Item 7. Management’s Discussion and Analysis
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Special Note Regarding Forward-Looking Statements
All statements other than statements
of historical fact included in this Annual Report on Form 10-K, 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 Annual Report
on Form 10-K, 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 Annual Report on Form 10-K. 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. is a
clinical stage research and development pharmaceutical company located in Jupiter, Florida. The Company is advancing a therapeutic
pipeline targeting 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
potential for improved bioavailability compared to standard resveratrol. The Company’s therapeutic development 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,
healthy-looking skin, and longevity.
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 initiate a Phase IIa clinical trial for Parkinson’s Disease, which
received final IND approval by the FDA in November of 2025 and is expected to start in the second quarter of 2026, with results anticipated
12 months later. The Company also aims to investigate other CNS indications, such as MCI and
Alzheimer’s disease, following the Parkinson’s study.
The Company
believes, based on pre-clinical and clinical studies, that high doses of resveratrol are necessary for potential therapeutic effects.
Currently available resveratrol products cannot reach these levels without causing severe gastrointestinal side effects. Human studies
evaluating resveratrol in Alzheimer’s patients (Turner et al 2015) and Friedreich’s Ataxia patients (Yu et al 2015) indicate
the concentration of resveratrol at its peak (CMax) measured in blood plasma should be 300 ng/ml or higher for a potential therapeutic
effect. A Phase 1 study with 500mg of resveratrol as a maximum dose in the JOTROL™ formulation showed levels of resveratrol exceeding
800 ng/ml without generating any severe adverse events (AAPS Open 2022). Resveratrol was shown in the Turner Alzheimer’s study to
cross the blood-brain barrier, possibly indicating a potential for positive effects on oxidative stress and inflammation. Subsequent analysis
published in Molecular Science 2025 (Mousa et al) further indicates that resveratrol may have an impact on neurodegeneration and neuroinflammation
in Alzheimer’s patients.
Over the past two years, JOTROL™
has garnered significant interest from Asian organizations. This interest is partly due to resveratrol’s use in Asian herbal medicines,
recent patent approvals in Hong Kong and China, and China’s list of rare disease indications where JOTROL™ could be applicable.
Additionally, recent publications in the Journal of Alzheimer’s Disease and AAPS Open, along with the projected growth of the Traditional
Chinese Medicine market, have contributed to this interest.
The Company has entered service agreements
with firms in Hong Kong to accelerate product development in Southeast Asia. These agreements aim to leverage local expertise and networks
to facilitate market entry and potential out-licensing deals. The Company entered into an agreement with Dominant Treasure Health to expand
its business development in China, Malaysia, and Singapore, aiming to penetrate the large and challenging Asian market.
During 2025, the Company launched Nugevia,
a premium line of longevity and performance supplements to support longevity, mental clarity and skin vitality. The Nugevia brand
targets the growing consumer demand for science-backed wellness solutions, leveraging Jupiter’s proprietary JOTROL™ technology—a
resveratrol-based platform with an improvement in bioavailability profile of resveratrol.
Nugevia’s initial product line features
three core formulations, each targeting a major aspect of wellness and longevity:
Product Name
Focus Area
Target Consumer Benefit
GLO
Skin beauty
Support skin beauty and healthy appearance
MND
Cognitive performance
Supports mental clarity, cognitive
resilience
PWR
Mitochondrial and physical health
Maintains energy, endurance, muscle recovery
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Nugevia’s formulations are
built on Jupiter’s patented JOTROL™ micellar delivery platform, which has shown potential for significantly enhanced
bioavailability and serves as the foundation for the company’s clinical-stage CNS therapies. The debut products—GLO,
MND, and PWR—are formulated to support wellness and longevity through synergistic ingredient combinations, all optimized for
absorption via the JOTROL™ system.
On October 24, 2025, the Company
entered into a Standby Equity Purchase Agreement (the “SEPA”) and related Registration Rights Agreement with YA II PN,
Ltd. (“Yorkville”), providing the Company the right, but not the obligation, to sell up to $20.0 million of common
stock from time to time, subject to customary conditions, including an effective resale registration statement. In connection with
the SEPA, Yorkville agreed to provide up to $6.0 million of pre-paid advances via convertible promissory notes. On October 27,
2025, the Company received $3,720,000 and issued a $4.0 million note (7% original issue discount, “OID”). A
second $1,860,000 tranche was received in December 2025, upon registration effectiveness and receipt of stockholder approval,
against a $2.0 million note (7% OID). The notes bear interest at 8% (increasing to 18% upon default), mature
on October 24, 2026, and are convertible at $1.50 per share, subject to proportional anti-dilution and price-protection
adjustments (not below a contractual floor). Beginning January 7, 2026, and monthly thereafter, the Company must repay
one-tenth (1/10) of the then-outstanding principal plus accrued interest (a 5% premium applies to cash
repayments). Installments may be satisfied via SEPA advances without the premium, and SEPA proceeds must be applied first to
repay the notes until they are repaid in full. On February 20, 2026, the Company and Yorkville entered into an Omnibus Amendment
(the “Amendment”). Among other changes, the Amendment revises the terms of the convertible promissory notes to defer the
commencement of monthly installment payments to April 1, 2026, effectively providing an extension of approximately three months.
In December 2024, we received gross proceeds
of $11 million in a registered public offering (“Public Offering”) of 2,750,000 shares of our common stock at a price of $4.00 per share for gross proceeds of $11 million before deducting underwriting discounts
and other related expenses. In connection with the Public Offering, the Company’s common stock was registered under Section 12(b)
of the Exchange Act and began trading on The Nasdaq Capital Market under the symbol “JUNS.”
Financial Position
For the fiscal years ended December 31,
2025 and 2024, we generated net revenues of $21,796 and $0, respectively from product sales and reported net losses of $8,644,897 and
$2,439,625, respectively, and negative cash flow from operating activities of $5,413,736 and $3,911,004, respectively. As noted in our
financial statements, as of December 31, 2025 and 2024, we had an accumulated deficit of $34,667,026 and $26,022,129, respectively. There
is substantial doubt regarding our ability to continue as a going concern as a result of our historical recurring losses and negative
cash flows from operations as well as our dependence on private equity and financings. See “Risk Factors—We have a history
of operating losses, our management has concluded that factors raise substantial doubt about our ability to continue as a going concern
and our auditor has included an explanatory paragraph relating to our ability to continue as a going concern in its audit report for the
fiscal years ended December 31, 2025 and 2024.”
Results of Operations
Year Ended December 31, 2025 Compared to Year Ended
December 31, 2024
Revenue
There was net revenue of $21,796
during the year ended December 31, 2025. Net revenue consisted of product sales from the Company’s Nugevia consumer product
line, which launched in the second half 2025. Gross sales were $24,874, offset by discounts of $1,777 and returns of
$1,301. Cost of goods sold through commercial products was $4,231, resulting in gross profit of $17,565. There was no revenue from
product sales during the years ended December 31, 2024 as Nugevia was launched in 2025.
Research and Development Expenses
Research and development (“R&D”)
expenses were $2,086,574 for the year ended December 31, 2025, compared to $492,660 for the year ended December 31, 2024. The increase
is driven primarily by $810,019 in consulting and professional fees, $438,425 in payroll and stock-based compensation, and $345,470 in
clinical trial supplies and miscellaneous costs as the Company prepared for initiation of its Phase IIa Parkinson’s disease trial.
R&D expenses related to the development
of JOTROL™, which is the platform product used in each indication defined in our product pipeline.
General and Administrative Expenses
General and administrative expenses were
$6,839,712 for the year ended December 31, 2025 compared to $2,598,622
for the year ended December 31, 2024, an increase of $4,241,090 or approximately 163%. The increase is primarily related to the increase
in employee salaries of approximately $1,730,902, consulting and professional services of approximately $908,363, investor relations of
approximately $472,923, and other general and administrative costs of $1,108,902.
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Interest Expense
Interest expenses were $66,020 for the
year ended December 31, 2025, compared to $248,366 for the year ended December 31, 2024, decrease of $182,346, or approximately 73%. During
2024, interest expense included $147,705 related to the combined convertible Notes I, II, and III, and $15,013 related to the amortization
of debt discounts. In 2025, interest expense is primarily attributable to accrued interest on the SEPA and interest expense on our corporate
credit card and the note payable to our Chief Executive Officer, Christer Rosén, which was repaid during 2025.
Gain on Change in Fair Value of Convertible Notes
The 2025 convertible promissory notes issued in connection with the SEPA were marked to market, and the change in fair value of the convertible
notes was recorded as a gain of $281,932 in the year ended December 31, 2025.
Loss on Change in Fair Value of Derivative Liability
As of December 31, 2024 and at each quarter
end during the year, 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 $53,257. These notes were fully paid off in the year
ended December 31, 2024.
Gain on Extinguishment of Debt
During the year ended 2024, the Senior
Secured Convertible Note was amended several times with materially different economics and subsequently paid off, thus requiring for the
recording of debt as an extinguishment and re-recording the debt with the amended terms. This resulted in a gain on extinguishment
of debt in the year ended December 31, 2024 of $857,723.
Liquidity and Capital Resources;
Plan of Operations
As of December 31, 2025, we had cash and
cash equivalents of $3,789,342. Our cash equivalents are held in high yield savings account. Since inception, we have incurred net losses
and negative cash flows from operations. On December 31, 2025, we had an accumulated deficit of $34,667,026.
Historically, we have financed our
operations primarily by selling common stock and convertible debt. On October 24, 2025, the Company entered into a Standby Equity
Purchase Agreement (“SEPA”) and related Registration Rights Agreement with YA II PN, Ltd. (“Yorkville”),
providing the Company the right, but not the obligation, to sell up to $20.0 million of common stock from time to time, subject
to customary conditions, including an effective resale registration statement. In connection with the SEPA, Yorkville agreed to
provide $6.0 million of pre-paid advances via convertible promissory notes. During the year ended December 31, 2025, the
company received aggregate proceeds of $5,100,000, which is net of $420,000 of issuance discounts and $480,000 of financing costs
associated with the transaction. During the year ended December 31, 2025, the Company received aggregate proceeds of $22,251 from
sales of common stock under the SEPA which were used to pay interest on the convertible promissory notes.
On December 2, 2024, the Company priced
its initial public offering of 2,750,000 shares of common stock at a price of $4.00 per share. The offering closed on December 4, 2024,
and the Company started trading on the Nasdaq Capital Market under the ticker symbol “JUNS”. The Company sold 2,750,000 shares
of its Common Stock to the underwriters and yielded proceeds of $9,725,213, net of underwriters and other fees of $1,274,787.
For the fiscal years ended December 31,
2025 and 2024, we generated net revenues of $21,796 and $0, respectively from product sales and reported net losses of $8,644,897 and
$2,439,625, respectively, and negative cash flow from operating activities of $5,413,736 and $3,911,004, respectively. As noted in our
financial statements, as of December 31, 2025 and 2024, we had an accumulated deficit of $34,667,026 and $26,022,129, respectively. There
is substantial doubt regarding our ability to continue as a going concern as a result of our historical recurring losses and negative
cash flows from operations as well as our dependence on private equity and financings. See “Risk Factors—We have a history
of operating losses, our management has concluded that factors raise substantial doubt about our ability to continue as a going concern
and our auditor has included an explanatory paragraph relating to our ability to continue as a going concern in its audit report for the
fiscal years ended December 31, 2025 and 2024.”
Our failure to raise capital as and when
needed could have a negative impact on our financial condition and our ability to pursue our business strategies. We anticipate that we
will need to raise substantial additional capital, the requirements of which will depend on many factors, including:
●
the scope, rate of progress and costs of our drug delivery, preclinical development activities, laboratory testing and clinical trials for our drug candidate;
●
the number and scope of clinical programs we decide to pursue;
●
the scope and costs of manufacturing development and commercial manufacturing activities;
●
the extent to which we acquire or in-license other drug 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.
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If we raise additional funds by issuing
equity securities, our stockholders may experience dilution. Any future debt financing into which we enter may impose upon us additional
covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase
our common stock, make certain investments and engage in certain merger, consolidation or asset sale transactions. Any debt financing
or additional equity that we raise may contain terms that are not favorable to us or our stockholders. 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. We may
also be required to sell or license to other parties rights to develop or commercialize our drug candidate that we would prefer to retain.
See “Risk Factors” for additional
risks associated with our capital requirements.
Cash Flows for the Years Ended December 31, 2025 and
2024
The following table shows a summary of
our cash flows for the years ended December 31, 2025 and 2024.
Fiscal Years Ended
December 31,
2025
2024
Net cash used in operating activities
$ (5,413,736 )
$ (3,911,004 )
Net cash provided by investing activities
-
-
Net cash provided by financing activities
$ 5,433,568
$ 7,652,036
Net increase (decrease) in cash
$ 19,832
$ 3,741,032
Cash - beginning of the period
$ 3,769,510
$ 28,478
Cash - end of the period
$ 3,789,342
$ 3,769,510
Net Cash Used in Operating Activities:
Net cash used in operating activities
was $5,413,736 for the year ended December 31, 2025, compared to $3,911,004 for the year ended December 31, 2024, representing an increase
in cash used of $1,502,732, primarily driven by a higher net loss of $8,644,897 in 2025 compared to $2,439,625 in 2024. This increase was partially
offset by higher non-cash addbacks, including an increase of $577,608 in stock-based compensation (from $1,840,908 to $2,418,516), an
increase of $712,054 in amortization of prepaid contracts (from $54,612 to $766,666), and $222,521 of stock-based payments related to
financing activities associated with the SEPA and the convertible promissory notes, partially offset by a $281,932 gain on the change
in fair value of convertible notes in 2025 with no comparable activity in 2024. These impacts were further offset by the absence of prior
year non-cash items, including an $857,723 gain on extinguishment of debt, a $53,257 loss on change in fair value of derivative liability,
and $43,288 of amortization of debt discounts, along with working capital changes.
Net Cash Used in Investing Activities:
No net cash was provided by or used in
investing activities during the years ended December 31, 2025 and 2024.
Net Cash Provided by Financing Activities:
Net cash provided by financing
activities was $5,433,568 for the year ended December 31, 2025, compared to $7,652,036 for the year ended December 31, 2024, representing
a decrease of $2,218,468, primarily due to the absence of $9,725,213 in IPO proceeds, net of costs, in 2025 compared to 2024. This decrease
was partially offset by $5,580,000 in proceeds from the issuance of convertible promissory notes, net of costs, issued in connection with
the SEPA in 2025, a $2,102,797 reduction in repayments of notes payable, and lower related party note repayments of $37,552, partially
offset by a $150,000 decrease in proceeds from the sale of common stock and a $138,500 decrease in related party note proceeds.
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.
Asian Business Development Activities
The Company initiated business development
activities in the Asian region beginning in October of 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, Christer Rosén, presented in person,
our company’s status and pipeline at the BIOHK 2023 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. These agreements are further described in the section “Other Material Agreements”.
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 Southeast 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 the company issued equity in 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.
