Rafael Holdings, Inc.

OVERVIEW

Rafael Holdings, Inc. (“Rafael Holdings”, “Rafael”, “we” or the “Company”) is a biotechnology company that develops pharmaceuticals and holds interests in clinical and early-stage companies that develop pharmaceuticals and medical devices. Our lead candidate is 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. We also hold: (i) a majority equity interest in LipoMedix Pharmaceuticals Ltd. (“LipoMedix”), a clinical stage pharmaceutical company; (ii) Barer Institute Inc. (“Barer”), a wholly-owned cancer research focused entity whose operations have been substantially curtailed; (iii) a majority interest in Cornerstone Pharmaceuticals, Inc. (“Cornerstone”), formerly known as Rafael Pharmaceuticals Inc., a cancer metabolism-based therapeutics company; (iv) 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 (v) a majority interest in Day Three Labs, Inc. (“Day Three”), a company which empowers third-party manufacturers to reimagine their existing product offerings by utilizing Day Three’s technology and innovation like Unlokt™. Our primary focus has been the continued development of Trappsol® Cyclo™ through the completion of its ongoing pivotal Phase 3 clinical trial, the potential filing for regulatory approval and ultimately, if approved, commercialization of the product. We also look to expand our investment portfolio through opportunistic and strategic investments including that address high unmet medical needs. We continuously evaluate our other holdings to ensure the focus of our resources are on core assets and specifically the continued development of Trappsol® Cyclo™ .

Historically, we owned real estate assets. As of July 31, 2025, we hold a portion of a commercial building in Jerusalem, Israel as our sole remaining real estate asset.

In May 2023, we first invested in Cyclo, 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 indicating 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, we consummated the Merger with Cyclo whereby Cyclo became a wholly-owned subsidiary of the Company. See Note 3 to our Consolidated Financial Statements for more information on the Merger with Cyclo.

LipoMedix is a clinical stage company based in Israel that is 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, 2025, our ownership interest in LipoMedix was approximately 95%. As needed, we provide debt or equity funding to Lipomedix to support its development and clinical efforts. LipoMedix is currently exploring strategic options for its lead candidate, including potential licensing opportunities, collaborations with industry partners, and investigator-initiated studies.

In 2019, we established Barer, originally as a preclinical cancer metabolism research operation, to focus on developing a pipeline of novel therapeutic compounds, including compounds designed to regulate cancer metabolism with potentially broader application in other indications beyond cancer. Barer was comprised of scientists and academic advisors that are experts in cancer metabolism, chemistry, and drug development. In addition to its own internal discovery efforts, Barer pursued collaborative research agreements and in-licensing opportunities with leading scientists from top academic institutions. Barer’s majority owned subsidiary, Farber Partners, LLC (“Farber”), was formed around one such agreement with Princeton University’s Office of Technology Licensing (“Princeton”) for technology from the laboratory of Dr. Joshua Rabinowitz, in the Department of Chemistry, Princeton University, for an exclusive worldwide license to its SHMT (serine hydroxymethyltransferase) inhibitor program. In November 2022, we resolved to curtail our early-stage development efforts, including pre-clinical research at Barer. Since then, we have sought partners for Farber programs and has entered into a license agreement for one of its technologies that is in the pre-clinical research stage with the Ludwig Institute of Cancer Research and has transferred majority ownership of another one of its technologies, SHMT, to a new company, Forme Therapeutics, that is being managed by Dr. Joshua Rabinowitz with the goal of developing SHMT. Going forward, we expect that Barer will primarily operate as an entity holding interest in these two cancer-focused opportunities.

We own 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 in which vehicles 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), hold an aggregate 37.5% equity interest. 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 be unlikely to achieve its primary endpoint (the “Data Events”). Due to the Data Events, RP Finance fully impaired its then debt and equity investments in Cornerstone.

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. 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 its optimal operational direction.

In May 2021, we 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, we invested approximately $582,000 in cash, and Rafael Medical Devices raised approximately $44,000 from third parties in exchange for Rafael Medical Devices' Class A Units. We currently hold 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 (“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). Rafael Medical Devices' 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.

In April 2023, we first invested in Day Three, a company which empowers third-party manufacturers to reimagine their existing product offerings enabling those third-party manufacturers to bring to market better, cleaner, more precise and predictable versions of their products by utilizing Day Three’s technology and innovation like Unlokt™. In January 2024, we entered into a series of transactions with Day Three and certain of its shareholders, acquiring a controlling interest in 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 in the Notes to our Consolidated Financial Statements for additional information.

Financial information by segment is presented in Note 22 in the Notes to our Consolidated Financial Statements in Item 8 of this Annual Report.

Our headquarters are located at 520 Broad Street, Newark, New Jersey 07102. The main telephone number at our headquarters is (212) 658-1450 and our corporate web site’s home page is www.rafaelholdings.com.

We make available free of charge our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to these reports, and all beneficial ownership reports on Forms 3, 4 and 5 filed by directors, officers and beneficial owners of more than 10% of our equity through the investor relations page of our website (https://rafaeholdings.irpass.com) as soon as reasonably practicable after such material is electronically filed with the Securities and Exchange Commission. Our website also contains information not incorporated into this Annual Report on Form 10-K or our other filings with the Securities and Exchange Commission.

BUSINESS DESCRIPTION

We work to advance the pipeline development of Trappsol® Cyclo™ as our primary focus and as research and clinical results warrant, continued investment in our other Portfolio Companies, including Cyclo, LipoMedix, Barer, Rafael Medical Devices, Cornerstone and Day Three. We also further seek to expand our portfolio through opportunistic and strategic investments, including investments in therapeutics which address high unmet medical needs. Historically, the Company owned real estate assets. Currently, the Company holds a portion of a commercial building in Jerusalem, Israel as its remaining real estate asset.

Portfolio Companies

Overview

We are a biotechnology company that develops pharmaceuticals and holds interests in clinical and early-stage companies that develop pharmaceuticals and medical devices. Our lead candidate is Trappsol® Cyclo™, which is being evaluated in clinical trials for the potential treatment of NPC1 a rare, fatal and progressive genetic disorder. We also hold (i) a majority equity interest in LipoMedix, a clinical stage pharmaceutical company, (ii) Barer, a wholly-owned cancer research focused entity whose operations have been substantially curtailed, (iii) a majority interest in Cornerstone, formerly known as Rafael Pharmaceuticals Inc., a cancer metabolism-based therapeutics company, (iv) a majority interest in Rafael Medical Devices, an orthopedic-focused medical device company developing instruments to advance minimally invasive surgeries, and (v) a majority interest in Day Three, a company which empowers third-party manufacturers to reimagine their existing product offerings by utilizing Day Three’s technology and innovation like Unlokt™. Our primary focus has been the continued development of Trappsol® Cyclo™ through the completion of its ongoing pivotal Phase 3 clinical trial, the potential filing for regulatory approval and ultimately, if approved, commercialization of the product. We also look to expand our investment portfolio through opportunistic and strategic investments including that address high unmet medical needs. We continuously evaluate our other holdings to ensure the focus of our resources are on core assets and specifically the continued development of Trappsol® Cyclo™ .

**Cyclo Therapeutics, LLC /Trappsol® Cyclo™

Cyclo Therapeutics, LLC (referred to as Cyclo) is a clinical -stage wholly owned subsidiary that develops cyclodextrin-based products primarily for the potential treatment of diseases.

Cyclo filed a Type II Drug Master File with the United States (US) Food and Drug Administration (“FDA”) in 2014 for Trappsol® Cyclo™ (hydroxypropyl beta cyclodextrin) as a treatment for Niemann-Pick Disease, Type C1 (“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 2015, Cyclo launched an International Clinical Program for Trappsol® Cyclo™ as a potential treatment for NPC1. In 2016, Cyclo filed an Investigational New Drug application (“IND”) with the FDA and was notified by the FDA that its study may proceed for its initial Phase I Protocol. In addition to the ongoing clinical development program within the IND, Trappsol® Cyclo™ has been granted Orphan Drug Designation (May 2010), Fast Track Designation (January 2017) and Rare Pediatric Disease Designation (December 2017) by the FDA. It is recognized that a Pediatric Study Plan (PSP) is not required for non-oncology products with Orphan Drug status in the US, however, a Pediatric Investigational Plan (PIP) has been agreed with the European Medicines Agency (EMA) for Trappsol® Cyclo™ which includes clinical trials in patients from birth to less than 18 years of age. Cyclo has also received Orphan Drug Designation in Europe (April 2015). If Trappsol® Cyclo™ were to be approved under an orphan-designated indication, it would provide Cyclo with the exclusive right to sell Trappsol® Cyclo™ for the treatment of NPC1 for seven years in the United States following FDA drug approval, and will provide 10 years of market exclusivity in Europe following EMA regulatory approval. An additional 2 years of exclusivity in Europe could be added upon acceptance by the EMA’s Pediatric Committee of Cyclo’s pediatric investigation plan (PIP) demonstrating that Trappsol® Cyclo™ addresses the pediatric population.

On December 1, 2017, the FDA granted Cyclo’s request and designated hydroxypropyl-B-cyclodextrin (HPBCD) for treatment of Niemann-Pick disease type C (NPC) as a drug for a “rare pediatric disease,” as defined in section 529(a)(3) of the Federal Food, Drug and Cosmetic Act (FD&C Act) (21 U.S.C. 360ff(a)(3)). Rare Pediatric Disease designation by FDA enables priority review voucher eligibility upon U.S. marketing approval of a designated drug for a rare pediatric disease. The Rare Pediatric Disease Priority Review Voucher, or PRV, program is intended to encourage development of therapies to prevent and treat rare pediatric diseases. The voucher, subject to meeting eligibility requirements and current statutory deadlines, could be awarded to the sponsor of a designated rare pediatric disease product application in the event that its New Drug Application ("NDA") or Biologics License Application ("BLA") receives FDA approval. Once received, the voucher could be used by us, or sold or transferred to another entity and used by that new holder of the voucher, to receive priority review for a future NDA submission, which generally can reduce the FDA review time of such future submission to six months.

NPC is a devastating lysosomal storage disorder which can occur in both the pediatric and adult population. Many children diagnosed with NPC die before their fifth birthday. This has a significant public health impact in relation to the resources required to support the needs of patients and their families. The manifestation of NPC is extremely varied, with some patients suffering from different severities of systemic effects such as hepatomegaly and other organomegalies and/or neurological effects which have significant impact on quality of life and ability to thrive. Despite three approved products treating various aspects of the disease, there still remains an unmet medical need and new therapies are urgently required.

Trappsol® Cyclo™ is an investigational new drug designed to deliver a first-in-class propriety cyclodextrin formulation that is administered intravenously (IV) in order to mobilize lysosomal cholesterol. Trappsol® Cyclo™ is designed to directly impact the root cause of NPC1 by mobilizing cholesterol from late-stage endosomes and lysosomes. The Trappsol® Cyclo™ development program includes 5 studies: 1 completed Phase 1 study, 1 completed Phase 1/2 study, 1 ongoing Open Label Extension (OLE) study to the completed Phase 1 study, 1 ongoing Phase 3 study and a sub-study (outside the US) under the Phase 3 study in accordance with the current PIP agreed with the EMA. The PIP covers patients from birth to less than 18 years of age.

In completed and ongoing studies, treatment of NPC with IV Trappsol® Cyclo™ has indicated engagement on central and peripheral neurologic symptoms associated with NPC. Furthermore, biochemical markers of cholesterol mobilization indicate the potential to be able to ameliorate systemic disease. Subject to FDA's and EMA's review of any future application for regulatory approval, Trappsol® Cyclo™ treatment may be able to offer a significant improvement to quality of life, life expectancy and unmet need of patients with NPC and it is believed that the observed neurological and systemic benefits of IV Trappsol® Cyclo™ treatment may be confirmed in the ongoing Phase 3 placebo-controlled, pivotal study and in the open-label study in patients less than 3 years of age.

