# EDGAR Filing Document

**Accession Number:** 0001604950
**File Stem:** 0001193125-25-175437
**Filing Date:** 2025-8
**Character Count:** 161057
**Document Hash:** 47dcc2789904f837ae52d64575f28889
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-25-175437.hdr.sgml**: 20250807

**ACCESSION NUMBER**: 0001193125-25-175437

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 69

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250807

**DATE AS OF CHANGE**: 20250807

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** scPharmaceuticals Inc.
- **CENTRAL INDEX KEY:** 0001604950
- **STANDARD INDUSTRIAL CLASSIFICATION:** PHARMACEUTICAL PREPARATIONS [2834]
- **ORGANIZATION NAME:** 03 Life Sciences
- **EIN:** 465184075
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38293
- **FILM NUMBER:** 251194194

**BUSINESS ADDRESS:**
- **STREET 1:** 25 BURLINGTON MALL ROAD, SUITE 203
- **CITY:** BURLINGTON
- **STATE:** MA
- **ZIP:** 01803
- **BUSINESS PHONE:** 617-517-0730

**MAIL ADDRESS:**
- **STREET 1:** 25 BURLINGTON MALL ROAD, SUITE 203
- **CITY:** BURLINGTON
- **STATE:** MA
- **ZIP:** 01803

?xml version='1.0' encoding='ASCII'? 10-Q

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**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

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**Form** 10-Q

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☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-38293

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SCPHARMACEUTICALS INC.

(Exact name of registrant as specified in its charter)

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| | |
|:---|:---|
| Delaware | 46-5184075 |
| (State or other jurisdiction of<br>incorporation or organization) | (I.R.S. Employer<br>Identification No.) |

---

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| | |
|:---|:---|
| 25 Mall Road, Suite 203 | 01803 |
| Burlington, Massachusetts | (Zip Code) |
| (Address of principal executive office) |  |

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Registrant's telephone number, including area code: (617) 517-0730

N/A

(Former name, former address and former fiscal year, if changed since last report)

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Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common stock, par value $0.0001 per share | SCPH | The Nasdaq Global Select Market |

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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

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| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒  | Smaller reporting company | ☒ |
| Emerging growth company | ☐ |  |  |

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 6, 2025, the Registrant had 53,298,296 common shares, $0.0001 par value per share, outstanding.

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i

**FORWARD-LOOKING STATEMENTS**

This Quarterly Report on Form 10-Q ("Quarterly Report") contains express or implied forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical fact contained in this Quarterly Report are forward-looking statements, including, but not limited to, statements about the commercialization of FUROSCIX, including the timing and progress thereof as well as increased costs due to negotiations with our device manufacturer, the timing or likelihood of regulatory filings and approvals, the potential development of an autoinjector in 2026 and related benefits and timing thereof, including as related to a sNDA application, the ongoing launch of FUROSCIX for the treatment of edema in patients with chronic kidney disease, our plans to develop and commercialize our product candidates, the timing of our ongoing or planned clinical trials, the clinical utility of our product candidates, expectations surrounding manufacturing capabilities and supply chain matters, our commercialization capabilities and strategy, the funds available under the Credit Agreement and Revenue Purchase and Sale Agreement and the timing thereof, the sufficiency of our cash and cash equivalents and our ability to raise additional capital to fund our operations, our future financial performance, the anticipated impact of general economic conditions on our business, and the plans and objectives of management for future operations, capital needs and capital expenditures. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue" or the negative of these terms or other comparable terminology.

The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements on our management's beliefs and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, you should not place undue reliance on forward-looking statements because they relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Important factors that may cause actual results to differ materially from current expectations include, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We are heavily dependent on the success of our product candidates and our approved product, FUROSCIX<sup>®</sup> (furosemide injection). We have only one approved product and we cannot give any assurance that we will receive regulatory approval for any other product candidates, which is necessary before they can be commercialized.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•If we fail to produce FUROSCIX in the volumes that we require on a timely basis, we may face delays in our commercialization efforts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The commercial success of FUROSCIX and any other product candidates, if approved, depends upon attaining market acceptance by hospital networks, physicians, patients, third-party payers and the medical community.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•If we are unable to expand our sales and marketing capabilities or continue to enter into agreements with third parties to market and sell FUROSCIX, we may be unable to generate substantial revenue.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We have a limited operating history and limited history of commercializing pharmaceutical products, which may make it difficult to evaluate the prospects for our future success.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We have a history of significant operating losses and expect to incur significant and increasing losses for the foreseeable future; we may never achieve or maintain profitability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We may need additional funding and may be unable to raise capital when needed, which would force us to delay, reduce or eliminate our product development programs or commercialization efforts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our success depends on our ability to manufacture, or the ability of third parties to deliver, sufficient quantities of supplies, components and drug product, at competitive costs, for commercialization of FUROSCIX or any of our product candidates, if approved, including our ability to monitor quality control issues related to the production of FUROSCIX and on-body infusors in the volumes that will be required on a timely basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our success depends on our ability to protect our intellectual property and proprietary technology, as well as the ability of our collaborators to protect their intellectual property and proprietary technology.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•If we fail to comply with our obligations under our existing and any future intellectual property license with third parties, we could lose license rights that are important to our business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We may be subject to product liability lawsuits related to our product candidates, if approved, which could divert our resources, result in substantial liabilities and reduce the commercial potential of our products and product candidates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our failure to successfully identify, develop and market additional product candidates could impair our ability to grow.

i

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ii

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We depend heavily on our executive officers, directors and principal consultants and the loss of their services would materially harm our business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Other risks and uncertainties, including those listed under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the Securities and Exchange Commission on March 19, 2025, as well as in our subsequent filings with the Securities and Exchange Commission.

If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, then actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. While we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report.

ii

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iii

**SCPHARMACEUTICALS INC.**

**INDEX**

---

| | | |
|:---|:---|:---|
|  |  | &nbsp;&nbsp;&nbsp;**Page** |
| [**<u>PART I – FINANCIAL INFORMATION</u>**](#part_i_financ_ial_information) | [**<u>PART I – FINANCIAL INFORMATION</u>**](#part_i_financ_ial_information) | [**<u>PART I – FINANCIAL INFORMATION</u>**](#part_i_financ_ial_information) |
| Item 1. | Condensed Consolidated Financial Statements (unaudited) |  |
|  | [<u>Condensed Consolidated Balance Sheets as of December 31, 2024 and June 30, 2025</u>](#condensed_balance_sheets) | 4 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;[<u>Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2024 and June 30, 2025</u>](#condensed_statements_operations_comprehe) | 5 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;[<u>Condensed Consolidated Statements of Stockholders' Equity (Deficit) for the Three and Six Months Ended June 30, 2024 and June 30, 2025</u>](#condensed_statements_equity) | 6 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;[<u>Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and June 30, 2025</u>](#condensed_statements_cash_flows) | 7 |
|  | [<u>Notes to Condensed Consolidated Financial Statements</u>](#notes_financial_statements) | 8 |
| Item 2. | [<u>Management's Discussion and Analysis of Financial Condition and Results of Operations</u>](#item_2_managements_discussion_analysis_f) | 23 |
| Item 3. | [<u>Quantitative and Qualitative Disclosures About Market Risk</u>](#item_3_quantitative_qualitative_disclosu) | 31 |
| Item 4. | [<u>Controls and Procedures</u>](#item_4_controls_procedures) | 31 |
| [**<u>PART II – OTHER INFORMATION</u>**](#part_ii_o_r_information) | [**<u>PART II – OTHER INFORMATION</u>**](#part_ii_o_r_information) | [**<u>PART II – OTHER INFORMATION</u>**](#part_ii_o_r_information) |
| Item 1. | [<u>Legal Proceedings</u>](#item_1_legal_proceedings) | 32 |
| Item 1A. | [<u>Risk Factors</u>](#item_1a_risk_factors) | 32 |
| Item 2. | [<u>Unregistered Sales of Equity Securities and Use of Proceeds</u>](#item_2_unregistered_sales_equity_securit) | 34 |
| Item 3. | [<u>Defaults Upon Senior Securities</u>](#item_3_default_securities) | 34 |
| Item 4. | [<u>Mine Safety Disclosures</u>](#item_4_mine_safety) | 34 |
| Item 5. | [<u>Other Information</u>](#item_5_other) | 34 |
| Item 6. | [<u>Exhibits</u>](#item_6_exhibits) | 35 |
| [<u>Exhibit Index</u>](#exhibit_index) | [<u>Exhibit Index</u>](#exhibit_index) | &nbsp;&nbsp;&nbsp;36 |
| [<u>Signatures</u>](#signatures) | [<u>Signatures</u>](#signatures) | &nbsp;&nbsp;&nbsp;37 |

---

iii

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**PART I — FINANCIAL INFORMATION**

**SCPHARMACEUTICALS INC.**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

**(In thousands, except share and per share amounts)**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **June 30,** |
|  | **2024** | **2025** |
| **Assets** |  |  |
| Current assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $75655 | $40809 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 11721 | 19409 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory, net | 13903 | 14573 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses | 3549 | 3654 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deposits and other current assets | 1021 | 284 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 105849 | 78729 |
| Property and equipment, net | 56 | 48 |
| Right-of-use lease assets - operating, net | 1273 | 1175 |
| Deposits and other assets | 341 | 303 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $107519 | $80255 |
| **Liabilities and Stockholders' Equity (Deficit)** |  |  |
| Current liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $3883 | $4026 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 10702 | 16082 |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease obligation - operating, short-term | 239 | 264 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities | 52 | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 14876 | 20430 |
| Term loan, long-term | 51350 | 51200 |
| Revenue purchase and sale liability | 26869 | 28957 |
| Lease obligation - operating, long-term | 1104 | 984 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 94199 | 101571 |
| Commitments and contingencies (Note 11) |  |  |
| Stockholders' equity (deficit) |  |  |
| Preferred stock, $0.0001 par value; 10,000,000 shares authorized and no shares<br> issued and outstanding | - | - |
| Common stock, $0.0001 par value; 150,000,000 shares authorized as of <br> June 30, 2025; 50,095,689 and 53,290,227 shares issued and outstanding <br> as of December 31, 2024 and June 30, 2025, respectively | 5 | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 379809 | 382939 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | (366494) | (404260) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity (deficit) | 13320 | (21316) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity (deficit) | $107519 | $80255 |

---

*The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.* 

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**SCPHARMACEUTICALS INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**

**(In thousands, except share and per share amounts)**

**(Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2024** | **2025** | **2024** | **2025** |
| Product revenues, net | $8054 | $16041 | $14156 | $27793 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of product revenues | 2300 | 5011 | 4085 | 8482 |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development | 2677 | 4098 | 5403 | 8729 |
| &nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative | 17508 | 21226 | 34955 | 42633 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 22485 | 30335 | 44443 | 59844 |
| Loss from operations | (14431) | (14294) | (30287) | (32051) |
| Change in fair value of term loan | - | (150) | - | 150 |
| Change in fair value of revenue purchase and sale liability | - | (2560) | - | (4312) |
| Other (expense) income | (1189) | (128) | 1783 | 8 |
| Interest income | 664 | 509 | 1541 | 1225 |
| Interest expense | (2134) | (1401) | (4235) | (2786) |
| Net loss | $(17090) | $(18024) | $(31198) | $(37766) |
| Net loss per share — basic and diluted | $(0.44) | $(0.34) | $(0.80) | $(0.70) |
| Weighted average common shares outstanding — basic and diluted | 38984745 | 53719662 | 38968438 | 53698138 |
| Other comprehensive loss: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized gain on short-term investments | $- | $- | $1 | $- |
| Comprehensive loss | $(17090) | $(18024) | $(31197) | $(37766) |

---

*The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.*

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**SCPHARMACEUTICALS INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY**

**Six Months Ended June 30, 2024 and 2025**

**(In thousands, except share amounts)**

**(Unaudited)**

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  |  | **ADDITIONAL** |  | **OTHER** | **TOTAL** |
|  | **COMMON STOCK** | **COMMON STOCK** | **PAID-IN** | **ACCUMULATED** | **COMPREHENSIVE** | **STOCKHOLDERS'** |
|  | **SHARES** | **AMOUNT** | **CAPITAL** | **DEFICIT** | **INCOME (LOSS)** | **(DEFICIT) EQUITY** |
| **At December 31, 2024** | 50095689 | $5 | $379809 | $(366494) | $— | $13320 |
| Net loss |  |  |  | (19742) |  | (19742) |
| Vesting of restricted stock | 188236 |  |  |  |  |  |
| Stock-based compensation |  |  | 1295 |  |  | 1295 |
| **At March 31, 2025** | 50283925 | 5 | 381104 | (386236) |  | (5127) |
| Net loss |  |  |  | (18024) |  | (18024) |
| Issuance of common stock upon<br> exercise of warrant | 2903935 |  |  |  |  |  |
| Issuance of common stock through<br> employee stock purchase plan | 102367 |  | 316 |  |  | 316 |
| Stock-based compensation |  |  | 1519 |  |  | 1519 |
| **At June 30, 2025** | 53290227 | $5 | $382939 | $(404260) | $— | $(21316) |
| **At December 31, 2023** | 35968510 | $4 | $318561 | $(281346) | $(1) | $37218 |
| Net loss |  |  |  | (14108) |  | (14108) |
| Issuance of common stock upon exercise<br> of stock options | 32754 |  | 181 |  |  | 181 |
| Vesting of restricted stock | 53145 |  | (166) |  |  | (166) |
| Stock-based compensation |  |  | 1440 |  |  | 1440 |
| Unrealized gain on short-term investments |  |  |  |  | 1 | 1 |
| **At March 31, 2024** | 36054409 | 4 | 320016 | (295454) |  | 24566 |
| Net loss |  |  |  | (17090) |  | (17090) |
| Issuance of common stock through<br> employee stock purchase plan | 85393 |  | 283 |  |  | 283 |
| Stock-based compensation |  |  | 1491 |  |  | 1491 |
| **At June 30, 2024** | 36139802 | $4 | $321790 | $(312544) | $— | $9250 |

