Jaguar Health, Inc.

Previous 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

Current wording

Jaguar was founded in San Francisco, California, as a Delaware corporation on June 6, 2013 (“inception”). The Company was a majority-owned subsidiary of Napo until the close of the Company's initial public offering on May 18, 2015. The Company was formed to develop and commercialize first-in-class prescription and non-prescription products for companion animals. 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 Therapeutics is initiating efforts to commence clinical development of crofelemer in SBS patients in support of the Company’s key focus on leveraging the EMA’s accelerated conditional marketing authorization pathway in Europe for these rare diseases. SBS affects approximately 10,000 to 20,000 people in the US, according to the Crohn's & Colitis Foundation, and it is estimated that the population of SBS patients in Europe is approximately the same size. Despite limited treatment options, the global SBS market exceeded $568 million in 2019 and is expected to reach $4.6 billion by 2027, according to a report by Vision Research Reports.

Current wording

SBS affects approximately 10,000 to 20,000 people in the US, according to the Crohn’s & Colitis Foundation, and it is estimated that the population of SBS patients in Europe is approximately the same size, and the US population of SBS-IF patients was estimated at 12,000 patients in 2021 in a well-done epidemiology study. Despite limited treatment options, the global market for SBS was valued at $2 billion in 2024 and is projected to reach $6.4 billion by 2030, according to a report by ResearchAndMarkets.com. MVID is an ultrarare pediatric disease, with an estimated prevalence of a couple of hundred patients globally. Jaguar estimates that the global market size for MVID therapies is in the range of $50 million to $100 million, based on market research with key opinion leaders (KOLs) and payers.

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. Our global MVID Phase 2 trial for Jaguar is being conducted under this IND.

Current wording

Crofelemer was granted Orphan Drug Designation (“ODD”) by the FDA in February 2023 for MVID, an ultra-rare congenital diarrheal disorder (“CDD”), and granted ODD for MVID by the European Medicines Agency (“EMA”) in October 2022. Crofelemer was granted ODD for short bowel syndrome (“SBS”) by the EMA in December 2021 and by the FDA in August 2017. In August 2023, the FDA activated Napo’s Investigational New Drug (“IND”) application for a new crofelemer powder for oral solution formulation for the treatment of MVID.

Previous wording

Jaguar is currently supporting three proof-of-concept (POC) investigator-initiated trials (IIT), and conducting two Phase 2 studies, of crofelemer for the rare diseases short bowel syndrome (SBS) with intestinal failure and/or MVID in the US, EU, and/or Middle East/North Africa regions. The Company’s Phase 2 study to evaluate the efficacy of crofelemer for MVID in pediatric patients has been initiated, as has the Company’s Phase 2 study to evaluate the efficacy of crofelemer for SBS with intestinal failure (SBS-IF) in adults, the independent IIT of crofelemer in pediatric patients with SBS-IF or MVID in Abu Dhabi in the United Arab Emirates, and the independent IIT in the US to evaluate crofelemer for SBS-IF in adults. The additional IIT is expected to initiate in Q2 2025, with the availability of the first POC IIT result potentially in H1 2025, and with additional POC IIT results expected throughout 2025. In accordance with the guidelines of specific European Union countries, published data from such clinical investigations could support reimbursed early patient access to crofelemer for these debilitating conditions in 2025 while the company pursues approval of crofelemer for SBS and MVID from the EMA and the FDA. Participation in early access programs, which do not exist in the US, provides an opportunity for reimbursement while impacting the morbidity and high cost of care for these chronic unmet needs. Additionally, the Company expects that if even just a very small number of MVID patients show benefit with crofelemer, this may potentially allow pathways for regulatory approval in the US and other regions and qualify crofelemer for participation in PRIME, a European Medicines Agency (EMA) program providing enhanced interaction and early dialogue with drug developers of novel medicines targeting unmet medical needs, and in the FDA’s Breakthrough Therapies program. If a drug is designated as breakthrough therapy, the FDA will expedite the development and review of the drug.

