CURX

Business Context and Reporting Period

Company: Curanex Pharmaceuticals Inc (CURX)
Filing Type: Form 10-Q (Unaudited)
Period Ended: June 30, 2025
Business Overview: Curanex is an emerging growth company focused on discovering and developing botanical drugs for inflammatory diseases. Its lead candidate, Phyto-N, targets ulcerative colitis. The company reincorporated in Nevada in June 2024 and completed its Initial Public Offering (IPO) on August 27, 2025, subsequent to the reporting period.

Key Financial Metrics

Debt and Liquidity: As of June 30, 2025, the company held $400,000 in loans from shareholders (related party) and $76,452 in lease liabilities. Cash decreased by approximately $40,000 during the six-month period despite the shareholder loans, primarily due to operating losses and the capitalization of IPO-related expenses.

Material Changes vs. Prior Period

• Increased Operating Loss: Net loss increased by approximately 59% year-over-year (from $(124,401) to $(197,929)), driven by a 57% increase in General & Administrative (G&A) expenses to $195,110. This increase is attributed to costs associated with IPO preparation and public company readiness.
• Balance Sheet Restructuring: Total liabilities increased significantly from $14,575 to $481,743. This is primarily due to the recognition of a $400,000 shareholder loan and the adoption of ASC 842, which recognized a $76,452 lease liability and corresponding right-of-use asset.
• Asset Composition: "Other Current Assets" increased to $596,186, representing deferred IPO expenses (legal, underwriting, and other costs) capitalized in anticipation of the offering.
• Share Count: The company completed a 3-for-5 reverse stock split effective November 19, 2024. All historical share data has been retroactively adjusted. Outstanding common shares remained at 24,000,000 during the reporting period.

Outlook, Risks, and Subsequent Events

Subsequent Event (IPO): On August 27, 2025, the company closed its IPO, selling 3,750,000 shares at $4.00 per share. Net proceeds were approximately $12.87 million. These proceeds are intended for the development of Phyto-N, GLP toxicology studies, IND application preparation, and working capital.

Going Concern: The filing includes a "Going Concern" disclosure. While the company has historically relied on equity and debt financing and has not achieved profitability, management believes substantial doubt regarding its ability to continue as a going concern has been alleviated by the shareholder loans received in Q1/Q2 2025 and the successful closing of the IPO.

Risks and Contingencies:

• Internal Controls: Management concluded that disclosure controls and procedures were not effective as of June 30, 2025.
• Patent Status: Four provisional patent applications acquired from a related party (Duraviva) expired on March 18, 2025. The company filed an international PCT application on March 13, 2025, to maintain protection for three of the indications.
• Related Party Transactions: Significant reliance on loans from founders and related entities (Duraviva) for operations and asset acquisition.

Investor Verification Checklist

• IPO Proceeds Utilization: Verify the actual deployment of the $12.87 million in IPO proceeds against the stated plan (Phyto-N development, GLP studies, IND filing).
• Internal Control Remediation: Review subsequent filings for updates on the remediation of ineffective disclosure controls and procedures.
• Patent Portfolio: Confirm the status of the PCT application (PCT/US25/19679) and the scope of protection for the lead candidate, Phyto-N.
• Related Party Debt Terms: Review the terms of the $400,000 shareholder loans (4.34% interest, maturity in 2027) and any potential conversion features or repayment schedules.
• Capitalization of IPO Costs: Monitor the write-off of the $596,186 in deferred IPO expenses once the offering is fully accounted for in the post-IPO financial statements.