10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to

Commission file number 001-36714

JAGUAR HEALTH, INC.

(Exact name of registrant as specified in its charter)

Delaware	46-2956775
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

200 Pine Street, Suite 400

San Francisco, California 94104

(Address of principal executive offices, zip code)

(415) 371-8300

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ◻	Accelerated filer ◻	Non-accelerated filer ⌧	Smaller reporting company ☒
			Emerging growth company ☐

If an emerging growth company, indicate by a check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Trading Symbol(s)	Name of each exchange on which registered:
Common stock, Par Value $0.0001 Per Share	JAGX	The NASDAQ Capital Market

As of May 14, 2024, there were (i) 293,353,560 shares of voting common stock, par value $0.0001 per share, outstanding, and (ii) 2,120,786 shares of non-voting common stock, par value $0.0001 per share, outstanding (convertible into nine shares of voting common stock).

	Page No.
PART I. — FINANCIAL INFORMATION	1
Item 1. Condensed Consolidated Financial Statements	1
Condensed Consolidated Balance Sheets	1
Condensed Consolidated Statements Of Operations	2
Condensed Consolidated Statements of Comprehensive Losses	3
Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity	4
Condensed Consolidated Statements of Cash Flows	6
Notes to Condensed Consolidated Financial Statements	8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	52
Item 3. Quantitative and Qualitative Disclosures About Market Risk	63
Item 4. Controls and Procedures	63
PART II. — OTHER INFORMATION	64
Item 1. Legal Proceedings	64
Item 1A. Risk Factors	64
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	64
Item 3. Defaults Upon Senior Securities	65
Item 4. Mine Safety Disclosures	65
Item 5. Other Information	65
Item 6. Exhibits	66
SIGNATURE	67

PART I. — FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

JAGUAR HEALTH, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,		December 31,
(In thousands, except share and per share data)	2024		2023
	(unaudited)
Assets
Current assets:
Cash	$	11,671	$	6,469
Accounts receivable, net		1,512		1,967
Other receivable		202		217
Inventory		9,020		9,189
Prepaid expenses and other current assets		11,309		10,121
Total current assets		33,714		27,963
Property and equipment, net		484		496
Operating lease - right-of-use asset		1,289		1,176
Intangible assets, net		19,627		20,116
Other assets		275		1,012
Total assets	$	55,389	$	50,763
Liabilities, Redeemable Preferred stock and Stockholders' equity
Current liabilities:
Accounts payable	$	3,320	$	4,974
Accrued liabilities		3,461		3,798
Deferred revenue		170		—
Operating lease liability, current		469		348
Notes payable, net of discount (includes note designated at Fair Value Option amounting to $10.2 million as of March 31, 2024 and $0 December 31, 2023, respectively)		10,394		4,867
Total current liabilities		17,814		13,987
Operating lease liability, net of current portion		873		886
Deferred revenue - long term		680		—
Notes payable, net of discount, net of current portion (includes notes designated at Fair Value Option amounting to $21.7 million as of March 31, 2024 and $31.0 million December 31, 2023, respectively)		21,719		30,993
Total liabilities		41,086		45,866
Commitments and contingencies (See Note 6)
Redeemable preferred stock: $0.0001 par value; 179 and 0 shares designated from 10,000.000 preferred stock authorized at March 31, 2024 and December 31, 2023; 99 and 0 shares issued and outstanding at March 31, 2024 and December 31, 2023		2,485		—
Stockholders' equity
Series G convertible preferred stock: $0.0001 par value; 137 and 137 shares designated from 10,000,000 preferred stock authorized at March 31, 2024 and December 31, 2023; 0 and 122 shares issued and outstanding at March 31, 2024 and December 31, 2023		—		—
Series H convertible preferred stock: $0.0001 par value; 105 and 105 shares designated from 10,000,000 preferred stock authorized at March 31, 2024 and December 31, 2023; zero shares issued and outstanding at March 31, 2024 and December 31, 2023		—		—
Series I convertible preferred stock: $0.0001 par value; 118 and 118 shares designated from 10,000,000 preferred stock authorized at March 31, 2024 and December 31, 2023; 0 and 56 shares issued and outstanding at March 31, 2024 and December 31, 2023		—		—
Common stock - voting: $0.0001 par value, 298,000,000 shares authorized at March 31, 2024 and December 31, 2023; 273,479,471 and 73,413,248 issued and outstanding at March 31, 2024 and December 31, 2023		27		7
Common stock - non-voting: $0.0001 par value, 50,000,000 shares authorized at March 31, 2024 and December 31, 2023; 9 shares issued and outstanding at March 31, 2024 and December 31, 2023		—		—
Additional paid-in capital		329,647		313,854
Noncontrolling interest		(180)		(64)
Accumulated deficit		(317,215)		(308,248)
Accumulated other comprehensive loss		(461)		(652)
Total stockholders' equity		11,818		4,897
Total liabilities, redeemable preferred stock and stockholders' equity	$	55,389	$	50,763

See accompanying notes to these unaudited condensed consolidated financial statements.

1

JAGUAR HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended
	March 31,
(In thousands, except share and per share data)	2024		2023
Product revenue, net	$	2,351	$	1,972
Operating expenses
Cost of product revenue		430		345
Research and development		4,312		4,775
Sales and marketing		1,443		1,884
General and administrative		4,381		4,813
Total operating expenses		10,566		11,817
Loss from operations		(8,215)		(9,845)
Interest expense		(611)		(2,181)
Change in fair value of freestanding and hybrid financial instruments designated at Fair Value Option		(2,021)		(359)
Gain on extinguishment of debt		1,245		—
Other income (expense)		234		(12)
Loss before income tax		(9,368)		(12,397)
Income tax expense		—		—
Net loss		(9,368)		(12,397)
Net loss attributable to noncontrolling interest	$	(142)	$	(195)
Net loss attributable to common stockholders	$	(9,226)	$	(12,202)
Net loss per share, basic	$	(0.06)	$	(2.39)
Net loss per share, diluted	$	(0.06)	$	(2.39)
Weighted-average common stock outstanding, basic		158,842,297		5,109,609
Weighted-average common stock outstanding, diluted		158,842,297		5,109,609

See accompanying notes to these unaudited condensed consolidated financial statements.

2

JAGUAR HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSES

(Unaudited)

	Three Months Ended
	March 31,
(In thousands, except share and per share data)	2024		2023
Net loss	$	(9,368)	$	(12,397)
Other comprehensive gains (loss)		217		(232)
Net comprehensive loss	$	(9,151)	$	(12,629)
Common stockholders:
Net loss attributable to common stockholders	$	(9,226)	$	(12,202)
Other comprehensive loss attributable to common stockholders
Translation adjustments		191		(204)
Net comprehensive loss attributable to common stockholders	$	(9,035)	$	(12,406)
Non-controlling interests:
Net loss attributable to non-controlling interests	$	(142)	$	(195)
Other comprehensive loss attributable to non-controlling interests
Translation adjustments		26		(28)
Net comprehensive loss attributable to non-controlling interests	$	(116)	$	(223)

See accompanying notes to these unaudited condensed consolidated financial statements.

3

JAGUAR HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

(Unaudited)

	Redeemable preferred stock			Series G Convertible preferred stock			Series I Convertible preferred stock			Common  Stock - voting			Common  Stock - non-voting			Additional		Noncontrolling		Accumulated		Accumulated other comprehensive		Total Stockholders'
(In thousands, except share data)	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		paid-in capital		interest		deficit		loss		Equity
Balances as of January 1, 2024	—	$	—	122	$	—	56	$	—	73,413,248	$	7	9	$	—	$	313,854	$	(64)	$	(308,248)	$	(652)	$	4,897
Common shares issued in At The Market offering, net of issuance and offering cost of $42	—		—	—		—	—		—	130,894,636		13	—		—		11,327		—		—		—		11,340
Preferred shares issued to Streeterville in exchange of notes payable and accrued interest	179		4,485	—		—	—		—	—		—	—		—		—		—		—		—		—
Common shares issued from conversion of warrants	—		—	—		—	—		—	18,837,500		2	—		—		(2)		—		—		—		—
Common shares issued to Streeterville from exchange of Series J Preferred Stock	(80)		(2,000)	—		—	—		—	18,333,333		2	—		—		1,738		—		259		—		1,999
Common shares issued to third party in exchange of license agreement	—		—	—		—	—		—	16,666,666		2	—		—		1,148		—		—		—		1,150
Common shares issued to Iliad in exchange of notes payable and accrued interest	—		—	—		—	—		—	8,000,000		1	—		—		835		—		—		—		836
Common shares issued from conversion of Series G Preferred Stock	—		—	(122)		—	—		—	3,050,000		—	—		—		—		—		—		—		—
Common shares issued to Iliad from conversion of Series I Preferred Stock	—		—	—		—	(56)		—	2,696,456		—	—		—		—		—		—		—		—
Common shares issued to Streeterville in exchange of notes payable and accrued interest	—		—	—		—	—		—	1,587,632		—	—		—		166		—		—		—		166
Stock-based compensation	—		—	—		—	—		—	—		—	—		—		581		—		—		—		581
Net loss	—		—	—		—	—		—	—		—	—		—		—		(142)		(9,226)		—		(9,368)
Translation gain	—		—	—		—	—		—	—		—	—		—		—		26		—		191		217
Balances as of March 31, 2024	99	$	2,485	—	$	—	—	$	—	273,479,471	$	27	9	$	—	$	329,647	$	(180)	$	(317,215)	$	(461)	$	11,818

See accompanying notes to these unaudited condensed consolidated financial statements.

4

JAGUAR HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

(Unaudited)

	Redeemable preferred stock			Series G Convertible preferred stock			Series I Convertible preferred stock			Common  Stock - voting			Common  Stock - non-voting			Additional		Noncontrolling		Accumulated		Accumulated other comprehensive		Total Stockholders'
(In thousands, except share data)	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		paid-in capital		interest		deficit		loss		Equity
Balances as of January 1, 2023	—	$	—	—	$	—	—	$	—	2,182,084	$	—	9	$	—	$	266,971	$	(699)	$	(266,948)	$	(680)	$	(1,356)
Common stock issued in At the Market offering, net of issuance and offering costs of $30	—		—	—		—	—		—	10,463,983		1	—		—		17,864		—		—		—		17,865
Common stock issued to Iliad in exchange of notes payable and accrued interest	—		—	—		—	—		—	1,370,005		—	—		—		1,275		—		—		—		1,275
Common stock issued to Irving in exchange of notes payable and accrued interest				—		—	—		—	150,000		—	—		—		627		—		—		—		627
Common stock issued to third party for services				—		—	—		—	9,669		—	—		—		166		—		—		—		166
Additional investments from non-controlling interests				—		—	—		—	—		—	—		—		—		1,232		—		—		1,232
Stock-based compensation	—		—	—		—	—		—	—		—	—		—		480		—		—		—		480
Net loss	—		—	—		—	—		—	—		—	—		—		—		(195)		(12,202)		—		(12,397)
Translation loss	—		—	—		—	—		—	—		—	—		—		—		(28)		—		(204)		(232)
Balances as of March 31, 2023	—	$	—	—	$	—	—	$	—	14,175,741	$	1	9	$	—	$	287,383	$	310	$	(279,150)	$	(884)	$	7,660

See accompanying notes to these unaudited condensed consolidated financial statements.

5

JAGUAR HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended
	March 31,
(in thousands)	2024		2023
Cash flows from operating activities
Net comprehensive loss	$	(9,151)	$	(12,629)
Adjustments to reconcile net loss and comprehensive loss to net cash used in operating activities:
Change in fair value of freestanding and hybrid financial instruments designated at Fair Value Option		2,021		359
Stock-based compensation, vested and released restricted stock units and exercised stock options		581		480
Depreciation and amortization expenses		501		504
Amortization of debt issuance costs, debt discount, and non-cash interest expense		274		1,276
Amortization of operating lease - right-of-use-asset		109		47
Share in joint venture's loss		16		31
Gain on extinguishment of debt		(1,245)		—
Shares issued in exchange for services		—		166
Changes in assets and liabilities
Accounts receivable		455		892
Other receivable		10		138
Inventory		169		(1,660)
Prepaid expenses and other current assets		(1,136)		(160)
Other assets		735		(18)
Accounts payable		(1,660)		(134)
Accrued liabilities		531		816
Deferred revenue		850		—
Operating lease liability		(107)		(53)
Total cash used in operating activities		(7,047)		(9,945)
Cash flows from financing activities
Proceeds from issuance of shares in At the Market offering, net of issuance and offering costs of $42 and $30 in 2024 and 2023, respectively		11,340		17,865
Proceeds from issuance of common shares in exchange of License Agreement		1,150		—
Investment from non-controlling interest		—		1,232
Payment of Tempesta Note		(50)		(50)
Repayment of insurance financing		(172)		(236)
Total cash provided by financing activities		12,268		18,811
Effects of foreign exchange rate changes on assets and liabilities		(19)		32
Net increase in cash		5,202		8,898
Cash at beginning of the year		6,469		5,469
Cash at end of the year	$	11,671	$	14,367

See accompanying notes to these unaudited condensed consolidated financial statements.

6

JAGUAR HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(Unaudited)

	Three Months Ended
	March 31,
	2024		2023
Supplemental schedule of cash flow information
Cash paid for interest	$	9	$	6
Supplemental schedule of non-cash financing and investing activities
Preferred stock issued to Streeterville in exchange of notes payable and accrued interest	$	4,485	$	—
Common stock issued to Streeterville in exchange of Series J Preferred Stock	$	1,999	$	—
Common stock issued to Iliad in exchange of notes payable and accrued interest	$	836	$	1,275
Recognition of operating lease - right-of-use asset and operating lease liability	$	221	$	30
Common stock issued to Streeterville in exchange of notes payable and accrued interest	$	166	$	627
Umbrella Insurance Financing	$	52	$	—
Common stock issued from conversion of warrants	$	2	$	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7

JAGUAR HEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Business

Jaguar Health, Inc. (“Jaguar” or the “Company”) was founded in San Francisco, California, as a Delaware corporation on June 6, 2013 (inception). The Company was a majority-owned subsidiary of Napo Pharmaceuticals, Inc. (“Napo”) until the close of the Company's initial public offering on May 18, 2015. The Company was formed to develop and commercialize first-in-class prescription and non-prescription products for companion animals.

On July 31, 2017, Jaguar completed a merger with Napo pursuant to the Agreement and Plan of Merger dated March 31, 2017, by and among Jaguar, Napo, Napo Acquisition Corporation (“Merger Sub”), and Napo's representative (the “Merger Agreement”). In accordance with the terms of the Merger Agreement, upon the completion of the merger, Merger Sub merged with and into Napo, with Napo surviving as the wholly owned subsidiary (the “Merger” or “Napo Merger”). Immediately following the Merger, Jaguar changed its name from “Jaguar Animal Health, Inc.” to “Jaguar Health, Inc.” Napo now operates as a wholly owned subsidiary of Jaguar focused on human health, including the ongoing development of crofelemer and commercialization of Mytesi.

On March 15, 2021, Jaguar established Napo EU S.p.A (which changed its name in December 2021 to “Napo Therapeutics”) in Milan, Italy as a subsidiary of Napo. Napo Therapeutics’ core mission is to provide access to crofelemer in Europe to address significant rare/orphan disease indications, including, initially, two key orphan target indications: short bowel syndrome (“SBS”) with intestinal failure and congenital diarrheal disorders (“CDD”).

The Company manages its operations through two segments – human health and animal health – and is headquartered in San Francisco, California.

Nasdaq Communication and Compliance

Minimum Bid Price Requirement

On May 10, 2023, the Listing Qualifications Staff (the “Staff”) of The Nasdaq Stock Market LLC issued to the Company a notification citing its failure to comply with the $1.00 minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2) (the "Minimum Bid Price Requirement"). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was initially provided 180 calendar days, or until November 6, 2023, and was subsequently granted an additional 180 calendar day period, or until May 6, 2024, to regain compliance with the Minimum Bid Price Requirement. However, on February 15, 2024, the Company received a delisting determination letter from the Staff in accordance with Nasdaq Listing Rule 5810(c)(3)(A)(iii) due to the Company’s securities having a closing bid price of $0.10 or less for ten consecutive trading days. Accordingly, on February 29, 2024, the Company requested a hearing before the Nasdaq Hearings Panel (the “Panel”) which automatically stayed the delisting of the Company’s common stock from Nasdaq pending a decision from the Panel. Pursuant to a review process, the Panel provided notice on April 5, 2024 granting the Company’s request to extend the period for it to regain compliance with the Minimum Bid Price Requirement until August 13, 2024.

Liquidity and Going Concern

The Company, since its inception, has incurred recurring operating losses and negative cash flows from operations and has an accumulated deficit of $317.2 million as of March 31, 2024. The Company expects to incur substantial losses and negative cash flows in future periods. Further, the Company’s future operations, which include the satisfaction of current obligations, are dependent on the success of the Company’s ongoing development and commercialization efforts, as well as securing of additional financing and generating positive cash flows from operations. There is no assurance that the Company will have adequate cash balances to maintain its operations.

8

Although the Company plans to finance its operations and cash flow needs through equity and/or debt financing, collaboration arrangements with other entities, license royalty agreements, as well as revenue from future product sales, the Company does not believe its current cash balances are sufficient to fund its operating plan through one year from the issuance of these unaudited condensed consolidated financial statements. There can be no assurance that additional funding will be available to the Company on acceptable terms, or on a timely basis, if at all, or that the Company will generate sufficient cash from operations to adequately fund operating needs. If the Company is unable to obtain an adequate level of financing needed for the long-term development and commercialization of the products, the Company will need to curtail planned activities and reduce costs. Doing so will likely have an adverse effect on the ability to execute the Company’s business plan; accordingly, there is substantial doubt about the ability of the Company to continue in existence as a going concern. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

2. Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and on a basis consistent with the annual consolidated financial statements, and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair presentation of the periods presented. These interim financial results are not necessarily indicative of the results to be expected for the year ending
December 31, 2024, or for any other future annual or interim period. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Annual Report on Form 10-K for the year ended December 31, 2023. The condensed consolidated balance sheet at December 31, 2023 has been derived from the audited consolidated financial statements at that date, but does not include all disclosures, including notes, required by U.S. GAAP for complete financial statements.

There has been no material change to the Company's significant accounting policies during the three months ended March 31, 2024 as compared to the significant accounting policies described in Note 2 of the “Notes to Consolidated Financial Statements” in the Company's Annual Report on Form 10-K as of and for the year ended December 31, 2023, which was filed to SEC on April 1, 2024 and amended on April 17, 2024.

Except as noted above, the unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to present fairly the financial position as of March 31, 2024, results of operations for the three months ended March 31, 2024 and 2023, changes in convertible preferred stock and stockholders' equity for the three months ended March 31, 2024 and 2023, and cash flows for the three months ended March 31, 2024 and 2023. The interim results are not necessarily indicative of the results for any future interim periods or for the entire year.

Principles of Consolidation

The consolidated financial statements have been prepared in accordance with U.S. GAAP and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) and include the accounts of the Company and its subsidiaries with controlling interest. All inter-company transactions and balances have been eliminated in consolidation. The reporting currency of the Company is the U.S dollar.

Non-controlling interest

The Company consolidates the results of Napo Therapeutics, which was owned 88% by the Company and 12% by private investors as of March 31, 2024, and December 31, 2023. The potential voting rights with a certainty of being exercised in its shares are included in the ownership percentage.

9

Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company’s management to make judgments, assumptions and estimates that affect the amounts reported in its unaudited consolidated financial statements and the accompanying notes. The accounting policies that reflect the Company’s more significant estimates and judgments and that the Company believes are the most critical to aid in fully understanding and evaluating its reported financial results are the valuation of stock options, restricted stock units (“RSUs”), hybrid instruments designated at fair value option (“FVO”), warrant liabilities, acquired in-process research and development (“IPR&D”), and useful lives assigned to long-lived assets; impairment assessment of non-financial assets; valuation adjustments for excess and obsolete inventory; allowance for doubtful accounts; deferred taxes and valuation allowances on deferred tax assets; evaluation and measurement of contingencies; and recognition of revenue, including estimates for product returns. Those estimates could change, and as a result, actual results could differ materially from those estimates.

Cash

The Company’s cash on deposit may exceed United States federally insured limits at certain times during the year. The Company maintains cash accounts with certain major financial institutions in the United States. The Company does not have cash equivalents as of March 31, 2024, and December 31, 2023.

Accounts Receivable

Accounts receivable is recorded net of allowances for discounts for prompt payment and credit losses.

The Company utilizes a loss rate approach in determining its lifetime expected credit losses on receivables from customers. This method calculates an estimate of credit losses based on historical experience, credit quality, age of the accounts receivable balances, and current and forecasted economic and business conditions that may affect a customer’s ability to pay. In determining the loss rates, the Company evaluates information related to its historical losses, adjusted for existing conditions and further adjusted for the period of time that can reasonably be forecasted. The facts and circumstances as of the balance sheet date are used to adjust the estimate for periods beyond those that can reasonably be forecasted.

The past due status of accounts receivable is determined based on the contractual due dates for payments. Receivable is deemed past due when payment hasn’t been received 30 days after the contractual due date. The credit loss allowance was immaterial as of March 31, 2024, and December 31, 2023. The corresponding expense for the credit loss allowance is reflected in general and administrative expenses.

Current Expected Credit Losses

The Company recognizes an allowance for credit losses for financial assets carried at amortized cost to present the net amount expected to be collected as of the balance sheet date. Such allowance is based on credit losses that are expected to arise over the contractual term of the asset, which includes consideration of historical credit loss information adjusted for current conditions and reasonable and supportable forecasts.

Changes in the allowance for credit losses are recorded as provision of (or reversal of) credit loss expense. Assets are written off when the Company determines that such are deemed uncollectible. Write-offs are recognized as a deduction from the allowance for credit losses. Expected recoveries of amounts previously written off, not to exceed the aggregate of the amount previously written off, are included in determining the necessary allowance at the balance sheet date.

Concentrations

Cash is the financial instrument that potentially subjects the Company to a concentration of credit risk as cash is deposited with a bank and cash balances are generally in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits.

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For the three months ended March 31, 2024, and 2023, substantially all of the Company’s revenue was derived from the sale of Mytesi. In looking at sales by the Company to specialty pharmacies whose net revenue percentage of total net revenue was equal to or greater than 10%, for fiscal years 2024 and 2023, the Company earned Mytesi revenue primarily from three specialty pharmacies located in the United States, respectively. Revenue earned from each major customer as a percentage of total revenue is as follows:

	Three Months Ended
	March 31,
	2024		2023
Customer 1	31	%	25	%
Customer 2	54	%	54	%

The Company is subject to credit risk from its accounts receivable related to its sales. The Company generally does not perform evaluations of customers' financial condition and generally does not require collateral. Accounts receivable balance of the significant customers as a percentage of total accounts receivable is as follows:

	March 31,		December 31,
	2023		2023
Customer 1	30	%	32	%
Customer 2	56	%	57	%

The Company is subject to concentration risk from its suppliers. The Company sources raw material used to produce the active pharmaceutical ingredient (“API”) in Mytesi from two suppliers and is dependent on a single third-party contract manufacturer as well for the supply of finished products for commercialization.

Other Risks and Uncertainties

The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations including, but not limited to, war, rapid technological change, obtaining second source suppliers and manufacturers, regulatory approval from the US Food and Drug Administration (“FDA”) or other regulatory authorities, the results of clinical trials and the achievement of milestones, market acceptance of the Company’s product candidates, competition from other products and larger companies, protection of proprietary technology, strategic relationships and dependence on key individuals.

Other Global Events

Macroeconomic conditions around the world are subject to constant change, influenced by several factors, including persistently high inflation, structural weaknesses in the labor market, low productivity growth, and adverse weather conditions. The UK's recession has severely impacted Europe's decline. The Company’s subsidiary in Italy, Napo Therapeutics, has not generated any revenue for the three months ended March 31, 2024. Despite these recent global events, there have been no significant changes in the subsidiary's operations.

Fair Value

The Company’s financial instruments include accounts receivable, net, other receivable, accounts payable, accrued liabilities, operating lease liability and debt. The recorded carrying amount of accounts receivable, accounts payable and accrued liabilities reflect their fair value due to their short-term nature. Other financial liabilities are initially recorded at fair value, and subsequently measured at either fair value or amortized cost using the effective interest method. See Note 3 for the fair value measurements.

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Fair Value Option

ASC 825-10, Financial Instruments, provides FVO election that allows companies an irrevocable election to use fair value as the initial and subsequent accounting measurement attribute for certain financial assets and liabilities. ASC 825-10 permits entities to elect to measure eligible financial assets and liabilities at fair value on an ongoing basis. Unrealized gains and losses on items for which the FVO has been elected are reported in earnings. The decision to elect the FVO is determined on an instrument-by-instrument basis, must be applied to an entire instrument and is irrevocable once elected. Assets and liabilities measured at fair value pursuant to ASC 825-10 are required to be reported separately from those instruments measured using another accounting method. In accordance with the options presented in ASC 825-10, the Company elected to present the aggregate of fair value and non-fair-value amounts in the same line item in the consolidated balance sheets and parenthetically disclose the amount measured at fair value in the aggregate amount. The fair values of the Company's financial instruments reflect the amounts that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The fair value estimates presented in these financial statements are based on information available to the Company as of March 31, 2024, and December 31, 2023.

Inventory

Inventory is stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method. Cost is initially recorded at the invoiced amount of raw materials or API, including the sum of qualified expenditures and charges in bringing the inventory to its existing condition and location. The Company calculates inventory valuation adjustments when conditions indicate that net realizable value is less than cost due to physical deterioration, usage, obsolescence, reductions in estimated future demand or reduction in selling price. Inventory write-downs are measured as the difference between the cost of inventory and net realizable value. The Company did not have allowance for inventory obsolescence as of March 31, 2024, and December 31, 2023.

Prelaunch Inventory

The Company’s policy is to capitalize costs for prelaunch inventories within the drug development phase that evidence that the product’s reasonably likely critical attributes for success are present and feasible, and the key causes of failures are absent based on management’s assumptions. The costs that can be capitalized for pre-launch inventory are recorded as “Prepayments and Other Assets”.

Property and Equipment

Land is stated at cost, reflecting the fair value of the property at July 31, 2017, the date of the Napo merger. Equipment is stated at cost, net of accumulated depreciation. Equipment begins to be depreciated when it is placed into service. Depreciation is calculated using the straight-line method over estimated useful lives ranging between three to ten years.

Expenditures for repairs and maintenance of assets are charged to expense as incurred. Costs of major additions and betterments are capitalized and depreciated on a straight-line basis over their estimated useful lives. Upon retirement or sale, the cost and related accumulated depreciation of assets disposed of are removed from the accounts and any resulting gain or loss is included in the unaudited condensed consolidated statements of operations.

Software Developed for Internal Use

The Company capitalizes the costs of developing software for internal use. These costs include both purchased software and internally developed software. Costs of developing software are expensed until technological feasibility has been established. Thereafter, all costs are capitalized and are carried at the lower of unamortized cost or net realizable value. Internally developed and purchased software costs are generally amortized over five years.

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Long-lived Assets

The Company regularly reviews the carrying value and estimated lives of all of its long-lived assets, including property and equipment and definite-lived intangible assets, to determine whether indicators of impairment exist that warrant adjustments to carrying values or estimated useful lives. The determinants used for this evaluation include management’s estimate of the asset’s ability to generate positive income from operations and positive cash flow in future periods as well as the strategic significance of the assets to the Company’s business objectives. If the Company determines that events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable, the Company evaluates the realizability of its long-lived assets (asset group) based on a comparison of projected undiscounted cash flows from use and eventual disposition with the carrying value of the related asset. Any write-downs (which are measured based on the difference between the fair value and the carrying value of the asset) are treated as permanent reductions in the carrying amount of the assets (asset group).

The Company evaluated the carrying value of its internal use software costs as at December 31, 2023 in accordance with ASC 360-10, Impairment of Long-lived Assets to be Held or Used. Based on the evaluation, the Company determined that the internal use software costs – registry's carrying value as of December 31, 2023, were no longer recoverable and recorded a corresponding impairment loss. The impairment loss was calculated as the difference between the registry's carrying value and its estimated fair value on December 31, 2023. The fair value was determined using a discounted cash flow (“DCF”) model, a Level 3 evaluation technique under ASC 820, Fair Value Measurements. The DCF model utilized entity-specific assumptions regarding future sales volume, pricing and costs. These assumptions considered factors such as continuity of existing customer relationships, potential shifts in economic conditions and other relevant market influences. The net cash flows generated by the model were then discounted to present value using a rate reflective of the time value of money and the inherent use associated with the expected cash flows. The discount rate was based on the comparable debt instrument deemed appropriate by management. Given the changing market conditions, there is a reasonable possibility that the estimates used to determine the registry's fair value may require adjustments in the near future. Any such changes in assumptions could result in further impairment charges. The Company recognized an expense for the year ended December 31, 2023, and a corresponding reduction in the carrying value of the internal use software-registry as a result of the impairment.

None of the Company’s long-lived assets were deemed impaired as of March 31, 2024.

Indefinite-lived Intangible Assets

Acquired IPR&D are intangible assets acquired in the July 2017 Napo merger. Under ASC 805 Business Combination, IPR&D are initially recognized at fair value and classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. During the development period, these assets will not be amortized as charges to earnings; instead, these assets will be tested for impairment on an annual basis or more frequently if impairment indicators are identified. An impairment loss is measured based on the excess of the carrying amount over the asset’s fair value. The Company recorded no impairment for the three months ended March 31, 2024, and 2023.

Leases

The Company accounts for its leases in accordance with ASC 842, Leases.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. Because the interest rate implicit in lease contracts is typically not readily determinable, the Company utilizes its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received.

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The Company elected to include both the lease and non-lease components as a single component and account for it as a lease.

Lease Modification

ASC 842 defines lease modification as a change to the terms and conditions of a contract that results in a change in the scope of or the consideration for a lease. A lease modification can result in either a separate new contract that is accounted for separately from the original contract or a single modified contract.

The Company shall account for a modification to a contract as a separate contract when the modification grants the lessee an additional right of use not included in the original lease and the lease payments increase commensurate with the standalone price for the additional right of use, adjusted for the circumstances of the particular contract. When the Company concludes that a lease modification should be accounted for as a new contract that is separate and apart from the original lease, the new contract should be evaluated for whether it is a lease or contains an embedded lease. If the new contract is a lease or contains an embedded lease, the new lease should be accounted for as any other new lease. The new lease is recorded on the commencement date of the new lease, which is the date the lessee has access to the leased asset.

If a lease modification is not accounted for as a separate contract, the Company should reassess whether the contract contains a lease. If the modified contract is a lease or contains an embedded lease, a lessee should reallocate contract consideration, reassess the lease classification, remeasure the lease liability, and adjust the right-of-use asset.

Research and Development Expense

Research and development expense consists of expenses incurred in performing research and development activities including related salaries, clinical trials and related drug and non-drug product costs, contract services and other outside service expenses. Research and development expense is charged to operating expense in the period incurred.

Clinical Trial Accruals

Clinical trial costs are a component of research and development expenses. The Company accrues and expenses clinical trial activities performed by third parties based upon actual work completed in accordance with agreements established with clinical research organizations and clinical sites. The Company determines the costs to be recorded based upon validation with the external service providers as to the progress or stage of completion of trials or services and the agreed-upon fee to be paid for such services.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”).

The Company’s policy typically permits returns if the product is damaged, defective, or otherwise cannot be used when received by the customer if the product has expired. Returns are accepted for product that will expire within three months or that have expired up to one year after their expiration dates. Estimates for expected returns of expired products are based primarily on an ongoing analysis of our historical return patterns.

The Company recognizes revenue in accordance with the core principle of ASC 606 or when there is a transfer of control of promised goods or services to customers in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services.

The Company recognizes the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less.

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The Company does not adjust the amount of consideration for the effects of a significant financing component if, at contract inception, the expected period between the transfer of promised goods or services and customer payment is one year or less.

The Company has elected to treat shipping and handling activities as fulfillment costs.

Additionally, the Company elected to record revenue net of sales and other similar taxes.

Contracts and Agreements

The Company's Canalevia-CA1 and Neonorm products are primarily sold to distributors, who then sell the products to the end customers. Since 2021, the Company has entered into two distribution agreements with established distributors to distribute the Company’s animal health products in the United States. The distribution agreements and the related purchase orders together meet the contract existence criteria under ASC 606. The Company sells directly to its customers without the use of an agent.

Performance obligations

For animal health products sold by the Company, the single performance obligation identified above is the Company’s promise to transfer the Company’s animal health products to distributors based on specified payment and shipping terms in the arrangement. Product warranties are assurance-type warranties that do not represent a performance obligation. For the Company’s human health product, Mytesi, the single performance obligation identified above is the Company’s promise to transfer Mytesi to specialty pharmacies, based on specified payment and shipping terms as outlined in the Exclusive Distribution Agreement entered into by the Company and Cardinal Health as of January 16, 2019.

Transaction price

For contracts with Cardinal Health and other distributors, the transaction price is the amount of consideration to which the Company expects to collect in exchange for transferring the promised goods or services. The transaction price of Mytesi is the Wholesaler Acquisition Cost (“WAC”), and the transaction price of Canalevia-CA1 and Neonorm is the manufacturer’s list price, net of discounts, returns, and price adjustments.

Allocate transaction price

For contracts with Cardinal Health and other distributors, the entire transaction price is allocated to the single performance obligation contained in each contract.

Revenue recognition

For contracts with Cardinal Health, a single performance obligation is satisfied at a point in time, upon the free on board (“FOB”) terms of each contract when control, including title and all risks, has transferred to the customer.

Disaggregation of Product Revenue

Human

Sales of Mytesi are recognized as revenue at a point in time when the products are delivered to the wholesaler. Net revenues from the sale of Mytesi were $2.3 million and $1.9 million for the three months ended March 31, 2024, and 2023, respectively.

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Animal

The Company recognized Canalevia-CA1 products revenues of $40,000 and $28,000 for the three months ended March 31, 2024, and 2023, respectively and Neonorm revenues of $9,000 and $18,000 for the three months ended March 31, 2024, and 2023, respectively. Revenues are recognized at a point in time upon shipment, when title and control are transferred to the buyer. Sales of Canalevia-CA1, Neonorm Calf and Foal to distributors are made under agreements that may provide distributor price adjustments and rights of return under certain circumstances.

Contracts – Specialty Pharmacies

Effective October 1, 2020, the Company engaged a private company as an authorized specialty pharmacy provider of the Company’s Mytesi product. Under the Specialty Product Distribution Agreement, the Company shall supply the products to the private company’s specialty pharmacies directly, in such amounts as may be ordered. There is no minimum purchase or inventory requirement. The specialty pharmacies were authorized distributors of record for all National Drug Codes of Mytesi.

Effective April 20, 2021, the Company engaged another private company as an authorized specialty pharmacy provider of Mytesi. Under the Specialty Pharmacy Distribution and Services Agreement, the private company shall sell and dispense the Mytesi directly ordered from the Company at the agreed price to patients within the territories identified in the agreement.

The Company has entered into agreements with a total of five different specialty pharmacy chains that are authorized to provide Mytesi to patients.

Performance obligations

The single performance obligation is the Company’s promise to transfer Mytesi to specialty pharmacies, based on specified payment and shipping terms as outlined in the agreements.

Transaction price

The transaction price is the amount of consideration to which the Company expects to collect in exchange for transferring the promised goods or services. The transaction price of Mytesi is the WAC, net of estimated discounts, returns, and price adjustments.

Allocate transaction price

The entire transaction price is allocated to the single performance obligation contained in each contract.

Revenue recognition

The single performance obligation is satisfied at a point in time, upon the FOB terms of each contract when control, including title and all risks, has transferred to the customer.

Product Revenue

Sales of Mytesi are recognized as revenue at a point in time when the products are delivered to the specialty pharmacies. Net revenues from the sale of Mytesi to the specialty pharmacies were $2.0 million and $1.5 million for the three months ended March 31, 2024, and 2023, respectively.

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Collaboration Revenue

Revenue recognition for collaboration agreements requires significant judgment. The Company’s assessments and estimates are based on contractual terms, historical experience and general industry practice. Revisions in these values or estimations have the effect of increasing or decreasing collaboration revenue in the period of revision.

On September 24, 2018, the Company entered into a Distribution, License and Supply Agreement (“License Agreement”) with Knight Therapeutics ("Knight"). The License Agreement has a term of 15 years (with automatic renewals) and provides Knight with an exclusive right to commercialize current and future Jaguar human health products (including crofelemer, NP-300, and any product containing a proanthocyanidin or with an anti-secretory mechanism) in Canada and Israel. Knight forfeited its right of first negotiation for expansion to Latin America. Under the License Agreement, Knight is responsible for applying for and obtaining necessary regulatory approvals in the territory of Canada and Israel, as well as marketing, sales and distribution of the licensed products. Knight will pay a transfer price for all licensed products, and upon achievement of certain regulatory and sales milestones, the Company may receive payments from Knight in an aggregate amount of up to approximately $18.0 million, payable throughout the initial 15-year term of the agreement. The Company did not have any license revenues for the three months ended March 31, 2024, and 2023.

Modifications to Liability-classified Instruments

In accounting for debt modifications and exchange transactions, it is the Company’s policy to first determine whether it qualifies as a troubled debt restructuring (“TDR”) pursuant to the guidance provided in ASC 470-60. A debt modification or exchange transaction that is not within the scope of the ASC 470-60 is accounted for under ASC 470-50 to determine if the transaction is a mere modification or an extinguishment.

For the three months ended March 31, 2024, the Company have not entered amendments to the terms of the October 2020 Royalty Interest, December 2020 Royalty Interest and August 2022 Royalty Interest.

For the three months ended March 31, 2023, the Company entered into amendment on the terms of its October 2020 and December 2020 Purchase Agreements.

The cumulative impact of these amendments significantly modified the terms of the royalty interest resulting to extinguishments (see Note 7).

Modifications to Equity-classified Instruments

In accounting for modifications of equity-classified warrants, it is the Company’s policy to determine the impact by analogy to the share-based compensation guidance of ASC 718, Compensation - Stock Compensation (“ASC 718”). The model for a modified share-based payment award that is classified as equity and remains classified in equity after the modification is addressed in ASC 718-20-35-3. Pursuant to that guidance, the incremental fair value from the modification is recognized as an expense in the statements of operations to the extent the modified instrument has a higher fair value; however, in certain circumstances, such as when an entire class of warrants is modified, the measured increase in fair value may be more appropriately recorded as a deemed dividend, depending upon the nature of the warrant modification.

The Company did not modify any equity-classified warrants for the three months ended March 31, 2024, and 2023.

In accounting for amendments to preferred stock, it is the Company’s policy to measure the impact by analogy to ASC 470-50 in determining if such an amendment is an extinguishment or a modification. If the amendment results in an extinguishment, the Company follows the SEC staff guidance in ASC 260-10-S99-2 and ASC 470-20. If the amendment results in a modification, the Company follows the model in either ASC 718 or ASC 470-50, depending on the nature of the amendment.

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The Company did not modify any equity-classified preferred stock for the three months ended March 31, 2024, and 2023.

Stock-based Compensation

The Company's Stock Incentive Plan (see Note 11) provides for the grant of stock options, restricted stock and restricted stock unit awards. The Company measures stock awards granted to employees, non-employees and directors at estimated fair value on the date of grant and recognizes the corresponding compensation expense of the awards, net of estimated forfeitures, over the requisite service periods, which correspond to the vesting periods of the awards. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company issues stock awards with only service-based vesting conditions, and records compensation expense for these awards using the straight-line method.

The Company uses the grant date fair market value of its common stock to determine the grant date fair value of options granted to employees, non-employees and directors. The Company measures and recognizes compensation expense for all stock options and restricted stock units (“RSUs”) granted to its employees and directors based on the estimated fair value of the award on the grant date. The Company uses the Black-Scholes valuation model to estimate the fair value of stock option awards. The fair value is recognized as expense, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award, on a straight-line basis. The Company believes that the fair value of stock options granted to non-employees is more reliably measured than the fair value of the services received. The determination of the grant date fair value of options using an option pricing model is affected by the Company’s estimated common stock fair value and requires management to make a number of assumptions including the expected life of the option, the volatility of the underlying stock, the risk-free interest rate and expected dividends.

The Company estimates the fair value of stock options using the Black-Scholes option valuation model. The fair value of employee stock options is being amortized on a straight-line basis over the requisite service period of the awards. The fair market value of common stock is based on the closing price of the Company’s common stock as reported on the date of the grant.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.

The Company has adopted the provisions of ASC 740, Income Taxes Related to Uncertain Tax Positions. Under these principals, tax positions are evaluated in a two-step process. The Company first determines whether it is more-likely-than-not that a tax position will be sustained upon examination. If a tax position meets the more-likely-than-not recognition threshold, it is then measured to determine the amount of benefit to be recognized in the financial statements. The tax position is measured as the largest amount of benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement.

Foreign Currency Remeasurement and Translation

The functional currency of Napo Therapeutics is Euro. The Company follows ASC 830, Foreign Currency Matters (“ASC 830”). ASC 830 requires the assets, liabilities, and results of operations of a foreign operation to be measured using the functional currency of that foreign operation. Exchange gains or losses from remeasuring transactions and monetary accounts in a currency other than the functional currency are included in current earnings.

For certain subsidiaries, translation adjustments result from the process of translating the functional currency of subsidiary financial statements into the U.S. Dollar reporting currency. These translation adjustments are reported

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separately and accumulated in the unaudited condensed consolidated balance sheets as a component of accumulated other comprehensive loss.

Comprehensive Loss

The Company follows ASC 220, Comprehensive Income, which establishes standards for reporting and displaying comprehensive income and its components (revenue, expenses, gains and losses) in a full set of general-purpose financial statements.

For the three months ended March 31, 2024, the amount of other comprehensive gain from translation adjustments was $217,000.

For the three months ended March 31, 2023, the amount of other comprehensive loss from translation adjustments was $232,000.

Basic and Diluted Net Loss Per Share of Common Stock

Basic net loss per share of common stock is computed by dividing net loss attributable to common stockholders for the year by the weighted-average number of common stock outstanding during the year. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders for the year by the weighted-average number of common stock, including potential dilutive shares of common stock assuming the dilutive effect of potential dilutive securities. For years in which the Company reports a net loss, diluted net loss per share is the same as basic net loss per share, because their impact would be anti-dilutive to the calculation of net loss per share. Diluted net loss per share of common stock is the same as basic net loss per share of common stock for the months ended March 31, 2024, and 2023.

Recent Accounting Pronouncements

There are no recent accounting pronouncements that are expected to have a material impact on the Company’s financial statements and related disclosures at March 31, 2024.

3. Fair Value Measurements

ASC 820, Fair Value Measurements, defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

● Level 1 – Observable inputs such as quoted prices (unadjusted) for identical instruments in active markets.

● Level 2 – Observable inputs such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-derived valuations whose significant inputs are observable.

● Level 3 – Unobservable inputs that reflect the reporting entity’s own assumptions.

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The following tables set forth the fair value of the Company’s financial instruments that were measured at fair value on a recurring basis as of March 31, 2024, and December 31, 2023.

	March 31, 2024
	(unaudited)
(in thousands)	Level 1		Level 2		Level 3		Total
Iliad	$	—	$	—	$	6,721	$	6,721
Uptown		—		—		7,880		7,880
Streeterville 2		—		—		7,118		7,118
Streeterville Note		—		—		10,242		10,242
Total fair value	$	—	$	—	$	31,961	$	31,961

	December 31, 2023
(in thousands)	Level 1		Level 2		Level 3		Total
Iliad	$	—	$	—	$	6,862	$	6,862
Uptown		—		—		7,473		7,473
Streeterville 2		—		—		6,815		6,815
Streeterville Note		—		—		9,793		9,793
Total fair value	$	—	$	—	$	30,943	$	30,943

The change in the estimated fair value of Level 3 liabilities is summarized below:

	Three Months Ended
	March 31, 2024
(in thousands)	Iliad		Uptown		Streeterville 2		Streeterville Note
Beginning fair value of Level 3 liability	$	6,862	$	7,473	$	6,814	$	9,792
Additions		—		—		—		—
Exchanges		(836)		—		(165)		—
Settlements		—		—		—		—
Change in fair value		695		407		469		450
Ending fair value of Level 3 liability	$	6,721	$	7,880	$	7,118	$	10,242

	Three Months Ended
	March 31, 2023
(in thousands)	Iliad		Uptown		Streeterville 2		Streeterville Note
Beginning fair value of Level 3 liability	$	—	$	—	$	—	$	7,839
Additions		—		—		—		—
Settlements		—		—		—		—
Change in fair value		—		—		—		359
Ending fair value of Level 3 liability	$	—	$	—	$	—	$	8,198

The fair value of the Streeterville Note recognized as a Level 3 liability at the date of issuance and as of March 31, 2024, amounted to $7.8 million and $10.2 million, respectively. The fair value of the remaining Level 3 liabilities at the extinguishment date and as of March 31, 2024, amounted to $20.2 million and $21.7 million. The fair values were based on the weighted average discounted expected future cash flows representing the terms of the notes, discounting them to their present value equivalents. The notes were classified as Level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including the Company’s own credit risk.

The Company determined and performed the valuations with the assistance of an independent valuation service provider. On a quarterly basis, the Company considers the main Level 3 inputs for hybrid instruments used derived as follows:

● Discount rate which was determined using a comparison of various effective yields on bonds as of the valuation date

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● Market indications for vouchers, which affect the Return Bonus from the sale of Tropical Disease Priority Review Voucher (“TDPRV”)

● Weighted probability of cash outflows which was estimated based on the entity's knowledge of the business and how the current economic environment is likely to impact the timing of the cash outflows, attributed to the different repayment features of the notes

The following table summarizes the quantitative information about the significant unobservable inputs used in Level 3 fair value measurement for hybrid instruments:

	Range of Inputs
	(probability-weighted average)		Relationship of unobservable inputs
Unobservable Inputs	2024	2023	to fair value
Risk Adjusted Discount Rate	8.57%-25.14% (25.14%)	9.02%-24.59% (24.59%)	If discount rate is adjusted to total of additional 100 basis points (bps), fair value would have decreased by $407,000. If discount rate is adjusted to total deduction of 100 bps, fair value would have increased by $407,000.
Sales Proceeds: Amount of comparable TDPRV	$67.5 million to $350 million ($100 million)	$67.5 million to $350 million ($100 million)	If expected cash flows by Management considered the lowest amount of market indications for vouchers, FV would have decreased by $1.4 million. If expected cash flows by Management considered the highest amount of market indications for vouchers, FV would have increased by $10.8 million.
Range of Probability for Timing of Cash Flows: Variations of the terms and conditions of the timing of cash flows, including settlement of the note principal, interest, penalties, and acceleration clause.	0.59%-73.27%	0.10%-73.27%	If expected cash flows by Management considered the Scenario with the least amount of indicated value, FV would have decreased by $216,000. If expected cash flows by Management considered the scenario with the greatest amount of indicated value, FV would have increased by $1.5 million.

For the additional notes designated at FVO that are not hybrid, the company considers only the discount rate which was determined using a comparison of various effective yields on bonds as of valuation date.

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The following table summarizes the quantitative information about the significant unobservable inputs used in Level 3 fair value measurement for the remaining instruments that are not classified as hybrid instruments:

	Range of Inputs
	(probability-weighted average)		Relationship of unobservable inputs
Unobservable Inputs	2024	2023	to fair value
Risk Adjusted Discount Rate	8.57%-27.14% (27.14%)	9.02%-26.59% (26.59%)	If discount rate is adjusted to total of additional 100 basis points (bps), fair value would have decreased by $541,000. If discount rate is adjusted to total deduction of 100 bps, fair value would have increased by $555,000.

Fair Value Option

The Company elected to apply the FVO accounting to certain freestanding instruments and to the entire class of hybrid instruments, including structured notes, of which there are assessed embedded derivatives that would be eligible for bifurcation, to align the measurement attributes of those instruments under US GAAP and to simplify the accounting model applied to these financial instruments.

The valuations of these instruments were predominantly driven by the discount rate and the derivative features embedded within the instruments. The Company determined and performed the valuations of the freestanding and hybrid instruments with the assistance of an independent valuation service provider. The valuation methodology utilized is consistent with the income approach for estimating the fair value of the interest-bearing portion of the instruments and the related derivatives. Cash flows of the financial instruments in their entirety, including the embedded derivatives, are discounted at an appropriate rate for the applicable duration of the instrument. Interests on the interest-bearing portion of the instruments that are held to maturity and mark-to-market adjustments are aggregated in the change in fair value of freestanding and hybrid financial instruments designated at FVO in the unaudited condensed consolidated statements of operations. As of March 31, 2024, and December 31, 2023, the Company did not note any fair value movement on FVO liabilities attributable to any instrument-specific credit risk, which should be recorded in other comprehensive income (loss).

