Financial Analysis

NOTE 10 COMMITMENTS AND CONTINGENCIES Licensing Commitments Please refer to Note 5 for further discussion of commitments to make milestone payments and to pay royalties under license agreements with XOMA and ActiveSite. Employment Agreements As of June 30, 2025, the Company was subject to employment agreements with three officers of the Company and one employee of the Company that provide for aggregate annual base salaries of $2.0 million. The agreements with the Chief Executive Officer, Chief Financial Officer, and Chief Medical Officer provide that if any of these individuals are terminated outside of a change in control event and without cause, (i) all of their stock options that are subject to ongoing vesting conditions over subsequent periods ranging from 12 to 18 months will immediately vest, and (ii) such stock options will remain exercisable for periods ranging from 6 to 12 months following the occurrence of the termination event. In addition, if either of the executive officers are terminated solely due to a change of control event, all of their respective unvested stock options will immediately vest and all outstanding stock options will remain exercisable for periods ranging from 6 to 12 months following the occurrence of the termination event. The Chief Medical Officers and Chief Financial Officers employment agreements, as amended, provides that upon the occurrence of a termination event other than a change of control, the Company is required to (i) make severanc …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 8 SHARE-BASED COMPENSATION AND WARRANTS Equity Incentive Plans Presented below is a summary of the number of shares authorized, outstanding, and available for future grants under the Companys equity incentive plans as of June 30, 2025: Number of Shares Description Authorized Outstanding Available 2015 Plan 15,500 15,500 2016 Plan 122,900 122,900 2019 Plan 200,000 200,000 2021 Plan 13,879,670 13,321,094 558,576 Inducement Awards 1,500,000 425,000 1,075,000 Total 15,718,070 14,084,494 1,633,576 The Company currently has one active equity incentive plan approved by shareholders which is the 2021 Plan. On December 5, 2024, the Companys shareholders approved an amendment to the 2021 Plan, increasing the number of shares of common stock to be issued under the plan up to 14,450,000 shares of common stock, before accounting for any reductions due to exercises. The 2021 Plan terminates on March 31, 2030. Pursuant to the 2021 Plan, no awards may be granted under the three legacy equity incentive plans shown in the table above, but all outstanding awards previously granted under those plans shall remain outstanding and subject to the terms of the respective plans. Awards outstanding under these plans expire pursuant to their contractual provisions on various dates through 2035. In addition, inducement awards are allowed for grants of options pursuant to Nasdaq Listing Rule 5635(c)(4) whereby the underlying shares are not authorized under any of the Companys equity incentive plans. …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

