Rafael Holdings, Inc.

NOTE 1 – DESCRIPTION OF BUSINESS

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™ (remibetadex), an investigational therapy for the potential treatment of Niemann-Pick Disease Type C (“NPC”), a rare, fatal and progressive genetic disorder. We have completed the pivotal Phase 3 clinical trial of Trappsol® Cyclo™ and on October 28, 2026 submitted a New Drug Application to the U.S. Food and Drug Administration. 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 subsidiary holding equity interests in early stage cancer assets; (iii) a majority equity, and debt, interest in Cornerstone Pharmaceuticals, Inc. (“Cornerstone”), formerly known as Rafael Pharmaceuticals Inc., a cancer metabolism-based therapeutics company; (iv) a majority equity 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 equity interest in Day Three Labs, Inc. (“Day Three”), which empowers third-party manufacturers to bring to market better, cleaner, more precise and predictable versions of their product by utilizing Day Three’s technology and which holds equity and debt interests in two industry related companies. Our primary focus is to obtain FDA approval of Trappsol® Cyclo™, for which we submitted a New Drug Application on October 28, 2026 following the recent completion of Cyclo’s pivotal Phase 3 clinical trial, and, if approved, to bring that product to market. We also evaluate opportunities to expand our investment portfolio through strategic investments, including in therapeutics, that address high unmet medical needs. We continuously evaluate our other holdings to ensure the future focus of our resources is on core assets and specifically the Trappsol® Cyclo™ clinical development and commercialization efforts.

On March 25, 2025, we consummated the Merger (as defined below) with Cyclo whereby Cyclo became a wholly-owned subsidiary. 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-β-cyclodextrin, IV), a treatment for NPC. NPC 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, FDA granted Fast Track designation to Trappsol® Cyclo™ for the treatment of NPC. 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 has completed its pivotal Phase 3 Clinical Trial evaluating Trappsol® Cyclo™ in Pediatric and Adult Patients with Niemann-Pick Disease, Type C and announced topline data from the study on September 30, 2026. The study did not meet its primary endpoint in the overall population; a prespecified analysis in patients receiving background miglustat and/or leucine therapy demonstrated a statistically significant treatment benefit. On October 28, 2026, Cyclo submitted a New Drug Application (“NDA”) to FDA seeking approval of Trappsol® Cyclo™ for the treatment of the neurovisceral manifestations of NPC in adult and pediatric patients from birth. Within 60 days of receipt, the FDA will determine whether the application is complete and acceptable for filing and, if accepted, whether Priority Review will be granted. If the application is accepted, the FDA will assign a Prescription Drug User Fee Act (PDUFA) target action date. The NDA includes a request for a rare pediatric disease priority review voucher. The United States Adopted Names (“USAN”) Council has assigned the nonproprietary name “remibetadex” to Trappsol® Cyclo™. In addition, on April 16, 2026, Cyclo entered into an exclusive, worldwide, royalty-bearing Patent License Agreement with the Massachusetts Institute of Technology (“MIT”) for certain patent rights relating to small molecules to improve myelination in Alzheimer’s disease and APOE4 carriers, under which Cyclo may develop and commercialize products containing hydroxypropyl-β-cyclodextrin for Alzheimer’s disease.

LipoMedix is a clinical stage Israeli company based in Israel that is focused on the development of a product candidate, Promitil, that holds the potential to be a therapy for cancer based on liposome delivery. As of July 31, 2026, 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 has recently initiated an IST (investigator sponsored study) specifically an open-label, Phase II Single-Arm Trial of PROMITIL Combined with Radiotherapy in patients with Cisplatin-Ineligible Head and Neck Cancer. LipoMedix is also 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 its early-stage development efforts, including pre-clinical research at Barer and have, since that date, ceased almost all of such activity. Since then, we have sought partners for Farber programs and have 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 have 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 while seeking out external investment and partnerships. Going forward, we expect that Barer will primarily operate as an entity holding interest in these two cancer-focused opportunities.

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. We are currently reviewing Cornerstone’s current efforts, prospects and available resources to determine the 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. In July 2026, we converted the balance of an intercompany promissory note plus accrued interest, totaling $2,087,086, in exchange for Rafael Medical Devices’ Class A Units. As a result, we currently hold an 83% 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. 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 investment and development opportunities.

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 (“DTLM”), a majority-owned subsidiary of Day Three, entered into an Asset Purchase Agreement and Licensing Agreement, pursuant to which DTLM sold assets and licensed certain applications of their Unlokt™ technology used in their cannabinoid ingredient manufacturing business in exchange for equity and debt interests in these companies.

The “Company” in these consolidated financial statements refers to Rafael Holdings and its subsidiaries on a consolidated basis.

All wholly and majority-owned subsidiaries and RP Finance, LLC are consolidated with all intercompany transactions and balances eliminated in consolidation. In addition to Rafael Holdings, Inc., the entities included in these consolidated financial statements are as follows:

*In November 2022, the Company resolved to curtail its early-stage development efforts, including pre-clinical research at Barer. The decision was taken to reduce spending as the Company focuses on exploring strategic opportunities.

**50% of CS Pharma Holdings, LLC is owned by Pharma Holdings, LLC. We have a 90% ownership interest in Pharma Holdings, LLC and, therefore, an effective 45% economic interest in CS Pharma Holdings, LLC. The Company, along with CS Pharma Holdings, LLC and Pharma Holdings LLC, collectively own securities representing 67% of the outstanding capital stock of Cornerstone.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company’s fiscal year ends on July 31 of each calendar year. Each reference below to a fiscal year refers to the fiscal year ending in the calendar year indicated (e.g., fiscal year 2026 refers to the fiscal year ended July 31, 2026).

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”)

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates.

Liquidity and Going Concern

As of July 31, 2026, the Company had a working capital surplus of approximately $14.8 million, an accumulated deficit of approximately $261.9 million and cash and cash equivalents of approximately $22.1 million. Throughout the history as an independent company, the Company has incurred recurring losses from operations and, for the years ended July 31, 2026 and 2025, had consolidated net losses of approximately $28.0 million and $30.6 million, respectively, and net cash outflows from operating activities of approximately $30.0 million and $18.9 million, respectively. The Company expects to incur significant expenses in connection with its ongoing activities to support FDA’s review of the NDA for Trappsol® Cyclo™, which Cyclo submitted on October 28, 2026, and, if approved, to commercialize Trappsol® Cyclo™.

The Company’s existing cash resources are not expected to provide sufficient funds to carry out the Company’s operations through the next twelve months from the issuance of these consolidated financial statements. The ability of the Company to continue as a going concern is dependent upon its ability to continue to successfully raise additional equity or debt financing to fund ongoing operations. While the Company is actively pursuing additional financing, there can be no assurance that such funding will be available on acceptable terms, or at all. If the Company is unable to obtain sufficient capital, it may be required to delay, reduce, or discontinue its clinical development programs or other operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

The accompanying consolidated financial statements do not include any adjustments to reflect the future effects on the recoverability and classification of assets or the amounts and classification of liabilities if the Company is unable to continue as a going concern, and do not include any adjustments that might result from the outcome of this uncertainty.

Concentration of Credit Risk and Significant Customers

The Company routinely assesses the financial strength of its customers. As a result, the Company believes that its accounts receivable credit risk exposure is limited. As of July 31, 2026, two third-party customers and one related-party tenant represented 14 %,12 % and 28 % of the Company’s accounts receivable balance, respectively. As of July 31, 2025, two third-party customers and one related-party tenant represented 26%,11%, and 11% of the Company’s accounts receivable balance, respectively.

For the year ended July 31, 2026, one third-party customer, one third-party tenant, and one related-party tenant represented 34%,27% and 14% of the Company’s total revenue, respectively.

For the year ended July 31, 2025, one third-party customer, one third-party tenant, and one related-party tenant represented 25%,21%, and 12% of the Company’s total revenue, respectively.

Major Vendors

Following the Cyclo Merger, one vendor made up 44% and 38% of research and development expenses for the years ended July 31, 2026 and 2025, respectively.

Cash and Cash Equivalents

The Company considers all liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

Reserve for Receivables

The allowance for credit losses reflects the Company’s best estimate of lifetime credit losses inherent in the accounts receivable balance. The allowance is determined based on known troubled accounts, historical experience and other currently available evidence. Doubtful accounts are written off upon final determination that the trade accounts will not be collected. The computation of this allowance is based on the tenants’ or customers’ payment histories, as well as certain industry or geographic specific credit considerations. If the Company’s estimates of collectability differ from the cash received, then the timing and amount of the Company’s reported revenue could be impacted. The Company didnot recognize any credit loss expense during the year ended July 31, 2026 or 2025.

Inventory and Cost of Goods Sold

Inventory consistsof VECTR system devices, cyclodextrin products and chemical complexes purchased for resale recorded at the lower of cost (first-in, first-out) or net realizable value. Cost of products sold includes the acquisition cost of the products sold. The Company records a specific reserve for inventory items that are determined to be obsolete. The Company determinedno reserve for obsolete inventory was necessary as of July 31, 2026 or July 31, 2025.

Prepaid Clinical Expenses

Prepaid clinical expenses consist of the Company’s active pharmaceutical ingredients and other raw materials for Trappsol® Cyclo™, that is expected to be used in its clinical trial program, recorded at cost. In addition, advance payments for goods or services for future research and development activities are included as prepaid clinical expenses. Prepaid clinical expenses are expensed as research and development costs as the goods are delivered or the related services are performed. Prepaid clinical expenses expected to be utilized beyond one year from the balance sheet date are classified as non-current assets.

Convertible Notes Receivable

The Company holds convertible notes receivable that are classified as available-for-sale as defined under Accounting Standards Codification (“ASC”) 320,Investments - Debt and Equity Securities (“ASC 320”), and are recorded at fair value. Subsequent changes in fair value are recorded in accumulated other comprehensive income.

The fair value of these convertible notes receivable are estimated using a scenario-based analysis based on the probability-weighted present value of future investment returns, considering each of the possible outcomes available to the Company, including cash repayment, equity conversion and collateral transfer scenarios. Estimating the fair value of the convertible note requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors.

Variable Interest Entities

In accordance with ASC 810,Consolidation(“ASC 810”), the Company assesses whether it has a variable interest in legal entities in which it has a financial relationship and, if so, whether or not those entities are variable interest entities (“VIEs”). For those entities that qualify as VIEs, ASC 810 requires the Company to determine if the Company is the primary beneficiary of the VIE, and if so, to consolidate the VIE.

If an entity is determined to be a VIE, the Company evaluates whether the Company is the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and economics. The Company consolidates a VIE if both power and benefits belong to the Company – that is, the Company (i) has the power to direct the activities of a VIE that most significantly influence the VIE’s economic performance (power), and (ii) has the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE (benefits). The Company consolidates VIEs whenever it is determined that the Company is the primary beneficiary.

Investments

The method of accounting applied to long-term investments in equity securities involves an evaluation of the significant terms of each investment that explicitly grant or suggest evidence of control or influence over the operations of the investee and also include the identification of any variable interests in which the Company is the primary beneficiary. The consolidated financial statements include the Company’s controlled affiliates. All significant intercompany accounts and transactions between the consolidated affiliates are eliminated.

Investments in equity securities may be accounted for using (i) the fair value option, if elected, (ii) fair value through earnings if fair value is readily determinable, or (iii) for equity investments without readily determinable fair values, the measurement alternative to measure at cost adjusted for any impairment and observable price changes, as applicable. The election to use the measurement alternative is made for each eligible investment.

