Company: JUNS
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010990
Chunk: 7

Company: JUPITER NEUROSCIENCES, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 7
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 expensed as the services are received. The
Company’s prepaid contracts are related to service agreements that span over three years, over which time the expense will be
recognized. See further discussion in Note 6 - Stockholders’ Equity.

Research and Development

Research and development costs are expensed as
incurred. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to
completion of specific tasks using data such as subject enrollment, monitoring visits, clinical site activations, or information provided
to us by our vendors with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual
arrangements, which may differ from the pattern of costs incurred, and are reflected in the condensed consolidated financial statements
as prepaid or accrued research and development expense, as the case may be.

    10

JUPITER NEUROSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025

Note 2 – Significant Accounting Policies,
continued

Income Taxes

The Company recognizes deferred tax assets and
liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities and the expected
benefits of net operating loss carryforwards. The impact of changes in tax rates and laws on deferred taxes, if any, applied during the
years in which temporary differences are expected to be settled, is reflected in the financial statements in the period of enactment.
The measurement of deferred tax assets is reduced, if necessary, if, based on weight of the evidence, it is more likely than not that
some, or all, of the deferred tax assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates
is recognized in the period that such tax rate changes are enacted. As of March 31, 2025 and December 31, 2024, the Company concluded
that a full valuation allowance is necessary for the net deferred tax assets.

Earnings Per Share of Common Stock

Basic earnings per share (“EPS”)
is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock
outstanding during each period. Diluted earnings per share includes the effect, if any, from the potential exercise or conversion of
securities, which would result in the issuance of incremental shares of common stock, using the treasury method.

The following table summarizes outstanding instruments which were not