60 DEGREES PHARMACEUTICALS, INC.
For the period ended Sep 30, 2025. Filed Nov 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.
Sep 30, 2025 · Filed Nov 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 2025-06-30; filed 2025-08-13.
0001554855-25-001009
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-13.
0001554855-25-002032
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 99 previous paragraphs and 108 current paragraphs.
64 unchanged; 30 reworded; 11 added; 3 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 14 previous and 16 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 (11)
Current report
July 2025 Offering
Current report
On July 15, 2025, we entered into a securities purchase agreement with certain institutional investors pursuant to which we sold, in a registered direct offering (the “July 2025 Offering”),1,753,314 units at an offering price of $1.90 per unit and 878,264 pre-funded units at an offering price of $1.899 per pre-funded unit. Each unit consisted of (i) one share of common stock, (ii) one series A-1 warrant exercisable for one share of common stock (the “July 2025 A-1 Warrants”), and (iii) one series A-2 warrant exercisable for one share of common stock (the “July 2025 A-2 Warrants” and together with the July 2025 A-1 Warrants, the “July 2025 Warrants”). Each pre-funded unit consists of one pre-funded warrant exercisable for one share of common stock (the “July 2025 Pre-Funded Warrants”) and warrants identical to the July 2025 Warrants included in the units. The July 2025 Pre-Funded Warrants have an exercise price of $0.001 per share, and were immediately exercisable beginning on July 16, 2025 until exercised in full. The July 2025 A-1 Warrants have an exercise price of $1.90 per share and are exercisable beginning on July 16, 2025 until July 15, 2030. The July 2025 A-2 Warrants have an exercise price of $1.90 per share and are exercisable beginning on July 16, 2025 until January 15, 2027.
Current report
As compensation for acting as the placement agent for the July 2025 Offering, we also issued to H.C. Wainwright & Co., LLC warrants (the “July 2025 Placement Agent Warrants”) to purchase up to 197,368 shares of common stock. The July 2025 Placement Agent Warrants have an exercise price equal to $2.375 per share and are exercisable upon issuance, or July 16, 2025, and expire five years from the date of issuance, or July 15, 2030.
Current report
The July 2025 Offering was made pursuant to our registration statement on Form S-1 (File No. 333-288550), which was declared effective by the Securities and Exchange Commission (the “SEC”) on July 15, 2025, and the final prospectus, which we filed with the SEC on July 16, 2025. The Offering closed on July 16, 2025, resulting in net proceeds of approximately $4,281,300, after deducting placement agent fees and other offering expenses paid by us.
Current report
On September 5, 2025, we entered into an At-The-Market Sales Agreement (the “2025 ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”) pursuant to which we may, from time to time, offer and sell shares of our common stock, having aggregate gross sales proceeds of up to $1,397,532 (the “2025 ATM Offering”). As compensation for acting as the sales agent for the 2025 ATM Offering, Wainwright will be entitled to a commission of 3.0% of the gross proceeds from sales of shares in the 2025 ATM Offering. The common stock to be sold under the 2025 ATM Agreement, if any, will be issued and sold pursuant to our shelf registration statement on Form S-3 and accompanying base prospectus (Registration Statement No. 333-280796), which was declared effective by the SEC on July 18, 2024, and our prospectus supplement dated September 5, 2025 relating to the offer and sale of the shares pursuant to the 2025 ATM Agreement. Between October 16, 2025 and November 13, 2025, we sold an aggregate of 125,979 shares at a weighted average price per share of $1.62, generating net proceeds of $196,356, after deducting commissions and certain other offering expenses.