The following table summarizes the fair value and outstanding balance for items the Company accounts for under FVO:

(in thousands)	Fair value		Unpaid Principal Balance		Accrued Interest		Fair Value Over (Under) Outstanding Balance
At March 31, 2024
Iliad	$	6,721	$	6,392	$	3,885	$	(3,556)
Uptown		7,880		7,994		4,366		(4,480)
Streeterville 2		7,118		10,094		1,265		(4,241)
Streeterville Note		10,242		6,000		651		3,591

(in thousands)	Fair value		Unpaid Principal Balance		Accrued Interest		Fair Value Over (Under) Outstanding Balance
At December 31, 2023
Iliad	$	6,862	$	7,292	$	3,621	$	(4,051)
Uptown		7,473		7,994		4,058		(4,579)
Streeterville 2		6,815		10,273		950		(4,408)
Streeterville Note		9,793		6,000		546		3,247

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4. Balance Sheet Components

Inventory

Inventory at March 31, 2024, and December 31, 2023 consisted of the following:

	March 31,		December 31,
	2024		2023
(in thousands)	(unaudited)
Raw material	$	2,202	$	2,057
Work in process		6,126		6,517
Finished goods		692		615
Inventory	$	9,020	$	9,189

Prelaunch Inventory

Costs capitalized for the Company’s lyophilized drug amounting to $3.0 million and $2.8 million as of March 31, 2024, and December 31, 2023, are included in the prepayments and other assets account. The Company’s proof-of-concept (“POC”) data is expected to be completed by the end of 2024. Upon approval, the prelaunch inventory shall be reclassified as part of the Company’s inventory.

Property and Equipment, net

Property and equipment at March 31, 2024, and December 31, 2023 consisted of the following:

	March 31,		December 31,
	2024		2023
(in thousands)	(unaudited)
Land	$	396	$	396
Lab equipment		477		477
Software		63		63
Furniture and fixtures		18		18
Computers and peripherals		7		7
Total property and equipment at cost		961		961
Accumulated depreciation		(477)		(465)
Property and equipment, net	$	484	$	496

Depreciation and amortization expenses were $12,000 and $16,000 for the three months ended March 31, 2024 and 2023, respectively.

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Intangible Assets, net

Intangible assets consisted of the following:

	March 31,		December 31,
	2024		2023
(in thousands)	(unaudited)
Developed technology	$	25,000	$	25,000
Accumulated developed technology amortization		(11,111)		(10,694)
Developed technology, net		13,889		14,306
In-process research and development		4,800		4,800
In process research and development, net		4,800		4,800
Trademarks		300		300
Accumulated trademark amortization		(133)		(128)
Trademarks, net		167		172
Internal use software costs - registry		1,236		1,236
Accumulated internal use software costs impairment		(371)		(371)
Accumulated internal use software costs amortization		(432)		(370)
Internal use software costs - registry, net		433		495
Patents		361		361
Accumulated patents amortization		(23)		(18)
Patents, net		338		343
Total intangible assets, net	$	19,627	$	20,116

Amortization expense of finite-lived intangible assets was $489,000 and $488,000 for the three months ended March 31, 2024 and 2023, respectively.

The following table summarized the Company’s estimated future amortization expense of intangible assets with finite lives as of March 31, 2024:

(in thousands)	Amounts
Remainder of 2024	$	1,464
2025		1,952
2026		1,952
2027		1,952
2028		1,952
Thereafter		5,555
	$	14,827

5. Related Party Transactions

Board of Directors (“BOD”) Cash Compensation

The Company makes BOD cash compensation on a quarterly basis based on the Director Compensation Program. For the three months ended March 31, 2024, and 2023, the Company paid approximately $112,256 and $68,000 cash compensation to its directors, respectively.

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6. Commitments and Contingencies

Commitments

Leases

On April 6, 2021, the Company entered into an office lease agreement of approximately 10,526 square feet of office space in San Francisco, inclusive of office space covered under the previous sublease agreement. The term of the lease began on September 1, 2021 and will expire on February 28, 2025, unless terminated earlier. The lease had an early occupancy provision which entitled the Company to use a portion of the leased premises on June 1, 2021, free of rent obligation. In addition, the Company has the option to extend the lease for one three-year period after the expiration date. This option was not included as part of the lease term as the Company was not reasonably certain to exercise it, hence the lease term only includes the noncancellable period of three years plus the period of early occupancy.

The base rent under the lease were $42,000 monthly for the first 12 months, $43,000 monthly for the next 12 months and $45,000 for the last twelve months. The lease agreement only contained one lease component, which is the lease of the office space. Non-lease components such as payment of building operating costs and share in real property taxes were accounted for separately and were not considered as part of the total lease payments. The lease was classified as an operating lease.

On October 7, 2021, the Company entered into an agreement for the lease of office premises from November 1, 2021 to April 30, 2022, subject to automatic renewal for subsequent periods until terminated by either party. Base rent amounted to €10,000 or approximately $10,500. If the contract was not terminated within 12 months, the lease amount would be increased in line with the index of relevant inflation at each annual expiration of the start date of the contract. The lessor had the right to decline the renewal of the contract. Upon the happening of certain specified events, the lessor might immediately withdraw from the contract. The Company was required to leave the occupied spaces immediately in the same condition in which they were found in the event of contract termination or expiry. The Company paid deposit of €20,000 or approximately $21,000 to the lessor. On January 26, 2022, the lease agreement was amended whereby the term was extended by 20 months from May 1, 2022 to December 31, 2023. All other contract provisions remained the same.

On October 25, 2023, the Company entered into a second amendment to extend the lease of the office premises whereby Suite 600 shall extend until February 28, 2025, while, the Suite 400 shall be accounted for as a separate lease commencing on September 1, 2023, and expiring on August 31, 2030. Under the second lease amendment, the office lease premises were separately remeasured with Suite 400 measuring approximately 5,735 square feet while Suite 600 at 5,263 square feet. The base rent for Suite 400 was $18,000 monthly on the first two years, $18,000 monthly on the third and fourth year, $19,000 monthly on the fifth and sixth year, $20,000 monthly on the seventh and eighth year and $21,000 on the last year. Accordingly, the Suite 600’s base rent was amended into $22,000 monthly on its remaining terms. The option to renew at the end of the lease term was amended into one-to-five-year period from the original one-to-three-year period. All other contract provisions remained the same.

On October 10, 2021, the Company also entered into a short-term office lease in Milan, Italy. The term of the lease began on November 1, 2021, subject to automatic renewal equal to the present term until terminated by mutual agreement. On January 26, 2022, the lease agreement was amended whereby the term was extended by 20 months from May 1, 2022 to December 31, 2023. The Company recognized rent expense on a straight-line basis over the non-cancellable lease period. On September 12, 2023, the Company entered into a second lease amendment whereby the term was extended by another year from January 1, 2024 to December 31, 2024. The Company recognized rent expense on a straight-line basis over the non-cancellable lease period. On December 31, 2023, the Company elected not to renew the October 10, 2021, lease agreement.

On December 8, 2023, the Company entered into a two-year office lease in Milan, Italy. The term of the lease began on January 1, 2024 until December 31, 2025. The Company recognizes rent expense on a straight-line basis over the non-cancellable lease period.

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On December 22, 2021, the Company entered into an agreement for the lease of two separate vehicles for 48 months expiring on November 30, 2025. Total monthly lease payment amounted to €2,000 or approximately $2,100 payable in advance. The Company elected to include both the lease and non-lease components as a single component and account for it as a lease. The Company also paid a total deposit of €19,000 or approximately $20,000, exclusive of VAT. Early termination of the contracts requires the payment of specified amounts.

On January 25, 2022, the Company entered into an agreement for the lease of office premises from March 1, 2022 to December 31, 2023, subject to automatic renewal for subsequent periods until terminated by either party. Base rent amounted to €4,000 or approximately $4,200. A similar agreement was entered with the lessor for the lease of premises to be used as office space from November 1, 2022 to December 31, 2023, subject to automatic renewal for subsequent periods until terminated by either party. Base rent amounted to €3,817 or approximately $4,000. If the contracts are not terminated within 12 months, the lease amounts will be increased in line with the index of relevant inflation at each annual expiration of the start date of the contract. The lessor has the right to decline the renewal of the contracts. Upon the happening of certain specified events, the lessor may immediately withdraw from the contracts. The Company is required to leave the occupied spaces immediately in the same conditions in which they were found in the event of contract termination or expiry. The Company paid deposit of €9,000 or approximately $9,500 to the Lessor.

In May 2022, the Company entered into an agreement for the lease of one vehicle for 48 months expiring on April 30, 2026. Total monthly lease payment amounted to €833 or approximately $880 payable in advance. The Company elected to include both the lease and non-lease components as a single component and account for it as a lease. The Company also paid a total deposit of €21,000 or approximately $22,000, exclusive of VAT. Early termination of the contracts requires the payment of specified amounts.

In October 2022, the Company entered into an agreement for the lease of three vehicles for 48 months expiring on September 30, 2026. Total monthly lease payment amounted to €2,094 or approximately $2,200 payable in advance. The Company elected to include both the lease and non-lease components as a single component and account for it as a lease.

In November 2022, the Company entered into an agreement for the lease of two vehicles for 48 months expiring on October 31, 2026. Total monthly lease payment amounted to €1,459 or approximately $1,500 payable in advance. The Company elected to include both the lease and non-lease components as a single component and account for it as a lease.

The table below provided additional details of the office space lease presented in the unaudited condensed consolidated balance sheet as of March 31, 2024, and December 31, 2023:

	March 31,		December 31,
	2024		2023
(in thousands)	(unaudited)
Operating lease - right-of-use asset	$	1,289	$	1,176
Operating lease liability, current		469		348
Operating lease liability, net of current portion		873		886
Total	$	1,342	$	1,234
Weighted-average remaining life (years)		4.27		4.76
Weighted-average discount rate		19.74%		21.34%

Lease cost included in general and administrative expenses in the unaudited condensed consolidated statements of operations for the three months ended March 31, 2024, and 2023 was approximately $276,000 and $209,000.

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For the three months ended March 31, 2024, cash recognized for operating lease liabilities under operating cash flows amounted to $336,000.

For the three months ended March 31, 2023, cash paid for operating lease liabilities recognized under operating cash flows amounted to $53,000.

Non-cash investing and financing activities for the three months ended March 31, 2024, and 2023, include addition to right-of-use asset obtained from new and modified operating liabilities, amounted to $221,000 and $30,000, respectively.

The following table summarizes the undiscounted cash payment obligations for operating lease liability as of March 31, 2024.

	March 31,
	2024
(in thousands)	(unaudited)
Remainder of 2024	$	656
2025		382
2026		254
2027		235
2028		242
2029		249
2030		105
Total undiscounted operating lease payments		2,123
Imputed interest expenses		(781)
Total operating lease liability		1,342
Less: Operating lease liability, current		469
Operating lease liability, net of current portion	$	873

Purchase Commitment

On September 3, 2020, the Company entered into a manufacturing and supply agreement (the “Agreement”) with Glenmark Life Sciences Limited (“Glenmark”), pursuant to which Glenmark will continue to serve as the Company’s manufacturer of crofelemer for use in Mytesi, the Company’s human prescription drug product approved by the FDA, and for other crofelemer-based products manufactured by the Company or its affiliates for human or animal use. The term of the Agreement is approximately 2.5 years (i.e., until March 31, 2023) and may be extended for successive two-year renewal terms upon mutual agreement between the parties thereto. ¹Pursuant to the terms of the Agreement, Glenmark will supply crofelemer to the Company. The Agreement contains provisions regarding the rights and responsibilities of the parties with respect to manufacturing specifications, forecasting and ordering, delivery arrangements, payment terms, confidentiality and indemnification, as well as other customary provisions. The Agreement includes a commitment for the purchase from Glenmark of a minimum quantity of 300 kilograms of crofelemer per year, pro-rated for partial years, where the Company may be obligated to pay any shortfall. Either party may terminate the Agreement for any reason with 12 months prior written notice to the other party. In addition, either party may terminate the Agreement upon written notice as a result of a material breach of the Agreement that remains uncured for a period of 90 days. If the Company terminates the Agreement as a result of a material breach caused by Glenmark, the Company will not be obligated to pay for any minimum quantity shortfall. As of March 31, 2024, the remaining commitment is 500 kilograms.

Master Services Agreement (“MSA”)

On October 5, 2020, the Company entered into an MSA for clinical research organization services (the “2020 MSA”) and a service order under such 2020 MSA with Integrium, LLC (“Integrium”). The service order covers the Company’s planned upcoming pivotal Phase 3 clinical trial for cancer-therapy related diarrhea. As consideration for its

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services, the Company would pay Integrium a total amount of up to approximately $12.4 million, later reduced to approximately $6.0 million, that would be paid over the term of the engagement and based on the achievement of certain milestones. The 2020 MSA will terminate upon the satisfactory performance of all services to be provided thereunder unless earlier terminated by the parties. For the three months ended March 31, 2024, and 2023, the Company paid Integrium $504,674 and $498,000 respectively.

Asset Transfer and Transition Commitment

On September 25, 2017, the Company entered into the Termination, Asset Transfer and Transition Agreement dated September 22, 2017 with Glenmark. As a result of the agreement, the Company now controls commercial rights for Mytesi for all indications, territories and patient populations globally, and also holds commercial rights to the existing regulatory approvals for crofelemer in Brazil, Ecuador, Zimbabwe and Botswana. In exchange, the Company agrees to pay Glenmark 25% of any payment it receives from a third party to whom the Company grants a license or sublicense or with whom the Company partners in respect of, or sells or otherwise transfers any of the transferred assets, subject to certain exclusions, until Glenmark has received a total of $7.0 million. For the three months ended March 31, 2024,no payment has been made to Glenmark. For the three months ended March 31, 2023, the Company paid Glenmark $1.9 million.

Revenue Sharing Commitment Update

On December 14, 2017, the Company announced its entry into a collaboration agreement with Seed Mena Businessmen Services LLC (“SEED”) for Equilevia™, the Company's non-prescription, personalized, premium product for total gut health in equine athletes. According to the terms of the Agreement, the Company will pay SEED 15% of total revenue generated from any clients or partners introduced to the Company by SEED in the form of fees, commissions, payments or revenue received by the Company or its business associates or partners, and the agreed-upon revenue percentage increases to 20% after the first million dollars of revenue. In return, SEED will provide the Company access to its existing United Arab Emirates (“UAE”) network and contacts and assist the Company with any legal or financial requirements. The agreement became effective on December 13, 2017 and will continue indefinitely until terminated by either party pursuant to the terms of the Agreement. No payments have been made to date.

Joint Venture - Magdalena Biosciences, Inc.

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

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The Company accounted for its 40% investment in Magdalena under the equity method. The summarized income statement information for the three months ended March 31, 2024 of Magdalena is as follows:

	Three months ended
	March 31,
	2024
(in thousands)	(unaudited)
Revenue	$	—
Operating expenses		(40)
Loss before income tax		(40)
Income tax expense		—
Net loss	$	(40)
Net loss attributable to the Company	$	(16)

Securities Purchase and Licensing Agreement

On March 18, 2024, the Company entered into a privately negotiated securities purchase agreement with Gen Ilac Ve Saglik Urunleri Sanayi Ve Ticaret, A.S., pursuant to which the Company issued 16,666,666 shares of the Company’s common stock at a price of $0.12 per share for gross proceeds of approximately $2.0 million. The sale of the securities was consummated in connection with the licensing transaction covering the exclusive license and commercialization agreement for the Company's FDA-approved prescription drug Crofelemer with purchasers in certain countries within Eastern Europe.

The Company determined that the issuance of shares and the grant of license should be accounted for as a single arrangement under ASC 606 Revenue from Contracts with Customers. The fair value of the common stock issued was excluded from the consideration allocated to the revenue unit of account following the separation and initial measurement requirements. The deferred revenue amounting to $850,000 will be recognized as revenue evenly over a period of 5 years which represents the approximate term of the license period considering the expiration dates of the licensed patents.

Contingencies

From time to time, the Company may become a party to various legal actions, both inside and outside the U.S., arising in the ordinary course of its business or otherwise. The Company accrues amounts, to the extent they can be reasonably estimated, that the Company believes will result in a probable loss (including, among other things, probable settlement value), to adequately address any liabilities related to legal proceedings and other loss contingencies. A loss or a range of loss is disclosed when it is reasonably possible that a material loss will incur and can be estimated, or when it is reasonably possible that the amount of a loss, when material, will exceed the recorded provision. The Company did not have any material accruals for any currently active legal action in its unaudited condensed balance sheets as of March 31, 2024, as the Company could not predict the ultimate outcome of these matters, or reasonably estimate the potential exposure.

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7. Debt

Notes payable at March 31, 2024, and December 31, 2023 consisted of the following:

	March 31,		December 31,
	2024		2023
(in thousands)	(unaudited)
Notes designated at Fair Value Option	$	31,961	$	30,943
Royalty Interest*		—		5,635
Insurance Financing		52		172
Tempesta Note		100		150
Total		32,113		36,900
Less: unamortized discount and debt issuance costs		—		(1,040)
Note payable, net of discount	$	32,113	$	35,860
Notes payable - non-current, net	$	21,719	$	30,993
Notes payable - current, net	$	10,394	$	4,867
Weighted average interest rate on short-term borrowings		3.24%		5.04%

*Notes with royalty interest not designated at Fair Value Option.

The Company paid $9,000 and $6,000 interest for its debt for the three months ended March 31, 2024, and 2023, respectively.

Future maturities of the notes payable not designated at FVO as of March 31, 2024 are as follows:

	Amounts
(in thousands)	(unaudited)
2025	$	10,394
2026		21,719
Total	$	32,113

Future maturities are based on contractual minimum payments. Timing of maturities may fluctuate based on future revenue.

Sale of Future Royalty Interest

October 2020 Purchase Agreement

On October 8, 2020, the Company entered into another royalty interest purchase agreement (the “October 2020 Purchase Agreement”) with Iliad Research and Trading, L.P. (“Iliad”), pursuant to which the Company sold to Iliad a royalty interest entitling Iliad to receive $12.0 million of future royalties on sales of Mytesi and certain up-front license fees and milestone payments from licensees and/or distributors (the “Royalty Repayment Amount”) for an aggregate purchase price of $6.0 million.

Until such time as the Royalty Repayment Amount has been paid in full, the Company will pay Iliad 10% of the Company’s net sales on included products and 10% of worldwide revenues related to upfront licensing fees and milestone payments from licensees and/or distributors, but specifically excluding licensing fees and/or milestone payments that are reimbursements of clinical trial expenses (the “Royalty Payments”). Beginning on the six-month anniversary of the delivery of the October 2020 Purchase Agreement to the Company (the “Purchase Price Date”) and continuing until the 12-month anniversary of the Purchase Price Date, the monthly Royalty Payment shall be the greater of (a) $250,000, and (b) the actual Royalty Payment amount Iliad is entitled to for such month. Beginning on the 12-month anniversary of the Purchase Price Date and continuing until 18-month anniversary of the Purchase Price Date, the monthly Royalty Payment shall be the greater of (a) $400,000 and (b) the actual Royalty Payment amount Iliad is

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entitled to for such month. Beginning on the 18-month anniversary of the Purchase Price Date and continuing until 24-month anniversary of the Purchase Price Date, the monthly Royalty Payment shall be the greater of (a) $600,000 and (b) the actual Royalty Payment amount Iliad is entitled to for such month. Beginning on the 24-month anniversary of the Purchase Price Date and continuing until the Royalty Repayment Amount has been paid in full, the monthly Royalty Payment shall be the greater of (a) $750,000, and (b) the actual Royalty Payment amount Iliad is entitled to for such month.

The Royalty Interest amount of $12.0 million was classified as debt, net of a $6.0 million discount, at initial recognition. Under ASC 470-10-35-3, royalty payments to Iliad will be amortized under the interest method per ASC 835-30. Because there is no set interest rate, and because the royalty payments are variable, the discount rate is variable. After each royalty payment, the Company will use a prospective method to determine a new discount rate based on the revised estimate of remaining cash flows. The new rate is the discount rate that equates the present value of the revised estimate of remaining cash flows with the carrying amount of the debt, and it will be used to recognize interest expense for the remaining periods. At issuance, based on projected cash outflows from future revenue streams, the discount rate was 34.51%.

Pursuant to the October 2020 Purchase Agreement, if the weekly volume weighted average price (“VWAP”) of the Company’s common stock is not equal or greater than the minimum VWAP of $0.9105 at least twice during each calendar month during the six-month period beginning on November 1, 2020, then the Royalty Repayment Amount will be automatically increased by $6.0 million at the end of such six-month period. During the observation period starting November 1, 2020, the Company’s weekly VWAP failed to reach the minimum VWAP of $0.9105 and on November 13, 2020, the Company concluded that the contingent clause has been met, warranting an additional $6.0 million Royalty Repayment Amount, to be added to the outstanding balance commencing on May 10, 2021 for the purpose of cash interest calculation. The change in the Royalty Repayment Amount was accounted for as a debt modification and resulted in a new discount rate of 45.42%.

On April 13, 2021, the Company entered into an exchange agreement with Iliad, pursuant to which the parties agreed to partition $3.0 million from the original outstanding balance of the royalty interest and exchange for 7,843 shares of the Company’s common stock. The exchange agreement was accounted for as a modification and resulted in a new discount rate of 77.09%.

On February 11, 2022, the Company entered into an exchange agreement with Iliad, pursuant to which the parties agreed to partition $2.4 million from the outstanding balance of the royalty interest and exchange for 23,117 shares of the Company’s common stock.

On March 2, 2022, the Company entered into an exchange agreement with Iliad, pursuant to which the parties agreed to partition $1.1 million from the outstanding balance of the royalty interest and exchange for 32,333 shares of the Company’s common stock.

On March 4, 2022, the Company entered into an exchange agreement with Iliad, pursuant to which the parties agreed to partition $800,000 from the outstanding balance of the royalty interest and exchange for 26,667 shares of the Company’s common stock.

On March 9, 2022, the Company entered into an exchange agreement with Iliad, pursuant to which the parties agreed to partition $700,000 from the outstanding balance of the royalty interest and exchange for 24,667 shares of the Company’s common stock.

Because the period between the first and last exchanges occurred within a 12-month period and each was individually assessed as a modification, the debt terms that existed prior to the February 13 exchange was used in the application of the 10% test on the cumulative assessment performed. The exchanges were cumulatively accounted for as an extinguishment and resulted to a loss of $2.2 million.

On April 14, 2022, the Company entered into amendments (the “Royalty Interest Global Amendments”) to its existing royalty interests including the Royalty Interest in the original principal amount of $12.0 million under the

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October 2020 Royalty Interest. The amendment grants the Company at its sole discretion, the right to exchange from time to time, all or any portion of the Royalty Interests for shares of the Company’s common stock at a price per share equal to the Nasdaq Minimum Price (as defined in Nasdaq Listing Rule 5635(d)) as of date of the applicable exchange. Under the Royalty Interest Global Amendments, the Company’s ability to exchange the Royalty Interests for shares of the Company’s common stock is subject to certain limitations, on which the Company will not have such right and issue any common stock to investors if (a) the issuance of the Company’s common stock would cause investor’s beneficial ownership to exceed 4.99% of Company’s issued and outstanding common stock as of such date; (b) any of the exchange conditions has not been satisfied as of the applicable exchange date; and (c) the total cumulative number of shares of the Company’s common stock issued pursuant to the Royalty Interests would exceed the requirements of The Nasdaq Capital Market (including the rules related to the aggregation of offerings under Nasdaq Listing Rule 5635(d) if applicable) (the “Exchange Cap”), unless stockholder approval is obtained to issue more than the Exchange Cap. The Exchange Cap shall be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction.

On May 13, 2022, the Company entered into an exchange agreement with Iliad, pursuant to which the parties agreed to partition $400,000 from the outstanding balance of the royalty interest and exchange for 15,249 shares of the Company’s common stock.

On July 25, 2022, the Company entered into another exchange agreement with Iliad, pursuant to which the parties agreed to partition $750,000 from the outstanding balance of the royalty interest and exchange for 31,546 shares of the Company’s stock.

On November 18, 2022, the Company entered into another exchange agreement with Iliad, pursuant to which the parties agreed to partition $715,000 from the outstanding balance of the royalty interest and exchange for 978 shares of the Company’s stock.

On March 17 and 23, 2023, the Company entered into another exchange agreement with Iliad, pursuant to which the parties agreed to partition $992,000 and $227,000, respectively from the outstanding balance of the royalty interest and exchange for 14,533 and 3,733 shares, respectively of the Company’s stock.

The exchanges that occurred within the 12-month period prior to May 13, 2022 exchange were previously accounted for as extinguishment, therefore, cumulative assessment was not performed anymore.

On May 8, 2023, the Company entered into a standstill agreement (as amended, the “Standstill Agreement”) with Iliad, Uptown Capital, LLC (f/k/a Irving Park Capital, LLC) (“Uptown”) and Streeterville Capital, LLC (“Streeterville”, and together with Iliad and Uptown, collectively, “Investor”) to allow the Company to refrain from making royalty payments with respect to four outstanding royalty interests issued by the Company to Investor dated October 8, 2020, December 22, 2020, March 8, 2021, and August 24, 2022, respectively (each, a “Royalty Interest” and collectively, the “Royalty Interests”), including any royalty payments due and payable as of May 8, 2023 (the ”Standstill Date”), and refrain from buying, selling, or otherwise trading in the Company’s common stock for a period beginning on the Standstill Date and ending on the earliest of (a) the date that is six months following the Standstill Date (b) the date of the public announcement of the probability value in Jaguar’s OnTarget Phase 3 clinical trial of crofelemer for prophylaxis of cancer therapy-related diarrhea (c) and the date of any offering or sale of any debt or equity securities, including without limitation any at-the-market offering (the “Standstill Period”), but excluding any exempt issuances. As a material inducement and consideration for Investor’s agreement to enter into the Standstill Agreement, the Company issued (i) Iliad warrants to purchase up to 826,738 shares of the common stock, (ii) Uptown warrants to purchase up to 1,097,756 shares of the common stock, and (iii) Streeterville warrants to purchase up to 1,892,808 shares of the common stock, at an exercise price of $0.48 per share.

On June 28, 2023, the Company entered into the first amendment to the Standstill Agreement, pursuant to which the Standstill Agreement was amended to, among other things, permit (i) the Company to issue an aggregate of 105 shares of the Company’s Series H Convertible Preferred Stock to Investor in exchange for a $756,992 reduction in the outstanding balance of the December 2020 Royalty Interest and a $1,726,888 reduction in the outstanding balance of the August 2022 Royalty Interest (the “Exchange Transaction”) without triggering the termination of the Standstill

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Period, and (ii) Investor to (A) consummate the Exchange Transaction during the Standstill Period and (B) sell all shares of the Company’s common stock beneficially owned by Investor immediately prior to the consummation of the Exchange Transaction during the Standstill Period.

On June 30, 2023, the Company entered into a binding memorandum of understanding (the “Binding MOU”) with the Investor to modify the allocation of the warrants as set forth in the Standstill Agreement such that the Company issued (i) Iliad warrants to purchase up to 1,711,954 shares of the common stock and (ii) Uptown warrants to purchase up to 2,105,348 shares of the common stock, and no warrants were issued to Streeterville under the Standstill Agreement.

On August 14, 2023, the Company entered into an amendment (“the Second Amendment”) to the Standstill Agreement with Iliad and Uptown (together, “Standstill Investor”) to (i) permit the Company to offer and sell securities without triggering the termination of the Standstill Period, and (ii) remove the restriction on Standstill Investor’s ability to buy, sell, or otherwise trade in shares of the Company’s common stock during the Standstill Period.

On September 29, 2023, the Company entered into the Global Amendment No. 2 to the October 2020 Royalty Interest with Iliad, pursuant to which, beginning on January 1, 2026, the monthly Royalty Payment under the October 2020 Royalty Interest shall be the greater of (a) $750,000.00, and (b) the actual Royalty Payment amount Iliad is entitled to for such month pursuant to the terms of the October 2020 Royalty Interest. As a material consideration for Iliad’s agreement to enter into this amendment, the Company agreed to issue to Iliad warrants to purchase up to 232,500 shares of the Company’s common stock at an exercise price of $0.37 per share. Such warrants may be exercisable for cash or on a cashless basis at any time and from time to time during the period commencing on September 29, 2023 (the “Issuance Date”) and ending on the five-year anniversary of the Issuance Date. Pursuant to an analysis of the indicators provided in ASC 470-60-55-8, the Company is not deemed to be experiencing financial difficulty. The debt restructuring is therefore not considered a TDR.

The cumulative effect of the exchanges to the October 2020 Royalty Interest resulted in significant modifications and was accounted for as extinguishment. The Company recorded an extinguishment gain in the unaudited condensed consolidated statements of operations amounting to $2.0 million. The extinguishment triggered a remeasurement event under ASC 825-10 and created an election date on whether to account for the October 2020 Royalty Interest under the fair value option accounting (“FVO”).

The Company irrevocably elected to initially and subsequently apply the FVO accounting to the entire royalty interest. The Company used the valuation report from an independent valuation service provided to measure the reporting date fair value of the royalty interest.

On December 28, 2023, the Company entered into a privately negotiated exchange agreement with Iliad, pursuant to which the Company issued an aggregate of 4,875,000 shares of the Company’s Common Stocks to Iliad in exchange for a $789,000 reduction in the outstanding balance of the October 2020 Royalty Interest. The effect of the exchange was accounted for as a debt modification.

On January 29, 2024, Company entered into a privately negotiated exchange agreement with Iliad pursuant to which the Company issued an aggregate of 8,000,000 shares of the Company’s common stock to Iliad in exchange for a $836,000.00 reduction in the outstanding balance of the royalty interest dated October 8, 2020, Royalty Interest. The effect of the exchange was accounted for as a debt modification.

On March 31, 2024, and December 31, 2023, the fair value was determined to be $6.7 million and $6.9 million. For the three months ended March 31, 2024, the net loss in the fair value was $695,000. The net loss in fair value was recorded in the change in fair value of freestanding and hybrid financial instruments designated at FVO in the unaudited condensed consolidated statements of operations.

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December 2020 Purchase Agreement

On December 22, 2020, the Company entered into a royalty interest purchase agreement (the “December 2020 Purchase Agreement”) with Uptown Capital, LLC(f/k/a Irving Park Capital, LLC) (“Uptown”), a company affiliated with CVP, pursuant to which the Company sold to Uptown a royalty interest entitling Uptown to receive $12.0 million of future royalties on sales of Mytesi and certain up-front license fees and milestone payments from licensees and/or distributors (the “Royalty Repayment Amount”) for an aggregate purchase price of $6.0 million (the “December 2020 Royalty Interest”).

Until such time as the Royalty Repayment Amount has been paid in full, the Company will pay Uptown 10% of the Company’s Net Sales on Included Products and 10% of worldwide revenues related to upfront licensing fees and milestone payments from licensees and/or distributors, but specifically excluding licensing fees and/or milestone payments that are reimbursements of clinical trial expenses (the “Royalty Payments”). Beginning on the payment start date of March 8, 2024 and continuing until the 12-month anniversary of the Purchase Price Date, the monthly Royalty Payment shall be the greater of (a) $750,000, and (b) the actual Royalty Payment amount Uptown is entitled to for such month.

The December 2020 Royalty Interest amount of $12.0 million is classified as debt, net of a $6.0 million discount, at initial recognition. Under ASC 470-10-35-3, royalty payments to Uptown will be amortized under the interest method per ASC 835-30. Because there is no set interest rate, and because the royalty payments are variable, the discount rate is variable. After each royalty payment, the Company will use a prospective method to determine a new discount rate based on the revised estimate of remaining cash flows. The new rate is the discount rate that equates the present value of the revised estimate of remaining cash flows with the carrying amount of the debt, and it will be used to recognize interest expense for the remaining periods. At issuance, based on projected cash outflows from future revenue streams, the discount rate was 23.70%.

On April 14, 2022, under the Royalty Interest Global Amendments, the Company is granted at its sole discretion, the right to exchange from time to time, all or any of the Royalty Interest under the original principal amount of $12.0 million or any portion of the December 2020 Purchase Agreement for shares of the Company’s common stock at a price per share equal to the Nasdaq Minimum Price (as defined in Nasdaq Listing Rule 5635(d)) as of date of the applicable exchange, subject to certain limitations.

On February 8, 2023, the Company entered into an exchange agreement with Uptown, pursuant to which the parties agreed to partition $675,000 from the outstanding balance of the royalty interest. The parties further agreed to exchange the partitioned royalty for 150,000 shares of the Company’s stock.

On May 8, 2023, the Company entered into an exchange agreement with Uptown to (i) partition a new royalty interest in the royalty repayment amount of $1,073,807 from the outstanding balance of the royalty interest and exchange for 1,908,651 shares of the Company’s common stock.

On the same date, the Company entered into the Standstill Agreement as described further above, pursuant to which the Company may refrain from making royalty payments on the December 2020 Royalty Interest during the Standstill Period.

On September 29, 2023, the Company entered into the Global Amendment No. 2 to the December 2020 Royalty Interest with Uptown, pursuant to which, beginning on January 1, 2026, the monthly Royalty Payment under the December 2020 Royalty Interest shall be the greater of (a) $750,000.00, and (b) the actual Royalty Payment amount Uptown is entitled to for such month pursuant to the terms of the December 2020 Royalty Interest. As a material consideration for Uptown’s agreement to enter into this amendment, the Company agreed to issue to Uptown warrants to purchase up to 262,500 shares of the Company’s common stock at an exercise price of $0.37 per share. Such warrants may be exercisable for cash or on a cashless basis at any time and from time to time during the period commencing on September 29, 2023 (the “Issuance Date”) and ending on the five-year anniversary of the Issuance Date. Pursuant to an analysis of the indicators provided in ASC 470-60-55-8, the Company is not deemed to be experiencing financial difficulty. The debt restructuring is therefore not considered a TDR.

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On the same date, the Company entered into a privately negotiated exchange agreement with Uptown (the “Exchange Agreement”), pursuant to which the Company issued an aggregate of 118 shares of the Company’s newly authorized Series I Convertible Preferred Stock (the “Series I Preferred Stock” or “Preferred Stock”) to Uptown, at an effective exchange price per share equal to the market price (defined as the Minimum Price under Nasdaq Listing Rule 5635(d)) as of the date of the Exchange Agreement, in exchange for a $1,500,000.00 reduction in the outstanding balance of the December 2020 Royalty Interest (“Partitioned Royalty”).(the “Exchange Transaction”). Subject to the terms of the Series I Preferred Stock, each share of Series I Preferred Stock is convertible into shares of the Company’s Common Stock (the “Conversion Shares”).

The cumulative effect of the exchanges to the December 2020 Royalty Interest resulted in significant modifications and was accounted for as extinguishment. The Company recorded an extinguishment gain in the unaudited condensed consolidated statements of operations amounting to $2.7 million. The extinguishment triggered a remeasurement event under ASC 825-10 and created an election date on whether to account for the December 2020 Royalty Interest under the FVO accounting.

The Company irrevocably elected to initially and subsequently apply the FVO accounting to the entire royalty interest. The Company used the valuation report from an independent valuation service provided to measure the reporting date fair value of the royalty interest.

On March 31, 2024, and December 31, 2023 the fair value was determined to be $7.9 million and $7.5 million. For the three months ended March 31, 2024, the net loss in the fair value was $407,000. The net loss in fair value was recorded as loss included in the change in fair value of financial instruments and hybrid instrument designated at FVO in the unaudited condensed consolidated statements of operations.

March 2021 Purchase Agreement

On March 8, 2021, the Company entered into a purchase agreement (the “March 2021 Purchase Agreement”) with Streeterville Capital, LLC (“Streeterville”), a company affiliated with CVP, pursuant to which the Company sold a royalty interest entitling Streeterville to $10.0 million and any interest, fees, and charges as royalty repayment amount for an aggregate purchase price of $5.0 million (the “March 2021 Royalty Interest”). Interest will accrue on the royalty repayment amount at a rate of 5% per annum, compounding quarterly, and will increase to 10% per annum, compounding quarterly on the 12-month anniversary of the closing date.

The Company will be obligated to make minimum royalty payments on a monthly basis beginning at the earlier of (a) 36 months following the closing date or (b) 30 days following the satisfaction of all existing royalties to Streeterville, and its affiliates namely Iliad and Uptown, but not earlier than 18 months following the closing date in an amount equal to the greater of (i) $250,000 beginning on the royalty payment start date and continuing until either the royalty repayment amount has been paid in full or the 6-month anniversary of the royalty payment start date, $400,000 beginning on the 6-month anniversary of the royalty payment start date and continuing until either the royalty repayment amount has been paid in full or the 12-month anniversary of the royalty payment start date, $600,000 beginning on the 12-month anniversary of the royalty payment start date and continuing until either the royalty repayment amount has been paid in full or the 18-month anniversary of the royalty payment start date, $750,000 beginning on the 18-month anniversary of the royalty payment start date and continuing until the royalty repayment amount has been paid in full, and (ii) 10% of the Company’s net sales on included products, 10% of worldwide revenues related to upfront licensing fees and milestone payments from licensees and/or distributors but specifically excluding licensing fees and/or milestone payments that are reimbursements of clinical trial expenses or associated with the license of Included Products from the Company to Napo EU, including but not limited to the upfront fee payable by Napo EU to Napo for included products and Crofelemer for other indications; and 50% of royalties collected from licenses of the included products to third parties.

The March 2021 Royalty Interest amount of $10.0 million is classified as debt, net of a $5.0 million discount, at initial recognition. Under ASC 470-10-35-3, royalty payments to Streeterville will be amortized under the interest method per ASC 835-30. Because there is no set interest rate, and because the royalty payments are variable, the discount rate is variable. After each royalty payment, the Company will use a prospective method to determine a new

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discount rate based on the revised estimate of remaining cash flows. The new rate is the discount rate that equates the present value of the revised estimate of remaining cash flows with the carrying amount of the debt, and it will be used to recognize interest expense for the remaining periods. At issuance, based on projected cash outflows from future revenue streams, the discount rate was 19.36%.

On April 14, 2022, under the Royalty Interest Global Amendments, the Company is granted at its sole discretion, the right to exchange from time to time, all or any of the Royalty Interest under the original principal amount of $10.0 million of the March 2021 Purchase Agreement for shares of the Company’s common stock at a price per share equal to the Nasdaq Minimum Price (as defined in Nasdaq Listing Rule 5635(d)) as of date of the applicable exchange, subject to certain limitations.

On August 17, 2022, the Company entered into an exchange agreement (the “Royalty Interest Exchange Agreement”) with Streeterville to (i) partition a new royalty interest in the royalty repayment amount of $3.4 million (“Partitioned Royalty”) from the royalty interest of the March 2021 Purchase Agreement and then cause the outstanding balance of the royalty interest to be reduced by an amount equal to the initial outstanding balance of the Partitioned Royalty, and (ii) exchange (“Royalty Exchange”) the Partitioned Royalty for 153,333 shares of the Company’s common stock with a par value of $0.0001 in accordance with the term of the Royalty Interest Exchange Agreement.

On September 30, 2022, the Company entered into an exchange agreement with Streeterville, pursuant to which the parties agreed to partition $2.0 million from the outstanding balance of the royalty interest and exchange the partitioned royalty for 156,863 shares of the Company’s common stock. The exchange was accounted for as a debt modification and resulted to a reduction in the outstanding balance of the royalty interest amounting to $2.0 million.

On March 1, 2024, the Company entered into a privately negotiated exchange agreement with Streeterville, pursuant to which the Company issued an aggregate of 179 shares of Series J Preferred Stock to Streeterville in exchange for the surrender of the March 2021 Royalty Interest by Streeterville. Upon completion of the CVP Exchange Transaction, all outstanding balance of the March 2021 Royalty Interest was fully paid, and the March 2021 Royalty Interest was terminated.

The exchanges of Series J Preferred Stock were accounted for as extinguishment. Because the fair value of the common stock transferred is less than the carrying amount of the Series J Preferred Stock surrendered, the difference was credited to retained earnings and added to earnings available to common shareholders.

Interest expense was $448,000 and $420,000 for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, and December 31, 2023, the carrying value of the debt was $0 and $4.6 million, respectively.

August 2022 Purchase Agreement

On August 24, 2022, the Company entered into another royalty interest purchase agreement (the “August 2022 Purchase Agreement”) with Streeterville, pursuant to which the Company sold to Streeterville a royalty interest to receive $12.0 million (the “August 2022 Royalty Interest”) of future royalties on sales of Mytesi® (crofelemer) for any indications that could cannibalize crofelemer indications or any other chronic indication and certain up-front license fees and milestone payments from licensees and/or distributors for an aggregate purchase price of $4.0 million (“the Royalty Financing”). The Company will use the proceeds to support the ongoing pivotal phase 3 clinical trial of crofelemer for prophylaxis of diarrhea in adults receiving targeted cancer therapy. Interest will accrue on the Royalty Repayment Amount at a rate of 5% per annum from the closing of the Royalty Financing until the one-year anniversary of such closing and 10% per annum thereafter, simple interest computed on the basis of a 360-day year comprised of twelve 30-day months.

The Company will be obligated to make minimum royalty payments on a monthly basis beginning on January 1, 2024 in an amount equal to the greater of (A) $250,000 (which increases to $400,000 beginning 6 months following the closing of the Royalty Financing, $600,000 beginning 12 months following the closing of the Royalty Financing, and $750,000 beginning 18 months following the closing of the Royalty Financing) and (B) the royalty payments to which

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Investor is entitled, consisting of (1) 10% of the Company’s net sales of crofelemer for any indications that could cannibalize crofelemer indications or any other chronic indication (including any improvements, modifications and follow-on products, collectively referred to as “Included Products”) (2) 10% of worldwide revenues related to upfront licensing fees and milestone payments from licensees and/or distributors, but specifically excluding licensing fees and/or milestone payments that are (A) reimbursements of clinical trial expenses or (B) associated with the license of the of the Included Products from the Company to Napo EU S.p.A. and (3) 50% of royalties collected from licenses of the Included Products to third parties.

Pursuant to the terms of the August 2022 Royalty Interest, the Company has the right to exchange from time to time at the Company’s sole discretion all or any portion of the Royalty Interest for shares of common stock at a price per share equal to the Nasdaq Minimum Price (as defined in Nasdaq Listing Rule 5635(d)) as of the date of the applicable exchange. At issuance, based on projected cash outflows from future revenue streams, the discount rate was 55.97%.

On September 29, 2023, the Company entered into a Global Amendment No. 2 (the “Global Amendment”) with the Investor as described further above, such that the Company issued Streeterville warrants to purchase 255,000 shares of the common stock the Global Amendment No. 1 and Global Amendment No. 2 to the August 2022 Royalty Interest with Streeterville, pursuant to which, (a) beginning on January 1, 2026, the monthly Royalty Payment under the August 2022 Royalty Interest shall be the greater of (x) $750,000.00, and (y) the actual Royalty Payment amount Streeterville is entitled to for such month pursuant to the terms of the August 2022 Royalty Interest, and (b) the Company is prohibited from making prepayments of the Royalty Repayment Amount under the August 2022 Royalty Interest. As a material consideration for Streeterville’s agreement to enter into these amendments, the Company agreed to issue to Streeterville warrants to purchase up to 255,000 shares of the Company’s common stock at an exercise price of $0.37 per share. Such warrants may be exercisable for cash or on a cashless basis at any time and from time to time during the period commencing on September 29, 2023 (the “Issuance Date”) and ending on the five-year anniversary of the Issuance Date. Pursuant to an analysis of the indicators provided in ASC 470-60-55-8, the Company is not deemed to be experiencing financial difficulty. The debt restructuring is therefore not considered a TDR.

The cumulative effect of the exchanges to the August 2022 Royalty Interest resulted to significant modifications and were accounted for as extinguishment. The Company recorded an extinguishment loss in the unaudited condensed consolidated statements of operations amounting to $1.0 million The extinguishment triggered a remeasurement event under ASC 825-10 and created an election date on whether to account for the August 2022 Royalty Interest resulted under the FVO accounting.

The Company irrevocably elected to initially and subsequently apply the FVO accounting to the entire royalty interest. The Company used the valuation report from an independent valuation service provided to measure the reporting date fair value of the royalty interest.

On January 29, 2024, the Company entered into a privately negotiated exchange agreement with Streeterville pursuant to which the Company issued 1,587,632 shares of the Company’s common stock, par value $0.0001 to Streeterville in exchange for a $165,000 reduction in the outstanding balance of the royalty interest dated August 24, 2022.

On March 31, 2024, and December 31, 2023 the fair value was determined to be $7.1 million and 6.8 million, respectively. For the three months ended March 31, 2024, the net loss in the fair value was $468,000. The net loss in fair value was recorded as loss included in the change in fair value of financial instruments and hybrid instrument designated at FVO in the unaudited condensed consolidated statements of operations.

Streeterville Note

On January 13, 2021, the Company issued a secured promissory note to Streeterville in the original principal amount of $6.2 million for an aggregate purchase price of $6.0 million. The Company will use the proceeds to fund development of the Company’s NP-300 drug product candidate for the indication of the symptomatic relief of diarrhea from cholera and general corporate purposes, including the Company’s product pipeline activities. The note is due after four years and bears interest at 3.25% per annum. Interest on the note is payable annually in advance by adding the

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interest charge for each upcoming year to the outstanding balance on the date each such interest charge is accrued. The Company also paid $25,000 to cover legal fees, accounting costs, due diligence, monitoring and other transaction costs incurred in connection with the issuance of the note. The first year of prepaid interest and the transaction expenses are included in the original principal amount.

At any time following the occurrence of a trial failure which refers to any of the following: (i) the Company abandons the clinical trial with NP-300 for an indication for the symptomatic relief of infectious diarrhea for cholera; (ii) the Company fails to start the Phase 1 clinical trial of NP-300 for the symptomatic relief of infectious diarrhea for cholera by July 1, 2022; or (iii) the Company fails to meet all primary endpoints in the pivotal trials of NP-300 for the symptomatic relief if infectious diarrhea for cholera with statistical significance, Streeterville may elect to increase the outstanding balance as of the date of the trial failure by 25% without acceleration (the “Trial Failure Effect”). If Streeterville elects to apply the Trial Failure Effect, it reserves the right to declare the outstanding balance immediately due and payable at any time. As of March 31, 2024, no trial failure occurred.

Streeterville is entitled to a maximum of 18% and a minimum of 1% of the gross proceeds received by the Company from the sale of TDPRV (the “Return Bonus”). The Return Bonus percentage is reduced pro rata based on the percentage of the original principal balance of the note that has been repaid as of the date of the sale of the TDPRV. Even if the note has been paid in full at the time of the sale of the TDPRV, the Company is still obliged to pay Streeterville a Return Bonus of 1%. If Streeterville applies the Trial Failure Effect, the Return Bonus will automatically be reduced to 1%. If the TDPRV has not been sold as of the day immediately preceding the maturity date of the note, the Return Bonus percentage will be fixed as of such date. As of March 31, 2024, the Company has not sold any TDPRV.

Beginning on the earlier of (a) 6 months after January 2021, and (b) initiation of human trials with NP-300 for symptomatic relief of infectious diarrhea for cholera, the Company may pay all or any portion of the outstanding balance earlier than it is due. In the event the Company elects to prepay all or any portion of the outstanding balance, it shall pay to Streeterville 112.5% of the portion of the outstanding balance the Company elects to prepay. The Company may not prepay the note without the Streeterville’s consent on the date the last patient is enrolled in a pivotal trial.

After Streeterville becomes aware of the occurrence of any default, Streeterville may accelerate the note, with the outstanding balance becoming immediately due and payable in cash at the Mandatory Default Amount (i.e., the outstanding balance following the application of the Default Effect). Streeterville reserves the right to declare the outstanding balance immediately due and payable at any time following the default. Default Effect means multiplying the outstanding balance as of the date of default by 5% or 15% for each occurrence of default, capped at an aggregate of 25%, and then adding the resulting product to the outstanding balance. The percentage to be used depends on whether the default is viewed as minor or major as defined in the agreement. Furthermore, interest accrues on the outstanding balance beginning on the date of default at an interest rate equal to the fewer of 18% per annum or the maximum rate permitted under applicable law. As of March 31, 2024, no default has occurred.

In connection with the note issuance, the Company has entered into a security agreement with Streeterville, pursuant to which Streeterville will receive a first priority security interest in all existing and future NP-300 technology, and any TDPRV and the sale proceeds therefrom that may be granted to the Company by the FDA in connection with the development of NP-300 for the cholera indication. The Company also agreed, with certain exceptions, not to grant any lien on any of the collateral securing the note and not to grant any license under any of the intellectual property relating to such collateral. The grant of security interest has become effective upon the receipt of the Salix Waiver on April 6, 2021 in observance to the requirement of the settlement agreement previously entered by the Company with Salix Pharmaceuticals, Inc.

The Company irrevocably elected to initially and subsequently apply the FVO accounting to the entire note. The fair value at transaction date was equal to the cash proceeds received of $6.0 million. The transaction expense of $25,000 was recognized in profit and loss as incurred. The Company used the valuation report from an independent valuation service provided to measure the reporting date fair value of the note.

On March 31, 2024, and December 31, 2023, the fair value was determined to be $10.2 million and $9.8 million, respectively. For the three months ended March 31, 2024, the net increase in the fair value was $450,000. The

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net decrease in fair value was recorded as loss included in the change in fair value of financial instruments and hybrid instrument designated at FVO in the unaudited condensed consolidated statements of operations.

Insurance Financing

May 2023 First Insurance Financing

In May 2023, the Company entered into a premium finance agreement for $575,000 with First Insurance representing the unpaid balance of the total premiums, taxes, and fees of $676,000 with an annual interest rate of 8.6%. The total finance charge was $23,000. Payment of principal and interest is due in equal monthly installments over ten months. Interest expense for the three months ended March 31, 2024, was $7,000. The financing balance was zero and $172,000 as of March 31, 2024 and December 31, 2023, respectively.

March 2024 First Insurance Financing

In March 2024, the Company entered into a premium finance agreement for $97,000 with First Insurance representing the unpaid balance of the total premiums, taxes, and fees of $52,000 with an annual interest rate of 9.3%. The total finance charge was $2,000. Payment of principal and interest is due in equal monthly installments over ten months. Interest expense for the three months ended March 31, 2024, was zero. The financing balance was $52,000 as of March 31, 2024.

