Rafael Holdings, Inc.

Previous wording

Rafael Holdings, Inc. (“Rafael Holdings”, “Rafael”, “we” or the “Company”) is a holding company with interests in clinical and early-stage pharmaceutical companies, including an investment in (and planned Merger with) Cyclo Therapeutics Inc. (Nasdaq: CYTH), (“Cyclo Therapeutics” or “Cyclo”), a clinical stage biotechnology company dedicated to developing Trappsol® Cyclo™, which is being evaluated in clinical trials for the potential treatment of Niemann-Pick Disease Type C1 (“NPC1”), a rare, fatal and progressive genetic disorder, a majority equity interest in LipoMedix Pharmaceuticals Ltd. (“LipoMedix”), a clinical stage pharmaceutical company, Barer Institute Inc. (“Barer”), a wholly-owned preclinical cancer metabolism research operation, and a majority interest in Cornerstone Pharmaceuticals, Inc. (“Cornerstone”), formerly known as Rafael Pharmaceuticals Inc., a cancer metabolism-based therapeutics company. We also hold a majority interest in Rafael Medical Devices, LLC (“Rafael Medical Devices”), an orthopedic-focused medical device company developing instruments to advance minimally invasive surgeries, and a majority interest in Day Three Labs, Inc. (“Day Three”), a company which empowers third-party manufacturers to reimagine their existing cannabis offerings enabling them to bring to market better, cleaner, more precise and predictable versions by utilizing Day Three’s technology and innovation like Unlokt™. In November 2022, the Company resolved to curtail its early-stage development efforts, including pre-clinical research at Barer. The decision was taken to reduce spending as the Company focuses on exploring strategic opportunities. Since then, the Company has sought partners for programs at Farber (as defined below) and has entered into a license agreement for one of its technologies that is in pre-clinical research stage. The Company’s primary focus, to date, has been to expand our investment portfolio through opportunistic and strategic investments including therapeutics, which address high unmet medical needs. Upon closing of the planned Merger with Cyclo, the Company intends to focus its efforts on making Trappsol® Cyclo™ its lead clinical program. In anticipation of that change in strategic focus, the Company is currently evaluating its operating entities (or portfolio of assets) to ensure the future focus of its resources on core assets and specifically the Trappsol® Cyclo™ clinical and development efforts.

Current wording

Rafael Holdings, Inc. (“Rafael Holdings”, “Rafael”, “we” or the “Company”) is a holding company with interests in clinical and early-stage pharmaceutical companies, including (i) Cyclo Therapeutics LLC. (“Cyclo Therapeutics” or “Cyclo”), a wholly-owned clinical stage biotechnology company dedicated to developing Trappsol® Cyclo™, which is being evaluated in clinical trials for the potential treatment of Niemann-Pick Disease Type C1 (“NPC1”), a rare, fatal and progressive genetic disorder, (ii) a majority equity interest in LipoMedix Pharmaceuticals Ltd. (“LipoMedix”), a clinical stage pharmaceutical company, (iii) Barer Institute Inc. (“Barer”), a wholly-owned preclinical cancer metabolism research operation, (iv) and a majority interest in Cornerstone Pharmaceuticals, Inc. (“Cornerstone”), formerly known as Rafael Pharmaceuticals Inc., a cancer metabolism-based therapeutics company. We also hold a majority interest in Rafael Medical Devices, LLC (“Rafael Medical Devices”), an orthopedic-focused medical device company developing instruments to advance minimally invasive surgeries, and a majority interest in Day Three Labs, Inc. (“Day Three”), a company which empowers third-party manufacturers to reimagine their existing cannabis offerings enabling them to bring to market better, cleaner, more precise and predictable versions by utilizing Day Three’s technology and innovation like Unlokt™. The Company’s primary focus is to invest in and expand our investment portfolio through opportunistic and strategic investments including therapeutics, which address high unmet medical needs. Since the closing, in March 2025, of the Merger, the Company has focused its efforts on making Trappsol® Cyclo™ its lead clinical program. In light of that change in strategic focus, the Company is currently evaluating its operating entities (and portfolio of assets) to ensure the future focus of its resources on core assets and specifically the Trappsol® Cyclo™ clinical and development efforts.

Previous wording

Historically, the Company owned real estate assets. As of January 31, 2025, the Company holds a portion of a commercial building in Jerusalem, Israel as its remaining owned real estate asset.

Current wording

Historically, the Company owned real estate assets. As of April 30, 2025, the Company holds a portion of a commercial building in Jerusalem, Israel as its remaining revenue generating real estate asset.