Prior to the Merger, as defined in Note 3, the Company elected the fair value option to account for its investment in Cyclo, as the Company had significant influence over Cyclo’s management. The fair value option is irrevocable once elected. The Company measured its initial investment in Cyclo at fair value and recorded all subsequent changes in fair value in earnings in the consolidated statements of operations and comprehensive loss. The Company believed the fair value option best reflected the underlying economics of the investment. Prior to the Merger, the Company had determined that Cyclo was a VIE, however, the Company had determined that it was not the primary beneficiary as the Company did not have the power to direct the activities of Cyclo that most significantly impact Cyclo’s economic performance. See Note 4, “Investment in Cyclo Therapeutics, LLC”.

Investments in which the Company does not have the ability to exercise significant influence over operating and financial matters are accounted for in accordance with ASC 321,Investments – Equity Securities. Investments without readily determinable fair values are accounted for using the measurement alternative which is at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company periodically evaluates its investments for impairment. If the Company determines that fair value is less than the investment’s carrying value, then an impairment loss is recorded in the accompanying consolidated statements of operations and comprehensive loss.

At July 31, 2026, the Company held an investment of $0.75 million in preferred shares of NINA Medical Ltd (“Nina”), warrants to purchase additional preferred shares of Nina, and a Simple Agreement for Future Equity (“SAFE”) convertible into preferred shares of Nina (see Note 15). The preferred shares do not represent in-substance common stock as defined in ASC 323-10-15-13 through 15-19. Accordingly, the investment is not accounted for under the equity method. Instead, the preferred shares are measured in accordance with ASC 321 using the measurement alternative, as they do not have a readily determinable fair value. Under this approach, the investment is recorded at cost, adjusted for observable price changes in orderly transactions for the identical or a similar investment and for impairment.

Investments - Hedge Funds

The Company accounted for its previously held investments in hedge funds in accordance with ASC 321,Investments – Equity Securities. Unrealized gains and losses resulting from the change in fair value of these securities are included in unrealized loss on investments - Hedge Funds in the consolidated statements of operations and comprehensive loss. During fiscal year 2025, the Company withdrew its remaining balance in Hedge Fund Investments.

Corporate Bonds and US Treasury Bills

The Company’s marketable securities are considered to be available-for-sale as defined under ASC 320,Investments - Debt and Equity Securities, and are recorded at fair value. Unrealized gains or losses are included in accumulated other comprehensive loss. Realized gains or losses are determined using the specific identification method and are released from accumulated other comprehensive loss and into earnings on the consolidated statements of operations and comprehensive loss. The Company did not hold any corporate bonds or US Treasury bills at July 31, 2026 or July 31, 2025.

Long-Lived Assets

Equipment, buildings, leasehold improvements and furniture and fixtures are recorded at cost less accumulated depreciation and amortization. The related depreciation and amortization are computed using the straight-line method over the estimated useful lives, which range as follows:

The Company owns a portion of the 6th floor of a building located at 5 Shlomo Halevi Street, in Jerusalem, Israel.

Business Combinations

The purchase price for acquisitions are allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The fair value of identifiable intangible assets is based on detailed valuations that use information and assumptions provided by management, including expected future cash flows. The Company allocates any excess purchase price over the fair value of the identifiable net assets and liabilities acquired to goodwill. Identifiable intangible assets with finite lives are amortized over their useful lives. Acquisition-related costs, including advisory, legal, accounting, valuation and other costs, are expensed in the periods in which the costs are incurred. The results of operations of acquired businesses are included in the consolidated financial statements from the acquisition date.

Impairment of Long-Lived Assets

In accordance with ASC 360,Property, Plant and Equipment, the Company assesses the recoverability of long-lived assets, which include property and equipment and finite-lived intangible assets, whenever significant events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If indicators of impairment exist, projected future undiscounted cash flows associated with the asset group are compared to its carrying amount to determine whether the asset group’s carrying value is recoverable. Any resulting impairment is recorded as a reduction in the carrying value of the related asset in excess of fair value and a charge to operating results.

For the years ended July 31, 2026 and 2025, the Company determined there wasno impairment of its long-lived assets.

The Company assesses goodwill for impairment on an annual basis or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired. The Company regularly monitors current business conditions and other factors including, but not limited to, adverse industry or economic trends and lower projections of profitability that may impact future operating results. The process of evaluating the potential impairment of goodwill requires significant judgment. In performing the Company’s annual goodwill impairment test, the Company is permitted to first assess qualitative factors to determine whether it is more likely than not that the fair value of any of the Company’s reporting units is less than its carrying amount, including goodwill. In performing the qualitative assessment, the Company considers certain events and circumstances specific to the reporting unit and the entity as a whole, such as macroeconomic conditions, industry and market considerations, overall financial performance and cost factors when evaluating whether it is more likely than not that the fair value of any of the reporting units is less than its carrying amount. The Company is also permitted to bypass the qualitative assessment and proceed directly to the quantitative test. If the Company chooses to undertake the qualitative assessment and concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company would then proceed to the quantitative impairment test. In the quantitative assessment, the Company compares the fair value of the reporting unit to its carrying amount, which includes goodwill. If the fair value exceeds the carrying value, no impairment loss exists. If the fair value is less than the carrying amount, a goodwill impairment loss is measured and recorded.

The Company assesses goodwill for impairment on an annual basis as of May 31, or more frequently when events and circumstances occur indicating that recorded goodwill may be impaired.

For the year ended July 31, 2026, the Company determined there was no impairment of goodwill.

During the year ended July 31, 2025, due to reductions in certain operations including a layoff within the Company’s Infusion Technology segment, the Company concluded that a triggering event occurred under ASC 350,Intangibles - Goodwill and Other(“ASC 350”), that required the Company to assess if there was an impairment. In accordance with ASC 350, the Company performed a quantitative goodwill impairment test, which indicated that the carrying amount of the reporting unit exceeded the estimated fair value of the reporting unit, indicating that the goodwill of the reporting unit was impaired. As a result, the Company recognized a goodwill impairment charge of $3.1 million for the year ended July 31, 2025, related to the Infusion Technology segment.

In-Process Research and Development

The Company has acquired in-process research and development (“IPR&D”) intangible assets pursuant to a business combination. These IPR&D assets are considered indefinite-lived intangible assets until completion or abandonment of the associated research and development efforts. These IPR&D assets are not amortized but reviewed for impairment analysis on an annual basis on May 31, or when events or changes in the business environment indicate the carrying value may be impaired. The process of evaluating the potential impairment of IPR&D requires significant judgment. In performing the Company’s annual IPR&D impairment test, the Company is permitted to first assess qualitative factors to determine whether it is more likely than not that the fair value of any of the Company’s IPR&D assets is less than its carrying amount. In performing the qualitative assessment, the Company considers the results of clinical trials, among other factors, when evaluating whether the IPR&D is impaired.

Acquired IPR&D pursuant to an asset acquisition that has no alternative future use is expensed immediately as a component of in-process research and development expense in the consolidated statements of operations and comprehensive loss.

For the years ended July 31, 2026 and 2025, the Company determined there wasno impairment of IPR&D.

Clinical Trial Accruals

The Company estimates the clinical trial accrual related to its obligations for services performed on their behalf by third-party vendors. The amount recorded for the clinical trial accrual represents the Company’s evaluation of the progress to completion of specific tasks and the facts and circumstances known at the time of the estimate as it relates to clinical trial activities.

Revenue Recognition

The Company applies the five-step approach as described in ASC 606,Revenue from Contracts with Customers, which consists of the following: (i) identifying the contract with a customer, (ii) identifying the performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the performance obligations in the contract, and (v) recognizing revenue when (or as) the entity satisfies a performance obligation. The Company disaggregates its revenue by source within its consolidated statements of operations and comprehensive loss.

Infusion Technology Revenue:

The Company’s Infusion Technology revenue is derived from Day Three’s Unlokt™ technology which is recognized in accordance with ASC 606. Day Three provides manufacturing services where it uses proprietary technology, equipment and processes to manufacture water-soluble product for their customers at their customer facilities. Day Three is acting as a principal in the transaction, as it is primarily responsible for fulfillment and acceptability of the services. Infusion Technology revenue is recognized over time as the Company’s performance obligation is satisfied, which is generally within a 30-day period. The criterion in ASC 606-10-25-27, that the entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced, is met given that the customer is controlling the product as Day Three is performing the service on the customer’s premises. Revenue is recognized over the period of performance using an output method where the number of grams produced is the output, as such method best depicts the Company’s efforts to satisfy the performance obligation. Customer billings in advance of revenue recognition result in contract liabilities. As of July 31, 2026 and 2025, there wereno contract liabilities recognized on the consolidated balance sheets related to Infusion Technology revenue.

The cost of Infusion Technology revenue includes costs related to supplies, materials, production labor and travel costs.

Rental Revenue:

As an owner and operator of real estate, the Company derives rental revenue from leasing office and parking space to tenants at its property. In addition, the Company earns revenue from recoveries from tenants, consisting of amounts due from tenants for common area maintenance, real estate taxes and other recoverable costs. Revenue from recoveries from tenants is recorded together with rental income on the consolidated statements of operations and comprehensive loss which is also consistent with the guidance under ASC 842,Leases.

Contractual rental revenue is reported on a straight-line basis over the terms of the respective leases. Accrued rental income, included within other assets on the consolidated balance sheets, represents cumulative rental income earned in excess of rent payments received pursuant to the terms of the individual lease agreements.

Product Revenue:

The majority of the Company’s product revenue is generated in North America from companies in the pharmaceutical industry that are manufacturing or conducting research. In other countries, the Company sells products primarily to wholesale distributors and other third-party distribution partners.

Revenues from product sales are recognized when the customer obtains control of the product, which occurs at a point in time, typically upon delivery to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that the Company would have recognized is one year or less or the amount is immaterial. Shipping and handling costs performed after a customer obtains control of the product are treated as a fulfillment cost. The Company has identified one performance obligation in its contracts with customers which is the delivery of product. The transaction price is recognized in full when the product is delivered to the customer, which is the point at which the Company has satisfied its performance obligation.

Research and Development Costs

Research and development costs and expenses incurred by consolidated entities consist primarily of salaries and related personnel expenses, stock-based compensation, fees paid to external service providers, laboratory supplies, costs for facilities and equipment, license costs and other costs for research and development activities. Research and development expenses are recorded in operating expenses in the period in which they are incurred. Estimates have been used in determining the liability for certain costs where services have been performed but not yet invoiced. The Company monitors levels of performance under each significant contract for external service providers, including the extent of patient enrollment and other activities through communications with the service providers to reflect the actual amount expended.

Contingent milestone payments associated with acquiring rights to intellectual property are recognized when probable and estimable. These amounts are recorded as research and development expense when there is no alternative future use associated with the intellectual property. There wereno such payment expenses during the years ended July 31, 2026 and 2025.

Stock-Based Compensation

The Company accounts for stock-based compensation using the provisions of ASC 718,Stock-Based Compensation, which requires the recognition of the fair value of stock-based compensation. Stock-based compensation is estimated at the grant date based on the fair value of the awards. The Company accounts for forfeitures of grants as they occur. Compensation cost for awards is recognized using the straight-line method over the vesting period. Stock-based compensation is included in general and administrative expense and research and development expense in the consolidated statements of operations and comprehensive loss.

Income Taxes

The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the period in which related temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in its assessment of a valuation allowance. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date of such change.

The Company uses a two-step approach for recognizing and measuring tax benefits taken or expected to be taken in a tax return. The Company determines whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more likely than not recognition threshold, the Company presumes that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. Tax positions that meet the more-likely-than-not recognition threshold are measured to determine the amount of tax benefit to recognize in the consolidated financial statements. The tax position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Differences between tax positions taken in a tax return and amounts recognized in the consolidated financial statements will generally result in one or more of the following: an increase in a liability for income taxes payable, a reduction of an income tax refund receivable, a reduction in a deferred tax asset, or an increase in a deferred tax liability.

The Company classifies interest and penalties on income taxes as a component of income tax expense, if any.

Contingencies

The Company accrues for loss contingencies when both (a) information available prior to issuance of the consolidated financial statements indicates that it is probable that a liability had been incurred at the date of the consolidated financial statements and (b) the amount of loss can reasonably be estimated. When the Company accrues for loss contingencies and the reasonable estimate of the loss is within a range, the Company records its best estimate within the range. When no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount in the range. The Company discloses an estimated possible loss or a range of loss when it is at least reasonably possible that a loss may have been incurred.

Fair Value Measurements

Fair value of financial and non-financial assets and liabilities is defined as an exit price, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three-tier hierarchy for inputs used to measure fair value, which prioritizes the inputs to valuation techniques used to measure fair value, is as follows:

A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy.

Functional Currency

The U.S. Dollar is the functional currency of our entities operating in the United States. The functional currency for our subsidiaries operating outside of the United States is the New Israeli Shekel, or NIS, the currency of the primary economic environment in which such subsidiaries primarily expend cash. The Company translates those subsidiaries’ financial statements into U.S. Dollars. The Company translates assets and liabilities at the exchange rate in effect as of the consolidated financial statement date, and translates accounts from the consolidated statements of operations and comprehensive loss using the weighted average exchange rate for the period. The Company reports gains and losses from currency exchange rate changes related to intercompany receivables and payables, which are not of a long-term investment nature, as part of other comprehensive loss.

Warrants

The Company accounts for warrants to purchase its Class B common stock as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the warrants considering the authoritative guidance in ASC 480,Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815,Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants meet the definition of a liability pursuant to ASC 480 and meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and satisfy additional conditions for equity classification. Equity classified warrants are measured at fair value at their issuance date in accordance with ASC 820,Fair Value Measurement. Warrants that are liability-classified are measured at fair value at each reporting date in accordance with the guidance in ASC 820, with any subsequent changes in fair value recognized in the statement of operations in the period of change.

Loss Per Share

Basic loss per share is computed by dividing net loss attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted loss per share is determined in the same manner as basic loss per share, except that the number of shares is increased to include restricted stock still subject to risk of forfeiture and to assume exercise of potentially dilutive stock options using the treasury stock method, unless the effect of such increase would be anti-dilutive.

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09,Income Taxes (Topic 740):Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The Company adopted the standard prospectively during the year ended July 31, 2026. The adoption resulted in more detailed income tax disclosures which are included in Note 16 - Income Taxes.

Recently Issued Accounting Standards Not Yet Adopted

On November 4, 2024, the FASB issued ASU 2024-03,Disaggregation of Income Statement Expenses (“DISE”), which requires disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the consolidated financial statements. ASU 2024-03 is effective for all public business entities for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the potential impact that this standard may have on its consolidated financial statements and related disclosures.

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

NOTE 3 - CYCLO MERGER

On March 25, 2025, the Company, Cyclo, Tandem Therapeutics, Inc., a wholly-owned subsidiary of the Company (“First Merger Sub”), and Tandem Therapeutics, LLC, a wholly-owned subsidiary of the Company (“Second Merger Sub”), completed a business combination transaction pursuant to which: (i) First Merger Sub merged with and into Cyclo, with Cyclo being the surviving entity (the “First Merger”), and (ii) immediately following the First Merger, Cyclo merged with and into Second Merger Sub, with Second Merger Sub being the surviving entity (the “Surviving Entity”) of the subsequent merger (the “Second Merger” and together with the First Merger, the “Merger”). As part of the Merger:

a) The Company issued 7,132,228 shares of its Class B common stock in exchange for 20,234,468 shares of common stock of Cyclo (“Cyclo Common Stock”) that were issued and outstanding immediately prior to March 25, 2025 (the “Closing Date”), based on an exchange ratio equal to 0.3525 (the “Exchange Ratio”);

b) All compensatory options (the “Historical Cyclo Options”) to purchase Cyclo Common Stock that were outstanding immediately prior to the Merger were converted into options to acquire, on substantially similar terms and conditions, a number of shares, adjusted based on the Exchange Ratio, of the Company’s Class B common stock (rounded down to the nearest whole share), at an adjusted exercise price per share based upon the Exchange Ratio (rounded up to the nearest whole cent) (the “Rollover Options”);

c) Unless otherwise provided for in outstanding warrant agreements, all outstanding warrants to purchase Cyclo Common Stock (the “Cyclo Warrants”), other than those held by the Company (the “Rafael-Owned Cyclo Warrants”, as more fully described in Note 4, which were cancelled), converted into warrants to purchase 1,087,100 shares of Rafael’s Class B common stock, at an adjusted exercise price per share based upon the Exchange Ratio (the “Replacement Warrants”). Certain historical Cyclo Warrants provided the holder with the right to elect to receive cash payment in lieu of receiving warrants to purchase Rafael’s Class B common stock and were settled through cash payments totaling $3.6 million; and

d) The outstanding principal and accrued interest on the Cyclo Convertible Notes, as defined in Note 5, were forgiven.

Upon consummation of, and as a result of the Merger, the Company became the primary beneficiary of Cyclo, a VIE that constitutes a business. In accordance with ASC 810, the initial consolidation of a VIE that is a business is a business combination and shall be accounted for in accordance with the provisions in ASC 805,Business Combinations (“ASC 805”).

In accordance with the guidance for a step acquisition in ASC 805, Rafael recognized goodwill on the initial consolidation of Cyclo as of the Closing Date of the Merger, measured as the excess of (a) the sum of (i) the fair value of consideration transferred, (ii) the fair value of any noncontrolling interests in the acquiree, and (iii) the fair value of previously held equity interests, over (b) the net amount of the identifiable assets acquired and liabilities assumed measured in accordance with ASC 805.

The following table presents, in accordance with ASC 805, the sum of (i) the fair value of consideration transferred, (ii) the fair value of any noncontrolling interests in the acquiree, and (iii) the fair value of previously held equity interests (amounts in thousands):

The following table presents the fair values of the identifiable assets acquired and liabilities assumed and goodwill recognized, measured in accordance with ASC 805 (amounts in thousands):

The Company incurred transaction costs of $1.0 million for the year ended July 31, 2025 for consulting, legal, accounting, and other professional fees that have been expensed as general and administrative expenses, as incurred, in connection with the Merger.

To value the IPR&D and Customer Relationships, the Company utilized the Multi-Period Excess Earnings Method (“MPEEM”), under the Income Approach. The method considers the present value of excess earnings generated by Cyclo’s IPR&D and customers after taking into account the cost to realize the revenue, charges for contributory assets and an appropriate discount rate to reflect the time value and risk associated with the invested capital. IPR&D acquired represents Cyclo’s research and development activities related to its lead drug candidate Trappsol® Cyclo™ (hydroxypropyl-β-cyclodextrin, IV) as a treatment for NPC. The acquired Customer Relationships are related to Cyclo’s Specialty Chemicals business. The identifiable intangible assets associated with Customer Relationships are being amortized on a straight-line basis over their estimated useful lives of eight years. IPR&D is considered an indefinite lived asset.

The Merger has been treated as a tax-free reorganization and therefore Cyclo’s tax basis in the assets acquired and liabilities assumed will carry over. Accordingly, the Company recognized net deferred tax liabilities associated with the Merger of $0.3 million.

The goodwill acquired, which is not tax deductible, represents the excess of the purchase price over the fair values of the net identifiable assets of the business acquired.

Pro Forma Financial Information

The following pro forma condensed combined financial information has been prepared to present the combination on a pro forma basis of the historical consolidated financial statements of Rafael and the historical financial statements of Cyclo, after giving effect to the Merger, as if the Merger had occurred on August 1, 2023.

The pro forma results of operations are presented for informational purposes only and are not indicative of the results of operations that would have been achieved if the Merger with Cyclo had taken place on the date noted above, or of results that may occur in the future.

NOTE 4 – INVESTMENT IN CYCLO THERAPEUTICS, LLC.

On December 23, 2024, Rafael exercised its discretionary conversion option under the Cyclo Convertible Notes (refer to Note 5) converting $2.5 million in outstanding principal amount of the Cyclo Convertible Note III, issued on August 21, 2024, into 3,968,254 shares of Cyclo Common Stock. Following the Conversion, Rafael’s ownership increased to 12,998,194 shares, representing ownership of 39.5% of the outstanding Cyclo Common Stock.

Prior to the Merger, William Conkling, who served as Rafael’s CEO, was a member of Cyclo’s Board of Directors.

Prior to the Merger, the Company had determined that Cyclo was a VIE; however, the Company determined that it was not the primary beneficiary as the Company did not have the power to direct the activities of Cyclo that most significantly impacted Cyclo’s economic performance and, therefore, was not required to consolidate Cyclo.

Prior to the Merger, Rafael’s ownership of 12,998,194 shares of outstanding Cyclo Common Stock and the Rafael-Owned Cyclo Warrants are collectively referred to herein as “Rafael’s Prior Investment in Cyclo”.

The Company elected to account for its investment in Cyclo under the fair value option, with subsequent changes in fair value recognized as Unrealized (gain) loss on investment - Cyclo in the consolidated statements of operations and comprehensive loss. During the year ended July 31, 2025, the Company recognized unrealized losses of $5.1 million related to its investment in Cyclo common stock and warrants attributed to the decrease in the market price of Cyclo’s common stock prior to the Cyclo Merger.

On March 25, 2025, Rafael consummated the Merger with Cyclo. As part of the Merger, Rafael’s Prior Investment in Cyclo represented previously held equity interests in Cyclo that were included in the purchase consideration at their fair values as of the closing of the Merger. See Note 3 for additional information regarding the Merger.

NOTE 5 – CONVERTIBLE NOTES RECEIVABLE, DUE FROM CYCLO THERAPEUTICS, LLC.

On June 11, 2024, the Company entered into a Note Purchase Agreement with Cyclo, pursuant to which Cyclo issued and sold a convertible promissory note in the principal amount of $2 million (the “Cyclo Convertible Note I”) to the Company for $2 million in cash. The Cyclo Convertible Note I was issued with a maturity date of November 11, 2024 and was amended to a maturity date of March 31, 2025 as described below, and bears interest at a rate of 5% per annum, payable upon maturity. The principal amount of the Cyclo Convertible Note I is convertible into shares of Cyclo Common Stock at the option of the Company unless converted automatically upon certain events, as defined in the Cyclo Convertible Note I Note Purchase Agreement.

On July 16, 2024, the Company entered into a First Amended and Restated Note Purchase Agreement with Cyclo, pursuant to which Cyclo issued and sold a convertible promissory note in the principal amount of $2 million (the “Cyclo Convertible Note II”) to the Company for $2 million in cash. The Cyclo Convertible Note II was issued with a maturity date of November 11, 2024 and was amended to a maturity date of March 31, 2025 as described below, and bears interest at a rate of 5% per annum, payable upon maturity. The principal amount of the Cyclo Convertible Note II is convertible into shares of Cyclo Common Stock at the option of the Company unless converted automatically upon certain events, as defined in the Cyclo Convertible Note II Note Purchase Agreement.

