Jaguar Health (JAGX) unveils special Series O dividend with major dilution risk
Rhea-AI Filing Summary
Jaguar Health declared a special one-time stock dividend of Series O Convertible Preferred Stock, granting one-tenth of one Series O share for each share of common stock and for Eligible Warrants covering 2,400,765 common shares held on the March 2, 2026 record date. The dividend is expected to be paid on March 4, 2026. The Series O Preferred Stock is non-transferable, pays no dividends, has minimal liquidation preference, and carries almost no voting rights, but will convert into common stock at the company’s election or automatically on December 31, 2026 based on a market-linked conversion price, subject to a 19.99% beneficial ownership cap per holder. Jaguar’s risk disclosures highlight that full conversion of the Series O Preferred Stock and potential future exchanges of approximately $30 million of debt into common stock could result in substantial dilution and pressure on the share price. The company also warns of ongoing risks to maintaining its Nasdaq listing following multiple reverse stock splits and evolving listing standards.
Positive
- None.
Negative
- High dilution risk: Illustrative scenarios show Series O Preferred Stock conversion could add up to 20,994,382 common shares versus 11,218,677 shares outstanding as of February 17, 2026, significantly reducing non-recipient holders’ ownership.
- Debt overhang and equity-for-debt risk: With approximately
$30 million of royalty interests and secured notes outstanding as of February 17, 2026, the company highlights that exchanging this debt at market-based prices could issue up to 75,000,000 new shares in one example. - Nasdaq listing vulnerability: The company has already executed 1-for-60 and 1-for-25 reverse stock splits to meet the minimum bid requirement and warns that cumulative split ratios and proposed tougher market value rules increase the risk of future delisting.
Insights
Special preferred dividend adds significant potential dilution and listing risk.
Jaguar Health is issuing a special Series O Preferred Stock dividend equal to one-tenth of a share per common share and certain warrants as of
Risk factors show how this structure could expand the share count materially. Using an assumed conversion price of
The company acknowledges these scenarios may significantly dilute holders who do not receive the preferred dividend, and that large potential share issuance may weigh on the stock price. It also details a history of reverse stock splits to cure Nasdaq bid-price deficiencies and notes that new Nasdaq rules and higher public-float thresholds raise the risk of future delisting if performance or price weaken again.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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| Item 3.03 | Material Modification to Rights of Security Holders |
The information set forth in Item 8.01 of this Current Report on Form 8-K is incorporated into this Item 3.03 by reference.
| Item 7.01 | Regulation FD Disclosure |
On February 18, 2026, Jaguar Health, Inc. (the “Company”) issued a press release announcing the special one-time dividend. A copy of the press release is attached hereto as Exhibit 99.1.
The information in this Item 7.01 disclosure is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities under that Section. In addition, the information in this Item 7.01 disclosure shall not be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended, or the Securities Act, except as shall be expressly set forth by specific reference in such filing.
| Item 8.01 | Other Events |
On February 18, 2026, the Company announced that its board of directors (the “Board”) declared a special one-time dividend of one-tenth of one share of Series O Preferred Stock (as defined below) for each share of voting common stock, par value $0.0001 per share, of the Company (the “Common Stock”) outstanding, plus each share issuable upon exercise of certain warrants to purchase, in aggregate, 2,400,765 shares of our Common Stock with dividend rights (the “Eligible Warrants”) outstanding, at the close of business on March 2, 2026 (the “Record Date”) (the “Preferred Stock Dividend”). The Preferred Stock Dividend is expected to be paid as of the close of business on March 4, 2026. Investors who trade during this period should consult with their broker with respect to the entitlement to the Preferred Stock Dividend.
The Company will file a Certificate of Designation of Preferences, Rights and Limitations of Series O Convertible Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Delaware prior to the issuance of the Preferred Stock Dividend. The Certificate of Designation will set forth the rights, preferences, powers, restrictions, and limitations of the Series O Convertible Preferred Stock, par value $0.0001 per share (the “Series O Preferred Stock”), and will be effective prior to issuance of the Preferred Stock Dividend. Below is a summary of certain of the provisions of the Certificate of Designation.
Series O Certificate of Designation
Issuance in Fraction
The Series O Preferred Stock may be issued in whole shares or in any fraction of a share that is one one-tenth (1/10th) of a share or any integral multiple of such fraction, which fractions shall entitle the Holder (as defined below), in proportion to such Holder’s fractional shares, to receive shares of Common Stock issuable upon conversion of the shares of Series O Preferred Stock in accordance with the terms of the Certificate of Designation (the “Conversion Shares”) upon a Conversion (as defined below), participate in distributions upon a Liquidation Event (as defined below) and have the benefit of any other rights of Holders as described herein.
Restrictions on Transfer
No shares of Series O Preferred Stock may be transferred, assigned or pledged by any Holder at any time without the prior written consent of the Company.