2019 Tempesta Note

In October 2019, the Company entered into a License Termination and Settlement Agreement with Dr. Michael Tempesta, pursuant to which certain royalty payment disputes between the Company and Tempesta were settled. Per the terms of the Agreement, Tempesta received $50,000 in cash, an unsecured promissory note issued by the Company in the aggregate principal amount of $550,000 and 13,333 shares of the Company’s common stock in exchange for the cessation of all royalty payments by the Company to Dr. Tempesta under the License Agreements. The $550,000 promissory note bears interest at the rate of 2.5% per annum and matures on March 1, 2025. The promissory note provides for the Company to make semi-annual payments equal to $50,000 plus accrued interest beginning on March 1, 2020 until the Note is paid in full. Interest expense for the three months ended March 31, 2024, and 2023 was $1,000 and $3,000, respectively. At March 31, 2024, and December 31, 2023, the net carrying value of the note was $100,000 and $150,000, respectively.

8. Warrants

The following table summarizes information about warrants outstanding and exercisable into shares of the Company’s common stock as of March 31, 2024, and December 31, 2023:

	March 31,	December 31,
	2024	2023
	(unaudited)
Warrants outstanding, beginning balance	12,109,807	7,505
Issuances	—	12,102,302
Exercises	—	—
Expirations and cancelations	(7,542,409)	—
Warrants outstanding, ending balance	4,567,398	12,109,807

As of March 31, 2024, and 2023, the Company’s outstanding warrants have an exercise price ranging from $0.24 to $0.88 per common stock and generally expires prior to December 31, 2024.

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PIPE Warrants

On May 8, 2023, the Company entered into a Securities Purchase Agreement (the “PIPE Purchase Agreement”) with certain investors named therein (collectively the “Purchasers”), pursuant to which the Company agreed to issue and sell to the Purchasers in a private placement an aggregate of (i) 137 shares (the “Preferred Shares”) of Series G Convertible Preferred Stock, par value $0.0001 per share, of the Company (“Series G Preferred Stock”) and (ii) warrants to purchase up to 6,850,000 shares of the Company’s common stock, at an exercise price of $0.48 per share (the “PIPE Warrants”), for an aggregate purchase price of approximately $1.86 million (the “Private Placement”). The Company intends to use the proceeds from the Private Placement for working capital and general corporate purposes.

The PIPE Warrants may be exercisable for cash or on a cashless basis at any time and from time to time during the period commencing on the later of (i) January 1, 2024, and (ii) the date on which the approval by the Company’s stockholders (the “Stockholder Approval”) to remove both the Voting Cap and the Conversion Cap (both as defined below) is obtained (the “PIPE Warrants Initial Exercise Date”) and ending on the five-year anniversary of the PIPE Warrants Initial Exercise Date.

On May 10, 2023, the Company issued warrants equivalent to 6,850,000 shares of the Company’s common stock in relation to the PIPE Purchase Agreement.

The PIPE Purchase Agreement provides that during the period commencing on the signing of the PIPE Purchase Agreement and ending October 22, 2023, the Company will not effect or enter into any agreement to (i) issue securities in exchange for any securities of the Company issued and outstanding on the date of the PIPE Purchase Agreement pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”), or (ii) effect issuance by the Company of common stock or Common Stock Equivalents (as defined in the PIPE Purchase Agreement), subject to certain customary exceptions set forth in the PIPE Purchase Agreement including, among others, issuance of shares of common stock pursuant to the At The Market Offering Agreement, dated December 10, 2021, by and between the Company and Ladenburg Thalmann & Co. Inc., as amended (the “Ladenburg Thalmann ATM”), provided that such issuance in the Ladenburg Thalmann ATM has consented.

On August 14, 2023, the Company entered into an amendment (“the First Amendment”) to the PIPE Purchase Agreement with certain holders (the “Holders”) named in the PIPE Purchase Agreement, pursuant to which the parties agreed to terminate the restriction on subsequent equity sales by the Company. In exchange for the Holders’ agreement to enter into the First Amendment, the Company agreed to issue the Holders warrants to purchase 685,000 shares of the Company’s common stock (the “PIPE Amendment Warrants”) in a private placement pursuant to Section 4(a)(2) of the Securities Act. The PIPE Amendment Warrants are substantially the same as the PIPE Warrants and have an exercise price of $0.48 per share. The PIPE Amendment Warrants may be exercisable for cash or on a cashless basis at any time and from time to time during the period commencing on January 1, 2024 (the “PIPE Amendment Warrants Initial Exercise Date”) and ending on the five-year anniversary of the PIPE Amendment Warrants Initial Exercise Date.

At the date of the PIPE Amendment Warrants, the warrants were valued at $1.2 million using the Black-Scholes option pricing model as follows: exercise price of $0.48 per share, stock price of $0.72 per share, expected life of five years, volatility of 145.95% and a risk-free rate of 3.37%. The warrants were classified in additional paid-in-capital.

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On February 27, 2024, pursuant to the PIPE Purchase Agreement, each of the PIPE investors entered into an exchange agreement with the Company (each, a “PIPE Warrant Exchange Agreement” and collectively, the “PIPE Warrant Exchange Agreements”). Pursuant to the PIPE Warrant Exchange Agreements, the Company agreed to exchange the PIPE Warrants for shares of common stock at an exchange ratio of 1-for-2.5 (“PIPE Warrant Exchange Transaction”). Upon completion of the PIPE Warrant Exchange Transaction, the Company exchanged the PIPE Warrants to purchase up to 7,535,000 shares of Common Stock for 18,837,500 shares of Common Stock (the “PIPE Exchange Shares”), and the PIPE Warrants were terminated. The PIPE Exchange Shares would be subject to a twelve-month lock-up, and any other equity security of the Company other than the PIPE Exchange Shares owned by the PIPE investors as of the date of the PIPE Warrant Exchange Agreement would be subject to a six-month lock-up.

On February 29, 2024, the PIPE investors converted 122 shares of Series G preferred stock into 3,050,000 shares of common stock subject to a six-month lock-up.

Standstill Agreement

Pursuant to the Company’s entry in the Standstill Agreement, as amended by the Binding MOU, as described further above, the Company agreed to issue (i) Iliad warrants to purchase up to 1,711,954 shares of the common stock, and (ii) Uptown warrants to purchase up to 2,105,348 shares of the common stock, at an exercise price of $0.48 per share (the “Standstill Warrants”).

The Standstill Warrants may be exercisable for cash or on a cashless basis at any time and from time to time during the period commencing on the later of (i) January 1, 2024 and (ii) the date on which the Stockholder Approval is obtained (the “Standstill Warrant Initial Exercise Date”) and ending on the five-year anniversary of the Standstill Warrant Initial Exercise Date.

At the date of the Standstill Agreement, the warrants were valued at $2.5 million using the Black-Scholes option pricing model as follows: exercise price of $0.48 per share, stock price of $0.73 per share, expected life of five years, volatility of 118.88% and a risk-free rate of 3.49%. The warrants were classified in additional paid-in-capital.

Royalty Interest Global Amendments

On September 29, 2023, the Company entered into amendments (the “Royalty Interest Global Amendments”) to (i) the October 2020 Royalty Interest with Iliad, (ii) the December 2020 Royalty Interest with Uptown, and (iii) the August 2022 Royalty Interest with Streeterville, pursuant to which, among other things, the Company agreed to issue to (i) Iliad warrants to purchase up to 232,500 shares of the Company’s common stock, (ii) Uptown warrants to purchase up to 262,500 shares of the common stock, and (iii) Streeterville warrants to purchase up to 255,000 shares of the Common Stock, at an exercise price of $0.37 per share (collectively, the “Royalty Interest Global Amendment Warrants”).

The Royalty Interest Global Amendment Warrants may be exercisable for cash or on a cashless basis at any time and from time to time during the period commencing on September 29, 2023 (the “Royalty Interest Global Amendment Initial Exercise Date”) and ending on the five-year anniversary of the Royalty Interest Global Amendment Initial Exercise Date.

At the date the Royalty Interest Global Amendments, the warrants were valued at $173,000 using the Black-Scholes option pricing model as follows: exercise price of $0.37 per share, stock price of $0.26 per share, expected life of five years, volatility of 139.53% and a risk-free rate of 4.6%. The warrants were classified in additional paid-in-capital.

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9. Preferred Stock

At March 31, 2024, and December 31, 2023 preferred stock consisted of the following:

March 31, 2024
							Liquidation
(in thousands, except share and per share data)	Shares		Issued and		Carrying		Preference
Series	Designated		Outstanding		Value		per Share
A		5,524,926		—	$	—	$	—
B		11,000		—		—		—
B-1		63		—		—		—
B-2		10,165		—		—		—
C		1,011,000		—		—		—
D		977,300		—		—		—
E		10		—		—		—
F		10		—		—		—
G		137		—		—		—
H		105		—		—		—
I		118		—		—		—
J		179		99		—		—
Total		7,535,013		99	$	—	$	—

December 31, 2023
							Liquidation
(in thousands, except share and per share data)	Shares		Issued and		Carrying		Preference
Series	Designated		Outstanding		Value		per Share
A		5,524,926		—	$	—	$	—
B		11,000		—		—		—
B-1		63		—		—		—
B-2		10,165		—		—		—
C		1,011,000		—		—		—
D		977,300		—		—		—
E		10		—		—		—
F		10		—		—		—
G		137		122		—		—
H		105		—		—		—
I		118		56		—		—
Total		7,534,834		178	$	—	$	—

The Company is authorized to issue a total of 10,000,000 shares of its preferred stock as of March 31, 2024, and December 31, 2023, with a total of 7,535,013 shares and 7,534,834 shares designated to specific Series as of
March 31, 2024, and December 31, 2023, respectively.

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Series B-2 Convertible Preferred Stock

In December 2019, the Company entered into an exchange agreement with Oasis Capital, pursuant to which Oasis Capital gave up (i) its remaining unexercised Prepaid Forward contracts exercisable for 412,074 shares of the Company’s common stock and (ii) 231,709 shares of common stock held as an investment by Oasis Capital, in exchange for 10,165 shares of the Company’s Series B-2 Convertible Preferred Stock.

In January 2020, a holder of the Series B-2 Convertible Preferred Stock converted 2,631 preferred shares into 166,630 shares of common stock. In October 2020, the Company entered into an exchange agreement with Oasis Capital pursuant to which the Company agreed to issue 166,728 shares of common stock in exchange for 975 shares of the Series B-2 Convertible Preferred Stock. The exchange agreement was accounted for as a modification. In December 2020, an investor converted the remaining 6,559 Series B-2 Convertible Preferred Stock into a total of 415,403 shares of the Company’s common stock. As a result, no shares of Series B-2 Preferred Stock remain outstanding as at March 31, 2024 and December 31, 2023.

Series C Perpetual Preferred Stock

In September 2020, the Company entered into an exchange agreement with Iliad to issue 842,500 shares of the Company's Series C Perpetual Preferred Stock at $0.0001 par value per share, for a non-cash exchange of equity instruments. The exchange agreement was contemporaneously entered with the issuance of Series D Perpetual Preferred shares, in exchange of remaining Series A Convertible Preferred shares totaling 5,524,926 shares, and accreted value of $11.2 million as of the exchange date. An amendment agreement of the Exchange Note 2 was also entered into, with issuance value of $2.3 million and a carrying value of $2.6 million as of the exchange date, to extend maturity from December 31, 2020 to December 31, 2021, in consideration of 5% increase in the outstanding balance.

The preferred stock has been classified as permanent stockholders' equity in accordance with authoritative guidance for the classification and measurement of perpetual shares without a mandatory redemption period because the redemption option was ultimately in the control of the Company. There were no shares of series C Preferred Stock outstanding as at March 31, 2024, and December 31, 2023.

Series E Preferred Stock

On August 18, 2022, the Company entered into an agreement (the “Series E Securities Purchase Agreement”) with a third party to issue 10 Series E Preferred Stock with a par value of $0.0001, amounting to $100. In consideration of the Series E Securities Purchase Agreement, the Company and third party agree to amend the existing definition of the term “Service Share Amount” in the License Agreement entered by both parties (See Note 2) and include a subsection for lock-up wherein the third party agrees not to sell, transfer, loan, grant any option of the purchase of, or otherwise dispose of any shares of common stock acquired pursuant to the License Agreement until after the 90-day period following the date of acquisition.

On October 4, 2022, the Company redeemed all 10 shares of Series E Preferred Stock in accordance with the terms of such securities. As a result, no shares of Series E Preferred Stock remain outstanding as at March 31, 2023 and December 31, 2023.

Series F Preferred Stock

On November 11, 2022, the Company entered into an agreement (the “Series F Securities Purchase Agreement”) with a third party to issue 10 Series F Preferred Stock with a par value of $0.0001, amounting to $100. In consideration of the Series F Securities Purchase Agreement, the Company and third party agree to amend the existing definition of the term “Service Share Amount” in the License Agreement entered by both parties (See Note 2) and include a subsection for lock-up wherein the third party agrees not to sell, transfer, loan, grant any option of the purchase of, or otherwise dispose of any shares of common stock acquired pursuant to the License Agreement until after the 90-day period following the date of acquisition.

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Series G Preferred Stock

On May 8, 2023, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company agreed to issue to such investors (i) 137 shares of Series G Convertible Preferred Stock, par value $0.0001 per share, of the Company (“Series G Preferred Stock”) and (ii) warrants to purchase up to 6,850,000 shares of the Company’s common stock, at an exercise price of $0.48 per share (the “PIPE Warrants”), for an aggregate purchase price of approximately $1.9 million (the “Private Placement”).

On February 29, 2024, the PIPE investors converted 122 shares of Series G preferred stock into 3,050,000 shares of common stock subject to a six-month lock-up.

Series H Preferred Stock

On June 28, 2023, the Company entered into privately negotiated exchange agreements with Uptown and Streeterville, under which the Company issued 32 and 73 shares of the Company’s newly authorized Series H Convertible Preferred Stock (the “Series H Preferred Stock”) to Uptown and Streeterville, respectively, at an effective exchange price per share equal to the market price (defined as the Minimum Price under Nasdaq Listing Rule 5635(d)) as of the date of the exchange agreements, in exchange for a $757,000 reduction in the outstanding balance of the December 2020 Royalty Interest and a $1.7 million reduction in the outstanding balance of the August 2022 Royalty Interest, respectively.

Series I Preferred Stock

On September 29, 2023, the Company entered into a privately negotiated exchange agreement with Uptown (the “Exchange Agreement”), pursuant to which the Company issued an aggregate of 118 shares of the Company’s newly authorized Series I Convertible Preferred Stock (the “Series I Preferred Stock”) to Uptown, at an effective exchange price per share equal to the market price (defined as the Minimum Price under Nasdaq Listing Rule 5635(d)) as of the date of the Exchange Agreement, in exchange for a $1,500,000.00 reduction in the outstanding balance of the December 2020 Royalty Interest.

On January 15, 2024, Uptown converted 56 shares of Series I Preferred Stock into 2,696,456 shares of common stock.

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10. Temporary Equity

On March 1, 2024, the Company entered into a privately negotiated exchange agreement with Streeterville Capital, LLC (“Streeterville”), pursuant to which the Company issued an aggregate of 179 shares of Series J Preferred Stock to Streeterville in exchange for the surrender of the March 2021 Royalty Interest by Streeterville (the “CVP Exchange Transaction”). Upon completion of the CVP Exchange Transaction, all outstanding balance of the March 2021 Royalty Interest was fully paid, and the March 2021 Royalty Interest was terminated. The Company reserves the right to exchange, at its sole discretion, a portion or all of the outstanding shares of Series J Preferred Stock held by investors for common stock at the stated value of $25,000 per share, divided by the applicable exchange price. The exchange price will be determined based on the lower of the Nasdaq official closing price and the 5-day average Nasdaq official closing price of the common stock immediately preceding the exchange date. The preferences, rights, limitations, and other matters relating to the Series J Preferred Stock are set forth in the Certificate of Designation, which the Company filed with the Secretary of State of the State of Delaware on March 1, 2024

The Company determined that the nature of the Series J Preferred Stock host was more analogous to a debt instrument, and that the economic characteristics and risks of the embedded redemption features were clearly and closely related to the Series J Preferred Stock host. As such, the redemption features were not required to be bifurcated under ASC 815, Derivatives and Hedging. Since the Series J Preferred Stock are redeemable in certain circumstances upon the occurrence of an event that is not solely within the Company’s control, they have been classified as mezzanine equity in the condensed consolidated balance sheets.

On March 5, 2024, the Company entered into a privately negotiated exchange agreement with Streeterville, pursuant to which the Company issued 10,000,000 shares of the Company’s common stock in exchange for the surrender and cancellation of 40 shares of Series J Perpetual Preferred Stock. On March 19, 2024, the Company entered into another privately negotiated exchange agreement with Streeterville, pursuant to which the Company issued 8,333,333 shares of the Company’s common stock in exchange for the surrender and cancellation of 40 shares of Series J Perpetual Preferred Stock based on an effective exchange price of $0.12 per share of common stock.

As of March 31, 2024, and December 31, 2023, the Company had 99 and zero shares outstanding of Series J preferred stock.

11. Stockholders' Equity

As of March 31, 2024, and December 31, 2023, the Company had reserved shares of common stock, on an as-if converted basis, for issuance as follows:

	March 31,	December 31,
	2024	2023
	(unaudited)
Options issued and outstanding	26,084	26,262
Inducement options issued and outstanding	1,512	1,512
Options available for grant under stock option plans	4,303,288	626,342
Restricted stock unit awards issued and outstanding	2,702,070	2,708,136
Warrants issued and outstanding	4,567,398	11,424,807
Total	11,600,352	14,787,059

Common Stock

The holders of common stock are entitled to one vote for each share of common stock held. The common stockholders are also entitled to receive dividends whenever funds and assets are legally available and when declared by the Board of Directors.

The holders of non-voting common stock are not entitled to vote, except on an as converted basis with respect to any change of control of the Company that is submitted to the stockholders of the Company for approval. Shares of

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the Company's non-voting common stock have the same rights to dividends and other distributions and are convertible into shares of the Company's common stock on a one-for-one basis.

At a special meeting of stockholders of Jaguar Health, Inc. (the “Company”) held on September 30, 2022 (the “Special Meeting”), the Company’s stockholders approved an amendment (the “Sixth Amendment”) to the Company’s Third Amended and Restated Certificate of Incorporation (the “COI”) to effect an increase in the number of authorized shares of the Company’s voting common stock, par value $0.0001 per share (the “Common Stock”), from 150,000,000 to 298,000,000 shares of Common Stock (the “Authorized Share Increase”) on September 30, 2022.

Pursuant to such authority granted by the Company’s stockholders, the Company’s board of directors approved the Authorized Share Increase and the filing of the Sixth Amendment to effectuate the Authorized Share Increase. On September 30, 2022, the Company filed the Sixth Amendment with the Secretary of State of the State of Delaware (the “DE Secretary of State”), and the Authorized Share Increase became effective in accordance with the terms of the Sixth Amendment immediately upon filing with the DE Secretary of State (the “Effective Time”).

The Company is now authorized to issue a total number of 358,000,000 stock, of which 298,000,000 shares are common stock, 50,000,000 are non-voting common stock and 10,000,000 are preferred stock.

Reverse Stock Split

On September 3, 2021, the Company filed an amendment to its Third Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware to effect a 1-for-3 reverse stock split of the Company’s issued and outstanding shares of voting common stock, effective September 8, 2021. Upon effectivity, every three shares of the Company’s issued and outstanding common stock immediately prior to the effective time shall automatically be reclassified into one share of common stock without any change in the par value.

On January 20, 2023, the Company approved a seventh amendment to the Company’s Third Amended and Restated Certificate of Incorporation to effect a 1-for-75 reverse stock split of the Company’s issued and outstanding shares of voting common stock, effective January 23, 2023.

The reverse stock split reduces the number of shares of common stock issuable upon the conversion of the Company’s outstanding non-voting common stock and the exercise or vesting of its outstanding stock options and warrants in proportion to the ratio of the reverse stock split and causes a proportionate increase in the conversion and exercise prices of such non-voting common stock, stock options and warrants. In addition, the number of shares reserved for issuance under the Company’s equity compensation plans immediately prior to the effective time will be reduced proportionately. The reverse stock split did not change the total number of authorized shares of common stock or preferred stock.

At the Market Offering (“ATM”)

December 2021 ATM Agreement

On December 10, 2021, the Company entered into an ATM Agreement (“December 2021 ATM Agreement”) with Ladenburg, pursuant to which the Company may offer and sell, from time to time through Ladenburg, shares of common stock having an aggregate offering price of up to $15.0 million, subject to the terms and conditions of the December 2021 ATM Agreement. The offering will terminate upon the earlier of (i) December 10, 2024 and (ii) termination of the December 2021 ATM Agreement as permitted therein.

On February 2, 2022, the Company entered into an amendment to the December 2021 ATM Agreement, pursuant to which, the aggregate offering amount of the shares of the Company’s common stock which the Company may sell and issue through Ladenburg, as the sales agent, was increased from $15.0 million to $75.0 million (the “ATM Upsize”).

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During the three months ended March 31, 2024, the Company issued an aggregate of 130,894,636 shares under the ATM Agreement for total net proceeds of $11.3 million.

Noncontrolling Interest

As a result of the merger on November 3, 2021 between Napo EU and Dragon SPAC, the Company assumed a non-controlling interest amounting to $242,000 as of December 31, 2021 which represents noncontrolling interest held by an investor in Napo Therapeutics.

During the three months ended March 31, 2024, noncontrolling interest increased by $116,000. During the three months ended March 31, 2023, noncontrolling interest increased by $1.0 million.

12. Stock-based Compensation

2013 Equity Incentive Plan

In November 2013, the Company's board of directors and sole stockholder adopted the Jaguar Health, Inc. 2013 Equity Incentive Plan (the “2013 Plan”). The 2013 Plan allows the Company's board of directors to grant stock options, restricted stock awards and restricted stock unit awards to employees, officers, directors and consultants of the Company. Following the effective date of the IPO and after effectiveness of any grants under the 2013 Plan that were contingent on the IPO, no additional stock awards will be granted under the 2013 Plan. Outstanding grants continue to be exercisable, however, any unissued shares under the plan and any forfeitures of outstanding options do not rollover to the 2014 Stock Incentive Plan. There were zero shares outstanding as at March 31, 2024, and December 31, 2023.

2014 Stock Incentive Plan

Effective May 12, 2015, the Company adopted the Jaguar Health, Inc. 2014 Stock Incentive Plan (“2014 Plan”). The 2014 Plan provides for the grant of options, restricted stock and restricted stock units to eligible employees, directors and consultants to purchase the Company's common stock. The term of an incentive stock option may not exceed 10 years, except that with respect to any participant who owns more than 10% of the voting power of all classes or our outstanding stock, the term must not exceed 5 years. The 2014 Plan that provides for automatic share increases on the first day of each fiscal year in the amount of 2% of the outstanding number of shares of the Company's common stock on the last day of the preceding calendar year. The 2014 Plan replaced the 2013 Plan except that all outstanding options under the 2013 Plan remain outstanding until exercised, canceled or expired.

On April 13, 2022, the Board of Directors of the Company approved a Registration Statement to register an additional 2,417,660 shares of the Company’s common stock for issuance pursuant to the awards granted under the 2014 Plan.

As of March 31, 2024, there were 27,596 options outstanding and 4,302,288 options available for grant. As of December 31, 2023, there were 26,262 options outstanding and 626,342 options available for grant.

2020 New Employee Inducement Award Plan

Effective June 16, 2020, the Company adopted the Jaguar Health, Inc. New Employee Inducement Award Plan (“2020 Inducement Award Plan”) and, subject to the adjustment provisions of the Inducement Award Plan, reserved 2,222 shares of the Company’s common stock for issuance pursuant to equity awards granted under the Inducement Award Plan. The term of an incentive stock option may not exceed 10 years, except that with respect to any participant who owns more than 10% of the voting power of all classes or our outstanding stock, the term must not exceed 5 years. The 2020 Inducement Award Plan provides for the grant of non-statutory stock options, restricted stock units, restricted stock, and performance shares. The 2020 Inducement Award Plan was adopted without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. The terms and conditions of the 2020 Inducement Award Plan are substantially similar to the Company’s 2014 Stock Incentive Plan, but with such other terms and conditions intended to comply with the Nasdaq inducement award rules. In accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules, the

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only persons eligible to receive grants of equity awards under the Inducement Award Plan are individuals who were not previously an employee or director of the Company, or following a bona fide period of non-employment, as an inducement material to such persons entering into employment with the Company.

On April 13, 2022, the Board of Directors of the Company approved an amendment to the 2020 Inducement Award Plan to reserve an additional 471,833 shares of the Company’s common stock for issuance pursuant to equity awards granted under the Inducement Award Plan, thereby increasing the number of shares of the Company’s common stock issuable thereunder from 500,000 shares to 971,833 shares.

As of March 31, 2024, there were 1,512 options outstanding and 498,488 options available for grant. As of December 31, 2023, there were 1,512 options outstanding and 6,967 options available for grant. The Company authorized an additional 498,448 shares for the stock incentive plans.

Stock Options and Restricted Stock Units (“RSUs”)

The following table summarizes the incentive plan activity for the three months ended March 31, 2024, and year ended December 31, 2023:

				Weighted		Weighted Average
	Shares	Stock		Average		Remaining	Aggregate
	Available	Options	RSUs	Stock Option		Contractual Life	Intrinsic
(in thousands, except share and per share data)	for Grant	Outstanding	Outstanding	Exercise Price		(Years)	Value*
Outstanding at January 1, 2023	122,978	28,079	44,865	$	592.73	7.19	$	—
Additional shares authorized	3,166,330	—	—		—	—		—
Options granted	—	—	—		—	—		—
Options exercised	—	—	—		—	—		—
Options canceled	305	(305)	—		327.81	—		—
RSUs granted	(2,690,320)	—	2,690,320		—	—		—
RSUs vested and released	21,808	—	(21,808)		—	—		—
RSUs cancelled	5,241	—	(5,241)		—	—		—
Outstanding at December 31, 2023	626,342	27,774	2,708,136	$	596	6.21	$	—
Additional shares authorized	3,670,702	—	—		—	—		—
Options granted	—	—	—		—	—		—
Options exercised	—	—	—		—	—		—
Options canceled	178	(178)	—		362.34	—		—
RSUs granted	—	—	—		—	—		—
RSUs excercised	125	—	(125)		—	—		—
RSUs cancelled	5,941	—	(5,941)		—	—		—
Outstanding at March 31, 2024	4,303,288	27,596	2,702,070	$	597	5.98	$	—
Exercisable at March 31, 2024		27,465		$	598.24	5.97	$	—
Vested and expected to vest at March 31, 2024		27,594		$	597.16	5.98	$	—

*Fair market value of Jaguar stock on March 31, 2024 was $0.09 per share.

The intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair market value of the Company's common stock for options that were in-the-money.

The number of options exercised during the three months ended March 31, 2024, and year ended December 31, 2023, were zero.

The weighted average grant date fair value of stock options granted was zero per share during the three months ended March 31, 2024, and for the year ended December 31, 2023, respectively.

The number of options that vested for the three months ended March 31, 2024, and for the year ended December 31, 2023, was 271 and 1,524, respectively. The grant date weighted average fair value of options that vested

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for the three months ended March 31, 2024, and for the year ended December 31, 2023, was $336.43 and $273.62, respectively.

Stock-Based Compensation

The following table summarizes stock-based compensation expense related to stock options, inducement stock options and RSUs for the three months ended March 31, 2024 and 2023, and are included in the unaudited condensed consolidated statements of operations as follows:

	Three Months Ended
	March 31,
(in thousands)	2024		2023
Research and development expense	$	289	$	227
Sales and marketing expense		40		49
General and administrative expense		252		204
Total	$	581	$	480

As of March 31, 2024, the Company had $28,968 of unrecognized stock-based compensation expense for options, inducement options and restricted stock units outstanding, which is expected to be recognized over a weighted-average period of 0.19 years.

The were no range of assumptions set forth and used in calculating the fair value of options granted during the three months ended March 31, 2024, and 2023, respectively.

401(k) Plan

The Company sponsors a 401(k) defined contribution plan covering all employees. There were no employer contributions to the plan from plan inception through March 31, 2024.

13. Net Loss Per Share

The following table presents the calculation of basic and diluted net loss per share of common stock for the periods indicated:

	Three Months Ended March 31,
(In thousands, except share and per share data)	2024		2023
Net loss attributable to common stockholders	$	(9,226)	$	(12,202)
Shares used to compute net loss per common stock, basic and diluted		158,842,297		5,109,609
Net loss per share attributable to common stockholders, basic and diluted	$	(0.06)	$	(2.39)

Basic net loss per share is calculated by dividing net loss by the weighted-average number of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock, convertible preferred stock, and certain common stock equivalents outstanding for the period. Common stock equivalents are only included when their effect is dilutive. The Company's potential securities which include warrants, convertible preferred series stock and other common stock equivalents were excluded because their effect is anti-dilutive. For the prior periods presented, there is no difference in the number of shares used to compute basic and diluted shares outstanding.

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The following are the other common stock equivalents of the Company for the three months ended March 31, 2024, and for year ended December 31, 2023:

	March 31,	December 31,
	2024	2023
	(unaudited)
Options issued and outstanding	26,084	26,262
Inducement options issued and outstanding	1,512	1,512
Restricted stock units issued and outstanding	2,702,070	2,708,136
Warrants issued and outstanding	4,567,398	11,424,807
Total	7,297,064	14,160,717

As of May 14, 2024, there were 19,874,088 shares of common stock issued after the balance sheet date.

14. Segment Data

The Company has two reportable segments- animal health and human health. The animal health segment is focused on developing and commercializing prescription and non-prescription products for companion and production animals. The human health segment is focused on developing and commercializing human products and the ongoing commercialization of Mytesi, which the U.S. FDA approves for the symptomatic relief of non-infectious diarrhea in adults with HIV/AIDS on antiretroviral therapy.

The Company's reportable segments net revenues and net loss for the three months ended March 31, 2024, and 2023 consisted of the following:

	Three Months Ended
	March 31,
	2024		2023
(in thousands)	(unaudited)
Revenue from external customers
Human Health	$	2,303	$	1,927
Animal Health		48		45
Consolidated Totals	$	2,351	$	1,972
Segment net loss
Human Health	$	(4,601)	$	(6,539)
Animal Health		(4,767)		(5,858)
Consolidated Totals	$	(9,368)	$	(12,397)

The Company's reportable segments assets consisted of the following:

	March 31,		December 31,
	2024		2023
(in thousands)	(unaudited)
Segment assets
Human Health	$	42,154	$	42,289
Animal Health		163,555		153,190
Total	$	205,709	$	195,479

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The reconciliation of segments assets to the consolidated assets is as follows:

	March 31,		December 31,
	2024		2023
(in thousands)	(unaudited)
Total assets for reportable segments	$	205,709	$	195,479
Less: Investment in subsidiary		(29,232)		(29,232)
Less: Intercompany loan		(121,088)		(115,484)
Consolidated Totals	$	55,389	$	50,763

15. Subsequent Events

December 2021 ATM Agreement

From April 1, 2024 to May 14, 2024, the Company issued an aggregate of 19,863,548 shares of common stock under the December 2021 ATM Agreement for total net proceeds of $2.2 million.

April 2024 Agreement for Gelclair

As part of the Company’s strategy to expand the commercial footprint beyond HIV-related supportive care to include cancer-related supportive care, on April 12, 2024, the Company entered into an exclusive 5-year in-license agreement with United Kingdom-based Venture Life Group PLC ("Venture Life"), an international consumer health company focused on the global self-care market for Venture Life's FDA-approved oral mucositis prescription product, Gelclair for the U.S. market. The Company is planning to begin commercial launch in the third quarter of 2024 for Gelclair.

Submission of Matters to a Vote of Security Holders

On April 9, 2024, the Company held a special meeting of stockholders of the Company (the “Special Meeting”). Four proposals were submitted to and approved by the Company’s stockholders, each of which is described in the Company’s definitive proxy statement for the Special Meeting (the “Proxy Statement”), filed with the Securities and Exchange Commission on March 15, 2024

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of financial condition and results of operations should be read together with the unaudited condensed consolidated financial statements and the related notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q, and with our audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K as of and for the year ended December 31, 2023 which was filed to the SEC on April 1, 2024 and amended on April 17, 2024.

Overview

Jaguar Health, Inc. (“Jaguar” or the “Company”) is a commercial stage pharmaceuticals company focused on developing novel, plant-based, sustainably derived prescription medicines for people and animals with gastrointestinal (“GI”) distress, including chronic, debilitating diarrhea. Jaguar's wholly owned subsidiary, Napo Pharmaceuticals, Inc. (“Napo”), focuses on developing and commercializing proprietary plant-based human prescription from plants for essential supportive care and management of neglected gastrointestinal symptoms across multiple complicated disease states. Our crofelemer drug product candidate is the subject of the OnTarget study, an ongoing pivotal Phase 3 clinical trial for prophylaxis of diarrhea in adult cancer patients receiving targeted therapy. As announced, Jaguar achieved a major milestone with completion of patient enrollment in OnTarget. Jaguar is the majority stockholder of Napo Therapeutics S.p.A. (“Napo Therapeutics”), an Italian corporation established by Jaguar in Milan, Italy in 2021 that focuses on expanding crofelemer access in Europe. Napo Therapeutics’ core mission is to provide access to crofelemer in Europe to address significant rare/orphan disease indications, including, initially, two key rare disease target indications: Short bowel syndrome (“SBS”) with intestinal failure and microvillus inclusion disease (“MVID”). Jaguar Animal Health is a tradename of Jaguar Health. Magdalena Biosciences Inc. (“Magdalena”), a joint venture formed by Jaguar and Filament Health Corp. (“Filament”) that emerged from Jaguar’s Entheogen Therapeutics Initiative (ETI), is focused on developing novel prescription medicines derived from plants for mental health indications.

Jaguar was founded in San Francisco, California as a Delaware corporation on June 6, 2013 (inception). The Company was a majority-owned subsidiary of Napo until the close of the Company's initial public offering on May 18, 2015. The Company was formed to develop and commercialize first-in-class prescription and non-prescription products for companion animals.

On July 31, 2017, Jaguar completed a merger with Napo pursuant to the Agreement and Plan of Merger dated March 31, 2017, by and among Jaguar, Napo, Napo Acquisition Corporation (“Merger Sub”), and Napo's representative (the “Merger Agreement”). In accordance with the terms of the Merger Agreement, upon the completion of the merger, Merger Sub merged with and into Napo, with Napo surviving as the wholly owned subsidiary (the “Merger” or “Napo Merger”). Immediately following the Merger, Jaguar changed its name from “Jaguar Animal Health, Inc.” to “Jaguar Health, Inc.” Napo now operates as a wholly owned subsidiary of Jaguar focused on human health including the ongoing development of crofelemer and commercialization of Mytesi.

Napo’s marketed drug Mytesi (crofelemer 125 mg delayed-release tablets) is a first-in-class oral botanical drug product approved by the FDA for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy. To date, this is the only oral plant-based botanical prescription medicine approved under the FDA’s Botanical Guidance. The Company’s Canalevia-CA1 (crofelemer delayed-release tablets) drug is the first and only oral plant-based prescription product that is FDA conditionally approved to treat chemotherapy-induced diarrhea (“CID”) in dogs.

Crofelemer was granted Orphan Drug Designation (“ODD”) by the FDA in February 2023 for MVID and granted ODD for MVID by the European Medicines Agency (“EMA”) in October 2022. Crofelemer was granted ODD for SBS by the EMA in December 2021 and by the FDA in August 2017. In June 2023, Napo submitted an Investigational New Drug (“IND”) application to the FDA for a new crofelemer powder for oral solution formulation for the treatment of MVID. Jaguar is supporting third-party investigator-initiated proof-of-concept (“POC”) studies of crofelemer in patients with SBS with intestinal failure or CDD, focused on obtaining POC data showing reduction of requirements of parenteral support, including parenteral nutrition and/or IV fluids. In accordance with the guidelines of specific European Union countries, publications of data from POC trials could support participation in early patient access programs for crofelemer for SBS or MVID, potentially in 2024, especially for patients with intestinal failure

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requiring parenteral support. Participation in early access programs, which do not exist in the United States, provides an opportunity for reimbursement while impacting the morbidity and high cost of care for these chronic unmet needs.

Napo Therapeutics is initiating efforts to commence clinical development of crofelemer in SBS patients in support of the company’s key focus on leveraging the EMA’s accelerated conditional marketing authorization pathway in Europe for these rare diseases. SBS affects approximately 10,000 to 20,000 people in the U.S., according to the Crohn's & Colitis Foundation, and it is estimated that the population of SBS patients in Europe is approximately the same size. Despite limited treatment options, the global SBS market exceeded $568 million in 2019 and is expected to reach $4.6 billion by 2027, according to a report by Vision Research Reports.

Most of the activities of the Company are focused on the development and/or commercialization of Mytesi, the ongoing clinical development of crofelemer for the prophylaxis of diarrhea in adult patients receiving targeted cancer therapy, and our prioritized clinical program centered around investigator-initiated POC trials of crofelemer for SBS and CDD.

In the field of animal health, we are continuing limited activities related to developing and commercializing first-in-class gastrointestinal products for dogs, dairy calves and foals.

Crofelemer is a novel, first-in-class anti-secretory antidiarrheal drug which has a normalizing effect on electrolyte and fluid balance in the gut, and this mechanism of action has the potential to benefit multiple disorders that cause gastrointestinal distress, including diarrhea and abdominal discomfort. Crofelemer is in development for multiple possible follow-on indications, including for our lead Phase 3 program in CTD, investigating prophylaxis of diarrhea related to targeted therapy with or without standard chemotherapy. Crofelemer delayed-release tablets are also being evaluated in diarrhea-predominant irritable bowel syndrome (“IBS-D”) and being evaluated for chronic idiopathic/functional diarrhea in investigator-initiated trials.

Crofelemer powder for oral solution is being developed to support orphan or rare disease indications for adults with SBS with intestinal failure and for pediatric MVID patients.

In addition, a second-generation proprietary anti-secretory antidiarrheal drug (“NP-300”) is in development for symptomatic relief and treatment of moderate-to-severe diarrhea, with or without concomitant antimicrobial therapy, from bacterial, viral and parasitic infections including Vibrio cholerae, the bacterium that causes cholera. This program is being pursued with the potential targeted incentive from the FDA of a tropical disease priority review voucher.

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

In December 2021, we received conditional approval from the FDA to market Canalevia-CA1 (crofelemer delayed-release tablets), our oral plant-based prescription drug and the only available veterinary drug for the treatment of chemotherapy-induced diarrhea (“CID”) in dogs, and Canalevia-CA1 is now available to multiple leading veterinary distributors in the U.S. Canalevia-CA1 is a tablet that is given orally and can be prescribed for home treatment of CID. Canalevia-CA1 is conditionally approved by the FDA under application number 141-552. Conditional approval allows for commercialization of the product while Jaguar Animal Health continues to collect the substantial evidence of

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effectiveness required for full approval. We have received Minor Use in a Major Species (“MUMS”) designation from the FDA for Canalevia-CA1 to treat CID in dogs. FDA has established a "small number" threshold for minor use in each of the seven major species covered by the MUMS act. The small number threshold is currently 80,000 for dogs, representing the largest number of dogs that can be affected by a disease or condition over the course of a year and still have the use qualify as a minor use.

As part of our strategy to expand our commercial footprint beyond HIV-related supportive care to include cancer-related supportive care, on April 12, 2024, we entered into an exclusive 5-year in-license agreement with United Kingdom-based Venture Life Group PLC ("Venture Life"), an international consumer health company focused on the global self-care market, for Venture Life's FDA-approved oral mucositis prescription product, Gelclair, for the U.S. market. We are planning to begin commercial launch in the third quarter of 2024 for Gelclair.

We believe Jaguar is poised to realize a number of synergistic, value adding benefits—an expanded pipeline of potential blockbuster human follow-on indications of crofelemer, and a second-generation anti-secretory agent—upon which to build global partnerships. Jaguar, through Napo, holds global unencumbered rights for crofelemer, Mytesi, and Canalevia-CA1. Additionally, several of the drug product opportunities in Jaguar’s crofelemer pipeline are backed by Phase 2 and proof of concept evidence from human clinical trials.

Financial Operations Overview

On a consolidated basis, we have not yet generated enough revenue to date to achieve break even or positive cash flows, and we expect to continue to incur significant research and development and other expenses. Our net loss was $9.5 million and $12.4 million for the three months ended March 31, 2024, and 2023, respectively. As of March 31, 2024, we had a total stockholders' equity of $11.8 million, an accumulated deficit of $317.2 million, and cash of $11. million. We expect to continue to incur losses and experience increased expenditures for the foreseeable future as we expand our product development activities, seek necessary approvals for our product candidates, conduct species-specific formulation studies for our non-prescription products, establish API manufacturing capabilities and begin additional commercialization activities.

Revenues

Our product and collaboration revenue consist of the following:

● Revenues from the sale of our human drug Mytesi, which is sold through distributors and wholesalers and specialty pharmacies.

● Revenues from the sale of our animal products branded as Canalevia-CA1, Neonorm Calf and Neonorm Foal. Our Canalevia-CA1, Neonorm and botanical extract products are primarily sold to distributors, who then sell the products to the end customers.

● Our policy typically permits returns if the product is damaged, defective, or otherwise cannot be used when received by the customer if the product has expired. Returns are accepted for product that will expire within six months or that have expired up to one year after their expiration dates. Estimates for expected returns of expired products are based primarily on an ongoing analysis of our historical return patterns.

See “Results of Operations” below for more detailed discussion on revenues.

Cost of Revenue

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

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Research and Development Expense

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

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

The timing and amount of our research and development expenses will depend largely upon the outcomes of current and future trials for our prescription drug product candidates as well as the related regulatory requirements, the outcomes of current and future species-specific formulation studies for our non-prescription products, manufacturing costs and any costs associated with the advancement of our line extension programs. We cannot determine with certainty the duration and completion costs of the current or future development activities.

The duration, costs, and timing of trials, formulation studies, and development of our prescription drug and non-prescription products will depend on a variety of factors, including:

● the scope, rate of progress, and expense of our ongoing, as well as any additional clinical trials, formulation studies, and other research and development activities;

● future clinical trial and formulation study results;

● potential changes in government regulations; and

● the timing and receipt of any regulatory approvals.

A change in the outcome of any of these variables with respect to the development of a prescription drug product candidate or non-prescription product could mean a significant change in the costs and timing associated with our development activities.

We expect research and development expense to increase due to the start-up costs associated with our clinical trials for other indications.

Sales and Marketing Expense

Sales and marketing expenses consist of personnel and related benefits expense, stock-based compensation expense, direct sales and marketing expense, employee travel expense, and management consulting expense. We currently incur sales and marketing expenses to promote Mytesi. We do not have significant marketing or promotional expenses related to Neonorm Calf or Neonorm Foal for the three months ended March 31, 2024, and 2023.

We expect sales and marketing expense to increase going forward as we focus on expanding our market access activities and commercial partnerships for the development of follow-on indications of Mytesi and crofelemer.

General and Administrative Expense

General and administrative expenses consist of personnel and related benefits expense, stock-based compensation expense, employee travel expense, legal and accounting fees, rent and facilities expense, and management consulting expense.

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

Interest Expense

Interest expense consists primarily of non-cash and cash interest costs related to our borrowings.

Change in Fair Value of Financial Instruments and Hybrid Instrument Designated at Fair Value Option

Change in fair value of financial instruments and hybrid instruments designated at Fair Value Option consists of gain or loss recognized related to fair values changes of our instruments designated at FVO.

Gain (Loss) on Debt Extinguishment

Gain (loss) on debt extinguishment consists of gain or loss incurred related to the exchanges resulting from the extinguishment of our borrowings.

Critical Accounting Policies and Significant Judgments and Estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures in the consolidated financial statements. Critical accounting policies are those accounting policies that may be material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and that have a material impact on financial condition or operating performance. While we base our estimates and judgments on our experience and on various other factors that we believe to be reasonable under the circumstances, actual results may differ from these estimates under different assumptions or conditions. Our significant accounting policies are described in Note 2 of the unaudited condensed consolidated financial statements. Our critical accounting policies and estimates were described in Part II, Item 7, Critical Accounting Policies and Estimates, in our Annual Report on Form 10-K for the year ended December 31, 2023.

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Results of Operations

Comparison for the three months ended March 31, 2024, and 2023

The following table summarizes the Company’s results of operations with respect to the items set forth in such table for the three months ended March 31, 2024 and 2023 together with the change in such items in dollars and as a percentage.

	Three Months Ended
	March 31,
(in thousands)	2024		2023		Variance		Variance %
Product revenue, net	$	2,351	$	1,972	$	379	19.2	%
Operating Expenses
Cost of product revenue		430		345		85	24.6	%
Research and development		4,312		4,775		(463)	(9.7)	%
Sales and marketing		1,443		1,884		(441)	(23.4)	%
General and administrative		4,381		4,813		(432)	(9.0)	%
Total operating expenses		10,566		11,817		(1,251)	(10.6)	%
Loss from operations		(8,215)		(9,845)		1,630	(16.6)	%
Interest expense		(611)		(2,181)		1,570	(72.0)	%
Change in fair value of freestanding and hybrid financial instruments designated at Fair Value Option		(2,021)		(359)		(1,662)	463.0	%
Gain on extinguishment of debt		1,245		—		1,245	100.0	%
Other income (expense)		234		(12)		246	(2,050.0)	%
Loss before income tax		(9,368)		(12,397)		3,029	(24.4)	%
Income tax expense		—		—		—	—	%
Net loss	$	(9,368)	$	(12,397)	$	3,029	(24.4)	%
Net loss attributable to noncontrolling interest		(142)		(195)		53	(27.2)	%
Net loss attributable to common stockholders	$	(9,226)	$	(12,202)	$	2,976	(24.4)	%

Revenue

Product revenue

Sales discounts were $273,000 and $303,000 for the three months ended March 31, 2024, and 2023, respectively, a decrease of $30,000.

Medicaid and AIDS Drug Assistance Program (“ADAP”) rebates accounted for $738,000 and $560,000 for the three months ended March 31, 2024, and 2023, respectively, an increase of $178,000.

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Due to the Company’s arrangements, including elements of variable consideration, gross product sales are reduced in order to reflect the expected consideration to arrive at net product sales. Deductions to reduce gross product sales to net product sales for the three months ended March 31, 2024, and 2023 were as follows:

	Three Months Ended
	March 31,
(in thousands)	2024		2023		Variance		Variance %
Gross product sales
Mytesi	$	3,370	$	2,797	$	573	20.5	%
Canalevia		40		28		12	42.9	%
Neonorm		9		18		(9)	(50.0)	%
Total gross product sales		3,419		2,843		576	20.3	%
Medicaid rebates		(738)		(560)		(178)	31.8	%
Sales discounts		(273)		(303)		30	(9.9)	%
Sales returns		(57)		(8)		(49)	612.5	%
Net product sales	$	2,351	$	1,972	$	379	19.2	%

Our gross product revenues were $3.4 million and $2.8 million for the three months ended March 31, 2024, and 2023, respectively. These periods reflect revenue from the sale of our human drug Mytesi and our animal products branded as Canalevia-CA1, Neonorm Calf and Neonorm Foal.

Our Mytesi product revenues were $3.4 million and $2.8 million for the three months ended March 31, 2024, and 2023. Our Canalevia product revenues were $40,000 and $28,000 for the three months ended March 31, 2024, and 2023, respectively. Our Neonorm product revenues were $9,000 and $18,000 for the three months ended March 31, 2024, and 2023, respectively. Sales and marketing expenses are not significant during 2024 and during the same period in 2023.

Cost of Product Revenue

	Three Months Ended
	March 31,
(in thousands)	2024		2023		Variance		Variance %
Cost of Product Revenue
Direct labor	$	199	$	282	$	(83)	(29.4)	%
Material cost		169		188		(19)	(10.1)	%
Distribution fees		46		(2)		48	(2,400.0)	%
Other		16		(123)		139	(113.0)	%
Total	$	430	$	345	$	85	24.6	%

The increase in cost of product revenue of $85,000 for the month three months ended March 31, 2024, compared to 2023 was primarily due to:

● Direct labor decreased by $83,000 from $282,000 for the three months ended March 31, 2023, to $199,000 in 2024, due to decreased resources in testing and manufacturing.

● Material cost decreased by $19,000 from $188,000 for the three months ended March 31, 2023, to $169,000 in 2024, due to the decrease in volume of materials used in manufacturing.

● Distribution fees increased by $48,000 from negative $2,000 for the three months ended March 31, 2023, to $46,000 in 2024, due to the increase in volume of materials used in manufacturing.

● Other costs increased by $139,000 from negative $123,000 for the three months ended March 31, 2023, to $16,000 in the same period in 2024 due to increase in cost incurred for maintenance and royalties.

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Research and Development

The following table presents the components of research and development (“R&D”) expense for the three months ended March 31, 2024, and 2023 together with the change in such components in dollars and as a percentage:

	Three Months Ended
	March 31,
(in thousands)	2024		2023		Variance		Variance %
Research and Development:
Clinical and contract manufacturing	$	1,933	$	2,247	$	(314)	(14.0)	%
Personnel and related benefits		1,619		1,448		171	11.8	%
Stock-based compensation		289		227		62	27.3	%
Materials expense and tree planting		80		96		(16)	(16.7)	%
Travel and other expenses		35		60		(25)	(41.7)	%
Other		356		697		(341)	(48.9)	%
Total	$	4,312	$	4,775	$	(463)	(9.7)	%

The decrease in R&D expense of $463,000 for the three months ended March 31, 2024 compared to the same period in 2023 was largely due to:

● Clinical and contract manufacturing expenses decreased by $314,000 from $2.2 million for the three months ended March 31, 2023, to $1.9 million in the same period in 2024 largely due to lower clinical trial activities related to start-up of CTD and other indications, additional CMC manufacturing, consulting and contractors’ expenses, and cholera/lechlemer research expenses.

● Personnel and related benefits increased by $171,000 from $1.4 million for the three months ended March 31, 2023, to $1.6 million in the same period in 2024 due to increased costs of benefits and resources.

● Stock-based compensation increased by $62,000 from $227,000 in the three months ended March 31, 2023, to $289,000 in the same period in 2024 primarily due to more options granted during the period as compared to the same period in 2023.

● Travel, and other expenses decreased by $25,000 from $60,000 for the three months ended March 31, 2023, to $35,000 in the same period in 2024 primarily due to fewer travel activities associated with the clinical trials.

● Other expenses consisting of consulting, formulation and regulatory fees decreased by $341,000 from $697,000 for the three months ended March 31, 2023 to $356,000 in the same period in 2024, largely from fewer CTD activities.

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Sales and Marketing

The following table presents the components of sales and marketing (“S&M”) expense for the three months ended March 31, 2024, and 2023 together with the change in such components in dollars and as a percentage:

	Three Months Ended
	March 31,
(in thousands)	2024		2023		Variance		Variance %
Sales and Marketing:
Personnel and related benefits	$	742	$	893	$	(151)	(16.9)	%
Direct marketing fees and expense		296		565		(269)	(47.6)	%
Stock-based compensation		40		49		(9)	(18.4)	%
Other		365		377		(12)	(3.2)	%
Total	$	1,443	$	1,884	$	(441)	(23.4)	%

The decrease in S&M expense of $441,000 for the three months ended March 31, 2024, compared to the same period in 2023 was largely due to:

● Personnel and related benefits decreased by $151,000 from $893,000 for the three months ended March 31, 2023, to $742,000 in the same period in 2024 due to decreased sales commission.

● Direct marketing fees and expenses decreased by $269,000 from $565,000 for the three months ended March 31, 2023, to $296,000 in the same period in 2024 due to savings associated with the utilization of a more cost-effective patient support services and other Mytesi marketing initiatives.

General and Administrative

The following table presents the components of general and administrative (“G&A”) expense for the three months ended March 31, 2024, and 2023 together with the change in such components in dollars and as a percentage:

	Three Months Ended
	March 31,
(in thousands)	2024		2023		Variance		Variance %
General and Administrative:
Personnel and related benefits	$	1,062	$	1,210	$	(148)	(12.2)	%
Legal services		539		711		(172)	(24.2)	%
Public company expense		399		489		(90)	(18.4)	%
Audit, tax and accounting services		339		316		23	7.3	%
Stock-based compensation		252		204		48	23.5	%
Third-party consulting services		293		142		151	106.3	%
Lease expense		276		209		67	32.1	%
Travel and other expenses		114		75		39	52.0	%
Other		1,107		1,457		(350)	(24.0)	%
Total	$	4,381	$	4,813	$	(432)	(9.0)	%

The decrease in G&A expenses of $432,000 for the three months ended March 31, 2024 compared to the same period in 2022 was largely due to:

● Personnel and related benefits decreased by $148,000 from $1.2 million for the three months ended March 31, 2023, to $1.1 million in the same period in 2024 due to lower headcount.

● Legal services decreased by $172,000 from $711,000 for the three months ended March 31, 2023, to $539,000 in the same period in 2024 due to lower legal fee decreased legal consultations for contracts and agreements and other regulatory filings.

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● Public company expense decreased by $90,000 from $489,000 for the three months ended March 31, 2023, to $339,000 in the same period in 2024 due less investor relations and communications consulting expenses, and no expense related to the annual shareholder meeting.

● Stock-based compensation increased by $48,000 from $204,000 for the three months ended March 31, 2023, to $252,000 in the same period in 2024 primarily due to more options granted during the period.

● Third-party consulting services increased by $151,000 from $142,000 for the three months ended March 31, 2023, to $293,000 in the same period in 2024 due to complex transactions for the period.

● Lease expense increased by $67,000 from $209,000 for the three months ended March 31, 2023, to $276,000 in the same period in 2024 primarily due to increase in fees related to occupancy of spaces and use of vehicles.

● Other expenses decreased by $350,000 from $1.5 million for the three months ended March 31, 2023, to $1.1 million in the same period in 2024 due to lower depreciation and amortization of fixed assets and intangible assets, insurance expenses and other support services.

Interest Expense, net

Interest expense decreased by $1.6 million from $2.2 million for the three months ended March 31, 2023 to $611,000 for the same period in 2024 primarily due to changing the accounting of certain debt instruments to Fair Value Option (FVO). The lower interest expense was offset by a higher loss in change in fair value of financial instruments and hybrid instrument designated at FVO.

Change in Fair Value of Financial Instruments and Hybrid Instrument Designated at FVO

Change in fair value of financial instrument and hybrid instrument designated at FVO decreased by $1.7 million from a loss of $359,000 in the three months ended March 31, 2023, to a loss of $2.0 million for the same period in 2024 primarily due to fair value adjustments in liability classified warrants and notes payable designated at FVO.

Gain on Extinguishment of Debt

Gain on extinguishment of debt increased by $1.2 million from zero in the three months ended March 31, 2023, to $1.2 million for the same period in 2024 primarily due to significant modifications of royalty interest agreements resulting to extinguishment accounting.

Liquidity and Capital Resources

Sources of Liquidity

We have incurred net losses since our inception. For the three months ended March 31, 2024, and 2023, we had net losses of $9.4 million and $12.4 million, respectively. We expect to incur additional losses in the near-term future. At March 31, 2024, we had an accumulated deficit of $317.2 million. To date, we have generated only limited revenue, and we may never achieve revenue sufficient to offset our expenses.

We had cash of $11.7 million as of March 31, 2024. We do not believe our current capital is sufficient to fund our operating plan through one year from the issuance of these unaudited condensed consolidated financial statements.

We have funded our operations primarily through the issuance of debt and equity securities, in addition to sales of our commercial products. Cash provided by financing activities for the three months ended March 31, 2024, were generated from the issuance of an aggregate of 130,894,636 shares of common stock under the ATM Agreement for total

61

net proceeds of approximately $11.3 million, issuance of an aggregate 16,666,666 common in exchange of License Agreement for a total net proceeds of $2.0 million.

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

Cash Flows for the Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023

The following table shows a summary of cash flows for the three months ended March 31, 2024 and 2023:

	Three Months Ended March 31,
(in thousands)	2024		2023
Total cash used in operating activities	$	(7,897)	$	(9,945)
Total cash used in investing activities		—		—
Total cash provided by financing activities		13,118		18,811
Effects of foreign exchange rate changes on assets and liabilities		(19)		32
Net increase in cash	$	5,202	$	8,898

Cash Used in Operating Activities

During the three months ended March 31, 2024, net cash used in operating activities of $7.9 million resulted from our net comprehensive loss of $9.2 million adjusted by the change in fair value of financial instrument and hybrid instrument designated at FVO of $2.0 million, stock-based compensation of $581,000, depreciation and amortization expenses of $501,000, amortization of debt discounts and debt issuance costs of $274,000, amortization of operating lease right-of-use asset of $109,000, equity in a net loss in the joint venture of $16,000 and changes in operating assets and liabilities of $153,000, partially off-set by the gain on extinguishment of debt of $1.2 million.

During the three months ended March 31, 2023, net cash used in operating activities of $9.9 million resulted from our net comprehensive loss of $12.6 million adjusted by the amortization of debt discounts and debt issuance costs of $1.3 million, stock-based compensation of $480,000, depreciation and amortization expenses of $504,000, change in fair value of financial instrument and hybrid instrument designated at FVO of $359,000, amortization of operating lease right-of-use asset of $47,000, shares issued in exchange of services of $166,000, equity in net loss in joint venture of $31,000 and changes in operating assets and liabilities of $179,000.

Cash Used in Investing Activities

There are no cash used in investing activities during the three months ended March 31, 2024, and 2023, respectively.

Cash Provided by Financing Activities

During the three months ended March 31, 2024, net cash provided by financing activities of $13.1 million consisted of $11.3 million in net proceeds from shares issued in an At the Market offering, $2.0 million proceeds from

62

issuance of common shares in exchange of License Agreement, offset by $172,000 repayment of insurance financing, and $50,000 in principal payments of the notes payable.

During the three months ended March 31, 2023, net cash provided by financing activities of $18.8 million consisted of $17.9 million in net proceeds from shares issued in an At the Market offering and investment from non-controlling interest of $1.2 million, offset by $236,000 repayment of insurance financing, and $50,000 in principal payments of the notes payable.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Our management, Chief Executive Officer, and Principal Financial and Accounting Officer evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2024. The term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Principal Financial and Accounting Officer, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Principal Financial and Accounting Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2024.

Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(c) under the Exchange Act. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of the effectiveness of internal control in future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate. Under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial and Accounting Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2024, using the criteria established in Internal Control-Integrated Framework (“2013 Framework”) issued by the Committee of Sponsoring Organization of the Treadway Commission (“COSO”). Based on our evaluation using those criteria, our management has concluded that, as of March 31, 2024, our internal control over financial reporting was effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles for the reasons discussed above.

This Quarterly Report on Form 10-Q does not include an attestation report of our registered public accounting firm on our internal control over financial reporting because we are a smaller reporting company and are not subject to auditor attestation requirements under applicable SEC rules.

There were no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. — OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may be subject to various legal proceedings and claims that arise in the ordinary course of our business activities. Regardless of the outcome, litigation can have a material adverse effect on us due to defense and settlement costs, diversion of our management resources, and other factors. We are not currently subject to any material legal proceedings.

Item 1A. Risk Factors

The following discussion of risk factors contains forward-looking statements. These risk factors may be important to understanding other statements in this Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our unaudited condensed consolidated financial statements and related notes, before making a decision to invest in our common stock. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations. If any of the events or circumstances described in the following risk factors actually occur, our business, operating results, financial condition, cash flows, and prospects could be materially and adversely affected. In that event, the market price of our common stock could decline, and you could lose part or all of your investment.

The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described below, any one or more of which could, directly or indirectly, cause the Company’s actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results, and stock price.

Because of the following factors, as well as other factors affecting the Company’s financial condition and operating results, past financial performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods.

Our royalty interests require us to make minimum royalty payments, even if we do not sell a sufficient amount of products to cover such.

Since March 2020, we have sold royalty interests to certain lenders that entitle such lenders to receive future royalties on sales of our products. These royalty interests require us to make minimum royalty payments beginning in 2021, even if we do not sell a sufficient amount of product to cover such payments, which may strain our cash resources. The total minimum royalty payments will be $27.0 million in 2026.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On January 29, 2024, the Company entered into a privately negotiated exchange agreement with Streeterville pursuant to which the Company issued 1,587,632 shares of the Company’s common stock, par value $0.0001 to Streeterville in exchange for a $165,000 reduction in the outstanding balance of the royalty interest dated August 24, 2022.

On January 29, 2024, the Company entered into a privately negotiated exchange agreement with Iliad pursuant to which the Company issued and aggregate of 8,000,000 shares of the Company’s common stock to Iliad in exchange for a $836,000 reduction in the outstanding balance of the royalty interest dated October 8, 2020, Royalty Interest. The effect of the exchange was accounted for as a debt modification.

On February 27, 2024, pursuant to the PIPE Purchase Agreement, each of the PIPE investors entered into an exchange agreement with the Company (each, a “PIPE Warrant Exchange Agreement” and collectively, the “PIPE Warrant Exchange Agreements”). Pursuant to the PIPE Warrant Exchange Agreements, the Company agreed to

64

exchange the PIPE Warrants for shares of common stock at an exchange ratio of 1-for-2.5 (“PIPE Warrant Exchange Transaction”). Upon completion of the PIPE Warrant Exchange Transaction, the Company exchanged the PIPE Warrants to purchase up to 7,535,000 shares of Common Stock for 18,837,500 shares of Common Stock (the “PIPE Exchange Shares”), and the PIPE Warrants were terminated. The PIPE Exchange Shares would be subject to a twelve-month lock-up, and any other equity security of the Company other than the PIPE Exchange Shares owned by the PIPE investors as of the date of the PIPE Warrant Exchange Agreement would be subject to a six-month lock-up.

On March 1, 2024, the Company entered into a privately negotiated exchange agreement with Streeterville (the “Streeterville Exchange Agreement”), pursuant to which the Company issued an aggregate of 179.3822 shares of Series J Preferred Stock to Streeterville at an effective exchange price per share equal to the market price (defined as the Minimum Price under Nasdaq Listing Rule 5635(d)) as of the date of the Streeterville Exchange Agreement, in exchange for the surrender of the March 2021 Purchase Agreement by Streeterville (the “Streeterville Exchange Transaction”).

On March 5, 2024, the Company entered into a privately negotiated exchange agreement with Streeterville, pursuant to which the Company issued 10,000,000 shares of the Company’s common stock in exchange for the surrender and cancellation of 40 shares of Series J Perpetual Preferred Stock. On March 19, 2024, the Company entered into a privately negotiated exchange agreement with Streeterville, pursuant to which the Company issued 8,333,333 shares of the Company’s common stock in exchange for the surrender and cancellation of 40 shares of Series J Perpetual Preferred Stock based on an effective exchange price of $0.12 per share of common stock.

The shares of common stock that were issued in the exchange transactions described above were issued in reliance on the exemption from registration provided under Section 3(a)(9) of the Securities Act. 

On March 18, 2024, the Company entered into a privately negotiated securities purchase agreement with Gen Ilac Ve Saglik Urunleri Sanayi Ve Ticaret, A.S., pursuant to which the Company issued 16,666,666 shares of the Company’s common stock at a price of $0.12 per share for gross proceeds of approximately $2.0 million. The sale of the securities was consummated in connection with the licensing transaction covering the exclusive license and commercialization agreement for the Company's FDA-approved prescription drug Crofelemer with purchasers in certain countries within Eastern Europe.

The offers, sales, and issuances of the securities described above were deemed to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act, Regulation D or Regulation S promulgated thereunder as transactions by an issuer not involving a public offering, as applicable. The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these transactions was an accredited or sophisticated person and had adequate access, through employment, business or other relationships, to information about us.

Other than equity securities issued in transactions disclosed above and on our Current Reports on Form 8-K filed with the SEC on March 1, 2024, March 8, 2024 and March 21, 2024, there were no unregistered sales of equity securities during the period.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

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Item 6. Exhibits

Exhibit No.	Description
3.1	Certificate of Designation of Series J Convertible Preferred Stock. (incorporated by reference to Exhibit 3.1 to the Form 8-K of Jaguar Health, Inc. filed March 1, 2024, File No. 001-36714).
10.1	Exchange Agreement, dated March 1, 2024, by and between Jaguar Health, Inc. and Streeterville Capital, LLC (incorporated by reference to Exhibit 10.1 to the Form 8-K filed March 1, 2024, File No. 001-36714).
10.2	Form of PIPE Warrant Exchange Agreement, dated February 27, 2024, by and between Jaguar Health, Inc. and the PIPE investor (incorporated by reference to Exhibit 10.2 to the Form 8-K filed March 1, 2024, File No. 001-36714).
10.3	First Amendment to Amended and Restated License Agreement, dated March 16, 2024, by and between Napo Pharmaceuticals, Inc. and Nano Therapeutics S.p.A.
31.1*	Principal Executive Officer’s Certification Pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.
31.2*	Principal Financial Officer’s Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification Pursuant to 18 U.S.C. § 1350 (Section 906 of Sarbanes-Oxley Act of 2002).
32.2**	Certification Pursuant to 18 U.S.C. § 1350 (Section 906 of Sarbanes-Oxley Act of 2002).
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

*     Filed herewith.

**   In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34 47986, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Form 10 Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or deemed to be incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933 except to the extent that the registrant specifically incorporates it by reference.

66

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

May 14, 2024
	JAGUAR HEALTH, INC.
	By:	/s/ Carol R. Lizak
		Principal Financial and Accounting Officer

67

EX-10.3

Exhibit 10.3

FIRST AMENDMENT TO

AMENDED AND RESTATED LICENSE AGREEMENT

This FIRST AMENDMENT (this “Amendment”) to the Amended and Restated License Agreement (as hereinafter defined) is made effective as of March 10, 2024 (the “Amendment Effective Date”) by and between Napo Pharmaceuticals, Inc., a Delaware corporation (“Licensor”), and Napo Therapeutics S.p.A. (f/k/a Napo EU S.p.A.), an Italy law joint stock company (“Licensee”). Licensor and Licensee are referred to in this Amendment individually as a “Party” and collectively as the “Parties.”

WHEREAS, Licensor and Licensee are parties to that certain Amended and Restated License Agreement, dated as of July 19, 2022 (the “A&R License Agreement”), which amended and restated in entirety the License Agreement between the Parties, dated as of August 18, 2021, as amended on October 21, 2021 and November 18, 2()21, pursuant to which A&R License Agreement, Licensee obtained from Licensor, and Licensor granted to Licensee, certain licenses under the Licensed IP to develop, commercialize and manufacture the Products; and

WHEREAS, the Parties desire to amend the A&R License Agreement to revise the Licensee Territory as specified in this Amendment.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements set forth herein, the receipt and sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

1.Definitions. Capitalized terms used in this Amendment and not otherwise defined in this Amendment shall have the meanings set forth in the A&R License Agreement.

2.Effective Date. This Amendment shall become effective as of the Amendment Effective Date.

3.Amendment. The words “Turkey” and “Ukraine” are hereby deleted from Exhibit C of the A&R License Agreement.

4.Effect pf Amendment. Except as expressly amended in this Amendment, all terms and conditions of the License Agreement shall remain in full force and effect.

5.Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed to be an original instrument enforceable in accordance with its terms and all of which shall constitute but one and the same agreement of the Parties.

6.Dispute Resolutions: Governing Law. The provisions of Sections 15.4, 15.5 and 15.10 of the A&R License Agreement shall apply equally to this Amendment.

[Remainder of page intentionally left blank; signature page follows]

IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be executed by their duly authorized officers or representatives as of the Amendment Effective Date.

LICENSOR:
NAPO PHARMACEUTICALS, INC.
By:	/s/ Lisa A. Conte
Name:	Lisa A. Conte
Title:	President & CEO
LICENSEE:
NAPO THERAPEUTICS S.P.A.
By:	/s/ Massimo Radaelli, PhD
Name:	Massimo Radaelli, PhD
Title:	Member, BOD

[Signature Page to First Amendment to License Agreement]

EX-31.1

Exhibit 31.1

PRINCIPAL EXECUTIVE OFFICER’S CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Lisa A. Conte, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Jaguar Health, Inc. for the quarter ended March 31, 2024;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 14, 2024
	/s/ Lisa A. Conte
	Lisa A. Conte
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

PRINCIPAL FINANCIAL OFFICER’S CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Carol Lizak, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Jaguar Health, Inc. for the quarter ended March 31, 2024;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 14, 2024
	/s/ Carol Lizak
	Carol Lizak
	Principal Financial and Accounting Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Jaguar Health, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 14, 2024
	/s/ Lisa A. Conte
	Lisa A. Conte
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Jaguar Health, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 14, 2024
	/s/ Carol Lizak
	Carol Lizak
	Principal Financial and Accounting Officer

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2024	May 14, 2024
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	001-36714
Entity Registrant Name	JAGUAR HEALTH, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-2956775
Entity Address, Address Line One	200 Pine Street, Suite 400
Entity Address, City or Town	San Francisco
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94104
City Area Code	415
Local Phone Number	371-8300
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Title of 12(b) Security	Common stock, Par Value $0.0001 Per Share
Trading Symbol	JAGX
Security Exchange Name	NASDAQ
Entity Central Index Key	0001585608
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false
Common stock - voting
Document and Entity Information
Entity Common Stock, Shares Outstanding		293,353,560
Common stock - non-voting
Document and Entity Information
Entity Common Stock, Shares Outstanding		2,120,786

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Current assets:
Cash	$ 11,671	$ 6,469
Accounts receivable, net	1,512	1,967
Other receivable	202	217
Inventory	9,020	9,189
Prepaid expenses and other current assets	11,309	10,121
Total current assets	33,714	27,963
Property and equipment, net	484	496
Operating lease - right-of-use asset	1,289	1,176
Intangible assets, net	19,627	20,116
Other assets	275	1,012
Total assets	55,389	50,763
Current liabilities:
Accounts payable	3,320	4,974
Accrued liabilities	3,461	3,798
Deferred revenue	170
Operating lease liability, current	469	348
Notes payable, net of discount (includes note designated at Fair Value Option amounting to $10.2 million as of March 31, 2024 and $0 December 31, 2023, respectively)	10,394	4,867
Total current liabilities	17,814	13,987
Operating lease liability, net of current portion	873	886
Deferred revenue - long term	680
Notes payable, net of discount, net of current portion (includes notes designated at Fair Value Option amounting to $21.7 million as of March 31, 2024 and $31.0 million December 31, 2023, respectively)	21,719	30,993
Total liabilities	41,086	45,866
Commitments and contingencies (See Note 6)
Redeemable preferred stock: $0.0001 par value; 179 and 0 shares designated from 10,000.000 preferred stock authorized at March 31, 2024 and December 31, 2023; 99 and 0 shares issued and outstanding at March 31, 2024 and December 31, 2023	2,485
Stockholders' equity
Additional paid-in capital	329,647	313,854
Noncontrolling interest	(180)	(64)
Accumulated deficit	(317,215)	(308,248)
Accumulated other comprehensive loss	(461)	(652)
Total stockholders' equity	11,818	4,897
Total liabilities, redeemable preferred stock and stockholder's equity	55,389	50,763
Series G convertible preferred stock
Stockholders' equity
Preferred stock value
Series H convertible preferred stock
Stockholders' equity
Preferred stock value
Series I convertible preferred stock
Stockholders' equity
Preferred stock value
Common stock - voting
Stockholders' equity
Common stock value	$ 27	$ 7

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Current notes designated at Fair Value Option	$ 10.2	$ 0.0
Non-current notes designated at Fair Value Option	$ 21.7	$ 31.0
Redeemable preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Redeemable preferred stock, designated from authorized preferred stock	179	0
Redeemable preferred stock, shares authorized (in shares)	10,000.000	10,000.000
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Redeemable preferred stock, shares issued (in shares)	99	0
Redeemable preferred stock, shares outstanding (in shares)	99	0
Convertible preferred stock, shares designated (in shares)	7,535,013	7,534,834
Convertible preferred stock, shares issued (in shares)	99	178
Convertible preferred stock, shares outstanding (in shares)	99	178
Series G convertible preferred stock
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Convertible preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Convertible preferred stock, shares designated (in shares)	137	137
Convertible preferred stock, shares issued (in shares)	0	122
Convertible preferred stock, shares outstanding (in shares)	0	122
Series H convertible preferred stock
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Redeemable preferred stock, shares issued (in shares)		0
Convertible preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Convertible preferred stock, shares designated (in shares)	105	105
Convertible preferred stock, shares issued (in shares)	0	0
Convertible preferred stock, shares outstanding (in shares)	0	0
Series I convertible preferred stock
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Convertible preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Convertible preferred stock, shares designated (in shares)	118	118
Convertible preferred stock, shares issued (in shares)	0	56
Convertible preferred stock, shares outstanding (in shares)	0	56
Common Stock | Common stock - voting
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	298,000,000	298,000,000
Common stock, shares issued (in shares)	273,479,471	73,413,248
Common stock, shares outstanding (in shares)	273,479,471	73,413,248
Common Stock | Common stock - non-voting
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	9	9
Common stock, shares outstanding (in shares)	9	9

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Operating expenses
Cost of product revenue	$ 430	$ 345
Research and development	4,312	4,775
Sales and marketing	1,443	1,884
General and administrative	4,381	4,813
Total operating expenses	10,566	11,817
Loss from operations	(8,215)	(9,845)
Interest expense	(611)	(2,181)
Change in fair value of freestanding and hybrid financial instruments designated at Fair Value Option	(2,021)	(359)
Gain on extinguishment of debt	1,245
Other income (expense)	234	(12)
Loss before income tax	(9,368)	(12,397)
Income tax expense	0	0
Net loss	(9,368)	(12,397)
Net loss attributable to noncontrolling interest	(142)	(195)
Net loss attributable to common stockholders	$ (9,226)	$ (12,202)
Net loss per share, basic	$ (0.06)	$ (2.39)
Net loss per share, diluted	$ (0.06)	$ (2.39)
Weighted-average common stock outstanding, basic	158,842,297	5,109,609
Weighted-average common stock outstanding, diluted	158,842,297	5,109,609
Product revenue, net
Revenue
Revenue	$ 2,351	$ 1,972

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSES - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSES
Net loss	$ (9,368)	$ (12,397)
Other comprehensive gains (loss)	217	(232)
Net comprehensive loss	(9,151)	(12,629)
Common stockholders:
Net loss attributable to common stockholders	(9,226)	(12,202)
Other comprehensive loss attributable to common stockholders
Translation adjustments	191	(204)
Net comprehensive loss attributable to common stockholders	(9,035)	(12,406)
Non-controlling interests:
Net loss attributable to non-controlling interests	(142)	(195)
Other comprehensive loss attributable to non-controlling interests
Translation adjustments	26	(28)
Net comprehensive loss attributable to non-controlling interests	$ (116)	$ (223)

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - USD ($)	Warrants issued and outstanding Common Stock Common stock - voting	Warrants issued and outstanding Additional paid-in capital	At The Market Offering Common Stock Common stock - voting	At The Market Offering Additional paid-in capital	At The Market Offering	Preferred Stock Series G convertible preferred stock	Preferred Stock Series I convertible preferred stock Iliad	Preferred Stock Series I convertible preferred stock	Common Stock Series G convertible preferred stock	Common Stock Series I convertible preferred stock Iliad	Common Stock Common stock - voting Streeterville	Common Stock Common stock - voting Iliad	Common Stock Common stock - voting Irving	Common Stock Common stock - voting	Common Stock Common stock - non-voting	Additional paid-in capital Streeterville	Additional paid-in capital Iliad	Additional paid-in capital Irving	Additional paid-in capital	Noncontrolling Interest	Accumulated deficit Streeterville	Accumulated deficit	Accumulated other comprehensive loss	Redeemable preferred stock Streeterville	Redeemable preferred stock	Series J convertible preferred stock	Streeterville	Iliad	Irving	Total
Redeemable preferred stock
Preferred shares issued to Streeterville in exchange of notes payable and accrued interest																	$ 1,275,000	$ 627,000										$ 1,275,000	$ 627,000
Preferred shares issued to Streeterville in exchange of notes payable and accrued interest (in shares)												1,370,005	150,000
Common shares issued in exchange of notes payable and accrued interest (in shares)												1,370,005	150,000
Beginning Balance at Dec. 31, 2022																			$ 266,971,000	$ (699,000)		$ (266,948,000)	$ (680,000)							$ (1,356,000)
Beginning Balance (in shares) at Dec. 31, 2022														2,182,084	9
Increase (decrease) in Stockholders' Equity (Deficit)
Issuance of common stock			$ 1,000	$ 17,864,000	$ 17,865,000
Issuance of common stock (In shares)			10,463,983
Common shares issued in exchange of notes payable and accrued interest																	1,275,000	$ 627,000										1,275,000	$ 627,000
Additional investment from non-controlling interests																				1,232,000										1,232,000
Stock-based compensation																			480,000											480,000
Shares issued to other third party for services																			166,000											166,000
Shares issued to other third party for services (in shares)														9,669
Stock Issued During Period, Value, Third Party For Services																			166,000											166,000
Net loss																				(195,000)		(12,202,000)								(12,397,000)
Translation Gain (Loss)																				(28,000)			(204,000)							(232,000)
Ending Balance at Mar. 31, 2023														$ 1,000					287,383,000	310,000		(279,150,000)	(884,000)							$ 7,660,000
Ending Balance (in shares) at Mar. 31, 2023														14,175,741	9
Beginning Balance, Redeemable preferred stock (in shares) at Dec. 31, 2023																														0
Redeemable preferred stock
Preferred shares issued to Streeterville in exchange of notes payable and accrued interest												$ 1,000				$ 166,000	835,000							$ 4,485,000			$ 166,000	836,000
Preferred shares issued to Streeterville in exchange of notes payable and accrued interest (in shares)											1,587,632	8,000,000												179
Common shares issued in exchange of notes payable and accrued interest (in shares)											1,587,632	8,000,000												179
Common shares issued from conversion	$ 2,000	$ (2,000)									$ 2,000					1,738,000					$ 259,000			$ (2,000,000)			1,999,000
Common shares issued from conversion(in shares)	18,837,500					(122)	(56)		3,050,000	2,696,456	18,333,333													(80)
Ending Balance, Redeemable preferred stock at Mar. 31, 2024																									$ 2,485,000					$ 2,485,000
Ending Balance, Redeemable preferred stock (in shares) at Mar. 31, 2024																									99	99				99
Beginning Balance at Dec. 31, 2023														$ 7,000	$ 9				313,854,000	(64,000)		(308,248,000)	(652,000)							$ 4,897,000
Beginning Balance (in shares) at Dec. 31, 2023						122		56						73,413,248
Increase (decrease) in Stockholders' Equity (Deficit)
Issuance of common stock			$ 13,000	$ 11,327,000	$ 11,340,000
Issuance of common stock (In shares)			130,894,636
Common shares issued from conversion	$ 2,000	$ (2,000)									$ 2,000					1,738,000					$ 259,000			$ (2,000,000)			1,999,000
Common shares issued to third party in exchange of license agreement														$ 2,000					1,148,000											1,150,000
Common shares issued to third party in exchange of license agreement (in shares)														16,666,666
Common shares issued in exchange of notes payable and accrued interest												$ 1,000				$ 166,000	$ 835,000							$ 4,485,000			$ 166,000	$ 836,000
Stock-based compensation																			581,000											581,000
Net loss																				(142,000)		(9,226,000)								(9,368,000)
Translation Gain (Loss)																				26,000			191,000							217,000
Ending Balance at Mar. 31, 2024														$ 27,000	$ 9				$ 329,647,000	$ (180,000)		$ (317,215,000)	$ (461,000)							$ 11,818,000
Ending Balance (in shares) at Mar. 31, 2024														273,479,471

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
At The Market Offering
Stock Transactions, Parenthetical Disclosures
Issuance costs	$ 42	$ 30

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities
Net comprehensive loss	$ (9,151,000)	$ (12,629,000)
Adjustments to reconcile net loss and comprehensive loss to net cash used in operating activities:
Change in fair value of freestanding and hybrid financial instruments designated at Fair Value Option	2,021,000	359,000
Stock-based compensation, vested and released restricted stock units and exercised stock options	581,000	480,000
Depreciation and amortization expenses	501,000	504,000
Amortization of debt issuance costs, debt discount, and non-cash interest expense	274,000	1,276,000
Amortization of operating lease - right-of-use-asset	109,000	47,000
Share in joint venture's loss	16,000	31,000
Gain on extinguishment of debt	(1,245,000)
Shares issued in exchange for services	0	166,000
Changes in assets and liabilities
Accounts receivable	455,000	892,000
Other receivable	10,000	138,000
Inventory	169,000	(1,660,000)
Prepaid expenses and other current assets	(1,136,000)	(160,000)
Other assets	735,000	(18,000)
Accounts payable	(1,660,000)	(134,000)
Accrued liabilities	531,000	816,000
Deferred revenue	850,000
Operating lease liability	(107,000)	(53,000)
Total cash used in operating activities	(7,047,000)	(9,945,000)
Cash flows from financing activities
Proceeds from issuance of shares in At the Market offering, net of issuance and offering costs of $42 and $30 in 2024 and 2023, respectively	11,340,000	17,865,000
Proceeds from issuance of common shares in exchange of License Agreement	1,150,000
Investment from non-controlling interest	0	1,232,000
Payment of Tempesta Note	(50,000)	(50,000)
Repayment of insurance financing	(172,000)	(236,000)
Total cash provided by financing activities	12,268,000	18,811,000
Effects of foreign exchange rate changes on assets and liabilities	(19,000)	32,000
Net increase in cash	5,202,000	8,898,000
Cash at beginning of the year	6,469,000	5,469,000
Cash at end of the year	11,671,000	14,367,000
Supplemental schedule of cash flow information
Cash paid for interest	9,000	6,000
Supplemental schedule of non-cash financing and investing activities
Recognition of operating lease - right-of-use asset and operating lease liability	221,000	30,000
Umbrella Insurance Financing	52,000
Common stock issued from conversion of warrants	2,000
Streeterville
Supplemental schedule of non-cash financing and investing activities
Shares Issued in Exchange of Preferred Stock	1,999,000
Streeterville | Preferred Stock
Supplemental schedule of non-cash financing and investing activities
Shares issued in exchange of notes payable and accrued interest	4,485,000
Streeterville | Common Stock
Supplemental schedule of non-cash financing and investing activities
Shares issued in exchange of notes payable and accrued interest	166,000	627,000
Iliad | Common Stock
Supplemental schedule of non-cash financing and investing activities
Shares issued in exchange of notes payable and accrued interest	$ 836,000	$ 1,275,000

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
At The Market Offering
Issuance costs	$ 42	$ 30

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Organization and Business

3 Months Ended

Mar. 31, 2024

Organization and Business

Organization and Business

1. Organization and Business

Jaguar Health, Inc. (“Jaguar” or the “Company”) was founded in San Francisco, California, as a Delaware corporation on June 6, 2013 (inception). The Company was a majority-owned subsidiary of Napo Pharmaceuticals, Inc. (“Napo”) until the close of the Company's initial public offering on May 18, 2015. The Company was formed to develop and commercialize first-in-class prescription and non-prescription products for companion animals.

On July 31, 2017, Jaguar completed a merger with Napo pursuant to the Agreement and Plan of Merger dated March 31, 2017, by and among Jaguar, Napo, Napo Acquisition Corporation (“Merger Sub”), and Napo's representative (the “Merger Agreement”). In accordance with the terms of the Merger Agreement, upon the completion of the merger, Merger Sub merged with and into Napo, with Napo surviving as the wholly owned subsidiary (the “Merger” or “Napo Merger”). Immediately following the Merger, Jaguar changed its name from “Jaguar Animal Health, Inc.” to “Jaguar Health, Inc.” Napo now operates as a wholly owned subsidiary of Jaguar focused on human health, including the ongoing development of crofelemer and commercialization of Mytesi.

On March 15, 2021, Jaguar established Napo EU S.p.A (which changed its name in December 2021 to “Napo Therapeutics”) in Milan, Italy as a subsidiary of Napo. Napo Therapeutics’ core mission is to provide access to crofelemer in Europe to address significant rare/orphan disease indications, including, initially, two key orphan target indications: short bowel syndrome (“SBS”) with intestinal failure and congenital diarrheal disorders (“CDD”).

The Company manages its operations through two segments – human health and animal health – and is headquartered in San Francisco, California.

Nasdaq Communication and Compliance

Minimum Bid Price Requirement

On May 10, 2023, the Listing Qualifications Staff (the “Staff”) of The Nasdaq Stock Market LLC issued to the Company a notification citing its failure to comply with the $1.00 minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2) (the "Minimum Bid Price Requirement"). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was initially provided 180 calendar days, or until November 6, 2023, and was subsequently granted an additional 180 calendar day period, or until May 6, 2024, to regain compliance with the Minimum Bid Price Requirement. However, on February 15, 2024, the Company received a delisting determination letter from the Staff in accordance with Nasdaq Listing Rule 5810(c)(3)(A)(iii) due to the Company’s securities having a closing bid price of $0.10 or less for ten consecutive trading days. Accordingly, on February 29, 2024, the Company requested a hearing before the Nasdaq Hearings Panel (the “Panel”) which automatically stayed the delisting of the Company’s common stock from Nasdaq pending a decision from the Panel. Pursuant to a review process, the Panel provided notice on April 5, 2024 granting the Company’s request to extend the period for it to regain compliance with the Minimum Bid Price Requirement until August 13, 2024.

Liquidity and Going Concern

The Company, since its inception, has incurred recurring operating losses and negative cash flows from operations and has an accumulated deficit of $317.2 million as of March 31, 2024. The Company expects to incur substantial losses and negative cash flows in future periods. Further, the Company’s future operations, which include the satisfaction of current obligations, are dependent on the success of the Company’s ongoing development and commercialization efforts, as well as securing of additional financing and generating positive cash flows from operations. There is no assurance that the Company will have adequate cash balances to maintain its operations.

Although the Company plans to finance its operations and cash flow needs through equity and/or debt financing, collaboration arrangements with other entities, license royalty agreements, as well as revenue from future product sales, the Company does not believe its current cash balances are sufficient to fund its operating plan through one year from the issuance of these unaudited condensed consolidated financial statements. There can be no assurance that additional funding will be available to the Company on acceptable terms, or on a timely basis, if at all, or that the Company will generate sufficient cash from operations to adequately fund operating needs. If the Company is unable to obtain an adequate level of financing needed for the long-term development and commercialization of the products, the Company will need to curtail planned activities and reduce costs. Doing so will likely have an adverse effect on the ability to execute the Company’s business plan; accordingly, there is substantial doubt about the ability of the Company to continue in existence as a going concern. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2024

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and on a basis consistent with the annual consolidated financial statements, and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair presentation of the periods presented. These interim financial results are not necessarily indicative of the results to be expected for the year ending
December 31, 2024, or for any other future annual or interim period. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Annual Report on Form 10-K for the year ended December 31, 2023. The condensed consolidated balance sheet at December 31, 2023 has been derived from the audited consolidated financial statements at that date, but does not include all disclosures, including notes, required by U.S. GAAP for complete financial statements.

There has been no material change to the Company's significant accounting policies during the three months ended March 31, 2024 as compared to the significant accounting policies described in Note 2 of the “Notes to Consolidated Financial Statements” in the Company's Annual Report on Form 10-K as of and for the year ended December 31, 2023, which was filed to SEC on April 1, 2024 and amended on April 17, 2024.

Except as noted above, the unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to present fairly the financial position as of March 31, 2024, results of operations for the three months ended March 31, 2024 and 2023, changes in convertible preferred stock and stockholders' equity for the three months ended March 31, 2024 and 2023, and cash flows for the three months ended March 31, 2024 and 2023. The interim results are not necessarily indicative of the results for any future interim periods or for the entire year.

Principles of Consolidation

The consolidated financial statements have been prepared in accordance with U.S. GAAP and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) and include the accounts of the Company and its subsidiaries with controlling interest. All inter-company transactions and balances have been eliminated in consolidation. The reporting currency of the Company is the U.S dollar.

Non-controlling interest

The Company consolidates the results of Napo Therapeutics, which was owned 88% by the Company and 12% by private investors as of March 31, 2024, and December 31, 2023. The potential voting rights with a certainty of being exercised in its shares are included in the ownership percentage.

Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company’s management to make judgments, assumptions and estimates that affect the amounts reported in its unaudited consolidated financial statements and the accompanying notes. The accounting policies that reflect the Company’s more significant estimates and judgments and that the Company believes are the most critical to aid in fully understanding and evaluating its reported financial results are the valuation of stock options, restricted stock units (“RSUs”), hybrid instruments designated at fair value option (“FVO”), warrant liabilities, acquired in-process research and development (“IPR&D”), and useful lives assigned to long-lived assets; impairment assessment of non-financial assets; valuation adjustments for excess and obsolete inventory; allowance for doubtful accounts; deferred taxes and valuation allowances on deferred tax assets; evaluation and measurement of contingencies; and recognition of revenue, including estimates for product returns. Those estimates could change, and as a result, actual results could differ materially from those estimates.

Cash

The Company’s cash on deposit may exceed United States federally insured limits at certain times during the year. The Company maintains cash accounts with certain major financial institutions in the United States. The Company does not have cash equivalents as of March 31, 2024, and December 31, 2023.

Accounts Receivable

Accounts receivable is recorded net of allowances for discounts for prompt payment and credit losses.

The Company utilizes a loss rate approach in determining its lifetime expected credit losses on receivables from customers. This method calculates an estimate of credit losses based on historical experience, credit quality, age of the accounts receivable balances, and current and forecasted economic and business conditions that may affect a customer’s ability to pay. In determining the loss rates, the Company evaluates information related to its historical losses, adjusted for existing conditions and further adjusted for the period of time that can reasonably be forecasted. The facts and circumstances as of the balance sheet date are used to adjust the estimate for periods beyond those that can reasonably be forecasted.

The past due status of accounts receivable is determined based on the contractual due dates for payments. Receivable is deemed past due when payment hasn’t been received 30 days after the contractual due date. The credit loss allowance was immaterial as of March 31, 2024, and December 31, 2023. The corresponding expense for the credit loss allowance is reflected in general and administrative expenses.

Current Expected Credit Losses

The Company recognizes an allowance for credit losses for financial assets carried at amortized cost to present the net amount expected to be collected as of the balance sheet date. Such allowance is based on credit losses that are expected to arise over the contractual term of the asset, which includes consideration of historical credit loss information adjusted for current conditions and reasonable and supportable forecasts.

Changes in the allowance for credit losses are recorded as provision of (or reversal of) credit loss expense. Assets are written off when the Company determines that such are deemed uncollectible. Write-offs are recognized as a deduction from the allowance for credit losses. Expected recoveries of amounts previously written off, not to exceed the aggregate of the amount previously written off, are included in determining the necessary allowance at the balance sheet date.

Concentrations

Cash is the financial instrument that potentially subjects the Company to a concentration of credit risk as cash is deposited with a bank and cash balances are generally in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits.

For the three months ended March 31, 2024, and 2023, substantially all of the Company’s revenue was derived from the sale of Mytesi. In looking at sales by the Company to specialty pharmacies whose net revenue percentage of total net revenue was equal to or greater than 10%, for fiscal years 2024 and 2023, the Company earned Mytesi revenue primarily from three specialty pharmacies located in the United States, respectively. Revenue earned from each major customer as a percentage of total revenue is as follows:

	Three Months Ended
	March 31,
	2024		2023
Customer 1	31	%	25	%
Customer 2	54	%	54	%

The Company is subject to credit risk from its accounts receivable related to its sales. The Company generally does not perform evaluations of customers' financial condition and generally does not require collateral. Accounts receivable balance of the significant customers as a percentage of total accounts receivable is as follows:

	March 31,		December 31,
	2023		2023
Customer 1	30	%	32	%
Customer 2	56	%	57	%

The Company is subject to concentration risk from its suppliers. The Company sources raw material used to produce the active pharmaceutical ingredient (“API”) in Mytesi from two suppliers and is dependent on a single third-party contract manufacturer as well for the supply of finished products for commercialization.

Other Risks and Uncertainties

The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations including, but not limited to, war, rapid technological change, obtaining second source suppliers and manufacturers, regulatory approval from the US Food and Drug Administration (“FDA”) or other regulatory authorities, the results of clinical trials and the achievement of milestones, market acceptance of the Company’s product candidates, competition from other products and larger companies, protection of proprietary technology, strategic relationships and dependence on key individuals.

Other Global Events

Macroeconomic conditions around the world are subject to constant change, influenced by several factors, including persistently high inflation, structural weaknesses in the labor market, low productivity growth, and adverse weather conditions. The UK's recession has severely impacted Europe's decline. The Company’s subsidiary in Italy, Napo Therapeutics, has not generated any revenue for the three months ended March 31, 2024. Despite these recent global events, there have been no significant changes in the subsidiary's operations.

Fair Value

The Company’s financial instruments include accounts receivable, net, other receivable, accounts payable, accrued liabilities, operating lease liability and debt. The recorded carrying amount of accounts receivable, accounts payable and accrued liabilities reflect their fair value due to their short-term nature. Other financial liabilities are initially recorded at fair value, and subsequently measured at either fair value or amortized cost using the effective interest method. See Note 3 for the fair value measurements.

Fair Value Option

ASC 825-10, Financial Instruments, provides FVO election that allows companies an irrevocable election to use fair value as the initial and subsequent accounting measurement attribute for certain financial assets and liabilities. ASC 825-10 permits entities to elect to measure eligible financial assets and liabilities at fair value on an ongoing basis. Unrealized gains and losses on items for which the FVO has been elected are reported in earnings. The decision to elect the FVO is determined on an instrument-by-instrument basis, must be applied to an entire instrument and is irrevocable once elected. Assets and liabilities measured at fair value pursuant to ASC 825-10 are required to be reported separately from those instruments measured using another accounting method. In accordance with the options presented in ASC 825-10, the Company elected to present the aggregate of fair value and non-fair-value amounts in the same line item in the consolidated balance sheets and parenthetically disclose the amount measured at fair value in the aggregate amount. The fair values of the Company's financial instruments reflect the amounts that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The fair value estimates presented in these financial statements are based on information available to the Company as of March 31, 2024, and December 31, 2023.

Inventory

Inventory is stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method. Cost is initially recorded at the invoiced amount of raw materials or API, including the sum of qualified expenditures and charges in bringing the inventory to its existing condition and location. The Company calculates inventory valuation adjustments when conditions indicate that net realizable value is less than cost due to physical deterioration, usage, obsolescence, reductions in estimated future demand or reduction in selling price. Inventory write-downs are measured as the difference between the cost of inventory and net realizable value. The Company did not have allowance for inventory obsolescence as of March 31, 2024, and December 31, 2023.

Prelaunch Inventory

The Company’s policy is to capitalize costs for prelaunch inventories within the drug development phase that evidence that the product’s reasonably likely critical attributes for success are present and feasible, and the key causes of failures are absent based on management’s assumptions. The costs that can be capitalized for pre-launch inventory are recorded as “Prepayments and Other Assets”.

Property and Equipment

Land is stated at cost, reflecting the fair value of the property at July 31, 2017, the date of the Napo merger. Equipment is stated at cost, net of accumulated depreciation. Equipment begins to be depreciated when it is placed into service. Depreciation is calculated using the straight-line method over estimated useful lives ranging between three to ten years.

Expenditures for repairs and maintenance of assets are charged to expense as incurred. Costs of major additions and betterments are capitalized and depreciated on a straight-line basis over their estimated useful lives. Upon retirement or sale, the cost and related accumulated depreciation of assets disposed of are removed from the accounts and any resulting gain or loss is included in the unaudited condensed consolidated statements of operations.

Software Developed for Internal Use

The Company capitalizes the costs of developing software for internal use. These costs include both purchased software and internally developed software. Costs of developing software are expensed until technological feasibility has been established. Thereafter, all costs are capitalized and are carried at the lower of unamortized cost or net realizable value. Internally developed and purchased software costs are generally amortized over five years.

Long-lived Assets

The Company regularly reviews the carrying value and estimated lives of all of its long-lived assets, including property and equipment and definite-lived intangible assets, to determine whether indicators of impairment exist that warrant adjustments to carrying values or estimated useful lives. The determinants used for this evaluation include management’s estimate of the asset’s ability to generate positive income from operations and positive cash flow in future periods as well as the strategic significance of the assets to the Company’s business objectives. If the Company determines that events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable, the Company evaluates the realizability of its long-lived assets (asset group) based on a comparison of projected undiscounted cash flows from use and eventual disposition with the carrying value of the related asset. Any write-downs (which are measured based on the difference between the fair value and the carrying value of the asset) are treated as permanent reductions in the carrying amount of the assets (asset group).

The Company evaluated the carrying value of its internal use software costs as at December 31, 2023 in accordance with ASC 360-10, Impairment of Long-lived Assets to be Held or Used. Based on the evaluation, the Company determined that the internal use software costs – registry's carrying value as of December 31, 2023, were no longer recoverable and recorded a corresponding impairment loss. The impairment loss was calculated as the difference between the registry's carrying value and its estimated fair value on December 31, 2023. The fair value was determined using a discounted cash flow (“DCF”) model, a Level 3 evaluation technique under ASC 820, Fair Value Measurements. The DCF model utilized entity-specific assumptions regarding future sales volume, pricing and costs. These assumptions considered factors such as continuity of existing customer relationships, potential shifts in economic conditions and other relevant market influences. The net cash flows generated by the model were then discounted to present value using a rate reflective of the time value of money and the inherent use associated with the expected cash flows. The discount rate was based on the comparable debt instrument deemed appropriate by management. Given the changing market conditions, there is a reasonable possibility that the estimates used to determine the registry's fair value may require adjustments in the near future. Any such changes in assumptions could result in further impairment charges. The Company recognized an expense for the year ended December 31, 2023, and a corresponding reduction in the carrying value of the internal use software-registry as a result of the impairment.

None of the Company’s long-lived assets were deemed impaired as of March 31, 2024.

Indefinite-lived Intangible Assets

Acquired IPR&D are intangible assets acquired in the July 2017 Napo merger. Under ASC 805 Business Combination, IPR&D are initially recognized at fair value and classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. During the development period, these assets will not be amortized as charges to earnings; instead, these assets will be tested for impairment on an annual basis or more frequently if impairment indicators are identified. An impairment loss is measured based on the excess of the carrying amount over the asset’s fair value. The Company recorded no impairment for the three months ended March 31, 2024, and 2023.

Leases

The Company accounts for its leases in accordance with ASC 842, Leases.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. Because the interest rate implicit in lease contracts is typically not readily determinable, the Company utilizes its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received.

The Company elected to include both the lease and non-lease components as a single component and account for it as a lease.

Lease Modification

ASC 842 defines lease modification as a change to the terms and conditions of a contract that results in a change in the scope of or the consideration for a lease. A lease modification can result in either a separate new contract that is accounted for separately from the original contract or a single modified contract.

The Company shall account for a modification to a contract as a separate contract when the modification grants the lessee an additional right of use not included in the original lease and the lease payments increase commensurate with the standalone price for the additional right of use, adjusted for the circumstances of the particular contract. When the Company concludes that a lease modification should be accounted for as a new contract that is separate and apart from the original lease, the new contract should be evaluated for whether it is a lease or contains an embedded lease. If the new contract is a lease or contains an embedded lease, the new lease should be accounted for as any other new lease. The new lease is recorded on the commencement date of the new lease, which is the date the lessee has access to the leased asset.

If a lease modification is not accounted for as a separate contract, the Company should reassess whether the contract contains a lease. If the modified contract is a lease or contains an embedded lease, a lessee should reallocate contract consideration, reassess the lease classification, remeasure the lease liability, and adjust the right-of-use asset.

Research and Development Expense

Research and development expense consists of expenses incurred in performing research and development activities including related salaries, clinical trials and related drug and non-drug product costs, contract services and other outside service expenses. Research and development expense is charged to operating expense in the period incurred.

Clinical Trial Accruals

Clinical trial costs are a component of research and development expenses. The Company accrues and expenses clinical trial activities performed by third parties based upon actual work completed in accordance with agreements established with clinical research organizations and clinical sites. The Company determines the costs to be recorded based upon validation with the external service providers as to the progress or stage of completion of trials or services and the agreed-upon fee to be paid for such services.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”).

The Company’s policy typically permits returns if the product is damaged, defective, or otherwise cannot be used when received by the customer if the product has expired. Returns are accepted for product that will expire within three months or that have expired up to one year after their expiration dates. Estimates for expected returns of expired products are based primarily on an ongoing analysis of our historical return patterns.

The Company recognizes revenue in accordance with the core principle of ASC 606 or when there is a transfer of control of promised goods or services to customers in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services.

The Company recognizes the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less.

The Company does not adjust the amount of consideration for the effects of a significant financing component if, at contract inception, the expected period between the transfer of promised goods or services and customer payment is one year or less.

The Company has elected to treat shipping and handling activities as fulfillment costs.

Additionally, the Company elected to record revenue net of sales and other similar taxes.

Contracts and Agreements

The Company's Canalevia-CA1 and Neonorm products are primarily sold to distributors, who then sell the products to the end customers. Since 2021, the Company has entered into two distribution agreements with established distributors to distribute the Company’s animal health products in the United States. The distribution agreements and the related purchase orders together meet the contract existence criteria under ASC 606. The Company sells directly to its customers without the use of an agent.

Performance obligations

For animal health products sold by the Company, the single performance obligation identified above is the Company’s promise to transfer the Company’s animal health products to distributors based on specified payment and shipping terms in the arrangement. Product warranties are assurance-type warranties that do not represent a performance obligation. For the Company’s human health product, Mytesi, the single performance obligation identified above is the Company’s promise to transfer Mytesi to specialty pharmacies, based on specified payment and shipping terms as outlined in the Exclusive Distribution Agreement entered into by the Company and Cardinal Health as of January 16, 2019.

Transaction price

For contracts with Cardinal Health and other distributors, the transaction price is the amount of consideration to which the Company expects to collect in exchange for transferring the promised goods or services. The transaction price of Mytesi is the Wholesaler Acquisition Cost (“WAC”), and the transaction price of Canalevia-CA1 and Neonorm is the manufacturer’s list price, net of discounts, returns, and price adjustments.

Allocate transaction price

For contracts with Cardinal Health and other distributors, the entire transaction price is allocated to the single performance obligation contained in each contract.

Revenue recognition

For contracts with Cardinal Health, a single performance obligation is satisfied at a point in time, upon the free on board (“FOB”) terms of each contract when control, including title and all risks, has transferred to the customer.

Disaggregation of Product Revenue

Human

Sales of Mytesi are recognized as revenue at a point in time when the products are delivered to the wholesaler. Net revenues from the sale of Mytesi were $2.3 million and $1.9 million for the three months ended March 31, 2024, and 2023, respectively.

Animal

The Company recognized Canalevia-CA1 products revenues of $40,000 and $28,000 for the three months ended March 31, 2024, and 2023, respectively and Neonorm revenues of $9,000 and $18,000 for the three months ended March 31, 2024, and 2023, respectively. Revenues are recognized at a point in time upon shipment, when title and control are transferred to the buyer. Sales of Canalevia-CA1, Neonorm Calf and Foal to distributors are made under agreements that may provide distributor price adjustments and rights of return under certain circumstances.

Contracts – Specialty Pharmacies

Effective October 1, 2020, the Company engaged a private company as an authorized specialty pharmacy provider of the Company’s Mytesi product. Under the Specialty Product Distribution Agreement, the Company shall supply the products to the private company’s specialty pharmacies directly, in such amounts as may be ordered. There is no minimum purchase or inventory requirement. The specialty pharmacies were authorized distributors of record for all National Drug Codes of Mytesi.

Effective April 20, 2021, the Company engaged another private company as an authorized specialty pharmacy provider of Mytesi. Under the Specialty Pharmacy Distribution and Services Agreement, the private company shall sell and dispense the Mytesi directly ordered from the Company at the agreed price to patients within the territories identified in the agreement.

The Company has entered into agreements with a total of five different specialty pharmacy chains that are authorized to provide Mytesi to patients.

Performance obligations

The single performance obligation is the Company’s promise to transfer Mytesi to specialty pharmacies, based on specified payment and shipping terms as outlined in the agreements.

Transaction price

The transaction price is the amount of consideration to which the Company expects to collect in exchange for transferring the promised goods or services. The transaction price of Mytesi is the WAC, net of estimated discounts, returns, and price adjustments.

Allocate transaction price

The entire transaction price is allocated to the single performance obligation contained in each contract.

Revenue recognition

The single performance obligation is satisfied at a point in time, upon the FOB terms of each contract when control, including title and all risks, has transferred to the customer.

Product Revenue

Sales of Mytesi are recognized as revenue at a point in time when the products are delivered to the specialty pharmacies. Net revenues from the sale of Mytesi to the specialty pharmacies were $2.0 million and $1.5 million for the three months ended March 31, 2024, and 2023, respectively.

Collaboration Revenue

Revenue recognition for collaboration agreements requires significant judgment. The Company’s assessments and estimates are based on contractual terms, historical experience and general industry practice. Revisions in these values or estimations have the effect of increasing or decreasing collaboration revenue in the period of revision.

On September 24, 2018, the Company entered into a Distribution, License and Supply Agreement (“License Agreement”) with Knight Therapeutics ("Knight"). The License Agreement has a term of 15 years (with automatic renewals) and provides Knight with an exclusive right to commercialize current and future Jaguar human health products (including crofelemer, NP-300, and any product containing a proanthocyanidin or with an anti-secretory mechanism) in Canada and Israel. Knight forfeited its right of first negotiation for expansion to Latin America. Under the License Agreement, Knight is responsible for applying for and obtaining necessary regulatory approvals in the territory of Canada and Israel, as well as marketing, sales and distribution of the licensed products. Knight will pay a transfer price for all licensed products, and upon achievement of certain regulatory and sales milestones, the Company may receive payments from Knight in an aggregate amount of up to approximately $18.0 million, payable throughout the initial 15-year term of the agreement. The Company did not have any license revenues for the three months ended March 31, 2024, and 2023.

Modifications to Liability-classified Instruments

In accounting for debt modifications and exchange transactions, it is the Company’s policy to first determine whether it qualifies as a troubled debt restructuring (“TDR”) pursuant to the guidance provided in ASC 470-60. A debt modification or exchange transaction that is not within the scope of the ASC 470-60 is accounted for under ASC 470-50 to determine if the transaction is a mere modification or an extinguishment.

For the three months ended March 31, 2024, the Company have not entered amendments to the terms of the October 2020 Royalty Interest, December 2020 Royalty Interest and August 2022 Royalty Interest.

For the three months ended March 31, 2023, the Company entered into amendment on the terms of its October 2020 and December 2020 Purchase Agreements.

The cumulative impact of these amendments significantly modified the terms of the royalty interest resulting to extinguishments (see Note 7).

Modifications to Equity-classified Instruments

In accounting for modifications of equity-classified warrants, it is the Company’s policy to determine the impact by analogy to the share-based compensation guidance of ASC 718, Compensation - Stock Compensation (“ASC 718”). The model for a modified share-based payment award that is classified as equity and remains classified in equity after the modification is addressed in ASC 718-20-35-3. Pursuant to that guidance, the incremental fair value from the modification is recognized as an expense in the statements of operations to the extent the modified instrument has a higher fair value; however, in certain circumstances, such as when an entire class of warrants is modified, the measured increase in fair value may be more appropriately recorded as a deemed dividend, depending upon the nature of the warrant modification.

The Company did not modify any equity-classified warrants for the three months ended March 31, 2024, and 2023.

In accounting for amendments to preferred stock, it is the Company’s policy to measure the impact by analogy to ASC 470-50 in determining if such an amendment is an extinguishment or a modification. If the amendment results in an extinguishment, the Company follows the SEC staff guidance in ASC 260-10-S99-2 and ASC 470-20. If the amendment results in a modification, the Company follows the model in either ASC 718 or ASC 470-50, depending on the nature of the amendment.

The Company did not modify any equity-classified preferred stock for the three months ended March 31, 2024, and 2023.

Stock-based Compensation

The Company's Stock Incentive Plan (see Note 11) provides for the grant of stock options, restricted stock and restricted stock unit awards. The Company measures stock awards granted to employees, non-employees and directors at estimated fair value on the date of grant and recognizes the corresponding compensation expense of the awards, net of estimated forfeitures, over the requisite service periods, which correspond to the vesting periods of the awards. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company issues stock awards with only service-based vesting conditions, and records compensation expense for these awards using the straight-line method.

The Company uses the grant date fair market value of its common stock to determine the grant date fair value of options granted to employees, non-employees and directors. The Company measures and recognizes compensation expense for all stock options and restricted stock units (“RSUs”) granted to its employees and directors based on the estimated fair value of the award on the grant date. The Company uses the Black-Scholes valuation model to estimate the fair value of stock option awards. The fair value is recognized as expense, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award, on a straight-line basis. The Company believes that the fair value of stock options granted to non-employees is more reliably measured than the fair value of the services received. The determination of the grant date fair value of options using an option pricing model is affected by the Company’s estimated common stock fair value and requires management to make a number of assumptions including the expected life of the option, the volatility of the underlying stock, the risk-free interest rate and expected dividends.

The Company estimates the fair value of stock options using the Black-Scholes option valuation model. The fair value of employee stock options is being amortized on a straight-line basis over the requisite service period of the awards. The fair market value of common stock is based on the closing price of the Company’s common stock as reported on the date of the grant.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.

The Company has adopted the provisions of ASC 740, Income Taxes Related to Uncertain Tax Positions. Under these principals, tax positions are evaluated in a two-step process. The Company first determines whether it is more-likely-than-not that a tax position will be sustained upon examination. If a tax position meets the more-likely-than-not recognition threshold, it is then measured to determine the amount of benefit to be recognized in the financial statements. The tax position is measured as the largest amount of benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement.

Foreign Currency Remeasurement and Translation

The functional currency of Napo Therapeutics is Euro. The Company follows ASC 830, Foreign Currency Matters (“ASC 830”). ASC 830 requires the assets, liabilities, and results of operations of a foreign operation to be measured using the functional currency of that foreign operation. Exchange gains or losses from remeasuring transactions and monetary accounts in a currency other than the functional currency are included in current earnings.

For certain subsidiaries, translation adjustments result from the process of translating the functional currency of subsidiary financial statements into the U.S. Dollar reporting currency. These translation adjustments are reported

separately and accumulated in the unaudited condensed consolidated balance sheets as a component of accumulated other comprehensive loss.

Comprehensive Loss

The Company follows ASC 220, Comprehensive Income, which establishes standards for reporting and displaying comprehensive income and its components (revenue, expenses, gains and losses) in a full set of general-purpose financial statements.

For the three months ended March 31, 2024, the amount of other comprehensive gain from translation adjustments was $217,000.

For the three months ended March 31, 2023, the amount of other comprehensive loss from translation adjustments was $232,000.

Basic and Diluted Net Loss Per Share of Common Stock

Basic net loss per share of common stock is computed by dividing net loss attributable to common stockholders for the year by the weighted-average number of common stock outstanding during the year. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders for the year by the weighted-average number of common stock, including potential dilutive shares of common stock assuming the dilutive effect of potential dilutive securities. For years in which the Company reports a net loss, diluted net loss per share is the same as basic net loss per share, because their impact would be anti-dilutive to the calculation of net loss per share. Diluted net loss per share of common stock is the same as basic net loss per share of common stock for the months ended March 31, 2024, and 2023.

Recent Accounting Pronouncements

There are no recent accounting pronouncements that are expected to have a material impact on the Company’s financial statements and related disclosures at March 31, 2024.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2024

Fair Value Measurements

Fair Value Measurements

3. Fair Value Measurements

ASC 820, Fair Value Measurements, defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

● Level 1 – Observable inputs such as quoted prices (unadjusted) for identical instruments in active markets.

● Level 2 – Observable inputs such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-derived valuations whose significant inputs are observable.

● Level 3 – Unobservable inputs that reflect the reporting entity’s own assumptions.

The following tables set forth the fair value of the Company’s financial instruments that were measured at fair value on a recurring basis as of March 31, 2024, and December 31, 2023.

	March 31, 2024
	(unaudited)
(in thousands)	Level 1		Level 2		Level 3		Total
Iliad	$	—	$	—	$	6,721	$	6,721
Uptown		—		—		7,880		7,880
Streeterville 2		—		—		7,118		7,118
Streeterville Note		—		—		10,242		10,242
Total fair value	$	—	$	—	$	31,961	$	31,961

	December 31, 2023
(in thousands)	Level 1		Level 2		Level 3		Total
Iliad	$	—	$	—	$	6,862	$	6,862
Uptown		—		—		7,473		7,473
Streeterville 2		—		—		6,815		6,815
Streeterville Note		—		—		9,793		9,793
Total fair value	$	—	$	—	$	30,943	$	30,943

The change in the estimated fair value of Level 3 liabilities is summarized below:

	Three Months Ended
	March 31, 2024
(in thousands)	Iliad		Uptown		Streeterville 2		Streeterville Note
Beginning fair value of Level 3 liability	$	6,862	$	7,473	$	6,814	$	9,792
Additions		—		—		—		—
Exchanges		(836)		—		(165)		—
Settlements		—		—		—		—
Change in fair value		695		407		469		450
Ending fair value of Level 3 liability	$	6,721	$	7,880	$	7,118	$	10,242

	Three Months Ended
	March 31, 2023
(in thousands)	Iliad		Uptown		Streeterville 2		Streeterville Note
Beginning fair value of Level 3 liability	$	—	$	—	$	—	$	7,839
Additions		—		—		—		—
Settlements		—		—		—		—
Change in fair value		—		—		—		359
Ending fair value of Level 3 liability	$	—	$	—	$	—	$	8,198

The fair value of the Streeterville Note recognized as a Level 3 liability at the date of issuance and as of March 31, 2024, amounted to $7.8 million and $10.2 million, respectively. The fair value of the remaining Level 3 liabilities at the extinguishment date and as of March 31, 2024, amounted to $20.2 million and $21.7 million. The fair values were based on the weighted average discounted expected future cash flows representing the terms of the notes, discounting them to their present value equivalents. The notes were classified as Level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including the Company’s own credit risk.

The Company determined and performed the valuations with the assistance of an independent valuation service provider. On a quarterly basis, the Company considers the main Level 3 inputs for hybrid instruments used derived as follows:

● Discount rate which was determined using a comparison of various effective yields on bonds as of the valuation date

● Market indications for vouchers, which affect the Return Bonus from the sale of Tropical Disease Priority Review Voucher (“TDPRV”)

● Weighted probability of cash outflows which was estimated based on the entity's knowledge of the business and how the current economic environment is likely to impact the timing of the cash outflows, attributed to the different repayment features of the notes

The following table summarizes the quantitative information about the significant unobservable inputs used in Level 3 fair value measurement for hybrid instruments:

	Range of Inputs
	(probability-weighted average)		Relationship of unobservable inputs
Unobservable Inputs	2024	2023	to fair value
Risk Adjusted Discount Rate	8.57%-25.14% (25.14%)	9.02%-24.59% (24.59%)	If discount rate is adjusted to total of additional 100 basis points (bps), fair value would have decreased by $407,000. If discount rate is adjusted to total deduction of 100 bps, fair value would have increased by $407,000.
Sales Proceeds: Amount of comparable TDPRV	$67.5 million to $350 million ($100 million)	$67.5 million to $350 million ($100 million)	If expected cash flows by Management considered the lowest amount of market indications for vouchers, FV would have decreased by $1.4 million. If expected cash flows by Management considered the highest amount of market indications for vouchers, FV would have increased by $10.8 million.
Range of Probability for Timing of Cash Flows: Variations of the terms and conditions of the timing of cash flows, including settlement of the note principal, interest, penalties, and acceleration clause.	0.59%-73.27%	0.10%-73.27%	If expected cash flows by Management considered the Scenario with the least amount of indicated value, FV would have decreased by $216,000. If expected cash flows by Management considered the scenario with the greatest amount of indicated value, FV would have increased by $1.5 million.

For the additional notes designated at FVO that are not hybrid, the company considers only the discount rate which was determined using a comparison of various effective yields on bonds as of valuation date.

The following table summarizes the quantitative information about the significant unobservable inputs used in Level 3 fair value measurement for the remaining instruments that are not classified as hybrid instruments:

	Range of Inputs
	(probability-weighted average)		Relationship of unobservable inputs
Unobservable Inputs	2024	2023	to fair value
Risk Adjusted Discount Rate	8.57%-27.14% (27.14%)	9.02%-26.59% (26.59%)	If discount rate is adjusted to total of additional 100 basis points (bps), fair value would have decreased by $541,000. If discount rate is adjusted to total deduction of 100 bps, fair value would have increased by $555,000.

Fair Value Option

The Company elected to apply the FVO accounting to certain freestanding instruments and to the entire class of hybrid instruments, including structured notes, of which there are assessed embedded derivatives that would be eligible for bifurcation, to align the measurement attributes of those instruments under US GAAP and to simplify the accounting model applied to these financial instruments.

The valuations of these instruments were predominantly driven by the discount rate and the derivative features embedded within the instruments. The Company determined and performed the valuations of the freestanding and hybrid instruments with the assistance of an independent valuation service provider. The valuation methodology utilized is consistent with the income approach for estimating the fair value of the interest-bearing portion of the instruments and the related derivatives. Cash flows of the financial instruments in their entirety, including the embedded derivatives, are discounted at an appropriate rate for the applicable duration of the instrument. Interests on the interest-bearing portion of the instruments that are held to maturity and mark-to-market adjustments are aggregated in the change in fair value of freestanding and hybrid financial instruments designated at FVO in the unaudited condensed consolidated statements of operations. As of March 31, 2024, and December 31, 2023, the Company did not note any fair value movement on FVO liabilities attributable to any instrument-specific credit risk, which should be recorded in other comprehensive income (loss).

The following table summarizes the fair value and outstanding balance for items the Company accounts for under FVO:

(in thousands)	Fair value		Unpaid Principal Balance		Accrued Interest		Fair Value Over (Under) Outstanding Balance
At March 31, 2024
Iliad	$	6,721	$	6,392	$	3,885	$	(3,556)
Uptown		7,880		7,994		4,366		(4,480)
Streeterville 2		7,118		10,094		1,265		(4,241)
Streeterville Note		10,242		6,000		651		3,591

(in thousands)	Fair value		Unpaid Principal Balance		Accrued Interest		Fair Value Over (Under) Outstanding Balance
At December 31, 2023
Iliad	$	6,862	$	7,292	$	3,621	$	(4,051)
Uptown		7,473		7,994		4,058		(4,579)
Streeterville 2		6,815		10,273		950		(4,408)
Streeterville Note		9,793		6,000		546		3,247

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Balance Sheet Components

3 Months Ended

Mar. 31, 2024

Balance Sheet Components

Balance Sheet Components

4. Balance Sheet Components

Inventory

Inventory at March 31, 2024, and December 31, 2023 consisted of the following:

	March 31,		December 31,
	2024		2023
(in thousands)	(unaudited)
Raw material	$	2,202	$	2,057
Work in process		6,126		6,517
Finished goods		692		615
Inventory	$	9,020	$	9,189

Prelaunch Inventory

Costs capitalized for the Company’s lyophilized drug amounting to $3.0 million and $2.8 million as of March 31, 2024, and December 31, 2023, are included in the prepayments and other assets account. The Company’s proof-of-concept (“POC”) data is expected to be completed by the end of 2024. Upon approval, the prelaunch inventory shall be reclassified as part of the Company’s inventory.

Property and Equipment, net

Property and equipment at March 31, 2024, and December 31, 2023 consisted of the following:

	March 31,		December 31,
	2024		2023
(in thousands)	(unaudited)
Land	$	396	$	396
Lab equipment		477		477
Software		63		63
Furniture and fixtures		18		18
Computers and peripherals		7		7
Total property and equipment at cost		961		961
Accumulated depreciation		(477)		(465)
Property and equipment, net	$	484	$	496

Depreciation and amortization expenses were $12,000 and $16,000 for the three months ended March 31, 2024 and 2023, respectively.

Intangible Assets, net

Intangible assets consisted of the following:

	March 31,		December 31,
	2024		2023
(in thousands)	(unaudited)
Developed technology	$	25,000	$	25,000
Accumulated developed technology amortization		(11,111)		(10,694)
Developed technology, net		13,889		14,306
In-process research and development		4,800		4,800
In process research and development, net		4,800		4,800
Trademarks		300		300
Accumulated trademark amortization		(133)		(128)
Trademarks, net		167		172
Internal use software costs - registry		1,236		1,236
Accumulated internal use software costs impairment		(371)		(371)
Accumulated internal use software costs amortization		(432)		(370)
Internal use software costs - registry, net		433		495
Patents		361		361
Accumulated patents amortization		(23)		(18)
Patents, net		338		343
Total intangible assets, net	$	19,627	$	20,116

Amortization expense of finite-lived intangible assets was $489,000 and $488,000 for the three months ended March 31, 2024 and 2023, respectively.

The following table summarized the Company’s estimated future amortization expense of intangible assets with finite lives as of March 31, 2024:

(in thousands)	Amounts
Remainder of 2024	$	1,464
2025		1,952
2026		1,952
2027		1,952
2028		1,952
Thereafter		5,555
	$	14,827

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Related Party Transactions

3 Months Ended

Mar. 31, 2024

Related Party Transactions

Related Party Transactions

5. Related Party Transactions

Board of Directors (“BOD”) Cash Compensation

The Company makes BOD cash compensation on a quarterly basis based on the Director Compensation Program. For the three months ended March 31, 2024, and 2023, the Company paid approximately $112,256 and $68,000 cash compensation to its directors, respectively.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies

Commitments and Contingencies

6. Commitments and Contingencies

Commitments

Leases

On April 6, 2021, the Company entered into an office lease agreement of approximately 10,526 square feet of office space in San Francisco, inclusive of office space covered under the previous sublease agreement. The term of the lease began on September 1, 2021 and will expire on February 28, 2025, unless terminated earlier. The lease had an early occupancy provision which entitled the Company to use a portion of the leased premises on June 1, 2021, free of rent obligation. In addition, the Company has the option to extend the lease for one three-year period after the expiration date. This option was not included as part of the lease term as the Company was not reasonably certain to exercise it, hence the lease term only includes the noncancellable period of three years plus the period of early occupancy.

The base rent under the lease were $42,000 monthly for the first 12 months, $43,000 monthly for the next 12 months and $45,000 for the last twelve months. The lease agreement only contained one lease component, which is the lease of the office space. Non-lease components such as payment of building operating costs and share in real property taxes were accounted for separately and were not considered as part of the total lease payments. The lease was classified as an operating lease.

On October 7, 2021, the Company entered into an agreement for the lease of office premises from November 1, 2021 to April 30, 2022, subject to automatic renewal for subsequent periods until terminated by either party. Base rent amounted to €10,000 or approximately $10,500. If the contract was not terminated within 12 months, the lease amount would be increased in line with the index of relevant inflation at each annual expiration of the start date of the contract. The lessor had the right to decline the renewal of the contract. Upon the happening of certain specified events, the lessor might immediately withdraw from the contract. The Company was required to leave the occupied spaces immediately in the same condition in which they were found in the event of contract termination or expiry. The Company paid deposit of €20,000 or approximately $21,000 to the lessor. On January 26, 2022, the lease agreement was amended whereby the term was extended by 20 months from May 1, 2022 to December 31, 2023. All other contract provisions remained the same.

On October 25, 2023, the Company entered into a second amendment to extend the lease of the office premises whereby Suite 600 shall extend until February 28, 2025, while, the Suite 400 shall be accounted for as a separate lease commencing on September 1, 2023, and expiring on August 31, 2030. Under the second lease amendment, the office lease premises were separately remeasured with Suite 400 measuring approximately 5,735 square feet while Suite 600 at 5,263 square feet. The base rent for Suite 400 was $18,000 monthly on the first two years, $18,000 monthly on the third and fourth year, $19,000 monthly on the fifth and sixth year, $20,000 monthly on the seventh and eighth year and $21,000 on the last year. Accordingly, the Suite 600’s base rent was amended into $22,000 monthly on its remaining terms. The option to renew at the end of the lease term was amended into one-to-five-year period from the original one-to-three-year period. All other contract provisions remained the same.

On October 10, 2021, the Company also entered into a short-term office lease in Milan, Italy. The term of the lease began on November 1, 2021, subject to automatic renewal equal to the present term until terminated by mutual agreement. On January 26, 2022, the lease agreement was amended whereby the term was extended by 20 months from May 1, 2022 to December 31, 2023. The Company recognized rent expense on a straight-line basis over the non-cancellable lease period. On September 12, 2023, the Company entered into a second lease amendment whereby the term was extended by another year from January 1, 2024 to December 31, 2024. The Company recognized rent expense on a straight-line basis over the non-cancellable lease period. On December 31, 2023, the Company elected not to renew the October 10, 2021, lease agreement.

On December 8, 2023, the Company entered into a two-year office lease in Milan, Italy. The term of the lease began on January 1, 2024 until December 31, 2025. The Company recognizes rent expense on a straight-line basis over the non-cancellable lease period.

On December 22, 2021, the Company entered into an agreement for the lease of two separate vehicles for 48 months expiring on November 30, 2025. Total monthly lease payment amounted to €2,000 or approximately $2,100 payable in advance. The Company elected to include both the lease and non-lease components as a single component and account for it as a lease. The Company also paid a total deposit of €19,000 or approximately $20,000, exclusive of VAT. Early termination of the contracts requires the payment of specified amounts.

On January 25, 2022, the Company entered into an agreement for the lease of office premises from March 1, 2022 to December 31, 2023, subject to automatic renewal for subsequent periods until terminated by either party. Base rent amounted to €4,000 or approximately $4,200. A similar agreement was entered with the lessor for the lease of premises to be used as office space from November 1, 2022 to December 31, 2023, subject to automatic renewal for subsequent periods until terminated by either party. Base rent amounted to €3,817 or approximately $4,000. If the contracts are not terminated within 12 months, the lease amounts will be increased in line with the index of relevant inflation at each annual expiration of the start date of the contract. The lessor has the right to decline the renewal of the contracts. Upon the happening of certain specified events, the lessor may immediately withdraw from the contracts. The Company is required to leave the occupied spaces immediately in the same conditions in which they were found in the event of contract termination or expiry. The Company paid deposit of €9,000 or approximately $9,500 to the Lessor.

In May 2022, the Company entered into an agreement for the lease of one vehicle for 48 months expiring on April 30, 2026. Total monthly lease payment amounted to €833 or approximately $880 payable in advance. The Company elected to include both the lease and non-lease components as a single component and account for it as a lease. The Company also paid a total deposit of €21,000 or approximately $22,000, exclusive of VAT. Early termination of the contracts requires the payment of specified amounts.

In October 2022, the Company entered into an agreement for the lease of three vehicles for 48 months expiring on September 30, 2026. Total monthly lease payment amounted to €2,094 or approximately $2,200 payable in advance. The Company elected to include both the lease and non-lease components as a single component and account for it as a lease.

In November 2022, the Company entered into an agreement for the lease of two vehicles for 48 months expiring on October 31, 2026. Total monthly lease payment amounted to €1,459 or approximately $1,500 payable in advance. The Company elected to include both the lease and non-lease components as a single component and account for it as a lease.

The table below provided additional details of the office space lease presented in the unaudited condensed consolidated balance sheet as of March 31, 2024, and December 31, 2023:

	March 31,		December 31,
	2024		2023
(in thousands)	(unaudited)
Operating lease - right-of-use asset	$	1,289	$	1,176
Operating lease liability, current		469		348
Operating lease liability, net of current portion		873		886
Total	$	1,342	$	1,234
Weighted-average remaining life (years)		4.27		4.76
Weighted-average discount rate		19.74%		21.34%

Lease cost included in general and administrative expenses in the unaudited condensed consolidated statements of operations for the three months ended March 31, 2024, and 2023 was approximately $276,000 and $209,000.

For the three months ended March 31, 2024, cash recognized for operating lease liabilities under operating cash flows amounted to $336,000.

For the three months ended March 31, 2023, cash paid for operating lease liabilities recognized under operating cash flows amounted to $53,000.

Non-cash investing and financing activities for the three months ended March 31, 2024, and 2023, include addition to right-of-use asset obtained from new and modified operating liabilities, amounted to $221,000 and $30,000, respectively.

The following table summarizes the undiscounted cash payment obligations for operating lease liability as of March 31, 2024.

	March 31,
	2024
(in thousands)	(unaudited)
Remainder of 2024	$	656
2025		382
2026		254
2027		235
2028		242
2029		249
2030		105
Total undiscounted operating lease payments		2,123
Imputed interest expenses		(781)
Total operating lease liability		1,342
Less: Operating lease liability, current		469
Operating lease liability, net of current portion	$	873

Purchase Commitment

On September 3, 2020, the Company entered into a manufacturing and supply agreement (the “Agreement”) with Glenmark Life Sciences Limited (“Glenmark”), pursuant to which Glenmark will continue to serve as the Company’s manufacturer of crofelemer for use in Mytesi, the Company’s human prescription drug product approved by the FDA, and for other crofelemer-based products manufactured by the Company or its affiliates for human or animal use. The term of the Agreement is approximately 2.5 years (i.e., until March 31, 2023) and may be extended for successive two-year renewal terms upon mutual agreement between the parties thereto. ¹Pursuant to the terms of the Agreement, Glenmark will supply crofelemer to the Company. The Agreement contains provisions regarding the rights and responsibilities of the parties with respect to manufacturing specifications, forecasting and ordering, delivery arrangements, payment terms, confidentiality and indemnification, as well as other customary provisions. The Agreement includes a commitment for the purchase from Glenmark of a minimum quantity of 300 kilograms of crofelemer per year, pro-rated for partial years, where the Company may be obligated to pay any shortfall. Either party may terminate the Agreement for any reason with 12 months prior written notice to the other party. In addition, either party may terminate the Agreement upon written notice as a result of a material breach of the Agreement that remains uncured for a period of 90 days. If the Company terminates the Agreement as a result of a material breach caused by Glenmark, the Company will not be obligated to pay for any minimum quantity shortfall. As of March 31, 2024, the remaining commitment is 500 kilograms.

Master Services Agreement (“MSA”)

On October 5, 2020, the Company entered into an MSA for clinical research organization services (the “2020 MSA”) and a service order under such 2020 MSA with Integrium, LLC (“Integrium”). The service order covers the Company’s planned upcoming pivotal Phase 3 clinical trial for cancer-therapy related diarrhea. As consideration for its

services, the Company would pay Integrium a total amount of up to approximately $12.4 million, later reduced to approximately $6.0 million, that would be paid over the term of the engagement and based on the achievement of certain milestones. The 2020 MSA will terminate upon the satisfactory performance of all services to be provided thereunder unless earlier terminated by the parties. For the three months ended March 31, 2024, and 2023, the Company paid Integrium $504,674 and $498,000 respectively.

Asset Transfer and Transition Commitment

On September 25, 2017, the Company entered into the Termination, Asset Transfer and Transition Agreement dated September 22, 2017 with Glenmark. As a result of the agreement, the Company now controls commercial rights for Mytesi for all indications, territories and patient populations globally, and also holds commercial rights to the existing regulatory approvals for crofelemer in Brazil, Ecuador, Zimbabwe and Botswana. In exchange, the Company agrees to pay Glenmark 25% of any payment it receives from a third party to whom the Company grants a license or sublicense or with whom the Company partners in respect of, or sells or otherwise transfers any of the transferred assets, subject to certain exclusions, until Glenmark has received a total of $7.0 million. For the three months ended March 31, 2024,no payment has been made to Glenmark. For the three months ended March 31, 2023, the Company paid Glenmark $1.9 million.

Revenue Sharing Commitment Update

On December 14, 2017, the Company announced its entry into a collaboration agreement with Seed Mena Businessmen Services LLC (“SEED”) for Equilevia™, the Company's non-prescription, personalized, premium product for total gut health in equine athletes. According to the terms of the Agreement, the Company will pay SEED 15% of total revenue generated from any clients or partners introduced to the Company by SEED in the form of fees, commissions, payments or revenue received by the Company or its business associates or partners, and the agreed-upon revenue percentage increases to 20% after the first million dollars of revenue. In return, SEED will provide the Company access to its existing United Arab Emirates (“UAE”) network and contacts and assist the Company with any legal or financial requirements. The agreement became effective on December 13, 2017 and will continue indefinitely until terminated by either party pursuant to the terms of the Agreement. No payments have been made to date.

Joint Venture - Magdalena Biosciences, Inc.

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

The Company accounted for its 40% investment in Magdalena under the equity method. The summarized income statement information for the three months ended March 31, 2024 of Magdalena is as follows:

	Three months ended
	March 31,
	2024
(in thousands)	(unaudited)
Revenue	$	—
Operating expenses		(40)
Loss before income tax		(40)
Income tax expense		—
Net loss	$	(40)
Net loss attributable to the Company	$	(16)

Securities Purchase and Licensing Agreement

On March 18, 2024, the Company entered into a privately negotiated securities purchase agreement with Gen Ilac Ve Saglik Urunleri Sanayi Ve Ticaret, A.S., pursuant to which the Company issued 16,666,666 shares of the Company’s common stock at a price of $0.12 per share for gross proceeds of approximately $2.0 million. The sale of the securities was consummated in connection with the licensing transaction covering the exclusive license and commercialization agreement for the Company's FDA-approved prescription drug Crofelemer with purchasers in certain countries within Eastern Europe.

The Company determined that the issuance of shares and the grant of license should be accounted for as a single arrangement under ASC 606 Revenue from Contracts with Customers. The fair value of the common stock issued was excluded from the consideration allocated to the revenue unit of account following the separation and initial measurement requirements. The deferred revenue amounting to $850,000 will be recognized as revenue evenly over a period of 5 years which represents the approximate term of the license period considering the expiration dates of the licensed patents.

Contingencies

From time to time, the Company may become a party to various legal actions, both inside and outside the U.S., arising in the ordinary course of its business or otherwise. The Company accrues amounts, to the extent they can be reasonably estimated, that the Company believes will result in a probable loss (including, among other things, probable settlement value), to adequately address any liabilities related to legal proceedings and other loss contingencies. A loss or a range of loss is disclosed when it is reasonably possible that a material loss will incur and can be estimated, or when it is reasonably possible that the amount of a loss, when material, will exceed the recorded provision. The Company did not have any material accruals for any currently active legal action in its unaudited condensed balance sheets as of March 31, 2024, as the Company could not predict the ultimate outcome of these matters, or reasonably estimate the potential exposure.

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Debt

3 Months Ended

Mar. 31, 2024

Debt

Debt

7. Debt

Notes payable at March 31, 2024, and December 31, 2023 consisted of the following:

	March 31,		December 31,
	2024		2023
(in thousands)	(unaudited)
Notes designated at Fair Value Option	$	31,961	$	30,943
Royalty Interest*		—		5,635
Insurance Financing		52		172
Tempesta Note		100		150
Total		32,113		36,900
Less: unamortized discount and debt issuance costs		—		(1,040)
Note payable, net of discount	$	32,113	$	35,860
Notes payable - non-current, net	$	21,719	$	30,993
Notes payable - current, net	$	10,394	$	4,867
Weighted average interest rate on short-term borrowings		3.24%		5.04%

*Notes with royalty interest not designated at Fair Value Option.

The Company paid $9,000 and $6,000 interest for its debt for the three months ended March 31, 2024, and 2023, respectively.

Future maturities of the notes payable not designated at FVO as of March 31, 2024 are as follows:

	Amounts
(in thousands)	(unaudited)
2025	$	10,394
2026		21,719
Total	$	32,113

Future maturities are based on contractual minimum payments. Timing of maturities may fluctuate based on future revenue.

Sale of Future Royalty Interest

October 2020 Purchase Agreement

On October 8, 2020, the Company entered into another royalty interest purchase agreement (the “October 2020 Purchase Agreement”) with Iliad Research and Trading, L.P. (“Iliad”), pursuant to which the Company sold to Iliad a royalty interest entitling Iliad to receive $12.0 million of future royalties on sales of Mytesi and certain up-front license fees and milestone payments from licensees and/or distributors (the “Royalty Repayment Amount”) for an aggregate purchase price of $6.0 million.

Until such time as the Royalty Repayment Amount has been paid in full, the Company will pay Iliad 10% of the Company’s net sales on included products and 10% of worldwide revenues related to upfront licensing fees and milestone payments from licensees and/or distributors, but specifically excluding licensing fees and/or milestone payments that are reimbursements of clinical trial expenses (the “Royalty Payments”). Beginning on the six-month anniversary of the delivery of the October 2020 Purchase Agreement to the Company (the “Purchase Price Date”) and continuing until the 12-month anniversary of the Purchase Price Date, the monthly Royalty Payment shall be the greater of (a) $250,000, and (b) the actual Royalty Payment amount Iliad is entitled to for such month. Beginning on the 12-month anniversary of the Purchase Price Date and continuing until 18-month anniversary of the Purchase Price Date, the monthly Royalty Payment shall be the greater of (a) $400,000 and (b) the actual Royalty Payment amount Iliad is

entitled to for such month. Beginning on the 18-month anniversary of the Purchase Price Date and continuing until 24-month anniversary of the Purchase Price Date, the monthly Royalty Payment shall be the greater of (a) $600,000 and (b) the actual Royalty Payment amount Iliad is entitled to for such month. Beginning on the 24-month anniversary of the Purchase Price Date and continuing until the Royalty Repayment Amount has been paid in full, the monthly Royalty Payment shall be the greater of (a) $750,000, and (b) the actual Royalty Payment amount Iliad is entitled to for such month.

The Royalty Interest amount of $12.0 million was classified as debt, net of a $6.0 million discount, at initial recognition. Under ASC 470-10-35-3, royalty payments to Iliad will be amortized under the interest method per ASC 835-30. Because there is no set interest rate, and because the royalty payments are variable, the discount rate is variable. After each royalty payment, the Company will use a prospective method to determine a new discount rate based on the revised estimate of remaining cash flows. The new rate is the discount rate that equates the present value of the revised estimate of remaining cash flows with the carrying amount of the debt, and it will be used to recognize interest expense for the remaining periods. At issuance, based on projected cash outflows from future revenue streams, the discount rate was 34.51%.

Pursuant to the October 2020 Purchase Agreement, if the weekly volume weighted average price (“VWAP”) of the Company’s common stock is not equal or greater than the minimum VWAP of $0.9105 at least twice during each calendar month during the six-month period beginning on November 1, 2020, then the Royalty Repayment Amount will be automatically increased by $6.0 million at the end of such six-month period. During the observation period starting November 1, 2020, the Company’s weekly VWAP failed to reach the minimum VWAP of $0.9105 and on November 13, 2020, the Company concluded that the contingent clause has been met, warranting an additional $6.0 million Royalty Repayment Amount, to be added to the outstanding balance commencing on May 10, 2021 for the purpose of cash interest calculation. The change in the Royalty Repayment Amount was accounted for as a debt modification and resulted in a new discount rate of 45.42%.

On April 13, 2021, the Company entered into an exchange agreement with Iliad, pursuant to which the parties agreed to partition $3.0 million from the original outstanding balance of the royalty interest and exchange for 7,843 shares of the Company’s common stock. The exchange agreement was accounted for as a modification and resulted in a new discount rate of 77.09%.

On February 11, 2022, the Company entered into an exchange agreement with Iliad, pursuant to which the parties agreed to partition $2.4 million from the outstanding balance of the royalty interest and exchange for 23,117 shares of the Company’s common stock.

On March 2, 2022, the Company entered into an exchange agreement with Iliad, pursuant to which the parties agreed to partition $1.1 million from the outstanding balance of the royalty interest and exchange for 32,333 shares of the Company’s common stock.

On March 4, 2022, the Company entered into an exchange agreement with Iliad, pursuant to which the parties agreed to partition $800,000 from the outstanding balance of the royalty interest and exchange for 26,667 shares of the Company’s common stock.

On March 9, 2022, the Company entered into an exchange agreement with Iliad, pursuant to which the parties agreed to partition $700,000 from the outstanding balance of the royalty interest and exchange for 24,667 shares of the Company’s common stock.

Because the period between the first and last exchanges occurred within a 12-month period and each was individually assessed as a modification, the debt terms that existed prior to the February 13 exchange was used in the application of the 10% test on the cumulative assessment performed. The exchanges were cumulatively accounted for as an extinguishment and resulted to a loss of $2.2 million.

On April 14, 2022, the Company entered into amendments (the “Royalty Interest Global Amendments”) to its existing royalty interests including the Royalty Interest in the original principal amount of $12.0 million under the

October 2020 Royalty Interest. The amendment grants the Company at its sole discretion, the right to exchange from time to time, all or any portion of the Royalty Interests for shares of the Company’s common stock at a price per share equal to the Nasdaq Minimum Price (as defined in Nasdaq Listing Rule 5635(d)) as of date of the applicable exchange. Under the Royalty Interest Global Amendments, the Company’s ability to exchange the Royalty Interests for shares of the Company’s common stock is subject to certain limitations, on which the Company will not have such right and issue any common stock to investors if (a) the issuance of the Company’s common stock would cause investor’s beneficial ownership to exceed 4.99% of Company’s issued and outstanding common stock as of such date; (b) any of the exchange conditions has not been satisfied as of the applicable exchange date; and (c) the total cumulative number of shares of the Company’s common stock issued pursuant to the Royalty Interests would exceed the requirements of The Nasdaq Capital Market (including the rules related to the aggregation of offerings under Nasdaq Listing Rule 5635(d) if applicable) (the “Exchange Cap”), unless stockholder approval is obtained to issue more than the Exchange Cap. The Exchange Cap shall be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction.

On May 13, 2022, the Company entered into an exchange agreement with Iliad, pursuant to which the parties agreed to partition $400,000 from the outstanding balance of the royalty interest and exchange for 15,249 shares of the Company’s common stock.

On July 25, 2022, the Company entered into another exchange agreement with Iliad, pursuant to which the parties agreed to partition $750,000 from the outstanding balance of the royalty interest and exchange for 31,546 shares of the Company’s stock.

On November 18, 2022, the Company entered into another exchange agreement with Iliad, pursuant to which the parties agreed to partition $715,000 from the outstanding balance of the royalty interest and exchange for 978 shares of the Company’s stock.

On March 17 and 23, 2023, the Company entered into another exchange agreement with Iliad, pursuant to which the parties agreed to partition $992,000 and $227,000, respectively from the outstanding balance of the royalty interest and exchange for 14,533 and 3,733 shares, respectively of the Company’s stock.

The exchanges that occurred within the 12-month period prior to May 13, 2022 exchange were previously accounted for as extinguishment, therefore, cumulative assessment was not performed anymore.

On May 8, 2023, the Company entered into a standstill agreement (as amended, the “Standstill Agreement”) with Iliad, Uptown Capital, LLC (f/k/a Irving Park Capital, LLC) (“Uptown”) and Streeterville Capital, LLC (“Streeterville”, and together with Iliad and Uptown, collectively, “Investor”) to allow the Company to refrain from making royalty payments with respect to four outstanding royalty interests issued by the Company to Investor dated October 8, 2020, December 22, 2020, March 8, 2021, and August 24, 2022, respectively (each, a “Royalty Interest” and collectively, the “Royalty Interests”), including any royalty payments due and payable as of May 8, 2023 (the ”Standstill Date”), and refrain from buying, selling, or otherwise trading in the Company’s common stock for a period beginning on the Standstill Date and ending on the earliest of (a) the date that is six months following the Standstill Date (b) the date of the public announcement of the probability value in Jaguar’s OnTarget Phase 3 clinical trial of crofelemer for prophylaxis of cancer therapy-related diarrhea (c) and the date of any offering or sale of any debt or equity securities, including without limitation any at-the-market offering (the “Standstill Period”), but excluding any exempt issuances. As a material inducement and consideration for Investor’s agreement to enter into the Standstill Agreement, the Company issued (i) Iliad warrants to purchase up to 826,738 shares of the common stock, (ii) Uptown warrants to purchase up to 1,097,756 shares of the common stock, and (iii) Streeterville warrants to purchase up to 1,892,808 shares of the common stock, at an exercise price of $0.48 per share.

On June 28, 2023, the Company entered into the first amendment to the Standstill Agreement, pursuant to which the Standstill Agreement was amended to, among other things, permit (i) the Company to issue an aggregate of 105 shares of the Company’s Series H Convertible Preferred Stock to Investor in exchange for a $756,992 reduction in the outstanding balance of the December 2020 Royalty Interest and a $1,726,888 reduction in the outstanding balance of the August 2022 Royalty Interest (the “Exchange Transaction”) without triggering the termination of the Standstill

Period, and (ii) Investor to (A) consummate the Exchange Transaction during the Standstill Period and (B) sell all shares of the Company’s common stock beneficially owned by Investor immediately prior to the consummation of the Exchange Transaction during the Standstill Period.

On June 30, 2023, the Company entered into a binding memorandum of understanding (the “Binding MOU”) with the Investor to modify the allocation of the warrants as set forth in the Standstill Agreement such that the Company issued (i) Iliad warrants to purchase up to 1,711,954 shares of the common stock and (ii) Uptown warrants to purchase up to 2,105,348 shares of the common stock, and no warrants were issued to Streeterville under the Standstill Agreement.

On August 14, 2023, the Company entered into an amendment (“the Second Amendment”) to the Standstill Agreement with Iliad and Uptown (together, “Standstill Investor”) to (i) permit the Company to offer and sell securities without triggering the termination of the Standstill Period, and (ii) remove the restriction on Standstill Investor’s ability to buy, sell, or otherwise trade in shares of the Company’s common stock during the Standstill Period.

On September 29, 2023, the Company entered into the Global Amendment No. 2 to the October 2020 Royalty Interest with Iliad, pursuant to which, beginning on January 1, 2026, the monthly Royalty Payment under the October 2020 Royalty Interest shall be the greater of (a) $750,000.00, and (b) the actual Royalty Payment amount Iliad is entitled to for such month pursuant to the terms of the October 2020 Royalty Interest. As a material consideration for Iliad’s agreement to enter into this amendment, the Company agreed to issue to Iliad warrants to purchase up to 232,500 shares of the Company’s common stock at an exercise price of $0.37 per share. Such warrants may be exercisable for cash or on a cashless basis at any time and from time to time during the period commencing on September 29, 2023 (the “Issuance Date”) and ending on the five-year anniversary of the Issuance Date. Pursuant to an analysis of the indicators provided in ASC 470-60-55-8, the Company is not deemed to be experiencing financial difficulty. The debt restructuring is therefore not considered a TDR.

The cumulative effect of the exchanges to the October 2020 Royalty Interest resulted in significant modifications and was accounted for as extinguishment. The Company recorded an extinguishment gain in the unaudited condensed consolidated statements of operations amounting to $2.0 million. The extinguishment triggered a remeasurement event under ASC 825-10 and created an election date on whether to account for the October 2020 Royalty Interest under the fair value option accounting (“FVO”).

The Company irrevocably elected to initially and subsequently apply the FVO accounting to the entire royalty interest. The Company used the valuation report from an independent valuation service provided to measure the reporting date fair value of the royalty interest.

On December 28, 2023, the Company entered into a privately negotiated exchange agreement with Iliad, pursuant to which the Company issued an aggregate of 4,875,000 shares of the Company’s Common Stocks to Iliad in exchange for a $789,000 reduction in the outstanding balance of the October 2020 Royalty Interest. The effect of the exchange was accounted for as a debt modification.

On January 29, 2024, Company entered into a privately negotiated exchange agreement with Iliad pursuant to which the Company issued an aggregate of 8,000,000 shares of the Company’s common stock to Iliad in exchange for a $836,000.00 reduction in the outstanding balance of the royalty interest dated October 8, 2020, Royalty Interest. The effect of the exchange was accounted for as a debt modification.

On March 31, 2024, and December 31, 2023, the fair value was determined to be $6.7 million and $6.9 million. For the three months ended March 31, 2024, the net loss in the fair value was $695,000. The net loss in fair value was recorded in the change in fair value of freestanding and hybrid financial instruments designated at FVO in the unaudited condensed consolidated statements of operations.

December 2020 Purchase Agreement

On December 22, 2020, the Company entered into a royalty interest purchase agreement (the “December 2020 Purchase Agreement”) with Uptown Capital, LLC(f/k/a Irving Park Capital, LLC) (“Uptown”), a company affiliated with CVP, pursuant to which the Company sold to Uptown a royalty interest entitling Uptown to receive $12.0 million of future royalties on sales of Mytesi and certain up-front license fees and milestone payments from licensees and/or distributors (the “Royalty Repayment Amount”) for an aggregate purchase price of $6.0 million (the “December 2020 Royalty Interest”).

Until such time as the Royalty Repayment Amount has been paid in full, the Company will pay Uptown 10% of the Company’s Net Sales on Included Products and 10% of worldwide revenues related to upfront licensing fees and milestone payments from licensees and/or distributors, but specifically excluding licensing fees and/or milestone payments that are reimbursements of clinical trial expenses (the “Royalty Payments”). Beginning on the payment start date of March 8, 2024 and continuing until the 12-month anniversary of the Purchase Price Date, the monthly Royalty Payment shall be the greater of (a) $750,000, and (b) the actual Royalty Payment amount Uptown is entitled to for such month.

The December 2020 Royalty Interest amount of $12.0 million is classified as debt, net of a $6.0 million discount, at initial recognition. Under ASC 470-10-35-3, royalty payments to Uptown will be amortized under the interest method per ASC 835-30. Because there is no set interest rate, and because the royalty payments are variable, the discount rate is variable. After each royalty payment, the Company will use a prospective method to determine a new discount rate based on the revised estimate of remaining cash flows. The new rate is the discount rate that equates the present value of the revised estimate of remaining cash flows with the carrying amount of the debt, and it will be used to recognize interest expense for the remaining periods. At issuance, based on projected cash outflows from future revenue streams, the discount rate was 23.70%.

On April 14, 2022, under the Royalty Interest Global Amendments, the Company is granted at its sole discretion, the right to exchange from time to time, all or any of the Royalty Interest under the original principal amount of $12.0 million or any portion of the December 2020 Purchase Agreement for shares of the Company’s common stock at a price per share equal to the Nasdaq Minimum Price (as defined in Nasdaq Listing Rule 5635(d)) as of date of the applicable exchange, subject to certain limitations.

On February 8, 2023, the Company entered into an exchange agreement with Uptown, pursuant to which the parties agreed to partition $675,000 from the outstanding balance of the royalty interest. The parties further agreed to exchange the partitioned royalty for 150,000 shares of the Company’s stock.

On May 8, 2023, the Company entered into an exchange agreement with Uptown to (i) partition a new royalty interest in the royalty repayment amount of $1,073,807 from the outstanding balance of the royalty interest and exchange for 1,908,651 shares of the Company’s common stock.

On the same date, the Company entered into the Standstill Agreement as described further above, pursuant to which the Company may refrain from making royalty payments on the December 2020 Royalty Interest during the Standstill Period.

On September 29, 2023, the Company entered into the Global Amendment No. 2 to the December 2020 Royalty Interest with Uptown, pursuant to which, beginning on January 1, 2026, the monthly Royalty Payment under the December 2020 Royalty Interest shall be the greater of (a) $750,000.00, and (b) the actual Royalty Payment amount Uptown is entitled to for such month pursuant to the terms of the December 2020 Royalty Interest. As a material consideration for Uptown’s agreement to enter into this amendment, the Company agreed to issue to Uptown warrants to purchase up to 262,500 shares of the Company’s common stock at an exercise price of $0.37 per share. Such warrants may be exercisable for cash or on a cashless basis at any time and from time to time during the period commencing on September 29, 2023 (the “Issuance Date”) and ending on the five-year anniversary of the Issuance Date. Pursuant to an analysis of the indicators provided in ASC 470-60-55-8, the Company is not deemed to be experiencing financial difficulty. The debt restructuring is therefore not considered a TDR.

On the same date, the Company entered into a privately negotiated exchange agreement with Uptown (the “Exchange Agreement”), pursuant to which the Company issued an aggregate of 118 shares of the Company’s newly authorized Series I Convertible Preferred Stock (the “Series I Preferred Stock” or “Preferred Stock”) to Uptown, at an effective exchange price per share equal to the market price (defined as the Minimum Price under Nasdaq Listing Rule 5635(d)) as of the date of the Exchange Agreement, in exchange for a $1,500,000.00 reduction in the outstanding balance of the December 2020 Royalty Interest (“Partitioned Royalty”).(the “Exchange Transaction”). Subject to the terms of the Series I Preferred Stock, each share of Series I Preferred Stock is convertible into shares of the Company’s Common Stock (the “Conversion Shares”).

The cumulative effect of the exchanges to the December 2020 Royalty Interest resulted in significant modifications and was accounted for as extinguishment. The Company recorded an extinguishment gain in the unaudited condensed consolidated statements of operations amounting to $2.7 million. The extinguishment triggered a remeasurement event under ASC 825-10 and created an election date on whether to account for the December 2020 Royalty Interest under the FVO accounting.

The Company irrevocably elected to initially and subsequently apply the FVO accounting to the entire royalty interest. The Company used the valuation report from an independent valuation service provided to measure the reporting date fair value of the royalty interest.

On March 31, 2024, and December 31, 2023 the fair value was determined to be $7.9 million and $7.5 million. For the three months ended March 31, 2024, the net loss in the fair value was $407,000. The net loss in fair value was recorded as loss included in the change in fair value of financial instruments and hybrid instrument designated at FVO in the unaudited condensed consolidated statements of operations.

March 2021 Purchase Agreement

On March 8, 2021, the Company entered into a purchase agreement (the “March 2021 Purchase Agreement”) with Streeterville Capital, LLC (“Streeterville”), a company affiliated with CVP, pursuant to which the Company sold a royalty interest entitling Streeterville to $10.0 million and any interest, fees, and charges as royalty repayment amount for an aggregate purchase price of $5.0 million (the “March 2021 Royalty Interest”). Interest will accrue on the royalty repayment amount at a rate of 5% per annum, compounding quarterly, and will increase to 10% per annum, compounding quarterly on the 12-month anniversary of the closing date.

The Company will be obligated to make minimum royalty payments on a monthly basis beginning at the earlier of (a) 36 months following the closing date or (b) 30 days following the satisfaction of all existing royalties to Streeterville, and its affiliates namely Iliad and Uptown, but not earlier than 18 months following the closing date in an amount equal to the greater of (i) $250,000 beginning on the royalty payment start date and continuing until either the royalty repayment amount has been paid in full or the 6-month anniversary of the royalty payment start date, $400,000 beginning on the 6-month anniversary of the royalty payment start date and continuing until either the royalty repayment amount has been paid in full or the 12-month anniversary of the royalty payment start date, $600,000 beginning on the 12-month anniversary of the royalty payment start date and continuing until either the royalty repayment amount has been paid in full or the 18-month anniversary of the royalty payment start date, $750,000 beginning on the 18-month anniversary of the royalty payment start date and continuing until the royalty repayment amount has been paid in full, and (ii) 10% of the Company’s net sales on included products, 10% of worldwide revenues related to upfront licensing fees and milestone payments from licensees and/or distributors but specifically excluding licensing fees and/or milestone payments that are reimbursements of clinical trial expenses or associated with the license of Included Products from the Company to Napo EU, including but not limited to the upfront fee payable by Napo EU to Napo for included products and Crofelemer for other indications; and 50% of royalties collected from licenses of the included products to third parties.

The March 2021 Royalty Interest amount of $10.0 million is classified as debt, net of a $5.0 million discount, at initial recognition. Under ASC 470-10-35-3, royalty payments to Streeterville will be amortized under the interest method per ASC 835-30. Because there is no set interest rate, and because the royalty payments are variable, the discount rate is variable. After each royalty payment, the Company will use a prospective method to determine a new

discount rate based on the revised estimate of remaining cash flows. The new rate is the discount rate that equates the present value of the revised estimate of remaining cash flows with the carrying amount of the debt, and it will be used to recognize interest expense for the remaining periods. At issuance, based on projected cash outflows from future revenue streams, the discount rate was 19.36%.

On April 14, 2022, under the Royalty Interest Global Amendments, the Company is granted at its sole discretion, the right to exchange from time to time, all or any of the Royalty Interest under the original principal amount of $10.0 million of the March 2021 Purchase Agreement for shares of the Company’s common stock at a price per share equal to the Nasdaq Minimum Price (as defined in Nasdaq Listing Rule 5635(d)) as of date of the applicable exchange, subject to certain limitations.

On August 17, 2022, the Company entered into an exchange agreement (the “Royalty Interest Exchange Agreement”) with Streeterville to (i) partition a new royalty interest in the royalty repayment amount of $3.4 million (“Partitioned Royalty”) from the royalty interest of the March 2021 Purchase Agreement and then cause the outstanding balance of the royalty interest to be reduced by an amount equal to the initial outstanding balance of the Partitioned Royalty, and (ii) exchange (“Royalty Exchange”) the Partitioned Royalty for 153,333 shares of the Company’s common stock with a par value of $0.0001 in accordance with the term of the Royalty Interest Exchange Agreement.

On September 30, 2022, the Company entered into an exchange agreement with Streeterville, pursuant to which the parties agreed to partition $2.0 million from the outstanding balance of the royalty interest and exchange the partitioned royalty for 156,863 shares of the Company’s common stock. The exchange was accounted for as a debt modification and resulted to a reduction in the outstanding balance of the royalty interest amounting to $2.0 million.

On March 1, 2024, the Company entered into a privately negotiated exchange agreement with Streeterville, pursuant to which the Company issued an aggregate of 179 shares of Series J Preferred Stock to Streeterville in exchange for the surrender of the March 2021 Royalty Interest by Streeterville. Upon completion of the CVP Exchange Transaction, all outstanding balance of the March 2021 Royalty Interest was fully paid, and the March 2021 Royalty Interest was terminated.

The exchanges of Series J Preferred Stock were accounted for as extinguishment. Because the fair value of the common stock transferred is less than the carrying amount of the Series J Preferred Stock surrendered, the difference was credited to retained earnings and added to earnings available to common shareholders.

Interest expense was $448,000 and $420,000 for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, and December 31, 2023, the carrying value of the debt was $0 and $4.6 million, respectively.

August 2022 Purchase Agreement

On August 24, 2022, the Company entered into another royalty interest purchase agreement (the “August 2022 Purchase Agreement”) with Streeterville, pursuant to which the Company sold to Streeterville a royalty interest to receive $12.0 million (the “August 2022 Royalty Interest”) of future royalties on sales of Mytesi® (crofelemer) for any indications that could cannibalize crofelemer indications or any other chronic indication and certain up-front license fees and milestone payments from licensees and/or distributors for an aggregate purchase price of $4.0 million (“the Royalty Financing”). The Company will use the proceeds to support the ongoing pivotal phase 3 clinical trial of crofelemer for prophylaxis of diarrhea in adults receiving targeted cancer therapy. Interest will accrue on the Royalty Repayment Amount at a rate of 5% per annum from the closing of the Royalty Financing until the one-year anniversary of such closing and 10% per annum thereafter, simple interest computed on the basis of a 360-day year comprised of twelve 30-day months.

The Company will be obligated to make minimum royalty payments on a monthly basis beginning on January 1, 2024 in an amount equal to the greater of (A) $250,000 (which increases to $400,000 beginning 6 months following the closing of the Royalty Financing, $600,000 beginning 12 months following the closing of the Royalty Financing, and $750,000 beginning 18 months following the closing of the Royalty Financing) and (B) the royalty payments to which

Investor is entitled, consisting of (1) 10% of the Company’s net sales of crofelemer for any indications that could cannibalize crofelemer indications or any other chronic indication (including any improvements, modifications and follow-on products, collectively referred to as “Included Products”) (2) 10% of worldwide revenues related to upfront licensing fees and milestone payments from licensees and/or distributors, but specifically excluding licensing fees and/or milestone payments that are (A) reimbursements of clinical trial expenses or (B) associated with the license of the of the Included Products from the Company to Napo EU S.p.A. and (3) 50% of royalties collected from licenses of the Included Products to third parties.

Pursuant to the terms of the August 2022 Royalty Interest, the Company has the right to exchange from time to time at the Company’s sole discretion all or any portion of the Royalty Interest for shares of common stock at a price per share equal to the Nasdaq Minimum Price (as defined in Nasdaq Listing Rule 5635(d)) as of the date of the applicable exchange. At issuance, based on projected cash outflows from future revenue streams, the discount rate was 55.97%.

On September 29, 2023, the Company entered into a Global Amendment No. 2 (the “Global Amendment”) with the Investor as described further above, such that the Company issued Streeterville warrants to purchase 255,000 shares of the common stock the Global Amendment No. 1 and Global Amendment No. 2 to the August 2022 Royalty Interest with Streeterville, pursuant to which, (a) beginning on January 1, 2026, the monthly Royalty Payment under the August 2022 Royalty Interest shall be the greater of (x) $750,000.00, and (y) the actual Royalty Payment amount Streeterville is entitled to for such month pursuant to the terms of the August 2022 Royalty Interest, and (b) the Company is prohibited from making prepayments of the Royalty Repayment Amount under the August 2022 Royalty Interest. As a material consideration for Streeterville’s agreement to enter into these amendments, the Company agreed to issue to Streeterville warrants to purchase up to 255,000 shares of the Company’s common stock at an exercise price of $0.37 per share. Such warrants may be exercisable for cash or on a cashless basis at any time and from time to time during the period commencing on September 29, 2023 (the “Issuance Date”) and ending on the five-year anniversary of the Issuance Date. Pursuant to an analysis of the indicators provided in ASC 470-60-55-8, the Company is not deemed to be experiencing financial difficulty. The debt restructuring is therefore not considered a TDR.

The cumulative effect of the exchanges to the August 2022 Royalty Interest resulted to significant modifications and were accounted for as extinguishment. The Company recorded an extinguishment loss in the unaudited condensed consolidated statements of operations amounting to $1.0 million The extinguishment triggered a remeasurement event under ASC 825-10 and created an election date on whether to account for the August 2022 Royalty Interest resulted under the FVO accounting.

The Company irrevocably elected to initially and subsequently apply the FVO accounting to the entire royalty interest. The Company used the valuation report from an independent valuation service provided to measure the reporting date fair value of the royalty interest.

On January 29, 2024, the Company entered into a privately negotiated exchange agreement with Streeterville pursuant to which the Company issued 1,587,632 shares of the Company’s common stock, par value $0.0001 to Streeterville in exchange for a $165,000 reduction in the outstanding balance of the royalty interest dated August 24, 2022.

On March 31, 2024, and December 31, 2023 the fair value was determined to be $7.1 million and 6.8 million, respectively. For the three months ended March 31, 2024, the net loss in the fair value was $468,000. The net loss in fair value was recorded as loss included in the change in fair value of financial instruments and hybrid instrument designated at FVO in the unaudited condensed consolidated statements of operations.

Streeterville Note

On January 13, 2021, the Company issued a secured promissory note to Streeterville in the original principal amount of $6.2 million for an aggregate purchase price of $6.0 million. The Company will use the proceeds to fund development of the Company’s NP-300 drug product candidate for the indication of the symptomatic relief of diarrhea from cholera and general corporate purposes, including the Company’s product pipeline activities. The note is due after four years and bears interest at 3.25% per annum. Interest on the note is payable annually in advance by adding the

interest charge for each upcoming year to the outstanding balance on the date each such interest charge is accrued. The Company also paid $25,000 to cover legal fees, accounting costs, due diligence, monitoring and other transaction costs incurred in connection with the issuance of the note. The first year of prepaid interest and the transaction expenses are included in the original principal amount.

At any time following the occurrence of a trial failure which refers to any of the following: (i) the Company abandons the clinical trial with NP-300 for an indication for the symptomatic relief of infectious diarrhea for cholera; (ii) the Company fails to start the Phase 1 clinical trial of NP-300 for the symptomatic relief of infectious diarrhea for cholera by July 1, 2022; or (iii) the Company fails to meet all primary endpoints in the pivotal trials of NP-300 for the symptomatic relief if infectious diarrhea for cholera with statistical significance, Streeterville may elect to increase the outstanding balance as of the date of the trial failure by 25% without acceleration (the “Trial Failure Effect”). If Streeterville elects to apply the Trial Failure Effect, it reserves the right to declare the outstanding balance immediately due and payable at any time. As of March 31, 2024, no trial failure occurred.

Streeterville is entitled to a maximum of 18% and a minimum of 1% of the gross proceeds received by the Company from the sale of TDPRV (the “Return Bonus”). The Return Bonus percentage is reduced pro rata based on the percentage of the original principal balance of the note that has been repaid as of the date of the sale of the TDPRV. Even if the note has been paid in full at the time of the sale of the TDPRV, the Company is still obliged to pay Streeterville a Return Bonus of 1%. If Streeterville applies the Trial Failure Effect, the Return Bonus will automatically be reduced to 1%. If the TDPRV has not been sold as of the day immediately preceding the maturity date of the note, the Return Bonus percentage will be fixed as of such date. As of March 31, 2024, the Company has not sold any TDPRV.

Beginning on the earlier of (a) 6 months after January 2021, and (b) initiation of human trials with NP-300 for symptomatic relief of infectious diarrhea for cholera, the Company may pay all or any portion of the outstanding balance earlier than it is due. In the event the Company elects to prepay all or any portion of the outstanding balance, it shall pay to Streeterville 112.5% of the portion of the outstanding balance the Company elects to prepay. The Company may not prepay the note without the Streeterville’s consent on the date the last patient is enrolled in a pivotal trial.

After Streeterville becomes aware of the occurrence of any default, Streeterville may accelerate the note, with the outstanding balance becoming immediately due and payable in cash at the Mandatory Default Amount (i.e., the outstanding balance following the application of the Default Effect). Streeterville reserves the right to declare the outstanding balance immediately due and payable at any time following the default. Default Effect means multiplying the outstanding balance as of the date of default by 5% or 15% for each occurrence of default, capped at an aggregate of 25%, and then adding the resulting product to the outstanding balance. The percentage to be used depends on whether the default is viewed as minor or major as defined in the agreement. Furthermore, interest accrues on the outstanding balance beginning on the date of default at an interest rate equal to the fewer of 18% per annum or the maximum rate permitted under applicable law. As of March 31, 2024, no default has occurred.

In connection with the note issuance, the Company has entered into a security agreement with Streeterville, pursuant to which Streeterville will receive a first priority security interest in all existing and future NP-300 technology, and any TDPRV and the sale proceeds therefrom that may be granted to the Company by the FDA in connection with the development of NP-300 for the cholera indication. The Company also agreed, with certain exceptions, not to grant any lien on any of the collateral securing the note and not to grant any license under any of the intellectual property relating to such collateral. The grant of security interest has become effective upon the receipt of the Salix Waiver on April 6, 2021 in observance to the requirement of the settlement agreement previously entered by the Company with Salix Pharmaceuticals, Inc.

The Company irrevocably elected to initially and subsequently apply the FVO accounting to the entire note. The fair value at transaction date was equal to the cash proceeds received of $6.0 million. The transaction expense of $25,000 was recognized in profit and loss as incurred. The Company used the valuation report from an independent valuation service provided to measure the reporting date fair value of the note.

On March 31, 2024, and December 31, 2023, the fair value was determined to be $10.2 million and $9.8 million, respectively. For the three months ended March 31, 2024, the net increase in the fair value was $450,000. The

net decrease in fair value was recorded as loss included in the change in fair value of financial instruments and hybrid instrument designated at FVO in the unaudited condensed consolidated statements of operations.

Insurance Financing

May 2023 First Insurance Financing

In May 2023, the Company entered into a premium finance agreement for $575,000 with First Insurance representing the unpaid balance of the total premiums, taxes, and fees of $676,000 with an annual interest rate of 8.6%. The total finance charge was $23,000. Payment of principal and interest is due in equal monthly installments over ten months. Interest expense for the three months ended March 31, 2024, was $7,000. The financing balance was zero and $172,000 as of March 31, 2024 and December 31, 2023, respectively.

March 2024 First Insurance Financing

In March 2024, the Company entered into a premium finance agreement for $97,000 with First Insurance representing the unpaid balance of the total premiums, taxes, and fees of $52,000 with an annual interest rate of 9.3%. The total finance charge was $2,000. Payment of principal and interest is due in equal monthly installments over ten months. Interest expense for the three months ended March 31, 2024, was zero. The financing balance was $52,000 as of March 31, 2024.

2019 Tempesta Note

In October 2019, the Company entered into a License Termination and Settlement Agreement with Dr. Michael Tempesta, pursuant to which certain royalty payment disputes between the Company and Tempesta were settled. Per the terms of the Agreement, Tempesta received $50,000 in cash, an unsecured promissory note issued by the Company in the aggregate principal amount of $550,000 and 13,333 shares of the Company’s common stock in exchange for the cessation of all royalty payments by the Company to Dr. Tempesta under the License Agreements. The $550,000 promissory note bears interest at the rate of 2.5% per annum and matures on March 1, 2025. The promissory note provides for the Company to make semi-annual payments equal to $50,000 plus accrued interest beginning on March 1, 2020 until the Note is paid in full. Interest expense for the three months ended March 31, 2024, and 2023 was $1,000 and $3,000, respectively. At March 31, 2024, and December 31, 2023, the net carrying value of the note was $100,000 and $150,000, respectively.

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Warrants

3 Months Ended

Mar. 31, 2024

Warrants

Warrants

8. Warrants

The following table summarizes information about warrants outstanding and exercisable into shares of the Company’s common stock as of March 31, 2024, and December 31, 2023:

	March 31,	December 31,
	2024	2023
	(unaudited)
Warrants outstanding, beginning balance	12,109,807	7,505
Issuances	—	12,102,302
Exercises	—	—
Expirations and cancelations	(7,542,409)	—
Warrants outstanding, ending balance	4,567,398	12,109,807

As of March 31, 2024, and 2023, the Company’s outstanding warrants have an exercise price ranging from $0.24 to $0.88 per common stock and generally expires prior to December 31, 2024.

PIPE Warrants

On May 8, 2023, the Company entered into a Securities Purchase Agreement (the “PIPE Purchase Agreement”) with certain investors named therein (collectively the “Purchasers”), pursuant to which the Company agreed to issue and sell to the Purchasers in a private placement an aggregate of (i) 137 shares (the “Preferred Shares”) of Series G Convertible Preferred Stock, par value $0.0001 per share, of the Company (“Series G Preferred Stock”) and (ii) warrants to purchase up to 6,850,000 shares of the Company’s common stock, at an exercise price of $0.48 per share (the “PIPE Warrants”), for an aggregate purchase price of approximately $1.86 million (the “Private Placement”). The Company intends to use the proceeds from the Private Placement for working capital and general corporate purposes.

The PIPE Warrants may be exercisable for cash or on a cashless basis at any time and from time to time during the period commencing on the later of (i) January 1, 2024, and (ii) the date on which the approval by the Company’s stockholders (the “Stockholder Approval”) to remove both the Voting Cap and the Conversion Cap (both as defined below) is obtained (the “PIPE Warrants Initial Exercise Date”) and ending on the five-year anniversary of the PIPE Warrants Initial Exercise Date.

On May 10, 2023, the Company issued warrants equivalent to 6,850,000 shares of the Company’s common stock in relation to the PIPE Purchase Agreement.

The PIPE Purchase Agreement provides that during the period commencing on the signing of the PIPE Purchase Agreement and ending October 22, 2023, the Company will not effect or enter into any agreement to (i) issue securities in exchange for any securities of the Company issued and outstanding on the date of the PIPE Purchase Agreement pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”), or (ii) effect issuance by the Company of common stock or Common Stock Equivalents (as defined in the PIPE Purchase Agreement), subject to certain customary exceptions set forth in the PIPE Purchase Agreement including, among others, issuance of shares of common stock pursuant to the At The Market Offering Agreement, dated December 10, 2021, by and between the Company and Ladenburg Thalmann & Co. Inc., as amended (the “Ladenburg Thalmann ATM”), provided that such issuance in the Ladenburg Thalmann ATM has consented.

On August 14, 2023, the Company entered into an amendment (“the First Amendment”) to the PIPE Purchase Agreement with certain holders (the “Holders”) named in the PIPE Purchase Agreement, pursuant to which the parties agreed to terminate the restriction on subsequent equity sales by the Company. In exchange for the Holders’ agreement to enter into the First Amendment, the Company agreed to issue the Holders warrants to purchase 685,000 shares of the Company’s common stock (the “PIPE Amendment Warrants”) in a private placement pursuant to Section 4(a)(2) of the Securities Act. The PIPE Amendment Warrants are substantially the same as the PIPE Warrants and have an exercise price of $0.48 per share. The PIPE Amendment Warrants may be exercisable for cash or on a cashless basis at any time and from time to time during the period commencing on January 1, 2024 (the “PIPE Amendment Warrants Initial Exercise Date”) and ending on the five-year anniversary of the PIPE Amendment Warrants Initial Exercise Date.

At the date of the PIPE Amendment Warrants, the warrants were valued at $1.2 million using the Black-Scholes option pricing model as follows: exercise price of $0.48 per share, stock price of $0.72 per share, expected life of five years, volatility of 145.95% and a risk-free rate of 3.37%. The warrants were classified in additional paid-in-capital.

On February 27, 2024, pursuant to the PIPE Purchase Agreement, each of the PIPE investors entered into an exchange agreement with the Company (each, a “PIPE Warrant Exchange Agreement” and collectively, the “PIPE Warrant Exchange Agreements”). Pursuant to the PIPE Warrant Exchange Agreements, the Company agreed to exchange the PIPE Warrants for shares of common stock at an exchange ratio of 1-for-2.5 (“PIPE Warrant Exchange Transaction”). Upon completion of the PIPE Warrant Exchange Transaction, the Company exchanged the PIPE Warrants to purchase up to 7,535,000 shares of Common Stock for 18,837,500 shares of Common Stock (the “PIPE Exchange Shares”), and the PIPE Warrants were terminated. The PIPE Exchange Shares would be subject to a twelve-month lock-up, and any other equity security of the Company other than the PIPE Exchange Shares owned by the PIPE investors as of the date of the PIPE Warrant Exchange Agreement would be subject to a six-month lock-up.

On February 29, 2024, the PIPE investors converted 122 shares of Series G preferred stock into 3,050,000 shares of common stock subject to a six-month lock-up.

Standstill Agreement

Pursuant to the Company’s entry in the Standstill Agreement, as amended by the Binding MOU, as described further above, the Company agreed to issue (i) Iliad warrants to purchase up to 1,711,954 shares of the common stock, and (ii) Uptown warrants to purchase up to 2,105,348 shares of the common stock, at an exercise price of $0.48 per share (the “Standstill Warrants”).

The Standstill Warrants may be exercisable for cash or on a cashless basis at any time and from time to time during the period commencing on the later of (i) January 1, 2024 and (ii) the date on which the Stockholder Approval is obtained (the “Standstill Warrant Initial Exercise Date”) and ending on the five-year anniversary of the Standstill Warrant Initial Exercise Date.

At the date of the Standstill Agreement, the warrants were valued at $2.5 million using the Black-Scholes option pricing model as follows: exercise price of $0.48 per share, stock price of $0.73 per share, expected life of five years, volatility of 118.88% and a risk-free rate of 3.49%. The warrants were classified in additional paid-in-capital.

Royalty Interest Global Amendments

On September 29, 2023, the Company entered into amendments (the “Royalty Interest Global Amendments”) to (i) the October 2020 Royalty Interest with Iliad, (ii) the December 2020 Royalty Interest with Uptown, and (iii) the August 2022 Royalty Interest with Streeterville, pursuant to which, among other things, the Company agreed to issue to (i) Iliad warrants to purchase up to 232,500 shares of the Company’s common stock, (ii) Uptown warrants to purchase up to 262,500 shares of the common stock, and (iii) Streeterville warrants to purchase up to 255,000 shares of the Common Stock, at an exercise price of $0.37 per share (collectively, the “Royalty Interest Global Amendment Warrants”).

The Royalty Interest Global Amendment Warrants may be exercisable for cash or on a cashless basis at any time and from time to time during the period commencing on September 29, 2023 (the “Royalty Interest Global Amendment Initial Exercise Date”) and ending on the five-year anniversary of the Royalty Interest Global Amendment Initial Exercise Date.

At the date the Royalty Interest Global Amendments, the warrants were valued at $173,000 using the Black-Scholes option pricing model as follows: exercise price of $0.37 per share, stock price of $0.26 per share, expected life of five years, volatility of 139.53% and a risk-free rate of 4.6%. The warrants were classified in additional paid-in-capital.

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Preferred Stock

3 Months Ended

Mar. 31, 2024

Preferred Stock

Preferred Stock

9. Preferred Stock

At March 31, 2024, and December 31, 2023 preferred stock consisted of the following:

March 31, 2024
							Liquidation
(in thousands, except share and per share data)	Shares		Issued and		Carrying		Preference
Series	Designated		Outstanding		Value		per Share
A		5,524,926		—	$	—	$	—
B		11,000		—		—		—
B-1		63		—		—		—
B-2		10,165		—		—		—
C		1,011,000		—		—		—
D		977,300		—		—		—
E		10		—		—		—
F		10		—		—		—
G		137		—		—		—
H		105		—		—		—
I		118		—		—		—
J		179		99		—		—
Total		7,535,013		99	$	—	$	—

December 31, 2023
							Liquidation
(in thousands, except share and per share data)	Shares		Issued and		Carrying		Preference
Series	Designated		Outstanding		Value		per Share
A		5,524,926		—	$	—	$	—
B		11,000		—		—		—
B-1		63		—		—		—
B-2		10,165		—		—		—
C		1,011,000		—		—		—
D		977,300		—		—		—
E		10		—		—		—
F		10		—		—		—
G		137		122		—		—
H		105		—		—		—
I		118		56		—		—
Total		7,534,834		178	$	—	$	—

The Company is authorized to issue a total of 10,000,000 shares of its preferred stock as of March 31, 2024, and December 31, 2023, with a total of 7,535,013 shares and 7,534,834 shares designated to specific Series as of
March 31, 2024, and December 31, 2023, respectively.

Series B-2 Convertible Preferred Stock

In December 2019, the Company entered into an exchange agreement with Oasis Capital, pursuant to which Oasis Capital gave up (i) its remaining unexercised Prepaid Forward contracts exercisable for 412,074 shares of the Company’s common stock and (ii) 231,709 shares of common stock held as an investment by Oasis Capital, in exchange for 10,165 shares of the Company’s Series B-2 Convertible Preferred Stock.

In January 2020, a holder of the Series B-2 Convertible Preferred Stock converted 2,631 preferred shares into 166,630 shares of common stock. In October 2020, the Company entered into an exchange agreement with Oasis Capital pursuant to which the Company agreed to issue 166,728 shares of common stock in exchange for 975 shares of the Series B-2 Convertible Preferred Stock. The exchange agreement was accounted for as a modification. In December 2020, an investor converted the remaining 6,559 Series B-2 Convertible Preferred Stock into a total of 415,403 shares of the Company’s common stock. As a result, no shares of Series B-2 Preferred Stock remain outstanding as at March 31, 2024 and December 31, 2023.

Series C Perpetual Preferred Stock

In September 2020, the Company entered into an exchange agreement with Iliad to issue 842,500 shares of the Company's Series C Perpetual Preferred Stock at $0.0001 par value per share, for a non-cash exchange of equity instruments. The exchange agreement was contemporaneously entered with the issuance of Series D Perpetual Preferred shares, in exchange of remaining Series A Convertible Preferred shares totaling 5,524,926 shares, and accreted value of $11.2 million as of the exchange date. An amendment agreement of the Exchange Note 2 was also entered into, with issuance value of $2.3 million and a carrying value of $2.6 million as of the exchange date, to extend maturity from December 31, 2020 to December 31, 2021, in consideration of 5% increase in the outstanding balance.

The preferred stock has been classified as permanent stockholders' equity in accordance with authoritative guidance for the classification and measurement of perpetual shares without a mandatory redemption period because the redemption option was ultimately in the control of the Company. There were no shares of series C Preferred Stock outstanding as at March 31, 2024, and December 31, 2023.

Series E Preferred Stock

On August 18, 2022, the Company entered into an agreement (the “Series E Securities Purchase Agreement”) with a third party to issue 10 Series E Preferred Stock with a par value of $0.0001, amounting to $100. In consideration of the Series E Securities Purchase Agreement, the Company and third party agree to amend the existing definition of the term “Service Share Amount” in the License Agreement entered by both parties (See Note 2) and include a subsection for lock-up wherein the third party agrees not to sell, transfer, loan, grant any option of the purchase of, or otherwise dispose of any shares of common stock acquired pursuant to the License Agreement until after the 90-day period following the date of acquisition.

On October 4, 2022, the Company redeemed all 10 shares of Series E Preferred Stock in accordance with the terms of such securities. As a result, no shares of Series E Preferred Stock remain outstanding as at March 31, 2023 and December 31, 2023.

Series F Preferred Stock

On November 11, 2022, the Company entered into an agreement (the “Series F Securities Purchase Agreement”) with a third party to issue 10 Series F Preferred Stock with a par value of $0.0001, amounting to $100. In consideration of the Series F Securities Purchase Agreement, the Company and third party agree to amend the existing definition of the term “Service Share Amount” in the License Agreement entered by both parties (See Note 2) and include a subsection for lock-up wherein the third party agrees not to sell, transfer, loan, grant any option of the purchase of, or otherwise dispose of any shares of common stock acquired pursuant to the License Agreement until after the 90-day period following the date of acquisition.

Series G Preferred Stock

On May 8, 2023, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company agreed to issue to such investors (i) 137 shares of Series G Convertible Preferred Stock, par value $0.0001 per share, of the Company (“Series G Preferred Stock”) and (ii) warrants to purchase up to 6,850,000 shares of the Company’s common stock, at an exercise price of $0.48 per share (the “PIPE Warrants”), for an aggregate purchase price of approximately $1.9 million (the “Private Placement”).

On February 29, 2024, the PIPE investors converted 122 shares of Series G preferred stock into 3,050,000 shares of common stock subject to a six-month lock-up.

Series H Preferred Stock

On June 28, 2023, the Company entered into privately negotiated exchange agreements with Uptown and Streeterville, under which the Company issued 32 and 73 shares of the Company’s newly authorized Series H Convertible Preferred Stock (the “Series H Preferred Stock”) to Uptown and Streeterville, respectively, at an effective exchange price per share equal to the market price (defined as the Minimum Price under Nasdaq Listing Rule 5635(d)) as of the date of the exchange agreements, in exchange for a $757,000 reduction in the outstanding balance of the December 2020 Royalty Interest and a $1.7 million reduction in the outstanding balance of the August 2022 Royalty Interest, respectively.

Series I Preferred Stock

On September 29, 2023, the Company entered into a privately negotiated exchange agreement with Uptown (the “Exchange Agreement”), pursuant to which the Company issued an aggregate of 118 shares of the Company’s newly authorized Series I Convertible Preferred Stock (the “Series I Preferred Stock”) to Uptown, at an effective exchange price per share equal to the market price (defined as the Minimum Price under Nasdaq Listing Rule 5635(d)) as of the date of the Exchange Agreement, in exchange for a $1,500,000.00 reduction in the outstanding balance of the December 2020 Royalty Interest.

On January 15, 2024, Uptown converted 56 shares of Series I Preferred Stock into 2,696,456 shares of common stock.

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Temporary Equity

3 Months Ended

Mar. 31, 2024

Temporary Equity

Temporary Equity

10. Temporary Equity

On March 1, 2024, the Company entered into a privately negotiated exchange agreement with Streeterville Capital, LLC (“Streeterville”), pursuant to which the Company issued an aggregate of 179 shares of Series J Preferred Stock to Streeterville in exchange for the surrender of the March 2021 Royalty Interest by Streeterville (the “CVP Exchange Transaction”). Upon completion of the CVP Exchange Transaction, all outstanding balance of the March 2021 Royalty Interest was fully paid, and the March 2021 Royalty Interest was terminated. The Company reserves the right to exchange, at its sole discretion, a portion or all of the outstanding shares of Series J Preferred Stock held by investors for common stock at the stated value of $25,000 per share, divided by the applicable exchange price. The exchange price will be determined based on the lower of the Nasdaq official closing price and the 5-day average Nasdaq official closing price of the common stock immediately preceding the exchange date. The preferences, rights, limitations, and other matters relating to the Series J Preferred Stock are set forth in the Certificate of Designation, which the Company filed with the Secretary of State of the State of Delaware on March 1, 2024

The Company determined that the nature of the Series J Preferred Stock host was more analogous to a debt instrument, and that the economic characteristics and risks of the embedded redemption features were clearly and closely related to the Series J Preferred Stock host. As such, the redemption features were not required to be bifurcated under ASC 815, Derivatives and Hedging. Since the Series J Preferred Stock are redeemable in certain circumstances upon the occurrence of an event that is not solely within the Company’s control, they have been classified as mezzanine equity in the condensed consolidated balance sheets.

On March 5, 2024, the Company entered into a privately negotiated exchange agreement with Streeterville, pursuant to which the Company issued 10,000,000 shares of the Company’s common stock in exchange for the surrender and cancellation of 40 shares of Series J Perpetual Preferred Stock. On March 19, 2024, the Company entered into another privately negotiated exchange agreement with Streeterville, pursuant to which the Company issued 8,333,333 shares of the Company’s common stock in exchange for the surrender and cancellation of 40 shares of Series J Perpetual Preferred Stock based on an effective exchange price of $0.12 per share of common stock.

As of March 31, 2024, and December 31, 2023, the Company had 99 and zero shares outstanding of Series J preferred stock.

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Stockholders' Equity

3 Months Ended

Mar. 31, 2024

Stockholders' Equity

Stockholders' Equity

11. Stockholders' Equity

As of March 31, 2024, and December 31, 2023, the Company had reserved shares of common stock, on an as-if converted basis, for issuance as follows:

	March 31,	December 31,
	2024	2023
	(unaudited)
Options issued and outstanding	26,084	26,262
Inducement options issued and outstanding	1,512	1,512
Options available for grant under stock option plans	4,303,288	626,342
Restricted stock unit awards issued and outstanding	2,702,070	2,708,136
Warrants issued and outstanding	4,567,398	11,424,807
Total	11,600,352	14,787,059

Common Stock

The holders of common stock are entitled to one vote for each share of common stock held. The common stockholders are also entitled to receive dividends whenever funds and assets are legally available and when declared by the Board of Directors.

The holders of non-voting common stock are not entitled to vote, except on an as converted basis with respect to any change of control of the Company that is submitted to the stockholders of the Company for approval. Shares of

the Company's non-voting common stock have the same rights to dividends and other distributions and are convertible into shares of the Company's common stock on a one-for-one basis.

At a special meeting of stockholders of Jaguar Health, Inc. (the “Company”) held on September 30, 2022 (the “Special Meeting”), the Company’s stockholders approved an amendment (the “Sixth Amendment”) to the Company’s Third Amended and Restated Certificate of Incorporation (the “COI”) to effect an increase in the number of authorized shares of the Company’s voting common stock, par value $0.0001 per share (the “Common Stock”), from 150,000,000 to 298,000,000 shares of Common Stock (the “Authorized Share Increase”) on September 30, 2022.

Pursuant to such authority granted by the Company’s stockholders, the Company’s board of directors approved the Authorized Share Increase and the filing of the Sixth Amendment to effectuate the Authorized Share Increase. On September 30, 2022, the Company filed the Sixth Amendment with the Secretary of State of the State of Delaware (the “DE Secretary of State”), and the Authorized Share Increase became effective in accordance with the terms of the Sixth Amendment immediately upon filing with the DE Secretary of State (the “Effective Time”).

The Company is now authorized to issue a total number of 358,000,000 stock, of which 298,000,000 shares are common stock, 50,000,000 are non-voting common stock and 10,000,000 are preferred stock.

Reverse Stock Split

On September 3, 2021, the Company filed an amendment to its Third Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware to effect a 1-for-3 reverse stock split of the Company’s issued and outstanding shares of voting common stock, effective September 8, 2021. Upon effectivity, every three shares of the Company’s issued and outstanding common stock immediately prior to the effective time shall automatically be reclassified into one share of common stock without any change in the par value.

On January 20, 2023, the Company approved a seventh amendment to the Company’s Third Amended and Restated Certificate of Incorporation to effect a 1-for-75 reverse stock split of the Company’s issued and outstanding shares of voting common stock, effective January 23, 2023.

The reverse stock split reduces the number of shares of common stock issuable upon the conversion of the Company’s outstanding non-voting common stock and the exercise or vesting of its outstanding stock options and warrants in proportion to the ratio of the reverse stock split and causes a proportionate increase in the conversion and exercise prices of such non-voting common stock, stock options and warrants. In addition, the number of shares reserved for issuance under the Company’s equity compensation plans immediately prior to the effective time will be reduced proportionately. The reverse stock split did not change the total number of authorized shares of common stock or preferred stock.

At the Market Offering (“ATM”)

December 2021 ATM Agreement

On December 10, 2021, the Company entered into an ATM Agreement (“December 2021 ATM Agreement”) with Ladenburg, pursuant to which the Company may offer and sell, from time to time through Ladenburg, shares of common stock having an aggregate offering price of up to $15.0 million, subject to the terms and conditions of the December 2021 ATM Agreement. The offering will terminate upon the earlier of (i) December 10, 2024 and (ii) termination of the December 2021 ATM Agreement as permitted therein.

On February 2, 2022, the Company entered into an amendment to the December 2021 ATM Agreement, pursuant to which, the aggregate offering amount of the shares of the Company’s common stock which the Company may sell and issue through Ladenburg, as the sales agent, was increased from $15.0 million to $75.0 million (the “ATM Upsize”).

During the three months ended March 31, 2024, the Company issued an aggregate of 130,894,636 shares under the ATM Agreement for total net proceeds of $11.3 million.

Noncontrolling Interest

As a result of the merger on November 3, 2021 between Napo EU and Dragon SPAC, the Company assumed a non-controlling interest amounting to $242,000 as of December 31, 2021 which represents noncontrolling interest held by an investor in Napo Therapeutics.

During the three months ended March 31, 2024, noncontrolling interest increased by $116,000. During the three months ended March 31, 2023, noncontrolling interest increased by $1.0 million.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2024

Stock-Based Compensation

Stock-Based Compensation

12. Stock-based Compensation

2013 Equity Incentive Plan

In November 2013, the Company's board of directors and sole stockholder adopted the Jaguar Health, Inc. 2013 Equity Incentive Plan (the “2013 Plan”). The 2013 Plan allows the Company's board of directors to grant stock options, restricted stock awards and restricted stock unit awards to employees, officers, directors and consultants of the Company. Following the effective date of the IPO and after effectiveness of any grants under the 2013 Plan that were contingent on the IPO, no additional stock awards will be granted under the 2013 Plan. Outstanding grants continue to be exercisable, however, any unissued shares under the plan and any forfeitures of outstanding options do not rollover to the 2014 Stock Incentive Plan. There were zero shares outstanding as at March 31, 2024, and December 31, 2023.

2014 Stock Incentive Plan

Effective May 12, 2015, the Company adopted the Jaguar Health, Inc. 2014 Stock Incentive Plan (“2014 Plan”). The 2014 Plan provides for the grant of options, restricted stock and restricted stock units to eligible employees, directors and consultants to purchase the Company's common stock. The term of an incentive stock option may not exceed 10 years, except that with respect to any participant who owns more than 10% of the voting power of all classes or our outstanding stock, the term must not exceed 5 years. The 2014 Plan that provides for automatic share increases on the first day of each fiscal year in the amount of 2% of the outstanding number of shares of the Company's common stock on the last day of the preceding calendar year. The 2014 Plan replaced the 2013 Plan except that all outstanding options under the 2013 Plan remain outstanding until exercised, canceled or expired.

On April 13, 2022, the Board of Directors of the Company approved a Registration Statement to register an additional 2,417,660 shares of the Company’s common stock for issuance pursuant to the awards granted under the 2014 Plan.

As of March 31, 2024, there were 27,596 options outstanding and 4,302,288 options available for grant. As of December 31, 2023, there were 26,262 options outstanding and 626,342 options available for grant.

2020 New Employee Inducement Award Plan

Effective June 16, 2020, the Company adopted the Jaguar Health, Inc. New Employee Inducement Award Plan (“2020 Inducement Award Plan”) and, subject to the adjustment provisions of the Inducement Award Plan, reserved 2,222 shares of the Company’s common stock for issuance pursuant to equity awards granted under the Inducement Award Plan. The term of an incentive stock option may not exceed 10 years, except that with respect to any participant who owns more than 10% of the voting power of all classes or our outstanding stock, the term must not exceed 5 years. The 2020 Inducement Award Plan provides for the grant of non-statutory stock options, restricted stock units, restricted stock, and performance shares. The 2020 Inducement Award Plan was adopted without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. The terms and conditions of the 2020 Inducement Award Plan are substantially similar to the Company’s 2014 Stock Incentive Plan, but with such other terms and conditions intended to comply with the Nasdaq inducement award rules. In accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules, the

only persons eligible to receive grants of equity awards under the Inducement Award Plan are individuals who were not previously an employee or director of the Company, or following a bona fide period of non-employment, as an inducement material to such persons entering into employment with the Company.

On April 13, 2022, the Board of Directors of the Company approved an amendment to the 2020 Inducement Award Plan to reserve an additional 471,833 shares of the Company’s common stock for issuance pursuant to equity awards granted under the Inducement Award Plan, thereby increasing the number of shares of the Company’s common stock issuable thereunder from 500,000 shares to 971,833 shares.

As of March 31, 2024, there were 1,512 options outstanding and 498,488 options available for grant. As of December 31, 2023, there were 1,512 options outstanding and 6,967 options available for grant. The Company authorized an additional 498,448 shares for the stock incentive plans.

Stock Options and Restricted Stock Units (“RSUs”)

The following table summarizes the incentive plan activity for the three months ended March 31, 2024, and year ended December 31, 2023:

				Weighted		Weighted Average
	Shares	Stock		Average		Remaining	Aggregate
	Available	Options	RSUs	Stock Option		Contractual Life	Intrinsic
(in thousands, except share and per share data)	for Grant	Outstanding	Outstanding	Exercise Price		(Years)	Value*
Outstanding at January 1, 2023	122,978	28,079	44,865	$	592.73	7.19	$	—
Additional shares authorized	3,166,330	—	—		—	—		—
Options granted	—	—	—		—	—		—
Options exercised	—	—	—		—	—		—
Options canceled	305	(305)	—		327.81	—		—
RSUs granted	(2,690,320)	—	2,690,320		—	—		—
RSUs vested and released	21,808	—	(21,808)		—	—		—
RSUs cancelled	5,241	—	(5,241)		—	—		—
Outstanding at December 31, 2023	626,342	27,774	2,708,136	$	596	6.21	$	—
Additional shares authorized	3,670,702	—	—		—	—		—
Options granted	—	—	—		—	—		—
Options exercised	—	—	—		—	—		—
Options canceled	178	(178)	—		362.34	—		—
RSUs granted	—	—	—		—	—		—
RSUs excercised	125	—	(125)		—	—		—
RSUs cancelled	5,941	—	(5,941)		—	—		—
Outstanding at March 31, 2024	4,303,288	27,596	2,702,070	$	597	5.98	$	—
Exercisable at March 31, 2024		27,465		$	598.24	5.97	$	—
Vested and expected to vest at March 31, 2024		27,594		$	597.16	5.98	$	—

*Fair market value of Jaguar stock on March 31, 2024 was $0.09 per share.

The intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair market value of the Company's common stock for options that were in-the-money.

The number of options exercised during the three months ended March 31, 2024, and year ended December 31, 2023, were zero.

The weighted average grant date fair value of stock options granted was zero per share during the three months ended March 31, 2024, and for the year ended December 31, 2023, respectively.

The number of options that vested for the three months ended March 31, 2024, and for the year ended December 31, 2023, was 271 and 1,524, respectively. The grant date weighted average fair value of options that vested

for the three months ended March 31, 2024, and for the year ended December 31, 2023, was $336.43 and $273.62, respectively.

Stock-Based Compensation

The following table summarizes stock-based compensation expense related to stock options, inducement stock options and RSUs for the three months ended March 31, 2024 and 2023, and are included in the unaudited condensed consolidated statements of operations as follows:

	Three Months Ended
	March 31,
(in thousands)	2024		2023
Research and development expense	$	289	$	227
Sales and marketing expense		40		49
General and administrative expense		252		204
Total	$	581	$	480

As of March 31, 2024, the Company had $28,968 of unrecognized stock-based compensation expense for options, inducement options and restricted stock units outstanding, which is expected to be recognized over a weighted-average period of 0.19 years.

The were no range of assumptions set forth and used in calculating the fair value of options granted during the three months ended March 31, 2024, and 2023, respectively.

401(k) Plan

The Company sponsors a 401(k) defined contribution plan covering all employees. There were no employer contributions to the plan from plan inception through March 31, 2024.

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Net Loss Per Share

3 Months Ended

Mar. 31, 2024

Net Loss Per Share

Net Loss Per Share

13. Net Loss Per Share

The following table presents the calculation of basic and diluted net loss per share of common stock for the periods indicated:

	Three Months Ended March 31,
(In thousands, except share and per share data)	2024		2023
Net loss attributable to common stockholders	$	(9,226)	$	(12,202)
Shares used to compute net loss per common stock, basic and diluted		158,842,297		5,109,609
Net loss per share attributable to common stockholders, basic and diluted	$	(0.06)	$	(2.39)

Basic net loss per share is calculated by dividing net loss by the weighted-average number of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock, convertible preferred stock, and certain common stock equivalents outstanding for the period. Common stock equivalents are only included when their effect is dilutive. The Company's potential securities which include warrants, convertible preferred series stock and other common stock equivalents were excluded because their effect is anti-dilutive. For the prior periods presented, there is no difference in the number of shares used to compute basic and diluted shares outstanding.

The following are the other common stock equivalents of the Company for the three months ended March 31, 2024, and for year ended December 31, 2023:

	March 31,	December 31,
	2024	2023
	(unaudited)
Options issued and outstanding	26,084	26,262
Inducement options issued and outstanding	1,512	1,512
Restricted stock units issued and outstanding	2,702,070	2,708,136
Warrants issued and outstanding	4,567,398	11,424,807
Total	7,297,064	14,160,717

As of May 14, 2024, there were 19,874,088 shares of common stock issued after the balance sheet date.

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Segment Data

3 Months Ended

Mar. 31, 2024

Segment Data

Segment Data

14. Segment Data

The Company has two reportable segments- animal health and human health. The animal health segment is focused on developing and commercializing prescription and non-prescription products for companion and production animals. The human health segment is focused on developing and commercializing human products and the ongoing commercialization of Mytesi, which the U.S. FDA approves for the symptomatic relief of non-infectious diarrhea in adults with HIV/AIDS on antiretroviral therapy.

The Company's reportable segments net revenues and net loss for the three months ended March 31, 2024, and 2023 consisted of the following:

	Three Months Ended
	March 31,
	2024		2023
(in thousands)	(unaudited)
Revenue from external customers
Human Health	$	2,303	$	1,927
Animal Health		48		45
Consolidated Totals	$	2,351	$	1,972
Segment net loss
Human Health	$	(4,601)	$	(6,539)
Animal Health		(4,767)		(5,858)
Consolidated Totals	$	(9,368)	$	(12,397)

The Company's reportable segments assets consisted of the following:

	March 31,		December 31,
	2024		2023
(in thousands)	(unaudited)
Segment assets
Human Health	$	42,154	$	42,289
Animal Health		163,555		153,190
Total	$	205,709	$	195,479

The reconciliation of segments assets to the consolidated assets is as follows:

	March 31,		December 31,
	2024		2023
(in thousands)	(unaudited)
Total assets for reportable segments	$	205,709	$	195,479
Less: Investment in subsidiary		(29,232)		(29,232)
Less: Intercompany loan		(121,088)		(115,484)
Consolidated Totals	$	55,389	$	50,763

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Subsequent Events

3 Months Ended

Mar. 31, 2024

Subsequent Events

Subsequent Events

15. Subsequent Events

December 2021 ATM Agreement

From April 1, 2024 to May 14, 2024, the Company issued an aggregate of 19,863,548 shares of common stock under the December 2021 ATM Agreement for total net proceeds of $2.2 million.

April 2024 Agreement for Gelclair

As part of the Company’s strategy to expand the commercial footprint beyond HIV-related supportive care to include cancer-related supportive care, on April 12, 2024, the Company entered into an exclusive 5-year in-license agreement with United Kingdom-based Venture Life Group PLC ("Venture Life"), an international consumer health company focused on the global self-care market for Venture Life's FDA-approved oral mucositis prescription product, Gelclair for the U.S. market. The Company is planning to begin commercial launch in the third quarter of 2024 for Gelclair.

Submission of Matters to a Vote of Security Holders

On April 9, 2024, the Company held a special meeting of stockholders of the Company (the “Special Meeting”). Four proposals were submitted to and approved by the Company’s stockholders, each of which is described in the Company’s definitive proxy statement for the Special Meeting (the “Proxy Statement”), filed with the Securities and Exchange Commission on March 15, 2024

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2024

Summary of Significant Accounting Policies

Basis of Presentation

Basis of Presentation

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and on a basis consistent with the annual consolidated financial statements, and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair presentation of the periods presented. These interim financial results are not necessarily indicative of the results to be expected for the year ending
December 31, 2024, or for any other future annual or interim period. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Annual Report on Form 10-K for the year ended December 31, 2023. The condensed consolidated balance sheet at December 31, 2023 has been derived from the audited consolidated financial statements at that date, but does not include all disclosures, including notes, required by U.S. GAAP for complete financial statements.

There has been no material change to the Company's significant accounting policies during the three months ended March 31, 2024 as compared to the significant accounting policies described in Note 2 of the “Notes to Consolidated Financial Statements” in the Company's Annual Report on Form 10-K as of and for the year ended December 31, 2023, which was filed to SEC on April 1, 2024 and amended on April 17, 2024.

Except as noted above, the unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to present fairly the financial position as of March 31, 2024, results of operations for the three months ended March 31, 2024 and 2023, changes in convertible preferred stock and stockholders' equity for the three months ended March 31, 2024 and 2023, and cash flows for the three months ended March 31, 2024 and 2023. The interim results are not necessarily indicative of the results for any future interim periods or for the entire year.

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements have been prepared in accordance with U.S. GAAP and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) and include the accounts of the Company and its subsidiaries with controlling interest. All inter-company transactions and balances have been eliminated in consolidation. The reporting currency of the Company is the U.S dollar.

Non-controlling interest

Non-controlling interest

Use of Estimates

Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company’s management to make judgments, assumptions and estimates that affect the amounts reported in its unaudited consolidated financial statements and the accompanying notes. The accounting policies that reflect the Company’s more significant estimates and judgments and that the Company believes are the most critical to aid in fully understanding and evaluating its reported financial results are the valuation of stock options, restricted stock units (“RSUs”), hybrid instruments designated at fair value option (“FVO”), warrant liabilities, acquired in-process research and development (“IPR&D”), and useful lives assigned to long-lived assets; impairment assessment of non-financial assets; valuation adjustments for excess and obsolete inventory; allowance for doubtful accounts; deferred taxes and valuation allowances on deferred tax assets; evaluation and measurement of contingencies; and recognition of revenue, including estimates for product returns. Those estimates could change, and as a result, actual results could differ materially from those estimates.

Cash

Cash

The Company’s cash on deposit may exceed United States federally insured limits at certain times during the year. The Company maintains cash accounts with certain major financial institutions in the United States. The Company does not have cash equivalents as of March 31, 2024, and December 31, 2023.

Accounts Receivable

Accounts Receivable

Accounts receivable is recorded net of allowances for discounts for prompt payment and credit losses.

The Company utilizes a loss rate approach in determining its lifetime expected credit losses on receivables from customers. This method calculates an estimate of credit losses based on historical experience, credit quality, age of the accounts receivable balances, and current and forecasted economic and business conditions that may affect a customer’s ability to pay. In determining the loss rates, the Company evaluates information related to its historical losses, adjusted for existing conditions and further adjusted for the period of time that can reasonably be forecasted. The facts and circumstances as of the balance sheet date are used to adjust the estimate for periods beyond those that can reasonably be forecasted.

The past due status of accounts receivable is determined based on the contractual due dates for payments. Receivable is deemed past due when payment hasn’t been received 30 days after the contractual due date. The credit loss allowance was immaterial as of March 31, 2024, and December 31, 2023. The corresponding expense for the credit loss allowance is reflected in general and administrative expenses.

Current Expected Credit Losses

Current Expected Credit Losses

The Company recognizes an allowance for credit losses for financial assets carried at amortized cost to present the net amount expected to be collected as of the balance sheet date. Such allowance is based on credit losses that are expected to arise over the contractual term of the asset, which includes consideration of historical credit loss information adjusted for current conditions and reasonable and supportable forecasts.

Changes in the allowance for credit losses are recorded as provision of (or reversal of) credit loss expense. Assets are written off when the Company determines that such are deemed uncollectible. Write-offs are recognized as a deduction from the allowance for credit losses. Expected recoveries of amounts previously written off, not to exceed the aggregate of the amount previously written off, are included in determining the necessary allowance at the balance sheet date.

Concentrations

Concentrations

Cash is the financial instrument that potentially subjects the Company to a concentration of credit risk as cash is deposited with a bank and cash balances are generally in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits.

For the three months ended March 31, 2024, and 2023, substantially all of the Company’s revenue was derived from the sale of Mytesi. In looking at sales by the Company to specialty pharmacies whose net revenue percentage of total net revenue was equal to or greater than 10%, for fiscal years 2024 and 2023, the Company earned Mytesi revenue primarily from three specialty pharmacies located in the United States, respectively. Revenue earned from each major customer as a percentage of total revenue is as follows:

	Three Months Ended
	March 31,
	2024		2023
Customer 1	31	%	25	%
Customer 2	54	%	54	%

The Company is subject to credit risk from its accounts receivable related to its sales. The Company generally does not perform evaluations of customers' financial condition and generally does not require collateral. Accounts receivable balance of the significant customers as a percentage of total accounts receivable is as follows:

	March 31,		December 31,
	2023		2023
Customer 1	30	%	32	%
Customer 2	56	%	57	%

The Company is subject to concentration risk from its suppliers. The Company sources raw material used to produce the active pharmaceutical ingredient (“API”) in Mytesi from two suppliers and is dependent on a single third-party contract manufacturer as well for the supply of finished products for commercialization.

Other Risks and Uncertainties

Other Risks and Uncertainties

The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations including, but not limited to, war, rapid technological change, obtaining second source suppliers and manufacturers, regulatory approval from the US Food and Drug Administration (“FDA”) or other regulatory authorities, the results of clinical trials and the achievement of milestones, market acceptance of the Company’s product candidates, competition from other products and larger companies, protection of proprietary technology, strategic relationships and dependence on key individuals.

Other Global Events

Macroeconomic conditions around the world are subject to constant change, influenced by several factors, including persistently high inflation, structural weaknesses in the labor market, low productivity growth, and adverse weather conditions. The UK's recession has severely impacted Europe's decline. The Company’s subsidiary in Italy, Napo Therapeutics, has not generated any revenue for the three months ended March 31, 2024. Despite these recent global events, there have been no significant changes in the subsidiary's operations.

Fair Value

Fair Value

The Company’s financial instruments include accounts receivable, net, other receivable, accounts payable, accrued liabilities, operating lease liability and debt. The recorded carrying amount of accounts receivable, accounts payable and accrued liabilities reflect their fair value due to their short-term nature. Other financial liabilities are initially recorded at fair value, and subsequently measured at either fair value or amortized cost using the effective interest method. See Note 3 for the fair value measurements.

Fair Value Option

Fair Value Option

ASC 825-10, Financial Instruments, provides FVO election that allows companies an irrevocable election to use fair value as the initial and subsequent accounting measurement attribute for certain financial assets and liabilities. ASC 825-10 permits entities to elect to measure eligible financial assets and liabilities at fair value on an ongoing basis. Unrealized gains and losses on items for which the FVO has been elected are reported in earnings. The decision to elect the FVO is determined on an instrument-by-instrument basis, must be applied to an entire instrument and is irrevocable once elected. Assets and liabilities measured at fair value pursuant to ASC 825-10 are required to be reported separately from those instruments measured using another accounting method. In accordance with the options presented in ASC 825-10, the Company elected to present the aggregate of fair value and non-fair-value amounts in the same line item in the consolidated balance sheets and parenthetically disclose the amount measured at fair value in the aggregate amount. The fair values of the Company's financial instruments reflect the amounts that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The fair value estimates presented in these financial statements are based on information available to the Company as of March 31, 2024, and December 31, 2023.

Inventory

Inventory

Inventory is stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method. Cost is initially recorded at the invoiced amount of raw materials or API, including the sum of qualified expenditures and charges in bringing the inventory to its existing condition and location. The Company calculates inventory valuation adjustments when conditions indicate that net realizable value is less than cost due to physical deterioration, usage, obsolescence, reductions in estimated future demand or reduction in selling price. Inventory write-downs are measured as the difference between the cost of inventory and net realizable value. The Company did not have allowance for inventory obsolescence as of March 31, 2024, and December 31, 2023.

Prelaunch Inventory

Prelaunch Inventory

The Company’s policy is to capitalize costs for prelaunch inventories within the drug development phase that evidence that the product’s reasonably likely critical attributes for success are present and feasible, and the key causes of failures are absent based on management’s assumptions. The costs that can be capitalized for pre-launch inventory are recorded as “Prepayments and Other Assets”.

Property and Equipment

Property and Equipment

Land is stated at cost, reflecting the fair value of the property at July 31, 2017, the date of the Napo merger. Equipment is stated at cost, net of accumulated depreciation. Equipment begins to be depreciated when it is placed into service. Depreciation is calculated using the straight-line method over estimated useful lives ranging between three to ten years.

Expenditures for repairs and maintenance of assets are charged to expense as incurred. Costs of major additions and betterments are capitalized and depreciated on a straight-line basis over their estimated useful lives. Upon retirement or sale, the cost and related accumulated depreciation of assets disposed of are removed from the accounts and any resulting gain or loss is included in the unaudited condensed consolidated statements of operations.

Software Developed for Internal Use

Software Developed for Internal Use

The Company capitalizes the costs of developing software for internal use. These costs include both purchased software and internally developed software. Costs of developing software are expensed until technological feasibility has been established. Thereafter, all costs are capitalized and are carried at the lower of unamortized cost or net realizable value. Internally developed and purchased software costs are generally amortized over five years.

Long-lived Assets

Long-lived Assets

The Company regularly reviews the carrying value and estimated lives of all of its long-lived assets, including property and equipment and definite-lived intangible assets, to determine whether indicators of impairment exist that warrant adjustments to carrying values or estimated useful lives. The determinants used for this evaluation include management’s estimate of the asset’s ability to generate positive income from operations and positive cash flow in future periods as well as the strategic significance of the assets to the Company’s business objectives. If the Company determines that events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable, the Company evaluates the realizability of its long-lived assets (asset group) based on a comparison of projected undiscounted cash flows from use and eventual disposition with the carrying value of the related asset. Any write-downs (which are measured based on the difference between the fair value and the carrying value of the asset) are treated as permanent reductions in the carrying amount of the assets (asset group).

The Company evaluated the carrying value of its internal use software costs as at December 31, 2023 in accordance with ASC 360-10, Impairment of Long-lived Assets to be Held or Used. Based on the evaluation, the Company determined that the internal use software costs – registry's carrying value as of December 31, 2023, were no longer recoverable and recorded a corresponding impairment loss. The impairment loss was calculated as the difference between the registry's carrying value and its estimated fair value on December 31, 2023. The fair value was determined using a discounted cash flow (“DCF”) model, a Level 3 evaluation technique under ASC 820, Fair Value Measurements. The DCF model utilized entity-specific assumptions regarding future sales volume, pricing and costs. These assumptions considered factors such as continuity of existing customer relationships, potential shifts in economic conditions and other relevant market influences. The net cash flows generated by the model were then discounted to present value using a rate reflective of the time value of money and the inherent use associated with the expected cash flows. The discount rate was based on the comparable debt instrument deemed appropriate by management. Given the changing market conditions, there is a reasonable possibility that the estimates used to determine the registry's fair value may require adjustments in the near future. Any such changes in assumptions could result in further impairment charges. The Company recognized an expense for the year ended December 31, 2023, and a corresponding reduction in the carrying value of the internal use software-registry as a result of the impairment.

None of the Company’s long-lived assets were deemed impaired as of March 31, 2024.

Indefinite-lived Intangible Assets

Indefinite-lived Intangible Assets

Acquired IPR&D are intangible assets acquired in the July 2017 Napo merger. Under ASC 805 Business Combination, IPR&D are initially recognized at fair value and classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. During the development period, these assets will not be amortized as charges to earnings; instead, these assets will be tested for impairment on an annual basis or more frequently if impairment indicators are identified. An impairment loss is measured based on the excess of the carrying amount over the asset’s fair value. The Company recorded no impairment for the three months ended March 31, 2024, and 2023.

Leases

Leases

The Company accounts for its leases in accordance with ASC 842, Leases.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. Because the interest rate implicit in lease contracts is typically not readily determinable, the Company utilizes its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received.

The Company elected to include both the lease and non-lease components as a single component and account for it as a lease.

Lease Modification

ASC 842 defines lease modification as a change to the terms and conditions of a contract that results in a change in the scope of or the consideration for a lease. A lease modification can result in either a separate new contract that is accounted for separately from the original contract or a single modified contract.

The Company shall account for a modification to a contract as a separate contract when the modification grants the lessee an additional right of use not included in the original lease and the lease payments increase commensurate with the standalone price for the additional right of use, adjusted for the circumstances of the particular contract. When the Company concludes that a lease modification should be accounted for as a new contract that is separate and apart from the original lease, the new contract should be evaluated for whether it is a lease or contains an embedded lease. If the new contract is a lease or contains an embedded lease, the new lease should be accounted for as any other new lease. The new lease is recorded on the commencement date of the new lease, which is the date the lessee has access to the leased asset.

If a lease modification is not accounted for as a separate contract, the Company should reassess whether the contract contains a lease. If the modified contract is a lease or contains an embedded lease, a lessee should reallocate contract consideration, reassess the lease classification, remeasure the lease liability, and adjust the right-of-use asset.

Research and Development Expense

Research and Development Expense

Research and development expense consists of expenses incurred in performing research and development activities including related salaries, clinical trials and related drug and non-drug product costs, contract services and other outside service expenses. Research and development expense is charged to operating expense in the period incurred.

Clinical Trial Accruals

Clinical Trial Accruals

Clinical trial costs are a component of research and development expenses. The Company accrues and expenses clinical trial activities performed by third parties based upon actual work completed in accordance with agreements established with clinical research organizations and clinical sites. The Company determines the costs to be recorded based upon validation with the external service providers as to the progress or stage of completion of trials or services and the agreed-upon fee to be paid for such services.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”).

The Company’s policy typically permits returns if the product is damaged, defective, or otherwise cannot be used when received by the customer if the product has expired. Returns are accepted for product that will expire within three months or that have expired up to one year after their expiration dates. Estimates for expected returns of expired products are based primarily on an ongoing analysis of our historical return patterns.

The Company recognizes revenue in accordance with the core principle of ASC 606 or when there is a transfer of control of promised goods or services to customers in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services.

The Company recognizes the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less.

The Company does not adjust the amount of consideration for the effects of a significant financing component if, at contract inception, the expected period between the transfer of promised goods or services and customer payment is one year or less.

The Company has elected to treat shipping and handling activities as fulfillment costs.

Additionally, the Company elected to record revenue net of sales and other similar taxes.

Contracts and Agreements

The Company's Canalevia-CA1 and Neonorm products are primarily sold to distributors, who then sell the products to the end customers. Since 2021, the Company has entered into two distribution agreements with established distributors to distribute the Company’s animal health products in the United States. The distribution agreements and the related purchase orders together meet the contract existence criteria under ASC 606. The Company sells directly to its customers without the use of an agent.

Performance obligations

For animal health products sold by the Company, the single performance obligation identified above is the Company’s promise to transfer the Company’s animal health products to distributors based on specified payment and shipping terms in the arrangement. Product warranties are assurance-type warranties that do not represent a performance obligation. For the Company’s human health product, Mytesi, the single performance obligation identified above is the Company’s promise to transfer Mytesi to specialty pharmacies, based on specified payment and shipping terms as outlined in the Exclusive Distribution Agreement entered into by the Company and Cardinal Health as of January 16, 2019.

Transaction price

For contracts with Cardinal Health and other distributors, the transaction price is the amount of consideration to which the Company expects to collect in exchange for transferring the promised goods or services. The transaction price of Mytesi is the Wholesaler Acquisition Cost (“WAC”), and the transaction price of Canalevia-CA1 and Neonorm is the manufacturer’s list price, net of discounts, returns, and price adjustments.

Allocate transaction price

For contracts with Cardinal Health and other distributors, the entire transaction price is allocated to the single performance obligation contained in each contract.

Revenue recognition

For contracts with Cardinal Health, a single performance obligation is satisfied at a point in time, upon the free on board (“FOB”) terms of each contract when control, including title and all risks, has transferred to the customer.

Disaggregation of Product Revenue

Human

Sales of Mytesi are recognized as revenue at a point in time when the products are delivered to the wholesaler. Net revenues from the sale of Mytesi were $2.3 million and $1.9 million for the three months ended March 31, 2024, and 2023, respectively.

Animal

The Company recognized Canalevia-CA1 products revenues of $40,000 and $28,000 for the three months ended March 31, 2024, and 2023, respectively and Neonorm revenues of $9,000 and $18,000 for the three months ended March 31, 2024, and 2023, respectively. Revenues are recognized at a point in time upon shipment, when title and control are transferred to the buyer. Sales of Canalevia-CA1, Neonorm Calf and Foal to distributors are made under agreements that may provide distributor price adjustments and rights of return under certain circumstances.

Contracts – Specialty Pharmacies

Effective October 1, 2020, the Company engaged a private company as an authorized specialty pharmacy provider of the Company’s Mytesi product. Under the Specialty Product Distribution Agreement, the Company shall supply the products to the private company’s specialty pharmacies directly, in such amounts as may be ordered. There is no minimum purchase or inventory requirement. The specialty pharmacies were authorized distributors of record for all National Drug Codes of Mytesi.

Effective April 20, 2021, the Company engaged another private company as an authorized specialty pharmacy provider of Mytesi. Under the Specialty Pharmacy Distribution and Services Agreement, the private company shall sell and dispense the Mytesi directly ordered from the Company at the agreed price to patients within the territories identified in the agreement.

The Company has entered into agreements with a total of five different specialty pharmacy chains that are authorized to provide Mytesi to patients.

Performance obligations

The single performance obligation is the Company’s promise to transfer Mytesi to specialty pharmacies, based on specified payment and shipping terms as outlined in the agreements.

Transaction price

The transaction price is the amount of consideration to which the Company expects to collect in exchange for transferring the promised goods or services. The transaction price of Mytesi is the WAC, net of estimated discounts, returns, and price adjustments.

Allocate transaction price

The entire transaction price is allocated to the single performance obligation contained in each contract.

Revenue recognition

The single performance obligation is satisfied at a point in time, upon the FOB terms of each contract when control, including title and all risks, has transferred to the customer.

Product Revenue

Sales of Mytesi are recognized as revenue at a point in time when the products are delivered to the specialty pharmacies. Net revenues from the sale of Mytesi to the specialty pharmacies were $2.0 million and $1.5 million for the three months ended March 31, 2024, and 2023, respectively.

Collaboration Revenue

Collaboration Revenue

Revenue recognition for collaboration agreements requires significant judgment. The Company’s assessments and estimates are based on contractual terms, historical experience and general industry practice. Revisions in these values or estimations have the effect of increasing or decreasing collaboration revenue in the period of revision.

On September 24, 2018, the Company entered into a Distribution, License and Supply Agreement (“License Agreement”) with Knight Therapeutics ("Knight"). The License Agreement has a term of 15 years (with automatic renewals) and provides Knight with an exclusive right to commercialize current and future Jaguar human health products (including crofelemer, NP-300, and any product containing a proanthocyanidin or with an anti-secretory mechanism) in Canada and Israel. Knight forfeited its right of first negotiation for expansion to Latin America. Under the License Agreement, Knight is responsible for applying for and obtaining necessary regulatory approvals in the territory of Canada and Israel, as well as marketing, sales and distribution of the licensed products. Knight will pay a transfer price for all licensed products, and upon achievement of certain regulatory and sales milestones, the Company may receive payments from Knight in an aggregate amount of up to approximately $18.0 million, payable throughout the initial 15-year term of the agreement. The Company did not have any license revenues for the three months ended March 31, 2024, and 2023.

Modifications to Liability-classified Instruments

Modifications to Liability-classified Instruments

In accounting for debt modifications and exchange transactions, it is the Company’s policy to first determine whether it qualifies as a troubled debt restructuring (“TDR”) pursuant to the guidance provided in ASC 470-60. A debt modification or exchange transaction that is not within the scope of the ASC 470-60 is accounted for under ASC 470-50 to determine if the transaction is a mere modification or an extinguishment.

For the three months ended March 31, 2024, the Company have not entered amendments to the terms of the October 2020 Royalty Interest, December 2020 Royalty Interest and August 2022 Royalty Interest.

For the three months ended March 31, 2023, the Company entered into amendment on the terms of its October 2020 and December 2020 Purchase Agreements.

The cumulative impact of these amendments significantly modified the terms of the royalty interest resulting to extinguishments (see Note 7).

Modifications to Equity-classified Instruments

Modifications to Equity-classified Instruments

In accounting for modifications of equity-classified warrants, it is the Company’s policy to determine the impact by analogy to the share-based compensation guidance of ASC 718, Compensation - Stock Compensation (“ASC 718”). The model for a modified share-based payment award that is classified as equity and remains classified in equity after the modification is addressed in ASC 718-20-35-3. Pursuant to that guidance, the incremental fair value from the modification is recognized as an expense in the statements of operations to the extent the modified instrument has a higher fair value; however, in certain circumstances, such as when an entire class of warrants is modified, the measured increase in fair value may be more appropriately recorded as a deemed dividend, depending upon the nature of the warrant modification.

The Company did not modify any equity-classified warrants for the three months ended March 31, 2024, and 2023.

In accounting for amendments to preferred stock, it is the Company’s policy to measure the impact by analogy to ASC 470-50 in determining if such an amendment is an extinguishment or a modification. If the amendment results in an extinguishment, the Company follows the SEC staff guidance in ASC 260-10-S99-2 and ASC 470-20. If the amendment results in a modification, the Company follows the model in either ASC 718 or ASC 470-50, depending on the nature of the amendment.

The Company did not modify any equity-classified preferred stock for the three months ended March 31, 2024, and 2023.

Stock-Based Compensation

Stock-based Compensation

The Company's Stock Incentive Plan (see Note 11) provides for the grant of stock options, restricted stock and restricted stock unit awards. The Company measures stock awards granted to employees, non-employees and directors at estimated fair value on the date of grant and recognizes the corresponding compensation expense of the awards, net of estimated forfeitures, over the requisite service periods, which correspond to the vesting periods of the awards. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company issues stock awards with only service-based vesting conditions, and records compensation expense for these awards using the straight-line method.

The Company uses the grant date fair market value of its common stock to determine the grant date fair value of options granted to employees, non-employees and directors. The Company measures and recognizes compensation expense for all stock options and restricted stock units (“RSUs”) granted to its employees and directors based on the estimated fair value of the award on the grant date. The Company uses the Black-Scholes valuation model to estimate the fair value of stock option awards. The fair value is recognized as expense, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award, on a straight-line basis. The Company believes that the fair value of stock options granted to non-employees is more reliably measured than the fair value of the services received. The determination of the grant date fair value of options using an option pricing model is affected by the Company’s estimated common stock fair value and requires management to make a number of assumptions including the expected life of the option, the volatility of the underlying stock, the risk-free interest rate and expected dividends.

The Company estimates the fair value of stock options using the Black-Scholes option valuation model. The fair value of employee stock options is being amortized on a straight-line basis over the requisite service period of the awards. The fair market value of common stock is based on the closing price of the Company’s common stock as reported on the date of the grant.

Income Taxes

Income Taxes

The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.

The Company has adopted the provisions of ASC 740, Income Taxes Related to Uncertain Tax Positions. Under these principals, tax positions are evaluated in a two-step process. The Company first determines whether it is more-likely-than-not that a tax position will be sustained upon examination. If a tax position meets the more-likely-than-not recognition threshold, it is then measured to determine the amount of benefit to be recognized in the financial statements. The tax position is measured as the largest amount of benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement.

Foreign Currency Remeasurement and Translation

Foreign Currency Remeasurement and Translation

The functional currency of Napo Therapeutics is Euro. The Company follows ASC 830, Foreign Currency Matters (“ASC 830”). ASC 830 requires the assets, liabilities, and results of operations of a foreign operation to be measured using the functional currency of that foreign operation. Exchange gains or losses from remeasuring transactions and monetary accounts in a currency other than the functional currency are included in current earnings.

For certain subsidiaries, translation adjustments result from the process of translating the functional currency of subsidiary financial statements into the U.S. Dollar reporting currency. These translation adjustments are reported

separately and accumulated in the unaudited condensed consolidated balance sheets as a component of accumulated other comprehensive loss.

Comprehensive Loss

Comprehensive Loss

The Company follows ASC 220, Comprehensive Income, which establishes standards for reporting and displaying comprehensive income and its components (revenue, expenses, gains and losses) in a full set of general-purpose financial statements.

For the three months ended March 31, 2024, the amount of other comprehensive gain from translation adjustments was $217,000.

For the three months ended March 31, 2023, the amount of other comprehensive loss from translation adjustments was $232,000.

Basic and Diluted Net Loss Per Share of Common Stock

Basic and Diluted Net Loss Per Share of Common Stock

Basic net loss per share of common stock is computed by dividing net loss attributable to common stockholders for the year by the weighted-average number of common stock outstanding during the year. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders for the year by the weighted-average number of common stock, including potential dilutive shares of common stock assuming the dilutive effect of potential dilutive securities. For years in which the Company reports a net loss, diluted net loss per share is the same as basic net loss per share, because their impact would be anti-dilutive to the calculation of net loss per share. Diluted net loss per share of common stock is the same as basic net loss per share of common stock for the months ended March 31, 2024, and 2023.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

There are no recent accounting pronouncements that are expected to have a material impact on the Company’s financial statements and related disclosures at March 31, 2024.

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Summary of Significant Accounting Policies (Tables) - Customer risk

3 Months Ended

Mar. 31, 2024

Total net revenue

Schedule of concentration risk

	Three Months Ended
	March 31,
	2024		2023
Customer 1	31	%	25	%
Customer 2	54	%	54	%

Total accounts receivable

Schedule of concentration risk

	March 31,		December 31,
	2023		2023
Customer 1	30	%	32	%
Customer 2	56	%	57	%

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value Measurements

Summary of information about the company's financial instruments that were measured at fair value on a recurring basis

	March 31, 2024
	(unaudited)
(in thousands)	Level 1		Level 2		Level 3		Total
Iliad	$	—	$	—	$	6,721	$	6,721
Uptown		—		—		7,880		7,880
Streeterville 2		—		—		7,118		7,118
Streeterville Note		—		—		10,242		10,242
Total fair value	$	—	$	—	$	31,961	$	31,961

	December 31, 2023
(in thousands)	Level 1		Level 2		Level 3		Total
Iliad	$	—	$	—	$	6,862	$	6,862
Uptown		—		—		7,473		7,473
Streeterville 2		—		—		6,815		6,815
Streeterville Note		—		—		9,793		9,793
Total fair value	$	—	$	—	$	30,943	$	30,943

Summary of change in the estimated fair value of level 3 liabilities

	Three Months Ended
	March 31, 2024
(in thousands)	Iliad		Uptown		Streeterville 2		Streeterville Note
Beginning fair value of Level 3 liability	$	6,862	$	7,473	$	6,814	$	9,792
Additions		—		—		—		—
Exchanges		(836)		—		(165)		—
Settlements		—		—		—		—
Change in fair value		695		407		469		450
Ending fair value of Level 3 liability	$	6,721	$	7,880	$	7,118	$	10,242

	Three Months Ended
	March 31, 2023
(in thousands)	Iliad		Uptown		Streeterville 2		Streeterville Note
Beginning fair value of Level 3 liability	$	—	$	—	$	—	$	7,839
Additions		—		—		—		—
Settlements		—		—		—		—
Change in fair value		—		—		—		359
Ending fair value of Level 3 liability	$	—	$	—	$	—	$	8,198

Summary of information about the significant unobservable inputs used in level 3 fair value measurements

	Range of Inputs
	(probability-weighted average)		Relationship of unobservable inputs
Unobservable Inputs	2024	2023	to fair value
Risk Adjusted Discount Rate	8.57%-25.14% (25.14%)	9.02%-24.59% (24.59%)	If discount rate is adjusted to total of additional 100 basis points (bps), fair value would have decreased by $407,000. If discount rate is adjusted to total deduction of 100 bps, fair value would have increased by $407,000.
Sales Proceeds: Amount of comparable TDPRV	$67.5 million to $350 million ($100 million)	$67.5 million to $350 million ($100 million)	If expected cash flows by Management considered the lowest amount of market indications for vouchers, FV would have decreased by $1.4 million. If expected cash flows by Management considered the highest amount of market indications for vouchers, FV would have increased by $10.8 million.
Range of Probability for Timing of Cash Flows: Variations of the terms and conditions of the timing of cash flows, including settlement of the note principal, interest, penalties, and acceleration clause.	0.59%-73.27%	0.10%-73.27%	If expected cash flows by Management considered the Scenario with the least amount of indicated value, FV would have decreased by $216,000. If expected cash flows by Management considered the scenario with the greatest amount of indicated value, FV would have increased by $1.5 million.

Summary of information about the significant unobservable inputs used in level 3 fair value measurements for instruments not classified as hybrid instruments

	Range of Inputs
	(probability-weighted average)		Relationship of unobservable inputs
Unobservable Inputs	2024	2023	to fair value
Risk Adjusted Discount Rate	8.57%-27.14% (27.14%)	9.02%-26.59% (26.59%)	If discount rate is adjusted to total of additional 100 basis points (bps), fair value would have decreased by $541,000. If discount rate is adjusted to total deduction of 100 bps, fair value would have increased by $555,000.

Summary of the fair value and unpaid principal balance for items the Company accounts for under FVO

(in thousands)	Fair value		Unpaid Principal Balance		Accrued Interest		Fair Value Over (Under) Outstanding Balance
At March 31, 2024
Iliad	$	6,721	$	6,392	$	3,885	$	(3,556)
Uptown		7,880		7,994		4,366		(4,480)
Streeterville 2		7,118		10,094		1,265		(4,241)
Streeterville Note		10,242		6,000		651		3,591

(in thousands)	Fair value		Unpaid Principal Balance		Accrued Interest		Fair Value Over (Under) Outstanding Balance
At December 31, 2023
Iliad	$	6,862	$	7,292	$	3,621	$	(4,051)
Uptown		7,473		7,994		4,058		(4,579)
Streeterville 2		6,815		10,273		950		(4,408)
Streeterville Note		9,793		6,000		546		3,247

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Balance Sheet Components (Tables)

3 Months Ended

Mar. 31, 2024

Balance Sheet Components

Schedule of inventory

	March 31,		December 31,
	2024		2023
(in thousands)	(unaudited)
Raw material	$	2,202	$	2,057
Work in process		6,126		6,517
Finished goods		692		615
Inventory	$	9,020	$	9,189

Schedule of property and equipment

	March 31,		December 31,
	2024		2023
(in thousands)	(unaudited)
Land	$	396	$	396
Lab equipment		477		477
Software		63		63
Furniture and fixtures		18		18
Computers and peripherals		7		7
Total property and equipment at cost		961		961
Accumulated depreciation		(477)		(465)
Property and equipment, net	$	484	$	496

Schedule of intangible assets

	March 31,		December 31,
	2024		2023
(in thousands)	(unaudited)
Developed technology	$	25,000	$	25,000
Accumulated developed technology amortization		(11,111)		(10,694)
Developed technology, net		13,889		14,306
In-process research and development		4,800		4,800
In process research and development, net		4,800		4,800
Trademarks		300		300
Accumulated trademark amortization		(133)		(128)
Trademarks, net		167		172
Internal use software costs - registry		1,236		1,236
Accumulated internal use software costs impairment		(371)		(371)
Accumulated internal use software costs amortization		(432)		(370)
Internal use software costs - registry, net		433		495
Patents		361		361
Accumulated patents amortization		(23)		(18)
Patents, net		338		343
Total intangible assets, net	$	19,627	$	20,116

Schedule of estimated future amortization expense of intangible assets with finite lives

(in thousands)	Amounts
Remainder of 2024	$	1,464
2025		1,952
2026		1,952
2027		1,952
2028		1,952
Thereafter		5,555
	$	14,827

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies

Schedule of additional details of office space lease

	March 31,		December 31,
	2024		2023
(in thousands)	(unaudited)
Operating lease - right-of-use asset	$	1,289	$	1,176
Operating lease liability, current		469		348
Operating lease liability, net of current portion		873		886
Total	$	1,342	$	1,234
Weighted-average remaining life (years)		4.27		4.76
Weighted-average discount rate		19.74%		21.34%

Schedule of undiscounted cash payment obligations

	March 31,
	2024
(in thousands)	(unaudited)
Remainder of 2024	$	656
2025		382
2026		254
2027		235
2028		242
2029		249
2030		105
Total undiscounted operating lease payments		2,123
Imputed interest expenses		(781)
Total operating lease liability		1,342
Less: Operating lease liability, current		469
Operating lease liability, net of current portion	$	873

Schedule of summarized income statement information using equity method

	Three months ended
	March 31,
	2024
(in thousands)	(unaudited)
Revenue	$	—
Operating expenses		(40)
Loss before income tax		(40)
Income tax expense		—
Net loss	$	(40)
Net loss attributable to the Company	$	(16)

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Debt (Tables)

3 Months Ended

Mar. 31, 2024

Debt

Schedule of notes payable

	March 31,		December 31,
	2024		2023
(in thousands)	(unaudited)
Notes designated at Fair Value Option	$	31,961	$	30,943
Royalty Interest*		—		5,635
Insurance Financing		52		172
Tempesta Note		100		150
Total		32,113		36,900
Less: unamortized discount and debt issuance costs		—		(1,040)
Note payable, net of discount	$	32,113	$	35,860
Notes payable - non-current, net	$	21,719	$	30,993
Notes payable - current, net	$	10,394	$	4,867
Weighted average interest rate on short-term borrowings		3.24%		5.04%

*Notes with royalty interest not designated at Fair Value Option.

Schedule of future maturities of notes payable

	Amounts
(in thousands)	(unaudited)
2025	$	10,394
2026		21,719
Total	$	32,113

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Warrants (Tables)

3 Months Ended

Mar. 31, 2024

Warrants

Summary of warrant activity

	March 31,	December 31,
	2024	2023
	(unaudited)
Warrants outstanding, beginning balance	12,109,807	7,505
Issuances	—	12,102,302
Exercises	—	—
Expirations and cancelations	(7,542,409)	—
Warrants outstanding, ending balance	4,567,398	12,109,807

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Preferred Stock (Tables)

3 Months Ended

Mar. 31, 2024

Preferred Stock

Schedule of convertible preferred stock

March 31, 2024
							Liquidation
(in thousands, except share and per share data)	Shares		Issued and		Carrying		Preference
Series	Designated		Outstanding		Value		per Share
A		5,524,926		—	$	—	$	—
B		11,000		—		—		—
B-1		63		—		—		—
B-2		10,165		—		—		—
C		1,011,000		—		—		—
D		977,300		—		—		—
E		10		—		—		—
F		10		—		—		—
G		137		—		—		—
H		105		—		—		—
I		118		—		—		—
J		179		99		—		—
Total		7,535,013		99	$	—	$	—

December 31, 2023
							Liquidation
(in thousands, except share and per share data)	Shares		Issued and		Carrying		Preference
Series	Designated		Outstanding		Value		per Share
A		5,524,926		—	$	—	$	—
B		11,000		—		—		—
B-1		63		—		—		—
B-2		10,165		—		—		—
C		1,011,000		—		—		—
D		977,300		—		—		—
E		10		—		—		—
F		10		—		—		—
G		137		122		—		—
H		105		—		—		—
I		118		56		—		—
Total		7,534,834		178	$	—	$	—

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Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2024

Stockholders' Equity

Schedule of common reserved shares of common stock for issuance

	March 31,	December 31,
	2024	2023
	(unaudited)
Options issued and outstanding	26,084	26,262
Inducement options issued and outstanding	1,512	1,512
Options available for grant under stock option plans	4,303,288	626,342
Restricted stock unit awards issued and outstanding	2,702,070	2,708,136
Warrants issued and outstanding	4,567,398	11,424,807
Total	11,600,352	14,787,059

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2024

Stock-Based Compensation

Summary of incentive plan activity

				Weighted		Weighted Average
	Shares	Stock		Average		Remaining	Aggregate
	Available	Options	RSUs	Stock Option		Contractual Life	Intrinsic
(in thousands, except share and per share data)	for Grant	Outstanding	Outstanding	Exercise Price		(Years)	Value*
Outstanding at January 1, 2023	122,978	28,079	44,865	$	592.73	7.19	$	—
Additional shares authorized	3,166,330	—	—		—	—		—
Options granted	—	—	—		—	—		—
Options exercised	—	—	—		—	—		—
Options canceled	305	(305)	—		327.81	—		—
RSUs granted	(2,690,320)	—	2,690,320		—	—		—
RSUs vested and released	21,808	—	(21,808)		—	—		—
RSUs cancelled	5,241	—	(5,241)		—	—		—
Outstanding at December 31, 2023	626,342	27,774	2,708,136	$	596	6.21	$	—
Additional shares authorized	3,670,702	—	—		—	—		—
Options granted	—	—	—		—	—		—
Options exercised	—	—	—		—	—		—
Options canceled	178	(178)	—		362.34	—		—
RSUs granted	—	—	—		—	—		—
RSUs excercised	125	—	(125)		—	—		—
RSUs cancelled	5,941	—	(5,941)		—	—		—
Outstanding at March 31, 2024	4,303,288	27,596	2,702,070	$	597	5.98	$	—
Exercisable at March 31, 2024		27,465		$	598.24	5.97	$	—
Vested and expected to vest at March 31, 2024		27,594		$	597.16	5.98	$	—

*Fair market value of Jaguar stock on March 31, 2024 was $0.09 per share.

Summary of stock-based compensation expense

	Three Months Ended
	March 31,
(in thousands)	2024		2023
Research and development expense	$	289	$	227
Sales and marketing expense		40		49
General and administrative expense		252		204
Total	$	581	$	480

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Net Loss Per Share (Tables)

3 Months Ended

Mar. 31, 2024

Net Loss Per Share

Schedule of calculation of basic and diluted net loss per common share

	Three Months Ended March 31,
(In thousands, except share and per share data)	2024		2023
Net loss attributable to common stockholders	$	(9,226)	$	(12,202)
Shares used to compute net loss per common stock, basic and diluted		158,842,297		5,109,609
Net loss per share attributable to common stockholders, basic and diluted	$	(0.06)	$	(2.39)

Schedule of other common stock equivalents

	March 31,	December 31,
	2024	2023
	(unaudited)
Options issued and outstanding	26,084	26,262
Inducement options issued and outstanding	1,512	1,512
Restricted stock units issued and outstanding	2,702,070	2,708,136
Warrants issued and outstanding	4,567,398	11,424,807
Total	7,297,064	14,160,717

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Segment Data (Tables)

3 Months Ended

Mar. 31, 2024

Segment Data

Schedule of reportable segments net revenue and net loss

	Three Months Ended
	March 31,
	2024		2023
(in thousands)	(unaudited)
Revenue from external customers
Human Health	$	2,303	$	1,927
Animal Health		48		45
Consolidated Totals	$	2,351	$	1,972
Segment net loss
Human Health	$	(4,601)	$	(6,539)
Animal Health		(4,767)		(5,858)
Consolidated Totals	$	(9,368)	$	(12,397)

Schedule of reportable segments assets

	March 31,		December 31,
	2024		2023
(in thousands)	(unaudited)
Segment assets
Human Health	$	42,154	$	42,289
Animal Health		163,555		153,190
Total	$	205,709	$	195,479

Schedule of reconciliation of segments assets to the consolidated assets

	March 31,		December 31,
	2024		2023
(in thousands)	(unaudited)
Total assets for reportable segments	$	205,709	$	195,479
Less: Investment in subsidiary		(29,232)		(29,232)
Less: Intercompany loan		(121,088)		(115,484)
Consolidated Totals	$	55,389	$	50,763

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Organization and Business (Details)	3 Months Ended
	Mar. 31, 2024 segment
Organization and Business
Number of operations segments	2

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Organization and Business - Nasdaq Communication and Compliance (Details) - USD ($) $ / shares in Units, $ in Thousands	Feb. 15, 2024	May 10, 2023	Mar. 31, 2024	Dec. 31, 2023	Mar. 10, 2023
Grace period	180 days	180 days
Consecutive business days in grace period	10 days
Stockholders' equity			$ 55,389	$ 50,763
Minimum
Share Price					$ 1.00
Maximum
Share Price	$ 0.10

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Organization and Business - Liquidity and Going Concern (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Organization and Business
Accumulated deficit	$ (317,215)	$ (308,248)

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Summary of Significant Accounting Policies - Non-Controlling Interest (Details)	Mar. 31, 2024	Dec. 31, 2023
Napo Therapeutics
Percentage of ownership interest by parent	88.00%
Private Investors
Percentage of ownership interest by non-controlling owners		12.00%

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Summary of Significant Accounting Policies - Accounts receivable and Concentrations (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2024 item Distributor	Mar. 31, 2023 Distributor	Dec. 31, 2023
Supplier risk
Concentrations
Number of suppliers | item	2
Total net revenue | Customer risk | Customer 1
Concentrations
Concentration risk (as a percentage)	31.00%	25.00%
Total net revenue | Customer risk | Customer 2
Concentrations
Concentration risk (as a percentage)	54.00%	54.00%
Total net revenue | Customer risk | Three major pharmaceutical distributors
Concentrations
Number of major distributors | Distributor	3	3
Total net revenue | Customer risk | Minimum
Concentrations
Threshold for calculating concentration risk percentage	10.00%	10.00%
Total accounts receivable | Customer risk | Customer 1
Concentrations
Concentration risk (as a percentage)		30.00%	32.00%
Total accounts receivable | Customer risk | Customer 2
Concentrations
Concentration risk (as a percentage)		56.00%	57.00%

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Summary of Significant Accounting Policies - Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Summary of Significant Accounting Policies
Allowance for inventory obsolescence	$ 0	$ 0

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Summary of Significant Accounting Policies - Property and Equipment and Indefinite-lived Intangible Assets (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Goodwill impairment charges
Impairment of long lived assets	$ 0
Impairment of indefinite-lived intangible assets	$ 0	$ 0
Internal use software costs - registry
Goodwill
Intangible asset amortization period	5 years
Napo (Member) | Equipment | Minimum
Goodwill
Estimated useful lives	3 years
Napo (Member) | Equipment | Maximum
Goodwill
Estimated useful lives	10 years

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Summary of Significant Accounting Policies - Revenue Recognition (Details)	3 Months Ended
	Mar. 31, 2024 USD ($) item agreement	Mar. 31, 2023 USD ($)
Disaggregation of Product Revenue
Number of distribution agreements | agreement	2
Mytesi
Disaggregation of Product Revenue
Product revenue	$ 2,300,000	$ 1,900,000
Number of specialty pharmacies. | item	5
Mytesi | Specialty Pharmacies
Disaggregation of Product Revenue
Product revenue	$ 2,000,000.0	1,500,000
Canalevia-CA1
Disaggregation of Product Revenue
Product revenue	40,000	28,000
Neonorm
Disaggregation of Product Revenue
Product revenue	$ 9,000	$ 18,000

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Summary of Significant Accounting Policies - Revenue Recognition - Collaboration Revenue (Details) - USD ($) $ in Thousands		3 Months Ended
	Sep. 24, 2018	Mar. 31, 2024	Mar. 31, 2023
Stockholders' Equity
Collaboration revenue		$ 0	$ 0
Knight
Stockholders' Equity
License agreement term (in years)	15 years
Transfer price receivable upon achievement of certain regulatory and sales milestones	$ 18,000

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Summary of Significant Accounting Policies - Comprehensive Loss (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Summary of Significant Accounting Policies
Translation Gain (Loss)	$ 217,000	$ (232,000)

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Fair Value Measurements - Fair Value of Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Jan. 13, 2021
Fair value of liabilities measured on a recurring basis
Total fair value	$ 31,961	$ 30,943
Level 3
Fair value of liabilities measured on a recurring basis
Fair value	21,700		$ 20,200
Total fair value	31,961	30,943
Iliad
Fair value of liabilities measured on a recurring basis
Fair value	6,721	6,862
Iliad | Level 3
Fair value of liabilities measured on a recurring basis
Fair value	6,721	6,862
Uptown
Fair value of liabilities measured on a recurring basis
Fair value	7,880	7,473
Uptown | Level 3
Fair value of liabilities measured on a recurring basis
Fair value	7,880	7,473
Streeterville 2
Fair value of liabilities measured on a recurring basis
Fair value	7,118	6,815
Streeterville 2 | Level 3
Fair value of liabilities measured on a recurring basis
Fair value	7,118	6,815
Streeterville Note
Fair value of liabilities measured on a recurring basis
Fair value	10,242	9,793
Streeterville Note | Level 3
Fair value of liabilities measured on a recurring basis
Fair value	$ 10,242	$ 9,793	$ 7,800

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Fair Value Measurements - Estimated fair value of Level 3 (Details) - Level 3 - Recurring - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Iliad
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning fair value of Level 3 liability	$ 6,862
Exchanges	(836)
Change in fair value	695
Ending fair value of level 3 liability	6,721
Uptown
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning fair value of Level 3 liability	7,473
Change in fair value	407
Ending fair value of level 3 liability	7,880
Streeterville 2
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning fair value of Level 3 liability	6,814
Exchanges	(165)
Change in fair value	469
Ending fair value of level 3 liability	7,118
Streeterville Note
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning fair value of Level 3 liability	9,792	$ 7,839
Change in fair value	450	359
Ending fair value of level 3 liability	$ 10,242	$ 8,198

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Fair Value Measurements - Streeterville Note (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Jan. 13, 2021
Level 3
Fair value of liabilities measured on a recurring basis
Fair value	$ 21,700		$ 20,200
Streeterville Note
Fair value of liabilities measured on a recurring basis
Fair value	10,242	$ 9,793
Streeterville Note | Level 3
Fair value of liabilities measured on a recurring basis
Fair value	$ 10,242	$ 9,793	$ 7,800

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Fair Value Measurements - Quantitative information about the significant unobservable inputs (Details) - Level 3	3 Months Ended		12 Months Ended
	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)
Discount rate | Minimum
Fair Value Measurement Inputs and Valuation Techniques
Probability (as a percent)	8.57		9.02
Basis point for adjustment of discount rate	1
Fair value increase (decrease)	$ (407,000)
Probability (as a percent)	0.0857	0.0902
Basis point for adjustment of discount rate for non-hybrid instruments	1
Fair value increase (decrease) for non-hybrid investments	$ 541,000
Discount rate | Maximum
Fair Value Measurement Inputs and Valuation Techniques
Probability (as a percent)	25.14		24.59
Basis point for adjustment of discount rate	1
Fair value increase (decrease)	$ 407,000
Probability (as a percent)	0.2714	0.2659
Basis point for adjustment of discount rate for non-hybrid instruments	1
Fair value increase (decrease) for non-hybrid investments	$ 555,000
Discount rate | Weighted average
Fair Value Measurement Inputs and Valuation Techniques
Probability (as a percent)	(25.14)		(24.59)
Fair value increase (decrease)		$ 0.2659
Probability (as a percent)	0.2714
Sale Proceeds | Minimum
Fair Value Measurement Inputs and Valuation Techniques
Amount of comparable TDPRV	$ 67,500,000		$ 67,500,000
Fair value increase (decrease)	(1,400,000)
Sale Proceeds | Maximum
Fair Value Measurement Inputs and Valuation Techniques
Amount of comparable TDPRV	350,000,000		350,000,000
Fair value increase (decrease)	10,800,000
Sale Proceeds | Weighted average
Fair Value Measurement Inputs and Valuation Techniques
Amount of comparable TDPRV	$ 100,000,000		$ 100,000,000
Timing of Cash Flows | Minimum
Fair Value Measurement Inputs and Valuation Techniques
Probability (as a percent)	0.59		0.10
Fair value increase (decrease)	$ (216,000)
Timing of Cash Flows | Maximum
Fair Value Measurement Inputs and Valuation Techniques
Probability (as a percent)	73.27		73.27
Fair value increase (decrease)	$ 1,500,000

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Fair Value Measurements - Fair Value Option - Hybrid Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Iliad
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value	$ 6,721	$ 6,862
Unpaid Principal Balance	6,392	7,292
Accrued Interest	3,885	3,621
Fair Value Over (Under) Outstanding Balance	(3,556)	(4,051)
Uptown
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value	7,880	7,473
Unpaid Principal Balance	7,994	7,994
Accrued Interest	4,366	4,058
Fair Value Over (Under) Outstanding Balance	(4,480)	(4,579)
Streeterville 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value	7,118	6,815
Unpaid Principal Balance	10,094	10,273
Accrued Interest	1,265	950
Fair Value Over (Under) Outstanding Balance	(4,241)	(4,408)
Streeterville Note
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value	10,242	9,793
Unpaid Principal Balance	6,000	6,000
Accrued Interest	651	546
Fair Value Over (Under) Outstanding Balance	$ 3,591	$ 3,247

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Balance Sheet Components - Inventory and Prelaunch Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Inventory
Raw material	$ 2,202	$ 2,057
Work in process	6,126	6,517
Finished goods	692	615
Inventory	9,020	9,189
Prepaid expenses and other current assets
Inventory
Capitalized costs	$ 3,000	$ 2,800

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Balance Sheet Components - Property and Equipment (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Land, Property and Equipment
Total property and equipment at cost	$ 961,000		$ 961,000
Accumulated depreciation	(477,000)		(465,000)
Property and equipment, net	484,000		496,000
Depreciation and amortization expense	12,000	$ 16,000
Land
Land, Property and Equipment
Total property and equipment at cost	396,000		396,000
Lab equipment
Land, Property and Equipment
Total property and equipment at cost	477,000		477,000
Software
Land, Property and Equipment
Total property and equipment at cost	63,000		63,000
Furniture and fixtures
Land, Property and Equipment
Total property and equipment at cost	18,000		18,000
Computers and peripherals
Land, Property and Equipment
Total property and equipment at cost	$ 7,000		$ 7,000

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Balance Sheet Components - Intangible assets (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Intangible assets
Finite-lived intangible assets, net	$ 14,827
Total intangible assets, net	19,627	$ 20,116
Developed technology
Intangible assets
Total intangible assets	25,000	25,000
Accumulated amortization	(11,111)	(10,694)
Finite-lived intangible assets, net	13,889	14,306
In process research and development
Intangible assets
Total intangible assets	4,800	4,800
Finite-lived intangible assets, net	4,800	4,800
Trademarks
Intangible assets
Total intangible assets	300	300
Accumulated amortization	(133)	(128)
Finite-lived intangible assets, net	167	172
Internal use software costs - registry
Intangible assets
Total intangible assets	1,236	1,236
Accumulated impairment	(371)	(371)
Accumulated amortization	(432)	(370)
Finite-lived intangible assets, net	433	495
Patents
Intangible assets
Total intangible assets	361	361
Accumulated amortization	(23)	(18)
Finite-lived intangible assets, net	$ 338	$ 343

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Balance Sheet Components - Amortization (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Balance Sheet Components
Amortization expense	$ 489,000	$ 488,000

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Balance Sheet Components - Estimated future amortization expense (Details) $ in Thousands	Mar. 31, 2024 USD ($)
Balance Sheet Components
Remainder of 2024	$ 1,464
2025	1,952
2026	1,952
2027	1,952
2028	1,952
Thereafter	5,555
Finite-lived intangible assets, net	$ 14,827

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Related Party Transactions - BOD Cash compensation (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Related party Transactions
Cash compensation	$ 4,381,000	$ 4,813,000
Affiliated Entity | Board of directors
Related party Transactions
Cash compensation	$ 112,256	$ 68,000

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Commitments and Contingencies - Commitments (Details)									1 Months Ended						3 Months Ended
	Oct. 25, 2023 USD ($) ft²	Jan. 25, 2022 USD ($)	Jan. 25, 2022 EUR (€)	Dec. 22, 2021 USD ($) item	Dec. 22, 2021 EUR (€) item	Oct. 07, 2021 USD ($)	Oct. 07, 2021 EUR (€)	Apr. 06, 2021 USD ($) ft²	Nov. 30, 2022 USD ($) item	Nov. 30, 2022 EUR (€) item	Oct. 31, 2022 USD ($) item	Oct. 31, 2022 EUR (€) item	May 31, 2022 USD ($) item	May 31, 2022 EUR (€) item	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)	Dec. 08, 2023	Oct. 24, 2023	Jan. 26, 2022
Commitments and Contingencies
Lease term																	2 years
Lease expense under non-cancelable operating lease		$ 4,200	€ 4,000
Total deposit paid		9,500	9,000
Cash paid for operating lease liabilities recognized under operating cash flows															$ 336,000	$ 53,000
Recognition of operating lease - right-of-use asset and operating lease liability															221,000	30,000
General and administrative expense
Commitments and Contingencies
Lease cost															$ 276,000	$ 209,000
If contracts are terminated within 12 months
Commitments and Contingencies
Lease expense under non-cancelable operating lease		$ 4,000	€ 3,817
Office space sub lease
Commitments and Contingencies
Area (in square feet) | ft²								10,526
Extension period								3 years
Lease term								3 years
Monthly base rent for first twelve months								$ 42,000
Monthly base rent for subsequent twelve months								43,000
Monthly base rent for final 12 months								$ 45,000
Leased office premises
Commitments and Contingencies
Extension period																			20 months
Leased vehicle
Commitments and Contingencies
Lease term									48 months	48 months	48 months	48 months
Number of vehicles on lease | item									2	2	3	3
Monthly base rent									$ 1,500	€ 1,459	$ 2,200	€ 2,094
Office lease agreement | Leased office premises
Commitments and Contingencies
Extension period																			20 months
Lease expense under non-cancelable operating lease						$ 10,500	€ 10,000
Total deposit paid						$ 21,000	€ 20,000
Office lease agreement | Suite 400
Commitments and Contingencies
Area (in square feet) | ft²	5,735
Monthly base rent for first two years	$ 18,000
Monthly base rent for third and fourth year	18,000
Monthly base rent for fifth and sixth year	19,000
Monthly base rent for seventh and eighth year	20,000
Monthly base rent for ninth year	$ 21,000
Office lease agreement | Suite 600
Commitments and Contingencies
Area (in square feet) | ft²	5,263
Monthly base rent for remaining term	$ 22,000
Option to extend the lease	true
Office lease agreement | Suite 600 | Minimum
Commitments and Contingencies
Extension period	1 year																	1 year
Office lease agreement | Suite 600 | Maximum
Commitments and Contingencies
Extension period	5 years																	3 years
Arval Service Lease Italia Spa agreement | Leased vehicle
Commitments and Contingencies
Lease term				48 months	48 months
Lease expense under non-cancelable operating lease				$ 2,100	€ 2,000
Total deposit paid				$ 20,000	€ 19,000
Number of vehicles on lease | item				2	2
Vehicle lease agreement | Leased vehicle
Commitments and Contingencies
Lease term													48 months	48 months
Lease expense under non-cancelable operating lease													$ 880	€ 833
Total deposit paid													$ 22,000	€ 21,000
Number of vehicles on lease | item													1	1

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Commitments and Contingencies - Additional details of office space lease (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Commitments and Contingencies
Operating lease - right-of-use asset	$ 1,289	$ 1,176
Operating lease liability, current	469	348
Operating lease liability, net of current portion	873	886
Total operating lease liability	$ 1,342	$ 1,234
Weighted-average remaining life (years)	4 years 3 months 7 days	4 years 9 months 3 days
Weighted-average discount rate	19.74%	21.34%

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Commitments and Contingencies - Undiscounted cash payment obligation (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Commitments and Contingencies
Remainder of 2024	$ 656
2025	382
2026	254
2027	235
2028	242
2029	249
2030	105
Total undiscounted operating lease payments	2,123
Imputed interest expenses	(781)
Total operating lease liability	1,342	$ 1,234
Less: Operating lease liability, current	469	348
Operating lease liability, net of current portion	$ 873	$ 886

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Commitments and Contingencies - Purchase Commitment (Details) - Manufacturing and Supply Agreement with Glenmark Life Sciences Limited - kg		3 Months Ended
	Sep. 03, 2020	Mar. 31, 2024
Purchase Commitment
License agreement term (in years)	2 years 6 months
Agreement extension term	2 years
License termination term option	12 months
License termination activated upon written notice of material breach of Agreement	90 days
Number of remaining commitments of kilograms		500
Minimum
Purchase Commitment
Number of kilograms of crofelemer per year per agreement	300

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Commitments and Contingencies - Master Services Agreement (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023	Oct. 05, 2020
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Lease liabilities	$ 1,342,000	$ 1,234,000
Master Services Agreement With Integrium LLC, 2020
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Reduced paid service for achievement of certain milestones				$ 6,000,000.0
Lease liabilities	$ 504,674		$ 498,000
Master Services Agreement With Integrium LLC, 2020 | Maximum
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Consideration payable on achievement of milestones				$ 12,400,000

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Commitments and Contingencies - Asset Transfer and Transition Commitment Update (Details) - USD ($) $ in Millions		3 Months Ended
	Sep. 25, 2017	Mar. 31, 2024	Mar. 31, 2023
Commitments and Contingencies
Percentage of amount received to be paid to Glenmark	25.00%
Maximum amount to be received by Glenmark	$ 7.0
Payments to Glenmark		$ 0.0	$ 1.9

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Commitments and Contingencies - Revenue Sharing Commitment Update, Joint Venture and Legal Proceedings (Details)		1 Months Ended	3 Months Ended
	Dec. 14, 2017	Jan. 31, 2023 Plant	Mar. 31, 2024 USD ($)
Long term purchase commitment
Number of highly characterized medicinal plants		2,300
Number of plant extracts		3,500
Magdalena Biosciences, Inc.
Long term purchase commitment
Percentage of equity method investment			40.00%
SEED
Long term purchase commitment
Percentage of revenue sharing commitment	15.00%
Percentage of revenue sharing commitment after first million dollars of revenue	20.00%
Payments made to date to SEED | $			$ 0

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Commitments and Contingencies - Joint Venture - Income Statement Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Long term purchase commitment
Loss before income tax	$ (9,368)	$ (12,397)
Income tax expense	0	0
Net loss	(9,368)	(12,397)
Net loss attributable to the Company	(9,226)	$ (12,202)
Magdalena Biosciences, Inc.
Long term purchase commitment
Operating expenses	(40)
Loss before income tax	(40)
Income tax expense	0
Net loss	(40)
Net loss attributable to the Company	$ (16)

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Commitments and Contingencies - Securities Purchase and Licensing Agreement (Details)	Mar. 18, 2024 USD ($) $ / shares shares
Long term purchase commitment
Contract with Customer, Liability	$ 850,000
Initial term of contract	5 years
Gen Ilac Ve Saglik Urunleri Sanayi Ve Ticaret, A.S
Long term purchase commitment
Issuance of common stock (In shares) | shares	16,666,666
Shares Issued, Price Per Share | $ / shares	$ 0.12
Proceeds from issuance of Common stock	$ 2,000,000.0

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Debt - Notes Payable (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Notes payable
Notes designated at Fair Value Option	$ 31,961,000		$ 30,943,000
Total	32,113,000		36,900,000
Less: unamortized discount and debt issuance costs			(1,040,000)
Notes payable, net of discount	32,113,000		35,860,000
Notes payable - non-current, net	21,719,000		30,993,000
Notes payable - current, net	$ 10,394,000		$ 4,867,000
Weighted average interest rate on short-term borrowings	3.24%		5.04%
Cash paid for interest	$ 9,000	$ 6,000
Notes payable
Notes payable
Notes payable - current, net	10,394,000		$ 4,867,000
Royalty Interest
Notes payable
Total			5,635,000
Insurance Financing
Notes payable
Total	52,000		172,000
Tempesta Note
Notes payable
Total	$ 100,000		$ 150,000

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Debt - Notes Payable - Future Maturities (Details) $ in Thousands	Mar. 31, 2024 USD ($)
Periods ended December 31,
2025	$ 10,394
2026	21,719
Total	$ 32,113

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Debt - Sale of Future Royalty Interest (Details)																													3 Months Ended
	Mar. 19, 2024 shares	Mar. 05, 2024 shares	Mar. 01, 2024 shares	Jan. 29, 2024 USD ($) $ / shares shares	Dec. 28, 2023 USD ($) shares	Sep. 29, 2023 USD ($) $ / shares shares	Jun. 28, 2023 USD ($) shares	May 08, 2023 USD ($) item $ / shares shares	Mar. 23, 2023 USD ($) shares	Mar. 17, 2023 USD ($) shares	Feb. 08, 2023 USD ($) shares	Nov. 18, 2022 USD ($) shares	Sep. 30, 2022 USD ($) shares	Aug. 24, 2022 USD ($)	Aug. 17, 2022 USD ($) $ / shares shares	Jul. 25, 2022 USD ($) shares	May 13, 2022 USD ($) shares	Apr. 14, 2022 USD ($)	Mar. 09, 2022 USD ($) shares	Mar. 04, 2022 USD ($) shares	Mar. 02, 2022 USD ($) shares	Feb. 11, 2022 USD ($) shares	Apr. 13, 2021 USD ($) shares	Mar. 08, 2021 USD ($)	Dec. 22, 2020 USD ($)	Nov. 13, 2020 USD ($)	Oct. 31, 2020 USD ($) $ / shares	Oct. 08, 2020 USD ($)	Mar. 31, 2024 USD ($) $ / shares shares	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($) shares	Aug. 14, 2023	Jun. 30, 2023 $ / shares shares	Nov. 01, 2020 $ / shares
Debt Instrument [Line Items]
Convertible preferred stock, shares issued (in shares) | shares																													99		178
Gain on extinguishment of debt																													$ 1,245,000
Term of warrant																																5 years
Minimum
Debt Instrument [Line Items]
Exercise price (in dollars per share) | $ / shares																													$ 0.24
Iliad
Debt Instrument [Line Items]
Royalties incurred									$ 227,000	$ 992,000		$ 715,000				$ 750,000	$ 400,000		$ 700,000	$ 800,000	$ 1,100,000	$ 2,400,000	$ 3,000,000.0
Issuance of common stock (In shares) | shares					4,875,000				3,733	14,533		978				31,546	15,249		24,667	26,667	32,333	23,117	7,843
Streeterville
Debt Instrument [Line Items]
Issuance of common stock (In shares) | shares	8,333,333	10,000,000
Series H convertible preferred stock
Debt Instrument [Line Items]
Convertible preferred stock, shares issued (in shares) | shares																													0		0
Series H convertible preferred stock | Streeterville
Debt Instrument [Line Items]
Royalty interest							$ 756,992
Series I convertible preferred stock
Debt Instrument [Line Items]
Convertible preferred stock, shares issued (in shares) | shares																													0		56
Issuance of common stock (In shares) | shares						118
Series J
Debt Instrument [Line Items]
Issuance of common stock (In shares) | shares			179
Beginning on March 2021
Debt Instrument [Line Items]
Shortfall restoration period																								30 days
October 2020 Purchase Agreement
Debt Instrument [Line Items]
Royalties paid																												$ 12,000,000.0
Aggregate purchase price																												$ 6,000,000.0
Percentage of net sales																												10.00%
Percentage of worldwide revenues																												10.00%
Royalty interest																												$ 12,000,000.0
Royalty discount																												$ 6,000,000.0
Royalty discount rate																							77.09%			45.42%		34.51%
Minimum volume weighted average price of stock | $ / shares																											$ 0.9105							$ 0.9105
Increase in royalty repayment amount																											$ 6,000,000.0
Additional royalty financings committed																										$ 6,000,000.0
Gain on extinguishment of debt																			$ (2,200,000)										$ (2,000,000.0)
October 2020 Purchase Agreement | Iliad
Debt Instrument [Line Items]
Principal amount																		$ 12,000,000.0
Fair value of notes																													6,700,000		$ 6,900,000
Net loss in the fair value																													(695,000)
October 2020 Purchase Agreement | Iliad | Minimum
Debt Instrument [Line Items]
Percentage of shares issued and outstanding																		4.99%
October 2020 Purchase Agreement | Beginning On April 2021
Debt Instrument [Line Items]
Minimum monthly royalty repayment amount																												$ 250,000
October 2020 Purchase Agreement | Beginning On October 2021
Debt Instrument [Line Items]
Minimum monthly royalty repayment amount																												400,000
October 2020 Purchase Agreement | Beginning On April 2022
Debt Instrument [Line Items]
Minimum monthly royalty repayment amount																												600,000
October 2020 Purchase Agreement | Beginning On October 2022
Debt Instrument [Line Items]
Minimum monthly royalty repayment amount																												$ 750,000
December 2020 Purchase Agreement
Debt Instrument [Line Items]
Aggregate purchase price																									$ 6,000,000.0
Percentage of net sales																									10.00%
Percentage of worldwide revenues																									10.00%
Minimum monthly royalty repayment amount																									$ 750,000
Royalty interest																									12,000,000.0
Royalty discount																									$ 6,000,000.0
Royalty discount rate																									23.70%
Royalties incurred											$ 675,000
Issuance of common stock (In shares) | shares											150,000
Gain on extinguishment of debt																													(2,700,000)
December 2020 Purchase Agreement | Iliad
Debt Instrument [Line Items]
Principal amount																		$ 12,000,000.0
December 2020 Purchase Agreement | Uptown Park Capital, LLC
Debt Instrument [Line Items]
Fair value of notes																													7,900,000		7,500,000
Net loss in the fair value																													(407,000)
December 2020 Purchase Agreement | Series H convertible preferred stock | Streeterville
Debt Instrument [Line Items]
Aggregate shares value							1,700,000
December 2020 Purchase Agreement | Series H convertible preferred stock | Uptown Park Capital, LLC
Debt Instrument [Line Items]
Aggregate shares value							757,000
December 2020 Purchase Agreement | Series I convertible preferred stock | Uptown Park Capital, LLC
Debt Instrument [Line Items]
Aggregate shares value						$ 1,500,000.00
March 2021 Purchase Agreement
Debt Instrument [Line Items]
Aggregate purchase price																								$ 5,000,000.0
Percentage of net sales																								10.00%
Percentage of worldwide revenues																								10.00%
Royalty discount rate																								19.36%
Threshold price																								$ 10,000,000.0
Percentage of royalties collected from licenses																								50.00%
Interest expense																													448,000	$ 420,000
Carrying value of notes																													0		4,600,000
March 2021 Purchase Agreement | Iliad
Debt Instrument [Line Items]
Principal amount																		$ 10,000,000.0
March 2021 Purchase Agreement | Streeterville
Debt Instrument [Line Items]
Aggregate purchase price															$ 3,400,000
Royalty interest													$ 2,000,000.0
Royalties incurred													$ 2,000,000.0
Issuance of common stock (In shares) | shares													156,863		153,333
Common stock, par value (in dollars per share) | $ / shares															$ 0.0001
March 2021 Purchase Agreement | Beginning on March 2021
Debt Instrument [Line Items]
Royalty interest																								$ 10,000,000.0
Royalty discount																								5,000,000.0
March 2021 Purchase Agreement | Beginning On April 2021
Debt Instrument [Line Items]
Minimum monthly royalty repayment amount																								$ 250,000
Increase in royalty repayment, percent																								5.00%
March 2021 Purchase Agreement | Beginning On October 2021
Debt Instrument [Line Items]
Minimum monthly royalty repayment amount																								$ 400,000
March 2021 Purchase Agreement | Beginning On April 2022
Debt Instrument [Line Items]
Increase in royalty repayment, percent																								10.00%
Royalty instrument, Debt instrument carrying value																								$ 600,000
March 2021 Purchase Agreement | Beginning On October 2022
Debt Instrument [Line Items]
Minimum monthly royalty repayment amount																								$ 750,000
August 2022 Purchase Agreement
Debt Instrument [Line Items]
Gain on extinguishment of debt																													(1,000,000.0)
Fair value																													7,100,000		$ 6,800,000
August 2022 Purchase Agreement | Streeterville
Debt Instrument [Line Items]
Aggregate purchase price														$ 4,000,000.0
Percentage of net sales														10.00%
Percentage of worldwide revenues														10.00%
Royalty interest														$ 12,000,000.0
Royalty discount rate														55.97%
Issuance of common stock (In shares) | shares				1,587,632
Aggregate shares value				$ 165,000
Percentage of royalties collected from licenses														50.00%
Common stock, par value (in dollars per share) | $ / shares				$ 0.0001
August 2022 Purchase Agreement | Until One Year Anniversary | Streeterville
Debt Instrument [Line Items]
Accrued interest rate on royalty														5.00%
August 2022 Purchase Agreement | After One Year Anniversary | Streeterville
Debt Instrument [Line Items]
Accrued interest rate on royalty														10.00%
August 2022 Purchase Agreement | Beginning On September 2022 | Streeterville
Debt Instrument [Line Items]
Minimum monthly royalty repayment amount														$ 250,000
August 2022 Purchase Agreement | Beginning On March 2023 | Streeterville
Debt Instrument [Line Items]
Minimum monthly royalty repayment amount														400,000
August 2022 Purchase Agreement | Beginning On September 2023 | Streeterville
Debt Instrument [Line Items]
Minimum monthly royalty repayment amount														600,000
August 2022 Purchase Agreement | Beginning On March 2024 | Streeterville
Debt Instrument [Line Items]
Minimum monthly royalty repayment amount														$ 750,000
Standstill Agreement
Debt Instrument [Line Items]
Number of royalty interests issued | item								4
Agreement term								6 months
Exercise price (in dollars per share) | $ / shares								$ 0.48
Standstill Agreement | Streeterville Warrants
Debt Instrument [Line Items]
Warrants to purchase shares of Common stock | shares								1,892,808
Standstill Agreement | Iliad Warrants [Member]
Debt Instrument [Line Items]
Warrants to purchase shares of Common stock | shares								826,738																									1,711,954
Standstill Agreement | Uptown warrants
Debt Instrument [Line Items]
Warrants to purchase shares of Common stock | shares								1,097,756																									2,105,348
Standstill Agreement | Standstill Warrants [Member]
Debt Instrument [Line Items]
Exercise price (in dollars per share) | $ / shares								$ 0.48																									$ 0.48
Term of warrant								5 years
Standstill Agreement | Series H convertible preferred stock | Streeterville
Debt Instrument [Line Items]
Royalty interest							$ 1,726,888
Number of shares to be exchanged | shares							105
Global Amendment No 2 to Royalty Interest October 2020 Purchase Agreement | Iliad
Debt Instrument [Line Items]
Warrants to purchase shares of Common stock | shares						232,500
Exercise price (in dollars per share) | $ / shares						$ 0.37
Threshold monthly royalty payment payable						$ 750,000.00
Term of warrant						5 years
Global Amendment No 2 to Royalty Interest October 2020 Purchase Agreement | Streeterville Warrants
Debt Instrument [Line Items]
Net loss in the fair value																													$ (468,000)
Global Amendment No 2 to Royalty Interest December, 2020 Purchase Agreement | Uptown Park Capital, LLC
Debt Instrument [Line Items]
Warrants to purchase shares of Common stock | shares						262,500
Exercise price (in dollars per share) | $ / shares						$ 0.37
Threshold monthly royalty payment payable						$ 750,000.00
Term of warrant						5 years
Global Amendment No 2 to Royalty Interest August, 2022 Purchase Agreement | Streeterville
Debt Instrument [Line Items]
Warrants to purchase shares of Common stock | shares						255,000
Exercise price (in dollars per share) | $ / shares						$ 0.37
Threshold monthly royalty payment payable						$ 750,000.00
Term of warrant						5 years
October 2020 royalty interest agreements | Iliad
Debt Instrument [Line Items]
Issuance of common stock (In shares) | shares				8,000,000
Aggregate shares value				$ 836,000.00	$ 789,000
Royalty Interest Exchange Agreement December 2020 [Member]
Debt Instrument [Line Items]
Number of shares to be exchanged | shares								1,908,651
Partitioned Royalty								$ 1,073,807

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Debt - Streeterville Note (Details) - Streeterville Note		1 Months Ended	3 Months Ended
	Jan. 13, 2021 USD ($)	Jan. 31, 2021	Mar. 31, 2024 USD ($)	Dec. 31, 2023 USD ($)
Debt
Principal amount	$ 6,200,000
Aggregate purchase price	$ 6,000,000.0
Debt term	4 years
Interest rate (as a percent)	3.25%
Percentage of return bonus payable	1
Percentage of reduction in return bonus		1
Term for initiation of human trials		6 months
Percentage of outstanding balance payable elected to prepay			112.5
Capped percentage of aggregate default	25.00%
Fair value	$ 6,000,000.0		$ 10,200,000	$ 9,800,000
Transaction expense	$ 25,000
Net increase in the fair value			$ 450,000
Maximum
Debt
Interest rate (as a percent)	18.00%
Percentage of gross proceeds received from return			18
Percentage of default effect	15.00%
Minimum
Debt
Interest rate (as a percent)			1.00%
Percentage of default effect	5.00%
Accounts Receivable Purchase Agreement
Debt
Interest rate (as a percent)	25.00%
Transaction fee	$ 25,000

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Debt - Insurance Premium Financing (Details) - USD ($)	1 Months Ended		3 Months Ended
	Mar. 31, 2024	May 31, 2023	Mar. 31, 2024	Dec. 31, 2023
May 2023 First Insurance Financing
Short-term Debt [Line Items]
Principal amount		$ 575,000
Unpaid balance		$ 676,000
Interest rate (as a percent)		8.60%
Finance charge		$ 23,000
Debt term		10 months
Interest expense			$ 7,000
Financing balance	$ 0		0	$ 172,000
March 2024 First Insurance Financing
Short-term Debt [Line Items]
Principal amount	97,000		97,000
Unpaid balance	$ 52,000		$ 52,000
Interest rate (as a percent)	9.30%		9.30%
Finance charge	$ 2,000
Debt term	10 months
Interest expense			$ 0
Financing balance	$ 52,000		$ 52,000

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Debt - 2019 Tempesta Notes (Details) - Tempesta Note - USD ($)	1 Months Ended	3 Months Ended
	Oct. 31, 2019	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Debt Instrument [Line Items]
Cash received in the settlement	$ 50,000
Principal amount	$ 550,000
Common stock issued in exchange of debt	13,333
Interest rate (as a percent)	2.50%
Semi-annual principal and interest payments	$ 50,000
Interest expense		$ 1,000	$ 3,000
Carrying value of notes		$ 100,000		$ 150,000

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Warrants - Warrants outstanding and exercisable (Details) - shares	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Warrants
Warrants outstanding, beginning balance	12,109,807	7,505
Issuances		12,102,302
Expirations and cancelations	(7,542,409)
Warrants outstanding, ending balance	4,567,398	12,109,807

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Warrants - Agreements 2 (Details)	Feb. 29, 2024 shares	Feb. 27, 2024 shares	May 08, 2023 USD ($) $ / shares shares	Mar. 31, 2024 Y $ / shares	Feb. 15, 2024 $ / shares	Sep. 29, 2023 USD ($) $ / shares shares	Aug. 14, 2023 USD ($) $ / shares shares	Jun. 30, 2023 $ / shares shares	May 10, 2023 shares	Mar. 31, 2023 $ / shares	Mar. 10, 2023 $ / shares
PIPE warrant exchange ratio		0.4
Term of warrant							5 years
Common Stock
Share Price				$ 0.09
Shares issued on conversion on common stock | shares	3,050,000	18,837,500
Minimum
Exercise price (in dollars per share)				$ 0.24
Share Price											$ 1.00
Maximum
Exercise price (in dollars per share)										$ 0.88
Share Price					$ 0.10
PIPE Purchase Agreement
Exercise price (in dollars per share)			$ 0.48
Proceeds from Issuance of Private Placement | $			$ 1,860,000
Term of warrant			5 years
Standstill Agreement
Exercise price (in dollars per share)			$ 0.48
Warrants | $			$ 2,500,000
Share Price			$ 0.73
Standstill Agreement | Expected life
Warrants - Measurement input | Y				5
Standstill Agreement | Volatility
Warrants - Measurement input			1.1888
Standstill Agreement | Risk free rate
Warrants - Measurement input			0.0349
PIPE Warrants
Shares converted | shares		7,535,000
PIPE Warrants | Expected life
Warrants - Measurement input | Y				5
PIPE Amendment Warrants
Warrants to purchase shares of Common stock | shares							685,000
Exercise price (in dollars per share)							$ 0.48
Warrants | $							$ 1,200,000
Share Price							$ 0.72
PIPE Amendment Warrants | Volatility
Warrants - Measurement input							1.4595
PIPE Amendment Warrants | Risk free rate
Warrants - Measurement input							0.0337
Royalty Interest Global Amendment Warrants
Exercise price (in dollars per share)						$ 0.37
Warrants | $						$ 173,000
Share Price						$ 0.26
Term of warrant						5 years
Royalty Interest Global Amendment Warrants | Expected life
Warrants - Measurement input | $						5
Royalty Interest Global Amendment Warrants | Volatility
Warrants - Measurement input						139.53
Royalty Interest Global Amendment Warrants | Risk free rate
Warrants - Measurement input						4.6
Series G Preferred Stock | PIPE Purchase Agreement
Number of shares issued | shares			137
Common stock, par value (in dollars per share)			$ 0.0001
Warrants to purchase shares of Common stock | shares			6,850,000						6,850,000
Standstill Warrants | Standstill Agreement
Exercise price (in dollars per share)			$ 0.48					$ 0.48
Term of warrant			5 years
Iliad Warrants | Standstill Agreement
Warrants to purchase shares of Common stock | shares			826,738					1,711,954
Iliad Warrants | Royalty Interest Global Amendment Warrants
Warrants to purchase shares of Common stock | shares						232,500
Uptown warrants | Standstill Agreement
Warrants to purchase shares of Common stock | shares			1,097,756					2,105,348
Uptown warrants | Royalty Interest Global Amendment Warrants
Warrants to purchase shares of Common stock | shares						262,500
Streeterville Warrants | Standstill Agreement
Warrants to purchase shares of Common stock | shares			1,892,808
Streeterville Warrants | Royalty Interest Global Amendment Warrants
Warrants to purchase shares of Common stock | shares						255,000
Exercise price (in dollars per share)						$ 0.37
Series G Preferred Stock
Shares converted | shares	122

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Preferred Stock (Details) - shares	Mar. 31, 2024	Dec. 31, 2023	Oct. 04, 2022	Sep. 30, 2020
Class of Stock [Line Items]
Shares designated	7,535,013	7,534,834
Issued	99	178
Outstanding	99	178
Shares Authorized	10,000,000	10,000,000
Series A
Class of Stock [Line Items]
Shares designated	5,524,926	5,524,926
Issued	0	0
Outstanding	0	0		5,524,926
Series B
Class of Stock [Line Items]
Shares designated	11,000	11,000
Issued	0	0
Outstanding	0	0
Series B-1
Class of Stock [Line Items]
Shares designated	63	63
Issued	0	0
Outstanding	0	0
Series B-2
Class of Stock [Line Items]
Shares designated	10,165	10,165
Issued	0	0
Outstanding	0	0
Series C
Class of Stock [Line Items]
Shares designated	1,011,000	1,011,000
Issued	0	0
Outstanding	0	0
Series D
Class of Stock [Line Items]
Shares designated	977,300	977,300
Issued	0	0
Outstanding	0	0
Series E
Class of Stock [Line Items]
Shares designated	10	10
Issued	0	0
Outstanding	0	0	0
Series F
Class of Stock [Line Items]
Shares designated	10	10
Issued	0	0
Outstanding	0	0
Series G
Class of Stock [Line Items]
Shares designated	137	137
Issued	0
Outstanding	0	122
Series H
Class of Stock [Line Items]
Shares designated	105	105
Issued	0	0
Outstanding	0	0
Shares Authorized	10,000,000	10,000,000
Series I
Class of Stock [Line Items]
Shares designated	118	118
Issued	0	56
Outstanding	0	56
Shares Authorized	10,000,000	10,000,000
Series J
Class of Stock [Line Items]
Shares designated	179
Outstanding	99

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Preferred Stock - Series B-2 Convertible Preferred Stock (Details) - shares	1 Months Ended
	Dec. 31, 2020	Oct. 31, 2020	Jan. 31, 2020	Mar. 31, 2024	Dec. 31, 2023	Dec. 31, 2019
Convertible preferred stock, shares outstanding (in shares)				99	178
Series B-2 Preferred Stock
Convertible preferred stock, shares outstanding (in shares)				0	0
Oasis Capital | Series B-2 Preferred Stock
Conversion of stock, forward contract exercisable convertible						412,074
Conversion of stock, common shares, convertible shares						231,709
Preferred stock convertible shares issuable						10,165
Shares converted	6,559	975	2,631
Shares issued on conversion on common stock	415,403	166,728	166,630
Convertible preferred stock, shares outstanding (in shares)	0

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Preferred Stock - Series C Perpetual Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended
	Sep. 30, 2020	Mar. 31, 2024	Dec. 31, 2023
Convertible preferred stock, shares outstanding (in shares)		99	178
Series A
Convertible preferred stock, shares outstanding (in shares)	5,524,926	0	0
Series C perpetual preferred stock
Convertible preferred stock, shares outstanding (in shares)		0	0
Iliad | Series C perpetual preferred stock
Number of shares issued for convertible preferred stock	842,500
Convertible preferred stock, par value (in dollars per share)	$ 0.0001
Accreted value	$ 11.2
Gross proceeds from the issuance of common stock	2.3
Carrying value	$ 2.6
Percentage increase in the outstanding balance	5.00%

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Preferred Stock - Series E Preferred Stock (Details) - USD ($)	Oct. 04, 2022	Aug. 18, 2022	Mar. 31, 2024	Dec. 31, 2023
Convertible preferred stock, shares issued (in shares)			99	178
Preferred Stock, Shares Outstanding			99	178
Series E perpetual preferred stock
Convertible preferred stock, shares issued (in shares)			0	0
Shares redeemed	10
Preferred Stock, Shares Outstanding	0		0	0
Certain investors | Securities Purchase Agreement | Series E perpetual preferred stock
Convertible preferred stock, shares issued (in shares)		10
Convertible preferred stock, par value (in dollars per share)		$ 0.0001
Aggregate proceeds		$ 100

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Preferred Stock - Series F Preferred Stock (Details) - USD ($)	Nov. 11, 2022	Mar. 31, 2024	Dec. 31, 2023
Convertible preferred stock, shares issued (in shares)		99	178
Series F perpetual preferred stock
Convertible preferred stock, shares issued (in shares)		0	0
Certain investors | Securities Purchase Agreement | Series F perpetual preferred stock
Convertible preferred stock, shares issued (in shares)	10
Convertible preferred stock, par value (in dollars per share)	$ 0.0001
Aggregate proceeds	$ 100

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Preferred Stock - Series G Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Millions	Feb. 29, 2024	Feb. 27, 2024	May 08, 2023	Mar. 31, 2024	Dec. 31, 2023
Preferred Stock, Shares Issued				99	178
Common Stock
Shares issued on conversion on common stock	3,050,000	18,837,500
Series G Preferred Stock
Preferred Stock, Shares Issued				0
Shares converted	122
Certain investors | Securities Purchase Agreement | Series G Preferred Stock
Preferred Stock, Shares Issued			137
Convertible preferred stock, par value (in dollars per share)			$ 0.0001
Warrants to purchase shares of Common stock			6,850,000
Exercise price (in dollars per share)			$ 0.48
Proceeds from Issuance of Private Placement			$ 1.9

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Preferred Stock - Series H Preferred Stock (Details) - USD ($)	Jun. 28, 2023	Mar. 31, 2024	Dec. 31, 2023
Convertible preferred stock, shares outstanding (in shares)		99	178
Series H convertible preferred stock
Convertible preferred stock, shares outstanding (in shares)		0	0
Series H convertible preferred stock | Uptown Park Capital, LLC | December 2020 Purchase Agreement
Aggregate shares issued	32
Aggregate shares value	$ 757,000
Series H convertible preferred stock | Streeterville | December 2020 Purchase Agreement
Aggregate shares issued	73
Aggregate shares value	$ 1,700,000

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Preferred Stock - Series I Preferred Stock (Details) - USD ($)	Jan. 15, 2024	Sep. 29, 2023
Common Stock
Number of shares issued for convertible preferred stock	2,696,456
Series I convertible preferred stock
Shares converted	56
Series I convertible preferred stock | Uptown Park Capital, LLC | December 2020 Purchase Agreement
Aggregate shares issued		118
Aggregate shares value		$ 1,500,000.00

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Preferred Stock - Series J Preferred Stock (Details) - shares	Mar. 31, 2024	Dec. 31, 2023
Preferred Stock
Preferred Stock, Shares Issued	99	178

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Temporary Equity (Details) - USD ($)	Mar. 19, 2024	Mar. 05, 2024	Mar. 31, 2024	Mar. 01, 2024	Dec. 31, 2023
Temporary Equity
Outstanding			99		0
Streeterville
Temporary Equity
Issuance of common stock (In shares)	8,333,333	10,000,000
Price per share	$ 0.12
Series J Preferred Stock
Temporary Equity
Right to exchange shares at per share price				$ 25,000
Outstanding			99
Series J Preferred Stock | Streeterville
Temporary Equity
Shares issued				$ 179
Series J Perpetual Preferred Stock
Temporary Equity
Surrender and cancellation of shares	40	40
Outstanding					0

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Stockholders' Equity - Reserved shares and Common stock (Details)				3 Months Ended
	Jan. 23, 2023	Sep. 08, 2021	Sep. 03, 2021	Mar. 31, 2024 Vote $ / shares shares	Dec. 31, 2023 $ / shares shares	Sep. 30, 2022 $ / shares shares	Sep. 29, 2022 shares
Shares of common stock reserved for issuance
Options issued and outstanding				26,084	26,262
Options available for grant under stock option plans				4,303,288	626,342
Restricted stock unit awards issued and outstanding				2,702,070	2,708,136
Warrants issued and outstanding				4,567,398	11,424,807
Total				11,600,352	14,787,059
Number of voting rights entitled for each share of common stock held | Vote				1
Reverse stock split ratio	0.0133	0.33	0.33
Total shares authorized				358,000,000
Preferred stock, shares authorized (in shares)				10,000,000	10,000,000
Inducement options issued and outstanding
Shares of common stock reserved for issuance
Options issued and outstanding				1,512	1,512
Common Stock | Common stock - voting
Shares of common stock reserved for issuance
Common stock, par value (in dollars per share) | $ / shares				$ 0.0001	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)				298,000,000	298,000,000	298,000,000	150,000,000
Common Stock | Common stock - non-voting
Shares of common stock reserved for issuance
Common stock, par value (in dollars per share) | $ / shares				$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)				50,000,000	50,000,000
Convertible non-voting common stock
Shares of common stock reserved for issuance
Reverse stock split ratio				1

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Stockholders' Equity - Reverse Stock Split and ATM (Details) $ in Millions							3 Months Ended
	Jan. 23, 2023	Feb. 02, 2022 USD ($)	Feb. 01, 2022 USD ($)	Dec. 10, 2021 USD ($)	Sep. 08, 2021	Sep. 03, 2021	Mar. 31, 2024 USD ($) shares
Reverse stock split ratio	0.0133				0.33	0.33
December 2021 ATM Agreement
Issuance of common stock (In shares) | shares							130,894,636
Proceeds from issuance of Common stock							$ 11.3
December 2021 ATM Agreement | Maximum
Aggregate offering price		$ 75.0		$ 15.0
December 2021 ATM Agreement | Minimum
Aggregate offering price			$ 15.0

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Stockholders' Equity- Noncontrolling Interest (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2021
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Noncontrolling interest	$ (180,000)		$ (64,000)
Decrease in noncontrolling interest	$ 116,000	$ 1.0
Napo Therapeutics
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Noncontrolling interest				$ 242,000

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Stock-Based Compensation - Summary of Stock Incentive Plans (Details) - $ / shares				1 Months Ended	3 Months Ended	12 Months Ended
	Apr. 13, 2022	Jun. 16, 2020	May 12, 2015	Nov. 30, 2013	Mar. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Stock-based Compensation
Option outstanding					26,084	26,262
Options available for grant under stock option plans					4,303,288	626,342
Shares Available for Grant
Beginning balance (in shares)					626,342
Ending balance (in shares)					4,303,288	626,342
Stock Options Outstanding
Beginning balance (in shares)					26,262
Ending balance (in shares)					26,084	26,262
RSUs Outstanding
Beginning balance (in shares)					2,708,136
Ending balance (in shares)					2,702,070	2,708,136
Options vested, exercisable and expected to vest
Weighted average grant date fair value of stock options granted (in dollars per share)					$ 0	$ 0
Number of options vested (in shares)					271	1,524
Weighted average fair value of options vested on grant date					$ 336.43	$ 273.62
Stock options
Stock-based Compensation
Option outstanding					27,596	27,774	28,079
Stock Options Outstanding
Beginning balance (in shares)					27,774	28,079
Options exercised (in shares)					0		0
Options cancelled (in shares)					(178)	(305)
Ending balance (in shares)					27,596	27,774	28,079
Weighted Average Stock Option Exercise Price
Beginning balance (in dollars per share)					$ 596	$ 592.73
Options cancelled (in dollars per share)					362.34	327.81
Ending balance (in dollars per share)					$ 597	$ 596	$ 592.73
Weighted Average Remaining Contractual Life (Years)
Weighted Average Remaining Contractual Life (Years)					5 years 11 months 23 days	6 years 2 months 15 days	7 years 2 months 8 days
Options vested, exercisable and expected to vest
Options exercisable (in shares)					27,465
Options exercisable (in dollars per share)					$ 598.24
Options exercisable (in years)					5 years 11 months 19 days
Options vested and expected to vest (in shares)					27,594
Options vested and expected to vest (in dollars per share)					$ 597.16
Options vested and expected to vest (in years)					5 years 11 months 23 days
Options exercised (in shares)					0		0
Stock options and RSUs
Stock-based Compensation
Options available for grant under stock option plans					4,303,288	626,342	122,978
Shares Available for Grant
Beginning balance (in shares)					626,342	122,978
Additional shares authorized (in shares)					3,670,702	3,166,330
Options cancelled (in shares)					178	305
RSUs granted (in shares)						(2,690,320)
RSUs exercised					125
RSUs cancelled					5,941	5,241
RSUs vested and released (in shares)						21,808
Ending balance (in shares)					4,303,288	626,342	122,978
RSUs Outstanding
RSUs vested and released (in shares)						21,808
Restricted stock units issued and outstanding
Shares Available for Grant
RSUs vested and released (in shares)						(21,808)
RSUs Outstanding
Beginning balance (in shares)					2,708,136	44,865
RSUs Granted (in shares)						2,690,320
RSUs Exercised (in shares)					(125)
RSUs vested and released (in shares)						(21,808)
RSUs Cancelled (in shares)					(5,941)	(5,241)
Ending balance (in shares)					2,702,070	2,708,136	44,865
2013 Plan
Stock-based Compensation
Option shares outstanding					0	0
2013 Plan | Stock options
Stock Options Outstanding
Options granted (in shares)				0
2014 Plan
Stock-based Compensation
Incentive stock option term			10 years
Increase in share reserve based on outstanding number of shares (as a percent)			2.00%
Option outstanding					27,596	26,262
Options available for grant under stock option plans					4,302,288	626,342
Shares Available for Grant
Beginning balance (in shares)					626,342
Additional shares authorized (in shares)	2,417,660
Ending balance (in shares)					4,302,288	626,342
Stock Options Outstanding
Beginning balance (in shares)					26,262
Ending balance (in shares)					27,596	26,262
2020 Inducement Award Plan
Stock-based Compensation
Incentive stock option term		10 years
Options available for grant under stock option plans		2,222
Number of shares reserved for issuance	500,000
Shares Available for Grant
Ending balance (in shares)		2,222
2020 New Employee Inducement Award Plan
Stock-based Compensation
Option outstanding					1,512	1,512
Options available for grant under stock option plans					498,488	6,967
Number of shares reserved for issuance	971,833
Shares Available for Grant
Beginning balance (in shares)					6,967
Additional shares authorized (in shares)	471,833					498,448
Ending balance (in shares)					498,488	6,967
Stock Options Outstanding
Beginning balance (in shares)					1,512
Ending balance (in shares)					1,512	1,512
Common Stock
Options vested, exercisable and expected to vest
Share Price					$ 0.09
Participants Voting Power More than Ten Percent | 2014 Plan
Stock-based Compensation
Incentive stock option term			5 years
Participants Voting Power More than Ten Percent | 2020 Inducement Award Plan
Stock-based Compensation
Incentive stock option term		5 years

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Stock-Based Compensation - Stock-Based Compensation (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Stock-based Compensation
Total stock-based compensation expense	$ 581,000	$ 480,000
Research and development expense
Stock-based Compensation
Total stock-based compensation expense	289,000	227,000
Sales and marketing expense
Stock-based Compensation
Total stock-based compensation expense	40,000	49,000
General and administrative expense
Stock-based Compensation
Total stock-based compensation expense	252,000	$ 204,000
Stock options and RSUs
Stock-based Compensation
Unrecognized stock-based compensation expense	$ 28,968
Expected weighted average period to be recognized	2 months 8 days

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Stock-Based Compensation - 401(k) Plan (Details)	3 Months Ended
	Mar. 31, 2024 USD ($)
Stock-Based Compensation
Employer contributions to the plan	$ 0

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Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Net Loss Per Share
Net loss attributable to common stockholders (basic)	$ (9,226)	$ (12,202)
Net loss attributable to common stockholders (diluted)	$ (9,226)	$ (12,202)
Shares used to compute net loss per common share, basic (in shares)	158,842,297	5,109,609
Shares used to compute net loss per common share, diluted (in shares)	158,842,297	5,109,609
Net loss per share attributable to common shareholders, basic (in dollars per share)	$ (0.06)	$ (2.39)
Net loss per share attributable to common shareholders, diluted (in dollars per share)	$ (0.06)	$ (2.39)

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Net Loss Per Share - Excluded From Calculation (Details) - shares	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023	May 14, 2024
Outstanding common stock equivalents have been excluded from diluted net loss per common share
Total (in shares)	7,297,064	14,160,717
Subsequent event
Outstanding common stock equivalents have been excluded from diluted net loss per common share
Common stock, shares issued (in shares)			19,874,088
Options issued and outstanding
Outstanding common stock equivalents have been excluded from diluted net loss per common share
Total (in shares)	26,084	26,262
Inducement options issued and outstanding
Outstanding common stock equivalents have been excluded from diluted net loss per common share
Total (in shares)	1,512	1,512
Restricted stock units issued and outstanding
Outstanding common stock equivalents have been excluded from diluted net loss per common share
Total (in shares)	2,702,070	2,708,136
Warrants issued and outstanding
Outstanding common stock equivalents have been excluded from diluted net loss per common share
Total (in shares)	4,567,398	11,424,807

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Segment Data (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($) segment	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)
Segment Information
Number of reportable segments | segment	2
Segment net loss	$ (9,368)	$ (12,397)
Segment assets	55,389		$ 50,763
Human Health
Segment Information
Segment net loss	(4,601)	(6,539)
Animal Health
Segment Information
Segment net loss	(4,767)	(5,858)
Product revenue, net
Segment Information
Revenue from external customers	2,351	1,972
Product revenue, net | Human Health
Segment Information
Revenue from external customers	2,303	1,927
Product revenue, net | Animal Health
Segment Information
Revenue from external customers	48	$ 45
Operating Segments
Segment Information
Segment assets	205,709		195,479
Operating Segments | Human Health
Segment Information
Segment assets	42,154		42,289
Operating Segments | Animal Health
Segment Information
Segment assets	163,555		153,190
Segment Reconciling Items
Segment Information
Segment assets	(29,232)		(29,232)
Intersegment Eliminations
Segment Information
Segment assets	$ (121,088)		$ (115,484)

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Subsequent Events (Details) - Subsequent event - USD ($) $ in Millions		1 Months Ended
	Apr. 12, 2024	May 14, 2024
License agreement with United Kingdom-based Venture Life Group PLC for Gelclair
Subsequent Events.
License agreement term	5 years
December 2021 ATM Agreement
Subsequent Events.
Number of shares issued		19,863,548
Total net proceeds		$ 2.2