Current wording

Napo is also supporting an IIT in the US to evaluate crofelemer powder for oral solution for treatment of adult SBS-IF patients. The Company plans to pursue approval of crofelemer powder for oral solution for MVID in the US following the completion of the pivotal pediatric MVID trial. In accordance with the guidelines of specific EU countries, published data from such clinical investigations could support reimbursed early patient access to crofelemer for these debilitating IF conditions. Participation in early access programs, which do not exist in the US, provides an opportunity for reimbursement while impacting the morbidity and high cost of care for these chronic unmet needs. Additionally, the Company expects that if even just a very small number of MVID patients show benefit with crofelemer, this may potentially allow expedited pathways for regulatory approval in the US. Napo Therapeutics plans to pursue the opportunity for crofelemer powder for oral solution for PRIME designation, a European Medicines Agency (EMA) program providing enhanced interaction and early dialogue with drug developers of novel medicines targeting unmet medical needs. In the US, Napo plans to pursue Breakthrough Therapy Designation (BTD) from the FDA. If a drug is designated as breakthrough therapy, the FDA will expedite the review timeline for the drug.

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, 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.

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 of a tropical disease review voucher from the FDA.

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 510(k) cleared oral mucositis prescription product, Gelclair, for the US 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.

Current wording

In keeping with the Company’s focus on supportive care for patients undergoing cancer treatment, Jaguar in April 2024 signed 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 US market. In October 2024, Jaguar initiated the commercial launch of Gelclair, the Company’s third commercialized prescription product, in the US.

Previous wording

In January 2023, Jaguar and Filament, with funding from One Small Planet, formed the US-based joint venture Magdalena. Magdalena’s focus is on the development of novel, natural prescription medicines derived from plants for mental health indications, including, initially, attention-deficit/hyperactivity disorder (“ADHD”) in adults. The goal of the collaboration is to extend the botanical drug development capabilities of Jaguar and Filament in order to develop pharmaceutical-grade, standardized drug candidates for mental health disorders and to partner with a potential future licensee to develop and commercialize these novel plant-based drugs. This venture aligns with Jaguar's ETI program and Filament's corporate mission to develop novel, natural prescription medicines from plants. Magdalena will leverage Jaguar's proprietary medicinal plant library and Filament's proprietary drug development technology. Jaguar’s library of 2,300 highly characterized medicinal plants and 3,500 plant extracts, all from firsthand ethnobotanical investigation by Jaguar and members of the ETI Scientific Strategy Team, is a key asset we have generated over 30 years that bridges the knowledge of traditional healers and Western medicine. Magdalena holds an exclusive license to plants and plant extracts in Jaguar's library, not including any sources of crofelemer or NP-300, for specific indications and is in the process of identifying plant candidates in the library that may prove beneficial for addressing indications such as ADHD. Magdalena is currently approximately 40-percent owned by Jaguar.

Current wording

In January 2023, Jaguar and Filament Health, with funding from One Small Planet, formed the US-based joint venture Magdalena Biosciences (“Magdalena”). Magdalena’s focus is on the development of novel, natural prescription medicines derived from plants for mental health indications, including, initially, attention-deficit/hyperactivity disorder (“ADHD”) in adults. The goal of the collaboration is to extend the botanical drug development capabilities of Jaguar and Filament in order to develop pharmaceutical-grade, standardized drug candidates for mental health disorders and to partner with a potential future licensee to develop and commercialize these novel plant-based drugs. This venture aligns with Jaguar's Entheogen Therapeutics Initiative (ETI) and Filament’s corporate mission to develop novel, natural prescription medicines from plants. Magdalena is leveraging Jaguar’s proprietary medicinal plant library and Filament’s proprietary drug development technology. Jaguar’s library of 2,300 highly characterized medicinal plants and 3,500 plant extracts, all from firsthand ethnobotanical investigation by Jaguar and members of the ETI Scientific Strategy Team. Magdalena is currently approximately 40-percent owned by Jaguar.

Previous wording

In December 2021, we received conditional approval from the FDA to market Canalevia-CA1 (crofelemer delayed-release tablets), our oral plant-based prescription drug and the only available veterinary drug for the treatment of CID in dogs, and Canalevia-CA1 is now available to multiple leading veterinary distributors in the US Canalevia-CA1 is a tablet that is given orally and can be prescribed for home treatment of CID. The FDA conditionally approves Canalevia-CA1 under application number 141-552. Conditional approval allows for product commercialization while Jaguar Animal Health continues to collect the substantial evidence of effectiveness required for full approval. We have received a Minor Use in a Major Species (“MUMS”) designation from the FDA for Canalevia-CA1 to treat CID in dogs. FDA has established a “small number” threshold for minor use in each of the seven major species covered by the MUMS Act. The small number threshold is currently 80,000 for dogs, representing the largest number of dogs that can be affected by a disease or condition over a year and still have the use qualify as a minor use.

Current wording

In the field of animal health, Jaguar Animal Health is continuing limited activities related to developing first-in-class gastrointestinal products for dogs. In December 2021, the Company received conditional approval from the FDA to market Canalevia-CA1 (crofelemer delayed-release tablets) for the treatment of chemotherapy-induced diarrhea (CID) in dogs. The FDA conditionally approved Canalevia-CA1 under application number 141-552. Conditional approval allows for product commercialization while Jaguar Animal Health continues to collect the substantial evidence of effectiveness required for full approval. We have received a Minor Use in a Major Species (“MUMS”) designation from the FDA for Canalevia-CA1 to treat CID in dogs. FDA has established a "small number" threshold for minor use in each of the seven major species covered by the MUMS Act. The small number threshold is currently 80,000 for dogs, representing the largest number of dogs that can be affected by a disease or condition over the course of a year and still have the use qualify as a minor use.

Previous wording

On a consolidated basis, we have not yet generated enough revenue to date to achieve break-even or positive cash flow, and we expect to continue to incur significant research and development and other expenses. Our net comprehensive losses were $39.0 million and $41.9 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had total stockholders' equity of $6.5 million, an accumulated deficit of $346.5 million, an accumulated other comprehensive loss of $467,000 and cash of $8.0 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. Payments of cash compensation to directors under the Director Compensation Program for the year ended December 31, 2024 amounted to $442,495.

Current wording

On a consolidated basis, we have not yet generated enough revenue to date to achieve break-even or positive cash flow, and we expect to continue to incur significant research and development and other expenses. Our net comprehensive losses were $54.4 million and $39.0 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had total stockholders' deficit of $18.7 million, an accumulated deficit of $399.9 million, an accumulated other comprehensive loss of $833,000 and cash of $968,000. 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 for the year ended December 31, 2025 amounted to $431,000.

Previous wording

Revenues from the license agreement made with Gen Ilac Ve Saglik Urunleri Sanayi Ve Ticaret, A.S., ("Gen") ("Licensee") from which all finished Mytesi are sold in the licensed territory.

Current wording

Revenues from the license agreement made with Gen Ilac Ve Saglik Urunleri Sanayi Ve Ticaret, A.S., ("Gen" or "Licensee") from which all finished Mytesi are sold in the licensed territory.

Previous wording

Cost of revenue consists of direct drug substance and drug product materials expense, direct labor, distribution fees, royalties and other related expenses associated with the sale of our products.

Current wording

The cost of revenue consists of direct drug substance and drug product materials expenses, direct labor, distribution fees, royalties, and other related expenses associated with the sale of our products.

Previous wording

Research and development expenses consist primarily of clinical and contract manufacturing expense, personnel and related benefit expense, stock‑based compensation expense, employee travel expense and reforestation expenses. Clinical and contract manufacturing expense consists primarily of costs to conduct stability, safety and efficacy studies, and manufacturing startup expenses at an outsourced API provider in Italy. It also includes expenses with a third-party provider for the transfer of the Mytesi manufacturing process, and the related feasibility and validation activities.

Current wording

Research and development ("R&D") expenses consist primarily of clinical trial expenses and contract manufacturing costs, personnel and related benefits, stock-based compensation, employee travel, and reforestation expenses. Clinical and contract manufacturing expenses consist primarily of costs for executing clinical study protocols for safety and efficacy together with evaluating the stability, and manufacturing costs for crofelemer delayed-release tablets as well as crofelemer drug substance from Alivus an outsourced, FDA-approved crofelemer API provider in India. It also includes expenses with a third-party provider for transferring the Mytesi manufacturing process and the related feasibility and validation activities at a contract manufacturing facility in the US.

Previous wording

We typically use our employee and infrastructure resources across multiple development programs. We track outsourced development costs by prescription drug product candidate and non‑prescription product but do not allocate personnel or other internal costs related to development to specific programs or development compounds.

Current wording

We typically use our employee and infrastructure resources across multiple development programs. We track outsourced development costs by prescription drug product candidate and non-prescription product, and we track personnel or other internal costs related to the development of specific programs or development compounds.

Previous wording

As of December 31, 2024, the Company has incurred approximately $6.1 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.

Current wording

As of December 31, 2025, the Company has incurred approximately $25.0 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

In the near term, we expect general and administrative expense to remain flat as we focus on our pipeline development and market access expansion. This will include efforts to grow the business.

Current wording

In the near term, we expect general and administrative expense to decrease as we focus on our pipeline development and market access expansion on our Intestinal Failure (IF) programs.

Previous wording

The Inflation Reduction Act, effective January 1, 2023, introduces several provisions that may impact the Company's operations and financial results. While the full effects of the Act on future results are uncertain, management acknowledges potential changes in market conditions, tax incentives, and regulatory requirements that could arise as a result of this legislation. Management is currently unable to predict the likelihood or timing of these changes and their specific implications for the Company’s financial performance. The pharmaceutical industry may face impacts from new pricing regulations and changes in tax incentives for research and development.

Current wording

Inflation and the Inflation Reduction Act (IRA)

Previous wording

Our gross product revenues were $15.5 million and $13.6 million for the years ended December 31, 2024 and 2023, respectively. These figures reflect revenue from the sale of our human drug Mytesi, our animal products branded as Neonorm Calf and Neonorm Foal and exclusive distribution agreement for the sale of Gelclair.

Current wording

Our gross product revenues were approximately $15.3 million and $15.5 million for the years ended December 31, 2025 and 2024, respectively. These figures reflect revenue from the sale of our human drug Mytesi, our animal products branded as Neonorm Calf and Neonorm Foal and exclusive distribution agreement for the sale of Gelclair.

Previous wording

The increase in gross product revenue of $1.8 million for the years ended December 31, 2024, compared to the same period in 2023 was primarily due to the increase in price of Mytesi and Canalevia-CA1, an increase to $15.2 million and $160,000, respectively. The Company launched Gelclair during the third quarter of 2024, and recognized $49,000 in revenue for the year ended December 31, 2024.

Current wording

The decrease in gross product revenue of $130,000 for the year ended December 31, 2025 compared to the same period in 2024, was primarily due to the decrease in sales volume of Mytesi and Canalevia-CA1. The Company launched Gelclair during the third quarter of 2024, and recognized $140,000 in revenue for the year ended December 31, 2025.

Previous wording

Medicaid and AIDS Drug Assistance Program (“ADAP”) rebates accounted for $2.6 million and $2.0 million for the years ended December 31, 2024 and 2023, respectively, an increase of $523,000 due to higher product utilization within the program coupled changes in rebates agreements.

Current wording

Medicaid and AIDS Drug Assistance Program (“ADAP”) rebates were $2.7 million and $2.6 million for the years ended December 31, 2025 and 2024, respectively, an increase of $141,000 due to higher product utilization within the program coupled with changes in rebate agreements.

