Quarterly Report for Quarter Ending August 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Certain information included in this quarterly report on Form 10-Q (this "Form 10-Q") contains, or incorporates by reference, forward-looking statements that involve risks, uncertainties, and assumptions that are difficult to predict. Words and expressions reflecting optimism, satisfaction, or disappointment with current prospects, as well as words such as "believes," "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.

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 elsewhere in this Form 10-Q, including Item 1A of Part II, as well as those set forth in Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended May 31, 2026 (the "2026 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 may include, among others, statements about leronlimab, its ability to have positive health outcomes, the Company's ability to implement a successful operating strategy for the development of leronlimab and thereby create shareholder value, the ability to obtain regulatory approval of the Company's drug products for commercial sales, and the strength of the Company's leadership team. The Company's forward-looking statements are not guarantees of performance, and actual results could vary materially from those contained in or expressed by such statements due to risks and uncertainties, including: (i) the regulatory determinations of leronlimab's safety and effectiveness to treat the disease and conditions for which we are studying the product by the FDA and, potentially, drug regulatory agencies in other countries; (ii) the Company's ability to raise additional capital to fund its operations; (iii) the Company's ability to meet its debt and other payment obligations; (iv) the Company's ability to enter into or maintain partnership or licensing arrangements with third parties; (v) the Company's ability to recruit and retain key employees; (vi) 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 applications for approval of the Company's drug product; (vii) the Company's ability to achieve approval of a marketable product; (viii) the design, implementation, and conduct of clinical trials; (ix) the results of any such clinical trials, including the possibility of unfavorable clinical trial results; (x) the market for, and marketability of, any product that is approved; (xi) 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; (xii) regulatory initiatives, compliance with governmental regulations, and the regulatory approval process; (xiii) legal proceedings, investigations, or inquiries affecting the Company or its products, including the finalization of an agreement in principle to settle the class action litigation filed against the Company in the state of Washington (the "Securities Class Action Lawsuit"); (xiv) stockholder actions or proposals with regard to the Company, its management, or its Board of Directors; (xv) general economic and business conditions; (xvi) changes in domestic and foreign political and social conditions; and (xvii) various other matters, many of which are beyond the Company's control.

We intend that all forward-looking statements made in this Form 10-Q will be subject to the safe harbor protection of the federal securities laws pursuant to Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to the extent applicable. Except as required by law, we do not undertake any responsibility to update these forward-looking statements to address events or circumstances that occur after the date of this Form 10-Q. Additionally, we do not undertake any responsibility to update you on the occurrence of any unanticipated events that may cause actual results to differ from those expressed or implied by these forward-looking statements.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our 2026 Form 10-K, and the other sections of this Form 10-Q, including our consolidated financial statements and related notes set forth in Part I, Item 1. This discussion and analysis contains forward-looking statements, including information about possible or assumed results of our financial condition, operations, plans, objectives, and performance that involve risks, uncertainties, and assumptions. The actual results may differ materially from those anticipated and set forth in such forward-looking statements.

Overview

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 its potential in solid-tumor oncology.

Our current business strategy is to continue to pursue the clinical development of leronlimab, which may include the following:

We may need significant additional funding to execute the above business strategy in full, which may include conducting a variety of additional pre-clinical studies and clinical trials, in furtherance of our efforts to obtain FDA approval to commercialize leronlimab. In addition to traditional fundraising, the Company will pursue non-dilutive financing opportunities, such as license agreements and co-development or strategic partnerships, to help implement its strategy.

Corporate Developments

Refer to Note 5, Equity - Private Placement of Common Stock and Warrants through Placement Agent, and Note 12, Subsequent Events, in Item 1 of Part I of this Form 10-Q.

