Core Viewpoint - Jaguar Health is implementing a one-for-60 reverse stock split to increase its share price and comply with Nasdaq's minimum bid price rule, aiming to attract institutional investors [3]. Group 1: Reverse Stock Split Details - The reverse stock split will consolidate 60 shares of JAGX into one share, with trading on a split-adjusted basis starting Thursday [1]. - Post-split, shares will continue to trade under the JAGX ticker on the Nasdaq Capital Market, with a new CUSIP number of 47010C805 [2]. Group 2: Market Reaction - As of Monday morning, JAGX stock has decreased by 40.3% [4].

[PART I — FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20%E2%80%94%20FINANCIAL%20INFORMATION) This section provides the company's unaudited interim financial information, including consolidated statements, management's discussion, market risk disclosures, and internal controls [Item 1. Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents Jaguar Health, Inc.'s unaudited interim financial statements, including balance sheets, income statements, and cash flows, with notes detailing accounting policies and a going concern warning [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of March 31, 2024, shows increased total assets and stockholders' equity, while total liabilities decreased Condensed Consolidated Balance Sheets (In thousands) | (In thousands) | March 31, 2024 (unaudited) | December 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $33,714 | $27,963 | | **Total Assets** | **$55,389** | **$50,763** | | **Total Current Liabilities** | $17,814 | $13,987 | | **Total Liabilities** | **$41,086** | **$45,866** | | **Total Stockholders' Equity** | **$11,818** | **$4,897** | [Condensed Consolidated Statements Of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20Of%20Operations) Net loss improved to $9.4 million in Q1 2024 due to increased product revenue and reduced operating expenses Condensed Consolidated Statements of Operations (In thousands, except per share data) | (In thousands, except per share data) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | **Product revenue, net** | $2,351 | $1,972 | | **Total operating expenses** | $10,566 | $11,817 | | **Loss from operations** | $(8,215) | $(9,845) | | **Net loss** | **$(9,368)** | **$(12,397)** | | **Net loss per share, basic & diluted** | **$(0.06)** | **$(2.39)** | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations was $7.0 million, offset by $12.3 million from financing activities, resulting in a $5.2 million cash increase Condensed Consolidated Statements of Cash Flows (In thousands) | (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | **Total cash used in operating activities** | $(7,047) | $(9,945) | | **Total cash provided by financing activities** | $12,268 | $18,811 | | **Net increase in cash** | $5,202 | $8,898 | | **Cash at end of the year** | **$11,671** | **$14,367** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, a going concern warning, customer concentration, and specifics on debt, equity, and segment performance - The company has incurred recurring operating losses and has an accumulated deficit of **$317.2 million** as of March 31, 2024, raising substantial doubt about its ability to continue as a going concern[31](index=31&type=chunk) - The company faces significant customer concentration risk, with two specialty pharmacy customers accounting for **54%** and **31%** of total revenue for the three months ended March 31, 2024[49](index=49&type=chunk) - The company manages its operations through two segments: human health, focused on crofelemer (Mytesi), and animal health[29](index=29&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=54&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2024 financial performance, highlighting revenue growth and reduced net loss, while acknowledging insufficient capital for future operations [Results of Operations](index=59&type=section&id=Results%20of%20Operations) Q1 2024 saw a 19.2% increase in net product revenue and a 10.6% decrease in operating expenses, leading to a reduced net loss Results of Operations (In thousands) | (in thousands) | Q1 2024 | Q1 2023 | Variance | Variance % | | :--- | :--- | :--- | :--- | :--- | | **Product revenue, net** | $2,351 | $1,972 | $379 | 19.2% | | **Total operating expenses** | $10,566 | $11,817 | $(1,251) | (10.6)% | | **Loss from operations** | $(8,215) | $(9,845) | $1,630 | (16.6)% | | **Net loss** | $(9,368) | $(12,397) | $3,029 | (24.4)% | - Research and Development (R&D) expenses decreased by **9.7%** to **$4.3 million**, mainly due to lower clinical trial activities for CTD and other indications[362](index=362&type=chunk) - Sales and Marketing (S&M) expenses decreased by **23.4%** to **$1.4 million**, driven by savings from a more cost-effective patient support service and lower sales commissions[365](index=365&type=chunk) [Liquidity and Capital Resources](index=63&type=section&id=Liquidity%20and%20Capital%20Resources) The company has an accumulated deficit of $317.2 million and insufficient cash for future operations, relying on debt and equity financing - The company had cash of **$11.7 million** as of March 31, 2024, and management does not believe this is sufficient to fund the operating plan for the next twelve months[373](index=373&type=chunk) - In Q1 2024, the company generated **$12.3 million** in cash from financing activities, primarily through the issuance of **130.9 million shares** under its ATM Agreement for net proceeds of **$11.3 million**[374](index=374&type=chunk)[382](index=382&type=chunk) - Net cash used in operating activities decreased to **$7.9 million** in Q1 2024 from **$9.9 million** in Q1 2023[378](index=378&type=chunk)[379](index=379&type=chunk)[380](index=380&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that quantitative and qualitative disclosures about market risk are not applicable - The company states that quantitative and qualitative disclosures about market risk are not applicable[385](index=385&type=chunk) [Item 4. Controls and Procedures](index=65&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of March 31, 2024 - Based on an evaluation as of March 31, 2024, the Chief Executive Officer and Principal Financial and Accounting Officer concluded that the company's disclosure controls and procedures were effective[387](index=387&type=chunk) - Management concluded that as of March 31, 2024, the company's internal control over financial reporting was effective. There were no material changes during the quarter[388](index=388&type=chunk)[389](index=389&type=chunk) [PART II — OTHER INFORMATION](index=66&type=section&id=PART%20II.%20%E2%80%94%20OTHER%20INFORMATION) This section covers other information including legal proceedings, risk factors related to royalty agreements, and details on unregistered equity sales [Item 1. Legal Proceedings](index=66&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any material legal proceedings - As of the filing date, the company is not subject to any material legal proceedings[391](index=391&type=chunk) [Item 1A. Risk Factors](index=66&type=section&id=Item%201A.%20Risk%20Factors) Key financial risks include minimum royalty payment obligations that could strain cash resources, reaching $27.0 million by 2026 - The company's royalty interest agreements require minimum royalty payments even if product sales are insufficient to cover them. The total minimum royalty payments are expected to be **$27.0 million** in 2026, which may strain cash resources[394](index=394&type=chunk)[395](index=395&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=66&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company engaged in unregistered equity sales in Q1 2024, primarily debt-for-equity exchanges and share issuances for licensing agreements - In Q1 2024, the company issued shares of common stock and Series J Preferred Stock in multiple private transactions to extinguish debt and royalty obligations with Streeterville and Iliad[396](index=396&type=chunk)[397](index=397&type=chunk)[400](index=400&type=chunk) - On February 27, 2024, the company exchanged PIPE Warrants to purchase **7.5 million shares** for **18.8 million shares** of common stock[399](index=399&type=chunk) - On March 18, 2024, the company issued **16.7 million shares** of common stock for gross proceeds of approximately **$2.0 million** in connection with a licensing agreement[403](index=403&type=chunk)

Jaguar Health (NASDAQ:JAGX) stock is rocketing higher on Tuesday after the pharmaceutical company announced a new license for a chemo mouth treatment.Jaguar Health is looking to treat chemo mouth, a side effect of chemotherapy, with Gelclair. This treatment already has approval from the Food and Drug Administration (FDA).Jaguar Health is licensing Gelclair from U.K.-based Venture Life Group. The product is a gel that makes it easier for patients undergoing chemotherapy to eat, drink, swallow, speak and slee ...

Former meme stock Jaguar Health (NASDAQ:JAGX) has won the approval of certain measures meant to help maintain its Nasdaq listing. These include an extension to Aug. 13 to regain compliance by getting its price over $1 as well as JAGX stockholder approval of a potential reverse stock split.Jaguar Health is delaying the reverse split as it seeks approval on a preventative treatment of cancer therapy-related diarrhea. The study is called OnTarget.This news is sending JAGX stock up 20% as of this writing. The s ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to COMMISSION FILE NO. 001-36714 JAGUAR HEALTH, INC. (Exact name of registrant as specified in its charter) Delaware 46-2956775 (State or other jurisd ...

Financial Data and Key Metrics Changes - Net revenue increased by 5% in Q3 2023 compared to Q2 2023, totaling approximately $2.8 million, but decreased by about 11% compared to Q3 2022, which was approximately $3.1 million [3][30] - Loss from operations decreased by $1.1 million from $9.9 million in Q3 2022 to $8.8 million in Q3 2023 [27] - Net loss attributable to common shareholders decreased by approximately $4.7 million from $12.6 million in Q3 2022 to $7.8 million in Q3 2023 [27] Business Line Data and Key Metrics Changes - Prescription volume for Mytesi remained unchanged in Q3 2023 compared to Q2 2023, but decreased approximately 7.5% compared to Q3 2022 [30] Market Data and Key Metrics Changes - The global short bowel syndrome market is projected to reach a value of $4.6 billion by 2027, indicating significant market potential for Crofelemer [22] Company Strategy and Development Direction - The company is focusing on expanding the indication of Crofelemer to include preventative treatment for diarrhea in adult cancer patients undergoing targeted therapy, with topline results from the OnTarget trial expected before Thanksgiving 2023 [3][10] - Plans to file a supplemental NDA for Mytesi to expand its indication to include cancer therapy-related diarrhea, targeting late 2024 for potential approval [10][17] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenging state of the small-cap biotech market but expresses optimism about transformative clinical events on the horizon [13] - The company emphasizes the importance of addressing significant neglected medical needs for patients, which could benefit all stakeholders [13] Other Important Information - Crofelemer has been granted orphan drug designation by both the FDA and EMA for microvillus inclusion disease and short bowel syndrome, with proof of concept data expected from multiple studies [5][6] - The OnTarget trial is designed to evaluate Crofelemer's efficacy in preventing chemotherapy-induced diarrhea, a significant side effect affecting cancer patients [7][20] Summary of Q&A Session - There was no Q&A segment at the end of the webcast due to the anticipation of pivotal data release from the OnTarget trial [23]

Table of Contents 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 September 30, 2023 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) (State or other jurisdict ...

