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 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 18, 2025, there were shares of the registrant’s common stock, issued and outstanding.
TABLE OF CONTENTS
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this Quarterly Report on Form 10-Q may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
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. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following risks, uncertainties and other factors:
| ● | We are early in our development efforts, with a limited operating history, and have no products approved for commercial sale; |
| ● | We have not generated any 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 ability to generate revenue and achieve profitability depends on the successful launch and commercialization of our Nugevia brand of premium supplements; |
| ● | There is intense competition in the premium supplement business; |
| ● | We are substantially dependent on the success of our product candidate, JOTROL for our pharmaceutical operations centered on the development of drug candidates. If we are unable to complete development of, obtain approval for and commercialize JOTROL for one or more indications in a timely manner, our business will be harmed; |
| ● | There are many regulatory and compliance risks involved with launching the Nugevia product line, which include compliance with marketing labeling and claims standards; |
| ● | Our prospects depend upon developing product candidate JOTROL for particular indications and possibly discovering, developing other product candidates in future programs; |
| ● | Clinical drug development involves a lengthy and expensive process with an uncertain outcome. The clinical trials of our product candidate JOTROL may not demonstrate safety and efficacy to the satisfaction of the U.S. Food and Drug Administration (FDA), European Medicines Agency (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 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 product candidates we develop, our commercial opportunities will be negatively impacted. In particular, we face competition for patients with MPS-I, Friedreich’s ataxia, MELAS, Parkinson’s Disease, Mild Cognitive Impairment, and early Alzheimer’s disease from companies that produce drugs to treat such diseases. |
| ● | We rely on third parties to conduct our preclinical studies, clinical trials, and manufacturing and these third parties may not perform satisfactorily; |
| ● | Once our common stock is listed on Nasdaq Capital Market, there can be no assurance that we will be able to comply with Nasdaq Capital Market’s continued listing standards; |
| ● | The price of our common stock could be subject to rapid and substantial volatility; and |
| ● | Our management’s assessment of historical losses, negative cash flows, and reliance on private equity financing raises substantial doubt about our ability to continue as a going concern, as noted in our auditor’s reports for 2023 and 2024. |
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 may be required under applicable securities laws.
These and other risks are described under the heading “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 28, 2025. Those factors and the other risk factors described therein are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results. Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements.
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JUPITER NEUROSCIENCES, INC.
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
JUPITER NEUROSCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| June 30, 2025 | December 31, 2024 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Prepaid contract | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Operating lease right of use asset, net | ||||||||
| Prepaid contract, net of current portion | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accrued compensation | ||||||||
| Accrued interest | ||||||||
| Current portion of operating lease liability | ||||||||
| Notes payable, related parties | ||||||||
| Total current liabilities | ||||||||
| Operating lease liability, net of current portion | ||||||||
| Total liabilities | $ | $ | ||||||
| Commitments and Contingencies (Note 7) | ||||||||
| Stockholders’ Equity: | ||||||||
| Series A preferred stock, par value $; shares authorized, shares issued and outstanding | ||||||||
| Common stock, par value $; shares authorized; and issued and outstanding, respectively | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements
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JUPITER NEUROSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Expenses: | ||||||||||||||||
| Research and development | $ | $ | $ | $ | ||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Income (Expenses): | ||||||||||||||||
| Interest income | ||||||||||||||||
| Loss on change in fair value of derivative liability | ( | ) | ( | ) | ||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gain on extinguishment of debt | ||||||||||||||||
| Other income | ||||||||||||||||
| Total other income (expenses), net | ||||||||||||||||
| Net (loss) income | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Net (loss) income per common share: | ||||||||||||||||
| Basic | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Diluted | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Weighted average number of common stock outstanding: | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements
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JUPITER NEUROSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024
(Unaudited)
| Common Stock | Additional Paid | Accumulated | Total Stockholders’ Equity | |||||||||||||||||
| Shares | Amount | in Capital | Deficit | (Deficit) | ||||||||||||||||
| December 31, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| March 31, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Shares issued for services rendered | ||||||||||||||||||||
| Shares issued for vested restricted stock units | ( | ) | ||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| June 30, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Additional | Receivables for Sale of | Total Stockholders’ | ||||||||||||||||||||||
| Common Stock | Paid | Common | Accumulated | Equity | ||||||||||||||||||||
| Shares | Amount | in Capital | Stock | Deficit | (Deficit) | |||||||||||||||||||
| December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||
| Issuance of restricted stock and stock options for accrued compensation | - | |||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||