---

*The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.*

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**SCPHARMACEUTICALS INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(In thousands)**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2024** | **2025** |
| **Cash flows from operating activities** |  |  |
| Net loss | $(31198) | $(37766) |
| Adjustments to reconcile net loss to cash used in operating activities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation expense | 11 | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization expense - right-of-use leased assets - operating | 92 | 119 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accretion on short-term investments | (120) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Allowance for excess, damaged and obsolete inventory | 50 | 135 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 2931 | 2814 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-cash interest expense | 1265 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value adjustment to term loan |  | (150) |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value adjustment to revenue purchase and sale liability |  | 4312 |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value adjustment to derivative liability | (2016) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (1627) | (7688) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory | (6519) | (805) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | (495) | 670 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable, accrued expenses and other liabilities | (302) | 5101 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (37928) | (33250) |
| **Cash flows from investing activities** |  |  |
| Maturities of short-term investments | 29320 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by investing activities | 29320 |  |
| **Cash flows from financing activities** |  |  |
| Payment on revenue purchase and sale liability |  | (1912) |
| Proceeds from employee stock purchase plan | 283 | 316 |
| Proceeds from the exercise of vested stock options | 181 |  |
| Settlement of restricted stock units for tax withholding obligations | (166) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) financing activities | 298 | (1596) |
| **Net decrease in cash and cash equivalents** | (8310) | (34846) |
| Cash and cash equivalents at beginning of period | 46814 | 75655 |
| Cash and cash equivalents at end of period | $38504 | $40809 |
| **Supplemental cash flow information** |  |  |
| Interest paid | $2970 | $2785 |
| Taxes paid | $128 | $122 |

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*The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.*

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**SCPHARMACEUTICALS INC.**

**Notes to Unaudited Condensed Consolidated Financial Statements**

**1. Description of Business and Basis of Presentation**

***Description of Business***

scPharmaceuticals LLC was formed as a limited liability company under the laws of the State of Delaware on February 19, 2013. On March 24, 2014, scPharmaceuticals LLC was converted to a Delaware corporation and changed its name to scPharmaceuticals Inc. ("the Company"). The Company is a pharmaceutical company focused on developing and commercializing products that have the potential to optimize the delivery of infused therapies, advance patient care and reduce healthcare costs. The Company's strategy is designed to enable the subcutaneous administration of therapies that have previously been limited to intravenous ("IV") delivery. The Company's headquarters and primary place of business is Burlington, Massachusetts.

***Basis of Presentation***

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information and have been prepared on a basis which assumes that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The condensed consolidated financial statements reflect the operations of the Company and its wholly-owned subsidiary, scPharmaceuticals Securities Corporation. Certain information and disclosures normally included in financial statements in accordance with U.S. GAAP have been condensed or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company's audited financial statements and related notes for the year ended December 31, 2024 included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on March 19, 2025.

The accompanying condensed consolidated balance sheet as of June 30, 2025, the condensed consolidated statements of operations and comprehensive loss and stockholders' equity (deficit) for the three and six months ended June 30, 2024 and 2025 and condensed consolidated statements of cash flows for the six months ended June 30, 2024 and 2025 are unaudited. The unaudited condensed consolidated financial statements have been prepared on a basis consistent with that used to prepare the Company's audited annual financial statements and include, in the opinion of management, adjustments, consisting of normal recurring items, necessary for the fair statement of the condensed consolidated financial statements. The operating results for the three and six months ended June 30, 2025 are not necessarily indicative of the results expected for the full year ending December 31, 2025.

***Liquidity***

As of June 30, 2025, the Company had an accumulated deficit of approximately $404.3 million. Management expects to continue to incur operating losses for the foreseeable future. The Company has financed its operations to date from proceeds from the sale of common stock, preferred stock and the incurrence of debt.

As of June 30, 2025, the Company had cash and cash equivalents of $40.8 million. On October 13, 2022, the Company entered into a Credit Agreement and Guaranty (the "Oaktree Agreement") with, among others, the lenders from time to time party thereto and Oaktree Fund Administration, LLC, in its capacity as administrative agent for the lenders (Note 8). On August 9, 2024 (the "Closing Date"), the Company entered into a Credit Agreement and Guaranty (the "Credit Agreement") with the guarantors from time to time party thereto, the lenders from time to time party thereto (the "Lenders"), and Perceptive Credit Holdings IV, LP, in its capacity as administrative agent for the Lenders (in such capacity, the "Agent") (Note 8). On the Closing Date, the Company also entered into a Revenue Participation Right Purchase and Sale Agreement (the "Revenue Purchase and Sale Agreement") with Perceptive Credit Holdings IV, LP (the "Purchaser") (Note 8). The Company used the proceeds of the Credit Agreement and the Revenue Purchase and Sale Agreement to, on the Closing Date, prepay all outstanding obligations under the Oaktree Agreement, including the payment of fees and expenses associated with the Oaktree Agreement. In addition, on August 13, 2024, the Company completed an underwritten public offering of shares of its common stock (and, in lieu of such shares of common stock to selected investors, pre-funded warrants to purchase shares of its common stock) with net proceeds of $53.5 million (Note 9).

The Company's existing cash and cash equivalents, along with funds available under the Revenue Purchase and Sale Agreement, will be sufficient to meet its cash commitments for at least the next 12 months after the date that the interim condensed consolidated financial statements are issued. Additionally, the Company expects to have the ability to sell shares pursuant to an at-the-market offering program with Cowen and Company, LLC (Note 9), or could otherwise seek additional

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funding through a combination of public or private equity offerings if it believes additional resources are needed. Additional financing may not be available on a timely basis on terms acceptable to the Company, or at all.

**2. Significant Accounting Policies**

***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 the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reported periods. Actual results could differ from those estimates.

***Foreign Currency Transactions***

The functional currency of the Company is the U.S. dollar. Accordingly, gains and losses resulting from translating transactions denominated in currencies and balances of assets and liabilities outstanding at the balance sheet date, other than U.S. dollars, are included in net loss in the condensed consolidated statements of operations and comprehensive loss.

***Cash and Cash Equivalents*** 

Cash and cash equivalents consists of bank deposits and money market accounts with financial institutions. Cash equivalents are carried at cost which approximates fair value due to their short-term nature and which the Company believes do not have a material exposure to credit risk. The Company considers all highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents. The Company's cash and cash equivalent accounts, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.

***Accounts Receivable***

Accounts receivable are recorded net of any estimated expected credit losses. The Company's measurement of expected credit losses is based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The Company's credit loss allowance for uncollectible trade receivables was $57,000 and $27,000 at December 31, 2024 and June 30, 2025, respectively.

***Concentration of Credit Risk***

Financial instruments that subject the Company to credit risk primarily consist of cash and cash equivalents. The Company maintains its cash and cash equivalent balances with high-quality financial institutions and, consequently, the Company believes that such funds are subject to minimal credit risk. The Company has adopted an investment policy that limits the amounts the Company may invest in any one type of investment and requires all investments held by the Company to hold a minimum rating, thereby reducing credit risk exposure.

***Customer and Supplier Concentration***

The Company has a limited number of specialty pharmacy customers and distributors. As of December 31, 2024 and June 30, 2025, two customers represented 96% and two customers represented 86% of accounts receivable, respectively. For the three and six months ended June 30, 2024, two and three customers represented 99% of revenue, respectively. For the three and six months ended June 30, 2025, three customers represented 91% of revenue.

The Company has a limited number of suppliers and contract manufacturers utilized in the production of its product. As of December 31, 2024 and June 30, 2025, three suppliers represented 71% and two suppliers represented 44% of accounts payable, respectively. For the three and six months ended June 30, 2024, two suppliers represented 69% and 48% of purchases, respectively. For the three and six months ended June 30, 2025, three suppliers represented 55% and two suppliers represented 41% of purchases, respectively.

The Company depends on suppliers for raw materials, active pharmaceutical ingredients, and other components that are subject to stringent FDA requirements. Some of these materials may only be available from one or a limited number of sources. Establishing additional or replacement suppliers may take a substantial period of time, as suppliers must be approved by the FDA. If the Company is unable to secure, on a timely basis, sufficient quantities of the materials it depends on to manufacture its products, it could have a materially adverse effect on the Company's business, financial condition and results of operations.

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##  ***Inventory*** 
Inventory is stated at the lower of cost and net realizable value and consists of raw materials, work-in-process and finished goods. The Company began capitalizing inventory costs following U.S. Food and Drug Administration ("FDA") approval of FUROSCIX on October 7, 2022. Inventory is sold on a first in, first out ("FIFO") basis and is costed on an actual cost model. The Company periodically reviews inventory for expiry and obsolescence and writes it down accordingly, if necessary.

***Leases***

The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use ("ROU") lease assets, current portion of lease obligations, and long-term lease obligations on the Company's condensed consolidated balance sheets.

ROU lease assets represent the Company's right to use an underlying asset for the lease term and lease obligations represent the Company's obligation to make lease payments arising from the lease. Operating ROU lease assets and obligations are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The ROU lease asset excludes lease incentives. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

***Fair Value Option***

As permitted under Financial Accounting Standards Board's ("FASB") Accounting Standards Codification ("ASC") Topic 825, Financial Instruments ("ASC 825"), the Company elected the fair value option to account for the Credit Agreement and the Revenue Purchase and Sale Agreement (collectively, the "Perceptive Financing"). In accordance with ASC 825, the Company records these instruments at fair value with changes in fair value recorded in the condensed consolidated statement of operations and comprehensive loss. As a result of applying the fair value option, direct costs and fees related to the Perceptive Financing were expensed as incurred and were not deferred.

The Company elected to account for the Perceptive Financing using the fair value option, which allows for valuing the Credit Agreement and the Revenue Purchase and Sale Agreement in their entirety versus bifurcation of the embedded derivatives.

***Revenue Recognition***

The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC Topic 606, Revenue from Contracts with Customer ("Topic 606"), the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied. The Company has identified one performance obligation, the delivery of FUROSCIX to its customers. The Company has not incurred any incremental costs associated with obtaining contracts with customers. The Company's revenues consist solely of the sale of FUROSCIX to customers in the United States.

*Product Net Sales*

FUROSCIX was approved by the FDA on October 7, 2022. The Company launched sales of FUROSCIX in the first quarter of 2023 and its customers consist of specialty pharmacies ("SPs"), specialty distributors ("SDs") and direct purchasers. The Company recognizes revenue from product sales at a point in time, typically upon receipt of product by the customer, the date at which the rights, title, interest and risk of loss are transferred. Revenues from product sales are recorded at the net sales price, which includes estimates of variable consideration that result from (a) sales discounts, (b) rebates (c) co-pay assistance, and (d) product returns. Reserves are established for the estimates of variable consideration based on the amounts earned or to be claimed on the related sales. The reserves for variable consideration are reflected as either a reduction to the related account receivable or as an accrued liability, depending on how the consideration is settled. The amount of variable consideration that is included in the transaction price may be constrained and is included in net product revenues only to the extent that it is probable

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that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company's estimates. If actual results vary from its estimates, the Company adjusts these estimates, which would affect net product revenue and earnings in the period such variances become known.

*Sales Discounts*: Sales discounts are agreed-upon discounts, from negotiated contracts, taken directly off the Company's sales invoices. Sales discounts are recorded as an offset to revenue based on contractual terms at the time revenue from the sale is recognized.

*Rebates*: Allowance for rebates include mandated discounts under the Medicaid Drug Rebate Program and the Medicare Part D prescription drug benefit, TRICARE program and contractual rebates with commercial payers. Rebates are amounts owed after the final dispensing of the product to a benefit plan participant and are based upon contractual agreements or statutory requirements. The allowance for rebates is based on contracted or statutory discount rates and expected utilization by benefit plan participants. The Company's estimates for expected utilization of rebates are based on utilization data received from the SPs since product launch. Rebates are generally invoiced and paid in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter's activity, plus an accrual balance for prior quarters' unpaid rebates. If actual future rebates vary from estimates, the Company may need to adjust prior period accruals, which would affect revenue in the period of adjustment.

*Co-Payment Assistance:* The Company offers co-payment assistance to commercially insured patients meeting certain eligibility requirements. Co-payment assistance is accrued at the time of product sale to SPs based on estimated patient participation and average co-pay benefit to be paid per a claim. The Company's estimated amounts are compared to actual program participation and co-pay amounts paid using data provided by third-party administrators. If actual amounts differ from the original estimates the assumptions being applied are updated and adjustment for prior period accruals will be adjusted in the current period.

*Product Returns:* Consistent with industry practice, the Company offers its customers limited product return rights for damages, shipment errors, and expiring product, provided that the return is within a specified period around the product expiration date as set forth in the applicable individual distribution agreement. The Company does not allow product returns for product that has been dispensed to a patient. As the Company receives inventory reports from the SPs and has the ability to control the amount of product that is sold to the SPs, it is able to make a reasonable estimate of future potential product returns based on this on-hand channel inventory data and sell-through data obtained from the SPs. Currently, sales to SDs are limited and there is no access to on-hand channel inventory or sell through data. As these arrangements mature, the Company will utilize any data that they can provide as part of this analysis. In arriving at its estimate, the Company also considers historical product returns, the underlying product demand, and industry data specific to the specialty pharmaceutical distribution industry.

##  ***Research and Development Costs*** 
Research and development costs are expensed as incurred. Nonrefundable advance payments, if any, for goods or services used in research and development are initially recorded as an asset and then recognized as an expense as the related goods are delivered or services are performed. Research and development expenses include contract services, consulting, salaries, materials and supplies and overhead.

##  ***Selling, General, and Administrative Costs*** 
Selling, general, and administrative costs consist primarily of employee-related expenses, promotional activities, marketing, conferences and trade shows, professional services fees, including legal, audit and tax fees, insurance costs, general corporate expenses and allocated facilities-related expenses.

Advertising costs are expensed as incurred in accordance with ASC 720-35, *Other Expense – Advertising Costs*, other than trade show expenses which are deferred until occurrence of the future event. Advertising costs for the three months ended June 30, 2024 and 2025 were $270,000 and $339,000, respectively. Advertising costs for the six months ended June 30, 2024 and 2025 were $384,000 and $725,000, respectively.

***Income Taxes***

The Company accounts for income taxes in accordance with the FASB ASC 740, *Income Taxes.* Deferred tax assets and liabilities are recorded to reflect the impact of temporary differences between amounts of assets and liabilities for financial reporting purposes and such amounts as measured under enacted tax laws. A valuation allowance is required to offset any net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax asset will not be realized.

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The Company provides reserves for potential payments of tax to various tax authorities related to uncertain tax positions. The tax benefits recorded are based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings or positions is "more likely than not" to be realized following resolution of any uncertainty related to the tax benefit, assuming that the matter in question will be raised by the tax authorities. Potential interest and penalties associated with such uncertain tax positions are recorded as a component of income tax expense. At June 30, 2025, the Company had no such accruals.

As part of the Tax Cuts and Jobs Act of 2017 ("TCJA"), beginning with the Company's fiscal year ended December 31, 2022, the Company is required to capitalize research and development expenses, as defined under section 174 of the Internal Revenue Code of 1986, as amended. For expenses that are incurred for research and development in the United States, the amounts will be amortized over 5 years, and expenses that are incurred for research and experimentation outside the United States will be amortized over 15 years.

On July 4, 2025, the One Big Beautiful Bill ("OBBB") Act, which includes a broad range of tax reform provisions, was signed into law in the United States and the Company continues to assess its impact. The Company currently does not expect the OBBB Act to have a material impact on its estimated annual effective tax rate in 2025.

***Stock-Based Compensation*** 

Stock-based compensation expense for stock options is recognized based on the grant-date fair value using the Black-Scholes valuation model. Restricted stock units are valued at the fair market value per share of the Company's common stock on the date of grant. The Company recognizes compensation expense only for those stock-based awards expected to vest after considering expected forfeitures. Cumulative compensation expense is at least equal to the compensation expense for vested awards. Stock-based compensation is recognized on a straight-line basis over the service period of each award.

***Segments*** 

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker ("CODM") in making decisions regarding resource allocation and assessing performance. The Company's chief executive officer is the CODM, and he uses consolidated financial information in determining how to allocate resources and assess performance. The Company has determined that it operates in one segment.

***Recently Issued Accounting Standards***

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, *Income Taxes* ("ASU 2023-09"), requiring entities to provide additional information in the income tax rate reconciliation and additional disclosures about income taxes paid. The new accounting guidance requires entities to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes and to provide more details about the reconciling items in some categories if the items meet a quantitative threshold. This guidance is effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of the adoption of ASU 2023-09 and does not expect adoption to have a material effect on the Company's annual consolidated financial statements or disclosures.

In November 2024, the FASB issued ASU 2024-03, *Income Statement (Subtopic 220-40): Reporting Comprehensive Income-Expense Disaggregation Disclosures,* which requires disaggregated disclosure of income statement expenses. ASU 2024-03 does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. This guidance is effective for annual periods beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2024-03 on the Company's condensed consolidated financial statements and disclosures.

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**3. Net Loss per Share**

***Net Loss per Share Attributable to Common Stockholders***

The following table sets forth the computation of basic and diluted net loss per share of common stock (in thousands, except share and per share data):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2024** | **2025** | **2024** | **2025** |
| Net loss | $(17090) | $(18024) | $(31198) | $(37766) |
| Weighted-average shares used in computing net loss per share | 38984745 | 53719662 | 38968438 | 53698138 |
| Net loss per share, basic and diluted | $(0.44) | $(0.34) | $(0.80) | $(0.70) |

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Basic and diluted weighted average shares of common stock outstanding for the three and six months ended June 30, 2025 and June 30, 2024 include the weighted average effect of outstanding pre-funded warrants for the purchase of shares of common stock for which the remaining unfunded exercise price is $0.001 per share.

The Company's potentially dilutive securities, which include unexercised stock options outstanding, unexercised warrants and unvested restricted stock units, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2024** | **2025** | **2024** | **2025** |
| Stock options to purchase common stock | 5545026 | 7176820 | 5545026 | 7176820 |
| Warrants to purchase common stock | 516345 | 1016345 | 516345 | 1016345 |
| Unvested restricted stock units | 732807 | 1361860 | 732807 | 1361860 |
| Total | 6794178 | 9555025 | 6794178 | 9555025 |

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**4. Inventory**

The Company's inventory balance consists of the following (in thousands):

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| | | |
|:---|:---|:---|
|  | **December 31,<br>2024** | **June 30,<br>2025** |
| Raw materials | $4784 | $5815 |
| Work-in-process | 7012 | 6780 |
| Finished goods | 2107 | 1978 |
|  | $13903 | $14573 |

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Inventory is stated at the lower of cost and net realizable value and consists of raw materials, work-in-process and

finished goods. The Company began capitalizing inventory costs following FDA approval of FUROSCIX in October 2022 and has not recorded any significant inventory write-downs since that time. At December 31, 2024 and June 30, 2025, the Company has an allowance for excess, damaged and obsolete inventory in the amount of $100,000 and $135,000, respectively. The Company currently uses a limited number of third-party contract manufacturing organizations ("CMOs") to produce its inventory.

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**5. Property and Equipment**

Purchased property and equipment consist of the following (dollars in thousands):

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| | | | |
|:---|:---|:---|:---|
|  | **ESTIMATED<br>USEFUL LIFE** | **December 31,<br>2024** | **June 30,<br>2025** |
| Office equipment | 5 years | $27 | $27 |
| Office furniture | 7 years | 85 | 85 |
| Computer equipment | 3 years | 15 | 15 |
| Leasehold improvements | Life of lease | 9 | 9 |
|  |  | 136 | 136 |
| Less: Accumulated depreciation |  | (80) | (88) |
| Property and equipment, net |  | $56 | $48 |

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Depreciation expense for the three months ended June 30, 2024 and 2025 was $5,000 and $4,000, respectively.

Depreciation expense for the six months ended June 30, 2024 and 2025 was $11,000 and $8,000, respectively.

**6. Accrued Expenses**

Accrued expenses consist of the following (in thousands):

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| | | |
|:---|:---|:---|
|  | **December 31,<br>2024** | **June 30,<br>2025** |
| Sales allowances and related costs | $2690 | $6889 |
| Employee compensation and related costs | 5203 | 4137 |
| Contract research and development | 644 | 1685 |
| Revenue purchase and sale agreement | 971 | 1283 |
| Manufacturing costs | 330 | 882 |
| Consulting and professional service fees | 529 | 789 |
| Royalty | 317 | 406 |
| Other | 18 | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total accrued expenses | $10702 | $16082 |

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**7. Fair Value of Financial Instruments** 

FASB ASC Topic 820, *Fair Value Measurements and Disclosures,* provides a fair value hierarchy, which classifies fair value measurements based on the inputs used in measuring fair value. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described below:

Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2—Valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3—Valuations that require inputs that reflect the Company's own assumptions that are both significant to the fair value measurement and observable.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The carrying values of the Company's cash, prepaid expenses and deposits approximate their fair values due to their short-term nature.

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The following tables summarize the Company's assets that are measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values (in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
|  | **TOTAL** | **Quoted Prices<br>in Active<br>Markets<br>(Level 1)** | **Significant<br>Other<br>Observable<br>Inputs<br>(Level 2)** | **Significant<br>Unobservable<br>Inputs<br>(Level 3)** |
| **Assets:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash equivalents | $73910 | $73910 | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $73910 | $73910 | $— | $— |
| **Liabilities:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Term loan | $51350 | $— | $— | $51350 |
| &nbsp;&nbsp;&nbsp;&nbsp;Revenue purchase and sale liability | 27840 |  |  | 27840 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $79190 | $— | $— | $79190 |
|  | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** |
|  | **TOTAL** | **Quoted Prices<br>in Active<br>Markets<br>(Level 1)** | **Significant<br>Other<br>Observable<br>Inputs<br>(Level 2)** | **Significant<br>Unobservable<br>Inputs<br>(Level 3)** |
| **Assets:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash equivalents | $38283 | $38283 | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $38283 | $38283 | $— | $— |
| **Liabilities:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Term loan | $51200 | $— | $— | $51200 |
| &nbsp;&nbsp;&nbsp;&nbsp;Revenue purchase and sale liability | 30240 |  |  | 30240 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $81440 | $— | $— | $81440 |

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The Company measures the term loan and the revenue purchase and sale liability from the Perceptive Financing at fair value based on significant inputs not observable in the market, which causes them to be classified as Level 3 measurements within the fair value hierarchy. These valuations use assumptions and estimates the Company believes would be made by a market participant in making the same valuation. The Company assesses these assumptions and estimates on an on-going basis as additional data impacting the assumptions and estimates are obtained. Changes in the fair value of the Perceptive Financing related to updated assumptions and estimates are recognized within the condensed consolidated statements of operations and comprehensive loss.

The fair value of the term loan was measured as of June 30, 2025, using a binomial lattice model to account for the dynamic nature of interest rate fluctuations and the strategic exercise of the certain optional prepayment features.

The fair value of the revenue purchase and sale liability was measured as of June 30, 2025, using the Monte Carlo simulation method, utilizing future cash flow projections and assumptions of the timing and probability of certain contingent events, such as the occurrence of a change of control and the exercise of call and put options. A discount rate of 21.2% was used.

The fair values of the term loan and the revenue purchase and sale liability may change significantly as additional data is obtained, impacting the Company's assumptions regarding probabilities of outcomes used to estimate the fair value of the liabilities. The estimates of fair value may not be indicative of the amounts that could be realized in a current market exchange. Accordingly, the use of different market assumptions and/or different valuation techniques may have a material effect on the estimated fair value amounts, and such changes could materially impact the Company's results of operations in future periods.

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Changes in the fair value of the Company's Level 3 liabilities for the six months ended June 30, 2025 are as follows (in thousands):

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| | | |
|:---|:---|:---|
|  | **Term Loan** | **Revenue Purchase and Sale Liability** |
| At December 31, 2024 | $51350 | $27840 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in fair value | (150) | 4312 |
| &nbsp;&nbsp;&nbsp;&nbsp;Repayments |  | (1912) |
| At June 30, 2025 | $51200 | $30240 |

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**8. Financial Liabilities**

**Perceptive Financing**

The following table presents the fair value of the Company's debt balance as of June 30, 2025 (in thousands):

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| | |
|:---|:---|
| Par value of the term loan | $50000 |
| Initial fair value adjustment | (1855) |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value of the term loan at issuance | 48145 |
| Change in fair value of the term loan | 3205 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total fair value of the term loan at December 31, 2024 | 51350 |
| Change in fair value of the term loan | (150) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total fair value of the term loan at June 30, 2025 | $51200 |

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On the Closing Date, the Company entered into the Credit Agreement. The Credit Agreement establishes a $75.0 million term loan facility, consisting of (i) $50.0 million funded on the Closing Date ("Tranche A Loan") and (ii) subject to satisfaction of certain conditions, $25.0 million (together with the Tranche A Loan, collectively, the "Term Loan") that the Company may borrow in a single borrowing on or prior to March 31, 2026.

