CYDY 10-K & 10-Q changes, risk factors and insider trading

Our business is subject to numerous risks and uncertainties, including those highlighted in this section, which represent challenges we face in our efforts to successfully implement our strategy. You should carefully consider the risks described below in addition to other information set forth in this Form 10-K, including Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and related notes in Part II, Item 8. These risks, some of which have occurred and any of which may occur, alone or in combination with other events or circumstancescircumstances, in the future, may have a material adverse effect on our business, financial condition, cash flows, results of operations,operations or the trading price of our common stock. The risks described below are not the only risks we face. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may occur or become material in the future. Therefore, historical financial and business performance, events and trends are often not a reliable indicator of future operating results, financial and business performance, events or trends.

As of JuneJuly 30,31, 2025,2026, we had an unrestricted cash balance of approximately $12.1$12.2 million and no reserved cash balance. We must continue to raise additional funds in the near term to meet our payment obligations and fund our operations. Additional funding may not be available on acceptable terms or at all. In addition, as of JuneJuly 30,31, 2025,2026, we had approximately 172.8206.3 million shares of common stock unreserved for other purposes and available for issuance in new financing transactions. Our outstanding accounts payable and accrued liabilities totaled approximately $16.1$31.0 million on JuneJuly 30,31, 2025.2026. If we are not able to raise additional funds on a timely basis, we may be forced to delay, reduce the scope of,of or eliminate one or more of our planned operating activities, including: conducting a study of leronlimab in patients with relapsed/refractory microsatellite stable colorectal cancer; conducting aadditional studystudies ofexploring leronlimab and its therapeutic potential in patientsother withsolid-tumor oncology indications, including but not limited to metastatic triple-negative breast cancer; pursuing research and development of longer-acting molecules; and evaluating other opportunities for pre-clinicalpreclinical studies and publishing data from previously conducted studies. Any delay or inability to pursue our planned activities likely will adversely affect our business, financial condition, and stock price. The continued low trading price of our common stock (with a closing price of $0.27$0.19 per share on JuneJuly 30,31, 20252026) presents a significant challenge to our ability to raise additional funds. If we deplete our cash reserves, we may have to discontinue our operations and liquidate our assets.

We have not generated revenue from product sales, licensing,licensing or other income opportunities to date. Since our inception, we have incurred operating losses each year due to costs incurred for research and development activities and general and administrative expenses related to our operations. We expect to incur losses for the foreseeable future, with no or only minimal revenues as we continue to pursue development of, and seek regulatory approvals for, leronlimab. If leronlimab fails to gain regulatory approval, or if it or other drug or biologic candidates we may acquire or license in the future do not achieve approval or market acceptance, we will not be able to generate revenue or explore other opportunities to enhance stockholder value, such as through a sale. If we fail to generate revenue or if we are unable to fund our continuing operations, our stockholders could lose a portion or all of their investments.

The recruitment and retention of skilled directors, executives, employees,employees and consultants may be difficult and expensive, may result in dilution to our stockholders, and any failure to attract and retain such individuals may adversely affect our drug development and commercialization activities.

Our business depends on the skills, performance,performance and dedication of our officers and key scientific and technical advisors, as well as our directors. All of our current scientific advisors are independent contractors and are either self-employed or employed by other organizations. As a result, they may have conflicts of interest or other commitments, such as consulting or advisory contracts with other organizations, that may affect their ability to provide services to us in a timely manner. We likely will need to recruit additional directors, executive management, employees,employees and advisors, particularly scientific and technical personnel. In addition, there is currently intense competition for skilled directors, executives,executives and employees with relevant scientific and technical expertise, and this competition is likely to continue. We compete for these qualified personnel against companies with greater financial resources than ours. These recruitment and retention efforts likely will require additional financial resources. To successfully recruit and retain qualified employees, we will need to offer a combination of salary, cash incentives,incentives and equity compensation. Future issuances of our equity securities for compensatory purposes will dilute existing stockholders’ ownership interests and reduce the shares available for future funding transactions. If we are unable to attract and retain individuals with relevant scientific, technical,technical and managerial experience, we may be forced to limit or delay our product development activities or may experience difficulties in successfully conducting our business, which would adversely affect our operations and financial condition.

The loss, temporary loss,loss or transition of members of our senior management team or any other key employees may adversely affect our business.

Section 404 of the Sarbanes-Oxley Act of 2002 and related regulations require us to evaluate the effectiveness of our internal control over financial reporting as of the end of each fiscal year, and to include a management report assessing the effectiveness of our internal control over financial reporting in our Form 10-K for that fiscal year. Failure to maintain our controls or operation of these controls may harm our operations, decrease the reliability of our financial reporting,reporting and cause us to fail to meet our financial reporting obligations, which could adversely affect our business and reduce our stock price.

Our information technology systems could fail to perform adequately or experience data corruption, cyber-based attacks,attacks or network security breaches.

We rely on information technology networks and systems, including the internet, to process, transmit,transmit and store electronic information. In particular, we depend on our information technology infrastructure to effectively manage our business data, finance,finance and other business processes and electronic communications between our personnel and corporate partners. If we do not allocate and effectively manage the resources necessary to build and sustain an appropriate technology infrastructure, security breaches or system failures of this infrastructure may result in system disruptions, shutdowns,shutdowns or unauthorized disclosure of confidential information, including patient information in violation of HIPAA requirements. In addition, our employees, contractors,contractors and other corporate partners increasingly are working from remote locations. As a result, we rely on information technology systems that are outside our direct control. These systems are potentially vulnerable to cyber-based attacks and security breaches. In addition, cyber criminals are increasing their attacks on individual employees, including scams designed to trick victims into transferring sensitive data or funds or stealing credentials that compromise information systems. If one of our employees falls victim to these attacks, or our information technology systems or those of our partners are compromised, our operations could be disrupted, or we may suffer financial loss, loss or misappropriation of intellectual property or other critical assets, reputational harm,harm and regulatory fines and intervention, and our business and financial condition may be adversely affected.

Our business, operating results,results and financial condition could be negatively affected as a result of litigation and other demands made by stockholders.

We are and have been involved in legal proceedings and other claims brought by stockholders, including class actions alleging securities law violations, derivative actions alleging waste of corporate assets, unjust enrichment, other breaches of fiduciary duties by former directors and current and former executive officers, and demands by activist investors. Similar actions may occur in the future. While the Company welcomes opinions of all stockholders, responding to demands, litigation, proxy contests,contests or other initiatives by stockholders or activist investors may divert the attention of our Board, management team, and employees from their regular duties in the pursuit of business opportunities to enhance stockholder value. Such actions may also cause our existing or potential employees, strategic partners,partners and stockholders to have questions or doubts about the future direction of the Company and may provide our competitors with an opportunity to exploit these concerns. Such circumstances could cause significant fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business. Refer to Part II, Item 8, Note 9,10, Commitments and Contingencies – Legal Proceedings in this Form 10-K for additional information.

We are subject to oversight by the SEC, FDA,FDA and other regulatory agencies. Investigations and proceedings by those agencies may divert management’s focus and have a material adverse effect on our reputation and financial condition.

We are subject to the regulation and oversight by the SEC and state regulatory agencies, in addition to the FDA and other federal regulatory agencies. As a result, we may face legal or administrative proceedings by these agencies. We have received subpoenas from the SEC and the U.S Department of Justice (the “DOJ”) requesting documents and information concerning, among other matters, leronlimab, our public statements regarding the use of leronlimab as a potential treatment for COVID-19, HIV, and triple-negative breast cancer, related communications with the FDA, investors, and others, litigation involving former employees, our retention of investor relations consultants, and trading in our securities. On December 20, 2022, the DOJ announced the unsealing of a criminal indictment charging both our former CEO, Nader Z. Pourhassan, and Kazem Kazempour, CEO of Amarex, our former CRO. That same day, the SEC announced charges against both Mr. Pourhassan and Mr. Kazempour for alleged violations of federal securities laws. In December 2024, a federal jury convicted Mr. Pourhassan and Mr. Kazempour on a number of counts. On January 23, 2026, Mr. Pourhassan was sentenced to 30 months imprisonment to be followed by three years of supervised release, was ordered to self-surrender by April 27, 2026, and was ordered to pay $5,392,280 in restitution. On January 26, 2026, Mr. Kazempour arewas currentlygranted scheduleda tonew be sentenced in September 2025.trial. The Company is cooperatingcooperated fully with the DOJ and SEC investigations. WeIn September 2025, the SEC and DOJ informed the Company that their respective investigations are unableeffectively toclosed, predictand that nothing further is required of the effect of any governmental investigations on our business, financial condition, or reputation. In addition, publicity surrounding any investigation, even if ultimately resolved favorably, could have a material adverse effect on our business. Refer to Part II, Item 8, Note 9, Commitments and Contingencies – Legal Proceedings in this Form 10-K for further information.Company.