"NOTE 9 INCOME TAXES Net Operating Loss Carryforwards The Company files income tax returns in the U.S. federal jurisdiction and in several states including, but not limited to, California, Colorado, and Oregon. The Companys federal and state tax returns for the 2022 fiscal year and forward are subject to examination by taxing authorities. Federal and state laws impose substantial restrictions on the utilization of federal net operation loss (NOL) carryforwards in the event of an ownership change for income tax purposes, as defined in Section 382 of the Internal Revenue Code (IRC). Pursuant to IRC Section 382, annual use of the Companys NOL carryforwards is limited in the event that a cumulative change in ownership of more than 50% occurs within any rolling three-year period. During the fiscal year ended June 30, 2025, the Company completed an IRC Section 382 analysis and concluded that the Companys NOL carryforwards are subject to limitations as a result of past and current ownership changes. As of June 30, 2025, the Company has U.S. federal net operating loss (NOL) carryforwards of approximately $201.4 million, of which approximately $33.4 million of NOL carryforwards will never be available for use due to the limitations under IRC section 382 discussed above. The remainder of the Companys NOL carryforwards of $168.0 million consists of (i) $10.5 million that are currently available to offset taxable income but if not utilized will expire in 2031 through 2035, (ii) $10.8 mil …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 4 LEASES In October 2023, the Company entered into an addendum to the lease agreement for its office in Bend, Oregon. The addendum provided for a 36-month extension, resulting in a new expiration date in February 2027. The average base rent payable over the remaining lease term is approximately $9,000 per month. Upon execution of the addendum, the Company re-measured the Bend, Oregon operating lease liability at approximately $352,000 using a discount rate of 10.0%, and the related right-of-use asset was recognized for approximately $346,000. In April 2022, the Company entered into a lease agreement for a corporate headquarters facility in Redwood City, California. The space consists of approximately 9,300 square feet and provides for total base rent payments of approximately $2.9 million through the expected expiration of the lease in November 2027. Prior to occupancy, the landlord was required to make improvements to the facility that were completed in October 2022, triggering the commencement of the lease. The lease provided for a six-month rent abatement period beginning upon commencement of the lease term. In addition, the lease provided an allowance of approximately $0.1 million that was utilized by the Company for the purchase of furniture and equipment. The average base rent payable in cash over the 60-month lease term is approximately $48,000 per month. Upon commencement of the lease, the Company recognized a right-of-use asset for approximately $2.3 million, an …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Recent Accounting Pronouncements Recently Adopted Accounting Standard. The following accounting standard was adopted for the fiscal year ended June 30, 2025: In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which improves reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. ASU 2023-07 expands public entities segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segments profit or loss and assets. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company implemented the guidance in ASU 2023-07 for the fiscal year ended June 30, 2025 and retrospectively for the fiscal year ended June 30, 2024 (see Note 15). The adoption of ASU 2023-07 did not have any material impact on the accompanying consolidated financial statements. Standard Required to be Adopted in Future Periods. The following accounting standard has not yet been adopted by the Company: In December 2023, the FASB issued ASU 2023-09, In …

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NOTE 11 RELATED PARTY TRANSACTIONS Related Party Licensing Agreement On September 15, 2020, the Company entered into an exclusive license agreement with Handok (the Handok License) for the territory of the Republic of Korea. The Handok License relates to pharmaceutical products in final dosage form containing the pharmaceutical compounds developed or to be developed by the Company, including those related to ersodetug and RZ402. The Handok License is in effect for a period of 20 years after the first commercial sale of each product and requires (i) milestone payments of $0.5 million upon approval of a New Drug Application (NDA) for each product in the territory, and (ii) the Company will sell products ordered by Handok at a transfer price equal to 70% of the net selling price of the products. To date, no milestone payments have been earned by the Company. Investors in 2024 Private Placement Handok was an investor in the 2024 Private Placement discussed in Note 7 for which the Company issued 1,250,000 shares of common stock at a purchase price of $4.00 resulting in gross proceeds of $5.0 million of the total $6.0 million gross proceeds. Investors in 2025 Private Placement Handok was an investor in the 2025 Private Placement discussed in Note 7 for which the Company issued 1,230,769 shares of common stock at a purchase price of $3.25 per share resulting in gross proceeds of $4.0 million. A member of the Companys Board of Directors was also an investor in the 2025 Private Placem …

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NOTE 15 SEGMENT DISCLOSURES The Company has determined that it operates as a single reportable segment which includes all of its activities as a clinical stage biopharmaceutical company. The CODM uses consolidated net loss as reported on the consolidated statement of operations to assess performance, analyze budget to actual results, forecast future periods, and allocate resources for its single reportable segment. The significant segment expenses regularly reviewed by the CODM consist of clinical and manufacturing costs of the Company's product candidates, personnel expenses, and other segment expenses. The measure of the operating segment assets is reported on the consolidated balance sheet as total assets and all of the Company's tangible assets are located in the United States. The following table presents consolidated net loss summarized by the significant segment expenses regularly reviewed by the CODM for the years ended June 30, 2025, and 2024 (in thousands): 2025 2024 Research and development: Ersodetug $ 31,752 $ 19,937 RZ402 601 7,648 Compensation and benefits 19,404 17,463 Other R&D segment expenses (1) 9,770 10,695 Total research and development 61,527 55,743 General and administrative: Compensation and benefits 10,756 8,933 Other G&A segment expenses (2) 7,611 5,747 Total general and administrative 18,367 14,680 Operating loss (79,894) (70,423) Total non-operating income (expense), net 5,482 1,964 Net loss $ (74,412) $ (68,459) (1) Other R&D segment …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 7 SHAREHOLDERS EQUITY Changes in Authorized Capital Stock On December 5, 2024, the Companys shareholders approved an increase in the authorized number of common shares from 100.0 million shares to 165.0 million shares. Accordingly, as of June 30, 2025, the Company was authorized to issue 165.0 million shares of common stock and 0.4 million shares of preferred stock. Pre-Funded Warrants Between October 2021 and April 2025, the Company issued fully vested pre-funded warrants (PFWs) exercisable to purchase an aggregate of 28.2 million shares of common stock. As of June 30, 2025 and 2024, all outstanding PFWs meet the requirements to be classified in shareholders equity under the caption additional paid-in capital . The PFWs do not entitle the holders thereof to any voting rights or any of the other rights or privileges to which holders of common stock are entitled. The exercise prices of the PFWs are subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting holders of common stock. In the event of certain fundamental corporate transactions, the holders of the PFWs are entitled to receive the kind and amount of securities, cash or other property that the holders would have received had they exercised the PFWs immediately prior to such transaction. The PFWs are exercisable at any time, subject to the then effective ownership blocker percentage (the OBP) as elected by each of …

