Jupiter Neurosciences Inc(JUNS) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of operations, changes in stockholders' deficit, and cash flows, along with detailed notes providing context on the company's business, accounting policies, related party transactions, debt, equity, commitments, and subsequent events Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets (Unaudited) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :------------------ | | Total Assets | $3,968,103 | $6,202,409 | | Cash | $1,878,247 | $3,769,510 | | Total Liabilities | $2,627,985 | $2,030,401 | | Total Stockholders' Equity | $1,340,118 | $4,172,008 | | Accumulated Deficit | $(29,803,961) | $(26,022,129) | Condensed Consolidated Statements of Operations Net (Loss) Income and EPS (Three Months Ended June 30) | Metric | 2025 | 2024 | | :----------------------- | :----------- | :----------- | | Net (loss) income | $(2,252,965) | $313,123 | | Basic EPS | $(0.07) | $0.01 | | Diluted EPS | $(0.07) | $0.01 | Net (Loss) Income and EPS (Six Months Ended June 30) | Metric | 2025 | 2024 | | :----------------------- | :----------- | :----------- | | Net (loss) income | $(3,781,832) | $(320,977) | | Basic EPS | $(0.11) | $(0.01) | | Diluted EPS | $(0.11) | $(0.01) | - Research and Development Expenses (Six Months Ended June 30): Increased by $1,026,449 (514%) from $199,744 in 2024 to $1,226,193 in 2025[19][126] - General and Administrative Expenses (Six Months Ended June 30): Increased by $1,648,662 (178%) from $928,028 in 2024 to $2,576,690 in 2025[19][127] Condensed Consolidated Statement of Changes in Stockholders' Deficit Changes in Stockholders' Equity (Six Months Ended June 30, 2025) | Metric | Amount | | :-------------------------- | :----------- | | Total Stockholders' Equity (Dec 31, 2024) | $4,172,008 | | Stock-based compensation | $883,942 | | Shares issued for services rendered | $66,000 | | Net loss | $(3,781,832) | | Total Stockholders' Equity (June 30, 2025) | $1,340,118 | Condensed Consolidated Statements of Cash Flows Cash Flow Summary (Six Months Ended June 30) | Metric | 2025 | 2024 | | :-------------------------------- | :----------- | :----------- | | Net cash flows from operating activities | $(1,891,263) | $(172,627) | | Net cash flows from investing activities | $0 | $0 | | Net cash flows from financing activities | $0 | $159,000 | | Net Change in Cash | $(1,891,263) | $(13,627) | | Cash at End of Period | $1,878,247 | $14,851 | Notes to the Condensed Consolidated Financial Statements Note 1 – Organization and Description of Business - Jupiter Neurosciences, Inc. is a clinical stage research and development pharmaceutical company focused on neuro-inflammation, particularly Parkinson's Disease, using its patented JOTROL resveratrol platform[24] - The company completed its IPO in December 2024, selling 2,750,000 shares at $4.00 per share for net proceeds of approximately $9,725,213[27] - The company regained compliance with Nasdaq's minimum bid price requirement on July 9, 2025, after previously receiving a non-compliance notification on March 21, 2025[28][29][30] Note 2 – Significant Accounting Policies - Management has substantial doubt about the company's ability to continue as a going concern due to a cumulative net loss of $29,803,961 and negative operating cash flows of $1,891,263 for the six months ended June 30, 2025[32][33] - The company views its operations in two segments: (i) premium nutritional supplements and (ii) pharmaceutical operations, though financial performance is currently evaluated on a consolidated basis[34] - Research and development costs are expensed as incurred, with recognition based on the progress to completion of specific tasks for activities like clinical trials[39] Note 3 – Related Party Transactions - A note payable to the CEO for working capital totaled $146,432 as of June 30, 2025, and December 31, 2024, accruing interest at 3% per annum[56] - In March 2024, a former executive relinquished $100,000 of accrued compensation in exchange for stock options and RSUs with a grant date fair value of $60,000, resulting in a $40,000 gain[59] Note 4 – Accounts Payable and Accrued Expenses Accounts Payable and Accrued Expenses | Category | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Accounts payable | $465,093 | $278,676 | | Professional fees | $70,890 | $40,271 | | License fee | $37,500 | $75,000 | | Credit cards | $481 | $2,536 | | Total | $573,964 | $396,483 | - Accrued compensation increased from $1,415,093 (Dec 31, 2024) to $1,857,919 (June 30, 2025), with payments contingent on available cash[60] Note 5 – Convertible Debt and Derivative Liability - All convertible notes (Notes I, II, and III) were fully repaid or converted in December 2024, eliminating related interest expenses and derivative liabilities by June 30, 2025[63][64][65][71] - A modification to Convertible Note II in April 2024 resulted in a gain on modification of $951,868 and an increase to derivative liability of $407,494[64][70] - The company recorded a loss of $63,142 relating to the change in fair value of derivative liability for the six months ended June 30, 2024, with no such loss in 2025[71] Note 6 – Stockholders' Equity - As of June 30, 2025, there were 34,833,083 shares of common stock issued and outstanding[74] - During the six months ended June 30, 2025, the company issued 103,186 shares of common stock with an aggregate fair value of $66,000 for services rendered[75] - The company granted 250,000 stock options to a consultant in June 2025 with an exercise price of $0.97 per share and a grant date fair value of $191,168[82] - All 1,626,037 issued and outstanding restricted stock units vested in June 2025, making the shares freely tradeable[89] Note 7 – Commitments and