Jaguar Health, Inc. (NASDAQ:JAGX) Q2 2023 Earnings Conference Call August 14, 2023 8:30 AM ET Company Participants Lisa Conte - President and Chief Executive Officer Carol Lizak - Chief Financial Officer Operator Good morning. Before I turn the call over to management, I'd like to remind you that management may make forward-looking statements relating to such matters as continued growth prospects for the company, uncertainties regarding market acceptance of products, the impact of competitive products and p ...

PART I. — FINANCIAL INFORMATION This section covers Jaguar Health, Inc.'s unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents Jaguar Health, Inc.'s unaudited condensed consolidated financial statements and detailed notes for the reporting periods [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets show Jaguar Health, Inc.'s financial position as of June 30, 2023, and December 31, 2022. Total assets increased to $52.17 million from $47.45 million, driven by an increase in current assets, particularly cash and prepaid expenses. Total liabilities decreased slightly, while stockholders' equity shifted from a deficit to a positive balance, primarily due to an increase in additional paid-in capital Summary of Condensed Consolidated Balance Sheets | Metric (in thousands) | June 30, 2023 | December 31, 2022 | Change | | :-------------------- | :------------ | :---------------- | :----- | | **Assets** | | | | | Total current assets | $28,227 | $22,321 | +$5,906 | | Total assets | $52,172 | $47,452 | +$4,720 | | **Liabilities** | | | | | Total current liabilities | $29,003 | $30,339 | -$1,336 | | Total liabilities | $46,344 | $48,808 | -$2,464 | | **Equity (Deficit)** | | | | | Total Stockholders' equity (deficit) | $5,828 | $(1,356) | +$7,184 | - Cash increased from **$5.47 million** at December 31, 2022, to **$8.63 million** at June 30, 2023[7](index=7&type=chunk) - Additional paid-in capital significantly increased from **$266.97 million** to **$297.66 million**[7](index=7&type=chunk) [Condensed Consolidated Statements of Comprehensive Losses](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Losses) The statements of comprehensive losses show a net loss for both the three and six months ended June 30, 2023, and 2022. For the six months ended June 30, 2023, the net loss was $24.69 million, an improvement from $27.55 million in the prior year, primarily due to decreased interest expense and the absence of debt extinguishment loss, despite a decline in product revenue and increased R&D expenses Summary of Condensed Consolidated Statements of Comprehensive Losses | Metric (in thousands) | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Product revenue | $2,676 | $2,921 | $4,648 | $5,546 | | Total operating expenses | $10,778 | $9,400 | $22,595 | $23,779 | | Loss from operations | $(8,102) | $(6,479) | $(17,947) | $(18,233) | | Interest expense | $(3,453) | $(2,536) | $(5,634) | $(7,358) | | Net loss | $(12,291) | $(9,390) | $(24,688) | $(27,554) | | Net loss per share, basic | $(0.69) | $(8.77) | $(2.14) | $(29.51) | - Product revenue decreased by **8.4%** for the three months ended June 30, 2023, and by **16.2%** for the six months ended June 30, 2023, compared to the same periods in 2022[9](index=9&type=chunk)[297](index=297&type=chunk) - Research and development expenses increased significantly by **74.5%** for the three months and **22.4%** for the six months ended June 30, 2023, compared to the prior year[9](index=9&type=chunk)[297](index=297&type=chunk) [Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Convertible%20Preferred%20Stock%20and%20Stockholders'%20Equity) This section details changes in convertible preferred stock and stockholders' equity, showing a shift to positive equity Summary of Changes in Stockholders' Equity | Metric (in thousands) | Balances as of Jan 1, 2023 | Balances as of June 30, 2023 | | :-------------------- | :------------------------- | :--------------------------- | | Total Stockholders' Equity (deficit) | $(1,356) | $5,828 | | Additional paid-in capital | $266,971 | $297,659 | | Accumulated deficit | $(266,948) | $(291,300) | - Issuance of **137 shares** of Series G convertible preferred stock and **105 shares** of Series H convertible preferred stock in exchange for notes payable and accrued interest[15](index=15&type=chunk)[20](index=20&type=chunk) - Issued **13,483,460 shares** of common stock in an At-the-Market offering, generating **$19.42 million** in additional paid-in capital[20](index=20&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The statements of cash flows show a net increase in cash driven by financing activities offsetting operating cash usage Summary of Condensed Consolidated Statements of Cash Flows | Metric (in thousands) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(19,001) | $(18,152) |\n| Net cash used in investing activities | $0 | $(1,258) | | Net cash provided by financing activities | $22,168 | $11,396 | | Net increase (decrease) in cash | $3,158 | $(8,037) | | Cash at end of the year | $8,627 | $9,014 | - Cash provided by financing activities increased by **94.5%** to **$22.17 million** in 2023, largely from ATM offerings and PIPE financing[26](index=26&type=chunk)[331](index=331&type=chunk)[337](index=337&type=chunk) - Non-cash financing activities included **$2.02 million** in common stock issued to Irving and **$1.93 million** in warrants issued to Irving in exchange for notes payable and Standstill agreements[29](index=29&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures supporting financial statements, highlighting operational losses, liquidity, and segment performance [1. Organization and Business](index=14&type=section&id=1.