Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

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.