Financial Analysis

NOTE 18 COMMITMENTS AND CONTINGENCIES Legal Proceedings 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 Companys results of operations, cash flows or financial condition. License Agreements 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 Alzheimers disease and APOE4 carriers. The MIT License Agreement grants Cyclo the exclusive right to develop, manufacture, use and commercialize licensed products containing hydroxypropyl-beta-cyclodextrin as the active pharmaceutical ingredient within the field of Alzheimers 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 achieve specified development milestones, including dosing the first patient in a U.S. Phase II clinical trial by March 31, 2027, filing with the U.S. FDA by June 1, 2034, and achieving a first commercial sale in the U.S. by May 1, 2035 in order for the license to continue. The Company paid MIT a license issuance fee of $50,000 and reimbursed approximately $50,000 in prior p …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 7 - CONVERTIBLE NOTES PAYABLE As of April 30, 2026, Cornerstone had $610 thousand in principal, and $248 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 Cornerstones 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 Cornerstones 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 holders 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 Cornerston …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

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: Level 1 - quoted prices in active markets for identical assets or liabilities; Level 2 - quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability; or Level 3 - unobservable inputs for the asset or liability, such as discounted cash flow models or valuations. 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 Companys assets required to be measured at fair value on a recurring basis and where they are classified within the fair value hierarchy as of April 30, 2026 and July 31, 2025 are as follows: April 30, 2026 Level 1 Level 2 Level 3 Total Assets: (in thousands) Convertible notes receivable classified as available-for-sale $ $ $ 2,124 $ 2,124 Total $ $ $ 2,124 $ 2,124 July 31, 2025 Level 1 Level 2 Level 3 Total Assets: (in thousands) Convertible notes receivable classified as available-for-sale 1,858 1,858 Total $ $ $ 1,858 $ 1,858 As of April 30, 2026 and July 31, 2025, the Company did not have any liabilities measured at …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

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 nine months ended April 30, 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 Companys Infusion Technology segment. We 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 …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 16 INCOME TAXES During the three and nine months ended April 30, 2026, the Company recognized a provision for income taxes of $6 thousand and $52 thousand, respectively, on losses before income tax of $2.9 million and $19.0 million, respectively. During the three and nine months ended April 30, 2025, the Company recognized a benefit from income taxes of $2.4 million in both periods on losses before income tax of $6.5 million and $21.0 million, respectively. The benefit from income tax in the prior year was due to the Companys participation in the State of New Jerseys Technology Business Tax Certificate Transfer Program. Under this program, the Company sold prior period net operating loss carryforwards (NOLs) and recognized proceeds of approximately $2.4 million for the sale of the Companys 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 three and nine months ended April 30, 2025. …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

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 $90 thousand and $77 thousand for the three months ended April 30, 2026 and 2025, respectively. Lease income included on the consolidated statements of operations and comprehensive loss was $262 thousand and $231 thousand for the nine months ended April 30, 2026 and 2025, respectively. During the three and nine months ended April 30, 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 April 30, 2026, under a non-cancellable operating lease are as follows (in thousands): Years Ending July 31, Total 2026 $ 46 2027 188 2028 31 Total Minimum Future Rental Income $ 265 …

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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 employment taxes initially made available under the Coronavirus Aid, Relief and Economic Security Act (the CARES Act). In accordance with the Companys 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. 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 three and nine months ended April 30, 2026, the Company recognized an additional $75 thousand of ERC as other income, net in the consolidated statements of operations and other comprehensive loss. All ERC and related accrued interest were collected in full during the nine months ended April 30, 2026. …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

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 Companys personnel that were paid by IDT as the relevant persons were also providing services to IDT. IDT billed the Company approximately $60 thousand and $61 thousand for services during the three months ended April 30, 2026 and 2025, respectively. IDT billed the Company approximately $217 and $221 thousand for services during the nine months ended April 30, 2026 and 2025, respectively. Balances of $60 thousand and $59 thousand due from IDT are included in due to related parties as of April 30, 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 $30 thousand and $28 thousand for the three months ended April 30, 2026 and 2025, respectively. The Company invoiced IDT approximately $89 thousand and $84 thousand for the nine months ended April 30, 2026 and 2025, respectively. As of April 30, 2026 and July 31, 2025, IDT owed the Company approximately $221 thousand and $93 thousand, respectively, for office rent and parking plus Israeli value added tax. Related Party Rental Income The Company leased space to rel …

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NOTE 17 BUSINESS SEGMENT INFORMATION The Company conducts business as three operating segments, Healthcare, Infusion Technology and Real Estate. The Companys reportable 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 Companys 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 income (loss) from operations. The CODM uses these measures to allocate the Companys 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 our 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 $89 thousand and $368 thousand of product revenue during the three and nine months ended April 30, 2026, respectively, the …

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NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. All adjustments, which include only normal recurring adjustments, considered necessary for a fair presentation have been included. The Companys 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). Operating results for the three and nine months ended April 30, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2026. The balance sheet at July 31, 2025 has been derived from the Companys audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. Therefore, these consolidated financial statements should be read in conjunction with the Companys audited consolidated financial statements and notes thereto included in t …

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NOTE 22 SUBSEQUENT EVENTS In June 2026, the Company announced that the last patient completed the final 96-week visit in its pivotal Phase 3 TransportNPC study evaluating Trappsol Cyclo for the treatment of NPC1. The Company expects to report topline results from the study in the second half of calendar 2026. Additionally, the Company has completed a pre-New Drug Application (NDA) meeting with the U.S. Food and Drug Administration (FDA) and expects to submit an NDA for Trappsol Cyclo in the second half of calendar 2026. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing