60 DEGREES PHARMACEUTICALS, INC.
For the period ended Jun 30, 2025. Filed Aug 13, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 13, 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-Q
Period ended 2025-03-31; filed 2025-05-15.
0001213900-25-043779
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-13.
0001554855-25-001009
Item 2. 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 110 previous paragraphs and 99 current paragraphs.
60 unchanged; 18 reworded; 13 added; 27 removed; 5 previous and 8 current paragraphs rearranged.
Tables are not compared: 13 previous and 14 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 (13)
Current report
Interest and Other (Expense) Income, Net
Current report
Arakoda entered the U.S. civilian supply chain in the third quarter of 2019. Since the introduction of the new 8-ct bottle in June 2025, we will be reporting Arakoda unit sales in terms of 16-ct box equivalents. For thethree months ended June 30, 2025, the equivalent of 1,082 16-ct boxes were sold to pharmacies and dispensaries. Sales volume decreased by 17%from 1,301 16-ct box equivalents sold to pharmacies and dispensaries for thethree months ended June 30, 2024. The sales volume decline to pharmacies and dispensaries is directly tied to the temporary unavailability of Arakoda 16-ct boxes in regular supply channels, as previously discussed. Arakoda (in the form of a new 8-ct bottle) had re-entered, but not saturated, existing distribution channels as of June 30, 2025, and Kodatef sales did not completely mitigate the shortage, which we assume was due to the overall higher out-of-pocket costs due to the nature of cash-only sales by Infuserve America.
Current report
Cost of revenues was $50,051 for thethree months ended June 30, 2025, as compared to $89,564 for thethree months ended June 30, 2024. The decrease in cost of goods sold is a combination of the aforementioned decline in sales as well as a more favorable mix of sales with a lower per unit cost. As a result of these factors, the Gross Margin % increased from 28.33% for thethree months ended June 30, 2024 to 50.41% for thethree months ended June 30, 2025. This increase is primarily attributable to lower rebates and per unit costs of goods sold that together, more than offset the decline in sales.
Current report
Research and development costs decreased by $2,845,442 for thethree months ended June 30, 2025 when compared to thethree months ended June 30, 2024. The decline is primarily attributable to a non-cash charge of $2,625,000 recognized during the three months ended June 30, 2024 for stock issued to the University of Kentucky upon the delivery of their report on the potential development of SJ733 + tafenoquine. Otherwise, research and development costs incurred for thethree months ended June 30, 2025 and 2024 primarily consisted of costs related to our babesiosis trials for tafenoquine. Direct trial-related costs represent 71% of the total research and development costs at $176,892 for thethree months ended June 30, 2025, compared to 13% of the costs at $389,735 for thethree months ended June 30, 2024.
Current report
For thethree months ended June 30, 2025, we recognized $13,066 in other income compared to $19,684 for thethree months ended June 30, 2024. For thethree months ended June 30, 2025, we recognized interest income from cash invested in interest-bearing accounts and investments in certificates of deposit of $15,687 ($20,669 for thethree months ended June 30, 2024).
Current report
Comparison of the Six Months Ended June 30, 2025, and 2024
Current report
Our product revenues - net of discounts and rebates were $264,484 for thesix months ended June 30, 2025, as compared to $230,646 for thesix months ended June 30, 2024. For thesix months ended June 30, 2025, our U.S. pharmaceutical distributor and Infuserve America accounted for 61% and 34% of our total net product sales of Arakoda, respectively, and Kodatef sales to our Australian distributor accounted for 5% of total net product sales (96%,0%, and 4% for thesix months ended June 30, 2024, respectively). Domestic, commercial product sales volume decreased during the period due to a shortage of Arakoda 16-ct boxes occurring in June 2025, resulting from a delay in completing commercial validation of a new packaging format. This shortage was mitigated partially through the importation of Kodatef with FDA approval, which was supplied to patients via Infuserve America, and the introduction of a new 8-ct Arakoda bottle into the regular commercial supply chain.
Current report
Arakoda entered the U.S. civilian supply chain in the third quarter of 2019. Since the introduction of the new 8-ct bottle in June 2025, we will be reporting Arakoda unit sales in terms of 16-ct box equivalents. For thesix months ended June 30, 2024,2,323 16-ct box equivalents were sold to pharmacies and dispensaries. Sales volume increased by 15% to 2,661 16-ct box equivalents sold to pharmacies and dispensaries for thesix months ended June 30, 2025.
Current report
Cost of revenues was $123,323 for thesix months ended June 30, 2025, as compared to $155,001 for thesix months ended June 30, 2024. The decrease in cost of goods sold is due to a more favorable mix of sales with a lower per unit cost. The Gross Margin % increased from 32.80% for thesix months ended June 30, 2024 to 53.37% for thesix months ended June 30, 2025. This is attributable to several factors: the growth in revenues, reduction in discounts associated with Kodatef, and the lower per unit cost of newly introduced Arakoda bottles and Kodatef boxes.
Current report
The research revenues earned by us were $299,670 for thesix months ended June 30, 2025, as compared to $30,359 for thesix months ended June 30, 2024. The increase in research revenues is primarily due 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 and the contract we signed with the University of Kentucky for tafenoquine clinical trial supply. We recognized research revenues of $194,914 related to the USAMMDA grant for thesix months ended June 30, 2025 ($0 for thesix months ended June 30, 2024). We recognized research revenues of $89,302 from the University of Kentucky for thesix months ended June 30, 2025 ($0 for thesix months ended June 30, 2024). Other research revenues were $15,454 for thesix months ended June 30, 2025 ($30,359 for thesix months ended June 30, 2024).
Current report
Interest and Other (Expense) Income, net
Current report
Interest Expense
Current report
Other Income, net
Removed paragraphs (27)
Previous 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.
Previous 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.
Previous report
1:5 Reverse Stock Split
Previous report
On November 6, 2024, our Board of Directors (“Board”) approved a reverse stock split of our common stock at a split ratio ranging between 1:3 and 1:5, as determined by the Board in its sole discretion. On November 6, 2024, a majority of our stockholders approved the proposed reverse stock split. On February 10, 2025, the Board approved a 1-for-5 reverse split ratio. On February 18, 2025, we filed a Certificate of Amendment to the Certificate of Incorporation, as corrected, with the Secretary of State of the State of Delaware that provides for a 1-for-12 split. On February 24, 2025, we effectuated a 1-for-5 reverse stock split of our common stock (the “1:5 Reverse Stock Split”). Beginning February 24, 2025, our common stock traded on The Nasdaq Capital Market on a split adjusted basis.
Previous report
As a result of the 1:5 Reverse Stock Split, proportional adjustments were made to the number of shares of common stock issuable upon exercise or conversion of our equity awards, warrants, and other equity instruments convertible into common stock, as well as the respective exercise prices, if applicable in accordance with the terms of the instruments. No fractional shares of common stock were issued in connection with the 1:5 Reverse Stock Split and all fractional shares were rounded up to the nearest whole share with respect to outstanding shares of common stock. Unless otherwise noted, all references to numbers of shares of our common stock and per share information presented in this Quarterly Report on Form 10-Q have been retroactively adjusted to reflect the effects of the 1:5 Reverse Stock Split.
Previous report
January 2025 Offering
Previous report
On January 28, 2025, we entered into a securities purchase agreement (the “January 2025 Securities Purchase Agreement”) with certain institutional investors (the “January 2025 Purchasers”) pursuant to which we sold an aggregate of 204,312 shares of common stock at a purchase price of $5.105 per share in a registered direct offering priced at-the-market under the rules of The Nasdaq Stock Market LLC (“Nasdaq”). In a concurrent private placement, we also issued to the January 2025 Purchasers unregistered warrants (the “January 2025 Warrants”) to purchase up to an aggregate of 408,621 shares of common stock at an exercise price of $3.855 per share. The January 2025 Warrants are exercisable upon issuance and expire twenty-four months from the date of issuance.
Previous report
The shares were offered pursuant to a “shelf” registration statement on Form S-3 (Registration No. 333-280796), which was declared effective by the Securities and Exchange Commission (the “SEC”) on July 18, 2024 as supplemented by a prospectus supplement dated January 28, 2025, filed with the SEC on January 30, 2025, and accompanying base prospectus, pursuant to Rule 424(b)(5) promulgated under the Securities Act of 1933, as amended (the “Securities Act”).
Previous report
H.C. Wainwright & Co., LLC (the “Placement Agent”) acted as our exclusive placement agent in connection with the offering. Pursuant to the terms of the placement agent agreement, we paid the Placement Agent a cash transaction fee equal to 7.5% of the aggregate gross cash proceeds in the offering and a management fee equal to 1.0% of the aggregate gross cash proceeds in the offering. In addition, we paid for certain non-accountable expenses in the amount of $15,000 and a clearing fee in the amount of $10,000. We also issued to the Placement Agent (or its designees) warrants to purchase up to 15,325 shares of common stock (the “January 2025 Placement Agent Warrants”). The January 2025 Placement Agent Warrants have an exercise price equal to $6.382 per share and are exercisable upon issuance and expire twenty-four months from the date of issuance.
Previous report
The registered direct offering and the concurrent private placement (collectively, the “January 2025 Offering”) closed on January 30, 2025, resulting in net proceeds of approximately $804,346, after deducting estimated offering expenses paid by us, including the Placement Agent fees.
Previous report
Pursuant to the January 2025 Securities Purchase Agreement, within 45 days from the date of the January 2025 Securities Purchase Agreement, we were required to file a registration statement with the SEC providing for the resale by the January 2025 Purchasers of the shares of common stock issuable upon exercise of the January 2025 Warrants. The registration statement was declared effective by the SEC on April 2, 2025. The Company shall use commercially reasonable efforts to keep such registration statement effective at all times until no January 2025 Purchaser owns any January 2025 Warrants or shares underlying the January 2025 Warrants issuable upon exercise thereof.
Previous report
February 2025 Offering
Previous report
On February 5, 2025, we entered into a securities purchase agreement (the “February 2025 Securities Purchase Agreement”) with certain institutional investors (the “February 2025 Purchasers”) pursuant to which we sold an aggregate of 300,700 shares of common stock at a purchase price of $3.575 per share in a registered direct offering priced at-the-market under the rules of Nasdaq. In a concurrent private placement, we also issued to the February 2025 Purchasers unregistered warrants (the “February 2025 Warrants”) to purchase up to an aggregate of 300,700 shares of common stock at an exercise price of $2.95 per share. The February 2025 Warrants are exercisable upon issuance and expire twenty-four months from the date of issuance.
Previous report
The shares were offered pursuant to a “shelf” registration statement on Form S-3 (Registration No. 333-280796), which was declared effective by the Securities and Exchange Commission (the “SEC”) on July 18, 2024 as supplemented by a prospectus supplement dated February 5, 2025, filed with the SEC on February 6, 2025 and accompanying base prospectus, pursuant to Rule 424(b)(5) promulgated under the Securities Act.
Previous report
The Placement Agent acted as our exclusive placement agent in connection with the offering. Pursuant to the terms of the placement agent agreement, we paid the Placement Agent a cash transaction fee equal to 7.5% of the aggregate gross cash proceeds in the offering and a management fee equal to 1.0% of the aggregate gross cash proceeds in the offering. In addition, we paid for certain non-accountable expenses in the amount of $15,000 and a clearing fee in the amount of $10,000. We also issued to the Placement Agent (or its designees) warrants to purchase up to 22,554 shares of Common Stock (the “February 2025 Placement Agent Warrants”). The February 2025 Placement Agent Warrants have an exercise price equal to $4.469 per share and are exercisable upon issuance and expire twenty-four months from the date of issuance.
Previous report
The registered direct offering and the concurrent private placement (collectively, the “February 2025 Offering”) closed on February 6, 2025, resulting in net proceeds of approximately $908,627, after deducting estimated offering expenses paid by us, including the Placement Agent fees.
Previous report
Pursuant to the February 2025 Securities Purchase Agreement, within 45 days from the date of the February 2025 Securities Purchase Agreement, we were required to file a registration statement with the SEC providing for the resale by the February 2025 Purchasers of the shares of common stock issuable upon exercise of the February 2025 Warrants. The registration statement was declared effective by the SEC on April 2, 2025. The Company shall use commercially reasonable efforts to keep such registration statement effective at all times until no February 2025 Purchaser owns any February 2025 Warrants or shares underlying the February 2025 Warrants issuable upon exercise thereof.
Previous report
Other Operating Revenues
Previous report
Operating Expenses
Previous report
Research and Development
Previous report
General and Administrative Expenses
Previous report
Arakoda entered the U.S. civilian supply chain in the third quarter of 2019. For the three months ended March 31, 2024, 1,022 boxes were sold to pharmacies and dispensaries. Sales volume increased by 55% to 1,579 boxes sold to pharmacies and dispensaries for the three months ended March 31, 2025. 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. 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.