Cyclo also continues to operate its legacy fine chemical business, consisting of the sale of cyclodextrins and related products to the pharmaceutical, nutritional, and other industries, primarily for use in diagnostics and specialty drugs.

Cyclo’s core business has transitioned to a biotechnology company primarily focused on the development of cyclodextrin-based biopharmaceuticals for the potential treatment of diseases.

Global Phase 3 Clinical Study (TransportNPCTM)

A Phase 3 multicenter, double-blind, randomized, placebo-controlled pivotal trial to evaluate the safety, tolerability, and efficacy of 2000 mg/kg of Trappsol® Cyclo™ (administration as a slow infusion over 6.5 hours every 2 weeks) and standard of care, or SOC, compared to placebo and SOC in patients with NPC. The trial has been authorized in more than 30+ sites across 13 countries (Argentina, Australia, Brazil, Germany, Israel, Italy, Poland, Saudi Arabia, Spain, Taiwan, Turkey, UK and US). It has fully enrolled 94 patients for a total study duration period of 4 years, inclusive of a 2-year open-label extension, or OLE. The primary endpoint is mean change in 5D-NPC-CSS and 4D-NPC-CSS composite severity score, with secondary endpoints of SCAFI, PAS following swallowing (via video fluorography), and Vineland-2. Enrollment of the planned 94 patients was completed in May 2024 and, as such, the interim analysis (planned to be conducted when all 94 patients have reached the 48 week timepoint) was conducted in June 2025.

In June 2025, an unblinded interim analysis at 48-weeks was reviewed by an independent Data Monitoring Committee ("DMC") when all 94 patients completed the 48-week timepoint. Upon the DMC review of those analyses, the DMC concluded Trappsol® Cyclo™ to be well-tolerated and recommended continuing the study for the full 96 weeks.

This Phase 3 study also includes an open-label sub-study which will include newborn patients to less than 3 years of age primarily for safety, but also to provide outcome data on global severity and improvement in response to Trappsol® Cyclo™ from both the investigator and patient/family perspective (CGI-S, CGI-C, CaGI-S, CaGI-C, and CaGI-C24). As of May 2024, the study has fully enrolled 10 patients, and 2 patients discontinued after 48 weeks (caregiver decision). Provided below is a summary of the data from this sub-study:

In summary, this open-label sub-study suggests that long-term treatment with Trappsol® Cyclo™ in patients with NPC is considered well tolerated, with treatment emergent adverse events that are monitorable and manageable, and only hearing loss and acute infusion reactions continue to be identified as Adverse Events of Special Interest (AESI). The benefit-risk of Trappsol® Cyclo™ is considered to continue to be acceptable based upon a consistent safety and tolerability profile across clinical studies and age groups, thus in Cyclo's view supporting the continued investigation of Trappsol® Cyclo™ in NPC.

European and Israeli Phase I/II Clinical Study

A multicenter, Phase I/II, randomized, blinded, parallel-group study has been conducted to compare the pharmacokinetics, or PK, of 3 different single IV doses of Trappsol® Cyclo™ in patients with NPC1 and to evaluate the efficacy and tolerability of the 3 different dosages of Trappsol® Cyclo™ in patients with NPC1 after 48 weeks of treatment. Patients received IV infusions of Trappsol® Cyclo™ at doses of 1500 mg/kg, 2000 mg/kg, or 2500 mg/kg body weight over 8–9 hours every 2 weeks for a 48-week period, with a follow-up evaluation 28 days after their last study visit.

A total of 12 patients were enrolled, randomized, and received study treatment. Nine (9) of the 12 patients completed the study (2 of 5 patients in the 1500 mg/kg group; all 4 patients in the 2000 mg/kg group; all 3 patients in the 2500 mg/kg group completed the study). Three patients, all in the 1500 mg/kg group, discontinued the study for non-safety-related reasons.

The objective of this study was to assess the effectiveness of Trappsol® Cyclo™ in the management of NPC by evaluation of the number of individual domains of the overall score in which an improvement was observed over 48 weeks of treatment. Outcome measures included at least a 1-point reduction (improvement) in 2 or more of the 17D-NPC-CSS domains and improvements in Caregiver Global Impressions – Severity (CGI-S) ratings. Provided below is a summary of the data:

In summary, this study indicated that treatment with Trappsol® Cyclo™ crosses the blood brain barrier, showed improvements in neurological features of NPC, and was well-tolerated.

US Phase 1 Clinical Study

A Phase 1 study was conducted to evaluate the single and multiple-dose pharmacokinetics of IV Trappsol Cyclo (HPβCD) in patients with Niemann-Pick disease Type C (NPC1) and the effects of dosing upon biomarkers of NPC disease.

This study was a 14 week study assessing 2 dose levels administered IV every 2 weeks:

Endpoints included safety, pharmacokinetics (PK) and pharmacodynamics (PD) of Trappsol® Cyclo™ in peripheral tissues and the CNS in adult patients with NPC1. Specifically, these parameters were assessed via serum, plasma and Cerebrospinal Fluid (CSF) biomarkers and liver assessments after 7 IV infusions (14 weeks).

In total, 13 subjects were enrolled and 10 completed all study visits (6 patients at the 1500 mg/kg dose and 4 at the 2500 mg/kg dose completed the study) and 3 patients discontinued for non-safety-related reasons. Overall, both dose groups were well-tolerated, with no significant laboratory findings and very few TEAEs being reported in either dose group.

The observed PK profile of Trappsol® Cyclo™ was similar following the first and seventh infusions, with a plasma half-life of 2 hours (h), a maximum plasma concentration reached at 6 to 8 h, and no evidence of accumulation. Based on Cmax values systemic exposure was predicted to increase on average 1.2- to 1.5-fold for a doubling in dose. The geometric mean clearance (76.9 – 112 mL/h/kg) was similar to the glomerular filtration rate. Trappsol® Cyclo™ was first detected in the CSF 4 h following the start of the infusion (first timepoint measured) for both dose groups. The highest CSF concentrations measured were 48.3 μg/mL (mean at 12 h, 33 μM) for the 1500 mg/kg group and 37.8 μg/mL (mean at 12 h, 25 μM) for the 2500 mg/kg group. CSF samples were not collected after this time point, precluding the ability to calculate a half-life (t1/2) for the drug in CSF. Trappsol® Cyclo™ persisted in the CSF for several hours after the IV infusion had ended.

The PD effect of storage of unesterified cholesterol in liver, the prime organ of cholesterol production and metabolism, was significantly increased at baseline and was down to normal levels at 14 weeks of treatment, depending on dose, indicating a significant mobilization of lysosomal liver cholesterol over 14 weeks. Serum levels of lathosterol, a marker of whole-body cholesterol synthesis, decreased transiently over several days of the first Trappsol® Cyclo™ infusion indicating increased availability of cholesterol to intracellular sites. The level of reduction post-infusion was reduced after 7 treatment cycles in line with a normalization of hepatic cholesterol metabolism and storage. Serum levels of 4β-hydroxycholesterol, a marker of cholesterol catabolism, increased significantly after the first infusion, a pattern that reduced after 7 treatment cycles, again indicating a normalization of visceral cholesterol metabolism.

24(S)-hydroxycholesterol (24(S)-HC) is a cholesterol metabolite produced by neurons in the CNS. While cholesterol does not cross the blood brain barrier (BBB), 24(S)-HC is transported across the BBB into the circulation and accounts for more than 50% of cholesterol export from the CNS. It increased significantly during the week following the first infusion with Trappsol® Cyclo™, with a peak in the mean serum concentration at 128.02% of the baseline value. This indicates increased availability of neuronal cholesterol for degradation in the neuronal endoplasmic reticulum (ER) in the days post-treatment. Again, this effect was reduced at Week 13, indicating a reduction in lysosomal cholesterol storage in neurons. Importantly, the quantity exported corresponds only to a few milligrams per treatment cycle, a minor fraction of cholesterol stored and mis-localized in the brain of NPC patients. The magnitude of this effect can be interpreted as a sign of primary redistribution of cholesterol in the CNS to cellular locations downstream of the E/L compartment, while only a small fraction is excreted as 24(S)-HC.

Finally, the level of tau-protein, a marker indicating neuro-inflammatory and neuro-degenerative processes in the brain showed a tendency to a post-treatment transient increase after the first infusion and an overall reduction at the end of the study in 8 out of 10 patients.

The results from the completed Phase I study support the anticipated mechanism of action of systemically (IV) administered Trappsol® Cyclo™ in mobilizing intracellular cholesterol stores in the liver and the CNS in subjects with NPC1 as shown previously by nonclinical studies and was well-tolerated.

An OLE study was open to patients in the US who have completed the Phase I study and collects important longer term safety and efficacy data. All patients are currently receiving 1500 mg/kg Trappsol® Cyclo™ in-home infusions every 2 weeks. Three patients remain on this study with the longest having reached over 5 years of treatment. This study continues to be well-tolerated.

LipoMedix

LipoMedix is a clinical stage company, based in Israel, focused on the development of a product candidate, Promitil®, that holds the potential to be an innovative, safe, and effective cancer therapy based on liposome delivery. As of July 31, 2025, the Company’s ownership interest in LipoMedix was approximately 95%. As needed, the Company provides funding to LipoMedix through intercompany promissory notes which are used to support research and development activities. LipoMedix is currently exploring strategic options for the Promitil® program, including potential licensing opportunities, collaborations with industry partners, and investigator-initiated studies.

About Promitil®:

LipoMedix was established to advance the pharmaceutical and clinical development of a patented prodrug of mitomycin-C (MMC) and its efficient delivery in liposomes to cancer cells. This proprietary molecule, known as Promitil – pegylated liposomal mitomycin-C lipidic prodrug (PL-MLP) – is designed with the goal of overcoming the toxicity associated with the clinical use of mitomycin-C and turns it into a targeted, anticancer therapeutic that could potentially become a treatment in a variety of cancers with high unmet need. The inventor and scientific founder, of LipoMedix is Alberto Gabizon, M.D., Ph.D., of the Hebrew University – Shaare Zedek Medical Center, Israel. He is the co-inventor and co-developer of Doxil® (pegylated liposomal doxorubicin), a successful and widely used anticancer product based on a similar drug development strategy. Prof. Gabizon is one of the few scientists intimately familiar with the successful development and commercialization process of liposomal drugs.

Promitil® is designed with the goal of providing targeted delivery of MMC in a proprietary prodrug form. Based upon data available to date, Promitil® appears to have the potential to confer tumor targeting advantage due to the enhanced permeability and retention effect (EPR) of liposomes. Once in the tumor cells, the prodrug is converted to the active drug (MMC) by thiolytic agents abundantly present in tumor tissues, and MMC induces DNA cross-linking leading to tumor cell death. In preclinical studies, Promitil® appeared to inhibit cancer cells growth in animal models (pancreatic, colorectal, stomach, breast, ovarian, melanoma, bladder), including multidrug resistant tumors, as monotherapy as well as in combination with radiotherapy and/or approved cancer drugs. In these early-stage, preclinical studies, Promitil® appeared to be more efficacious and less toxic than MMC by a 3-fold factor.

LipoMedix has completed 4 clinical studies with Promitil® including:

In these four clinical studies, over 140 patients were treated with Promitil® as a single agent or in combination with other anticancer drugs or radiotherapy under a United States IND to assess the safety, PK profile, and preliminary efficacy, in addition to 40 patients who were treated under a compassionate use program. Promitil® was given by intravenous infusion once every 3 or 4 weeks and appeared to be well-tolerated at a dose up to 2 mg/kg. Except for mild myelosuppression, no other toxicities such as skin irritation, mouth ulcers, neuropathic pain, diarrhea, or hair loss were reported in these studies. Promitil® was stable in plasma with a half-life of approximately 20 hours (vs 40-50 minutes for naked MMC).

