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

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with our financial statements and the related notes thereto. The management's discussion and analysis contain forward-looking statements, such as statements of our plans, objectives, expectations, and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words "believe," "plan," "intend," "anticipate," "target," "estimate," "expect" and the like, and/or future tense or conditional constructions ("will," "may," "could," "should," etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including those under "Risk Factors," which appear in our annual report on Form 10-K filed with the SEC on March 30, 2026 that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report.

Overview

We are a developmental stage pharmaceutical company dedicated to discovering, developing and commercializing innovative botanical drugs to treat patients suffering from inflammatory diseases. Our mission is to address significant unmet medical needs and to improve patients' lives by harnessing the power of natural substances. We are dedicated to discovering, developing and commercializing botanical medicines for treating patients with immune and inflammatory diseases and to develop therapies that may offer potential benefits to patients with unmet clinical needs in various fields, such as autoimmune diseases, metabolic diseases and viral infections. We are committed to "Bringing hope and healing through the wisdom of plants."

Our business strategy is centered on developing innovative botanical drugs, with a focus on Phyto-N as our lead candidate, for the treatment of inflammatory diseases. Phyto-N is a proprietary botanical extract with chemical components and pharmacological activities that harnesses potential anti-inflammatory properties of a medicinal plant with a long history of human use. Phyto-N has approximately 30 years of human use experience and has shown positive results in animal models of multiple inflammatory diseases. We aim to prioritize the development of Phyto-N and its active compounds, to conduct further preclinical and clinical studies to evaluate its therapeutic potential and safety profile, and if warranted, to seek the necessary regulatory approval in order to commercialize Phyto-N.

On August 27, 2025, the Company completed its initial public offering (the "IPO") and its shares of common stock are listed on The Nasdaq Capital Market ("Nasdaq") under the symbol "CURX." On September 12, 2025, we completed the additional closing related to the IPO, in which the underwriters in the IPO fully exercised their over-allotment option pursuant to the underwriting agreement dated August 25, 2025 with Dominari Securities, LLC, as representative of the underwriters. The Company is utilizing the net proceeds from the IPO primarily for (i) the development of its lead product candidate, Phyto-N, for the treatment of ulcerative colitis, atopic dermatitis, rheumatoid arthritis, gouty arthritis, and diabetic foot; (ii) the conduct of FDA-required GLP toxicology and pharmacokinetic studies and chemistry, manufacturing, and controls ("CMC") activities for Phyto-N in ulcerative colitis and (iii) the preparation and submission of an investigational new drug (IND) application.

We are currently targeting submission of an IND for the treatment of ulcerative colitis in the fourth quarter of 2026. The timing of our IND submission will depend in part on the FDA's response to our pre-IND meeting request, which we expect to receive by December 11, 2026, and on the completion of our ongoing IND-enabling studies, and the submission may occur in 2027. If allowed to proceed by the FDA, a Phase I trial may be initiated as early as 30 days after FDA receipt of the IND. If the Phase I trial is completed with positive results, we intend to proceed with a Phase II trial for ulcerative colitis as our lead indication. Contingent upon the success of our ulcerative colitis trials, available funding, and other strategic considerations, Curanex may subsequently initiate additional Phase II trials in other high-value indications such as atopic dermatitis, coronavirus (COVID-19), gout, diabetes, and NAFLD, or may seek to license out these indications to third parties at the Phase II stage. This multiple indication strategy represents our long-term vision to explore and maximize the value of Phyto-N and build a robust pipeline of botanical drug candidates targeting inflammatory diseases. The successful completion of these clinical trials could position Phyto-N as a potential botanical drug candidate for multiple inflammatory indications, addressing specific unmet medical needs. If approved, Phyto-N could provide patients with new treatment options for various inflammatory conditions.

The Company is also expanding its drug development pipeline and is focusing on a new core indication: cancer. The management believes that the focus on treatment of cancer aligns with the Company's broader focus on treatment of serious diseases involving inflammation and metabolic disruption. While Curanex remains committed to advancing its lead ulcerative colitis program, the Company believes that by expanding its long-term pipeline potential by also focusing on cancer treatment, the Company will strengthen its positioning as an emerging therapeutics company.

