Caring Brands, Inc.: Form 10-Q for the period ended Jun 30, 2026

Overview

The following discussion of our financial condition and results of operations should be read in conjunction with the other information contained in this Form 10-Q, including our unaudited Condensed Consolidated Financial Statements and notes thereto included elsewhere in this Form 10-Q, as well as our audited Consolidated Financial Statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2025 (“Form 10-K”), filed with the SEC. This discussion, as well as various other sections of this Form 10-Q, contain and refer to statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Such statements are any statements other than those of historical fact and relate to our intent, belief or current expectations primarily with respect to our future operating, financial and strategic performance. Any such forward-looking statements are not guarantees of future performance and may involve risks and uncertainties. These risks and uncertainties include, but are not limited to, those described in Part I, “Item 1A. Risk Factors,” and elsewhere in our Form 10-K, Part I, “Item 1A. Risk Factors,” and elsewhere in this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2026 and those described from time to time in other reports filed with the SEC. Actual results may differ from those contained in or implied by the forward-looking statements as a result of various factors. For more information, see “Cautionary Statement Regarding Forward-Looking Information” in our Form 10-K.

Overview and Business Trends

Caring Brands, Inc., a Nevada corporation (“Caring Brands” and together with its subsidiaries, the “Company,” or “we”), is a wellness consumer products company. We offer several over-the-counter, or (OTC) and cosmetic, consumer products. Our product pipeline includes a diverse range of products, such as hair loss treatments, Eczema and Psoriasis Treatments, vitiligo solutions, and a Jellyfish sting protective suncare line, that cater to different health and wellness needs. Our method of operation is to ensure that (1) the mechanism of action of all products is established, (2) efficacy is determined through controlled clinical trials, (3) products are protected by issued and filed patents, and (4) products have acceptable commercial stability.

Results of operations

The following table sets forth our consolidated statements of operations data in dollars for the periods presented:

*Due to the anti-dilutive effect, the computation of basic and diluted EPS did not include the shares underlying the exercise of warrants, options, RSUs and Series A preferred stock as the Company had a net loss for the three and six months ended June 30, 2026 and 2025.

Comparison of the three and six months ended June 30, 2026 to the three and six months ended June 30, 2025.

Revenue and Cost of revenue

For the three months ended June 30, 2026, the Company generated no revenue, compared to revenue of $1,587 for the three months ended June 30, 2025, and cost of revenue was $0, compared to $722 for the same period. The prior-year amounts were inconsequential and reflected early-stage product activity.

For the six months ended June 30, 2026, the Company generated no revenue, compared to revenue of $3,056 for the six months ended June 30, 2025, and cost of revenue was $0, compared to $1,400 for the same period. The Company is still in the process of developing and commercializing its products and has not yet generated meaningful commercial revenue.

Operating expenses

Total operating expenses for the three months ended June 30, 2026 were $638,737, compared to $660,448 for the three months ended June 30, 2025, a decrease of $21,711, or approximately 3%. Selling, general and administrative expenses increased by $4,856, or approximately 23%, to $26,187, reflecting higher public company compliance, insurance and administrative costs. Payroll expenses decreased by $74,928, or approximately 15%, to $414,186, primarily because the prior-year quarter included $382,000 of stock-based consulting expense, while the current quarter included $204,967 of non-cash amortization of restricted stock units and stock options. Professional service fees increased by $123,361, or approximately 164%, to $198,364, primarily attributable to higher legal, accounting and audit fees incurred in connection with settlement matters, the second tranche of the Series A Convertible Redeemable Preferred Stock financing, and ongoing public company compliance obligations. Depreciation and amortization decreased to $0 from $75,000, due to the full impairment of the Company’s intellectual property license recorded during the year ended December 31, 2025.

Total operating expenses for the six months ended June 30, 2026 were $2,360,236, compared to $1,200,582 for the six months ended June 30, 2025, an increase of $1,159,654, or approximately 97%. Selling, general and administrative expenses increased by $63,233, or approximately 123%, to $114,723, reflecting higher corporate overhead costs, including public company compliance, insurance and administrative expenses. Payroll expenses increased by $658,739, or approximately 77%, to $1,514,886, primarily reflecting non-cash stock-based compensation, including restricted stock unit and stock option amortization and shares committed under consulting, advisory and settlement arrangements, as well as expanded management personnel; the prior-year period included $607,000 of shares issued for services. Professional service fees increased by $587,682 to $730,627, primarily attributable to higher legal, accounting, consulting and audit fees incurred in connection with the Series A Convertible Redeemable Preferred Stock financings, settlement matters, and ongoing public company compliance obligations, including $300,000 of consulting fees to be settled in stock. Depreciation and amortization decreased to $0 from $150,000, due to the full impairment of the intellectual property license recorded during the year ended December 31, 2025.