Dividends
Holders of shares of Series O Preferred Stock (the “Holders”) will not be entitled to receive any dividends on shares of Series O Preferred Stock.
Voting Rights
Except as otherwise provided in the Certificate of Designation or as otherwise required by law, the Series O Preferred Stock shall have no voting rights. For any matter in which the Holders are entitled to vote, such Holders shall be entitled to one vote per one-tenth of one share of Series O Preferred Stock.
Liquidation Rights
In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or Deemed Liquidation Event (as defined below) (each, a “Liquidation Event”), each share of Series O Preferred Stock shall be entitled to be paid, out of the assets of the Company available for distribution to its stockholders, before any distribution or payment out of the assets of the Company may be made to or set aside for the holders of Common Stock and subject to the rights of the Company’s depositors and other creditors, an amount per share of Series O Preferred Stock equal to $0.0001 (as applicable, the “Liquidation Amount”). If upon any such liquidation, dissolution or winding up of the Company (other than a Chapter 7 bankruptcy) or Deemed Liquidation Event, the assets of the Company available for distribution to its stockholders shall be insufficient to pay the Liquidation Amount, the Holders shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. Following the payment of the Liquidation Amount, if there are any remaining assets of the Company available for distribution to its stockholders, the Series O Preferred Stock shall not participate in such distributions. Notwithstanding the foregoing, if in the event of a dissolution or winding up of the Company in connection with a Chapter 7 bankruptcy, the assets of the Company available for distribution to its stockholders shall be insufficient to pay the Liquidation Amount, the Holders, with respect to their shares of Series O Preferred Stock, shall be entitled to receive out of such assets the same amount that each share of the Common Stock would receive as if each outstanding share of Series O Preferred Stock were, immediately prior to the applicable record date, fully converted (disregarding solely for such purposes any conversion or exchange limitations hereunder) to shares of Common Stock at the conversion ratio for each whole share of Preferred Stock (the “Conversion Ratio”), which is equal to the Stated Value (as defined in the Certificate of Designation) divided by the applicable Conversion Price.
For each share of Series O Preferred Stock, the “Conversion Price” shall be, unless otherwise provided in this Certificate of Designation, equal to the Minimum Price as of the applicable Conversion Date (as defined below). “Minimum Price” means, with respect to a given date, the lower of: (i) the Closing Price (as defined in the Certificate of Designation) of the Common Stock immediately preceding such date or (ii) the average Closing Price of the Common Stock for the five (5) Trading Days (as defined in the Certificate of Designation) immediately preceding such date.
Each of the following events shall be considered a “Deemed Liquidation Event”: (A) a merger or consolidation in which the Company is a constituent party and in which the stockholders of the Company immediately prior to such merger or consolidation do not continue to hold a majority of the voting power of the Company or any successor entity following such merger or consolidation; or (B) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Company or any subsidiary of the Company of all or substantially all the assets of the Company and its subsidiaries taken as a whole, or the sale or disposition (whether by merger, consolidation or otherwise) of one or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Company.
Conversion Rights
| • | Optional Conversion |
At any time prior to December 31, 2026, the Company may, in its sole discretion, elect to convert all (and not part) of the then outstanding shares of Series O Preferred Stock to Conversion Shares at the Conversion Ratio (the “Optional Conversion”); provided, however, that in no event may Conversion Shares be issued to any Holder that would cause such Holder, together with its affiliates, to beneficially own shares of Common Stock in excess of the Maximum Percentage (as defined below) immediately after giving effect to the issuance of the Conversion Shares. The Company shall effect the Optional Conversion by providing Holders with the Company Conversion Notice (as defined in the Certificate of Designation), which shall specify, inter alia, the date on which such conversion is to be effected (the “Optional Conversion Date”). On the Optional Conversion Date, each outstanding share of Series O Preferred Stock will automatically convert (subject to the Maximum Percentage limitation) into such whole number of fully paid and non-assessable shares of Common Stock as is determined by the Conversion Ratio.
| • | Automatic Conversion |
If no Optional Conversion occurs pursuant to the terms of the Certificate of Designation, then on December 31, 2026 (the “Automatic Conversion Date” and together with an Optional Conversion Date, the “Conversion Date”), each outstanding share of Series O Preferred Stock will automatically convert (subject to the Maximum Percentage limitation) into such whole number of fully paid and non-assessable shares of Common Stock as is determined by the Conversion Ratio (the “Automatic Conversion” and together with the Optional Conversion, the “Conversion”).
For any issuance of Conversion Shares that would cause a breach of the Maximum Percentage limitation, the Company may issue, in lieu of such number of Conversion Shares in excess of the Maximum Percentage, one or more pre-funded warrants (each, a “Pre-Funded Warrant”) exercisable into, in aggregate, such number of Conversion Shares in excess of the Maximum Percentage to the Holder; provided, however, that the terms of such Pre-Funded Warrants shall provide that they may not be exercised to such extent as to cause the Holder, together with its affiliates, to beneficially own shares of Common Stock in excess of the Maximum Percentage immediately after giving effect to such exercise.