| Shares issued for vesting of restricted stock | ( | ) | ||||||||||||||||||||||
| Sale of common stock, net of receivables of $ | ( | ) | ||||||||||||||||||||||
| Reconciling shares due to forward stock split | ||||||||||||||||||||||||
| Net income | - | |||||||||||||||||||||||
| June 30, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements
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JUPITER NEUROSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| June 30, 2025 | June 30, 2024 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Loss on change in fair value of derivative liability | ||||||||
| Amortization of debt discounts | ||||||||
| Gain on extinguishment of debt | ( | ) | ||||||
| Gain on forgiveness of accrued compensation | ( | ) | ||||||
| Non- cash amortization of prepaid contracts | ||||||||
| Shares issued for services | ||||||||
| Stock-based compensation | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid and other current assets | ( | ) | ||||||
| Operating lease right of use asset | ( | ) | ( | ) | ||||
| Accounts payable and accrued expenses | ||||||||
| Accrued compensation | ||||||||
| Increase in accrued interest | ||||||||
| Net cash flows from operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from note payable, related parties | ||||||||
| Proceeds from sale of common stock | ||||||||
| Net cash flows from financing activities | ||||||||
| Net Change in Cash | ( | ) | ( | ) | ||||
| Beginning of period | ||||||||
| End of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| Non-Cash Investing and Financing Activities: | ||||||||
| Restricted stock and stock options issued for the forgiveness of accrued compensation | $ | $ | ||||||
| Notes payable, related party assign to Note payable | $ | $ | ||||||
| Receivables from Sale of Common Stock | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements
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JUPITER NEUROSCIENCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2025
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 has developed a unique resveratrol platform product primarily targeting treatment of neuro-inflammation. The product candidate, called JOTROL, has many potential indications of use for rare diseases. We are primarily targeting Parkingson’s Disease. In addition, and more broadly, JOTROL has potential indications for use related Mucopolysaccharidoses Type 1, Friedreich’s Ataxia, and MELAS and Mild Cognitive Impairment/early Alzheimer’s disease.
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. Based on the results of the Company’s Phase I study, JOTROL may 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.
The Company’s Phase 1 dose finding pharmacokinetics (“PK”) study was completed in 2021.and funded by the U.S. National Institute on Aging, an institute of the U.S. National Institutes of Health (“NIH”): Safety and Pharmacokinetics of JOTROL for Alzheimer’s Disease, Federal Award Identification Number R44AG067907-01A1 (the “Award”). This Phase 1 PK study will be homogeneous for all indications where JOTROL will be used in Phase II and Phase III clinical trials.
Initial Public Offering
In
December 2024, the Company’s sold shares of common stock, par value $ per share (“common stock”) at
a price of $ per share for gross proceeds of $
Nasdaq Minimum Bid Price Compliance
On
March 21, 2025, the Company received a notification letter from The Nasdaq Stock Market LLC (“Nasdaq”) indicating that the
Company was not in compliance with the minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2), which requires listed securities
to maintain a minimum closing bid price of $
Pursuant
to Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided 180 calendar days, or until September 17, 2025, to regain compliance by
maintaining a minimum closing bid price of at least $
On
July 9, 2025, the Company received written confirmation from Nasdaq that it had regained compliance with Listing Rule 5550(a)(2), as
the closing bid price of its common stock had been at or above $
| 8 |
JUPITER NEUROSCIENCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2024
Note 2 – Significant Accounting Policies
Basis of presentation, Liquidity and Management’s Plans
The
accompanying condensed consolidated financial statements of the Company have been prepared in conformity with accounting principles generally
accepted in the United States of America (“U.S. GAAP”). U.S GAAP contemplates the continuation of the Company as a going
concern. The Company has had no revenues from product sales since inception and incurred a net loss 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. The Company plans to finance future operations with proceeds from equity securities, grant awards and strategic collaborations. However, there is no assurance that the Company will be able to affect 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. The Company views its operations and manages its business in two operating segments: (i) the production and sale of premium nutritional supplements, and (ii) pharmaceutical operations focused on the development of drug candidates.
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.
The Company bases its estimates on historical experience and other assumptions, which include both quantitative and qualitative assessments that it believes to be reasonable under the circumstances. Changes in estimates are recorded in the period in which they become known.
Significant estimates during the three and six month periods ended June 30, 2025 and 2024 include valuation of share based arrangements and those related to the recognition and disclosure of income taxes.
Cash
The
Company considers all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents. From
time to time, the Company has cash and cash equivalent balances in excess of the FDIC insured limit of $
Prepaid Contracts
Prepaid contracts are related to certain agreements for which the services are being rendered by the counterparty over the three year term of the agreement and the value of which is expensed ratably over that term. See further discussion in Note 6 - Stockholders’ Equity.
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 condensed consolidated financial statements as prepaid or accrued research and development expense, as the case may be.
| 9 |
JUPITER NEUROSCIENCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2025
Note 2 – Significant Accounting Policies, continued
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, 2025 and December 31, 2024, the Company concluded that a full valuation allowance is necessary for the net deferred tax assets.