%20Organization%20and%20Business) Jaguar Health, Inc. operates in human and animal health, facing significant liquidity challenges and recurring operating losses - Jaguar Health, Inc. manages operations through two segments: human health (Napo Pharmaceuticals, Inc.) and animal health (Jaguar Animal Health)[34](index=34&type=chunk) - The company has incurred recurring operating losses and negative cash flows, with an accumulated deficit of **$291.3 million** as of June 30, 2023[37](index=37&type=chunk) - Received a Nasdaq notice on May 10, 2023, for failing to meet the minimum **$1.00** bid price requirement, with a grace period until November 6, 2023[35](index=35&type=chunk)[36](index=36&type=chunk) [2. Summary of Significant Accounting Policies](index=15&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines Jaguar Health, Inc.'s significant accounting policies, including consolidation, estimates, and revenue recognition - The financial statements are prepared in accordance with U.S. GAAP for interim financial information and consolidate the accounts of the Company and its subsidiaries with controlling interest[40](index=40&type=chunk)[43](index=43&type=chunk) - The Company consolidates Napo Therapeutics, where it owns **88%** as of June 30, 2023, and **90%** as of December 31, 2022. An additional investment from a private entity increased non-controlling interest percentage in 2023[44](index=44&type=chunk) Customer Revenue Concentration | Customer | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | | :------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Customer 1 | 29% | 34% | 27% | 34% | | Customer 2 | 54% | 53% | 52% | 53% | | Customer 3 | — | 10% | — | 5% | - Substantially all revenue is derived from Mytesi sales, with significant concentration among three specialty pharmacies. The company also faces concentration risk from two raw material suppliers and a single third-party contract manufacturer for Mytesi[54](index=54&type=chunk) [3. Fair Value Measurements](index=25&type=section&id=3.%20Fair%20Value%20Measurements) This section details fair value measurements of financial instruments, primarily the Level 3 Streeterville Note, using unobservable inputs Fair Value Measurement of Streeterville Note | Metric (in thousands) | June 30, 2023 | December 31, 2022 | | :-------------------- | :------------ | :---------------- | | Streeterville note (Level 3) | $8,960 | $7,839 | | Total fair value | $8,960 | $7,839 | - The fair value of the Streeterville Note increased by **$1.12 million** for the six months ended June 30, 2023, compared to a decrease of **$477,000** in the same period of 2022[118](index=118&type=chunk)[207](index=207&type=chunk) - Key unobservable inputs for Level 3 fair value measurement include risk-adjusted discount rates (**9.64%-24.00%** in 2023) and estimated sales proceeds from Tropical Disease Priority Review Vouchers (TDPRV)[121](index=121&type=chunk) [4. Balance Sheet Components](index=28&type=section&id=4.%20Balance%20Sheet%20Components) This section provides a breakdown of key balance sheet components, including inventory, property, and intangible assets Inventory Breakdown | Metric (in thousands) | June 30, 2023 | December 31, 2022 | | :-------------------- | :------------ | :---------------- | | Inventory | $8,264 | $7,024 | | Raw Material | $2,000 | $2,101 | | Work in Process | $5,396 | $3,599 | | Finished Goods | $868 | $1,324 | Property and Intangible Assets | Metric (in thousands) | June 30, 2023 | December 31, 2022 | | :-------------------- | :------------ | :---------------- | | Property and equipment, net | $526 | $557 | | Intangible assets, net | $21,463 | $22,439 | - Prelaunch inventory for the Company's lyophilized drug, amounting to **$2.5 million**, is included in prepaid expenses and other assets, with POC data expected by end of 2023[129](index=129&type=chunk) [5. Related Party Transactions](index=29&type=section&id=5.%20Related%20Party%20Transactions) This section details related party transactions, specifically Board of Directors cash compensation, which increased in 2023 Board of Directors Cash Compensation | Metric (in thousands) | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | BOD Cash Compensation | $68 | $69 | $136 | $104 | [6. Commitments and Contingencies](index=30&type=section&id=6.%20Commitments%20and%20Contingencies) Jaguar Health, Inc. has various commitments, including leases, supply agreements, and a joint venture - The Company has office and vehicle lease agreements, with total operating lease liability of **$1.01 million** as of June 30, 2023[144](index=144&type=chunk) - A manufacturing and supply agreement with Glenmark Life Sciences Limited commits the Company to purchase a minimum of **300 kilograms** of crofelemer per year, with a remaining commitment of **375 kilograms** as of June 30, 2023[149](index=149&type=chunk) - Formed a joint venture, Magdalena Biosciences, Inc., in January 2023, a joint venture with Filament Health, to develop novel, natural prescription medicines from plants for mental health indications like ADHD. The Company accounts for its **40%** investment under the equity method[154](index=154&type=chunk)[155](index=155&type=chunk) - No material accruals for legal actions were made as of June 30, 2023, as the ultimate outcome or potential exposure could not be reasonably estimated[157](index=157&type=chunk) [7. Debt](index=34&type=section&id=7.%20Debt) Jaguar Health, Inc.'s debt primarily consists of royalty interests and a secured promissory note, totaling $30.65 million Summary of Debt Components | Metric (in thousands) | June 30, 2023 | December 31, 2022 | | :-------------------- | :------------ | :---------------- | | Royalty Interest | $33,480 | $38,931 | | Streeterville Note | $8,960 | $7,840 | | Insurance Financing | $579 | $234 | | Tempesta Note | $200 | $250 | | Notes payable, net of discount | $30,653 | $33,627 | - The Company entered into a Standstill Agreement on May 8, 2023, to refrain from making royalty payments on four outstanding royalty interests during a specified period[177](index=177&type=chunk) - The fair value of the Streeterville Note, accounted for under the Fair Value Option, increased by **$1.1 million** for the six months ended June 30, 2023, to **$9.0 million**[207](index=207&type=chunk) [8. Warrants](index=43&type=section&id=8.%20Warrants) Jaguar Health, Inc. had 10.67 million warrants outstanding, a significant increase due to PIPE and Standstill Warrants Warrants Outstanding | Metric | June 30, 2023 | December 31, 2022 | | :----- | :------------ | :---------------- | | Warrants outstanding, ending balance | 10,674,807 | 7,505 | - Issued **6,850,000 PIPE Warrants** with an exercise price of **$0.48** per share, valued at **$4.6 million** using the Black-Scholes model[213](index=213&type=chunk)[215](index=215&type=chunk)[217](index=217&type=chunk) - Issued **3,817,302 Standstill Warrants** with an exercise price of **$0.48** per share, valued at **$2.5 million** using the Black-Scholes model, as part of the Standstill Agreement[218](index=218&type=chunk)[220](index=220&type=chunk) [9. Preferred Stock](index=44&type=section&id=9.%20Preferred%20Stock) This section outlines preferred stock structure, with 242 shares of Series G and H convertible preferred stock outstanding Preferred Stock Summary | Series | Shares Authorized (June 30, 2023) | Issued and Outstanding (June 30, 2023) | | :----- | :-------------------------------- | :------------------------------------- | | B-2 | 10,165 | — | | C | 1,011,000 | — | | E | 10 | — | | G and H | 242 | 242 | - **137 shares** of Series G Convertible Preferred Stock were issued in a private placement for an aggregate purchase price of approximately **$1.86 million**[231](index=231&type=chunk) - **105 shares** of Series H Convertible Preferred Stock were issued in exchange for a reduction in outstanding royalty interest balances[232](index=232&type=chunk) [10. Stockholders' Equity](index=46&type=section&id=10.%20Stockholders'%20Equity) This section details stockholders' equity, including authorized and outstanding common and preferred stock and reserved shares Stockholders' Equity and Reserved Shares | Metric | June 30, 2023 | December 31, 2022 | | :----- | :------------ | :---------------- | | Options issued and outstanding | 26,264 | 26,533 | | Restricted stock unit awards issued and outstanding | 35,278 | 44,865 | | Warrants issued and outstanding | 10,674,807 | 7,505 | | Total shares reserved for issuance | 11,340,253 | 203,427 | - The number of authorized voting common stock increased from **150,000,000** to **298,000,000 shares** on September 30, 2022[236](index=236&type=chunk)[237](index=237&type=chunk) - A **1-for-75** reverse stock split of voting common shares became effective on January 23, 2023[241](index=241&type=chunk) - During the six months ended June 30, 2023, the Company issued **13,483,460 shares** under the At the Market (ATM) Agreement for net proceeds of **$19.4 million**[244](index=244&type=chunk) [11. Stock-based Compensation](index=48&type=section&id=11.%20Stock-based%20Compensation) This section details stock-based compensation plans, with total expense decreasing to $998,000 for the six months ended June 30, 2023 Stock-based Compensation Expense | Metric (in thousands) | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Research and development expense | $257 | $365 | $484 | $713 | | Sales and marketing expense | $86 | $120 | $115 | $202 | | General and administrative expense | $175 | $532 | $399 | $1,165 | | Total | $518 | $1,017 | $998 | $2,080 | - As of June 30, 2023, there was **$294,000** of unrecognized stock-based compensation expense, expected to be recognized over a weighted-average period of **0.83 years**[257](index=257&type=chunk) - The decrease in stock-based compensation expense is primarily due to fewer options and RSUs granted during the period compared to 2022[303](index=303&type=chunk)[307](index=307&type=chunk)[311](index=311&type=chunk) [12. Net Loss Per Share](index=51&type=section&id=12.%20Net%20Loss%20Per%20Share) This section presents basic and diluted net loss per share, showing significant improvement for the six months ended June 30, 2023 Net Loss Per Share Calculation | Metric (in thousands, except per share data) | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | | :----------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net loss attributable to common stockholders (basic) | $(12,150) | $(9,367) | $(24,352) | $(27,353) | | Shares used to compute net loss per common stock, basic | 17,631,514 | 1,068,267 | 11,405,153 | 927,040 | | Net loss per share attributable to common stockholders, basic | $(0.69) | $(8.77) | $(2.14) | $(29.51) | | Net loss per share attributable to common stockholders, diluted | $(0.42) | $(8.77) | $(1.42) | $(29.51) | - Diluted net loss per share for the six months ended June 30, 2023, was **$(1.42)**, a substantial improvement from **$(29.51)** in the prior year, reflecting a lower net loss and a higher weighted-average number of diluted common stock outstanding (**17,175,861** vs. **927,040**)[261](index=261&type=chunk) - Potentially dilutive securities, including Standstill warrants, PIPE warrants, and convertible preferred stock, were included in the diluted EPS computation for the six months ended June 30, 2023[261](index=261&type=chunk)[262](index=262&type=chunk) [13. Segment Data](index=51&type=section&id=13.