CytoDyn Inc

Previous wording

Certain information included in this quarterly report on Form 10-Q contains, or incorporates by reference, forward-looking statements within the meaning of Section 21E of the Exchange Act. Words and expressions reflecting optimism, satisfaction or disappointment with current prospects, as well as words such as “believes,” “hopes,” “intends,” “estimates,” “expects,” “projects,” “plans,” “anticipates” and variations thereof, or the use of future tense, identify forward-looking statements, but their absence does not mean that a statement is not forward-looking.

Current wording

Certain information included in this quarterly report on Form 10-Q contains, or incorporates by reference, forward-looking statements within the meaning of Section 21E of the Exchange Act. Words and expressions reflecting optimism, satisfaction or disappointment with current prospects, as well as words such as “believes,” “intends,” “estimates,” “expects,” “plans,” “anticipates” and variations thereof, or the use of future tense, identify forward-looking statements, but their absence does not mean that a statement is not forward-looking.

Previous wording

Our forward-looking statements are not guarantees of performance, and actual results could vary materially from those contained in or expressed by such statements. In evaluating all such statements, we urge you to specifically consider various risks identified in Part II, Item 1A and elsewhere in this quarterly report, and those set forth in Item 1A.Risk Factors in our Annual Report on Form 10-K for the fiscal year ended May 31, 2023 (the “2023 Form 10-K”), any of which could cause actual results to differ materially from those indicated by our forward-looking statements. Our forward-looking statements reflect our current views with respect to future events and are based on currently available financial, economic, scientific, and competitive data and information about current business plans. Forward-looking statements include, among others, statements about leronlimab, its ability to have positive health outcomes, the Company’s ability to resolve the clinical hold imposed by the FDA in December 2023, and information regarding future operations and clinical studies and trials, future operating and capital expenditures, and future availability of capital. You should not place undue reliance on our forward-looking statements, which are subject to risks and uncertainties relating to, among other things: the regulatory determinations of leronlimab’s safety and effectiveness by the FDA and various drug regulatory agencies in other countries; the Company’s ability to raise additional capital to fund its operations; the Company’s ability to meet its debt and other payment obligations; the Company’s ability to enter into or maintain partnership or licensing arrangements with third parties; the Company’s ability to recruit and retain key employees; the timely and sufficient development, through internal resources or third-party consultants, of analyses of the data generated from the Company’s clinical trials required by the FDA or other regulatory agencies in connection with the Company’s regulatory submissions or applications for approval of the Company’s drug product; the Company’s ability to achieve approval of a marketable product; the design, implementation and conduct of clinical trials; the results of any such clinical trials, including the possibility of unfavorable clinical trial results; the market for, and marketability of, any product that is approved; the existence or development of vaccines, drugs, or other treatments that are viewed by medical professionals or patients as superior to the Company’s products; regulatory initiatives, compliance with governmental regulations and the regulatory approval process; the Company’s ability to resolve its disputes with Amarex and Samsung; other legal proceedings, investigations or inquiries affecting the Company or its products; stockholder actions or proposals with regard to the Company, its management, or its Board of Directors; and various other matters, many of which are beyond the Company’s control…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Our forward-looking statements are not guarantees of performance, and actual results could vary materially from those contained in or expressed by such statements. In evaluating all such statements, we urge you to specifically consider various risks identified in Part II, Item 1A and elsewhere in this quarterly report, and those set forth in Item 1A.Risk Factors in our Annual Report on Form 10-K for the fiscal year ended May 31, 2023 (the “2023 Form 10-K”), any of which could cause actual results to differ materially from those indicated by our forward-looking statements. Our forward-looking statements reflect our current views with respect to future events and are based on currently available financial, economic, scientific, and competitive data and information about current business plans. Forward-looking statements include, among others, statements about leronlimab, its ability to have positive health outcomes, and information regarding future operations and clinical studies and trials, future operating and capital expenditures, and future availability of capital. You should not place undue reliance on our forward-looking statements, which are subject to risks and uncertainties relating to, among other things: the regulatory determinations of leronlimab’s safety and effectiveness by the FDA and various drug regulatory agencies in other countries; the Company’s ability to raise additional capital to fund its operations; the Company’s ability to meet its debt and other payment obligations; the Company’s ability to enter into or maintain partnership or licensing arrangements with third parties; the Company’s ability to recruit and retain key employees; the timely and sufficient development, through internal resources or third-party consultants, of analyses of the data generated from the Company’s clinical trials required by the FDA or other regulatory agencies in connection with the Company’s regulatory submissions or applications for approval of the Company’s drug product; the Company’s ability to achieve approval of a marketable product; the design, implementation and conduct of clinical trials; the results of any such clinical trials, including the possibility of unfavorable clinical trial results; the market for, and marketability of, any product that is approved; the existence or development of vaccines, drugs, or other treatments that are viewed by medical professionals or patients as superior to the Company’s products; regulatory initiatives, compliance with governmental regulations and the regulatory approval process; the Company’s ability to resolve its disputes with Amarex and Samsung; other legal proceedings, investigations or inquiries affecting the Company or its products; stockholder actions or proposals with regard to the Company, its management, or its Board of Directors; and various other matters, many of which are beyond the Company’s control. Should one or more of these risks or uncertainties develop, or should underlying assum…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