Total operating expenses for the three months ended June 30, 2026 were $638,737, compared to $660,448 for the three months ended June 30, 2025, a decrease of $21,711, or approximately 3%, primarily because the prior-year quarter included $382,000 of stock-based consulting expense. Total operating expenses for the six months ended June 30, 2026 were $2,360,236, compared to $1,200,582 for the six months ended June 30, 2025. The increase of $1,159,654, or approximately 97%, was primarily attributable to payroll expenses, including stock-based compensation, and professional service fees.

No impairment charges were recorded during the three and six months ended June 30, 2026 or the comparable prior-year periods.

As a result of the foregoing, the Company reported an operating loss of $638,737 for the three months ended June 30, 2026, compared to an operating loss of $659,583 for the three months ended June 30, 2025, a decrease of $20,846, or approximately 3%, primarily because the prior-year quarter included the stock-based consulting expense under the Genesis agreement described above.

For the six months ended June 30, 2026, the Company reported an operating loss of $2,360,236, compared to an operating loss of $1,198,926 for the six months ended June 30, 2025, an increase of $1,161,310, or approximately 97%, primarily driven by higher stock-based compensation and professional service fees, partially offset by the absence of depreciation and amortization in the current period.

Other income (expense)

For the three months ended June 30, 2026, interest expense, net was $39 and other income was $50, compared to interest expense of $0 and other expense of $1,000 for the three months ended June 30, 2025. Amounts in both quarters were immaterial.

Interest expense, net was $287,028 for the six months ended June 30, 2026, compared to $427 for the six months ended June 30, 2025. The increase of $286,601 was recorded entirely in the first quarter of 2026 and was primarily attributable to non-cash charges consisting of $148,867 of guaranteed interest on convertible debt, $141,350 of amortization of debt discounts, and $6,903 of amortization of debt issuance costs, all associated with the Greentree Promissory Note converted into common stock in March 2026, as further discussed in Note 7 – Debt.

Financial condition, liquidity and capital resources

Overview

As of June 30, 2026, the Company had cash and cash equivalents of $1,820,365, compared to $2,189,232 as of December 31, 2025. The decrease of $368,867 during the six months ended June 30, 2026 was primarily attributable to cash used in operating activities of $1,013,867, partially offset by net cash provided by financing activities of $645,000 relating to Private Investment in Public Equity financing (“PIPE Financing”) proceeds, net of the repurchase of common stock.

During the six months ended June 30, 2026, the Company raised aggregate gross proceeds of $3,870,000 from private placements of its Series A Convertible Redeemable Preferred Stock, consisting of $3,470,000 of net proceeds received in March 2026 and $400,000 of subscription proceeds received in June 2026 under the second tranche of the PIPE Financing. Concurrent with the initial PIPE Financing, the Company repurchased 6,250,000 shares of its common stock for an aggregate consideration of $3,075,000.

Total assets decreased to $1,909,623 as of June 30, 2026, compared to $2,326,818 as of December 31, 2025. The decrease of $417,195 was primarily driven by a net decrease in cash and cash equivalents of $368,867 and a decrease in prepaid expenses and other current assets of $48,328, while inventory remained unchanged. The Company had no non-current assets as of either balance sheet date.

Total liabilities increased to $384,646 as of June 30, 2026, compared to $235,494 as of December 31, 2025. The increase of $149,152 was primarily attributable to an increase in accounts payable of $123,454, primarily related to consulting services incurred in connection with the Genesis agreement, and an increase in accrued expenses and other current liabilities of $84,348, largely reflecting accrued dividends on the Series A Preferred Stock, partially offset by a decrease in long-term debt of $58,650 due to the conversion of the Greentree Promissory Note.

The Company’s primary cash requirements consist of funding operating expenses, including payroll and professional service fees, and supporting corporate development and compliance activities as a public company.

Based on current operating plans and available cash on hand, management believes that existing cash resources are sufficient to fund operations for at least the next twelve months. The Company may seek additional capital in the future to support long-term growth initiatives, strategic investments, or acquisitions. Such financing, if pursued, may include equity offerings, debt financing, or other strategic transactions; however, there can be no assurance that additional capital will be available on acceptable terms, or at all.

Our ability to meet our operating, investing and financing needs depends to a significant extent on our future financial performance, which will be subject in part to general economic, competitive, financial, regulatory and other factors that are beyond our control, including those described elsewhere in Part II, Item 1A “Risk factors.”

Cash flows

For the six months ended June 30, 2026, net cash used in operating activities was $1,013,867, compared to net cash used of $451,105 for the six months ended June 30, 2025. For the six months ended June 30, 2026, cash used in operating activities included a net loss of $2,647,202, partially offset by non-cash expenses consisting primarily of:

• $1,036,496 of stock-based compensation, including restricted stock unit and stock option amortization and shares committed under consulting, advisory and settlement arrangements;
• $137,500 of loss on stock repurchased from related parties; and
• $141,350 of amortization of debt discounts.