No fractional shares or scrip representing fractional shares shall be issued upon the conversion of the Series O Preferred Stock. As to any fraction of a Conversion Share which a Holder would otherwise be entitled to receive upon such conversion, the Company shall pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the closing price of a share of Common Stock as of the Trading Day immediately prior to the applicable Conversion Date.
Maximum Percentage
In no event may shares of Common Stock be issued to any Holder that would cause such Holder’s beneficial ownership to exceed the Maximum Percentage, which is 19.99% of the number of shares of Common Stock outstanding on a given date (including for such purpose the shares of Common Stock issuable upon such issuance).
Trading Market
There is no established trading market for any of the Series O Preferred Stock, and we do not expect a market to develop. We do not intend to apply for a listing for any of the Series O Preferred Stock on any securities exchange or other nationally recognized trading system. The Series O Preferred Stock will not trade with the Common Stock.
The foregoing description of the form of Certificate of Designation and the Pre-Funded Warrants does not purport to be complete and is qualified in its entirety by reference to the full text of the Certificate of Designation and the form of Pre-Funded Warrants, copies of which are filed as Exhibits 3.1 and 4.1, respectively, to this Current Report and are incorporated by reference herein.
The Company is also supplementing the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as amended, Quarterly Reports on Form 10-Q for the quarters ended
March 31, 2025, June 30, 2025 and September 30, 2025, and other filings made with the SEC, with the risk factors relating to the Preferred Stock Dividend and certain other matters, filed as Exhibit 99.2 hereto and incorporated by reference herein.
| Item 9.01 | Financial Statements and Exhibits. |
| Exhibit |
Exhibit Description | |
| 3.1 | Form of Certificate of Designation of Preferences, Rights and Limitations of Series O Convertible Preferred Stock. | |
| 4.1 | Form of Pre-Funded Warrant. | |
| 99.1 | Press Release, dated February 18, 2026, related to the special dividend of Series O Preferred Stock. | |
| 99.2 | Supplemental Risk Factors. | |
| 104 | Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| JAGUAR HEALTH, INC. | ||||||
| Date: February 18, 2026 | By: | /s/ Lisa A. Conte | ||||
| Lisa A. Conte | ||||||
| Chief Executive Officer & President | ||||||
Exhibit 99.1
Jaguar Health Announces a Special One-time Stock Dividend
Dividend intended to provide dilution protection to Jaguar shareholders as company explores pathway to restructure debt
SAN FRANCISCO, CA / February 18, 2026 / Jaguar Health, Inc. (NASDAQ: JAGX) (“Jaguar” or “the Company”) today announced that its Board of Directors has declared a one-time special stock dividend (the “Special Stock Dividend”) to holders of Jaguar Common Stock and certain outstanding warrants as of record on March 2, 2026. The Special Stock Dividend will consist of the Company’s Series O Convertible Preferred Stock (the “Preferred Stock”).
Only persons who own shares of the Company’s voting common stock (the “Common Stock”), or certain warrants to purchase Common Stock with dividend rights (the “Warrants”) at the close of business on March 2, 2026 (the “Record Date”) will be entitled to receive shares of the Preferred Stock. Each share of Preferred Stock will convert into shares of Common Stock at the Company’s election at any time as determined by the Board of Directors, provided, however, if the Preferred Stock has not converted by December 31, 2026, the Preferred Stock will automatically convert on that date. The conversion will be at a value based on the market price of the Common Stock at the time of conversion. The Board of Directors of the Company may elect to have the Preferred Stock converted into Common Stock based on several factors, including the potential reduction of debt in the Company and how that might affect risk of future dilution after conversion of the Preferred Stock into Common Stock.
“Jaguar is issuing the Special Stock Dividend to reward and recognize our passionate and supportive stockholders and provide protection against potential dilution as we explore pathways to repay and restructure our existing indebtedness,” said Lisa Conte, Jaguar’s founder, president, and CEO. “Jaguar has a sharp strategic focus on our ongoing global development program for our crofelemer powder-for-oral-solution formulation for intestinal failure. As announced, Jaguar was provided with meaningful non-dilutive capital in January 2026 upon entering a U.S. license agreement with Future Pak for Mytesi® – an agreement that is fully aligned with our strategy to concentrate Jaguar’s crofelemer development efforts on human rare-disease intestinal failure indications. Our intestinal failure program is expected to continue to provide clinical proof-of-concept milestones and is the subject of business development discussions with the potential to bring in non-dilutive funds from potential licensee partners. Jaguar is targeting Breakthrough Therapy designation for crofelemer for the indication of microvillus inclusion disease (MVID), with a planned filing of an NDA (New Drug Application) with the U.S. Food and Drug Administration for this indication in the first half of 2027. MVID is a lethal and ultrarare genetic pediatric disorder that causes intestinal failure. Crofelemer recently demonstrated groundbreaking benefit in the initial pediatric MVID patient treated – demonstrating a reduction in weekly parenteral support (PS) needs of up to 37%. The safety of locally acting crofelemer continues to be a hallmark of the drug and a critical factor in assessing the benefit-to-risk ratio of crofelemer for intestinal failure patients. Our crofelemer intestinal failure programs are also enhanced by clinical proof-of-concept data in pediatric patients with intestinal failure due to its effects in another rare disease short bowel syndrome with intestinal failure (SBS-IF). The Company has an ongoing randomized double-blind placebo-controlled Phase 2 study of crofelemer powder-for-oral solution in adult SBS-IF patients.”