GMP Pilot-Scale Manufacturing Milestone

In February 2026, Curanex successfully completed a pilot-scale batch of Phyto-N manufactured under Good Manufacturing Practice (GMP) standards. This GMP-compliant material is intended to support Good Laboratory Practice (GLP)-compliant toxicology, pharmacokinetic, and other IND-enabling nonclinical studies. Completion of the GMP pilot-scale batch represents an important step in strengthening the Company's manufacturing foundation as it advances toward IND submission.

Key Chemistry, Manufacturing and Controls (CMC) activities completed to date include:

	●	Development of quality control methods for botanical raw materials and extracted drug substance;
	●	Laboratory scale process optimization, including extraction, concentration, and drying; and
	●	Scale-up and production of GMP-compliant pilot material.

With GMP pilot-scale material now available, the Company has initiated formal GLP toxicology and pharmacokinetic studies as part of its IND preparation.

Dose-Range Finding Toxicology Study

In March 2026, the Company announced the successful completion of a dose-range finding toxicology study of Phyto-N, conducted in Sprague-Dawley rats and dogs. The study evaluated repeat-dose oral tolerability over 28 days at multiple dose levels and was designed to inform dose selection and study design for the Company's subsequent GLP-compliant toxicology studies. The maximum feasible dose identified in this study will serve as the high-dose anchor for the design of the pivotal GLP toxicology studies that will form a core component of the Company's IND submission. These results support the Company's target IND filing in the fourth quarter of 2026. The Company's pivotal GLP repeat-dose toxicology studies of Phyto-N in rats and dogs are currently ongoing, and its GLP safety pharmacology studies evaluating cardiovascular, central nervous system (functional observational battery) and respiratory function are also underway. The Company submitted a pre-IND meeting request to the FDA on October 14, 2026. The Company expects to receive the FDA's response by December 11, 2026. The Company intends to consider the FDA's feedback before finalizing its IND submission.

Recent Developments

The Company Regained Compliance with the Minimum Bid Price Requirement

As previously reported by the Company on a Current Report on Form 8-K filed with the SEC on May 7, 2026, on May 5, 2026, the Listing Qualifications Department of The Nasdaq Stock Market LLC ("Nasdaq Staff") notified the Company that while the Company did not regain compliance with the $1.00 minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on Nasdaq (the "Minimum Bid Price Requirement") by May 4, 2026 (in accordance with the initial 180-day compliance period provided to the Company), Nasdaq granted the Company a second 180-day compliance period to regain compliance with the Minimum Bid Price Requirement by November 2, 2026. That determination to grant the Company an additional 180 calendar day period was based on the Company's satisfaction of the continued listing requirements for the market value of publicly held shares and all other applicable requirements for initial listing on Nasdaq, with the exception of the Minimum Bid Price Requirement.

On September 3, 2026, Nasdaq confirmed that the Company had satisfied its minimum bid-price requirement following the effectiveness of the Reverse Stock Split and closed the matter.

On July 22, 2026, the Board approved the 1-for-20 Reverse Stock Split of the outstanding shares of the Company's common stock, based on the prior approval and authorization by the holders of a majority of the outstanding voting power of the Company (the "Majority Stockholders") to grant the Board the discretionary authority to determine the exact ratio of the reverse stock split within 1-for-10 and 1-for-50 reverse stock split range. The Reverse Stock Split became effective on August 20, 2026.

Upon the effectiveness of the Reverse Stock Split, every twenty shares of common stock outstanding immediately prior to the effectiveness were combined and reclassified into one share of common stock. No fractional shares were issued in connection with the Reverse Stock Split, and any fractional shares were rounded up to the next whole share. The number of authorized shares of common stock and the par value per share were not affected by the Reverse Stock Split.

2026 Equity Incentive Plan

On May 31, 2026, our Board of Directors adopted the 2026 Equity Incentive Plan (the "2026 Plan"), which became effective on June 11, 2026, upon approval by the Majority Stockholders. We adopted the 2026 Plan to enable us to attract, retain and incentivize qualified personnel as we advance our development programs toward our targeted IND submission, and to align the interests of our employees, directors and consultants with those of our stockholders. Pursuant to the 2026 Plan, the Company reserved an aggregate of 285,000 shares of our common stock for issuance as stock options, restricted stock, restricted stock units and other stock-based awards to our employees, directors and consultants. On July 21, 2026, we filed a first registration statement on Form S-8 registering in that registration statement 150,000 shares of common stock reserved under the 2026 Plan, representing approximately 10.58% of our issued and outstanding shares of common stock as of the date of filing. Between July 27 and August 7, 2026, the Company issued a total of 150,000 shares to six nonemployee consultants under the 2026 Plan, with an aggregate grant-date fair value of $573,100. On October 19, 2026, the Company filed a second registration statement on Form S-8, registering in that registration statement the remaining 135,000 shares under the 2026 Plan. As of the date of this Quarterly Report, the Company had not issued any shares of common stock pursuant to that second registration statement on Form S-8.

Results of Operations

Comparison of Results of Operations for the Three Months Ended September 30, 2026 and 2025

Revenue and Cost of Sales

We did not generate any revenue during the three months ended September 30, 2026, or 2025. This is consistent with our focus on advancing the development of our botanical drug candidates and progressing toward our clinical and regulatory milestones.

We anticipate generating revenue only upon successful commercialization of our product candidates or from entering into strategic licensing agreements. However, there is no assurance as to the timing or likelihood of these events.

Operating Expenses

General and Administrative Expenses

General and administrative expenses were $877,121 for the three months ended September 30, 2026, compared to $273,853 for the same period in 2025. The increase was primarily attributable to higher personnel-related expenses, including approximately $211,007 of increased payroll costs, reflecting recent hires and compensation for our founder and certain members of senior management following the completion of our IPO, whereas little or no cash compensation had been paid to these individuals prior to that time. The increase also reflects higher professional fees and other costs associated with operating as a public company. The current period also includes $34,491 of noncash consulting expense for strategic business-development and licensing services under the 2026 Plan.

Research and Development Expenses

Following our initial public offering, we continue to invest in research and development ("R&D") activities primarily related to FDA-mandated investigational new drug ("IND") studies targeting ulcerative colitis as our lead indication and cancer as our second core indication, as well as atopic dermatitis, rheumatoid arthritis, gouty arthritis, and diabetic foot. For the three months ended September 30, 2026, R&D expenses totaled $1,952,587, compared to $677,474 for the same period in 2025, primarily reflecting costs incurred under service agreements for IND-related studies and research activities, with such costs recognized over the respective service period in accordance with the terms of the underlying agreements. The current period includes $119,518 of noncash consulting expense for Australian clinical trial feasibility services. As of September 30, 2026, the Company recorded $314,783 in prepaid R&D, including $49,101 of advance payments to Contract Research Organizations ("CROs") and Contract Development and Manufacturing Organizations ("CDMOs") and other research service providers for services to be rendered under ongoing IND studies and $265,682 of noncash prepaid clinical-feasibility consulting services. We expect R&D spending to remain significant. Expense from existing prepaid study arrangements is expected to decline as the respective service periods conclude, while new spending is expected to increase in connection with our planned IND submission and subsequent clinical trial activities.

Other Income (Expense)

For the three months ended September 30, 2026, other income was $14,111, compared to $1,358 for the same period in 2025, primarily interest income earned on cash and cash equivalents. The increase was primarily attributable to higher interest income earned on the Company's cash balances. The higher interest income primarily reflects increased cash balances following the receipt of net proceeds from the Company's IPO. Interest expense was nil for the three months ended September 30, 2026, compared to $4,090 for the same period in 2025, following repayment of the shareholder loans in September 2025.

Net loss

As a result of the foregoing, the Company recorded a net loss of $2,815,597 for the three months ended September 30, 2026, compared to $954,059 for the three months ended September 30, 2025.

Comparison of Results of Operations for the Nine Months Ended September 30, 2026 and 2025

Revenue and Cost of Sales

We did not generate any revenue during the nine months ended September 30, 2026, or 2025. This is consistent with our focus on advancing the development of our botanical drug candidates and progressing toward our clinical and regulatory milestones.

We anticipate generating revenue only upon successful commercialization of our product candidates or from entering into strategic licensing agreements. However, there is no assurance as to the timing or likelihood of these events.

Operating Expenses

General and Administrative Expenses

General and administrative expenses were $2,536,161 for the nine months ended September 30, 2026, compared to $466,863 for the same period in 2025. The increase was primarily attributable to higher personnel-related expenses, including approximately $1,025,597 of increased payroll costs, reflecting recent hires and compensation for our founder and certain members of senior management following the completion of our IPO, whereas little or no cash compensation had been paid to these individuals prior to that time. The increase also reflects higher professional fees and other costs associated with operating as a public company. General and administrative expenses for the nine months ended September 30, 2026 also included $9,792 of non-cash stock-based compensation associated with the issuance of 1,200 shares of common stock in March 2026, compared to $nil in the prior year period. The current period also includes $34,491 of noncash consulting expense for strategic business-development and licensing services under the 2026 Plan.

Research and Development Expenses

Following our initial public offering, we continue to invest in research and development ("R&D") activities primarily related to FDA-mandated investigational new drug ("IND") studies targeting ulcerative colitis as our lead indication and cancer as our second core indication, as well as atopic dermatitis, rheumatoid arthritis, gouty arthritis, and diabetic foot. For the nine months ended September 30, 2026, R&D expenses totaled $6,802,466, compared to $679,574 for the same period in 2025, primarily reflecting costs incurred under service agreements for IND-related studies and research activities, with such costs recognized over the respective service period in accordance with the terms of the underlying agreements. The current period includes $119,518 of noncash consulting expense for Australian clinical trial feasibility services. As of September 30, 2026, the Company recorded $314,783 in prepaid R&D, including $49,101 of advance payments to Contract Research Organizations ("CROs") and Contract Development and Manufacturing Organizations ("CDMOs") and other research service providers for services to be rendered under ongoing IND studies and $265,682 of noncash prepaid clinical-feasibility consulting services. We expect R&D spending to remain significant. Expense from existing prepaid study arrangements is expected to decline as the respective service periods conclude, while new spending is expected to increase in connection with our planned IND submission and subsequent clinical trial activities.

Other Income (Expense)

For the nine months ended September 30, 2026, other income was $81,832, compared to $2,986 for the same period in 2025, primarily interest income earned on cash and cash equivalents. The increase was primarily attributable to higher interest income earned on the Company's cash balances. The higher interest income primarily reflects increased cash balances following the receipt of net proceeds from the Company's IPO. Interest expense was nil for the nine months ended September 30, 2026, compared to $8,537 for the same period in 2025, following repayment of the shareholder loans in September 2025.

Net loss

As a result of the foregoing, the Company recorded a net loss of $9,256,795 for the nine months ended September 30, 2026, compared to $1,151,988 for the nine months ended September 30, 2025.

Liquidity and Capital Resources

Since our inception through September 30, 2026, we have funded our operations principally through the issuance of equity and debt securities. We have not generated any revenue since inception and do not expect to generate revenue unless and until we successfully commercialize a product candidate or enter into strategic licensing arrangements.

On August 27, 2025, we closed our initial public offering pursuant to the Underwriting Agreement, receiving net cash proceeds of approximately $13.24 million after deducting underwriting discounts and commissions and offering expenses. On September 12, 2025, the underwriters exercised their over-allotment option in full, resulting in additional net proceeds of approximately $2.07 million. We have no committed sources of additional capital and no available credit facility.

As of September 30, 2026, we had cash and cash equivalents of $1,579,689, compared to $4,973,134 as of December 31, 2025, and an accumulated deficit of $14,104,350. We recorded a net loss of $9,256,795 for the nine months ended September 30, 2026, compared to $1,151,988 for the nine months ended September 30, 2025.

Our net cash used in operating activities for the nine months ended September 30, 2026 of $3,393,445 was substantially lower than our net loss for the period because a significant portion of our operating expenses was funded through the utilization of prepaid research and development balances paid in prior periods rather than through cash expenditures during the period. Our total prepaid expenses declined from $6,254,374 as of December 31, 2025 to $976,701 as of September 30, 2026, a reduction of $5,277,673 reflecting a $5,851,511 reduction in prepaid research and development, partially offset by increases in other prepaid balances. The ending prepaid balance includes $419,091 of noncash consulting-service prepayments recognized during the quarter. Noncash consulting expense of $154,009 also contributed to the difference between net loss and operating cash flows. The $5,696,764 prepaid movement in operating cash flows excludes the noncash addition to ending prepaids. As these prepaid balances are consumed, we expect our cash used in operating activities to increase substantially and to approximate our operating expenses.

We further expect our research and development expenditures to increase in connection with our targeted Investigational New Drug application submission, currently targeted for the fourth quarter of 2026 but which may occur in 2027, and the initiation of a Phase I clinical trial thereafter. Clinical trial activities require substantial capital that we have not yet secured.

Awards granted under the 2026 Plan will be settled in shares of our common stock and will not require the use of cash, which we expect will allow us to conserve cash resources in compensating our personnel as we advance our development programs. Any awards granted under the 2026 Plan will, however, dilute the ownership interests of our existing stockholders upon issuance. As of September 30, 2026, the Company had issued 150,000 shares under the 2026 Plan. These shares were issued to nonemployee consultants and recognized $154,009 of related expense, with $419,091 remaining prepaid at September 30, 2026. No cash proceeds were received from these issuances.

We will require additional capital to fund our operations. We may seek to raise additional capital through public or private equity offerings, debt financings, strategic collaborations or licensing arrangements. Our ability to raise capital on acceptable terms may be adversely affected by the trading price of our common stock, our ability to maintain compliance with Nasdaq listing requirements, and general market conditions. Additional equity financing would dilute our existing stockholders, and debt financing, if available, may involve restrictive covenants. If we are unable to raise additional capital when needed, we would be required to delay, reduce or eliminate certain of our development programs.

Going Concern Considerations

We have not generated any revenue since inception and have incurred recurring net losses and negative cash flows from operations. For the nine months ended September 30, 2026, we incurred a net loss of $9,256,795 and used cash in operating activities of $3,393,445. As of September 30, 2026, we had cash and cash equivalents of $1,579,689 and an accumulated deficit of $14,104,350.

As described above, our cash used in operating activities during the nine months ended September 30, 2026 was substantially lower than our operating expenses because a significant portion of those expenses was funded through prepaid balances paid in prior periods. As those balances are consumed, we expect our cash requirements to increase materially, and we expect our research and development expenditures to increase further in connection with our planned Investigational New Drug application submission and subsequent clinical trial activities.

Based on our current operating plan, we do not expect our existing cash and cash equivalents to be sufficient to fund our operations for at least twelve months from the date of issuance of the unaudited interim financial statements included in this Quarterly Report. These conditions raise substantial doubt about our ability to continue as a going concern.

Our plans to address these conditions include raising additional capital through the issuance of equity or debt securities, pursuing strategic collaborations or out-licensing arrangements for our product candidates, and reducing or deferring discretionary operating and development expenditures. We have no committed sources of additional capital, and there can be no assurance that we will be able to obtain additional financing on acceptable terms, or at all. Because these plans are not considered probable of being effectively implemented, they do not alleviate the substantial doubt about our ability to continue as a going concern.

If we are unable to obtain sufficient amount of additional capital, we may be required to reduce the scope of our planned development, If we are unable to raise additional capital when needed, we would be required to delay, reduce or eliminate certain of our development programs and could harm our business, financial condition and operating results. If we obtain additional funds by selling any of our equity, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution, or the equity securities may have rights preferences or privileges senior to our common stock. If we issue debt securities, there may be negative covenants which may restrict our company's activities. If adequate funds are not available to the Company when needed on satisfactory terms, we may be required to cease operating or otherwise modify our business strategy.

The unaudited interim financial statements included in this Quarterly Report have been prepared assuming we will continue as a going concern and do not include any adjustments to the carrying amounts or classification of assets and liabilities that might result from the outcome of this uncertainty. See Note 1 to our unaudited interim financial statements.

Contractual Obligations and Contingencies

On January 1, 2025, the Company assumed an office lease from Duraviva, a related party under common control, pursuant to a lease assignment agreement. The term of the lease extended to August 31, 2026. On August 13, 2026, the Company entered into a lease amendment extending the lease term to September 30, 2031, effective September 1, 2026. Additionally, during the 4^th quarter of 2025, the Company entered into lease agreements for three motor vehicles with non-cancelable lease terms ranging from 36 to 51 months. These leases are classified as operating leases. In accordance with ASC 842, the Company recognized a right-of-use asset and corresponding lease liability as of the adoption date.

The lease liability was $542,090 as of September 30, 2026.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of September 30, 2026.

Emerging Growth Company and Smaller Reporting Company Status

We continue to qualify as an emerging growth company (EGC) and smaller reporting company (SRC), enabling us to utilize scaled disclosures and defer adoption of certain accounting standards.