UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

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

 

For the quarterly period ended June 30, 2026

 

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

 

Commission File No. 001-42815

 

Curanex Pharmaceuticals Inc

(Exact name of registrant as specified in its charter)

 

Nevada		83-0741390
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

 

2 Jericho Plaza, Suite 101B
Jericho, NY		11753
(Address of principal executive offices)		(Zip Code)

 

(718) 673-6078

(Registrant’s telephone number, including area code)

 

N/A

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

 

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

 

Title of each class		Trading Symbol(s)		Name of exchange on which registered
Common Stock, par value $0.0001 per share		CURX		The Nasdaq Capital Market

 

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

 

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

 

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

 

☐	Large accelerated filer	☐	Accelerated filer
☒	Non-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 ☒

 

As of August 14, 2026, the registrant had 31,364,812 shares of common stock, par value $0.0001 per share, outstanding.

 

 

 

TABLE OF CONTENTS

 

		Page
PART I – FINANCIAL INFORMATION		4
Item 1.	Unaudited Financial Statements.	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	20
Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	26
Item 4.	Controls and Procedures.	26
PART II – OTHER INFORMATION		27
Item 1.	Legal Proceedings.	27
Item 1A.	Risk Factors.	27
Item 2.	Unregistered Sales of Equity Securities.	27
Item 3.	Defaults Upon Senior Securities.	27
Item 4.	Mine Safety Disclosures.	27
Item 5.	Other Information.	27
Item 6.	Exhibits.	27
SIGNATURES		28

 

 

FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on form 10-Q (the “Quarterly Report”) contains forward-looking statements that reflect management’s current views with respect to future events and financial performance. Forward-looking statements are projections in respect of future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. Forward-looking statements contained in the Quarterly Report include, but are not limited to, statements about:

 

	●	our future financial performance, including our revenue, costs of revenue, operating expenses and profitability;
	●	our ability to meet our liquidity needs and to raise additional capital on acceptable terms, if needed;
	●	the availability of financing for smaller publicly traded companies like us; and
	●	our ability to effectively manage our growth and future expenses.

 

We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements include information concerning possible or assumed future results of our operations, including statements about our business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, our ability to obtain or maintain patents or other appropriate protection for our intellectual property, and any other statements that are not historical facts.

 

These statements are only predictions and involve known and unknown risks, uncertainties and other factors. Readers are urged to carefully review and consider the various disclosures made by us in this Quarterly Report and in our other reports filed with the Securities and Exchange Commission (the “SEC”). Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

 

As used in this Quarterly Report and unless otherwise indicated, the terms “Curanex,” “we,” “us,” “our,” or “Company” refer to Curanex Pharmaceuticals Inc, a Nevada corporation.

 

 

CURANEX PHARMACEUTICALS INC

AS OF JUNE 30, 2026

 

PART I- FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

INDEX TO FINANCIAL STATEMENTS

 

Balance Sheets	5
Statements of Operations	6
Statements of Changes in Shareholders’ Equity	7
Statements of Cash Flows	8
Notes to Financial Statements	9

 

 

CURANEX PHARMACEUTICALS INC

BALANCE SHEETS

 

		As of June 30, 2026				As of December 31, 2025
		(Unaudited)
ASSETS
Current assets
Cash		$	2,938,463			$	4,973,134
Prepaid Expenses			1,854,530				6,254,374
Total current assets			4,792,993				11,227,508
Right-of-Use Asset			280,939				352,616
TOTAL ASSETS		$	5,073,932			$	11,580,124
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accrued expenses		$	9,741			$	11,915
Accounts payable			154				2,426
Lease Liability, current			94,411				122,689
Total current liabilities			104,306				137,030
Lease Liability, noncurrent			181,948				224,010
TOTAL LIABILITIES			286,254				361,040
Shareholders’ equity
Common stock, 475,000,000 shares authorized; $0.0001 par value; 28,364,812 and 28,340,812 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively			2,836				2,834
Preferred stock, 25,000,000 shares authorized; $0.0001 par value; 1,000,000 shares issued and outstanding as of June 30, 2026 and December 31, 2025			100				100
Additional paid-in capital			16,073,495				16,063,705
Accumulated deficit			(11,288,753	)			(4,847,555	)
TOTAL SHAREHOLDERS’ EQUITY			4,787,678				11,219,084
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	5,073,932			$	11,580,124

 

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

 

 

CURANEX PHARMACEUTICALS INC

UNAUDITED STATEMENTS OF OPERATIONS

 

		2026				2025				2026				2025
		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2026				2025				2026				2025
Operating expenses:
General & administrative		$	731,843				57,658				1,659,040				195,110
Research & Development			2,593,717				-				4,849,879				-
Total operating expenses			3,325,560				57,658				6,508,919				195,110
Loss from operations			(3,325,560	)			(57,658	)			(6,508,919	)			(195,110	)
Interest Expense			-				(3,091	)			-				(4,447	)
Other income			34,590				403				67,721				1,628
Net Loss		$	(3,290,970	)			(60,346	)			(6,441,198	)			(197,929	)
Net loss per common share: Basic and Diluted			(0.12	)			(0.00	)			(0.23	)			(0.01	)
Weighted average number of common shares outstanding: Basic and Diluted			28,364,812				24,000,000				28,354,867				24,000,000

 

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

 

 

CURANEX PHARMACEUTICALS INC

UNAUDITED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

 

		Number of Shares				Amount				Number of Shares				Amount				Stock to be issued				Paid in Capital				Accumulated Deficit				Total
		Common Stock								Preferred Stock								Common				Additional
		Number of Shares				Amount				Number of Shares				Amount				Stock to be issued				Paid in Capital				Accumulated Deficit				Total
Balance at December 31, 2024			24,000,000			$	2,400				1,000,000			$	100			$	200,000			$	923,309			$	(622,449	)		$	503,360
Net loss			-				-				-				-				-				-				(137,583	)			(137,583	)
Balance at March 31, 2025			24,000,000			$	2,400				1,000,000			$	100			$	200,000			$	923,309			$	(760,032	)		$	365,777
Net loss			-				-				-				-				-				-				(60,346	)			(60,346	)
Balance at June 30, 2025			24,000,000			$	2,400				1,000,000			$	100			$	200,000			$	923,309			$	(820,378	)		$	305,431
Balance at December 31, 2025			28,340,812			$	2,834				1,000,000			$	100			$	-			$	16,063,705			$	(4,847,555	)		$	11,219,084
Share based compensation			24,000				2				-				-				-				9,790				-				9,792
Net loss			-				-				-				-				-				-				(3,150,228	)			(3,150,228	)
Balance at March 31, 2026			28,364,812			$	2,836				1,000,000			$	100			$	-			$	16,073,495			$	(7,997,783	)		$	8,078,648
Net loss			-				-				-				-				-				-				(3,290,970	)			(3,290,970	)
Balance at June 30, 2026			28,364,812			$	2,836				1,000,000			$	100			$	-			$	16,073,495			$	(11,288,753	)		$	4,787,678

 

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

 

 

CURANEX PHARMACEUTICALS INC

UNAUDITED STATEMENTS OF CASH FLOWS

 