Previous report
Cost of revenues was $73,272 for the three months ended March 31, 2025, as compared to $65,437 for the three months ended March 31, 2024. The increase in cost of goods sold is primarily driven by the inflationary increase in fixed COGS charges for serialization and inventory material charges. Despite the increase, the Gross Margin % increased from 38.08% for the three months ended March 31, 2024 to 55.20% for the three months ended March 31, 2025. This is primarily attributable to the growth in revenues. 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.
Previous report
Other Operating Revenues
Previous report
Operating Expenses
Previous report
Research and Development
Previous report
General and Administrative Expenses
Reworded paragraphs (18)
Previous wording
As of March 31, 2025, we had cash and cash equivalents of $3,451,500 ($1,659,353 as of December 31, 2024). For the three months ended March 31, 2025 and 2024, our net cash used in operating activities was $1,597,366 and $1,140,438, 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 the January and February 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 Phase II 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.
Current wording
As of June 30, 2025, we had cash and cash equivalents of $1,966,930 ($1,659,353 as of December 31, 2024). For thesix months ended June 30, 2025 and 2024, our net cash used in operating activities was $3,047,494 and $2,328,650, 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 $4.46 million received from the July 2025 public offering, we estimate that we will have sufficient funds to remain viable through March 31, 2026, 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
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 wording
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 andsecurity agreements.
Previous wording
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 wording
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 Material 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.
Previous wording
We 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. Interest expense for the periods presented is limited to a single $150,000 SBA loan that bears interest at 3.75%. Other components of other income (expense) include changes in the fair value of derivative liabilities and other miscellaneous income or expenses.
Current wording
We 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. Interest expense for the periods presented is limited to a single $150,000 SBA loan that bears interest at 3.75%. Other components ofother (expense) income include changes in the fair value of derivative liabilities and other miscellaneous income or expenses.
Previous wording
Our product revenues - net of discounts and rebates were $163,552 for the three months ended March 31, 2025, as compared to $105,674 for the three months ended March 31, 2024. For the three months ended March 31, 2025, our U.S. pharmaceutical distributor and Infuserve America accounted for 85% and 6% of our total net product sales of Arakoda, respectively, and Kodatef sales to our Australian distributor accounted for 9% of total net product sales (99%, 0%, and 1% for the three months ended March 31, 2024, respectively). Domestic, commercial product sales are primarily driving increased sales volume during the period.
Current wording
Our product revenues - net of discounts and rebates were $100,932 for thethree months ended June 30, 2025, as compared to $124,972 for thethree months ended June 30, 2024. For thethree months ended June 30, 2025, our U.S. pharmaceutical distributor and Infuserve America accounted for 21% and 78% of our total net product sales of Arakoda, respectively, and Kodatef sales to our Australian distributor accounted for 1% of total net product sales (92%,0% and 7% for thethree months ended June 30, 2024, respectively). Domestic, commercial product sales volume decreased during the period due to a shortage of existing Arakoda 16-ct boxes beginning in April 2025. This shortage was mitigated partially through the importation of Kodatef with FDA approval, which was supplied to patients via Infuserve America, as well as the introduction of a new 8-ct Arakoda bottle into the regular commercial supply chain.
Previous wording
The research revenues earned by us were $92,731 for the three months ended March 31, 2025, as compared to $29,631 for the three months ended March 31, 2024. The increase in research revenues is due 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. We recognized research revenues of $77,966 related to this grant for the three months ended March 31, 2025 ($0 for the three months ended March 31, 2024). We also recognized research revenues from the Australian Tax Authority for research activities conducted in Australia of $5,138 for the three months ended March 31, 2025 ($29,631 for the three months ended March 31, 2024).
Current wording
The research revenues earned by us were $206,939 for thethree months ended June 30, 2025, as compared to $728 for thethree months ended June 30, 2024. The increase in research revenues is primarily due 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 and the contract we signed with the University of Kentucky for tafenoquine clinical trial supply. We recognized research revenues of $116,948 related to the USAMMDA grant for thethree months ended June 30, 2025 ($0 for thethree months ended June 30, 2024). For the three months ended June 30, 2025, we recognized research revenues of $89,302 from the University of Kentucky ($0 for the three months ended June 30, 2024). We also recognized research revenues from the Australian Tax Authority for research activities conducted in Australia of $954 for thethree months ended June 30, 2025 ($366 for thethree months ended June 30, 2024).
