Jaguar Health, Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Jaguar Health, Inc. Index to Financial Statements ​ ​ Page Financial Statements ​ Reports of Independent Registered Public Accounting Firms 84 Consolidated Balance Sheets as of December 31, 2023 and 2022 86 Consolidated Statements of Operations for the years ended December 31, 2023 and 2022 87 Consolidated Statements of Comprehensive Loss for the years ended December 31, 2023 and 2022 88 Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2023 and 2022 89 Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022 91 Notes to Consolidated Financial Statements 93 ​ ​ ​ 83 Table of Contents ​ ​ 101 Larkspur Landing Circle Suite 321 Larkspur, California 94939 415.448-5061 www.rbsmllp.com ​ ​ ​ Report of Independent Registered Public Accounting Firm ​ ​ ​ To the Board of Directors and Stockholders of Jaguar Health, Inc.: ​ ​ Opinion on the Financial Statements ​ We have audited the accompanying consolidated balance sheets of Jaguar Health, Inc., and subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and 2022 and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. ​ The Company’s Ability to Continue as a Going Concern ​ The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has an accumulated deficit, recurring losses, and expects continuing future losses. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. ​ Basis for Opinion ​ These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. ​ We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. New York, NY Washington DC Las Vegas, NV, San Francisco, CA Athens, GRE Beijing, CHN Mumbai, and Pune IND Member ANTEA INTERNATIONAL with offices worldwide Table of Contents ​ Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. ​ Critical Audit Matters ​ The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. ​ ​ /s/ RBSM, LLP ​ RBSM LLP We have served as the Company's auditor since 2022. Larkspur, California April 1, 2024 ​ PCAOB ID Number 587 ​ ​ ​ New York, NY Washington DC Las Vegas, NV, San Francisco, CA Athens, GRE Beijing, CHN Mumbai, and Pune IND Member ANTEA INTERNATIONAL with offices worldwide Table of Contents JAGUAR HEALTH, INC. CONSOLIDATED BALANCE S HEETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, (In thousands, except share and per share data) 2023 2022 ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ Cash ​ $ 6,469 ​ $ 5,469 Accounts receivable, net ​ ​ 1,967 ​ ​ 1,879 Other receivable ​ ​ 217 ​ ​ 588 Inventory ​ ​ 9,189 ​ ​ 7,024 Prepaid expenses and other current assets ​ ​ 10,121 ​ ​ 7,361 Total current assets ​ 27,963 ​ 22,321 Property and equipment, net ​ ​ 496 ​ ​ 557 Operating lease - right-of-use asset ​ ​ 1,176 ​ ​ 1,140 Intangible assets, net ​ ​ 20,116 ​ ​ 22,439 Other assets ​ 1,012 ​ 995 Total assets ​ $ 50,763 ​ $ 47,452 ​ ​ ​ ​ ​ ​ ​ Liabilities and Stockholders' equity (deficit) ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 4,974 ​ $ 5,808 Accrued liabilities ​ ​ 3,798 ​ ​ 8,165 Operating lease liability, current ​ ​ 348 ​ ​ 483 Notes payable, current ​ 4,867 ​ 15,883 Total current liabilities ​ 13,987 ​ 30,339 Operating lease liability, net of current portion ​ ​ 886 ​ ​ 725 Notes payable, net of discount, net of current portion (includes notes designated at Fair Value Option amounting to $ 31.0 million as of December 31, 2023 and $ 7.8 million December 31, 2022, respectively) ​ ​ 30,993 ​ ​ 17,744 Total liabilities ​ ​ 45,866 ​ ​ 48,808 ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies (See Note 5) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders' equity (deficit) ​ ​ ​ ​ ​ ​ Series G convertible preferred stock: $ 0.0001 par value; 137 and zero shares designated from 10,000,000 preferred stock authorized at December 31, 2023 and December 31, 2022; 122 and zero shares issued and outstanding at December 31, 2023 and December 31, 2022 ​ ​ — ​ ​ — Series H convertible preferred stock: $ 0.0001 par value; 105 and zero shares designated from 10,000,000 preferred stock authorized at December 31, 2023 and December 31, 2022; zero shares issued and outstanding at December 31, 2023 and December 31, 2022 ​ ​ — ​ ​ — Series I convertible preferred stock: $ 0.0001 par value; 118 and zero shares designated from 10,000,000 preferred stock authorized at December 31, 2023 and December 31, 2022; 56 and zero shares issued and outstanding at December 31, 2023 and December 31, 2022 ​ ​ — ​ ​ — Common stock - voting: $ 0.0001 par value, 298,000,000 shares authorized at December 31, 2023 and December 31, 2022; 73,413,248 and 2,182,084 issued and outstanding at December 31, 2023 and December 31, 2022 ​ 7 ​ — Common stock - non-voting: $ 0.0001 par value, 50,000,000 shares authorized at December 31, 2023 and December 31, 2022; 9 shares issued and outstanding at December 31, 2023 and December 31, 2022 ​ ​ — ​ ​ — Additional paid-in capital ​ 313,854 ​ 266,971 Noncontrolling interest ​ ​ ( 64 ) ​ ​ ( 699 ) Accumulated deficit ​ ( 308,248 ) ​ ( 266,948 ) Accumulated other comprehensive loss ​ ​ ( 652 ) ​ ​ ( 680 ) Total stockholders' equity (deficit) ​ ​ 4,897 ​ ​ ( 1,356 ) Total liabilities and stockholders' equity (deficit) ​ $ 50,763 ​ $ 47,452 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 86 Table of Contents JAGUAR HEALTH, INC. CONSOLIDATED STATEMENTS OF OPERATIONS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, (In thousands, except share and per share data) 2023 2022 Product revenue, net ​ $ 9,761 ​ $ 11,956 Operating expenses ​ ​ ​ ​ ​ ​ Cost of product revenue ​ ​ 2,037 ​ ​ 2,019 Research and development ​ 18,596 ​ 17,647 Sales and marketing ​ ​ 6,460 ​ ​ 8,837 General and administrative ​ ​ 16,588 ​ ​ 17,868 Impairment loss on intangible assets ​ ​ 371 ​ ​ — Total operating expenses ​ 44,052 ​ 46,371 Loss from operations ​ ( 34,291 ) ​ ( 34,415 ) Interest expense ​ ( 6,382 ) ​ ( 12,723 ) Change in fair value of freestanding and hybrid financial instruments designated at Fair Value Option ​ ​ ( 5,125 ) ​ ​ ( 20 ) Gain (loss) on extinguishment of debt ​ ​ 3,697 ​ ​ ( 2,187 ) Other income ​ ​ 200 ​ ​ 950 Loss before income tax ​ ​ ( 41,901 ) ​ ​ ( 48,395 ) Income tax expense ​ ​ — ​ ​ — Net loss ​ ​ ( 41,901 ) ​ ​ ( 48,395 ) Net loss attributable to noncontrolling interest ​ $ ( 601 ) ​ $ ( 941 ) Net loss attributable to common stockholders ​ $ ( 41,300 ) ​ $ ( 47,454 ) Net loss per share, basic ​ $ ( 1.79 ) ​ $ ( 36.18 ) Net loss per share, diluted ​ $ ( 1.79 ) ​ $ ( 36.18 ) Weighted-average common stock outstanding, basic ​ 23,068,423 ​ 1,311,519 Weighted-average common stock outstanding, diluted ​ ​ 23,068,423 ​ ​ 1,311,519 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 87 Table of Contents ​ ​ JAGUAR HEALTH, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, (In thousands, except share and per share data) 2023 2022 Net loss ​ $ ( 41,901 ) ​ $ ( 48,395 ) Other comprehensive income (loss) ​ ​ 31 ​ ​ ( 680 ) Net comprehensive loss ​ $ ( 41,870 ) ​ $ ( 49,075 ) Common stockholders: ​ ​ ​ ​ ​ ​ Net loss attributable to common stockholders ​ $ ( 41,300 ) ​ $ ( 47,454 ) Other comprehensive loss attributable to common stockholders ​ ​ ​ ​ ​ ​ Translation adjustments ​ ​ 28 ​ ​ ( 680 ) Net comprehensive loss attributable to common stockholders ​ $ ( 41,272 ) ​ $ ( 48,134 ) Non-controlling interests: ​ ​ ​ ​ ​ ​ Net loss attributable to non-controlling interests ​ $ ( 601 ) ​ $ ( 941 ) Other comprehensive loss attributable to non-controlling interests ​ ​ ​ ​ ​ ​ Translation adjustments ​ ​ 3 ​ ​ — Net comprehensive loss attributable to non-controlling interests ​ $ ( 598 ) ​ $ ( 941 ) ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ ​ 88 Table of Contents JAGUAR HEALTH, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Series G Convertible preferred stock ​ Series H 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 ​ (Deficit) Balances as of January 1, 2022 ​ — ​ $ — ​ — ​ $ — ​ — ​ $ — ​ 644,700 ​ $ — ​ 9 ​ $ — ​ $ 231,105 ​ $ 242 ​ $ ( 219,494 ) ​ $ — ​ $ 11,853 Common stock issued in At the Market offering, net of issuance and offering costs of $ 103 ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ 923,164 ​ ​ — ​ — ​ ​ — ​ ​ 20,462 ​ ​ — ​ ​ — ​ ​ — ​ ​ 20,462 Common stock issued to Iliad in exchange of notes payable and accrued interest ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ 235,461 ​ ​ — ​ — ​ ​ — ​ ​ 6,207 ​ ​ — ​ ​ — ​ ​ — ​ ​ 6,207 Common stock issued to Streeterville in exchange of notes payable and accrued interest ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ 310,196 ​ ​ — ​ — ​ ​ — ​ ​ 5,056 ​ ​ — ​ ​ — ​ ​ — ​ ​ 5,056 Shares issued to Synworld for services ​ — ​ ​ — ​ — — ​ — ​ — ​ ​ — ​ 45,896 ​ ​ — ​ — ​ ​ — ​ ​ 800 ​ ​ — ​ ​ — ​ ​ — ​ ​ 800 Common stock issued upon exercise of restricted stock units ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ 2,516 ​ ​ — ​ — ​ ​ — ​ ​ 100 ​ ​ — ​ ​ — ​ ​ — ​ ​ 100 Common stock issued to other third party for services ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ 20,151 ​ ​ — ​ — ​ ​ — ​ ​ 23 ​ ​ — ​ ​ — ​ ​ — ​ ​ 23 Stock-based compensation ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 3,218 ​ ​ — ​ ​ — ​ ​ — ​ ​ 3,218 Net loss ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 941 ) ​ ​ ( 47,454 ) ​ ​ — ​ ​ ( 48,395 ) Translation loss ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 680 ) ​ ​ ( 680 ) Balances as of December 31, 2022 ​ — ​ $ — ​ — ​ $ — ​ — ​ $ — ​ 2,182,084 ​ $ — ​ 9 ​ $ — ​ $ 266,971 ​ $ ( 699 ) ​ $ ( 266,948 ) ​ $ ( 680 ) ​ $ ( 1,356 ) The accompanying notes are an integral part of these consolidated financial statements. 89 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Series G Convertible preferred stock ​ Series H 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 $ 242 ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ 54,283,779 ​ ​ 6 ​ — ​ ​ — ​ ​ 32,094 ​ ​ — ​ ​ — ​ ​ — ​ ​ 32,100 Preferred stock issued in PIPE financing, net of issuance and offering costs of $ 12 ​ 137 ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 611 ​ ​ — ​ ​ — ​ ​ — ​ ​ 611 Preferred stock issued to Streeterville in exchange of notes payable and accrued interest ​ — ​ ​ — ​ 73 ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 1,730 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,730 Preferred stock issued to Irving in exchange of notes payable and accrued interest ​ — ​ ​ — ​ 32 ​ ​ — ​ 118 ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 2,201 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,201 Common stock issued to Iliad in exchange of notes payable and accrued interest ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ 6,245,005 ​ ​ 1 ​ — ​ ​ — ​ ​ 2,063 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,064 Common shares issued to Streeterville from conversion of Series H Preferred Stock ​ — ​ ​ — ​ ( 73 ) ​ ​ — ​ — ​ ​ — ​ 3,650,000 ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Common shares issued to Irving from conversion of Series I Preferred Stock ​ — ​ ​ — ​ — ​ ​ — ​ ( 62 ) ​ ​ — ​ 2,985,362 ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Common stock issued to Irving in exchange of notes payable and accrued interest ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ 2,058,651 ​ ​ — ​ — ​ ​ — ​ ​ 2,022 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,022 Common shares issued to Irving from conversion of Series H Preferred Stock ​ — ​ ​ — ​ ( 32 ) ​ ​ — ​ — ​ ​ — ​ 1,600,000 ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Common shares issued to from conversion of Series G Preferred Stock ​ ( 15 ) ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ 375,000 ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Common stock issued upon exercise of restricted stock units ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ 13,149 ​ ​ — ​ — ​ ​ — ​ ​ 9 ​ ​ — ​ ​ — ​ ​ — ​ ​ 9 Common stock issued to other third party for services ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ 18,869 ​ ​ — ​ — ​ ​ — ​ ​ 171 ​ ​ — ​ ​ — ​ ​ — ​ ​ 171 RSUs issued ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ 1,349 ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Warrants issued to Irving in exchange of Standstill ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 1,934 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,934 Warrants issued in PIPE financing ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 1,236 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,236 Warrants issued to Iliad in exchange of Standstill ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 535 ​ ​ — ​ ​ — ​ ​ — ​ ​ 535 Warrants issued to Irving through Royal Global Amendment Exchange ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 61 ​ ​ — ​ ​ — ​ ​ — ​ ​ 61 Warrants issued to Streeterville through Royal Global Amendment Exchange ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 59 ​ ​ — ​ ​ — ​ ​ — ​ ​ 59 Warrants issued to Iliad through Royal Global Amendment Exchange ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 54 ​ ​ — ​ ​ — ​ ​ — ​ ​ 54 Stock-based compensation ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 2,103 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,103 Additional investment from non-controlling interests ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ 1,233 ​ ​ — ​ ​ — ​ ​ 1,233 Net loss ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 601 ) ​ ​ ( 41,300 ) ​ ​ — ​ ​ ( 41,901 ) Translation gain ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ 3 ​ ​ — ​ ​ 28 ​ ​ 31 Balances as of December 31, 2023 ​ 122 ​ $ — ​ — ​ $ — ​ 56 ​ $ — ​ 73,413,248 ​ $ 7 ​ 9 ​ $ — ​ $ 313,854 ​ $ ( 64 ) ​ $ ( 308,248 ) ​ $ ( 652 ) ​ $ 4,897 ​ ​ The accompanying notes are an integral part of these consolidated financial statements 90 Table of Contents JAGUAR HEALTH, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, (in thousands) 2023 2022 Cash flows from operating activities ​ ​ ​ ​ Net comprehensive loss ​ $ ( 41,870 ) ​ $ ( 49,075 ) Adjustments to reconcile net loss and comprehensive loss to net cash used in operating activities: ​ ​ ​ ​ ​ ​ Amortization of debt issuance costs, debt discount, and non-cash interest expense ​ ​ 13,206 ​ ​ 11,758 Change in fair value of freestanding and hybrid financial instruments designated at Fair Value Option ​ ​ 5,125 ​ ​ 21 Stock-based compensation, vested and released restricted stock units and exercised stock options ​ 2,112 ​ 3,318 Depreciation and amortization expenses ​ 2,013 ​ 1,981 Amortization of operating lease - right-of-use-asset ​ ​ 375 ​ ​ 311 Impairment loss on intangible assets ​ ​ 371 ​ ​ — Shares issued in exchange for services ​ ​ 171 ​ ​ 823 Share in joint venture's loss ​ ​ 51 ​ ​ — (Gain) Loss on extinguishment of debt ​ ​ ( 3,697 ) ​ ​ 2,187 Changes in assets and liabilities ​ ​ ​ ​ Accounts receivable ​ ​ ( 88 ) ​ ​ ( 170 ) Other receivable ​ ​ 386 ​ ​ ( 251 ) Inventory ​ ( 2,165 ) ​ ( 2,124 ) Prepaid expenses and other current assets ​ ( 5,011 ) ​ ( 1,560 ) Other assets ​ ​ ( 17 ) ​ ​ ( 550 ) Accounts payable ​ ​ ( 855 ) ​ ​ 902 Accrued liabilities ​ ( 2,955 ) ​ ( 360 ) Operating lease liability ​ ​ ( 394 ) ​ ​ ( 315 ) Total cash used in operating activities ​ ( 33,242 ) ​ ( 33,104 ) Cash flows from investing activities ​ ​ ​ ​ ​ ​ Purchase of equipment ​ ​ — ​ ​ ( 77 ) Purchase of intangible assets ​ ​ — ​ ​ ( 1,598 ) Total cash used in investing activities ​ — ​ ( 1,675 ) Cash flows from financing activities ​ ​ ​ ​ Proceeds from issuance of shares in At the Market offering, net of issuance and offering costs of $ 242 and $ 103 in 2023 and 2022, respectively ​ ​ 32,100 ​ ​ 20,462 Proceeds from issuance of warrants in PIPE financing ​ ​ 1,236 ​ ​ — Investment from non-controlling interest ​ ​ 1,233 ​ ​ — Proceeds from issuance of preferred stock in PIPE financing, net of issuance cost of $ 12 ​ ​ 611 ​ ​ — Payment of Tempesta Note ​ ​ ( 100 ) ​ ​ ( 100 ) Repayment of insurance financing ​ ​ ( 853 ) ​ ​ ( 1,156 ) Proceeds from notes payable with Streeterville ​ ​ — ​ ​ 3,975 Total cash provided by financing activities ​ ​ 34,227 ​ ​ 23,181 Effects of foreign exchange rate changes on assets and liabilities ​ ​ 15 ​ ​ 16 Net increase (decrease) in cash ​ 1,000 ​ ( 11,582 ) Cash at beginning of the year ​ ​ 5,469 ​ ​ 17,051 Cash at end of the year ​ $ 6,469 ​ $ 5,469 ​ ​ ​ 91 Table of Contents JAGUAR HEALTH, INC. STATEMENTS OF CASH FLOWS (continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ 2023 ​ 2022 Supplemental schedule of cash flow information ​ ​ ​ ​ ​ ​ Cash paid for interest ​ $ 35 ​ $ 23 Supplemental schedule of non-cash financing and investing activities ​ ​ ​ ​ ​ ​ Preferred stock issued to Irving in exchange of notes payable and accrued interest ​ $ 2,201 ​ $ — Common stock issued to Irving in exchange of notes payable and accrued interest ​ $ 2,022 ​ $ — Warrants issued to Irving in exchange of Standstill ​ $ 1,934 ​ $ — Preferred stock issued to Streeterville in exchange of notes payable and accrued interest ​ $ 1,730 ​ $ 792 Common stock issued to Iliad in exchange of notes payable and accrued interest ​ $ 2,064 ​ $ 10,472 First Insurance Financing ​ $ 676 ​ $ 1,056 Warrants issued to Iliad in exchange of Standstill ​ $ 535 ​ $ — Lease modification ​ $ 441 ​ $ — Umbrella Insurance Financing ​ $ 110 ​ $ — Warrants issued to Irving due to Royal Interest Global Amendment ​ $ 61 ​ $ — Warrants issued to Streeterville due to Royal Interest Global Amendment ​ $ 59 ​ $ — Warrants issued to Iliad due to Royal Interest Global Amendment ​ $ 54 ​ $ — Recognition of operating lease - right-of-use asset and operating lease liability ​ $ 30 ​ $ 365 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 92 Table of Contents Jaguar Health, Inc. Notes to 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 (“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 Stockholders’ Equity Requirement On May 10, 2023, the Company received a letter from the Staff of Nasdaq indicating that the bid price for the Company’s common stock for the last 30 consecutive business days had closed below the minimum $ 1.00 per share required for continued listing under Nasdaq Listing Rule 5550(a)(2). ​ Under Nasdaq Listing Rule 5810(c)(3)(A), the Company has been granted a 180 -calendar day grace period, or until November 6, 2023, to regain compliance with the minimum bid price requirement. The continued listing standard will be met if the Company evidences a closing bid price of at least $ 1.00 per share for a minimum of 10 consecutive business days during the 180 calendar-day grace period. In order for Nasdaq to consider granting the Company additional time beyond November 6, 2023, the Company would be required, among other things, to meet the continued listing requirement for the market value of publicly held shares as well as all other standards for initial listing on Nasdaq, with the exception of the minimum bid price requirement. If measured today, the Company would qualify for Nasdaq’s consideration of an extension because the Company currently has stockholders’ equity of at least $ 2.5 million. In the event the Company does not regain compliance with the $ 1.00 bid price requirement by November 6, 2023, eligibility for Nasdaq’s consideration of a second 180 -day day grace period would be determined on the Company’s compliance with the above referenced criteria on November 6, 2023. ​ On November 8, 2023, the Company received a formal notice from the Staff of Nasdaq granting the Company an additional 180-day grace period, through May 6, 2024 to regain compliance with the $ 1.00 bid price requirement for the continued listing on the Nasdaq Capital Market. ​ 93 Table of Contents 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 $ 308.2 million as of December 31, 2023. 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, joint ventures, 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 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 our 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 audited 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 audited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Principles of Consolidation The consolidated financial statements have been prepared in accordance with US GAAP and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) and include the accounts of the Company and its subsidiaries. All inter-company transactions and balances have been eliminated in consolidation. The reporting currency of the Company is the US dollar. Non-controlling interest The Company consolidates the results of Napo Therapeutics, which was owned 88 % and 90 % by the Company and 12 % and 10 % by private investors as of December 31, 2023 and 2022, respectively. The potential voting rights with a certainty of being exercised in its shares are included in the ownership percentage. During the year ended December 31, 2023, an additional investment from a private entity amounting to € 1.1 million equivalent to $ 1.23 million resulted in the increase in non-controlling interest percentage. Use of Estimates The preparation of the consolidated financial statements in conformity with US GAAP requires the Company’s management to make judgments, assumptions and estimates that affect the amounts reported in its audited 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”), valuation of freestanding and hybrid instruments designated at fair value option (“FVO”), valuation of warrant liabilities, acquired in-process research and development (“IPR&D”), and useful lives assigned to long-lived 94 Table of Contents 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 the US and European federally insured limits at certain times during the year. The Company maintains cash accounts with certain major financial institutions in the US and Europe. The Company does not have cash equivalents as of December 31, 2023 and 2022. 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 December 31, 2023 and 2022. 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 banks and cash balances are generally in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. For the years ended December 31, 2023 and 2022, substantially all of the Company’s revenue was derived from the sale of Mytesi. In looking at sales by the Company to distributors whose net revenue percentage of total net revenue was equal to or greater than 10 %, for fiscal years 2023 and 2022, the Company earned Mytesi revenue 95 Table of Contents primarily from two major pharmaceutical distributor(s) located in the US, respectively. Revenue earned from each major customer as a percentage of total revenue is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ December 31, ​ ​ ​ 2023 2022 ​ Customer 1 ​ ​ 28 % 35 % Customer 2 ​ ​ 56 % 53 % ​ 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: ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2023 ​ 2022 Customer 1 ​ 32 % ​ 38 % Customer 2 ​ 57 % ​ 54 % ​ 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 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 year ending December 31, 2023. 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. 96 Table of Contents 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 December 31, 2023 and 2022. 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 does no t have an allowance for inventory obsolescence as of December 31, 2023 and 2022. 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 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 3 to 10 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 audited consolidated comprehensive loss. 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 . ​ 97 Table of Contents 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. As at December 31, 2022, none of the Company’s long-lived assets were deemed impaired. Indefinite-lived Intangible Assets Acquired IPR&D are intangible assets acquired in the July 2017 Napo merger. Under ASC 805, Business Combinations, 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 had no impairment of indefinite-lived intangible assets for the years ended December 31, 2023 and 2022. 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. 98 Table of Contents 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 trial 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 Topic 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 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. The Company recognizes revenue in accordance with the core principle of ASC 606 or when there is a transfer of control of promised goods to customers in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods. 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. 99 Table of Contents 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 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 US. The distribution agreements and the related purchase orders together meet the contract existence criteria under ASC 606-10-25-1. 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 on 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, for the Company, a 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. 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 $ 9.6 million and $ 11.7 million for the years ended December 31, 2023 and 2022, respectively. 100 Table of Contents Animal The Company recognized Canalevia-CA1 products revenues of $ 130,000 and $ 167,000 for the years ended December 31, 2023 and 2022, respectively. The Company recognized Neonorm revenues of $ 42,000 and $ 48,000 for the years ended December 31, 2023 and 2022, respectively. Revenues are recognized at a point in time upon shipment, which is when title and control is 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 its third-party logistics distribution agent for commercial sales 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, through a designated wholesaler, 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 (“NDCs”) 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 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 free on board (“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 $ 8.1 million and $ 10.3 million for the years ended December 31, 2023 and 2022, respectively. 101 Table of Contents 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 million payable throughout the initial 15 -year term of the agreement. The Company did not have any significant license revenues for the years ended December 31, 2023 and 2022. 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 year ended December 31, 2023, the Company entered amendments to the terms of the October 2020 Royalty Interest, December 2020 Royalty Interest, and August 2022 Royalty Interest. For the year December 31, 2022, the Company entered into another amendment on the terms of its October 2020 and March 2021 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 are 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 in the year 2023 and 2022. In accounting for amendments to equity-classified 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. 102 Table of Contents The Company did not modify any equity-classified preferred stock in the years 2023 and 2022. 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 principles, 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 resulting from the process of translating the functional currency of subsidiary financial statements into the US Dollar reporting currency. These translation adjustments are 103 Table of Contents reported separately and accumulated in the consolidated balance sheets as a component of accumulated other comprehensive income (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 years ended December 31, 2023 and 2022, the amount of other comprehensive income (loss) from translation adjustments were $ 31,000 and ($ 680,000 ), respectively. Basic and Diluted Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss attributable to common stockholders for the year by the weighted-average number of common shares 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 shares, 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 common share is the same as basic net loss per common share, because their impact would be anti-dilutive to the calculation of net loss per common share. Diluted net loss per common share is the same as basic net loss per common share for the years ended December 31, 2023 and 2022. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The main objective of the standard is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this standard replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The update is effective for the Company beginning January 1, 2023 with early adoption permitted. The Company adopted the standard on January 1, 2023. The adoption of this standard did not have a material effect on the Company’s audited consolidated financial statements and related disclosures. Recently Issued Accounting Pronouncements Not Yet Adopted In October 2023, the FASB issued ASU 2023-06—Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative. The main objective of the amendment is to modify the disclosure or presentation requirements of various Topics in the Codification. Certain amendments represent clarifications to or technical corrections of the current requirements. to eliminate disclosure requirements that were redundant, duplicative, overlapping, outdated, or superseded. The effective date for each amendment will be when the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company is still evaluating the impact of the adoption of this standard. 3 . Fair Value Measurements ASC 820, Fair Value Measurements ("ASC 820"), defines fair value, establishes a framework for measuring fair value under US GAAP 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 104 Table of Contents 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 consolidated financial instruments that were measured at fair value as of December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 (in thousands) Level 1 Level 2 Level 3 Total Streeterville Note ​ $ — ​ $ — ​ $ 7,839 ​ $ 7,839 Total fair value ​ $ — ​ $ — ​ $ 7,839 ​ $ 7,839 ​ The change in the estimated fair value of the Level 3 liabilities is summarized below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ December 31, 2023 (in thousands) Iliad ​ Uptown ​ Streeterville 2 Streeterville Note Beginning fair value of Level 3 liability $ — ​ $ — ​ $ — $ 7,839 Additions ​ 6,580 ​ ​ 7,478 ​ ​ 6,154 ​ ​ — Exchanges ​ ( 789 ) ​ ​ — ​ ​ — ​ ​ — Settlements ​ — ​ ​ ( 1,444 ) ​ ​ — ​ ​ — Change in fair value 1,071 ​ 1,439 ​ ​ 661 ​ 1,954 Ending fair value of Level 3 liability $ 6,862 ​ $ 7,473 ​ $ 6,815 $ 9,793 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ December 31, 2022 (in thousands) Iliad ​ Uptown ​ Streeterville 2 Streeterville Note Beginning fair value of Level 3 liability $ — ​ $ — ​ $ — $ 7,819 Additions ​ — ​ ​ — ​ ​ — ​ ​ — Settlements ​ — ​ ​ — ​ ​ — ​ ​ — Change in fair value — ​ — ​ ​ — ​ 20 Ending fair value of Level 3 liability $ — ​ $ — ​ $ — $ 7,839 ​ 105 Table of Contents The fair value of the Streeterville Note recognized as a Level 3 liability at the date of issuance and as of December 31, 2023 amounted to $ 7.8 million and $ 9.8 million, respectively. The fair value of the remaining Level 3 liabilities at the election date and as of December 31, 2023 amounted to $ 20.2 million and $ 21.0 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 the hybrid instrument 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. 106 Table of Contents The following table summarizes the quantitative information about the significant unobservable inputs used in Level 3 fair value measurement of the hybrid instrument: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Range of Inputs ​ ​ ​ ​ (probability-weighted average) ​ Relationship of unobservable inputs Unobservable Inputs ​ 2023 ​ 2022 ​ to fair value Risk Adjusted Discount Rate ​ 9.02 %- 24.59 % ( 24.59 %) ​ 11.53 %- 26.06 % ( 26.06 %) ​ If discount rate is adjusted to total of additional 100 basis points (bps), fair value would have decreased by $ 398,000 . If discount rate is adjusted to total deduction of 100 bps, fair value would have increased by $ 398,000 . 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 $ 1.34 million. If expected cash flows by Management considered the highest amount of market indications for vouchers, FV would have increased by $ 10.38 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. ​ 0.10 %- 73.27 % ​ 0.39 %- 46.55 % ​ If expected cash flows by Management considered the Scenario with the least amount of indicated value, FV would have decreased by $ 227,000 . If expected cash flows by Management considered the scenario with the greatest amount of indicated value, FV would have increased by $ 3.18 million. ​ For the additional notes designated at FVO that are freestanding, the Company considers only the discount rate which was determined using a comparison of various effective yields on bonds as of valuation date. ​ ​ 107 Table of Contents 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 classified as freestanding: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Range of Inputs ​ ​ ​ ​ (probability-weighted average) ​ Relationship of unobservable inputs Unobservable Inputs ​ 2023 ​ 2022 ​ to fair value Risk Adjusted Discount Rate ​ 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 ($ 583,464 ). If discount rate is adjusted to total deduction of 100 bps, fair value would have increased by $ 600,531 . ​ 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 consolidated statements of operations. For the year ended December 31, 2023 and 2022, 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). ​ 108 Table of Contents The following table summarizes the fair value and unpaid principal balance for items the Company accounts under FVO: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (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 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ Fair value ​ Unpaid Principal Balance ​ Accrued Interest ​ Fair Value Over (Under) Outstanding Balance At December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Streeterville Note ​ $ 7,839 ​ $ 6,000 ​ $ 390 ​ $ 1,449 ​ ​ ​ ​ ​ 4. Related Party Transactions BOD Cash Compensation The Company makes BOD cash compensation on a quarterly basis based on the Director Compensation Program. For the years ended December 31, 2023, and 2022, the Company paid approximately $ 498,000 and $ 411,000 cash compensation to its directors. ​ ​ ​ ​ ​ ​ ​ ​ 109 Table of Contents 5 . 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 rents 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, that 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, one located on the 4 th floor of the building (“Suite 400”) and the other one on the 6 th floor (“Suite 600”), 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 is not terminated within 12 months, the lease amount 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 contract. Upon the happening of certain specified events, the lessor may immediately withdraw from the contract. The Company is 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 a 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. 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 recognizes rent expense on a straight-line basis over the non-cancellable lease period. 110 Table of Contents ​ 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 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 a 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. ​ 111 Table of Contents The table below provided additional details of the office space lease presented in the consolidated balance sheet: ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2023 ​ 2022 (in thousands) ​ ​ ​ ​ Operating lease - right-of-use asset $ 1,176 ​ $ 1,140 ​ ​ ​ ​ ​ ​ Operating lease liability, current ​ 348 ​ ​ 483 Operating lease liability, net of current portion ​ 886 ​ ​ 725 Total $ 1,234 ​ $ 1,208 ​ ​ ​ ​ ​ ​ Weighted-average remaining life (years) ​ 1.71 ​ ​ 2.36 Weighted-average discount rate ​ 16.82 % ​ ​ 17.89 % ​ Lease cost included in general and administrative expenses in the consolidated statements of operations for the years ended December 31, 2023 and 2022 was approximately $ 821,000 and $ 629,000 . ​ For the years ended December 31, 2023 and 2022, cash paid for operating lease liabilities recognized under operating cash flows amounted to $ 394,000 and $ 315,000 , respectively. Non-cash investing and financing activities for the years ended December 31, 2023 and 2022 include addition to right-of-use asset obtained from new operating liabilities amounting to $ 30,000 and $ 365,000 , respectively, and lease modification amounting to $ 441,000 and zero respectively. The following table summarizes the undiscounted cash payment obligations for the operating lease liability: ​ ​ ​ ​ ​ December 31, ​ 2023 (in thousands) ​ 2024 $ 562 2025 ​ 346 2026 ​ 266 2027 ​ 233 2028 ​ 240 2029 ​ 247 2030 ​ 168 Total undiscounted operating lease payments ​ 2,062 Imputed interest expenses ​ ( 828 ) Total operating lease liability ​ 1,234 Less: Operating lease liability, current ​ 348 Operating lease liability, net of current portion $ 886 ​ ​ 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 US Food and Drug Administration, 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 112 Table of Contents thereto. Pursuant 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 500 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 December 31, 2023, the remaining commitment is 125 kilograms. ​ Master Services Agreement (“MSA”) On October 5, 2020, the Company entered into another MSA for clinical research organization services (the “2020 MSA”) and a service order under such 2020 MSA with 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 will pay Integrium a total amount of up to approximately $ 12.4 million that will 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 years ended December 31, 2023 and 2022, the Company paid Integrium $ 1.8 million and $ 1.9 million, respectively. Asset Transfer and Transition Commitment On September 25, 2017, Napo entered into the Termination, Asset Transfer and Transition Agreement dated September 22, 2017 with Glenmark. As a result of the agreement, Napo 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, Napo agrees to pay Glenmark 25 % of any payment it receives from a third party to whom Napo grants a license or sublicense or with whom Napo 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 years ended December 31, 2023 and 2022, the Company paid Glenmark $ 3.0 million and $ 2.6 million, respectively. 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 US-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 113 Table of Contents 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 year ended December 31, 2023 of Magdalena is as follows: ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31, ​ 2023 (in thousands) ​ ​ ​ Revenue ​ $ — Operating expenses ​ ​ ( 128 ) Loss before income tax ​ ​ ( 128 ) Income tax expense ​ ​ — Net loss ​ $ ( 128 ) Net loss attributable to the Company ​ $ ( 51 ) ​ Contingencies From time to time, the Company maybe a party to various legal actions, both inside and outside the US, 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 consolidated balance sheets as of December 31, 2023, as the Company could not predict the ultimate outcome of these matters, or reasonably estimate the potential exposure. ​ 6. Balance Sheet Components Inventory Inventory at December 31, 2023 and 2022 consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2023 2022 (in thousands) ​ ​ ​ ​ Raw material ​ $ 2,057 ​ $ 2,101 Work in process ​ ​ 6,517 ​ ​ 3,599 Finished goods ​ ​ 615 ​ ​ 1,324 Inventory ​ $ 9,189 ​ $ 7,024 ​ ​ 114 Table of Contents Prelaunch Inventory ​ Costs capitalized for the Company’s lyophilized drug amounting to $ 2.8 million and $ 2.1 million as of December 31, 2023, and 2022 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 December 31, 2023 and 2022 consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2023 2022 (in thousands) ​ ​ ​ ​ ​ 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 ​ ( 465 ) ​ ( 404 ) Property and equipment, net ​ $ 496 ​ $ 557 ​ Depreciation and amortization expense was $ 61,000 and $ 171,000 for the years ended December 31, 2023 and 2022, respectively . Intangible assets, net Intangible assets, net of amortization, at December 31, 2023 and 2022 consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2023 ​ 2022 (in thousands) ​ ​ ​ ​ ​ Developed technology ​ $ 25,000 ​ $ 25,000 Accumulated developed technology amortization ​ ( 10,694 ) ​ ( 9,028 ) Developed technology, net ​ 14,306 ​ 15,972 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 ​ ( 128 ) ​ ( 108 ) Trademarks, net ​ 172 ​ 192 Internal use software costs - registry ​ ​ 1,236 ​ ​ 1,236 Accumulated internal use software costs impairment ​ ​ ( 371 ) ​ ​ — Accumulated internal use software costs amortization ​ ( 370 ) ​ ( 122 ) Internal use software costs - registry, net ​ 495 ​ 1,114 Patents ​ ​ 361 ​ ​ 361 Accumulated patents amortization ​ ​ ( 18 ) ​ ​ — Patents, net ​ ​ 343 ​ ​ 361 Total intangible assets, net ​ $ 20,116 ​ $ 22,439 ​ Amortization expense of finite-lived intangible assets was $ 2.0 million and $ 1.8 million for the years ended December 31, 2023 and 2022, respectively. ​ 115 Table of Contents During 2023, the Company experienced lower-than-anticipated sales growth for Canalevia and Neonorm, its two primary animal health products. This triggered a reevaluation of the carrying value of the entire asset group associated with these products. Based on the evaluation, the Company determined that the internal use software costs - registry carrying value of $ 866,000 , was no longer recoverable. For the year ended December 31, 2023, The Company wrote the internal use software costs – registry down to its estimated fair value of $ 495,000 and recognized an impairment loss on intangible asset of $ 371,000 . No assets were determined to be impaired as at December 31, 2022. ​ The following table summarizes the Company’s estimated future amortization expense of intangible assets with finite lives as of December 31, 2023: ​ ​ ​ ​ ​ (in thousands) Amounts 2024 ​ $ 1,952 2025 ​ ​ 1,952 2026 ​ ​ 1,952 2027 ​ ​ 1,952 2028 ​ ​ 1,952 Thereafter ​ ​ 5,556 ​ ​ $ 15,316 ​ Accrued Liabilities Accrued liabilities at December 31, 2023 and 2022 consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, (in thousands) 2023 2022 Accrued interest ​ $ 719 ​ $ 5,489 Accrued vacation ​ ​ 377 ​ ​ 310 Accrued payroll and commission ​ 208 ​ 263 Accrued audit and tax services ​ ​ 162 ​ ​ 575 Accrued local tax ​ ​ 122 ​ ​ 9 Accrued legal costs ​ ​ 117 ​ ​ 36 Accrued chargebacks and discounts ​ ​ 68 ​ ​ — Accrued payroll tax ​ ​ 8 ​ ​ 1 Accrued other ​ ​ 2,017 ​ ​ 1,482 Total ​ $ 3,798 ​ $ 8,165 ​ Other accrued liabilities as of December 31, 2023 and 2022 largely consist of consultancy fees, contract fees and scientific advisory board fees. ​ ​ 116 Table of Contents 7. Debt Notes payable at December 31, 2023 and 2022 consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2023 ​ 2022 (in thousands) ​ ​ ​ ​ ​ Notes designated at Fair Value Option ​ $ 30,943 ​ $ 7,839 Royalty Interest ​ ​ 5,635 ​ ​ 38,931 Insurance Financing ​ ​ 172 ​ ​ 235 Tempesta Note ​ ​ 150 ​ ​ 250 Total ​ ​ 36,900 ​ 47,255 Less: unamortized discount and debt issuance costs ​ ( 1,040 ) ( 13,628 ) Note payable, net of discount ​ $ 35,860 $ 33,627 Notes payable - non-current, net ​ $ 30,993 ​ $ 17,744 Notes payable - current, net ​ $ 4,867 ​ $ 15,883 ​ Future maturities of the notes payable as of December 31, 2023 are as follows: ​ ​ ​ ​ ​ (in thousands) ​ Amounts Periods ended December 31, ​ ​ ​ 2024 ​ $ 5,907 2025 ​ ​ 50 ​ ​ ​ 5,957 Less: unamortized discount and debt issuance costs ​ ​ ( 1,040 ) Total ​ $ 4,917 ​ 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, 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 117 Table of Contents 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 is classified as debt, net of a $ 6.0 million discount. 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. The parties further agreed to exchange the partitioned royalty for 7,843 shares of the Company’s common stock. The exchange consisted of Iliad surrendering the partitioned royalty in exchange for the exchange shares. The exchange agreement was accounted for as a modification and resulted in a new discount rate of 77.09 % . As of December 31, 2023, the forecasted future revenues changed which resulted to a new discount rate of 74.59 % . 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. The parties further agreed to exchange the partitioned royalty for 23,117 shares of the Company’s common stock. The exchange consisted of Iliad surrendering the partitioned royalty in exchange for the exchange shares. 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. The parties further agreed to exchange the partitioned royalty for 32,333 shares of the Company’s common stock. The exchange consisted of Iliad surrendering the partitioned royalty in exchange for the exchange shares. 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. The parties further agreed to exchange the partitioned royalty for 26,667 shares of the Company’s common stock. The exchange consisted of Iliad surrendering the partitioned royalty in exchange for the exchange shares. 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. The parties further agreed to exchange the partitioned royalty for 24,667 shares of the Company’s common stock. The exchange consisted of Iliad surrendering the partitioned royalty in exchange for the exchange shares. 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 in a loss of $ 2.2 million. 118 Table of Contents 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 shares 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. The parties further agreed to exchange the partitioned royalty for 15,249 shares of the Company’s common stock. The exchange consisted of Iliad surrendering the partitioned royalty in exchange for the exchange shares. On July 25, 2022, the Company entered into an exchange agreement with Iliad, pursuant to which the parties agreed to partition $ 750,000 from the outstanding balance of the royalty interest. The parties further agreed to exchange the partitioned royalty for 31,546 shares of the Company’s stock. The exchange consisted of Iliad surrendering the partitioned royalty in exchange for the exchange shares. 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. The parties further agreed to exchange the partitioned royalty for 73,333 shares of the Company’s stock. The exchange consisted of Iliad surrendering the partitioned royalty in exchange for the exchange shares. 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. The parties further agreed to exchange the partitioned royalty for 14,533 and 3,733 shares, respectively of the Company’s stock. The exchange consisted of Iliad surrendering the partitioned royalty in exchange for the exchange shares. 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 119 Table of Contents 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 audited consolidated statements of comprehensive loss 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. The Company irrevocably elected to remeasure and subsequently apply the FVO accounting to the entire note. The Company used the valuation report from an independent valuation service provided to measure the reporting date fair value of the note. 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 December 31, 2023, the fair value was determined to be $ 6.9 million. For the year ended December 31, 2023, the net loss in the fair value was $ 1.1 million. 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 audited consolidated statements of comprehensive loss. 120 Table of Contents December 2020 Purchase Agreement On December 22, 2020, the Company entered into a royalty interest purchase agreement (the “December 2020 Purchase Agreement”) with Irving Park Capital, LLC (“Uptown”), pursuant to which the Company sold to Irving a royalty interest entitling Irving 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 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 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 Irving 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 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. The parties further agreed to exchange the partitioned royalty 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 121 Table of Contents 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 Purchase Agreement resulted in significant modifications and was accounted for as extinguishment. The Company recorded an extinguishment gain in the audited consolidated statements of comprehensive loss 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 Purchase Agreement under the FVO accounting. The Company irrevocably elected to initially and subsequently apply the FVO accounting to the entire note. The Company used the valuation report from an independent valuation service provided to measure the reporting date fair value of the note. On December 31, 2023, the fair value was determined to be $ 7.5 million. For the year ended December 31, 2023, the net loss in the fair value was $ 1.4 million. 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 audited consolidated statements of comprehensive loss. 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. 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 Irving, 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 Therapeutics, including but not limited to the upfront fee payable by Napo Therapeutics 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 %. 122 Table of Contents 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 million 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. Under the terms of the Royalty Interest Exchange Agreement, the Royalty Exchange will consist of Streeterville surrendering the Partitioned Royalty in exchange for the shares, free of any restrictive securities legend, and Streeterville shall give no consideration of any kind whatsoever to the Company in connection with 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. The parties further agreed to exchange the partitioned royalty for 156,863 shares of the Company’s common stock. The exchange consisted of Streeterville surrendering the partitioned royalty in exchange for the exchange shares. 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. As of December 31, 2023 the forecasted future revenues changed which resulted to a new discount of 53.85 %. Interest expense for the years ended December 31, 2023 and 2022 was $ 2.1 million and $ 1.9 million, respectively. As of December 31, 2023 and 2022, the carrying value of the debt was $ 4.6 million and $ 3.1 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 (the entitling “Investor”) a royalty interest to receive $ 12.0 million 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 123 Table of Contents 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 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 Purchase Agreement resulted to significant modifications and were accounted for as extinguishment. The Company recorded an extinguishment loss in the audited consolidated statements of comprehensive loss 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 Purchase Agreement resulted under the FVO accounting. The Company irrevocably elected to initially and subsequently apply the FVO accounting to the entire note. The Company used the valuation report from an independent valuation service provided to measure the reporting date fair value of the note. On December 31, 2023, the fair value was determined to be $ 6.8 million. For the year ended December 31, 2023, the net loss in the fair value was $ 661,000 . 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 audited consolidated statements of comprehensive loss. 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 124 Table of Contents 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 December 31, 2022, 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 December 31, 2022, 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 lesser of 18 % per annum or the maximum rate permitted under applicable law. As of December 31, 2023, 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-related 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 the 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. At December 31, 2023 and 2022, the fair values were determined to be $ 9.8 million and $ 7.8 million, respectively. For the year ended December 31, 2023 and 2022, the net losses in the fair value of $ 2.0 million and $ 20,000 , respectively were recorded in the change in fair value of freestanding and hybrid financial instruments designated at FVO in the consolidated statements of operations. Insurance Financing March 2022 First Insurance Financing ​ In March 2022, the Company entered into a premium finance agreement for $ 100,000 with First Insurance Funding (“First Insurance”) representing the unpaid balance of the total premiums, taxes, and fees of $ 115,000 with an annual interest rate of 4.6 %. The total finance charge was $ 15,000 . Payment of principal and interest is due in equal monthly installments over ten months . The Company granted and assigned First Insurance a first priority lien on 125 Table of Contents and security interest in the financed policies and any additional premium required under the financed policies. Interest expense for the year ended December 31, 2023 and 2022 was zero . The financing balance was zero and $ 9,000 at December 31, 2023 and 2022, respectively. ​ May 2022 First Insurance Financing ​ In May 2022, the Company entered into another premium finance agreement for $ 752,000 with First Insurance representing the unpaid balance of the total premiums, taxes, and fees of $ 941,000 with an annual interest rate of 4.3 %. The total finance charge was $ 15,000 . Payment of principal and interest is due in equal monthly installments over ten months . Interest expense for the year ended December 31, 2023 and 2022 was zero . The financing balance was zero and $ 226,000 at December 31, 2023 and 2022, respectively. ​ March 2023 First Insurance Financing ​ In March 2023, the Company entered into another premium finance agreement for $ 98,000 with First Insurance representing the unpaid balance of the total premiums, taxes, and fees of $ 115,000 with an annual interest rate of 8.6 %. The total finance charge was $ 2,000 . Payment of principal and interest is due in equal monthly installments over ten months . Interest expense for year ended December 31, 2023 $ 33,000 . The financing balance was zero as of December 31, 2023. May 2023 First Insurance Financing ​ In May 2023, the Company entered into another 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 year ended December 31, 2023, was $ 16,000 . The financing balance was $ 172,000 as of December 31, 2023. 2019 Tempesta Note In October 2019, the Company entered into a License Termination and Settlement Agreement with Dr. Michael Tempesta (“Tempesta”), pursuant to which certain royalty payment disputes between Napo 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 178 shares of the Company’s common stock in exchange for the cessation of all royalty payments by Napo 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 semiannual payments equal to $ 50,000 plus accrued interest beginning on March 1, 2020 until the note is paid in full. Interest expense for the years ended December 31, 2023 and 2022 was $ 5,000 and $ 10,000 , respectively. At December 31, 2023 and 2022, the net carrying value of the Tempesta note was $ 150,000 and $ 250,000 respectively. 126 Table of Contents 8. Warrants The following table summarizes information about warrants outstanding and exercisable into shares of the Company’s common stock for the years ended December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2023 ​ 2022 ​ ​ ​ ​ ​ Warrants outstanding, beginning balance ​ 7,505 ​ 7,513 Issuances ​ 11,417,302 ​ — Exercises ​ — ​ — Expirations and cancelations ​ — ​ ( 8 ) Warrants outstanding, ending balance ​ 11,424,807 ​ 7,505 ​ As of December 31, 2023 and 2022, the Company’s outstanding warrants have an exercise price ranging from $ 0.24 to $ 1.47 per common share 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 127 Table of Contents 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 fifth 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. 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 share, 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 fifth 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. ​ 128 Table of Contents 9. Preferred Stock At December 31, 2023 and 2022, preferred stock consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ ​ — ​ ​ — ​ ​ — Total ​ ​ 7,534,474 ​ ​ — ​ $ — ​ $ — ​ The Company is authorized to issue a total of 10,000,000 shares of its preferred stock as of December 31, 2023, and December 31, 2022 with a total of 7,534,834 shares and 7,534,474 shares designated to specific Series as of December 31, 2023 and December 31, 2022, respectively. Series E Preferred Stock On August 18, 2022, the Company entered into an agreement (the “Securities Purchase Agreement”) with Synworld to issue 10 Series E Preferred Stock with a par value of $ 0.0001 , amounting to $ 100 . In consideration of the Securities Purchase Agreement, the Company and Synworld agree to amend the existing definition of the term “Service Share Amount” in the License Agreement entered by both parties and include a subsection for lock-up wherein Synworld 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. ​ 129 Table of Contents Series F Preferred Stock On November 11, 2022, the Company entered into an agreement (the “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 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 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 December 28, 2023, the Company converted 15 shares of Series G Preferred Stock in accordance with the terms of such securities. As a result, 122 shares of Series G Preferred Stock remain outstanding. 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. As of December 31,2023, the company converted all issued shares of Series H and no shares remain outstanding. 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 $ 1.5 million reduction in the outstanding balance of the December 2020 Royalty Interest. On November 14, 2023, the Company converted 62 shares of Series I Preferred Stock in accordance with the terms of such securities. As a result, 56 shares of Series I Preferred Stock remain outstanding. ​ 130 Table of Contents 10. Stockholders’ Equity As of December 31, 2023 and 2022, the Company had reserved shares of common stock, on an as-if converted basis, for issuance as follows: ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2023 ​ 2022 ​ ​ ​ ​ ​ Options issued and outstanding 26,262 ​ 26,533 Inducement options issued and outstanding ​ 1,512 ​ 1,546 Options available for grant under stock option plans 626,342 ​ 122,978 Restricted stock unit awards issued and outstanding 2,708,136 ​ 44,865 Warrants issued and outstanding 11,424,807 ​ 7,505 Total 14,787,059 203,427 ​ 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 352,475,074 shares, of which 298,000,000 shares are common stock, 50,000,000 are non-voting common stock and 4,464,011 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 another amendment to the Company’s Third Amendment 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. Upon effectivity, every seventy-five shares of the 131 Table of Contents Company’s issued 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. The reverse stock splits 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”). As of December 31, 2023, the Company has issued 55,222,809 shares under the ATM Agreement for a total net proceeds of $ 56.1 million. Noncontrolling Interest As a result of the merger on November 3, 2021 between Napo EU and Dragon SPAC, the Company assumed a noncontrolling interest amounting to $ 242,000 as of December 31, 2021 which represents noncontrolling interest held by an investor in Napo Therapeutics. For the year ended December 31, 2023, noncontrolling interest increased by $ 635,000 due to additional investment, net of share in comprehensive losses. For the year ended December 31, 2022, noncontrolling interest decreased by $ 941,000 due to the share in net loss. ​ ​ ​ ​ 11. 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 and two option shares outstanding at December 31, 2023 and 2022, respectively. 132 Table of Contents 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 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 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, cancelled 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 December 31, 2023, there were 26,262 options outstanding and 127,854 options available for grant. As of December 31, 2022, there were 26,553 options outstanding and 116,011 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 December 31, 2023, there were 1,512 options outstanding and 498,488 options available for grant. As of December 31, 2022, there were 1,546 options outstanding and 6,967 options available for grant. The Company authorized an additional 491,481 shares for the stock incentive plans. ​ 133 Table of Contents Stock Options and Restricted Stock Units (“RSUs”) ​ The following table summarized the incentive plan activity for the year ended December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, 2022 ​ 8,417 ​ 33,286 ​ 6,499 ​ $ 707.97 ​ 8.35 ​ $ 3 Additional shares authorized ​ 151,079 ​ — ​ — ​ ​ — ​ ​ ​ ​ — Options granted ​ ( 44 ) ​ 44 ​ — ​ ​ 23.46 ​ ​ ​ ​ — Options exercised ​ — ​ — ​ — ​ ​ — ​ ​ ​ ​ — Options canceled ​ 5,251 ​ ( 5,251 ) ​ — ​ ​ 418.34 ​ ​ ​ ​ — RSUs granted ​ ( 41,725 ) ​ — ​ 41,725 ​ ​ — ​ ​ ​ ​ — RSUs vested and released ​ — ​ — ​ ( 2,516 ) ​ ​ — ​ ​ ​ ​ — RSUs cancelled ​ — ​ — ​ ( 843 ) ​ ​ — ​ ​ ​ ​ — Outstanding at December 31, 2022 ​ 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 excercised ​ 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 ​ $ — Exercisable at December 31, 2023 ​ ​ 27,369 ​ ​ ​ $ 599.12 6.19 ​ $ — Vested and expected to vest at December 31, 2023 ​ ​ 27,761 ​ ​ ​ $ 595.76 6.21 ​ $ — *Fair market value of Jaguar stock on December 31, 2023 was $ 0.15 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 year ended December 31, 2023 and 2022 were zero , respectively. The weighted average grant date fair value of stock options granted was zero and $ 22.04 per share during the years ended December 31, 2023, and 2022, respectively. The number of options that vested in the years ended December 31, 2023, and 2022 was 1,524 and 7,492 , respectively. The grant date weighted average fair value of options that vested in the years ended December 31, 2023, and 2022 was $ 273.62 and $ 304.57 , respectively. 134 Table of Contents Stock-Based Compensation The following table summarizes stock-based compensation expense related to stock options, inducement stock options and RSUs for the years ended December 31, 2023 and 2022, and are included in the consolidated statements of operations as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ December 31, ​ (in thousands) 2023 2022 ​ ​ ​ ​ ​ Research and development expense ​ $ 1,044 ​ $ 1,263 ​ Sales and marketing expense ​ 152 ​ 267 ​ General and administrative expense ​ 916 ​ 1,788 ​ Total ​ $ 2,112 ​ $ 3,318 ​ ​ As of December 31, 2023, the Company had $ 116,736 of unrecognized stock-based compensation expense for options and RSU’s, which is expected to be recognized over a weighted-average period of 0.35 years. The fair value of options granted during the years ended December 31, 2023 and 2022, respectively, were calculated using the range of assumptions set forth below: ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2023 ​ 2022 ​ ​ ​ ​ Volatility ​ — ​ 164.0 % Expected term (years) ​ — 5.0 Risk-free interest rate ​ — 3.2 % Expected dividend yield ​ — ​ — ​ 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 December 31, 2023. ​ ​ ​ 12. Net Loss Per Share Attributable to Common Stockholders The following table presents the calculation of basic and diluted net loss per common share for the years ended December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (In thousands, except share and per share data) 2023 2022 Net loss attributable to common stockholders ​ $ ( 41,300 ) ​ $ ( 47,454 ) Shares used to compute net loss per common share, basic and diluted ​ ​ 23,068,423 ​ ​ 1,311,519 Net loss per share attributable to common shareholders, basic and diluted ​ $ ( 1.79 ) ​ $ ( 36.18 ) ​ Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares 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 share equivalents outstanding for the period. Common stock equivalents are only included when their effect is dilutive. The Company's potential securities which include Standstill warrants, PIPE warrants, Royal Global Amendment Exchange warrants and convertible preferred series stock and other common stock equivalents were excluded because their effect is anti- 135 Table of Contents 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 years ended December 31, 2023 and December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2023 ​ 2022 Options issued and outstanding ​ 26,262 ​ 26,533 Inducement options issued and outstanding ​ 1,512 ​ 1,546 Restricted stock units issued and outstanding ​ 2,708,136 ​ 44,865 Warrants issued and outstanding ​ 11,424,807 ​ 7,505 Total ​ 14,160,717 ​ 80,449 ​ As of April 1, 2024, there were 202,803,012 shares of common stock issued after the balance sheet date. ​ ​ 13. Income Taxes The Company's loss before provision for income taxes during the years ended December 31, 2023 and 2022, was a domestic loss of $ 35.6 million and $ 42.1 million, and a foreign loss of $ 6.3 million and $ 6.3 million, respectively. The effective tax rate for 2023 and 2022 was 0 %. As a result of the Company's history of net operating losses (“NOL”) and a full valuation allowance against its deferred tax assets, there was minimal current income tax and no deferred income tax provision for the years ended December 31, 2023 and 2022. The Company’s effective tax during the years ended December 31, 2023 and 2022, differed from the federal statutory rate as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2023 2022 Statutory rate ​ ( 21.0 ) % ( 21.0 ) % State taxes ​ ( 2.0 ) % ( 1.8 ) % Intercompany transactions ​ 1.0 % 0.2 % Valuation allowance ​ 20.7 % 18.3 % Nondeductible warrant expense ​ — % ( 0.3 ) % Book loss on debt extinguishment ​ ( 1.9 ) % 1.0 % Foreign rate differential ​ ( 1.8 ) % ( 0.7 ) % Other ​ 4.9 % 4.3 % Effective tax rate ​ — % — % ​ 136 Table of Contents Net deferred tax assets as of December 31, 2023 and 2022 consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (In thousands) ​ 2023 ​ 2022 Non-current deferred tax assets: ​ ​ ​ ​ ​ ​ Net operating losses ​ $ 51,853 ​ $ 24,773 Tax credits ​ ​ 241 ​ ​ 241 Stock compensation ​ ​ 559 ​ ​ 3,042 Other ​ ​ 4,981 ​ ​ 1,006 ​ ​ 57,634 ​ ​ 29,062 Valuation allowance ​ ​ ( 56,222 ) ​ ​ ( 28,454 ) Net non-current deferred tax assets ​ ​ 1,412 ​ ​ 608 Non-current deferred tax liabilities: ​ ​ ​ ​ ​ ​ Other ​ ​ ( 1,431 ) ​ ​ ( 566 ) Property and equipment ​ ​ 19 ​ ​ ( 42 ) Net non-current deferred tax liability ​ ​ ( 1,412 ) ​ ​ ( 608 ) Net non-current deferred tax asset (liability) ​ $ — ​ $ — ​ A valuation allowance is provided when it is more likely than not that the deferred tax assets will not be realized. The Company has established a valuation allowance to offset net deferred tax assets as of December 31, 2023 and 2022, due to the uncertainty of realizing future tax benefits from its NOL carryforwards and other deferred tax assets. The valuation allowance increased by $ 27.4 million during the year ended December 31, 2023. As of December 31, 2023, the Company had federal and California NOL carryovers of approximately $ 209.9 million and $ 29.4 million, respectively. Of the federal NOL, $ 20.7 million will begin to expire in 2034 and $ 122.5 million will carryforward indefinitely. The California NOL will begin to expire in 2033. As of December 31, 2023, the Company had California research credit carryovers of approximately $ 382,000 . The California research credits carry forward indefinitely. The Company had no Federal research credit carryovers. Utilization of the domestic NOL and tax credit forwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by the Internal Revenue Code Section 382, as well as similar state provisions. In general, an "ownership change," as defined by the code, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups. Any limitation may result in expiration of all or a portion of the NOL or tax credit carryforwards before utilization. The Company has previously reduced its federal and California R&D credit carryforwards by $ 1.4 million and $ 697,000 , respectively. Enacted on March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“the CARES Act”) authorizes more than $2.0 trillion to battle COVID-19 and its economic effects, including immediate cash relief for individual citizens, loan programs for small business, support for hospitals and other medical providers, and various types of economic relief for impacted businesses and industries. The CARES Act does not have a material impact on the Company’s financial results for the year ended December 31, 2023 and 2022. The Consolidated Appropriations Act, 2021 (the "Act") was enacted in the US on December 27, 2020. The Act enhances and expands certain provisions of the CARES Act. The Act does not have a material impact on the Company’s financial results for the year ended December 31, 2023 and 2022. 137 Table of Contents Uncertain Tax Positions 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. As of December 31, 2023, all unrecognized tax benefits were offset against deferred tax assets which are subject to a full valuation allowance, and if recognized, will not affect the Company's tax rate. The Company does not anticipate that the total amounts of unrecognized tax benefits will significantly increase or decrease in the next 12 months. The Company's policy is to include interest and penalties related to unrecognized tax benefits within its provision for income taxes. Due to the Company's net operating loss position, the Company has not recorded an accrual for interest or penalties related to uncertain tax positions for the years ended December 31, 2023 or 2022. The following is a reconciliation of the beginning and ending amount of the Company’s total gross unrecognized tax benefit liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (In thousands) 2023 2022 Gross Unrecognized Tax Benefit--Beginning Balance ​ $ 77 ​ $ 77 Increases Related to Tax Positions from Prior Years ​ ​ — ​ ​ — Increases Related to Tax Positions Taken During the Current Year ​ ​ — ​ ​ — Gross Unrecognized Tax Benefit--Ending Balance ​ $ 77 ​ $ 77 ​ ​ 14. Segment Data The Company has two reportable segments-human health and animal 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 of human products and the ongoing commercialization of Mytesi, which is approved by the FDA 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 years ended December 31, 2023 and 2022 consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, (in thousands) 2023 2022 Revenue from external customers ​ ​ Human Health ​ $ 9,588 ​ $ 11,741 Animal Health ​ 173 ​ 215 Consolidated Totals ​ $ 9,761 ​ $ 11,956 ​ ​ ​ ​ ​ ​ ​ Segment net loss ​ ​ Human Health ​ $ ( 21,655 ) ​ $ ( 18,278 ) Animal Health ​ ( 20,246 ) ​ ( 30,117 ) Consolidated Totals ​ $ ( 41,901 ) ​ $ ( 48,395 ) ​ 138 Table of Contents The Company’s reportable segments assets consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2023 ​ 2022 (in thousands) ​ ​ ​ ​ ​ Segment assets ​ ​ Human Health ​ $ 42,289 ​ $ 40,898 Animal Health ​ 153,190 ​ 128,607 Total ​ $ 195,479 ​ $ 169,505 ​ The reconciliation of segments assets to the consolidated assets is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, (in thousands) 2023 2022 ​ ​ ​ ​ ​ ​ Total assets for reportable segments ​ $ 195,479 ​ $ 169,505 Less: Investment in subsidiary ​ ( 29,232 ) ​ ( 29,232 ) Less: Intercompany loan ​ ( 115,484 ) ​ ( 92,821 ) Consolidated Totals ​ $ 50,763 ​ $ 47,452 ​ ​ 139 Table of Contents 15. Subsequent Events December 2021 ATM Agreement From January 1, 2024 to April 1, 2024 the Company issued an aggregate of 133,631,424 shares of common stock under the December 2021 ATM Agreement for total net proceeds of $ 11.6 million. Series I Convertible Preferred Stock On January 15, 2024, Uptown converted 56 shares of Series I Preferred Stock into 2,696,456 shares of common stock. 3a9 Exchanges On January 29, 2024, the Company entered into an 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 $ 900,800 reduction in the outstanding balance of the October 2020 Royalty Interest. Additionally, the Company entered into an exchange agreement with Streeterville, which the Company issued an aggregate of 1,587,632 shares of the Company’s common stock in exchange for $ 179,000 reduction in the outstanding balance of the August 2022 Royalty Interest. PIPE Warrant Exchanges 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. March 2021 Purchase Agreement Extinguishment and Streeterville Exchange 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”). Upon completion of the Streeterville Exchange Transaction, all outstanding balance of the March 2021 Purchase Agreement was fully paid and the March 2021 Purchase Agreement was terminated. Series J Convertible Preferred Stock On March 5, 2024, the Company issued 10,000,000 shares of the Company’s common stock to Streeterville in exchange for the surrender and cancellation of 40 shares of Series J Perpetual Preferred Stock. Subsequently, on March 19, 2024, the Company issued 8,333,333 shares of the Company’s common stock in exchange for the surrender and cancellation of another 40 shares of Series J Perpetual Preferred Stock. 140 Table of Contents ​ Securities Purchase Agreement On March 18, 2024, the Company entered into a privately negotiated securities purchase agreement (the “Securities Purchase Agreement”) with Gen Ilac Ve Saglik Urunleri Sanayi Ve Ticaret, A.S. (the “Purchaser”), 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 Agreement (as defined below). Licensing Agreement ​ On March 20, 2024, the Company had signed a binding term sheet covering the exclusive license and commercialization agreement for the Company's FDA-approved prescription drug crofelemer with Gen Ilac Ve Saglik Urunleri Sanayi Ve Ticaret, A.S. (the “Purchaser”) in certain countries within Eastern Europe (the "Licensing Agreement”). Aside from the Securities Purchase Agreement, The Licensing Agreement entails payment of royalties to Jaguar on all finished crofelemer products sold in the licensed territory, and transfer pricing terms for crofelemer supplied by Jaguar. ​ ​ 141 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ​ ​