		For the six Months Ended June 30,
		2026				2025
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss for the period		$	(6,441,198	)		$	(197,929	)
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Amortization of right-of-use assets			71,677				29,663
Stock-based Compensation Expense			9,792				-
Interest expense			-				(4,447	)
Changes in operating assets and liabilities:
Prepaid expenses			4,399,844				(5,110	)
Lease liabilities			(70,340	)			(29,048	)
Accounts payable			(2,272	)			(4,731	)
Interest payable			-				4,447
Accrued expenses			(2,174	)			(4,553	)
Other current assets			-				(228,321	)
NET CASH USED IN OPERATING ACTIVITIES			(2,034,671	)			(440,029	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Loan from shareholders			-				400,000
NET CASH PROVIDED BY FINANCING ACTIVITIES			-				400,000
NET DECREASE IN CASH			(2,034,671	)			(40,029	)
Cash at beginning of period			4,973,134				148,891
CASH AT END OF PERIOD		$	2,938,463			$	108,862
Supplemental schedule of cash flow information:
Non-cash investing & financing activities:
Recognition of right-of-use asset in exchange for lease liability		$	-			$	105,501

 

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

 

 

CURANEX PHARMACEUTICALS INC

 

NOTES TO FINANCIAL STATEMENTS

 

1.	Description of Business and Summary of Significant Accounting Policies

 

Description of Business

 

Curanex Pharmaceuticals Inc (the “Company”) was originally incorporated as Durand Damiel Health Inc. under the laws of the State of New York on June 1, 2018. The Company is headquartered in Jericho, NY, with an initial focus on research and development of health products and botanical medicines.

 

On November 9, 2023, the Company was rebranded as Curanex Pharmaceuticals Inc, and shifted its focus to discovering, developing, and commercializing innovative botanical drugs for treating major unmet medical needs in patients with inflammatory diseases.

 

On June 10, 2024, Curanex Pharmaceuticals Inc., a New York corporation (“Curanex NY”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Curanex Pharmaceuticals Inc, (the “Surviving Corporation”), a newly formed Nevada corporation and wholly owned subsidiary of Curanex NY. Pursuant to the Merger Agreement, on the same date, Curanex NY, as the parent in this transaction, merged with and into the Surviving Corporation (the “Reincorporation Merger”). Upon the consummation of the Reincorporation Merger, Curanex NY ceased its legal existence as a New York corporation, and the Surviving Corporation continued the business as the surviving corporation under the name “Curanex Pharmaceuticals Inc”.

 

The financial statements for the year ended 2024 reflect the impact of the Reincorporation Merger. In accordance with ASC 805 Business Combinations, the merger has been treated as a reorganization under common control. As such, the assets and liabilities have been transferred to the Surviving Corporation at their historical carrying amounts, and no gain or loss has been recognized in connection with the merger. The balance sheet now presents the Nevada corporation as the surviving entity, incorporating the combined assets and liabilities of the predecessor and the successor entities.

 

This merger did not result in any changes to the reported financial position or results of operations for prior periods, as the historical financial information of the Company has been carried forward to the Surviving Corporation. The impact of the merger on the financial statements is primarily legal and administrative, ensuring the continuity of the Company’s operations under the new jurisdiction without interruption. Consequently, the financial statements include all transactions and balances of both the original and the surviving entities, presented as if the merger had occurred at the beginning of the earliest period presented. This approach ensures consistency and comparability in the financial reporting of the Company’s ongoing business activities.

 

On August 27, 2025, the Company successfully completed its initial public offering (the “IPO”) and began trading on the Nasdaq Capital Market under the ticker symbol “CURX.”

 

Following the completion of our IPO, the Company incurred significant research and development (“R&D”) expense, totaling approximately $2,983,773 within the year ended December 31, 2025. These expenditures primarily related to FDA-mandated investigational new drug (“IND”)-enabling studies supporting programs in ulcerative colitis, atopic dermatitis, rheumatoid arthritis, gouty arthritis, and diabetic foot. R&D activities during the period included good laboratory practice (“GLP”) toxicology and pharmacokinetic/bioanalytical studies, chemistry, manufacturing, and controls (“CMC”) work involving formulation, stability, and method validation, as well as fees to Contract Research Organizations (“CROs”) and Contract Development and Manufacturing Organizations (“CDMOs”). The increase in R&D expense compared to prior periods reflects the progression of multiple investigational programs through preclinical development toward IND submission and future clinical evaluation, consistent with the Company’s development strategy following the IPO.

 

On April 2, 2026, the Company expanded its drug development pipeline by adding cancer cachexia as a new core indication, supplementing its existing six core therapeutic areas. Cancer cachexia is a severe, cancer-related wasting syndrome with high prevalence among advanced cancer patients, limited treatment alternatives and no approved therapies in the United States, representing substantial unmet medical needs and considerable long-term commercial potential. While continuing to advance its lead preclinical candidate Phyto-N and other pipeline assets targeting inflammatory, metabolic and physical decline-related diseases, the Company’s strategic expansion into cancer cachexia further diversifies its product portfolio, aligns with its long-term therapeutic development focus, and strengthens its overall positioning as an emerging biotechnology company.

 

9

 

 

Basis of Accounting

 

The accompanying unaudited interim financial statements of the Company have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial reporting. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows for the interim periods presented have been included. The results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full fiscal year or any future period.

 

Use of Estimates

 

The preparation of the Company’s unaudited interim financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions reflected in these interim financial statements are consistent with those described in the Company’s most recent annual financial statements.

 

These estimates and assumptions are based on historical experience and other factors that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results could differ from those estimates, and such differences may be material to the financial statements.

 

Management evaluates its estimates on an ongoing basis. Changes in estimates are recognized in the period in which they become known and, if applicable, in future periods.

 

Going Concern

 

At the end of each reporting period, management exercises judgment in assessing the Company’s ability to continue as a going concern in accordance with ASC 205-40, Presentation of Financial Statements—Going Concern, by reviewing the Company’s performance, resources, and future obligations. This assessment considers conditions and events that are known and reasonably knowable as of the date the financial statements are issued, and involves critical judgments regarding the Company’s short and long-term operating budgets, expected profitability, investment and financing activities, and strategic planning.

 

The Company did not generate operating revenue during the recent several years and has incurred recurring net losses and negative cash flows from operations. For the six months ended June 30, 2026, the Company incurred a net loss of $6,441,198 and used cash in operating activities of approximately $2.03 million. As of June 30, 2026, the Company had cash and cash equivalents of $2,938,463 and an accumulated deficit of $11,288,753.

 

The Company’s operating expenses for the six months ended June 30, 2026 were partially funded through the utilization of prepaid research and development balances, which declined from $6,166,294 as of December 31, 2025 to $1,819,177 as of June 30, 2026. As these prepaid balances are consumed, the Company expects its cash used in operating activities to increase materially. The Company further expects research and development expenditures to increase in connection with its planned Investigational New Drug application submission and subsequent clinical trial activities.

 

Based on its current operating plan, the Company does not expect its existing cash and cash equivalents to be sufficient to fund operations for at least twelve months from the date these unaudited interim financial statements are issued. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

 

Management’s plans to address these conditions include raising additional capital through the issuance of equity or debt securities, pursuing strategic collaborations or out-licensing arrangements for its product candidates, and reducing or deferring discretionary operating and development expenditures. There can be no assurance that the Company will be able to obtain additional financing on acceptable terms, or at all. The Company’s common stock is currently subject to a Nasdaq minimum bid price deficiency, which may adversely affect its ability to raise capital. Because these plans are not considered probable of being effectively implemented within the meaning of ASC 205-40, they do not alleviate the substantial doubt.

 

10

 

 

The accompanying unaudited interim financial statements have been prepared assuming the Company will continue as a going concern and do not include any adjustments to the carrying amounts or classification of assets and liabilities that might result from the outcome of this uncertainty.

 

Cash

 

The Company maintains balances with multiple financial institutions, with balances periodically exceeding the Federal Deposit Insurance Corporation (FDIC) insurance limit of $250,000 per depositor, per insured bank, for each account ownership category. The management monitors the cash balances in the operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in the operating accounts.

 

Basic and Diluted Net Loss per Common Share

 

The Company computes loss per share in accordance with ASC 260, Earnings per Share, which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. During the six months ended June 30, 2026, and 2025, the Company had no potential dilutive instruments and accordingly basic loss and diluted loss per share are the same.

 

Initial Public Offering

 

The Company completed its IPO of 3,750,000 shares of its common stock, par value $0.0001 per share, at a public offering price of $4.00 per share. This offering generated gross proceeds of $15.0 million before underwriting discounts, commissions, and other offering expenses.

 

In connection with the IPO, total offering costs were approximately $2.12 million, consisting of $1.41 million in underwriting discounts and commissions and $0.71 million of other offering-related expenses (including legal, accounting, and filing fees). The Company had previously recorded these other offering costs as deferred IPO costs prior to the effectiveness of the registration statement. Upon the closing of the IPO, all deferred costs were reclassified and recorded as a reduction to additional paid-in capital (“APIC”) within stockholders’ equity.

 

After deducting total underwriting discounts, commissions, and offering expenses, the Company received net cash proceeds of approximately $13.24 million from its IPO. Certain offering costs had been paid by the Company prior to the completion of the IPO and were recorded as deferred offering costs on the consolidated balance sheets prior to being reclassified against additional paid-in capital upon the consummation of the IPO.

 

Over-Allotment Option

 

On September 12, 2025, the underwriters exercised their option to purchase an additional 562,500 shares of the Company’s common stock at the same public offering price of $4.00 per share, resulting in gross proceeds of $2.25 million. The Company incurred $0.18 million in underwriting discounts and commissions related to the option exercise. After deducting these offering costs, the Company received net proceeds of $2.07 million.

 

All costs directly attributable to the over-allotment exercise were likewise recorded as a reduction of APIC within stockholders’ equity, consistent with the accounting for the initial closing.

 

11

 

 

Fair Value of Financial Instruments

 

ASC 820 Fair Value Measurements and Disclosures establishes a framework for all fair value measurements and expands disclosures related to fair value measurement and developments. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

 

ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories:

 

	●	Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;
	●	Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and
	●	Level 3 – Inputs that are not based on observable market data.

 

The carrying amounts of cash and accrued liabilities approximate fair value because of the short-term nature of these items.

 

Leases & Right of Use Assets

 

The Company adopted ASC 842 Leases on January 1, 2022. At inception of a contract, the Company assesses whether a contract is, or contains, a lease. Contracts that convey the right to control the use of an identified asset for a period of time in exchange for consideration are accounted for as leases giving rise to right-of-use assets.

 

At the commencement date, a right-of-use asset is measured at cost, where cost comprises: (a) the amount of the initial measurement of the lease liability; (b) any lease payments made at or before the commencement date, less any lease incentives received; (c) any initial direct costs incurred by the Company; and (d) an estimate of costs to be incurred by the Company in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories.

 

A lease liability is initially measured at the present value of the unpaid lease payments. Subsequently, the Company measures a lease liability by: (a) increasing the carrying amount to reflect interest on the lease liability; (b) reducing the carrying amount to reflect the lease payments made; and (c) re-measuring the carrying amount to reflect any reassessment or lease modifications, or to reflect revised in-substance fixed lease payments. Each lease payment is allocated between repayment of the lease principal and interest. Interest on the lease liability in each period during the lease term is allocated to produce a constant periodic rate of interest on the remaining balance of the lease liability. Except where the costs are included in the carrying amount of another asset, the Company recognizes in profit or loss (a) the interest on a lease liability and (b) variable lease payments not included in the measurement of a lease liability in the period in which the event or condition that triggers those payments occurs. The Company subsequently measures a right-of-use asset at cost less any accumulated amortization and any accumulated impairment losses; and adjusted for any re-measurement of the lease liability. Right-of-use assets are depreciated over the shorter of the asset’s useful life and the lease term.

 

Research and Development Costs

 

The Company accounts for research and development (“R&D”) costs in accordance with ASC 730, Research and Development. R&D costs are expensed as incurred unless they represent nonrefundable advance payments for goods or services to be received in the future. Nonrefundable advance payments to third parties—such as Contract Research Organizations (“CROs”), Contract Development and Manufacturing Organizations (“CDMOs”), clinical sites, and other service providers—are recorded as prepaid expenses and recognized in R&D expense as the related services are performed, generally over the contractual period of performance.

 

12

 

 

R&D expense primarily includes employee-related costs (salaries, benefits, and stock-based compensation) for personnel engaged in R&D; fees to CROs, CDMOs, consultants, and other third parties; clinical trial and preclinical study costs; and costs to manufacture and test preclinical and clinical materials. The Company records accruals for services performed but not yet invoiced based on estimates of work completed, patient enrollment/visits, manufacturing progress, and data from vendors. Up-front set-up or activation fees under executory service arrangements are deferred and recognized over the expected period of performance. Materials, equipment, and licenses with no alternative future use are expensed when incurred; items with alternative future use are capitalized and recognized in accordance with the applicable guidance. Prepaid R&D balances are evaluated for recoverability and adjusted for changes in project scope, timing, or cancellations.

 

Stock-Based Compensation

 

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation. Share-based payment awards granted to employees, non-employee directors and non-employee service providers are measured at the grant-date fair value of the award and recognized as compensation expense over the requisite service period, which is generally the vesting period. Awards that are fully vested on the grant date are expensed in full at that date. The fair value of awards of common stock and restricted stock is determined by reference to the closing price of the Company’s common stock as reported on Nasdaq on the grant date. The fair value of stock options, if granted, is estimated using the Black-Scholes option-pricing model, which requires management to make assumptions regarding the expected term, expected volatility, risk-free interest rate and expected dividend yield. Because the Company has limited trading history, expected volatility is estimated by reference to the historical volatility of a group of comparable publicly traded companies. The Company has elected to account for forfeitures as they occur. Stock-based compensation expense is classified within research and development expense or general and administrative expense based on the function of the recipient’s services.

 

Income Taxes

 

The Company accounts for income taxes under ASC 740, Income Taxes. This standard requires the Company to use the asset and liability method, which involves making estimates and assumptions and exercising judgment regarding the carrying values of assets and liabilities. These values are subject to inherent accounting estimates, the interpretation of income tax legislation across various jurisdictions, expectations about future operating results, the timing of reversal of temporary differences, and potential audits of income tax filings by tax authorities.

 

Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years when those temporary differences are expected to be recovered or settled. The impact of changes in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to amounts expected to be realized.

 

When the Company incurs losses for income tax purposes, it assesses the probability of future taxable income based on budgeted forecasts. These forecasts are adjusted to account for non-taxable income and expenses and specific rules on the use of unused credits and tax losses. If the forecasts indicate that sufficient future taxable income will not be available to deduct the temporary differences, a deferred tax asset is not recognized for all deductible temporary differences.

 

Related Party Transactions

 

The Company identifies and accounts for related party transactions, disclosing them in accordance with ASC 850, Related Party Disclosures, and other relevant ASC standards. Parties are considered related to the Company if they, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include the principal owners of the Company, its management, members of the immediate families of the principal owners and management, and other parties with which the Company may engage in transactions if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.