Previous wording
For the three months ended March 31, 2025, we recognized $1,790 of interest expense ($1,402 for the three months ended March 31, 2024). Our interest expense for the periods presented relates entirely to our single outstanding loan from the SBA. Cash paid for interest expense was $2,193 and $2,193 for the three months ended March 31, 2025 and March 31, 2024, respectively.
Current wording
For thethree months ended June 30, 2025, we recognized $1,221 of interest expense ($3,621 for thethree months ended June 30, 2024). Our interest expense for the periods presented relates to our single outstanding loan from the SBA. Cash paid for interest expense was $2,193 and $2,193 for thethree months ended June 30, 2025 and June 30, 2024, respectively.
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 offered to our 3PL partner amount to 12% (lower rates available upon reaching larger revenue tiers) along with a $5,500 fixed monthly fee. 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 three months ended March 31, 2025, discounts and rebates were $91,401 compared to $94,869 for the three months ended March 31, 2024.
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. 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 six months ended June 30, 2025, discounts and rebates were $174,205 compared to $201,624 for the six months ended June 30, 2024.
Previous wording
Kodatef sales to our distributor Biocelect in Australia for the three months ended March 31, 2025 were $12,066 ($1,004 for the three months ended March 31, 2024). A historical portion of sales to Biocelect remain subject to a profit share distribution once the original transfer price has been recouped. Biocelect, which acts as a distributor in the Australian and New Zealand market, reported (42%) year-over-year decline, the equivalent of 386 boxes sold for the three months ended March 31, 2025, compared to 665 boxes for the three months ended March 31, 2024. As of March 31, 2025, Biocelect’s unsold inventory that remains subject to profit share was the equivalent of 109.5 boxes. Additionally, under a new agreement executed during the quarter, Biocelect began to purchase from the latest manufactured lot of Kodatef at $45 AUD per box which are not subject to historical profit share. For the quarter ended March 31, 2025, 200 boxes of Kodatef were sold to Biocelect. As of March 31, 2025, $5,826 of profit share was due to us ($1,004 as of March 31, 2024).
Current wording
Kodatef sales to our distributor Biocelect in Australia for thesix months ended June 30, 2025 were $13,285 ($10,006 for thesix months ended June 30, 2024). A historical portion of sales to Biocelect remain subject to a profit share distribution once the original transfer price has been recouped. Biocelect, which acts as a distributor in the Australian and New Zealand market, reported 27% year-over-year decline, the equivalent of 782 boxes sold for thesix months ended June 30, 2025, compared to 1,075 boxes for thesix months ended June 30, 2024. As of June 30, 2025, Biocelect’s unsold inventory that remains subject to profit share was the equivalent of 31.5 boxes. Additionally, under a new agreement executed during the quarter, Biocelect began to purchase from the latest manufactured lot of Kodatef at $49.50 AUD per box which are not subject to historical profit share. For the six months ended June 30, 2025,200 boxes of Kodatef were sold to Biocelect (None for thethree and six months ended June 30, 2024). As of June 30, 2025, $1,252 of profit share was due to us ($9,444 as of December 31, 2024).
Previous wording
Arakoda sales volume in Europe continues to grow. We first shipped Arakoda to our distributor Scandinavian Biopharma (“SB”) in September 2022. For the three months ended March 31, 2025, SB reported 73 boxes sold (27 boxes sold for the three months ended March 31, 2024). According to our distributor, this is due to greater interest in treating babesiosis.
Current wording
Arakoda sales volume in Europe continues to grow. We first shipped Arakoda to our distributor Scandinavian Biopharma (“SB”) in September 2022. For thesix months ended June 30, 2025, SB reported 183 boxes sold (55 boxes sold for thesix months ended June 30, 2024). According to our distributor, this is due to greater interest in treating babesiosis.