The Company is a clinical stage biotechnology company focused on the clinical development and potential commercialization of its product candidate, leronlimab, which is being studied for MASH, MASH-HIV, solid tumors in oncology, and other HIV indications. The Company’s focus is on implementing a therapeutic development and commercialization pathway for leronlimab through an approach that is opportunistic and minimizes the amount of

Current wording

The Company is a clinical stage biotechnology company focused on the clinical development and potential commercialization of its product candidate, leronlimab, which is being studied for MASH, solid tumors in oncology, and HIV indications. The Company’s focus is on implementing a therapeutic development and commercialization pathway for leronlimab through an approach that is opportunistic and minimizes the amount of Company capital needed for the creation of value by identifying strategies that are time- and cost-effective and support the creation of non-dilutive

Previous wording

Company capital needed for the creation of value by identifying strategies that are time- and cost-effective and support the creation of non-dilutive financing opportunities, such as license agreements and co-development or strategic partnerships. Our current business strategy is to seek the removal of the clinical hold imposed by the FDA in December 2023, and proceed towards conducting a Phase II study evaluating the effects of leronlimab on chronic immune activation and inflammation in cisgender men and women and transgender women living with HIV; pursuing research and development of longer-acting molecules, including for the treatment and/or prevention of HIV; evaluating whether to conduct a combination pre-clinical study or monotherapy Phase 2b/3 clinical trial in MASH; evaluating opportunities for pre-clinical studies in solid tumors in oncology and publishing data from previously conducted studies; and resolving legal, regulatory, and financial matters.

Current wording

financing opportunities, such as license agreements and co-development or strategic partnerships. Our current business strategy, following the February 2024 removal of the clinical hold imposed by the FDA in December 2023, as described in more detail below, is to proceed toward conducting a Phase II study evaluating the effects of leronlimab on chronic inflammation; evaluating opportunities in solid tumors in oncology; pursuing research and development of longer-acting molecules; evaluating whether to conduct a combination pre-clinical study or monotherapy Phase 2b/3 clinical trial in MASH; publishing data from previously conducted studies; and resolving legal, regulatory, and financial matters.

Previous wording

In March 2022, the FDA notified the Company that it had placed a partial clinical hold on the Company’s HIV program. The FDA’s hold letter requested that the Company provide the agency with an aggregate analysis of cardiovascular events across all leronlimab clinical programs, a Safety Surveillance Plan, an aggregate safety data analysis, an updated Investigator’s Brochure, annual reports, a benefit-risk assessment, and a general investigational plan. In November 2023, the Company submitted a response to the FDA’s clinical hold letter addressing comments received through previous incomplete response communications and an informal meeting with the agency primarily related to the benefit-risk assessment for the intended HIV population and the proposed new HIV clinical trial protocol. The Company held a series of advisory board meetings with key opinion leaders in the HIV space to further inform responses to the FDA’s comments with regard to the benefit-risk analysis and an appropriate population of patients for a future clinical trial in HIV who could benefit from leronlimab given the current competitive landscape. The FDA notified the Company in early December 2023 that the partial clinical hold on the HIV program had been lifted.