Borrowings under the Term Loan bear interest at a rate per annum equal to the one-month term SOFR (subject to a 3.25% floor), plus an applicable margin of 6.75%, payable monthly in arrears. There will be no scheduled repayments of outstanding principal on the Term Loan prior to August 9, 2029 (the "Maturity Date"). The Company may voluntarily prepay the outstanding Term Loan, subject to a yield protection premium equal to (i) 5.0% of the principal amount of the Term Loan prepaid, if prepaid on or prior to the first anniversary of the Closing Date, (ii) 3.0% of the principal amount of the Term Loan if prepaid after the first anniversary of the Closing Date through and including the second anniversary of the Closing Date, (iii) 1.0% of the principal amount of the Term Loan if prepaid after the second anniversary of the Closing Date through and including the third anniversary of the Closing Date, with no prepayment premium due after the third anniversary of the Closing date through the Maturity Date.

On the Closing Date, the Company was required to issue to the Lenders of such Term Loan warrants to purchase 300,000 of shares of the Company's common stock, in the aggregate (the ***"***Warrant"), at an exercise price of $4.5902 per share. Upon the completion of the sale of common stock on August 13, 2024 (Note 9), the exercise price of the warrants was adjusted to $4.00 per share according to the terms of the agreement. Upon inception, the Company evaluated the warrants and determined that they met all the requirements for equity classification under ASC Topic 815 *Derivatives and Hedging* ("ASC 815"). This transaction was accounted for as a detachable warrant at its fair value, using the residual method, and is recorded as an increase to additional paid-in-capital on the condensed consolidated statement of stockholder's equity in the amount of $1.6 million. The Company used the Black-Scholes option pricing model to determine the fair value of the warrants. Assumptions included the fair market value per share of common stock on the valuation date of $4.33, the exercise price per warrant equal to $4.00, the expected volatility of 87.5%, the risk-free interest rate of 3.83%, the contractual term of 6 years and the absence of a dividend. The Warrant is immediately exercisable, and the exercise period will expire 6 years from the date of issuance.

In addition to the Warrant, the Company will be required to issue to the Lenders warrants to purchase 200,000 of shares of the Company's common stock (the "Tranche B Warrant") upon the draw down of the second tranche of the Term Loan on or prior to March 31, 2026. These warrants were accounted for using the residual method and were recorded on a relative fair value basis, resulting in an increase to additional paid-in capital on the condensed consolidated statements of stockholders' equity (deficit) in the amount of $0.2 million. The Company used the Black-Scholes option pricing model to determine the fair value of the warrants.

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Assumptions included the fair market value per share of common stock on the valuation date of $4.33, the exercise price per warrant equal to $4.00, the expected volatility of 82.5%, the risk-free interest rate of 3.87%, the contractual term of 7.64 years and the absence of a dividend. The Tranche B Warrant will expire 6 years from the date of issuance.

The Company's obligations under the Credit Agreement and the other Loan Documents (as defined in the Credit Agreement) will be guaranteed by any domestic subsidiaries of ours that become Guarantors (as defined in the Credit Agreement), subject to certain exceptions. The Borrowers' and the Guarantors' (collectively, the *"Loan Parties"*) respective obligations under the Credit Agreement and the other Loan Documents are secured by first priority security interests in substantially all assets of the Loan Parties, subject to certain customary thresholds and exceptions.

The Credit Agreement contains customary representations, warranties and affirmative and negative covenants, including financial covenants requiring the Company to (i) maintain certain levels of cash and cash equivalents in accounts subject to a control agreement in favor of the Agent of at least $5.0 million at all times after the Closing Date and (ii) meet minimum quarterly net sales targets described in the Credit Agreement.

In addition, the Credit Agreement contains customary events of default that entitle the Agent to cause the Company's indebtedness under the Credit Agreement to become immediately due and payable, and to exercise remedies against the Loan Parties and the collateral securing the Term Loan, including cash. Under the Credit Agreement, an event of default will occur if, among other things, the Company fails to make payments under the Credit Agreement (subject to specified periods), the Company or its subsidiaries breach any of the covenants under the Credit Agreement (subject to specified cure periods with respect to certain breaches), a material adverse change occurs, the Company, its subsidiaries or its respective assets become subject to certain legal proceedings, such as bankruptcy proceedings, the Company and/or its subsidiaries are unable to pay its debts as they become due or default on contracts with third parties which would permit the holder of indebtedness in excess of a certain threshold to accelerate the maturity of such indebtedness or that could cause a material adverse change. Upon the occurrence and for the duration of an event of default, an additional default interest rate equal to 3.0% per annum may apply to all obligations owed under the Credit Agreement.

On the Closing Date, the Company also entered into the Revenue Purchase and Sale Agreement with the Purchaser. Under the Revenue Purchase and Sale Agreement, in exchange for the Purchaser's payment to the Company of a purchase price of up to $50.0 million, in the aggregate, the Company has agreed to sell to the Purchaser its right to receive payment in full of a tiered single digit percentage of net sales of FUROSCIX. The initial sale of the Revenue Payment (as defined therein) under the Revenue Purchase and Sale Agreement in the amount of $25.0 million took place on the Closing Date. The Purchaser's right to receive the Revenue Payment terminates and the Company no longer has the obligation to pay Purchaser Revenue Payments once the Purchaser receives 200.0% (subject to reductions on September 30, 2027 and September 30, 2029 depending on the amount of Revenue Payments received by such dates) of the Purchase Price. The Company may also buy-out the Purchaser's rights to receive the Revenue Payments by paying Purchaser a tiered multiple on the Purchaser Price.

The Revenue Purchase and Sale Agreement contains various representations and warranties, including with respect to organization, authorization, and certain other matters, certain covenants with respect to payment, reporting, intellectual property, in-licenses, out-licenses, and certain other actions, indemnification obligations and other provisions customary for transactions of this nature.

Certain conversion and redemption features of the Perceptive Financing would typically be considered derivatives that would require bifurcation. In lieu of bifurcating various features in the agreements, the Company has elected the fair value option for the Perceptive Financing and will record the changes in the fair value within the accompanying condensed consolidated statements of operations and comprehensive loss at the end of each reporting period. The initial fair value of the Term Loan and the Revenue Purchase and Sale Agreement were $48.1 million and $25.0 million, respectively. As of June 30, 2025*,* the fair value of the Term Loan and the Revenue Purchase and Sale Agreement were $51.2 million and $30.2 million, respectively. Refer to Note 7*,* "Fair Value of Financial Instruments" for additional details regarding the fair value measurement. The Revenue Payment payable in connection with the Revenue Purchase and Sale Agreement was $1.3 million and was recorded within accrued expenses on the condensed consolidated balance sheet at June 30, 2025.

In conjunction with the closing of the Perceptive Financing, the Company used a portion of the proceeds to prepay all outstanding loans under the Oaktree Agreement, including the exit fee, on the Closing Date.

**Oaktree Agreement**

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On October 13, 2022 ("Oaktree Closing Date"), the Company entered into the Oaktree Agreement with Oaktree Fund Administration, LLC as administrative agent, and the lenders party thereto (collectively "Oaktree") to borrow up to $100.0 million in three tranches with a maturity date of October 13, 2027.

The first tranche of $50.0 million was drawn immediately. In connection with entering into the Oaktree Agreement, the Company granted warrants to Oaktree to purchase up to an aggregate of 516,345 shares of the Company's common stock at an exercise price of $5.40 per share. Upon inception, the Company evaluated the warrants and determined that they met all the requirements for equity classification under ASC Topic 815 *Derivatives and Hedging* ("ASC 815"). This transaction was accounted for as a detachable warrant at its fair value, using the relative fair value method, which is based on a number of unobservable inputs and is recorded as an increase to additional paid-in-capital on the condensed consolidated statements of stockholders' equity (deficit). The relative fair value of the warrants, $2.0 million, was reflected as a discount to the term loan and was amortized using the effective interest method. The Company used the Black-Scholes option pricing model to determine the fair value of the warrants. Assumptions included the fair market value per share of common stock on the valuation date of $5.50, the exercise price per warrant equal to $5.40, the expected volatility of 77%, the risk-free interest rate of 4.11%, the contractual term of 7 years and the absence of a dividend. The warrants are immediately exercisable and the exercise period expires on October 13, 2029.

The Company identified a number of embedded derivatives that required bifurcation from the term loan and that were separately accounted for in the consolidated financial statements as one compound derivative liability. Certain of these embedded features include contingent interest rate reset upon event of default, contingent put options, including change in control and going concern provisions, and additional costs as a result of changes in law. These embedded features met the criteria requiring these to be bifurcated because they were not clearly and closely related to the host instrument in accordance with ASC 815-15. The fair value of the embedded derivative liabilities associated with the term loan was estimated using a hybrid between the discounted cash flow and Monte Carlo simulation methods. This involved significant Level 3 inputs and assumptions including an estimated probability and timing of a change in control. The initial recognition of the embedded derivative liability upon issuance of the Term Loan was $8.9 million.

Prepayments of the term loan, in whole or in part, were subject to a prepayment fee. The Company was also required to pay an exit fee upon any payment or prepayment equal to 2.0% of the aggregate principal amount of the loans funded under the Oaktree Agreement.

In connection with the Credit Agreement, the Company paid off all unpaid borrowings under the Oaktree Agreement on August 9, 2024, including the $1.0 million exit fee and a prepayment premium of $2.6 million. For the three and six months ended June 30, 2024, the Company recorded $604,000 and $1.2 million, respectively, related to the amortization of the debt discount associated with the Oaktree Agreement. For the three and six months ended June 30, 2024, the Company recorded $45,000 and $87,000, respectively, related to the amortization of the exit fee associated with the Oaktree Agreement.

**9. Stockholders' Equity (Deficit)**

**2021 At-the-Market Issuance Sales Agreement**

On March 23, 2021, the Company entered into an Open Market Sale Agreement (the "2021 ATM Agreement") with Cowen and Company, LLC ("Cowen") with respect to an at-the-market offering program under which the Company could offer and sell shares of its common stock (the "2021 ATM Shares"), having an aggregate offering price of up to $50.0 million through Cowen as its sales agent. The Company agreed to pay Cowen a commission up to 3.0% of the gross sales proceeds of such 2021 ATM Shares. On March 13, 2024, the Company amended and restated the 2021 ATM Agreement and entered into a new $50.0 million Open Market Sales Agreement with Cowen (the "2024 ATM Agreement"). As of March 13, 2024, the Company had sold a total of 1,726,043 2021 ATM Shares under the 2021 ATM Program at a weighted average gross selling price of $9.01 per share for net proceeds of $15.2 million.

**2024 At-the-Market Issuance Sales Agreement**

Pursuant to the 2024 ATM Agreement, the Company could offer and sell shares of its common stock (the "2024 ATM Shares"), having an aggregate offering price of up to $50.0 million through Cowen as its sales agent (the "2024 ATM Program"). The offering and sale of the 2024 ATM Shares will be made pursuant to the Company's shelf registration statement on Form S-3, which was declared effective by the SEC on March 22, 2024 (the "2024 Registration Statement"). There were no shares issued under the 2024 ATM Program as of June 30, 2025.

**Sale of Common Stock**

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On August 13 2024, the Company completed an underwritten public offering of 13,875,000 shares of its common stock, $0.0001 par value per share (the "2024 Offering Shares"), and, in lieu of shares of common stock to certain select investors, pre-funded warrants to purchase up to an aggregate of 500,000 shares of common stock at an exercise price equal to $0.001 per share, pursuant to the 2024 Registration Statement.

The 2024 Offering Shares were sold at an offering price of $4.00 per share. The pre-funded warrants were sold at an offering price of $3.999 per underlying share, which was equal to the price per share of common stock being sold in this offering, minus $0.001, which is the exercise price per share of the pre-funded warrants. The pre-funded warrants were accounted for as equity instruments. Net proceeds of the offering were $53.5 million, after deducting underwriting discounts, commissions and offering expenses.

**10. Stock-Based Compensation**

***Stock Options***

The Company's 2017 Stock Option and Incentive Plan (the "2017 Stock Plan") became effective in November 2017, upon the closing of the Company's initial public offering and will expire in October 2027. Under the 2017 Stock Plan, the Company may grant incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units ("RSUs") and other stock-based awards. The Company's 2014 Stock Incentive Plan (the "2014 Stock Plan") was terminated in November 2017 effective upon the completion of the Company's initial public offering and no further options will be granted under the 2014 Stock Plan. At June 30, 2025, there were 536,732 options outstanding under the 2014 Stock Plan.

As of June 30, 2025, there were 10,604,263 shares of the Company's common stock authorized for issuance under the 2017 Stock Plan, including 385,518 options that have been forfeited from the 2014 Stock Plan.