On August 21, 2024, Rafael entered into a Second Amended and Restated Note Purchase Agreement with Cyclo, pursuant to which Cyclo issued and sold a convertible promissory note in the principal amount of $3 million to Rafael for $3 million (the “Cyclo Convertible Note III”) in cash. The Cyclo Convertible Note III was issued with a maturity date of December 21, 2024 and was amended to a maturity date of March 31, 2025 as described below, and bears interest at a rate of 5% per annum, payable upon maturity. The principal amount of the Cyclo Convertible Note III is convertible into shares of Cyclo Common Stock at the option of Rafael (provided, however, that Rafael may not elect to convert the convertible note (or prior convertible notes) issued by Cyclo to Rafael in connection with previous loans if, following such conversion, Rafael will beneficially own more than 49.9% of Cyclo Common Stock); and automatically on certain other events.

On September 9, 2024, Rafael entered into a Third Amended and Restated Note Purchase Agreement with Cyclo, pursuant to which Cyclo issued and sold a convertible promissory note in the principal amount of $3 million (the “Cyclo Convertible Note IV”) to Rafael for $3 million in cash. The Cyclo Convertible Note IV was issued with a maturity date of December 21, 2024 and was amended to a maturity date of March 31, 2025 as described below, and bears interest at a rate of 5% per annum, payable upon maturity. The principal amount of the Cyclo Convertible Note IV is convertible into shares of Cyclo Common Stock at the option of Rafael (provided, however, that Rafael may not elect to convert the convertible note (or prior convertible notes) issued by Cyclo to Rafael in connection with previous loans if, following such conversion, Rafael will beneficially own more than 49.9% of Cyclo Common Stock); and automatically on certain other events.

On October 8, 2024, Rafael entered into a Fourth Amended and Restated Note Purchase Agreement with Cyclo, pursuant to which Cyclo issued and sold a convertible promissory note in the principal amount of $3 million (the “Cyclo Convertible Note V”) to Rafael for $3 million in cash. The Cyclo Convertible Note V was issued with a maturity date of December 21, 2024 and was amended to a maturity date of March 31, 2025 as described below, and bears interest at a rate of 5% per annum, payable upon maturity. The principal amount of the Cyclo Convertible Note V is convertible into shares of Cyclo Common Stock at the option of Rafael (provided, however, that Rafael may not elect to convert the convertible note (or prior convertible notes) issued by Cyclo to Rafael in connection with previous loans if, following such conversion, Rafael will beneficially own more than 49.9% of Cyclo Common Stock); and automatically on certain other events.

Also on October 8, 2024, Rafael entered into an Amendment to Convertible Promissory Notes whereby the maturity dates of the Cyclo Convertible Note I and the Cyclo Convertible Note II were amended to be December 21, 2024, such that each of the Cyclo Convertible Notes that were outstanding as of October 8, 2024 had a maturity date of December 21, 2024 as of the date of this amendment. The maturity date of the Cyclo Convertible Notes was subsequently amended, as discussed below.

On November 7, 2024, the Company entered into a Fifth Amended and Restated Note Purchase Agreement with Cyclo, pursuant to which Cyclo issued and sold a convertible promissory note in the principal amount of $2 million (the “Cyclo Convertible Note VI”) for $2 million in cash. The Cyclo Convertible Note VI was issued with a maturity date of December 21, 2024 and was amended to a maturity date of March 31, 2025 as described below, and bears interest at a rate of 5% per annum, payable upon maturity. The principal amount of the Cyclo Convertible Note VI is convertible into shares of Cyclo Common Stock at the option of the Company (provided, however, that Rafael may not elect to convert the convertible note (or prior convertible notes) issued by Cyclo in connection with previous loans if, following such conversion, the Company will beneficially own more than 49.9% of Cyclo Common Stock); and automatically on certain other events.

On December 5, 2024, the Company entered into a Sixth Amended and Restated Note Purchase Agreement with Cyclo, pursuant to which Cyclo issued and sold a convertible promissory note in the principal amount of $1 million (the “Cyclo Convertible Note VII”) for $1 million in cash. The Cyclo Convertible Note VII was issued with a maturity date of December 21, 2024 and was amended to a maturity date of March 31, 2025 as described below, and bears interest at a rate of 5% per annum, payable upon maturity. The principal amount of the Cyclo Convertible Note VII is convertible into shares of Cyclo Common Stock at the option of the Company (provided, however, that Rafael may not elect to convert the convertible note (or prior convertible notes) issued by Cyclo in connection with previous loans if, following such conversion, the Company will beneficially own more than 49.9% of Cyclo Common Stock); and automatically on certain other events.

On December 21, 2024, Rafael entered into an Amendment to Convertible Promissory Notes whereby the maturity date of each of the Cyclo Convertible Notes was amended to be February 15, 2025. The maturity date of the Cyclo Convertible Notes was subsequently amended, as discussed below.

On December 23, 2024, Rafael exercised its discretionary conversion option under the Cyclo Convertible Notes, converting $2.5 million in outstanding principal amount of the Cyclo Convertible Note III into 3,968,254 shares of Cyclo Common Stock at a conversion price of $0.63 per share, which was the closing price of Cyclo Common Stock on The NASDAQ Capital Market on December 20, 2024, the trading date immediately preceding the date of the conversion.

On January 3, 2025, Rafael entered into a Seventh Amended and Restated Note Purchase Agreement with Cyclo, pursuant to which Cyclo issued and sold a convertible promissory note in the principal amount of $3 million (the “Cyclo Convertible Note VIII”) to Rafael for $3 million in cash. The Cyclo Convertible Note VIII was issued with a maturity date of February 15, 2025 and was amended to a maturity date of March 31, 2025 as described below, and bears interest at a rate of 5% per annum, payable upon maturity. The principal amount of the Cyclo Convertible Note VIII is convertible into shares of Cyclo Common Stock at the option of Rafael (provided, however, that Rafael may not elect to convert the convertible note (or prior convertible notes issued by Cyclo to Rafael in connection with previous loans) if, following such conversion, Rafael will beneficially own more than 49.9% of Cyclo Common Stock); and automatically on certain other events.

On February 4, 2025, Rafael entered into an Eighth Amended and Restated Note Purchase Agreement with Cyclo, pursuant to which Cyclo issued and sold a convertible promissory note in the principal amount of $2 million (the “Cyclo Convertible Note IX”) to Rafael for $2 million in cash. The Cyclo Convertible Note IX was issued with a maturity date of March 31, 2025 and bears interest at a rate of 5% per annum, payable upon maturity. The principal amount of the Cyclo Convertible Note IX is convertible into shares of Cyclo Common Stock at the option of Rafael (provided, however, that Rafael may not elect to convert the convertible note (or prior convertible notes issued by Cyclo to Rafael in connection with previous loans) if, following such conversion, Rafael will beneficially own more than 49.9% of Cyclo Common Stock); and automatically on certain other events.

Also on February 4, 2025, Rafael entered into an Amendment to Convertible Promissory Notes whereby the maturity date of each of the Cyclo Convertible Notes was amended to be March 31, 2025.

On March 6, 2025, the Company entered into a Ninth Amended and Restated Note Purchase Agreement with Cyclo, pursuant to which Cyclo issued and sold a convertible promissory note in the principal amount of $2.5 million (the “Cyclo Convertible Note X”) for $2.5 million in cash. The Cyclo Convertible Note X matures on March 31, 2025 and bears interest at a rate of 5% per annum, payable upon maturity. The principal amount of the Cyclo Convertible Note X is convertible into shares of Cyclo Common Stock at the option of the Company (provided, however, that Rafael may not elect to convert the convertible note (or prior convertible notes) issued by Cyclo in connection with previous loans if, following such conversion, the Company will beneficially own more than 49.9% of Cyclo Common Stock); and automatically on certain other events.

The Cyclo Convertible Note I, the Cyclo Convertible Note II, the Cyclo Convertible Note III, the Cyclo Convertible Note IV, the Cyclo Convertible Note V, the Cyclo Convertible Note VI, the Cyclo Convertible Note VII, the Cyclo Convertible Note VIII, the Cyclo Convertible Note IX and the Cyclo Convertible Note X are collectively referred to as the “Cyclo Convertible Notes”.

Prior to the Merger with Cyclo, the Cyclo Convertible Notes were required to be accounted for at fair value pursuant to ASC 825,Financial Instruments(“ASC 825”), at their respective dates of issuance and in subsequent reporting periods, as the Company elected to account for its prior investment in Cyclo Common Stock under the fair value option. The Company had elected to present interest income from the Cyclo Convertible Notes, together with the changes in fair value of the Cyclo Convertible Notes in unrealized gain/loss on convertible notes due from Cyclo on the consolidated statements of operations and comprehensive loss.

On March 25, 2025, Rafael consummated the Merger with Cyclo. As part of the Merger, the outstanding principal and accrued interest on the Cyclo Convertible Notes were forgiven and their fair values as of the Closing Date of the Merger, which equaled the outstanding principal and accrued interest through that date, is included in the purchase consideration of the Merger. See Note 3 for additional information regarding the Merger.

NOTE 6 – INTERCOMPANY LINE OF CREDIT

On February 3, 2020, Cornerstone entered into a Line of Credit with RP Finance (“RPF Line of Credit”) which provided a revolving commitment of up to $50,000,000 to fund clinical trials and other capital needs. In connection with entering into the RPF Line of Credit, Cornerstone issued to RP Finance 261,230 shares (post-Reverse Stock Split) of Cornerstone Common Stock representing 12% of the issued and outstanding shares of Cornerstone Common Stock, with such interest subject to anti-dilution protection as set forth in the RPF Line of Credit.

The Company owns 37.5% of the equity interests in RP Finance, an entity associated with members of the family of Howard Jonas owns 37.5% of the equity interests in RP Finance, and the remaining 25% equity interests in RP Finance are owned by other stockholders of Cornerstone.

RP Finance had funded a cumulative total of $21.9 million to Cornerstone under the RPF Line of Credit, of which the Company had funded a cumulative total of $9.375 million in accordance with its 37.5% ownership interests in RP Finance. During fiscal year 2022, the amounts funded had been fully reserved.

On March 13, 2024, Cornerstone and RP Finance amended the RPF Line of Credit agreement. to (i) extend the maturity date of the approximately $21.9 million in borrowings thereunder to May 31, 2028, (ii) limit the number of shares to be issued thereunder in respect of anti-dilution protection provided for therein in connection with the Cornerstone Restructuring and to provide RP Finance 3,658,368 shares of post-Reverse Stock Split Cornerstone Common Stock so that following the transaction, RP Finance holds six percent (6%) of the outstanding Common Stock of Cornerstone (the “RPF 6% Top Up Shares”), (iii) terminate any anti-dilution protection in respect of such ownership interest following consummation of the transaction, and (iv) terminate all future lending obligations of RP Finance under the RPF Line of Credit (as so amended, the “Amended RPF Line of Credit”).