Previous wording
Research and development costs increased by $70,440 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024. Research and development costs incurred for the three months ended March 31, 2025 and 2024 primarily consisted of costs related to our babesiosis trial for tafenoquine. Direct trial-related costs represent 68% of the total research and development costs at $275,633 for the three months ended March 31, 2025, compared to 55% of the costs at $186,091 for the three months ended March 31, 2024. We also recorded $63,015 in research and development expenses related to commercial validation and packaging of Arakoda, for which a majority qualifies for reimbursement under the USAMMDA grant discussed above.
Current wording
Research and development costs decreased by $2,775,002 for thesix months ended June 30, 2025 when compared to thesix months ended June 30, 2024. The decline is primarily attributable to a non-cash charge of $2,625,000 recognized during thesix months ended June 30, 2024 for stock issued to the University of Kentucky upon the delivery of their report on the potential development of SJ733 + tafenoquine. Otherwise, research and development costs incurred for thesix months ended June 30, 2025 and 2024 primarily consisted of costs related to our babesiosis trial for tafenoquine. Direct trial-related costs represent 69% of the total research and development costs at $452,525 for thesix months ended June 30, 2025, compared to 17% of the costs at $575,826 for thesix months ended June 30, 2024. We also recorded $61,413 in research and development expenses related to commercial validation and packaging of Arakoda, for which a majority qualifies for reimbursement under the USAMMDA grant discussed above.
Previous wording
For the three months ended March 31, 2025, our general and administrative expenses increased by approximately 57% or $611,130 from the three months ended March 31, 2024. For the three months ended March 31, 2025, we incurred significantly higher sales, advertising and promotion expenses and investor outreach expenses at $285,287 and $393,687 for the three months ended March 31, 2025, up from $104,064 and $182,164 for the three months ended March 31, 2024, respectively. Additionally, for the three months ended March 31, 2025, we recognized $142,645 in stock-based compensation expense ($0 for the three months ended March 31, 2024). This increase was in part due to new partially vested option grants awarded to two executives in January 2025, as well as the quarterly expense recognized for additional stock options granted in the third quarter of 2024.
Current wording
For thesix months ended June 30, 2025, our general and administrative expenses increased by approximately 49.64% or $1,094,334 from thesix months ended June 30, 2024. For thesix months ended June 30, 2025, we incurred significantly higher sales, advertising and promotion expenses and investor outreach expenses at $680,384 and $759,211, up from $178,379 and $448,429 for thesix months ended June 30, 2024, respectively. Additionally, for thesix months ended June 30, 2025, we recognized $177,148 in stock-based compensation expense ($0 for thesix months ended June 30, 2024). This increase was in part due to new partially vested option grants awarded to two executives in January 2025, as well as the quarterly expense recognized for additional stock options granted in the third quarter of 2024.
Previous wording
For the three months ended March 31, 2025, we recognized a gain on the change in fair value of derivative liabilities of $5,105 compared to $1,740,847 for the three months ended March 31, 2024. During the periods presented, derivative liabilities include the contingent milestone payment due to Knight upon a future sale of Arakoda or a Change of Control. We use a probability-weighted expected return method to estimate the fair value of this derivative liability.
Current wording
For thesix months ended June 30, 2025, we recognized a loss on the change in fair value of derivative liabilities of $135,342 compared to the gain of $1,739,746 for thesix months ended June 30, 2024. During the periods presented, derivative liabilities include the contingent milestone payment due to Knight upon a future sale of Arakoda or a Change of Control. We use a probability-weighted expected return method to estimate the fair value of this derivative liability.
Previous wording
For the three months ended March 31, 2025, we recognized $30,322 in other income compared to $31,051 for the three months ended March 31, 2024. For the three months ended March 31, 2025, we recognized interest income from cash invested in interest-bearing accounts and investments in certificates of deposit of $31,897 ($21,888 for the three months ended March 31, 2024). Other income for the three months ended March 31, 2024 also includes $10,789 of storage revenue recognized in association with final payment under the legacy contract with the USAMMDA for storing Arakoda purchases. We did not recognize storage revenue for the three months ended March 31, 2025.
Current wording
For thesix months ended June 30, 2025, we recognized $43,388 in other income compared to $50,735 for thesix months ended June 30, 2024. For thesix months ended June 30, 2025, we recognized interest income from cash invested in interest-bearing accounts and investments in certificates of deposit of $47,584 ($42,557 for thesix months ended June 30, 2024). Other income for thesix months ended June 30, 2024 also included $10,789 of storage revenue recognized in association with final payment under the legacy contract with the USAMMDA for storing Arakoda purchases. We did not recognize storage revenue for the six months ended June 30, 2025.
Previous wording
Net cash used in operating activities was $1,597,366 for the three months ended March 31, 2025, as compared to $1,140,438 for the three months ended March 31, 2024. Our net cash used in operating activities increased, primarily due to higher general and administrative expenses at $1,686,264 for the three months ended March 31, 2025 ($1,075,134 for the three months ended March 31, 2024), as a result of higher sales, advertising and promotion costs and investor outreach expenses, as discussed above. In addition, we incurred higher research and development costs at $407,622 for the three months ended March 31, 2025 ($337,182 for the three months ended March 31, 2024), primarily related to conducting our tafenoquine-babesiosis trial.
Current wording
Net cash used in operating activities was $3,047,494 for thesix months ended June 30, 2025, as compared to $2,328,650 for thesix months ended June 30, 2024. Our net cash used in operating activities decreased, primarily due tohigher general and administrative expenses at $3,299,028 for thesix months ended June 30, 2025 ($2,204,694 for thesix months ended June 30, 2024), as a result of higher sales, advertising and promotion costs and investor outreach expenses, as discussed above, partially offset bylower research and development costs for our babesiosis trial at $452,525 for thesix months ended June 30, 2025 ($575,826 for thesix months ended June 30, 2024).
Previous wording
Net cash provided by investing activities was $1,702,518 for the three months ended March 31, 2025, as compared to net cash used in investing activities of $9,814 for the three months ended March 31, 2024. For the three months ended March 31, 2025, we received proceeds of $1,708,000 from maturities of certain short-term investments in certificates of deposit ($0 for the three months ended March 31, 2024). The cash proceeds are partially offset by higher capitalized patent costs of $2,804 and fixed asset purchases of $2,678 for the three months ended March 31, 2025 ($726 and $0 for the three months ended March 31, 2024, respectively). However, we did not capitalize website development costs for the three months ended March 31, 2025 ($9,088 capitalized for the three months ended March 31, 2024 associated with enhancements to the functionality of our corporate website).
Current wording
Net cash provided by investing activities was $1,650,834 for thesix months ended June 30, 2025, as compared to net cash used in investing activities of $140,373 for thesix months ended June 30, 2024. For thesix months ended June 30, 2025, we received proceeds of $1,708,000 from maturities of certain short-term investments in certificates of deposit ($0 for thesix months ended June 30, 2024). The cash proceeds are partially offset by capitalized patent costs of $7,165 and fixed asset purchases of $50,001 for thesix months ended June 30, 2025 ($28,298 and $90,000 for thesix months ended June 30, 2024, respectively). However, we did not capitalize website development costs for thesix months ended June 30, 2025 ($22,075 capitalized for thesix months ended June 30, 2024 associated with enhancements to the functionality of our corporate website).
Previous wording
Net cash provided by financing activities was $1,696,899 for the three months ended March 31, 2025, as compared to $1,903,291 for the three months ended March 31, 2024. The decrease in net cash provided by financing activities is mainly attributable to net proceeds of $1,898,296 received in connection with our common stock and warrant offering in January 2024, which exceeded the aggregate net proceeds of $1,712,973 received in connection with our common stock and warrant offerings completed in January 2025 and February 2025. We also received lower proceeds from the exercise of warrants at $1,926 for the three months ended March 31, 2025, compared to $4,995 for the three months ended March 31, 2024. Additionally, for the three months ended March 31, 2025, we withheld shares valued at $18,000 to cover tax withholdings for net share settlement of certain 2024 performance bonuses awarded to our executives ($0 for the three months ended March 31, 2024).
Current wording
Net cash provided by financing activities was $1,696,899 for thesix months ended June 30, 2025, as compared to $1,902,426 for thesix months ended June 30, 2024. Thedecreased in net cash provided by financing activities is mainly attributable to net proceeds of $1,898,296 received in connection with our common stock and warrant offering in January 2024, which exceeded the aggregate net proceeds of $1,712,973 received in connection with our common stock and warrant offerings completed in January 2025 and February 2025. We also received lower proceeds from the exercise of warrants at $1,926 for thesix months ended June 30, 2025, compared to $9,990 for thesix months ended June 30, 2024. Additionally, for thesix months ended June 30, 2025, we withheld shares valued at $18,000 to cover tax withholdings for net share settlement of certain 2024 performance bonuses awarded to our executives ($0 for thesix months ended June 30, 2024).
Previous wording
Our foreign operations were small relative to U.S. operations for the three months ended March 31, 2025 and March 31, 2024, thus effects of foreign currency translation have been minor.
Current wording
Our foreign operations were small relative to U.S. operations for thesix months ended June 30, 2025 and June 30, 2024, thus effects of foreign currency translation have been minor.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
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. 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 thethree months ended June 30, 2025, discounts and rebates were $82,804 compared to $106,755 for thethree months ended June 30, 2024. The rebate on Kodatef sales was only 10% and there were no PBM-related discounts on sales of Kodatef.
Current report — wording carried from elsewhere
Kodatef sales to our distributor Biocelect in Australia for thethree months ended June 30, 2025 were $1,219 ($9,002 for thethree months ended June 30, 2024). A historical portion of sales to Biocelect remain subject to a profit share distribution once the original transfer price has been recouped. Biocelect, which acts as a distributor in the Australian and New Zealand markets, reported a 3% quarter-over--quarter decline, with 396 boxes sold for thethree months ended June 30, 2025, compared to 410 boxes for thethree months ended June 30, 2024. As of June 30, 2025, Biocelect’s unsold inventory that remains subject to profit share was the equivalent of 31.5 boxes. Additionally, under a new agreement executed during the quarter, Biocelect began to purchase from the latest manufactured lot of Kodatef at $49.50 AUD per box which are not subject to historical profit share. For the quarter ended June 30, 2025, no boxes of Kodatef were sold to Biocelect (none for the quarter ended June 30, 2024). As of June 30, 2025,1,252 of profit share was due to us ($9,444 as of December 31, 2024).
Current report — wording carried from elsewhere
Arakoda sales volume in Europe continues to grow. We first shipped Arakoda to our distributor Scandinavian Biopharma (“SB”) in September 2022. SB reported 110 boxes sold during thethree months ended June 30, 2025, representing a 293%increase from 28 boxes sold during thethree months ended June 30, 2024. According to our distributor, this is due to greater interest in treating babesiosis.
Current report — wording carried from elsewhere
For thethree months ended June 30, 2025, our general and administrative expenses increased by approximately 42.78% or $483,204 from thethree months ended June 30, 2024. For thethree months ended June 30, 2025, we incurred significantly higher sales, advertising and promotion expenses and investor outreach expenses at $395,097 and $365,523, up from $74,315 and $266,266 for thethree months ended June 30, 2024, respectively. Additionally, for thethree months ended June 30, 2025, we recognized $34,503 in stock-based compensation expense ($0 for thethree months ended June 30, 2024). This increase was in part due to new partially vested option grants awarded to two executives in January 2025, as well as the ongoing quarterly expense recognized for additional stock options granted in the third quarter of 2024.
Current report — wording carried from elsewhere
For thethree months ended June 30, 2025, we recognized a loss on the change in fair value of derivative liabilities of $140,447 compared to the loss of $1,101 for thethree months ended June 30, 2024. During the periods presented, derivative liabilities include the contingent milestone payment due to Knight upon a future sale of Arakoda or a Change of Control. We use a probability-weighted expected return method to estimate the fair value of this derivative liability.
Current report — wording carried from elsewhere
Product Revenues - net of Discounts and Rebates, Cost of Revenues, Gross Profit, and Gross Margin
Current report — wording carried from elsewhere
For thesix months ended June 30, 2025, we recognized $3,011 of interest expense ($5,023 for thesix months ended June 30, 2024). Our interest expense for the periods presented relates entirely to our single outstanding loan from the SBA. Cash paid for interest expense was $4,386 and $4,386 for thesix months ended June 30, 2025 and 2024, respectively.
Current report — wording carried from elsewhere
Change in Fair Value of Derivative Liabilities
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
Product Revenues - net of Discounts and Rebates
Previous report — wording carried elsewhere
Cost of Revenues, Gross Profit, and Gross Margin
Previous report — wording carried elsewhere
Interest and Other Income (Expense), Net
Previous report — wording carried elsewhere
Product Revenues - net of Discounts and Rebates
Previous report — wording carried elsewhere
Cost of Revenues, Gross Profit, and Gross Margin