JUPITER NEUROSCIENCES, INC. 10-K

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 We are a clinical stage research and development company. We have developed a unique resveratrol platform product primarily targeting treatment of neuro-inflammation. Our platform product, JOTROL, an enhanced oral formulation of resveratrol, has many potential indications of use for rare diseases. In the larger disease areas, we are primarily targeting Parkinson’s Disease and Mild Cognitive Impairment/early Alzheimer’s disease. 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, par value $0.0001 per share (“common stock”) at a price of $4.00 per share for gross proceeds of $11 million before deducing 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.” Business Overview The Company’s platform product, JOTROL, is an enhanced orally administered resveratrol formulation designed and intended to deliver therapeutically relevant, safe levels of resveratrol. This platform has many potential indications of use for rare diseases, which include Mucopolysaccharidoses Type 1, Friedreich’s ataxia and MELAS. In the larger disease areas, we are primarily targeting Parkinson’s Disease and Mild Cognitive Impairment/early Alzheimer’s disease. The present primary target for the Company is treatment of Parkinson’s Disease (PD). The Company completed preclinical activities in a validated mouse model of Parkinson’s Disease (PD) at the University of Miami in 2021. See our “Clinical Studies”. The model of Parkinson’s Disease that was used in this preclinical study mimics many aspects of the disease utilizing a unilateral injection of a neurotoxin precursor that elicits nigral cell loss, striatal dopamine loss and behavior deficits similar to physiological characteristics of human disease. We believe that results from this preclinical study indicate that Parkinson’s Disease might be the best target for treatment and financial opportunity among the multiple indications where JOTROL might play a role. The Company is now in the process to start its first Phase II clinical trial in a patient population. This will be a Phase IIa study conducted with the assistance of Zina Biopharmaceuticals that is led by Dr. Charbel Moussa, MBBS,Ph.D. The study is expected to start in the third quarter of 2025 and have results available approximately 12 months thereafter. We are also targeting the treatment of MCI/early Alzheimer’s Disease. We received funding of $2.2 million from the National Institute of Aging (“NIA”) in in 2020 and 2022 from a grant application for a Phase 1 study for Mild Cognitive Impairment/ Alzheimer’. In the NIA scientific review summary statement of our Phase I study application, it is stated that the NIA is looking forward to a Phase II study with an enhanced resveratrol product, based on the earlier study results from the well published Turner et al. Alzheimer’s study. We presently have a pending grant application, $16.5 Million, for a Phase II trial in MCI/early Alzheimer’s Disease with the NIA. This is an application for a 3-year Phase II trial that is expected to be completed with approximately 100 patients that have Mild Cognitive Impairment. We expect a decision on this grant application in May 2025. There is no guarantee that the application will be approved, and the trial will be put on hold if an approval is not awarded to the Company. A draft of the final study design is not yet determined but a draft synopsis is described in “Item 1. Business - “ of this Annual Report on Form 10-K. 83 We have recently entered into service agreements in the areas of Business Development, CMC (Chemistry, Manufacturing, and Controls), regulatory affairs and clinical trial management with companies that has their main operation in Hong Kong. These agreements are with companies that, we believe, have the knowledge and network in the South-East Asian market to accelerate steps that is needed to have a product that can have treatment value in the territory. The agreements are further described in the section “Activities in Asia”. In March 2025, the Company announced that it had entered into a partnership with Aquanova AG to develop a series of nutritional products targeting longevity, aging and Healthspan. The first three products, which will focus on the concept of “Beauty from Within”, are slated to hit the market in the third quarter of 2025 through a Direct-to-Consumer model. The Company will form a wholly-owned subsidiary to focus on the consumer market, and will market its products on a to-be-developed website targeting the US market, along with social media marketing. Internationally, the Company is focusing on partners who can market and accelerate sales, with an initial focus on the Asian region. Financial Position For the fiscal years ended December 31, 2024 and 2023, we generated no revenues from product sales and reported net losses of $2,439,625 and $4,783,689, respectively, and negative cash flow from operating activities of $3,911,004 and $480,953, respectively. As noted in our financial statements, as of December 31, 2024, we had an accumulated deficit of $26,022,129. 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, 2024 and 2023. Results of Operations Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Revenue and Federal Awards There was no revenue from product sales during the years ended December 31, 2024 or 2023 as we are focused on research and development. Research and Development Expenses Research and development (“R&D”) expenses were $492,660 for the year ended December 31, 2024 compared to $954,793 for the year ended December 31, 2023. R&D expenses related to the federal grant were segregated in the chart of accounts from non-federal award costs. At this time, we are not tracking R&D expenses per indication as all of the R&D expenses incurred to date related to JOTROL, which is the platform product used in each indication defined in our product pipeline. In addition, the probability of success for JOTROL will depend on numerous factors, including manufacturing capability, satisfactory results in follow on clinical trials, regulatory approvals and commercial viability. See “Risk Factors”. General and Administrative Expenses General and administrative expenses were $2,598,622 for the year ended December 31, 2024 compared to $2,915,978 for the year ended December 31, 2023. The decrease relates directly to the reduction of employee salaries that began in December 2023. Interest Expense Interest expenses were $248,366 for the year ended December 31, 2024, compared to $218,705 for the year ended December 31, 2023. Interest expense is primarily attributable to interest expense associated with our previously outstanding notes payable, convertible notes payable, notes payable to our Chief Executive Officer, Christer Rosén, and interest expense on our corporate credit card. Loss (Gain) on Change in Fair Value of Derivative Liability As of December 31, 2024 and 2023 and at each quarter end during these years, the variable conversion options embedded in our convertible notes were marked to market, and the change in fair value of the derivative was recorded as a (loss)/gain of $(53,257) and $148,751, in the years ended December 31, 2024 and 2023, respectively. Gain (Loss) on Extinguishment of Debt During the years ended 2024 and 2023, the Senior Secured Convertible Note was amended several times with materially different economics thus requiring for the recording of debt as an extinguishment and re-recording the debt with the amended terms. This resulted in a gain/(loss) on extinguishment of debt in the years ended December 31, 2024 and 2023 of $857,723 and $(887,946), respectively. 84 Liquidity and Capital Resources; Plan of Operations As of December 31, 2024, we had cash and cash equivalents of $3,769,510. 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, 2024, we had an accumulated deficit of $26,022,129. Historically, we have financed our operations primarily by selling common stock and convertible debt. 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. On April 11, 2022, we issued a senior secured convertible note in the principal amount of $1,111,111 in exchange for $1,000,000 as described above in “Item 1. Business” of this Annual Report on Form 10-K, which was paid down with the proceeds from the initial public offering. For the fiscal years ended December 31, 2024 and 2023, we generated no revenues from product sales and reported net losses of $2,439,625 and $4,783,689, respectively, and negative cash flow from operating activities of $3,911,004 and $480,953, 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 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, 2024 and 2023. 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. 85 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, 2024 and 2023 The following table shows a summary of our cash flows for the years ended December 31, 2024 and 2023. Fiscal Years Ended December 31, 2024 2023 Net cash used in operating activities $ (3,911,004 ) $ (480,953 ) Net cash used in investing activities - - Net cash provided by financing activities $ 7,652,036 $ 445,000 Net increase (decrease) in cash $ 3,741,032 $ (35,953 ) Cash - beginning of the period $ $ Cash - end of the period $ 3,769,510 $ 28,478 Net Cash Used in Operating Activities: Net cash used in operating activities during the year ended December 31, 2024 increased $3,430,051 from December 31, 2023 mainly attributable to an increase of $2,300,000 in prepaid contracts due to stock issuances associated with Asian Business Development service agreements, an increase of $118,796 in other current assets, a decrease of $2,187,051 in accrued compensation, a decrease of $314,412 in accounts payable and accrued expenses, a decrease of $1,517,085 in changes associated with debt (amortization of debt discounts, loss on extinguishment of debt, gain/loss on change in fair value of derivative liabilities, and increase in accrued interest), an increase in amortization of prepaid contracts of $54,612, an increase of $642,329 in stock-based compensation, partially offset a decrease of $2,334,064 in Net Loss. Net Cash Used in Investing Activities: No net cash was provided by or used in investing activities during the years ended December 31, 2024 and 2023. Net Cash Provided by Financing Activities: Net cash provided by financing activities for the year ended December 31, 2024 increased by $7,207,036 from the year ended December 31, 2023. The increase is mainly attributed the proceeds raised from the Company’s initial public offering, net of offering costs of $9,725,213 partially offset by the repayments of notes payables of $2,361,677. 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 South-East Asian territories. However, there are no assurances that this approach will be successful. The agreements executed are very similar in nature that include an equity investment in our company by the other party and in turn 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. 86 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 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”) 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 bears interest at a rate of 10% per year, payable monthly in arrears, and mature 12 months from issuance. A “Qualified Offering” is a debt or equity financing for the account of the Company or any of its subsidiaries in which shares of common stock, or securities, directly or indirectly, convertible into or exchangeable or exercisable for shares of common stock are issued, which financing results in cumulative aggregate proceeds to the Company of at least $8,000,000. The principal and interest on the Note will be amortized on a straight-line basis at 110% of the principal amount commencing sixth months after the closing. On October 10, 2022, the Note was amended to postpone the commencement of the amortization amount from October 11, 2022 to November 11, 2022. On November 10, 2022, the Note was amended to postpone the commencement of the amortization from November 11, 2022 to February 11, 2023 and payable in three monthly installments. As consideration for the amendment, an additional 11,431 shares of common stock were issued to the accredited investor on October 10, 2022 and 34,293 shares issued to the accredited investor on November 10, 2022. On January 13, 2023, the Note was amended to delay the interest payment due and payable on January 11, 2023 to the earlier of (i) January 31, 2023 and (ii) the closing of a Qualified Offering. Upon an Event of Default and after a Qualified Offering, the principal and interest are convertible at any time at the option of the holder into shares of the Company’s common stock at a conversion price equal to 30% discount to the lowest closing price of the common stock for the 20 prior trading days; provided, however, the holder will not have the right to convert any portion of the Note, to the extent that after giving effect to the conversion, the holder, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to its conversion. The holder may increase or decrease its ownership limitation to any percentage not exceeding 9.99% upon 61 days prior written notice to the Company. The Company will have the right at any time to redeem in cash all or a portion of the Note at 120% (or 125% on or after the first six months from the closing; provided, however, if interest due and payable on January 31, 2023 is not paid in full, 130% on or after the first six months from the closing) of the principal amount thereof plus any unpaid accrued interest to the date of repayment. The Company will be required to offer to prepay in cash the aggregate principal amount of the Note at 120% (or 125% on or after the first six months from the closing; provided, however, if interest due and payable on January 31, 2023 is not paid in full, 130% on or after the first six months from the closing) of the principal amount thereof plus any unpaid accrued interest to the date of repayment, on the sale of all or substantially all of the assets of the Company and its subsidiaries, upon a Change of Control (as defined in the Note), or on a Qualified Offering. 87 Upon an Event of Default (as defined therein) interest shall accrue at 1 1/2% per month and the 125% (or 130% if interest due and payable on January 31, 2023 is not paid in full) of principal and interest through maturity shall be due and payable. At the holder’s option the holder shall be entitled to be paid in cash or after the Qualified Offering (as defined in the Purchase Agreement) common stock with the conversion price of the common stock equal to a 30% discount to the lowest closing price of the common stock for the 20 prior trading days. On February 6, 2023, the Note was amended to postpone the commencement of the principle to February 28, 2023. On March 6, 2023, the Note was amended to postpone the commencement of the principal from February 11, 2023 to May 31, 2023. The Company and the note holder agreed to a repayment plan on past due interest. In addition, the Company agreed to prepay in cash the aggregate principal amount of the Note of 120% (or 137.5% on or after the first six months from closing) plus any accrued interest on the sale of all the assets of the Company and its subsidiaries, upon the Change of Control, or on a Qualified Offering. Upon default of the Note the Company agrees to pay 137.5% of the outstanding note principal, and accrued interest through maturity and all liquidation damages. As a result of the material modification, the incremental fair value of the modified derivative was classified as a debt extinguishment. Due to the extension of the maturity date of the convertible note, the fair value of the derivative liability increased. This resulted in the Company recording a loss on extinguishment of debt of $670,419. On September 22, 2023, the Note was amended to postpone the commencement of the principle to December 31, 2023. The Company and the note holder agreed to a repayment plan on past due interest. In addition, the Company agreed to prepay in cash the aggregate principal amount of the Note of 120% (or 150% on or after the first six months from closing) plus any accrued interest on the sale of all the assets of the Company and its subsidiaries, upon the Change of Control, or on a Qualified Offering. Upon default of the Note the Company agrees to pay 150% of the outstanding note principal, and accrued interest through maturity and all liquidation damages. In addition, upon closing the Note holder will receive 175% stock coverage. As a result of the material modification, the incremental fair value of the modified derivative was classified as a debt extinguishment. Due to the extension of the maturity date of the convertible note, the fair value of the derivative liability increased. This resulted in the Company recording a loss on extinguishment of debt of $217,527. 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. 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. 88 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. The Shares . In connection with the issuance of the Note, 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. 89 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 and 2023 was $146,432 and $358,479, respectively. The loan is due on demand and accrues interest at 3% per year. Accrued interest relating to the loan was $1,064 and $11,308 as of December 31, 2024 and 2023, respectively, and is included in accrued interest on the accompanying balance sheets. 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. During the year ended December 31, 2023, an employee loaned the Company $25,000. The balance of the loan as of December 31, 2024 and 2023, was $0 and $25,000, respectively. The loan is due on demand and accrues interest at 3% per year. Accrued interest related to the loan was $0 and $723 as of December 31, 2024 and 2023, respectively, and is included in accrued interest on the accompanying balance sheet. The Company repaid a total of $26,422 during the year ended December 31, 2024, $25,000 in principal and $1,421 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 agrees 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 of 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. During 2020, the Company began paying salaries at 50% of the respective employment agreements. As of September 2021, the Company began paying full salaries. During the first quarter of 2022, the Company returned to paying partial salaries in an effort to conserve cash outflows in an effort to conserve cash outflows. On September 29, 2023, various employees and board members agreed to forgive accrued compensation in the amount of $4,189,626. In exchange of the forgiveness the Company issued an aggregate of 2,353,661 stock options with an exercise price of $1.33 and an aggregate of 1,399,834 restricted stock units with a grant date value of $1.33 in exchange for the aggregate forgiveness of compensation in the amount of $4,189,626. Additionally, the Company agreed to a bonus of $513,013 for the employees and a bonus of $70,200 to the board members, to be paid upon the occurrence of a successful IPO in exchange for the forgiveness of the afore-mentioned accrued compensation. On December 18, 2023, various employees and board members agreed to amend the accrued compensation debt forgiveness dated September 29, 2023. Pursuant to the amendment the cash bonuses of $513,013 for the employees and a bonus of $70,200 to the board members agreed to on September 29, 2023, were forgiven, and no cash is to be paid upon a successful IPO. In addition, the options issued in connection with the forgiveness dated September 29, 2023, were amended to vest fully on the effective date of the new amendment. In addition, the restricted stock unit issued in connection with the forgiveness dated September 29, 2023, were terminated and replaced with 1,399,834 restricted stock units that vest upon the earlier occurrence of the initial public offering or a change of control of the Company. In exchange for the forgiveness of the accrued bonuses the Company issued an aggregate of 289,294 stock options with an exercise price of $1.33 and an aggregate of 218,703 restricted stock units with a grant date value of $1.33 in exchange for the aggregate forgiveness of compensation in the amount of $583,213. 90 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, 2024 and 2023, $64,105 and $67,750, respectively, was due to a Company wholly owned by the Company’s Chief Financial Officer, who also is an option holder. 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. Recent Developments 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. 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. The management approach requires companies to report segment financial information consistent with information used by management for making operating decisions and assessing performance as the basis for identifying the Company’s reportable segments. The Company has identified one single reportable operating segment. The Company manages its business on the basis of one operating and reportable segment and derives revenues from selling its product and related services. Use of Estimates Preparing financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates, and those estimates may be material. 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, 2024 and 2023, respectively, include valuation of stock-based compensation, uncertain tax positions, 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, 2024 and 2023 were $492,660 and $954,793, respectively. 91 Stock-Based Compensation The Company accounts for stock-based compensation in accordance with the provisions of Accounting Standards Codification (ASC) Topic 718, Compensation—Stock Compensation, or ASC 718, which requires the recognition of expense related to the fair value of stock-based awards in the statements of operations. 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, 2024 and 2023, stock-based compensation expenses totaled $1,840,908 and $1,198,579, respectively. 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 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 to be separately accounted for in accordance with ASC 815-10 – Derivative and Hedging – Contract in Entity’s Own Equity . 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. 92 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Reference is made to pages F-1 through F-25 comprising a portion of this Annual Report on Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable.