# 60 Degrees Pharmaceuticals, Inc.: Form 10-Q for the period ended Jun 30, 2025

- Company: [60 Degrees Pharmaceuticals, Inc.](/companies/sxtp.md) (CIK 1946563)
- Form: 10-Q
- Filed: 2025-08-13
- Accepted by EDGAR: Aug 13, 2025, 14:45 ET
- Period: 2025-06-30
- Accession: 0001554855-25-001009
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1946563/000155485525001009/sxtp-20250630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1946563/000155485525001009/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $100.9k | us-gaap:Revenues |
| Revenue | 6 months, 2025-01-01 to 2025-06-30 | $264.5k | us-gaap:Revenues |
| Cost of revenue | 3 months, 2025-04-01 to 2025-06-30 | $50.1k | us-gaap:CostOfRevenue |
| Cost of revenue | 6 months, 2025-01-01 to 2025-06-30 | $123.3k | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2025-04-01 to 2025-06-30 | $50.9k | us-gaap:GrossProfit |
| Gross profit | 6 months, 2025-01-01 to 2025-06-30 | $141.2k | us-gaap:GrossProfit |
| Research and development | 3 months, 2025-04-01 to 2025-06-30 | $249.9k | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 6 months, 2025-01-01 to 2025-06-30 | $657.5k | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | −$1.6m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2025-01-01 to 2025-06-30 | −$3.5m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-04-01 to 2025-06-30 | $1.2k | us-gaap:InterestExpenseNonoperating |
| Interest expense | 6 months, 2025-01-01 to 2025-06-30 | $3.0k | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | $1.5k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2025-01-01 to 2025-06-30 | $1.6k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | −$1.7m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | −$3.6m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | −$1.25 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | −$2.79 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | −$1.25 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | −$2.79 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 1,472,891 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 1,378,700 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | −$3.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2025-01-01 to 2025-06-30 | $50.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2025-06-30 | $2.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-30 | $3.8m | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $4.2m | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $1.7m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-06-30 | $1.8m | us-gaap:Liabilities |
| Long-term debt | at 2025-06-30 | $150.0k | us-gaap:LongTermDebt |
| Current portion of debt | at 2025-06-30 | $8.8k | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2025-06-30 | $2.4m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 51,386 characters.

The following discussion and analysis is intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with our unaudited consolidated condensed financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and the other information set forth in certain of our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 27, 2025. In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the SEC.

### Overview

We are a specialty pharmaceutical company with a goal of using cutting-edge biological science and applied research to further develop and commercialize new therapies for the prevention and treatment of infectious diseases. We have successfully achieved regulatory approval of Arakoda® (“Arakoda”), a malaria preventative treatment that has been on the market since late 2019. Currently, 60P’s pipeline under development covers development programs for vector-borne, fungal, and viral diseases utilizing three of the Company’s future products: (i) new products that contain the Arakoda regimen of Tafenoquine; (ii) new products that contain Tafenoquine; and (iii) Celgosivir and/or botanical extracts from Australian Chestnut Trees.

### Business Developments

The following highlights significant business developments in our business during the quarter ended June 30, 2025.

- The Company concluded several commercial research studies that collectively suggest that annual incidence of babesiosis is between 25,000 and 380,000 cases, and that the total addressable market for Arakoda for babesiosis may be up to $1.1 billion over the remaining 10-year patent life for the malaria indication.
- A new 8-ct bottle format of Arakoda was introduced into the U.S. supply chain. This option will reduce the cost of Arakoda for short-term travelers and is alleviating the temporary shortage of the 16-ct blister pack of Arakoda in regular supply channels.

### Liquidity and Capital Resources

As of June 30, 2025, we had cash and cash equivalents of $1,966,930 ($1,659,353 as of December 31, 2024). For the six months ended June 30, 2025 and 2024, our net cash used in operating activities was $3,047,494 and $2,328,650, respectively. To date, we have financed our operations primarily through the issuance of common stock, warrants to purchase common stock, and proceeds from the issuance of convertible debt and promissory notes. Based on current internal projections, taking into consideration the net proceeds of approximately $4.46 million received from the July 2025 public offering, we estimate that we will have sufficient funds to remain viable through March 31, 2026, assuming no additional capital raises. We cannot give assurance that we can increase our cash balances or limit our cash consumption and thus maintain sufficient cash balances for our planned operations or future acquisitions. Future business demands may lead to cash utilization at levels greater than recently experienced. We may need to raise additional capital in the future. However, we cannot assure you that we will be able to raise additional capital on acceptable terms, or at all.

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### Going Concern

In their audit report for the fiscal year ended December 31, 2024, our auditors have expressed their concern as to our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate cash flows from operations and obtain financing. The audited consolidated financial statements for the year ended December 31, 2024 included an explanatory note referring to our recurring operating losses and expressing substantial doubt in our ability to continue as a going concern.

Our future results are subject to substantial risks and uncertainties. Since our inception, we have not demonstrated the ability to generate enough revenues to date to cover operating expenses and we have accumulated losses to date. To date, we have funded our operations primarily with proceeds from sales of common stock and warrants for the purchase of common stock, sales of preferred stock, proceeds from the issuance of convertible debt and borrowings under loan and security agreements.

Continuation as a going concern is dependent upon our ability to meet our financial requirements, raise additional capital, and achieve gross profitability from our single marketed product. To achieve profitability, we expect we will need to raise additional capital to fund our activities relating to commercial support for our existing product and any future clinical research trials and operating activities. However, there can be no assurance that we will ever achieve or maintain profitability. These conditions, among others, raise substantial doubt about our ability to continue as a going concern for one year from the date these financial statements are issued.

We plan to fund our operations through third party and related party debt/advances, private placement of restricted securities and the issuance of stock in a subsequent offering until such a time as the business achieves profitability or a business combination may be achieved. However, there can be no assurance that we will be successful in raising additional capital or that such capital, if available, will be on terms that are favorable to us. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.

As such, we have concluded that such plans do not alleviate the substantial doubt about our ability to continue as a going concern for one year from the date the accompanying financial statements are issued.

The accompanying consolidated condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of obligations in the normal course of business, and do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.

### Contractual Obligations

The following table summarizes our contractual obligations as of June 30, 2025:

|  | Total | Payments Due By Period Less than 1 year | 1-3 years | 4-5 years | More than 5 Years |
| --- | ---: | ---: | ---: | ---: | ---: |
| Principal obligations on the debt arrangements | $150,000 | $- | $5,339 | $6,941 | $137,720 |
| Interest obligations on the debt arrangements | 100,261 | 8,772 | 12,205 | 10,603 | 68,681 |
| Accounts payable and accrued expenses | 905,813 | 905,813 | - | - | - |
| Total | $1,156,074 | $914,585 | $17,544 | $17,544 | $206,401 |

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Amounts related to contingent milestone payments are not considered contractual obligations as they are contingent on the achievement of certain milestones. These contingent milestones may or may not be achieved. We have not included any of these amounts in the table above as we cannot estimate or predict when, or if, these amounts will become due.

### Components of Results of Operations

### Product Revenues - net of Discounts and Rebates

We receive the majority of our product revenues from sales of our Arakoda product to resellers in the U.S. and abroad. Foreign sales to both Australia and Europe are further subject to profit sharing agreements for boxes sold to customers. Sales to resellers in the US are subject to considerable discounts and rebates for services provided by our third-party logistics (“3PL”) partner and wholesalers and pharmacy benefit managers (“PBMs”).

### Cost of Revenues, Gross Profit, and Gross Margin

Cost of revenues associated with our products is primarily comprised of direct materials, shipping, manufacturing-related costs incurred in the production process, serialization costs, and inventory write-downs due to expiration.

### Other Operating Revenues

Other operating revenues for the periods presented include research revenue earned from the Australian Tax Authority for research activities conducted in Australia. Beginning in the third quarter of 2024, we began to recognize research revenues associated with our new contract with the United States Army Medical Material Development Activity (USAMMDA) for Arakoda supply chain upgrade support. Research revenue under this contract is recognized when we incur the direct costs eligible for reimbursement, up to the maximum allowable amount.

### Operating Expenses

#### Research and Development

Research and development costs for the periods presented primarily consist of contracted R&D services and costs associated with preparation for and conducting our Babesiosis trial. We expense all research and development costs in the period in which they are incurred. Payments made prior to the receipt of goods or services to be used in research and development are recognized as prepaid assets and expensed over the service period as the services are provided. We have also issued shares of our common stock to vendors in exchange for research and development services.

#### General and Administrative Expenses

Our general and administrative expenses primarily consist of salaries, advertising and promotion expenses, professional services fees, such as consulting, audit, accounting and legal fees, general corporate costs and allocated costs, including facilities, information technology and amortization of intangibles.

### Interest and Other (Expense) Income, Net

We earn interest income from cash invested in interest-bearing accounts, as well as cash equivalents and short-term investments consisting of certificates of deposits with original maturities ranging from three to six months. Interest expense for the periods presented is limited to a single $150,000 SBA loan that bears interest at 3.75%. Other components of other (expense) income include changes in the fair value of derivative liabilities and other miscellaneous income or expenses.

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### Results of Operations

The following table sets forth our results of operations for the periods presented:

| Consolidated Statements of Operations Data: | For the Three Months Ended June 30, 2025 | 2024 | For the Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Product Revenues – net of Discounts and Rebates | $100,932 | $124,972 | $264,484 | $230,646 |
| Cost of Revenues | 50,051 | 89,564 | 123,323 | 155,001 |
| Gross Profit | 50,881 | 35,408 | 141,161 | 75,645 |
| Research Revenues | 206,939 | 728 | 299,670 | 30,359 |
| Net Revenue | 257,820 | 36,136 | 440,831 | 106,004 |
| Operating Expenses: |  |  |  |  |
| Research and Development | 249,884 | 3,095,326 | 657,506 | 3,432,508 |
| General and Administrative Expenses | 1,612,764 | 1,129,560 | 3,299,028 | 2,204,694 |
| Total Operating Expenses | 1,862,648 | 4,224,886 | 3,956,534 | 5,637,202 |
| Loss from Operations | (1,604,828) | (4,188,750) | (3,515,703) | (5,531,198) |
| Interest Expense | (1,221) | (3,621) | (3,011) | (5,023) |
| Change in Fair Value of Derivative Liabilities | (140,447) | (1,101) | (135,342) | 1,739,746 |
| Other Income, net | 13,066 | 19,684 | 43,388 | 50,735 |
| Total Interest and Other (Expense) Income, net | (128,602) | 14,962 | (94,965) | 1,785,458 |
| Loss from Operations before Provision for Income Taxes | (1,733,430) | (4,173,788) | (3,610,668) | (3,745,740) |
| Provision for Income Taxes | 1,500 | 438 | 1,563 | 501 |
| Net Loss including Noncontrolling Interest | (1,734,930) | (4,174,226) | (3,612,231) | (3,746,241) |
| Net Loss – Noncontrolling Interest | (1,204) | (1,471) | (1,956) | (3,956) |
| Net Loss – attributed to 60 Degrees Pharmaceuticals, Inc. | $(1,733,726) | $(4,172,755) | $(3,610,275) | $(3,742,285) |

The following table sets forth our results of operations as a percentage of revenue:

| Consolidated Statements of Operations Data: | For the Three Months Ended June 30, 2025 | 2024 | For the Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Product Revenues – net of Discounts and Rebates | 100.00% | 100.00% | 100.00% | 100.00% |
| Cost of Revenues | 49.59 | 71.67 | 46.63 | 67.20 |
| Gross Profit | 50.41 | 28.33 | 53.37 | 32.80 |
| Research Revenues | 205.03 | 0.58 | 113.30 | 13.16 |
| Net Revenue | 255.44 | 28.92 | 166.68 | 45.96 |
| Operating Expenses: |  |  |  |  |
| Research and Development | 247.58 | 2,476.82 | 248.60 | 1,488.21 |
| General and Administrative Expenses | 1,597.87 | 903.85 | 1,247.35 | 955.88 |
| Total Operating Expenses | 1,845.45 | 3,380.67 | 1,495.94 | 2,444.09 |
| Loss from Operations | (1,590.01) | (3,351.75) | (1,329.27) | (2,398.13) |
| Interest Expense | (1.21) | (2.90) | (1.14) | (2.18) |
| Change in Fair Value of Derivative Liabilities | (139.15) | (0.88) | (51.17) | 754.29 |
| Other Income, net | 12.95 | 15.75 | 16.40 | 22.00 |
| Total Interest and Other (Expense) Income, net | (127.41) | 11.97 | (35.91) | 774.11 |
| Loss from Operations before Provision for Income Taxes | (1,717.42) | (3,339.78) | (1,365.17) | (1,624.02) |
| Provision for Income Taxes | 1.49 | 0.35 | 0.59 | 0.22 |
| Net Loss including Noncontrolling Interest | (1,718.91) | (3,340.13) | (1,365.77) | (1,624.24) |
| Net Loss – Noncontrolling Interest | (1.19) | (1.18) | (0.74) | (1.72) |
| Net Loss – attributed to 60 Degrees Pharmaceuticals, Inc. | (1,717.72)% | (3,338.95)% | (1,365.03)% | (1,622.52)% |

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### Comparison of the Three Months Ended June 30, 2025 and 2024

### Product Revenues - net of Discounts and Rebates, Cost of Revenues, Gross Profit, and Gross Margin

| Consolidated Statements of Operations Data: | For the Three Months Ended June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Product Revenues – net of Discounts and Rebates | $100,932 | $124,972 | $(24,040) | (19.24)% |
| Cost of Revenues | 50,051 | 89,564 | (39,513) | (44.12) |
| Gross Profit | $50,881 | $35,408 | $15,473 | 43.70% |
| **Gross Margin %** | **50.41%** | **28.33%** |  |  |

#### Product Revenues - net of Discounts and Rebates

Our product revenues - net of discounts and rebates were $100,932 for the three months ended June 30, 2025, as compared to $124,972 for the three months ended June 30, 2024. For the three months ended June 30, 2025, our U.S. pharmaceutical distributor and Infuserve America accounted for 21% and 78% of our total net product sales of Arakoda, respectively, and Kodatef sales to our Australian distributor accounted for 1% of total net product sales (92%, 0% and 7% for the three months ended June 30, 2024, respectively). Domestic, commercial product sales volume decreased during the period due to a shortage of existing Arakoda 16-ct boxes beginning in April 2025. This shortage was mitigated partially through the importation of Kodatef with FDA approval, which was supplied to patients via Infuserve America, as well as the introduction of a new 8-ct Arakoda bottle into the regular commercial supply chain.

We offer discounts and rebates to the civilian U.S. supply chain distribution channel. We record sales when our 3PL partner transfers boxes into their title model. Discounts and rebates offered to our 3PL partner amount to 12% (lower rates available upon reaching larger revenue tiers) along with a $5,500 fixed monthly fee. The product is then transferred usually to one of the three large U.S. pharmaceutical distributors where rebates are 10%. Lastly, we have relationships with several large pharmacy benefit managers (“PBMs”) that allow patients to purchase Arakoda at a discount. The rebate associated with PBMs ranges from 30% to 41.25% depending on the amount of coverage provided. For the three months ended June 30, 2025, discounts and rebates were $82,804 compared to $106,755 for the three months ended June 30, 2024. The rebate on Kodatef sales was only 10% and there were no PBM-related discounts on sales of Kodatef.

Arakoda entered the U.S. civilian supply chain in the third quarter of 2019. Since the introduction of the new 8-ct bottle in June 2025, we will be reporting Arakoda unit sales in terms of 16-ct box equivalents. For the three months ended June 30, 2025, the equivalent of 1,082 16-ct boxes were sold to pharmacies and dispensaries. Sales volume decreased by 17% from 1,301 16-ct box equivalents sold to pharmacies and dispensaries for the three months ended June 30, 2024. The sales volume decline to pharmacies and dispensaries is directly tied to the temporary unavailability of Arakoda 16-ct boxes in regular supply channels, as previously discussed. Arakoda (in the form of a new 8-ct bottle) had re-entered, but not saturated, existing distribution channels as of June 30, 2025, and Kodatef sales did not completely mitigate the shortage, which we assume was due to the overall higher out-of-pocket costs due to the nature of cash-only sales by Infuserve America.

Kodatef sales to our distributor Biocelect in Australia for the three months ended June 30, 2025 were $1,219 ($9,002 for the three months ended June 30, 2024). A historical portion of sales to Biocelect remain subject to a profit share distribution once the original transfer price has been recouped. Biocelect, which acts as a distributor in the Australian and New Zealand markets, reported a 3% quarter-over--quarter decline, with 396 boxes sold for the three months ended June 30, 2025, compared to 410 boxes for the three months ended June 30, 2024. As of June 30, 2025, Biocelect’s unsold inventory that remains subject to profit share was the equivalent of 31.5 boxes. Additionally, under a new agreement executed during the quarter, Biocelect began to purchase from the latest manufactured lot of Kodatef at $49.50 AUD per box which are not subject to historical profit share. For the quarter ended June 30, 2025, no boxes of Kodatef were sold to Biocelect (none for the quarter ended June 30, 2024). As of June 30, 2025, 1,252 of profit share was due to us ($9,444 as of December 31, 2024).

Arakoda sales volume in Europe continues to grow. We first shipped Arakoda to our distributor Scandinavian Biopharma (“SB”) in September 2022. SB reported 110 boxes sold during the three months ended June 30, 2025, representing a 293% increase from 28 boxes sold during the three months ended June 30, 2024. According to our distributor, this is due to greater interest in treating babesiosis.

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#### Cost of Revenues, Gross Profit, and Gross Margin

Cost of revenues was $50,051 for the three months ended June 30, 2025, as compared to $89,564 for the three months ended June 30, 2024. The decrease in cost of goods sold is a combination of the aforementioned decline in sales as well as a more favorable mix of sales with a lower per unit cost. As a result of these factors, the Gross Margin % increased from 28.33% for the three months ended June 30, 2024 to 50.41% for the three months ended June 30, 2025. This increase is primarily attributable to lower rebates and per unit costs of goods sold that together, more than offset the decline in sales.

### Other Operating Revenues

| Consolidated Statements of Operations Data: | For the Three Months Ended June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Research Revenues | $206,939 | $728 | $206,211 | 28,325.69% |

The research revenues earned by us were $206,939 for the three months ended June 30, 2025, as compared to $728 for the three months ended June 30, 2024. The increase in research revenues is primarily due to the new USAMMDA contract we were awarded in July 2024 to facilitate commercial validation of a new bottle and replacement blister packaging of Arakoda and the contract we signed with the University of Kentucky for tafenoquine clinical trial supply. We recognized research revenues of $116,948 related to the USAMMDA grant for the three months ended June 30, 2025 ($0 for the three months ended June 30, 2024). For the three months ended June 30, 2025, we recognized research revenues of $89,302 from the University of Kentucky ($0 for the three months ended June 30, 2024). We also recognized research revenues from the Australian Tax Authority for research activities conducted in Australia of $954 for the three months ended June 30, 2025 ($366 for the three months ended June 30, 2024).

### Operating Expenses

| Consolidated Statements of Operations Data: | For the Three Months Ended June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Research and Development | $249,884 | $3,095,326 | $(2,845,442) | (91.93)% |
| General and Administrative Expenses | 1,612,764 | 1,129,560 | 483,204 | 42.78 |
| Total Operating Expenses | $1,862,648 | $4,224,886 | $(2,362,238) | (55.91)% |

#### Research and Development

Research and development costs decreased by $2,845,442 for the three months ended June 30, 2025 when compared to the three months ended June 30, 2024. The decline is primarily attributable to a non-cash charge of $2,625,000 recognized during the three months ended June 30, 2024 for stock issued to the University of Kentucky upon the delivery of their report on the potential development of SJ733 + tafenoquine. Otherwise, research and development costs incurred for the three months ended June 30, 2025 and 2024 primarily consisted of costs related to our babesiosis trials for tafenoquine. Direct trial-related costs represent 71% of the total research and development costs at $176,892 for the three months ended June 30, 2025, compared to 13% of the costs at $389,735 for the three months ended June 30, 2024.

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#### General and Administrative Expenses

For the three months ended June 30, 2025, our general and administrative expenses increased by approximately 42.78% or $483,204 from the three months ended June 30, 2024. For the three months ended June 30, 2025, we incurred significantly higher sales, advertising and promotion expenses and investor outreach expenses at $395,097 and $365,523, up from $74,315 and $266,266 for the three months ended June 30, 2024, respectively. Additionally, for the three months ended June 30, 2025, we recognized $34,503 in stock-based compensation expense ($0 for the three months ended June 30, 2024). This increase was in part due to new partially vested option grants awarded to two executives in January 2025, as well as the ongoing quarterly expense recognized for additional stock options granted in the third quarter of 2024.

### Interest and Other Income, net

| Consolidated Statements of Operations Data: | For the Three Months Ended June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Interest Expense | $(1,221) | $(3,621) | $2,400 | (66.28)% |
| Change in Fair Value of Derivative Liabilities | (140,447) | (1,101) | (139,346) | 12,656.31 |
| Other Income, net | 13,066 | 19,684 | (6,618) | (33.62) |
| Total Interest and Other (Expense) Income, net | $(128,602) | $14,962 | $(143,564) | (959.52)% |

#### Interest Expense

For the three months ended June 30, 2025, we recognized $1,221 of interest expense ($3,621 for the three months ended June 30, 2024). Our interest expense for the periods presented relates to our single outstanding loan from the SBA. Cash paid for interest expense was $2,193 and $2,193 for the three months ended June 30, 2025 and June 30, 2024, respectively.

#### Change in Fair Value of Derivative Liabilities

For the three months ended June 30, 2025, we recognized a loss on the change in fair value of derivative liabilities of $140,447 compared to the loss of $1,101 for the three months ended June 30, 2024. During the periods presented, derivative liabilities include the contingent milestone payment due to Knight upon a future sale of Arakoda or a Change of Control. We use a probability-weighted expected return method to estimate the fair value of this derivative liability.

#### Other Income, net

For the three months ended June 30, 2025, we recognized $13,066 in other income compared to $19,684 for the three months ended June 30, 2024. For the three months ended June 30, 2025, we recognized interest income from cash invested in interest-bearing accounts and investments in certificates of deposit of $15,687 ($20,669 for the three months ended June 30, 2024).

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### Comparison of the Six Months Ended June 30, 2025, and 2024

### Product Revenues - net of Discounts and Rebates, Cost of Revenues, Gross Profit, and Gross Margin

| Consolidated Statements of Operations Data: | For the Six Months Ended June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Product Revenues – net of Discounts and Rebates | $264,484 | $230,646 | $33,838 | 14.67% |
| Cost of Revenues | 123,323 | 155,001 | (31,678) | (20.44) |
| Gross Profit | $141,161 | $75,645 | $65,516 | 86.61% |
| **Gross Margin %** | **53.37%** | **32.80%** |  |  |

#### Product Revenues - net of Discounts and Rebates

Our product revenues - net of discounts and rebates were $264,484 for the six months ended June 30, 2025, as compared to $230,646 for the six months ended June 30, 2024. For the six months ended June 30, 2025, our U.S. pharmaceutical distributor and Infuserve America accounted for 61% and 34% of our total net product sales of Arakoda, respectively, and Kodatef sales to our Australian distributor accounted for 5% of total net product sales (96%, 0%, and 4% for the six months ended June 30, 2024, respectively). Domestic, commercial product sales volume decreased during the period due to a shortage of Arakoda 16-ct boxes occurring in June 2025, resulting from a delay in completing commercial validation of a new packaging format. This shortage was mitigated partially through the importation of Kodatef with FDA approval, which was supplied to patients via Infuserve America, and the introduction of a new 8-ct Arakoda bottle into the regular commercial supply chain.

We offer discounts and rebates to the civilian U.S. supply chain distribution channel. We record sales when our 3PL partner transfers boxes into their title model. Discounts and rebates offered to our 3PL partner amount to 12% (lower rates available upon reaching larger revenue tiers) along with a $5,500 fixed monthly fee. The product is then transferred usually to one of the three large U.S. pharmaceutical distributors where rebates are 10%. Lastly, we have relationships with several large pharmacy benefit managers (“PBMs”) that allow patients to purchase Arakoda at a discount. The rebate associated with PBMs ranges from 30% to 41.25% depending on the amount of coverage provided. For the six months ended June 30, 2025, discounts and rebates were $174,205 compared to $201,624 for the six months ended June 30, 2024.

Arakoda entered the U.S. civilian supply chain in the third quarter of 2019. Since the introduction of the new 8-ct bottle in June 2025, we will be reporting Arakoda unit sales in terms of 16-ct box equivalents. For the six months ended June 30, 2024, 2,323 16-ct box equivalents were sold to pharmacies and dispensaries. Sales volume increased by 15% to 2,661 16-ct box equivalents sold to pharmacies and dispensaries for the six months ended June 30, 2025.

Kodatef sales to our distributor Biocelect in Australia for the six months ended June 30, 2025 were $13,285 ($10,006 for the six months ended June 30, 2024). A historical portion of sales to Biocelect remain subject to a profit share distribution once the original transfer price has been recouped. Biocelect, which acts as a distributor in the Australian and New Zealand market, reported 27% year-over-year decline, the equivalent of 782 boxes sold for the six months ended June 30, 2025, compared to 1,075 boxes for the six months ended June 30, 2024. As of June 30, 2025, Biocelect’s unsold inventory that remains subject to profit share was the equivalent of 31.5 boxes. Additionally, under a new agreement executed during the quarter, Biocelect began to purchase from the latest manufactured lot of Kodatef at $49.50 AUD per box which are not subject to historical profit share. For the six months ended June 30, 2025, 200 boxes of Kodatef were sold to Biocelect (None for the three and six months ended June 30, 2024). As of June 30, 2025, $1,252 of profit share was due to us ($9,444 as of December 31, 2024).

Arakoda sales volume in Europe continues to grow. We first shipped Arakoda to our distributor Scandinavian Biopharma (“SB”) in September 2022. For the six months ended June 30, 2025, SB reported 183 boxes sold (55 boxes sold for the six months ended June 30, 2024). According to our distributor, this is due to greater interest in treating babesiosis.

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#### Cost of Revenues, Gross Profit, and Gross Margin

Cost of revenues was $123,323 for the six months ended June 30, 2025, as compared to $155,001 for the six months ended June 30, 2024. The decrease in cost of goods sold is due to a more favorable mix of sales with a lower per unit cost. The Gross Margin % increased from 32.80% for the six months ended June 30, 2024 to 53.37% for the six months ended June 30, 2025. This is attributable to several factors: the growth in revenues, reduction in discounts associated with Kodatef, and the lower per unit cost of newly introduced Arakoda bottles and Kodatef boxes.

### Other Operating Revenues

| Consolidated Statements of Operations Data: | For the Six Months Ended June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Research Revenues | $299,670 | $30,359 | $269,311 | 887.09% |

The research revenues earned by us were $299,670 for the six months ended June 30, 2025, as compared to $30,359 for the six months ended June 30, 2024. The increase in research revenues is primarily due to the new USAMMDA contract we were awarded in July 2024 to facilitate commercial validation of a new bottle and replacement blister packaging of Arakoda and the contract we signed with the University of Kentucky for tafenoquine clinical trial supply. We recognized research revenues of $194,914 related to the USAMMDA grant for the six months ended June 30, 2025 ($0 for the six months ended June 30, 2024). We recognized research revenues of $89,302 from the University of Kentucky for the six months ended June 30, 2025 ($0 for the six months ended June 30, 2024). Other research revenues were $15,454 for the six months ended June 30, 2025 ($30,359 for the six months ended June 30, 2024).

### Operating Expenses

| Consolidated Statements of Operations Data: | For the Six Months Ended June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Research and Development | $657,506 | $3,432,508 | $(2,775,002) | (80.84)% |
| General and Administrative Expenses | 3,299,028 | 2,204,694 | 1,094,334 | 49.64 |
| Total Operating Expenses | $3,956,534 | $5,637,202 | $(1,680,668) | (29.81)% |

#### Research and Development

Research and development costs decreased by $2,775,002 for the six months ended June 30, 2025 when compared to the six months ended June 30, 2024. The decline is primarily attributable to a non-cash charge of $2,625,000 recognized during the six months ended June 30, 2024 for stock issued to the University of Kentucky upon the delivery of their report on the potential development of SJ733 + tafenoquine. Otherwise, research and development costs incurred for the six months ended June 30, 2025 and 2024 primarily consisted of costs related to our babesiosis trial for tafenoquine. Direct trial-related costs represent 69% of the total research and development costs at $452,525 for the six months ended June 30, 2025, compared to 17% of the costs at $575,826 for the six months ended June 30, 2024. We also recorded $61,413 in research and development expenses related to commercial validation and packaging of Arakoda, for which a majority qualifies for reimbursement under the USAMMDA grant discussed above.

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#### General and Administrative Expenses

For the six months ended June 30, 2025, our general and administrative expenses increased by approximately 49.64% or $1,094,334 from the six months ended June 30, 2024. For the six months ended June 30, 2025, we incurred significantly higher sales, advertising and promotion expenses and investor outreach expenses at $680,384 and $759,211, up from $178,379 and $448,429 for the six months ended June 30, 2024, respectively. Additionally, for the six months ended June 30, 2025, we recognized $177,148 in stock-based compensation expense ($0 for the six months ended June 30, 2024). This increase was in part due to new partially vested option grants awarded to two executives in January 2025, as well as the quarterly expense recognized for additional stock options granted in the third quarter of 2024.

### Interest and Other (Expense) Income, net

| Consolidated Statements of Operations Data: | For the Six Months Ended June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Interest Expense | $(3,011) | $(5,023) | $2,012 | (40.06)% |
| Change in Fair Value of Derivative Liabilities | (135,342) | 1,739,746 | (1,875,088) | (107.78) |
| Other Income, net | 43,388 | 50,735 | (7,347) | (14.48) |
| Total Interest and Other (Expense) Income, net | $(94,965) | $1,785,458 | $(1,880,423) | (105.32)% |

#### Interest Expense

For the six months ended June 30, 2025, we recognized $3,011 of interest expense ($5,023 for the six months ended June 30, 2024). Our interest expense for the periods presented relates entirely to our single outstanding loan from the SBA. Cash paid for interest expense was $4,386 and $4,386 for the six months ended June 30, 2025 and 2024, respectively.

#### Change in Fair Value of Derivative Liabilities

For the six months ended June 30, 2025, we recognized a loss on the change in fair value of derivative liabilities of $135,342 compared to the gain of $1,739,746 for the six months ended June 30, 2024. During the periods presented, derivative liabilities include the contingent milestone payment due to Knight upon a future sale of Arakoda or a Change of Control. We use a probability-weighted expected return method to estimate the fair value of this derivative liability.

#### Other Income, net

For the six months ended June 30, 2025, we recognized $43,388 in other income compared to $50,735 for the six months ended June 30, 2024. For the six months ended June 30, 2025, we recognized interest income from cash invested in interest-bearing accounts and investments in certificates of deposit of $47,584 ($42,557 for the six months ended June 30, 2024). Other income for the six months ended June 30, 2024 also included $10,789 of storage revenue recognized in association with final payment under the legacy contract with the USAMMDA for storing Arakoda purchases. We did not recognize storage revenue for the six months ended June 30, 2025.

### Cash Flows

| Net Cash (Used In) Provided By : | For the Six Months Ended June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Operating Activities | $(3,047,494) | $(2,328,650) | $(718,844) | 30.87% |
| Investing Activities | 1,650,834 | (140,373) | 1,791,207 | (1,276.03) |
| Financing Activities | 1,696,899 | 1,902,426 | (205,527) | (10.80) |
| Effect of Foreign Currency Translation on Cash Flow | 7,338 | 714 | 6,624 | 927.73 |
| Net Increase (Decrease) in Cash and Cash Equivalents | $307,577 | $(565,883) | $873,460 | (154.35)% |

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#### Cash Used in Operating Activities

Net cash used in operating activities was $3,047,494 for the six months ended June 30, 2025, as compared to $2,328,650 for the six months ended June 30, 2024. Our net cash used in operating activities decreased, primarily due to higher general and administrative expenses at $3,299,028 for the six months ended June 30, 2025 ($2,204,694 for the six months ended June 30, 2024), as a result of higher sales, advertising and promotion costs and investor outreach expenses, as discussed above, partially offset by lower research and development costs for our babesiosis trial at $452,525 for the six months ended June 30, 2025 ($575,826 for the six months ended June 30, 2024).

#### Cash Provided by (Used in) Investing Activities

Net cash provided by investing activities was $1,650,834 for the six months ended June 30, 2025, as compared to net cash used in investing activities of $140,373 for the six months ended June 30, 2024. For the six months ended June 30, 2025, we received proceeds of $1,708,000 from maturities of certain short-term investments in certificates of deposit ($0 for the six months ended June 30, 2024). The cash proceeds are partially offset by capitalized patent costs of $7,165 and fixed asset purchases of $50,001 for the six months ended June 30, 2025 ($28,298 and $90,000 for the six months ended June 30, 2024, respectively). However, we did not capitalize website development costs for the six months ended June 30, 2025 ($22,075 capitalized for the six months ended June 30, 2024 associated with enhancements to the functionality of our corporate website).

#### Cash Provided by Financing Activities

Net cash provided by financing activities was $1,696,899 for the six months ended June 30, 2025, as compared to $1,902,426 for the six months ended June 30, 2024. The decreased in net cash provided by financing activities is mainly attributable to net proceeds of $1,898,296 received in connection with our common stock and warrant offering in January 2024, which exceeded the aggregate net proceeds of $1,712,973 received in connection with our common stock and warrant offerings completed in January 2025 and February 2025. We also received lower proceeds from the exercise of warrants at $1,926 for the six months ended June 30, 2025, compared to $9,990 for the six months ended June 30, 2024. Additionally, for the six months ended June 30, 2025, we withheld shares valued at $18,000 to cover tax withholdings for net share settlement of certain 2024 performance bonuses awarded to our executives ($0 for the six months ended June 30, 2024).

#### Effect of Foreign Currency Translation on Cash

Our foreign operations were small relative to U.S. operations for the six months ended June 30, 2025 and June 30, 2024, thus effects of foreign currency translation have been minor.

### Critical Accounting Policies, Significant Judgments, and Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

### Revenue Recognition

We recognize revenue in accordance with FASB ASC Topic No. 606, *Revenue from Contracts with Customers (“*ASC 606”). Revenues are recognized when control is transferred to customers in amounts that reflect the consideration we expect to be entitled to receive in exchange for those goods. Revenue recognition is evaluated through the following five steps: (i) identification of the contract, or contracts, with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied. As part of the accounting for these arrangements, we may be required to make significant judgments, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each performance obligation.

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Revenues from product sales are recorded at the net sales price, or “transaction price,” which may include estimates of variable consideration that result from product returns. We determine the amount of variable consideration by using either the expected value method or the most-likely-amount method. We include the unconstrained amount of estimated variable consideration in the transaction price, which reflects the amount for which it is probable that a significant reversal of cumulative revenue recognized will not occur. At the end of each subsequent reporting period, we re-evaluate the estimated variable consideration included in the transaction price and any related constraint, and if necessary, adjust our estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis in the period of adjustment. Reserves are established for the estimates of variable consideration based on the amounts we expect to be earned or to be claimed on the related sales.

We record U.S. commercial revenues as a receivable when our American distributor transfers shipped product to their title model for 60P. Foreign sales to both Australia and Europe are recognized as a receivable at the point product is shipped to distributor. The shipments to Australia and Europe are further subject to profit sharing agreements for boxes sold to customers.

### Share-Based Payments

We account for share-based payments in accordance with ASC Subtopic 718, *Compensation - Stock Compensation (“*ASC 718”). We measure compensation for all share-based payment awards granted to employees, directors, and nonemployees, based on the estimated fair value of the awards on the date of grant. For awards that vest based on continued service, the service-based compensation cost is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the awards. For service vesting awards with compensation expense recognized on a straight-line basis, at no point in time does the cumulative grant date value of vested awards exceed the cumulative amount of compensation expense recognized. The grant date is determined based on the date when a mutual understanding of the key terms of the share-based awards is established. We account for forfeitures as they occur.

We estimate the fair value of all stock option awards as of the grant date by applying the Black-Scholes option pricing model. The application of this valuation model involves assumptions, including the fair value of the common stock, expected volatility, risk-free interest rate, expected dividends and the expected term of the option. Due to the lack of a public market for our common stock prior to the IPO and lack of company-specific historical implied volatility data, we base our computations of expected volatility on the historical volatility of a representative group of public companies with similar characteristics of the Company, including stage of development and industry focus. The historical volatility is calculated based on a period of time commensurate with the expected term assumption. We generally use the simplified method as prescribed by the SEC Staff Accounting Bulletin Topic 14, *Share-Based Payment*, to estimate the expected term for stock options, whereby, the expected term equals the midpoint of the weighted average remaining time to vest, vesting period and the contractual term of the options due to our lack of historical exercise data. For certain options granted out-of-the-money, our best estimate of the expected term is the contractual term of the award. The risk-free interest rate is based on U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The expected dividend yield is assumed to be zero as we have never paid dividends and have no current plans to pay any dividends on our common stock. The assumptions used in calculating the fair value of share-based awards represent our best estimates and involve inherent uncertainties and the application of significant judgment.

We recognize compensation expense for restricted stock units (“RSUs”) with only service-based vesting conditions on a straight-line basis over the vesting period. Compensation cost for service-based RSUs is based on the grant date fair value of the award, which is the closing market price of our common stock on the grant date multiplied by the number of shares awarded.

For awards that vest upon a liquidity event or a change in control, the performance condition is not probable of being achieved until the event occurs. As a result, no compensation expense is recognized until the performance-based vesting condition is achieved, at which time the cumulative compensation expense is recognized. Compensation cost related to any remaining time-based service for share-based awards after the liquidity-based event is recognized on a straight-line basis over the remaining service period.