Contingencies Operating Lease Summary (June 30, 2025) | Metric | Amount | | :-------------------------------- | :----------- | | Operating lease right-of-use asset, net | $46,649 | | Total lease liabilities | $46,428 | - The company entered into a Strategic Services Agreement with Dominant Treasure Health Company Limited, involving a $2,300,000 prepaid contract expensed over three years, to accelerate product development and distribution in the Southeast Asian market[97] - Licensing agreements with Aquanova AG and Murdoch Children's Research Institute outline development, manufacturing, and commercialization rights for JOTROL, with associated annual license fees, approval fees, and sales royalties[100][101][102] Note 8 – Segment Report - The company is transitioning its operations into two reportable segments: (i) premium nutritional supplements and (ii) pharmaceutical operations[104] - As of June 30, 2025, the Chief Operating Decision Maker (CODM) continues to evaluate financial performance on a consolidated basis, and discrete segment-level financial information is not yet regularly reviewed[104][105] Note 9 – Subsequent Events - On July 2, 2025, the Compensation Committee approved the grant of 357,448 stock options to executives and cash bonuses totaling $449,000, contingent on maintaining $3,500,000 cash on hand[107] - Warrants for 1,249,999 shares were cashless exercised on July 16, 2025, resulting in 913,299 shares issued, with an agreement to issue an additional 86,700 shares by August 31, 2025[108] - Warrants for 109,376 shares were cashless exercised on August 12, 2025, resulting in 30,547 shares issued, with an agreement for an additional 56,954 shares by August 31, 2025[109] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial performance and condition, highlighting its clinical-stage pharmaceutical focus on CNS disorders and rare diseases with JOTROL, alongside its Nugevia supplement line. It reiterates the going concern doubt due to significant losses and negative cash flows, details the substantial increases in R&D and G&A expenses, and outlines financing plans Business Overview - Jupiter Neurosciences is a clinical stage research and development pharmaceutical company focused on CNS disorders and rare diseases with JOTROL, and expanding into the consumer longevity market with its Nugevia product line[114] - The company plans a Phase IIa clinical trial for Parkinson's Disease in Q4 2025, with results anticipated 12 months later, following promising preclinical studies[115] - JOTROL's Phase 1 study demonstrated resveratrol levels exceeding 800 ng/ml (above the therapeutic threshold of 200 ng/ml) without severe adverse events, addressing bioavailability challenges[115] - The company is actively pursuing market expansion in Southeast Asia through service agreements with Hong Kong firms to leverage local expertise and facilitate market entry and potential out-licensing deals[117][143] Financial Position - The company has generated no revenues from product sales since inception[120] - Incurred a net loss of $3,781,832 and negative cash flows from operations totaling $1,891,263 for the six months ended June 30, 2025[120] - Accumulated a cumulative net loss since inception totaling $29,803,961[120] - Management concludes these conditions raise substantial doubt about the company's ability to continue as a going concern for at least twelve months[121] Results of Operations (Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024) - Research and development expenses increased by $658,371 (651%) to $759,448, driven by Southeast Asian market development and Parkinson's disease clinical trial supplies[122] - General and administrative expenses increased by $1,049,432 (230%) to $1,505,432, due to full employee salaries, bonus accruals, increased legal/professional fees post-Nasdaq listing, and higher insurance/consulting costs[123] - Interest expense decreased by $55,155 (98%) to $1,135, as prior interest-bearing obligations were repaid or converted[124] Results of Operations (Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024) - Research and development expenses increased by $1,026,449 (514%) to $1,226,193, primarily due to costs for product development and distribution in Southeast Asia and procurement of clinical trial supplies for the Parkinson's disease program[126] - General and administrative expenses increased by $1,648,662 (178%) to $2,576,690, attributed to full employee salaries, bonus accruals, increased legal and professional fees post-public listing, and higher insurance and consulting fees[127] - Interest expense decreased by $119,682 (98%) to $2,364, as all prior interest-bearing obligations were repaid or converted in prior periods[128] Liquidity and Capital Resources; Plan of Operations - The company has historically financed operations through common stock sales, convertible debt, and IPO proceeds[132] - Management has substantial doubt about the company's ability to continue as a going concern due to recurring losses, negative operating cash flows, and a cumulative deficit of $29,803,961[133] - Future operations depend on raising additional funds through equity, debt, licensing, or strategic collaborations, with no assurance of success on commercially reasonable terms[134] Cash Flows for the Six Months Ended June 30, 2025 and 2024 Cash Flow Summary (Six Months Ended June 30) | Metric | 2025 | 2024 | | :-------------------------------- | :----------- | :----------- | | Net cash flows from operating activities | $(1,891,263) | $(172,627) | | Net cash flows from financing activities | $0 | $159,000 | - The increase in net cash used in operating activities was primarily due to a significant increase in net loss ($3,781,832 in 2025 vs $320,977 in 2024) and higher non-cash adjustments like stock-based compensation and amortization of prepaid contracts[139] - The decrease in net cash provided by financing activities was due to the absence of financing transactions in 2025, compared to $109,000 from related-party notes and $50,000 from common stock sales in 2024[140] Off-balance sheet financing arrangements - The company has no off-balance sheet arrangements, obligations, assets, or liabilities that would materially affect its financial condition, results of operations, or liquidity[141][142] Business Development Activities - The company is actively pursuing business development in the Asian region to accelerate JOTROL's drug development and commercialization, driven by strategic interest and recent patent approvals[143] - Service agreements with Asian firms involve equity investments and issuance of common stock for three years of services, aiming for cost-effective market penetration and potential out-licensing deals in Southeast Asia[143][144] Contractual Obligations - The company has a $146,432 note payable to its CEO, due on demand with 3% annual interest, as of June 30, 2025[145] - An amount of $85,466 was due to a company wholly owned by the CFO as of June 30, 2025, included in accrued compensation[146] Critical Accounting Policies - The company's critical accounting policies are more fully described in Note 2 to its consolidated financial statements and its 2024 Annual Report on Form 10-K[147] Item 3. Quantitative and Qualitative Disclosures About Market Risk This item is marked as "Not applicable," indicating that the company does not have material market risk disclosures to report for the period - The company has no material quantitative and qualitative disclosures about market risk to report[148] Item 4. Controls and Procedures As of June 30, 2025, management, with the participation of the CEO and CFO, concluded that the company's disclosure controls and procedures were effective. No material changes in internal control over financial reporting occurred during the quarter Evaluation of Disclosure Controls and Procedures - As of June 30, 2025, the company's disclosure controls and procedures were evaluated by management, including the CEO and CFO, and concluded to be effective[149] - Disclosure controls and procedures provide only reasonable, not absolute, assurance that objectives are met, acknowledging inherent limitations and resource constraints[150] Changes in Internal Control over Financial Reporting - There were no changes in internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[151] PART II – OTHER INFORMATION Item 1. Legal Proceedings The company may become involved in legal proceedings in the ordinary course of business, but it does not anticipate that their resolution would have a material adverse effect on its business, financial condition, or results of operations - Legal proceedings arising in the ordinary course of business are not anticipated to have a material adverse effect on the company's financial condition or results of operations[153] Item 1A. Risk Factors Investors are advised to carefully consider the risk factors detailed in the company's Annual Report on Form 10-K for fiscal year ended December 31, 2024, as these, along with other unknown factors, could materially impact the business - Investors should carefully consider the risk factors discussed in the Annual Report on Form 10-K for fiscal year ended December 31, 2024[154] - Other unknown or unpredictable factors could also materially adversely affect the business, financial condition, or future results[154] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company issued 103,816 shares of common stock for services rendered to a marketing firm and an investor relations firm on April 23, 2025, with an aggregate fair value of $66,000. Additionally, 250,000 options were granted to a consultant on June 10, 2025. All these transactions were exempt from registration under Section 4(a)(2) of the Securities Act - On April 23, 2025, the company issued 103,816 shares of common stock (25,000 to a marketing firm and 78,816 to an investor relations firm) with an aggregate grant date fair value of $66,000 for services rendered[155] - On June 10, 2025, the company granted 250,000 options to a consultant with an exercise price of $0.67 per share, vesting 25% immediately and the remainder monthly[156] - These transactions were exempt from registration in reliance on Section 4(a)(2) of the Securities Act of 1933[157] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities for the period - No defaults upon senior securities were reported[158] Item 4. Mine Safety Disclosures This item is marked as "Not applicable," indicating no mine safety disclosures are relevant to the company - The company has no mine safety disclosures to report[159] Item 5. Other Information During the three months ended June 30, 2025, no director or officer of the company adopted, modified, or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" - No director or officer adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[160] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications from the Principal Executive Officer and Principal Financial Officer, and various Inline XBRL documents - Exhibits include certifications of Principal Executive Officer and Principal Financial Officer (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[161][162][163] Signatures The report is duly signed on behalf of Jupiter Neurosciences, Inc. by Christer Rosén, Chief Executive Officer, and Saleem Elmasri, Chief Financial Officer, on August 18, 2025 - The report was signed by Christer Rosén, Chief Executive Officer, and Saleem Elmasri, Chief Financial Officer, on August 18, 2025[166]