At June 30, 2025, there were 2,611,090 options available for issuance under the 2017 Stock Plan, 6,565,088 options outstanding and 1,361,860 RSUs outstanding.

On February 1, 2023, the Board of Directors of the Company adopted the 2023 Employment Inducement Award Plan (the "Inducement Plan") and, subject to the adjustment provisions of the Inducement Plan, reserved 500,000 shares of the Company's common stock for issuance pursuant to equity awards granted under the Inducement Plan. At June 30, 2025, there were 425,000 options available for issuance under the Inducement Plan, and 75,000 options outstanding.

Awards granted under the 2017 Stock Plan and the Inducement Plan have a term of ten years. Vesting of awards under the 2017 Stock Plan and Inducement Plan is determined by the board of directors, but is generally over one to four-year terms.

The fair value of options at date of grant was estimated using the Black-Scholes option-pricing model with the following assumptions:

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| | | |
|:---|:---|:---|
|  | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** |
|  | **2024** | **2025** |
| Risk-free interest rate | 3.78% - 4.59% | 3.88% - 4.39% |
| Expected dividend yield | 0% | 0% |
| Expected life | 5.5-6.7 years | 5.5-6.6 years |
| Expected volatility | 77%-79% | 75%-77% |
| Weighted-average grant date fair value | $3.84 | $2.34 |

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The following table summarizes information about stock option activity during the six months ended June 30, 2025 (in thousands, except share and per share data):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **NUMBER OF<br>SHARES** | **WEIGHTED-<br>AVERAGE<br>EXERCISE<br>PRICE** | **WEIGHTED-<br>AVERAGE<br>REMAINING<br>CONTRACTUAL<br>TERM** | **AGGREGATE<br>INTRINSIC<br>VALUE** |
| Outstanding, December 31, 2024 | 5530823 | $5.89 |  |  |
| Granted | 1792652 | 3.40 |  |  |
| Forfeited | (127960) | 5.31 |  |  |
| Expired | (18695) | 8.12 |  |  |
| Outstanding, June 30, 2025 | 7176820 | $5.27 | 6.99 | $786 |
| Vested and exercisable, June 30, 2025 | 4248599 | $5.98 | 5.56 | $58 |
| Vested and expected to vest, June 30, 2025 | 6595807 | $5.38 | 6.79 | $616 |

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24,343 options were exercised on December 29, 2023 and the shares settled on January 2, 2024. The share issuance has been recognized on the Company's condensed consolidated statements of stockholders' equity (deficit) for the quarter ending March 31, 2024.

The following table summarizes information about RSU activity during the six months ended June 30, 2025:

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| | | |
|:---|:---|:---|
|  | **RSUs** | **AVERAGE GRANT<br>DATE FAIR<br>VALUE (IN DOLLARS PER<br>SHARE)** |
| RSUs outstanding, December 31, 2024 | 736229 | $5.87 |
| Granted | 851747 | 3.33 |
| Released | (188236) | 5.97 |
| Forfeited | (37880) | 5.15 |
| RSUs outstanding at June 30, 2025 | 1361860 | $4.29 |

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Unrecognized compensation expense related to unvested options as of June 30, 2025 was $6.3 million and will be recognized over the remaining vesting periods of the underlying awards. The weighted-average period over which such compensation is expected to be recognized is 2.4 years. Unrecognized compensation expense related to unvested RSUs as of June 30, 2025 was $3.6 million and will be recognized over the remaining vesting periods of the underlying awards. The weighted-average period over which such compensation is expected to be recognized is 2.9 years.

***Employee Stock Purchase Plan***

In October 2017, the board of directors approved the 2017 Employee Stock Purchase Plan (the "ESPP") which became effective in November 2017, upon the closing of the Company's IPO. As part of the ESPP, eligible employees may acquire an ownership interest in the Company by purchasing common stock, at a discount, through payroll deductions. Eligible employees who elected to participate were able to participate in the ESPP beginning September 1, 2021.

During the six months ended June 30, 2025, 102,367 shares were issued under the ESPP. As of June 30, 2025, there were 1,424,251 shares of common stock available for issuance under the ESPP.

The Company recorded stock-based compensation expense in the following expense categories of its accompanying condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2024 and 2025 (in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended<br>June 30,** | **Three Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** |
|  | **2024** | **2025** | **2024** | **2025** |
| Research and development | $410 | $406 | $775 | $765 |
| General and administrative | 1081 | 1113 | 2156 | 2049 |
| Total | $1491 | $1519 | $2931 | $2814 |

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**11. Commitments and Contingencies**

***Leases***

The Company leases office facilities and equipment under long-term, non-cancelable operating lease agreements. The leases expire at various dates through 2029 and do not include renewal options.

Certain leases provide for increases in future minimum annual rental payments as defined in the lease agreements. The leases generally also include real estate taxes and common area maintenance charges in the annual rental payments.

Short-term leases are leases having a term of twelve months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related lease asset or liability for such leases.

The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of June 30, 2025 (in thousands):

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| | |
|:---|:---|
| Year ended: |  |
| December 31, 2025 | $196 |
| December 31, 2026 | 384 |
| December 31, 2027 | 367 |
| December 31, 2028 | 369 |
| December 31, 2029 | 249 |
| Thereafter | - |
| Total minimum lease payments | 1565 |
| Less imputed interest | (317) |
| Total | $1248 |

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| | | |
|:---|:---|:---|
|  | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** |
|  | **2024** | **2025** |
| **Lease cost:** |  |  |
| Operating lease cost | $172 | $195 |
| Short-term lease cost | 25 | - |
| Total lease cost | $197 | $195 |
| **Other information** |  |  |
| Cash paid for amounts included in the measurement of lease liabilities | $169 | $190 |
| Operating cash flows from operating leases | $7 | $3 |
| Weighted-average remaining lease term - operating leases | 5.2 years | 4.0 years |
| Weighted-average discount rate - operating leases | 11.7% | 11.6% |

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***Research and Development Agreements***

As part of the Company's research and development efforts, the Company enters into research and development agreements with certain companies. These agreements contain varying terms and provisions which include fees and milestones to be paid by the Company. Some of these agreements also contain provisions which require the Company to make payments for exclusivity in the development of products in the area of loop diuretics.

**12. Segment** 

The Company operates in a single segment. The accounting policies of the segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for the segment and decides how to allocate resources based on the net income (loss) that also is reported on the condensed consolidated statements of operations and comprehensive (loss) as consolidated net income (loss). Net income (loss) is used to monitor budget versus actual results. monitoring of budgeted versus actual results are used in assessing performance of the segment and in establishing management's compensation. The Company's CODM is the chief executive officer.

Segment net loss for the three and six months ended June 30, 2024 and 2025 is as follows (in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2024** | **2025** | **2024** | **2025** |
| Product revenues, net | $8054 | $16041 | $14156 | $27793 |
| Less: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of product revenues | 2300 | 5011 | 4085 | 8482 |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development expenses | 2164 | 3585 | 4438 | 7750 |
| &nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative expenses | 16148 | 19800 | 32271 | 39954 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other segment items (1) | 1873 | 1939 | 3649 | 3658 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of term loan |  | 150 |  | (150) |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of revenue purchase and sale liability |  | 2560 |  | 4312 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income | 1189 | 128 | (1783) | (8) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income | (664) | (509) | (1541) | (1225) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | 2134 | 1401 | 4235 | 2786 |
| Segment net loss | $(17090) | $(18024) | $(31198) | $(37766) |
| (1) Other segment items include stock-based compensation expense, facility-related costs and depreciation. | (1) Other segment items include stock-based compensation expense, facility-related costs and depreciation. | (1) Other segment items include stock-based compensation expense, facility-related costs and depreciation. | (1) Other segment items include stock-based compensation expense, facility-related costs and depreciation. | (1) Other segment items include stock-based compensation expense, facility-related costs and depreciation. |

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**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations**

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q ("Quarterly Report") and our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the "Annual Report") filed with the Securities and Exchange Commission (the "SEC") on March 19, 2025. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many important factors, including those factors set forth in the "Risk Factors" section in our Annual Report and in this Quarterly Report, our actual results could differ materially from the results described in or implied by, the forward-looking statements contained in the following discussion and analysis.*

**OVERVIEW**

We are a pharmaceutical company committed to revolutionizing cardiorenal healthcare through patient-centric innovations while developing and commercializing products that have the potential to optimize the delivery of infused therapies, advance patient care and reduce healthcare costs. Our strategy is to develop therapies for subcutaneous administration that have previously been limited to intravenous, or IV, delivery. By moving delivery away from the high-cost healthcare settings typically required for IV administration, we believe our strategy has the potential to reduce overall healthcare costs and advance the quality and convenience of care. Our approved product, FUROSCIX, consists of our novel formulation of furosemide delivered via West Pharmaceutical Services, Inc.'s, or West's, on-body infusor, which delivers an 80 mg/10 mL dose over 5 hours. On October 10, 2022, we announced that the U.S. Food and Drug Administration, or FDA, approved FUROSCIX for the treatment of congestion due to fluid overload in adults with New York Heart Association, or NYHA, Class II/III chronic heart failure. Subsequently, we announced the approval of our supplemental drug application expanding the FUROSCIX indication in heart failure on August 9, 2024 to include NYHA Class IV heart failure patients. FUROSCIX is the first and only FDA-approved subcutaneous loop diuretic that delivers IV equivalent diuresis at home. IV equivalence was established in a clinical study in which FUROSCIX demonstrated 99.6% bioavailability (90% CI: 94.8%-104.8%) and 8-hour urine output of 2.7 L which was similar to subjects receiving intravenous furosemide. The commercial launch of FUROSCIX for congestion in patients with chronic heart failure commenced in the first quarter of 2023.

In early May 2024 we submitted a supplemental New Drug Application (sNDA), seeking to expand the indication of FUROSCIX to include the treatment of edema due to fluid overload in adult patients with chronic kidney disease (CKD).The FDA had previously confirmed that no additional clinical studies would be needed to expand the indication to CKD, provided that we can demonstrate an adequate pharmacokinetic/pharmacodynamic (PK/PD) bridge to the listed drug, furosemide injection, 10mg/mL. The application was accepted for filing by the FDA in July 2024 and approved on March 6, 2025. We commenced the product launch in April 2025 and continue to see prescriptions being written by nephrologists on the expanded indication.

On October 7, 2024, we were notified that the FDA awarded 3-year exclusivity to FUROSCIX on the basis of clinical investigations conducted by the Company that were essential to approval. As a result, the FDA may not approve a subsequent product for subcutaneous administration of furosemide for 3 years from the date of approval of FUROSCIX, or October 7, 2025.

We are developing an 80mg/1mL autoinjector intended to provide an additional option to the on-body infusor for treatment of fluid overload in eligible adult patients who do not require hospitalization. We believe that the development of an autoinjector, if approved, has the potential to significantly reduce manufacturing costs compared to the current on-body infusor and confer certain environmental advantages. We currently have five U.S. patents granted on our concentrated formulations of furosemide. We have progressed our development on multiple formulations described in the patent properties, have identified potential product candidates, and have completed a pharmacokinetic/pharmacodynamic PK/PD study with positive data announced in August 2024 with a combination product using the lead formulation. We are targeting a sNDA submission for the autoinjector in the third quarter of 2025.

We estimate that there is a $12.5 billion total addressable market opportunity for FUROSCIX in the United States in patients with chronic heart failure and CKD. We believe FUROSCIX will allow eligible patients with chronic heart failure and chronic kidney disease with worsening symptoms due to fluid overload despite oral diuretics to receive IV-strength diuresis outside the high-cost hospital setting. At a price of approximately $947 per dose, we estimate the average cost of treatment with FUROSCIX for each episode to be approximately $5,685, which can be significantly lower than the cost of a single hospitalization for worsening heart failure. Prevention of heart failure hospital admissions and reduced readmission rates would result in reducing days patients spend in the hospital each year. By decreasing the number of heart failure admissions and readmissions to hospitals and shortening the hospital length of stay by completing diuresis post-discharge at home, we believe we can drive significant cost savings to payers and hospitals and improve patients' quality of life through outpatient management of their fluid overload. In the quarter ended June 30, 2025, approximately 20,200 FUROSCIX doses were filled.

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*Perceptive Financing*

On August 9, 2024 (the "Closing Date"), we entered into a Credit Agreement and Guaranty (the "Credit Agreement"), by and among us, the guarantors from time to time party thereto, the lenders from time to time party thereto (the "Lenders"), and Perceptive Credit Holdings IV, LP, in its capacity as administrative agent for the Lenders (in such capacity, the "Agent"). The Credit Agreement establishes a $75.0 million term loan facility, consisting of (i) $50.0 million (the **"**Tranche A Loan") funded on the Closing Date, (ii) $25.0 million (the "Tranche B Loan" and, together with the Tranche A Loan, collectively, the "Term Loan") that we may borrow in a single borrowing on or prior to March 31, 2026; provided, in the case of the Tranche B Loan, that we and our subsidiaries have obtained certain regulatory approval and achieved certain net sales targets, each as described in the Credit Agreement. The Term Loan has a maturity date of August 9, 2029 (the "Maturity Date").

Borrowings under the Term Loan bear interest at a rate per annum equal to the one-month term SOFR (subject to a 3.25% floor), plus an applicable margin of 6.75%, payable monthly in arrears. There will be no scheduled repayments of outstanding principal on the Term Loan prior to the Maturity Date. We may voluntarily prepay the outstanding Term Loan, subject to a yield protection premium equal to (i) 5.0% of the principal amount of the Term Loan prepaid, if prepaid on or prior to the first anniversary of the Closing Date, (ii) 3.0% of the principal amount of the Term Loan if prepaid after the first anniversary of the Closing Date through and including the second anniversary of the Closing Date, (iii) 1.0% of the principal amount of the Term Loan if prepaid after the second anniversary of the Closing Date through and including the third anniversary of the Closing Date, with no prepayment premium due after the third anniversary of the Closing date through the Maturity Date. On the Closing Date, we were required to issue to the Lenders of such Term Loan warrants to purchase 300,000 of shares of our common stock, in the aggregate (the *"*Warrant"), at an exercise price of $4.5902 per share. The Warrant is immediately exercisable, and the exercise period will expire 6 years from the date of issuance. Upon the completion of the sale of our common stock, $0.0001 par value per share (the "Common Stock") on August 13, 2024, the exercise price of the Warrants was adjusted to $4.00 per share according to the terms of the agreement. Please see Note 9. Stockholder's Equity to our condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information.

Our obligations under the Credit Agreement and the other Loan Documents (as defined in the Credit Agreement) will be guaranteed by any domestic subsidiaries of ours that become Guarantors (as defined in the Credit Agreement), subject to certain exceptions. The Borrowers' and the Guarantors' (collectively, the *"*Loan Parties*"*) respective obligations under the Credit Agreement and the other Loan Documents are secured by first priority security interests in substantially all assets of the Loan Parties, subject to certain customary thresholds and exceptions. As of the Closing Date, there are no Guarantors.

The Credit Agreement contains customary representations, warranties and affirmative and negative covenants, including financial covenants requiring us to (i) maintain certain levels of cash and cash equivalents in accounts subject to a control agreement in favor of the Agent of at least $5.0 million at all times after the Closing Date and (ii) meet minimum quarterly net sales targets described in the Credit Agreement.

In addition, the Credit Agreement contains customary events of default that entitle the Agent to cause our indebtedness under the Credit Agreement to become immediately due and payable, and to exercise remedies against the Loan Parties and the collateral securing the Term Loan, including cash. Under the Credit Agreement, an event of default will occur if, among other things, we fail to make payments under the Credit Agreement (subject to specified periods), we or our subsidiaries breach any of the covenants under the Credit Agreement (subject to specified cure periods with respect to certain breaches), a material adverse change occurs, we, our subsidiaries or their respective assets become subject to certain legal proceedings, such as bankruptcy proceedings, we and/or our subsidiaries are unable to pay our debts as they become due or default on contracts with third parties which would permit the holder of indebtedness in excess of a certain threshold to accelerate the maturity of such indebtedness or that could cause a material adverse change. Upon the occurrence and for the duration of an event of default, an additional default interest rate equal to 3.0% per annum may apply to all obligations owed under the Credit Agreement.

On the Closing Date, we entered into a revenue participation right purchase and sale agreement (the "Revenue Purchase and Sale Agreement") with Perceptive Credit Holdings IV, LP (the "Purchaser"). Under the terms of the Revenue Purchase and Sale Agreement, in exchange for the Purchaser's payment to us of a purchase price of $50.0 million, in the aggregate subject to certain conditions at closing (the "Purchase Price"), we have agreed to sell to the Purchaser its right to receive payment in full of a tiered single digit percentage of net sales of FUROSCIX (the "Revenue Payment") for each calendar quarter commencing on the effective date of the Revenue Purchase and Sale Agreement, subject to adjustments on June 30, 2028 and June 30, 2030 depending on the amount of Revenue Payments received by such dates. The Purchaser's right to receive the Revenue Payment terminates and we no longer have the obligation to pay Purchaser Revenue Payments once the Purchaser receives 200.0% (subject to reductions on September 30, 2027 and September 30, 2029 depending on the amount of Revenue Payments received by such dates) of the Purchase Price. We may also buy-out the Purchaser's rights to receive the Revenue Payments by paying Purchaser a tiered multiple on the Purchaser Price.

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The Revenue Purchase and Sale Agreement contains various representations and warranties, including with respect to organization, authorization, and certain other matters, certain covenants with respect to payment, reporting, intellectual property, in-licenses, out-licenses, and certain other actions, indemnification obligations and other provisions customary for transactions of this nature.

*2024 Public Offering*

On August 12, 2024, we entered into an underwriting agreement (the "Underwriting Agreement") with Leerink Partners LLC and TD Securities (USA) LLC, as representatives of the several underwriters named in Schedule A thereto (collectively, the "Underwriters"), relating to an underwritten offering of 12,000,000 shares (the "Shares") of Common Stock to select investors, pre-funded warrants (the "Pre-funded Warrants") to purchase 500,000 shares of Common Stock.

The offering price of the Shares to the public was $4.00 per share, and the offering price of the Pre-funded Warrants to the public was $3.999 per underlying share, which was equal to the price per share of Common Stock being sold in the offering, minus $0.001, which is the exercise price per share of the Pre-funded Warrants. Under the terms of the Underwriting Agreement, we also granted the Underwriters an option exercisable for 30 days to purchase up to an additional 1,875,000 shares of Common Stock at a price of $4.00 per share, less underwriting discounts and commissions. On August 12, 2024, the Underwriters exercised this option in full. The closing of the offering (including the sale of the Shares subject to the Underwriters' option to purchase additional shares) took place on August 13, 2024.

The net proceeds from the offering were $53.5 million, after deducting underwriting discounts, commissions and offering expenses. We do not intend to list the Pre-funded Warrants on Nasdaq or any other nationally recognized securities exchange or trading system.

We have funded our operations from inception through June 30, 2025 primarily through the sale of shares of our common stock and incurrence of debt and, prior to that, through the private placement of our preferred stock.

As of June 30, 2025, we had an accumulated deficit of approximately $404.3 million and cash and cash equivalents of $40.8 million. We expect to continue to incur net losses for the foreseeable future as we support the commercialization efforts of FUROSCIX in the United States, including expanding our sales and marketing organization, continuing research and development efforts, engaging in scale-up manufacturing and seeking regulatory approval for new product candidates and enhancements. Our financial results may fluctuate from quarter to quarter and will depend on, among other factors, the net sales of FUROSCIX, the scope and progress of our research and development efforts and timing of certain expenses.

**COMPONENTS OF OUR RESULTS OF OPERATIONS** 

***Product Revenues***

Product revenues, net, consist of net sales of FUROSCIX. We initiated shipments of FUROSCIX to customers in the United States, which include specialty pharmacies, in February 2023. We recognize revenue for product received by our customers net of allowances for customer discounts, service fees, estimated returns and rebates.

***Cost of Product Revenues***

Cost of product revenues include costs related to the manufacturing of FUROSCIX, including third party manufacturing costs, packaging and freight, in addition to royalty expenses. We began capitalizing inventory upon FDA approval of FUROSCIX. All costs related to inventory for FUROSCIX that was produced prior to FDA approval were expensed as incurred and therefore not included in cost of revenues. We anticipate an increase of 15-25% in cost of product revenues in 2026 due to current negotiations with our device manufacturer for the current FUROSCIX product. We expect a minimal impact beyond 2026 given the anticipated launch of the 80mg/1ml autoinjector in late 2026.

***Research and Development Expenses*** 

Research and development ("R&D") expenses consist of the cost of engineering, clinical trials, regulatory and medical affairs and quality assurance associated with developing our proprietary technology and product candidates. R&D expenses consist primarily of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•employee-related expenses, including salaries, benefits, travel expense and stock-based compensation expense;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•cost of outside consultants who assist with technology development, regulatory affairs, clinical trials and medical affairs, and quality assurance;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•cost of clinical trial activities performed by third parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•cost of pre-approval pharmaceutical batch manufacturing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•cost of facilities and supplies used for internal research and development and clinical activities.

We expense R&D costs as incurred. Given the emphasis to date on our approved product FUROSCIX, our R&D expenses have not been allocated on a program-specific basis. In the future, we expect R&D expenses to increase in absolute dollars as we continue to develop new products and enhance existing products and technologies. We anticipate that our expenses will increase significantly as we:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•continue to advance our pipeline programs beyond FUROSCIX;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•continue our current research and development activity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•seek to identify additional research programs and additional product candidates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•initiate preclinical testing and clinical trials for any product candidates we identify and develop, maintain, expand and protect our intellectual property portfolio; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•hire additional research, clinical and scientific personnel.

***Selling, General and Administrative Expenses*** 

Selling, general and administrative ("SG&A") expenses consist of employee-related expenses, including salaries, benefits, travel expense and stock-based compensation expense for personnel in executive, finance, commercial, field sales, human resources, facility operations and administrative functions. Other SG&A expenses include promotional activities, marketing, conferences and trade shows, professional services fees, including legal, audit and tax fees, insurance costs, general corporate expenses and allocated facilities-related expenses.

We anticipate that our SG&A expenses will increase as we continue to expand our corporate and commercial infrastructure to support the commercialization activities of FUROSCIX in the United States.

**Results of Operations** 

***Comparison of Three Months Ended June 30, 2024 and 2025***

The following table summarizes our results of operations for the three months ended June 30, 2024 and 2025 (in thousands):

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| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Increase** |
|  | **2024** | **2025** | **(Decrease)** |
| Product revenues, net | $8054 | $16041 | $7987 |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of product revenues | 2300 | 5011 | 2711 |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development | 2677 | 4098 | 1421 |
| &nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative | 17508 | 21226 | 3718 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 22485 | 30335 | 7850 |
| Loss from operations | (14431) | (14294) | (137) |
| Change in fair value of term loan | - | (150) | (150) |
| Change in fair value of revenue purchase and sale liability | - | (2560) | (2560) |
| Other expense | (1189) | (128) | (1061) |
| Interest income | 664 | 509 | (155) |
| Interest expense | (2134) | (1401) | (733) |
| Net loss | $(17090) | $(18024) | $934 |

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*Product revenues.* Product revenues were $16.0 million for the three months ended June 30, 2025, compared to $8.1 million for the three months ended June 30, 2024. The increase of $8.0 million was due to an increase in demand of FUROSCIX further into commercial launch.

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*Cost of product revenues.* Cost of product revenues were $5.0 million for the three months ended June 30, 2025, compared to $2.3 million for the three months ended June 30, 2024. Similar to product revenues, the increase of $2.7 million was due to an increase in demand of FUROSCIX further into commercial launch, and related manufacturing costs.

*Research and development expenses.* R&D expenses were $4.1 million for the three months ended June 30, 2025, compared to $2.7 million for the three months ended June 30, 2024. The increase of $1.4 million was primarily attributable to a $1.0 million increase in device development costs, a $0.6 million increase in pharmaceutical development costs and a $0.2 million increase in employee-related costs. This was offset by a $0.4 million decrease in clinical study costs.

*Selling, general and administrative expenses.* SG&A expenses were $21.2 million for the three months ended June 30, 2025, compared to $17.5 million for the three months ended June 30, 2024. The increase of $3.7 million was primarily attributable to a $2.6 million increase in employee-related costs, a $0.8 million increase in commercial costs and a $0.6 million increase in professional service costs. The increase was partially offset by a $0.3 million decrease in patient support costs.

*Change in fair value of term loan.* The change in the fair value of the term loan, which is accounted for under the fair value option, was $0.2 million for the three months ended June 30, 2025. The change in fair value was primarily due to changes in market yields and payoff assumptions.

*Change in fair value of revenue purchase and sale liability.* The change in fair value of the revenue purchase and sale liability, which is accounted for under the fair value option, was $2.6 million for the three months ended June 30, 2025. The change in fair value was primarily due to changes in market yields and payoff assumptions.

*Other expense.* Other expense was $128,000 for the three months ended June 30, 2025, compared to $1.2 million for the three months ended June 30, 2024. The decrease in expense of $1.1 million was primarily attributable to the fair value adjustment to the derivative liability in the three months ended June 30, 2024.

*Interest income.* Interest income was $0.5 million for the three months ended June 30, 2025, compared to $0.7 million for the three months ended June 30, 2024. The decrease of $0.2 million was primarily attributable to lower balances on our financial instruments.

*Interest expense.* Interest expense was $1.4 million for the three months ended June 30, 2025 compared to $2.1 million for the three months ended June 30, 2024. The decrease of $0.7 million was due to lower interest rates and the absence of amortization of debt costs associated with the Oaktree Agreement (as defined below).

***Comparison of Six Months Ended June 30, 2024 and June 30, 2025***

The following table summarizes our results of operations for the six months ended June 30, 2024 and 2025 (in thousands):

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| | | | |
|:---|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Increase** |
|  | **2024** | **2025** | **(Decrease)** |
| Product revenues, net | $14156 | $27793 | $13637 |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of product revenues | 4085 | 8482 | 4397 |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development | 5403 | 8729 | 3326 |
| &nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative | 34955 | 42633 | 7678 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 44443 | 59844 | 15401 |
| Loss from operations | (30287) | (32051) | 1764 |
| Change in fair value of term loan | - | 150 | 150 |
| Change in fair value of revenue purchase and sale liability | - | (4312) | (4312) |
| Other income | 1783 | 8 | (1775) |
| Interest income | 1541 | 1225 | (316) |
| Interest expense | (4235) | (2786) | (1449) |
| Net loss | $(31198) | $(37766) | $6568 |

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*Product revenues.* Product revenues were $27.8 million for the six months ended June 30, 2025, compared to $14.2 million for the six months ended June 30, 2024. The increase of $13.6 million was due to an increase in demand of FUROSCIX further into commercial launch.

*Cost of product revenues.* Cost of product revenues were $8.5 million for the six months ended June 30, 2025, compared to $4.1 million for the six months ended June 30, 2024. Similar to product revenues, the increase of $4.4 million was due to an increase in demand of FUROSCIX further into commercial launch, and related manufacturing costs.

*Research and development expenses.* R&D expenses were $8.7 million for the six months ended June 30, 2025, compared to $5.4 million for the six months ended June 30, 2024. The increase of $3.3 million was primarily attributable to a $2.5 million increase in pharmaceutical development costs, a $1.0 million increase in device development costs and a $0.3 million increase in employee-related costs. This was offset by a $0.5 million decrease in clinical study costs.

*Selling, general and administrative expenses.* SG&A expenses were $42.6 million for the six months ended June 30, 2025, compared to $35.0 million for the six months ended June 30, 2024. The increase of $7.7 million was primarily attributable to a $4.3 million increase in employee-related costs, a $1.9 million increase in commercial costs, a $0.7 million increase in professional service costs, a $0.6 million increase in patient support costs, a $0.1 million increase in investor relations and a $0.1 million increase in software costs.

*Change in fair value of term loan.* The change in the fair value of the term loan, which is accounted for under the fair value option, was $0.2 million for the six months ended June 30, 2025. The change in fair value was primarily due to changes in market yields and payoff assumptions.

*Change in fair value of revenue purchase and sale liability.* The change in fair value of the revenue purchase and sale liability, which is accounted for under the fair value option, was $4.3 million for the six months ended June 30, 2025. The change in fair value was primarily due to changes in volatility, market yields and payoff assumptions.

*Other income.* Other income was $8,000 for the six months ended June 30, 2025, compared to $1.8 million for the six months ended June 30, 2024. The decrease in income of $1.8 million was primarily attributable to the fair value adjustment to the derivative liability in the six months ended June 30, 2024.

*Interest income.* Interest income was $1.2 million for the six months ended June 30, 2025, compared to $1.5 million for the six months ended June 30, 2024. The decrease of $0.3 million was primarily attributable to lower balances on our financial instruments.

*Interest expense.* Interest expense was $2.8 million for the six months ended June 30, 2025 compared to $4.2 million for the six months ended June 30, 2024. The decrease of $1.4 million was due to lower interest rates and the absence of amortization of debt costs associated with the Oaktree Agreement (as defined below).

**LIQUIDITY AND CAPITAL RESOURCES** 

***Overview***

We have funded our operations from inception through June 30, 2025 primarily through the sale of shares of our Common Stock, through the private placement of our preferred stock and the incurrence of debt. As of June 30, 2025, we had received net cash proceeds of $92.7 million from our initial public offering; $56.7 million from sales of our preferred stock; $81.6 million from borrowings under our previous term loan with SLR Investment Corp. and Silicon Valley Bank, our previous term loan under the Credit Agreement and Guaranty (the "Oaktree Agreement") with Oaktree Fund Administration, LLC as administrative agent, and the lenders party thereto (collectively "Oaktree"), and the Credit Agreement and Revenue Purchase and Sale Agreement with Perceptive Credit Holdings IV, LP; $13.5 million from sales of convertible notes; $50.2 million from our public offering of Common Stock in 2020; $46.6 million from our public offering of Common Stock in 2022; $53.5 million from our public offering of Common Stock in 2024; $14.4 million from the sale of Common Stock in our 2019 at-the-market offering; and $15.2 million from the sale of Common Stock in our 2021 at-the-market offering. As of June 30, 2025, we had cash and cash equivalents of $40.8 million. Our cash and cash equivalents are maintained at a number of financial institutions in amounts that may exceed federally insured limits. Our existing cash and cash equivalents, including the available proceeds from the Revenue Purchase and Sale Agreement, will be sufficient to meet our cash commitments for at least the next 12 months after the date that the interim condensed consolidated financial statements are issued.

On March 23, 2021, we entered into an Open Market Sales Agreement (the "2021 ATM Agreement") with Cowen and Company LLC ("Cowen") to sell shares of our Common Stock, from time to time, with aggregate gross sales proceeds of up to $50.0 million,

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through an at-the-market equity offering program under which Cowen will act as our sales agent. On March 13, 2024, we amended the 2021 ATM Agreement by issuing the 2024 ATM Agreement. As of March 13, 2024, we had sold a total of 1,726,043 2021 ATM Shares under the 2021 ATM Program at a weighted average gross selling price of $9.01 per share for net proceeds of $15.2 million.

On March 13, 2024, we amended and restated the 2021 ATM Agreement where we entered into an Open Market Sales Agreement with Cowen with respect to an at-the-market offering program under which we could offer and sell the 2024 ATM Shares, having an aggregate offering price of up to $50.0 million through Cowen as its sales agent (the "2024 ATM Program"). The offering and sale of the 2024 ATM Shares will be made pursuant to the our shelf registration statement of Form S-3, which was declared effective by the SEC on March 22, 2024. There were no shares issued under the 2024 ATM Program as of June 30, 2025. Please see Note 9. Stockholders' Equity to our condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information.

On August 9, 2024, we entered into the Credit Agreement and Revenue Purchase and Sale Agreement. The Credit Agreement established a $75.0 million term loan facility, consisting of (i) $50.0 million funded immediately and (ii) $25.0 million that we may borrow in a single borrowing on or prior to March 31, 2026. Under the Revenue Purchase and Sale Agreement, in exchange for the Purchaser's payment to us of a purchase price of $50.0 million, in the aggregate, we have agreed to sell to the Purchaser its right to receive payment in full of a tiered single digit percentage of net sales of FUROSCIX. In connection with the Credit Agreement, we paid off all unpaid borrowings under the Oaktree Agreement on August 9, 2024, including the $1.0 million exit fee and a prepayment premium of $2.6 million.

On August 12, 2024, we entered into the Underwriting Agreement with the Underwriters, relating to an underwritten offering of 12,000,000 shares of our Common Stock and, in lieu of Common Stock to select investors, pre-funded warrants to purchase 500,000 shares of Common Stock. Under the terms of the Underwriting Agreement, we also granted the Underwriters an option exercisable for 30 days to purchase up to an additional 1,875,000 shares of Common Stock at a price of $4.00 per share, less underwriting discounts and commissions. On August 12, 2024, the Underwriters exercised this option in full. The closing of the offering (including the sale of the Shares subject to the Underwriters' option to purchase additional shares) took place on August 13, 2024. The net proceeds from the offering were $53.5 million, after deducting underwriting discounts and commissions and offering expenses.

We expect to incur substantial additional expenditures in the near future to support our ongoing activities and commercialization of FUROSCIX. We expect our costs and expenses to increase in the future as we continue U.S. commercialization of FUROSCIX, including the expansion of our direct sales force, and as we continue to make substantial expenditures on research and development, including to increase our manufacturing capacity and for conducting clinical trials of our product candidates. Additionally, we continue to incur additional costs as a result of operating as a public company. We plan to continue to fund our operations through cash and cash equivalents on hand. Additionally, we expect to be able to sell shares pursuant to our at-the-market offering program with Cowen and Company, LLC, or we could otherwise seek additional funding through a combination of public or private equity offerings, or debt financings, if we believe additional resources are needed. Our future capital requirements will depend on many factors, including without limitation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the costs and expenses of expanding our U.S. sales and marketing infrastructure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the costs and expenses related to the manufacturing of FUROSCIX and our agreements with third-party manufacturers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the degree of success we experience in commercializing FUROSCIX;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the revenue generated by sales of FUROSCIX and of other product candidates that may be approved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the pricing and reimbursement of FUROSCIX and of other product candidates that may be approved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the costs, timing and outcomes of clinical trials and regulatory reviews associated with our product candidates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the emergence of competing or complementary technological developments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the extent to which FUROSCIX is adopted by the healthcare community;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the number and types of future products we develop and commercialize;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property-related claims; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the extent and scope of our general and administrative expenses.

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Additional financing may not be available on a timely basis on terms acceptable to us, or at all. We may raise funds in equity, royalty-based or debt financings or enter into additional credit facilities in order to access funds for our capital needs. If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution in their percentage ownership of our Company, and any new equity securities we issue could have rights, preferences and privileges senior to those of holders of our Common Stock. If we raise additional funds through royalty-based financing arrangements, we will likely agree to relinquish rights to potentially valuable future revenue streams and may agree to covenants that restrict our operations or strategic flexibility. Any debt financing obtained by us in the future would cause us to incur additional debt service expenses and could include restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and pursue business opportunities. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, we may terminate or delay the development of one or more of our products, delay clinical trials necessary to market our products, or delay establishment or expansion of sales and marketing capabilities or other activities necessary to commercialize our products. For example, the trading prices for our and other biopharmaceutical companies' securities have been highly volatile as a result of macroeconomic conditions and developments in our industry. As a result, we may face difficulties raising capital through sales of our securities and any such sales may be on unfavorable terms. Additionally, our ability to raise capital may be further impacted by global macroeconomic conditions including, for example, as a result of international political conflict and/or instability, including due to war or terrorism, supply chain issues, tariffs and trade wars, and fluctuating inflation and interest rates.

**CASH FLOWS**

The following table summarizes our sources and uses of cash for each of the periods presented:

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| | | |
|:---|:---|:---|
|  | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** |
| **(in thousands)** | **2024** | **2025** |
| Net cash (used in) provided by: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating activities | $(37928) | $(33250) |
| &nbsp;&nbsp;&nbsp;&nbsp;Investing activities | 29320 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Financing activities | 298 | (1596) |
| Net decrease in cash and cash equivalents | $(8310) | $(34846) |

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***Net Cash Used in Operating Activities*** 

During the six months ended June 30, 2025, net cash used in operating activities was $33.3 million, consisting primarily of a net loss of $37.8 million and an increase in net operating assets of $2.7 million. This was offset by non-cash charges of $7.2 million. The increase in net operating assets is related to accounts receivable and inventory to support the ongoing commercial operations of FUROSCIX. The non-cash charges primarily consisted of depreciation, amortization related to our right-of-use leased assets, stock-based compensation expense, and the fair value adjustments to the term loan and revenue purchase and sale liability.

During the six months ended June 30, 2024, net cash used in operating activities was $37.9 million, consisting primarily of a net loss of $31.2 million and an increase in net operating assets of $8.9 million. This was offset by non-cash charges of $2.2 million. The increase in net operating assets is related to accounts receivable and inventory to support the ongoing commercial operations of FUROSCIX. The non-cash charges primarily consisted of depreciation, amortization related to our right-of-use leased assets, stock-based compensation expense, non-cash interest expense related to amortization of debt discount associated with the Oaktree Agreement, the fair value adjustment to the derivative liability and accretion of premium on investments.

***Net Cash Provided by Investing Activities***

During the six months ended June 30, 2024, net cash provided by investing activities was $29.3 million, consisting of maturities of short-term investments. There was no net cash provided by investing activities during the six months ended June 30, 2025.

***Net Cash Provided by (Used in) Financing Activities*** 

During the six months ended June 30, 2025, net cash used in financing activities was $1.6 million due to payments made on the revenue purchase and sale liability, offset by purchases pursuant to our 2017 Employee Stock Purchase Plan.

During the six months ended June 30, 2024, net cash provided by financing activities was $0.3 million due to purchases pursuant to our 2017 Employee Stock Purchase Plan and stock option exercises, offset by amounts paid to settle restricted stock unit tax withholding obligations.

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**CRITICAL ACCOUNTING POLICIES AND ESTIMATES** 

Management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, expenses and related disclosures. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material. Our critical accounting policies are more fully described under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates" in our Annual Report. There have been no material changes to that information disclosed in our Annual Report during the six months ended June 30, 2025.

**Item 3. Quantitative and Qualitative Disclosures About Market Risk.**

We are exposed to market risks related to changes in foreign currency exchange rates and interest rates.

We contract with vendors in foreign countries. As such, we have exposure to adverse changes in exchange rates of foreign currencies, principally the Swiss franc and Euro, associated with our foreign transactions. We believe this exposure to be immaterial. We currently do not hedge against this exposure to fluctuations in exchange rates.

Our exposure to market risk also relates to interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates. We have elected the fair value option for certain liabilities. The fair value of the liabilities related to the Credit Agreement and the Revenue Purchase and Sale Agreement will increase as market interest rates decrease. In addition, the fair value of the liabilities may fluctuate based upon changes in the Company's credit rating. Changes in the interest rate environment and the credit rating of the Company could have an effect on our future earnings.

We do not believe that inflation has had a material effect on our business. However, if our costs, in particular costs related to manufacture and supply, were to become subject to significant inflationary pressures, it may adversely impact our business, operating results and financial condition.

**Item 4. Controls an** **d Procedures.**

*Limitations on Effectiveness of Controls and Procedures*

In designing and evaluating our disclosure controls and procedures, 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 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.

*Evaluation of Disclosure Controls and Procedures*

Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation of our disclosure controls and procedures as of June 30, 2025, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures as of such date are effective at the reasonable assurance level.

*Changes in Internal Control over Financial Reporting*

There were no changes in our internal control over financial reporting identified in management's evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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**PART II — OTHER INFORMATION**

**Item 1. Legal Proceedings**

From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We are not currently aware of any such proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or results of operations.

**Item 1A. Risk Factors**

Investing in our common stock involves a high degree of risk. Information regarding risk factors appears in Part I, Item 1A. "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2024 (the "Annual Report"), which was filed with the SEC on March 19, 2025. There have been no material changes from the risk factors previously disclosed in our Annual Report, other than stated below.

***Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of any product candidates and commercialize FUROSCIX and may affect the prices we may obtain.*** 

In the United States and many foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of any of our product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell FUROSCIX or any product candidates for which we obtain marketing approval. Changes in regulations, statutes or the interpretation of existing regulations could impact our business in the future by requiring, for example: (i) changes to our manufacturing arrangements; (ii) additions or modifications to product labeling; (iii) the recall or discontinuation of our products; or (iv) additional record-keeping requirements. If any such changes were to be imposed, they could adversely affect the operation of our business.

Among policy makers and payers in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives. The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, collectively referred to as the ACA, is a sweeping law intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for the healthcare and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms.

Among the provisions of the ACA of importance to our products and product candidates are the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for certain drugs and biologics that are inhaled, infused, instilled, implanted or injected;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13.0% of the average manufacturer price for branded and generic drugs, respectively;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪expansion of potential liability under federal healthcare fraud and abuse laws, including the False Claims Act, or FCA, and the Anti-Kickback Statute, or AKS;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪a new Medicare Part D coverage gap discount program, which was replaced by a new manufacturer discount program on January 1, 2025 (as discussed below), in which manufacturers were required to offer 50% (70% as of January 1, 2019 due to the Bipartisan Budget Act of 2018, or the BBA) point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer's outpatient drugs to be covered under Medicare Part D;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪extension of manufacturers' Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals, thereby potentially increasing manufacturers' Medicaid rebate liability;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪expansion of the entities eligible for discounts under the 340B drug pricing program;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪new requirements to annually report to CMS certain data on payments and other transfers of value to physicians and teaching hospitals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪a requirement to annually report drug samples that manufacturers and distributors provide to physicians; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.

There have been a number of significant changes to the ACA and its implementation, as well as judicial, executive and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.

In addition, other legislative changes have been proposed and adopted since the ACA was enacted. For example, the American Rescue Plan Act of 2021 eliminated the statutory Medicaid drug rebate cap, beginning January 1, 2024. Previously, the Medicaid rebate was capped at 100% of a drug's average manufacturer price, or AMP.

Moreover, the federal government and the individual states in the United States have become increasingly active in developing proposals, passing legislation and implementing regulations designed to control drug pricing, including price or patient reimbursement constraints, discounts, formulary flexibility, marketing cost disclosure, drug price increase reporting, and other transparency measures. These types of initiatives may result in additional reductions in Medicare, Medicaid, and other healthcare funding, and may otherwise affect the prices we may obtain for FUROSCIX or the frequency with which FUROSCIX is prescribed or used.

Most significantly, in August 2022, the Inflation Reduction Act of 2022 (IRA) was signed into law. This statute marks the most significant action by Congress with respect to the pharmaceutical industry since adoption of the ACA in 2010. Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare, with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); redesigns the Medicare Part D benefit (beginning in 2024); and replaces the Part D coverage gap discount program with a new manufacturer discount program (beginning in 2025). CMS has published the negotiated prices for the initial ten drugs, which will first be effective in 2026, and has published the list of the subsequent 15 drugs that will be subject to negotiation. The IRA permits the Secretary of the Department of Health and Human Services (HHS) to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs are implemented, although the Medicare drug price negotiation program is currently subject to legal challenges. The impact of the IRA on us and the pharmaceutical industry cannot yet be fully determined, but is likely to be significant. These laws and similar future initiatives may result in additional reductions in Medicare and other healthcare funding, which could have an adverse effect on customers for FUROSCIX or our product candidates, if approved, and, accordingly, our financial operations.

There also has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices. Specifically, there have been several recent U.S. Congressional inquiries and proposed federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs. In March 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory Medicaid drug rebate cap for single source and innovator multiple source drugs, beginning January 1, 2024. The rebate was previously capped at 100% of a drug's average manufacturer price. In August 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law. Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (which began on January 1, 2025). The IRA permits the Secretary of the Department of Health and Human Services to implement many of these provisions through guidance, as opposed to regulation, for the initial years. On August 15, 2024, HHS announced the agreed-upon prices for the first ten drugs that are subject to price negotiations, which take effect in January 2026. HHS will select up to fifteen additional products covered under Part D for negotiation in 2025. Each year thereafter, more Part B and Part D products will become subject to the HHS price negotiation program, although the program is currently subject to legal challenges. For that and other reasons, it is currently unclear how the IRA will be effectuated, or the impact of the IRA on our business.

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In addition, there have been several changes to the 340B drug pricing program, which imposes ceilings on prices that drug manufacturers can charge for medications sold to certain health care facilities. For the 2018 and 2019 fiscal years, CMS altered the reimbursement formula from Average Sale Price, or ASP, plus 6 percent to ASP minus 22.5 percent on specified covered outpatient drugs, or SCODs, but did so without issuing a formal notice of proposed rulemaking, which was subsequently challenged in court. In June 2022, the U.S. Supreme Court held that although the Department of Health and Human Services, or HHS, has authority to set reimbursement rates based on average price and discretion to "adjust" the price up or down, HHS may not vary the reimbursement rates by hospital group unless it conducts a survey of hospitals' acquisition costs. Accordingly, the U.S. Supreme Court held that HHS's changes to the 2018 and 2019 reimbursement rates for 340B hospitals were unlawful. Based on the foregoing, CMS issued a final rule, effective January 1, 2023, pursuant to which CMS pays 340B hospitals under Medicare Part B for certain outpatient drugs at the drug's ASP, plus 6%, the same rate used for non-340B hospitals. It is unclear how future changes to the payment methodology may affect pharmaceutical manufacturers and hospitals who purchase their products now and in the future.

Further, the One Big Beautiful Bill Act, which was enacted in July 2025, imposes significant reductions in the funding of the Medicaid program. Such reductions are expected to decrease the number of persons enrolled in Medicaid and reduce the services covered by Medicaid, which could adversely affect our sales of FUROSCIX.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

We expect that these and other healthcare reform measures that may be adopted in the future may result in more rigorous coverage and payment criteria and in additional downward pressure on the price that we receive for any approved drug. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our drugs. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.

In addition, new and changing laws, regulations, executive orders and other governmental actions may also create uncertainty about how laws and regulations will be interpreted and applied. Regulatory changes and other actions that materially affect our business may be announced with little or no advance notice, and we may be unable to effectively mitigate all adverse impacts from such measures.

We cannot predict with certainty what impact any federal or state health reforms will have on us, but such changes could impose new or more stringent regulatory requirements on our activities or result in reduced reimbursement for our products, any of which could adversely affect our business, results of operations and financial condition.

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds**

None.

**Item 3. Defaults Upon Senior Securities**

None**.**

**Item 4. Mine Safety Disclosures**

Not applicable.

**Item 5. Other Information**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Disclosure in lieu of reporting on a Current Report on Form 8-K.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

None.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Material changes to the procedures by which security holders may recommend nominees to the board of directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Insider Trading Arrangements and Policies.

During the three months ended June 30, 2025, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

**Item 6. Exhibits**

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**EXHIBIT INDEX**

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| | |
|:---|:---|
| **Exhibit**<br>**Number** | **Description** |
| &nbsp;&nbsp;&nbsp;&nbsp;3.1 | [<u>Second Amended and Restated Certificate of Incorporation of scPharmaceuticals Inc. (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 001-38293) filed on November 21, 2017).</u>](https://www.sec.gov/Archives/edgar/data/1604950/000119312517349354/d488218dex31.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;3.2 | [<u>Amended and Restated By-laws of scPharmaceuticals Inc. (incorporated by reference to Exhibit 3.2 to the Registrant's Current Report on Form 8-K (File No. 001-38293) filed on November 21, 2017).</u>](https://www.sec.gov/Archives/edgar/data/1604950/000119312517349354/d488218dex32.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;3.3 | [<u>Amendment No. 1 to the Amended and Restated By-laws of scPharmaceuticals Inc. (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 001-38293) filed on June 10, 2020).</u>](https://www.sec.gov/Archives/edgar/data/1604950/000119312520165709/d942891dex31.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;3.4 | [<u>Amendment No. 2 to the Amended and Restated By-laws of scPharmaceuticals Inc. (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 001-38293) filed on March 12, 2021).</u>](https://www.sec.gov/Archives/edgar/data/1604950/000119312521078698/d151721dex31.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.1 | [<u>Form of Warrant, dated October 13, 2022, issued by scPharmaceuticals Inc. to certain lenders, together with a schedule of warrant holders (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K (File No. 001-38293) filed on October 14, 2022).</u>](https://www.sec.gov/Archives/edgar/data/1604950/000119312522262940/d329625dex41.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.2 | [<u>Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K (File No. 001-38293) filed on November 23, 2022).</u>](https://www.sec.gov/Archives/edgar/data/1604950/000119312522292028/d240360dex41.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.3 | [<u>Warrant, dated August 9, 2024, issued by scPharmaceuticals, Inc. to Perceptive Credit holdings IV, LP (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K (File No. 001-38293) filed on August 12, 2024).</u>](https://www.sec.gov/Archives/edgar/data/1604950/000119312524198309/d755257dex41.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.4 | [<u>Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K (File No. 001-38293) filed on August 13, 2024.</u>](https://www.sec.gov/Archives/edgar/data/1604950/000119312524199456/d875997dex41.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;31.1\* | [<u>Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</u>](scph-ex31_1.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;31.2\* | [<u>Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</u>](scph-ex31_2.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;32.1\*\*  | [<u>Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</u>](scph-ex32_1.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;32.2\*\* | [<u>Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</u>](scph-ex32_2.htm) |
| 101\* | Inline XBRL Document Set for the condensed consolidated financial statements and accompanying notes in Part I, Item 1, "Financial Statements" of this Quarterly Report on Form 10-Q. |
| 104\* | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101\*). |

---

------

\* Filed herewith.

\*\* Furnished herewith.

------

**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 thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **SCPHARMACEUTICALS INC.** | **SCPHARMACEUTICALS INC.** |
| Date: August 7, 2025 | By: | /s/ Rachael Nokes |
|  |  | Rachael Nokes |
|  |  | Chief Financial Officer<br>(Principal Financial Officer) |

---

------

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION**

I, John H. Tucker, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2025 of scPharmaceuticals Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: August 7, 2025 | /s/ John H. Tucker |
|  | John H. Tucker |
|  | President and Chief Executive Officer |
|  | (Principal Executive Officer) |

---

------

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION**

I, Rachael Nokes, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2025 of scPharmaceuticals Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: August 7, 2025 | /s/ Rachael Nokes |
|  | Rachael Nokes |
|  | Chief Financial Officer |
|  | (Principal Financial Officer) |

---

------

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the Quarterly Report on Form 10-Q of scPharmaceuticals Inc. (the "Company") for the period ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John H. Tucker, President and Chief Executive Officer (Principal Executive Officer), hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| Date: August 7, 2025 | /s/ John H. Tucker |
|  | John H. Tucker  |
|  | President and Chief Executive Officer |
|  | (Principal Executive Officer) |

---

------

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the Quarterly Report on Form 10-Q of scPharmaceuticals Inc. (the "Company") for the period ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Rachael Nokes, Chief Financial Officer (Principal Financial Officer), hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| Date: August 7, 2025 | /s/ Rachael Nokes |
|  | Rachael Nokes |
|  | Chief Financial Officer |
|  | (Principal Financial Officer) |

---

------