%20Segment%20Data) Jaguar Health, Inc. operates in human and animal health segments, both reporting net losses for the six months ended June 30, 2023 Segment Revenue and Net Loss | Metric (in thousands) | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | **Revenue from external customers** | | | | | | Human Health | $2,627 | $2,819 | $4,553 | $5,380 | | Animal Health | $49 | $102 | $95 | $166 | | **Segment net loss** | | | | | | Human Health | $(4,576) | $372 | $(11,115) | $(9,596) | | Animal Health | $(7,715) | $(9,762) | $(13,573) | $(17,958) | - Human Health segment assets were **$40.82 million** and Animal Health segment assets were **$145.15 million** as of June 30, 2023[265](index=265&type=chunk) [14. Subsequent Events](index=52&type=section&id=14.%20Subsequent%20Events) As of June 30, 2023, there were no subsequent events to report - No subsequent events were reported as of June 30, 2023[266](index=266&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=53&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition and operational results, highlighting clinical trials and financing [Overview](index=53&type=section&id=Overview) Jaguar Health, Inc. is a commercial-stage pharmaceutical company focused on plant-based GI medicines, facing net losses and relying on financing - Jaguar is a commercial-stage pharmaceutical company developing plant-based prescription medicines for GI distress in humans and animals[268](index=268&type=chunk) - Crofelemer is in a pivotal Phase 3 clinical trial (OnTarget study) for prophylaxis of diarrhea in adult cancer patients receiving targeted therapy[268](index=268&type=chunk) - Napo Therapeutics, a majority-owned subsidiary, focuses on expanding crofelemer access in Europe for rare diseases like Short bowel syndrome (SBS) and microvillus inclusion disease (MVID)[268](index=268&type=chunk)[272](index=272&type=chunk) - Formed Magdalena Biosciences, Inc. in January 2023, a joint venture with Filament Health, to develop novel, natural prescription medicines from plants for mental health indications, initially ADHD[279](index=279&type=chunk) - Net loss was **$24.7 million** for the six months ended June 30, 2023, with an accumulated deficit of **$291.3 million**, indicating continued reliance on external financing[283](index=283&type=chunk) [Financial Operations Overview](index=55&type=section&id=Financial%20Operations%20Overview) Jaguar Health, Inc. continues to experience net losses and negative cash flows, with an accumulated deficit of $291.3 million - The Company has not yet generated enough revenue to achieve break-even or positive cash flows, with a net loss of **$24.7 million** for the six months ended June 30, 2023, and an accumulated deficit of **$291.3 million**[283](index=283&type=chunk) - Revenues are primarily from Mytesi sales (human drug) and animal products (Canalevia-CA1, Neonorm Calf, Neonorm Foal), sold through distributors and specialty pharmacies[286](index=286&type=chunk) - Research and development expenses are expected to increase due to new clinical trials and manufacturing activities[290](index=290&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=57&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) This section emphasizes that financial statement preparation requires significant estimates and judgments for complex areas like valuation - Critical accounting policies involve significant estimates and judgments, including valuation of stock options, restricted stock units, hybrid instruments, warrant liabilities, acquired in-process R&D, and useful lives of long-lived assets[45](index=45&type=chunk)[295](index=295&type=chunk) - Estimates also cover impairment assessment of non-financial assets, inventory valuation adjustments, allowance for doubtful accounts, deferred taxes, and revenue recognition[45](index=45&type=chunk) [Results of Operations](index=57&type=section&id=Results%20of%20Operations) This section analyzes financial performance, showing an improved net loss for the six-month period despite decreased product revenue [Comparison for the six months ended June 30, 2023 and 2022](index=57&type=section&id=Comparison%20for%20the%20six%20months%20ended%20June%2030,%202023%20and%202022) For the six months ended June 30, 2023, Jaguar Health, Inc. reported an improved net loss despite decreased product revenue and increased R&D Six-Month Operating Results Comparison | Metric (in thousands) | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | Variance | Variance % | | :-------------------- | :--------------------------- | :--------------------------- | :------- | :--------- | | Product revenue | $4,648 | $5,546 | $(898) | (16.2)% | | Research and development | $9,052 | $7,396 | $1,656 | 22.4% | | Sales and marketing | $3,457 | $4,979 | $(1,522) | (30.6)% | | General and administrative | $9,250 | $10,493 | $(1,243) | (11.8)% | | Interest expense | $(5,634) | $(7,358) | $1,724 | (23.4)% | | Net loss | $(24,688) | $(27,554) | $2,866 | (10.4)% | - The decrease in product revenue was primarily due to a **12.1%** decline in Mytesi gross sales and a **48.9%** decrease in Canalevia