JUNS 10-Q
Jupiter Neurosciences, Inc. (JUNS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
(Mark One)
For
the quarterly period ended
For the transition period from __________ to ___________
Commission
file number:
(Exact name of registrant as specified in its charter)
| (State of Incorporation) | (IRS Employer ID Number) |
(Address of Principal Executive Offices)
(Registrant’s Telephone number)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The |
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 past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days.
| ☒ | No | ☐ |
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 for 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).
| ☒ | 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.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
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.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
| Yes | ☐ | No |
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of August 14, 2026, there were shares of Common Stock, par value $ per share (“Common Stock”) issued and outstanding.
TABLE OF CONTENTS
| Page | ||
| PART 1 - FINANCIAL INFORMATION | ||
| Item 1. | Financial Statements (unaudited) | 5 |
| Condensed Balance Sheets | 5 | |
| Condensed Statements of Operations | 6 | |
| Condensed Statement of Changes in Stockholders’ Equity (Deficit) | 7 | |
| Condensed Statements of Cash Flows | 8 | |
| Notes to Condensed Financial Statements | 9 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 23 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 31 |
| Item 4. | Controls and Procedures | 32 |
| PART II - OTHER INFORMATION | ||
| Item 1. | Legal Proceedings | 33 |
| Item 1A. | Risk Factors | 33 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 34 |
| Item 3. | Defaults Upon Senior Securities | 34 |
| Item 4. | Mine Safety Disclosures | 34 |
| Item 5. | Other Information | 34 |
| Item 6. | Exhibits | 35 |
| Signatures | 36 |
| 2 |
EXPLANATORY NOTE REGARDING REVERSE STOCK SPLIT
On August 6, 2026, we effected a reverse stock split of our common stock at a ratio of 1-for-75 (the “Reverse Split”). Upon the effectiveness of the Reverse Split, every 75 issued shares of common stock were reclassified and combined into one share of common stock. In addition, the number of shares of common stock issuable upon the exercise of the Company’s equity awards and convertible securities and warrants was proportionally decreased, and the corresponding conversion price or exercise price was proportionally increased. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who would otherwise be entitled to receive a fractional share are entitled to receive cash in lieu thereof. Accordingly, all share and per share amounts for all periods presented in these condensed financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the Reverse Split and adjustment of the conversion price or exercise price of each outstanding equity award and convertible security as if the transaction had occurred as of the beginning of the earliest period presented.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q for the six months ended June 30, 2026 (the “Quarterly Report on Form 10-Q”) contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this Quarterly Report on Form 10-Q, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast”, “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “propose,” “seeks,” “should,” “would” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements.
The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on our current expectations and beliefs concerning future developments and their potential effects on us. These forward-looking statements are not guarantees for future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and those discussed in the section titled Risk Factors in this filing and our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the Securities and Exchange Commission (the “SEC”) on April 1, 2026 (the “Annual Report on Form 10-K”):
| ● | Our substantial amount of indebtedness associated with the convertible promissory notes issued in connection with the Standby Equity Purchase Agreement may adversely affect our cash flow and our ability to operate our business, remain in compliance with debt covenants and make payments on our indebtedness; |
| ● | Low trading volume in our common stock may limit or prevent our ability to draw on the Standby Equity Purchase Agreement to pay down the convertible promissory notes; |
| ● | We have not generated meaningful revenue from product sales to date, have incurred significant net losses since our inception, and expect to continue to incur significant net losses for the foreseeable future; |
| ● | Our management has concluded that factors raise substantial doubt about our ability to continue as a going concern and our auditor has included an explanatory paragraph relating to our ability to continue as a going concern in its audit report; |
| ● | We will require substantial additional capital to finance our operations. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our research and drug development programs or future commercialization efforts; |
| ● | Raising additional capital may cause substantial dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates; |
| ● | Our business and future prospects with the Nugevia brand and our pharmaceutical products are significantly dependent on our exclusive, worldwide license agreement with Aquanova. Any adverse development related to this license agreement could materially and adversely affect our operations, financial condition, and results of operations; |
| ● | Clinical drug development involves a lengthy and expensive process with an uncertain outcome. The clinical trials of our product candidate may not demonstrate safety and efficacy to the satisfaction of the FDA, EMA or other comparable foreign regulatory authorities or otherwise produce positive results and the results of preclinical studies and early clinical trials may not be predictive of future results. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates; |
| 3 |
| ● | We have limited resources and are currently focusing the majority of our efforts on developing JOTROL™ for particular indications. As a result, we may fail to capitalize on other indications or product candidates that may ultimately have proven to be more profitable; |
| ● | We face significant competition and if our competitors develop and market technologies or products more rapidly than we do or that are more effective, safer or less expensive than the products we develop, our commercial opportunities will be negatively impacted; |
| ● | We may not be successful in our efforts to develop our proprietary drug delivery platform, JOTROL™, to build a pipeline of indications; |
| ● | The FDA, EMA and other comparable foreign regulatory authorities may not accept data from trials conducted in locations outside of their jurisdiction; |
| ● | We may face difficulties from changes to current regulations and future legislation; |
| ● | Our success is highly dependent on our ability to attract and retain highly skilled executive officers and employees; |
| ● | The Company’s failure to meet the continued listing requirements of The Nasdaq Capital Market could result in a delisting of its securities; |
| ● | The price of our common stock could be subject to rapid and substantial volatility. A “short squeeze” due to a sudden increase in demand for shares of our common stock could lead to extreme price volatility in shares of our common stock. As a relatively small-capitalization company with relatively small public float, we may experience greater stock price volatility, extreme price run-ups, lower trading volume and less liquidity than large-capitalization companies. In addition, if the trading volumes of our common stock are low, persons buying or selling in relatively small quantities may easily influence prices of our common stock. This low volume of trades could also cause the price of our common stock to fluctuate greatly, with large percentage changes in price occurring in any trading day session. Holders of our common stock may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading; |
| ● | The effects of the recent disruptions to and volatility in the credit and financial markets in the United States and worldwide from the conflict between Russia and Ukraine as well as the conflict in the Middle East; and |
| ● | Other risks and uncertainties, including those listed under the captions “Organization and Description of Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
| 4 |
JUPITER NEUROSCIENCES, INC.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
JUPITER NEUROSCIENCES, INC.
CONDENSED BALANCE SHEETS
(Unaudited)
| June 30, 2026 | December 31, 2025 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Prepaid contracts | ||||||||
| Inventory, net | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Operating lease right of use asset, net | ||||||||
| Prepaid contracts, noncurrent | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Deficit | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accrued compensation | ||||||||
| Accrued interest | ||||||||
| Deferred revenue | ||||||||
| Operating lease liability | ||||||||
| Convertible notes payable, fair value | ||||||||
| Refund liability | ||||||||
| Total current liabilities | ||||||||
| Operating lease liability, net of current portion | ||||||||
| Total liabilities | ||||||||
| Commitments and Contingencies (Note 7) | ||||||||
| Stockholders’ Deficit: | ||||||||
| Series A preferred stock, par value $; shares authorized, shares issued and outstanding | ||||||||
| Common stock, par value $; and shares authorized, respectively; and issued and outstanding, respectively | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 5 |
JUPITER NEUROSCIENCES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Product revenues, net | ||||||||||||||||
| Cost of goods sold | ||||||||||||||||
| Gross Profit | ||||||||||||||||
| Expenses: | ||||||||||||||||
| Research and development | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expenses): | ||||||||||||||||
| Interest income | ||||||||||||||||
| Gain on change in fair value of convertible notes | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other income (expenses), net | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per common share: | ||||||||||||||||
| Basic and diluted | ) | ) | ) | ) | ||||||||||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 6 |
JUPITER NEUROSCIENCES, INC.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
| Common Stock | Additional Paid | Accumulated | Total Stockholders’ | |||||||||||||||||
| Shares | Amount | in Capital | Deficit | Equity (Deficit) | ||||||||||||||||
| December 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Shares issued for exercise of stock options | ||||||||||||||||||||
| Issuance of common stock for payment of notes and interest | ||||||||||||||||||||
| Shares issued for conversion of convertible notes | ||||||||||||||||||||
| Shares issued for service agreement | ||||||||||||||||||||
| Reverse stock split rounding adjustment | ( | ) | ||||||||||||||||||
| Net operating loss | - | ( | ) | ( | ) | |||||||||||||||
| March 31, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Issuance of common stock for payment of notes and interest | ||||||||||||||||||||
| Registered direct offering, net of offering costs | ||||||||||||||||||||
| Shares issued for vested restricted stock units | ( | ) | ||||||||||||||||||
| Reverse stock split rounding adjustment | ||||||||||||||||||||
| Net operating loss | - | ( | ) | ( | ) | |||||||||||||||
| June 30, 2026 | ( | ) | ( | ) | ||||||||||||||||
| Common Stock | Additional Paid | Accumulated | Total Stockholders’ Equity | |||||||||||||||||
| Shares | Amount | in Capital | Deficit | (Deficit) | ||||||||||||||||
| December 31, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Net operating loss | - | ( | ) | ( | ) | |||||||||||||||
| March 31, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Shares issued for services rendered | ||||||||||||||||||||
| Shares issued for vested restricted stock units | ( | ) | ||||||||||||||||||
| Net operating loss | - | ( | ) | ( | ) | |||||||||||||||
| June 30, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 7 |
JUPITER NEUROSCIENCES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Six Months Ended | For the Six Months Ended | |||||||
| June 30, 2026 | June 30, 2025 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Gain on change in fair value of convertible notes | ( | ) | ||||||
| Interest expense paid through sale of common stock | ||||||||
| Amortization of prepaid contracts | ||||||||
| Stock-based compensation | ||||||||
| Shares issued for services | ||||||||
| Change in operating lease right of use asset and lease liabilities | ( | ) | ||||||
| Decreases (increases) in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepaid contracts | ( | ) | ||||||
| PharmAla escrow deposit -other assets | ( | ) | ||||||
| Inventory | ||||||||
| Other assets | ( | ) | ||||||
| Accounts payable and accrued expenses | ||||||||
| Accrued compensation | ||||||||
| Deferred revenue | ||||||||
| Refund liability | ||||||||
| Accrued interest | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from exercise of stock options | ||||||||
| Payment on convertible note payable | ( | ) | ||||||
| Proceeds from offering, net of costs | ||||||||
| Net cash provided by financing activities | ||||||||
| Net Change in Cash | ( | ) | ( | ) | ||||
| Beginning of period | ||||||||
| End of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Operating lease right-of-use asset obtained in exchange for operating lease liability | $ | $ | ||||||
| Schedule of Non-Cash Investing and Financing Activities: | ||||||||
| Payment of convertible note from issuance of common stock | $ | $ | ||||||
| Stock issued in connection with interest payment | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 8 |
JUPITER NEUROSCIENCES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
June 30, 2026
Note 1 – Organization and Description of Business
Jupiter Neurosciences, Inc. (the “Company”) is a clinical stage research and development pharmaceutical company located in Jupiter, Florida. The Company incorporated in Delaware in January 2016. The Company is advancing a therapeutic pipeline targeting central nervous system (“CNS”) disorders and rare diseases, while also expanding into the consumer longevity market with its Nugevia product line. Both efforts are powered by JOTROL™, the Company’s proprietary, enhanced resveratrol formulation that has demonstrated potential for significantly improved bioavailability. The Company’s prescription pipeline is focused broadly on CNS disorders, presently with an ongoing Phase IIa clinical study in Parkinson’s disease. The Company’s Nugevia product line brings clinical-grade science to the supplement space, supporting mental clarity, skin health, and mitochondrial function.
JOTROL™ has the potential to deliver a therapeutically effective dose of resveratrol in the blood stream, using a unique patented micellar formulation, without causing gastrointestinal side effects. We expect JOTROL™, based on the results of our Phase I study, will resolve the major obstacle of resveratrol’s poor bioavailability, which has been documented in various scientific articles describing previously conducted human trials with resveratrol as well as preclinical trial results in mice and rats.
Standby Equity Purchase Agreement
On October 24, 2025, the Company
entered into a Standby Equity Purchase Agreement, pursuant to which the Company has the right to sell to an investor up to $
Registered Direct Offering
On May 20, 2026, the Company entered into a Securities
Purchase Agreement with investors (the “Investors”), pursuant to which the Company agreed to issue and sell, in a registered
direct offering by the Company directly to the Investors (the “Offering”), shares of common stock of the Company at
a price of $ per share, for aggregate gross proceeds to the Company of approximately $
Nasdaq Minimum Bid Price Compliance
On February 26, 2026, the Company received two written
notices from the Listing Qualifications Department of Nasdaq notifying the Company that (i) the listing of the Company’s Common
Stock was not in compliance with the minimum bid price requirement as set forth under Nasdaq Listing Rule 5550(a)(2) for continued listing
of its Common Stock on The Nasdaq Capital Market, as the closing bid price of the Common Stock was less than $
Pursuant to Nasdaq Listing Rule 5810(c)(3)(A),
the Company was provided 180 calendar days, or until August 25, 2026, to regain compliance by maintaining a minimum closing bid price
of at least $
| 9 |
PharmAla Biotech Holdings Inc.
On May 19, 2026, the Company and PharmAla Biotech Holdings Inc. (“PharmAla”) executed a non-binding summary of proposed terms (the “Term Sheet”) describing a potential licensing transaction pursuant to which the Company would acquire from PharmAla exclusive and perpetual U.S. rights to ALA-002, a proprietary, next-generation MDMA formulation, together with related intellectual property, regulatory materials, tangible inventory, and certain contractual and regulatory rights (collectively, the “Assets”), subject to the Company’s compliance with the definitive agreements. PharmAla is a Canadian biotechnology company engaged in the research, development and GMP production of MDXX-class psychedelics, including clinical-grade MDMA and novel analogues, and owns a proprietary investigational compound known as ALA-002.
On July 20, 2026, the Company and PharmAla entered into a definitive Strategic Asset License Agreement (the “License Agreement”). Pursuant to the License Agreement, PharmAla granted the Company an exclusive royalty-bearing, sublicensable (subject to restrictions on sublicenses to persons engaged in a competing business without PharmAla’s prior written consent) license under PharmAla’s licensed intellectual property (including patents, know-how and regulatory documentation) to develop, manufacture and commercialize products incorporating or derived from ALA-002 (each, a “Licensed Product”), for all human therapeutic, prophylactic, palliative, diagnostic and supportive uses, solely in the United States of America, including its territories, possessions and commonwealths, and including Puerto Rico (the “Territory”). The license also permits us to manufacture Licensed Products outside the Territory solely for import and sale into the Territory. PharmAla retains all rights to ALA-002 and the licensed intellectual property outside the Territory. In connection with the license, PharmAla has agreed to make available to the Company certain licensed know-how, manufacturing and analytical information, and regulatory documentation reasonably necessary or useful for the Company to develop, manufacture and commercialize Licensed Products in the Territory.
The
Company will pay PharmAla an aggregate upfront payment of $
The
Company will pay PharmAla development milestone payments totaling up to $
The
Company will pay PharmAla commercialization milestone payments totaling up to $
| 10 |
Beginning with the calendar quarter in which the third commercialization milestone becomes payable, the Company will pay PharmAla a royalty of 3% of net sales of Licensed Products in the Territory during the term of the License Agreement.
The Company has the exclusive right and obligation to develop Licensed Products in the Territory and must use commercially reasonable efforts, at its sole cost and expense, to develop, obtain regulatory approval for, and commercialize Licensed Products in the Territory, including conducting clinical trials, making regulatory filings, and achieving first commercial sale within six months following NDA approval. The Company must also deliver quarterly progress reports to PharmAla during the development period. The Company has sole and exclusive responsibility for manufacturing ALA-002 and Licensed Products for use in the Territory. At our request, PharmAla will arrange supply of GMP-grade ALA-002 drug substance and/or drug product under a separate supply agreement to be negotiated on customary terms.
Unless earlier terminated, the License Agreement continues in perpetuity. Either party may terminate the License Agreement for an uncured material breach after a 90-day cure period (five Business Days for certain critical payment obligations, including the Upfront Payment, cash consideration payable as a condition to the effective date, and amounts payable in connection with the VWAP Reset Mechanic or the Nasdaq exchange cap, and 30 days for all other payment obligations). Either party may terminate immediately upon the other party’s insolvency or bankruptcy. PharmAla may terminate upon 90 days’ notice if the Company fails to achieve development milestones by applicable deadlines (subject to specified extensions) and such failure remains uncured. The Company may not consummate a change of control involving a competing business without PharmAla’s prior written consent, and PharmAla may terminate immediately if such a transaction is consummated without consent. We may terminate for convenience upon at least 180 days’ prior written notice, without relieving accrued payment obligations.
As
of June 30, 2026, the definitive agreement had not yet been executed, and the $
Reverse Stock Split
On
August 6, 2026, the Company filed a Certificate of Amendment to its Certificate of Incorporation and effected a 1-for-75 reverse
stock split of its common stock (the “Reverse Stock Split”), effective at 4:01 p.m. Eastern Time. Every seventy-five
shares of issued and outstanding common stock were combined into one share. The par value of the common stock remained $ per
share, and the authorized number of common shares was not reduced. The Reverse Stock Split was effected on a holder-by-holder basis.
No fractional shares were issued; fractional interests were rounded down, and holders otherwise entitled to a fractional share are
entitled to cash in lieu thereof based on the split-adjusted closing sales price of the common stock on August 6, 2026. The
Company’s common stock continues to trade under the symbol “JUNS,” and the post-split CUSIP number is 48208B302.
Because the Reverse Stock Split became effective after June 30, 2026 but before issuance of these unaudited condensed financial
statements, all common-share and per-share amounts for all periods presented, including weighted-average shares and net loss per
share, shares underlying stock options, restricted stock units, and convertible securities, and applicable exercise and conversion
prices, have been retrospectively adjusted to reflect the Reverse Stock Split. For outstanding equity awards, the number of shares
underlying each award was adjusted on an award-by-award basis, with any resulting fractional award shares rounded down to the
nearest whole share; no fractional award shares were carried forward. The reduction in the stated value of common stock was
reclassified to additional paid-in capital. This presentation adjustment to the opening balances of common stock and additional paid
in capital caused a decrease in common stock and an increase in additional paid-in capital by $
Note 2 – Significant Accounting Policies
Basis of presentation, Liquidity and Management’s Plans
The
accompanying condensed financial statements of the Company have been prepared in conformity with generally accepted accounting
principles in the United States of America (“U.S. GAAP”). U.S. GAAP contemplates the continuation of the Company as a
going concern. For the six months ended June 30, 2026, the Company had net revenues from product sales of $
In management’s opinion, these conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months from the date of this report.
Management’s plans to address the Company’s liquidity needs include raising additional capital through the Company’s existing Standby Equity Purchase Agreement (“SEPA”) and, as necessary, through other equity or debt financing transactions. As of June 30, 2026, approximately $17.2 million of the $20.0 million aggregate commitment under the SEPA remained available; however, the Company’s ability to access this amount is subject to the availability of shares registered for resale, applicable contractual and regulatory limitations, prevailing market conditions and the trading price and trading volume of the Company’s common stock. On July 7, 2026, the SEC declared effective the Company’s registration statement on Form S-1 registering for resale by Yorkville up to an additional shares of common stock that may be issued under the SEPA. The Company’s historically low trading volume may limit the amount and timing of proceeds that can realistically be raised under the SEPA, and therefore the Company cannot presently conclude that the entire remaining commitment will be available when needed. Management intends to utilize available capacity under the SEPA during the third and fourth quarters of 2026, subject to market conditions and applicable limitations, while concurrently evaluating additional financing alternatives to fund the Company’s operations and development activities. There is no assurance that the Company will be able to effect transactions on commercially reasonable terms, if at all.
Business Segment
Business segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the Company’s Chief Operating Decision Maker (“CODM”) and relied upon when making decisions regarding resource allocation and assessing performance. When evaluating the Company’s financial performance, the CODM reviews total revenues, total expenses, and expenses by functional classification, using this information to make decisions on a company-wide basis. Effective October 1, 2025, the Company operates through two reportable segments: (i) premium nutritional supplements, and (ii) pharmaceutical operations focused on drug candidates for CNS and rare orphan diseases.
Use of Estimates
Preparing 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 revenues and expenses during the reported period. Actual results could differ from those estimates, and those estimates may be material.
| 11 |
Significant estimates during the six months ended June 30, 2026 and 2025, respectively, include valuation of stock-based compensation, uncertain tax positions, the valuation of debt instruments, and the valuation allowance on deferred tax assets.
Cash
The
Company considers all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents. The
Company maintains its cash balances with high-credit-quality financial institutions. At times, such balances may exceed federally insured
limits provided by the Federal Deposit Insurance Corporation (“FDIC”). In 2025, the Company has implemented a deposit insurance
program in the Company’s primary account, whereby funds in excess of FDIC insurance limits are insured. The Company did not have
any uninsured cash balances that exceeded the FDIC limit of $
Inventory
Inventory
is stated at the lower of cost or net realizable value, with cost determined using the first-in, first-out method. The Company evaluates
inventory for excess or obsolescence based on forecasted demand and records reserves as necessary. As of June 30, 2026 and December 31,
2025, inventory totaled $
Revenue Recognition
The Company recognizes revenue when control of its products is transferred to customers, generally upon shipment or delivery, depending on the terms of the arrangement.
Revenue is recorded net of estimated variable consideration, including product returns, rebates, discounts, and other allowances, based on historical experience and other relevant factors.
The Company evaluates whether it is the principal or agent in its arrangements and records revenue on a gross or net basis accordingly. Shipping and handling activities are considered fulfilment activities, and the related costs are included in cost of goods sold.
Prepaid Contracts
Prepaid contracts generally represent service agreements which the Company would receive services over a period of time and are expensed as the services are received. The Company’s prepaid contracts are related to service agreements that span over three years; therefore the expense will be recognized over the three year term. See further discussion in Note 6 - Stockholders’ Equity.
Other Assets
As of June 30, 2026, the Company had
deposited $
Research and Development
Research and development costs are expensed as incurred. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as subject enrollment, monitoring visits, clinical site activations, or information provided to us by our vendors with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense, as the case may be.
| 12 |
Income Taxes
The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities and the expected benefits of net operating loss carryforwards. The impact of changes in tax rates and laws on deferred taxes, if any, applied during the years in which temporary differences are expected to be settled, is reflected in the financial statements in the period of enactment. The measurement of deferred tax assets is reduced, if necessary, if, based on weight of the evidence, it is more likely than not that some, or all, of the deferred tax assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. As of June 30, 2026 and December 31, 2025, the Company concluded that a full valuation allowance is necessary for the net deferred tax assets.
Basic loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share includes the effect, if any, from the potential exercise or conversion of securities, such as convertible preferred stock, convertible notes payable, stock options, and unvested restricted stock, which would result in the issuance of incremental shares of common stock, as calculated using the treasury method. In computing the basic and diluted net loss per share applicable to common stockholders, the weighted average number of shares remains the same for both calculations due to the fact that when a net loss exists, dilutive shares are not included in the calculation.
As of June 30, 2026, there were restricted stock units and stock options excluded from the computation of diluted loss per share because their effect was anti-dilutive.
As of December 31, 2025, there were restricted stock units and stock options.
Stock-Based Compensation
The grant date fair value of stock-based awards issued to employees, non-employees and members of the board of directors, is determined using the Black-Scholes option pricing model and ratably expensed over the requisite service period, which is generally the vesting term of the award. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock, risk-free interest rates and future dividend yields.
Clinical Trial Expenses
When applicable in preparing financial statements, the Company estimates clinical trial-related expenses based on contracts with vendors, clinical sites, and consultants. Because payment timing often differs from service delivery, the Company records expenses according to actual service performance and trial progression, using discussions with internal staff and external providers. Estimates are periodically adjusted as actual results become known. Accurate accruals depend on timely reporting from third-party vendors, and differences between estimated and actual expenses, though not expected to be significant, may occur.
Fair Value of Financial Instruments and Fair Value Measurements
The Company measures its financial assets and liabilities in accordance with US GAAP. For certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, the carrying amounts approximate fair value due to their short maturities. Amounts recorded for notes payable, net of discount, and loans payable also approximate fair value because current interest rates available for debt with similar terms and maturities are substantially the same.
The Company follows accounting guidance for financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost).
| 13 |
The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs, other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.
Also see Note 5 - Standby Equity Purchase Agreement and Convertible Debt.
Convertible Notes with Embedded Derivative Liabilities
The Company has entered into convertible notes, some of which contain variable conversion options, whereby the outstanding principal and accrued interest may be converted, by the holder, into shares of common stock at a fixed discount to the price of the common stock at or around the time of conversion upon certain trigger events. The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives. This accounting treatment requires that the carrying amount of any derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with the Company, the change in the fair value during the period is recorded as either other income or expense. Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment, or exercise date and then the related fair value amount is reclassified to other income or expense as part of gain or loss on debt extinguishment.
Leases
Operating lease right-of-use (“ROU”) assets and related operating lease liabilities are recognized based on the present value of future minimum lease payments over the expected term of the lease after taking into account the likelihood of renewals and extensions at inception. In the event an implicit interest rate is not present in the lease agreement, the Company utilizes its incremental borrowing rate at lease inception in order to determine the present value. Short term leases with an initial term of less than twelve months are expensed as incurred.
Note 3 – Related Party Transactions
As
of June 30, 2026 and December 31, 2025, $
Note 4 – Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consisted of the following:
June 30, 2026 | December 31, 2025 | |||||||
| Accounts payable | $ | $ | ||||||
| Professional fees | ||||||||
| License fee | ||||||||
| Credit cards | ||||||||
| Total accounts payable and accrued expenses | $ | $ | ||||||
Additionally,
as of June 30, 2026 and December 31, 2025, there was accrued compensation of $
| 14 |
Note 5 – Standby Equity Purchase Agreement and Convertible Debt
Standby Equity Purchase Agreement and 2025 Convertible Promissory Notes
On
October 24, 2025, the Company entered into a Standby Equity Purchase Agreement (“SEPA”) and related Registration Rights Agreement
with YA II PN, Ltd. (“Yorkville”), providing the Company the right, but not the obligation, to sell up to $
In
connection with the SEPA, Yorkville agreed to provide up to $
As
consideration for Yorkville’s commitment to purchase common stock at the Company’s direction pursuant to the SEPA, the
Company (i) paid to Yorkville a cash “structuring fee” in the amount of $
On February 20, 2026, the Company and Yorkville entered into an Omnibus Amendment (the “Amendment”). Among other changes, the Amendment revises the terms of the Convertible Notes to defer the commencement of monthly instalment payments to April 1, 2026, effectively providing an extension of approximately three months.
On
June 26, 2026, the Company filed a registration statement on Form S-1 to register for resale by Yorkville up to an additional
shares of common stock that may be issued pursuant to future Advances under the SEPA. The Company will not receive proceeds from Yorkville’s
resale of such shares. The Company may receive proceeds when and if it elects to issue and sell shares to Yorkville pursuant to future
Advances under the SEPA. As of June 30, 2026, approximately $ million of the $
The Convertible Notes include features that allow for settlement through either (i) cash repayment or (ii) issuance of common stock at variable or fixed conversion prices, subject to certain contractual terms, including a floor price and instalment-based repayment structure.
The Convertible Notes are classified as a Level III liability within the fair value hierarchy, as their valuation is based on significant unobservable inputs and assumptions.
The Company elected the fair value option for the Convertible Notes upon issuance. As such, the Convertible Notes are measured at fair value at inception and remeasured at each reporting date, with changes in fair value recognized in earnings. The fair value of the Convertible Notes was determined using a Monte Carlo simulation model.
| 15 |
This valuation approach incorporates multiple potential stock price paths over the contractual term, the Company’s ability to settle in shares or cash, the note holder’s ability to convert at a fixed price, variable conversion features tied to market prices, and contractual floors and share caps.
The model simulates a large number of potential outcomes and calculates the expected fair value based on probability-weighted results.
The Convertible Notes accounted for under the fair value election are each debt host financial instruments containing embedded features wherein the entire financial instrument is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. Changes in the estimated fair value of the Convertible Notes are recorded as a component of Other (expense) income in the statements of operations, except that the change in estimated fair value attributable to a change in the instrument-specific credit risks is recognized as a component of other comprehensive income. The instrument specific credit risk associated with the Convertible Notes was de minimis. As a result of electing the fair value method, issuance costs related to the Convertible Notes, including the structuring fee and the commitment fee were expensed as incurred.