Next Steps:

Homologous recombination (HR) is an evolutionarily conserved process for repairing DNA double-strand breaks with high fidelity, and the BRCA1 and BRCA2 proteins are considered to play essential roles in this process. Patients harboring germline mutations in the BRCA1 and/or BRCA2 genes have significantly increased lifetime risk of developing breast, ovarian, pancreatic, and prostate cancer. Tumors with BRCA mutations are susceptible to platinum-based chemotherapy and hypersensitive to agents that inhibit poly(ADP-ribose) polymerase (PARP). However, despite their initial anti-tumor activity, multiple resistance mechanisms have been described, and the development of resistance limits the clinical utility of platinum-based and PARP inhibitor (PARPi) therapies. Overall, treating cancers associated with deleterious germline mutations in HR genes, such as BRCA1, BRCA2, and PALB2, remains a clinical challenge.

Preclinical studies have suggested that mitomycin C (MMC) was effective in killing BRCA2-mutant tumors. Preliminary indications of clinical efficacy of MMC have also been reported in heavily pretreated ovarian cancer patients with BRCA1 mutations and in a patient with advanced, gemcitabine-resistant pancreatic cancer harboring a PALB2 gene mutation. Pancreatic ductal adenocarcinoma (PDAC) continues to be one of the most lethal malignant neoplasms, with a 5-year survival rate of only 5%. Surgery is the only potentially curative treatment; however, only about 20% of PDAC patients are candidates for surgery at diagnosis, and recurrence is common, often accompanied by therapeutic resistance. Despite advances in systemic combination chemotherapies, survival outcomes in PDAC remain poor.

Based on the reported indications of preclinical and clinical activity of MMC in BRCA-mutated tumors and data suggesting a potential favorable safety profile of Promitil® in earlier clinical studies, LipoMedix initiated a Phase IIa clinical trial to evaluate the safety and preliminary efficacy of Promitil® in patients with deleterious germline mutations in BRCA1, BRCA2, or PALB2. This study was conducted across six hospitals in Israel.

While the treatment was generally well tolerated, the study did not meet its efficacy endpoints. These results underscore the complexity of treating BRCA- and PALB2-mutated pancreatic and other cancers, and highlight the need for continued research into novel therapeutic strategies for this challenging patient population.

In light of these findings, LipoMedix is currently exploring strategic options for the Promitil® program, including potential licensing opportunities, collaborations with industry partners, and investigator-initiated studies.

Farber

Farber, a majority owned subsidiary of Barer, was formed around an agreement with Princeton University’s Office of Technology Licensing for technology from the laboratory of Dr. Joshua Rabinowitz, in the Department of Chemistry, Princeton University, for an exclusive worldwide license to its SHMT (serine hydroxymethyltransferase) inhibitor program. In November 2022, we resolved to curtail our early-stage development efforts, including pre-clinical research at Barer Institute. Since then, we have sought partners for Farber programs and has entered into a license agreement for one of its technologies that is in the pre-clinical research stage with the Ludwig Institute of Cancer Research and has transferred majority ownership of another one of its technologies, SHMT, to a new company, Forme Therapeutics, that is being managed by Dr. Joshua Rabinowitz with the goal of developing SHMT. Going forward, we expect that Barer, through its Farber subsidiary, will primarily operate as an entity holding interest in these cancer-focused opportunities.

Cornerstone

We own our interest in Cornerstone through a 90% equity ownership interest in, and consolidate, Pharma Holdings, LLC (“Pharma Holdings”). Pharma Holdings holds 50% of the equity interests in, and consolidates, CS Pharma Holdings, LLC. We serve as the managing member of Pharma Holdings, and Pharma Holdings serves as the managing member of CS Pharma, with broad authority to make all key decisions regarding their respective holdings. Based on our ownership interest in Pharma Holdings, and Pharma Holdings’ ownership interest in CS Pharma Holdings, we have an effective 45% equity ownership interest in CS Pharma Holdings, LLC.

In March of 2024, Cornerstone completed a comprehensive restructuring transaction including, the conversion of the debt under a line of credit agreement and the promissory note held by the Company, the conversion and modification of other Cornerstone debt obligations, the extension of the Cornerstone debt held by RP Finance, a reverse stock split, the conversion of all outstanding preferred stock of Cornerstone into common stock and the adoption of certain governance measures. Subsequent to the restructuring the Company owns 67% of Cornerstone.

Science and Preclinical:

Cornerstone’s lead development candidate is CPI-613® (devimistat), a stable analog of normally transient, acylated catalytic intermediates of lipoate. The CPI-613® intermediates are designed to disrupt mitochondrial function and thereby decrease the TCA cycle function; thus, CPI-613® (devimistat) misinforms these tumor systems, triggering mitochondrial stress and turning off the cancer cell TCA cycle. CPI-613® is designed to broadly affect tumor metabolism, including disrupting mitochondria and potentially intercalating in cancer cell membranes. The metabolic and mitochondrial stress have been found to trigger apoptotic and necrotic cell death pathways in tumor cells (Zachar et al., J Mol Med, 2011, 89:1137-48; Stuart et al., Cancer Metab. 2014, 2, 4: reviewed in Bingham et al., Expert Rev Clin Pharmacol. 2014, 7:837-46 and Hammoudi et al., Chin J Cancer. 2011, ;30:508-25). These data suggest that CPI-613® may hold the potential to have anti-cancer activity. Combining CPI-613® with generalized metabolic stressors like chemotherapy could hold the potential to result in the effective killing of even the most intractable tumors like pancreatic cancer. These effects were observed in Cornerstone's Phase I/II trials to date (Alistar, et al., 2017; Pardee et al., 2018). CPI-613® has been found to be selectively accumulated in tumors in animal studies. CPI-613 is a lipoic acid analog with a fatty acid tail that may be able to utilize fatty acid transporters. Cancer cells have been shown to up-regulate fatty acid metabolism to support tumorigenesis.

Existing data suggests that there may be potential advantages of CPI-613® (devimistat) over alternative anti-metabolism and anti-cancer drugs. CPI-613® is believed to be selectively taken up by cancer cells. As a result, CPI-613® (devimistat) could hold the potential to be minimally toxic to healthy cells (i.e., potentially safe and well tolerated), potentially allowing extended treatment courses. Moreover, its emerging toxicity profile may allow CPI-613® (devimistat) to be used in combination with other drugs and in older patients. These potential combination regimens include established standards of care for major malignancies, possibly allowing potential treatment of surgically unresectable cancers. Additionally, this potential toxicity profile could possibly support the administration of cocktails of anti-cancer drugs that may work synergistically with CPI-613®.

Several pre-clinical pharmacology and toxicology studies (including good laboratory practice toxicology (GLP Tox) studies) were conducted to investigate the pharmacokinetics (PK), drug metabolism, safety, and anticancer activity of CPI-613® (devimistat). In pre-clinical in vitro and ex vivo studies, CPI-613® (devimistat) appeared to exhibit anticancer activities against tumor cell lines and cells. CPI-613® (devimistat) also appeared to be taken up less in non-malignant cells. In vivo animal models bearing diverse tumor types were used to evaluate dose-response, PK, and metabolism of CPI-613® (devimistat). In these early-state, pre-clinical studies, the drug was well tolerated in the animal models studied. Prolonged survival was observed when compared to untreated controls in these animal models. GLP toxicology studies indicated that any adverse events related to CPI-613® (devimistat) were considered transient and mostly observed during acute dosing; animals returned to normal post-dose (i.e., toxicities appeared to be reversible or recoverable). Toxicokinetic (TK) exposures of Cmax (peak concentration) and area under the curve (AUC) of CPI-613® (devimistat) from GLP Tox studies in rats and minipigs have suggested safety margins expected to cover PK exposures of Cmax and AUC of CPI-613® (devimistat) in pancreatic cancer patients at doses studied.

Clinical Highlights:

Overall, one thousand thirty-three (1033) patients have been exposed to CPI-613® (devimistat) throughout the various trials (25) in the proposed indications.

Currently, one clinical trial is in the follow-up/close-out phase in the following program:

CPI-613® (devimistat) has been tested in 3 randomized controlled trials. Currently, Cornerstone is exploring strategic alternatives to further its clinical development.

In March 2023, Cornerstone purchased all assets and rights of telaglenastat (CB-839), a glutaminase inhibitor, from Calithera Biosciences, Inc. In February of 2025, Cornerstone sold the rights to telaglenastat to Synhale for a modest upfront payment and potential future milestones based on development achievements. Synhale plans to develop the drug candidate for patients with pulmonary hypertension.

Rafael Medical Devices

Rafael Medical Devices is a medical device company currently concentrating on developing surgical and procedural devices designed to provide meaningful advantages to patients and healthcare providers in the orthopedic market. Its current lead product is an orthopedic arthroscopy instrument for carpal and cubital tunnel syndrome.

Rafael Medical Devices has assembled an in-house team with expertise in engineering, device development quality control, and design who have been part of teams that have created successful commercial medical devices in the past. It has begun to expand its expert network of experienced device creators, key opinion leaders.

Orthopedics comprise a large addressable market. Rafael Medical Devices is seeking to assemble a portfolio of Class I, II and III devices to mitigate risk across a portfolio of devices with overlapping needs and markets. This strategy is designed to minimize supply chain requirements while maximizing market potential.

On December 11, 2024, Rafael Medical Devices received a substantial equivalence determination for the VECTR System from the 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 as a Class II device. Rafael Medical Devices has initiated a sales effort in the United States and building a network of distributors as it builds out its commercial presence for the VECTR System. Rafael Medical Devices is actively expanding its manufacturing volume and engaging with regional orthopedic distributors in the field of hand surgery.

The Company has initiated design of its second product, a follow on to the VECTR system that utilizes a retrograde release system. The development of future products will depend upon the success of the VECTR System and the Company’s ability to identify attractive opportunities in the marketplace.

Day Three Labs

Day Three Labs is a technology company focused on creating solutions for increased bioavailability of other third-party manufacturers’ products, with a specific focus on compounds used as active ingredients in pharmaceutical and food supplement products. Day Three Labs’ majority-owned subsidiary, Day Three Labs Manufacturing, is dedicated to the commercialization of technology for the cannabis and hemp industries and has developed technological solutions specifically engineered for increased bioavailability of cannabinoids. On March 14, 2025, Day Three Labs Manufacturing entered into an Asset Purchase Agreement and Licensing Agreement (the “DTLM Sale Agreement”), pursuant to which Day Three Labs Manufacturing sold certain assets and licensed certain applications of their Unlokt™ technology used in their cannabinoid ingredient manufacturing business to a third party in exchange for a $500,000 convertible note in the acquiring company and milestone payments.

OUR STRATEGY

We are a biotechnology company that develops pharmaceuticals and holds interests in clinical and early-stage Portfolio Companies, including our wholly-owned Cyclo, Barer and our majority interest in LipoMedix, Rafael Medical Devices, Day Three and Cornerstone. Historically, our focus was on investing in and funding entities to discover and develop novel cancer therapies. Our primary focus has been the continued development of Trappsol® Cyclo™ through the completion of its ongoing pivotal Phase 3 clinical trial, the potential filing for regulatory approval and ultimately, if approved, commercialization of the product and to expand our investment portfolio through opportunistic and strategic investments, including in therapeutics that address high unmet medical needs. We are currently evaluating our other holdings to ensure the future focus of our resources are on core assets and specifically the Trappsol® Cyclo™ clinical and development efforts.

The focus of our efforts is subject to change with market conditions, results of our internal development efforts, the availability of investment opportunities on acceptable terms, the investment and acquisition opportunities we may pursue, and developments at those targets.

Our goal within biopharma is to develop and bring to market therapeutics which address high unmet medical needs, opportunistic investments, acquisitions and in-licensing of assets.

We may selectively invest in pre-clinical and clinical stage healthcare opportunities, including those in which we already own interests, when determined to be consistent with our goals, and move toward clinical stage programs as research and development results warrant, while being ready to exploit other opportunities that may arise.

Our internal and external investment decisions will be based on the progress and results of our clinical development and pre-clinical activities and other operational developments, and the availability of targets for investment, acquisition or licensing.

GOVERNMENT REGULATION AND COMPLIANCE

Our operations, products, services, and potential future customers and those of our Portfolio Companies are subject to extensive government regulation by the FDA and other federal and state authorities in the United States, as well as comparable authorities in foreign jurisdictions. The global regulatory environment is increasingly stringent, unpredictable, and complex. There is a global trend toward increased regulatory and enforcement activity related to all medical products.

In the U.S., our product candidates and device candidates are regulated as either drugs or biological products under the Federal Food, Drug and Cosmetic Act, or FFDCA, and the Public Health Service Act, or PHSA, and their implementing regulations, or as medical devices under the FFDCA and its implementing regulations, each as amended and enforced by the FDA. These laws govern the processes by which our product candidates and device candidates would be brought to market. The FDA has enacted extensive regulations that control all aspects of the development, design, performance, non-clinical and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, servicing, recordkeeping, premarket clearance or approval, adverse event reporting, advertising, promotion, marketing and distribution, postmarket surveillance, and import and export of drugs, biological products, and medical devices. In addition, the FDA controls the access of products to market through processes designed to ensure that only products that are safe and effective for their intended use(s) and otherwise meet the applicable requirements of the FFDCA and/or PHSA before they are made available to the public.

Review And Approval Of Drugs In The United States

In the United States, the FDA approves and regulates drugs under the FFDCA, and its implementing regulations. The failure to comply with requirements under the FFDCA and other applicable laws at any time during the product development process, approval process or after approval may subject an applicant and/or sponsor to a variety of administrative or judicial sanctions, including refusal by the FDA to approve pending applications, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters and other types of compliance letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement of profits, or civil or criminal investigations and penalties brought by the FDA and the Department of Justice or other governmental entities.

Each of Cyclo, LipoMedix’s, Barer’s, and Cornerstone’s (collectively referred to as the “Pharmaceutical Companies”) current product candidates must be approved by the FDA through a New Drug Application, or NDA. An applicant seeking approval to market and distribute a new drug product in the United States must typically undertake the following:

Before an applicant begins testing a compound with potential therapeutic value in humans, the drug candidate enters the preclinical testing stage. Preclinical studies include laboratory evaluation of product chemistry, toxicity and formulation, and the purity and stability of the drug substance, as well as in vitro and animal studies to assess the potential safety and activity of the drug for initial testing in humans and to establish a rationale for therapeutic use. The conduct of the preclinical tests must comply with federal regulations and requirements including good laboratory practices, or GLP, requirements. The sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol, to the FDA as part of the IND. An IND is an exemption from the FFDCA that allows an unapproved drug to be shipped in interstate commerce for use in an investigational clinical trial and a request for FDA authorization to administer an investigational drug to humans. Such authorization must be secured prior to interstate shipment and administration of any new drug that is not the subject of an approved NDA. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA places the clinical trial on a clinical hold within that 30-day time period. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. The FDA may also impose clinical holds on a drug candidate at any time before or during clinical trials due to safety concerns or non-compliance.

A sponsor may choose, but is not required, to conduct a foreign clinical study under an IND. When a foreign clinical study is conducted under an IND, all FDA IND requirements must be met unless waived. When the foreign clinical study is not conducted under an IND, the sponsor must ensure that the study complies with certain FDA regulatory requirements to use the study as support for an IND or subsequent application for regulatory approval. Such studies must be conducted in accordance with GCP, including review and approval by an independent ethics committee, or IEC, and include informed consent from subjects. The GCP requirements encompass both ethical and data integrity standards for clinical studies. The FDA’s regulations are intended to help ensure the protection of human subjects enrolled in non-IND foreign clinical studies, as well as the quality and integrity of the resulting data. They further help ensure that non-IND foreign studies are conducted in a manner comparable to that required for IND studies.

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include, among other things, the requirement that all research subjects provide their informed consent in writing before their participation in any clinical trial. Clinical trials are conducted under written study protocols detailing, among other things, the objectives of the study, inclusion and exclusion criteria, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated. Each protocol must be submitted to the FDA as part of the IND before a clinical trial can begin in the US. In addition, an IRB representing each study site participating in the clinical trial must review and approve the plan for any clinical trial before it commences at each site, and the IRB must conduct continuing review and reapprove the study at least annually. The IRB must review and approve, among other things, the study protocol and informed consent information to be provided to study subjects.

Human clinical trials are typically conducted in four sequential phases, which may overlap or be combined under certain limited circumstances when authorized in advance by FDA:

Phase 1. The drug candidate is initially introduced into a small number of healthy human subjects or, in certain indications such as cancer, patients with the target disease or condition (e.g., cancer) and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its potential effectiveness and to determine optimal dosage.

Phase 2. The drug candidate is administered to a limited number of patients in the target patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the potential efficacy of the product for a specific targeted disease, and to determine dosage tolerance and optimal dosage.

Phase 3. These clinical trials are commonly referred to as “pivotal” studies, which denotes a study or studies that present the pivotal data (but not the only data) that the FDA or other relevant regulatory agency will use to determine whether or not to approve a drug candidate. The investigational drug is administered to an expanded number of patients in the target patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.

Phase 4. Post-approval studies may be required to be conducted, or a sponsor may decide on its own to conduct them, in order to collect additional data after initial regulatory approval. These studies are used to gain additional experience and additional safety and/or efficacy data from the treatment of patients in the approved therapeutic indication. Following review by FDA, data from Phase 4 studies can result in the suspension of marketing and/or the withdrawal of approval of the drug for safety or effectiveness reasons.

Progress reports detailing the results of all clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events occur. In addition, IND safety reports must be submitted to the FDA for any of the following: serious and unexpected suspected adverse reactions; findings from other studies or animal or in vitro testing that suggest a significant risk in humans exposed to the drug; and any clinically important increase in the case of a serious suspected adverse reaction over that listed in the investigator brochure.

Concurrent with clinical trials, companies often complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the drug as well as finalize a process for manufacturing and packaging the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the drug candidate and, among other things, the sponsor must develop methods for testing the identity, strength, quality, purity, and potency of the final drug. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted in the selected packaging to demonstrate that the drug candidate does not undergo unacceptable deterioration in that packaging over its shelf life.

If clinical trials are successful, the next step in the drug development process is the preparation and submission to the FDA of an NDA or BLA, Biologics License Application, following payment of applicable user fees, if any, under PDUFA, the Prescription Drug User Fee Act. The NDA or BLA is the vehicle through which applicants formally propose that the FDA approve a new drug or biologic for marketing and sale in the United States for one or more indications. The results of product development, preclinical studies, and clinical trials, along with detailed descriptions of the manufacturing process, analytical tests conducted on the chemistry of the drug, proposed labeling, and other relevant information are submitted to the FDA as part of an NDA or BLA requesting approval to market the product. The submission of an NDA or BLA is subject to the payment of substantial user fees; a waiver of such fees may be obtained under certain limited circumstances. For example, products with orphan drug designation are not subject to user fees.

The FDA initially reviews all NDAs and BLAs submitted to identify if there are any deficiencies before it can officially accept the applications for in-depth review, also known as “filing” of the NDA or BLA. The FDA may request additional information before deciding whether to accept an NDA or BLA for filing, and the applicant generally must submit the requested information before FDA proceeds. Subject to any additional information requests by FDA, this is generally a 60-day filing period. Once the submission is accepted for filing, the FDA begins an in-depth review of the NDA or BLA.

After the NDA or BLA submission is accepted for filing, the FDA reviews the NDA or BLA to determine, among other things, whether the proposed product is safe and effective for its intended use, whether the product is being manufactured in accordance with cGMP to assure and preserve the product’s identity, strength, quality, and purity, and whether the product has appropriate labeling for its proposed intended use. There generally is a two-tiered system of review times – standard review and priority review – under the FDA’s regulations and PDUFA performance goals and procedures. A priority review designation means FDA’s current PDUFA goal is to review and take action on 90% of such applications within six months (compared to 10 months under standard review) in addition to the 60-day filing period. During the approval process, the FDA also will determine whether a risk evaluation and mitigation strategy, or REMS, is necessary to assure the safe use of the drug or biologic following its approval. If the FDA concludes that a REMS is needed, the sponsor of the NDA must submit a proposed REMS; the FDA will not approve the NDA without a REMS, if a REMS is deemed to be required.

Before approving an NDA or BLA, the FDA will typically inspect the facilities at which the product is to be manufactured. These preapproval inspections may cover all facilities associated with an NDA or BLA submission, including drug component manufacturing (e.g., active pharmaceutical ingredients), finished drug product manufacturing, labeling and packaging operations, and control testing laboratories. The FDA will not approve an application unless it determines that the manufacturing processes and all facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA or BLA, the FDA will typically inspect one or more clinical trial sites to assure compliance with GCP.

The FDA is required to refer an application for a novel drug to an advisory committee or explain why such referral was not made. Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions about the approval of the drug.

On the basis of the FDA’s evaluation of the NDA or BLA and accompanying information, including the results of the inspection of the manufacturing facilities and clinical trial sites, the FDA may issue an approval letter or a complete response letter. An approval letter authorizes commercial marketing of the product with specific prescribing information for a specific indication or indications in accordance with approved labeling. A complete response letter generally outlines the deficiencies in the application and may require the sponsor to undertake substantial additional testing or gather significant additional data and information in order for the FDA to reconsider the application. Historically, the text of complete response letters generally was not released by the sponsor or FDA, and any disclosures associated with such complete response letters was limited to a sponsor’s determination of as to what portion of such letters were material or otherwise should be disclosed. In June 2025, FDA adopted a policy of “radical transparency” and, after completing redactions for trade secrets and confidential commercial information and personal private information, published more than 200 complete response letters that had been issued to sponsors in response to applications submitted to FDA for approval of drugs or biological products between 2020 and 2024. In September 2025, FDA released 89 additional, previously-unpublished complete response letters issued from 2024 to the present associated with pending or withdrawn applications. The Agency also announced that, going forward, FDA would promptly release newly-issued complete response letters, and, when approving applications, would release all complete response letters associated with that application, and that FDA also would publish batches of previously-issued CRLs associated with withdrawn or abandoned applications. If a complete response letter is issued, the applicant may either resubmit the application, addressing all of the deficiencies identified in the complete response letter, or withdraw the application. If and when those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA or BLA, the FDA will issue an approval letter. In its current PDUFA performance goals and procedures, the FDA has committed to reviewing and acting on 90% of such resubmissions in two or six months depending on the type of information included and the FDA’s classification of the resubmission. Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

If a product receives regulatory approval, the approval may be limited to a specific disease(s) and dosage(s) or the indication(s) for use or other product labeling may otherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings or precautions be included in the product labeling. In addition, the FDA may require phase 4 testing, which involves post-approval clinical trials designed to further assess a product’s safety and/or effectiveness, and also may require testing and surveillance programs to monitor the safety of approved products that have been commercialized.

Fast track, breakthrough therapy, and priority review designations

The FDA is authorized to designate certain product candidates for expedited review if they are intended to address an unmet medical need in the treatment of a serious or life-threatening disease or condition. These programs are fast track designation, breakthrough therapy designation, and priority review designation. Receipt of such a designation does not necessarily mean that a product candidate will receive an expedited approval.

