Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

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

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

Overview

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

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

On August 27, 2025, the Company completed its initial public offering (the "IPO") and its shares of common stock are quoted on The Nasdaq Capital Market 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; (ii) to conduct FDA-required GLP toxicology and pharmacokinetic studies for Phyto-N in ulcerative colitis, (iii) to prepare and submit an IND application.

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

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

Recent Developments

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 is actively working on initiating formal GLP toxicology and pharmacokinetic studies as part of its IND preparation.

Dose-Range Finding Toxicology Study

In March 2026, the Company announced the successful completion of a dose-range finding toxicology study of Phyto-N, conducted in Sprague-Dawley rats and dogs. The study evaluated repeat-dose oral tolerability over 28 days at multiple dose levels and was designed to inform dose selection and study design for the Company's subsequent GLP-compliant toxicology studies. The maximum feasible dose identified in this study will serve as the high-dose anchor for the design of the pivotal GLP toxicology studies that will form a core component of the Company's IND submission. These results keep the program on schedule toward the Company's target IND filing in the fourth quarter of 2026.

Nasdaq Notifications regarding Minimum Bid Price Requirement.

On November 5, 2025, we received a letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC ("Nasdaq") notifying the Company that the closing bid price for our Common Stock for the previous 30 consecutive business days was below $1.00 per share, which is the minimum closing bid price (the "Minimum Bid Price") required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the "Notice"). The Notice indicated that in accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided a compliance period of 180 calendar days from the date of the Notice, or until May 4, 2026, to regain compliance with the Minimum Bid Price requirement.

On May 5, 2026, Nasdaq notified the Company that although the Company has not regained compliance with the Minimum Bid Price Requirement, the Company is eligible to receive an additional 180 calendar day period or until November 2, 2026, to regain compliance with the Minimum Bid Price Requirement. Nasdaq's 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 the Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement. Additionally, the Company has provided Nasdaq with written notice of its intention to cure the deficiency during the second compliance period, by implementing a reverse stock split, if necessary.

If at any time during this second compliance period, the closing bid price of the Company's Common Stock is at least $1.00 per share for a minimum of ten consecutive business days (unless the Nasdaq staff exercises its discretion to extend this ten business day period pursuant to Nasdaq Listing Rule 5810(c)(3)(H)), Nasdaq will provide the Company written confirmation of compliance with the Minimum Bid Price, and the matter will be closed. If compliance cannot be demonstrated by November 2, 2026, Nasdaq will provide written notification that the Company's securities will be delisted. At that time, the Company may appeal Nasdaq's determination to a Nasdaq Hearings Panel.

The Company is currently monitoring the closing bid price of its common stock and will consider available options, including a reverse stock split, if appropriate, to regain compliance with the Minimum Bid Price Requirement by November 2, 2026. There can be no assurance that the Company will be able to regain compliance with the Minimum Bid Price Requirement, even if it maintains compliance with other listing requirements of the Nasdaq Capital Market.

Results of Operations

Comparison of Results of Operations for the Three Months Ended March 31, 2026 and 2025

Revenue and Cost of Sales

We did not generate any revenue during the three months ended March 31, 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 $927,197 for the three months ended March 31, 2026, compared to $137,452 for the same period in 2025. The increase was primarily attributable to higher personnel-related expenses, including approximately $466,518 of increased payroll costs, as our founder and certain members of senior management began receiving compensation following the completion of our IPO, whereas little or no cash compensation had been paid to these individuals prior to that time. The increase also reflects higher professional fees and other costs associated with operating as a public company.

Research and Development Expenses

Following our initial public offering, we continued to invest in research and development ("R&D") activities primarily related to FDA-mandated investigational new drug ("IND") studies targeting ulcerative colitis, atopic dermatitis, rheumatoid arthritis, gouty arthritis, and diabetic foot. For the three months ended March 31, 2026, R&D expenses totaled $2,256,162, primarily reflecting costs incurred under service agreements for IND-related studies and research activities, with such costs recognized over the respective service period in accordance with the terms of the underlying agreements. As of March 31, 2026, the Company recorded $3.9 million in prepaid R&D, representing advance payments to Contract Research Organizations ("CROs") and Contract Development and Manufacturing Organizations ("CDMOs") for services to be rendered under ongoing IND studies. We expect R&D spending to remain significant as these studies progress but to moderate in future periods until FDA approvals are obtained and clinical trial activities commence.

Other Income (Expense)

For the three months ended March 31, 2026, other income was $33,131, primarily interest income earned on cash and cash equivalents. The increase was primarily attributable to higher interest income earned on the Company's cash balances. The higher interest income primarily reflects increased cash balances following the receipt of net proceeds from the Company's IPO.

Net loss

As a result of foregoing, the Company recorded a net loss of $3,150,228 for the three months ended March 31, 2026, compared to $137,583 for the three months ended March 31, 2025.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures. Since our inception through March 31, 2026, we have funded our operations, principally with the issuance of equity and debt.

On August 27, 2025, we closed the IPO pursuant to the Underwriting Agreement. The net proceeds to the Company from the IPO, after deducting the underwriting discount, the underwriters' fees and expenses and the Company's estimated offering expenses were approximately $12,871,280. In addition, on September 12, 2025, we had a closing of the Option Shares, resulting in the net proceeds of approximately $2,070,000.

As of March 31, 2026, we had cash and cash equivalents totaling $4,018,574, compared to $198,943 as of March 31, 2025. The increase in cash and cash equivalents was primarily attributable to net proceeds of approximately $15.3 million received from the Company's IPO completed in August 2025 and the exercise in full of the underwriters' over-allotment option in September 2025.

We believe our existing cash and access to shareholders' support are sufficient to fund our operations for at least the next twelve months. However, our ability to continue operating beyond this period is dependent upon the successful implementation of our business plan, including conducting FDA-required good laboratory practice ("GLP") toxicology and pharmacokinetic studies for Phyto-N in ulcerative colitis, and preparation and submission of an Investigational New Drug application.

Going Concern Considerations

We have not yet achieved profitability and anticipate continued operating losses in the foreseeable future. Our financial statements include a going concern disclosure due to our recurring losses, accumulated deficit, and reliance on external funding. However, management believes that substantial doubt has been alleviated due to our strong cash position, receipt of the IPO proceeds.

Contractual Obligations and Contingencies

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

The lease liability was $311,000 as of March 31, 2026.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of March 31, 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.