Changes in working capital also impacted operating cash flows during the six months ended June 30, 2026. Accounts payable increased operating cash by $123,454, prepaid expenses and other current assets decreased by $48,328, and accrued expenses and other current liabilities increased by $146,207; inventory was unchanged. For the six months ended June 30, 2025, net cash used in operating activities of $451,105 was primarily attributable to a net loss of $1,199,353, partially offset by $607,000 of shares issued for services and $150,000 of depreciation and amortization, together with working capital changes including an increase in accounts payable of $6,935, a decrease in accrued expenses of $11,438, an increase in prepaid expenses of $4,891 and a decrease in inventory of $642.

For the six months ended June 30, 2026 and 2025, net cash used in investing activities was $0. The Company had no investing activity in either period.

For the six months ended June 30, 2026, net cash provided by financing activities was $645,000, compared to $56,000 for the six months ended June 30, 2025, consisting of:

The Management’s Discussion and Analysis (“MD&A”) is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these unaudited condensed consolidated financial statements required the use of estimates and judgments that affect the reported amounts of our assets, liabilities, revenues and expenses. Management bases estimates on historical experience and other assumptions it believes to be reasonable under the circumstances and evaluates these estimates on an on-going basis. Actual results may differ from these estimates. There have been no significant changes to the critical accounting policies and estimates included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, except as described below.

Intellectual property, including license agreements, is recorded at cost and amortized over the estimated useful life of the license using the straight-line method. The Company evaluates its intellectual property for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable, in accordance with ASC 360. During the year ended December 31, 2025, management determined that the carrying value of the intellectual property was not recoverable and recorded a full impairment charge of $2,550,000. As a result, the Company had no remaining intellectual property balance as of December 31, 2025 or June 30, 2026, and accordingly no amortization expense was recorded during the three and six months ended June 30, 2026. No impairment charges were recorded during the three and six months ended June 30, 2026 or the comparable prior-year periods.

Stock Based Compensation

The Company recognizes compensation costs to employees under FASB Accounting Standards Codification 718 “Compensation - Stock Compensation” (“ASC 718”). Under ASC 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options and warrants. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.

The Company has adopted ASU No. 2018-07 “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” These amendments expand the scope of Topic 718, Compensation - Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to non-employees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned.

Mezzanine Equity – Redeemable Preferred Stock

The Company’s Series A Convertible Redeemable Preferred Stock is classified outside of permanent equity (“mezzanine equity”) in accordance with ASC 480-10-S99, as the preferred stock is redeemable upon the occurrence of events not solely within the Company’s control. The preferred stock is initially recorded at the proceeds allocated to it upon issuance and is subsequently adjusted to its redemption value at each reporting period end through charges to additional paid-in capital. The accretion to redemption value is treated as a deemed dividend and is reflected as an adjustment to net loss to arrive at net loss attributable to common stockholders in the Condensed Consolidated Statements of Operations. For the six months ended June 30, 2026, the Company recorded accretion of $2,062,360 to reflect the Series A Preferred Stock at its redemption value.

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.

Recent accounting pronouncements

New accounting pronouncements issued but not yet adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40). The standard requires additional disclosures, in the notes to financial statements, of specified information about certain costs and expenses included in the captions presented on the face of the income statement. The new guidance is effective for the Company’s annual reporting period beginning January 1, 2027, and interim reporting periods beginning January 1, 2028. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively and early adoption is permitted. The Company expects ASU 2024-03 to only impact its disclosures with no impacts to the Company’s results of operations, cash flows, and financial condition.

In May 2025, the FASB issued ASU No. 2025-04, Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606), which is intended to reduce diversity in practice and improve existing guidance, primarily by revising the definition of a “performance condition” and eliminating forfeiture policy election for service conditions associated with share-based consideration payable to a customer. In addition, ASU No. 2025-04 clarifies that the guidance in ASC 606 on the variable consideration constraints does not apply to share-based consideration payable to a customer regardless of whether an award’s grant date has occurred (as determined under ASC 718). ASU No. 2025-04 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. We plan to adopt ASU No. 2025-04 in the first quarter of fiscal year 2028. We are currently evaluating the impact of this ASU on our financial statements and disclosures.

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the effect of recently issued standards that are not yet effective will not have a material effect on its consolidated financial position or results of operations upon adoption.

Recently adopted accounting pronouncements

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740). The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The new requirements apply to all entities subject to income taxes and will be effective for the Company’s annual periods beginning January 1, 2026. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively and early adoption is permitted. The Company expects ASU 2023-09 to only impact its disclosures with no impacts to the Company’s results of operations, cash flows, and financial condition. Please refer to Note 12, Income taxes for the inclusion of the new required disclosures.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 (as amended, the “Exchange Act”) and are not required to provide the information under this item.