Accelerated approval pathway

The FDA may grant accelerated approval to a product for a serious or life-threatening condition that provides meaningful therapeutic advantage to patients over existing treatments based upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit. The FDA may also grant accelerated approval for such a condition when the product has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality, or IMM, and that is reasonably likely to predict an effect on IMM or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. Products granted accelerated approval must meet the same statutory standards for safety and effectiveness as those granted non-accelerated approval. If post-marketing clinical studies fail to verify the anticipated clinical benefit, FDA may withdraw approval.

Post-Approval Requirements

Any drug that receives FDA approval is subject to continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, continued adherence to cGMP, periodic reporting, product sampling and distribution, advertising and promotion, and reporting of adverse experiences with the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims, by submitting supplemental NDAs, are subject to prior FDA review and approval. There also are continuing, annual user fee requirements for any marketed products and the establishments at which such products are manufactured, as well as new application fees for supplemental applications containing clinical data.

In addition, drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and state agencies, and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with cGMP requirements. Changes to the manufacturing process are strictly regulated and often require prior FDA review and approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers, packagers or distributors that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance.

Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of manufacturing or distribution or other restrictions. Other potential consequences include, among other things:

The FDA strictly regulates the marketing, labeling, advertising, and promotion of products that are placed on the market. Drugs may be promoted only for the approved indication(s) and in accordance with the provisions of the approved labeling. The FDA and other agencies actively enforce the laws and regulations prohibiting false or misleading promotion and the promotion of off-label uses, which require that promotion is truthful, not misleading, fairly balanced and provides adequate directions for use, and that all claims are substantiated, and which also prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling, in accordance with FDA guidance on off-label dissemination of information and responding to unsolicited requests for information. A company that is found to have improperly promoted off-label uses or engaged in any other false or misleading promotion may be subject to significant liability and enforcement actions.

In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act, or PDMA, and its implementing regulations, as well as the Drug Supply Chain Security Act, or DSCA, and its implementing regulations, which together regulate, among other things, the distribution and tracking and tracing of prescription drugs and prescription drug samples at the federal level, and set minimum standards for the regulation of drug distributors by the states. The PDMA, its implementing regulations, and state laws limit the distribution of prescription pharmaceutical product samples, and the DSCA and its implementing regulations impose requirements to ensure accountability in distribution and to identify, trace and remove counterfeit and other illegitimate or harmful drugs from the market.

Abbreviated new drug applications for generic drugs

In 1984, with passage of the Hatch-Waxman Amendments to the FFDCA, Congress established an abbreviated regulatory scheme authorizing the FDA to approve generic drugs that are shown to contain the same active ingredients as, and to be bioequivalent to, drugs previously approved by the FDA pursuant to NDAs. To obtain approval of a generic drug, an applicant must submit an abbreviated new drug application, or ANDA, to the agency. An ANDA is a comprehensive submission that contains, among other things, data and information pertaining to the active pharmaceutical ingredient, bioequivalence, drug product formulation, specifications, and stability of the generic drug, as well as analytical methods, manufacturing process validation data, and quality control procedures. ANDAs are “abbreviated” because they generally do not include preclinical and clinical data to demonstrate safety and effectiveness. Instead, in support of such applications, a generic manufacturer may rely on the FDA’s prior determination of safety and effectiveness based upon the preclinical and clinical testing previously conducted for a drug product previously approved under an NDA, known as the reference-listed drug, or RLD.

505(b)(2) NDAs

As an alternative path to FDA approval for modifications to formulations or uses of products previously approved by the FDA pursuant to an NDA, an applicant may submit an NDA under Section 505(b)(2) of the FFDCA. Section 505(b)(2) was enacted as part of the Hatch-Waxman Amendments and permits the filing of an NDA where at least some of the information required for approval comes from studies not conducted by, or for, the applicant. If the 505(b)(2) applicant can establish that reliance on FDA’s previous finding of safety and effectiveness of the RLD is scientifically and legally appropriate, it may eliminate the need to conduct certain preclinical or clinical studies of the new product. The FDA may also require companies to perform additional studies or measurements, including clinical trials, to support the change from the previously approved RLD. The FDA may then approve the new product candidate for all, or some, of the label indication(s) for which the RLD has been approved, and/or for any new indication(s) for which approval is sought by the 505(b)(2) applicant.

Pediatric studies and exclusivity

Under the Pediatric Research Equity Act, an NDA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the drug candidate for the proposed indication(s) in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is determined to be safe and effective. With enactment in 2012 of the Food and Drug Administration Safety and Innovation Act, or FDASIA, sponsors must also submit pediatric study plans prior to the assessment data. Those plans must contain an outline of the proposed pediatric study or studies the applicant plans to conduct, including study objectives and design, any deferral or waiver requests, and any other information required by regulation. The applicant, the FDA, and the FDA’s internal review committee must then review the information submitted, consult with each other, and agree upon a final plan. The FDA or the applicant may request an amendment to the plan at any time. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements. Additional requirements and procedures relating to waiver requests, deferral requests and requests for extension of deferrals are contained in FDASIA. Unless and until FDA promulgates a regulation stating otherwise, the pediatric data requirements generally do not apply to products with orphan designation. However, in accordance with the FDA Reauthorization Act of 2017, or FDARA, certain orphan designated cancer drugs are no longer exempt from having to conduct pediatric studies. FDARA requires that any original NDA or BLA submitted on or after August 18, 2020, for a new active ingredient, must contain studies of molecularly targeted pediatric cancers, unless a deferral or a waiver is granted, if the drug that is the subject of the application is intended for the treatment of an adult cancer and directed at a molecular target that the FDA determines to be substantially relevant to the growth or progression of a pediatric cancer.

Orphan drug designation and exclusivity

Under the Orphan Drug Act, the FDA may designate a drug product as an “orphan drug” if it is intended to treat a rare disease or condition, generally meaning that it affects fewer than 200,000 individuals in the United States, or more in cases in which there is no reasonable expectation that the cost of developing and making a drug product available in the United States for treatment of the disease or condition will be recovered from sales of the product. A company must request orphan drug designation before submitting an NDA or BLA for the drug for the rare disease or condition. If the request is granted, the FDA will disclose the identity of the therapeutic agent and its potential use(s). Orphan drug designation does not shorten the PDUFA goal dates for the regulatory review and approval process, although it does convey certain advantages such as tax benefits and exemption from the PDUFA application fee. The first applicant to obtain approval of an orphan drug is eligible for seven years of exclusivity for a drug, or twelve years of exclusivity for a biologic, during which FDA may not approve the same drug for the same approved orphan indication unless the subsequent product is shown to be clinically superior or if the FDA withdraws exclusive approval or revokes orphan drug designation, or if the marketing application (NDA or BLA) for the orphan drug is withdrawn for any reason, or if the holder of the orphan exclusive approval fails to assure a sufficient quantity of the orphan drug.

Patent term restoration and extension

A patent claiming a new drug product or its method of use or its method of manufacturing may be eligible for a limited patent term extension, also known as patent term restoration, under the Hatch-Waxman Act, which permits a patent restoration of up to five years for patent term lost during product development and the FDA regulatory review process. Patent term extension is generally available only for drug products whose active ingredient has not previously been approved by the FDA. The restoration period granted is typically one-half the time between the effective date of an IND and the submission date of an NDA or BLA, plus the time between the submission date of an NDA or BLA and the ultimate approval date, up to a maximum of five years. Patent term extension cannot be used to extend the remaining term of a patent past a total of 14 years from the product’s approval date. Only one patent applicable to an approved drug product is eligible for the extension, and the application for the extension must be submitted prior to the expiration of the patent in question. A patent that covers multiple drugs for which approval is sought can only be extended in connection with one of the approvals. The United States Patent and Trademark Office, or PTO, reviews and approves the application for any patent term extension in consultation with the FDA upon PTO’s determination that the requirements for an extension have been met.

FDA approval and regulation of companion diagnostics

If safe and effective use of a therapeutic depends on a diagnostic, a medical device that is often anin vitrodiagnostic or IVD, then the FDA generally will require approval or clearance of that diagnostic, known as a companion diagnostic, at the same time that the FDA approves the therapeutic product. In August 2014, the FDA issued final guidance clarifying the requirements that will apply to approval of therapeutic products andin vitro companion diagnostics. According to the guidance, for novel drugs, a candidate IVD companion diagnostic and its corresponding therapeutic should be co-developed and approved or cleared contemporaneously by the FDA for the use indicated in the therapeutic product’s labeling. In July 2016, the FDA issued a draft guidance detailing general principles to guide co-development of an in vitro companion diagnostic device with a therapeutic product. In April 2020, the FDA issued final guidance intended to facilitate class labeling on diagnostic tests for oncology therapeutic products, where scientifically appropriate.

FDA’s Rare Pediatric Disease Designation and Priority Review Voucher Program

Section 529 of the FFDCA grants the FDA authority to award priority review vouchers, or PRVs, to sponsors of certain rare pediatric disease product applications that meet the criteria specified in section 529. Under its Rare Pediatric Disease Priority Review Voucher program, a PRV may be awarded only for an approved rare pediatric disease product application for a product that treats or prevents a “rare pediatric disease.” A rare pediatric disease product application is an NDA or BLA for a product that treats or prevents a serious or life-threatening disease in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years; in general, the disease must affect fewer than 200,000 such individuals in the U.S.; the NDA or BLA must be deemed eligible for priority review; the NDA or BLA must not seek approval for a different adult indication (i.e., for a different disease/condition); the product must not contain an active ingredient that has been previously approved by the FDA in any other application; and the NDA or BLA must rely on clinical data derived from studies examining a pediatric population such that the approved product can be adequately labeled for the pediatric population. Before NDA or BLA approval, the FDA may designate a product in development as a product for a rare pediatric disease, and, after December 20, 2024, such designation is required to receive a PRV. To receive a rare pediatric disease PRV, a sponsor must, among other requirements, notify the FDA, upon submission of the NDA or BLA, of its intent to request a voucher. If the FDA determines that the NDA or BLA is a rare pediatric disease product application and grants priority review, and if the NDA is approved, the FDA will award the sponsor of the NDA or BLA a PRV upon approval of the application. The FDA may revoke any PRV if the rare pediatric disease drug for which the voucher was awarded is not marketed in the U.S. within 1 year following the date of approval.

If a PRV is received, it can used by the Company and is transferable to another sponsor and can be redeemed to receive a priority review of a subsequent marketing application for a different product, and it is not limited to drugs for rare pediatric diseases. Once a PRV is issued, it may be sold or transferred an unlimited number of times as long as the sponsor making the transfer has not yet submitted the application. The PRV entitles the holder of the PRV to priority review of the accompanying NDA or BLA. The sponsor submitting the PRV must notify the FDA of its intent to submit the voucher with the NDA or BLA at least 90 days prior to submission of the NDA or BLA and must pay a priority review user fee in addition to any other required user fee. The FDA generally has a goal to take action on an NDA or BLA under priority review within the applicable six month window after an NDA or BLA submission. However, neither a rare pediatric disease designation nor a PRV changes the standards for approval, may not ultimately expedite the development or approval process for a product candidate that has received designation or to which a PRV is applied, and it does not assure ultimate approval by the FDA. Further, there may be changes to the regulatory scheme surrounding these designations, which render them obsolete.