The payment date for the Special Stock Dividend is March 4, 2026, two days after the Record Date. The Preferred Stock is not transferable and will not be listed for trading on any stock exchange and will not trade with the Common Stock.
Distribution of the Special Stock Dividend is a special one-time event. The payment of dividends in the future is subject to the discretion of the Board of Directors, which will evaluate the possibility of future dividend distributions from time to time based on factors that the Board of Directors deem relevant. However, no additional dividends have been authorized or are being contemplated at this time.
For additional information about the Special Stock Dividend and terms of the Preferred Stock and associated risk factors, please refer to the Form 8-K the Company filed with the U.S. Securities and Exchange Commission on February 18, 2026, which can be viewed on the Company’s website by clicking here.
About Crofelemer
Crofelemer is a novel, oral plant-based prescription medicine purified from the red bark sap, also referred to as “dragon’s blood,” of the Croton lechleri tree in the Amazon Rainforest. Napo Pharmaceuticals has established a sustainable harvesting program, under fair trade practices, for crofelemer to ensure a high degree of quality, ecological integrity, and support for indigenous communities.
About the Jaguar Health Family of Companies
Jaguar Health, Inc. (Jaguar) is a commercial stage pharmaceuticals company focused on developing novel proprietary prescription medicines sustainably derived from plants from rainforest areas for people and animals with gastrointestinal distress. Jaguar family companies Napo Pharmaceuticals, Inc. (Napo) and Napo Therapeutics S.p.A. focus on the development and commercialization of novel crofelemer powder for oral solution for the treatment of rare and orphan gastrointestinal disorders with intestinal failure, including microvillus inclusion disease and short bowel syndrome.
For more information about:
Jaguar Health, visit https://jaguar.health
Napo Pharmaceuticals, visit napopharma.com
Napo Therapeutics, visit napotherapeutics.com
Forward-Looking Statements
Certain statements in this press release constitute “forward-looking statements.” These include statements regarding payment of dividends, conversion of the Preferred Stock, Jaguar’s expectation that its intestinal failure program will continue to provide clinical proof-of-concept milestones, Jaguar’s expectation that the opportunity may exist to bring in non-dilutive funds from potential licensee partners to support the intestinal failure program, Jaguar’s plans to pursue Breakthrough Therapy designation for crofelemer for the indication of MVID, and Jaguar’s expectation that the Company will file an NDA with the U.S. Food and Drug Administration for the MVID indication in the first half of 2027. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “aim,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this release are only predictions. Jaguar has based these forward-looking statements largely on its current expectations and projections about future events. These forward-looking statements speak only as of the date of this release and are subject to several risks, uncertainties, and assumptions, some of which cannot be predicted or quantified and some of which are beyond Jaguar’s control. Except as required by applicable law, Jaguar does not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
Source: Jaguar Health, Inc.
Contact:
hello@jaguar.health
Jaguar-JAGX
Exhibit 99.2
Risk Factors
Unless the context otherwise requires, references herein to “Jaguar,” the “Company,” “we,” “us,” and “our” refer to Jaguar Health, Inc. Terms used but not defined herein have the respective meanings set forth in the Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on February 18, 2026. (the “Current Report”). The risk factors discussed below contain description of the terms and conditions of the form of the Certificate of Designation of Preferences, Rights and Limitations of Series O Convertible Preferred Stock (the “Certificate of Designation”). Such description does not purport to be complete and is qualified in its entirety by reference to the full text of the Certificate of Designation, a copy of which is filed as Exhibit 31 to the Current Report.
Risks Related to the Preferred Stock Dividend
The Series O Preferred Stock is not freely transferable and therefore provides limited liquidity to investors.
The Series O Preferred Stock provides limited liquidity since the Series O Preferred Stock may not be transferred, assigned or pledged by any holder without the prior written consent of the Company and are not certificated, listed on any exchange, or quoted on any quotation system. Moreover, the Series O Preferred Stock does not trade with our Common Stock.
The potential issuance of a large number of shares of Common Stock upon the conversion of our Series O Convertible Preferred Stock (the “Series O Preferred Stock”) may have a negative effect on the trading price of our Common Stock as well as a significant dilutive effect.
The Certificate of Designation provides that all of the then outstanding shares of Series O Preferred Stock shall convert, either as of December 31, 2026 or upon such earlier date, as determined by the Company’s board of directors (the “Board”) in its sole discretion, to shares of Common Stock (the “Conversion Shares”) at a ratio, for each share of Series O Preferred Stock (the “Series O Conversion Ratio”), equal to (i) the Stated Value (as defined in the Certificate of Designation) of a share of Series O Preferred Stock, divided by (ii) the Minimum Price (as defined hereunder) as of the applicable conversion date (the “Series O Conversion Price”). The “Minimum Price” as defined in the form of the Certificate of Designation means, with respect to any given date, the lower of: (i) the closing price of our Common Stock immediately preceding such date or (ii) the average closing price of the Common Stock for the five trading days immediately preceding such date.
This conversion of all of the Series O Preferred Stock will result in the issuance of a substantial number of additional shares of our Common Stock and, as a result, the percentage ownership and voting power held by our stockholders who do not receive the Series O Preferred Stock as described below will be significantly reduced. Such stockholders will experience significant dilution.
A stockholder’s entitlement to the dividend of Series O Preferred Stock (the “ Preferred Stock Dividend”) as declared by the Board is determined by whether such stockholder holds shares of our Common Stock as of the Record Date (as defined hereunder) for the Preferred Stock Dividend.
Our Board set March 2, 2026 as the record date (the “Record Date”) and March 4, 2026 as the dividend payment date (the “Dividend Payment Date”).
By way of example only, if a person acquires shares of our Common Stock on March 3, 2026, the day between the Record Date and the Dividend Payment Date, even though such person is a holder of record of our Common Stock when the Preferred Stock Dividend is paid, such dividend would be paid to the seller of the Common Stock who is the holder of record as of the Record Date rather than such person, because such person is not a holder of record of our Common Stock as of the Record Date.
As such, any person who trades our Common Stock in proximity to the Preferred Stock Dividend timeline may face negative unintended outcomes, and as such may not be able to receive, proportionally or at all, benefits from the Preferred Stock Dividend, even if they hold shares of our Common Stock on the Dividend Payment Date. Such persons will experience greater dilution compared to the stockholders who enjoy the rights and benefits from the Preferred Stock Dividend.
Because the Series O Conversion Ratio for a future conversion will be based on the Series O Conversion Price as of the time of such conversion, the exact magnitude of the dilutive effect of a future conversion cannot be conclusively determined as of this date but will very likely be material to those stockholders who do not receive our Preferred Stock Dividend. Potential future reverse stock splits and potential exchanges of our existing debt for our Common Stock after the Record Date pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”), for example, could result in significant future dilution to our holders of Common Stock acquired after the dates outlined above who do not benefit from holding our Series O Preferred Stock.
By way of example only, based on an assumed effective Series O Conversion Price of $0.40 per share (the “Assumed Series O Conversion Price”), and assuming (i) the Stated Value for one share of Series O Preferred Stock is $6.17, and (ii) there are 1,361,945 shares of Series O Preferred Stock outstanding, which is the total number of shares of Series O Preferred Stock that would be received by holders of record of the share of Common Stock outstanding as of February 17, 2026 and those certain warrants to purchase Common Stock with dividend rights (the “Eligible Warrants”) outstanding as of February 17, 2026 as the Preferred Stock Dividend, assuming February 17, 2026 is the record date for such dividend (the “Assumed Series O Share Amount”), all of which shall be converted, up to a maximum of 20,994,382 shares of our Common Stock will be issuable upon such conversion. Based on the shares of our Common Stock outstanding as of February 17, 2026 which was 11,218,677, the shares of Common Stock issued upon the full conversion of the Series O Preferred Stock would represent approximately 60.65% of our outstanding Common Stock (after giving effect to such conversion and assuming full exercise of the Eligible Warrants into shares of Common Stock). The Conversion Price in connection with a future conversion could be materially lower than the Assumed Series O Conversion Price, which, for example, would have an even greater material dilutive effect on those stockholders who do not receive our Preferred Stock Dividend.