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For fully vested, nonforfeitable equity instruments that are granted at the date we enter into an agreement for goods or services with a nonemployee, we recognize the fair value of the equity instruments on the grant date. The corresponding cost is recognized as an immediate expense or a prepaid asset and expensed over the service period depending on the specific facts and circumstances of the agreement with the nonemployee.

### Derivative Liabilities

We analyze all financial instruments with features of both liabilities and equity under ASC Topic 480, *Distinguishing Liabilities from Equity (“*ASC 480”) and ASC Topic 815, *Derivatives and Hedging (“*ASC 815”). The classification of derivative financial instruments is reassessed each reporting period. Derivative liabilities are adjusted to reflect fair value at each reporting period, with any increase or decrease in the fair value recorded in the results of operations (other income/expense) as change in fair value of derivative liabilities. As of June 30, 2025, derivative liabilities consist of contingent payment arrangements. We use a probability-weighted expected return method to determine the fair value of these instruments.

Upon conversion or repayment of a debt or equity instrument in exchange for equity shares, where the embedded conversion option has been bifurcated and accounted for as a derivative liability (generally convertible debt and warrants), we record the equity shares at fair value on the date of conversion, relieve all related debt, derivative liabilities, and unamortized debt discounts, and recognize a net gain or loss on debt extinguishment, if any.

Equity or liability instruments that become subject to reclassification under ASC Topic 815 are reclassified at the fair value of the instrument on the reclassification date.

### Off-Balance Sheet Arrangements

During 2025 and 2024, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

### JOBS Act Accounting Election

In April 2012, the JOBS Act was enacted. Section 107(b) of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

### Recent Accounting Pronouncements

From time to time, the FASB issues Accounting Standards Updates (“ASU”) to amend the authoritative literature in the ASC. The Company regularly evaluates new ASUs to determine the impact that these pronouncements may have on the consolidated condensed financial statements. Other than the pronouncements listed below, management believes that those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, or (iii) are not applicable to the Company’s consolidated condensed financial statements or related disclosures.

In November 2023, the FASB issued ASU 2023-07, *Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“*ASU 2023-07”) which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses and segment profit or loss. ASU 2023-07 also requires entities with a single reportable segment to provide all segment disclosures under ASC 280, including the new required disclosures under the ASU. We adopted ASU 2023-07 on a retrospective basis for the 2024 annual period, and for interim periods beginning in 2025. The impact is limited to our financial statement disclosures, which are presented in Note 2 to the accompanying consolidated condensed financial statements.

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In December 2023, the FASB issued ASU 2023-09, Income Taxes (ASC 740): *Improvements to Income Tax Disclosures (“*ASU 2023-09”) which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact that ASU 2023-09 will have on our financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, *Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“*ASU 2024-03”), which applies to all public business entities that file financial statements with the SEC. The amendments in this ASU require public business entities to disclose on an annual and interim basis, disaggregated information about certain income statement expense line items. The new standard is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. We are currently evaluating the impact that ASU 2024-03 will have on our financial statement disclosures.

## Market risk

As filed, 273 characters.

As a smaller reporting company as defined by Rule 12b-2 of the Exchange Act of 1934, as amended and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this item.

## Controls and procedures

As filed, 3,453 characters.

#### Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2025. Based on that evaluation, the Company’s Chief Executive Officer and the Company’s Chief Financial Officer have concluded that as of June 30, 2025, due to the existence of the material weakness in the Company’s internal control over financial reporting described below, the Company’s disclosure controls and procedures were not effective.

Management is responsible for establishing and maintaining adequate internal control over our financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting. Management has used the framework set forth in the report entitled “Internal Control-Integrated Framework (2013)” published by the Committee of Sponsoring Organizations of the Treadway Commission to evaluate the effectiveness of our internal control over financial reporting. Based on that assessment, our management has identified certain material weaknesses in our internal control over financial reporting.

Our management concluded that as of June 30, 2025, our internal control over financial reporting was not effective, and that material weaknesses existed in the following areas:

(1) we do not employ full time in-house personnel with the technical knowledge to identify and address some of the reporting issues surrounding certain complex or non-routine transactions. With respect to material, complex and non-routine transactions, management has and will continue to seek guidance from third-party experts and/or consultants to gain a thorough understanding of these transactions;

(2) we have inadequate segregation of duties consistent with the control objectives including but not limited to the disbursement process, transaction or account changes, and the performance of account reconciliations and approval; and

(3) we have ineffective controls over the period end financial disclosure and reporting process caused by insufficient accounting staff.

#### Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

#### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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## Risk factors

As filed, 1,305 characters.

As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and in item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this item. In any event, there have been no material changes in our risk factors as previously disclosed in the Registration Statement.

***We may issue a substantial number of shares of common stock upon exercise of the warrants issued in our July 2025 Offering, which would cause dilution to our stockholders and may affect the market price of our common stock.***

In connection with our July 2025 Offering, we issued (i) 878,264 pre-funded warrants, (ii) Series A-1 warrants to purchase up to 2,631,578 shares of common stock, and (iii) Series A-2 warrants to purchase up to 2,631,578 shares of common stock. We also issued placement agent warrants to purchase up to 197,368 shares of common stock. The exercise of these warrants will results in the issuance of a substantial number of additional shares of common stock, which will dilute the ownership interests of existing stockholders. The sale of such shares, or the perception that such sales could occur, could also cause the market price of our common stock to decline.

Filed Aug 13, 2025.
Source: SEC EDGAR, the filing index for accession 0001554855-25-001009. Last ingested by Listed: Nov 6, 2026, 12:18 ET. No prices; not investment advice.