In addition, from time to time, we may also be involved in legal proceedings and investigations arising in the ordinary course of business, including those relating to employment matters, relationships with partners, intellectual property disputes,disputes and other business matters. Any such claims or investigations may be time-consuming, costly, divert management resources, or otherwise have a material adverse effect on our business, financial condition,condition or results of operations. Any claims or litigation, even if fully indemnified or insured, could damage our reputation and make it more difficult to compete effectively or obtain adequate insurance in the future.

Certain agreements and related license agreements require us to make significant milestone, royalty,royalty and other payments, which will require additional financing and, in the event we do commercialize leronlimab, decrease the revenues we may ultimately receive on sales. To the extent that such milestone, royalty, and other payments are not timely made, the counterparties to such agreements in certain cases have repurchase and termination rights thereunder with respect to leronlimab.

Under agreements we have with Progenics Pharmaceuticals, Inc. (“Progenics”) and Lonza Sales AG (“Lonza”), as well as a Development and License Agreement (the “PDL License”) between Protein Design Labs (now AbbVie Inc. (“AbbVie”)) and Progenics, we are required to pay significant milestone payments, license fees for “system know-how” technology,technology and royalties related to leronlimab upon the occurrence of specified events. To make these milestone and license payments, we will need to raise additional funds. In addition, our royalty obligations will reduce the economic benefits to us of future sales, if any. To the extent that such milestone payments and royalties are not timely made, under their respective agreements, Progenics has certain repurchase rights relating to the assets sold to us, and AbbVie has certain termination rights relating to our license of leronlimab under the PDL License. Refer to Part II, Item 8, Note 9,10, Commitments and Contingencies – PRO 140 Acquisition and Licensing Arrangements in this Form 10-K for further information.

If we are unable to obtain all required regulatory approvals for leronlimab, we will not be able to commercialize our primary product candidate, which would materially and adversely affect our business, financial condition,condition and stock price.

Clinical testing is expensive, difficult to design and implement, may take many years to complete,complete and its outcome is uncertain. The research, testing, manufacturing, labeling, packaging, storage, approval, sale, marketing, advertising and promotion, pricing, export, import,import and distribution of drug products are subject to extensive regulation by the FDA and other regulatory authorities in the United States and other countries, with regulations differing from country to country. We are not permitted to market a drug candidate as prescription pharmaceutical products in the United States until we receive approval from the FDA, or in foreign markets until we receive the requisite approval from comparable regulatory authorities in foreign countries. In the United States, the FDA generally requires the completion of clinical trials of each drug to establish its safety and efficacy, and extensive pharmaceutical development to ensure its quality before approval. Regulatory authorities in other jurisdictions impose similar requirements. Of the substantial number of drugs in development, only a small percentage are approved for commercialization. Receipt of necessary regulatory approval for the use of leronlimab for one or more indications is subject to a number of risks which include, among others:

We cannot guarantee that regulators will agree with our assessment of the results of our past or future clinical trials or that such trials will be considered by regulators to have shown safety or efficacy of our product candidate. The FDA has substantial discretion in the approval process and may refuse to accept any application or may require additional clinical trials or pre-clinical or other studies. Additionally, we have limited experience in filing the applications necessary to gain regulatory approvals and expect to continue to rely on consultants and our CROs to assist us in this process. Securing FDA approval requires the submission of pre-clinical, clinical,clinical and/or pharmacokinetic data, information about product manufacturing processes and inspection of facilities, and supporting information for each therapeutic indication to establish a product candidate’s safety and efficacy for each indication. Our drug candidate may prove to have undesirable or unintended side effects, toxicities,toxicities or other characteristics that may preclude us from obtaining regulatory approval or prevent or limit commercial use with respect to one or all intended indications. Failure to obtain regulatory approval for leronlimab will prevent us from commercializing it as a prescription product, and our ability to generate revenue will be seriously impaired.

Disruptions and changes in priorities at the FDA and other government agencies caused by funding shortages, Executive Orders,Orders or globalother health concernsfactors could hinder their ability to hire, retain,retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved,approved or commercialized in a timely manner or at all, which could negatively impact our business.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the other sections of this Form 10-K, including our consolidated financial statements and related notes set forth in Part II, Item 8. This discussion and analysis contains forward-looking statements, including information about possible or assumed results of our operations, our performance, financial condition, plans,plans and objectives, thatwhich involve risks, uncertainties,uncertainties and assumptions. The actual results may differ materially from those anticipated and set forth in such forward-looking statements. See Forward-Looking Statements preceding Part I and Item 1A, Risk Factors in this Form 10-K.

The Company is a clinical stageclinical-stage biotechnology company focused on the clinical development and potential commercialization of its product candidate, leronlimab, which is being studied for its potential in solid-tumor oncology.

