a probability-weighted expected return method to determine the fair value of these instruments.
Previous wording
The Financial Accounting Standards Board (the “FASB”) issues Accounting Standards Update (“ASUs”) to amend the authoritative literature in ASC. There have been a number of ASUs to date, that amend the original text of ASC. Management believes that those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to us or (iv) are not expected to have a significant impact on our consolidated financial statements.
Current wording
From time to time, the FASB issues Accounting Standards Update (“ASUs”) to amend the authoritative literature in the ASC. We regularly evaluate new ASUs to determine the impact that these pronouncements may have on our consolidated financial statements. Other than the pronouncements listed below, management believes that those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, or (iii) are not applicable to our consolidated financial statements or related disclosures.
Previous wording
In November 2023, the FASB issued 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses and segment profit or loss. The ASU also requires entities with a single reportable segment to provide all segment disclosures under ASC 280, including the new required disclosures under the ASU. The ASU is effective for all public entities with fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The ASU must be applied retrospectively. We are currently evaluating the impact that ASU 2023-07 will have on our financial statement disclosures.
Current wording
In November 2023, the FASB issued ASU 2023-07,Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”) which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses and segment profit or loss. ASU 2023-07 also requires entities with a single reportable segment to provide all segment disclosures under ASC 280, including the new required disclosures under the ASU. We adopted ASU 2023-07 on a retrospective basis for the 2024 annual period, and for interim periods beginning in 2025. The impact is limited to our financial statement disclosures, which are presented in Note 2 to the accompanying consolidated financial statements.
Previous wording
In December 2023, the FASB issued ASU 2023-09, Income Taxes (ASC 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact that ASU 2023-09 will have on our financial statement disclosures.
Current wording
In December 2023, the FASB issued ASU 2023-09,Income Taxes (ASC 740): Improvements to Income Tax Disclosures (“ASU 2023-09”) which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact that ASU 2023-09 will have on our financial statement disclosures.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
We also earn research revenues from the Australian Tax Authority for qualified research activities conducted in Australia.