The following key assumptions were used in the Monte Carlo Simulation valuation at each measurement date:
| Assumption | December 31, 2025 | June 30, 2026 | ||||||
| Stock Price (VWAP) | $ | $ | ||||||
| Volatility | ~ | % | ~ | % | ||||
| Risk-Free Rates | % | % | ||||||
Volatility was estimated using a combination of the Company’s historical volatility and that of comparable publicly traded companies.
As
of December 31, 2025, the fair value of the Convertible Notes was $
For
the three and six months ended June 30, 2026, the Company recognized a net gain on change in fair value of Convertible Notes of $
For
the three and six months ended June 30, 2026, the Company incurred interest expense of $
The Company also repaid principal of $
For the three and six months ended June 30, 2026, the share-settled payments for principal and interest were funded
through the issuance and sale of approximately and shares of common stock during the three and six month periods, respectively,
pursuant to the SEPA, at an average price of $
The $
As
of December 31, 2025, the Company incurred $
Since inception
and through June 30, 2026, we have issued and sold approximately
shares of common stock to Yorkville pursuant to the SEPA in connection with the settlement of Prepaid Advances and issued
shares of common stock upon conversion of a portion of the Convertible Notes into common stock, for aggregate net proceeds to us of $
| 16 |
A summary of activity of the Convertible Notes, which represent the Level III fair value measurements, is presented below:
| Notes | ||||
| Balance at December 31, 2025 | $ | |||
| Repayments | ( | ) | ||
| Fair value change | ( | ) | ||
| Balance at March 31, 2026 | $ | |||
| Repayments | ( | ) | ||
| Fair value change | ( | ) | ||
| Balance at June 30, 2026 | $ | |||
Note 6 – Stockholders’ Equity (Deficit)
Common Stock
The Company is authorized to issue shares of common stock and shares of preferred stock. The Company had shares of common stock issued and outstanding as of June 30, 2026. There was preferred stock issued and outstanding as of June 30, 2026.
On
May 20, 2026, the Company entered into a Securities Purchase Agreement with investors (the “Investors”), pursuant to
which the Company sold, in a registered direct offering by the Company directly to the Investors (the
“Offering”), shares
of common stock of the Company at a price of $ per
share, for aggregate gross proceeds to the Company of approximately $
On October 24, 2025, the Company entered
into a Standby Equity Purchase Agreement (“SEPA”) and related Registration Rights Agreement with YA II PN, Ltd. (“Yorkville”),
providing the Company the right, but not the obligation, to sell up to $
Equity Awards and Compensation Arrangements
On June 2, 2026, the Compensation Committee approved stock option grants to each independent non-employee director to purchase up to shares of common stock under the 2025 Equity Incentive Plan, vesting over three years commencing September 2, 2026 in equal quarterly installments.
On June 2, 2026, the Board approved stock options to executive officers under the 2025 Equity Incentive Plan. The Board also approved a one-time option grant to the Chief Financial Officer to purchase up to shares of common stock. Each grant vests over three years commencing September 2, 2026 in equal quarterly installments.
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The options have an exercise price equal to the fair market value of the Company’s common stock on the grant date and vest in equal quarterly installments over 36 months, subject to Dr. Philipson’s continued service as a director.
During
the six months ended June 30, 2026, the Company issued shares of Common Stock, with an aggregate fair value of $
Service Agreement
On
June 3, 2024, The Company entered into service agreements with three separate entities, each with a 36-month term. In connection therewith
the Company issued an aggregate of restricted shares of Common Stock, ratably to each entity with an aggregate fair
value at issuance totaling $
Pursuant to the agreements, the counterparties are obligated to perform certain services, as defined, and the Company is recognizing the fair value of the issued restricted shares as compensation expense over the 36-month term, the requisite service period. During the three months ended June 30, 2026 and 2025, the Company recorded compensation expense of $ in each period, related to the agreement, which is included in general and administrative expenses in the accompanying condensed statements of operations.
Stock Options
On April 2, 2026, the Company granted an aggregate of stock options to two consultants with an exercise price of $ per share and a grant date fair value of $. The stock options have a -year term and % of the stock options vest immediately on the grant date, with options vesting in equal monthly installments over 36 months. On June 2, 2026, the Company also issued stock options to executive officers, board members, and certain employees with an exercise price of $ per share and a grant date fair value of $. The stock options have a -year term and % of the stock options vest commencing from September 2, 2026, in equal quarterly installments over 36 months. On June 29, 2026, the Company also issued stock options to a new board of director member with an exercise price of $ per share and a grant date fair value of $. The stock options have a -year term and vest in equal quarterly installments over 36 months.
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Dividend Yield | % | % | ||||||
| Weighted average expected term (years) | ||||||||
| Volatility | - | % | % | |||||
| Risk-free rate | - | % | % | |||||
| Weighted average exercise price | $ | $ | ||||||
| Number of Options | Weighted Average Exercise Price | Weighted Average Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding as of December 31, 2025 | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Exercised | ( | ) | ||||||||||||||
| Forfeited | ||||||||||||||||
| Outstanding as of June 30, 2026 | ||||||||||||||||
| Exercisable as of June 30, 2026 | ||||||||||||||||
| Outstanding Options | Vested Options | |||||||||||||||||
| Exercise Price | Number Outstanding at June 30, 2026 | Weighted Average Remaining Life | Number Exercisable at June 30, 2026 | Weighted Average Remaining Life | ||||||||||||||
| $ | - | |||||||||||||||||
| $ | - | |||||||||||||||||
| $ | ||||||||||||||||||
| $ | ||||||||||||||||||
| $ | ||||||||||||||||||
| $ | ||||||||||||||||||
| $ | - | |||||||||||||||||
| $ | ||||||||||||||||||
| $ | ||||||||||||||||||
| $ | ||||||||||||||||||
For
the six months ended June 30, 2026, the Company recognized stock-based compensation expense of $,
consisting of $
Restricted Stock Units
On April 30, 2026, the Company granted
Victoria Silvstedt
restricted stock units under the 2025 Equity Incentive Plan, with each restricted stock unit representing the right to receive one share
of the Company’s common stock. Twenty-five
percent of the award vested on the grant date, and the remaining restricted stock units vest in four equal quarterly installments through
April 30, 2027, subject to continued service. As of June 30, 2026,
There was $ unrecognized stock-based compensation expense as of June 30, 2026, which will be recognized over a period of approximately years.
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Note 7 – Commitments and Contingencies
Legal Matters
In the ordinary course of business, we are from time to time involved in lawsuits, claims, investigations, proceedings, and threats of litigation relating to, among other things, intellectual property, commercial arrangements, employment, and regulatory matters. While the outcome of these proceedings and claims cannot be predicted with certainty, as of June 30, 2026, we were not party to any material legal or arbitration proceedings. No governmental proceedings are pending or, to our knowledge, contemplated against us.
Office Lease
On
May 1, 2021, the Company entered into a
On
June 1, 2026, the Company commenced a new operating lease for office space with a term of
As
of June 30, the Company’s operating lease right-of-use asset, net (ROU) is $
| June 30, | ||||
| 2026 | ||||
| Operating lease right-of-use asset (“ROU”) is summarized below: | ||||
| Office lease ROU | $ | |||
| Less accumulated reduction | ( | ) | ||
| Balance of ROU, net | $ | |||
| Operating lease liability related to the ROU asset is summarized below: | ||||
| Office lease liability | $ | |||
| Change in lease liability | ||||
| Total | $ | |||
| 19 |
Future minimum lease liability payments under the non-cancellable operating lease at June 30, 2026 is as follows:
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| 2031 | ||||
| 2032 | ||||
| Less: imputed interest | ( | ) | ||
| Total lease liabilities | $ | |||
| Current operating lease liabilities | ||||
| Non-current operating lease liabilities | ||||
| Total lease liabilities | $ |
Consulting Agreements
On December 15, 2024, the Company
entered into a 36-month strategic services agreement with Dominant Treasure Health Company Limited to support product development and
distribution in Southeast Asia for a $
Licensing and Royalty Agreements - Aquanova AG
On September 13, 2016, the Company
entered into a license agreement with Aquanova AG granting the Company exclusive worldwide rights to develop, manufacture and commercialize
JOTROL™ and related products. The agreement provides for annual license fees of $
| 20 |
As
of June 30, 2026 and December 31, 2025, $
Note 8 – Segment Report
The Company’s Chief Executive Officer serves as the Chief Operating Decision Maker (“CODM”). The CODM evaluates financial performance and makes resource allocation decisions based on the operating results of the Company’s reportable segments.
Effective
October 1, 2025, the Company operates through
Premium Nutritional Supplements
This segment includes all activities related to the commercialization and sale of the Company’s Nugevia product line. Activities within this segment primarily consist of marketing, distribution, sales, customer support, and related supply chain management associated with Nugevia products.
Pharmaceutical Operations
This segment includes all activities related to the research, development, and regulatory advancement of JOTROL™, the Company’s proprietary resveratrol-based therapeutic candidate, which is being developed to address unmet medical needs and improve patient outcomes. Activities within this segment primarily consist of clinical development, regulatory, manufacturing development, intellectual property protection, and related research and development functions.
The CODM assesses segment performance and allocates resources based on segment net loss (income), which represents the primary measure of profit or loss reviewed. The CODM does not evaluate segments using discrete asset or liability information.
Allocation Methodology
Expenses are attributed to each reportable segment based on the nature of the activity and the function to which the expense relates. Costs that are directly identifiable with a specific segment are recorded to that segment. Selling, general and administrative expenses that benefit both segments are allocated using reasonable and consistently applied methodologies that reflect the estimated level of effort or resources consumed by each segment. These allocation methodologies may include time and effort analyses, headcount, relative revenue, or other activity-based measures, depending on the underlying cost driver.
| 21 |
The allocation methodologies are reviewed periodically and refined as necessary to reflect changes in the business. The Company believes such allocations are reasonable and consistent with the manner in which the CODM evaluates segment performance and makes resource allocation decisions.
Corporate and other expenses consist primarily of public company costs (including board, investor relations, and SEC reporting expenses), certain executive compensation, certain stock-based compensation, interest income (expense), other income (expense), and income taxes. These costs are not allocated to reportable segments because they are not included in the measures reviewed by the CODM for purposes of assessing segment performance.
Segment information for the three months ended June 30, 2026 is presented below:
| Pharmaceutical Operations | Premium Nutritional Supplements | Total Reportable Segments | Corporate / Other | Total | ||||||||||||||||
| Revenue | ||||||||||||||||||||
| Cost of goods sold | ||||||||||||||||||||
| Research and development | ||||||||||||||||||||
| Selling, general and administrative | ||||||||||||||||||||
| Segment net loss | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Other interest income (expense), net | ||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
Segment information for the six months ended June 30, 2026 is presented below:
| Pharmaceutical Operations | Premium Nutritional Supplements | Total Reportable Segments | Corporate / Other | Total | ||||||||||||||||
| Revenue | ||||||||||||||||||||
| Cost of goods sold | ||||||||||||||||||||
| Research and development | ||||||||||||||||||||
| Selling, general and administrative | ||||||||||||||||||||
| Segment net loss | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Other interest income (expense), net | ||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
Note 9 – Subsequent Events
On July 20, 2026, the Company entered
into a definitive license agreement with PharmAla Biotech Holdings Inc. (“PharmAla”) for perpetual exclusive U.S. rights
to ALA-002. In connection with the agreement, the Company made an additional $
Subsequent to June 30, 2026 and through the date of this filing, the Company sold
shares of common stock under the SEPA at an average price of $ per share, resulting in gross proceeds of $
At the July 22, 2026 Annual Meeting,
| 22 |
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 financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited financial information and related notes included in our Annual Report on Form 10-K.
Unless the context otherwise requires references to, “JUNS,” “we,” “us,” “our,” or the “Company” refers to Jupiter Neurosciences, Inc.
Business Overview
Jupiter Neurosciences, Inc. is a clinical stage research and development pharmaceutical company located in Jupiter, Florida. The Company is advancing a therapeutic pipeline targeting central nervous system (“CNS”) disorders and rare diseases, while also expanding into the consumer market with its Nugevia™ product line. Both efforts are powered by JOTROL™, Jupiter’s proprietary, enhanced resveratrol formulation that has demonstrated potential for significantly improved bioavailability in an FDA regulated Phase I study. The Company’s therapeutic development pipeline is focused broadly on CNS disorders, presently with a Phase IIa clinical study in Parkinson’s disease. The Company’s Nugevia product line brings cutting edge science to the supplement space, supporting mental clarity, skin health, and mitochondrial function.
The Company completed preclinical studies at the University of Miami for Parkinson’s Disease in 2021. These studies used a validated mouse model to mimic human disease characteristics. JOTROL™ demonstrated consistent improvements in motor coordination, endurance, and strength across multiple endpoints in a validated Parkinson’s disease model, with statistically significant benefits versus untreated disease controls. The promising results have led the Company to initiate a Phase IIa clinical trial for Parkinson’s Disease, which received final IND approval by the FDA in November of 2025 and started in the second quarter of 2026, with results anticipated 12 months later. The Company also aims to investigate other CNS indications, such as Mild Cognitive Impairment (“MCI”) and Alzheimer’s disease, following the Parkinson’s study.
The Company believes, based on pre-clinical and clinical studies, that high doses of resveratrol are necessary for potential therapeutic effects. Currently available resveratrol products cannot reach these levels without causing severe gastrointestinal side effects. Human studies evaluating resveratrol in Alzheimer’s patients (Turner et al 2015) and Friedreich’s Ataxia patients (Yu et al 2015) indicate the concentration of resveratrol at its peak (CMax) measured in blood plasma should be 300 ng/ml or higher for a potential therapeutic effect. A Phase 1 study with 500mg of resveratrol as a maximum dose in the JOTROL™ formulation showed levels of resveratrol exceeding 800 ng/ml without generating any severe adverse events (AAPS Open 2022). Resveratrol was shown in the Turner Alzheimer’s study to cross the blood-brain barrier, possibly indicating a potential for positive effects on oxidative stress and inflammation. Subsequent analysis published in Molecular Science 2025 (Mousa et al) further indicates that resveratrol may have an impact on neurodegeneration and neuroinflammation in Alzheimer’s patients.
Over the past two years, JOTROL™ has garnered significant interest from Asian organizations. This interest is partly due to resveratrol’s use in Asian herbal medicines, recent patent approvals in Hong Kong and China, and China’s list of rare disease indications where JOTROL™ could be applicable. Additionally, recent publications in the Journal of Alzheimer’s Disease and AAPS Open, along with the projected growth of the Traditional Chinese Medicine market, have contributed to this interest.
The Company has entered service agreements with firms in Hong Kong to accelerate product development in Southeast Asia. These agreements aim to leverage local expertise and networks to facilitate market entry and potential out-licensing deals. The Company entered into an agreement with Dominant Treasure Health to expand its business development in China, Malaysia, and Singapore, aiming to penetrate the large and challenging Asian market.
On May 19, 2026, the Company and PharmAla Biotech Holdings Inc. (“PharmAla”) executed a non-binding summary of proposed terms (the “Term Sheet”) describing a potential licensing transaction pursuant to which the Company would acquire from PharmAla exclusive and perpetual U.S. rights to ALA-002, a proprietary, next-generation MDMA formulation, together with related intellectual property, regulatory materials, tangible inventory, and certain contractual and regulatory rights (collectively, the “Assets”), subject to the Company’s compliance with the definitive agreements. PharmAla is a Canadian biotechnology company engaged in the research, development and GMP production of MDXX-class psychedelics, including clinical-grade MDMA and novel analogues, and owns a proprietary investigational compound known as ALA-002.
| 23 |
On July 20, 2026, the Company and PharmAla entered into a definitive Strategic Asset License Agreement (the “License Agreement”). Pursuant to the License Agreement, PharmAla granted the Company an exclusive royalty-bearing, sublicensable (subject to restrictions on sublicenses to persons engaged in a competing business without PharmAla’s prior written consent) license under PharmAla’s licensed intellectual property (including patents, know-how and regulatory documentation) to develop, manufacture and commercialize products incorporating or derived from ALA-002 (each, a “Licensed Product”), for all human therapeutic, prophylactic, palliative, diagnostic and supportive uses, solely in the United States of America, including its territories, possessions and commonwealths, and including Puerto Rico (the “Territory”). The license also permits us to manufacture Licensed Products outside the Territory solely for import and sale into the Territory. PharmAla retains all rights to ALA-002 and the licensed intellectual property outside the Territory. In connection with the license, PharmAla has agreed to make available to the Company certain licensed know-how, manufacturing and analytical information, and regulatory documentation reasonably necessary or useful for the Company to develop, manufacture and commercialize Licensed Products in the Territory.
The Company will pay PharmAla an aggregate upfront payment of $3,333,333 (the “Upfront Payment”), comprised of (i) $1,500,000 in cash (the “Initial Cash Consideration”), consisting of a $600,000 escrow deposit made at the time of entering into the non-binding term sheet on May 19, 2026 and $900,000 paid on signing of the definitive agreements on July 20, 2026, and (ii) $1,833,333 payable in shares of common stock (the “Equity Consideration”). We may elect to pay all or any portion of the Equity Consideration in cash. The Initial Cash Consideration is payable as a condition precedent to the effective date of the License Agreement. The shares of common stock will be issued no later than 30 days after the effective date based on the volume-weighted average price (“VWAP”) of shares of common stock for the 20 consecutive trading days ending on the trading day immediately preceding the issuance date, subject to a Nasdaq 19.99% exchange cap unless stockholder approval is obtained. The License Agreement includes a VWAP reset mechanic pursuant to which if the VWAP during the pricing window is less than the initial issuance price, the Company is required to issue additional shares (or, if the price falls below the Equity Floor Price, pay cash) to ensure PharmAla receives the full value of the Equity Consideration (the “VWAP Reset Mechanic”). The shares are subject to a 120-day lock-up period and registration rights, including our obligation to file a registration statement within 30 days following the issuance date. The Equity Consideration has not been issued as of the date of this filing.
The Company will pay PharmAla development milestone payments totaling up to $23,333,333, comprised of (i) $3,333,333 upon first dosing of the first patient in a Phase 3 clinical trial of a Licensed Product in the Territory (payable fifty percent (50%) in cash and fifty percent (50%), at PharmAla’s election, in cash or common stock) and (ii) $20,000,000 upon first FDA approval of an NDA for a Licensed Pr6oduct (payable in cash). Each development milestone payment is payable only once.
The Company will pay PharmAla commercialization milestone payments totaling up to $73,333,333, comprised of (i) $10,000,000 upon first achievement of $333,333,333 in net sales in the Territory, (ii) $30,000,000 upon first achievement of $1,000,000,000 in net sales in the Territory, and (iii) $33,333,333 upon first achievement of $2,000,000,000 in net sales in the Territory. Each commercialization milestone payment is payable only once.
Beginning with the calendar quarter in which the third commercialization milestone becomes payable, the Company will pay PharmAla a royalty of 3% of net sales of Licensed Products in the Territory during the term of the License Agreement.
The Company has the exclusive right and obligation to develop Licensed Products in the Territory and must use commercially reasonable efforts, at its sole cost and expense, to develop, obtain regulatory approval for, and commercialize Licensed Products in the Territory, including conducting clinical trials, making regulatory filings, and achieving first commercial sale within six months following NDA approval. The Company must also deliver quarterly progress reports to PharmAla during the development period. The Company has sole and exclusive responsibility for manufacturing ALA-002 and Licensed Products for use in the Territory. At our request, PharmAla will arrange supply of GMP-grade ALA-002 drug substance and/or drug product under a separate supply agreement to be negotiated on customary terms.
Unless earlier terminated, the License Agreement continues in perpetuity. Either party may terminate the License Agreement for an uncured material breach after a 90-day cure period (five Business Days for certain critical payment obligations, including the Upfront Payment, cash consideration payable as a condition to the effective date, and amounts payable in connection with the VWAP Reset Mechanic or the Nasdaq exchange cap, and 30 days for all other payment obligations). Either party may terminate immediately upon the other party’s insolvency or bankruptcy. PharmAla may terminate upon 90 days’ notice if the Company fails to achieve development milestones by applicable deadlines (subject to specified extensions) and such failure remains uncured. The Company may not consummate a change of control involving a competing business without PharmAla’s prior written consent, and PharmAla may terminate immediately if such a transaction is consummated without consent. We may terminate for convenience upon at least 180 days’ prior written notice, without relieving accrued payment obligations.
As of June 30, 2026, the definitive agreement had not yet been executed, and the $600,000 escrow deposit was recorded as a noncurrent asset in the accompanying condensed balance sheet. No assets or liabilities associated with the proposed acquisition, other than the escrow deposit, were recognized as of June 30, 2026.
On June 5, 2026, the Company amended Alison Silva’s employment agreement in connection with her appointment as Chief Operating Officer and President, increasing her annual base salary from $315,000 to $340,200. In connection with her appointment, the Board also approved a one-time grant of options to purchase 8,000 shares of the Company’s common stock under the 2025 Equity Incentive Plan.
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In March 2025, the Company unveiled a new strategic initiative to introduce Nugevia—a consumer-oriented product line dedicated to longevity and wellness. This initiative aims to meet the rising demand for scientifically backed wellness solutions by developing nutritional products that support both longevity and health span. Positioned within a rapidly growing global industry expected to reach $8.0 trillion by 2030, Nugevia products will leverage Jupiter’s proprietary JOTROL™ technology, a resveratrol-based platform that is designed to deliver an increase in the bioavailability profile of resveratrol.
The first products under the Nugevia brand, focusing on supporting longevity and health span are available for sale and shipments began in the fourth quarter of 2025 through a direct-to-consumer model. The products are:
● Nugevia GLO (“GLO”), which helps promote and support cellular functions and skin vitality;
● Nugevia MND (“MND”), which supports cognitive resilience; and
● Nugevia PWR (“PWR”), which helps support mitochondrial function, which is a key for sustained growth and performance.
The three debut formulations—GLO, MND, and PWR—are designed to support wellness and longevity through intelligent stacking of synergistic ingredients, all enhanced for optimal absorption via the JOTROL™ system.
The Company plans to market these products in the U.S. and internationally.
Nugevia’s launch is a pivotal move to monetize Jupiter’s proprietary science, support ongoing clinical trials, and capture a share of the booming longevity market.
The Company operates through two segments: (i) the sale of premium nutritional supplements under the Nugevia brand, and (ii) pharmaceutical operations centered on the development of drug candidates.
Financial Position
For the six months ended June 30, 2026 and 2025, we generated net revenues of $42,897 and $0, respectively from product sales and reported net losses of $4,336,355 and $3,781,832, respectively, and negative cash flow from operating activities of $3,727,022 and $1,891,263, respectively. As noted in our financial statements, as of June 30, 2026 and December 31, 2025, we had an accumulated deficit of $39,003,381 and $34,667,026, respectively. There is substantial doubt regarding our ability to continue as a going concern as a result of our historical recurring losses and negative cash flows from operations as well as our dependence on private equity and financings. See “Risk Factors” included herein and in our Annual Report on Form 10-K for additional discussion of risks associated with our capital requirements.
Components of Results of Operations
Research and Development Expenses
Research and development expense reflects costs to advance our pharmaceutical programs and support product development for our consumer health initiatives. Key drivers include third-party service agreements to accelerate development and distribution efforts in Asia and program-level activities such as procurement of clinical trial supplies. We expense research and development expenses as incurred, and certain multi-period service arrangements are recognized ratably over their terms, which can create period-to-period variability as new agreements commence or milestones occur.
General and Administrative Expenses
General and administrative expense comprises corporate overhead necessary to operate as a public company and to support our dual focus on pharmaceuticals and premium nutritional supplements. Major components include personnel-related costs, professional fees (legal, accounting, regulatory, commercialization support), facilities and insurance, and other public-company compliance costs. Fluctuations versus prior periods primarily reflect changes in staffing, stock-based compensation, external advisory needs, and launch-readiness activities for the consumer health business.
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Interest Income
Interest income is generated from cash and cash equivalents, with period-to-period changes driven by average cash balances and prevailing short-term yields. The timing of capital raises, and operating cash usage can influence both the absolute level of interest income and its variability across reporting periods. Our policy treats highly liquid investments with original maturities of three months or less as cash equivalents.
Interest Expense
Interest expense primarily arises from financing arrangements recorded on our balance sheet (including notes payable), and will vary based on outstanding principal, effective interest rates, and any amortization of related financing costs. Changes in borrowings or the terms of such obligations can therefore impact period-over-period comparability.
Results of Operations
Three Months Ended June 30, 2026 Compared to the Three Months Ended June 30, 2025
The period-to-period comparisons of our historical results are not necessarily indicative of the results that may be expected in the future. The results of operations for the three months ended June 30, 2026 and June 30, 2025, have been derived from the condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q.
| For the Three Months Ended | ||||||||
June 30, 2026 | June, 2025 | |||||||
| Product revenues, net | 24,245 | - | ||||||
| Cost of goods sold | 3,181 | - | ||||||
| Gross Profit | $ | 21,064 | $ | - | ||||
| Expenses: | ||||||||
| Research and development | 600,353 | 759,448 | ||||||
| General and administrative | 2,163,656 | 1,505,432 | ||||||
| Total operating expenses | 2,764,009 | 2,264,880 | ||||||
| Operating loss | (2,742,945 | ) | (2,264,880 | ) | ||||
| Other Income (Expenses): | ||||||||
| Interest income | 10,068 | 13,050 | ||||||
| Gain on change in fair value of convertible notes | 549,098 | - | ||||||
| Interest expense | (90,618 | ) | (1,135 | ) | ||||
| Total other income (expenses), net | 468,548 | 11,915 | ||||||
| Net loss | $ | (2,274,397 | ) | $ | (2,252,965 | ) | ||
| Net loss per common share: | ||||||||
| Basic and diluted | $ | (4.08 | ) | $ | (5.09 | ) | ||
| Weighted average number of common shares outstanding: | ||||||||
| Basic and diluted | 557,567 | 442,413 | ||||||
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Research and Development Expenses
Research and development (“R&D”) expenses were $600,353 for three months ended June 30, 2026 compared to $759,448 for the three months ended June 30, 2025, representing a decrease of $159,095, or 21%. The decrease in research and development expenses was primarily driven by decreases in payroll and consulting expenses of $100,675, clinical trial expenses of $58,269, and other expenses of $151.
General and Administrative Expenses
General and administrative expenses were $2,163,656 for the three months ended June 30, 2026 compared to $1,505,432 for the three months ended June 30, 2025, representing an increase of $658,224, or 44%. The increase is due to increases in payroll and consulting expenses of $648,734 and investor and public relation expenses of $33,519, offset by decreases in Nugevia related expenses of $4,826 and other expenses of $19,203.
Interest Income
Interest income was $10,068 for the three months ended June 30, 2026, compared to $13,050 for the three months ended June 30, 2025, representing a decrease of $2,982, or 23%. The decrease was primarily attributable to lower average cash balances maintained in the Company’s money market accounts during the 2026 period.
Interest Expense
Interest expense was $90,618 for the three months ended June 30, 2026, compared to $1,135 for the three months ended June 30, 2025, representing an increase of $89,483, or 7,884%. The significant increase in the current period is due to interest related to the convertible promissory notes.
Gain on Change in Fair Value of Convertible Notes
The Company recognized a $549,098 gain from marking to market the Convertible Notes during the three months ended June 30, 2026.
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Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025
The period-to-period comparisons of our historical results are not necessarily indicative of the results that may be expected in the future. The results of operations for the six months ended June 30, 2026 and June 30, 2025, have been derived from the condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q.
| For the Six Months Ended | ||||||||
June 30, 2026 | June 30, 2025 | |||||||
| Product revenues, net | 42,897 | - | ||||||
| Cost of goods sold | 7,543 | - | ||||||
| Gross Profit | $ | 35,354 | $ | - | ||||
| Expenses: | ||||||||
| Research and development | 1,011,402 | 1,226,193 | ||||||
| General and administrative | 3,729,897 | 2,576,690 | ||||||
| Total operating expenses | 4,741,299 | 3,802,883 | ||||||
| Operating loss | (4,705,945 | ) | (3,802,883 | ) | ||||
| Other Income (Expenses): | ||||||||
| Interest income | 28,472 | 23,415 | ||||||
| Gain on change in fair value of convertible notes | 550,380 | - | ||||||
| Interest expense | (209,262 | ) | (2,364 | ) | ||||
| Total other income (expenses), net | 369,590 | 21,051 | ||||||
| Net loss | $ | (4,336,355 | ) | $ | (3,781,832 | ) | ||
| Net loss per common share: | ||||||||
| Basic and diluted | $ | (8.44 | ) | $ | (8.49 | ) | ||
| Weighted average number of common shares outstanding: | ||||||||
| Basic and diluted | 514,059 | 445,256 | ||||||
Research and Development Expenses
R&D expenses were $1,011,402 for six months ended June 30, 2026 compared to $1,226,193 for six months ended June 30, 2025, representing a decrease of $214,791, or 18%. The decrease in research and development expenses was primarily driven by decreases in clinical trial expenses of $112,383, payroll and consulting expenses of $98,906, and other expenses of $9,528, offset by increases in meetings and conferences expenses of $6,026.
General and Administrative Expenses
General and administrative expenses were $3,729,897 for the six months ended June 30, 2026 compared to $2,576,690 for the six months ended June 30, 2025, representing an increase of $1,153,207, or 45%. The increase is due to increases in payroll and consulting expenses of $808,277, Nugevia related expenses of $179,999, investor and public relations expenses of $116,901 and other expenses of $48,030.
Interest Income
Interest income was $28,472 for the six months ended June 30, 2026, compared to $23,415 for the six months ended June 30, 2025, representing an increase of $5,057, or 22%. The increase was primarily attributable to higher average cash balances maintained in the Company’s money market accounts during the 2026 period.
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Interest Expense
Interest expense was $209,262 for the six months ended June 30, 2026, compared to $2,364 for the six months ended June 30, 2025, representing an increase of $206,898, or 8,752%. The significant increase in the current period is due to interest related to the convertible promissory notes.
Gain on Change in Fair Value of Convertible Notes
The Company recognized a $550,380 gain from marking to market the Convertible Notes during the six months ended June 30, 2026.
Liquidity and Capital Resources; Plan of Operations
As of June 30, 2026, we had cash and cash equivalents of $1,521,874. Our cash equivalents are held in a high yield savings account. Since inception, we have incurred net losses and negative cash flows from operations. On June 30, 2026, we had an accumulated deficit of $39,003,381.
Historically, we have financed our operations primarily by selling common stock and convertible debt.
On May 20, 2026, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain investors (the “Investors”), pursuant to which the Company agreed to issue and sell, in a registered direct offering by the Company directly to the Investors 95,238 shares of common stock at a price of $21.00 per share, for aggregate gross proceeds to the Company of approximately $2.0 million before deducting the placement agent’s fees and related offering expenses. The Shares were offered by the Company pursuant to a Registration Statement on Form S-3 (File No. 333-295085), which was filed with the Securities and Exchange Commission (the “Commission”) on April 16, 2026, and was declared effective by the Commission on April 24, 2026.
On October 24, 2025, the Company entered into a Standby Equity Purchase Agreement (“SEPA”) and related Registration Rights Agreement with YA II PN, Ltd. (“Yorkville”), providing the Company the right, but not the obligation, to sell up to $20.0 million of common stock from time to time, subject to customary conditions, including an effective resale registration statement. In connection with the SEPA, Yorkville agreed to provide $6.0 million of pre-paid advances via convertible promissory notes. During the year ended December 31, 2025, the company received aggregate proceeds of $5,100,000, which is net of $420,000 of issuance discounts and $480,000 of financing costs associated with the transaction. During the six months ended June 30, 2026, the Company received aggregate proceeds of $2,808,602 from sales of common stock under the SEPA which were used to pay interest and principal on the convertible promissory notes.
On December 2, 2024, the Company priced its initial public offering of 36,667 shares of common stock at a price of $300.00 per share. The offering closed on December 4, 2024, and the Company started trading on the Nasdaq Capital Market under the ticker symbol “JUNS”. The Company sold 36,667 shares of its Common Stock to the underwriters and yielded proceeds of $9,725,213, net of underwriters and other fees of $1,274,787.
On August 6, 2026, the Company effected a 1-for-75 Reverse Stock Split. The Reverse Stock Split did not generate any proceeds or change the Company’s aggregate stockholders’ deficit. The Reverse Stock Split was intended to assist the Company in seeking to regain compliance with Nasdaq’s minimum bid price requirement; however, it does not assure continued listing and does not, by itself, address the separate market value of listed securities requirement.
For the six months ended June 30, 2026 and 2025, we generated net revenues of $42,897 and $0, respectively from product sales and reported net losses of $4,336,355 and $3,781,832, respectively, and negative cash flow from operating activities of $3,727,022 and $1,891,263, respectively. As noted in our financial statements, as of June 30, 2026 and December 31, 2025, we had an accumulated deficit of $39,003,381 and $34,667,026, respectively. There is substantial doubt regarding our ability to continue as a going concern as a result of our historical recurring losses and negative cash flows from operations as well as our dependence on private equity and financings.
Management’s plans to address the Company’s liquidity needs include raising additional capital through the Company’s existing Standby Equity Purchase Agreement (“SEPA”) and, as necessary, through other equity or debt financing transactions. As of June 30, 2026, approximately $17.2 million of the $20.0 million aggregate commitment under the SEPA remained available; however, the Company’s ability to access this amount is subject to the availability of shares registered for resale, applicable contractual and regulatory limitations, prevailing market conditions and the trading price and trading volume of the Company’s common stock. On July 7, 2026, the SEC declared effective the Company’s registration statement on Form S-1 registering for resale by Yorkville up to an additional 213,333 shares of common stock that may be issued under the SEPA. The Company’s historically low trading volume may limit the amount and timing of proceeds that can realistically be raised under the SEPA, and therefore the Company cannot presently conclude that the entire remaining commitment will be available when needed. Management intends to utilize available capacity under the SEPA during the third and fourth quarters of 2026, subject to market conditions and applicable limitations, while concurrently evaluating additional financing alternatives to fund the Company’s operations and development activities. There is no assurance that the Company will be able to effect transactions on commercially reasonable terms, if at all.
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Our failure to raise capital as and when needed could have a negative impact on our financial condition and our ability to pursue our business strategies. We anticipate that we will need to raise substantial additional capital, the requirements of which will depend on many factors, including:
| ● | the scope, rate of progress and costs of our drug delivery, preclinical development activities, laboratory testing and clinical trials for our drug candidate; |
| ● | the number and scope of clinical programs we decide to pursue; |
| ● | the scope and costs of manufacturing development and commercial manufacturing activities; |
| ● | the extent to which we acquire or in-license other drug candidates and technologies; |
| ● | the cost, timing and outcome of regulatory review of our drug candidate; |
| ● | the cost and timing of establishing sales and marketing capabilities, if our drug candidate receives marketing approval; |
| ● | the costs of preparing, filing and prosecuting patent applications, obtaining, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; |
| ● | our ability to establish and maintain collaborations on favorable terms, if at all; |
| ● | our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of our drug candidate; |
| ● | the amount of profit, if any, generated from the sales of the Nugevia product line; |
| ● | the costs associated with being a public company; and |
| ● | the cost associated with commercializing our drug candidate, if it receives marketing approval. |
See “Risk Factors” included herein and in our Annual Report on Form 10-K for additional discussion of risks associated with our capital requirements.
Cash Flows for the Six Months Ended June 30, 2026 and 2025
The following table shows a summary of our cash flows for the six months ended June 30, 2026 and 2025.
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net cash flows from operating activities | $ | (3,727,022 | ) | $ | (1,891,263 | ) | ||
| Net cash flows from financing activities | $ | 1,459,554 | $ | - | ||||
| Net increase (decrease) in cash | $ | (2,267,468 | ) | $ | (1,891,263 | ) | ||
Net Cash Flows From Operating Activities:
Net cash used in operating activities was $3,727,022 for the six months ended June 30, 2026, compared to $1,891,263 for the six months ended June 30, 2025. The increase was primarily attributable to an increase in net loss to $4,336,355 in 2026 from $3,781,832 in 2025, a $550,380 non-cash gain on the change in fair value of convertible notes, the $600,000 PharmAla escrow deposit, an increase in accounts receivable of $7,604, an increase in other assets of $22,467, and a decrease in accrued interest of $39,829. These uses of cash were partially offset by non-cash adjustments, including stock-based compensation of $991,989 in 2026 compared to $883,942 in 2025, amortization of prepaid contracts of $380,183 in 2026 compared to $380,182 in 2025, and $131,479 of interest expense paid through the issuance of common stock in 2026. Changes in working capital also included an increase in accounts payable and accrued expenses of $279,597 in 2026 compared to $177,481 in 2025, an increase in accrued compensation of $16,680 in 2026 compared to $442,826 in 2025, and a decrease in inventory of $24,500.
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Net Cash Flows From Financing Activities:
Net cash provided by financing activities was $1,459,554 for the six months ended June 30, 2026, compared to no cash provided by or used in financing activities for the six months ended June 30, 2025. The increase in net cash provided by financing activities was primarily attributable to $1,860,000 from the Company’s offering and $5,507 of proceeds from the exercise of stock options, partially offset by $405,953 of payments on convertible notes payable.
Off-balance sheet financing arrangements
We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Related Party Transactions
As of June 30, 2026 and December 31, 2025, $84,105 and $64,105, respectively, were payable to Titan Advisory Services LLC (“Titan”), a company wholly owned by the Company’s Chief Financial Officer, pursuant to a Master Services Agreement (“MSA”) dated December 31, 2022. Under the MSA, Titan provides executive finance and corporate support services to the Company, including services by Saleem Elmasri as Chief Financial Officer.
Critical Accounting Policies
Our accounting policies are more fully described in Note 2 - Significant accounting policies to our financial statements included as part of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
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ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of June 30, 2026, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of June 30, 2026, our disclosure controls and procedures were ineffective due to a material weakness in our ability to adequately segregate responsibility over financial transaction processing and reporting. Based on the number of personnel available to serve the Company’s accounting function, management believes we are not able to adequately segregate responsibility over financial transaction processing and reporting. Further, the Company does not have a formal internal control environment in place and operating effectively. As such, we have identified these issues as material weaknesses in our internal control over financial reporting and we may identify additional material weaknesses in the future that may cause us to fail to meet our reporting obligations or result in material misstatements of our financial statements. If our remediation of such material weaknesses is not effective, or if we fail to develop and maintain an effective system of internal controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be materially and adversely affected and the market price of our common stock could be negatively affected, which could require additional financial and management resources.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter 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
In the ordinary course of business, we are from time to time involved in lawsuits, claims, investigations, proceedings, and threats of litigation relating to, among other things, intellectual property, commercial arrangement, employment, and regulatory matters. While the outcome of these proceedings and claims cannot be predicted with certainty, as of June 30, 2026, we were not party to any material legal or arbitration proceedings. No governmental proceedings are pending or, to our knowledge, contemplated against us.
ITEM 1A. RISK FACTORS
Please carefully consider the information set forth in this Quarterly Report on Form 10-Q, and the risk factors discussed in Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K, which could materially affect our business, financial condition, or future results. Any of the risk factors contained in our Annual Report on Form 10-K, as well as additional risks and uncertainties not presently known to us or that we currently deem immaterial, could materially affect our business, results of operations, and financial condition or future results, which in turn could materially and adversely affect the trading price of shares of our Common Stock. As of the date of this Quarterly Report on Form 10-Q, there have been no material updates or changes with respect to the risk factors previously disclosed in our Annual Report on Form 10-K, except as follows:
We have limited cash resources and will need additional financing to continue our operations; if we are unable to obtain sufficient capital, satisfy our obligations under our financing arrangements or consummate strategic transactions, we may be forced to significantly curtail or cease operations and may seek protection under bankruptcy or insolvency laws or pursue a liquidation, dissolution or wind-down.
Our current cash balance is not sufficient to fund our planned operations and satisfy our obligations for the next twelve months, and we will require substantial additional capital to continue operating our business. If we are unable to raise sufficient additional capital in the near term, we may be required to significantly reduce, delay, or discontinue our operations, reduce headcount, defer or terminate development or commercialization activities, sell or license assets on unfavorable terms, or pursue other strategic alternatives. These alternatives may not be available on acceptable terms, or at all, and may not provide sufficient liquidity to enable us to continue as a going concern.
If we are unable to obtain adequate financing or consummate a strategic transaction, we may be forced to seek protection under applicable bankruptcy or insolvency laws or pursue a liquidation, dissolution, wind-down, or similar proceeding. In that event, holders of our common stock could lose all or substantially all of their investment, and any recovery by stockholders would depend on the amount, if any, remaining after the satisfaction of our obligations to creditors and any holders of securities senior to our common stock.
The Company’s failure to meet the continued listing requirements of The Nasdaq Capital Market could result in a delisting of its securities.
Our common stock is currently listed for trading on Nasdaq. On March 21, 2025, the Company received a written notice from the Listing Qualifications Department of Nasdaq indicating that the Company was not in compliance with the minimum bid price requirement set forth under Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”), as the closing bid price of the Company’s common stock was below $1.00 per share for 30 consecutive business days. Listing Rule 5550(a)(2) requires the registrant to maintain a minimum bid price of $1.00 USD per share for its securities listed on Nasdaq, and Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. Based on the closing bid price of the Company’s shares for the 30 consecutive business days prior to that notice (February 6, 2025 through March 20, 2025), the Company did not meet the Minimum Bid Price Requirement. On July 9, 2025, the Company received a written notice from the Nasdaq stating that the Company has since regained compliance with Listing Rule 5550(a)(2) because the closing bid price of the Company’s Common Stock has been $1.00 USD per share or greater for a period of thirteen (13) days (June 18, 2025 to July 8, 2025).
Subsequently, on February 26, 2026, the Company received additional written notices (the “Notices”) from Nasdaq indicating that the Company is not in compliance with (i) the Minimum Bid Price Requirement and (ii) the minimum market value of listed securities requirement set forth under Nasdaq Listing Rule 5550(b)(2) (the “MVLS Requirement”). Based on the closing bid price of the Company’s common stock for the 30 consecutive business days prior to the Notices (January 13, 2026 through February 25, 2026), the Company did not meet the Minimum Bid Price Requirement. In addition, based on Nasdaq’s review of the Company’s market value of listed securities for the 30 consecutive business days ended February 26, 2026, the Company did not meet the MVLS Requirement.
Pursuant to Nasdaq Listing Rules 5810(c)(3)(A) and 5810(c)(3)(C), the Company has 180 calendar days, or until August 25, 2026, to regain compliance with both the Minimum Bid Price Requirement and the MVLS Requirement. To regain compliance with the Minimum Bid Price Requirement, the Company’s common stock must have a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days (or such longer period, up to 20 consecutive business days, as Nasdaq may require). To regain compliance with the MVLS Requirement, the Company’s market value of listed securities must be at least $35 million for a minimum of 10 consecutive business days.
On August 6, 2026, the Company effected a 1-for-75 reverse stock split (the “Reverse Stock Split”) of its common stock, which was approved by the Company’s stockholders at the annual meeting of stockholders held on July 22, 2026. The Reverse Stock Split became effective at 4:01 p.m. Eastern Time on August 6, 2026, and the Company’s common stock began trading on a split-adjusted basis on The Nasdaq Capital Market on August 7, 2026 under the ticker symbol “JUNS.” The Reverse Stock Split reduced the number of outstanding shares of common stock from approximately 57,756,143 shares to approximately 770,081 shares and was intended to increase the per share trading price of the Company’s common stock to enable the Company to regain compliance with the Minimum Bid Price Requirement. Although the Company effected the Reverse Stock Split to address the Minimum Bid Price Requirement deficiency, there can be no assurance that the closing bid price of the Company’s common stock will remain at or above $1.00 per share for the requisite period, or at all, following the Reverse Stock Split.
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If the Company does not regain compliance with the Minimum Bid Price Requirement by August 25, 2026, the Company may be eligible for an additional 180-day compliance period, provided that it meets all other initial listing standards for The Nasdaq Capital Market, other than the Minimum Bid Price Requirement, and provides written notice of its intention to cure the deficiency. If the Company does not regain compliance with the MVLS Requirement within the applicable compliance period, Nasdaq will provide notice that the Company’s common stock is subject to delisting. In such event, the Company may appeal the delisting determination to a hearings panel. The Reverse Stock Split does not directly address the MVLS Requirement, which is based on the aggregate market value of the Company’s listed securities rather than the per share bid price, and there can be no assurance that the Company will regain compliance with the MVLS Requirement by the August 25, 2026 deadline.
The receipt of the Notices has no immediate effect on the listing of the Company’s common stock, and the common stock will continue to trade on Nasdaq under the symbol “JUNS” during the applicable compliance periods. However, there can be no assurance that the Company will be successful in regaining or maintaining compliance with the Nasdaq continued listing requirements. If the Company fails to regain compliance and its securities are delisted from Nasdaq, such delisting could adversely affect the market liquidity of the Company’s common stock, the ability of the Company to raise capital, and the price at which the common stock trades.
If Nasdaq delists the Company’s common stock, the Company’s liquidity and market price could be affected.
Our common stock is currently listed on Nasdaq. If we do not regain compliance, our common stock may begin trading on an over-the-counter market, such as the OTCQB or the OTC Pink. Trading on such markets is characterized by lower trading volumes, fewer market makers and greater price volatility compared to trading on a national securities exchange. As a result, a delisting could reduce the liquidity of our common stock, result in decreased institutional investor interest and may impair a stockholder’s ability to sell or purchase shares of our common stock. In addition, delisting could impair our ability to raise additional capital.
Our management has concluded that factors raise substantial doubt about our ability to continue as a going concern and our auditor has included an explanatory paragraph relating to our ability to continue as a going concern in its audit report for the fiscal years ended December 31, 2025 and 2024.
Our management has concluded that our historical recurring losses from operations and negative cash flows from operations as well as our dependence on private equity and other financings raise substantial doubt about our ability to continue as a going concern and our auditor has included an explanatory paragraph relating to our ability to continue as a going concern in its audit report for the fiscal years ended December 31, 2025 and 2024.
Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. These adjustments would likely include substantial impairment of the carrying amount of our assets and potential contingent liabilities that may arise if we are unable to fulfill various operational commitments. In addition, the value of our securities would be greatly impaired. Our ability to continue as a going concern is dependent upon generating sufficient cash flow from operations and obtaining additional capital and financing. If our ability to generate cash flow from operations is delayed or reduced and we are unable to raise additional funding from other sources, we may be unable to continue in business.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Trading Arrangements
During
the three months ended June 30, 2026, no director or officer of the Company
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ITEM 6. EXHIBITS
* Filed herewith.
** Furnished herewith.
+ Indicates a management contract or compensation plan or arrangement.
† Certain portions of this exhibit (indicated by “[***]”) have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K because the omitted information is not material and is the type of information that the registrant customarily and actually treats as private or confidential.
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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.
| Jupiter Neurosciences, Inc. | |
| Date: August 14, 2026 | /s/ Christer Rosén |
| Christer Rosén | |
| Chief Executive Officer | |
| (Principal Executive Officer) | |
| Date: August 14, 2026 | /s/ Saleem Elmasri |
| Saleem Elmasri | |
| Chief Financial Officer | |
| (Principal Financial Officer and Principal Accounting Officer) |
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