Our current business strategy is to continue to pursue the clinical development of leronlimab, which may include the following:

We may need significant additional funding to execute the above business strategy in full, which may include conducting a variety of additional pre-clinicalpreclinical studies and clinical trials, in furtherance of our efforts to obtain FDA approval to commercialize leronlimab. In addition to traditional fundraising, the Company will pursue non-dilutive financing opportunities, such as license agreements and co-development or strategic partnerships, to help implement its strategy.

ActionsKey taken by the Companyinitiatives during fiscal 20252026 included:

In August 2024, the Company completed a meeting with the U.S. Food and Drug Administration (FDA) to gain alignment on the rationale and proposed dosing for a Phase II2 study investigating the preliminary safety and activity of leronlimab in combination with trifluridine plus tipiracil (TAS-102) and bevacizumab in participants with CCR5+, microsatellite stable (“MSS”), relapsed or refractory metastatic colorectal cancer ("mCRC").

In October 2024, the Company engaged Syneos Health as the contract research organization (“CRO”) for its Phase II2 trial, which will evaluate the efficacystudy of leronlimab in patients with relapsed/refractory micro-satelliteMSS stable colorectal cancer (“CRC”).mCRC. Syneos Health is a leading fully integrated biopharmaceutical solutions organization that supports customers in accelerating the delivery of life-saving therapies to market. Syneos Health leverages advanced data analytics and artificial intelligence ("AI")/MLmachine learning capabilities to improve outcomes at every stage of the asset lifecycle, from clinical development to commercialization.

In November 2024, the Company received clearance from the US Food and Drug Administration (“FDA”) to commence its Phase II2 CRC trial, evaluating the efficacy of leronlimab in patients with relapsed/refractory microsatellite stable colorectal cancer.study. This milestone reflectedreflects the continued positiveimprovement development ofin the Company’s improved relationship with the FDA.

In DecemberJune 2024,2025, the Companyfirst announcedpatient thatwas Dr.dosed Ben Weinberg from Georgetown University and the MedStar Health Alliance had agreed to be the lead Principal Investigator forin the CRC study.study and patient enrollment and initiation of additional clinical sites commenced through Syneos Health. As requested by the FDA, the first five patients enrolled in this study will receivereceived 350 mg of leronlimab SQsubcutaneously once/week in combination with TAS-102 and Bevacizumab.bevacizumab. After a preliminary safety review, subsequent patients willwere then be randomized to 350 or 700 mg of weekly leronlimab with the same background regimen. The Data and Safety Monitoring Board (DSMB) will performperformed a second safety review after the first 20 patients have completed at least 1 cycle of therapy. The DSMB could then recommend restricting further enrollment to a single dose level, should they identify a signal of superior activity in either one of the treatment arms.

In July 2025, the Company announcedpresented clinical data at the European Society for Medical Oncology (“ESMO”) Gastrointestinal Cancers Congress 2025, sharing encouraging historical clinical findings among patients with advanced mCRC, previously treated with leronlimab. The final results indicated that three of five patients treated with leronlimab had at least a partial response, as measured by radiologic criteria, including one patient with a complete response who remains alive five years later. TheThese final results, from patients treated between April 2020 and January 2021 under a prior compassionate use protocol, reiterate a favorable safety profile of leronlimab as well as its potential for clinical benefit in patients with mCRC. The results also support the rationale for the design and therapeutic potential of the Phase II2 CRC trial.study.

In February and March 2025, the Company announced encouraging survival outcomes among a group of patients with mTNBC treated with leronlimab in the Company’saforementioned 2019 trialstudy(sies). Although mTNBC patients typically have a poor prognosis, observed survival rates at 12, 24, 36, and 48 months after treatment with leronlimab compare favorably with reported life expectancy after treatment with currently approved therapies. In addition, the Company confirmed that a small group of patients who failed treatment after developing metastatic disease survived more than 48 months after receiving leronlimab, are alive today, and currently identify as having no evidence of ongoing disease.

In May 2025, the Company announced new data suggesting a novel mechanism of action of leronlimab for the treatment of solid tumors. The Company analyzed data from its prior clinical trials of patients with mTNBC and found that leronlimab treatment correlated with increased expression of an immune cell protein or “checkpoint inhibitor” known as programmed death-ligand 1 (“PD-L1”) on patient’spatients’ circulating tumor cells (“CTCs”).cells. The results indicated that 15 of 17 (88%) of patients who received a weekly dose of 525 mg or higher experienced a significant increase in PD-L1 expression on their CTCs over a 30-to-90-day period after starting leronlimab. Increasing expression of PD-L1 can be likened to turning “cold” tumors “hot”, elevating PD-L1 levels to the level necessary for patients to potentially derive benefit from further treatment with a class of drugs known as immune checkpoint inhibitors (“ICIs”). The Company also confirmed that all five patients (100%) who demonstrated a significant increase in PD-L1 expression after receiving leronlimab and received treatment with any ICI remain alive today.