 

13

 

 

Segment Reporting

 

Operating segments are defined as components of an entity where discrete financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s Chief Executive Officer is its CODM. The Company’s CODM uses GAAP financial statements for the purposes of making operating decisions, allocating resources and evaluating financial performance. As such, the Company has determined that it operates in one operating and one reportable segment. The Company’s long-lived assets are entirely based in the United States.

 

Recent Accounting Pronouncements

 

The Company is classified as an “emerging growth company” (EGC) under the Jumpstart Our Business Startups Act of 2012 (the JOBS Act). This classification allows EGCs to delay adopting new or revised accounting standards issued after the enactment of the JOBS Act until these standards apply to private companies. The Company has chosen to delay the adoption of these new or revised accounting standards.

 

The Company is classified as a “smaller reporting company” (SRC) under the Securities and Exchange Commission (SEC) regulations. This classification allows SRCs to provide scaled disclosures in their SEC filings, including reduced financial statement and executive compensation disclosure requirements. The Company has elected to take advantage of these scaled disclosure requirements to simplify its reporting processes.

 

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The Company adopted this ASU on a prospective basis effective January 1, 2025. Refer to Note 5, Income Taxes for the inclusion of new disclosures required.

 

The Company evaluated the impact of ASU 2024-03, Disaggregation of Income Statement Expenses, issued by the Financial Accounting Standards Board (“FASB”) as issued by the FASB in November 2024. The update requires additional disclosures to provide disaggregated information about certain expense captions presented in the income statement, including, among other items, inventory, employee compensation, depreciation, and amortization, to enhance transparency into the nature of expenses. The amendments in ASU 2024-03 are effective for annual reporting periods beginning after December 15, 2026, and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its financial statement disclosures. While the standard is not expected to have an impact on the Company’s results of operations, financial position, or cash flows, it is expected to result in expanded disclosures upon adoption.

 

Apart from as mentioned above, management does not believe that other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s balance sheets, statements of operations, or cash flows.

 

 

2.	Accrued Expenses

 

A summary of accrued expenses is as follows:

 Schedule of Accrued Expenses 

		As of June 30, 2026				As of December 31, 2025
		(Unaudited)
Accounting fees		$	-			$	550
Payroll expenses			9,741				9,741
Rent			-				1,599
Tax fees			-				25
Total Accrued Expenses		$	9,741			$	11,915

 

14

 

 

3.	Prepaid expenses

 

A summary of prepaid expenses is as follows:

 Schedule of Prepaid Expenses 

		As of June 30, 2026				As of December 31, 2025
		(Unaudited)
Insurance		$	20,033			$	80,232
R&D		$	1,819,177			$	6,166,294
Other		$	15,320			$	7,848
Total Prepaid Expenses		$	1,854,530			$	6,254,374

 

 

4.

Leases

 

On January 1, 2025, the Company assumed an office lease from Duraviva Pharma Inc. (“Duraviva”), a New York corporation under common control, through a lease assignment agreement. The lease term extends through August 31, 2026. The Company classified the lease as an operating lease. Upon adoption of ASC 842, the Company recognized right-of-use asset and corresponding lease liability for its operating lease.

 

During the fourth quarter of 2025, the Company entered into lease agreements for three motor vehicles with non-cancelable lease terms ranging from 36 to 51 months.

 

The following summarizes information about the Company’s leases as of June 30, 2026 and December 31, 2025.

 

 Schedule of Lease

		2026				2025
		For the Three Months Ended June 30,
		2026				2025
		(Unaudited)				(Unaudited)
Amount recognized in the income statements
Operating lease expense		$	40,494			$	17,404

 

		2026				2025
		For the Six Months Ended June 30,
		2026				2025
		(Unaudited)				(Unaudited)
Amount recognized in the income statements
Operating lease expense		$	79,938			$	34,807

 

		As of June 30, 2026				As of December 31, 2025
		(Unaudited)
Amount recognized in the balance sheets
Right-of-use assets		$	280,939			$	352,616
Operating lease liabilities			276,359				346,699
Cash paid for amounts included in the measurement of lease liabilities
Operating lease expense		$	80,199			$	93,957
Lease commitment
2026		$	99,803			$	136,921
2027			89,964				89,964
2028			77,172				86,766
2029			25,690				61,078
Total future minimum lease payments			292,629				374,729
less imputed interest			(16,270	)			(28,030	)
Present value of lease liabilities		$	276,359			$	346,699
Supplemental information
Weighted average discount rate			5.47	%			5.47	%
Weight average remaining lease term			41 months				47 months

 

15

 

 

5.	Income Taxes

 

Due to the Company’s net losses and the valuation allowance provided on the related deferred tax assets, there were no provisions for income taxes for the six months ended June 30, 2026 and 2025.

 

The components of income tax provision (benefit) for the six months ended June 30, 2026 and 2025 are as follows:

 

Schedule of Components of Income Tax Provision (benefit)

		2026				2025
		For the Three Months Ended June 30,
		2026				2025
		(Unaudited)				(Unaudited)
Current income tax expense:
Federal		$	-			$	-
State and local			-				-
Total current income tax expense:			-				-
Deferred income tax expense (benefit)
Federal			-				-
State and local			-				-
Total deferred income tax expense			-				-
Total income tax provision (benefit)		$	-			$	-

 

		2026				2025
		For the Six Months Ended June 30,
		2026				2025
		(Unaudited)				(Unaudited)
Current income tax expense:
Federal		$	-			$	-
State and local			-				-
Total current income tax expense:			-				-
Deferred income tax expense (benefit)
Federal			-				-
State and local			-				-
Total deferred income tax expense			-				-
Total income tax provision (benefit)		$	-			$	-

 

16

 

 

The following table presents a reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate for the six months ended June 30, 2026 and 2025:

 

Schedule of Reconciliation of Effective Tax Rate

		2026				2025
		For the Three Months Ended June 30,
		2026				2025
		(Unaudited)				(Unaudited)
U.S. federal statutory rate			21.0	%			21.0	%
State and local taxes, net of federal benefit			5.1	%			5.1	%
Change in valuation allowance			(26.1	)%			(26.1	)%
Effective tax rate			-	%			-	%

 

		2026				2025
		For the Six Months Ended June 30,
		2026				2025
		(Unaudited)				(Unaudited)
U.S. federal statutory rate			21.0	%			21.0	%
State and local taxes, net of federal benefit			5.1	%			5.1	%
Change in valuation allowance			(26.1	)%			(26.1	)%
Effective tax rate			-	%			-	%

 

Deferred income tax assets as of June 30, 2026 and December 31, 2025, are as follows:

 Schedule of Deferred Income Tax Assets

		As of June 30, 2026				As of December 31, 2025
			(Unaudited)
Net operating losses carry forwards		$	2,370,011			$	1,017,359
Others			2,056				-
Total deferred tax assets			2,372,067				1,017,359
Less valuation allowance			(2,372,067	)			(1,017,359	)
Total deferred tax assets		$	-			$	-

 

In assessing the realization of deferred tax assets, management evaluates whether it is more likely than not that some or all of these assets will not be realized. The ultimate realization of deferred tax assets depends on generating future taxable income during the periods when these temporary differences become deductible.

 

Based on the available objective evidence, management believes it is more likely than not that the net deferred tax assets will not be realizable. Accordingly, the Company has applied a full valuation allowance against its net deferred tax assets as of June 30, 2026 and December 31, 2025. The net change in the total valuation allowance between June 30, 2026, and December 31, 2025, was an increase of $1,354,708.

 

The Company is subject to U.S. federal and state income tax examinations by the Internal Revenue Service (IRS) and relevant state tax authorities. The Company is incorporated in the state of Nevada, which does not impose a corporate income tax.

 

The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of June 30, 2026, and December 31, 2025, the Company did not have any significant uncertain tax positions or unrecognized tax benefits. Additionally, as of June 30, 2026, and December 31, 2025, the Company has federal net operating loss carryforwards of $11,285,765 and $4,847,550, respectively, for tax purposes. These net operating loss carryforwards may be carried forward indefinitely; however, their utilization may be subject to limitations under Section 382 of the Internal Revenue Code in the event of a change in ownership.

 

17

 

 

6.	Related Party Transactions

 

In January 2025, Duraviva also assigned its office lease to the Company. The terms of the lease, including the original lease end date, remained unchanged upon reassignment. The Company accounted for the lease under ASC 842 as an operating lease. Please refer to Note 4 Leases.

 

In February and May 2025, the Company received two $200,000 loans from an existing shareholder to support ongoing costs related to its initial public offering. The loans accrue simple interest at an annual rate of 4.34%, with both principal and interest due at maturity in February and May 2027.

 

In September 2025, following the completion of the Company’s IPO, the shareholder loans were fully repaid, including all accrued interest. Total interest paid upon settlement amounted to $8,537. As a result of the repayment, there were no outstanding related-party loan balances as of June 30, 2026.

 

7.	Shareholders’ Equity

 

Common Stock

 

The Company is authorized to issue 475,000,000 shares of common stock, par value $0.0001 per share. Each share entitles the holder to one vote on matters submitted to stockholders and to receive dividends as and if declared by the Board of Directors.

 

During the year of 2025, the Company completed the following equity issuances in connection with its initial public offering and related activities:

 

●	3,750,000 shares of common stock issued upon the closing of the IPO on August 27, 2025.
●	562,500 additional shares of common stock issued on September 12, 2025 upon the underwriters’ exercise of their over-allotment option.
●	28,312 shares of common stock issued on September 23, 2025 to satisfy a previously recorded “common stock to be issued” balance (see “Subscriptions Received – Shares to be Issued” below).

 

Following these issuances, the Company had 28,340,812 shares of its common stock issued and outstanding as of December 31, 2025, including an aggregate of 4,340,812 shares of common stock issued during the quarter ended September 30, 2025.

 

On March 18, 2026, the Company issued an aggregate of 24,000 shares of Common Stock to Dr. Huijuan Zhong as compensation for services. These shares were issued in reliance on exemption from registration requirements under Section 4(a)(2) of the Securities Act, as transactions by an issuer do not involve any public offering and are subject to contractual transfer restrictions until 12 months following the Company’s initial public offering. Following this issuance, the Company had 28,364,812 shares of common stock issued and outstanding as of June 30, 2026. For further information regarding the measurement and recognition of the related stock-based compensation, see Note 8, Stock-Based Compensation.

 

Subscriptions Received – Shares to be Issued

 

In 2019, the Company received $200,000 in cash from an existing investor for a subscription to common stock representing 0.1% of the Company’s then-anticipated total issued and outstanding shares upon completion of the IPO. This amount was recorded as “common stock to be issued” within stockholders’ equity and remained outstanding as of December 31,2024.

 

Following the successful completion of the IPO, the Company issued 28,312 shares of common stock during the quarter ended September 30, 2025 to settle this subscription in full. As of June 30, 2026, there were no remaining shares or amounts recorded as “common stock to be issued.”

 

18

 

 

Preferred Stock

 

The Company is authorized to issue 25,000,000 shares of preferred stock at $0.0001 per share. The Company’s Board of Directors also has the authority to issue additional preferred stock in one or more classes or series.

 

On June 14, 2024, the Company’s Board of Directors approved the issuance of 1,000,000 shares of Series A Super Voting Preferred Stock (“Series A Preferred Stock”) at the par value of $0.0001 per share. These shares grant the holders 40% of the total voting power of the Company’s equity voting stock. Holders of the Series A Preferred Stock do not possess any rights to dividends.

 

No shares of preferred stock were issued during the three and six months ended June 30, 2026.

 

8.	Stock-Based Compensation

 

2026 Equity Incentive Plan

 

On May 31, 2026, the Company’s Board of Directors adopted the Curanex Pharmaceuticals Inc 2026 Equity Incentive Plan (the “2026 Plan”), which was approved by the Company’s stockholders on June 11, 2026. The 2026 Plan permits the grant of stock options, restricted stock, restricted stock units and other stock-based awards to employees, directors and consultants of the Company. An aggregate of 5,700,000 shares of common stock, par value $0.0001 per share, are reserved and available for issuance under the 2026 Plan, representing approximately 20.1% of the shares of common stock issued and outstanding as of June 30, 2026. The 2026 Plan is administered by the Board of Directors, or a committee designated by the Board, which determines the recipients, types, terms, vesting conditions and, where applicable, exercise prices of awards. The number of shares reserved under the 2026 Plan is subject to proportionate adjustment in the event of a stock split, reverse stock split, stock dividend, recapitalization or similar change in the Company’s capitalization.

 

On July 21, 2026, the Company filed a Registration Statement on Form S-8 with the Securities and Exchange Commission registering 3,000,000 of the 5,700,000 shares of common stock reserved for issuance under the 2026 Plan, representing approximately 10.58% of the shares of common stock issued and outstanding as of the date of filing. The Registration Statement became effective upon filing in accordance with Rule 462 under the Securities Act of 1933, as amended. The remaining 2,700,000 shares reserved under the 2026 Plan have not been registered.

 

No awards were granted under the 2026 Plan during the three and six months ended June 30, 2026, and no shares of common stock had been issued under the 2026 Plan as of June 30, 2026. Accordingly, no compensation cost related to the 2026 Plan was recognized for the three and six months ended June 30, 2026, and there was no unrecognized compensation cost related to the 2026 Plan as of June 30, 2026.

 

Other Stock-Based Compensation

 

On March 18, 2026, the Company issued an aggregate of 24,000 shares of common stock to Dr. Huijuan Zhong as additional compensation pursuant to an employment arrangement entered into in June 2024 (see Note 7, Shareholders’ Equity). Following the Company’s initial public offering, the Company issued the full 24,000 shares in a single issuance, and no further service-based forfeiture conditions remained after issuance. All shares were vested upon issuance. The shares were valued at $0.408 per share, the closing price of the Company’s common stock on March 17, 2026 as reported on Nasdaq. The Company recognized stock-based compensation expense of $nil and $9,792 within general and administrative expenses for the three and six months ended June 30, 2026, respectively, and $nil for the three and six months ended June 30, 2025.

 

9.	Subsequent Events

 

Other than disclosed in Note 8, “Stock-Based Compensation”, the Company has evaluated subsequent events through the date these unaudited interim financial statements were issued and determined that, no subsequent events requiring adjustment to or disclosure in the financial statements were identified.

 

 

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

 

The following discussion and analysis should be read in conjunction with our financial statements and the related notes thereto. The management’s discussion and analysis contain forward-looking statements, such as statements of our plans, objectives, expectations, and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect” and the like, and/or future tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including those under “Risk Factors,” which appear in our annual report on Form 10-K filed with the SEC on March 30, 2026 that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report.