Current report
Interest and Other Income (Expense), Net
Current report
Cost of Revenues, Gross (Loss) Profit, and Gross Margin
Current report
Cost of revenues was $537,690 for thethree months ended September 30, 2025, as compared to $111,687 for thethree months ended September 30, 2024. The significant increase in cost of goods sold was primarily due to higher write-offs of inventory not expected to be sold prior to its expiration date. Write-offs of expiring inventory were $436,561 for thethree months ended September 30, 2025, as compared to $1,165 for thethree months ended September 30, 2024. The excess inventory resulted from our strategic decision to validate a new, larger-scale production method with then soon to be expiring raw materials (API), with the offsetting assistance from our USAMMDA grant. The development proved successful but the dating on the produced inventory is already considered in the industry to be short-dated and will have to be replaced by the beginning of the second quarter of 2026. The temporary increase in inventory write-offs was a necessary step in scaling our operations and is not expected to be recurring. Our new larger-scale production processes are expected to help keep inventory costs lower than otherwise. As a result of these factors, the Gross Margin % decreased from 17.45% for thethree months ended September 30, 2024 to a Gross Loss % of 22.87% for thethree months ended September 30, 2025.
Current report
For thethree months ended September 30, 2025, our general and administrative expenses increased by approximately 24.00% or $291,567 from thethree months ended September 30, 2024. For thethree months ended September 30, 2025, we incurred higher sales, advertising and promotion expenses at $414,718, up from $47,645 for thethree months ended September 30, 2024. Additionally, for thethree months ended September 30, 2025, we incurred higher legal and professional fees at $177,401 ($86,335 for thethree months ended September 30, 2024).
Current report
Comparison of the Nine Months Ended September 30, 2025, and 2024
Current report
Cost of revenues was $661,013 for thenine months ended September 30, 2025, as compared to $266,688 for thenine months ended September 30, 2024. The significant increase in cost of goods sold was primarily due to higher write-offs of inventory not expected to be sold prior to its expiration date. Write-offs of expiring inventory were $436,596 for thenine months ended September 30, 2025, as compared to $18,490 for thenine months ended September 30, 2024. The excess inventory resulted from our strategic decision to validate a new, larger-scale production method with then soon to be expiring raw materials (API), with the offsetting assistance from our USAMMDA grant. The development proved successful but the dating on the produced inventory is already considered in the industry to be short-dated and will have to be replaced by the beginning of the second quarter 2026. The temporary increase in inventory writeoffs was a necessary step in scaling our operations and is not expected to be recurring. Our new larger-scale production processes are expected to help keep inventory costs lower than otherwise. Due to these factors, the Gross Margin % decreased from 27.12% for thenine months ended September 30, 2024 to 5.85% for thenine months ended September 30, 2025.
Removed paragraphs (3)
Previous 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.
Previous report
Comparison of the Six Months Ended June 30, 2025, and 2024
Previous 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.
Reworded paragraphs (30)
Previous 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.
Current wording
As of September 30, 2025, we had cash and cash equivalents of $4,115,779 ($1,659,353 as of December 31, 2024). For thenine months ended September 30, 2025 and 2024, our net cash used in operating activities was $5,156,566 and $4,009,871, 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 $4.3 million received from the July 2025 public offering and an additional $196 thousand received through the 2025 ATM Agreement, 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
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. 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.
Current wording
Research and development costs for the periods presented primarily consist of contracted research and development services and costs associated with preparation for and conducting our Babesiosis 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
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.
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 income (expense) include changes in the fair value of derivative liabilities and other miscellaneous income or expenses.
Previous wording
Product Revenues - net of Discounts and Rebates, Cost of Revenues, Gross Profit, and Gross Margin
Current wording
Product Revenues - net of Discounts and Rebates, Cost of Revenues, Gross (Loss) Profit, and Gross Margin
Previous 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.
Current wording
Our product revenues - net of discounts and rebates were $437,602 for thethree months ended September 30, 2025, as compared to $135,293 for thethree months ended September 30, 2024. For thethree months ended September 30, 2025, our U.S. pharmaceutical distributor and Infuserve America accounted for 80% and 8% of our total net product sales of Arakoda, respectively, and Kodatef sales to our Australian distributor accounted for 7% of total net product sales (92%,0% and 8% for thethree months ended September 30, 2024, respectively). Domestic, commercial product sales increased substantially in the period due to refilling the supply chain after stocking out in Q2 2025.
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 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 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 thethree months ended September 30, 2025, discounts and rebates were $150,532 compared to $122,862 for thethree months ended September 30, 2024. The rebate on Kodatef sales was only 10% and there were no PBM-related discounts on sales of Kodatef.
Previous wording
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 wording
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 September 30, 2025, the equivalent of 1,505 16-ct boxes were sold to pharmacies and dispensaries. Sales volume increased by 14% from 1,319 16-ct box equivalents sold to pharmacies and dispensaries for thethree months ended September 30, 2024.
Previous wording
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 wording
Kodatef sales to our distributor Biocelect in Australia for thethree months ended September 30, 2025 were $29,490 ($10,691 for thethree months ended September 30, 2024). A historical portion of sales to Biocelect remained 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 33% quarter-over-quarter increase, with 552 boxes sold for thethree months ended September 30, 2025, compared to 414 boxes for thethree months ended September 30, 2024. As of September 30, 2025, Biocelect has no inventory left that remains subject to profit share. Additionally, under a new agreement executed during the second 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 September 30, 2025,900 boxes of Kodatef were sold to Biocelect (none for the quarter ended September 30, 2024). As of September 30, 2025, $16,331 of receivables were 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. 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 wording
Arakoda sales volume in Europe continues to grow. We first shipped Arakoda to our distributor Scandinavian Biopharma (“SB”) in September 2022. SB reported 66 boxes sold during thethree months ended September 30, 2025, representing a 22%increase from the 54 boxes sold during thethree months ended September 30, 2024. According to our distributor, the stock out experienced in the US during the second quarter of 2025 also negatively impacted sales for the quarter in Europe. This only became rectified in late August when we sent 1,000 bottles of Arakoda to Europe.
Previous 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).
Current wording
The research revenues earned by us were $90,960 for thethree months ended September 30, 2025, as compared to $12,818 for thethree months ended September 30, 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 $90,960 related to the USAMMDA grant for thethree months ended September 30, 2025 ($12,994 for thethree months ended September 30, 2024).
Previous wording
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 wording
Research and development costs decreased by $130,286 for thethree months ended September 30, 2025 when compared to thethree months ended September 30, 2024. The decline is partially attributable to a non-cash charge of $600,000 recognized during thethree months ended September 30, 2024 upon the delivery from Trevally of 8.8 kilograms of castanospermine, for which we had previously issued fully vested shares as advance consideration for the research materials. Otherwise, research and development costs incurred for thethree months ended September 30, 2025 and 2024 primarily consisted of costs related to our babesiosis trials for tafenoquine. Direct trial-related costs represent 81% of the total research and development costs at $656,754 for thethree months ended September 30, 2025, compared to 29% of the costs at $270,497 for thethree months ended September 30, 2024.
Previous 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.
Current wording
For thethree months ended September 30, 2025, we recognized $1,708 of interest expense ($1,467 for thethree months ended September 30, 2024). Our interest expense for the periods presented primarily relates to our single outstanding loan from the SBA. Cash paid for interest expense was $2,193 and $2,193 for thethree months ended September 30, 2025 and September 30, 2024, respectively.
Previous wording
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 wording
For thethree months ended September 30, 2025, we recognized a loss on the change in fair value of derivative liabilities of $21,103 compared to the loss of $56,712 for thethree months ended September 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. Generally in the valuation model as we get closer to potential milestones the value of the derivative increases.
Previous wording
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 wording
For thethree months ended September 30, 2025, we recognized $31,550 in other income compared to $16,623 for thethree months ended September 30, 2024. For thethree months ended September 30, 2025, we recognized interest income from cash invested in interest-bearing accounts and investments in certificates of deposit of $32,566 ($16,635 for thethree months ended September 30, 2024).
Previous wording
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 wording
Our product revenues - net of discounts and rebates were $702,086 for thenine months ended September 30, 2025, as compared to $365,939 for thenine months ended September 30, 2024. For thenine months ended September 30, 2025, our U.S. pharmaceutical distributor and Infuserve America accounted for 73% and 18% of our total net product sales of Arakoda, respectively, and Kodatef sales to our Australian distributor accounted for 6% of total net product sales (94%,0%, and 6% for thenine months ended September 30, 2024, respectively). Despite a shortage of Arakoda 16-ct boxes starting in April 2025, which resulted from a delay in completing commercial validation of a new packaging format, domestic, commercial product sales increased during the period, primarily due to the combination of rising sales, price increases and fewer returns.
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 six months ended June 30, 2025, discounts and rebates were $174,205 compared to $201,624 for the six months ended June 30, 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 thenine months ended September 30, 2025, discounts and rebates were $324,948 compared to $324,486 for thenine months ended September 30, 2024.
Previous wording
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 wording
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 thenine months ended September 30, 2024,3,642 16-ct box equivalents were sold to pharmacies and dispensaries. Sales volume increased by 14% to 4,166 16-ct box equivalents sold to pharmacies and dispensaries for thenine months ended September 30, 2025.
Previous 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).
Current wording
Kodatef sales to our distributor Biocelect in Australia for thenine months ended September 30, 2025 were $42,775 ($20,697 for thenine months ended September 30, 2024). A historical portion of sales to Biocelect remained 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 10% year-over-year decline, the equivalent of 1,334 boxes sold for thenine months ended September 30, 2025, compared to 1,489 boxes for thenine months ended September 30, 2024. As of September 30, 2025, Biocelect has no inventory left that remains subject to profit share. Additionally, under a new agreement executed during the period, 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 nine months ended September 30, 2025,1,100 boxes of Kodatef were sold to Biocelect (None for thenine months ended September 30, 2024). As of September 30, 2025, $16,331 of receivables 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 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.
Current wording
Arakoda sales volume in Europe continues to grow. We first shipped Arakoda to our distributor Scandinavian Biopharma (“SB”) in September 2022. For thenine months ended September 30, 2025, SB reported 249 boxes sold (109 boxes sold for thenine months ended September 30, 2024). According to our distributor, this is due to greater interest in treating babesiosis. Additionally, we received another purchase order of product from Europe and shipped 1,000 bottles towards the end of August 2025.
Previous wording
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 wording
The research revenues earned by us were $390,630 for thenine months ended September 30, 2025, as compared to $43,177 for thenine months ended September 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 $285,874 related to the USAMMDA grant for thenine months ended September 30, 2025 ($12,994 for thenine months ended September 30, 2024). We recognized research revenues of $89,302 from the University of Kentucky for thenine months ended September 30, 2025 ($0 for thenine months ended September 30, 2024). Other research revenues were $15,454 for thenine months ended September 30, 2025 ($30,183 for thenine months ended September 30, 2024).
Previous 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.
Current wording
Research and development costs decreased by $2,905,288 for thenine months ended September 30, 2025 when compared to thenine months ended September 30, 2024. The decline is primarily attributable to a non-cash charge of $3,225,000 recognized during thenine months ended September 30, 2024 related to share-based payments issued to vendors in January 2023 as advance consideration, 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 thenine months ended September 30, 2024. Otherwise, research and development costs incurred for thenine months ended September 30, 2025 and 2024 primarily consisted of costs related to our babesiosis trial for tafenoquine. Direct trial-related costs represent 76% of the total research and development costs at $1,109,279 for thenine months ended September 30, 2025, compared to 19% of the costs at $846,323 for thenine months ended September 30, 2024. We also recorded $204,112 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 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 wording
For thenine months ended September 30, 2025, our general and administrative expenses increased by approximately 40.53% or $1,385,901 from thenine months ended September 30, 2024. For thenine months ended September 30, 2025, we incurred significantly higher sales, advertising and promotion expenses and investor outreach expenses at $1,095,102 and $992,044, up from $226,024 and $684,808 for thenine months ended September 30, 2024, respectively. Additionally, for thenine months ended September 30, 2025, we recognized $212,030 in stock-based compensation expense ($15,246 for thenine months ended September 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.
Previous wording
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 wording
For thenine months ended September 30, 2025, we recognized $4,719 of interest expense ($6,490 for thenine months ended September 30, 2024). Our interest expense for the periods presented relates primarily to our single outstanding loan from the SBA. Cash paid for interest expense was $6,579 and $6,579 for thenine months ended September 30, 2025 and 2024, respectively.
Previous 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.
Current wording
For thenine months ended September 30, 2025, we recognized a loss on the change in fair value of derivative liabilities of $156,445 compared to the gain of $1,683,034 for thenine months ended September 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 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.
Current wording
For thenine months ended September 30, 2025, we recognized $74,938 in other income compared to $67,358 for thenine months ended September 30, 2024. For thenine months ended September 30, 2025, we recognized interest income from cash invested in interest-bearing accounts and investments in certificates of deposit of $80,150 ($59,192 for thenine months ended September 30, 2024). Other income for thenine months ended September 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 nine months ended September 30, 2025.
Previous 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).
Current wording
Net cash used in operating activities was $5,156,566 for thenine months ended September 30, 2025, as compared to $4,009,871 for thenine months ended September 30, 2024. Our net cash used in operating activities increased primarily due tohigher general and administrative expenses at $4,805,648 for thenine months ended September 30, 2025 ($3,419,747 for thenine months ended September 30, 2024), as a result of higher sales, advertising and promotion costs and investor outreach expenses, as discussed above, and higher research and development costs for our babesiosis trial at $1,109,279 for thenine months ended September 30, 2025 ($846,323 for thenine months ended September 30, 2024).
Previous 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).
Current wording
Net cash provided by investing activities was $1,625,347 for thenine months ended September 30, 2025, as compared to net cash used in investing activities of $1,887,016 for thenine months ended September 30, 2024. For thenine months ended September 30, 2025, we received proceeds of $1,708,000 from maturities of certain short-term investments in certificates of deposit ($0 for thenine months ended September 30, 2024). The cash proceeds are partially offset by capitalized patent costs of $20,868 and fixed asset purchases of $60,000 for thenine months ended September 30, 2025 ($49,869 and $103,773 for thenine months ended September 30, 2024, respectively). Additionally, we capitalized less website development costs for thenine months ended September 30, 2025 at $1,785 ($25,374 capitalized for thenine months ended September 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 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).
Current wording
Net cash provided by financing activities was $5,979,077 for thenine months ended September 30, 2025, as compared to $7,052,598 for thenine months ended September 30, 2024. Thedecrease in net cash provided by financing activities is mainly attributable to net proceeds aggregating to $7,042,608 received in connection with (i) our common stock and warrant offering in January 2024, (ii) the sale of common stock pursuant to the At-the-Market Sales Agreement in July and August 2024, and (iii) the sale of warrants in our Private Placement offering that closed in September 2024, which exceeded the aggregate net proceeds of $5,994,273 received in connection with our common stock and warrant offerings completed in January, February, and July 2025.
Previous 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.
Current wording
Our foreign operations were small relative to U.S. operations for thenine months ended September 30, 2025 and September 30, 2024, thus effects of foreign currency translation have been minor.
Previous 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 annual periods 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 annual periods beginning after December 15, 2024. We will adopt this standard for the annual period ending December 31, 2025. The impact of ASU 2023-09 will be limited to our financial statement disclosures.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Cost of Revenues, Gross Profit, and Gross Margin
Current report — wording carried from elsewhere
Cost of Revenues, Gross Profit, and Gross Margin
Current report — wording carried from elsewhere
We also received lower proceeds from the exercise of warrants at $2,804 for thenine months ended September 30, 2025, compared to $9,990 for thenine months ended September 30, 2024. Additionally, for thenine months ended September 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 thenine months ended September 30, 2024).
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
Interest and Other (Expense) Income, net