sales[299](index=299&type=chunk) - R&D expense increase was driven by higher clinical and contract manufacturing expenses (**$708,000** increase) and other expenses (**$955,000** increase) related to CTD activities[303](index=303&type=chunk) - S&M expense decrease was mainly due to a **$1.1 million** reduction in direct marketing fees and patient access programs for Mytesi[307](index=307&type=chunk) [Comparison of the three months ended June 30, 2023 and 2022](index=62&type=section&id=Comparison%20of%20the%20three%20months%20ended%20June%2030,%202023%20and%202022) For the three months ended June 30, 2023, Jaguar Health, Inc. reported an increased net loss with decreased product revenue and surging R&D Three-Month Operating Results Comparison | Metric (in thousands) | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | Variance | Variance % | | :-------------------- | :--------------------------- | :--------------------------- | :------- | :--------- | | Product revenue | $2,676 | $2,921 | $(245) | (8.4)% | | Research and development | $4,277 | $2,451 | $1,826 | 74.5% | | Sales and marketing | $1,573 | $2,144 | $(571) | (26.6)% | | General and administrative | $4,437 | $4,349 | $88 | 2.0% | | Interest expense | $(3,453) | $(2,536) | $(917) | 36.2% | | Net loss | $(12,291) | $(9,390) | $(2,901) | 30.9% | - The increase in R&D expense was primarily due to higher personnel and related benefits (**$592,000** increase) and other expenses (**$1.1 million** increase) related to clinical trial activities[321](index=321&type=chunk) - The decrease in S&M expense was mainly due to a **$514,000** reduction in direct marketing fees and patient access programs for Mytesi[325](index=325&type=chunk) - The increase in G&A expenses was driven by higher personnel and related benefits (**$251,000** increase) and third-party consulting services (**$239,000** increase), partially offset by lower public company expenses[326](index=326&type=chunk) [Liquidity and Capital Resources](index=67&type=section&id=Liquidity%20and%20Capital%20Resources) Jaguar Health, Inc. faces liquidity challenges with recurring net losses and insufficient cash, relying on debt and equity [Sources of Liquidity](index=67&type=section&id=Sources%20of%20Liquidity) Jaguar Health, Inc. has incurred net losses since inception, with current cash insufficient to fund operations, requiring additional financing - The Company has incurred net losses since inception, with an accumulated deficit of **$291.3 million** as of June 30, 2023[329](index=329&type=chunk) - Current cash balances of **$8.6 million** as of June 30, 2023, are not sufficient to fund operating plans through one year from the issuance of these financial statements[330](index=330&type=chunk) - Operations are primarily funded through debt and equity securities, collaboration arrangements, license royalty agreements, and future product sales[332](index=332&type=chunk) [Cash Flows for the Six months ended June 30, 2023 Compared to Six Months Ended June 30, 2022](index=67&type=section&id=Cash%20Flows%20for%20the%20Six%20months%20ended%20June%2030,%202023%20Compared%20to%20Six%20Months%20Ended%20June%2030,%202022) For the six months ended June 30, 2023, Jaguar Health, Inc. saw a net increase in cash, driven by financing activities Six-Month Cash Flow Comparison | Metric (in thousands) | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | | :-------------------- | :--------------------------- | :--------------------------- | | Total cash used in operating activities | $(19,001) | $(18,152) | | Total cash used in investing activities | $0 | $(1,258) | | Total cash provided by financing activities | $22,168 | $11,396 | | Net increase (decrease) in cash | $3,158 | $(8,037) | - Cash provided by financing activities increased by **94.5%** to **$22.17 million** in 2023, primarily from **$19.4 million** in ATM offerings and **$1.2 million** from PIPE financing warrants[337](index=337&type=chunk) - Net cash used in operating activities increased slightly to **$19.0 million** in 2023 from **$18.2 million** in 2022, mainly due to the net comprehensive loss[334](index=334&type=chunk)[335](index=335&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=63&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there are no quantitative and qualitative disclosures about market risk applicable for the reporting period - Not applicable for this reporting period[339](index=339&type=chunk) [Item 4. Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of June 30, 2023 - Disclosure controls and procedures were evaluated and deemed effective at the reasonable assurance level as of June 30, 2023[340](index=340&type=chunk)[342](index=342&type=chunk) - Internal control over financial reporting was concluded to be effective as of June 30, 2023, based on the COSO 2013 Framework[343](index=343&type=chunk) - No material changes in internal control over financial reporting were reported during the period[344](index=344&type=chunk) PART II. — OTHER INFORMATION This section provides other information, including legal proceedings, risk factors, equity sales, and subsequent events [Item 1. Legal Proceedings](index=65&type=section&id=Item%201.%20Legal%20Proceedings) Jaguar Health, Inc. is not currently subject to any material legal proceedings or claims - The Company is not currently subject to any material legal proceedings[346](index=346&type=chunk) [Item 1A. Risk Factors](index=70&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the Risk Factors previously disclosed in the Company's Annual Report on Form 10-K - No material changes to the Risk Factors previously disclosed in the Annual Report on Form 10-K[347](index=347&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=70&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for this period - None[348](index=348&type=chunk) [Item 3. Defaults Upon Senior Securities](index=70&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report for this period - None[349](index=349&type=chunk) [Item 4. Mine Safety Disclosures](index=70&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to Jaguar Health, Inc - Not applicable[350](index=350&type=chunk) [Item 5. Other Information](index=70&type=section&id=Item%205.%20Other%20Information) On August 14, 2023, Jaguar Health, Inc. amended agreements to terminate restrictions on subsequent equity sales - On August 14, 2023, the PIPE Purchase Agreement was amended to terminate restrictions on subsequent equity sales by the Company[351](index=351&type=chunk) - In exchange for the PIPE Purchase Agreement amendment, the Company issued **685,000 PIPE Amendment Warrants** with an exercise price of **$0.48** per share[351](index=351&type=chunk) - The Standstill Agreement was also amended on August 14, 2023, to allow the Company to offer and sell securities and remove trading restrictions on Standstill Investors[352](index=352&type=chunk) [Item 6. Exhibits](index=71&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certificates, warrants, agreements, and certifications - Includes Certificates of Designation for Series G and H Convertible Preferred Stock[355](index=355&type=chunk) - Lists the Form of Warrant, Securities Purchase Agreement, and Standstill Agreement, along with amendments[355](index=355&type=chunk) - Contains certifications from the Principal Executive Officer and Principal Financial Officer pursuant to the Sarbanes-Oxley Act[355](index=355&type=chunk) [SIGNATURE](index=72&type=section&id=SIGNATURE) The report is duly signed by Carol R. Lizak, Principal Financial and Accounting Officer, on August 14, 2023 - Report signed by Carol R. Lizak, Principal Financial and Accounting Officer, on August 14, 2023[358](index=358&type=chunk)

Financial Data and Key Metrics Changes - Prescription product net revenue for Q1 2023 was approximately $2 million, a decrease of 40% compared to Q4 2022's $3.3 million and a decrease of approximately 25% compared to Q1 2022's $2.6 million [72] - Net loss attributable to common shareholders decreased from $18 million in Q1 2022 to $12 million in Q1 2023, a reduction of approximately $6 million [73] - Loss from operations decreased by $2 million from $11.8 million in Q1 2022 to about $9.8 million in Q1 2023 [98] Business Line Data and Key Metrics Changes - Mytesi prescription volume decreased approximately 9% in Q1 2023 compared to Q4 2022 and decreased 1% compared to Q1 2022 [98] - The company has shifted to a specialty pharmacy distribution model, improving gross-to-net revenues by decreasing distribution costs and enhancing payer mix [10] Market Data and Key Metrics Changes - The aging population of adults living with HIV-AIDS is impacting sales, with nearly 50% of those living with HIV in the U.S. being age 50 and older [11] - The Inflation Reduction Act is expected to reduce prescription abandonment due to lower out-of-pocket expenses for patients starting in 2024, which should benefit the Mytesi brand [12] Company Strategy and Development Direction - The company is focusing on the potential introduction of crofelemer for cancer therapy-related diarrhea, targeting a much larger oncology market with an estimated 1.8 million new cancer diagnoses annually in the U.S. [13] - The OnTarget trial for crofelemer has been fully enrolled, aiming to address the prophylactic treatment of cancer therapy-related diarrhea [15] - The company is prioritizing late-stage clinical development programs and learning from patient voices to enhance its market strategies [70] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a decrease in prescription product sales as a learning moment, emphasizing the need to better incorporate patient voices into their strategies [9] - The company is optimistic about the provisions in the Inflation Reduction Act and their potential positive impact on sales in the future [12] - Management expressed confidence in their ability to reach key clinical milestones in 2023, which they believe will be transformative for the company's value [75] Other Important Information - The company has approximately $14.3 million in cash at the end of Q1 2023, with an average monthly burn rate of about $3 million [76] - The company is planning to submit an investigational new drug application for microvillus inclusion disease (MVID) in Q2 2023 [94] Q&A Session Summary Question: How many shares are currently outstanding and what is the cash position? - The last reported cash at the end of Q1 is approximately $14.3 million, with about 19 million shares outstanding [76] Question: What is the expected date of readout from the OnTarget trial? - The expected date for top-line results from the OnTarget trial is in October of this year [76] Question: How does the company plan to address the challenges faced in Q1? - The company noted that Q1 challenges are common due to deductible resets and emphasized their co-pay program to assist commercially insured patients [80][81] Question: What is the company's strategy regarding the Chewy partnership? - The partnership with Chewy aims to enhance access to Canalevia for pet owners, making it more convenient for veterinarians to prescribe the product [102][103]