Previous wording

In May 2023, the Company first invested in Cyclo Therapeutics. Cyclo is a clinical-stage biotechnology company that develops cyclodextrin-based products for the potential treatment of neurodegenerative diseases. Cyclo’s lead drug candidate is Trappsol® Cyclo™ (hydroxypropyl beta cyclodextrin), a treatment for NPC1. NPC1 is a rare and fatal autosomal recessive genetic disease resulting in disrupted cholesterol metabolism that impacts the brain, lungs, liver, spleen, and other organs. In January 2017 the FDA granted Fast Track designation to Trappsol® Cyclo™ for the treatment of NPC1. Initial patient enrollment in the U.S. Phase I study commenced in September 2017, and in May 2020 Cyclo announced Top Line data showing Trappsol® Cyclo™ was well tolerated in this study. Cyclo is currently conducting a Phase 3 Clinical Trial evaluating Trappsol®Cyclo™ in Pediatric and Adult Patients with Niemann-Pick Disease, Type C1. See Notes 11 and 12 to the Consolidated Financial Statements for more information on the Company’s investments in Cyclo.

Current wording

In May 2023, the Company first invested in Cyclo Therapeutics. Cyclo is a clinical-stage biotechnology company that develops cyclodextrin-based products for the potential treatment of neurodegenerative diseases. Cyclo’s lead drug candidate is Trappsol® Cyclo™ (hydroxypropyl beta cyclodextrin), a treatment for NPC1. NPC1 is a rare and fatal autosomal recessive genetic disease resulting in disrupted cholesterol metabolism that impacts the brain, lungs, liver, spleen, and other organs. In January 2017, the FDA granted Fast Track designation to Trappsol® Cyclo™ for the treatment of NPC1. Initial patient enrollment in the U.S. Phase I study commenced in September 2017 and in May 2020, Cyclo announced Top Line data showing Trappsol® Cyclo™ was well tolerated in this study. Cyclo is currently conducting a Phase 3 Clinical Trial evaluating Trappsol®Cyclo™ in Pediatric and Adult Patients with Niemann-Pick Disease, Type C1. On March 25, 2025, the Company consummated a merger with Cyclo whereby Cyclo became a wholly-owned subsidiary of the Company. See Note 3 for more information on the Company’s Merger with Cyclo. The Company intends to fund the TransportNPC Phase 3 clinical trial for Trappsol® Cyclo™ for the treatment of Niemann Pick C to its 48-week interim analysis, with results expected later this month, and focus its efforts on Trappsol® Cyclo™ as its lead clinical program. At that point, the Company will make a determination as to whether or not to file an NDA for Trappsol® Cyclo™.

Previous wording

LipoMedix is a clinical stage Israeli company focused on the development of a product candidate that holds the potential to be an innovative, safe, and effective cancer therapy based on liposome delivery. As of July 31, 2024, the Company’s ownership interest in LipoMedix was approximately 95%. LipoMedix has completed various clinical stages of Promitil® including Phase 1A (solid tumors) and 1B (as single agent and in combination with capecitabine and/or bevacizumab in colorectal cancer). Another phase 1B testing Promitil® as radiosensitizer is ongoing and near completion. A total of 149 patients have been treated with Promitil® as a single agent, or in combination with other anticancer drugs or radiotherapy, under the framework of a Phase 1A and two 1B clinical studies and under named patient approval for compassionate use.

Current wording

LipoMedix is a clinical stage Israeli company focused on the development of a product candidate that holds the potential to be an innovative, safe, and effective cancer therapy based on liposome delivery. As of April 30, 2025, the Company’s ownership interest in LipoMedix was approximately 95%. LipoMedix has completed various clinical stages of Promitil® including Phase 1A (solid tumors) and 1B (as single agent and in combination with capecitabine and/or bevacizumab in colorectal cancer). A total of 149 patients have been treated with Promitil® as a single agent, or in combination with other anticancer drugs or radiotherapy, under the framework of a phase 1A and two 1B clinical studies and under named patient approval for compassionate use.

Previous wording

The Company owns a 37.5% equity interest in RP Finance LLC (“RP Finance”), which was, until March 13, 2024 (the date of the RP Finance Consolidation, as described in Note 3 to the Consolidated Financial Statements), accounted for under the equity method. RP Finance is an entity associated with members of the family of Howard Jonas (Executive Chairman, Chairman of the Board, and controlling stockholder of the Company) which holds 37.5% equity interest of RP Finance. RP Finance holds debt and equity investments in Cornerstone. In October 2021, Cornerstone received negative results of its Avenger 500 Phase 3 study for Devimistat in pancreatic cancer as well as a recommendation to stop its ARMADA 2000 Phase 3 study due to a determination that the trial would unlikely achieve its primary endpoint (the “Data Events”). Due to the Data Events, RP Finance fully impaired its then debt and equity investments in Cornerstone.

Current wording

The Company owns a 37.5% equity interest in RP Finance LLC (“RP Finance”), which was, until March 13, 2024 (the date of the RP Finance Consolidation, as described in Note 6 to the Consolidated Financial Statements, accounted for under the equity method. RP Finance is an entity associated with members of the family of Howard S. Jonas (Executive Chairman, Chief Executive Officer, President, Chairman of the Board, and controlling stockholder of the Company) which holds 37.5% equity interest of RP Finance. RP Finance holds debt and equity investments in Cornerstone. In October 2021, Cornerstone received negative results of its Avenger 500 Phase 3 study for devimistat in pancreatic cancer as well as a recommendation to stop its ARMADA 2000 Phase 3 study due to a determination that the trial would unlikely achieve its primary endpoint (the “Data Events”). Due to the Data Events, RP Finance fully impaired its then debt and equity investments in Cornerstone.

Previous wording

On March 13, 2024, Cornerstone consummated a restructuring of its outstanding debt and equity interests (the “Cornerstone Restructuring”). As a result of the Cornerstone Restructuring, Rafael became a 67% owner of the issued and outstanding common stock of Cornerstone (the “Cornerstone Acquisition”), and Cornerstone became a consolidated subsidiary of Rafael. The Cornerstone Acquisition is accounted for as an acquisition of a variable interest entity that is not a business in accordance with U.S. GAAP. The Company was determined to be the accounting acquirer for financial reporting purposes. See Note 3 to the Consolidated Financial Statements for additional information regarding the transaction. In conjunction with the Cornerstone Restructuring and Cornerstone Acquisition, the Company reassessed its relationship with RP Finance, and as a result determined that RP Finance is still a variable interest entity and that the Company became the primary beneficiary of RP Finance as the Company now holds the ability to control repayment of the RP Finance Line of Credit which directly impacts RP Finance’s economic performance. Therefore, following the Cornerstone Restructuring and Cornerstone Acquisition, the Company consolidated RP Finance (the “RP Finance Consolidation”). See Note 3 to the Consolidated Financial Statementsfor additional information on the Consolidation. The Company is currently reviewing Cornerstone’s current efforts, prospects and available resources to determine the optimal operational direction.

Current wording

On March 13, 2024, Cornerstone consummated a restructuring of its outstanding debt and equity interests (the “Cornerstone Restructuring”). As a result of the Cornerstone Restructuring, Rafael became a 67% owner of the issued and outstanding common stock of Cornerstone (the “Cornerstone Acquisition”), and Cornerstone became a consolidated subsidiary of Rafael. The Cornerstone Acquisition is accounted for as an acquisition of a variable interest entity that is not a business in accordance with U.S. GAAP. The Company was determined to be the accounting acquirer for financial reporting purposes. In conjunction with the Cornerstone Restructuring and Cornerstone Acquisition, the Company reassessed its relationship with RP Finance, and as a result determined that RP Finance is still a variable interest entity and that the Company became the primary beneficiary of RP Finance as the Company now holds the ability to control repayment of the RP Finance Line of Credit which directly impacts RP Finance’s economic performance. Therefore, following the Cornerstone Restructuring and Cornerstone Acquisition, the Company consolidated RP Finance (the “RP Finance Consolidation”). See Note 6 to the Consolidated Financial Statements for additional information on the Cornerstone Restructuring, Cornerstone Acquisition, and RP Finance Consolidation. The Company is currently reviewing Cornerstone’s current efforts, prospects and available resources to determine the optimal operational direction.

Previous wording

In May 2021, the Company formed Rafael Medical Devices, an orthopedic-focused medical device company developing instruments to advance minimally invasive surgeries. In August 2023, the Company raised $925,000 from third parties in exchange for 31.6% ownership of Rafael Medical Devices. On December 11, 2024, Rafael Medical Devices received the Food and Drug Administration’s (“FDA”) substantial equivalence determination for the VECTR System in response to Rafael Medical Devices’ 510(k) premarket notification. The FDA’s clearance of the VECTR System is for use in minimally invasive ligament or fascia release surgeries, such as carpal tunnel release in the wrist and cubital tunnel release in the elbow. The VECTR System has been classified into Class II and is subject to special controls (performance standards) in addition to the general controls provisions of the Federal Food, Drug and Cosmetic Act and the Quality System regulation codified in 21 CFR Part 820 which requires that each manufacturer establish a quality system by which the manufacturer monitors the manufacturing process and maintains records that show compliance with the FDA regulations and the manufacturer’s written specifications and procedures relating to each device, as well as other requirements and applicable laws and regulations. Our development of future products will depend upon the success of the VECTR System and the our ability to identify attractive opportunities in the marketplace.