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Contractual obligations
We do not have any long-term capital lease
obligations, operating lease obligations or long-term liabilities, except as follows:
On April 30, 2021, the Company executed
a lease agreement for office space in Jupiter, Florida. The term of the lease is sixty-one months commencing May 1, 2021 rent free until
June 1, 2021. Fixed annual rent amounts are as follows:
Lease Period
Annual Fixed Rent
6/1/2021-5/31/2022
$ 45,396
6/1/2022-5/31/2023
$ 46,758
6/1/2023-5/31/2024
$ 48,158
6/1/2024-5/31/2025
$ 49,608
6/ l/2025-5/31/2026
$ 51,096
Standby Equity Purchase Agreement
and Convertible Promissory Notes
On October
24, 2025, we entered into the SEPA with Yorkville. Pursuant to the SEPA, we have the right, but not the obligation, to issue and sell
to Yorkville, from time to time, up to $20.0 million of shares of our Common Stock (the “SEPA Shares”), subject to certain
limitations and conditions set forth in the SEPA.
In addition, pursuant to the SEPA, we
may request, and Yorkville may, in its sole discretion, elect to provide, one or more prepaid advances (each, a “Prepaid Advance”
and collectively, the “Prepaid Advances”), pursuant to which Yorkville would advance funds to us and we would issue to Yorkville
a promissory note evidencing such Prepaid Advance. We requested, and Yorkville funded, two Prepaid Advances in an aggregate amount of
$6.0 million as described below. Each Prepaid Advance is expected to be repaid through the issuance of SEPA Shares at a price per share
determined in accordance with the terms of the SEPA, which is generally based on a discount to the prevailing market price of our common
stock during a specified pricing period, unless earlier repaid in cash at our option, subject to the terms of the SEPA. Accordingly, the
number of SEPA Shares issuable upon settlement of any Prepaid Advance will depend on the market price of our Common Stock at the time
of such settlement and cannot be determined at the time such Prepaid Advance is made or thereafter until settlement.
As consideration for Yorkville’s
commitment to purchase common stock at the Company’s direction pursuant the SEPA, the Company (i) paid to Yorkville a cash “structuring
fee” in the amount of $25,000 and (ii) upon execution of the SEPA, issued to Yorkville 131,909 Commitment Shares, which have a total
aggregate dollar value equal to $200,000, or 1.0% of Yorkville’s $20.0 million aggregate purchase commitment under the SEPA (each
Commitment Share valued at approximately $1.5162 per share, representing the VWAP on October 23, 2025, the trading day immediately prior
to the date of execution of the SEPA, rounded to the nearest whole share).
In connection with the SEPA, and subject
to the conditions set forth therein, Yorkville provided us with a Prepaid Advance of $6.0 million, funded in two tranches, in exchange
for our issuance of convertible promissory notes (each, a “Convertible Note” and collectively, the “2025 Convertible
Notes” or “2025 Notes”). On October 27, 2025, we received the first tranche of the Prepaid Advance in the amount of
$3,720,000 and issued to Yorkville a Convertible Note in the principal amount of $4.0 million (the “First Convertible Note”),
which was issued with an original issue discount of 7.0%. The First Convertible Note is initially convertible into shares of our Common
Stock at a fixed conversion price of $1.50 per share.
Subsequently, upon satisfaction of the
applicable conditions, on December 23, 2025 we received the second tranche of the Prepaid Advance in the amount of $1,860,000 and issued
to Yorkville a Convertible Note in the principal amount of $2.0 million (the “Second Convertible Note”), which was issued
with an original issue discount of 7.0% and is initially convertible into shares of our common stock at a fixed conversion price of $1.50
per share.
Interest accrues on the outstanding balance
of each Convertible Note at a rate of 8% per annum, subject to an increase to 18% upon the occurrence of certain events of default, and
each Convertible Note matures on October 24, 2026.
We and Yorkville also entered into a registration
rights agreement (the “Registration Rights Agreement”), pursuant to which we agreed to file with the U.S. Securities and Exchange
Commission (the “SEC”) a registration statement registering the resale by Yorkville of the SEPA Shares, including SEPA Shares
issuable upon settlement of the Prepaid Advances. On November 26, 2025, we filed a registration statement on Form S-1 (File No. 333-291832)
with the SEC (the “Registration Statement”) for the resale by Yorkville of 10,000,000 SEPA Shares, which was declared effective
by the SEC on December 11, 2025.
As of the date of this Annual Report,
we have issued and sold approximately 1.1 million SEPA Shares to Yorkville pursuant to the SEPA, including SEPA Shares issued in connection
with the settlement of Prepaid Advances and upon conversion of the Convertible Notes, for aggregate net proceeds to us of approximately
$625,748. We may continue to issue SEPA Shares to Yorkville pursuant to the SEPA, including in connection with any outstanding
or future Prepaid Advances or conversions of Convertible Notes, subject to the terms and conditions of the SEPA.
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Senior Secured Note
On April
11, 2022, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an accredited
investor for the sale of the Company’s convertible notes. Pursuant to the terms of the Purchase Agreement, on April 11, 2022,
the Company received aggregate gross proceeds of $1,000,000 and issued (i) a 10% Original Issue Discount Senior Secured Convertible
Note in the principal amount of $1,111,111.11 (the “Note” or “Note II”) and (ii) 514,403 shares of common stock, par value $0.0001
per share (the “Shares”), of the Company.
