Jaguar Health(JAGX) - 2025 Q2 - Quarterly Report

PART I — FINANCIAL INFORMATION This section presents the company's condensed consolidated financial statements and related disclosures Item 1. Condensed Consolidated Financial Statements The financial statements show decreased assets, increased net loss, and significant cash reduction, raising going concern doubts Condensed Consolidated Balance Sheets Total assets decreased to $48.3 million, driven by a significant cash drop, while liabilities and equity remained stable Condensed Consolidated Balance Sheet Highlights (in thousands of USD) | Balance Sheet Item | June 30, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash | $2,207 | $8,002 | | Total current assets | $27,903 | $32,198 | | Total assets | $48,268 | $53,425 | | Liabilities & Equity | | | | Total current liabilities | $29,218 | $19,704 | | Total liabilities | $41,388 | $44,446 | | Total stockholders' equity | $6,880 | $6,494 | | Total liabilities and stockholders' equity | $48,268 | $53,425 | Condensed Consolidated Statements of Operations Net losses increased to $21.2 million for the six months, driven by higher operating expenses despite a slight revenue increase Statements of Operations Summary (in thousands of USD, except per share data) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenue, net | $2,979 | $2,721 | $5,193 | $5,072 | | Total operating expenses | $10,986 | $9,918 | $22,621 | $20,484 | | Loss from operations | $(8,007) | $(7,197) | $(17,428) | $(15,412) | | Net loss | $(10,560) | $(9,628) | $(21,156) | $(18,996) | | Net loss per share | $(10.26) | $(2.66) | $(26.78) | $(7.80) | Condensed Consolidated Statements of Cash Flows Cash decreased by $5.8 million, with $13.5 million used in operations and reduced financing activities Cash Flow Summary for Six Months Ended June 30 (in thousands of USD) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(13,509) | $(15,217) | | Net cash used in investing activities | $0 | $(16) | | Net cash provided by financing activities | $7,621 | $24,842 | | Net increase (decrease) in cash | $(5,795) | $9,580 | | Cash at beginning of period | $8,002 | $6,469 | | Cash at end of period | $2,207 | $16,049 | Notes to Condensed Consolidated Financial Statements Notes detail a going concern warning, revenue concentration, debt instruments, and equity transactions - The company has incurred recurring operating losses and has an accumulated deficit of $367.4 million as of June 30, 2025. Management has substantial doubt about the company's ability to continue as a going concern as current cash balances are not sufficient to fund operations for the next year[37][38] - The company is highly dependent on two major customers, which accounted for 58% and 30% of total revenue for the three months ended June 30, 2025[53] - The company manages its operations through two segments: human health and animal health, with the human health segment focused on developing and commercializing products like Mytesi[36] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses plant-based medicines, OnTarget trial results, Gelclair launch, and critical liquidity concerns Overview Jaguar Health focuses on plant-based GI medicines, with mixed OnTarget trial results, a new Gelclair launch, and orphan disease development - The OnTarget Phase 3 clinical trial for prophylaxis of diarrhea in adult cancer patients did not meet its primary endpoint for all tumor types, but a prespecified subgroup analysis of breast cancer patients showed statistical significance[341] - The company entered into an exclusive 5-year in-license agreement for Gelclair, a prescription product for oral mucositis, and initiated its commercial launch in October 2024 to expand its cancer-related supportive care offerings[345] - Napo Therapeutics, a subsidiary, is focused on expanding crofelemer access in Europe for orphan diseases, initially targeting Short Bowel Syndrome (SBS-IF) and Microvillus Inclusion Disease (MVID)[346] Results of Operations Revenue slightly increased, but operating expenses rose significantly due to sales and marketing for Gelclair, widening the operating loss Comparison of Results for Six Months Ended June 30 (in thousands of USD) | Item | 2025 | 2024 | Variance | Variance % | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $5,193 | $5,072 | $121 | 2.4% | | Cost of product revenue | $1,042 | $857 | $185 | 21.6% | | Research and development | $6,995 | $7,965 | $(970) | (12.2)% | | Sales and marketing | $4,960 | $2,967 | $1,993 | 67.2% | | General and administrative | $9,624 | $8,695 | $929 | 10.7% | | Loss from operations | $(17,428) | $(15,412) | $(2,016) | 13.1% | | Net loss | $(21,156) | $(18,996) | $(2,160) | 11.4% | - The increase in Sales and Marketing expense was primarily due to a $1.1 million increase in personnel costs and a $0.7 million increase in direct marketing fees to support the Gelclair launch[414][418] - The decrease in Research and Development expense was largely due to a $0.9 million reduction in clinical and contract manufacturing costs as the Phase 3 OnTarget Clinical Trial concluded[413][415] Liquidity and Capital Resources Cash reserves are critically low at $2.2 million, insufficient for future operations, necessitating additional funding to avoid curtailing activities - As of June 30, 2025, the company had cash of $2.2 million and an accumulated deficit of $367.4 million[438][439] - Management acknowledges that current capital resources are not sufficient to fund the operating plan for at least one year, and if additional financing is not obtained, the company will need to curtail planned activities and reduce costs[439][441] Cash Flow Summary for Six Months Ended June 30 (in thousands of USD) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(13,509) | $(15,217) | | Net cash provided by financing activities | $7,621 | $24,842 | | Net increase (decrease) in cash | $(5,795) | $9,580 | Item 3. Quantitative and Qualitative Disclosures About Market Risk 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[458] Item 4. Controls and Procedures Management concluded that disclosure controls and internal control over financial reporting were effective as of June 30, 2025 - Based on an evaluation as of June 30, 2025, the CEO and Principal Financial and Accounting Officer concluded that the company's disclosure controls and procedures were effective[460] - Management concluded that as of June 30, 2025, the company's internal control over financial reporting was effective based on the COSO 2013 framework[461] PART II — OTHER INFORMATION This section provides additional information including legal proceedings, risk factors, and equity security sales Item 1. Legal Proceedings The company is not currently subject to any material legal proceedings, though it may encounter routine legal actions - The company is not currently subject to any material legal proceedings[463] Item 1A. Risk Factors Key risks include substantial minimum royalty payments starting in 2026 and potential FDA review delays impacting product approvals - The company's royalty interests require minimum royalty payments, totaling approximately $36.0 million, which will commence in 2026, potentially straining cash resources regardless of product sales levels[467][468] - Disruptions at the FDA, including layoffs and the departure of senior scientists, could lead to slower review cycles and delayed approvals for the company's product candidates, materially harming the business[469][472] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company conducted several unregistered equity sales, including common and preferred stock exchanges for debt, and issued warrants and convertible notes - Issued common stock and Series L and M Preferred Stock in multiple transactions to Iliad and Streeterville in exchange for reductions of outstanding royalty interest debt[473][475][480] - In a private placement on May 20, 2025, issued unregistered warrants to purchase up to 492,612 shares of common stock to institutional investors[476] - On June 24, 2025, completed a private exchange of approximately $2.57 million of new convertible promissory notes and new warrants for existing convertible notes[477][478] Item 6. Exhibits This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including certificates, warrants, agreements, and officer certifications