Previous wording

Sales returns were $182,000 and $356,000 for the years ended December 31, 2024 and 2023, respectively, a decrease of $174,000, relatively due to enhanced manufacturing process as compared to year 2023.

Current wording

Sales returns were $21,000 and $182,000 for the years ended December 31, 2025 and 2024, respectively, a decrease of $161,000 due to the decrease in volume of sales returns.

Previous wording

License revenues increased by $129,000 from $0 for the year ended December 31, 2023 to $129,000 in the same period in 2024, due to license agreement entered by the Company with GEN on March 18, 2024. The license revenue is recognized as the Licensee receives and consumes the benefits from the Company’s performance of providing access to its intellectual property evenly over the license period of 5 years.

Current wording

License revenues increased by $43,000 from $129,000 for the year ended December 31, 2024 to $172,000 in the same period in 2025, due to license agreement entered by the Company with GEN on March 18, 2024. The license revenue is recognized as the Licensee receives and consumes the benefits from the Company’s performance of providing access to its intellectual property evenly over the license period of 5 years.

Previous wording

The change in cost of product revenue of $82,000 for the year ended December 31, 2024 compared to 2023 was primarily due to:

Current wording

The increase in cost of product revenue of $1.8 million for the year ended December 31, 2025 compared to 2024 was primarily due to:

Previous wording

Direct labor decreased by $256,000 from $1.2 million for the year ended December 31, 2023 to $896,000 in the same period in 2024, due to decrease in resources spent in testing and manufacturing of inventory.

Current wording

Direct labor decreased by $340,000 from $896,000 for the year ended December 31, 2024 to $556,000 in the same period in 2025, due to a decrease in resources spent in testing and manufacturing of inventory.

Previous wording

Distribution fees increased by $235,000 from negative $49,000 for the year ended December 31, 2023, to $186,000 in the same period in 2024, due to the increase in warehouse fees driven by the increase in sales volume for Mytesi.

Current wording

Distribution fees decreased by $61,000 from $186,000 for the year ended December 31, 2024 to $125,000 in the same period in 2025, due to the decrease in warehouse fees driven by the decrease in overall sales volume.

Previous wording

The change in R&D expense of $2.1 million for the year ended December 31, 2024 compared to 2023 was primarily due to:

Current wording

The increase in R&D expense of $8.4 million for the year ended December 31, 2025 compared to 2024 was primarily due to:

Previous wording

Clinical and contract manufacturing expenses decreased by $2.1 million from $8.2 million for the year ended December 31, 2023 to $6.1 million in the same period in 2024 as the Phase 3 On Target Clinical Trial concluded, reducing the clinical trial-related costs and external contract manufacturing services.

Current wording

CTD clinical trial expenses decreased by $2.5 million from $3.6 million for the year ended December 31, 2024 to $1.2 million in the same period in 2025, as the Phase 3 OnTarget Clinical Trial concluded, reducing the clinical trial-related costs and external contract manufacturing services.

Previous wording

The following table presents the components of sales and marketing (“S&M”) expense for the years ended December 31, 2024 and 2023:

Current wording

The following table presents the components of sales and marketing (“S&M”) expense for the years ended December 31, 2025 and 2024, together with the change in such components in dollars and as a percentage:

Previous wording

The change in S&M expense of $1.2 million for the year ended December 31, 2024 compared to 2023 was primarily due to:

Current wording

The increase in S&M expense of $1.5 million for the year ended December 31, 2025 compared to 2024 was primarily due to:

Previous wording

The following table presents the components of general and administrative (“G&A”) expense for the years ended December 31, 2024 and 2023:

Current wording

The following table presents the components of general and administrative (“G&A”) expense for the years ended December 31, 2025 and 2024, together with the change in such components in dollars and as a percentage:

Previous wording

The change in G&A expenses of negative $257,000 for the year ended December 31, 2024 compared to 2023 was due primarily to:

Current wording

The increase in G&A expenses of $2.3 million for the year ended December 31, 2025 compared to 2024 was due primarily to:

Previous wording

Travel and other expenses increased by $94,000 from $435,000 for the year ended December 31, 2023 to $529,000 in the same period in 2024 due to increased travel activity by the CEO to attract potential investors to the Company.