Current wording

In March 2022, the FDA notified the Company that it had placed a partial clinical hold on the Company’s HIV program. The FDA’s hold letter requested that the Company provide the agency with an aggregate analysis of cardiovascular events across all leronlimab clinical programs, a Safety Surveillance Plan, an aggregate safety data analysis, an updated Investigator’s Brochure, annual reports, a benefit-risk assessment, and a general investigational plan. In November 2023, the Company submitted a response to the FDA’s clinical hold letter addressing comments received through previous incomplete response communications and an informal meeting with the agency primarily related to the benefit-risk assessment for the intended HIV population and a proposed new HIV clinical trial protocol.

Previous wording

In December 2023, the Company entered into a partnership with Albert Einstein College of Medicine and Montefiore Medical Center, located in New York. The Company will be providing leronlimab to support a pre-clinical study evaluating the efficacy of leronlimab independently and in combination with temozolomide in treating glioblastoma multiforme, also known as grade IV astrocytoma (“GBM”) in infected humanized mice. The study will involve three groups of humanized mice: one control group, one group that will receive only leronlimab, and another group that will receive a combination of leronlimab and temozolomide. The primary objective of this study is to evaluate the effect of leronlimab on the primary tumor growth and occurrence of metastases on CCR5+ and CCR5- cells in humanized mice. Upon completion of the study, the academic institutions will provide the Company with a research report outlining the study results, and they will have the right to publish and present the study results. GBM is the most common type of primary malignant brain tumor and is aggressive and fast-growing. This study is expected to take place in the 2024 calendar year.

Current wording

In December 2023, the Company entered into a partnership with Albert Einstein College of Medicine and Montefiore Medical Center, located in New York. The Company is providing leronlimab to support a pre-clinical study evaluating the efficacy of leronlimab independently and in combination with temozolomide in treating glioblastoma multiforme, also known as grade IV astrocytoma (“GBM”), in infected humanized mice. The study will involve three groups of humanized mice: one control group, one group that will receive only leronlimab, and another group that will receive a combination of leronlimab and temozolomide. The primary objective of this study is to evaluate the effect of leronlimab on the primary tumor growth and occurrence of metastases on CCR5+ and CCR5- cells in humanized mice. Upon completion of the study, the academic institutions will provide the Company with a research report outlining the study results, and they will have the right to publish and present the study results. GBM is the most common type of primary malignant brain tumor and is aggressive and fast-growing. This study is expected to take place in the 2024 calendar year.

Previous wording

The Company continues to identify the next steps in the clinical development of leronlimab and is exploring potential business opportunities to continue the investigation of leronlimab for solid tumors in oncology based on data generated to date by the Company.

Current wording

The Company continues to identify additional next steps in the clinical development of leronlimab and is exploring potential business opportunities to continue the investigation of leronlimab for solid tumors in oncology based on data generated to date by the Company.

Previous wording

The Company is currently evaluating whether to perform a combination therapy pre-clinical study in MASH that could generate valuable data leading to potential non-dilutive financing opportunities and would be significantly less

Current wording

The Company continues to evaluate whether to perform a pre-clinical study in MASH that would be significantly less capital-intensive than a human clinical trial and could generate potentially valuable data leading to partnerships or other potential non-dilutive financing opportunities.

Previous wording

During the quarter ended November 30, 2023, the Company concluded a private offering through a placement agent for a total net proceeds of approximately $3.0 million, including approximately $0.4 million during the quarter. Additionally, the Company commenced a sale of unsecured promissory notes during the quarter resulting in net proceeds

Current wording

During the quarter ended February 29, 2024, the Company concluded a sale of unsecured promissory notes resulting in net proceeds of approximately $0.9 million, including approximately $0.7 million during the quarter, and commenced a private offering through a placement agent, resulting in aggregate net proceeds of approximately $2.7 million.

Previous wording

The decreases in G&A expenses for the three- and six-month periods ended November 30, 2023, compared to the same periods in the prior year, were primarily due to a reduction in legal fees, other, stock-based compensation, and salaries, benefits, and other compensation. The decreases in legal fees were primarily due to decreased legal fees related to the SEC and DOJ investigations, offset by a decrease in the amount of fees covered by the Company’s insurance carrier(s) and increased fees related to the Amarex litigation. Additionally, for the three-month period ending November 30, 2023, legal fees were further decreased due to a reduction in fees related to regulatory and corporate related matters. The decreases in other expenses were primarily the result of a reduction in auditor and audit-related fees. The decreases in stock-based compensation and salaries, benefits, and other compensation were primarily related to headcount reductions as an effort by the Company to preserve cash and align resources with necessary corporate priorities.