The Note .
The aggregate principal amount of the Note is $1,111,111, and the Company received gross proceeds of $1,000,000 after giving effect to
the original issue discount of 10%. The Note bore interest at a rate of 10% per year, payable monthly in arrears, and mature 12 months
from issuance.
On April 29, 2024, the Company, the Holder
of the Note II and the CEO entered into an amendment in which the CEO agreed to exchange 685,867 shares issued to the Holder in exchange
for his related party notes that accrued interest at 3% that are due from the Company in an aggregate principal amount of $266,667 and
the Holder agreed to forfeit all rights to all additional future shares from the Company that would of become due upon a qualified offering
as well as the conversion option. Therefore, the principal amount of the note was increased to $1,377,778 and the exchange debt follows
the requirements of Note II. In addition, the Holder agreed to extend the note maturity date to August 11, 2024. The note shall be designated
as a 10% original issue discount secured note (“Senior Secured Note”) moving forward. The Senior Secured Note and interest
will become due and payable upon the earliest of the maturity date or upon the occurrence of a qualified event. The note is recorded on
the balance sheet under note payable. As a result of the conversion feature of the note being removed the Company recorded a one-time
gain on the modification of the debt of $951,868 and a new derivative liability of $407,494 was recorded related to the Senior Secured
Note.
On August 8, 2024, the Company, and the
Holder of the Senior Secured Note entered into an amendment to extend the maturity date of the Senior Secured Note to October 11, 2024.
On November 15, 2024, the Company, and
the Holder of the Senior Secured Note entered into an amendment to extend the maturity date of the Senior Secured Note to December 10,
2024. During December 2024, the Company fully repaid the Senior Secured Note pursuant to the terms in the amount of $2,102,797. On April
29, 2024, the Company, the Holder of the Note II and the CEO entered into an amendment in which the CEO agrees to exchange 685,867 shares
issued to the Holder in exchange for his related party notes that accrued interest at 3% that are due from the Company in an aggregate
principal amount of $266,667 and the Holder agreed to forfeit all rights to all additional future shares from the Company that would of
become due upon a qualified offering as well as the conversion option. Therefore, the principal amount of the note was increased to $1,377,778
and the exchange debt follows the requirements of Note II. In addition, the Holder agreed to extend the note maturity date to August 11,
2024. The note shall be designated as a 10% original issue discount secured note (“Senior Secured Note”) moving forward. The
Senior Secured Note and interest will become due and payable upon the earliest of the maturity date or upon the occurrence of a qualified
event. The note is recorded on the balance sheet under note payable. As a result of the conversion feature of the note being removed the
Company recorded a one-time gain on the modification of the debt of $951,868 and a new derivative liability of $407,494 was recorded related
to the Senior Secured Note.
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During December 2024, the Company fully
repaid the Senior Secured Note pursuant to the terms in the amount of $2,102,797.
The Shares . In
connection with the issuance of Note II, the Company issued 514,403 shares of common stock to the holder with a fair market value of
$2.16 per share (aggregate value of $1,111,111) as additional consideration for the holder lending $1,000,000 to the Company. The
514,403 shares have a relatively fair value of $310,000.
The Purchase Agreement related to the
Note was amended to provide that upon closing, the purchaser will receive 133.33% coverage (i.e. the face amount of the Note, i.e., $1,111,111.11
divided by the lesser of (i) the price/share of the last issuance of solely common stock (including options) of the Company, i.e., $5.00/share
or (ii) the price per share of common stock (or if units are issued in the Qualified Offering, the price of units sold in the Qualified
Offering), in shares of common stock of the Company (or if units are issued in the Qualified Offering, units). The number of shares to
be received at closing shall be determined by using clause (i) above.
In light of the foregoing, the holder
shall receive an additional number of shares of common stock, such that it shall have received the number of shares of common stock of
the aggregate value of $1,111,111 divided by the lesser of (i) the price/share of the last issuance of solely common stock (including
options) of the Company, i.e., $5.00/share or (ii) the price per share of common stock (or if units are issued in the Qualified Offering,
the price of units sold in the Qualified Offering), in shares of common stock of the Company (or if units are issued in the Qualified
Offering, units) (“Share True Up”). The Share True Up was forfeited as a result of the April 29, 2024 agreement.
Ancillary
Agreements . In connection with the Company’s obligations under the Note, the Company entered into a security agreement and
intellectual property security agreement with the holder, pursuant to which the Company granted a security interest on all assets of the
Company, including all intellectual property of the Company, for the benefit of the holders, to secure the Company’s obligations
under the Note and the other transaction documents. In addition, the holder was granted piggyback registration rights for the shares of
common stock issued under the Purchase Agreement and shares of common stock issuable upon conversion of the Note (collectively, “Registrable
Securities”). At any time while there are any Registrable Securities of holder outstanding, if the Company proposes to register
any of its securities either for its own account or for the account of other security holders (other than a registration statement relating
solely to employee benefit plans on Form S-8 or a Commission Rule 145 transaction on Form S-4), the holder is entitled to include its
Registrable Securities in the registration. Notwithstanding, the Company and underwriters in an underwritten registration may exclude
some or all of the Registrable Securities from the underwritten registration if the underwriters believe that including the Registrable
Securities would adversely affect the underwritten offering.
At any time within
the 12 months closing, upon any issuance by the Company or any of its subsidiaries of debt or common stock or common stock equivalents
for cash consideration, indebtedness or a combination of units thereof, other than in an underwritten public offering (a “Subsequent
Financing”), the investor will have the right to participate up to its investment amount in the Note, but not more than 25% of the
Subsequent Financing, on the same terms, conditions and price provided for in the Subsequent Financing.
Until the Company has consummated a Qualified
Offering which results in a listing of the common stock onto a national securities exchange, if the Company engages in any future financing
transactions with a third-party investor, if the holder determines that the terms of the subsequent investment are preferable in any respect
to the terms of the securities of the Company issued to the Holder pursuant to the terms of the Purchase Agreement, the holder will have
the right to amend and restate such securities to include the preferable term or terms.
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Notes Payable, related party
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 December 31, 2024 was $146,432. The loan was due on demand and accrues interest at 3% per year. Accrued interest
relating to the loan was $1,064 as of December 31, 2024, and is included in accrued interest on the accompanying 2024 balance
sheets. The Company fully settled the debt in 2025 by repaying a total of $150,782, $146,432 in principal and $4,350 in accrued
interest. The Company repaid a total of $100,000 during the year ended December 31, 2024, $83,880 in principal and $16,120 in
accrued interest.
On April
29, 2024, the Company, the Holder of the Note II and the CEO entered into an amendment in which the CEO agreed to exchange 685,869
shares issued to the Holder in exchange for his related party notes that accrued interest at 3% that are due from the Company in an
aggregate principal amount of $266,667 and the Holder agreed to forfeit all rights to all additional future shares from the Company
that would have become due upon a qualified offering and the conversion feature of the note. In addition, the Holder agreed to
extend the note maturity date to August 11, 2024. The note shall be designated as a 10% original issue discount secured note
(“Senior Secured Note”) moving forward. The note and interest will become due and payable upon the earliest of the
maturity date or upon the occurrence of a qualified event.
Other Related Party Transactions
Accrued compensation includes partially
accrued salaries to executives since inception. Since inception, executive salaries have been paid in cash when the Company’s cash
flow has permitted such payment.
On March 15, 2024, a former executive
agreed to forgive $100,000 of accrued compensation in exchange for 49,605 options to purchase common stock and 7,500 restricted stock
units, The options to purchase common stock have a strike price of $1.33. The option had a grant date fair value of $50,000. The Company
recorded a gain on the forgiveness of accrued compensation in the amount of $40,000.
As of December 31, 2025 and 2024, $64,105
was due to a Company wholly owned by the Company’s Chief Financial Officer, who also is an option holder, respectively. The amount
is included in accrued compensation on the Company’s balance sheets.
Share Issuances
On June 3, 2024, the Company issued 1,162,500
shares of common stock to each of Optimize Wellness Limited, Regis Healthcare Group Limited, and Longevity Technology Group Limited (collectively,
“Asian Partners”) with a fair market value of $1.33 per share (3,487,500 shares in aggregate, with an aggregate fair market
value of $4,638,375), as pre-payment for 3 years of services.
On June 3, 2024, the Company sold 112,500
shares of common stock to the Asian Partners for $1.33 per share, with each Selling Stockholder purchasing 37,500 shares of common stock.
On December 2, 2024, the Company priced
its initial public offering of 2,750,000 shares of common stock at a price of $4.00 per share. The offering closed on December 4, 2024,
and the Company started trading on the Nasdaq Capital Market under the ticker symbol “JUNS”. The Company sold 2,750,000 shares
of its Common Stock to the underwriters and yielded proceeds of $9,725,213, net of underwriters and other fees of $1,274,787.
Upon the closing of the offering on December
4, 2024, the outstanding principle and all unpaid accrued interest, totaling $109,216, of the Notes I converted into an aggregate of 227,447
share of common stock of the Company at $2.80, which is 70% of the offering price of $4.00.
On April 23, 2025, the Company issued
103,186 shares of common stock, with an aggregate fair value of $66,000, as consideration for services rendered related to media and investor
relations activities, strategic communications support, enhancement to the Company’s market visibility and shareholder engagement.
The fair value of the shares issued was determined based on the market price of the Company’s common stock at the date of issuance
and is included general and administrative expenses in the accompanying 2024 condensed consolidated statement of operations.
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Effective June 22, 2025, the Company entered
into an amendment with a warrant holder for a warrant to purchase 109,376 shares of Common Stock. The amendment extended the
warrant’s exercise period through August 31, 2025, and clarified the exercise mechanism applicable to the warrant. The effects of
the warrant modification were de minimis.
On July 16, 2025 the Company entered into
an amendment with a warrant holder who holds 1,249,999 warrants that clarified the exercise mechanisms. Concurrently with the
amendment, the warrant holder exercised the warrants via a cashless exercise and received 913,299 shares of Common Stock. Pursuant
to the amendment, the Company agreed to issue the warrant holder 86,700 shares of Common Stock.
On August 12, 2025, the Company received
an exercise notice from a warrant holder who holds 109,376 warrants. The warrant was exercised via a cashless exercise, and
the warrant holder received 30,547 shares of Common Stock. Pursuant to the amended warrant agreement, the Company agreed to
issue the warrant holder 56,954 shares of Common Stock.
On October 24, 2025, As consideration
for Yorkville’s commitment to purchase common stock at the Company’s direction pursuant the SEPA, the Company issued to Yorkville
131,909 Commitment Shares, which have a total aggregate dollar value equal to $200,000, or 1.0% of Yorkville’s $20.0 million aggregate
purchase commitment under the SEPA (each Commitment Share valued at approximately $1.5162 per share, representing the VWAP on October
23, 2025, the trading day immediately prior to the date of execution of the SEPA, rounded to the nearest whole share).
Recent Developments
On October 24,
2025, we entered into the SEPA with Yorkville. Pursuant to the SEPA, we have the right, but not the obligation, to issue and sell to Yorkville,
from time to time, up to $20.0 million of shares of our Common Stock (the “SEPA Shares”), subject to certain limitations and
conditions set forth in the SEPA.
In addition, pursuant to the SEPA, we
may request, and Yorkville may, in its sole discretion, elect to provide, one or more prepaid advances (each, a “Prepaid Advance”
and collectively, the “Prepaid Advances”), pursuant to which Yorkville would advance funds to us and we would issue to Yorkville
a promissory note evidencing such Prepaid Advance. We requested, and Yorkville funded, two Prepaid Advances in an aggregate amount of
$6.0 million as described below. Each Prepaid Advance is expected to be repaid through the issuance of SEPA Shares at a price per share
determined in accordance with the terms of the SEPA, which is generally based on a discount to the prevailing market price of our common
stock during a specified pricing period, unless earlier repaid in cash at our option, subject to the terms of the SEPA. Accordingly, the
number of SEPA Shares issuable upon settlement of any Prepaid Advance will depend on the market price of our Common Stock at the time
of such settlement and cannot be determined at the time such Prepaid Advance is made or thereafter until settlement.
As consideration for Yorkville’s
commitment to purchase common stock at the Company’s direction pursuant the SEPA, the Company (i) paid to Yorkville a cash “structuring
fee” in the amount of $25,000 and (ii) upon execution of the SEPA, issued to Yorkville 131,909 Commitment Shares, which have a total
aggregate dollar value equal to $200,000, or 1.0% of Yorkville’s $20.0 million aggregate purchase commitment under the SEPA (each
Commitment Share valued at approximately $1.5162 per share, representing the VWAP on October 23, 2025, the trading day immediately prior
to the date of execution of the SEPA, rounded to the nearest whole share).
In connection with the SEPA, and subject
to the conditions set forth therein, Yorkville provided us with a Prepaid Advance of $6.0 million, funded in two tranches, in exchange
for our issuance of convertible promissory notes (each, a “Convertible Note” and collectively, the “2025 Convertible
Notes” or “2025 Notes”). On October 27, 2025, we received the first tranche of the Prepaid Advance in the amount of
$3,720,000 and issued to Yorkville a Convertible Note in the principal amount of $4.0 million (the “First Convertible Note”),
which was issued with an original issue discount of 7.0%. The First Convertible Note is initially convertible into shares of our Common
Stock at a fixed conversion price of $1.50 per share.
Subsequently, upon satisfaction of the
applicable conditions, on December 23, 2025 we received the second tranche of the Prepaid Advance in the amount of $1,860,000 and issued
to Yorkville a Convertible Note in the principal amount of $2.0 million (the “Second Convertible Note”), which was issued
with an original issue discount of 7.0% and is initially convertible into shares of our common stock at a fixed conversion price of $1.50
per share.
Interest accrues on the outstanding balance
of each Convertible Note at a rate of 8% per annum, subject to an increase to 18% upon the occurrence of certain events of default, and
each Convertible Note matures on October 24, 2026.
We and Yorkville also entered into a registration
rights agreement (the “Registration Rights Agreement”), pursuant to which we agreed to file with the U.S. Securities and Exchange
Commission (the “SEC”) a registration statement registering the resale by Yorkville of the SEPA Shares, including SEPA Shares
issuable upon settlement of the Prepaid Advances. On November 26, 2025, we filed a registration statement on Form S-1 (File No. 333-291832)
with the SEC (the “Registration Statement”) for the resale by Yorkville of 10,000,000 SEPA Shares, which was declared effective
by the SEC on December 11, 2025.
As of the date of this Annual Report,
we have issued and sold approximately 1.1 million SEPA Shares to Yorkville pursuant to the SEPA, including SEPA Shares issued in connection
with the settlement of Prepaid Advances and upon conversion of the Convertible Notes, for aggregate net proceeds to us of approximately
$625,748. We may continue to issue SEPA Shares to Yorkville pursuant to the SEPA, including in connection with any outstanding
or future Prepaid Advances or conversions of Convertible Notes, subject to the terms and conditions of the SEPA.
On December 2, 2024, the Company priced
its initial public offering of 2,750,000 shares of common stock at a price of $4.00 per share. The offering closed on December 4, 2024,
and the Company started trading on the Nasdaq Capital Market under the ticker symbol “JUNS”. The Company sold 2,750,000 shares
of its Common Stock to the underwriters and yielded proceeds of $9,725,213, net of underwriters and other fees of $1,274,787.
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Critical Accounting Policies
Basis of Presentation
The financial statements of the Company
have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).
Business Segments
The Company uses the “management approach” to
identify its reportable segments in accordance with ASC 280, Segment Reporting. The management approach requires companies to report segment
financial information consistent with the information regularly reviewed by the Chief Operating Decision Maker (“CODM”) for
purposes of making operating decisions and assessing performance.
The Company’s Chief Executive
Officer serves as the CODM. The CODM evaluates financial performance and allocates resources based on the operating results of the
Company’s reportable segments. Effective October 1, 2025, the Company operates through two reportable segments: (i) its premium nutritional supplements, and (ii) pharmaceutical operations
focused on drug candidates for CNS.
The CODM assesses segment performance primarily based on segment
net loss (income). Selling, general and administrative expenses are directly attributable to segments or allocated based on reasonable
and consistently applied methodologies. Corporate and other expenses that are not allocated to reportable segments consist primarily of
public company costs, certain executive compensation, certain stock-based compensation, interest income (expense), other income (expense),
and income taxes.
The identification of two reportable segments reflects the
manner in which the CODM reviews financial information and allocates resources. Prior-period information has been recast to conform to
the current presentation.
Use of Estimates
Preparing financial statements in
conformity with U.S. GAAP requires management to make estimates and assumptions that materially 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.
Changes in estimates are recorded in the
period in which they become known. 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.
Significant estimates during the
years ended December 31, 2025 and 2024, respectively, include valuation of stock-based compensation, uncertain tax positions,
valuation of debt instruments, and the valuation allowance on deferred tax assets.
Research and Development
Research and
development costs are expensed as incurred. Costs for certain development activities, such as clinical trials, are recognized based on
an evaluation of the progress to completion of specific tasks using data such as subject enrollment, monitoring visits, clinical site
activations, or information provided to us by our vendors with respect to their actual costs incurred. Payments for these activities are
based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial
statements as prepaid or accrued research and development expense, as the case may be. Total research and development costs for the fiscal
years ended December 31, 2025 and 2024 were $2,086,574 and $492,660, respectively.
Stock-Based Compensation
The Company records stock-based compensation equal to the grant date fair value of the stock awards issued. For stock
options issued to employees, non-employees and members of our board of directors for their services on our board of directors, the Company
estimates the grant-date fair value of options using the Black-Scholes option pricing model. 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
consistent with the expected life of the option, risk-free interest rates, and, for grants prior to our initial public offering, the value
of the common stock. For awards subject to time-based vesting, the Company recognized stock-based compensation expense, on a straight-line
basis over the requisite service period, which is generally the vesting term of the award. As of December 31, 2025 and 2024, stock-based
compensation expenses totaled $2,418,516 and $1,840,908, respectively, and includes expenses associated with shares issued to service providers and warrant holders.
Clinical Trial Expenses
As part of the process of preparing our
financial statements, the Company is required to estimate expenses resulting from obligations under contracts with vendors, clinical research
organizations and consultants and under clinical site agreements in connection with conducting clinical trials. The financial terms of
these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the
periods over which materials or services are provided under such contracts. The Company’s objective is to reflect the appropriate
trial expenses in the financial statements by matching those expenses with the period in which services are performed and efforts are
expended. The Company accounts for these expenses according to the progress of the trial as measured by patient progression and the timing
of various aspects of the trial. The Company determines accrual estimates based on estimates of services received and efforts expended
that take into account discussion with applicable personnel and outside service providers as to the progress or state of consummation
of trials. During the course of a clinical trial, the Company adjusts the clinical expense recognition if actual results differ from its
estimates. The Company makes estimates of the accrued expenses as of each balance sheet date based on the facts and circumstances known
at that time. The clinical trial accruals are dependent upon the timely and accurate reporting of contract research organizations and
other third-party vendors. Although the Company does not expect the estimates to be materially different from amounts actually incurred,
understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and
may result in reporting amounts that are too high or too low for any particular period.
Convertible Notes with and without Embedded Derivative
Liabilities
The Company has entered into convertible
notes, some of which contain variable conversion options, whereby the outstanding principal and accrued interest may be converted, by
the holder, into shares of common stock at a fixed discount to the price of the common stock at or around the time of conversion upon
certain trigger events. The Company evaluates all its financial instruments to determine if those contracts or any potential embedded
components of those contracts qualify as derivatives. This accounting treatment requires that the carrying amount of any derivatives
be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as
a liability, as is the case with the Company, the change in the fair value during the period is recorded as either other income or expense.
Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment, or
exercise date and then the related fair value amount is reclassified to other income or expense as part of gain or loss on debt extinguishment.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
Not applicable.
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