For illustration purposes only, below is a table showing the number of shares of Common Stock that may potentially be issued upon full conversion of the shares of Series O Preferred Stock, based on the Assumed Series O Share Amount and three hypothetical conversion prices. The number of shares of Common Stock issuable will correspondingly increase or decrease depending on the actual Conversion Price for the Series O Preferred Stock.
| Scenario A | Scenario B | Scenario C | ||||||||||
| Hypothetical Series O Conversion Price |
$ | 0.10 | $ | 0.60 | $ | 1.50 | ||||||
| Hypothetical Series O Conversion Ratio |
61.66 | 10.28 | 4.11 | |||||||||
| Hypothetical Aggregate Outstanding Shares of Series O Preferred Stock |
1,361,945 | 1,361,945 | 1,361,945 | |||||||||
| Total Number of Shares of Common Stock Issued Upon Full Conversion of Series O Preferred Stock |
83,977,529 | 13,996,255 | 5,598,502 | |||||||||
| Percentage of Outstanding Common Stock Represented by Shares of Common Stock Issued Upon Full Conversion of Series O Preferred Stock (After Giving Effect to Such Conversion and assuming full exercise of the Eligible Warrants into shares of Common Stock)* |
86.05 | % | 50.68 | % | 29.13 | % | ||||||
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| * | Calculated based on the shares of our Common Stock outstanding as of February 17, 2026 which was 11,218,677. |
The potential for the issuance of such a substantial number of shares of Common Stock may depress the price of our Common Stock regardless of our business performance. We may find it more difficult to raise additional equity capital while the Series O Preferred Stock is outstanding.
Further, it is possible that we will not have a sufficient number of available shares of Common Stock to satisfy the full conversion of the Series O Preferred Stock if the applicable Conversion Price is reduced. If we do not have a sufficient number of available shares for such conversion, we will be required to increase our authorized shares of Common Stock or conduct a reverse stock split with respect to issued and outstanding shares of Common Stock, which may require additional stockholder approval and will be time consuming and expensive.
Holders of Eligible Warrants will not actually receive the Preferred Stock Dividend unless and until the exercise of the Eligible Warrants and will cease to be entitled to the Preferred Stock Dividend upon transfer of the Eligible Warrants.
In addition to the holders of record of shares of our Common Stock at the close of business on the Record Date, holders of certain warrants to purchase, in aggregate, 2,400,765 shares of our Common Stock with dividend rights (the “Eligible Warrants”) outstanding at the close of business on the Record Date will also be entitled to the Preferred Stock Dividend. However, pursuant to the terms and conditions of the Eligible Warrants respectively, a holder of an Eligible Warrant will not actually receive shares of Series O Preferred Stock as a dividend (or alternatively, shares of our Common Stock issued upon conversion of the Series O Preferred Stock in accordance with the terms of the Certificate of Designation, if the Series O Preferred Stock has been converted), in respect of any shares of our Common Stock issuable upon exercise of the Eligible Warrant (the “Warrant Shares”), unless and until such holder exercises the Eligible Warrant at any time prior to the expiration of the Eligible Warrant.
Moreover, an Eligible Warrant may be transferrable by its holder, with the right to receive the Preferred Stock Dividend (or the Conversion Shares upon and after the conversion of Series O Preferred Stock, as described hereunder) transferrable along with such Eligible Warrant, pursuant to the terms of such Eligible Warrant (a “Transferrable Eligible Warrant”). In the event that a Transferrable Eligible Warrant is transferred by its holder in accordance with its terms after the Record Date, the transferee of such Transferrable Eligible Warrant shall become entitled to receive the Series O Preferred Stock as a dividend (or alternatively, the Conversion Shares issued upon conversion of the Series O Preferred Stock in accordance with the terms of the Certificate of Designation, if the Series O Preferred Stock has been converted), in respect of the Warrant Shares issued upon exercise of the Transferrable Eligible Warrant by the transferee. The transferor of the Transferrable Eligible Warrant shall, upon such transfer, cease to have any right to receive the Preferred Stock Dividend (or the Conversion Shares upon and after the conversion of Series O Preferred Stock).
Risks Related to Our Common Stock
Our issuance of additional Common Stock and other securities to repay debt would dilute your proportionate ownership and voting rights and could have a negative impact on the market price of our Common Stock.
Since March 2020, we have sold royalty interests to certain lenders that entitle such lenders to receive future royalties on sales of our products. The royalty interests (as amended) require us to make minimum royalty payments beginning in April 2026, even if we do not sell a sufficient amount of products to cover such payments, which may strain our cash resources.
Pursuant to the terms of the royalty interests (as amended), we have the right, at our sole discretion and subject to certain limitations, to exchange from time to time, all or any portion of such 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 the date of the applicable exchange. Since January 2025, we have conducted various debt-for-equity and equity-for-equity exchanges in accordance with Section 3(a)(9) of the Securities Act, whereby we issued, in the aggregate, approximately 1.27 million shares of Common Stock and pre-funded warrants to purchase up to 13.39 million shares of Common Stock in exchange for a reduction in the outstanding balance of the royalty interests of approximately $12.17 million. As of February 17, 2026, approximately 4.22 million shares of Common Stock were issued upon exercise of the aforementioned pre-funded warrants.
In addition to the royalty interests, we also issued secured promissory notes to certain lenders in January 2021 and November 2025, respectively. The total outstanding balance of the royalty interests and the secured promissory notes as of February 17, 2026 was approximately $30 million.
Since our inception, we have incurred recurring operating losses and negative cash flows from operations. We expect to incur substantial losses and negative cash flows in future periods. At the present time, we have very limited cash resources to allocate to the repayment of outstanding debt when any part thereof becomes due. We have previously, as described above, issued equity securities including shares of our Common Stock and pre-funded warrants in exchange for debt, and we may continue to do so based upon such factors as the Board may deem relevant in its sole discretion, including, but not limited to, our cash balances. It is very likely that we will continue to issue additional securities to reduce debt in the future.
Because the exchange ratio for a future exchange would be based on the Nasdaq Minimum Price as of the time of such exchange, the exact magnitude of the dilutive effect of a future exchange cannot be conclusively determined as of this date.
By way of example only, based on an assumed effective Nasdaq Minimum Price of $0.40 per share (the “Assumed Exchange Price”), and assuming the Company has $30,000,000 debt outstanding (the “Assumed Debt Amount”), all of which shall be exchanged, up to a maximum of 75,000,000 shares of our Common Stock would be issuable upon such exchange. Based on the shares of our Common Stock outstanding as of February 17, 2026 which was 11,218,677, the shares of Common Stock issued upon the full exchange of the Assumed Debt Amount would represent approximately 86.99% of our outstanding Common Stock (after giving effect to such exchange). The Nasdaq Minimum Price in connection with any future exchange could be materially lower than the Assumed Exchange Price, which, for example, would have a material dilutive effect on existing stockholders.
For illustration purposes only, below is a table showing the number of shares of Common Stock that may potentially be issued upon full exchange of the Assumed Debt Amount, based on three hypothetical exchange prices. The number of shares of Common Stock issuable will correspondingly increase or decrease depending on the actual Nasdaq Minimum Price for the exchange.
| Scenario A | Scenario B | Scenario C | ||||||||||
| Hypothetical Nasdaq Minimum Price |
$ | 0.10 | $ | 0.60 | $ | 1.50 | ||||||
| Assumed Debt Amount |
30,000,000 | 30,000,000 | 30,000,000 | |||||||||
| Total Number of Shares of Common Stock Issued Upon Full Exchange of Assumed Debt Amount |
300,000,000 | 50,000,000 | 20,000,000 | |||||||||
| Percentage of Outstanding Common Stock Represented by Shares of Common Stock Issued Upon Full Exchange of Assumed Debt Amount (After Giving Effect to Such Exchange)* |
96.40 | % | 81.67 | % | 64.06 | % | ||||||
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| * | Calculated based on the shares of our Common Stock outstanding as of February 17, 2026 which was 11,218,677. |
The potential for the issuance of such a substantial number of shares of Common Stock may depress the price of our Common Stock regardless of our business performance.
Our failure to meet the continued listing requirements of The Nasdaq Capital Market could result in a delisting of our Common Stock.
Our Common Stock is listed on the Nasdaq Capital Market under the symbol “JAGX.” In order to maintain that listing, we must satisfy minimum financial and other requirements, including, without limitation, the minimum stockholders’ equity requirement, the minimum bid price requirement and the market value of publicly held shares requirement.
There can be no assurances that we will be successful in maintaining, or if we fall out of compliance, in regaining compliance with the continued listing requirements and maintaining the listing of our Common Stock on the Nasdaq Capital Market. Delisting from Nasdaq could adversely affect our ability to raise additional financing through the public or private sale of equity securities, and we would incur additional costs under requirements of state “blue sky” laws in connection with any sales of our securities. Delisting could also have other negative results, including the potential loss of confidence by employees, the loss of institutional investor interest, and fewer business development opportunities. If Nasdaq delists our Common Stock, the price of our Common Stock may decline, and our Common Stock may be eligible to trade on the OTC Bulletin Board, another over-the-counter quotation system, or on the pink sheets, which would negatively affect the liquidity of our Common Stock and a person may find it more difficult to dispose of our Common Stock or obtain accurate quotations as to the market value of our Common Stock.
On May 10, 2023, the Listing Qualifications Staff (the “Staff”) of The Nasdaq Stock Market LLC issued to the Company a notification citing its failure to comply with the $1.00 minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was initially provided 180 calendar days, or until November 6, 2023, and was subsequently granted an additional 180 calendar day period, or until May 6, 2024, to regain compliance with the Minimum Bid Price Requirement. On February 15, 2024, the Company received a delisting determination letter from the Staff in accordance with Nasdaq Listing Rule 5810(c)(3)(A)(iii) due to the Company’s securities having a closing bid price of $0.10 or less for ten consecutive trading days. Accordingly, on February 29, 2024, the Company requested a hearing before the Nasdaq Hearings Panel (the “Panel”), which automatically stayed the delisting of the Company’s Common Stock from Nasdaq pending a decision from the Panel. Pursuant to a review process, the Panel provided notice on April 5, 2024, granting the Company’s request to extend the period for it to regain compliance with the Minimum Bid Price Requirement until August 13, 2024.