 

Overview

 

We are a developmental stage pharmaceutical company dedicated to discovering, developing and commercializing innovative botanical drugs to treat patients suffering from inflammatory diseases. Our mission is to address significant unmet medical needs and to improve patients’ lives by harnessing the power of natural substances. We are dedicated to discovering, developing and commercializing botanical medicines for treating patients with immune and inflammatory diseases and to develop therapies that may offer potential benefits to patients with unmet clinical needs in various fields, such as autoimmune diseases, metabolic diseases and viral infections. We are committed to “Bringing hope and healing through the wisdom of plants.”

 

Our business strategy is centered on developing innovative botanical drugs, with a focus on Phyto-N as our lead candidate, for the treatment of inflammatory diseases. Phyto-N is a proprietary botanical extract with chemical components and pharmacological activities that harnesses potential anti-inflammatory properties of a medicinal plant with a long history of human use. Phyto-N has a long history of use in Chinese traditional medicine, which focuses on an alternative herbal medical practice, and has shown positive results in animal models of multiple inflammatory diseases. We aim to prioritize the development of Phyto-N and its active compounds, to conduct further preclinical and clinical studies to evaluate its therapeutic potential and safety profile, and if warranted, to seek the necessary regulatory approval in order to commercialize Phyto-N.

 

On August 27, 2025, the Company completed its initial public offering (the “IPO”) and its shares of common stock are quoted on The Nasdaq Capital Market (“Nasdaq”) under the symbol “CURX.” On September 12, 2025, we completed the additional closing related to the IPO, in which the underwriters in the IPO fully exercised their over-allotment option pursuant to the underwriting agreement dated August 25, 2025 with Dominari Securities, LLC, as representative of the underwriters. The Company is utilizing the net proceeds from the IPO primarily for (i) the development of its lead product candidate, Phyto-N, for the treatment of ulcerative colitis, atopic dermatitis, rheumatoid arthritis, gouty arthritis, and diabetic foot; (ii) the conduct of FDA-required GLP toxicology and pharmacokinetic studies and chemistry, manufacturing, and controls (“CMC”) activities for Phyto-N in ulcerative colitis and (iii) the preparation and submission of an investigational new drug (IND) application.

 

We are planning to submit an IND for the treatment of ulcerative colitis in the fourth quarter of 2026. If allowed to proceed by the FDA, a Phase I trial will be initiated 30 days post-IND submission. If the Phase I trial is completed with positive results, we intend to proceed with a Phase II trial for ulcerative colitis as our lead indication. Contingent upon the success of our ulcerative colitis trials, available funding, and other strategic considerations, Curanex may subsequently initiate additional Phase II trials in other high-value indications such as atopic dermatitis, coronavirus (COVID-19), gout, diabetes, and NAFLD, or may seek to license out these indications to third parties at the Phase II stage. This multiple indication strategy represents our long-term vision to explore and maximize the value of Phyto-N and build a robust pipeline of botanical drug candidates targeting inflammatory diseases. The successful completion of these clinical trials could position Phyto-N as a potential botanical drug candidate for multiple inflammatory indications, addressing specific unmet medical needs. If approved, Phyto-N could provide patients with new treatment options for various inflammatory conditions.

 

 

The Company is also expanding its drug development pipeline and is focusing on a new core indication: cancer cachexia, a serious cancer-associated wasting syndrome marked by progressive weight loss, muscle depletion, weakness and declining physical function. The management believes that the focus on treatment of cancer cachexia aligns with the Company’s broader focus on treatment of serious diseases involving inflammation, metabolic disruption and physical decline. While Curanex remains committed to advancing its lead ulcerative colitis program, the Company believes that by expanding its long-term pipeline potential by also focusing on cancer cachexia treatment, the Company will strengthen its positioning as an emerging therapeutics company.

 

GMP Pilot-Scale Manufacturing Milestone

 

In February 2026, Curanex successfully completed a pilot-scale batch of Phyto-N manufactured under Good Manufacturing Practice (GMP) standards. This GMP-compliant material is intended to support Good Laboratory Practice (GLP)-compliant toxicology, pharmacokinetic, and other IND-enabling nonclinical studies. Completion of the GMP pilot-scale batch represents an important step in strengthening the Company’s manufacturing foundation as it advances toward IND submission.

 

Key Chemistry, Manufacturing and Controls (CMC) activities completed to date include:

 

	●	Development of quality control methods for botanical raw materials and extracted drug substance;
	●	Laboratory scale process optimization, including extraction, concentration, and drying; and
	●	Scale-up and production of GMP-compliant pilot material.

 

With GMP pilot-scale material now available, the Company has initiated formal GLP toxicology and pharmacokinetic studies as part of its IND preparation.

 

Dose-Range Finding Toxicology Study

 

In March 2026, the Company announced the successful completion of a dose-range finding toxicology study of Phyto-N, conducted in Sprague-Dawley rats and dogs. The study evaluated repeat-dose oral tolerability over 28 days at multiple dose levels and was designed to inform dose selection and study design for the Company’s subsequent GLP-compliant toxicology studies. The maximum feasible dose identified in this study will serve as the high-dose anchor for the design of the pivotal GLP toxicology studies that will form a core component of the Company’s IND submission. These results keep the program on schedule toward the Company’s target IND filing in the fourth quarter of 2026. The Company’s pivotal GLP repeat-dose toxicology studies of Phyto-N in rats and dogs are currently ongoing, and its GLP safety pharmacology studies evaluating cardiovascular, central nervous system (functional observational battery) and respiratory function are also underway. The Company plans to hold a pre-IND meeting with the FDA in October 2026.

 

Recent Developments

 

Nasdaq Notifications regarding Minimum Bid Price Requirement and the Contemplated Reverse Stock Split

 

As previously reported by the Company on Current Report on Form 8-K filed with the SEC on May 7, 2026, on May 5, 2026, the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq Staff”) notified the Company that while the Company did not regain compliance with the $1.00 minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on Nasdaq (the “Minimum Bid Price Requirement”) by May 4, 2026 (in accordance with the initial 180-day compliance period provided to the Company), Nasdaq granted the Company a second 180-day compliance period to regain compliance with the Minimum Bid Price by November 2, 2026. That determination to grant the Company an additional 180 calendar day period was based on the Company’s satisfaction of the continued listing requirements for the market value of publicly held shares and all other applicable requirements for initial listing on Nasdaq, with the exception of the Minimum Bid Price Requirement.

 

 

If at any time during this second compliance period, the closing bid price of the Company’s Common Stock is at least $1.00 per share for a minimum of ten consecutive business days (unless the Nasdaq Staff exercises its discretion to extend this ten business day period pursuant to Nasdaq Listing Rule 5810(c)(3)(H)), Nasdaq Staff will provide the Company written confirmation of compliance with the Minimum Bid Price, and the matter will be closed. If compliance cannot be demonstrated by November 2, 2026, Nasdaq Staff will provide written notification that the Company’s securities will be delisted. At that time, the Company may appeal Nasdaq’s determination to a Nasdaq Hearings Panel.

 

On May 31, 2026, the Board approved a reverse stock split of the issued and outstanding shares of our common stock (the “Reverse Stock Split”) at a ratio of not less than 1-for-10 and not more than 1-for-50 (the “Reverse Split Range”) and a form of an amendment to our Amended and Restated Articles of Incorporation, as amended (the “Certificate of Amendment”), to implement the Reverse Stock Split.

 

On June 11, 2026, holders of a majority of the outstanding voting power of the Company (the “Majority Stockholders”), acting by written consent, in accordance with the applicable provisions of the Nevada Revised Statutes and the Company’s Amended and Restated Articles of Incorporation and its Bylaws, approved the Reverse Split Range and granted the Board the discretionary authority to determine the exact ratio of the Reverse Stock Split within the Reverse Split Range, to file the Certificate of Amendment with the Nevada Secretary of State, and to effect the Reverse Stock Split at such time and date, if at all, as to be determined by the Board in its sole discretion.

 

On July 22, 2026, the Board approved the 1-for-20 ratio of the Reverse Stock Split and authorized the Company to proceed with the preparation of the necessary documents and actions, including applying for the new CUSIP, submitting the Event Notification Form with Nasdaq, and the filing of the Certificate of Amendment with the Nevada Secretary of State, to effect the Reverse Stock Split in Nevada and on Nasdaq. The Company is planning that the Reverse Stock Split will become effective on Nasdaq by August 20, 2026.

 

Upon effectiveness of the Reverse Stock Split, every twenty shares of common stock outstanding immediately prior to the effectiveness will be combined and reclassified into one share of common stock. No fractional shares will be issued in connection with the Reverse Stock Split, and any fractional shares will be rounded to the nearest whole share. The number of authorized shares of common stock and the par value per share will not be affected by the Reverse Stock Split.

 

However, upon effectiveness of the Reverse Stock Split, there can be no assurance that the Company will be able to regain compliance with the Minimum Bid Price Requirement or maintain compliance with other Nasdaq listing rules for continuing listing.

 

2026 Equity Incentive Plan

 

On May 31, 2026, our Board of Directors adopted the 2026 Equity Incentive Plan (the “2026 Plan”), which became effective on June 11, 2026, upon approval by the Majority Stockholders. Pursuant to the 2026 Plan, the Company reserved an aggregate of 5,700,000 shares of our common stock for issuance as stock options, restricted stock, restricted stock units and other stock-based awards to our employees, directors and consultants. On July 21, 2026, we filed a Registration Statement on Form S-8 (the “S-8 Registration Statement”) registering 3,000,000 of the shares of common stock reserved under the 2026 Plan, representing approximately 10.58% of our issued and outstanding shares of common stock as of the date of filing. We adopted the 2026 Plan to enable us to attract, retain and incentivize qualified personnel as we advance our development programs toward our targeted IND submission, and to align the interests of our employees, directors and consultants with those of our stockholders. Issuance of awards under the 2026 Plan will dilute the ownership interests of our existing stockholders. As of June 30, 2026, no awards had been granted under the 2026 Plan. See Note 8 to our unaudited interim financial statements. As of the date of this Quarterly Report, all of the 3,000,000 shares of common stock registered under the S-8 Registration Statement were issued by the Company.

 

 

Results of Operations

 

Comparison of Results of Operations for the Three Months Ended June 30, 2026 and 2025

 

Revenue and Cost of Sales

 

We did not generate any revenue during the three months ended June 30, 2026, or 2025. This is consistent with our focus on advancing the development of our botanical drug candidates and progressing toward our clinical and regulatory milestones.

 

We anticipate generating revenue only upon successful commercialization of our product candidates or from entering into strategic licensing agreements. However, there is no assurance as to the timing or likelihood of these events.

 

Operating Expenses

 

General and Administrative Expenses

 

General and administrative expenses were $731,843 for the three months ended June 30, 2026, compared to $57,658 for the same period in 2025. The increase was primarily attributable to higher personnel-related expenses, including approximately $348,072 of increased payroll costs, as our founder and certain members of senior management began receiving compensation following the completion of our IPO, whereas little or no cash compensation had been paid to these individuals prior to that time. The increase also reflects higher professional fees and other costs associated with operating as a public company.

 

Research and Development Expenses

 

Following our initial public offering, we continued to invest in research and development (“R&D”) activities primarily related to FDA-mandated investigational new drug (“IND”) studies targeting ulcerative colitis as our lead indication and cancer cachexia as our second core indication, as well as atopic dermatitis, rheumatoid arthritis, gouty arthritis, and diabetic foot. For the three months ended June 30, 2026, R&D expenses totaled $2,593,717, primarily reflecting costs incurred under service agreements for IND-related studies and research activities, with such costs recognized over the respective service period in accordance with the terms of the underlying agreements. As of June 30, 2026, the Company recorded $1.8 million in prepaid R&D, representing advance payments to Contract Research Organizations (“CROs”) and Contract Development and Manufacturing Organizations (“CDMOs”) for services to be rendered under ongoing IND studies. We expect R&D spending to remain significant as these studies progress but to moderate in future periods until FDA approvals are obtained and clinical trial activities commence.

 

Other Income (Expense)

 

For the three months ended June 30, 2026, other income was $34,590, primarily interest income earned on cash and cash equivalents. The increase was primarily attributable to higher interest income earned on the Company’s cash balances. The higher interest income primarily reflects increased cash balances following the receipt of net proceeds from the Company’s IPO.

 

Net loss

 

As a result of the foregoing, the Company recorded a net loss of $3,290,970 for the three months ended June 30, 2026, compared to $60,346 for the three months ended June 30, 2025.

 

Comparison of Results of Operations for the Six Months Ended June 30, 2026 and 2025

 

Revenue and Cost of Sales

 

We did not generate any revenue during the six months ended June 30, 2026, or 2025. This is consistent with our focus on advancing the development of our botanical drug candidates and progressing toward our clinical and regulatory milestones.

 

We anticipate generating revenue only upon successful commercialization of our product candidates or from entering into strategic licensing agreements. However, there is no assurance as to the timing or likelihood of these events.

 

 

Operating Expenses

 

General and Administrative Expenses

 

General and administrative expenses were $1,659,040 for the six months ended June 30, 2026, compared to $195,110 for the same period in 2025. The increase was primarily attributable to higher personnel-related expenses, including approximately $814,590 of increased payroll costs, as our founder and certain members of senior management began receiving compensation following the completion of our IPO, whereas little or no cash compensation had been paid to these individuals prior to that time. The increase also reflects higher professional fees and other costs associated with operating as a public company. General and administrative expenses for the six months ended June 30, 2026 also included $9,792 of non-cash stock-based compensation associated with the issuance of 24,000 shares of common stock in March 2026, compared to $nil in the prior year period.

 

Research and Development Expenses

 

Following our initial public offering, we continued to invest in research and development (“R&D”) activities primarily related to FDA-mandated investigational new drug (“IND”) studies targeting ulcerative colitis as our lead indication and cancer cachexia as our second core indication, as well as atopic dermatitis, rheumatoid arthritis, gouty arthritis, and diabetic foot. For the six months ended June 30, 2026, R&D expenses totaled $4,849,879, primarily reflecting costs incurred under service agreements for IND-related studies and research activities, with such costs recognized over the respective service period in accordance with the terms of the underlying agreements. As of June 30, 2026, the Company recorded $1.8 million in prepaid R&D, representing advance payments to Contract Research Organizations (“CROs”) and Contract Development and Manufacturing Organizations (“CDMOs”) for services to be rendered under ongoing IND studies. We expect R&D spending to remain significant as these studies progress but to moderate in future periods until FDA approvals are obtained and clinical trial activities commence.

 

Other Income (Expense)

 

For the six months ended June 30, 2026, other income was $67,721, primarily interest income earned on cash and cash equivalents. The increase was primarily attributable to higher interest income earned on the Company’s cash balances. The higher interest income primarily reflects increased cash balances following the receipt of net proceeds from the Company’s IPO.

 

Net loss

 

As a result of the foregoing, the Company recorded a net loss of $6,441,198 for the six months ended June 30, 2026, compared to $197,929 for the six months ended June 30, 2025.

 

Liquidity and Capital Resources

 

Since our inception through June 30, 2026, we have funded our operations principally through the issuance of equity and debt securities. We have not generated any revenue since inception and do not expect to generate revenue unless and until we successfully commercialize a product candidate or enter into strategic licensing arrangements.

 

On August 27, 2025, we closed our initial public offering pursuant to the Underwriting Agreement, receiving net cash proceeds of approximately $13.24 million after deducting underwriting discounts and commissions and offering expenses. On September 12, 2025, the underwriters exercised their over-allotment option in full, resulting in additional net proceeds of approximately $2.07 million. We have no committed sources of additional capital and no available credit facility.

 

 

As of June 30, 2026, we had cash and cash equivalents of $2,938,463, compared to $4,973,134 as of December 31, 2025, and an accumulated deficit of $11,288,753. We recorded a net loss of $6,441,198 for the six months ended June 30, 2026, compared to $197,929 for the six months ended June 30, 2025.

 

Our net cash used in operating activities for the six months ended June 30, 2026 of $2,034,671 was substantially lower than our net loss for the period because a significant portion of our operating expenses was funded through the utilization of prepaid research and development balances paid in prior periods rather than through cash expenditures during the period. Our total prepaid expenses declined from $6,254,374 as of December 31, 2025 to $1,854,529 as of June 30, 2026, a reduction of $4,399,844, of which prepaid research and development accounted for $4,347,118. As these prepaid balances are consumed, we expect our cash used in operating activities to increase substantially and to approximate our operating expenses.

 

We further expect our research and development expenditures to increase in connection with our targeted Investigational New Drug application submission in the fourth quarter of 2026 and the initiation of a Phase I clinical trial thereafter. Clinical trial activities require substantial capital that we have not yet secured.

 

Awards granted under the 2026 Plan will be settled in shares of our common stock and will not require the use of cash, which we expect will allow us to conserve cash resources in compensating our personnel as we advance our development programs. Any awards granted under the 2026 Plan will, however, dilute the ownership interests of our existing stockholders upon issuance. As of June 30, 2026, no awards had been granted under the 2026 Plan. Between July 27, 2026 and August 7, 2026, the Company issued all of the 3,000,000 shares of our common stock under the 2026 Plan, registered in the S-8 Registration Statement.

 

We will require additional capital to fund our operations. We may seek to raise additional capital through public or private equity offerings, debt financings, strategic collaborations or licensing arrangements. Our ability to raise capital on acceptable terms may be adversely affected by the trading price of our common stock, current deficiency with the Minimum Bid Price Requirement and our ability to regain compliance with that Nasdaq rule and maintain compliance with other Nasdaq listing rules for continued listing, and general market conditions. Issuance of shares of Common Stock under the 2026 Plan and additional equity financing would dilute our existing stockholders, and debt financing, if available, may involve restrictive covenants. If we are unable to raise additional capital when needed, we would be required to delay, reduce or eliminate certain of our development programs.

 

Going Concern Considerations

 

We have not generated any revenue since inception and have incurred recurring net losses and negative cash flows from operations. For the six months ended June 30, 2026, we incurred a net loss of $6,441,198 and used cash in operating activities of $2,034,671. As of June 30, 2026, we had cash and cash equivalents of $2,938,463 and an accumulated deficit of $11,288,753.

 

As described above, our cash used in operating activities during the six months ended June 30, 2026 was substantially lower than our operating expenses because a significant portion of those expenses was funded through prepaid balances paid in prior periods. As those balances are consumed, we expect our cash requirements to increase materially, and we expect our research and development expenditures to increase further in connection with our planned Investigational New Drug application submission and subsequent clinical trial activities.

 

Based on our current operating plan, we do not expect our existing cash and cash equivalents to be sufficient to fund our operations for at least twelve months from the date of issuance of the unaudited interim financial statements included in this Quarterly Report. These conditions raise substantial doubt about our ability to continue as a going concern. There can be no assurance we will be successful in raising additional capital on favorable terms, or at all. Because these plans are not considered probable of being effectively implemented, they do not alleviate the substantial doubt about our ability to continue as a going concern. If we are unable to obtain sufficient amount of additional capital, we may be required to reduce the scope of our planned development, If we are unable to raise additional capital when needed, we would be required to delay, reduce or eliminate certain of our development programs and could harm our business, financial condition and operating results. If we obtain additional funds by selling any of our equity, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution, or the equity securities may have rights preferences or privileges senior to our common stock. If we issue debt securities, there may be negative covenants which may restrict our company’s activities. If adequate funds are not available to the Company when needed on satisfactory terms, we may be required to cease operating or otherwise modify our business strategy.

 

 

The unaudited interim financial statements included in this Quarterly Report have been prepared assuming we will continue as a going concern and do not include any adjustments to the carrying amounts or classification of assets and liabilities that might result from the outcome of this uncertainty. See Note 1 to our unaudited interim financial statements.

 

Contractual Obligations and Contingencies

 

On January 1, 2025, the Company assumed an office lease from Duraviva, a related party under common control, pursuant to a lease assignment agreement. The term of the lease has extended to August 31, 2026. Additionally, during the 4^th quarter of 2025, the Company entered into lease agreements for three motor vehicles with non-cancelable lease terms ranging from 36 to 51 months. These leases are classified as operating leases. In accordance with ASC 842, the Company recognized a right-of-use asset and corresponding lease liability as of the adoption date.

 

The lease liability was $276,359 as of June 30, 2026.

 

Off-Balance Sheet Arrangements

 

We did not have any off-balance sheet arrangements as of June 30, 2026.

 

Emerging Growth Company and Smaller Reporting Company Status

 

We continue to qualify as an emerging growth company (EGC) and smaller reporting company (SRC), enabling us to utilize scaled disclosures and defer adoption of certain accounting standards.

 

Item 3. Quantitative And Qualitative Disclosures About Market Risk.

 

We are a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act, and are not required to provide the information required by this Item.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Principal Executive Officer and our Principal Financial Officer or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

 

Based on that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report, these disclosure controls and procedures were not effective to provide reasonable assurance that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

 

Our management does not expect that our disclosure controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. The design of any system of controls is based in part upon 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. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.

 

Changes in Internal Control over Financial Reporting

 

During the period covered by this Quarterly Report, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.

 

Item 1A. Risk Factors.

 

We are a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act, and are not required to provide the information under this item.

 

Item 2. Unregistered Sales Of Equity Securities And Use Of Proceeds

 

There were no sales of equity securities during the period covered by this Quarterly Report that were not registered under the Securities Act and were not previously reported in a Current Report on Form 8-K filed by the Company.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosure

 

Not applicable.

 

Item 5. Other Information

 

During the three months ended June 30, 2026, none of the Company’s directors or officers adopted or terminated any contract, instruction, or written plan for the purchase or sale of our securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any non-Rule 10b5-1 trading arrangements as defined in Item 408(a) of Regulation S-K.

 

Item 6. Exhibits.

 

Exhibit Number		Description
31.1*		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
31.2*		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
32.1*		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		Inline XBRL Instance Document
101.INS*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

 

* Filed herewith

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: August 14, 2026	CURANEX PHARMACEUTICALS INC
	By:	/s/ Jun Liu
	Name:	Jun Liu
	Title:	Chief Executive Officer and President
		(Principal Executive Officer)
Dated: August 14, 2026	By:	/s/ Wanjun Zhang
	Name:	Wanjun Zhang
	Title:	Chief Financial Officer
		(Principal Financial and Accounting Officer)