Our management, with the participation of our Chief Executive Officer and Interim Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of June 30, 2026.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Interim Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Based on this evaluation, our Chief Executive Officer and Interim Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2026 due to the following deficiencies that we believe to be material weaknesses.

• The Company’s system of internal controls failed to identify multiple journal entries that were identified by the Company’s external auditor.
• The Company has no formal control process related to the identification and approval of related party transactions.

We are in the process of designing and implementing enhanced controls and formalizing our internal control environment to remediate this material weakness.

Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The Company has included in Item 1A of Part 1 of its Annual Report on Form 10-K for the year ended December 31, 2025 (“Form 10-K”), a description of certain risks and uncertainties that could affect the Company’s business, future performance, or financial condition (the “Risk Factors”). Except as set forth below, there have been no material changes to the risk factors disclosed in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2025. The following risk factor updates and replaces the risk factor entitled “We may not be able to satisfy listing requirements of the NASDAQ or obtain or maintain a listing of our common stock on the NASDAQ.”

We are not in compliance with Nasdaq’s continued listing requirements and have appealed a Staff Delisting Determination. If our appeal is unsuccessful, our common stock will be suspended from trading and delisted from Nasdaq, which would materially adversely affect the liquidity and market price of our common stock and our ability to raise capital.

Our common stock is listed on The Nasdaq Capital Market under the symbol “CABR.” On April 7, 2026, we received notice from the Listing Qualifications Department of Nasdaq (the “Staff”) that we were not in compliance with Nasdaq Listing Rule 5550(b)(1), which requires at least $2.5 million in stockholders’ equity, and that we did not satisfy either alternative continued listing standard under Nasdaq Listing Rule 5550(b). The notice was based on our Annual Report on Form 10-K for the year ended December 31, 2025.

We submitted a plan to regain compliance that contemplated (i) amending the Certificate of Designation of our Series A Convertible Redeemable Preferred Stock to eliminate its redemption rights and permit its reclassification from mezzanine equity to permanent stockholders’ equity and (ii) obtaining additional financing from the holder of the Series A Convertible Redeemable Preferred Stock. On July 15, 2026, we received a Staff Delisting Determination denying our request for continued listing. The Staff determined that, because we had not entered into a definitive agreement for the contemplated financing, we had not demonstrated our ability to regain compliance in the near term and sustain compliance over an extended period. Accordingly, the Staff did not grant us a discretionary compliance period.

We timely requested a hearing before a Nasdaq Hearings Panel (the “Panel”), which stayed the suspension of trading in our common stock and the filing of a Form 25-NSE pending the Panel’s decision. The hearing is scheduled for August 25, 2026. There can be no assurance that the Panel will grant our request for continued listing or that we will regain or maintain compliance with Nasdaq’s continued listing requirements. Any exception granted by the Panel would be subject to milestones established by the Panel. Failure to satisfy any such milestone could result in the suspension and delisting of our common stock. We could also be subject to a one-year Discretionary Panel Monitor, during which a new deficiency could result in another Staff Delisting Determination without an opportunity to submit a compliance plan or receive an otherwise available cure period.

Our ability to regain compliance depends on our ability to amend the Certificate of Designation, obtain additional financing on acceptable terms and demonstrate that we can sustain compliance over an extended period. We may be unable to complete these actions, and Nasdaq may determine that any actions we complete are insufficient. In addition, our continued losses may further reduce our stockholders’ equity, and we must continue to satisfy all other Nasdaq continued listing requirements.

On July 22, 2026, the SEC’s Division of Trading and Markets approved a Nasdaq rule change that would require companies listed on The Nasdaq Capital Market to maintain a market value of listed securities of at least $5 million. Under the approved rule, a company falling below that threshold for 30 consecutive business days would be subject to immediate suspension and delisting proceedings without a cure period, and a hearing request would not stay the suspension. On July 29, 2026, the approval order was stayed pending review by the full Commission. Accordingly, the new requirement is not currently effective. There can be no assurance regarding the timing or outcome of the Commission’s review or whether the rule will become effective in its current or a modified form. If the rule becomes effective and we fail to satisfy the requirement, our common stock could be suspended and subjected to delisting proceedings with little or no opportunity for remedial action.

If our common stock is delisted, our stockholders may experience reduced liquidity, limited availability of market quotations and decreased trading prices. Our common stock may also become subject to the SEC’s “penny stock” rules, which would impose additional requirements on broker-dealers and could further limit trading. Delisting could also reduce analyst coverage, impair our ability to issue securities or obtain financing, adversely affect our relationships with investors and financial institutions and materially reduce the value of an investment in our common stock.