Caring Brands, Inc. (CABR) - 10-Q Summary
Business Context and Reporting Period
This Quarterly Report on Form 10-Q covers the period ended June 30, 2026. Caring Brands, Inc. is a Nevada corporation focused on over-the-counter and prescription-grade health and wellness products. The Company is classified as a smaller reporting company and an emerging growth company. As of June 30, 2026, the Company had 10,368,226 shares of common stock outstanding.
Key Financial Metrics
| Metric | Six Months Ended June 30, 2026 | Three Months Ended June 30, 2026 |
|---|---|---|
| Revenue | $0 | $0 |
| Net Loss | $(2,647,202) | $(638,726) |
| Net Loss Attributable to Common Stockholders | $(4,798,070) | $(935,019) |
| Cash and Cash Equivalents (End of Period) | $1,820,365 | $1,820,365 |
| Accumulated Deficit | $(9,788,184) | $(9,788,184) |
| Total Liabilities | $384,646 | $384,646 |
| Long-Term Debt | $0 | $0 |
| Mezzanine Equity (Series A Preferred) | $4,232,686 | $4,232,686 |
Liquidity: The Company reported a net decrease in cash of $368,867 for the six months ended June 30, 2026. Management believes existing cash resources are sufficient to fund operations for at least the next twelve months.
Material Changes vs. Prior Period
- Revenue: The Company generated no revenue for the three or six months ended June 30, 2026, compared to nominal revenue of $1,587 and $3,056, respectively, in the prior year periods.
- Operating Expenses: Total operating expenses for the six months ended June 30, 2026, increased by approximately 97% to $2,360,236 from $1,200,582 in the prior year. This increase was driven primarily by higher payroll expenses (including stock-based compensation) and professional service fees related to financing and compliance.
- Interest Expense: Interest expense, net, increased significantly to $287,028 for the six months ended June 30, 2026, compared to $427 in the prior year. This was primarily due to the conversion of a convertible promissory note in March 2026, which triggered the recognition of guaranteed interest and amortization of debt discounts.
- Debt: The Company converted its entire $200,000 Greentree Promissory Note into equity in March 2026, resulting in zero long-term debt as of June 30, 2026.
- Equity Structure: The Company issued Series A Convertible Redeemable Preferred Stock (classified as mezzanine equity) with an aggregate redemption value of $4,232,686. This issuance included accretion of $2,062,360 to redemption value during the six-month period.
Guidance, Outlook, Risks, and Unusual Items
- Going Concern: The financial statements are prepared on a going concern basis. The Company has incurred significant losses and has minimal revenue. Continued operations depend on generating revenue or obtaining additional financing.
- Nasdaq Delisting Risk: On July 17, 2026, the Company received a delisting determination from Nasdaq due to non-compliance with the minimum stockholders' equity requirement ($2.5 million). The Company has requested a hearing scheduled for August 25, 2026. There is no assurance the Company will regain compliance.
- Series A Preferred Stock: The Series A Preferred Stock is redeemable upon the occurrence of certain triggering events (e.g., regulatory rejection of transactions). As of June 30, 2026, the base Triggering Redemption Amount was approximately $4.2 million, exclusive of accrued dividends and legal fees.
- Related Party Transactions: The Company repurchased 6,250,000 shares of common stock from related parties for $3,075,000 in connection with the PIPE offering. Additionally, the Company settled disputes with NovoDX Corporation and D. Boral Capital LLC involving cash and stock issuances.
- Internal Controls: Management concluded that disclosure controls and procedures were not effective as of June 30, 2026, citing material weaknesses related to journal entry identification and the lack of formal controls for related party transactions.
Key Facts for Investor Verification
- Delisting Status: Verify the outcome of the Nasdaq hearing scheduled for August 25, 2026, and the Company's ability to regain compliance with listing standards.
- Redemption Obligation: Confirm the current redemption value of the Series A Preferred Stock and any potential triggering events that could require immediate cash payment of approximately $4.2 million plus accrued dividends.
- Revenue Generation: Assess the timeline for commercializing products, as the Company has generated zero revenue for the current reporting period.
- Capital Needs: Monitor the Company's cash burn rate and any announcements regarding additional equity or debt financing required to sustain operations beyond the next twelve months.
- Related Party Settlements: Review the terms and financial impact of recent settlements with NovoDX and D. Boral Capital, including the issuance of shares and cash payments.