Current wording

In May 2021, the Company formed Rafael Medical Devices, an orthopedic-focused medical device company developing instruments to advance minimally invasive surgeries. In August 2023, Rafael Medical Devices sold an aggregate 31.6% equity interest to third parties for $925,000. In February 2025, the Company invested approximately $582,000 in cash, and Rafael Medical Devices raised approximately $45,000 from third parties in exchange for Rafael Medical Devices' Class A Units. Following the foregoing financing transactions, the Company holds a 73% equity interest in Rafael Medical Devices. On December 11, 2024, Rafael Medical Devices received a substantial equivalence determination for the VECTR System from the Food and Drug Administration's (“FDA”) in response to Rafael Medical Devices’ 510(k) premarket notification. The FDA’s clearance of the VECTR System is for use in minimally invasive ligament or fascia release surgeries, such as carpal tunnel release in the wrist and cubital tunnel release in the elbow. The VECTR System has been classified into Class II and is subject to special controls (performance standards). The Company’s development of future products will depend upon the success of the VECTR System and our Company’s ability to identify attractive opportunities in the marketplace.

Previous wording

In April 2023, the Company first invested in Day Three, a company which empowers third-party manufacturers to reimagine their existing cannabis offerings enabling them to bring to market better, cleaner, more precise and predictable versions by utilizing Day Three’s technology and innovation like Unlokt™. In January 2024, the Company entered into a series of transactions with Day Three and certain shareholders, acquiring a controlling interest of Day Three and subsequently consolidating Day Three’s results (the “Day Three Acquisition”). The Company is evaluating the prospects for Day Three’s technology and offerings in light of current regulatory and commercial conditions. During the three months ended January 31, 2025, Day Three has reduced certain operations.

Current wording

In April 2023, the Company first invested in Day Three, a company which empowers third-party manufacturers to reimagine their existing cannabis offerings enabling them to bring to market better, cleaner, more precise and predictable versions by utilizing Day Three’s technology and innovation like Unlokt™. In January 2024, the Company entered into a series of transactions with Day Three and certain shareholders, acquiring a controlling interest of Day Three and subsequently consolidating Day Three's results (the “Day Three Acquisition”). On March 14, 2025, Day Three Labs Manufacturing, a majority owned subsidiary of Day Three, entered into an Asset Purchase Agreement and Licensing Agreement (the “DTLM Sale Agreement”), pursuant to which they sold assets and licensed certain applications of their Unlokt™ technology used in their cannabinoid ingredient manufacturing business. See Note 13 to the Consolidated Financial Statements for additional information.

Previous wording

Consolidated expenses for our Healthcare segment were as follows:

Current wording

Results of operations for our Healthcare segment were as follows:

Previous wording

To date, the Healthcare segment has not generated any revenues. The expenses in the Healthcare segment relate to the activities of Barer, LipoMedix, Farber, Cornerstone, and Rafael Medical Devices. As of January 31, 2025, we held a 100% interest in Barer, a 95% interest in LipoMedix, a 93% interest in Farber, a 67% interest in Cornerstone, and a 68% interest in Rafael Medical Devices.

Current wording

The Healthcare segment is comprised of the activities of Barer, LipoMedix, Farber, Cornerstone, Cyclo, and Rafael Medical Devices. As of April 30, 2025, we held a 100% interest in Barer and Cyclo, a 95% interest in LipoMedix, a 93% interest in Farber, a 67% interest in Cornerstone, and a 73% interest in Rafael Medical Devices.

Previous wording

General and administrative expenses. General and administrative expenses consist mainly of payroll, stock-based compensation expense, benefits, facilities, consulting and professional fees. The decrease in general and administrative expenses during the three months ended January 31, 2025 compared to the three months ended January 31, 2024 is due to a decrease in stock-based compensation, offset by an increase in legal and professional fees due to the plan of merger with Cyclo.