The FDA’s Rare Pediatric Disease Priority Review Voucher program began to sunset on December 20, 2024, due to the U.S. Congress’ failure to pass a continuing resolution or other legislation that reauthorized the program or otherwise extended it. Under the current statutory sunset provisions, after December 20, 2024, the FDA may award a PRV for an approved rare pediatric disease product application only if the sponsor already had secured rare pediatric disease designation for the product candidate and only if that designation had been granted by December 20, 2024. Moreover, under the current sunset provisions, after September 30, 2026, the FDA may not award any rare pediatric disease PRVs unless the program is extended. In other words, even if a product candidate has received rare pediatric disease designation, if the NDA for that product candidate is not approved by the FDA by September 30, 2026, no PRV will be awarded under the current sunset provisions even if all of the other requirements for a PRV had been met. Although legislation to reauthorize and extend the rare pediatric disease priority review voucher program has been proposed, the U.S. Congress has not yet, and may never, pass a bill to reauthorize the program, extend the sunset dates, or otherwise amend the current statutory provisions governing the awarding of PRVs after September 30, 2026. Consequently, the future of the program and its potential applicability to our product candidates remain unknown at this time.

Review And Approval, Clearance Or Marketing Authorization Of Medical Devices In The United States

Unless an exemption applies, each medical device commercially distributed in the United States requires either FDA clearance of a Premarket Notification, or 510(k), FDA approval of a Premarket Approval, or PMA, application, or FDA marketing authorization in response to a De Novo request. Under the FFDCA, medical devices are classified into one of three classes – Class I, Class II or Class III – depending on the degree of risk associated with each medical device and the extent of manufacturer and regulatory control needed to ensure the device’s safety and effectiveness. Devices deemed by the FDA to pose the greatest risks, such as life sustaining, life supporting or some implantable devices, or devices that have a new intended use, or that use advanced technology which is not substantially equivalent to that of a legally marketed device, are generally placed into Class III.

While most Class I devices are exempt from the 510(k) premarket notification requirement, manufacturers of most Class II devices are required to submit to the FDA a premarket notification under Section 510(k) of the FFDCA requesting permission to commercially distribute the proposed device. The FDA’s permission to commercially distribute a device subject to a 510(k) premarket notification is generally known as 510(k) clearance. Class III devices require approval of a PMA evidencing safety and effectiveness of the device. Certain novel devices of low to moderate risk, for which the FDA can make a risk-based classification of the device into Class I or II, can receive marketing authorization in response to a De Novo request.

To obtain 510(k) clearance, a manufacturer must pay the appropriate device user fee, unless eligible for a waiver or exemption, and submit a 510(k) premarket notification demonstrating to the FDA’s satisfaction that the proposed device is at least as safe and effective as, that is, “substantially equivalent” to, another legally marketed device that itself does not require PMA approval, or a predicate device. A predicate device is a legally marketed device that is not subject to premarket approval,i.e., a device that was legally marketed prior to May 28, 1976 (pre-amendment device) and for which a PMA is not required, a device that has been reclassified from Class III to Class II or I, or a device that was found substantially equivalent through the 510(k) process. The sponsor must submit data and information that supports its substantial equivalency claims. The FDA’s 510(k) clearance process usually takes from three to twelve months, but often takes longer. FDA may require additional information, including clinical data, to make a determination regarding substantial equivalence. In addition, the FDA collects user fees for certain medical device submissions and annual fees for medical device establishments.

Before the sponsor can market a proposed device that is the subject of a 510(k) premarket notification, the sponsor must receive an order from the FDA finding substantial equivalence and clearing the new device for commercial distribution in the US. If the FDA agrees that the device is substantially equivalent to a lawfully marketed predicate device, it will grant 510(k) clearance to authorize the device for commercialization. If the FDA determines that the device is “not substantially equivalent,” the device is automatically designated as a Class III device. The device sponsor then must either fulfill the more rigorous PMA requirements, or the sponsor can submit a De Novo request seeking a risk-based classification determination for the device in accordance with the FDA’s De Novo classification process, which is a route to market for novel medical devices that are low to moderate risk and are not substantially equivalent to a predicate device. A sponsor also can submit a De Novo classification request directly, without first submitting a 510(k), if the sponsor determines that there is no legally marketed predicate device upon which to base a determination of substantial equivalence.

After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change or modification in its intended use, will require a new 510(k) clearance or, depending on the modification, PMA approval or De Novo classification. The FDA requires each manufacturer to determine in the first instance whether the proposed change requires submission of a 510(k), a De Novo classification request or a PMA, but the FDA can review any such decision and disagree with a sponsor’s determination. If the FDA disagrees with a manufacturer’s determination not to seek a new 510(k) or other form of marketing authorization for a modification to a 510(k)-cleared product, the FDA can require the manufacturer to cease marketing and/or request the recall of the modified device until 510(k) clearance or PMA approval is obtained or a De Novo classification is granted.

The PMA process is more demanding than either the 510(k) premarket notification process or the De Novo classification process and includes stringent clinical investigation and other requirements. In a PMA, the manufacturer must demonstrate that the device is safe and effective, and the PMA must be supported by extensive data, including data from preclinical studies and human clinical trials. All clinical investigations of devices to determine safety and effectiveness must be conducted in accordance with the FDA’s investigational device exemption, or IDE, regulations, which govern investigational device labeling, prohibit promotion of investigational devices, and specify an array of recordkeeping, reporting, and monitoring responsibilities of study sponsors and study investigators. If the device presents a “significant risk” to human health, as defined by the FDA, the FDA requires the device sponsor to submit an IDE application to the FDA, which must become effective prior to commencing human clinical trials. A significant risk device is one that presents a potential for serious risk to the health, safety or welfare of a patient and either is implanted, used in supporting or sustaining human life, substantially important in diagnosing, curing, mitigating or treating disease or otherwise preventing impairment of human health, or otherwise presents a potential for serious risk to a subject. In addition, the study must be approved in advance by, and conducted under the oversight of, an Institutional Review Board, or IRB, for each clinical site. The IRB is responsible for the initial and continuing review of the IDE, and the IRB may impose additional requirements for the conduct of the clinical trial. If the device presents a non-significant risk to the patient, a sponsor may begin the clinical trial after obtaining approval for the trial by one or more IRBs without separate authorization from FDA, but must still follow abbreviated IDE requirements, such as monitoring the investigation, ensuring that the investigators obtain informed consent, and adhering to labeling and recordkeeping requirements.

In addition to clinical and preclinical data, the PMA must contain a full description of the device and its components, a full description of the methods, facilities, and controls used for manufacturing, and proposed labeling. Following receipt of a PMA, the FDA determines whether the application is sufficiently complete to permit a substantive review. If FDA accepts the PMA for review, FDA has 180 days under the FFDCA to complete its review of a PMA, although in practice, the FDA’s review often takes significantly longer, and can take up to several years. An advisory panel of experts from outside the FDA may be convened to review and evaluate the application and provide recommendations to the FDA as to the approvability of the device. The FDA may or may not accept the panel’s recommendation. In addition, the FDA generally will conduct a pre-approval inspection of the applicant and/or its third-party manufacturers’ or suppliers’ facilities to ensure compliance with the FDA’s Quality System Regulation codified in 21 CFR Part 820, or QSR.

The FDA will approve the new device for commercial distribution if the FDA determines that the data and information in the PMA constitute valid scientific evidence and that there is reasonable assurance that the device is safe and effective for its intended use(s). The FDA may approve a PMA with post-approval conditions intended to ensure the safety and effectiveness of the device, including, among other things, restrictions on labeling, promotion, sale and distribution, and collection of long-term follow-up data from patients in the clinical study that supported PMA approval or requirements to conduct additional clinical studies post-approval. The FDA may condition PMA approval on some form of post-market surveillance when deemed necessary to protect the public health or to provide additional safety and efficacy data for the device in a larger population or for a longer period of use. In such cases, the manufacturer might be required to follow certain patient groups for a number of years and to make periodic reports to the FDA on the clinical status of those patients. Failure to comply with the conditions of approval can result in material adverse enforcement action, including withdrawal of the approval. Certain changes to an approved device, such as changes in manufacturing facilities, methods, or quality control procedures, or changes in the design performance specifications, which affect the safety or effectiveness of the device, require submission of a PMA supplement, or in some cases a new PMA.

Both before and after a medical device is commercially released, the sponsor has ongoing responsibilities under the FFDCA and FDA regulations. The FDA reviews design and manufacturing practices, labeling and recordkeeping, and manufacturers’ required reports of adverse experiences and other information to identify potential problems with marketed medical devices. Sponsors are also subject to periodic inspection by the FDA for compliance with the FDA’s QSR, among other FDA requirements, such as requirements for advertising and promotion of medical devices. The sponsor’s manufacturing operations, and those of any third-party manufacturers, are required to comply with the QSR, which require manufacturers, including third-party manufacturers and suppliers, to follow stringent design, testing, control, maintenance of records and documentation, and other quality assurance procedures during all aspects of the design and manufacturing process both before and after receiving device clearance or approval. The QSR 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. QSR compliance is necessary to receive and maintain FDA clearance, approval, or marketing authorization to market new and existing medical devices, and it is also necessary for distributing in the United States certain devices exempt from FDA clearance and approval requirements. The FDA conducts announced and unannounced periodic and ongoing inspections of medical device manufacturers, including third-party manufacturers and suppliers, to determine compliance with the QSR. If in connection with these inspections the FDA believes the manufacturer has failed to comply with applicable regulations and/or procedures, the FDA may issue inspectional observations on Form FDA-483, or Form 483, that would necessitate prompt corrective action. If the FDA inspectional observations are not addressed and/or corrective action is not taken in a timely manner and to the FDA’s satisfaction, the FDA may issue a warning letter (which would similarly necessitate prompt corrective action) and/or proceed directly to other forms of enforcement action, including the imposition of operating restrictions, including a ceasing of operations, on one or more facilities, enjoining and restraining certain violations of applicable law pertaining to products, mandating recall of products, seizure of products, and assessing civil or criminal penalties against the manufacturer and its officers and employees. The FDA could also issue a corporate warning letter or a recidivist warning letter or negotiate the entry of a consent decree of permanent injunction with the manufacturer. The FDA may also recommend prosecution to the U.S. Department of Justice, or DOJ. Any adverse regulatory action, depending on its magnitude, may restrict a manufacturer from effectively manufacturing, marketing, and selling any medical device(s) and could have a material adverse effect on the manufacturer’s business, financial condition, and results of operations.

After a device is cleared, receives marketing authorization, or is approved for marketing, numerous pervasive regulatory requirements continue to apply unless a device is explicitly exempt from them. These include, among other things:

Review And Approval Of Drugs In Europe And Other Foreign Jurisdictions

In addition to regulations in the US, a manufacturer of drugs is subject to a variety of regulations in foreign jurisdictions to the extent they choose to sell any drug products in those foreign countries. Even if a manufacturer obtains FDA approval of a product, it must still obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in those countries. To obtain regulatory approval of an investigational drug or biological product in the European Union, or the EU, a manufacturer must submit a marketing authorization application, or MAA, to the European Medicines Agency or EMA. For other countries outside of the EU, such as countries in Eastern Europe, Latin America or Asia, the requirements governing the conduct of clinical trials, product licensing, pricing, and reimbursement vary from country to country. In all cases, clinical trials are to be conducted in accordance with GCP and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki. The time required to obtain approval by a foreign country may be longer or shorter than that required for FDA approval, and the requirements may differ significantly.

Review And Approval Of Medical Devices In Europe And Other Foreign Jurisdictions

In addition to regulations in the US, a manufacturer of medical devices is subject to a variety of regulations in foreign jurisdictions, which vary substantially from country to country, to the extent a manufacturer chooses to sell any medical devices in those foreign countries. In those countries, a manufacturer can be subject to supranational, national, regional, and local regulations affecting, among other things, the development, design, manufacturing, product standards, packaging, advertising, promotion, labeling, marketing, and postmarket surveillance of medical devices. In order to market a medical device in other countries, the sponsor must obtain regulatory approvals or certifications and comply with extensive safety and quality regulations enforced in those countries. The time required to obtain approval or certification by a foreign country may be longer or shorter than that required for FDA approval or clearance, and the requirements may differ significantly.

The EU has adopted specific directives and regulations regulating the design, manufacture, clinical investigation, conformity assessment, labeling, and adverse event reporting for medical devices. Until May 25, 2021, medical devices were regulated by Council Directive 93/42/EEC, the EU Medical Devices Directive, or MDD, which had created a single set of medical device regulations for devices marketed in all EU member countries. Compliance with the MDD and certification to a quality system (e.g., ISO 13485 certification) enabled a manufacturer to place a CE mark on its products. To obtain authorization to affix the CE mark to a product, a recognized European Notified Body had to assess a manufacturer’s quality system and the product’s conformity to the requirements of the MDD.

The MDD has been repealed and replaced by Regulation (EU) No 2017/745, the EU Medical Devices Regulation, or MDR, which imposes significant additional premarket and postmarket requirements on medical devices. The MDR entered into application on May 26, 2021. Under a corrigendum to the MDR finalized in December 2019, some low-risk medical devices being up-classified as a result of the MDR, including low-risk instruments, were potentially eligible to receive a transitional period to comply by May 2024 under certain conditions. The European Commission recently extended the implementation period to the end of 2027 for high-risk devices and to the end of 2028 for medium- and low-risk devices.

The MDR establishes a uniform, transparent, predictable, and sustainable regulatory framework across the EU for medical devices and ensures a high level of safety and health while supporting innovation. Unlike the MDD, the MDR is directly applicable in EU member states without the need for member states to implement the MDR into national law, with the aim of increasing harmonization across the EU. The MDR, among other things:

Devices lawfully placed on the market pursuant to the MDD prior to May 26, 2021, or thereafter if eligible under the MDR transition provisions, may generally continue to be made available on the market or put into service through the applicable extended transition period, provided that the requirements of the MDR’s transitional provisions are fulfilled. Among other requirements, depending on the class of device, the certificate in question must still be valid and not withdrawn, an MDR-compliant quality management system must be implemented and an application for a conformity assessment must be submitted by May 26, 2024, and an agreement for a conformity assessment must be executed with a Notified Body by September 26, 2024. However, even in these cases, manufacturers must comply with a number of new or reinforced requirements set forth in the MDR, in particular the obligations described below.

The MDR requires that before placing a device, other than a custom-made device, on the market, manufacturers (as well as other economic operators such as authorized representatives and importers) must register by submitting identification information to the electronic system (EUDAMED), unless they have already registered. The information to be submitted by manufacturers (and authorized representatives) also includes the name, address, and contact details of the person or persons responsible for regulatory compliance. The MDR also requires that, before placing a device, other than a custom-made device, on the market, manufacturers must assign a unique identifier to the device and provide it along with other core data to the unique device identifier, or UDI, database. These new requirements aim at ensuring better identification and traceability of medical devices. Each device – and, as applicable, each package – will have a UDI composed of two parts: a device identifier, or UDI-DI, specific to a device, and a production identifier, or UDI-PI, to identify the unit producing the device. Manufacturers are also responsible for entering the necessary data on EUDAMED, which includes the UDI database, and for keeping it up to date. The obligations for registration in EUDAMED and other mandatory uses of the system had originally been planned to start six months after the entire EUDAMED system (including all six modules) had been declared fully functional following an independent audit and an EU Commission notice to be published in the Official Journal and in accordance with the transitional provisions set out in the MDR. Based upon updates from the European Commission’s Stuttgart workshop in May 2025, EUDAMED is transitioning to a phased implementation model, and this phased implementation, enabled by recent regulation (EU) 2024/1860 amending Regulations (EU) 2017/745 and (EU) 2017/746, replaces the previous all-or-nothing approach with a module-by-module activation system and enables the gradual implementation of EUDAMED by a roll-out of individual modules once each individual module is audited and a Commission notice confirming the functionality of the module is published in the Official Journal of the European Union, or OJEU. The obligations and requirements that relate to a certain module of EUDAMED will become applicable 6 months after the publication in the OJEU of the notice confirming the functionality of the given module. Until the date on which the obligations and requirements that relate to a certain EUDAMED module become mandatory, the corresponding Directives’ provisions and obligations relating to vigilance, clinical investigations/performance studies, registration of devices and economic operators., and certificate notifications apply. This is intended to provide for a clear cut-off date when the Directives’ provisions (and the corresponding national transposition measures) cease to apply and the EUDAMED-related provisions become mandatory, thus preventing double registrations issues. Regulation (EU) 2024/1860 deleted Article 120(8) MDR and Article 110(8) IVDR, which established that during the transition period from the publication of the notice confirming the functionality of EUDAMED until its mandatory use for device and certificate registration, the registration of devices and certificates using EUDAMED would have been considered to comply with the national registration requirements pursuant to the Directives.

All manufacturers placing medical devices into the market in the EU must comply with the EU medical device vigilance system. Under this system, serious incidents and Field Safety Corrective Actions, or FSCAs, must be reported to the relevant authorities of the EU member states. Manufacturers are required to take FSCAs, which are defined as any corrective action for technical or medical reasons to prevent or reduce a risk of a serious incident associated with the use of a medical device that is made available on the market. An FSCA may include the recall, modification, exchange, destruction or retrofitting of the device.

The advertising and promotion of medical devices in the EU is subject to some general principles set forth in EU legislation. Under the MDR, only devices that are CE marked may be marketed and advertised in the EU in accordance with their intended purpose. Directive 2006/114/EC concerning misleading and comparative advertising and Directive 2005/29/EC on unfair commercial practices, while not specific to the advertising of medical devices, also apply to the advertising of medical devices and contain general rules, for example, requiring that advertisements are evidenced, balanced, and not misleading. Specific requirements are defined at a national level. EU member states’ laws related to the advertising and promotion of medical devices, which vary between jurisdictions, may limit or restrict the advertising and promotion of products to the general public and may impose limitations on promotional activities with healthcare professionals.

Many EU member states have adopted specific anti-gift statutes that further limit commercial practices for medical devices, in particular with respect to healthcare professionals and organizations. Additionally, there has been a recent trend of increased regulation of payments and transfers of value provided to healthcare professionals or entities, and many EU member states have adopted national “Sunshine Acts” which impose reporting and transparency requirements (often on an annual basis), similar to the requirements in the US, on medical device manufacturers. Certain countries also mandate implementation of commercial compliance programs.

The aforementioned EU requirements are generally applicable in the European Economic Area, or EEA, which consists of the 27 EU member states plus Norway, Liechtenstein, and Iceland.

Many other countries have specific requirements for classification, registration, and post-marketing surveillance that are independent of the countries discussed above. This landscape is constantly evolving and compliance with the regulatory requirements may require modifications to various systems, additional resources in certain functions, and updates to technical parameters, among other changes. Rafael Medical Devices could be found in violation if it interprets the laws incorrectly or fails to keep pace with changes in laws and regulations. In the event of either of these occurrences, Rafael Medical Devices could be instructed to recall any products that it is marketing, cease manufacturing and/or distribution, and/or be subject to civil or criminal penalties.

Pharmaceutical Coverage, Pricing, And Reimbursement

In the United States and markets in other countries, patients who are prescribed treatments for their conditions and providers performing the prescribed services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Patients are unlikely to use our products unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of our products. Significant uncertainty exists as to the coverage and reimbursement status of products approved by the FDA and other government authorities. Even if one of the Pharmaceutical Companies’ product candidates is approved, sales of the Pharmaceutical Companies’ products will depend, in part, on the extent to which third-party payors, including government health programs in the United States such as Medicare and Medicaid, commercial health insurers, and managed care organizations, provide coverage, and establish adequate reimbursement levels for, such products. The process for determining whether a payor will provide coverage for a product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the product once coverage is approved. Third-party payors are increasingly challenging the prices charged, examining the medical necessity, and reviewing the cost-effectiveness of medical products and services and imposing controls to manage costs. Third-party payors may limit coverage to specific products on an approved list, also known as a formulary, which might not include all of the approved products for a particular indication.

On May 12, 2025, President Trump signed an Executive Order titled: “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients”. Among other steps, the Executive Order directs multiple federal agencies, including the U.S. Department of Health and Human Services, or HHS, to take specific actions aimed at compelling drug manufacturers to lower drug prices in the United States in a manner comparable with other “developed nations.” HHS subsequently announced that the Department “expects each [drug] manufacturer to commit to aligning [United States] pricing for all brand products across all markets that do not currently have generic or biosimilar competition with the lowest price of a set of economic peer countries.” HHS indicated that it will calculate the most-favored-nation, or MFN, price as the lowest price in a country that is part of the Organisation for Economic Co-operation and Development and that has a per capita gross domestic product (GDP) of at least 60% of the U.S. per capita GDP. In July 2025, President Trump sent letters to leading pharmaceutical manufacturers outlining the steps they must take to bring down the prices of prescription drugs in the US to match the lowest price offered in other developed nations. Should any of the Pharmaceutical Companies’ products be successfully developed and secure regulatory approval in the US and foreign countries, and if such MFN policies remain in effect at that time or are reintroduced at a later date and are applied to any of the Pharmaceutical Companies’ products that do secure regulatory approval, if any, such MFN policies could have a material adverse effect on their and our business, results of operations, financial condition and cash flows.

There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal, and state levels directed at broadening the availability of healthcare and containing or lowering the cost of healthcare. Such reforms could have an adverse effect on anticipated revenue from product candidates that the Pharmaceutical Companies or Rafael Medical Devices may successfully develop and for which they may obtain regulatory approval and may affect their overall financial condition and ability to develop product candidates.

Healthcare Law And Regulation

In addition to FDA restrictions on marketing of drug products and medical devices, other supranational, national, regional, federal, state, and local laws concerning healthcare fraud and abuse, including false claims and anti-kickback laws, healthcare professional payment transparency laws, and privacy laws restrict business practices in the pharmaceutical and medical device industries. These laws have been subject to increased enforcement activities with respect to medical product manufacturers and distributors in recent years. Violations of these laws are punishable by criminal and/or civil sanctions, including, in some instances, fines, imprisonment and, within the US, exclusion from participation in government healthcare programs, including Medicare, Medicaid, Department of Defense, and Veterans Administration health programs. Restrictions under applicable federal and state and analogous foreign healthcare laws and regulations include the following:

In addition, our operations in foreign countries are subject to the extraterritorial application of the United States Foreign Corrupt Practices Act, or FCPA. Our global operations are also subject to foreign anti-corruption laws, such as the United Kingdom Bribery Act, among others. As part of our global compliance program, we seek to address anti-corruption risks proactively.

COMPETITION

We and the Portfolio Companies operate in highly competitive segments. We and the Portfolio Companies face competition from many different sources, including commercial pharmaceutical and biotechnology and medical device enterprises, academic institutions, government agencies, and private and public research institutions. Many of our and the Portfolio Companies’ competitors have significantly greater financial, product development, manufacturing and marketing resources than we and the Portfolio Companies possess. Large pharmaceutical companies and medical device companies have extensive experience in development, clinical testing and obtaining regulatory approval for drugs and devices. In addition, many universities and private and public research institutes are active in research in direct competition with us and the Portfolio Companies. We and the Portfolio Companies also may compete with these organizations to recruit scientists and clinical development personnel. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

Our and the Portfolio Companies’ competitors are pursuing the development and/or acquisition of pharmaceuticals, medical devices and over-the-counter (“OTC”) products that target the same diseases, conditions and unmet needs that we and the Portfolio Companies are targeting. If competitors introduce new products, delivery systems or processes with therapeutic or cost advantages, our and the Portfolio Companies’ products can be subject to progressive price reductions or decreased volume of sales, or both. Most new products that we and the Portfolio Companies would introduce must compete with other products already on the market or products that are later developed by competitors. The principal methods of competition for our and the Portfolio Companies’ products include quality, efficacy, market acceptance, price, and marketing and promotional efforts, patient access assistant programs and product insurance coverage and reimbursement.