The Company assumed Cornerstone’s liability to RP Finance under the Amended RPF Line of Credit at its fair value in the Cornerstone Acquisition and acquired RP Finance’s receivable from Cornerstone under the Amended RPF Line of Credit at its fair value in the RP Finance Consolidation. These intercompany amounts are eliminated in consolidation. The Company will accrete the fair value of Cornerstone’s liability and RP Finance’s receivable under the Amended RPF Line of Credit to the amount due on May 31, 2028 as interest expense and interest income, respectively, in the consolidated statements of operations and comprehensive loss over the estimated term of the Amended RPF Line of Credit.

NOTE 7 - CONVERTIBLE NOTES PAYABLE

As of July 31, 2026, Cornerstone had $610 thousand in principal, and $253 thousand of accrued interest thereon, of Series C Convertible Notes outstanding (the “Series C Convertible Notes”). The Series C Convertible Notes accrue interest at a rate of 3.5% per annum and are due, together with accrued interest, one year (unless amended) from the date of issuance and automatically accelerate upon the sale of Cornerstone in its entirety or the sale or license of substantially all of Cornerstone’s assets or intellectual property. The Series C Convertible Notes (including all accrued and unpaid interest thereon) automatically convert into the same class of securities (including stock warrants) sold in the Cornerstone’s equity financing (i) where Cornerstone receives gross proceeds of at least $10,000,000 from Institutional Investors (a “Qualified Financing”), or (ii) from an underwritten initial public offering (“IPO”). The conversion price of the Series C Convertible Notes upon a Qualified Financing shall be the lesser of (i)90% of the price per share (or unit) at which the securities in the Qualified Financing are sold, or (ii) $1.25 price per share (or unit) (whichever is less) at the holder’s selection of (i) or (ii), and 90% of the share price per share (or unit) at which securities in an IPO are first sold.

The outstanding Series C Convertible Notes are convertible, at the option of the holders, in certain equity financings consummated by Cornerstone or into equity securities and warrants to purchase equity securities of Cornerstone.

In the event of a liquidation event of Cornerstone prior to the repayment or conversion of the Series C Convertible Notes, the holders are entitled to receive either (a) an amount equal to the outstanding principal and interest due, or (b) the pro rata per share amount of the proceeds of such liquidation the holders would be entitled to had they exercised their conversion right.

Of the Series C Convertible Notes outstanding as of July 31, 2026:

During the year ended July 31, 2026, the Company entered into settlement agreements with four holders of Series C Convertible Notes. Under these agreements, the Company settled aggregate principal and interest balances of $76 thousand and $28 thousand, respectively, for cash payments totaling approximately $11 thousand and recognized a gain on settlement of convertible notes of $93 thousand, which is included in gain on settlement of accounts payable and convertible notes payable on the consolidated statements of operations and comprehensive loss.

During the year ended July 31, 2026, the Company recorded $21 thousand of interest expense in relation to the Cornerstone Series C Convertible Notes to interest expense on the consolidated statements of operations and comprehensive loss.

During the year ended July 31, 2025, the Company recorded $24 thousand of interest expense in relation to the Cornerstone Series C Convertible Notes to interest expense on the consolidated statements of operations and comprehensive loss.

NOTE 8 - ACCRUED EXPENSES

Accrued expenses consist of the following:

Creditor Payable

In the Cornerstone Acquisition, Rafael assumed a forbearance agreement, signed by Cornerstone on June 2, 2023, with a major creditor (the “Creditor”) of Cornerstone to which Cornerstone owed approximately $10.5 million arising from unpaid amounts in connection with work performed and costs incurred by the Creditor under previous work orders. The outstanding balance does not bear interest. As part of Cornerstone’s plan to seek new capitalization, it paid $2.0 million following the execution of a change order on July 21, 2023. Cornerstone also agreed to an additional payment of $2.0 million upon the issuance of an FDA authorization to market any product of Cornerstone (the “FDA Approval Payment”). In the event Cornerstone completes a capital transaction which results in an aggregate of $100 million in additional capital received after January 1, 2023, Cornerstone agrees to pay an additional $4.0 million to the Creditor within 15 days of such capital transaction (the “Capital Raise Payment”). In exchange for Cornerstone’s agreement to make timely payments of the above-mentioned sums due as per the forbearance agreement, and after the payment of the FDA Approval Payment and the Capital Raise Payment, the Creditor will waive approximately $2.5 million of outstanding debt representing all remaining amounts due to the Creditor.

Following the payment of the initial $2.0 million, and pursuant to the terms of the agreement, the Creditor agreed to forbear from exercising any of its rights, remedies or claims in respect to the outstanding balance. The forbearance shall not be deemed to have otherwise waived, released, or adversely affected any of the Creditor’s rights, remedies or claims in respect to the outstanding balance.

As part of the Cornerstone Acquisition, the creditor payable was recognized by the Company as an assumed liability and measured at its fair value of $2.7 million as of the date of the Cornerstone Acquisition. The Company accreted the fair value of the creditor payable to the amount payable of $8.5 million owed to the Creditor as interest expense in the consolidated statements of operations and comprehensive loss over the estimated term of the forbearance agreement through July 31, 2033. The Company recorded $311 thousand of accretion in relation to the creditor payable recorded to interest expense in the consolidated statements of operations and comprehensive loss for the year ended July 31, 2026. The Company recorded $617 thousand of accretion in relation to the creditor payable recorded to interest expense in the consolidated statements of operations and comprehensive loss for the year ended July 31, 2025.

On January 30, 2026, the Company entered into a debt settlement agreement with the Creditor to settle the outstanding creditor payable totaling $8.5 million. Under the terms of the agreement, the Creditor agreed to cancel the full amount of the liability in exchange for (i) an upfront cash payment of approximately $0.4 million, payable within 15 days of the effective date, and (ii) subsequent contingent payments equal to the Creditor’s pro-rata share, as defined in the settlement agreement, from proceeds of assets of any kind, revenues, royalties, rents, sales, sale of assets or debt or equity securities, or other value or payment of any kind from any source derived from Cornerstone. The Company remitted the settlement payment in February 2026. The carrying value of the creditor payable at the time of the settlement was $3.9 million. The Company recognized a gain of $3.5 million during the year ended July 31, 2026, which is included in gain on settlement of accounts payable and convertible notes payable on the consolidated statements of operations and comprehensive loss.

NOTE 9 – CONVERTIBLE NOTES RECEIVABLE

On March 8, 2024, Day Three entered into a convertible note subscription agreement with a third-party company, Steady State LLC. Steady State LLC promises to pay Day Three $1.0 million, together with interest, on October 16, 2026. The convertible note accumulates simple interest at an annual rate equal to the lesser of: (i) the Bank of England base rate (updated on the first business day of each quarter) plus eight (8) percentage points, or (ii)15% (computed on the basis of 365 days per year). Upon the closing and funding of a bona fide offering of equity securities by Steady State, LLC in an aggregate amount of at least $5.0 million, the convertible note will automatically convert into the number of membership interests equal to the outstanding principal plus accrued and unpaid interest divided by eighty percent (80%) of the price per membership unit in the offering. If a qualifying bona fide offering has not occurred on or before the maturity date, the principal and unpaid accrued interest of the convertible note may be converted, at the option of Day Three, into membership units. Subsequent to year end, the maturity date of the note was extended to October 2027.

In March 2025, Day Three Labs Manufacturing received a convertible promissory note with a principal amount of $500 thousand from SoRSE Technology Corporation (“SoRSE”), a Delaware corporation, as part of the DTLM Sale Transactions. The note bears interest at an annual rate of 4%, commencing on the 91st day following the issuance date. The outstanding principal and accrued interest due under the note will automatically convert into shares of common stock of SoRSE upon the occurrence of a qualified sale or financing transaction, as defined in the note. If the note has not been fully converted prior to its September 2026 maturity date, Day Three Labs Manufacturing may convert all or any portion of the outstanding principal and accrued interest into the most senior class or series of capital stock of SoRSE.

The Company’s convertible notes receivable are classified as available-for-sale and recorded at fair value (see Note 10).

NOTE 10 – FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The Company’s assets required to be measured at fair value on a recurring basis and where they are classified within the fair value hierarchy as of July 31, 2026 and July 31, 2025 are as follows:

As of July 31, 2026 and July 31, 2025, the Company did not have any liabilities measured at fair value on a recurring basis.

The following table summarizes the changes in the fair value of the assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

Available-for-sale securities classified as Level 3 include convertible notes receivable which may not be based on readily observable data inputs. The availability of observable inputs can vary and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets and other characteristics particular to the security. The fair value of these assets is estimated using a scenario-based analysis based on the probability-weighted present value of future investment returns, considering each of the possible outcomes available to us, including cash repayment, equity conversion and collateral transfer scenarios. Estimating the fair value of the convertible notes receivable requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. Therefore, these assets are classified as Level 3.

Fair Value of Other Financial Instruments

The estimated fair value of the Company’s other financial instruments was determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting these data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.

The Company’s financial instruments include trade accounts receivable, trade accounts payable and due from related parties. The recorded carrying amounts of accounts receivable, accounts payable and due to related parties approximate their fair value due to their short-term nature.

NOTE 11 – ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following:

NOTE 12 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

Other property and equipment consist of other equipment and miscellaneous computer hardware.

Depreciation and amortization expense pertaining to property and equipment was approximately $73 thousand and $146 thousand for the years ended July 31, 2026 and 2025, respectively.

NOTE 13 - GOODWILL AND INTANGIBLE ASSETS

Impairment

The Company assesses goodwill and indefinite-lived intangible assets, including IPR&D, for impairment at least annually at May 31, or more frequently if events or changes in the business environment indicate the carrying value may be impaired. The Company assesses the recoverability of long-lived assets, which include property and equipment and finite-lived intangible assets, whenever significant events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable.

During the year ended July 31, 2025, the Company identified a triggering event that required an impairment test for its long-lived assets and goodwill balances within its Infusion Technology reporting unit in accordance with ASC 360 and ASC 350, respectively. The triggering event was identified due to reductions in certain operations including a layoff within the Company’s Infusion Technology segment. The Company performed an interim impairment analysis of the Infusion Technology reporting unit as of November 30, 2024.

Under ASC 360, the Company performed a recoverability test for its long-lived assets. The carrying amount of the long-lived assets was compared to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the assets. Based on this assessment, the Company determined that the carrying amount of its long-lived assets was recoverable, and no impairment was recognized.

In accordance with ASC 350 the Company performed a quantitative goodwill impairment test that utilized a combination of an income and market approach to assess the fair value of the reporting unit as of November 30, 2024. The income approach utilized a discounted cash flow model, considering projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, and perpetual growth rate, while the guideline public company market approach used guideline public company revenue multiples from a selection of comparable public companies. The Company determined that the carrying amount of the reporting unit exceeded the estimated fair value of the reporting unit, indicating that the goodwill of the reporting unit was impaired. The Company recorded the impairment charge of $3.1 million within loss on impairment of goodwill in the consolidated statement of operations. The loss on impairment of goodwill relates to the Company’s Infusion Technology Segment.

The following is a summary of goodwill by reportable segment as of July 31, 2026 and July 31, 2025:

IPR&D

The Company has acquired in-process research and development intangible assets pursuant to a business combination. These IPR&D assets are considered indefinite-lived intangible assets until completion or abandonment of the associated research and development efforts.

The following is a summary of in-process research and development as of July 31, 2026 and July 31, 2025:

Intangible assets

The following is a summary of intangible assets at July 31, 2026:

The following is a summary of intangible assets at July 31, 2025:

Amortization expense for the next five years and thereafter for intangible assets is estimated to be as follows for years ending:

Amortization of intangible assets totaled $131 thousand and $142 thousand for the years ended July 31, 2026 and 2025, respectively, and is included in depreciation and amortization expense within the consolidated statements of operations and comprehensive loss.

NOTE 14 – LOSS PER SHARE

Basic loss per share is computed by dividing net loss attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted loss per share includes potentially dilutive securities such as stock options, unvested restricted stock, warrants to purchase common stock and other convertible instruments unless the result of inclusion would be anti-dilutive.

The following table summarizes the Company’s potentially dilutive securities which have been excluded from the calculation of dilutive loss per share as their effect would be anti-dilutive:

Restricted stock may be granted to directors, officers, employees, or consultants of the Company and are subject to service-based vesting conditions. Non-vested restricted stock is excluded from the computation of basic loss per share, as the underlying shares are not considered outstanding until the applicable vesting conditions have been satisfied. As of July 31, 2026 and 2025, the Company had 580,301 and 416,720 non-vested restricted stock awards outstanding, respectively.

The diluted loss per share computation equals basic loss per share for the years ended July 31, 2026 and 2025, because the Company had a net loss in both such periods and the impact of the assumed vesting of restricted shares, exercise of stock options and exercise of warrants would have been anti-dilutive.

The following table summarizes the basic and diluted loss per share calculations (in thousands, except for share and per share amounts):

NOTE 15 – RELATED PARTY TRANSACTIONS

IDT Corporation

IDT Corporation (“IDT”), a related party through common ownership and some common members of management, has historically maintained a due to/from balance that relates to cash advances for investments, loan repayments, charges for services provided to the Company by IDT and payroll costs for the Company’s personnel that were paid by IDT as the relevant persons were also providing services to IDT. IDT billed the Company approximately $287 and $275 thousand for services during the years ended July 31, 2026 and 2025, respectively. Balances of $70 thousand and $59 thousand due to IDT are included in due to related parties as of July 31, 2026 and July 31, 2025, respectively.

IDT currently leases approximately 3,600 square feet of office and parking space in our real estate asset. The Company invoiced IDT approximately $140 thousand for the years ended July 31, 2026 and 2025, respectively. As of July 31, 2026 and July 31, 2025, IDT owed the Company approximately $190 thousand and $93 thousand, respectively, for office rent and parking plus Israeli value added tax. Subsequent to year-end, in August 2026, IDT paid in full the outstanding balance owed to the Company as of July 31, 2026.

Related Party Rental Income

The Company leased space to related parties (including IDT Corporation - see above) which represented approximately 14 % and 12% of the Company’s total revenue for the years ended July 31, 2026 and 2025, respectively.

Howard S. Jonas, Chairman of the Board, Chief Executive Officer

On May 6, 2025, the Company entered into a Standby Purchase Agreement with Howard S. Jonas. The agreement was entered into in connection with a $25.0 million rights offering of Class B common stock undertaken by the Company at a subscription price of $1.28 per share (the “Rights Offering”). Eligible stockholders received non-transferable rights to purchase shares. The agreement also provided that within 10 days after the closing of the Rights Offering, Mr. Jonas would purchase, or cause other parties to purchase, from the Company in a private placement, any shares of Class B common stock included in the Rights Offering that were not subscribed for and purchased by other eligible stockholders for the same subscription price of $1.28.

Following the expiration of the Rights Offering on June 4, 2025, certain related parties of Howard S. Jonas purchased 16,386,020 shares of Class B common stock in a private placement for approximately $21.0 million, representing the unsubscribed portion of the offering. No fees were paid to Mr. Jonas for his commitment nor did the Company reimburse Mr. Jonas for any expenses related thereto. As of July 31, 2026, Mr. Jonas had voting power over 787,163 shares of Class A common stock (which are convertible into shares of Class B common stock on a 1-for-1 basis) and 14,099,507 shares of Class B common stock, approximately 27% of the Company’s Class B Common Stock, representing approximately 50% of the combined voting power of the Company’s outstanding capital stock.

NINA Medical Ltd.

On September 21, 2025, the Company entered into the Second Series Seed Preferred Share Purchase Agreement with NINA Medical Ltd., pursuant to which the Company invested $500,000 in exchange for 86,983 Series Seed Preferred Shares, representing 6.3% of Nina’s outstanding shares. In connection with the investment, the Company also received a warrant to purchase an additional 173,965 Seed Preferred Shares at an exercise price per share equal to $5.75, with a term offive years from the date of issuance.

The Seed Preferred Shares are convertible at the holder’s option into ordinary shares without additional consideration and will automatically convert into ordinary shares upon a qualified IPO or upon the affirmative vote or written consent of the majority of the holders of preferred shares. Howard S. Jonas holds an indirect investment in Nina. For so long as these combined investments (that of the Company and Howard S. Jonas) represent more than 10% of the Nina’s issued share capital, the investors are collectively entitled to designate one director, who can serve as Chairman of the Board of Directors of Nina (the “Seed Director”). Howard S. Jonas is currently serving as the Seed Director.

On December 25, 2025, the Company invested $250,000 in a SAFE issued by Nina. The SAFE provides the Company the right to receive SAFE Preferred Shares upon a future qualified financing, liquidity event, or dissolution event, as defined in the SAFE, with conversion based on the more favorable of a 25% discount to the financing price or a $20 million valuation cap, and includes a most-favored-nation provision allowing adoption of superior economic terms offered in subsequent convertible instruments. The SAFE does not accrue interest, has no maturity date and provides no voting or protective rights prior to conversion.

Subsequent to year-end, on August 11, 2026, the Company invested $100,000 in a SAFE issued by Nina. The SAFE provides the Company the right to receive future issuance of equity securities upon the occurrence of certain financing or liquidity events and includes a valuation cap of $20.0 million and a 25% discount to the price of securities issued in a qualifying financing.

NOTE 16 – INCOME TAXES

The components of loss before income taxes are as follows:

Benefit from income taxes consisted of the following:

The reconciliation between the Company’s effective tax rate on loss before income taxes and the statutory tax rate for the year ended July 31, 2026 is as follows:

The reconciliation between the Company’s effective tax rate on loss before income taxes and the statutory tax rate for the year ended July 31, 2025, prior to the adoption of ASU 2023-09, is as follows:

In accordance with the State of New Jersey’s Technology Business Tax Certificate Transfer Program, which allowed certain high technology and biotechnology companies to sell unused net operating loss carryforwards (“NOLs”) to other New Jersey-based corporate taxpayers, the Company received approximately $2.4 million for the sale of the Company’s prior period NOLs totaling $28.6 million which was recorded in the benefit from income taxes in the consolidated statements of operations and comprehensive loss for the year ended July 31, 2025.

Deferred income taxes reflect the net tax effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Realization of net deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain.

Significant components of the Company’s deferred tax assets and deferred tax liabilities are as follows:

The Company continually evaluates the likelihood of the realization of deferred tax assets and adjusts the carrying amount of the deferred tax assets by the valuation allowance to the extent the future realization of the deferred tax assets is more likely than not. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectation of future taxable income or loss, the timing of reversals of taxable temporary differences, the carryforward periods available to the Company for tax reporting purposes, and other relevant factors.

Deferred tax assets established for the excess outside tax basis of an investee are derecognized upon the event that the investee becomes a domestic subsidiary as a result of a business combination or consolidation, as it is likely that the deferred tax asset will no longer qualify for recognition. During the year ended July 31, 2025, the Company derecognized unrealized loss deferred tax assets related to prior investments in Cyclo as a result of the Cyclo Acquisition.

As of July 31, 2026, based on the Company’s history of losses and its assessment of future losses, management believes that it is more likely than not that future taxable income will not be sufficient to realize all of the Company’s deferred tax assets. Therefore, a valuation allowance has been applied to deferred tax assets.

Effective for tax years beginning after December 31, 2021, taxpayers are required to capitalize any expenses incurred that are considered incidental to research and experimentation (“R&E”) activities under IRC Section 174. While taxpayers historically had the option of deducting these expenses under IRC Section 174, the December 2017 Tax Cuts and Jobs Act mandates capitalization and amortization of R&E expenses for tax years beginning after December 31, 2021. Expenses incurred in connection with R&E activities in the U.S. must be amortized over a five-year period and R&E expenses incurred outside the U.S. must be amortized over a 15-year period. R&E activities are broader in scope than qualified research activities that are considered under IRC Section 41 (relating to the research tax credit).

As of July 31, 2026, the Company has federal and state net operating loss carryforwards of approximately $467 million and $195 million, respectively. The Company acquired federal and state net operating loss carryforwards of approximately $87.1 million and $74.8 million, respectively in connection with the Merger with Cyclo in March 2025. Federal net operating loss carryforwards in the amount of $90 million begin expiring in 2027 and approximately $377 million have an indefinite life. Federal NOL carryforwards generated after tax year 2021 are subject to an 80% limitation on taxable income, do not expire and will carryforward indefinitely. State net operating loss carryforwards in the amount of $116 million begin expiring in 2028 and $79 million have an indefinite life.

The utilization of the Company’s, excluding Cyclo’s, net operating losses and research and development tax credits may be subject to a U.S. federal limitation due to the “change in ownership provisions” under Sections 382 and 383 of the Internal Revenue Code and other similar limitations in various state jurisdictions. Such limitations may result in a reduction of the amount of net operating loss carryforwards and research and development tax credits in future years and possibly the expiration of certain net operating loss carryforwards and research and development tax credits before their utilization. In connection with the acquisition of Cyclo, the Company completed a Section 382 analysis, which determined that Cyclo experienced an ownership change in March 2025. The Company has not conducted a Section 382 analysis with respect to its other prior transactions to determine the potential limitations on the utilization of its remaining net operating loss carryforwards and other tax attributes. Management does not believe that any such limitations, if applicable, would have a material impact on the Company’s consolidated financial statements.

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examinations by federal, foreign, and state and local jurisdictions, where applicable. There are currently no pending tax examinations. The Company’s tax years are still open under statute from 2021 to present in the U.S. and from 2020 to present in the Company’s foreign operations. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service and state and local tax authorities to the extent utilized in a future period.

On July 4, 2025, the One Big Beautiful Bill was enacted (“OBBBA”), introducing significant and wide-ranging changes to the U.S. federal tax system. Significant components include restoration of 100% accelerated tax depreciation on qualifying property including expansion to cover qualified production property. Another major aspect includes the return to immediate expensing of domestic research and experimental expenditures (“R&E”) which in some cases may include retroactive application back to 2021 for businesses with gross receipts of less than $31 million or accelerated tax deductions of R&E that was previously capitalized for larger businesses. The legislation also reinstates EBITDA-based interest deductions for tax purposes and makes several business tax incentives permanent. Less favorable business provisions include limitations on tax deductions for charitable contributions.

The OBBBA modified the U.S. International Tax provisions for Global Intangible Low-Taxed Income (“GILTI”), Foreign-Derived Intangible Income (“FDII”), and the Base-erosion Anti-abuse Tax (“BEAT”) effective for tax years starting after December 31, 2025. The tax rate on GILTI, now renamed to Net CFC Tested Income (“NCTI”), is now 12.6%. The FDII rules, now renamed to Foreign Derived Deduction Eligible Income (“FDDEI”), now carry a 14% tax rate on FDDEI eligible income. The OBBB Act increases the BEAT rate from 10% to 10.5%.

The Company is also subject to certain non-income taxes such as value added taxes, sales taxes, and property taxes. The Company has taken certain positions that management feels, although not free from doubt, should not result in a successful challenge by certain tax authorities.

As required by the uncertain tax position guidance in ASC No. 740,Income Taxes, (“ASC 740”) the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company applied the uncertain tax position guidance in ASC 740 to all tax positions for which the statute of limitations remained open. Any estimates of tax contingencies contain assumptions and judgments about potential actions by taxing jurisdictions. Any interest and penalties related to uncertain tax positions would be included as part of the income tax provision.

The Company’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analysis of or changes in tax laws, regulations and interpretations thereof as well as other factors.

A reconciliation of the beginning and ending amount of unrecognized tax benefits associated with uncertain tax positions is as follows:

NOTE 17 – BUSINESS SEGMENT INFORMATION

The Company conducts business asthree operating segments, Healthcare, Infusion Technology and Real Estate. The Company’sreportable segments are distinguished by types of service, customers and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company’s Chief Financial Officer who is the chief operating decision-maker (“CODM”).

The accounting policies of the segments are the same as the accounting policies of the Company as a whole. The Company evaluates the performance of its Healthcare segment based primarily on results of clinical trials and loss from operations, and the Infusion Technology and Real Estate segments based primarily on revenues and (loss) income from operations. The CODM uses these measures to allocate the Company’s resources. The CODM does not review any measure of significant segment expenses which differ from the level of reporting reflected in the tables below. Currently, the CODM does not review assets in evaluating the results of the operating segments, and therefore, such information is not presented.

The Healthcare segment is comprised of the Company’s ownership of Cyclo (and the interest therein prior to the Merger) and majority equity interests in LipoMedix, Barer, Cornerstone and Rafael Medical Devices. The Healthcare segment generated $519 thousand of product revenue during the year ended July 31, 2026, the majority of which was generated at Cyclo.

The Real Estate segment consists of the Company’s real estate holdings, which are currently comprised of a portion of a commercial building in Israel.

The Infusion Technology segment is comprised of a majority equity interest in Day Three. Revenues associated with the Infusion Technology segment include Infusion Technology revenue derived from Day Three’s Unlokt™ technology.

Operating results for the business segments of the Company are as follows:

A reconciliation between loss from operations by reportable segment to consolidated net loss before income taxes for the years ended July 31, 2026 and 2025, is as follows:

Geographic Information

Healthcare Segment

Revenue from the Healthcare segment was generated primarily from customers located in the United States. During the year ended July 31, 2026, product revenue from customers outside of the United States was nominal. During the year ended July 31, 2025, approximately $30 thousand of product revenue was generated from customers located in Canada.

Infusion Technology Segment

Revenue from the Infusion Technology segment was generated entirely from customers located in the United States.

Real Estate Segment

Revenue from the Real Estate segment was generated entirely from tenants located in Israel.

Assets

Net property, plant and equipment and total assets summarized by geographic area are as follows:

NOTE 18 – COMMITMENTS AND CONTINGENCIES

The Company may from time to time be subject to legal proceedings that arise in the ordinary course of business. Although there can be no assurance in this regard, the Company does not expect any of those legal proceedings to have a material adverse effect on the Company’s results of operations, cash flows or financial condition.

License Agreements

License Agreement - Cyclo

On April 16, 2026, Cyclo entered into an exclusive, worldwide, royalty-bearing Patent License Agreement (the “MIT License Agreement”) with MIT for certain patent rights relating to small molecules to improve myelination in Alzheimer’s disease and APOE4 carriers. The MIT License Agreement grants Cyclo the exclusive right to develop, manufacture, use and commercialize licensed products containing hydroxypropyl-β-cyclodextrin as the active pharmaceutical ingredient within the field of Alzheimer’s disease. The MIT License Agreement remains in effect until the expiration of the last valid claim under the licensed patent rights, unless earlier terminated. Under the MIT License Agreement, the Company is required to satisfy certain development, regulatory and commercialization diligence requirements within specified time periods. Failure to satisfy these requirements, subject to applicable extension and cure provisions, could result in termination of the agreement.

The Company paid MIT a license issuance fee of $50,000 and reimbursed approximately $50,000 in prior patent costs upon execution which are included in research and development expenses in the consolidated statements of operations and comprehensive loss for the year ended July 31, 2026. The MIT License Agreement requires annual license maintenance fees ranging from $37,500 to $50,000, running royalties of 2.0% on U.S. net sales and 0.5% on non-U.S. net sales, and 4.0% of sublicense income. The Company is also obligated to make aggregate product development milestone payments of up to $850,000 and commercial milestone payments of up to $15,000,000 upon achievement of specified regulatory and sales thresholds. All milestone payments are subject to doubling upon a change of control of Cyclo in addition to a one-time change of control fee. The Company is responsible for ongoing patent prosecution costs and is required to maintain specified insurance coverage and indemnify MIT against third-party claims arising under the MIT License Agreement. No milestones were met by Cyclo as of July 31, 2026.

License Agreement - Cornerstone

Cornerstone is party to two license agreements in connection with certain technology being used for products under development and is required to make certain annual maintenance payments to maintain such licenses. In addition, royalty payments, calculated on a low single digit percentage of net sales, as defined in the respective agreements, will be required upon the commercialization of licensed technology. Sublicensing fees are calculated and due based upon a percentage of gross sublicense fees. Cornerstone expenses license obligation payments to research and development on the consolidated statements of operations and comprehensive loss.

One worldwide license agreement requires Cornerstone to reimburse the other party for costs associated with filing and defending various patents worldwide. Payment obligations under this license agreement remain in effect until the last underlying patents granted under the license agreement expire in their respective countries. The last patent expired in 2019. License maintenance fees are currently $20,000 per year and continue for the term of the agreement, which expires in October 2026. The license maintenance fees are replaced by minimum royalties of $10,000 during the first year following governmental approval to market products and escalates to $1,000,000 during the term of the agreement. Cornerstone is also responsible to pay fees on any sub-licensing of the licensed patents. Cornerstone may credit each annual license maintenance fee in full against all royalties and sublicensing fees due during the same calendar year. Cornerstone may terminate the license agreement upon 90 days’ notice. Either party may terminate the license agreement if the other party commits any material breach of any covenant or promise and does not cure such breach within 30 days of the receipt of written notice of such material breach. In May 2017, Cornerstone renegotiated the agreement referred to as the “second license” In exchange for a waiver of certain product development milestones, Cornerstone modified the agreement to pay a low single digit percentage royalty for a duration offive years on Net Sales of product sold after the expiration of the licensed patent and potentially up toeight years. As of July 31, 2026, there are no products being marketed which are covered by the patents under the license agreement.

The remaining minimum payments required under the license agreement, assuming the agreement is not terminated by Cornerstone, excluding any escalation for receiving government marketing approval subsequent to July 31, 2018, are $20,000 per year. The agreement may continue until January 1, 2029 (if not earlier terminated).

Cornerstone’s second license continues until the later of the last to expire patent or royalty obligation under the agreement on a country-by-country basis (currently, or as otherwise provided in the license agreement). Fifty percent of the maintenance fee payments, up to $1.1 million, may be credited against the potential future royalty payments, calculated on a single digit percentage of net sales, as defined, that Cornerstone would have to make to the license holder should royalties be paid. The agreement may be terminated on 15 days’ written notice after default by the other party if said default is not cured within 30 days of receipt of notice by the defaulting party. In addition, Cornerstone may terminate the agreement on 15 days’ written notice to the license holder. Royalties are due based on Gross Sales, as defined, for products sold relating to patented and unpatented technology, and shall terminate on the 15 th anniversary of the first commercial sale of the product in the corresponding country or territory. Sublicense payments are due in connection with any sublicense fees received relating to patented and non-patented products related to the patented technology and proprietary know-how, as provided in the agreement. As of July 31, 2026, there were no products being marketed which are covered by the patents under the license agreement. There wereno additional annual license maintenance fees required beyond 2010.

As part of a royalty agreement, Cornerstone is obligated to pay royalties, based upon percentage (low single digit) of net sales, to Altira Capital and Consulting LLC (“Altira”), a consolidated majority-owned subsidiary of the Company. The royalty obligations remain in effect, on a country-by-country basis, until the last to expire patent claims associated with such products and services expire or are no longer in force. No payments have been made in connection with a royalty pool. As of July 31, 2026, the last to expire patent claim is to remain in force until fiscal year 2034.

Release Agreements

On August 4, 2025, John Goldberg resigned as the Chief Medical Officer of the Company, effective July 31, 2025. In connection with Dr. Goldberg’s departure, the Company entered into a general release agreement pursuant to which Dr. Goldberg will receive severance in the amount of $218,195 and, in lieu of any entitlement for a performance bonus for the Company’s fiscal year 2025, the Company issued to Dr. Goldberg 99,429 shares of the Company’s Class B common stock which vested on November 10, 2025. On August 12, 2025, in connection with the separation, Dr. Goldberg also entered into a consulting agreement with the Company providing for annual fees of $100,000 and the accelerated vesting, on November 10, 2025, of all stock options and restricted stock in the Company previously granted to Dr. Goldberg. During the year ended July 31, 2025, the Company recognized $218,195 of severance expense to be paid subsequent to year end and approximately $96,000 of expense related to the shares to be issued related to the general release agreement with Dr. Goldberg which was included in research and development expense. During the year ended July 31, 2026, the Company recognized $250,700 of expense related to the accelerated vesting of outstanding stock options and restricted stock in the Company which is included in research and development expense in the consolidated statements of operations and comprehensive loss.

On July 31, 2025, N. Scott Fine resigned as the Chief Executive Officer of Cyclo Therapeutics. In connection with Fine’s departure, the Company entered into a general release agreement pursuant to which Fine will receive severance in the amount of $852,168, which will be paid to Fine semi-monthly in thirty-six (36) equal installments of $23,671 (less applicable taxes and withholdings). Effective August 1, 2025, Fine was named Vice-Chairman of the Board of Directors of the Company. Fine’s outstanding and unvested equity awards shall continue to vest, in accordance with the terms of the 2021 Equity Incentive Plan and Cyclo Therapeutics, Inc. 2021 Omnibus Equity Incentive Plan through the last day of Mr. Fine’s service as Vice-Chairman of the Company. The Company recognized $852,168 of severance expense during the year ended July 31, 2025 related to the general release agreement with Fine which was included in general and administrative expense. During the year ended July 31, 2026, the Company paid Fine $568,112 of the total severance due.

NOTE 19 – EQUITY

Class A Common Stock and Class B Common Stock

The rights of holders of Class A common stock and Class B common stock are identical except for certain voting and conversion rights and restrictions on transferability. The holders of Class A common stock and Class B common stock receive identical dividends per share when and if declared by the Company’s Board of Directors. In addition, the holders of Class A common stock and Class B common stock have identical and equal priority rights per share in liquidation. The Class A common stock and Class B common stock do not have any other contractual participation rights. The holders of Class A common stock are entitled to three votes per share and the holders of Class B common stock are entitled to one-tenth of a vote per share. Each share of Class A common stock may be converted into one share of Class B common stock, at any time, at the option of the holder. Shares of Class A common stock are subject to certain limitations on transferability that do not apply to shares of Class B common stock.

Equity Incentive Plans

In March 2018, the Company established its 2018 Equity Incentive Plan. On January 19, 2022, the Company’s stockholders approved the Company’s 2021 Equity Incentive Plan (the “2021 Plan”). The 2018 Equity Incentive Plan was suspended and replaced by the 2021 Plan and, following January 19, 2022, no new grants are to be awarded under the 2018 Equity Incentive Plan. Existing grants under the 2018 Equity Incentive Plan were not impacted by the adoption of the 2021 Plan. Any of the Company’s employees, directors, consultants and other service providers, and those of the Company’s affiliates, are eligible to participate in the 2021 Plan. In accordance with applicable tax rules, only employees (and the employees of parent or subsidiary corporations) are eligible to be granted incentive stock options. The 2021 Plan authorizes stock options (both incentive stock options or non-qualified stock options), stock appreciation rights, restricted stock, restricted stock units and cash or other stock-based awards. On January 19, 2022, the Company filed a Registration Statement on Form S-8 registering 1,919,025 shares of Class B common stock reserved for issuance under the 2021 Plan. On November 28, 2022, the Company’s Board of Directors approved an amendment to the 2021 Plan that, among other things, increases the number of shares of the Company’s Class B common stock available for the grant of awards thereunder by an additional 696,770, which the stockholders approved on January 23, 2023. On January 9, 2025, the Company’s Board of Directors approved an amendment to the 2021 Plan that, among other things, increases the number of shares of the Company’s Class B common stock available for the grant of awards thereunder by an additional 750,000, which the stockholders approved on January 13, 2025.

On January 8, 2026, the Company’s Board of Directors approved an amendment to the 2021 Plan that, among other things, increased the number of shares of the Company’s Class B common stock available for the grant of awards thereunder by an additional 1,000,000, which the stockholders approved on January 12, 2026. The maximum number of shares of Class B common stock that may be issued under the 2021 Plan is 4,365,795 shares. As of July 31, 2026, there were 408,187 shares still available for issuance under the 2021 Plan.

Stock Options

A summary of stock option activity for the Company is as follows:

At July 31, 2026, there were unrecognized compensation costs related to non-vested stock options granted under the 2021 Plan of $556 thousand, which are expected to be recognized over the next 2.7 years.

The determination of the fair value of options granted during the year ended July 31, 2026 used the following assumptions and key inputs:

The weighted average fair value per share of stock options granted for the year ended July 31, 2026 was $1.02.

The determination of the fair value of options granted during the year ended July 31, 2025 used the following assumptions and key inputs:

The weighted average fair value per share of stock options granted for the year ended July 31, 2025 was $1.50.

Subsequent to year end, on August 18, 2026, the Company granted stock options to employees and consultants of the Company to purchase an aggregate of 1,925,670 shares of Class B common stock with an exercise price of $1.87 per share. The awards vest based on the achievement of specified regulatory milestones, with 50% vesting upon FDA approval of Trappsol®Cyclo™ and issuance of a Priority Review Voucher (PRV),25% vesting on the first anniversary of FDA approval, and the remaining 25% vesting on the second anniversary of FDA approval, subject to the recipient’s continued service. If FDA approval is not obtained by August 12, 2027, the awards will be forfeited and rendered null and void. The awards are subject to stockholder approval of an amendment to the Company’s 2021 Plan to increase the shares available for issuance.

Rafael Medical Devices Stock Options

In connection with the conversion of Rafael Medical Devices from a Delaware corporation to a Delaware limited liability company, Rafael Medical Devices adopted the Rafael Medical Devices, LLC 2023 Equity Incentive Plan (the “RMD 2023 Plan”) in August 2023. The RMD 2023 Plan allows for issuance of up to 46,125 Class A Units of Rafael Medical Devices. There were 10,372 Units available for issuance under the RMD 2023 Plan as of July 31, 2026.

Rafael Medical Devices, LLC records compensation expense for stock-based awards based upon an assessment of the grant date fair value for options using the Black-Scholes model. The expected term was determined according to the simplified method, which is the average of the vesting tranche dates and the contractual term. Due to the lack of company specific historical and implied volatility data, the estimate of expected volatility is primarily based on the historical volatility of a group of similar companies that are publicly traded. For these analyses, characteristics from comparable companies are selected, including enterprise value and position within the industry, and with historical share price information sufficient to meet the expected life of the share-based awards. The risk-free interest rate is determined by reference to the U.S. Treasury Constant Maturity Treasury rates with remaining maturities similar to the expected term of the options. Expected dividend yield is zero as Rafael Medical Devices, LLC has never paid cash dividends and does not expect to pay cash dividends in the foreseeable future.

A summary of option activity for Rafael Medical Devices, LLC is as follows:

At July 31, 2026, the total unrecognized compensation related to stock option awards granted under the RMD 2023 Plan was $31 thousand, which the Company expects to recognize over a weighted average period of approximately 1.0 years.

The determination of the fair value of options granted during the year ended July 31, 2026 used the following assumptions and key inputs:

The weighted average fair value per share of stock options granted for the year ended July 31, 2026 was $7.91.

Cornerstone Stock Options

Cornerstone has outstanding stock options and non-qualified options to purchase Cornerstone’s common stock which were granted under Cornerstone’s 2009 and 2018 Stock Incentive Plans (the “Cornerstone Plans”), as well as additional options issued during a prior capital raise.

At July 31, 2026, there were 1,004,341 options outstanding granted under the Cornerstone Plans that are vested with a weighted average exercise price of $24.17 per share and a weighted average remaining contractual term of 3.0 years. The fair value of outstanding options granted under the Cornerstone Plans assumed during the Cornerstone Acquisition were determined to be de minimis.

In connection with Cornerstone’s 2003 common stock offerings, Cornerstone entered into an option agreement with an individual in connection with identifying investors. The option agreement grants the right to purchase an option (a “Purchase Option”) to purchase 472,000 Class A Options (“Class A Options”), which allows the purchase of 0.25 shares of common stock for each Class A Option at $11.00 per share. In order to secure this Class A Option, a Purchase Option must initially be purchased for $.005 per potential share of Class A options. Upon exercise of each Class A Option, a right is granted to one Class B Option (“Class B Options”), which allow the purchase of 0.25 shares of common stock for each Class B Option at $12.50 per share. The expiration date of the Class A Options is the later of October 29, 2005 or six months from the date the Company’s shares become publicly traded. The Class B Options expire 180 days from the exercise of the Class A Options. In 2003,625,000 options (the “Cornerstone Common Options”) were granted with an exercise price of $11.00 per share to a 2003 investor. These Cornerstone Common Options are set to expire 180 days following the closing of an IPO, or from the date Cornerstone’s shares become publicly traded. The fair value of the Class A Options, Class B Options and Cornerstone Common Options assumed during the Cornerstone Acquisition were determined to be de minimis.

As part of the Cornerstone Restructuring, Cornerstone increased the available reserve of Cornerstone Common Stock for grant to employees, consultants and other service providers to approximately 10% of Cornerstone’s capital stock following the Cornerstone Restructuring, the Mandatory Common Conversion and the Reverse Stock Split (the “Reserve Increase”) but prior to the issuance of the RPF 6% Top Up Shares or any shares to the holders of the Remaining Series C Convertible Notes after the Closing.

Replacement Warrants

As part of the Merger with Cyclo, all outstanding warrants to purchase Cyclo Common Stock (other than those held by Rafael, which were cancelled, and those which were settled in cash) were automatically converted into warrants to purchase 1,087,100 shares of Rafael Class B common stock, at an adjusted exercise price per share based upon the Exchange Ratio.

The following table presents the number of common stock warrants outstanding:

The following table presents the number of common stock warrants outstanding, their exercise price and expiration dates as of July 31, 2026 (the names below refer to the related Cyclo transaction prior to the Merger):

Restricted Stock

The fair value of restricted shares of the Company’s Class B common stock is determined based on the closing price of the Company’s Class B common stock on the grant date. Share awards generally vest on a graded basis over three to four years of service.

On January 6, 2025, the Company issued 84,918 shares of Class B restricted stock to the independent non-employee members of its Board of Directors.

On January 13, 2025, the Company issued 270,000 shares of Class B restricted stock to employees of, and consultants to, the Company.

On June 13, 2025, the Company issued 118,596 shares of Class B restricted stock to Howard S. Jonas.

On September 2, 2025, the Company issued 99,429 shares of Class B restricted stock to John Goldberg, former Chief Medical Officer of, and currently a consultant to the Company.

On January 13, 2026, the Company issued 220,000 shares of Class B restricted stock to employees of, and consultants to, the Company.

On January 28, 2026, the Company issued 154,200 shares of Class B restricted stock to independent non-employee members of its Board of Directors.

On June 15, 2026, the Company issued 142,857 shares of Class B restricted stock to Howard S. Jonas.

On July 29, 2026, the Company issued 54,945 shares of Class B restricted stock to Howard S. Jonas.

A summary of the status of the Company’s grants of restricted shares of Class B common stock is presented below:

At July 31, 2026, there was $817 thousand of total unrecognized compensation cost related to non-vested stock-based compensation arrangements, which is expected to be recognized over the next 3.5 years.

A summary of the stock-based compensation expense for the Company’s equity incentive plans is presented below (in thousands):

NOTE 20 – LEASES

The Company is the lessor of the Israeli property which is leased to tenants under net operating leases expiring in 2027. Lease income included on the consolidated statements of operations and comprehensive loss was $355 thousand and $309 thousand for the years ended July 31, 2026 and 2025, respectively. During the years ended July 31, 2026 and 2025, no real estate property taxes were included in rental income.

The future contractual minimum lease payments to be received (excluding operating expense reimbursements) by the Company as of July 31, 2026, under non-cancellable operating leases are as follows (in thousands):

NOTE 21 - EMPLOYEE RETENTION CREDITS

During the year ended July 31, 2025, the Company recorded refunds as a result of Employee Retention Credits (“ERCs”), which are refundable tax credits against certain federal employment taxes initially made available under the Coronavirus Aid, Relief and Economic Security Act (the “CARES” Act). In accordance with the Company’s accounting policy, the ERC amounts have been recognized in other income, net as the Company determined that all relevant criteria for recognition had been met. The ERC represents a one-time benefit and does not constitute recurring operational income.

During the year ended July 31, 2025, the Company recognized $236 thousand of ERC within other income and $36 thousand of related interest income in the consolidated statements of operations. As of July 31, 2025, the Company recorded $272 thousand of ERC as other receivables on the consolidated balance sheet. In addition, $933 thousand of ERC was acquired in the Cyclo Merger and is included in other receivables as of July 31, 2025. During the year ended July 31, 2026, the Company recognized an additional $75 thousand of ERC as other income, net in the consolidated statements of operations and comprehensive loss. All ERC and related accrued interest were collected in full during the year ended July 31, 2026.

NOTE 22 – SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date the consolidated financial statements were issued.

On October 15, 2026, Barer entered into a securities purchase agreement with CBX Therapeutics Ltd. (“CBX”), pursuant to which CBX issued 42,399 ordinary shares to Barer for aggregate gross proceeds of $225,000. In connection with the investment, CBX granted Barer certain governance and investor rights, including the right to appoint one member of the Board of Directors and certain preemptive and consent rights.

On September 30, 2026, the Company announced topline results from its Phase 3 TransportNPC™ study of Trappsol® Cyclo™, which did not meet its primary endpoint in the overall study population.

On October 28, 2026, Cyclo submitted a New Drug Application to FDA seeking approval of Trappsol® Cyclo™ (remibetadex) for the treatment of the neurovisceral manifestations of Niemann-Pick Disease Type C in adult and pediatric patients from birth.