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NOTE 16 SUBSEQUENT EVENTS Investments in Marketable Debt Securities In July 2025, the Company utilized approximately $64.8 million of cash and cash equivalents from the 2025 Underwritten Offering and 2025 Private Placement to purchase investments in marketable debt securities with maturities that range from October 2025 through July 2026. Exercise of PFWs In July 2025, a holder of certain 2022 PFWs provided notice of cashless exercises of 2,200,000 Class B PFWs, which resulted in the issuance of 2,199,623 shares of common stock in July 2025. In July 2025, a holder of certain 2024 PFWs provided notice of cashless exercises of 792,231 PFWs, which resulted in the issuance of 792,096 shares of common stock in July 2025. In July 2025, a holder of certain 2025 PFWs provided notice of cashless exercises of 793,225 PFWs, which resulted in the issuance of 793,089 shares of common stock in July 2025. Employment Agreement In connection with the appointment of the Companys Chief Commercial Officer in August 2025, the Company entered into an employment agreement that provides for an annual base salary of $475,000 , a signing bonus of $65,000 , and eligibility for annual incentive compensation with a target of up 40% of base salary subject to certain performance metrics. Additionally, the Board of Directors approved the grant of stock options exercisable for the purchase of 275,000 shares of the Companys common stock at an exercise price of $6.55 per share. The stock options are considered …

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Note 9 Commitments and Contingencies Licensing Commitments Please refer to Note 5 for further discussion of commitments to make milestone payments and to pay royalties under license agreements with XOMA and ActiveSite. Amended Employment Agreement On October 17, 2025, the Company entered into amendments to employment agreements with Nevan Elam, Brian Roberts, Daron Evans, and Sunil Karnawat. The amendments entitle each of the executive officers to a full gross-up payment (the Gross-Up Payment) for any excise tax imposed by Section 4999 of the Internal Revenue Code (the IRC) and other local, state and federal taxes imposed if an excess parachute payment is paid in connection with a future change of control event, as determined under Section 280G of the IRC. The determination of the amount of any Gross-Up Payment will be made by the Company in its sole discretion. Except for the provisions related to Gross-Up Payments, all other terms of the respective employment agreements were unchanged. Legal Matters From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. At each reporting period, the Company evaluates known claims to determine whether a potential loss or a potential range of loss is probable and reasonably estimable under ASC 450, Contingencies . As of December 31, 2025, there have been several law firms that have initiated investigations into the Company and have filed press releases seekin …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Note 8 Share-Based Compensation and Warrants Inducement Grants In connection with the appointment of the Companys Chief Commercial Officer in August 2025 the Board of Directors approved the grant of stock options exercisable for the purchase of 275,000 shares of the Companys common stock at an exercise price of $6.55 per share. These stock options qualify as inducement grants pursuant to Nasdaq Listing Rule 5635(c)(4) whereby the underlying shares were not authorized under any of the Companys stock option plans (Inducement Awards). The stock options are exercisable until August 2035 and vest for (i) one-fourth of the option shares on the one-year anniversary of the employee start date, and (ii) one thirty-sixth of the remaining option shares vest on the same day of each month thereafter until the stock options are 100% vested. The fair value of this Inducement Award of $1.3 million was computed using the Black-Scholes-Merton (BSM) option-pricing model. Additionally, in connection with the hiring of four employees during the six months ended December 31, 2025, the Company issued additional Inducement Awards, consisting of stock options exercisable for the purchase of an aggregate of 370,000 shares of the Companys common stock. These stock options are exercisable for a ten-year term and vest for (i) one-fourth of the option shares on the one-year anniversary of each employees start date, and (ii) one thirty-sixth of the remaining option shares vest on the same day of each month …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Note 11 Income Taxes Income tax expense during interim periods is based on applying an estimated annualized effective income tax rate applied to the respective quarterly periods, adjusted for discrete tax items in the period in which they occur. The computation of the annualized estimated effective tax rate for each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating results for the year, projections of the proportion of income earned and taxed in various jurisdictions, permanent and temporary differences, and the likelihood of recovering deferred income tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is obtained, additional information becomes known, or as the tax environment changes. For the three and six months ended December 31, 2025 and 2024, the Company did not recognize any income tax benefit due to a full valuation allowance on its deferred income tax assets. The Company did not have any material changes to its conclusions regarding valuation allowances for deferred income tax assets or uncertain tax positions for the three and six months ended December 31, 2025 and 2024. …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Note 4 Operating Leases The carrying value of all right-of-use assets and operating lease liabilities is as follows (in thousands): December 31, June 30, 2025 2025 Right-of-use assets $ 1,064 $ 1,348 Operating lease liabilities: Current $ 666 $ 632 Long-term 619 983 Total $ 1,285 $ 1,615 For the three and six months ended December 31, 2025 and 2024, operating lease expense is included under the following captions in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss (in thousands): Three Months Ended Six Months Ended December 31, December 31, 2025 2024 2025 2024 Research and development $ 120 $ 119 $ 240 $ 238 General and administrative 57 48 104 96 Total $ 177 $ 167 $ 344 $ 334 As of December 31, 2025, the weighted average remaining lease term under operating leases was 1.8 years, and the weighted average discount rate used to determine the operating lease liabilities was 7.1%. Future cash payments under all operating lease agreements as of December 31, 2025 are as follows (in thousands): Fiscal year ending June 30, Remainder of fiscal year 2026 $ 389 2027 750 2028 224 Total lease payments 1,363 Less imputed interest (78) Present value of operating lease liabilities $ 1,285 …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Recent Accounting Pronouncements Not Yet Adopted In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures. ASU 2023-09 requires disclosure of additional income tax information, primarily related to the rate reconciliation and income taxes paid. This ASU is intended to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company is required to adopt ASU 2023-09 in its annual financial statements for the fiscal year ended June 30, 2026, and for interim periods thereafter. The Company does not expect the adoption of ASU 2023-09 will have a material impact on its consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 is intended to enhance disclosures by requiring public entities to disclose specified information about certain costs and expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026. The Company is required to adopt ASU 2024-03 in its annual financial statements for the fiscal year ending June 30, 2028, and for interim periods thereafter. The Company does not expect the adoption of ASU 2024-03 will have a material impact on its cons …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Note 10 Related Party Transactions Related Party Licensing Agreement On September 15, 2020, the Company and Handok entered into an exclusive license agreement (the Handok License) for the territory of the Republic of Korea. The Handok License relates to pharmaceutical products in final dosage form containing the pharmaceutical compounds developed or to be developed by the Company, including those related to ersodetug and the PKI Portfolio. The Handok License is in effect for a period of 20 years after the first commercial sale of each product and requires (i) milestone payments to the Company of $0.5 million upon approval of a New Drug Application (NDA) for each product in the territory, and (ii) the Company will sell products ordered by Handok at a transfer price equal to 70% of the net selling price of the products. To date, no milestone payments have been earned by the Company. …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

Note 15 Reduction in Workforce On December 11, 2025, the Company announced that its Phase 3 sunRIZE clinical trial did not meet its primary or key secondary endpoints. Management approved a reduction in workforce of 29 employees on December 15, 2025 to reduce overall operating expenses and preserve capital to support the Companys Phase 3 clinical trial in tumor HI and plan for future interactions with the FDA to review sunRIZE data. The Company incurred approximately $1.5 million of one-time severance expenses consisting of $0.9 million of research and development expense and $0.6 million in general and administrative expense for the three and six months ended December 31, 2025. All of the $1.5 million of one-time severance benefits is included as an accrued liability in the condensed consolidated balance sheet as of December 31, 2025 and is included in operating expenses in the condensed consolidated statement of operations for the three and six months ended December 31, 2025. The accrued liability of $1.5 million was paid in full to the affected employees in January 2026 and no remaining liability related to the one-time severance benefits remain at the issuance date of the unaudited condensed consolidated financial statements. …

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Note 14 Segment Disclosures The Company has determined that it operates as a single reportable segment which includes all of its activities as a clinical stage biopharmaceutical company. The CODM uses consolidated net loss as reported in the unaudited condensed consolidated statements of operations and comprehensive loss to assess performance, analyze budget to actual results, forecast future operating results and cash requirements, and allocate resources for its single reportable segment. The significant segment expenses regularly reviewed by the CODM consist of clinical and manufacturing costs of ersodetug, personnel expenses, and other segment expenses. The measure of the operating segment assets is reported on the unaudited condensed consolidated balance sheets as total assets and all of the Company's tangible assets are located in the United States. The following table presents consolidated net loss summarized by the significant segment expenses regularly reviewed by the CODM for the three and six months ended December 31, 2025, and 2024 (in thousands): Three Months Ended Six Months Ended December 31, December 31, 2025 2024 2025 2024 Research and development: Ersodetug $ 5,647 $ 7,260 $ 11,257 $ 14,476 Compensation and benefits 6,991 4,491 12,579 8,788 Other research and development segment expenses (1) 1,710 876 3,661 2,117 Total research and development 14,348 12,627 27,497 25,381 General and administrative: Compensation and benefits 4,917 2,602 8,267 4,854 Other gener …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Significant Accounting Policies T he Companys significant accounting policies are described in Note 1 to the financial statements in Item 8 of the 2025 Form 10-K. …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

Note 7 Shareholders Equity Quarterly Changes in Shareholders' Equity The following table presents changes in shareholders equity for the three months ended December 31, 2025 and 2024 (in thousands, except number of shares): Accumulated Additional Other Total Common Stock Paid-in Comprehensive Accumulated Shareholders' Shares Amount Capital Income (Loss) Deficit Equity Three Months Ended December 31, 2025: Balances, September 30, 2025 91,036,700 $ 91 $ 569,034 $ 49 $ (422,006) $ 147,168 Issuance of common stock upon exercise of stock options 72,227 1 194 195 Share-based compensation expense 3,411 3,411 Cashless exercise of pre-funded warrants 4,439,071 4 (4) Other comprehensive loss (2) (2) Net loss (22,774) (22,774) Balances, December 31, 2025 95,547,998 $ 96 $ 572,635 $ 47 $ (444,780) $ 127,998 Three Months Ended December 31, 2024: Balances, September 30, 2024 55,394,338 $ 55 $ 457,919 $ 289 $ (344,822) $ 113,441 Issuance of common stock upon exercise of stock options 225,363 1 657 658 Share-based compensation expense 1,445 1,445 Cashless exercise of pre-funded warrants 4,914,994 5 (5) Other comprehensive loss (225) (225) Net loss (15,730) (15,730) Balances, December 31, 2024 60,534,695 $ 61 $ 460,016 $ 64 $ (360,552) $ 99,589 Pre-Funded Warrants Between October 2021 and April 2025, the Company issued fully vested pre-funded warrants (PFWs) exercisable to purchase an aggregate of 28,237,901 shares of common stock. As of December 31, 2025, all outstanding PFWs meet the requir …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing