60 DEGREES PHARMACEUTICALS, INC.
For the period ended Jun 30, 2026. Filed Aug 14, 2026.
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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, 2026 · Filed Aug 14, 2026
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 2026-03-31; filed 2026-05-15.
0001554855-26-001058
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-14.
0001554855-26-001860
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 114 previous paragraphs and 126 current paragraphs.
80 unchanged; 20 reworded; 22 added; 10 removed; 4 previous and 4 current paragraphs rearranged.
Tables are not compared: 13 previous and 15 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 (22)
Current report
In addition, the Company has non-cancelable purchase obligations totaling $468,960, payable to its manufacturer Piramal, contingent upon the vendor meeting certain manufacturing milestones. $228,960 is expected to be payable around December 2026, with the remaining $240,000 is expected in March 2027. These amounts are not recognized on the consolidated balance sheet, as payment is contingent upon achievement of future events.
Current report
For thethree months ended June 30, 2026, product revenues – net of discounts and rebates were $207,898, compared to $100,932 for the same period in 2025, an increase of $106,966, or 105.98%. The increase was attributable to two factors. First, the prior-year period was affected by a shortage of Arakoda 16-ct boxes, as previously disclosed, while new product lots underwent commercial validation at our secondary packager. Second, during the current period our third-party logistics partner (“3PL”) agreed to carry higher inventory levels on a continuing basis, after deliveries to wholesalers and pharmacies were delayed at prior inventory levels. As a result, shipments to our 3PL in the current period exceeded sell-through to pharmacies by approximately $200,000. We do not expect this increase in channel inventory to recur, and revenue for the current period is not indicative of future quarterly revenue.
Current report
For thethree months ended June 30, 2026, our 3PL, which purchases product from us and resells it to three large U.S. pharmaceutical wholesalers and to a compounding pharmacy, Infuserve America (“IA”), accounted for 92% of total net product sales of Arakoda (compared to 21% in the prior-year period), IA accounted for 0% (compared to 78%), and Kodatef sales to our Australian distributor accounted for 8% (compared to 1% in the prior-year period). During the shortage described above, we imported Kodatef from Australia under a temporary FDA authorization that facilitated patient access, and sold it directly to IA, which dispensed it to patients. That authorization has expired, and IA has since resumed purchasing through our 3PL.
Current report
We recognize revenue on transfer of control of product to our 3PL, which generally occurs upon shipment. Unit volumes described below as sold to pharmacies and dispensaries, and volumes reported by our distributors in Australia and Europe, represent sell-through to their respective customers and are not directly correlated to the revenue we recognize in any period.
Current report
Product returns for the three months ended June 30, 2026 were $178,659, compared to a net credit of $1,232 in the prior-year period. Returns consist of authorized returns of expired product from our 3PL and returns from wholesalers and pharmacies processed through a third-party administrator for destruction. The increase was primarily attributable to the expiration of product lots held in the distribution channel. As a percentage of gross product sales, returns were 32.6% in the current period.
Current report
Cost of revenues was $151,100 for thethree months ended June 30, 2026, as compared to $50,051 for thethree months ended June 30, 2025. In 2025, total cost of revenues was uniquely low as the FDA allowed us to import and sell lower cost per unit Kodatef on a temporary basis due to stock out of Arakoda. As a result of no longer selling Kodatef in the US in 2026, gross margin % decreased to 27.32% for thethree months ended June 30, 2026, from 50.41% in the prior-year period. Still, our gross profit increased by $5,917 to $56,798 for thethree months ended June 30, 2026, from $50,881 in the prior-year period.
Current report
Comparison of the Six Months Ended June 30, 2026, and 2025
Current report
Our product revenues - net of discounts and rebates were $369,990 for thesix months ended June 30, 2026, as compared to $264,484 for thesix months ended June 30, 2025, an increase of $105,506, or 39.89%. Sell-through volume to pharmacies and dispensaries declined 4% over the same period, from 2,661 to 2,563 16-ct box equivalents. Revenue increased notwithstanding lower sell-through volume because the prior-year period was affected by a shortage of Arakoda 16-ct boxes, as previously disclosed, and because shipments in the current period exceeded sell-through as our 3PL moved to higher inventory levels. Revenue for the current period is not indicative of future results.
Current report
For thesix months ended June 30, 2026, our third-party logistics partner (“3PL”), which purchases product from us and resells it to three large U.S. pharmaceutical wholesalers and to a compounding pharmacy, Infuserve America (“IA”), and IA accounted for 92% and 0% of our total net product sales of Arakoda, respectively, and Kodatef sales to our Australian distributor accounted for 8% of total net product sales (61%,34%, and 5% for thesix months ended June 30, 2025, respectively). During the shortage described above, we imported Kodatef from Australia under a temporary FDA authorization that facilitated patient access, and sold it directly to IA, which dispensed it to patients. That authorization has expired, and IA has since resumed purchasing through our 3PL. The introduction of a new 8-ct Arakoda bottle into the commercial supply chain in June 2025 also mitigated the shortage.
Current report
We recognize revenue on transfer of control of product to our 3PL, which generally occurs upon shipment. Unit volumes described as sold to pharmacies and dispensaries, and volumes reported by our distributors in Australia and Europe, represent sell-through to their respective customers and are not directly correlated to the revenue we recognize in any period.
Current report
We offer discounts and rebates to the civilian U.S. supply chain distribution channel. Our 3PL partner receives a distribution rebate of 10% of amounts invoiced and a 2% discount conditional on prompt payment, and we pay our 3PL partner a fixed fee of $5,500 per month together with data fees incurred in connection with serialization and distribution requirements. The product is then transferred usually to one of the three large U.S. pharmaceutical wholesalers or to IA, where rebates are 10% of their purchases from 3PL. Under our partnership with GoodRx, which commenced on February 2, 2026, eligible patients may obtain savings of up to 30% on Arakoda; amounts recorded under that program, including associated program fees, were $23,219 for the six months ended June 30, 2026. 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. Because rebates payable to wholesalers and PBMs are paid to parties that are not our customers, we account for them as variable consideration rather than as trade discounts. We estimate these forms of variable consideration using the expected value method and constrain estimates to amounts for which it is probable that a significant reversal of cumulative revenue will not occur when the related uncertainties are resolved. For thesix months ended June 30, 2026, discounts and rebates were $259,207 compared to $174,205 for thesix months ended June 30, 2025. The increase reflects higher gross sales volume; as a percentage of gross U.S. product sales, discounts and rebates decreased period over period, reflecting the conclusion of the temporary IA arrangement, under which a substantially higher proportion of sales were subject to PBM rebates.
Current report
Product returns for thesix months ended June 30, 2026 were $211,346, compared to a net credit of $18,025 for thesix months ended June 30, 2025. Returns consist of authorized returns of expired product from our 3PL and returns from wholesalers and pharmacies processed through a third-party administrator for destruction. The increase was primarily attributable to the expiration of product lots held in the distribution channel.
Current report
Kodatef sales to our distributor Biocelect in Australia for thesix months ended June 30, 2026 were $31,278 ($13,285 for thesix months ended June 30, 2025). Biocelect, which acts as a distributor in the Australian and New Zealand market, reported a 9% year-over-year increase, the equivalent of 851 boxes sold for thesix months ended June 30, 2026, compared to 782 boxes for thesix months ended June 30, 2025. For thesix months ended June 30, 2026,900 boxes of Kodatef were sold to Biocelect (200 boxes for thesix months ended June 30, 2025). Amounts we recognize as revenue reflect shipments to Biocelect, which are made periodically to replenish its inventory.
Current report
Arakoda sales volume in Europe has been flat. We ship Arakoda to our European distributor, Scandinavian Biopharma (“SB”), periodically rather than each quarter, and did not recognize revenue on shipments to SB during either period presented. For thesix months ended June 30, 2026, SB reported 180 boxes sold (183 boxes sold for thesix months ended June 30, 2025).
Current report
Cost of revenues was $236,815 for thesix months ended June 30, 2026, as compared to $123,323 for thesix months ended June 30, 2025. The increase reflects higher unit volumes shipped together with a higher cost per unit. Cost of revenues in the prior-year period was uniquely low for three reasons: a substantial portion of product sold consisted of imported Kodatef, which does not require the child-resistant packaging applied to Arakoda in the United States and therefore carried a significantly lower cost per unit; the prior-year period included a higher proportion of 8-ct bottles, which carry a lower packaging cost per box equivalent; and product sold in the prior-year period was manufactured using active pharmaceutical ingredient acquired in 2018 at a lower cost per kilogram than the material used in current lots. Cost of revenues in the current period also included yield losses incurred during tableting, blistering and final packaging of new product lots, higher storage costs charged by our secondary packager, and the destruction of product lots that expired during the period. Yield losses are incurred only in periods in which new lots are produced. The Gross Margin % decreased from 53.37% for thesix months ended June 30, 2025 to 35.99% for thesix months ended June 30, 2026.
Current report
The research revenues earned by us were $0 for thesix months ended June 30, 2026, as compared to $299,670 for thesix months ended June 30, 2025. The decrease in research revenues is primarily due to the 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 $0 related to the USAMMDA grant for thesix months ended June 30, 2026 ($194,914 for thesix months ended June 30, 2025). We recognized research revenues of $0 from the University of Kentucky for thesix months ended June 30, 2026 ($89,302 for thesix months ended June 30, 2025). Other research revenues were $0 for thesix months ended June 30, 2026 ($15,454 for thesix months ended June 30, 2025).
Current report
Research and development costs increased by $277,392 for thesix months ended June 30, 2026 when compared to thesix months ended June 30, 2025. The increase is primarily attributable to having three Babesiosis trials fully active for the first time. Direct trial-related costs represent 73% of the total research and development costs at $638,959 for thesix months ended June 30, 2026, compared to 75% of the costs at $452,525 for thesix months ended June 30, 2025.
Current report
For thesix months ended June 30, 2026, our general and administrative expenses increased by approximately 7.86% or $263,749 from thesix months ended June 30, 2025. For thesix months ended June 30, 2026, we incurred significantly higher sales, advertising and promotion expenses at $1,092,408, up from $680,384 for the six months ended June 30, 2025. This was partially offset by decreased investor outreach expenses of $423,934 for the six months ended June 30, 2026, as compared to $759,211 for the six months ended June 30, 2025.
Current report
Interest and Other Income, net
Current report
Interest Expense
Current report
Other Income, net
Current report
For the six months ended June 30, 2026, we recognized $23,346 in other income compared to $43,388 for the six months ended June 30, 2025. For the six months ended June 30, 2026, we recognized interest income from cash invested in interest-bearing accounts and investments in certificates of deposit of $23,794 ($47,584 for the six months ended June 30, 2025).
Removed paragraphs (10)
Previous report
Other Operating Revenues
Previous report
Operating Expenses
Previous report
Research and Development
Previous report
General and Administrative Expenses
Previous report
For the three months ended March 31, 2026, product revenues – net of discounts and rebates were $162,092, compared to $163,552 for the same period in 2025, a decrease of $1,460, or 0.89%. For the three months ended March 31, 2026, our U.S. pharmaceutical distributor accounted for 90% of total net product sales of Arakoda (compared to 85% in the prior-year period), Infuserve America accounted for 0% (compared to 6%), and Kodatef sales to our Australian distributor accounted for 10% (compared to 9% in the prior-year period). Total net product revenues experienced a slight decline, primarily due to returns associated with expiring product lots during the period.
Previous report
Cost of revenues was $85,715 for thethree months ended March 31, 2026, as compared to $73,272 for thethree months ended March 31, 2025. The increase in total cost of revenues was primarily driven by higher quarterly storage costs with our U.S.-based packager. On a per-unit basis, however, cost of revenues declined due to the introduction of the bottle format, which has reduced packaging costs. As a result of these factors, gross margin % decreased to 47.12% for thethree months ended March 31, 2026, from 55.20% in the prior-year period. Thus, our gross profit declined by $13,903 to $76,377 for thethree months ended March 31, 2026, from $90,280 in the prior-year period. Inventory write‑downs for expired product were not a primary driver of the gross margin decline period over period.
Previous report
Other Operating Revenues
Previous report
Operating Expenses
Previous report
Research and Development
Previous report
General and Administrative Expenses
Reworded paragraphs (20)
Previous wording
As of March 31, 2026, we had cash and cash equivalents of $3,337,760 ($1,510,065 as of December 31, 2025). For thethree months ended March 31, 2026 and 2025, our net cash used in operating activities was $2,741,559 and $1,597,366, 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 approximately $3.8 million in net proceeds received through the 2025 ATM Agreement and related prospectus supplements between October 2025 and March 2026, and excluding licensing and supply chain costs contingent on possible non-objection by FDA to our New Dietary Notification for Australian Chestnut Extract, we estimate that we will have sufficient funds to remain viable through mid-September, 2026, assuming no additional capital raises. However, based on our cash forecasts and planned operating expenditures, we do not currently have sufficient cash and cash equivalents to fund our operating plan for at least the next 12 months from the date of issuance of these financial statements, which raises substantial doubt about our ability to continue as a going concern. Our plans to address these conditions, which include additional equity financings and potential business development transactions, are not currently sufficient to alleviate this substantial doubt. 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, 2026, we had cash and cash equivalents of $1,022,606 ($1,510,065 as of December 31, 2025). For thesix months ended June 30, 2026 and 2025, our net cash used in operating activities was $4,973,280 and $3,047,494, 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 $0.7 million received from the July 2026 PIPE public offering following approximately $3.8 million in net proceeds received through the 2025 ATM Agreement and related prospectus supplements between October 2025 and March 2026, we estimate that we will have sufficient funds to remain viable through early-October 2026. However, based on our cash forecasts and planned operating expenditures, we do not currently have sufficient cash and cash equivalents to fund our operating plan for at least the next 12 months from the date of issuance of these financial statements, which raises substantial doubt about our ability to continue as a going concern. Our plans to address these conditions, which include additional equity financings and potential business development transactions, are not currently sufficient to alleviate this substantial doubt. 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 near future. However, we cannot assure you that we will be able to raise additional capital on acceptable terms, or at all.
Previous wording
We receive the majority of our product revenues from sales of our Arakoda product to resellers in the U.S. and abroad. Foreign sales to both Australia and Europe are further subject to profit sharing agreements for boxes sold to customers. Sales to resellers in the US are subject to considerable discounts and rebates for services provided by our third-party logistics (“3PL”) partner and wholesalers and pharmacy benefit managers (“PBMs”). We recognize revenue when control of Arakoda transfers to our U.S. distributor or 3PL partner, which generally occurs upon shipment. We record product revenue net of estimated discounts, rebates, chargebacks and product returns in accordance with ASC 606. We estimate these forms of variable consideration using the expected value method and constrain estimates to amounts for which it is probable that a significant reversal of cumulative revenue will not occur when the related uncertainties are resolved.
Current wording
We receive the majority of our product revenues from sales of our Arakoda product to resellers in the U.S. and abroad. Foreign sales to Europe are further subject to profit sharing agreements for boxes sold to customers. Sales to resellers in the US are subject to considerable discounts and rebates for services provided by our third-party logistics (“3PL”) partner and wholesalers and pharmacy benefit managers (“PBMs”). We recognize revenue when control of Arakoda transfers to our 3PL partner, which generally occurs upon shipment. We record product revenue net of estimated discounts, rebates, chargebacks and product returns in accordance with ASC 606. We estimate these forms of variable consideration using the expected value method and constrain estimates to amounts for which it is probable that a significant reversal of cumulative revenue will not occur when the related uncertainties are resolved.
Previous wording
Other operating revenues for the periods presented include research revenue earned from the Australian Tax Authority for research activities conducted in Australia. In 2025, other operating revenues also included research revenues associated with our contract with the United States Army Medical Material Development Activity (USAMMDA) for Arakoda supply chain upgrade support. We recognized research revenue related to the USAMMDA contract over time as qualifying costs were incurred, up to the maximum contractual funding amount. All funded activities under this contract were completed and fully reimbursed by December 31, 2025, and no additional amounts are expected to be earned under the arrangement.
Current wording
Other operating revenues for the periods presented include research revenue earned from the Australian Tax Authority for research activities conducted in Australia. In 2025, other operating revenues also included research revenues associated with our contract with the United States Army Medical Material Development Activity (USAMMDA) for Arakoda supply chain upgrade support. We recognized research revenue related to the USAMMDA contract over time as qualifying costs were incurred, up to the maximum contractual funding amount. All funded activities under this contract were completed and fully reimbursed by December 31, 2025, and no additional amounts are expected to be earned under the arrangement. Currently, we are not engaging in research activity that would lead directly and immediately to research revenue.
Previous 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.
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.
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 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 $150,030 SBA loan that bears interest at 3.75%. Other components ofother income (loss) include changes in the fair value of derivative liabilities and other miscellaneous income or expenses.
Previous wording
We offer discounts and rebates to the civilian U.S. supply chain distribution channel. 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%. Additionally, in the current quarter, we implemented a new partnership with GoodRx where patients can acquire a discount on their purchase. 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. We estimate these forms of variable consideration using the expected value method and constrain estimates to amounts for which it is probable that a significant reversal of cumulative revenue will not occur when the related uncertainties are resolved. Total discounts and rebates for thethree months ended March 31, 2026 were $96,857, an increase of $5,456, or 6%, from $91,401 in the prior-year period.
Current wording
We offer discounts and rebates to the civilian U.S. supply chain distribution channel. Our 3PL partner receives a distribution rebate of 10% of amounts invoiced and a 2% discount conditional on prompt payment, and we pay our 3PL partner a fixed fee of $5,500 per month together with data fees incurred in connection with serialization and distribution requirements. The product is then transferred usually to one of the three large U.S. pharmaceutical wholesalers or to IA, where rebates are 10% of their purchases from 3PL. Under our partnership with GoodRx, which commenced on February 2, 2026, eligible patients may obtain savings of up to 30% on Arakoda; amounts recorded under that program, including associated program fees, were $13,294 for the three months ended June 30, 2026. 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. Because rebates payable to wholesalers and PBMs are paid to parties that are not our customers, we account for them as variable consideration rather than as trade discounts. We estimate these forms of variable consideration using the expected value method and constrain estimates to amounts for which it is probable that a significant reversal of cumulative revenue will not occur when the related uncertainties are resolved. Total discounts and rebates for thethree months ended June 30, 2026 were $162,350, an increase of $79,546, or 96%, from $82,804 in the prior-year period. As a percentage of gross product sales, discounts and rebates were 29.6% and 45.4% in the current and prior-year periods, respectively. The decrease reflects the conclusion of the temporary IA arrangement, under which a substantially higher proportion of sales were subject to PBM rebates.
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 March 31, 2026, the equivalent of 1,276 16-ct boxes were sold to pharmacies and dispensaries. Sales volume decreased by 19% from 1,579 16-ct box equivalents sold to pharmacies and dispensaries for thethree months ended March 31, 2025.
Current wording
For thethree months ended June 30, 2026, the equivalent of 1,287 16-ct boxes were sold to U.S. pharmacies and dispensaries. Sales volume sold through increased by 19% from 1,082 16-ct box equivalents sold to U.S. pharmacies and dispensaries for thethree months ended June 30, 2025. As previously disclosed, we report Arakoda unit sales in 16-ct box equivalents following the introduction of the 8-ct bottle in June 2025.
Previous wording
Kodatef sales to our distributor Biocelect in Australia for thethree months ended March 31, 2026 were $15,470 ($12,066 for thethree months ended March 31, 2025). 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 an 8% quarter-over-quarter decrease, with 354 boxes sold for thethree months ended March 31, 2026, compared to 386 boxes for thethree months ended March 31, 2025. As of March 31, 2026, Biocelect has no inventory left that remains subject to profit share. Beginning in the first quarter of 2025, 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. As of March 31, 2026, no receivables were due to us (none as of December 31, 2025).
Current wording
Kodatef sales to our distributor Biocelect in Australia for thethree months ended June 30, 2026 were $15,808 ($1,219 for thethree months ended June 30, 2025). Biocelect, which acts as a distributor in the Australian and New Zealand markets, reported a 26% year-over-year increase in sell-through, with 497 boxes sold to its customers for thethree months ended June 30, 2026, compared to 396 boxes for thethree months ended June 30, 2025. As of June 30, 2026, no receivables were due from Biocelet (none as of December 31, 2025).
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 77 boxes sold during thethree months ended March 31, 2026, representing a 5%increase from the 73 boxes sold during thethree months ended March 31, 2025.
Current wording
We ship Arakoda to our European distributor, Scandinavian Biopharma (“SB”), periodically rather than each quarter, and did not recognize revenue on shipments to SB during either period presented. SB reported 103 boxes sold during thethree months ended June 30, 2026, representing a 6%decrease from the 110 boxes sold during thethree months ended June 30, 2025.
Previous wording
The research revenues earned by us were none for thethree months ended March 31, 2026, as compared to $92,731 for thethree months ended March 31, 2025. The decrease in research revenues is due to the USAMMDA contract we were awarded in July 2024 to facilitate commercial validation of a new bottle and replacement blister packaging of Arakoda, which was fully utilized by the end of 2025. We recognized research revenues of $77,966 related to the USAMMDA grant for the three months ended March 31, 2025, compared tonone for thethree months ended March 31, 2026. Research revenues for thethree months ended March 31, 2025 also included $5,138 earned from the Australian Tax Authority for qualifying research activities conducted in Australia. We recognized research revenue related to the USAMMDA contract over time as qualifying costs were incurred, up to the maximum contractual funding amount. All funded activities under this contract were completed and fully reimbursed by December 31, 2025, and no additional amounts are expected to be earned under the arrangement.
Current wording
The research revenues earned by us were none for thethree months ended June 30, 2026, as compared to $206,939 for thethree months ended June 30, 2025. The decrease in research revenues is primarily due to the USAMMDA contract we were awarded in July 2024 to facilitate commercial validation of a new bottle and replacement blister packaging of Arakoda, which was fully utilized by the end of 2025. We recognized research revenues of $116,948 related to the USAMMDA grant for thethree months ended June 30, 2025, compared tonone for thethree months ended June 30, 2026. Research revenues for thethree months ended June 30, 2025 also included $954 earned from the Australian Tax Authority for qualifying research activities conducted in Australia. We recognized research revenue related to the USAMMDA contract over time as qualifying costs were incurred, up to the maximum contractual funding amount. All funded activities under this contract were completed and fully reimbursed by December 31, 2025, and no additional amounts are expected to be earned under the arrangement.
Previous wording
Research and development costs decreased by $89,349 for thethree months ended March 31, 2026 when compared to thethree months ended March 31, 2025. The decrease was partially driven by $63,015 of packaging validation costs recognized in the prior-year period, with no comparable costs in the current period following the completion of the USAMMDA-funded activities. Otherwise, research and development costs incurred for thethree months ended March 31, 2026 and 2025 primarily consisted of costs related to our babesiosis trials for tafenoquine. Direct trial-related costs represent 68% of the total research and development costs at $191,391 for thethree months ended March 31, 2026, compared to 74% of the costs at $275,633 for thethree months ended March 31, 2025.
Current wording
Research and development costs increased by $366,741 for thethree months ended June 30, 2026 when compared to thethree months ended June 30, 2025. The increase was primarily driven by an earlier start to the tick season which increased costs for our hospitalization study. Otherwise, research and development costs incurred for thethree months ended June 30, 2026 and 2025 primarily consisted of costs related to our babesiosis trials for tafenoquine. Direct trial-related costs represent 69% of the total research and development costs at $413,424 for thethree months ended June 30, 2026, compared to 76% of the costs at $176,892 for thethree months ended June 30, 2025.
Previous wording
For thethree months ended March 31, 2026, our general and administrative expenses increased by approximately 9.68% or $166,738 from thethree months ended March 31, 2025. The increase was driven by: (1) higher sales, advertising, and promotion expenses ($521,178 vs. $285,287), and (2) higher audit, legal, and professional fees ($248,152 vs. $220,793). These increases were partially offset by lower investor outreach expenses ($197,232 vs. $393,687) and reduced stock-based compensation ($79,524 vs. $142,645). The decrease in stock-based compensation expense is attributable to two partially vested option grants awarded to executives in January 2025.
Current wording
For thethree months ended June 30, 2026, our general and administrative expenses increased by approximately 5.94% or $97,011 from thethree months ended June 30, 2025. The increase was driven by higher sales, advertising, and promotion expenses ($571,231 vs. $395,097) and partially offset by lower investor outreach expenses ($226,702 vs. $365,523).
Previous wording
For thethree months ended March 31, 2026, we recognized $1,389 of interest expense ($1,790 for thethree months ended March 31, 2025). 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 March 31, 2026 and March 31, 2025, respectively.
Current wording
For thethree months ended June 30, 2026, we recognized $1,403 of interest expense ($1,221 for thethree months ended June 30, 2025). Our interest expense for the periods presented primarily relates to our single outstanding loan from the SBA. Cash paid for interest expense was $2,197 and $2,193 for thethree months ended June 30, 2026 and June 30, 2025, respectively.
Previous wording
For thethree months ended March 31, 2026, we recognized a net (loss) gain on the change in fair value of derivative liabilities of $(4,567) compared to $5,105 for thethree months ended March 31, 2025. 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. This method requires significant judgment and is sensitive to changes in assumptions related to the expected timing of payment, the likelihood of potential exit scenarios, and the selected discount rate. The gains and losses recognized during the periods presented are non‑cash in nature and do not impact our liquidity or cash flows.
Current wording
For thethree months ended June 30, 2026, we recognized a net loss on the change in fair value of derivative liabilities of $5,665 compared to $140,447 for thethree months ended June 30, 2025. 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. This method requires significant judgment and is sensitive to changes in assumptions related to the expected timing of payment, the likelihood of potential exit scenarios, and the selected discount rate. The losses recognized during the periods presented are non‑cash in nature and do not impact our liquidity or cash flows.
Previous wording
For thethree months ended March 31, 2026, we recognized $10,762 in other income compared to $30,322 for thethree months ended March 31, 2025. For thethree months ended March 31, 2026, we recognized interest income from cash invested in interest-bearing accounts and investments in certificates of deposit of $11,210 ($31,897 for thethree months ended March 31, 2025).
Current wording
For thethree months ended June 30, 2026, we recognized $12,584 in other income compared to $13,066 for thethree months ended June 30, 2025. For thethree months ended June 30, 2026, we recognized interest income from cash invested in interest-bearing accounts and investments in certificates of deposit of $12,584 ($15,687 for thethree months ended June 30, 2025).
Previous wording
Net cash used in operating activities was $2,741,559 for thethree months ended March 31, 2026, as compared to $1,597,366 for thethree months ended March 31, 2025. Our net cash used in operating activities increased primarily due tohigher general and administrative expenses at $1,889,874 for thethree months ended March 31, 2026 ($1,723,136 for thethree months ended March 31, 2025), as a result of higher sales, advertising and promotion costs and audit, legal and professional fees, as discussed above. In addition, cash outflows increased due to higher levels of vendor prepayments primarily due to initiating new API production at Piramal during thethree months ended March 31, 2026 when compared to thethree months ended March 31, 2025.
Current wording
Net cash used in operating activities was $4,973,280 for thesix months ended June 30, 2026, as compared to $3,047,494 for thesix months ended June 30, 2025. Our net cash used in operating activities increased primarily due tohigher general and administrative expenses at $3,619,121 for thesix months ended June 30, 2026 ($3,355,372 for thesix months ended June 30, 2025), as a result of higher sales, advertising and promotion costs, as discussed above. In addition, cash outflows increased due to higher levels of vendor prepayments primarily due to initiating new API production at Piramal during thesix months ended June 30, 2026 when compared to thesix months ended June 30, 2025.
Previous wording
Net cash provided by investing activities was $1,193,560 for thethree months ended March 31, 2026, as compared to $1,702,518 for thethree months ended March 31, 2025. For thethree months ended March 31, 2026, we received proceeds of $1,235,000 from maturities of certain short-term investments in certificates of deposit ($1,708,000 for thethree months ended March 31, 2025). The cash proceeds are partially offset by fixed asset purchases of $30,000 for thethree months ended March 31, 2026 ($2,678 for thethree months ended March 31, 2025). Additionally, for thethree months ended March 31, 2026, we paid cash of $11,440 for capitalized website development costs associated with enhancements to the functionality of our corporate website. We did not have any cash outflows for capitalized website development costs for thethree months ended March 31, 2025.
Current wording
Net cash provided by investing activities was $1,107,576 for thesix months ended June 30, 2026, as compared to $1,650,834 for thesix months ended June 30, 2025. For thesix months ended June 30, 2026, we received proceeds of $1,235,000 from maturities of certain short-term investments in certificates of deposit ($1,708,000 for thesix months ended June 30, 2025). The cash proceeds are partially offset by fixed asset purchases of $30,000 for thesix months ended June 30, 2026 ($50,001 for thesix months ended June 30, 2025). Additionally, for thesix months ended June 30, 2026, we paid cash of $64,376 for capitalized website development costs associated with enhancements to the functionality of our corporate website. We did not have any cash outflows for capitalized website development costs for thesix months ended June 30, 2025.
Previous wording
Net cash provided by financing activities was $3,369,752 for thethree months ended March 31, 2026, as compared to $1,696,899 for thethree months ended March 31, 2025. Theincrease in net cash provided by financing activities is attributable to higher net proceeds from the sale of common stock under our At-the-Market (ATM) Sales Agreement between January and March 2026, which exceeded the aggregate net proceeds of $1,712,973 received from our common stock and warrant offerings completed in January and February 2025.
Current wording
Net cash provided by financing activities was $3,369,752 for thesix months ended June 30, 2026, as compared to $1,696,899 for thesix months ended June 30, 2025. Theincrease in net cash provided by financing activities is attributable to higher net proceeds from the sale of common stock under our At-the-Market (ATM) Sales Agreement between January and March 2026, which exceeded the aggregate net proceeds of $1,712,973 received from our common stock and warrant offerings completed in January and February 2025.
Previous wording
The increase was partially offset by lower proceeds from warrant exercises, which were $0 for thethree months ended March 31, 2026, compared to $1,926 for thethree months ended March 31, 2025. In addition, during thethree months ended March 31, 2025, we withheld shares valued at $18,000 to cover tax withholdings associated with the net share settlement of certain 2024 performance bonuses awarded to our executives. No such share withholding or net share settlement activity occurred during thethree months ended March 31, 2026.
Current wording
The increase was partially offset by lower proceeds from warrant exercises, which were $0 for thesix months ended June 30, 2026, compared to $1,926 for thesix months ended June 30, 2025. In addition, during thesix months ended June 30, 2025, we withheld shares valued at $18,000 to cover tax withholdings associated with the net share settlement of certain 2024 performance bonuses awarded to our executives. No such share withholding or net share settlement activity occurred during thesix months ended June 30, 2026.
Previous wording
Our foreign operations were small relative to U.S. operations for thethree months ended March 31, 2026 and March 31, 2025, 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, 2026 and June 30, 2025, thus effects of foreign currency translation have been minor.
Rearranged current paragraphs (4)
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 the six months ended June 30, 2026, we recognized $2,792 of interest expense ($3,011 for the six months ended June 30, 2025). Our interest expense for the periods presented primarily relates to our single outstanding loan from the SBA. Cash paid for interest expense was $4,390 and $4,386 for the six months ended June 30, 2026 and June 30, 2025, respectively.
Current report — wording carried from elsewhere
Change in Fair Value of Derivative Liabilities
Current report — wording carried from elsewhere
For the six months ended June 30, 2026, we recognized a net loss on the change in fair value of derivative liabilities of $10,232 compared to $135,342 for the six months ended June 30, 2025. 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. This method requires significant judgment and is sensitive to changes in assumptions related to the expected timing of payment, the likelihood of potential exit scenarios, and the selected discount rate. The losses recognized during the periods presented are non‑cash in nature and do not impact our liquidity or cash flows.
Rearranged previous paragraphs (4)
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
Product Revenues - net of Discounts and Rebates
Previous report — wording carried elsewhere
Cost of Revenues, Gross Profit, and Gross Margin