We face competition from other entities, including pharmaceutical and biotechnology companies and governmental institutions that are working on supporting orphan drug designations and clinical trials for the neurological manifestations of NPC. Some of these entities are well-funded, with more financial, technical and personnel resources than we have, and have more experience than we do in designing and implementing clinical trials. Two of our competitors were granted FDA approval one a combination therapy for NPC on September 20, 2024 and the second a monotherapy on September 24, 2024, both products became commercially available in the US in 2025. If we are unable to compete effectively against our current or future competitors, sales of our Trappsol® Cyclo™ product may not grow and our financial condition may suffer.

INTELLECTUAL PROPERTY

Licenses

LipoMedix maintains an exclusive license agreement with Yissum Research and Development Company, the technology transfer arm of the Hebrew University of Jerusalem granting LipoMedix the exclusive right to make, use and sell products covered under specified patents relating to the mitomycin lipophilic prodrug and its liposomal formulation (Promitil®) with the right to grant sublicenses. LipoMedix also maintains an exclusive license agreement with Shaare Zedek Scientific Company, the technology transfer arm of Shaare Zedek Medical Center (“SZMC”), granting LipoMedix the exclusive right to license any new intellectual property developed at SZMC relating to the mitomycin lipophilic prodrug and its liposomal formulation (Promitil®) with the right to grant sublicenses.

Cornerstone maintains (i) an exclusive license agreement with the Research Foundation of the State University of New York at Stony Brook, or RF, granting Cornerstone the exclusive right to make, use and sell products covered under specified technology relating to lipoic acid derivatives with the right to grant sublicenses. This license agreement was amended in 2004, 2007 and 2017 and (ii) Cornerstone maintains a low single-digit royalty agreement with Altira Capital and Consulting, LLC ("Altira"), pursuant to which Cornerstone is granted sole ownership of certain patents directed to lipoic acid derivatives and other technology. Rafael possesses a two-thirds ownership interest in Altira.

Patents

The designation of Trappsol® Cyclo™ as an orphan drug for the treatment of NPC1 by the FDA and European regulators would provide Cyclo with seven years in the US, and 10 to 12 years in the EU, of market exclusivity, respectively, if it were to receive regulatory approval for its designated orphan indication. Cyclo also protected its Trappsol®and Aquaplex® trademarks by registering them with the USPTO. In July 2024, Cyclo received a notice of decision from the European Patent Office to grant a patent application regarding the methods to treat Alzheimer’s Disease, with an effective date of August 21, 2024.

LipoMedix owns or in-licenses several families of U.S. patents. Additional patent applications may be filed as studies continue. Patents that LipoMedix has obtained and patents that may issue in the future based on LipoMedix’s currently pending patent applications for its platform technologies are scheduled to expire in years 2032 through 2040. These dates do not include potential patent term extensions.

Four patent applications covering the use of Promitil®, in combination with other chemotherapies and with radiotherapy, targeting of Promitil® with a folate ligand, and a reformulation of Promitil® with co-encapsulated mitomycin prodrug and doxorubicin have been approved by the USPTO or EPO in 2018-2020. The patent portfolio is currently comprised of four granted families of patents and two applications under review.

Barer has filed patents for its novel inventions, and has entered into licensing agreements for other intellectual property. Patent applications have been filed in the name of Farber Partners, LLC (Barer’s subsidiary) in the areas of T-cell nutrients to enhance checkpoint inhibition and one-carbon metabolism, and serine hydroxymethyltransferase (SHMT) inhibitors for therapies directed to treatment of cancer, autoimmune disease and fibrotic disease. In the area of T-cell nutrients, a Patent Cooperation Treaty Application (PCT) was filed on July 15, 2022, claiming priority to two US provisional applications that were filed in July and December of 2021. The PCT application entered the US national phase and the European regional phase in January of 2024. In the area of SHMT inhibitors, a US provisional application was filed on May 22, 2025. Pursuant to a Collaboration and Assignment Agreement between Farber and Ludwig Institute for Cancer Research Ltd. (“Ludwig”), Farber assigned its rights to these patents relating to T-cel nutrients to Ludwig. Farber and Ludwig also entered into a license agreement for its T-Cell Nutrient technology and Farber will receive a royalty upon the achievement of certain milestones and sales related to the product.

Cornerstone patents its technology, inventions, and improvements that it considers important to the development of its business. Cornerstone also has obtained U.S. orphan drug designation (ODD) for CPI-613® (devimistat) in the treatment of Pancreatic cancer, AML, MDS, Burkitt’s Lymphoma, Peripheral T-cell Lymphoma (PTCL), Soft tissue sarcoma, and Biliary cancer, and EMA ODD for Pancreatic cancer, AML, Burkitt’s Lymphoma, and Biliary cancer.

Cornerstone maintains US. and international trademarks covering its lead development compound (CPI-613® (devimistat)). U.S. and international trademarks are also maintained for potential brand names of devimistat that potentially could be used if it were to receive regulatory approval permitting commercialization and if such brand names were to receive the requisite regulatory clearance.

Rafael Medical Devices patents its technology, inventions, and improvements that it considers important to the development of its business and seeks to expand its intellectual property portfolio. As of September 16, 2023, Rafael Medical Devices had filed the following patent applications related to its devices with the USPTO and PCT: patent application entitled, Compression Anchor Systems, Devices, Instruments, Implants and Methods of Assembly and Use; and patent application entitled Videoscopic Arthroscopic Instruments, Devices, and Systems and Methods of Use and Assembly.

Day Three Labs Manufacturing, a majority-owned subsidiary of Day Three Labs, owns several families of US and international patents and patent applications related to increasing the bioavailability of cannabinoids. Day Three Labs Manufacturing has also filed for trademark protection over the use of the term UNLOKT, which it uses as the brand name for the other third-party manufacturers’ cannabinoids processed using its technology.

Additional patent and trademark applications may be filed as development progresses across the Portfolio Companies as deemed to be in its best interest.

MANUFACTURING

Neither we nor the Portfolio Companies own or operate, and currently have no plans to establish, any manufacturing facilities or fill-and-finish facilities. The Pharmaceutical Companies currently rely, and we expect us and them to continue to rely, on third parties for the manufacture of their product candidates for preclinical and clinical testing, as well as for commercial manufacture of any products that they may commercialize should they receive regulatory approval. The Pharmaceutical Companies obtain supplies from these established contract manufacturers on a purchase-order basis and do not have long-term supply arrangements in place. The Pharmaceutical Companies do not currently have arrangements in place for a redundant supply of bulk drug substance or drug product, however, they may seek to add that capability if they move toward regulatory approval and potential commercialization of specific candidates. For all of the product candidates, the Pharmaceutical Companies intend to identify and qualify additional manufacturers to provide the active pharmaceutical ingredient and the formulation and fill-and-finish.

We are developing our lead product candidate, Trappsol® Cyclo™, for the proposed treatment of NPC1. We own all manufacturing and commercial rights to the product and have manufactured using a validated, commercial-scale process using a team of contract manufacturing service providers.

LipoMedix’s Promitil® and other pipeline candidates are based on an active pharmaceutical ingredient (API) referred to as MLP (abbreviation of mitomycin-C lipid-based prodrug) that is formulated into customized nanoparticles. These nanoparticles consist of lipids and a polyethylene-glycol (PEG) polymer and are known as pegylated liposomes. LipoMedix obtains bulk drug substance and drug product supplies from established contract manufacturers on a purchase order basis and does not have long-term supply arrangements in place. LipoMedix does not currently have arrangements in place for commercial supply or redundant supply for bulk drug substance or drug product.

Rafael Medical Devices optimizes supply chains and manufacturing on a device per device basis focusing on quality, time, and cost. At present, Rafael Medical Devices does not own or operate manufacturing facilities. Rafael Medical Devices' management has relationships with top tier manufacturers that it leverages on an as-needed basis. 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 the Company’s ability to identify attractive opportunities in the marketplace.

Cornerstone owns all manufacturing to its lead development compound CPI-613® (devimistat) and has it manufactured using a validated, commercial-scale process using a team of contract manufacturing service providers.

Real Estate

Our current commercial real estate holdings consist of a portion of a building in Israel. Prior to its sale in August 2022, we also owned the 520 Property.

On August 22, 2022, we completed the sale of the 520 Property for a purchase price of $49.4 million.

The 520 Property was encumbered by a mortgage securing a $15 million loan which was paid off in this transaction. After repaying the loan, and paying commissions, taxes, and other costs, the Company received a net amount of approximately $33 million at closing.

The 520 Property serves as the headquarters of the Company and affiliated entities, IDT Corporation ("IDT"), and Genie Energy, Ltd. (“Genie”), who occupy the third through fourth floors.

Our holding in Israel is a condominium portion of an office building built in 2004 located in the Har Hotzvim section of Jerusalem, Israel. The condominium is one floor comprising approximately 12,400 gross square feet including 24 indoor parking spaces. Har Hotzvim is a high-tech industrial park located in northwest Jerusalem. It is the city’s main zone for science-based and technology companies, among them Intel, Teva and Mobileye. As of July 31, 2025, the space is fully leased to two tenants; one of which is an IDT subsidiary.

Depreciation expense of property, plant and equipment was $146 thousand and $137 thousand for the years ended July 31, 2025 and 2024, respectively. Depreciation expense for the year ended July 31, 2025 includes depreciation of acquired assets from the Day Three Acquisition, Cornerstone Acquisition and Cyclo Merger.

COMPETITION

With respect to our real estate business, we compete for commercial (office and retail) tenants in Jerusalem, Israel. The commercial real estate market is highly competitive. Numerous commercial properties compete with us for tenants based on location, rental rates, tenant allowances, operating expenses and the quality and design of the property. Other factors tenants consider are; quality and breadth of tenant services provided, onsite amenities and reputation of the owner and property manager.

OUR STRATEGY

Our strategy related to our real estate business is to continue to operate and maximize the value of our real estate holding in Israel.

HUMAN CAPITAL

Attracting and retaining qualified personnel familiar with our businesses who head our different businesses units is critical to our success. As of October 27, 2025, Rafael Holdings and its subsidiaries had 21 full-time and 2 part-time employees. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants. To accomplish that, our compensation practices are designed to attract and retain qualified and motivated personnel and align their interests with the goals of the Company and with the best interests of our stockholders. Our compensation philosophy is to provide compensation to attract the individuals necessary for our current needs and growth initiatives, and provide them with the proper incentives to motivate those individuals to achieve our long-term plans, which includes among other things, equity and cash incentive plans that attract, retain and reward personnel through the granting of stock-based and cash-based compensation awards.

We believe that talent attraction and retention are critical to our ability to achieve our strategy and that a trained, diverse and inspired workforce is integral to delivering on our objectives. Our recruiting process reaches a wide array of potential employees, and we employ a rigorous screening process to ensure that we identify and hire quality professionals. We work to ensure that compensation and benefits offered to employees are fair and reflects industry standards and best practices.

We are committed to diversity and inclusion in the workforce including a policy of non-discriminatory treatment and respect of human rights for all current and prospective employees. Discrimination on the basis of an individual’s race, religion, creed, color, sex, sexual orientation, age, marital status, disability, national origin or veteran’s status is not permitted by us and is illegal in many jurisdictions. We respect the human rights of all employees and strive to treat them with dignity consistent with standards and practices recognized by the international community.