Fluctuations in operating results

The Company's operating results may fluctuate significantly depending on the outcomes, number, and timing of pre-clinical and clinical studies, patient enrollment and/or completion rates in the studies, and their related effect on research and development expenses, regulatory and compliance activities, activities related to seeking FDA approval of our drug product, general and administrative expenses, professional fees, and legal and regulatory proceedings and related consequences. We require a significant amount of capital to continue to operate; therefore, we regularly conduct financing offerings to raise capital, which may result in various forms of non-cash interest expense or other expenses. Additionally, we periodically seek to negotiate settlement of debt payment obligations in exchange for equity securities of the Company and enter into warrant exchanges or modifications that may result in non-cash charges. Our ability to continue to fund operations will depend on our ability to raise additional funds. See the Liquidity and Capital Resources and Going Concern sections in this Item 2 of Part I, Item 1A of Part II of this Form 10-Q, and Item 1A. Risk Factors in our 2026 Form 10-K.

The results of operations were as follows for the periods presented:

General and administrative ("G&A") expenses

G&A expenses consisted of the following:

The increase in G&A expenses for the three-month period ended August 31, 2026, compared to the same period in the prior year, was primarily due to stock-based compensation, primarily attributable to an increase of outstanding stock

options compared to the prior period and the change of the vesting schedules of stock options granted in the fiscal year ended May 31, 2026.

Research and development ("R&D") expenses

R&D expenses consisted of the following:

The increases in R&D expenses in the three-month period ended August 31, 2026, compared to the same period in the prior year, was due to higher clinical expenses related to the Phase II trial of leronlimab in patients with relapsed/refractory micro-satellite stable colorectal cancer in the current period.

The future trend of our R&D expenses is dependent on the costs of any future clinical trials and our decisions regarding 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 and inflammation, as well as efforts to develop a long-acting new or modified therapeutic, and the timing and outcomes of such efforts.

Interest and other income (expense)

Interest and other income (expense) consisted of the following:

The increase in interest and other expenses for the three-month period ended August 31, 2026, compared with the same period in the prior year, was primarily due to the loss on note extinguishment and issuance costs for private placement of shares through placement agent, partially offset by the legal settlement revaluation. The increase in loss on note extinguishment was due to the final closing price of the related private placements being lower than the initial closing price. See Note 5, Equity, of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q, for more information on the issuance costs for private placement of shares and warrants through placement agent. The legal settlement revaluation is related to the change in value of the Securities Class Action Lawsuit settlement.

Liquidity and Capital Resources

As of August 31, 2026, we had a total of approximately $16.4 million in cash and cash equivalents and approximately $49.7 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 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 August 31, 2026, we had approximately 118.5 million shares of common stock available for issuance in new financing transactions.

Since inception, the Company has financed its activities principally from the public and private sale of equity securities as well as with proceeds from issuances of convertible notes. 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.

During the 2021 fiscal year, the Company entered into long-term convertible notes that are secured by all of our assets (excluding our intellectual property), and include certain restrictive provisions, including limitations on incurring additional indebtedness and future dilutive issuances of securities, any of which could impair our ability to raise additional capital on acceptable terms.

On November 3, 2025, the Company entered into a Standby Equity Purchase Agreement with YA II PN, Ltd., a Cayman Islands exempt limited partnership (the "Investor"), pursuant to which the Company has the right to sell to the Investor up to $30.0 million of its shares of common stock, subject to certain limitations and conditions set forth in the purchase agreement, from time to time during the term of the purchase agreement.

Future third-party funding arrangements may also require the Company to relinquish valuable rights. Additional capital, if available, may not be available on reasonable or non-dilutive terms.

Cash and cash equivalents

The Company's cash and cash equivalents position of approximately $16.4 million as of August 31, 2026 increased by approximately $4.5 million when compared to the balance of $11.9 million as of May 31, 2026. This increase was primarily the result of approximately $12.2 million in cash provided by financing activities offset by operational expenses. Refer to Item 1, Note 2, Summary of Significant Accounting Policies - Going Concern, and the Going 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:

Cash used in operating activities

Net cash used in operating activities totaled approximately $7.7 million during the three months ended August 31, 2026, representing an increase of approximately $5.3 million compared to the three months ended August 31, 2025. The increase in the net amount of cash used in operating activities was due primarily to an increase in research and development related payments and paying the full annual insurance expenses in the current quarter.

Cash provided by financing activities

Net cash provided by financing activities totaled approximately $12.2 million during the three months ended August 31, 2026, an increase of approximately $12.4 million compared to the three months ended August 31, 2025. The increase in net cash provided was primarily the result of the private sale of common stock and warrants.

Convertible debt

April 2, 2021 Convertible Note

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. At August 31, 2026, the Note terms provided for accruing interest daily at a rate of 5% per annum, a stated conversion price of $10.00 per share, and maturity in April 2029. As of August 31, 2026, the outstanding balance of the April 2, 2021 Note, including accrued interest, was approximately $8.8 million.

April 23, 2021 Convertible Note

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. At August 31, 2026, the Note terms provided for accruing interest daily at a rate of 5% per annum, a stated conversion price of $10.00 per share, and maturity in April 2029. As of August 31, 2026, the outstanding balance of the April 23, 2021 Note, including accrued interest, was approximately $27.0 million. In September 2026, in satisfaction of the required monthly payment, the Company and the Noteholder of the April 23, 2021 Note entered into an exchange agreement, pursuant to which a portion of the April 23, 2021 Note was partitioned into a new note with an aggregate principal amount of approximately $1.0 million. The new note was exchanged concurrently for approximately 4.9 million shares. Refer to Item 1, Note 12. Subsequent Events.

Common stock

We have 2,250.0 million authorized shares of common stock. The table below summarizes intended uses of common stock.

As of August 31, 2026, we had approximately 118.5 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 have to discontinue our operations and liquidate our assets. In extreme cases, we could be forced to file for bankruptcy protection.

Off-Balance Sheet Arrangements

As of August 31, 2026, we did not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on our current or future financial condition, results of operations, liquidity, capital expenditures or capital resources.

Contractual Obligations

Refer to Note 3, Accrued Liabilities and Compensation, Note 4, Convertible Instruments and Accrued Interest, and Note 10, Commitments and Contingencies included in Part I, Item 1 of this Form 10-Q, and Notes 4 and 10 in Part II, Item 8 in the 2026 Form 10-K.

Legal Proceedings

The Company is a party to various legal proceedings described in Part I, Item 1, Note 10, Commitments and Contingencies - Legal Proceedings of this Form 10-Q. The Company recognizes accruals for such proceedings to the extent a loss is determined to be both probable and reasonably estimable. The best estimate of a loss within a possible range is accrued; however, if no estimate in the range is more probable than another, then the minimum amount in the range is accrued. If it is determined that a material loss is not probable but reasonably possible and the loss or range of loss can be estimated, the possible loss is disclosed.

It generally is not possible to predict the outcome of these proceedings, including the defense and other litigation-related costs and expenses that may be incurred by the Company, as the outcomes of legal proceedings are inherently uncertain, and the outcomes could differ significantly from recognized accruals. Therefore, it is possible that the ultimate outcome of any proceeding, if in excess of a recognized accrual, if any, could be material to the Company's consolidated financial statements. As of August 31, 2026, the Company had not recorded any accruals related to the outcomes of the legal matters discussed in this Form 10-Q, other than approximately $11.6 million in connection with an agreement in principle to settle the Securities Class Action Lawsuit, as discussed in Part I, Item 1, Note 10, Commitments and Contingencies - Legal Proceedings of this Form 10-Q.

Going Concern

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 had an accumulated deficit of approximately $950.4 million as of August 31, 2026. These factors, among several others, 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.

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 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 also Liquidity and Capital Resources above.

New Accounting Pronouncements

Refer to Part I, Item 1, Note 2, Summary of Significant Accounting Policies - Recent Accounting Pronouncements in this Form 10-Q for the discussion.

Critical Accounting Estimates

This discussion and analysis of the Company's financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of our financial statements and related disclosures requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of expenses during the reporting periods. The Company's critical accounting estimates are described under the heading Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates in our 2026 Form 10-K.