Current wording

Travel and other expenses increased by $94,000 from $529,000 for the year ended December 31, 2024 to $623,000 in the same period in 2025, due to higher international trips related to funding activities undertaken by the officers of the Company.

Previous wording

The fair value of financial instrument and hybrid instrument designated at FVO increased by $4.4 million, from a loss of $5.1 million in year ended December 31, 2023, to a loss of $9.5 million in 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 $3.2 million, from a loss of $9.5 million in year ended December 31, 2024, to a loss of $6.3 million in the same period in 2025, primarily due to fair value adjustments in notes payable designated at FVO.

Previous wording

Gain on extinguishment of debt decreased by $2.5 million from a gain of $3.7 million gain for the year ended December 31, 2023 to a gain of $1.2 million for the same period in 2024 primarily due to significant modifications of royalty interest agreements resulting to extinguishment accounting.

Current wording

Loss on extinguishment of debt increased by $3.0 million from a gain of $1.2 million gain for the year ended December 31, 2024 to a loss of $1.8 million for the same period in 2025, primarily due to substantial modifications to the expected payments of one royalty interest agreement, which triggered extinguishment accounting.

Previous wording

We have incurred net losses since our inception. For the years ended December 31, 2024 and 2023, we had net losses of $39.3 million and $41.9 million, respectively, and expect to incur additional losses in the near-term future due to significant expenses incurred related to the research and development phase. At December 31, 2024, we had an accumulated deficit of $346.5 million and accumulated comprehensive loss of $467,000. 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.

Current wording

We have incurred net losses since our inception. For the years ended December 31, 2025 and 2024, we had net losses of $54.0 million and $39.3 million, respectively, and expect to incur additional losses in the near-term future due to significant expenses incurred related to the research and development phase. At December 31, 2025, we had an accumulated deficit of $399.9 million and accumulated comprehensive loss of $833,000. 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 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 year ended December 31, 2024, were generated from the issuance of an aggregate of 388,634 shares of common stock under the ATM Agreement for total net proceeds of approximately $30.8 million, and issuance of an aggregate 11,111 common stock 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 year ended December 31, 2025, were generated from $10.0 million proceeds from New Note from Streeterville, issuance of an aggregate of 2,159,049 shares of common stock under the ATM Agreement for total net proceeds of approximately $6.3 million, $3.4 million proceeds from Convertible Notes, $2.4 million in net proceeds from shares issued in PIPE financing, $1.3 million in net proceeds from shares issued to placement agents, $1.0 million in net proceeds from shares issued to Brown Stone Capital Limited, offset by $652,000 repayment of insurance financing, and $100,000 in principal payments of the notes payable.

Previous wording

We expect our expenditures will continue to increase as we continue our efforts to develop our products and continue the development of our pipeline in the near term. We may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. We may also not be successful in entering into partnerships that include payment of upfront licensing fees for our products and product candidates for markets outside the US, where appropriate. If we do not generate upfront fees from any anticipated arrangements, it would have a negative effect on our operating plan. We still plan to finance our operations and capital funding needs through equity and/or debt financing as well as revenue from future product sales. However, there can be no assurance that additional funding will be available to us on acceptable terms on a timely basis, if at all, or that we will generate sufficient cash from operations to adequately fund operating needs or ultimately achieve profitability. If we are unable to obtain an adequate level of financing needed for the long-term development and commercialization of our products, we will need to curtail planned activities and reduce costs. Doing so will likely have an adverse effect on our ability to execute on our business plan.

Current wording

We expect our expenditures will continue to increase as we continue our efforts to develop our products and continue the development of our pipeline in the near term. We may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. We may also not be successful in entering into partnerships that include payment of upfront licensing fees for our products and product candidates for markets outside the United States, where appropriate. If we do not generate upfront fees from any anticipated arrangements, it would have a negative effect on our operating plan. We still plan to finance our operations and capital funding needs through equity and debt financing as well as revenue from future product sales. However, there can be no assurance that additional funding will be available to us on acceptable terms on a timely basis, if at all, or that we will generate sufficient cash from operations to fund operating needs or ultimately achieve profitability adequately. If we are unable to obtain an adequate level of financing needed for the long-term development and commercialization of our products, we will need to curtail planned activities and reduce costs. Doing so will likely have an adverse effect on our ability to execute on our business plan.

Previous wording

As of December 31, 2024, the Company is actively monitoring trends in its capital resources, recognizing favorable and unfavorable developments that may materially impact its financial position. The Company has experienced an increase in debt levels due to recent financing activities intended to support operational growth. In contrast, equity levels remain stable, though future fundraising efforts may affect the capital structure.

Current wording

As of December 31, 2025, the Company is actively monitoring trends in its capital resources, recognizing favorable and unfavorable developments that may materially impact its financial position. The Company has experienced a substantial increase in debt levels due to recent financing activities intended to support operational growth.

Previous wording

Comparison of Operating Income and Cash Flow

Current wording

Comparison of Operating Loss and Cash Flow

Previous wording

For the year ended December 31, 2024, the Company’s operating cash flows showed a significant improvement over the prior period, primarily due to reductions in cash outflows associated with operating expenses. Operating income, while still negative at a loss of $39.3 million, improved by $2.6 million, or 6%, over the prior period due to a decrease in total operating expenses. This reflects the Company's efforts in cost containment. However, while operating cash flows benefited from these reductions, the ongoing significant variation between operating income and operating cash flows, highlights challenges in achieving cash flow positivity due to high non-cash charges, such as depreciation and stock-based compensation, alongside increased working capital needs to support expanded operations. This variation highlights the Company’s strategic focus on managing liquidity to maintain operational stability and pursue growth opportunities effectively.

Current wording

For the year ended December 31, 2025, the Company’s operating cash flows showed a decline over the prior period. Net loss was $54.0 million, decreased by $15.4 million, or 37.6%, over the prior period due to an increase in research and development expenses. The ongoing significant variation between net loss and operating cash flows, highlights challenges in achieving cash flow positivity due to high non-cash charges, such as provision for inventory obsolescence, depreciation and stock-based compensation, alongside increased working capital needs to support expanded operations. This variation highlights the Company’s strategic focus on managing liquidity to maintain operational stability and pursue growth opportunities effectively.

Previous wording

During the year ended December 31, 2023, net cash used in operating activities of $33.2 million resulted from our net comprehensive loss of $41.9 million adjusted by amortization of debt issuance costs, debt discount, and non-cash interest expense of $13.2 million, change in fair value of freestanding and hybrid financial instruments designated at FVO of $5.1 million, stock-based compensation of $2.1 million, depreciation and amortization expenses of $2.0 million, amortization of operating lease right-of-use assets of $375,000, impairment loss on intangible asset of $371,000, shares issued in exchange for services of $171,000, share in joint venture’s loss of $51,000, gain on extinguishment of debt $3.7 million, and net changes in operating assets and liabilities of $11.1 million.

Current wording

During the year ended December 31, 2025, net cash used in operating activities of $23.7 million resulted from our net comprehensive loss of $54.4 million adjusted by the change in fair value of freestanding and hybrid financial instruments designated at FVO of $6.3 million, provision for inventory obsolescence of $2.0 million, depreciation and amortization expenses of $1.9 million, loss on extinguishment of debt $1.8 million, stock-based compensation of $831,000, impairment loss on indefinite-lived intangible assets of $800,000, amortization of operating lease right-of-use assets of $289,000, share in joint venture’s loss of $162,000, amortization of debt issuance costs, debt discount, and non-cash interest expense of $153,000, and net changes in operating assets and liabilities of $16.5 million.