On May 23, 2024, we effected a 1-for-60 reverse stock split of our outstanding Common Stock. On June 25, 2024, we received a letter from the Nasdaq Office of General Counsel notifying the Company that the minimum bid price deficiency had been cured and that The Nasdaq Stock Market LLC had determined to continue the listing of the Company’s Common Stock on The Nasdaq Stock Market.
During January and February 2025, the closing bid prices of our Common Stock were below $1.00 on most of the trading days. On March 24, 2025, we effected a 1-for-25 reverse stock split of our outstanding Common Stock, for purposes of increasing the price of our Common Stock in order to meet the Minimum Bid Price Requirement for continued listing on The Nasdaq Stock Market.
While Nasdaq rules do not impose a specific limit on the number of times a listed company may effect a reverse stock split to maintain or regain compliance with the Minimum Bid Price Requirement, Nasdaq has stated that a series of reverse stock splits may undermine investor confidence in securities listed on Nasdaq. Accordingly, if we fail to maintain compliance with the Minimum Bid Price Requirement, Nasdaq may determine that it is not in the public interest to maintain the listing of our Common Stock, even if we should effect another reverse stock split for the purpose of regaining compliance with the Minimum Bid Price Requirement.
In 2020, the SEC approved a Nasdaq rule change to expedite the delisting of securities of companies that have had one or more reverse stock splits with a cumulative ratio of one for 250 or more shares over the prior two-year period. Under the new rules, if a company falls out of compliance with the $1.00 minimum bid price after completing reverse stock splits over the immediately preceding two years that cumulatively result in a ratio of one for 250 shares, the company will not be able to avail itself of any compliance periods. Nasdaq will instead require the issuance of a Staff delisting determination, which is appealable to a hearings panel. As of February 2026, we have exceeded this limitation on the cumulative ratio. Our ability to remain listed on the Nasdaq Capital Market may be negatively impacted by this Nasdaq rule.
In addition, while Listing Rule 5550(a)(5) currently requires the market value of publicly held shares of at least $1 million, Nasdaq has recently announced its intention to amend its rules to not only increase the market value of publicly held shares requirement to at least $5 million, but accelerate the suspension and delisting process for certain noncompliant companies. Specifically, assuming the proposed amendment to the rules as is adopted, if a company remains noncompliant with the $5 million market value of publicly held shares requirement for 30 consecutive trading days, it will be subject to immediate suspension and delisting without a compliance period.
We continue to actively monitor our performance with respect to the listing standards and will consider available options to resolve any deficiency and maintain compliance with the Nasdaq rules. There can be no assurance that we will be able to maintain compliance or, if we fall out of compliance, regain compliance with any deficiency, or if we implement an option that regains our compliance, maintain compliance thereafter. In addition, even if we are successful in maintaining compliance with applicable Nasdaq continued listing requirements, our Board may decide, in its sole discretion, that the costs of compliance and the demands of management time and our resources required to maintain our Nasdaq listing are greater than the benefits received by the Company and our stockholders from being a Nasdaq-listed company and that, accordingly, consistent with other cash management and cost reduction measures that we have implemented, we should voluntarily delist from the Nasdaq Capital Market.
If our Common Stock were delisted from Nasdaq voluntarily or involuntarily, trading of our Common Stock most likely will be conducted in the over-the-counter market on an electronic bulletin board established for unlisted securities such as OTCID, OTCQX, OTCBX or OTC Pink which will reduce the market liquidity of our Common Stock. Delisting may result in lower levels of ownership and trading by institutional investors, who are generally guided by quantitative and qualitative investment standards such as market capitalization, minimum share price and liquidity, which in turn often produces lower trading volumes and reduced liquidity. As a result, an investor would find it more difficult to dispose of, or obtain accurate quotations for the price of, our Common Stock. Also, many brokers will not allow customers to hold non-listed securities in managed accounts or place restrictions which inhibit holding or trading, and it is generally understood that brokers will not recommend non-listed securities to retail clients, perhaps not as official policy but rather as a practical reality. We cannot assure you that our Common Stock, if delisted from Nasdaq voluntarily, or if they would be delisted involuntarily by Nasdaq, will be listed on another national securities exchange or quoted on an over-the counter quotation system.
FAQ
What did Jaguar Health (JAGX) announce regarding a special dividend?
How will Jaguar Health’s Series O Preferred Stock convert into common shares?
How significant is potential dilution from Jaguar Health’s Series O Preferred Stock?
What debt-related equity issuance risk does Jaguar Health (JAGX) describe?
Is Jaguar Health’s Series O Preferred Stock liquid or tradable?
What Nasdaq listing risks does Jaguar Health highlight in this filing?
Filing Exhibits & Attachments
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