Current wording

The decrease in G&A expenses for the nine-month period ended February 29, 2024, compared to the same period in the prior year, was primarily due to a reduction in legal fees, other, stock-based compensation, and salaries, benefits, and other compensation. The decrease in legal fees was primarily due to decreased fees related to the SEC and DOJ investigations, offset by less fees covered by the Company’s insurance carrier(s) and increased fees related to the Amarex litigation. The decrease in other expenses was primarily the result of a reduction in audit-related fees. The decreases in stock-based compensation and salaries, benefits, and other compensation were primarily related to headcount reductions in an effort by the Company to preserve cash and align resources with corporate priorities.

Previous wording

The increases in R&D expenses in the three- and six-month periods ended November 30, 2023, compared to the same periods in the prior year, were primarily related to a credit balance in prior year clinical expense related to credits received related to the Brazilian COVID-19 trials offset by decreases in costs related to activities focused on addressing the HIV program partial clinical hold and studies completed, paused, or closed in the prior year. Additionally for the six-month period ended November 30, 2023, clinical expenses were further increased by close-out costs incurred related to the Brazilian COVID-19 trials. The increase in non-clinical expenses was primarily driven by activities related to the discovery and development of a long-acting modified therapeutic. The decrease in CMC expenses was primarily driven by the reduction in necessary stability testing of previously manufactured leronlimab.

Current wording

The increase in R&D expense in the nine-month period ended February 29, 2024, compared to the same period in the prior year, was primarily related to an increase in clinical and non-clinical expenses, partially offset by a decrease in CMC. The increase in clinical expenses was primarily related to a credit balance in the prior year due to a reduction in CRO costs for the Brazilian COVID-19 trials, resulting in vendor credits, and Brazilian COVID-19 CRO close-out costs incurred in the current period, offset by decreases in costs related to the HIV program partial clinical hold and studies completed, paused, or closed in the prior year. The increase in non-clinical expenses was primarily driven by activities related to the discovery and development of a long-acting modified therapeutic. The decrease in CMC expenses was primarily driven by the reduction in necessary stability testing of previously manufactured leronlimab.

Previous wording

The future trend of our R&D expenses is dependent on the timing of FDA clearance of the current clinical hold and any future clinical trials, our decision-making and timing of which indications on which to focus our future efforts toward the development and study of leronlimab, which may include pre-clinical and clinical studies for MASH, MASH-HIV, oncology, and other HIV related indications, as well as efforts to develop a long-acting new or modified therapeutic, and the timing and outcomes of such efforts, and the timing of the final close-out of closed studies.

Current wording

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

Previous wording

The decrease in the inventory charge for the three- and six-month periods ended November 30, 2023, compared to the same periods in the prior year was attributable to the full inventory write-off in the prior year due to the pre-launch inventories no longer qualifying for inventory capitalization due to the withdrawal of the Company’s BLA submission to the FDA. See Note 3,Inventories, net, in the 2023 Form 10-K for additional information.

Current wording

The decrease in the inventory charge for the nine-month period ended February 29, 2024, compared to the same period in the prior year was attributable to the full inventory write-off in the prior year because the pre-launch inventories no longer qualified for inventory capitalization following the withdrawal of the Company’s BLA submission to the FDA. See Note 3,Inventories, net, in the 2023 Form 10-K for additional information.

Previous wording

The decrease in interest and other expenses for the six-month period ended November 30, 2023, compared to the same period in the prior year, was primarily due to a decrease in non-cash loss on derivatives, offset by increases in loss on note extinguishment and loss on induced conversion. The decrease in loss on derivatives is due to fewer liability-classified warrants in the current six-month period compared to the same period in the prior year. The increase in loss on induced conversions resulted from the Company settling a larger balance of the outstanding convertible debt with common stock during the current six-month period compared to the prior period. The increase in loss on note extinguishment resulted from the Company retiring outstanding convertible debt by converting notes outstanding to common stock and warrants and due to the final closing price of the private placement being lower than the initial closing price, which resulted in a loss on note extinguishment during the current six-month period.

Current wording

The decrease in interest and other expenses for the nine-month period ended February 29, 2024, compared to the same period in the prior year, was primarily due to a decrease in non-cash loss on derivatives and finance charges, partially offset by increases in loss on induced conversion and loss on note extinguishment. The decrease in loss on derivatives in the current nine-month period compared to the same period in the prior year is due to the issuance of fewer liability-classified warrants in the current period. The increase in loss on note extinguishment resulted from the Company retiring outstanding convertible debt by converting notes outstanding to common stock and warrants, and due to the final closing price of the related private placement being lower than the initial closing price. The increase in loss on induced conversion for the current nine-month period compared to the prior period resulted from the Company settling a larger balance of the outstanding convertible debt with common stock in the current period.

Previous wording

As of November 30, 2023, we had a total of approximately $0.1 million in cash and $6.6 million in restricted cash and approximately $123.4 million in short-term liabilities. We expect to continue to incur operating losses and require a significant amount of capital in the future as we continue to develop and seek approval to commercialize leronlimab. We cannot be certain, however, that future funding will be available to us when needed on terms that are acceptable to us, or at all. We sell securities and incur debt when the terms of such arrangements are deemed acceptable to both parties under then current circumstances and as necessary to fund our current and projected cash needs. As of December 31, 2023, we have approximately 371.0 million shares of common stock available for issuance in new financing transactions.

Current wording

As of February 29, 2024, we had a total of approximately $1.4 million in cash and $6.6 million in restricted cash and approximately $129.5 million in short-term liabilities. We expect to continue to incur operating losses and require a significant amount of capital in the future as we continue to develop and seek approval to commercialize leronlimab. There can be no assurance that future funding will be available to us when needed on terms that are acceptable to us, or at all. We sell securities and incur debt when the terms of such arrangements are deemed acceptable to both parties under then current circumstances and as necessary to fund our current and projected cash needs. As of March 31, 2024, we have approximately 298.7 million shares of common stock available for issuance in new financing transactions.

Previous wording

Since inception, the Company has financed its activities principally from the public and private sale of equity securities as well as with proceeds from issuance of convertible notes and related party notes payable. The Company intends to finance its future operating activities and its working capital needs largely from the sale of equity and debt securities. The sale of equity and convertible debt securities to raise additional capital is likely to result in dilution to

Current wording

Since inception, the Company has financed its activities principally from the public and private sale of equity securities as well as with proceeds from issuance of convertible notes and related party notes payable. The Company intends to finance its future operating activities and its working capital needs largely from the sale of equity and debt securities. The sale of equity and convertible debt securities to raise additional capital is likely to result in dilution to stockholders and those securities may have rights senior to those of common shares. If the Company raises funds through the issuance of additional preferred stock, convertible debt securities or other debt or equity financing, the related transaction documents may contain covenants restricting its operations.

Previous wording

The Company’s cash and restricted cash position of approximately $0.1 million and $6.6 million, respectively, as of November 30, 2023, decreased by approximately $2.4 million and increased by approximately $0.1 million, respectively, when compared to the balance of $2.5 million and $6.5 million, respectively, as of May 31, 2023. This decrease was primarily the result of approximately $7.0 million in cash used in our operating activities, offset by approximately $4.7 million in cash provided by financing activities during the six months ended November 30, 2023. Refer to Item 1, Note 2,Summary of Significant Accounting Policies – Going Concern, and theGoing Concern discussion below* for information regarding *concerns about the Company’s ability to continue to fund its operations and satisfy its payment obligations and commitments. A summary of cash flows and changes between the periods presented is as follows:

Current wording

The Company’s cash and restricted cash position of approximately $1.4 million and $6.6 million, respectively, as of February 29, 2024, decreased by approximately $1.1 million and increased by approximately $0.1 million, respectively, when compared to the balance of $2.5 million and $6.5 million, respectively, as of May 31, 2023. This decrease was primarily the result of approximately $9.3 million in cash used in our operating activities, offset by approximately $8.3 million in cash provided by financing activities during the nine months ended February 29, 2024. Refer to Item 1, Note 2,Summary of Significant Accounting Policies – Going Concern, and theGoing Concern discussion below* for information regarding *concerns about the Company’s ability to continue to fund its operations and satisfy its payment obligations and commitments. A summary of cash flows and changes between the periods presented is as follows:

Previous wording

Net cash used in operating activities totaled approximately $7.0 million during the six months ended November 30, 2023, representing an improvement of approximately $8.5 million compared to the six months ended November 30, 2022. The decrease in the net amount of cash used was due primarily to a decrease in our net loss, primarily attributable to decreased G&A expense, and working capital fluctuations, all of which are highly variable. Refer toGeneral and Administrative Expenses section for further discussion.

Current wording

Net cash used in operating activities totaled approximately $9.3 million during the nine months ended February 29, 2024, representing an improvement of approximately $12.4 million compared to the nine months ended February 28, 2023. The decrease in the net amount of cash used was due primarily to a decrease in our net loss, primarily attributable to decreased G&A expense, and working capital fluctuations, all of which are highly variable. Refer toGeneral and Administrative Expenses section for further discussion.

Previous wording

Net cash provided by financing activities totaled approximately $4.7 million during the six months ended November 30, 2023, a decrease of approximately $9.2 million compared to the six months ended November 30, 2022. The decrease in net cash provided was primarily the result of raising less funds from private placements of common stock and warrants, partially offset by an increase in funds from the issuance of convertible notes.

Current wording

Net cash provided by financing activities totaled approximately $8.3 million during the nine months ended February 29, 2024, a decrease of approximately $20.3 million compared to the nine months ended February 28, 2023. The decrease in net cash provided was primarily the result of raising less funds from private placements of common stock and warrants, partially offset by an increase in funds from the issuance of convertible notes.

Previous wording

The Company previously capitalized pre-launch inventories which were subsequently charged-off in October of 2022 for GAAP accounting purposes due to no longer qualifying for pre-launch inventory capitalization. Work-in-progress and finished drug product inventories continue to be physically maintained, can be used for clinical trials, and can be sold commercially upon regulatory approval if the shelf-lives can be extended as a result of the performance of on-going stability tests. Raw materials continued to be maintained so that they can be used in the future if needed.

Current wording

The Company previously capitalized pre-launch inventories which were subsequently charged-off in October 2022 for GAAP accounting purposes due to no longer qualifying for pre-launch inventory capitalization. Work-in-progress and finished drug product inventories continue to be physically maintained, can be used for clinical trials, and can be sold commercially upon regulatory approval if the shelf-lives can be extended as a result of the performance of on-going stability tests. For additional information, refer to Note 3,Inventories, net, in the 2023 Form 10-K.

Previous wording

On April 2, 2021, we issued a convertible note with a principal amount of $28.5 million resulting in net cash proceeds of $25.0 million, after $3.4 million of debt discount and $0.1 million of offering costs. The note accrues interest daily at a rate of 10% per annum, contains a stated conversion price of $10.00 per share, and matures in April 2025. The April 2, 2021 Note required monthly debt reduction payments of $7.5 million for the six months beginning in May 2021, which could also be satisfied by payments on other notes held by the noteholder or its affiliates. Beginning six months after the issuance date, the noteholder may request monthly redemptions of up to $3.5 million. As of November 30, 2023, the outstanding balance of the April 2, 2021 Note, including accrued interest, was approximately $8.3 million.

Current wording

On April 2, 2021, we issued a convertible note with a principal amount of $28.5 million resulting in net cash proceeds of $25.0 million, after $3.4 million of debt discount and $0.1 million of offering costs. The note accrues interest daily at a rate of 10% per annum, contains a stated conversion price of $10.00 per share, and matures in April 2025. The April 2, 2021 Note required monthly debt reduction payments of $7.5 million for the six months beginning in May 2021, which could also be satisfied by payments on other notes held by the noteholder or its affiliates. Beginning six months after the issuance date, the noteholder may request monthly redemptions of up to $3.5 million. As of February 29, 2024, the outstanding balance of the April 2, 2021 Note, including accrued interest, was approximately $7.3 million.

Previous wording

On April 23, 2021, we issued a convertible note with a principal amount of $28.5 million resulting in net cash proceeds of $25.0 million, after $3.4 million of debt discount and $0.1 million of offering costs. The note accrues interest daily at a rate of 10% per annum, contains a stated conversion price of $10.00 per share, and matures in April 2025. Beginning six months after the issuance date, the noteholder may request monthly redemptions of up to $7.0 million. As of November 30, 2023, the outstanding balance of the April 23, 2021 Note, including accrued interest, was approximately $38.0 million.

Current wording

On April 23, 2021, we issued a convertible note with a principal amount of $28.5 million resulting in net cash proceeds of $25.0 million, after $3.4 million of debt discount and $0.1 million of offering costs. The note accrues interest daily at a rate of 10% per annum, contains a stated conversion price of $10.00 per share, and matures in April 2025. Beginning six months after the issuance date, the noteholder may request monthly redemptions of up to $7.0 million. As of February 29, 2024, the outstanding balance of the April 23, 2021 Note, including accrued interest, was approximately $37.5 million.

Previous wording

As of November 30, 2023, we had approximately 398.1 million unreserved authorized shares of common stock available for issuance. Our ability to continue to fund our operations depends on our ability to raise capital. The funding necessary for our operations may not be available on acceptable terms, or at all. If we deplete our cash reserves, we may be forced to file for bankruptcy protection, discontinue operations, or liquidate our assets.

Current wording

As of February 29, 2024, we had approximately 321.9 million unreserved authorized shares of common stock available for issuance. Our ability to continue to fund our operations depends on our ability to raise capital. The funding necessary for our operations may not be available on acceptable terms, or at all. If we deplete our cash reserves, we may be forced to file for bankruptcy protection, discontinue operations, or liquidate our assets.

Previous wording

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As presented in the accompanying consolidated financial statements, the Company had losses for all periods presented. The Company incurred a net loss of approximately $21.1 million in the three months ended November 30, 2023, and has an accumulated deficit of approximately $862.8 million as of November 30, 2023. These factors, among several others, including the various matters discussed in Note 8,Commitments and Contingencies, raise substantial doubt about our ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

Current wording

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As presented in the accompanying consolidated financial statements, the Company had losses for all periods presented. The Company incurred a net loss of approximately $33.1 million in the nine months ended February 29, 2024, and has an accumulated deficit of approximately $874.7 million as of February 29, 2024. These factors, among several others, including the various matters discussed in Note 8,Commitments and Contingencies, raise substantial doubt about our ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

Previous wording

The Company’s continuance as a going concern is dependent upon its ability to obtain additional operating capital, complete the development of its product candidate, leronlimab, obtain approval to commercialize leronlimab from regulatory agencies, continue to outsource manufacturing of leronlimab, and ultimately achieve revenues and attain profitability. The Company plans to continue to engage in research and development activities related to leronlimab and a new or modified longer-acting therapeutic for multiple indications and expects to incur significant research and development expenses in the future, primarily related to its regulatory compliance, including seeking the lifting of the FDA’s clinical hold related to the Company’s recently submitted protocol, performing additional clinical trials, and seeking regulatory approval of its product candidate for commercialization. These research and development activities are subject to significant risks and uncertainties. The Company intends to finance its future development activities and its working capital needs primarily from the sale of equity and debt securities, combined with additional funding from other sources. However, there can be no assurance that the Company will be successful in these endeavors. See alsoLiquidity and Capital Resourcesabove.

Current wording

The Company’s continuance as a going concern is dependent upon its ability to obtain additional operating capital, complete the development of its product candidate, leronlimab, obtain approval to commercialize leronlimab from regulatory agencies, continue to outsource manufacturing of leronlimab, and ultimately achieve revenues and attain profitability. The Company plans to continue to engage in research and development activities related to leronlimab and a new or modified longer-acting therapeutic for multiple indications and expects to incur significant research and development expenses in the future, primarily related to its regulatory compliance, including performing additional clinical trials and seeking regulatory approval of its product candidate for commercialization. These research and development activities are subject to significant risks and uncertainties. The Company intends to finance its future development activities and its working capital needs primarily from the sale of equity and debt securities, combined with additional funding from other sources. However, there can be no assurance that the Company will be successful in these endeavors. See alsoLiquidity and Capital Resourcesabove.