The Company is currently in the process of resuming its clinical development in mTNBC, with the intention to prospectively confirm the retrospective observations in mTNBC outlined above. In early 2025, theThe Company announcedcurrently several preclinical studies in TNBC intendedexpects to identifycommence treatmentat strategiesleast to optimize the design of a future Phase II study,one, and topotentially furthermultiple examine the apparent mechanism behind the observed increase in survival as compared to existing treatment paths. In the interim, ongoing discussions with KOLs are being conducted towards initiating a studystudies in patients with mTNBCbreast oncancer, anwith abbreviatedthe timeline.first such study set to start enrolling in the Fall of 2026.

The Company has an active and ongoing joint development agreement with a third-party company with generative AI drug discovery and development tools in an effort to develop one or more longer-acting molecules. TheIf successful, a longer-acting formulation has the potential to improve patient convenience, support chronic administration where appropriate, and enhance the commercial profile of leronlimab across selected indications. This joint development initiative remains in progress at this time, and the Company believes this collaboration will resultprovide infurther theupdates expeditedwhen development of a modified, longer-acting therapeutic, and could lead to greater acceptance by patients due to the requirement for less frequent injections. The services provided by the third party may yield extended intellectual property protection, thereby increasing the value of the Company’s patent portfolio.appropriate.

The Company’s operating results may fluctuate significantly depending on the outcomes, number and timing of pre-clinicalpreclinical and clinical studies, patient enrollment and/or completion rates in the studies, and their related effect on research and development expenses, regulatory and compliance activities, activities related to seeking FDA approval of our drug product, general and administrative expenses, professional fees,fees and legal and regulatory proceedings and related consequences. We require a significant amount of capital to continue to operate; therefore, we regularly conduct financing offerings to raise capital, which may result in various forms of non-cash interest expense or other expenses. Additionally, we periodically seek to negotiate settlement of debt payment obligations in exchange for equity securities of the Company and enter into warrant exchanges or modifications that may result in non-cash charges. Our ability to continue to fund operations will depend on our ability to raise additional funds. Refer to Risk Factors, Liquidity and Capital Resources,Resources and Going Concern sections included in this report.Form 10-K.

The decreaseincrease in G&A expenses for the fiscal year ended May 31, 2025,2026, compared to the prior fiscal year, was primarily dueattributable to a reduction in stock-based compensation and salaries, benefitsbenefits, and other compensation duearising tofrom classifyingheadcount clinical employees’ compensation as a research and development expense in the current fiscal year.increases.

The decreaseincrease in R&D expenses in the fiscal year ended May 31, 2025,2026, compared to the prior fiscal year, was primarily due to higher clinical expenses related to the Phase 2 preclinical study of leronlimab in patients with relapsed/refractory micro-satellite stable colorectal cancer. Additionally, the primary factor contributing to the increase in R&D expenses was a return of clinical expenses related to the settlement of the Company’s litigation with Amarex in July 2024. Refer to Note 9, Commitments and Contingencies – Legal Proceedings – Settlement of Amarex Dispute for further information.

The future trend of our R&D expenses is dependent on the costs of any future clinical trials and our decisions regarding which indications on which to focus our future efforts toward the development and study of leronlimab, which may include pre-clinicalpreclinical and clinical studies for oncology and inflammation, as well as the timing and outcomes of efforts to develop a long-acting new or modified therapeutic, the timing and outcomes of such efforts, and the timing of the final close-out of closed studies.therapeutic.

Interest and other expenseexpenses

The decrease in interest and other expenses for the fiscal year ended May 31, 2025,2026, compared with the prior fiscal year, was primarily due to thelower decreasesinterest inon lossconvertible notes payable, absence of losses on induced conversion,conversion lossand on notederivatives extinguishmentin andthe financemost charges.recent fiscal year. The decrease in interest on convertible notes payable is due to a lower interest rate compared to the prior period. The decrease in loss on induced conversion is due to recentthe note payments classifiedin asthe gainscurrent onfiscal restructuringyear being exchanged with an equal value of payables.shares of common stock. The decrease in loss on note extinguishmentderivatives is due to noteno extinguishmentsderivative occurringactivity in the priorfiscal 2026 period. The decrease in financeinterest chargesand isother dueexpenses for the fiscal year ended May 31, 2026 was partially offset by issuance costs related to restructuring the balanceprivate dueplacement toof Samsung,common whichstock removedand anywarrants futurethrough interest.a placement agent.

As of May 31, 2025,2026, we had a total of approximately $11.9 million in cash and cash equivalents, and approximately $70.5$53.7 million in short-term liabilities consisting primarily of approximately $45.4$12.0 million representing the principalshort-term portion of the principal and accrued interest on convertible notes payable, net of unamortized debt discount, and approximately $16.9$32.1 million in accounts payable and accrued liabilities and compensation. We will continue to incur operating losseslosses, and the Company will require a significant amount of additional capital in the future as we continue to seek approval to commercialize leronlimab. Despite the Company’s negative working capital position, vendor relations remain relatively accommodative given liquidity constraints. We cannot be certain, however, that future funding will be available to us when needed on terms that are acceptable to us, or at all. We sell securities and incur debt when the terms of such agreements are deemed favorable to both parties under then current circumstances and as necessary to fund our current and projected cash needs.

The Company’s cash and cash equivalents position of approximately $11.9 million and zero restricted cash, respectively, on May 31, 2025,2026, increasedhad bylittle approximately $8.8 million and decreased by $6.7 million, respectively,change compared to the cash balance of approximately $3.1 million and restricted cash balance of approximately $6.7$11.9 million on May 31, 2024.2025.

Net cash used in operating activities totaled approximately $8.8$17.3 million during the fiscal year ended May 31, 2025,2026, representing an improvementincrease of approximately $2.2$8.5 million compared to the prior year. The increase in the net amount of cash providedused byin operating activities was due primarily to a one-time legal settlement of approximately $10.0 million,million offsetin bythe additionalprior clinical research payments. Refer to Note 9, Commitments and Contingencies – Legal Proceedings – Settlement of Amarex Dispute for further information.period.

Net cash provided by financing activities totaled approximately $10.9$17.2 million, aan decreaseincrease of approximately $0.9$6.3 million compared to the prior year. The decreaseincrease in net cash provided was primarily the result of raising less funds fromthe private placementssale of common stock and warrants, offset by an increase in funds raised from warrant exchange transactions.warrants.

On April 2, 2021, we issued a convertible note with a principal amount of $28.5 million resulting in net cash proceeds of $25.0 million, after $3.4 million of debt discount and $0.1 million of offering costs. The note as amended in AprilMarch 20252026 accrues interest daily at a rate of 6%5% per annum, has a stated conversion price of $10.00 per share, and matures in April 2026.2029. As of May 31, 2025,2026, the outstanding balance of the April 2, 2021 Note, including accrued interest, was approximately $8.2$8.7 million.

On April 23, 2021, we issued a convertible note with a principal amount of $28.5 million resulting in net cash proceeds of $25.0 million, after $3.4 million of debt discount and $0.1 million of offering costs. The note as amended in AprilMarch 20252026 accrues interest daily at a rate of 6%5% per annum, has a stated conversion price of $10.00 per share, and matures in April 2026.2029. As of May 31, 2025,2026, the outstanding balance of the April 23, 2021 Note, including accrued interest, was approximately $37.1$29.6 million.

As of May 31, 2025,2026, we did not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on our current or future financial condition, results of operations, liquidity, capital expenditures,expenditures or capital resources.

The Company had no activities that produced revenue in the periods presented and has had operating losses since inception. The Company’s continuation as a going concern is dependent upon its ability to obtain a significant amount of additional operating capital to continue to fund operations and pay its liabilities and commitments, to pursue its research into multiple indications for and development of its product candidate, to obtain FDA approval of its product candidate for use in treating one or more indications, to outsource manufacturing of its product,product and ultimately to attain profitability. We intend to seek additional funding through equity or debt offerings, licensing agreements, supply and distribution agreements, and strategic alliances to implement our business strategies. There are no assurances, however, that we will be successful in these endeavors. If we are not able to raise capital on a timely basis on favorable terms, if at all, we may need to significantly change or scale back operations, including pursuing other development and commercialization initiatives and obtaining adequate funding to cover the costs of the legal proceedings in which we are involved, all of which individually or in combination could materially impede our ability to achieve profitability. The Company’s failure to raise additional capital could also affect our relationships with key vendors and disrupt our ability to timely execute our business plan. In extreme cases, the Company could be forced to file for bankruptcy protection, discontinue operations,operations or liquidate assets.

Since inception, the Company has financed its activities principally from the public and private sale of equity securities, as well as with proceeds from issuance of convertible notes and related party notes payable. The Company intends to finance its future development activities and its working capital needs primarily from the sale of equity and debt securities. As of JuneJuly 30,31, 2025,2026, the Company had approximately 172.8206.3 million shares of common stock authorized for issuance under its certificate of incorporation, as amended, and available for future uses. The sale of equity and convertible debt securities to raise additional capital is likely to result in dilution to stockholders and those securities may have rights senior to the common stock. If the Company raises funds through the issuance of additional preferred stock, convertible debt securities, or other debt or equity financing, the related transaction documents could contain covenants restricting its operations.

We prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles, which require our management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking into account of our circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis.

We are subject to various risks, including risk factors identified in our 2025 Form 10-K. You should carefully consider those risk factors in addition to the risk factor set forth below and other information in this Form 10-Q.

The decreaseincrease in G&A expenses for the three-three-month and six-month periodsperiod ended NovemberFebruary 30,28, 2025,2026, compared to the same periodsperiod in the prior year, was primarily due to legalsalaries, fees.benefits, Theand decreaseother in legal fees iscompensation, primarily attributable to decreasedheadcount legal activity compared to the prior year.increases.

The increases in R&D expenses in the three- and six-monthnine-month periods ended NovemberFebruary 30,28, 2025,2026, compared to the same periods in the prior year, were due to higher clinical expenses related to the Phase II trial of leronlimab in patients with relapsed/refractory micro-satellite stable colorectal cancer in the fiscal 2026 periods. Additionally with regard to the six-monthnine-month period ended NovemberFebruary 30,28, 2025,2026, the primary factor contributing to the increase in R&D expenses was a return of clinical expenses related to the settlement of the Company’s litigation with Amarex in the six-monthnine-month period ended NovemberFebruary 30,28, 2024.2025.

The decrease in interest and other expenses for the three-month period ended NovemberFebruary 30,28, 2025,2026, compared with the same period in the prior year, was primarily due to a lower interest rate in the currentlegal periodsettlement comparedrevaluation, which is related to the priorchange period.in value of the Securities Class Action Lawsuits settlement. The decrease was partially offset by an increase in issuance costs related to the commitmentprivate feeplacement forof common stock and warrants through a standbyplacement equity purchase agreement. See Note 5, Equity—Standby Equity Purchase Agreement, included in Part I, Item 1 of this Form 10-Q for additional information.agent.

The decrease in interest and other expenses for the six-monthnine-month period ended NovemberFebruary 30,28, 2025,2026, compared with the same period in the prior year, was primarily due to the decreaseslegal insettlement loss on induced conversion,revaluation, interest on convertible notes payable, loss on induced conversion, and loss on derivatives. The legal settlement revaluation is related to the change in value of the Securities Class Action Lawsuits settlement. The decrease in interest on convertible notes payable is due to a lower interest rate compared to the prior period. The decrease in loss on induced conversion is due to the note payments in the current fiscal year being exchanged with an equal value of shares of common stock. The decrease in interest on convertible notes payable is due to a lower interest rate compared to the prior period. The decrease in loss on derivatives is due to no derivative activity in the fiscal 2026 period. The decrease in interest and other expenses for the nine-month period ended February 28, 2026 was partially offset by issuance costs related to the private placement of common stock and warrants through a placement agent.

As of NovemberFebruary 30,28, 2025,2026, we had a total of approximately $5.0$15.7 million in cash and cash equivalents and approximately $85.1$50.4 million in short-term liabilities. We expect to continue to incur operating losses and require a significant amount of capital in the future as we continue to seek approval to commercialize leronlimab. There can be no assurance that future funding will be available to us when needed on terms that are acceptable to us, or at all. We sell securities and incur debt when the terms of such arrangements are deemed acceptable to both parties under then current circumstances and as necessary to fund our current and projected cash needs. As of NovemberFebruary 30,28, 2025,2026, we had approximately 490.1312.8 million shares of common stock available for issuance in new financing transactions.

The Company’s cash and cash equivalents position of approximately $5.0$15.7 million as of NovemberFebruary 30,28, 2025,2026, decreasedincreased by approximately $6.9$3.8 million when compared to the balance of $11.9 million as of May 31, 2025. This decreaseincrease was primarily the result of approximately $6.8$16.1 million cash usedprovided inby operatingfinancing activities.activities offset by operational expenses. Refer to Item 1, Note 2, Summary of Significant Accounting Policies – Going Concern, and the Going Concern discussion below for information regarding concerns about the Company’s ability to continue to fund its operations and satisfy its payment obligations and commitments. A summary of cash flows and changes between the periods presented is as follows:

Net cash used in operating activities totaled approximately $6.8$12.3 million during the sixnine months ended NovemberFebruary 30,28, 2025,2026, representing an increase of approximately $8.7$9.2 million compared to the sixnine months ended NovemberFebruary 30,28, 2024.2025. The increase in the net amount of cash used in operating activities was due primarily to a one-time legal settlement of approximately $10.0 million in the prior period.

Cash usedprovided inby financing activities

Net cash used in financing activities totaled approximately $0.1$16.1 million during the sixnine months ended NovemberFebruary 30,28, 2025,2026, aan decreaseincrease of approximately $9.8$6.4 million compared to the sixnine months ended NovemberFebruary 30,28, 2024.2025. The decreaseincrease in net cash provided was primarily the result of no significant fundraising during the fiscalprivate 2026sale period.of common stock and warrants.

On April 2, 2021, we issued a convertible note with a principal amount of $28.5 millionmillion, resulting in net cash proceeds of $25.0 million,million after $3.4 million of debt discount and $0.1 million of offering costs. TheAt noteFebruary accrues28, 2026, the Note terms provided for accruing interest daily at a rate of 6% per annum, has a stated conversion price of $10.00 per share, and maturesmaturity in April 2026. Subsequent to February 28, 2026, the Company and the Noteholders entered into an amendment to the Note, extending the maturity date by 36 months, changing the required monthly payment, and lowering the interest rate to 5%. For more information, see Note 12, Subsequent Events in Part I, Item 1 of this Form 10-Q. As of NovemberFebruary 30,28, 2025,2026, the outstanding balance of the April 2, 2021 Note, including accrued interest, was approximately $8.5$8.6 million.

On April 23, 2021, we issued a convertible note with a principal amount of $28.5 millionmillion, resulting in net cash proceeds of $25.0 million,million after $3.4 million of debt discount and $0.1 million of offering costs. TheAt noteFebruary accrues28, 2026, the Note terms provided for accruing interest daily at a rate of 6% per annum, has a stated conversion price of $10.00 per share, and maturesmaturity in April 2026. Subsequent to February 28, 2026, the Company and the Noteholders entered into an amendment to the Note, extending the maturity date by 36 months, changing the required monthly payment, and lowering the interest rate to 5%. For more information, see Note 12, Subsequent Events in Part I, Item 1 of this Form 10-Q. As of NovemberFebruary 30,28, 2025,2026, the outstanding balance of the April 23, 2021 Note, including accrued interest, was approximately $33.7$31.9 million. In March 2026, in satisfaction of the required monthly payment, the Company and the Noteholder of the April 23, 2021 Note entered into an exchange agreement, pursuant to which a portion of the April 23, 2021 Note was partitioned into a new note with an aggregate principal amount of approximately $0.8 million. The new note was exchanged concurrently for approximately 2.7 million shares. Refer to Item 1, Note 12. Subsequent Events.

As of NovemberFebruary 30,28, 2025,2026, we had approximately 490.1312.8 million unreserved authorized shares of common stock available for issuance. Our ability to continue to fund our operations depends on our ability to raise capital. The funding necessary for our operations may not be available on acceptable terms, or at all. If we deplete our cash reserves, we may have to discontinue our operations and liquidate our assets. In extreme cases, we could be forced to file for bankruptcy protection.

As of NovemberFebruary 30,28, 2025,2026, we did not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on our current or future financial condition, results of operations, liquidity, capital expenditures or capital resources.

It generally is not possible to predict the outcome of these proceedings, including the defense and other litigation-related costs and expenses that may be incurred by the Company, as the outcomes of legal proceedings are inherently uncertain, and the outcomes could differ significantly from recognized accruals. Therefore, it is possible that the ultimate outcome of any proceeding, if in excess of a recognized accrual, if any, could be material to the Company’s consolidated financial statements. As of NovemberFebruary 30,28, 2025,2026, the Company had not recorded any accruals related to the outcomes of the legal matters discussed in this Form 10-Q, other than approximately $16.6$12.7 million in connection with an agreement in principle to settle the Securities Class Action, as discussed above under “Corporate Developments.”.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As presented in the accompanying consolidated financial statements, the Company had losses for all periods presented, except for the sixnine months ended NovemberFebruary 30,28, 2024.2025. Net income of $14.5$9.7 million in the sixnine months ended NovemberFebruary 30,28, 2024,2025, resulted from the recovery of approximately $25.0 million in clinical expenses due to the settlement of the Company’s litigation with Amarex, which is a non-recurring event. The Company had an accumulated deficit of approximately $915.9$920.6 million as of NovemberFebruary 30,28, 2025.2026. These factors, among several others, raise substantial doubt about our ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.