Current wording

General and administrative expenses. General and administrative expenses consist mainly of payroll, stock-based compensation expense, benefits, facilities, consulting and professional fees. The increase in general and administrative expenses during the three and nine months ended April 30, 2025 compared to the three and nine months ended April 30, 2024 are due to an increase in legal and professional fees due to the Cyclo Merger. Additionally, the inclusion of Cyclo's general and administrative expenses following the completion of the Merger which occurred in the three months ended April 30, 2025, contributed to the increase. These costs were partially offset by a decrease in stock-based compensation.

Previous wording

Research and development expenses. Research and development expenses increased for the three and six months ended January 31, 2025 and 2024 compared to the corresponding periods of the prior fiscal year. Research and development expenses are derived from activity at Barer, LipoMedix, Farber, Cornerstone, and Rafael Medical Devices. The increases stems primarily from the inclusion of expenses of Cornerstone following its acquisition in March 2024 (See Note 3) as well as ongoing clinical trials including at Lipomedix.

Current wording

Research and development expenses. Research and development expenses increased for the three and nine months ended April 30, 2025 and 2024 compared to the corresponding periods of the prior fiscal year. Research and development expenses are derived from activity at Cyclo, Barer, LipoMedix, Farber, Cornerstone, and Rafael Medical Devices, with the majority of the expenses in the current year periods from activities at Cyclo. The increases stem primarily from the inclusion of expenses of Cyclo following the Cyclo Merger in March 2025 as well as ongoing research and development activities at Lipomedix and Cornerstone.

Previous wording

The Infusion Technology segment is comprised of our majority equity interest in Day Three, which was acquired in January 2024. The Infusion Technology segment did not have significant operating results for the three and six months ended January 31, 2024. Revenues associated with the Infusion Technology segment consist of infusion technology revenue derived from Day Three’s Unlokt technology. Cost of Infusion Technology revenue includes supplies, materials, production labor, and travel costs. General and administrative expenses for the Infusion Technology segment consist mainly of payroll, insurance, software, and licenses. Research and development expenses for the Infusion Technology segment include costs related to the development of new products and services.

Current wording

The Infusion Technology segment is comprised of our majority equity interest in Day Three, which was acquired in January 2024. Revenues associated with the Infusion Technology segment consist of Infusion Technology revenue derived from Day Three's Unlokt technology. Cost of Infusion Technology revenue includes supplies, materials, production labor, and travel costs. General and administrative expenses for the Infusion Technology segment consist mainly of payroll, insurance, software, and licenses. Research and development expenses for the Infusion Technology segment include costs related to the development of new products and services.

Previous wording

Due to reductions in certain operations including a layoff within the Company’s Infusion Technology segment, the Company concluded that a triggering event occurred during the three months ended January 31, 2025 under ASC 350 and ASC 360 that required the Company to assess if there was an impairment. The Company completed an analysis pursuant to ASC 360 and determined that the expected undiscounted cash flows of the asset group exceeded its carrying amount, indicating that the long-lived assets were not impaired. In accordance with ASC 350, the Company performed a quantitative goodwill impairment test, which indicated that the carrying amount of the reporting unit exceeded the estimated fair value of the reporting unit, indicating that the goodwill of the reporting unit was impaired. The Company recorded an impairment charge of $3.1 million related to the Infusion Technology segment’s goodwill during the three months ended January 31, 2025.

Current wording

Due to reductions in certain operations including a layoff within the Company's Infusion Technology segment, we concluded that a triggering event occurred during November 2024 under ASC 350 and ASC 360 that required us to assess if there was an impairment. We completed an analysis pursuant to ASC 360 and determined that the expected undiscounted cash flows of the asset group exceeded its carrying amount, indicating that the long-lived assets were not impaired. In accordance with ASC 350, we performed a quantitative goodwill impairment test, which indicated that the carrying amount of the reporting unit exceeded the estimated fair value of the reporting unit, indicating that the goodwill of the reporting unit was impaired. We recorded an impairment charge of $3.1 million related to the Infusion Technology segment's goodwill during the nine months ended April 30, 2025.

Previous wording

The Real Estate segment consists of a portion of a commercial building in Israel. Consolidated revenue, expenses and (loss) income for our Real Estate segment were as follows:

Current wording

The Real Estate segment consists of a portion of a commercial building in Israel. Consolidated revenue, expenses and loss for our Real Estate segment were as follows:

Previous wording

Interest income. We recorded interest income of $0.5 million and$0.7 million for the three months ended January 31, 2025 and 2024, respectively, and interest income of$1.1 millionand$1.3 millionfor the six months ended January 31, 2025 and 2024, respectively. In November 2024, we sold our investments in available-for-sale securities and cash equivalents to reallocate assets to better align with the Company’s strategic goals. Accordingly, interest income has decreased due to a lower interest rate earned on these assets.