Basic earnings per share (“EPS”) 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 earnings per share includes the effect, if any, from the potential exercise or conversion of securities, which would result in the issuance of incremental shares of common stock, using the treasury stock method, unless the effect would be anti-dilutive.
| Common stock options | ||||
| Unvested restricted stock | ||||
| Warrants | ||||
Stock-Based Compensation
The grant date fair value of stock-based awards issued to employees, non-employees and members of the board of directors, 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.
| 10 |
JUPITER NEUROSCIENCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2025
Note 2 – Significant Accounting Policies, continued
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 and presents financial instruments at estimated Fair Value. Fair Value is defined 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. Disclosures about the fair value of financial instruments are based on pertinent information available to the Company at each reporting date.
Disclosures related to fair value are categorized in a three level hierarchy (“Fair Value Hierarchy), generally based on whether the inputs to the valuation techniques utilized to calculated fair value are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).
The three levels of the Fair Value Hierarchy are briefly described as follows:
| ● | 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. |
In instances where the determination of the fair value measurement is based on inputs from different levels of the Fair Value Hierarchy, the level in which the fair value of a financial instrument is classified is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.
The carrying amounts reported in the condensed consolidated balance sheet for cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value based on the short-term maturity of these instruments. The amount reported in the condensed consolidated balance sheet for note payable, related party approximates fair value as the interest rate substantially equivalent the Company’s incremental borrowing rate for an instrument with similar terms and time to maturity.
See Note 5 - Convertible Debt and Derivative Liability.
| 11 |
JUPITER NEUROSCIENCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2025
Note 2 – Significant Accounting Policies, continued
Derivative Instruments
Derivative instruments measured at fair value. Gains or losses resulting from changes in the fair value of derivatives instruments recorded as assets or liabilities are recognized in earnings at each reporting period.
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
Note payable, related party
Since
inception, from time to time, the Company’s Chief Executive Officer (CEO) loaned the Company working capital. The
balance outstanding, totaling $
| 12 |
JUPITER NEUROSCIENCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2025
Note 3 – Related Party Transactions, continued
Equity Instruments Exchanged for Accrued Compensation
In March 2024, in exchange for the issuance of stock options, with a strike price of $, and restricted stock units (“RSUs”), a former executive relinquished his right to received $ of previously accrued, but unpaid compensation The grant date fair value of the stock options and RSUs totaled $, resulting a $ gain, which is included other income in the accompanying 2024 statement of operations.
Note 4 – Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consisted of the following:
| June 30, 2025 | December 31, 2024 | |||||||
| Accounts payable | $ | $ | ||||||
| Professional fees | ||||||||
| License fee | ||||||||
| Credit cards | ||||||||
| Total accounts payable and accrued expenses | $ | $ | ||||||
Accrued
compensation of $
See Note 9 – Subsequent Events for details regarding the approval of cash bonuses cash bonuses payable to certain officers.
| 13 |
JUPITER NEUROSCIENCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2025
Note 5 – Convertible Debt and Derivative Liability
Convertible Debt I
Between
August and December 2021, the Company issued convertible notes (collectively, “Notes I”) totaling $
Convertible Debt II
In
April 2022, the Company issued a senior secured convertible note (“Note II”) and shares of common stock for net proceeds
of $
Convertible Debt III
In
March 2023, the Company issued a convertible note (“Note III”) with a principal amount of $
| 14 |
JUPITER NEUROSCIENCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2025
Note 5 – Convertible Debt and Derivative Liability, continued
Interest
During
the three and six months ended June 30, 2024, interest expense of $
Embedded Derivative
Based on the terms of the Notes, the Company determined, at the time of issuance, that the conversion option represented an embedded component of a host instrument, the Notes, and was required to be accounted for separately as a derivative financial instrument. Accordingly, the Company recorded the value of the embedded conversion option as a derivative liability with a corresponding discount to the face value of the Notes at the time of issuance. Thereafter, the derivative liability was measured at fair value, as determined using a Monte Carlo valuation model, at each reporting date and changes in fair value were recognized through earnings.
During the second quarter of 2024,
the terms of Note II were modified including the terms of the conversion option accounted for as a derivative liability. In
connection therewith, the fair value of the derivative liability was measured based on the modified terms and as a result of that
remeasurement, the Company recorded a gain totaling $
During
the three and six months ended June 30, 2024, the Company recorded a loss totaling $
Significant assumptions utilized in the determination of the fair value of derivative liabilities utilizing a Monte Carlo valuation model were as follows:
June 30, 2024 | ||||
| Dividend Rate | ||||
| Term | ||||
| Volatility | % | |||
| Risk-free rate | % | |||
| Probability of IPO | % | |||
| 15 |
JUPITER NEUROSCIENCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2025
Note 6 – Stockholders’ Equity
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, 2025. There were shares of preferred stock issued and outstanding as of June 30, 2025.
During
the six months ended June 30, 2025, the Company issued
shares of common stock, with an aggregate fair value of $
See Note 6 – Stockholders’ Equity – Restricted Stock Units for additional details regarding the issuance of common stock upon the vesting of restricted stock units.
Service Agreement
In
June 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 six months ended June 30, 2025 the Company recorded compensation expense of $ related to the agreement, which in general and administrative expenses in the accompanying condensed consolidated statements of operations. There was no such expense recorded during the six months ended June 30, 2024 due to the timing of the execution of the service agreements.
| 16 |
JUPITER NEUROSCIENCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2025
Note 6 – Stockholders’ Equity, continued
Stock Options
The Company grants stock under the provisions of its 2021 Equity Incentive Plan (“the Plan”).
In January 2024, the Company granted stock options to a consultant with an exercise price of $ per share and a grant date fair value of $, of which
As discussed in Note 3 – Related Party Transactions - Equity Instruments Exchanged for Accrued Compensation, during the six months ended June 30, 2024, the Company issued additional options related to accrued compensation.
In
June 2025, the Company granted
stock options to a consultant with an exercise price of $
per share and a grant date fair value of $,
and a 10 year term. The % of the stock options vest immediately on the grant date, with
| June 30, | June 30, | |||||||
| 2025 | 2024 | |||||||
| Dividend Yield | % | % | ||||||
| Weighted average expected term (years) | - | |||||||
| Volatility | % | - | % | |||||
| Risk-free rate | % | % | ||||||
| Weighted average exercise price | $ | $ | ||||||
| 17 |
JUPITER NEUROSCIENCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2025
Note 6 – Stockholders’ Equity, continued
| Number of Options | Weighted Average Exercise Price | Weighted Average Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding as of December 31, 2024 | $ | |||||||||||||||
| Granted | ||||||||||||||||
| Exercised | - | |||||||||||||||
| Forfeited | - | |||||||||||||||
| Outstanding as of June 30, 2025 | $ | $ | ||||||||||||||
| Exercisable as of June 30, 2025 | $ | $ | ||||||||||||||
| Outstanding Options | Vested Options | |||||||||||||||||
| Exercise Price | Number Outstanding at June 30, 2025 | Weighted Average Remaining Life | Number Exercisable at June 30, 2025 | Weighted Average Remaining Life | ||||||||||||||
| $ | ||||||||||||||||||
| $ | ||||||||||||||||||
| $ | ||||||||||||||||||
| $ | ||||||||||||||||||
| $ | ||||||||||||||||||
| $ | ||||||||||||||||||
There was $ unrecognized stock-based compensation expense as of June 30, 2025 which will be recognized over a period of approximately 0.82 years.
Warrants
| Number of Shares | Weighted Average Exercise Price per Share | Weighted Average Remaining Life (Years) | ||||||||||
| Outstanding as of December 31, 2024 | $ | |||||||||||
| Granted | - | |||||||||||
| Forfeited | - | |||||||||||
| Outstanding as of June 30, 2025 | $ | |||||||||||
| 18 |
JUPITER NEUROSCIENCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2025
Note 6 – Stockholders’ Equity, continued
Effective June 22, 2025, the Company entered into
an amendment with a warrant holder who holds warrants exercisable for
Restricted Stock Units
No restricted stock units were issued during the six months ended June 30, 2025. In June 2025, all then issued and outstanding restricted stock units vested whereby shares of common stock were freely tradeable by the Holder.
Note 7 – Commitments and Contingencies
Legal Matters
From time to time, claims are made against the Company in the ordinary course of business, which could result in legal proceedings. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, which could have a material adverse effect on the Company’s results of operations for that period or future periods.
| 19 |
JUPITER NEUROSCIENCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2025
Note 7 – Commitments and Contingencies, continued
Leases
On
May 1, 2021, the Company entered into a
As
of June 30, 2025 and December 31, 2024, the Company’s operating lease right-of-use asset, net (ROU) is $
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Operating lease right-of-use asset is summarized below: | ||||||||
| Right-of-use asset | $ | $ | ||||||
| Less accumulated amortization | ( | ) | ( | ) | ||||
| Right-of-use asset, net | $ | $ | ||||||
Future minimum lease liability payments under the non-cancelable operating lease at June 30, 2025 and December 31, 2024 are as follows:
| 2025 | $ | $ | ||||||
| 2026 | ||||||||
| Less: imputed interest | ( | ) | ( | ) | ||||
| Total lease liabilities | $ | $ | ||||||
| Current operating lease liabilities | ||||||||
| Non-current operating lease liabilities | ||||||||
| Total lease liabilities | $ | $ |
| 20 |
JUPITER NEUROSCIENCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2025
Note 7 – Commitments and Contingencies, continued
Leases, continued
Short-term
rental costs expensed as incurred totaled $
Consulting Agreements
The Company utilizes various consultants and advisors for clinical research, scientific advisory services and business strategies. Each consultant has an executed agreement in place defining term, compensation, duties, confidentiality, intellectual property. Agreements are evaluated for renewal upon expiration. Bonus provisions are at the discretion of the Company’s Board of Directors and are granted on an individual agreement basis.
On
December 15, 2024, the Company entered into a Strategic Services Agreement (the “Dominant Treasure Agreement”) with Dominant
Treasure Health Company Limited (“Dominant Treasure”). Pursuant to the terms of the Dominant Treasure Agreement, Dominant
Treasure agreed to provide certain services to the Company to assist the Company in accelerating the Company’s desire to get its
products developed and distributed in the Southeast Asian market. In exchange for Dominant Treasure’s has services pursuant to
the Dominant Treasure Agreement, the Company agreed to pay Dominant Treasure a one-time payment of $
| 21 |
JUPITER NEUROSCIENCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2025
Note 7 – Commitments and Contingencies, continued
Licensing and Royalty Agreements - Aquanova AG
In September 2016, the Company entered into a Development, Collaboration and License Agreement (“License Agreement”) with Aquanova AG, a German company in the field of development, manufacturing and selling of colloidal formulas. The License Agreement resulted in the creation of the pharmaceutic product, JOTROL. The License Agreement remains in effect until product launch, which is undeterminable at this time. The Chief Scientific Officer of the Company and the CEO of Aquanova are the joint inventors of JOTROL. Aquanova is the assignee on the patents in the United States, the European Union, China and Japan whereas the Company is obligated to maintain the patents. The License Agreement grants the Company ownership of any regulatory approvals as well as the sole and exclusive worldwide right to develop, manufacture and commercialize all products, including JOTROL. Aquanova has been granted the exclusive license to conduct formulation development and manufacturing.
The
License Agreement defines various fees due to Aquanova for product and formulation development and licensing of the products. The Company
is obligated to pay Aquanova an annual license fee of $
Finally,
pursuant to the terms of the License Agreement, upon mutual agreement, the Company may pay a one-time royalty of $
Murdoch Children’s Research Institute
In
2015, the Company entered into a Global Development and License Agreement (“License Agreement II”) with Murdoch Children’s
Research Institute (“MCRI”), an Australian Institute at the Royal Children’s Hospital in Australia, with the know-how
in the process of using pharmaceutical grade Resveratrol for the treatment of Friedreich’s ataxia. License Agreement II provides
for joint development for a delivery system, clinical trials for the treatment of Friedreich’s ataxia, and worldwide commercialization
by the Company. Furthermore, License Agreement II grants an exclusive worldwide license to the Company to use the MCRI know-how for developing,
manufacturing, and commercializing the product candidate for proposed treatment for Friedreich’s ataxia. In turn, MCRI has been
granted an irrevocable, royalty free, worldwide license for the use any product inventions along with patent rights for internal research
and development. Upon receipt of approval of an MMA in each territory, as defined (e.g., United States, European Union, China, Japan),
the Company will be obligated to pay an approval fee of $
Note 8 – Segment Report
The Company’s Chief Executive Officer serves as the Chief Operating Decision Maker (“CODM”) and evaluates the financial performance of the business and makes resource allocation decisions on a consolidated basis.
During 2025, the Company began to transition its operation into two reportable segments: (i) the production and sale of premium nutritional supplements, and (ii) pharmaceutical operations focused on the development of drug candidates. However, as of June 30, 2025, the CODM has not begun reviewing operating results separately for these activities for purposes of performance assessment or resource allocation. The CODM continues to evaluate the Company’s financial performance on a consolidated basis, and the internal reporting structure has not been modified to provide discrete segment-level financial information.
Management believes a transitional period is appropriate given the timing of these operational changes. Accordingly, the Company has concluded that no change in reportable segments has occurred as of June 30, 2025. The Company will continue to monitor the CODM’s review practices and internal reporting structure and will update segment disclosures in future periods if and when discrete financial information is regularly reviewed at the segment level.
In accordance with ASC 280-10-50-34, if or when a change in reportable segments occurs in a future period, the Company will recast prior-period segment disclosures retrospectively to reflect the new segment structure historic segment information on the same basis as then reported.
Note 9 – Subsequent Events
On
July 2, 2025, the Compensation Committee of the Board of Directors approved the grant of an aggregate of
stock options issued to certain executives with an exercise price equal to the closing price of the Company’s common stock on
the grant date, a ten-year
term, and which vest in equal annual installments over a three-year period, subject to continued employment. In addition, the
Compensation committee approved cash bonuses totaling $
On July 16, the Company entered into a
amendment with a warrant holder who holds warrants exercisable for
On August 12, 2025, the Company received an
exercise notice from a warrant holder who holds warrants exercisable for
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed 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 for fiscal 2024, which was filed with the Securities and Exchange Commission, or the SEC, on March 28, 2025, or the Annual Report.
Special Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q, including, without limitation, statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this Quarterly Report on Form 10-Q, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or the Company’s management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Unless the context otherwise requires, “JNS,” “we,” “us,” “our,” or the “Company” refers to Jupiter Neurosciences, Inc.
Business Overview
Jupiter Neurosciences, Inc. (the “Company,” “we” or “us”) 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 longevity market with its Nugevia™ product line. Both efforts are powered by JOTROL™, Jupiter’s proprietary, enhanced resveratrol formulation that has demonstrated significantly improved bioavailability. The Company’s prescription pipeline is focused broadly on CNS disorders, presently with a planned 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.
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. The promising results have led the Company to plan a Phase IIa clinical trial for Parkinson’s Disease, which is expected to start in the fourth quarter of 2025, with results anticipated 12 months later. The Company also aims to explore 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 therapeutic effects. Current resveratrol products can not reach these levels without causing severe gastrointestinal side effects. Indications are from human studies in Alzheimer’s patients (Turner et al 2015) and Friedreich’s Ataxia patients (Yu et al 2015) that a concentration at the highest dose (CMax) of resveratrol in blood plasma needs to be 200 ng/ml or higher for 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, indicating positive effects on oxidative stress and inflammation. Subsequent analysis published in Molecular Science 2025 (Mousa et al) further indicates that resveratrol has effect 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 South-East 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.
| 23 |
In March 2025, the Company announced that it had entered into a partnership with Aquanova AG to develop a series of nutritional products targeting longevity, aging and healthspan. The first three products, which will focus on the concept of “Beauty from Within”, are slated to hit the market in the third quarter of 2025 through a Direct-to-Consumer model. The Company will form a wholly-owned subsidiary to focus on the consumer market, and will market its products on a to-be-developed website targeting the US market, along with social media marketing. Internationally, the Company is focusing on partners who can market and accelerate sales, with an initial focus on the Asian region.
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
The accompanying condensed consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). U.S GAAP contemplates the continuation of the Company as a going concern. The Company has had no revenues from product sales since inception and incurred a net loss of $3,781,832 and had negative cash flows of operations totaling $1,891,263 for the six months ended June 30, 2025, and a cumulative net loss since inception totaling $29,803,961.
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. The Company plans to finance future operations with proceeds from equity securities, grant awards and strategic collaborations. However, there is no assurance that the Company will be able to affect transactions on commercially reasonable terms, if at all.
Results of Operations
Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024
Research and Development Expenses
Research and development (“R&D”) expenses were $759,448 for three months ended June 30, 2025 compared to $101,077 for three months ended June 30, 2024, representing an increase of $658,371, or 651%. The increase in research and development expenses was primarily driven by costs incurred under a three-year service agreement associated with product development and distribution efforts in the Southeast Asian market. The remainder of the increase relates to heightened R&D activities, specifically the procurement of clinical trial supplies for our Parkinson’s disease program.
General and Administrative Expenses
General and administrative expenses were $1,505,432 for the three months ended June 30, 2025 compared to $456,000 for the three months ended June 30, 2024, representing an increase of $1,049,432, or 230%. The increase is due to employees receiving their full salaries and an accrual for a bonus in the three months ended June 30, 2025 compared to the prior period. In addition, there was an increase in legal and professional fees in the three months ended June 30, 2025 compared to the prior period as a direct result of the Company being listed on Nasdaq. Lastly, the increase in general and administrative expenses is attributed to an increase in insurance expenses and consulting fees. Overall, this increase is a direct result of the Company expanding its operations in the current period compared to the prior period.
Interest Expense
Interest expense was $1,135 for the three months ended June 30, 2025, compared to $56,290 for the three months ended June 30, 2024, representing a decrease of $55,155, or 98%. The significant decrease in the current period is due to the fact that none of these interest-bearing obligations remain outstanding, as they were either repaid or converted in prior periods.
Loss on Change in Fair Value of Derivative Liability
At each quarter end during these years, the variable conversion options embedded in our convertible notes were marked to market, and the change in fair value of the derivative was recorded as a loss of $25,431 for the six months ended June 30, 2024. There were no derivative liabilities during the current period
For the three months ended June 30, 2024, the Senior Secured Convertible Note were amendment several times with materially different economics thus requiring for the recording of debt as an extinguishment and re-recording the debt with the amended terms. This resulted in a loss on extinguishment of debt in the three month period ended June 30, 2024 of $951,868.
| 24 |
Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024
Research and Development Expenses
Research and development (“R&D”) expenses were $1,226,193 for six months ended June 30, 2025 compared to $199,744 for six months ended June 30, 2024, representing an increase of $1,026,449, or 514%. The increase in research and development expenses was primarily driven by costs incurred under a three-year service agreement associated with product development and distribution efforts in the Southeast Asian market. The remainder of the increase relates to heightened R&D activities, specifically the procurement of clinical trial supplies for our Parkinson’s disease program.
General and Administrative Expenses
General and administrative expenses were $2,576,690 for the six months ended June 30, 2025 compared to $928,028 for the six months ended June 30, 2024, representing an increase of $1,648,662, or 178%. The increase is due to employees receiving their full salaries and an accrual for a bonus in six months ended June 30, 2025 compared to the prior period. In addition, there was an increase in legal and professional fees in the current period compared to the prior period as a direct result of the Company being listed on a public exchange. Lastly, the increase in general and administrative expenses is attributed to an increase in insurance expenses and consulting fees. Overall, this is a direct result of the Company expanding its operations in the current period compared to the prior period.
Interest Expense
Interest expense was $2,364 for the six months ended June 30, 2025, compared to $122,046 for the six months ended June 30, 2024, representing a decrease of $119,682, or 98%. The significant decrease in the current period is due to the fact that none of these interest-bearing obligations remain outstanding, as they were either repaid or converted in prior periods. As a result, the Company did not incur material interest expense during the current period.
Loss on Change in Fair Value of Derivative Liability
At each quarter end during these years, the variable conversion options embedded in our convertible notes were marked to market, and the change in fair value of the derivative was recorded as a loss of $63,142 for the six months ended June 30, 2024. There were no derivative liabilities during the current period.
For the six months ended June 30, 2024, the Senior Secured Convertible Note were amended several times with materially different economics thus requiring for the recording of debt as an extinguishment and re-recording the debt with the amended terms. This resulted in a loss on extinguishment of debt in the six month period ended June 30, 2024 of $951,868.
| 25 |
Liquidity and Capital Resources; Plan of Operations
Historically, we have financed our operations primarily by selling common stock, convertible debt, and proceeds from our IPO.
We have generated no revenues from product sales since inception, incurred a net loss of $3,781,832 for the six months ended June 30, 2025, accumulated negative cash flows from operating activities totaling $1,891,263 during that same period, and have an accumulated deficit since inception totaling $29,803,961. Accordingly, management has concluded there is substantial doubt regarding our ability to continue as a going concern for a period of at least twelve months as a result of our historical recurring losses, negative operating cash flows from operations and our dependence on external financings. In addition, the report of our external auditor with respect to their audit of our financial statements as of and for the years ended December 31, 2024 and 2023, included in our 2024 Annual Report on Form 10-K, includes an explanatory paragraph regarding our ability to continue as a going concern.
In order to achieve our business plans and sustain operations, we will need to raise additional funds which may be from sources including, but not limited to, the issuance of equity or debt securities, licensing of our intellectual property, or entering into other partnering agreements. If we are unable to raise additional funds when needed, we may be required to delay, reduce, or terminate some or all of our development programs and clinical trials. However, there can also be no assurance that we will be able to raise additional funds on commercially reasonable terms, if at all.
The timing, extent, and terms of additional capital the requirements will be 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 candidate 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 costs associated with being a public company; and | |
| ● | the cost associated with commercializing our drug candidate, if it receives marketing approval. |
| 26 |
See “Risk Factors” included herein and in our 2024 Annual Report on Form 10-K for fiscal 2024 filed with the Securities and Exchange Commission (the “SEC”) on March 28, 2025 for additional discussion of risks associated with our capital requirements.
Cash Flows for the Six Months Ended June 30, 2025 and 2024
The following table shows a summary of our cash flows for the six months ended June 30, 2025 and 2024.
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Net cash flows from operating activities | $ | (1,891,263 | ) | $ | (172,627 | ) | ||
| Net cash flows from investing activities | - | - | ||||||
| Net cash flows from financing activities | $ | - | $ | 159,000 | ||||
| Net increase (decrease) in cash | $ | (1,891,263 | ) | $ | (13,627 | ) | ||
Net Cash Flows From Operating Activities:
Net cash used in operating activities during the six months ended June 30, 2025 was $1,891,263, as compared to net cash used in operating activities of $172,627 for the six months ended June 30, 2024. The increase in net cash used in operating activities was primarily attributable to the significant increase in net loss, which totaled $3,781,832 in 2025 compared to $320,977 in 2024. The higher net loss was partially offset by increased non-cash adjustments, including $983,942 of stock-based compensation in 2025 compared to $632,300 in 2024 and $380,182 of non -cash amortization of prepaid contracts in 2025 compared to no comparable amortization in 2024. Additionally, the prior period included a non-cash loss on extinguishment of debt of $951,868 and a gain on forgiveness of accrued compensation of $40,000, which did not recur in the current period. Changes in working capital also contributed to the variance, primarily due to an increase in accounts payable and accrued expenses of $177,481 in 2025 compared to $34,524 in 2024 and a decrease in accrued compensation in 2025 versus an increase in 2024.
Net Cash Flows From Financing Activities:
Net cash provided by financing activities during the six months ended June 30, 2025 was $0, as compared to net cash provided in financing activities of $159,000 for the six months ended June 30, 2024. The decrease in net cash provided by financing activities was primarily related to the absence of financing transactions in the current period, compared to proceeds from related-party notes payable of $109,000 and proceeds from the sale of common stock of $50,000 during the six months ended June 30, 2024.
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.
Business Development Activities
The Company initiated business development activities in the Asian region in 2021. The Company has a strong strategic interest in accelerating the drug development and potential commercialization efforts of JOTROL in this market. Our Chairman & CEO, presented in person, our company’s status and pipeline at the BIOHK 2023 conference in Hong Kong in September of 2023. The presentation led to several follow-on meetings, and we have recently agreed to service agreements in the areas of business development, CMC (Chemistry, Manufacturing, and Controls), regulatory affairs and clinical trial management. The Asian market is very large and hard to penetrate for a small company and we believe that our strategy with these agreements is cost effective and have the possibility to accelerate an out-licensing deal in the South-East Asian territories. However, there are no assurances that this approach will be successful.
The agreements executed are very similar in nature that include an equity investment in our Company by the other party and in turn we issued equity in the form of shares of common stock, in lieu of cash, for 3 years of services from each company.
The Company believes these agreements to be favorable for both parties based on the cash position of the Company and the need for these activities to be executed and enabling the possibility of a one or more out-licensing agreements in the territory.
| 27 |
Contractual Obligations
We do not have any long-term capital lease obligations, operating lease obligations or long-term liabilities, except as follows:
Notes Payable to Related Parties and Other Transactions
The Company’s Chief Executive Officer (CEO) has loaned the Company working capital since inception. The balance of the loans to the CEO as of June 30, 2025 and December 31, 2024 and 2023 was $146,432, respectively. The loan is due on demand and accrues interest at 3% per year. Accrued interest relating to the loan was $3,242 and $1,064 as of June 30, 2025 and December 31, 2024, respectively, and is included in accrued interest on the accompanying balance sheets.
As of June 30, 2025 and December 31, 2024, $85,466 and $64,105, respectively, was due to a company wholly owned by the Company’s Chief Financial Officer. The amount is included in accrued compensation on the Company’s balance sheets.
Critical Accounting Policies
Our accounting policies are more fully described in Note 2 – Significant accounting policies to our consolidated financial statements included as part of this Quarterly Report and our 2024 Annual Report on Form 10-K, filed with the SEC on March 28, 2025.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
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, 2025, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of June 30, 2025, our disclosure controls and procedures were effective.
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
From time to time, we may become involved in legal proceedings arising in the ordinary course of our business, the resolution of which we do not anticipate would have, individually or in the aggregate, a material adverse effect on our business, financial condition, or results of operations.
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 28, 2025, which is available at www.sec.gov. Any of the risk factors contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 could materially affect our business, financial condition or future results, and such risk factors may not be the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results. We do not undertake to update any of the “forward-looking” statements or to announce the results of any revisions to these “forward-looking” statements except as required by law.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On April 23, 2025, the Company issued 25,000 shares of its common stock to a marketing firm and 78,816 shares of its common stock to an investor relations firm for services rendered under consulting agreements. The shares were issued with an aggregate grant date fair value of $66,000. The shares issued to these consultants are restricted and bear a Rule 144 legend.
On June 10, 2025, the Company approved the grant of 250,000 options pursuant to the Company’s 2023 Equity Incentive Plan to a consultant for services to be rendered under a consulting agreement. The exercise price of the options is $0.67 per share, with 25% of the options vesting immediately and the remainder vesting ratably on a monthly basis, commencing on July 31, 2025 and ending on May 31, 2027. The options expire ten years after the grant date.
All of these transactions described above were exempt from registration in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended, as transaction by an issuer not involving a public offering. The purchasers of securities in each of these transactions represented their intention to acquire the securities for investment only and not with a view to offer or sell, in connection with any distribution of the securities, and appropriate Rule 144 legends were affixed to the share certificates/stock transfer records and instruments issued in such transactions.
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, 2025, no director or officer of the Company
ITEM 6. EXHIBITS
| Exhibit No. | 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 Section 906 of the Sarbanes-Oxley Act** | |
| 32.2* | Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act** | |
| 101.INS* | Inline XBRL Instance Document* | |
| 101.SCH* | 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 (embedded within the Inline XBRL document)* |
* Filed herewith.
** Furnished herewith.
| 30 |
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 18, 2025 | /s/ Christer Rosén |
| Christer Rosén | |
| Chief Executive Officer | |
| (Principal Executive Officer) | |
| Date: August 18, 2025 | /s/ Saleem Elmasri |
| Saleem Elmasri | |
| Chief Financial Officer | |
| (Principal Financial Officer and Principal Accounting Officer) |
| 31 |