Current wording

Interest income. We recorded interest income of $0.5 million for the three months ended April 30, 2025 and 2024, respectively, and interest income of$1.5 millionand$1.8 millionfor the nine months ended April 30, 2025 and 2024, respectively. In November 2024, we sold our investments in available-for-sale securities and cash equivalents to reallocate assets to better align with our strategic goals. Accordingly, interest income has decreased due to a lower interest rate earned on these assets.

Previous wording

*Realized gain (loss) on available-for-sale securities.*We recognized a realized loss on available-for-sale securities of$16 thousand during the three months ended January 31, 2025 related to the sale of our available-for-sale securities in November 2024. We recognized a realized gain of$0.2 millionfor the six months ended January 31, 2025 related to the sale and maturity ofavailable-for-sale securities. We recognized a realized gain on available-for-sale securities of $0.4 million and$0.6 millionfor the three and six months ended January 31, 2024, respectively, related to the sale and maturity ofavailable-for-sale securities.

Current wording

*Realized gain on available-for-sale securities.*We recognized a realized gain of$0.2 millionfor thenine months ended April 30, 2025 related to the maturity of certain available-for-sale securities and the sale of our available-for-sale securities in November 2024. We did not recognize a realized gain on available-for-sale securities during the three months ended April 30, 2025 due to the sale of our available-for-sale securities in November 2024. We recognized a realized gain on available-for-sale securities of $0.9 million and$1.5 millionfor thethree and nine months ended April 30, 2024, respectively, related to the sale and maturity ofavailable-for-sale securities.

Previous wording

*Unrealized gain (loss) on investment - Cyclo.*Unrealized gains and losses on investment - Cyclo are recognized as a result of changes in the fair value of our investments in Cyclo common stock and warrants which fluctuate due to the volatility of the market price of Cyclo common stock. We recorded an unrealized gain of $0.6 million and an unrealized loss of $3.8 million for the three and six months ended January 31, 2025, respectively. We recorded an unrealized gain of $9.7 million and $7.6 million for the three and six months ended January 31, 2024, respectively.

Current wording

*Unrealized (loss) gain on investment - Cyclo.*Unrealized gains and losses on investment - Cyclo are recognized as a result of changes in the fair value of our investments in Cyclo common stock and warrants which fluctuate due to the volatility of the market price of Cyclo common stock leading up to the Cyclo Merger. We recorded an unrealized loss of $1.4 million and $5.1 million for the three and nine months ended April 30, 2025, respectively. We recorded an unrealized loss of $4.4 million and an unrealized gain of $3.2 million for the three and nine months ended April 30, 2024, respectively.

Previous wording

*Unrealized gain (loss) on convertible notes receivable, due from Cyclo.*We recorded an unrealized gain of $0.5 million and an unrealized loss of $1.1 million for the three and six months ended January 31, 2025, respectively, on our convertible notes receivable, due from Cyclo.

Current wording

*Unrealized gain (loss) on convertible notes receivable, due from Cyclo.*We recorded an unrealized gain of $0.4 million and an unrealized loss of $0.7 million for the three and nine months ended April 30, 2025, respectively, on our convertible notes receivable, due from Cyclo. The outstanding principal and accrued interest on the Cyclo Convertible Notes were forgiven in the Cyclo Merger.

Previous wording

Unrealized gain (loss) on investment - Hedge Funds. We recorded an unrealized gain of $51 thousand and an unrealized loss of $115 thousand for the three and six months ended January 31, 2024, respectively. During thesix months ended January 31, 2025, the Company requested a withdrawal of its remaining balance in Hedge Fund Investments. The Company recognized a realized loss of $2 thousand upon the approval of the withdrawal, which is included in interest income.

Current wording

Unrealized loss on investment - Hedge Funds. We recorded an unrealized loss of $3 thousand and $118 thousand for the three and nine months ended April 30, 2024, respectively. During thenine months ended April 30, 2025, we requested a withdrawal of our remaining balance in Hedge Fund Investments, and no longer hold any hedge fund investments.

Previous wording

*Interest expense.*Interest expense was $0.2 and $0.3 million for thethree and six months ended January 31, 2025, respectively, which is attributable to liabilities assumed in the Cornerstone Acquisition in March 2024. We did not have interest expense in the three and six months ended January 31, 2024.

Current wording

*Interest expense.*Interest expense was $0.2 million and $0.5 million for thethree and nine months ended April 30, 2025, respectively, which is attributable to liabilities assumed in the Cornerstone Acquisition in March 2024. Interest expense was $0.1 million for the three and nine months ended April 30, 2024.

Previous wording

Equity in loss of Day Three. We recognized a loss of $0.2 million and $0.4 million from our ownership interest in Day Three due to operating results for the three and six months ended January 31, 2024, respectively. As of January 2, 2024, Day Three is a majority-owned subsidiary which is consolidated. See Note 10 to our accompanying consolidated financial statements for further information regarding the acquisition.

Current wording

Equity in loss of Day Three. We recognized a loss of $0.4 million from our ownership interest in Day Three due to operating results for the nine months ended April 30, 2024. As of January 2, 2024, Day Three is a majority-owned subsidiary which is consolidated.

Previous wording

*Net loss attributable to noncontrolling interests.*The change in the net loss attributable to noncontrolling interests is primarily attributed to acquisition of Cornerstone and Day Three.

Current wording

*Net loss attributable to noncontrolling interests.*The change in the net loss attributable to noncontrolling interests is primarily attributed to acquisition of Cornerstone and Day Three and the consolidation of their activity.

Previous wording

As of January 31, 2025, we held cash and cash equivalents of approximately $48.3 million. The Company expects its balance of cash and cash equivalents to be sufficient to meet our obligations for at least the next 12 months from the filing of this Quarterly Report on Form 10-Q.

Current wording

As of April 30, 2025, we held cash and cash equivalents of approximately $37.9 million. We expect the balance of cash and cash equivalents to be sufficient to meet our obligations for at least the next 12 months from the filing of this Quarterly Report on Form 10-Q.

Previous wording

Cash used in operating activities increased by $0.7 million from cash used of $4.7 million for the six months ended January 31, 2024 to cash used of $5.4 million for the six months ended January 31, 2025, due to the change from a net income to net loss position, partially offset by the impact from non-cash items and changes in assets and liabilities.

Current wording

Cash used in operating activities increased by $3.6 million from cash used of $4.9 million for the nine months ended April 30, 2024 to cash used of $8.5 million for the nine months ended April 30, 2025, primarily due to an increase of operating activity following the Cyclo Merger offset by the changes in operating assets and liabilities.

Previous wording

Cash provided by investing activities for the six months ended January 31, 2025 was primarily due to proceeds of $80.7 million from sales and maturities of available-for-sale securities and $2.3 million in proceeds from hedge funds, partially offset by purchases of available-for-sale securities of approximately $16.9 million and payments of $15.0 million for convertible notes due from Cyclo.

Current wording

Cash provided by investing activities for the nine months ended April 30, 2025 was primarily due to proceeds of $80.7 million from sales and maturities of available-for-sale securities and $2.3 million in proceeds from hedge funds, partially offset by purchases of available-for-sale securities of approximately $16.9 million and payments of $19.5 million for convertible notes due from Cyclo.

Previous wording

Cash used in investing activities for the six months ended January 31, 2024 was primarily due to purchases of available-for-sale securities of approximately $105.1 million and the investment in Cyclo of $6.8 million, partially offset by proceeds of $100.1 million from sales and maturities of available-for-sale securities and $2.5 million in proceeds from hedge funds.

Current wording

Cash used in investing activities for the nine months ended April 30, 2024 was primarily due to purchases of available-for-sale securities of approximately $133.7 million and the investment in Cyclo of $6.8 million, partially offset by proceeds of $129.0 million from sales and maturities of available-for-sale securities and $2.5 million in proceeds from hedge funds.

Previous wording

Cash used in financing activities for the six months ended January 31, 2025 was related to a payment for taxes related to shares withheld for employee taxes of $75 thousand.

Current wording

Cash used in financing activities for the nine months ended April 30, 2025 was related to a payment for taxes related to shares withheld for employee taxes of $108 thousand and offset by proceeds from sale of RMD membership units of $44 thousand.

Previous wording

Cash provided by financing activities for the six months ended January 31, 2024 was primarily related to proceeds from sale of RMD membership units of $0.9 million, partially offset by principal payments on our installment note payable of $0.8 million.

Current wording

Cash provided by financing activities for the nine months ended April 30, 2024 was primarily related to proceeds from sale of RMD membership units of $0.9 million, partially offset by principal payments on our installment note payable of $0.8 million.

Previous wording

The application of critical accounting policies requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. These estimates and assumptions are based on historical and other factors believed to be reasonable under the circumstances. We evaluate these estimates and assumptions on an ongoing basis and may retain outside consultants to assist in our evaluation. If actual results ultimately differ from previous estimates, the revisions are included in results of operations in the period in which the actual amounts become known. The critical accounting policies that involve the most significant management judgments and estimates used in preparation of our consolidated financial statements, or are the most sensitive to change from outside factors, are discussed in the Critical Accounting Estimates section in Item 7 of the Annual Report on Form 10-K/A for fiscal 2024. There were no material changes during the six months ended January 31, 2025 to the Critical Accounting Estimates previously disclosed except as follows:

Current wording

The application of critical accounting policies requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. These estimates and assumptions are based on historical and other factors believed to be reasonable under the circumstances. We evaluate these estimates and assumptions on an ongoing basis and may retain outside consultants to assist in our evaluation. If actual results ultimately differ from previous estimates, the revisions are included in results of operations in the period in which the actual amounts become known. The critical accounting policies that involve the most significant management judgments and estimates used in preparation of our consolidated financial statements, or are the most sensitive to change from outside factors, are discussed in the Critical Accounting Estimates section in Item 7 of the Annual Report on Form 10-K/A for fiscal 2024. There were no material changes during the nine months ended April 30, 2025 to the Critical Accounting Estimates previously disclosed except as follows:

Previous wording

Due to reductions in certain operations including a layoff within the Company’s Infusion Technology segment, the Company concluded that a triggering event occurred during the three months ended January 31, 2025 under ASC 360 that required the Company to evaluate long-lived assets within the Infusion Technology segment for potential impairment. Accordingly, the Company completed an analysis pursuant to ASC 360, wherein the income approach utilized an undiscounted cash flow model, considering projected future cash flows (including timing and profitability) and perpetual growth rate, and determined that the expected undiscounted cash flows of the asset group exceeded its carrying amount, indicating that the long-lived assets were not impaired.

Current wording

Due to reductions in certain operations including a layoff within the Company's Infusion Technology segment, the Company concluded that a triggering event occurred during November 2024 under ASC 360 that required the Company to evaluate long-lived assets within the Infusion Technology segment for potential impairment. Accordingly, the Company completed an analysis pursuant to ASC 360, wherein the income approach utilized an undiscounted cash flow model, considering projected future cash flows (including timing and profitability) and perpetual growth rate, and determined that the expected undiscounted cash flows of the asset group exceeded its carrying amount, indicating that the long-lived assets were not impaired.

Previous wording

For the three and six months ended January 31, 2025 and 2024, the Company determined there was no impairment of its long-lived assets.

Current wording

For the three and nine months ended April 30, 2025 and 2024, the Company determined there was no impairment of its long-lived assets.

Previous wording

Due to reductions in certain operations including a layoff within the Company’s Infusion Technology segment, the Company concluded that a triggering event occurred during the three months ended January 31, 2025 under ASC 350 that required the Company to assess if there was an impairment. In accordance with ASC 350, the Company performed a quantitative goodwill impairment test that utilized a combination of an income and market approach to assess the fair value of the reporting unit as of November 30, 2024. The income approach utilized a discounted cash flow model, considering projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, and perpetual growth rate, while the guideline public company market approach used guideline public company revenue multiples from a selection of comparable public companies. The quantitative goodwill impairment test indicated that the carrying amount of the reporting unit exceeded the estimated fair value of the reporting unit, indicating that the goodwill of the reporting unit was impaired. The Company recorded an impairment charge of $3.1 million related to the Infusion Technology segment’s goodwill during the three months ended January 31, 2025. See Note 17 for further information.

Current wording

Due to reductions in certain operations including a layoff within the Company's Infusion Technology segment, the Company concluded that a triggering event occurred during November 2024 under ASC 350 that required the Company to assess if there was an impairment. In accordance with ASC 350, the Company performed a quantitative goodwill impairment test that utilized a combination of an income and market approach to assess the fair value of the reporting unit as of November 30, 2024. The income approach utilized a discounted cash flow model, considering projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, and perpetual growth rate, while the guideline public company market approach used guideline public company revenue multiples from a selection of comparable public companies. The quantitative goodwill impairment test indicated that the carrying amount of the reporting unit exceeded the estimated fair value of the reporting unit, indicating that the goodwill of the reporting unit was impaired. The Company recorded an impairment charge of $3.1 million related to the Infusion Technology segment's goodwill during the nine months ended April 30, 2025.